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THE LEAD WITH JAKE TAPPER

Government Shutdown; Interview With Pennsylvania Senator Pat Toomey; Interview with Senator Dick Durbin of Illinois; Paul Ryan Proposes Debt Limit Compromise In Op-Ed

Aired October 9, 2013 - 16:00   ET

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


JAKE TAPPER, CNN ANCHOR: Congress' approval rating drops to -- ready for this -- five percent, five percent, which begs the question, who exactly is this five percent?

I'm Jake Tapper. This is "THE LEAD."

The national lead, everyone agrees on one thing, the families of our fallen troops deserve their death benefits now, but other than that, the shutdown is spreading, including to the agency that makes sure our nuclear power plants don't explode.

And we hit it in eight days. To hear some tell it, the U.S. could enter a catastrophic default if we don't raise the debt ceiling.

Other's say that's a "Chicken Little" way of thinking. What's the truth?

And the pop culture lead. Just like any long-running soap opera, the government is repeating a lot of the same plotlines, but there's just something about total government dysfunction that really gets the creative juices flowing in Hollywood.

Good afternoon, everyone. I'm Jake Tapper. Welcome to THE LEAD.

We will begin again this national lead. This is day nine of the partial government shutdown. The stalemate is so deep at this point, the media is reduced to seizing on the tiniest gestures from our elected officials to see if there is any sign of headway. Is the president listening intently or is he just suppressing a sneeze?

Is House Speaker John Boehner smiling? Is he pleased? Or is he just checking to see if he has something in his teeth? President Obama is starting to hold meeting with party caucuses from the House and Senate to talk about reopening the government and raising the debt limit, which the U.S. will hit next week.

You may not think that closing parks is necessarily such a big deal, but how about I told you that the agency that monitors the nation's 100 commercial power plants is thinking of furloughing? The Nuclear Regulatory Commission says it's out of money and it's now going to furlough most of its workers this afternoon.

The patience of the American people is dropping every day this goes on. In a new Associated Press poll, the approval rating for Congress dropped to 5 percent, 5 percent. As a friend of mine remarked, when you factor in the margin of error, Congress may now be less popular than al Qaeda.

President Obama fares better in the new AP poll, though his approval rating is still dismal at 37 percent. The president has indicated a willingness to accept a short-term deal with Congress, but only after Congress votes to reopen the government and raise the debt ceiling even just for a few weeks. The White House thinks the GOP will ultimately bend.

(BEGIN VIDEO CLIP)

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: In the end, he believes Congress will do the right thing. It's unfortunate that we have to go through these manufactured crises.

(END VIDEO CLIP)

TAPPER: Meanwhile, a House Republican tells me his party is now considering a new plan that would reopen the going to and raise the debt limit in exchange for a slew of Republican priorities, such as changing some entitlement programs and paving the way for new tax reform legislation.

House Budget Committee Chairman Paul Ryan detailed much of it in an op-ed for "The Wall Street Journal," but there was one word that did not appear in this op-ed, Obamacare. Remember Obamacare? That's the reason we have this government shutdown?

House Speaker John Boehner today returned to the floor of the House to focus on Obamacare.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: What a train wreck. How can we tax people for not buying a product from a Web site that doesn't work? How can you give big businesses a tax break and leave hardworking families out in the cold?

(END VIDEO CLIP)

TAPPER: There's one area of some seeming agreement to report today. The Pentagon made a deal with the charity Fisher House to restore death benefits to the families of fallen servicemen and servicewomen. And the House voted unanimously to start paying those benefits out again. More on that later in the show, but let's turn back to this new potential House GOP plan.

Can it gain traction in the Senate? Is there any sort of opening there?

Let's bring in Republican Senator Pat Toomey of Pennsylvania. He also serves on the Senate Budget Committee.

Senator Toomey, thanks for being here.

SEN. PAT TOOMEY (R), PENNSYLVANIA: Thanks for having me, Jake.

TAPPER: Do you think at this point, the only way out of this is some sort of big grand bargain type deal, such as the one I described earlier in the show?

TOOMEY: I think a big grand bargain is quite unlikely, Jake.

Honestly, I think the biggest problem is the president's insistence that he will not negotiate. The president thinks that he should be the first and only president in modern times not to have to address the most challenging issue that faces our country, which is getting our spending, getting our fiscal house in order.

Every previous president in my lifetime has agreed to address those things and done so over the debt ceiling and the funding of the government. This president thinks that he should have nothing to do with that. That is completely unreasonable.

I, for one, and many of my Republican colleagues would be very flexible about the many things we could do to begin to get on a sustainable fiscal path, but when you can't have a conversation with the president until he gets everything he wants, it's really hard to make progress.

TAPPER: I don't know that the public shares your view of what's transpired in the last few weeks.

Let's put of the latest Gallup favorability numbers on both parties. The Republican Party is down 10 percent since last month . It's now at a record low in the Gallup poll, 28 percent.

Senator, how low do the GOP's poll numbers have to go before your party realizes the American people does not approve of what Republicans in Congress are doing?

TOOMEY: I don't think the American people approve of what the president is doing, refusing to negotiate. I don't think they approve of what Senator Reid is doing by rejecting every Republican-passed bill.

You know the House has passed four different bills, each in which they move closer to the Democratic position, and Senator Reid chooses not to take them up.

Look, I'm as frustrated as anybody is on this. I never thought it was a good idea to insist on the complete defunding of Obamacare in return for funding the government, because I never thought that was achievable, but it's obvious that this bill is badly flawed.

Speaker Boehner is right when he points out that the president has granted all kinds of waivers to other groups, but yet individuals are being forced to buy a product on an exchange that doesn't work. So is it really unreasonable to ask for a delay for individuals and families who are subject to that? I don't think that's unreasonable.

TAPPER: I don't think the American people think that trying to alter or improve Obamacare is unreasonable. I think that, based on polling, they feel the way you say you do, which is trying this to funding the government is irresponsible and unreasonable. And that's what House Republicans did.

TOOMEY: Well, you and I disagree about that.

I think when people realize that the only vehicle we have to bring this administration to the table on making even some modest tweaks to Obamacare, on doing anything about achieving some fiscal discipline, these are the only vehicles for us. I would remind everything that it was in 2011 over the debt limit that the president agreed to spending caps that are scheduled. If we live with them, they will save $2 trillion, which isn't nearly enough, but it is an important start.

That was agreed to over the debt limit. And this is the only time we have been able to get this president to agree to do anything to solve the actual problem we have.

TAPPER: Let's turn to the debt limit in the two minutes we have left. You and many Republicans are arguing that it is, as you say, irresponsible for the Obama administration to suggest that we are going to default on our debt if we go past this October 17 deadline.

You're not saying that it's no big deal if we do it? I mean, you are a reasonable man. You believe that we should raise the debt ceiling before October 17, right?

TOOMEY: I would much prefer that we find a way to make some progress on the underlying problem and raise the debt ceiling, because it will become disruptive if we go for an indefinite period of time without raising the debt ceiling.

But I will also say that it is completely untrue that we will necessarily default on our debt. You know, the ongoing tax revenue coming into Washington is about 12 times what it takes to service our debt. The payment mechanism is separate for debt service from all over payments.

So the treasury secretary and the president would have to willfully choose to create a financial catastrophe by defaulting on our debt. I would certainly hope they would never choose to do that. I would rather they come to the table, let's work on something that begins to solve our problem, and then let's not have to confront this.

TAPPER: But if they choose to pay down the interest on the debt, as you say, there are other things, Medicare checks, payments to the military, other items that might not go funded.

And even if we're talking about paying the debt and whether or not that would cause a default, you remember Lehman Brothers, what happened when that collapsed. You remember what happened when the House Republicans failed to pass TARP. The stock market, the retirement savings for all those Pennsylvanians you represent, that would go down hundreds of points.

TOOMEY: Jake, it's not clear exactly what would happen. I don't know that you or I can predict exactly what the stock market is going to do.

Interestingly, the bond market has been -- you know, the biggest market in the world, has been watching this whole debate, and it hasn't budged. So investors in U.S. treasuries don't seem to be too worried that they're not going to get their interest and principal payments.

By the way, I have introduced legislation that would require the treasury secretary to prioritize interest on our debt, Social Security payments, and active-duty military, including the provision that in the event that on any given day there weren't enough cash to honor those payments, the Treasury would be authorized to borrow such sums as necessary.

TAPPER: Senator, you say...

TOOMEY: Look, that's not the path that we want to go down.

TAPPER: Right.

TOOMEY: But I can't control the outcome of a vote, and I can't bring -- force a president to be reasonable about these things. We should at least have a contingency in place that minimizes damage.

TAPPER: You can't predict. I can't predict.

TOOMEY: Right.

TAPPER: The people who are paid to predict, like Morgan Stanley research analysts, they say we're entering an econ DEFCON 3, jitters rising, financial conditions tightening.

You really believe there's not going to be any negative market reaction if we got past this deadline and it won't hurt your constituents' retirement?

TOOMEY: I didn't say there were no negative consequences.

But, also, I would point out Moody's put out a memo just two days ago in which they made it very clear there would be no default on our debt even if the debt ceiling were not raised and there would be no threat to the creditworthiness of the United States.

As I have said before, this is not the path that I prefer. My preference is that we have a president who would actually take on the responsibility of his office and sit down with us and address the fundamental problems that cause us to keep borrowing so much money.

We're spending too much. And I'm not asking to completely solve the problem. How about we make just a little bit of progress? I don't think that's unreasonable.

TAPPER: Well, I can't disagree with your final point. I really hope that we do make some progress.

Senator Pat Toomey from the great Commonwealth of Pennsylvania, thank you so much for talking to us.

TOOMEY: Thanks for having me, Jake.

TAPPER: Coming up: The president was -- quote -- "disturbed to learn" death benefits were cut off to military families. A move was made to fix that today. But why did he not know this was going on?

And 2016 keeps coming up, whether New Jersey Governor Chris Christie wants it to or not. Hear what he had to say. That's fueling even more speculation about his possible presidential candidacy.

(COMMERCIAL BREAK)

TAPPER: Welcome back to THE LEAD. I'm Jake Tapper.

More now on our national lead. In just a few minutes, President Obama will be meeting with House Democrats about, guess what, this ongoing stalemate over the government shutdown and the looming debt ceiling deadline. And, tomorrow, House Republicans will get their turn for some face time with the president. It's great that they're all finally talking. But will this lead to any action?

Joining me now live is Democratic Senator Dick Durbin of Illinois.

Senator Durbin, thanks for being here.

One thing that the Republicans say that does seem to have some resonance is, President Obama's message is, "I'm not negotiating, I'm not negotiating, I'm not negotiating." That's just not how this works. They point out there have been previous negotiations over both opening the government and the debt ceiling.

Why is it so unreasonable to expect some sort of negotiation?

SEN. RICHARD DURBIN (D), ILLINOIS: Because the president remembers what happened two years ago when the Republicans again threatened not to extend the debt ceiling. It was devastating to our economy. It took money out of our economy, out of people's savings account and retirement. It jeopardized the credit rating of the United States of America for the first time in history.

The president said, this president and no president should ever face that kind of blackmail. He said he will negotiate, but only after we've reopened the government and paid the bills.

TAPPER: But surely you agree we're not in the situation -- you can see John Boehner, maybe you would be a better speaker than John Boehner if you had stayed in the House and the Democrats had kept the House. But you're watching him, you understand he can't bring nothing back to his caucus. There needs to be some sort deal.

You understand the politics of this. Why is just denying Boehner anything, even things that you know, for example, President Obama has offered before, such as tweaks to entitlement or social welfare programs, such as a promise for tax reform? Why is that so unreasonable? DURBIN: There was a headline in one of the local Hill newspapers, which said the Republicans don't know how to get out of this mess. They really have reached a point.

I mean, remember what they started off by saying? Senator Cruz said this was all be defunding Obamacare. We haven't heard that in a while, have we?

I mean, what's happened here is the Republican script keeps changing. They're trying to find an end game and they can't find it.

Let me tell you what the end game should be and it should be an honest one. Reopen, the government, pay our bills and then we'll sit down and discuss all of these things. The president said that. I would say that. Let's have a meaningful discussion about our deficit, about health care, about the farm bill -- put it all on the table.

TAPPER: Whether or not you feel like you have the moral high ground and President Obama feels like he has the moral high ground and Senator Reid feels like you have the moral high ground, at the end of the day, we're all in this right now and they need -- if you say he needs a way out of it, Boehner needs a way out of it? Fine. He needs a way out of it. We get it. Their approval ratings are far worse than the Democrats' approval ratings or President Obama's approval ratings.

But we are all in this. The government's is now opening. Veterans are not getting their checks. There are kids who depend on formula through the WIC program. And we need a way out of this. Not to mention the debt ceiling.

Why isn't the Democratic Party not doing anything to acknowledge the reality of where we are and trying to figure out a way to get out of it together? It doesn't matter how we got here to a degree. We're here.

Now what?

DURBIN: Well, Jake, I think you probably would guess, and it would be true, there are conversations under way as to what we will discuss, you know, what we will negotiate over, what things will be on the table. But what we said is open the government, pay our bills and let's have this honest conversation.

Think about this. We're going to face this regularly, the next time this continuing resolution, temporary spending bills expires, the next time we have to extend the debt ceiling for bills we've already incurred -- this is going to come over and over again. And if each time we lay off 800,000 federal workers, or end up interrupting the services this government, or jeopardizing our international credit rating, it's disastrous for a great country like America.

The president is trying to establish a standard of conduct that is reasonable and bipartisan and puts everything on the table. I think that's the way to approach it. TAPPER: Senator, Obamacare has ruled out in the last week. It's hard to argue that it's been a super success. I don't know what you're hearing in Illinois. But what we're hearing here is people are still having a lot of problems getting onto the Web site, signing up. There is a mandate that individuals get this health insurance by the end of the year, even if they can't get onto the Web site.

What is so crazy about delaying the individual mandate --

DURBIN: Oh, no.

TAPPER: -- given the fact that so many people are having trouble even getting in and signing up?

DURBIN: Jake, the reason why the people -- and I've been online because members of Congress are going to be buying their health insurance through they insurance exchanges.

TAPPER: Right.

DURBIN: I went online and I was able to price it. I'm going to pay more in my income category. Of course I should.

But those who are in the middle and lower income categories are getting premiums that they can't believe. They are so low.

Why are they so low? Because there would be a mandate that says everybody has to buy health insurance. And what that -- unless you're satisfied with what you have, everybody has to have health insurance, at least through the exchange. Why does it make a difference? If the insurance pool is just open to those who are really sick, imagine what the premiums will be. We want everyone in the pool.

I had a meeting yesterday with a surgeon.

TAPPER: They can't get on the pool, though, Senator.

DURBIN: Well, but let me explain this to you. We have 9 million people who've already tried to get online. I think the number is even higher.

I met yesterday with a surgeon from Boston, who's well known, Atul Gawande is his name. He said -- a prominent author. And I said, "How did the Massachusetts plan, Romneycare, how did get that started?" Oh, he said, "We had some problems at the beginning with our Internet, getting online, but once that was smoothed out, it's 98 percent of Massachusetts residents now have health insurance."

So, let's let a few glitches at the beginning sour the ultimate goal of giving people who have never been able to afford health insurance, never had health insurance, this kind of protection for the first time in their lives.

TAPPER: I would argue it's more than a few glitches. But before you go, Senator Durbin, I want to ask you, you mentioned something a few minutes ago about conversations that have started about where this might ultimately lead. What can you tell us about that? Are these bipartisan conversations?

DURBIN: Oh, yes, they are.

And, of course, we kind of made it clear, we're open to these conversations. Once you open the government, once we pay or debts, we're ready to do it.

And I -- some of us have some credibility, some cred, if you will, with folks on the other side. We've worked with them on bipartisan measures like immigration reform and student loan reform and the farm bill. We can work together on a bipartisan basis.

I don't know what's going to happen in the House, but the Senate ought to roll up its sleeves and get to work on this.

TAPPER: All right. Senator Dick Durbin, with cred, I appreciate you keeping it real. Thank you very much. Appreciate it.

DURBIN: Thanks, Jake.

TAPPER: Let's check in with our political panel in the green room.

Kevin Madden, Senator Ted Cruz told "People" that the shutdown has affected his family too. The Texas lawmaker says on their weekend trip to the capital this weekend, his family had to go apple picking instead of visiting the monuments and museums. Now, between this and the fact there's no towel service in the congressional gyms, I ask you, will this madness ever stopped?

KEVIN MADDEN, CNN CONTRIBUTOR: Yes, I don't think that's going to get much sympathy from folks. The fact is we -- it looks like we've gone from Marie Antoinette and to let them eat cake to let them pick apples. Not going in the right direction.

TAPPER: No towel service.

MADDEN: Right.

TAPPER: We'll be right back with more.

(COMMERCIAL BREAK)

TAPPER: Welcome back to THE LEAD. Now, it's time for the politics lead.

House Speaker John Boehner was on the House floor today, once again railing against Obamacare.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: Our message in the House has been clear. We wanted to reopen the government and provide fairness to all Americans under the president's health care law.

(END VIDEO CLIP)

TAPPER: Has the message in the House really been pretty clear? I'm not sure about that.

In an op-ed in "The Wall Street Journal" today, Congressman Paul Ryan seemed to steer away from defunding of the Obamacare law specifically, and he proposed instead something of a grand bargain, more general entitlement reforms and tax reforms.

So, did the goal posts just move? Is Obamacare still enemy number one for the GOP?

Let's bring in our panel.

CNN contributor and Washington correspondent for "The New Yorker" magazine, Ryan Lizza; senior advisor for the Ready for Hillary SuperPAC, Tracy Sefl -- that's a new description we have for you, very exciting; and CNN contributor and former adviser to the Romney campaign, Kevin Madden.

Kevin, there was kind of a -- I wouldn't say snarky, but it wasn't without judgment, a tweet from Amanda Carpenter, who is speechwriter, communications adviser for Ted Cruz, this morning, noting that the Ryan op-ed did not include the word "Obamacare." And it didn't. He was looking for a way out, and he didn't talk about Obamacare.

Is this where the Republican Party now hopes to go?

MADDEN: Well, I think you're looking at that -- I think he laid out a vision for what happens after the 2014 elections. That may not be the people's most -- their greatest desire, but I think 2014, for all intents and purposes, is going to be focused -- Obamacare will be the center of the universe.

So many Republicans right now see it as a vehicle to argue about the economy, to argue about the growth of government, and to argue about what Republicans can do to draw a contrast with their Democratic opponents. So, I think when I looked at that op-ed from Paul today, I said this what -- this looks like what the future of the Republican Party can be. But right now, I still think it's focused entirely on Obamacare.

TAPPER: Obamacare, the subject that we would all be discussing right now, Ryan, if it weren't for the fact that the government has been shut down and we're facing the debt ceiling.

RYAN LIZZA, THE NEW YORKER: Look, what happened is Ryan, Boehner and Cantor had a strategy for this whole fight, right? Their strategy was use the debt ceiling as leverage to force a major agreement on the business fiscal issues, entitlement reform and tax reform.

And it got hijacked, right? It got hijacked by the populist to libertarian right wing of the party, with Ted Cruz and some of the outside groups. And they decided actually the fight we want to have is over government shutdown and Obamacare. And Boehner was forced to have that fight.

Now, what it looks like to me is Boehner, Ryan and Cantor are trying to steer things back to the original battle they wanted. Of course, you know, it's like, you know, you want to be in one ballots, but unfortunately you've led the troops into a separate battle. You haven't finished that one yet, and yet you're trying to fight Obama here. And that's how -- Boehner is a little trap.