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CNN LIVE EVENT/SPECIAL

The U.S. Government Shuts Down

Aired October 1, 2013 - 03:00   ET

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


JOHN VAUSE, CNN ANCHOR: And Senate Democrats just refuse to accept it.

NATALIE ALLEN, CNN ANCHOR: And that means many government offices will be closed today as furloughs begin for some 800,000 federal workers, even as the key part of President Obama's signature health care law goes into effect today.

And all this fuels a much bigger concern about what sort of battle to expect when it comes to raising the nation's debt ceiling just a few weeks from now. Let's go straight to Washington for the very latest in our live coverage. Joe Johns on duty at this late hour in our Washington bureau.

So, John (sic), the House and the Senate, they reconvene what, about six and a half hours from now?

What can we expect then?

JOE JOHNS, CNN CORRESPONDENT: Anybody's guess, quite frankly, John. What we do know is that when last the House convened, they determined that they would seek some type of a negotiation through conferees with the Senate over this matter. The word is from the Senate is they'll come back in around 9:30 Eastern time and, in all likelihood, will table that measure. And we're back where we started.

At the end of the day, the leaders generally get together in situations like this, whether on telephones or in person or through staff and try to see their way clear to negotiate something to at least get the government running for a few more days while they work something for a longer period out. So that's the way it's happened before.

Of course, the last time the government shut down was 17 years ago. Anybody's guess how the Speaker of the House now and the President of the United States now might deal with it, John.

VAUSE: Joe, you mentioned the last shutdown back 17 years ago. A lot of people are sort of looking at that as guidance as to what happened now. But that was really different back then. That was Republicans debating Democrats. This time around it's been Republicans against Republicans.

JOHNS: That's true. But it's also true that the bottom line issue of government spending was there then. It's here now. I can tell you I was there 17 years ago, and it was actually a lot more unpleasant, I would say, simply because it was so cold. And the parties were a bit different too. Newt Gingrich and President Bill Clinton talked at each other quite a bit, but they did have something of a back channel.

It's not clear just how much of a back channel President Obama has with John Boehner right now.

VAUSE: I'm just wondering politically, with the Democrats united in this, like you rarely see Democrats united this much, and the Republicans so divided, politically, I guess does that mean that President Obama doesn't have to budge here? He's got all the support he needs?

JOHNS: Well, Democrats, I think, do believe that they have an advantage. They have an advantage in numbers, in terms of controlling both the Senate as well as the White House.

And they also think they have an advantage in terms of the polls, because polling tends to suggest that, while Americans aren't that crazy about ObamaCare so far, they don't like the idea of linking a government shutdown to getting rid of ObamaCare.

So they think they have something of an advantage, and there is also some suggestion that Republicans in Congress will get blamed the longer this goes on. That's something that tracked just about the same way back during the Clinton and Newt Gingrich days, John.

VAUSE: Very quickly, finally, congressional pay will not be affected by this shutdown.

How does that work?

JOHNS: Well, they tried to link it, obviously, over on the House side, but no. It just doesn't work that way.

VAUSE: OK. Clearly the members of Congress believe they are essential. Joe, thank you. Joe Johns at four minutes past 3:00 in Washington. Great to have you with us. Thanks.

JOHNS: Thanks, John.

NATALIE ALLEN: The U.S. government shutdown is just now over three hours old. Let's take a look at the reaction from global markets. Pauline Chiou is live in Hong Kong with Asian markets for us, and Nina dos Santos is in London with reaction from Europe. Thank you both.

Let's begin with you, Pauline. What are you seeing?

PAULINE CHIOU, CNN HOST: Well, Natalie, I'm seeing mostly green, actually, and we're seeing pretty muted reaction to the U.S. government shutdown. Investors did position themselves yesterday when they saw what was on the horizon politically.

Take a look at the Nikkei. It ended the session up by 0.2 percent. It was up even higher by more than 1 percent earlier in the trading day, off the back of the tenken (ph) survey of business confidence, which actually beat forecasts and this survey showed that manufacturers in Japan are the most optimistic in six years.

Now, this is very good news for the prime minister, Shinzo Abe, who is set to announce his decision later on today on whether or not to hike the sales tax in Japan.

The Seoul KOSPI also ended up by about 0.1 percent off of good manufacturing data, but exports did drop 1.5 percent from a year ago in the month of September. The main Aussie benchmark ended down by almost a quarter of 1 percent.

The RBA, the Reserve Bank of Australia, left its benchmark interest rate at a record low of 2.5 percent.

And the SENSEX in Mumbai is still trading right now. It is up 0.5 percent. So it seems like it sort of shrugged off the political issue on Capitol Hill there.

But, Natalie, I should point out that we did have light trading today here in the Asia-Pacific region because Shanghai and also Hong Kong right here are closed for a public holiday.

NATALIE ALLEN: They got to get a little break to absorb this a little more before they figure out how to react. Pauline for us, Pauline Chiou in Hong Kong, thanks, Pauline.

Let's take a look at how markets in Europe are reacting to the shutdown. Let's go to Nina now for that.

Hi, Nina.

NINA DOS SANTOS, CNN HOST: Thanks so much. Good morning, Natalie. Well, they've only had six minutes and 17 seconds to react to what is going on in the United States. The news of no deal being reached. As you can see from the figures moving about, we are heading into positive territory.

But some markets are notably undecided like the FTSE 100. It hasn't managed to make it above the plus line so far. (Inaudible) for the likes of the Xetra DAX and the CAC 40. We haven't really seen these markets put on half of 1 percent in a few days now.

They have remained rather depressed on an uncertain outlook not just for the United States, but also for the political impasse that is going on in Italy with the specter of the government over there potentially collapsing.

When there is a confidence vote, this will be going through parliament in Rome on Wednesday. As you can see, things not looking too badly on the markets. On the equity side for the first seven minutes of trading.

I just want to head in to the currencies. Might point out that the U.S. dollar is falling against the euro and the British pound on the back of concerns over what is going to happen from here on in Washington. It's actually gaining against the Japanese yen, though.

But that's largely the domestic factors that Pauline mentioned before, Natalie.

NATALIE ALLEN: Have you been able to check the headlines yet there in London?

DOS SANTOS: The headlines?

(CROSSTALK)

NATALIE ALLEN: The newspapers, what they're saying about the U.S. government?

DOS SANTOS: Ah, about the U.S. shutdown, of course, yes. Well, obviously, there is a lot of consternation, to be quite honest, where I am, Natalie. Because remember that I'm in a region where austerity really has bitten. We're talking about countries across the European Union, at least four of them that have had to be bailed out because they didn't have enough money.

And there is a lot of confusion. And consternation, as I was saying before, looking at the world's richest country, America, and seeing its government actually shut down, and then we've got the October the 17th debt deadline looming as well, which means that perhaps the United States could even, even though it's a remote chance, default on its debt if it dumps any of those interest payments.

So there is quite a bit of interest over here and people are frankly quite perplexed.

NATALIE ALLEN: Certainly understand that. Nina dos Santos for us in London. Thank you, Nina.

Over to John.

VAUSE: OK, Natalie, government employees deemed essential will stay on the job. This of course includes active duty military members. The U.S. president says those service men and women in uniform will continue to get their paychecks and get them on time. He addressed the troops in a statement released just as the shutdown took effect.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Those of you in uniform will remain on your normal duty status. The threats to our national security have not changed and we need you to be ready for any contingency.

Ongoing military operations, like our efforts in Afghanistan, will continue. If you're serving in harm's way, we're going to make sure you have what you need to succeed in your missions.

(END VIDEO CLIP)

NATALIE ALLEN: So the U.S. government is shut down. Up next here, details on what exactly that means beyond the military and such. We'll look at the political battles as well that got the country to this point we're at today. You're watching CNN.

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UNIDENTIFIED MALE: If I ran my house the way the government is running the country, I would be bankrupt.

UNIDENTIFIED MALE: You made your point. Let's get on with the business of running the country and pass the budget, pass the debt limits, and let us keep improving the economy. But don't play games anymore, please.

(END VIDEO CLIP)

NATALIE ALLEN: There you have it. As the state presses on, we'll be getting more of that from the American people.

Welcome back to our continuing coverage of the U.S. government shutdown. It is less than four hours until dawn in Washington. And 800,000 federal government workers will be waking up but furloughed from their jobs. So how will it all affect daily life in the U.S.?

We want to take a look at that first.

(BEGIN VIDEO CLIP)

ALLEN (voice-over): First, hundreds of thousands of federal employees are being furloughed. Federal offices will be closed. That said, critical workers, including air traffic controllers and food inspectors, for example, still have to go to work but without pay. All military personnel also remain on duty.

They will continue to be paid, thanks to a bill adopted unanimously in Congress on Monday and signed by the president. However, hundreds of national parks, museums and zoos, those are all closed, and millions of visitors will be turned away.

The last time there was a shutdown, thousands of passport application went unprocessed, meaning tourism and airline revenues could take a hit. But we're told the State Department is saying it will continue visa and passport operations overseas.

John?

VAUSE: OK. So how did Washington get to this point? Is compromise even possible now with much of the government shuttered? Lisa Desjardins is joining us now with our continuing coverage; she is in Washington.

So Lisa, let's just talk about the situation with the problem that we have within Congress and the lack of goodwill, essentially.

LISA DESJARDINS, CNN RADIO CORRESPONDENT: That's right. You know, when you talk about exactly how we got here, it has been many bumpy years of partisan divide that led to this point. Part of that is politics, a big chunk. Part of it is philosophy. But let's start with the politics.

Where we are at this exact moment is the House has sent over another idea to the Democratic-run Senate. Republicans saying hey, let's have a conference committee and work out our differences. Democrats say no. Really, all we will agree to is a spending bill with no other changes to it. So essentially, those two sides are just blaming each other.

(BEGIN VIDEO CLIP)

JOHN BOEHNER, SPEAKER OF THE HOUSE: The House has voted to keep the government open. But we also want basic fairness for all Americans under ObamaCare.

QUESTION: What do you say to those workers, sir?

REP. CHRIS VAN HOLLEN (D), MD.: Instead of passing the bill already adopted by the Senate, which would guarantee that we keep the government open, they're 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.

(END VIDEO CLIP)

DESJARDINS: So that's a bit predictable, right? Both sides blaming each other. You can see the Democrats' point is they think a spending bill should be passed without any politics attached. Republicans think ObamaCare, the health care program, is such a problem that it needs to be dealt with right away. That's the politics.

But in a couple of sentences, let's talk quickly about the philosophy here, John. This is all about the size of the American government, what should it do, what it should not do. Essentially, Democrats have been saying for years government should do something. They've kind of won that battle with the American public.

But Republicans have said for years government should not tax too much or spend too much. Americans agree with that, too. And those two ideas are coming to a head right now.

VAUSE: OK. Let's talk about the politics about this for a moment. Is this now essentially up to Speaker John Boehner to try and find a resolution? Because the Democrats aren't moving, and they're united. The Republicans are who are divided. So this has all come down now to Boehner?

DESJARDINS: It depends how you look at it. House Republicans would say the Democrats are just as free as we are to move on this issue.

However, if you look at how the chessboard has been played, I think the biggest point is that so far the Republicans have started with very large demands, and they've sent offers and offers and offers, each time whittling down their demands, making them smaller and smaller.

The Democrats have never changed their position through all of this. So that does indicate if you look at the gamesmanship here, that Democrats may have what they believe to be a stronger position. Republicans have been changing their position, not Democrats.

In the end, though, we don't really know who is going to have to give in. That's a political question.

VAUSE: Yes, I guess the question is who is going to blink.

DESJARDINS: Yes.

VAUSE: Well, we'll know over the next couple of hours, I guess, the next couple of days, the next couple of weeks, who knows. Lisa, thank you, Lisa.

(CROSSTALK)

DESJARDINS: It's a mess.

VAUSE: It is a mess. What do you expect? Lisa, thank you.

Natalie?

NATALIE ALLEN: Well, much more on the mess ahead in our live global coverage for you.

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ALLEN (voice-over): But also ahead here, we'll turn to another international story. A couple tries to help orphans escape from North Korea. We'll tell you how their plan went very wrong.

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NATALIE ALLEN: We'll get back to the government shutdown in the U.S. in just a moment. But first we want to tell you about a story of a dream that became a nightmare for a missionary couple who tried to help nine young orphans defect from North Korea. The couple spoke exclusively with CNN's Paula Hancocks.

(BEGIN VIDEOTAPE)

PAULA HANCOCKS, CNN CORRESPONDENT (voice-over): Trekking through the jungle at night to avoid detection, nine young North Koreans crossed the border from China to Laos, believing the next stop was South Korea and freedom. They were wrong. Aged between 15 and 23, some escaped North Korea four years ago into China, looking for food. This video was filmed by a South Korean missionary, who calls himself MJ.

MJ and his wife hide their identity because they try to help refugees that China regularly arrests and sends back to North Korea.

"They look for fish bones and rice," he tells me, "to mix together to make porridge. Then they eat toothpaste to help them digest it."

This boy says he wants to live in China because here even the beggars don't go hungry.

The nights were spent living in abandoned building, the days avoiding Chinese border guards. When MJ met them in December 2009, it was minus 30 degrees Celsius. Most had frostbite on their hands and toes and skin diseases. Some had injuries they say came from beatings by guards when they were caught stealing food.

"All of them seem to have suffered from tuberculosis," says MJ. "And as they were malnourished, their growth was stunted."

MJ and his wife offered to help them leave China for Laos, and then on to South Korea or the United States to claim asylum, a route they had successfully taken with other defectors.

But after crossing into Laos this time, the plan went wrong.

"There was a search made while we were on the bus," MJ says. "This is the first time it ever happened."

The defectors and missionaries were investigated by Laos immigration for more than two weeks. Calling the South Korean embassy repeatedly for help, MJ said they were told everything was fine and the youngsters were being processed. No embassy official came to visit.

May 27th, the defectors were told to pack as they were leaving for South Korea. As the missionaries tried to follow them, they say the door of the immigration office was shut, and they were locked in a room for two hours.

According to the United Nations, the young defectors were deported to North Korea via China. MJ's wife breaks down, saying, "It is unbearable that these children were taken away from us. But what makes me really angry is the response from the South Korean embassy."

South Korea's foreign ministry tells CNN, "It is unfortunate and regrettable the nine young North Korean defectors were forcefully taken," and they're inspecting the problems revealed from this incident and have improved and strengthened the overall support system.

HANCOCKS: The foreign ministry in Laos says that the North Koreans were in their country illegally, and they also accuse the missionaries of human trafficking.

But the United Nations and human rights groups are criticizing the country for deporting the refugees.

HANCOCKS (voice-over): The defectors were last seen on North Korean state television, saying they had been tricked into leaving the country, and it was by the grace of North Korea's leader, Kim Jong-un, that they were allowed to return.

Human rights groups say defectors who are sent back are sometimes tortured or even executed. Fears are high for the nine young North Koreans, who thought they had escaped.

(END VIDEOTAPE)

NATALIE ALLEN: A very, very sad story.

Joining me now from CNN Seoul is our Paula Hancocks.

Paula, it's terrifying to think what could happen to these poor children.

HANCOCKS: That's right, Natalie, as it really is a heartbreaking story. And I think the reason that this particular missionary, M. JOHNSON: , spoke out was because he was so concerned at what had happened. The fact is, this is a route that has been traveled many times before for North Korean defectors.

This is a route from North Korea into China, and then these children and other defectors are then helped by human rights groups, are helped by missionaries like MJ, to go on to another country, quite often Laos. And then from Laos they are then sent on to places like South Korea or the United States.

Now, this is something that MJ and his wife had successfully done before. They had managed to send defectors to the United States and to South Korea. So really, they're very concerned as other human rights groups are that something has changed, that the Laos authorities on this occasion decided to send the defectors back.

Natalie?

NATALIE ALLEN: And I guess it's anyone's guess what is to become of these children. And I guess at this point, can anybody else intercede? I mean, they look like the North Koreans have them back where they want them.

HANCOCKS: Well, MJ said that he understood that they were going to be used for propaganda purposes once they got back, and we saw that. They were. They were on state-run television. But what he was more concerned about was what happens after the propaganda.

What happens once they have served their use for the North Korean regime?

Are they then in danger?

Human rights groups say that many defectors that are sent back are in danger. They are tortured, possibly some executed, according to these groups. And some are sent to prison camps which are particularly brutal.

So of course there is a great deal of concern for these children, some of them above the age of 18, but all of them youngsters, as to what exactly has happened to them. And of course it's very difficult for the missionaries to find out through the North Korean regime what has happened.

Really, the only pressure that can come to the North Korean regime is from other governments. But even then it is such a country that it can ignore that, Natalie.

NATALIE ALLEN: Right. And you can see on one of their faces that they were being used as propaganda, as pawns. So very unfortunate and frightening. Thank you for your story.

Paula Hancocks out of Seoul for us.

And we'll have much more of CNN NEWSROOM right after this.

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VAUSE: And welcome back to CNN's live coverage of the U.S. government shutdown. It's the product of deadlock between the House and Senate over a stopgap spending bill.

NATALIE ALLEN: Democrats in the Senate have repeatedly defeated House Republicans' efforts to tie the measure to a delay in ObamaCare.

Some moderate House Republicans even tried to organize a revolt against their Tea Party colleagues by voting against the spending plan with anti-ObamaCare provisions. But that effort failed as well.

NATALIE ALLEN: So the House and the Senate are due back in session in about six hours. We'll see then if they're able to come to some sort of agreement to reopen the federal government.

But some U.S. government services will not close, despite the shutdown. We want to tell you about those. They include air traffic control, thank goodness, and airport security.

So if you have a flight in or out of the U.S., you will not be affected by the shutdown. Also, U.S. embassies and consulates overseas will remain open as well. And most passport offices will stay open, unless they are in a federal building that is being closed as a result of the shutdown.

But government officials say passports and visas will be processed. And your mail will still get through. The U.S. Postal Service will remain open.

VAUSE: As the deadline on the U.S. government shutdown approached, tempers flared on the floor of Congress. NATALIE ALLEN: Democrat House member Sheila Jackson Lee placed the blame squarely on the shoulders of the Republican-controlled House.

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REP. SHEILA JACKSON LEE (D), TEXAS: The Republicans are on the floor of the House with a phony procedural vote that is not going anywhere and the government is shut down. Hundreds of thousands of federal employees shut down. The SBA with no loan, shut down. Projects to improve our transportation, shut down. Federal economic reports and businesses shut down.

Workers in Region 6 offices in the State of Texas shut down. They will not be able to go to work tomorrow.

I only hope that we'll have a moment of reconciliation and common sense to speak on behalf of the American people. Please note that Texas recognizes that the American people are important. I don't want a government shutdown.

UNIDENTIFIED MALE: The gentlelady's time is expired.

JACKSON LEE: I want a vote that a clean continuing resolution now.

UNIDENTIFIED MALE: The gentlelady's time has expired. Gentlelady's time is expired.

JACKSON LEE: This is a (inaudible) for American, not (inaudible).

UNIDENTIFIED MALE: The gentlelady's time has expired. Gentlelady's time is expired.

JACKSON LEE: I yield back.

(UNKNOWN): The gentlelady's time has expired.

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VAUSE: It was a long night. And this shutdown brings back memories of the last time Washington was paralyzed. Similar gridlock on Capitol Hill brought the U.S. government to a standstill 17 years ago. Christine Romans report.

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CHRISTINE ROMANS, CNN ANCHOR: The government is shut down for the first time in nearly 18 years. Last time was 1995, well before ObamaCare and the Tea Party. President Clinton then vetoed a spending bill from the Republican-controlled House, a spending bill that would have cut benefits and hundreds of federal programs.

That shutdown lasted five days; 800,000 federal workers stayed home. Federal offices, national parks closed.

Sound familiar? After Congress failed to extend a short-term spending measure, the government shut down again in December. That shutdown lasted 21 days.

Shutdowns don't save money. The final cost in '95 and '96, $1.4 billion, or about $2 billion in today's dollars.

Furlough workers were eventually paid then. Work still needed to be done in closed parks, zoos and museums were more than an inconvenience. It also means lost revenue. Last time closing 368 national park service sites meant 7 million fewer visitors.

This shutdown could be much more damaging. The economy is more fragile right now. Job creation is still sluggish. And the longer the shutdown drags on, the more damaging it would be.

The more than 800,000 workers who are furloughed will be losing $1 billion in wages each week. And according to one analyst's estimate, the total economic impact could be 10 times bigger than that.

A three- to four-week shutdown could cost the economy some $55 billion, on par with a natural disaster. That's the last thing the U.S. needs as the economy comes out of the worst financial crisis since the Great Depression. The bottom line, there is no way that this is a good way to run the world's largest business -- Christine Romans, CNN, New York.

(END VIDEOTAPE)

NATALIE ALLEN: Newt Gingrich was the Speaker of the House during that showdown back in '95. Earlier on Piers Morgan, he compared the relationship between himself and then President Bill Clinton to the relationship between current Speaker John Boehner and President Obama.

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NEWT GINGRICH, FORMER HOUSE SPEAKER: The burden is largely on the president just by nature of the job, but the fact is that they are in a much weaker position to negotiate than Bill Clinton and I were, partly by personality and partly by design.

We both had -- and I think Dick (ph) would agree with us -- we both had a terrific capacity for compartmentalizing. So there was a part of us which would fight and a part of us which would negotiate. And we didn't let the fighting stop the negotiating. We also didn't let the negotiating stop the fighting.

(END VIDEO CLIP)

VAUSE: So with the U.S. government shut down, the finger-pointing is well under way. Both major political parties blame the other. Among those being faulted is a small group of Republican congressmen who their detractors have nicknamed the suicide caucus. Brian Todd has more.

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BRIAN TODD, CNN CORRESPONDENT (voice-over): By most accounts, House Speaker John Boehner didn't want it to get this far, didn't want to use the prospect of a government shutdown to push for defunding the president's health care law.

But according to a recent report, a small core of Republican representatives were the catalyst for the current showdown and forced Boehner's hand.

It started with a letter to Boehner in August from an obscure freshman Republican congressman from North Carolina, Mark Meadows.

The letter said, quote, "We urge you to affirmatively defund the implementation and enforcement of ObamaCare in any relevant appropriations bill brought to the House, including any continuing appropriations bill."

Ryan Lizza, who reported this for "The New Yorker," says the idea gained serious momentum.

RYAN LIZZA, "THE NEW YORKER" MAGAZINE: Some of the serious groups got behind his effort, including Freedom Works and some conservative senators, Ted Cruz, Marco Rubio, Mike Lee.

TODD (voice-over): Soon, Lizza says, the letter was signed by 80 Republican representatives.

But some influential conservatives slammed the strategy. Pundit and strategist Karl Rove wrote in "The Wall Street Journal," "It was an ill-conceived tactic that would alienate independents."

Columnist Charles Krauthammer called this group the "suicide caucus." One of the letter's signers, Texas Republican Blake Farenthold responded.

REP. BLAKE FARENTHOLD (R), TEXAS: Listen, we've got to use what few leverage points we have in a divided government. And the continuing resolution is one of them. You know, we can't move anything unless we've got some leverage.

TODD (voice-over): Farenthold says the vast majority of people in his district don't want ObamaCare. But if he is one of only 80 Republicans who signed onto the strategy early on, why did Boehner go for it?

LIZZA: He has got 233 members. And it takes right now 217 to get a majority in the House of Representatives.

So if he loses just a few members, he doesn't have his majority. So 80, even though it's not even a majority of the Republicans, it's enough for him to have to listen to them or he can't pass legislation.

TODD: Other factors, Lizza says, Boehner doesn't have earmarks to offer, like his predecessors, as Speaker. And outside conservative groups who raised money for those hardline congressmen in their districts have also siphoned power away from the speaker's office. We couldn't get a response specifically to that or to the criticism from other Republicans of this strategy from Boehner's office -- Brian Todd, CNN, Washington.

(END VIDEO CLIP)

NATALIE ALLEN: Well, Republicans and Democrats are divided on many issues. But they can at least agree on one thing, making sure the U.S. military continues to run.

VAUSE: One thing. That's about it.

Late Monday night, President Barack Obama signed off on a bill that ensures active members of the military will be paid despite the shutdown. Mr. Obama recorded this message to reassure American troops.

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OBAMA: Today I want to speak directly to you about what happens next. Those of you in uniform will remain on your normal duty status. The threats to our national security have not changed, and we need you to be ready for any contingency. Ongoing military operations like our efforts in Afghanistan will continue. If you're serving in harm's way, we're going to make sure you have what you need to succeed in your missions.

(END VIDEO CLIP)

NATALIE ALLEN: That is the situation for serving members of the Armed Forces.

VAUSE: There is still a lot of uncertainty about how the shutdown could affect military veterans. And Barbara Starr has more on that.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): For 3.3 million disabled veterans, the budget mess in Washington is about to affect them in a big way.

OBAMA: Veterans who have sacrificed for their country will find their support centers unstaffed.

STARR (voice-over): If the government shuts down and it stretches into late October, the Department of Veterans Affairs will run out of money. And that means disability and pension checks could stop for elderly and ill veterans.

Advocates are outraged.

TOM TARANTINO, IRAQ AND AFGHANISTAN VETERANS OF AMERICA: That's what they need to pay rent, to pay food. It's not their total income, but it is a significant part of it.

And taking that out of the mix because the government can't get its act together is really dangerous for these men and women who need it the most.

STARR (voice-over): Disability payments can reach $3,000 a month. For the nation's war wounded, it can be a financial lifeline. Tom Tarantino is an Iraq war combat veteran.

Tarantino: Members of Congress, members of the administration, any politician needs to understand that if you are holding veterans hostage for the sake of political gain, or if you're trying to balance the budget on the backs of the men and women who have served and sacrificed for this country, you are going to pay a political price.

STARR (voice-over): For America's 1.4 million troops still on duty and their families, the prospect of a shutdown has also brought worry about delayed paychecks, even though Congress has moved to ensure men and women in uniform, including those in Afghanistan, are paid on time.

But Eileen Huck, a Navy wife, says there is still plenty of anxiety about what may happen.

EILEEN HUCK, NAVY WIFE: Short-term you know the commissaries where we do a lot of our shopping will be shut down. And for those of us who get our health care, our children's health care at military treatment facilities, it's possible that that is going to be affected as well. Routine appointments are not going to be available.

STARR (voice-over): Still, 400,000 civilian Defense Department personnel will be furloughed until Congress and the White House reach an agreement -- Barbara Starr, the Pentagon.

(END VIDEOTAPE)

NATALIE ALLEN: All right. We've been covering this story for a good three hours now.

VAUSE: Three hours, 36 minutes for us. A lot longer for CNN.

NATALIE ALLEN: So you know we'll continue to cover it. We're going to step aside just for a moment, tell you some other stories here.

Israel's prime minister is about to take center stage at the U.N.

VAUSE: Yes, coming up, we don't know if Benjamin Netanyahu will have the Wile E. Coyote bomb with him this year like he did last year, but Iran's nuclear program is expected to be his primary focus once again. And we will go live to Jerusalem.

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VAUSE: Thousands of U.S. government workers will be turned away when they show up to work this morning. A deadlock between politicians in Congress has forced a shutdown. They failed to reach compromise, but they all will be back in session in just a few hours from now.

NATALIE ALLEN: More on the shutdown this hour. But first, some other stories that we're following.

And we begin in Iraq, where reports say more than 50 people have been killed, dozens injured in a wave of attacks in and around Baghdad. Most were car bombings in the Iraqi capital Shia neighborhoods. It appears to be the latest sectarian violence to hit that country.

Kenyan lawmakers are set to begin their investigation into possible intelligence failures ahead of the massacre at Nairobi's Westgate Shopping Mall. Legislators visited the scene on Monday and are still asking anyone with additional information to come forward. Sixty- seven people were killed during the siege September 21st. Militant group Al-Shabaab claimed responsibility for the attack.

Authorities in Chicago, Illinois, trying to solve a mystery. They're investigating why a commuter train that was parked and empty somehow moved onto a rail line and smashed into another train that was filled with passengers. Dozens of people were injured. Officials are trying to determine if there was a mechanical failure of some sort or the train was deliberately set into motion.

VAUSE: Well, just a few hours from now, Israel's Prime Minister Benjamin Netanyahu is expected to be the last world leader to address the U.N. General Assembly. And just like he did last year, Mr. Netanyahu is expected to warn the world about the dangers of Iran's nuclear program.

Jim Clancy joins us now live from Jerusalem with more on this.

And, Jim, we know last year Mr. Netanyahu had those visual aids, the cartoon bomb. He got a lot of flak for that. So I guess this year he'll play it fairly straight. But the message may be a little different.

JIM CLANCY, CNN CORRESPONDENT: Yes. I mean, playing it straight, I don't know. He's got to confront the charm offensive. That's job number one, John. Last week it was all about Iran's new president, Hassan Rouhani. Today Israel's prime ministers are going to stand up there at that podium.

He is going to try to pull the curtain back and expose what he firmly believes is an act, a ploy by Iran to appear moderate and willing to compromise in order to lift painful economic sanctions. Mr. Netanyahu is going to be telling the world, anyone who will listen, that Iran is stalling for time, and continuing to develop a nuclear capability.

It's likely that he is going to present intelligence on Iran's nuclear progress. This may be some more cards. It may be photographs, but he's going to come with evidence, trying to underscore Tehran's repeated failures to answer the questions of U.N. nuclear inspectors. He'll undoubtedly stress one of the main points that he made in the meeting with President Barack Obama Monday at the White House.

Now not the time to lift sanctions but consider increasing them to force Iran to completely dismantle its nuclear program. He doesn't want to see that program reduced or moderated in some way. He wants it gone. Some may criticize the prime minister for not embracing the change that Iran's new leader seems to be offering. That won't deter a prime minister convinced nothing has changed in Iran's drive to become a regional superpower armed with nuclear weapons. John?

VAUSE: Jim, I guess we'll be waiting for that aha moment to see if he has got the goods to back it up. But this has been a fairly important trip for Mr. Netanyahu. He met for some time with President Obama at the White House, two men who in the past, you know, don't have the best relationship, being described as frosty.

But what was it -- where does it stand now, I guess?

CLANCY: Well, I think Israel's prime minister, he had to accept that the U.S. leader is going to give Iran's new president a chance, that he is going to test the waters, so to speak. Obviously, Mr. Netanyahu thinks Obama is wasting his time. But he held his tongue and he didn't dismiss it. He sat there. He listened as the president went on.

What he did get was a firm commitment from Barack Obama that nothing, including the military option, is off the table and that the U.S. is still committed to preventing Iran from gaining nuclear arms capability. The two men seemed relaxed enough together, if you watched them there at the White House, each well knowing the political sentiments of their counterpart.

Now, Obama left the issue of Iran until the very last item during their comments after the White House meeting. It may have hinted that they were trying to play down the importance of those first contacts between the Oval Office and a leader in Iran in more than 30 years. No one, including the Iranians most likely bought that.

John, back to you.

VAUSE: OK, Jim.

Jim Clancy there live for us in Jerusalem with a preview of what we can expect in the coming hours as Benjamin Netanyahu addresses the United Nations General Assembly.

Thank you very much, Jim.

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NATALIE ALLEN: Back to -- here I am. Back to our top story, the U.S. government shutdown. And among the federal agencies affected, the National Weather Service. Ivan Cabrera, our official weather service dude, is not affected. So glad you're here. And it's hurricane season. So --

IVAN CABRERA, AMS METEOROLOGIST: Can you imagine?

NATALIE ALLEN: -- that's not a good thing.

CABRERA: Yes, no. The National Weather Service employees are going to show up for work. Unfortunately, they're not going to be paid. Hopefully they'll be retroactively paid. But for now working for free. So here's the bottom line.

The worst agencies going to be impacted here is going to be NASA. They're going from 18,000 employees to 600 essential employees. We have satellites up there that need to be operated.

We also have six human beings in the International Space Station that need, of course, continuous assistance. So we're not going to leave them hanging. And that's why we have the 600 that are going to stay on the job.

Again, all NOAA employees stay on the job. If you're wondering if that's just to let you know whether it's going to rain. No, I can do that and your local weather person can, too. That is mainly for aviation safety.

You cannot be a pilot and fly into unknown weather. You need to know what the forecast is going to be. So again, National Weather Service, National Hurricane Center, that all falls under the umbrella of NOAA. They're all going to remain open.

Now, this is interesting. Federal aid, as you recall the tragedy in Colorado there, the flood that we just had last few weeks there. That aid supposedly continues there. The money will continue, but there may be some interruption as far as the reconstruction efforts there until we can get the government to do its job.

All right. Let's check in on one of the satellites that NOAA does operate for us here. And we wouldn't be able to show this to you without their employment there. And, my goodness, this was Wutip, a dangerous typhoon that made landfall just in the last 24 hours.

Let's show you some of the pictures if we have them from the typhoon as it made landfall and impacted not only with Hainan, there in southern China, but also of course with Southeast Asia, including Vietnam, where the eye wall made landfall there with torrential amounts of rain and damaging winds.

The worst of the -- as far as the fatalities here, not from the storm making landfall here, but for now, it was those fishermen that we lost at sea. Still 74 unaccounted.

Three fishing vessels going down in the South China Sea as a result of what you're seeing there, that typhoon. And now we're getting reports as well of upwards of 30 people lost as well as a result of the rain. Almost 300 millimeters falling in part of Cambodia, Laos, and there you see in Vietnam.

But at this point, there you see the spin kind of disappearing? Our system fading away. So thankfully things are getting back to normal. They're going to take some time to recover here. And they are going to have a little bit of a breathing room here. But the next storm, it's not going that way. It's going to the north.

This is Fitow. This is going to be our next weather-maker here over the next few days. I do think this will become a typhoon about the time we're talking tomorrow, in 24 hours, and then potentially a strong typhoon. So warnings and watches will be posted for the southern Japanese islands. We only have three days to prepare for the potential of a 200-kilometer-per-hour storm raking the Japanese islands.

And then eventually of course getting into Korea by the time we get into the weekend. As far as Sepat, this thing is just going to again potentially going to cause some delays with gusty winds in Tokyo in the next 24 to 48 hours. Not making a direct landfall here and the system is weakening as it's approaching Japan here. So certainly excellent news. We need that in the weather department.

But as I mentioned, the Western Pacific will remain a hotbed for typhoons the next few days. The computer model forecasts are still indicating two additional strong storms in the next few days. We'll continue to watch that.

Quick check on Europe here, if you're watching us from Europe. An new system approaching France here. And this one across the southeastern Balkans, look at this, 249 millimeters of water in just 12 hours. The monthly average there in Croatia in that location, 165.

So they had some issues there with flooding as you can well imagine. That storm system now beginning to move off to the east. We'll keep you posted on that and of course on the action in on the tropics as well.

NATALIE ALLEN: All right, there is a lot of that. Thank you, Ivan. Glad you're with us.

VAUSE: Glad your maps are still working.

CABRERA: They are.

VAUSE: At least for now.

CABRERA: Yes, indeed.

VAUSE: Thanks, Ivan.

NATALIE ALLEN: All right. Pope John Paul II is said to be canonized just nine years after his death.

VAUSE: In fact, the Vatican has revealed that Pope John XXIII will also be declared a saint April 27th next year. Big day for declaring saints.

NATALIE ALLEN: Absolutely.

VAUSE: And Ben Wedeman has more from Rome.

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BEN WEDEMAN, CNN CORRESPONDENT (voice-over): John Paul II hadn't even been buried when the cries came from the faithful attending his funeral in 2005. "Santo Subito," short for make him a saint now. Their call was heard. And bypassing the normal five-year waiting period, Pope Benedict XVI set in motion the process to canonize his predecessor.

To be named a saint involves a series of steps, but the qualifications are straightforward, says veteran Vatican analyst John Allen.

JOHN ALLEN, CNN SR. VATICAN ANALYST: You put a holy life and two miracles together according to the Catholic system, you've got a saint.

WEDEMAN (voice-over): John Paul is said to have miraculously cured a French nun, Sister Marie Simone Pierre (ph), suffering from Parkinson's disease, several months after his death.

The church says the second miracle occurred when a Costa Rican woman with a brain aneurysm recovered after praying to John Paul.

Pope John XXIII, revered for his role in the Second Vatican Council, is only recorded as having performed one miracle after his death in 1963.

JOHN ALLEN: So in the case of Pope John XXIII, Pope Francis has decided there already was a decree of heroic virtue, saying the man had lived a holy life; there already was one miracle certified for his beatification in 2000. So Pope Francis has decided he doesn't have to pass go and doesn't have to collect $200. He can go directly to sainthood.

WEDEMAN (voice-over): In fact, canonization by the Catholic Church merely formalizes on Earth what is already in place in heaven, Allen points out.

JOHN ALLEN: It's not like Carlo Bertia (ph), John Paul II, will suddenly become a saint when the canonization ceremony occurs. The belief would be he is already in heaven with God, living the life of a saint. All that is going to happen when the canonization ceremony occurs is that the church will officially recognize that.

WEDEMAN: When John Paul II was beatified in May of 2011, more than 1 million people came here to attend the ceremony. And it's expected when the canonization of these two popes takes place on the 27th of April next year, even more will come to the Vatican -- Ben Wedeman, CNN, Rome.

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NATALIE ALLEN: All right. The U.S. government will take a miracle or two about now. Because it's going to take a toll on millions of people.

VAUSE: Why it's going to make New York's Liberty Island a very lonely place. That's coming up on CNN's live coverage of the U.S. government shutdown.

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REP. STEVE ISRAEL (D): The American people deserve two things, a government that stays open and a Congress that communicates. Our view is we should keep the government open and communicate with a conference. The Republican view is you can only do one. You can talk but close the government and the American people deserve better than that.

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NATALIE ALLEN: You're watching our live coverage of the U.S. government shutdown.

VAUSE: Congress will be back in session about six hours from now. We'll see then if congressional Democrats and Republicans can come up with a compromise that ends the shutdown and reopens the federal government.

NATALIE ALLEN: Hope so. This is not the first time a government shutdown has happened. Budget battles curtailed U.S. government activities twice during the 1990s.

VAUSE: The federal government shut down for 21 days, from December 15, 1995, to January 6, 1996.

NATALIE ALLEN: I remember it well because I was in the CNN anchor chair back then.

VAUSE: Good times.

NATALIE ALLEN: And before that -- good times -- for five days from November 13th to November 19th in 1995. U.S. officials say those shutdowns cost a combined $1.4 billion and 800,000 federal employees were furloughed.

VAUSE: And among the places which will be affected by this stalemate in the United States, museums and of course national parks.

NATALIE ALLEN: One of the most revered sights in the entire world is included. Poppy Harlow tells us the very symbol of America will be seen by tourists and patriotic Americans only from afar.

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POPPY HARLOW, CNNMONEY.COM CORRESPONDENT: Liberty Island was slammed by superstorm Sandy, closed for eight months. Now another shutdown.

HARLOW: What does it mean for to you visit the Statue of Liberty?

STACY GARCIA (PH), LIBERTY ISLAND VISITOR: Freedom, liberty. That's why I'm in America. So, to hear that the government is shutting down, it's like, what have we come to?

HARLOW (voice-over): Stacy Garcia (ph) is among the last visitors to the island. UNIDENTIFIED MALE: (Inaudible) statue (inaudible) Lady Liberty.

HARLOW: So along with a government shutdown comes the closure of all the nation's national parks, and that includes Lady Liberty. So for folks coming to New York to see the iconic Statue of Liberty, this may be their last chance in who knows how long.

UNIDENTIFIED MALE: It's going to be awful. It's also going to damage the economy in ways that nobody has bothered to calculate yet. It's just mindless.

HARLOW (voice-over): With more than 280 million visitors a year from Yellowstone to Yosemite to the Grand Canyon, more than 400 national parks are now closed.

ROBERT SIEGERT, TOURIST FROM INDIANA: I'm not going to let Congress, you know, make me miss the Statue of Liberty, which is so important to me as a retired history teacher.

HARLOW (voice-over): Tourists turned away. More than 21,000 national parks employees furloughed and thousands more, like clean-up crews and concession stand workers, all left without jobs.

VICTORIA DUNCAN, EMPLOYEE ON LIBERTY ISLAND: I have to find another job if, like, they're not paying us while we're laid off or file for unemployment. But it's still not going to be enough. It's hard; even to think about, it's hard to think about.

HARLOW (voice-over): Quinn Agard (ph) says he needs this job just to get by. And he doesn't have a plan B.

HARLOW: Do you have a message for Washington?

QUINN AGARD, EMPLOYEE ON LIBERTY ISLAND: Things like this can have such a big impact on the people that aren't in the limelight, you know, the people that are working hourly positions at spots. This whole island will be shut down. So that's a ton of different positions that people won't be working and won't be getting paid for.

UNIDENTIFIED MALE: New York City's boat is headed back to New York City, guys.

HARLOW (voice-over): Liberty Island sees up to 4 million visitors a year, 20,000 a day in peak season. That's $17 per ticket for adults. That's big money.

UNIDENTIFIED MALE: Even more than the money, it's the fact that there are folks that, you know, this is a once-in-a-lifetime opportunity for a lot of folks.

HARLOW (voice-over): An opportunity that means a lot for so many, like Stacy Garcia (ph) -- Poppy Harlow, CNN, New York.

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NATALIE ALLEN: Well, as we said, they're all coming back to try to figure it out in the morning.

VAUSE: Yes. Just a few hours from now, continuing coverage here on CNN, of course.

NATALIE ALLEN: We want to say goodbye to our viewers right now in the United States. But there is much more live coverage of the shutdown ahead here on CNN. I'm Natalie Allen at CNN Center.

VAUSE: I'm John Vause. Stay with us. "WORLD BUSINESS TODAY" is coming up with Nina dos Santos in London and Pauline Chiou in Hong Kong.

See you later.

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OBAMA: Unfortunately, Congress has not fulfilled its responsibility. It's failed to pass a budget.

JOHN BOEHNER, SPEAKER OF THE HOUSE: The Senate has continued to reject our offers.

SEN. HARRY REID, MAJORITY LEADER: We like to resolve issues, but we will not go to conference with a gun to our head.

ZORAIDA SAMBOLIN, CNN HOST: The U.S. government shutting down after the Congress fails to pass a spending plan and this morning how the shutdown is going to affect you as leaders from both political parties continue to play the blame game.

On that note, we're going to say good morning to you and welcome to EARLY START. We are here for you, right?

JOHN BERMAN, CNN CORRESPONDENT: That's right. The government is not but we are here.

SAMBOLIN: I'm Zoraida Sambolin.

BERMAN: And I'm John Berman. It is Tuesday, October 1st, it is 4:00 am in the east. And welcome to the wonderful world of the shutdown.

Actually you know what, it's not wonderful at all. Frankly, it is embarrassing and a lot of people are being hurt.

It was a late night in Washington with the House and Senate each voting and each passing their own plans to keep the government running.