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Government Shutdown; Interview with Senator Rand Paul; Breakdown on Capitol Hill; Interview with Jay Carney; Stemming the Shutdown

Aired October 1, 2013 - 08:30   ET

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


ANNOUNCER: You're watching NEW Day with Chris Cuomo, Kate Bolduan and Michaela Pereira.

CHRIS CUOMO, CNN ANCHOR: Welcome back to NEW DAY. It's Tuesday, October 1st. Grab your coffee because we're getting after it for you this morning. The bitter budget battle comes to a head. What will turn around the government shutdown? We're going to take it on.

KATE BOLDUAN, CNN ANCHOR: We're going to speak exclusively with Kentucky Senator Rand Paul for the latest from Republicans. We're also going to be joined by White House Press Secretary Jay Carney to tell us the president's reaction and the president's next move.

But first, let's get straight to Michaela for the five things to know for your new day.

MICHAELA PEREIRA, CNN ANCHOR: All right. Here we go.

At number one, the U.S. government, as you well know, shut down. Eight hundred thousand federal workers facing furlough today. In about an hour, the Senate is expected to formally reject a House spending plan that calls for a delay in implementing Obamacare.

And it is Obamacare's debut. Open enrollment beginning today with millions of Americans getting a chance to shop for health plans. The president meeting this afternoon with people who will directly benefit.

A rock slide in Colorado has killed five hikers reportedly from a single family. A 13-year-old girl was rescued. She's in the hospital. Officials say last month's record rainfall may have led to instability.

About 300 New Yorkers left homeless after Superstorm Sandy about to be evicted from their hotel rooms. Most of them still waiting for repairs to their homes or trying to find public housing help.

And at number five, the excitement building in the steel city. Tonight, the Pittsburgh Pirates host the Cincinnati Reds in a one-game wild card playoff. It's the first postseason home game for the Bucs in 21 years.

We're always updating those five things to know. So be sure to go to newdaycnn.com for the very latest. Guys.

CUOMO: All right, we heard you. You're not ready yet. You're still chasing kids around, trying to get to school, picking out your outfit. We're going to give you a quick break. But when we come back, we're going to have for you perspective on the shutdown from two people who could not disagree more, Republican senator and Tea Party favorite Rand Paul and White House Press Secretary Jay Carney. Both sides for you right here on NEW DAY.

(COMMERCIAL BREAK)

BOLDUAN: Welcome back to NEW DAY.

We are almost nine hours into a government shutdown after Congress was unable to reach an agreement to keep the government open and to fund the government. So, how will lawmakers work their way out of this stalemate? And is this just a prequel to the upcoming fight, many would argue, the bigger fight over the debt ceiling. Senator Rand Paul is a Republican from Kentucky. He is joining us exclusively from Capitol Hill.

Senator, it's great to see you. Thank you so much for your time this morning.

SEN. RAND PAUL (R), KENTUCKY: Good morning.

BOLDUAN: Good morning.

From your perspective, where do things go from here this morning?

PAUL: Well, you know, I've had a couple of suggestions. And one suggestion is that when we disagree, historically, we've gone to conference committee. You have Republicans in the House who want to alter or compromise on Obamacare. You have Senate Democrats unwilling to. So if you have a disagreement, you come together with equal number of Republicans, equal number of Democrats, and you find a compromise.

BOLDUAN: That's not a bad idea. That's something that House Republicans, they move to do after things fell apart yesterday. We -- I spoke with Senator Dick Durbin earlier in the show and he said that Democrats, they would be open to going to conference, but first they want to see House Republicans pass a stop-gap funding measure. And Harry Reid said they don't want to go to conference with a gun held to their heads. Is that something you could support?

PAUL: Well, I think what we could do, is we could pass a very short term, maybe not six weeks but what about one week so we can negotiate over a week. I think a continuing bill to keep the government open while we negotiate is a good idea. I do agree that negotiating with the government closed probably to them appears like strong-arm tactics. So if we keep the government open, but I think it needs to be short-term enough that we are having an active negotiation, that we don't just say, oh, we're going to fund it for three months or two months and come back. I think if we did it for a week or two, I think we could still continue to negotiate, have a conference committee and really I think the American people do want us to work this out.

BOLDUAN: That might be the first glimmer of hope I've heard all morning. So I appreciate it.

You know, Democrats will also argue that they've been calling for going to -- you've been calling for going to conference for quite a while. Democrats say they've also been saying that for a while, to go to conference, to hammer out when you - these budget issues. Do you think Speaker Boehner then made a mistake, that he didn't make a move to go to conference earlier, because this was the - this was their - kind of their last straw last night.

PAUL: Right. Well, I think that -- to go to conference it takes both sides agreeing to it. I don't think that the House has been against it. I think the interesting thing about this process is that we've offered a lot of different compromises. Our first position really wasn't so much a compromise. We don't want Obamacare. We think it's a bad idea and going to hurt people. So we offered to get rid of it completely.

But that didn't pass and so we offered a compromise to say, look, you've been delaying other parts of it, why don't we delay the whole thing for a year? That, I think, is a compromise position. That was rejected.

We then offered to delay only the individual mandate. The president has unilaterally done it with the employer mandate. That's another compromise that's been rejected. Now we're offering also a clean CR for a week or two. But then my understanding is that Senator Reid has rejected that out of hand as well.

So, really, we're offering a series of moving compromises, trying to get a middle position. And we haven't gotten any -- anything back from the Democrats that they're willing to compromise.

BOLDUAN: And how do you respond then to Democrats who say, but you're beginning from an irrational bargaining position. They don't think that these budget negotiations should have anything to do with the president's health care law. Just keep the government funded and fight that out - fight it out separately.

PAUL: Well - right. I think that any time you disagree, if you and I disagree and I start out by calling you irrational, we're not going to get anywhere. I mean obviously when we disagree, we don't like the premise of the other person's position. But the thing is, is that funding is a function of Congress. So a law is passed, but how we fund it and how we modify that law overtime, it doesn't mean from here till the end of time Obamacare is everything the president wanted it to be. The president's been modifying his own plan over the last several months. Should Congress not be part of that? Some of us think it's illegal for the president to do it without our authority. So, really, I think we should be part of the mix and he shouldn't get 100 percent of Obamacare as he wants it without any input from Republicans, as well as the rest of the country.

BOLDUAN: So, senator, kind of how this all really -- this end stage kind of kicked off was we -- you stood with Senator Ted Cruz in that marathon protest on the Senate floor. When you look at that, where you stood there and where we are today, do you think that protest helped or hurt negotiations? I ask that because we are hearing more and more some moderate Republicans in the House saying things like "the Ted Cruz wing of the party" in terms of criticizing how things have been handled.

PAUL: You know, I think it was helpful to talk more about it. We haven't had a big debate about Obamacare really since it passed in Congress. And so I think it was helpful to have the debate. And I'll give you an example. I'm going on the exchanges. I'm going to have to buy my insurance on the Obamacare exchanges. In my state, there's only going to be two insurance companies. It used to be 30. Now there's going to be two. And one of my choices doesn't cover me out of state. So when I travel up here, and because of all the shutdown I have a heart attack, I want my insurance to cover me here. But under Obamacare, it's not going to cover me in Washington. So, I mean, there's a lot of problems with this that if we don't work it out, we're just going to cause millions of people to go into these exchanges and they're not ready.

BOLDUAN: Well, let's hope that never happens. No heart attacks no matter what happens in the job. I'll say that.

Real quick, senator, Democrats, the president, they say that Republicans will be blamed. They're blaming Republicans for this government shutdown. The polls that we have, and I know that you love to debate methodology, but the polls that we have say that Republicans are going to face more of the blame now that the government is shut down. Does that concern you at all?

PAUL: I think what we ought to do is argue about right and wrong. So, for example, right now we're borrowing $30,000 every second. We have $17 trillion in debt. We're adding nearly $1 trillion in debt every year. That's because we continue to spend. What's called a continuing resolution, without reforming it. So I don't think we can go on.

And while I don't want to shut down government and I would be for short-term solutions to keep it open, I think we do sometimes have to make a stand and say enough's enough. We're spending our kids' future and we can't keep doing it this way.

BOLDUAN: Senator Rand Paul, always great to have your perspective. Thank you so much for joining us this morning.

PAUL: Thank you.

BOLDUAN: Of course.

Chris.

CUOMO: All right, Kate, we're going to take a quick break. When we come back, the White House will weigh in. We're going to talk with Press Secretary Jay Carney about what's being done to get the government going again. Stay with us.

(COMMERCIAL BREAK)

CUOMO: Welcome back. We've heard from some Republicans. So now what will the White House do in order to get the government going again? We need leadership, we need to fix this, we have to worry about the looming debt ceiling. It can only get worse in that situation.

So we have Jay Carney, White House spokes Press Secretary, he joins us now. Jay thank you very much for being with us. I appreciate you taking the opportunity.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: Chris, glad to be here. Thank you.

CUOMO: So from the other side, the allegation is clear. It is on you at the White House because you're making plenty of changes to the Affordable Care Act on your own. Stop saying that you won't compromise and call for a conference. Will you do it?

CARNEY: Chris, as you know, the President has asked for no concessions, nothing to go along with Congress's responsibility to fund the government. The President has asked for nothing to go along with Congress's responsibility -- constitutional responsibility to ensure that our bills are paid and, therefore, raise the debt ceiling. The only party to this discussion that is attaching political and ideological items -- agenda items to that responsibility are the House Republicans. In particular, the Tea Party Caucus of the House Republican conference.

So you have one faction of one party of one House, of one branch of government driving us to shut down and potentially, far worse, driving us to default for the first time in our history.

The President is ready to have discussions and negotiations, as he has been willing all year, about how to improve where it can be improved the Affordable Care Act, about how we can responsibly fund our budget priorities, protect the middle class, invest where we need to so our economy can grow and responsibly continue to reduce our deficit.

But he won't do that under the threat of shutdown or under default because Republicans who couldn't get what they wanted on the Affordable Care Act through the legislative process or through the election process or through the Supreme Court are now basically holding the American people hostage in an attempt to do it that way.

CUOMO: But look at where we are, Jay right. I mean now we're in a shutdown people aren't getting paid, we need leadership. We need compromise. I mean doesn't it stand to reason that if you do nothing we're just going to wind up watching these people's lives get compromised?

CARNEY: But Chris -- Chris the President has compromised. He has had a budget on the table since the beginning of the year in which he has offered, you know, real tough choices for a Democratic president, to the consternation, in some cases, of his own party. What we haven't seen from the Republicans is a commensurate willingness to compromise or move forward although the President all year long has had fruitful discussions with lawmakers -- Republican lawmakers especially in the Senate who have been interested in the idea of finding common ground.

But -- but again when you talk about compromise, if the President were behaving the way Republicans were, he might say you know what I won't sign a bill keeping the government open unless Republicans agree to extend background checks on gun sales because that's a priority of his. Or I won't sign a bill to pay our bills, to prevent us from defaulting unless I get some other priority of mine that I couldn't get through the normal process.

(CROSSTALK)

CUOMO: But isn't he doing --

CARNEY: That and instead, he is showing compromise and saying you know what I'm not -- I am not attaching -- I'm not asking for anything when it comes to Congress doing its job, which is to pay the bills of the government and ensure the government remains open.

CUOMO: But isn't he flexing his muscle by saying I'm not going to put anything on this bill? You fund the government and then we'll talk? And by refusing any compromise, is helping to push us into the shutdown.

CARNEY: Chris, I don't understand. Look if you're talking about a bill where if the Republicans -- the Republicans who say, you know, basically defund or delay a major piece of domestic legislation that they could not achieve legislatively, they could not achieve at the ballot box and in return for that, we'll fund the government for 45 days and then we'll come back in 45 days and say you know what we want to take a woman's right to get access to contraception through health care plans. We're going to give that authority to her boss instead of herself.

And then, you know, the next time we're going to ask for something else. All these agenda items, this ideologically driven agenda items that have nothing to do with the responsibility of Congress to fund government and certainly nothing to do with Congress's responsibility to ensure that the United States does not default for the first time in history.

(CROSSTALK)

CUOMO: Listen I get it --

CARNEY: And the President -- the President has been willing all year long.

Here's the thing when it comes to compromise. Last year at the end of the year when we had budget negotiations over the so-called fiscal cliff, the main thing that Republicans extracted from Democrats and the President, they said, was the compromise that the Senate would pass a budget. Because they complained bitterly that the Senate, under the control of the Democrats, had not passed a budget the way that the House had under the control of the Republicans.

And so what happened? Democrats agreed to do that. Democrats passed a budget in the Senate. The House passed their budget. Democrats were ready to do -- return to regular order, which is what House Republican leaders said they wanted, to negotiate over a budget. But guess what happened. When they got what they wanted, Republicans refused to conference on that budget. They refused to sit down and negotiate. So you know, we've operated in good faith here.

CUOMO: Right but Jay.

CARNEY: And the price of this -- of this extremism is being exacted from the American people and the American economy.

CUOMO: But they're not crazy about the Affordable Care Act either.

CARNEY: Fine.

CUOMO: They don't understand it.

CARNEY: Fine.

CUOMO: And that's the tricky thing about leadership though Jay. I mean I get that it's difficult. But I mean that's the part of being President which is why only one person gets the job. I mean you have to find a better way. Don't you?

CARNEY: Chris -- they don't like the Affordable Care Act and they ought to try to change it any way they can or repeal it any way they can. And in fact in the House they've done that now 42 times.

CUOMO: Right.

CARNEY: The fact that the American people decided to re-elect President Obama last year when his opponent ran very strongly against the Affordable Care Act, I think, reaffirms and validates the fact that Congress passed it, the fact that the Supreme Court upheld it and the fact that today despite everything that's happening on Capitol Hill, Americans across the country have the opportunity to enroll and get action to affordable health insurance that they've never had before.

CUOMO: I get that tying the shutdown to the Affordable Care Act is unusual in terms of politics and unacceptable for the people who are being punished. There's no question about that.

Here's my concern. Now we're looking at the debt ceiling. D.C. can't fix what they break with the debt ceiling because the markets are going to respond. You know the dominos that fall there.

So that's the question about leadership. What are you doing down there to strategize for going forward? Because this isn't working and that fight matters.

CARNEY: And on behalf of the country, on behalf of the economy and on behalf of every future president, no matter what his or her party, the President refuses to have the full faith and credit of the United States held hostage by a faction within one party, of one House, of one branch of government. You know he's -- he is not -- he is saying Congress must raise the debt ceiling. I will sign the bill that has Congress raising the debt ceiling without asking for any concessions on my part. What Republicans are saying they'll do -- and what we're seeing with the government shutdown is simply a preview of what they're threatening to do with the debt ceiling. Is that they won't -- they will allow the United States to default with all the terrible consequences that you just mentioned, unless they get what they want. Unless they get what they couldn't get at the ballot box, what they couldn't get through Congress and what they couldn't get from the Supreme Court.

The consequences of that would be catastrophic. You know financial experts would know better than I, but you're talking about a situation where the bedrock economy in the global system, the United States economy, would suddenly be cast in doubt. And so much of the world economy depends on the stability of the American system that default would be -- would make what's happening now under shutdown pale by comparison.

CUOMO: Jay Carney thank you for taking the opportunity. I guess to paraphrase the President we're hoping that from a leadership perspective he opens the fist a little bit and starts reaching out his hand to the other side so we can avoid crisis.

(CROSSTALK)

CARNEY: Hey Chris I just have to say -- I cannot let you end that way. The President is ready to sit down with the Republicans as he has all year long. What he won't do is let Republicans hold the American people hostage in return for their ideological demands. That would be irresponsible and that would be the opposite of leadership.

CUOMO: White House gets the last word.

CARNEY: Thank you Chris.

CUOMO: Jay Carney, thank you very much for coming on NEW DAY. I appreciate it.

We're going to take a break right now. Stay with us.

(COMMERCIAL BREAK)

CUOMO: Thanks for watching NEW DAY -- over to Carol Costello.

CAROL COSTELLO, CNN ANCHOR: All right. Thanks, guys. Have a great day. "NEWSROOM" starts now.