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ERIN BURNETT OUTFRONT

Government Shutdown in Less Than 1 Hour Away; Interview with Senator Jeff Merkley of Oregon; Government Shutdown Minutes Away

Aired September 30, 2013 - 23:00   ET

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


ERIN BURNETT, CNN ANCHOR: And welcome to a live special edition of OUTFRONT. As we count down to a government shutdown, obviously, in Washington working hard tonight. Harry Reid is speaking on the Senate floor, and I want to listen to him talking about whether there will be a compromise.

SEN. HARRY REID (D-NV), MAJORITY LEADER: -- this agenda that is so hurtful to the American people. So I want everyone to hear what I just said. We will not go to conference until we get a clean C.R.

Government closes. What benefit do we have from that? We have in two weeks -- we have the government is not only going to close down we're going to lose the credit rating because they are talking about not raising the debt ceiling.

SEN. CHARLES SCHUMER (D), NEW YORK: Madam President --

UNIDENTIFIED FEMALE: Senator from New York.

SCHUMER: Madam President, I sort of feel sorry for Speaker Boehner. He has this hard-right Tea Party group --

BURNETT: Right now, Chuck Schumer is speaking. We're going to keep monitoring what's going on here. But obviously significant developments as we count down in this final 59 minutes -- 49 minutes and 30 seconds until a shutdown.

Dana Bash on Capitol Hill.

Dana, Harry Reid coming up to the podium speaking. Explain what just happened. I know there could -- I mean, breakthrough is too big of a word. There is something afoot right now.

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: There was a possibility, perhaps. But what we just heard Senator Reid say in Senate speak is that no -- is no, we're not going to do that. That was an idea that House Republicans are going forward with that we have reporting over the past hour, which is they are going to take another vote on the House floor tonight and that is going to be the same vote they took before, that the Senate rejected just an hour ago.

But along with that they are going to say they want Congress to appoint what are known as conferees in layman's terms, negotiators, to work out a deal on the budget bill or on the spending bill. So what that means, the fact they said, no, is what we thought, which is that the Senate -- excuse me, the government will shut down. The government will shut down technically or any other way at midnight tonight.

So it's in less than an hour.

BURNETT: So, Dana, what happens from here? If the Republicans were saying, well, we'll go into conference and the Democrats are saying yes, sure, if you pass the bill clean beforehand, right? So here we are back to another stalemate.

BASH: Exactly.

BURNETT: What happens then tomorrow? I mean, we have a few days here where things are not good but it's not going to be the end of the world. Are they going to be able to resolve this in that time or not?

BASH: You know, it's really unclear how this particular standoff is going to end and when is it going to end. I mean, the idea is -- from Senate Democrats point of view and, frankly, we have been told, ultimately from the relationship leadership they would have to relent at a certain point. But we thought that would happen two moves ago but House Republicans and it didn't -- three moves ago.

So, we don't know how it's going to go. Basically, probably it will go as long as John Boehner thinks it needs to go until he can say eureka or look at the House conservatives and say I played all my moves. We did everything we could, we fought the good fight, let's get the government up and running.

BURNETT: So, Dana, before you go and I know you're going to be with us through the hour, because this is developing so quickly. But I guess my fundamental question is this, John Boehner didn't want to be in this position. He had -- the right wing of the party got him to say, look, you lay down the law -- lay down on the ground in front of this truck and do it over this budget. Don't wait for the debt ceiling.

But if they end up caving, if they end up losing, do they have the ability to even fight over the debt ceiling or did they just completely lose altogether?

BASH: That -- I have to tell you that's a very astute question, Erin, that is part of the concern I had heard privately from some House Republicans that they are using their arsenal for the debt ceiling on this bill which they didn't want to do. And at the end of the day, that could hurt the Republicans' hand when they negotiate on the debt ceiling and that is exactly --

(VIDEO GAP)

BURNETT: Thank you very much.

And Dana, of course, is going to be with us for the next 55 minutes. You know, the president also has refused to budge on this. You have both sides categorically saying we're not here to negotiate. Tonight, the president called House Speaker John Boehner and other top congressional leaders to discuss the shutdown.

Now, this was a big development because at that time, it had been over a week since the speaker and the president had spoken. So, there was hope that this could be some sort of breakthrough. But then Speaker Boehner went to the House floor to explain what he said happened on the phone with the president.

Here's what he did.

(BEGIN VIDEO CLIP)

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. We're 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.

(END VIDEO CLIP)

BOEHNER: All right. That call obviously didn't make a dent when you hear John Boehner summarizing the president's stand as I'm not going to negotiate, I'm not going to negotiate.

Jim Acosta is at the White House.

Jim, you know, you first reported on these calls during the 7:00 hour when you said the president had made these calls, could it be some sort of a breakthrough. I guess when I think about now how John Boehner is describing that call, you have a relationship between these two men that is not polite and let's get things done behind the scenes. It just appears to be frankly rather nasty and that appears to be the worth possible thing to get things done.

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: It's not good, Erin. And I think if there is one thing that the White House and speaker can agree on this evening is that when the president basically said earlier tonight, he basically said, no, I'm not going to negotiate over this health care law in terms of a threat to a government shutdown or of a debt default.

So, the president has said time and again he will look at changes to the health care law but not under the threat of a shutdown or debt default. He's just not going to do that. He's just not go there.

And, Erin, one of the clearer signs earlier tonight that we were heading towards a shutdown came within the last hour when a White House official told CNN that the president did, in fact, sign the bill into law that protects the pay of active duty military personnel. So, their pay will be going out on time. Those paychecks will be going out on time as opposed to what we originally thought in the midst of all of this that perhaps those paychecks might be delayed. The White House put out a picture of that.

Also, Erin, earlier this evening, the White House has a Web site a page that says essentially how the government shutdown affects of you, and it goes to sort of line by line how a shutdown would affect the economy, costing $10 billion a week, how it would affect seniors, women, children, et cetera, and putting this -- the blame squarely on Republicans saying that if the government shuts down, it's because House Republicans refused to pass that continuing resolution out of the Senate.

And one e-mail that came from the White House earlier this evening, summing up all of this, Erin, it said P.S. at the bottom -- P.S., you will still be able to sign up for Obamacare tomorrow shut down or no shutdown.

So, this is a White House that is digging in and standing its ground.

BURNETT: And standing its ground. All right. Thank you very much. Jim Acosta, reporting live from the White House tonight.

Democratic Senator Jeff Merkley sits on the Appropriations Committee, the Budget Committee, and Banking Committee. So, front and center on all of this.

And thank you very much for joining us, sir. Really appreciate it.

SEN. JEFF MERKLEY (D), OREGON: You're welcome, Erin.

BURNETT: So, let me start off with this question that was on the table, when House leaders said, look, we'll appoint negotiators to sit down with Senate leaders, try to find a resolution. You just heard obviously, your leader Harry Reid saying, no, I'm just not going to do that.

You pass the continuing resolution with no strings attached and then we'll talk.

Is there any way that you would have voted for this going to committee for some sort of negotiations or was that a nonstarter in terms of your vote?

MERKLEY: Well, actually, we voted for that six months ago. The reason we have not had a Budget Committee conference is because the Senate Republicans have been blocking it from happening. They have gone to the floor 18 times and blocked it from being negotiation. The very negotiation they are calling for now.

So, they should go to the floor and withdraw their blockade, let this conference go ahead. But meanwhile, we shouldn't be shutting down the government while carrying on the conversation.

Republicans still have plenty of leverage. They've already said they are going to hold the country hostage once again in just a couple of weeks over the debt limit and probably once again when the existing continuing resolution expires which is only weeks away.

But it makes no sense now to shut down the government.

BURNETT: So, let me ask you, though, because they have raised a couple of points here, which and you know what -- I've been tough on them. Jason Chaffetz has been on the show. He will attest to that.

But he has raised a point I want to raise with you, and that is that one issue that they have with Obamacare is that Congress and the White House get special treatment, right? So regular Americans who earn what your staffers or you earn don't get subsidies and all these benefits from Obamacare that people who are in Congress and their staffs get.

That seems deeply unfair to a lot of people. It's one of the things that the Republicans want to change.

Why wouldn't you negotiate on something like that?

MERKLEY: Well, quite frankly, there's going to be a lot of things that work and don't work in something that takes up a sixth of the national economy. That is health care. But you don't do it by embedding a hostage-taking situation, that we are going to run the economy off the cliff in order to have that debate. And if we endorse this now, there is no end to the trouble ahead.

Let's lots of things I want. I want the Senate to pass a farm bill. We have sent one to them twice, bipartisan farm bill. I want them to pass an infrastructure bill for water resources development that communities need all across America.

But we're not going to hold the American economy hostage to make that happen. There is a policy process and there is a budget process. And, by the way --

(CROSSTALK)

BURNETT: But, Senator, why hasn't this happened yet then? I mean, it sounds like, you know, if you are willing to talk about it why hasn't it happened? It seems like they are put in a position where they have to do these things, seizing these moment, because you guys don't want to talk to them at other times. That's what they would say.

MERKLEY: Well, certainly they would say that. But here's the thing -- if you want to talk health care policy, their health care committee should have been putting out bills that actually do the reforms and sending them to us. Instead, they voted 45 times or whatever it is to shut down access for 30 million Americans to health care rather than actually putting ideas on the table to be discussed.

I mean, here's the challenge. Ted Cruz says he does not want this to go into effect because the American people might like it. They might found out that this actually works. Preexisting conditions are a big problem, is going to be solved and small businesses are going to get a better deal in exchange because they're part of a larger group. He doesn't want America to discover that this will actually work. So, he's got to stop it now.

That's an absurd position to take and a tactic that's absurd as well.

BURNETT: All right. Senator Merkley, thank you very much. We appreciate it. Nice to have you on the show, sir.

All right. Well, our breaking news coverage continues here. We are live tonight on OUTFRONT.

Nancy Pelosi is getting ready to speak in just a couple of moments. So, she's going to give a press conference, as you can see there. We are going to be taking that live. Obviously significant what she has to say, to see whether there could be any breakthrough here or whether a shutdown at midnight is now inevitable.

We'll be right back.

(COMMERCIAL BREAK)

BURNETT: All right. Breaking news -- we are counting down to the shutdown. We are live here on CNN. This is a special edition of OUTFRONT, 11:16 in Washington.

You are looking at a picture right now where Nancy Pelosi will be speaking, holding a press conference in just a few moments.

Obviously, we're going to give that to you live. Given the negotiations going on right now, that will be significant. So, we're going to go to that live.

You know, there's been a lot of back and forth. And right now, where it stands is, the government is going to shut down in just under 45 minutes time. But there may be conferences tomorrow or there maybe absolutely nothing happening tomorrow. And that, of course, is the ultimate problem.

Joining us now as we get ready for the house minority leader to speak is Michael Medved. Michael Medved has a radio show, a syndicated radio host. And we also have with us also joining us, John Avlon here. Of course, executive editor of "The Daily Beast". And Terry Holt also joining us.

Good to have all three of you with us.

Let me start with you, Michael, because when I look at the situation it's gotten a little confusing, right? You have the GOP -- the GOP comes out tonight and says no deal. We're not going to negotiate. And then they say we're going into conference, you know, and we'll talk about this tomorrow. But let's not shut the government down because they don't want that bad wrap.

Democrats say no. There's been -- Republicans have staging revolt, voting against Republicans.

I mean, how much damage has the GOP done to itself? Or is that all that talk overblown?

DAVID MEDVED, RADIO HOST: Well, let me tell you, Erin, I was looking at the coverage on CNN. There are the beautiful shots of the Capitol dome lit it night, and I was thinking, profiles in courage. Actually, this is profiles in crazy.

And there is so much blame to go around and the American people are universally disgusted. They are disgusted with the Democrats. They're disgusted with the Republicans. They're disgusted with the Tea Party. They're disgusted with the establishment. They're disgusted with President Obama.

And to me, that is the biggest missed opportunity here. The president this afternoon instead of repeating I'm not going to negotiate, I'm not going to negotiate, could have said, you know what, I want Harry Reid, I want John Boehner, I want Eric Cantor, I want Mitch McConnell, I want everyone to come into the Oval Office and let's work this out.

Everyone says we don't want the government to shut down. It does no good to anybody. It hurts a lot of people. We're not that far apart. Let's just settle this thing.

And the only question is, they are going to settle it eventually. Why is it that it's better to settle it after the government shuts down? It is crazy.

BURNETT: Well, I think we can all probably agree it's crazy.

So, let me ask you, Terry, you used to be the spokesman for John Boehner. John Boehner said in March he didn't think that the government should use these moments for negotiations. That he thought it was not a smart idea. And yet here he is coming out being the guy who's saying it's a smart idea.

Does he feel sick every time he has to say it, or has he bought into what the far right wing of his party are making him do?

TERRY HOLT, REPUBLICAN STRATEGIST: But remember, it's the president who said he's not going to negotiate and the Democrats who have been unwilling to delay Obamacare.

Remember, Barack Obama delayed Obamacare this summer.

BURNETT: OK. Fair point. But I know where you are going. But let me just pull you back here.

HOLT: Sure.

BURNETT: Is it making John Boehner sick every time he has to do this because he didn't want to do it? Is he really bought in?

HOLT: John Boehner is managing a conference of congressmen who believe that they are doing the right thing. It is a tough situation. There are guys out there that believe a government shutdown is what it's going to take to shake this country up and get it back on its fiscal feet.

They believe that Obamacare is going to wreck this economy and they believe in their principles. It's not wrong in the United States Congress to disagree. The fact that the American people -- I think what Michael said is right. People are sick of this.

The main narrative for most people is not all the hype about the shutdown. It's that Washington doesn't work any more. Until it starts working, most of these politicians are in dangerous in the next election.

BURNETT: Which is a fair point.

But, John Avlon, part of the reason it's not working is that people feel that they only need to act on the principles on what one group of voters wants.

JOHN AVLON, THE DAILY BEAST: Well, and also --

BURNETT: So, therefore, they do not negotiate and it happens on both sides.

AVLON: It does. But I mean, they are confusing principles with hyper partisanship. I mean, let's get real here. Everybody agrees that we shouldn't have the government shutdown. Everybody is saying we shouldn't play chicken with the debt ceiling. And yet, that's where we're going.

So, either we have impotent leadership in the House or they have essential delegated the direction of the country to people who are fundamentally unreasonable. I mean, we divided government has -- we've had it before in the past and it has worked well. Independent voters like divided government.

But now it's dysfunctional government and this is fundamentally different.

BURENTT: All I'm going to hit pause with all three of you because Nancy Pelosi is approaching the microphone. Let's listen to her and then get your reaction.

She gets ready to give this press conference. As you can see Chris Van Hollen is behind her. Steny Hoyer.

Here's Nancy Pelosi.

REP. NANCY PELOSI (D-CA), MINORITY LEADER: Listen to very good one.

As we gather here right near Statuary Hall, I'm reminded that President Washington when he was leaving office cautioned political parties that were at war with their own government. And here we are tonight. You know what they are planning to do, if you don't, Chris Van Hollen, who is the ranking member on the budget committee for the house Democrats and has led us with great -- based on values and to reduce the deficit and create jobs I'm going to yield to Chris, because he will give perspective to what is happening tonight and why it is not a good evening -- Chris.

Chris Van Hollen of Maryland.

REP. CHRIS VAN HOLLEN (D), MARYLAND: Thank you, Madam Leader. As the leader said, we are gathered here at a very sad point in the history of this Congress. Because what the House Republicans are doing right now is voting for a government shutdown. We have 45 minutes to go. And instead of passing the bill already adopted by the Senate, which would guarantee that we keep the government open, they are rejecting that, and instead saying that they want to go to conference with 45 minutes left, which is a recipe for shutting down the government.

Now I just want everybody to be clear on one thing. We have been pressing our Republican colleagues to negotiate on the budget since last March. The House passed a budget and the Senate passed a budget.

You may remember our colleagues making a big deal about no budget, no pay. Well, it turns out, they weren't serious about getting a federal budget. We did get a House budget. We did get a Senate budget but no federal budget.

So, why don't we have a budget? Because the law requires that by April 15th, you have negotiators between the House and the Senate meet and work out these differences, try and make compromises for the greater good. They refused to do that.

I just want to call your attention to a resolution that we introduced here in the House, the Democrats, way back in April. April 23rd, resolution, very simple -- expressing the sense of the House of Representatives that the speaker should immediately request a conference to appoint conferees to complete work on a fiscal year 2014 budget resolution with the United States Senate. That's what we introduced way back in April.

What did the speaker do? He said no. He refused to appoint anybody to negotiate on the budget. We had votes calling upon the House, calling upon the speaker to appoint budget negotiators. They voted no. They voted to deny the House an opportunity to appoint budget conferees.

What happened in the Senate? I believe at least 15 times -- 18 times. The majority leader Harry Reid and the budget chairman, Patty Murray, asked to appoint conferees to work out the budget issues. And 18 times, Republicans, led by people like Senator Lee said no. They blocked it.

I would point out that Senator McCain at the time said it was, quote, "insane," for Republicans to be blocking a negotiation on the budget since they spent all of last year calling upon the Senate to have a budget.

Now the speaker of the House earlier this year said, he didn't want to engage any more with the president, the White House on negotiations and wanted to go through the regular order. Well, the regular order means appointing budget negotiators. So, the reason we're here today is that the speaker of the House refused to name budget negotiators and the Senate Republicans blocked budget negotiations.

Now, why would they do that? Because you have to compromise when you go to a budget negotiation, conference in budget. They didn't want to do that. And so, instead we have a very deliberate and calculated strategy not to go through those negotiations but to wait until the government is on the precipice of shutdown because then they figure they don't have to compromise. They can just demand that Democrats and the Congress adopt their radical propositions, getting rid of the Affordable Care Act.

And they threatened the government will no longer pay its bills is their next step. They believe that that they would not have to compromise by driving the federal government to the edge and shut down as we are 40 minutes away, and threatening that the United States will not pay its bills on time.

So, we are eager to go to conference on the budget any time. If but let's not shut down the government, in order to get there. Let's keep the government open, which we can do if we adopt the Senate bill and then let's do what we have been asking for, Leader Pelosi and the Democrats in the House, the Democrats in the Senate have been asking for since March and April of this year. Let's have --

BURNETT: All right. So you are listening to Chris Van Hollen. And underlying what Nancy Pelosi said and, of course, what you heard Senator Merkley said on this show which is clearly the now Democratic talking point. And that is, last spring, we wanted to get this done, we wanted to go to conference and talk about it and John Boehner refused.

Of course, we have our panel with us.

John Avlon, a quick fact check on that. It's true but not totally true.

AVLON: So, what they're doing right now is explaining to the American people why Democrats are rejecting Speaker Boehner's 11th hour offer to try to resolve this in conference. that clearly was the plan that they thought would be able to resolve this and possibly avoid a shutdown or have a short window.

What they are saying is, look, the whole reason we are having this fight is because we haven't passed a budget. And the House passed a budget and the Senate passed a budget, and we have been wanting to go to conference but the Republicans have blocked it. That's their argument. That's their explanation.

BURNETT: Republicans have blocked it because Democrats wanted to include an automatic increase in the debt ceiling in that.

AVLON: Correct. To avoid this fiscal fight.

BURNETT: Te Republicans did want to do because they want to use the debt ceiling as a conversation point for spending.

AVLON: Conversation point is a generous term. But, yes, that's a leverage point and Mike Lee, Rubio and Cruz have been fighting that fight in the Senate hard. BURNETT: All right. So, Terry, let me bring you in here, because what about this? Did John Boehner make a mistake by not going into conference before? I mean, the question is here, is he going have ended up overplaying his hand in such a way that not only the Republicans lose this battle over the budget and not able to fight a battle over the debt ceiling in two weeks?

HOLT: Well, before that, the claptrap from the Democrats. I need to point out first of all that Harry Reid refused to bring the Senate in on Sunday. That would have given us an extra day.

But the thing that the Democrats want to do in the spring was to give President Obama a blank check to raise the debt ceiling automatically and without any debate in the Congress. They just didn't want to do that.

This president has increased the debt and put trillions of dollars on the next-generation of Americans. And they just weren't willing to do that. I think that was a reasonable position.

As for John Boehner's position now, he is in a position of saying let's delay Obamacare as part of this. It may not be the clean way to do it. But it is a legitimate way that people feel in this country -- Obamacare is unpopular. People believe that job will be lost and the economy will continue to drag under this huge new government entitlement.

This is the Congress. They get to disagree. The fact that they haven't been able to talk together from this spring until now is a recipe for disaster for the American people.

They say a pox on all their houses. They are acting like spoiled children. But at end of the day, the Democrats are held just as responsible as Republicans in this.

BURNETT: Not quite by the polls. You are right. People hold them all responsible and called them spoiled children. But the Republicans do take the lions share of the blame, according to the polls, which we'll get to in the moment.

HOLT: But the president has the bully pulpit. He can say what he wants and gets on all the television shows and he has the megaphone to challenge this. Remember, President Clinton won this showdown in 1995. It's instructive for Republicans. But that's a different topic.

BURNETT: Final word, Michael Medved?

Yes, I just think that we shouldn't be already trying to assign blame for something that hasn't even happened yet. Why not look for solutions?

BURNETT: Well, you got 30 minutes and one second.

MEDVED: Right. It could -- this could be the only good part about the shutdown, Erin, which is that I do believe they now are going to have to bring in raising the debt ceiling. And honestly they shouldn't just have a solution that kicks the can down the road for two weeks or two months. They should do something and get some kind of terms of agreement or at least some mechanism so that they can work out these fights.

The American people are tired of this. They have seen this movie. It's not a fun thriller. It's a stupid thriller. It's a thriller where all sides lose.

And the one thing you can say here is maybe it's somebody's diabolical plan to suppress turnout, because everyone will be so disillusioned with all parties to this dispute that nobody will vote.

BURNETT: All right. Well, I'm going to hit pause there. All I can say is they should deal with the spending issues before the debt ceiling. Because all the debt ceiling, everybody, is paying for things you have already approved. Therefore we shouldn't have fights over spending at the debt ceiling. It should happen before that point if we had courageous leadership on all sides.

But hey, I'm just speaking like an American frustrated with leadership in Washington. No matter who it is.

All right. We're going to take a brief break but there's still a lot of action going on the Senate floor as we are down to 29 minutes before the shutdown. Obviously at this point looking extremely unlikely that there will be some sort of a breakthrough tonight. But we are monitoring that. Right now this is the live shot of the Senate floor. We're going to be back in just one moment as we count you down live here on CNN on OUTFRONT to the government shutdown.

(COMMERCIAL BREAK)

BURNETT: Breaking news, in less than 30 minutes, we're just about 25 minutes, the U.S. government is going to shut down. It will be the first time in 17 years that Republicans and Democrats have failed to agree on a spending plan. So with 25 minutes to go only a legislative miracle will stop the shutdown.

OUTFRONT tonight Republican Congressman Todd Rokita.

Congressman, thank you very much for taking the time. Obviously 25 minutes away here and, you know, the context here is the American people are really P.O.'d. All right? Let's be honest. They don't want the shutdown whether they're Democrats or whether they're Republicans.

Why are we 25 minutes away --

REP. TODD ROKITA (R), INDIANA: But they also don't want Obamacare either.

BURNETT: Well, they don't, but when you ask them if the price of getting rid of Obamacare is a shutdown they overwhelmingly say don't shut down the government. ROKITA: Well, depends on who you ask, too, and how you ask the question. This is an insidious law. It is terrible. We are the -- we are the ones that have been reasonable here. We've offered all kinds of different solutions. And by the way, their solutions are based on our duty in the House of Representatives that hold the purse strings in the Constitution to decide what to fund and not fund in our government.

The only people talking about, Erin, talking about shutting down the government is the president, Senate Democrats and Harry Reid. We want to keep the government open. We just want to help the American get by and through what is one of the most insidious laws ever created by man. And that is Obamacare.

BURNETT: All right. I understand, look, a lot of people don't like the law. But it hasn't gone into effect yet. So how do you know it is one of the most insidious laws ever created by man if you haven't actually seen its impact?

ROKITA: We have seen its impact. First of all, the president himself and his administration admit that it's one of the worst laws. He's given 1200 waivers to this law in the last eight months. He's offered 13 different delays to different parts of this law. The authors of the law, one of them, even said it was a train wreck.

So you don't have to actually wait until October 1st to realize the negative impacts. Businesses, large and small, are reducing full-time workers to part-time workers. We're incentivizing a lower-hour workweek.

The 40-hour workweek, Erin, has been the bedrock of the middle class in modern American history and we're -- we're destroying that. Thousands of workers are either getting laid off or reduced to part- time status. Insurance is actually going up. I had a letter today from a farmer in Indiana, Angie May (ph), who's seeing a 140 percent increase in her insurance. There has been no change in the health status of her family. And I get 80 -- 8800 letters just like that in the last month.

BURNETT: So let me ask you a question, though. All right.

ROKITA: Yes.

BURNETT: You have these issues with it and you want to make changes to it.

ROKITA: Yes.

BURNETT: And my understanding is the president has acknowledged there's a lot of problems with this bill, too. So, you know, maybe you can agree on some but not all. I don't know. Right? I'm not going to try to negotiate here on television.

ROKITA: Yes, you know --

BURNETT: But my question is this. ROKITA: Right.

BURNETT: Why use the debt ceiling? Why use the budget and a government shutdown as a way to have these conversations?

ROKITA: Yes. Well, we --

BURNETT: I mean, why do we always have to come to this?

ROKITA: We haven't even --

BURNETT: It makes our country look bad to the world.

ROKITA: No, no, no. We haven't even gotten to the debt ceiling -- yet. That's number one. Number two, we are being reasonable. We started out this negotiation with a full repeal, then a full defund. The last offer we made tonight -- before the last offer was, just to get rid of the individual mandate for a year so it matches the employer mandate that he already --

BURNETT: Delayed. Yes.

ROKITA: Sidelined. Yes, already delayed. And now we're talking about simply going to conference to further negotiate. The only people that have been unreasonable in all this, again, is the president and Harry Reid. They haven't offered a better solution, they haven't offered to negotiate. They just keep saying no. And that's not what the American people want either.

BURNETT: All right. Well, Congressman Rokita, thank you very much.

Obviously giving an impassioned case for where he stands on this issue as we are 20 minutes away from a shutdown.

We are going to take a brief break. When we come back we're going to be joined by a market expert who's going to say whether that position makes sense, whether it's good for this economy, for your mortgage, for all of our individual lives because this is something that truly matters.

We will be back live in just a couple of minutes right here on OUTFRONT.

(COMMERCIAL BREAK)

BURNETT: And welcome back to a special live edition of OUTFRONT on this breaking news. In less than 20 minutes the U.S. government is going to shut down. It'll be the first time in 17 years that this has happened because Republicans and Democrats could not agree.

OUTFRONT tonight the president of Americans for Tax Reform Grover Norquist, PIMCO's Tony Crescenzi, executive editor of the "Daily Beast" John Avlon, and our contributor, Reihan Salam.

Reihan, let me start with you. You just heard Congressman Rokita saying that the health care law is the most insidious law known to man. Obviously you are here representing the more right hand -- right view of things. That seemed to me to be a bit of hyperbole.

REIHAN SALAM, CNN CONTRIBUTOR: Yes. I mean, I think that the law is incredibly problematic and the law is making the case against itself. You don't need this kind of a showdown to make the law unpopular, to make the case against it. And I think that that kind of hyperbole is something that is getting the Republicans in trouble.

BURNETT: And, John Avlon, getting them -- getting them in serious trouble because now here we are in a position where -- as --

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Freshman Republican Thomas Massie, he told Reuters, I thought very astutely, so by the way, everyone, that means he's on the right-hand side of this, he agrees with the principle of the conservatives who are pushing for no deal here.

We keep coming down in our price, while the Democrats haven't moved. You preannounced your conditions, we preannounced a long time ago.

JOHN AVLON, CNN POLITICAL ANALYST: Yes.

BURNETT: That we weren't going to shut down the government. This is no way to negotiate. So --

AVLON: Yes.

BURNETT: I mean, this is saying that his own side has bungled the negotiations.

AVLON: That's right. Right up to the election, Boehner saying that we weren't going to shut down the government. But the fundamental problem is the structure here. The Republicans don't have the power. They don't have the leverage. They don't have control of government to unilaterally try to defund this president's signature law. And by tying it to the budget all they're doing is trying to create governing by crisis. And negotiating in that atmosphere is an illogical fool's errand. It ain't going to happen.

BURNETT: Twenty percent say governing by crisis is a good way to put it and at what point do the markets exact a real price and a real toll on the American economy which, let's just be honest, thus far you've got the credit downgrade, but the U.S. is a disaster but everywhere else is a bigger disaster so it hasn't frankly really hurt people.

TONY CRESCENZI, PIMCO: Hey, Erin, you're right. And there have been a number of shutdowns, as you've heard many times. Seventeen of them since the late '70s. And so -- and those shutdowns have an effect -- didn't affect the stock market much and didn't affect the bond market much.

What we're look at in the next weeks is the debt ceiling being reached. And that's the more important thing for the markets. Nevertheless, just think of today alone, the stock market falling 1 percent. If it continued to happen, which we would expect, that 1 percent decline is $300 billion of wealth wiped out over time. That can have an effect on the economy. And more importantly, the uncertainty, that's been the major impact on business for three years now. It's why business spending has been held back. So that's probably the biggest thing of all, the uncertainty that government is creating.

BURNETT: And it hurts this economy, and Grover, I guess my question to you is, I don't understand why they use these moments, this governing by crisis moment, to do what they should have done before. Right? I mean, the debt ceiling, for example, or this budget is simply just keeping up with promises you've already made.

So they should have these discussions when they make the promises, cut the spending then, as opposed to saying now, that you should have cut the spending which enables you to actually not cut it all.

GROVER NORQUIST, PRESIDENT, AMERICANS FOR TAX REFORM: Well, the president of the United States wants to spend more money. Doesn't want to cut spending. Every time we've talked about negotiations, he wanted to raise taxes a trillion and increase spending $400 billion.

So the president doesn't want to cut spending. The Democratic Senate, you saw Reid tell his head of the Finance Committee that if you want to do tax reform the only tax reform he wanted would raise at least a trillion dollars so it could all be spent. So the Democrats want to spend more, the Republicans want to spend less. It's a little hard to see how they come to an agreement.

But since the only time the president talks to Republicans is during these moments of CR, budget, or debt ceiling, this is when all decisions will get made. I mean, you did have three years in a row where the Democratic Senate didn't even do a budget. So there was no get-together and discuss the budget. Democrats didn't pass a budget in the Senate.

So why are we doing this now? Because for years the president hasn't sat down and talked with the Republicans because the Democrats in the Senate haven't even bothered to pass budgets.

BURNETT: Well, they would say --

NORQUIST: This is the only time things happen.

BURNETT: -- they tried to go to conference as they're now saying with Republicans who turned them down. Look, I get the politics of all of this. But, Tony, I guess the question for you, though, is when is it going to count? The government shuts down tonight, some people will feel it, a lot of people will not. When is it going to hurt? How much time do we have?

CRESCENZI: Well, it's -- there's an immediate effect. There are 800,000 checks that won't be going out to people. And then of course the agency gets shut down. And it's the indirect effects that I'm alluding to before and the effect on businesses and uncertainty and of course the effect on markets. But don't look for a big impact on markets. The stock market ultimately is driven by corporate profits and the rate of growth of economy. The bond market, interest rates and mortgage rates driven by the Federal Reserve, which by the way all employees will be at their desks tomorrow which is an interesting way to look at this.

The federal government hasn't been doing much. So the Fed is left to hold up the fort, so to speak.

BURNETT: Yes.

CRESCENZI: So the Fed drives interest rates, and so does inflation. Keep in mind, those things, most of all, that's what investors should be thinking about.

BURNETT: Right. Well, we're going to hit pause right there. But obviously that is the crucial question.

And still to come, we are just 12 minutes away from what could be a government shutdown. I mean, just imagine if Washington worked. You really could have seen this economy firing on many cylinders. But instead it's not.

When we return, we're going to talk about what the shutdown will mean for Democrats and Republicans in the long run. Right now with the lowest approval rating ever seen in the history of the United States.

We'll be right back live.

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BURNETT: Welcome back to a special live edition of OUTFRONT. Breaking news, you're looking at the White House and that is where the president has just ordered government agencies to begin shutting down. Hundreds of thousands of workers will get furloughed. As you heard Tony Crescenzi of the nation's largest bond investors say 800,000 checks will stop going out. Millions of Americans will lose access to some services.

How will the shut down affect the president and lawmakers? Because this does come down to polls. And obviously none of them are faring well in the polls. But that is the crucial question. So we bring in presidential historian Douglas Brinkley and chief political analyst Gloria Borger.

Great to have both of you with us.

Doug, let me start with you. Latest polling for CNN, 44 percent of Americans approve of the way the president is handling his job as president. That's only down a point from June so it's not a big move. But obviously it is -- it is below 50 percent.

So how does this shutdown affect the president in the long run? And obviously the context is he has a lot of stuff going on in foreign affairs and things right now which are challenging as well. DOUGLAS BRINKLEY, PRESIDENTIAL HISTORIAN: Well, the big poll was the 2008 election in which he won and Obamacare is now going to become the law of the land. This is really a last-gasp effort to derail it. And you are seeing the Republican Party, I think, split in two, while the Tea Party caucus, it's really unsustainable what they're doing. If they stall any longer, it'll melt into the debt ceiling crisis and they'll be blamed for all this.

So I think the president sitting in the catbird seat tonight, but nevertheless when you create uncertainty in this world, it's -- anything can happen. You just had a market analyst telling you, you know, anything possibly could happen with it. But right now we've had -- if it's a short government shutdown, I think President Obama will be -- holding the winner's hand right now.

BURNETT: And, Gloria, I mean, what is this going to do to the Republican Party? Speaker Boehner -- among Republicans, more than half approve of him but only 54 percent, 37 percent unfavorable rating in May. That's up to -- 48 percent now. I mean that's a big jump. The president's rating has moved a point, the speaker has moved nine points.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Yes, I think, look, what John Boehner is trying to do, as Doug points out, is control a fractious caucus here. And actually I was talking to a senior House Republican tonight who said to me that Boehner is actually more popular inside his own caucus right now than he was before this entire thing started.

Because he listened to the hell-no caucus within his caucus and he's united Republicans who all do not like Obamacare, has given them something to rally around, as they worry not about their Democratic challengers, Erin, but about being primaried on the right. And so this gives them something to take back to those conservatives who would outconservative them and say, look, we tried to kill Obamacare.

The question is, generally, about how do you make the transition from being a congressional party to a presidential party.

BURNETT: Right.

BORGER: And the people who are most upset about this really are independent voters, and those are the people you need to win if you want to win the White House.

BURNETT: So let me ask you, Doug, when you look at your analysis of this. I mean, obviously conventional wisdom is this is going to hurt Republicans for re-election, whether, as Gloria says, because they're facing threats from the right or when they want the president -- they want the White House, they can't win the middle. Is it too early to make -- to make that verdict?

BRINKLEY: Yes, way too early. And we have so many news cycles to come. Look, when it was -- this were being called the Affordable Care Act it might give some of the more conservative Republicans some wiggle room. The very fact that it's Obamacare -- BURNETT: Right.

BRINKLEY: -- with the president's name on it, and the president is calling it, it'd be like Social Security being FDR care or, you know, Medicaid and Medicare being LBJ care. It's just something that the Republicans are going to be warring against here for the next year. They don't want it to work. But we'll have to see for the midterms.

Traditionally it should be a good time for the Republicans because in those midterm elections the party not in the White House usually does a little better.

BURNETT: OK. All right. Well, we -- we obviously shall see and of course we'll see whether Obamacare works or not. We'll be right back with the shutdown.

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BURNETT: Breaking news. It is now midnight. The U.S. government has officially shut down. "PIERS MORGAN LIVE" takes over our coverage now.

ANNOUNCER: This is CNN BREAKING NEWS.

PIERS MORGAN, CNN HOST: This is PIERS MORGAN LIVE. Welcome to our viewers in the United States and around the world. It's midnight on the East Coast. You're looking live at the Capitol.

Our breaking news tonight the government and the United States of America has shut down. It hasn't happened for 17 years. But now it has. We'll see the effects almost immediately. From the most iconic places in America, locked up, the Washington Monument, the heart of the capital, closed. The Statue of Liberty, to billions around the world, the very epitome of freedom and democracy, shut down.