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THE LEAD WITH JAKE TAPPER

Dems Winning The Shutdown Standoff?; Debt Ceiling Battle Looms Over Shutdown Crisis

Aired September 30, 2013 - 16:30   ET

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


(COMMERCIAL BREAK)

JAKE TAPPER, CNN HOST: Welcome back to THE LEAD. We're awaiting live remarks from President Obama in a little more than 10 minutes. That's the scheduled time, anyway. We'll bring it to you live.

As we speak, the House is preparing to vote yet again on a bill to continue funding the government, but only if the individual mandate, the requirement that individuals buy insurance, is removed from Obamacare. So far, Senate Democrats have rejected each spending bill that would tweak Obamacare in any way. And if the two chambers can't pass something, the government will shut down in just a little over seven hours.

I want to get to our chief congressional correspondent, Dana Bash, here at the Capitol. Dana, you have been speaking to some of the key players here. What is the latest in this incredibly tumultuous story?

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: The latest is it looks much more likely that the government will shut down even for a short period of time. The only thing, according to Senate Democrats who say that they're standing their ground, clean spending bill or nothing -- the only thing that will keep it from shutting down is that. And in just talking quietly to sources in the halls here, it just seems unlikely for John Boehner and his fellow Republican leaders, even assuming that their latest bid is rejected, to take up that clean, no-strings-attached bill before the clock strikes midnight tonight and the government shutdown officially happens.

It just seems as though they are going to need to feel like conservatives kind of got their wish because make no mistake about it, despite what they say publicly, there are a number of conservatives, even elected officials in the House, who think that a government shutdown would be a good thing in terms of sending a message that they mean it when they say that they really want to do whatever is possible to change or chip away at Obamacare.

So, that's where things stand now. We will certainly be here until midnight, but unless something dramatic changes, it doesn't look like things are going to move to funding the government by that deadline.

TAPPER: And then where do we go from here? Theoretically if that happens, and it doesn't seem as though there are any major conversations going on between the White House and Boehner or the House and the Senate -- if that does happen, and the Senate is insisting clean bill, nothing attached to it, just funding the government, and the House is saying no, then what?

BASH: You know, I had a senior Republican source say to me over the weekend that they sort of feel like they're going to have to let some of their more conservative, more vocal members who say fight, fight, fight, touch the stove enough times to realize that they are going to get burned.

But then what is really up in the air, because probably it's going to depend what happens with the markets. It's going to depend what their response is from the public, and maybe more importantly, from the economy, if in fact the government does shut down as it seems like it is heading that way. And then they're going to reassess. Say, maybe John Boehner will call his people together tomorrow or Wednesday and say okay, guys, are we ready? Enough already, let's do this and fight the next fight, which of course is just around the corner on the debt ceiling, which could have even more catastrophic effects on the economy.

TAPPER: Dana Bash, thank you so much. A little more than seven hours away, we are right now from a shutdown, partial government shutdown. House Republicans are trying to scrape together a plan to cancel the government's unscheduled vacation. In the meantime, the GOP circular firing squad seems to have borrowed Walter White's M-60, and they're targeting the Ted Cruz wing of the party right now.

Scott Galupo - Galupo, I guess it's pronounced - writes this morning in The American Conservative, "The push to defund or merely delay the implementation of Obamacare is maybe the most moronic and counterproductive gambit yet devised by the fire-breathing right flank of the congressional GOP." Just to say that again, that was from The American Conservative magazine.

Joining me now to talk about all this, CNN chief political analyst Gloria Borger, CNN political contributor and former advisor to Mitt Romney, Kevin Madden. And president of the Center for American Progress and former domestic policy director for President Obama's 2008 campaign, Neera Tanden.

Kevin, of course I'm going to start with you, the Republican in our interview. Your former boss, Mitt Romney, made very clear he didn't think this was a good tactic and he thought it was going to hurt Republicans. Is it going to have to be that Republicans get hurt, that -- the poll numbers, I mean, I don't know how much farther down you can go from 10 percent approval rating for Congress, which is what our new CNN poll shows. But what has to happen for people to realize that maybe this isn't the best way to change or even get rid of Obamacare?

KEVIN MADDEN, CNN POLITICAL CONTRIBUTOR: Look, that's the conventional wisdom I think on that is right, that there is going to be a risk here for Republicans, that the blame's going to be shifted on us.

I don't think, though -- I think there's too much value put in the argument that somehow Democrats and the president have a lot to gain here politically.

(CROSSTALK)

MADDEN: If you look at a lot of the numbers, I mean, this is essentially the American people looking at Washington and seeing this dysfunctional entity, and they are going to blame all parties involved. I think for the folks back there having worked in this building, right now I think that's what's going to happen. We are going to see a bunch of volleying back and forth.

So much of the discussion focused on process, right? Using terms like CRs, as if the American people really know about what that actually means and how that affects them in their daily lives. But so much of that will be the pressure building once the government does shut down and whether or not you go from having 175 votes for a clean CR to having over 218 that you are going to need to get the government start moving again.

TAPPER: I will say one thing about this, Nira, because I know you probably blame the House Republicans entirely for this. A liberal Democrat I know who has never had a poor word to say about President Obama ever -- obviously this is just anecdotal -- but over the weekend said to me -- blamed it all on the House Republicans but said boy, I really wish President Obama liked dealing with Congress more. He's not the kind of guy who likes to do deals, he's not a schmoozer.

I'm not saying it's his fault, OK? I understand this is a complicated situation, but I think Kevin's right. This hurts everybody at the end of the day.

NEERA TANDEN, PRESIDENT, CENTER FOR AMERICAN PROGRESS: I definitely think it hurts everybody. It's going to hurt everybody; it's definitely hurt Republicans a lot more. Because I think what people are seeing is that there's one side that's really intransigent.

And I have to say, what we've seen in the actual negotiations or debate about this -- because we haven't had negotiations -- is every time we get to a moment like this, Republicans need more and more scalps. I actually think being in negotiations with them means they need more and more scalps from Democrats. And I think that's the problem we're seeing right now, is that we have -- Democrats don't even like this clean CR, right? It actually assumes the Republican numbers on the budget.

TAPPER: Well, they're lower numbers.

TANDEN: They're lower numbers than what Democrats wanted (ph), but they are going along with this because they actually believe in doing their job, which is governing.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Here's the real problem for Republicans. And yes, their poll numbers are going to suffer. They had a pretty clean message to sell on Obamacare, which is that it's bad and it has a lot of problems. And tomorrow is the official enrollment date. And if they wanted to carry a message, they could say oh, guess what, it's been delayed for small businesses. Oh, guess what, it's not clear in every state what you're going to do, you know. Oh, guess what, on and on and on about, you know, corporations are allowed to delay but not individuals.

So you guys, not saying --

MADDEN: Quit blaming me.

BORGER: I know, sorry about that. Generically, Republicans -

(CROSSTALK)

(LAUGHTER)

BORGER: There are no such things as generic Republicans -- but could have made the case on this date about how the law they don't like is bad and how they would actually intend to fix it. Instead, we're talking about shutting down the government.

MADDEN: To that point real quickly, I think it remains to be seen. I think the short-term, there's understanding that there's risk. But long term, when people are making a judgment in 2014, November 2014, will all of what happened with Obamacare and how it changed people's health care, that and the taxes, the regulations, the spending that comes along with it, will that impact?

(CROSSTALK)

TAPPER: We have to take a quick break. You guys all stick around. We will take a very quick break. President Obama is scheduled to speak at 4:45. We are waiting for him to make those remarks. Should happen any minute. We'll go live to the White House briefing room. We're going to take this very quick break, and we'll be right back. And our panel is staying here.

(COMMERCIAL BREAK)

TAPPER: Welcome back to THE LEAD. We're awaiting remarks from President Obama about the possible partial government shutdown that would come in less than seven hours as now President Obama appearing, but the shutdown itself. We're expecting President Obama any minute.

Let's go right to our senior White House correspondent, Jim Acosta. He's there. Jim, have aides briefed you at all on what he's going to say or are you anticipating based on following the story that he's going to criticize Republicans?

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: We expect that, Jake. Earlier today, the president was in a meeting as you know with Israeli Prime Minister Benjamin Netanyahu and at that meeting, the president said he was not resigned to the prospect of a government shutdown. He thought there was still some hope. That was before House Speaker John Boehner said that the House at this point is going to send something back to the Senate that has some of these anti- Obamacare provisions in it. That is obviously a nonstarter in the Senate. The president has said repeatedly and the administration has said repeatedly that is a nonstarter for them as well. So I think we will hear the president repeat that once again. I think something else that we'll also hear, we heard the president say this earlier today, we also heard White House Press Secretary Jay Carney say this at the podium at the briefing earlier today, talking about some of the people who will be hurt by all of this.

Jay Carney talked about the "Meals on Wheels" program, call centers for veterans who call in about their benefits, the president talked about women and children being hurt. I think that's probably some of what we'll hear from the president in just a few moments. Obviously, we can't predict what he's going to say entirely, but I would say at this point that, yes, blaming the Republicans is very much on the agenda in the next few moments -- Jake.

TAPPER: All right, we'll tune in for some more of that in a minute. Jim Acosta, thank you so much. We'll go back to the White House when President Obama comes in. We'll bring that to you live.

Let's bring back our panel right now, Gloria Borger, Kevin Madden and Neera Tanden. Neera, why not, in order just to break through the impasse, allow the medical device tax, removing that tax, which the Senate overwhelmingly voted to do, like 70 or something votes. The House voted to do. Why not just do that? It's already there. It's already the support for it's already there. Why not just end the whole thing?

TANDEN: There's no evidence that passing a medical device tax will --

TAPPER: No, getting rid of --

TANDEN: Getting rid of, that's what I mean, passing new legislation on the medical device tax to get rid of it would have any impact. What the Republicans keep demonstrating they want is to drive a stake through the heart of the affordable care act, what we all call Obamacare, because they don't want to see it work. What I would say to all my colleagues and friends on the other side is again, we had an election on this. Kevin supported someone who campaigned very actively against Obamacare.

TAPPER: You can say his name, Mitt Romney.

TANDEN: Mitt Romney. And you know, and Schumer, Senator Dchumer is right about this. Senate Democrats were attacked on this and they still won, in fact, expanded their majority. This is not what the American people want. They do not want to shut the government down over Obamacare and litigating this is litigating this for a far right base and the House should work its will. Let's just have a bill on the C.R. go up and it would pass. It would pass tonight.

TAPPER: Kevin, Senator John McCain raised this issue that Neera just did, which is there was an election on this. Mitt Romney was against Obamacare. Mitt Romney did not win. Former Senator Jim DeMint, who is now with the Heritage Foundation, he was asked this and said that Romney, that that wasn't really true, because Romney was a flawed carrier of the anti-Obamacare mantle --

TANDEN: I think he was a great carrier.

TAPPER: Because obviously, he passed Romneycare, which was the model for Obamacare. I don't want to re-litigate Romneycare and Obamacare, obviously there are differences, but do you buy that? Were people not thinking this guy's going to repeal Obamacare when they voted for Romney?

MADDEN: I don't think one election is run on a single issue. They had their view they presented to the American public and we had ours. There was an election and it worked out Obama was re-elected, but that doesn't change the fact that the House of Representatives, that majority was also re-elected. They were sent here because people had problems with spending, taxes and regulations and job losses that are occurring because of Obama care.

It's their duty they believe to take the frustrations and anxieties to Washington and litigate it. Here's the other thing. All the talk of bullies and scalps and everything like that, these are substantive disagreements that legislators are bringing to the White House and to their colleagues in the Senate, and they have a difference of opinion. In many of these cases, they are actually the line with voter sentiment when it comes to the ills of Obamacare.

BORGER: I think you're being a little idealistic about some of the motives of Republicans, because here's what I'm -- when you talk to some of these Republicans on background, not for quoting, they will say to you know what, we have been pushed into a corner here because some of these political action committees run by people like Jim DeMint are campaigning against Obamacare and we're afraid we are going to be challenged on the right in our districts by people who are saying we're not --

MADDEN: A lot of it has to do with taxes. The overall message they are trying to get across about what Obamacare is doing to our economy is substantive.

BORGER: But we're not hearing that message. That's where they seem to be stepping on themselves. We're just hearing OK, we're willing to do this, to shut the government down, but the argument should be over the substance of the president's health care plan and the budget, and how much it's going to cost, particularly if they want to make this argument on the debt ceiling.

MADDEN: Real quick, I would agree with you on that. I do think that once we get past the tactical fight, there is still a great deal of opportunity there for Republicans to be the voice of people, to serve as the voice for people who don't like --

BORGER: I would agree with that.

TANDEN: What I would say is the issue really here is we litigated Obamacare. I think you can pass your 45th, 50th, 57th vote against Obamacare. You shouldn't hold the budget hostage. I think that's what Gloria is saying. I think also -- MADDEN: Once something goes in, that's it.

BORGER: What's the difference?

MADDEN: The constitution is a process. We are in the process of this.

TANDEN: What Americans are rejecting is the idea that you are going to hold food for women, infants and children, the parks, hostage to Obamacare. Should we shut down the government over Obama care? An overwhelming majority of Americans say no. The majority in the House of Representatives does not represent the majority of Americans.

TAPPER: We want to go to the redistricting fights on the state level, we can do that.

MADDEN: You can't choose which parts of democracy you want.

TANDEN: Exactly. That's why I'm saying I don't think Democrats should use these tactics.

MADDEN: If they worked to --

BORGER: This is risky for you guys with your base. A majority of Republicans believe that it's OK. It's not really a risk for your base, if you want to be a congressional majority. If you want to become a presidential majority, then it's risky.

MADDEN: There is a large swath of the American electorate, including Republicans and many centrist conservative Democrats who disagree with Obama care, who are unhappy with the effect that it's having --

TANDEN: They have been asked about this particular strategy and said no.

MADDEN: And very upset with the spending taxes and regulations that are making health care less patient-centric.

TANDEN: You know, we are going to have this law go into effect tomorrow. I think it will have the same effect it had in Massachusetts, which had higher growth. You actually addressed the problem. Let's give --

MADDEN: Massachusetts was that a federal or state standard for a small population of seven million people, or a federal statute set for 330 million?

TANDEN: It's not 330 million.

TAPPER: Remove ourselves from the commonwealth of Massachusetts for awhile. The point she is making about redistricting, which is a point I hear a lot from liberals, which is if you look at how many people voted for Democrats in the congressional elections and House elections, it's more than a million and a half people more than voted for Republicans and this all has to do with redistricting. If you look at my great state of Pennsylvania, which was a state that Obama won, it's something like 12 Republicans for five Democrats because of redistricting. That's a fine argument, doesn't mean anything because anybody can redistrict any way they want. All you have to do is win those legislatures and you will admit that the Obama campaign probably didn't pay as much attention to the legislatures as they should have.

TANDEN: I totally agree.

BORGER: The reason we have this problem is there is no reward in politics anymore for compromise. There is only reward --

TAPPER: When did that happen?

TANDEN: Because of the primary system we have. Gloria's point is --

TAPPER: The congressional primaries or the presidential?

TANDEN: Because these are gerrymandered districts, people are more concerned about their primaries and that's what's driving this debate today. The House is not reflecting the will of the majority of Americans.

TAPPER: That means that -- just talking about the House, not the Senate. I understand how it works.

TANDEN: Sorry.

TAPPER: Just to explain to the viewers. That means also that the House seats are more liberal, that there are fewer blue dog Democrats so it's more left and more right.

TANDEN: This is a perfect example. Nancy Pelosi today said she would provide votes for a clean C.R. which is --

TAPPER: A clean spending bill for the government.

TANDEN: Just to translate, yes, clean spending bill for the government --

TAPPER: Even at the lower level of spending that the Republicans like.

TANDEN: Which is much closer to where the Republican members are, she's coming all the way over to where Republicans are. She is willing to do that because she recognizes that they have a job to do in governing and this is a compromise.

BORGER: The president does not want the government to shut down on this.

TAPPER: Former Senator Gregg from New Hampshire, former chairman of the senate Budget Committee, said today he thinks this problem is because there are a number of Republicans who don't understand. I'm paraphrasing here, who don't understand the process of governing. I think what he was suggesting is there is a reluctance to compromise in order to get things done and have the government basically function. Is that not fair?

MADDEN: I think it is a fair observation. I think that it's not applied on just one party or the other. I think there are calcified polls on each side of the party that aren't willing to compromise. I think one of the bigger problems that we have is that so many members now, because of the way some of these districts are drawn, there is no incentive to go home, vote yes and explain to their constituents what they just did. It's so much easier to vote no and go home and explain a no vote.

TANDEN: We have bipartisanship in the Senate. I do think there has been bipartisanship in the Senate over what to do.

BORGER: In talking to a conservative Republican who is against Obamacare and willing to shut down the government, an office holder said to me look, people, we talked about sequester and the sky was falling and all the rest, and the sky didn't fall. We talk about a government shutdown and guess what? The sky's not going to fall.

I would argue he might be right on that point. The bigger point is the more potent political argument Republicans have over the budget is actually on the next fight, which will be the debt ceiling, and that would be the more catastrophic economically, where the sky might fall. So they can make this fight, but what are they going to do on the next one?

MADDEN: Gloria brings up a good point. When you talk to a lot of these folks, these conservatives, these 50 or so conservatives in the House, they will tell you that the last thing they want to do is be part of anything that resembles the status quo here in Washington.

And that for years, we have done things the way that everybody wanted them to be and we kept the government open, but it kept continuing to grow, grow to the point where it was too big so many of them do want to sort of send a message.

I think they want to send a message to the Republican leadership, which is that we have a much more important say in this process than you're letting us, than you are letting on, but they also want to send a message about what a government shutdown would do. It may not -- the sky may not fall.

TAPPER: We can all agree here that a government shutdown for a day or two is undesirable, but far preferable to anything happening with the debt ceiling. That could be catastrophic for the markets or people's retirement savings.

MADDEN: The House Republicans feel they have more leverage on that particular issue because again, that's an issue where, when people look at Washington, they are tired of debt and deficits and they see that issue as related to that and they do want some sort of either spending or economic reforms as part of that broader discussion. Rather than just going about things the same way we always did.

TAPPER: Last thought.

TANDEN: Then why do we have this debate on the government shutdown? The thing I'm nervous about is if we can't negotiate the smaller deal about a government shutdown, I think there's going to be catastrophic risk.

TAPPER: We have to go. Neera, Kevin, Gloria, thanks so much. That's it for THE LEAD. I'm Jake Tapper. We're still waiting for President Obama to speak. It should be about a minute, minute and a half.

I will turn you over to Wolf Blitzer right now in "THE SITUATION ROOM," who will usher in President Obama. Thanks for watching.