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CROSSFIRE

Republicans Surrendering?

Aired October 11, 2013 - 18:28   ET

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


(BEGIN VIDEO CLIP)

ANNOUNCER: Tonight on CROSSFIRE, the government is still closed, the debt limit isn't raised, but everyone is still talking, including the president.

UNIDENTIFIED FEMALE: He may not want to call it a negotiation. That's what I would call it.

ANNOUNCER: But are the Republicans folding on Obama care?

On the left, Stephanie Cutter. On the right, S.E. Cupp. In the CROSSFIRE, former Governor Brian Schweitzer, Montana's first Democrat to hold the office in 20 years, and Congressman David Schweikert, a Tea Party ally who wants Speaker Boehner to hold firm. Going and coming, but can they get a deal? Tonight on CROSSFIRE.

(END VIDEO CLIP)

S.E. CUPP, CO-HOST: Welcome to CROSSFIRE. I'm S.E. Cupp on the right.

STEPHANIE CUTTER, CO-HOST: And I'm Stephanie Cutter on the left.

So Republicans spent the day at the White House. They've agreed to keep talking with President Obama, but what they're really discussing are the terms of their surrender.

Their tone has almost shifted completely overnight. We're no longer talking about defunding or delaying Obama care or defaulting on our debt. It's a major shift. More and more Republicans are coming out every today calling the Ted Cruz shutdown plan a dumb idea. So it looks like Republicans are finally listening to the country.

CUPP: Well, before you unfurl the "Mission Accomplished" victory banners, let's call it like it is. Nothing has changed yet. The government isn't reopened. The debt ceiling has not been lifted, nearly or otherwise. In fact, the only thing that's actually changed is President Obama is finally back at the table after promising he would not negotiate, and he's reportedly considering bills that might fundamentally change Obama care.

So let's not count the chickens before they've hatched and see where this goes.

In the CROSSFIRE tonight, Montana's Democratic former governor, Brian Schweitzer, and Arizona Republican Congressman David Schweikert. Now, for the sake of ease, gentlemen, you will be Congressman, and you will be Governor.

REP. DAVID SCHWEIKERT (R), ARIZONA: Yes, without last names. I think your producers took you to school a little bit with our last names.

CUPP: We'll make it very clear for the audience. Governor, House Republicans have proposed a clean six-week debt ceiling raise, to which Harry Reid responded, "Please."

Then we heard they also want to set up immediate talks to negotiate reopening the government. Senate Republicans want to reopen the government and repeal that medical device tax, a couple of other things. Are Democrats going to learn how to say yes at some point?

BRIAN SCHWEITZER (D), FORMER MONTANA GOVERNOR: I hope they do, but listen, a six-week delay on this is like kissing your sister. The markets are not going to be happy with this. The markets are going to continue to say, "Oh, my God, how are the politicians going to screw it up six weeks from now?"

Look, it's the full credit and faith of the United States in America. And people can say, "Well, that doesn't matter. It's only a few percent here and a few percent there." Full faith and credit.

CUPP: You want them to say no?

SCHWEITZER: I want them to say, "We're not let's not use it as a negotiating chip. But get that done, and if we want to make the government smaller, I've got ideas. In fact, I haven't heard a lot of congressmen on the Republican side with ideas on how to make the government smaller. I'll give you a big list.

You could start right now. You could say, "We're going to have vacancy savings." When somebody retires from the federal government, we won't replace them. And we'll do, say 5 or 10 percent of them. If you just incrementally did these things, you wouldn't hurt these programs, but you could make government more efficient. Why aren't you putting those kinds of things forward?

SCHWEIKERT: Obviously, you haven't been listening to many of us on the House Republican side. For many of us, we've been laying out repeatedly, and for people like myself, who have also been trying to deal with the reality of how bonded indebtedness (ph) works in the House. So those are many of the ideas we have.

But think about how the miraculous thing should happen: we have a president who's actually now engaging in a conversation. For weeks and weeks, saying, "I'm not talking to you guys."

And the fact of the matter is you look at the success of the '90s, where you also had divided government. It was a conversation. Now, they had to go through a shutdown dance and learn how to communicate. Maybe, maybe that's what's about to happen, is the adults are coming into the room and realizing that a divided government, there are ideas out there on both sides...

CUTTER: We have to talk. Let's talk about the adults in the room.

So the president has made clear, and nothing has changed here, that he's not going to negotiate over our full faith and credit.

SCHWEIKERT: Nor should he.

CUTTER: Right. So he's not good to do that. He's also not going to negotiate on anything until the government reopens. And that still remains the position.

However, in the discussions -- you know, I was not in the room today. S.E. wasn't in the room. We're just reading what's out there. My understanding is that you guys have completely folded on Obama care. We're not delaying; we're not defunding. You have a big proposal out.

SCHWEIKERT: Let's walk through something here. Our fourth offer that was also just tabled by our beloved majority leader in the Senate, basically was nothing but an argument for fairness, saying look, individuals deserve the same treatment as big business and big labor. And, oh by the way, those of us in Congress should also live under the law as written. And it was stunning: We didn't even get a counteroffer back on that. But that was a lot of...

CUTTER: And you know why. You know why, right?

SCHWEIKERT: Well, I...

CUTTER: Because this is a problem that you created, because you followed Ted Cruz off that plank into shutting down the government. And why should Democrats negotiate reopening the government with you when they've already agreed to significant budget cuts, a budget that you wanted, and this really was just a political ploy over Obama care? The American people now know that.

SCHWEIKERT: A fine talking point, but it actually loses a lot of substance in the math.

The reality of it is, for many of us, when you're moving into another multitrillion-dollar entitlement at the same time where we all agree, as right and left, that we have a stunning debt crisis coming at us near the end of the decade, it's the honorable thing to stand up and say, "We can't afford this, and we're in real trouble if..."

SCHWEITZER: Look, I'm going to save you a lot of trouble. I'm going to buy 535 $2 calculators and give it to the members of Congress. So far you proposed we shut down the government but continue to pay the people who aren't working. You've also suggested that it may be all right if interest rates go up a little bit.

SCHWEIKERT: Actually...

SCHWEITZER: You proposed that the government ought to do this. Let's sell Freddie Mac, and let's sell some other real estate. That's like a guy that has a 1,000-acre ranch, can't pay his debts, so he sells 40 acres at a time, and pretty soon you're out of business.

SCHWEIKERT: Well, that's actually sort of a ridiculous statement. One of the things I've worked for is how do you do debt management? How have they done it in Europe, with the countries that succeeded? How would you do it on your ranch?

The fact of the matter is we're $600 billion short. So we're 16 percent short of spending to our revenues for the coming year. How would you cover that shortfall?

SCHWEITZER: Here's how you would do it on a ranch. You asked how you would do it on a ranch?

SCHWEIKERT: Borrow more money?

SCHWEITZER: No. On the years where you have a big crop, you pay it down. On the years you have a weak crop, you get the banker to help.

SCHWEIKERT: God bless you. And tell me the last time that this president forged any attempt to pay down the debt. And you start to -- but you walk through...

SCHWEITZER: You have to pay attention. Because if you've noticed, a few trillion dollars have turned the other way just in the last year. Some of it is increased revenue, and you must remember the sequester. That decreased spending. We have...

SCHWEIKERT: And yet -- and yet the long-term fiscal outlook that was just...

SCHWEITZER: Is better.

SCHWEIKERT: Absolutely not. It was just published last week. It's almost a 50 percent worse, because the economic outlook for GDP growth has been cut dramatically. We hit 100 percent of GDP to debt in half the time.

SCHWEITZER: That's running your business looking in the rear- view mirror.

SCHWEIKERT: No, no. That's actually the budgeting. That's the budgeting that's in front of us. If we're going to play the truth with math -- and math is my thing -- it's how do you turn to the world debt markets and say, "We're not just going to borrow our way to prosperity"?

SCHWEITZER: Math works for me, too. I was governor for eight years. Every single year we had the largest budget surpluses in history, cut more taxes than any time, because we were able to challenge expenses, not cut programs.

SCHWEIKERT: And a Republican legislature.

SCHWEITZER: Who tried to raise taxes, and I vetoed it.

SCHWEIKERT: But once again you have divided government, and you talked to each other.

SCHWEITZER: We did. But you had a premise...

(CROSSTALK)

CUPP: Let me -- let me cut in here, guys. Let me cut in here, guys. And on that point, I've just been looking at our banners. The last one there said, "Republicans surrender." This one says, "Obama, GOP to keep talking."

Governor Schweitzer, let me ask you this: The president is negotiating. He's in that room. He's been in that room a number of times now in the past two days. The Hill today called him an aloof buyer, showing up 20 minutes late, comparison shopping for the best deal. This sounds like a negotiation to me, something he promised he wouldn't do. Do you think he's been an effective leader throughout this crisis?

SCHWEITZER: Here's what you're missing, and I think the congressman's missing it, as well. I was a chief executive. In every legislative session, there was a different dynamic of leaders. Sometimes they would wag their finger at the governor and say, "We're not meeting with you. We'll send you a bill when it's our time."

Others times they'd say, "We'll meet with you, but we don't really want to be, you know, in front of the press."

SCHWEIKERT: And wouldn't show up?

SCHWEITZER: And -- yes. I had -- I had members of the legislature, Republican leaders, who said, "We're not meeting with you." I said, "Fine, you'll have to send me a bill at some point."

But the point is, some of whom you work with closely, some of whom here's what you do. You bring them in, you say, "Congressman, you know, have you working out? You're looking really good, and I saw your wife the other day. Boy she's looking beautiful and, you know, your business seems to be just soaring. Now -- now let's talk about..."

SCHWEIKERT: It demonstrates how a bit of human connection and charm can often bring together that gap.

CUTTER: OK.

SCHWEIKERT: And God bless, hopefully we're about to have the president actually engage. Because when I hear Democrats in the elevator longing for the days of Bill Clinton, someone who had actually talked to them, I'm actually starting to agree with them.

CUTTER: And I hear Democrats longing for the days of Newt Gingrich, our co-host, because there is nobody to negotiate with in the House. The last time we were at this point, two years ago, John Boehner walked away from a significant deficit reduction deal with your managing debt. You would have liked that deal. He walked away from it.

As a result we lost a trillion dollars in the stock market, consumer confidence, and hiring was at zero. So is -- the point here is that negotiation is very important in Washington. Both sides should be talking to each other. But one side is self-inflicting wounds on this country. It's very difficult.

SCHWEIKERT: First of all, I like the re-creation -- I like the re-creation of history.

CUTTER: Well, I was there.

SCHWEIKERT: But as we both know -- yes, as we know from the books of that time, and if you're going to say Woodward is a liar in his book, he made it very clear: It was the president that crashed the opportunity for a big deal.

CUTTER: Well, he also said Boehner went missing for an entire day.

SCHWEIKERT: That's not what the book says.

CUTTER: Turned off his cell phone.

CUPP: OK. All right. I think I'm with everyone. Let's get the heck out of Washington for a minute.

CUTTER: Good idea.

CUPP: Governor, you passed up the opportunity to run for an open U.S. Senate seat next year.

After we get back, I want to ask you whether the mess in Washington will make 2014 a very Republican year.

(COMMERCIAL BREAK)

CUPP: Welcome back. It's day 11 of the government shutdown and less than a week from the default deadline. In the CROSSFIRE night, former Montana governor Brian Schweitzer and Arizona Republican Congressman David Schweikert.

Look, guys, I see a way for us to go forward. If Republicans can walk away from these negotiations with some entitlement reform, some tax reform, some spending cuts, hey, that's a win for me. Do you guys see it differently?

SCHWEITZER: Done deal. Where do we sign up?

CUTTER: Well, the details matter.

SCHWEITZER: The details matter. SCHWEIKERT: And look, understand I believe the House is heading towards rolling out a very big tax reform. I mean, Dave Camp has been busting his backside for two years.

CUTTER: Will it increase revenue?

SCHWEIKERT: It would increase revenue, because it will grow the economy. And -- and look, that -- it's time we look away from the special lobbyist-created deals that are here in Washington where they carved out all their little special treats in the tax code and do something...

SCHWEITZER: Look, I don't trust you guys. Look, I don't trust you. The same cast of characters who carved out all those special deals for all those multinational corporations are -- yes, let's see -- still in charge.

Now, when we say tax reform, well, we see what General Electric and General Motors and Ford and Lockheed Martin want, and then we do it.

SCHWEIKERT: But the reality of it is -- and this is something for the audience to get their head around. The General Electrics of the world aren't big supporters of Republicans. They love this president. They love...

CUTTER: I disagree with that.

SCHWEIKERT: Big business, the U.S. Chamber of commerce loves those who give them the special deals. And that's where it's going to be -- have to be a bipartisan battle to say the only way out of the mess we're all walking into at the end of this decade is massive growth in the economy. The only way to get there is a dramatic change of our tax code, a dramatic change of our regulatory code. And immigration, we're going to have to deal with all these things. We need to listen and deal with a...

SCHWEITZER: Meanwhile -- meanwhile, you have a Congress that is dedicated to motion masquerading as action. I can't see -- I can't see a damned thing that's happened here in the last year that's been good. Now you finally said, "We're going to hold our breath until we turn blue." Are you blue yet?

SCHWEIKERT: But think about -- think about what you just said. In divided government, my side controls one third. So I don't control the Senate. I don't control the presidency. So I'm very happy you're willing to throw the Democrats under the bus in that fashion. I'm elated now I have a president who's willing to talk to us in the House.

CUTTER: Well, let's talk about what your current strategy is and whether your current strategy has been working.

So yesterday NBC/"Wall Street Journal" came out with a new poll that showed Republicans at an all-time low in favorability by the American people. I believe the favorability was 24 percent. And in terms of who they blame for the current government shutdown, it's Republicans at a significantly higher rate margin than what Republicans were blamed for in the '95-'96 shutdown.

So in terms of divided government, making Washington work, talking to each other, will you at least admit that what you've done thus far has not worked?

SCHWEIKERT: Actually, no. And Nate Silverman wrote an amazing little article this morning. And you know, he's not a fan of my philosophy. And diced it up and made it very clear, The D's, Democrats left need to be very careful of what they're actually seeing in those numbers. But it's the left that's walking into the brutal Senate year. They're the ones that have -- and if -- you've got to walk through the math. If it's a pox on all their House...

CUTTER: I don't disagree with you ...

SCHWEIKERT: And if it's Democrats that have the majority of the Senate...

CUTTER: I don't disagree with you, but what's also...

SCHWEIKERT: ... and is the president is really now...

CUTTER: ... on the generic ballot, Republicans are going to be getting their butt kicked.

SCHWEIKERT: If the president is now in the mid-30s in favorability tests, particularly even worse in those Senate seats that need to be defended in those states...

(CROSSTALK)

CUTTER: Let me...

SCHWEITZER: Let me just say this. Wait a minute, I find -- let me just say this. Finally I've heard a strategy. You put the skunk in the chicken coop, and while he's eating the chickens and stealing the eggs, you've decided we all have to go and get him out so we'll get enough smell on the Democrats that they'll lose the elections along with us. I mean, come on.

CUPP: Let me ask you about.

SCHWEIKERT: Very folksy. Bizarre bus folksy.

SCHWEITZER: You've been around skunks.

SCHWEIKERT: Actually, not many in Arizona.

CUPP: Everyone hates Congress but continues to vote for their guy. I think where this would matter, though, is in state houses.

But let me ask you about Montana. Interesting politics there. It's a Republican-ish state. Democrats have been running on this antigun message nationally. That's bad for business in Montana. Obama and Obama care not completely popular in your state, but you're proof a Democrat can win. What do you make of all the politics happening right now? Do Democrats have a chance at getting the 2014 Senate seat in Montana?

SCHWEITZER: Well, thank God that we have some strategists here in Washington, D.C., on the Republican side, because they're making it easier for Democrats.

CUPP: I sense the sarcasm.

SCHWEITZER: Look, I can't understand the Republican strategy right now. You know, you mentioned 28 percent. They did bring the Democrats down with them.

CUPP: They did. At a slower rate.

SCHWEITZER: But more of a Republican -- but here's -- here's the problem. They're saying, "We want that mandate to go away for one year." Now I actually kind of support that. I signed a bill in Montana that we wouldn't enforce the mandate until there was -- until there was a legitimate public option, because I don't think you ought to force a private citizen to have to buy it from a private insurance company.

SCHWEIKERT: I hate to say this. I'm starting to like you.

SCHWEITZER: No, no, no. Some of the Democrats -- the Democrats were sleeping with the insurance industry; the Republicans are married to them. So there you go.

SCHWEIKERT: Wow. Except if you actually look at the campaign contributions. A lot of big hospitals; a lot of big insurance. They make a fortune off Obama care.

And the reality of it is a year is a very long term. I mean, we've all been around politics for a long time. A year from now, what will the American experience be with the new health-care law? Many on the left think it's going to be wonderful. Those on the right believe it will be a disaster.

CUPP: Yes. In November, I'm betting they're going to be thinking about Obama care when they go to the...

SCHWEIKERT: But that will be the benchmark. And I've got to tell you, a lot of my brothers and sisters on the left in the House, when that elevator closes and we talk about it, that's what they're scared about. They will be judged a year from this November on the law.

CUPP: They will.

SCHWEITZER: That's where Republicans lose. If you believe that Obama care is going to be a complete wreck, you should have stood back and... SCHWEIKERT: No, you're absolutely wrong on that. If we did not get the information to the low-information voter that we were the ones opposing it, you were the ones supporting it...

CUTTER: I don't think there's any misunderstanding about it, at all. I mean, you've been doing this for three and a half years.

SCHWEIKERT: Having seen -- having actually seen some of the cross tests, it was stunning to the low information voters didn't understand...

CUTTER: In that same poll, you know, I know S.E. said polls shmolls, but I want to get back to one more pool.

SCHWEITZER: You've got to run for office and say it.

CUTTER: And...

SCHWEIKERT: Yes, while you're writing your check for your pollster.

CUTTER: Obama care actually went up in approval rating. And this is why you're shutting down -- why you're shutting down the government over it. And I will say that there is huge disagreement over in your party right now with the strategy over Obama care. Your governor, Jane Brewer, doesn't want the government shut down, doesn't want, you know, Obama care repealed. Because you're getting a significant amount of money in Arizona from the law.

SCHWEIKERT: They want more...

CUTTER: Governor McCain -- I mean, Senator McCain -- sorry -- wants the Republican Party to move on. Elections matter. He campaigned all over the country on this, and the American people didn't care. They reelected President Obama.

CUPP: And Ted Cruz and Rand Paul.

And Mike Lee.

(CROSSTALK)

SCHWEIKERT: But let's make the -- but let's make the circle on what you're sharing. You're sharing it, actually, quite well. The elections a year from now, at that time, what will be the American impression of the health-care law, that from my view, was shoved down their throats. And if they love it, you know, your side wins.

CUTTER: Right, so...

SCHWEIKERT: If they have had...

CUTTER: Are we leaving Obama care?

SCHWEIKERT: ... if they've had the horrible experience I believe they will, they'll at least know our side fought to maximize...

CUPP: Tried, right.

SCHWEIKERT: ... their freedom, their choice and their optionality.

SCHWEITZER: I had a lot of ideas. I had a lot of ideas for making this health-care law better. My ideas for the most part were not incorporated. But there's almost 40 million people that had preexisting conditions who are going to love this chance of finally having financial security, because they have a child.

SCHWEIKERT: But you make -- but in some ways you're making our point. You do understand. There's nothing the Republicans were doing that touched the preexisting conditions.

CUTTER: That's not true.

SCHWEIKERT: It's absolutely true.

CUTTER: That's not true, no. If you take away the individual mandate, you can't cover people with preexisting...

SCHWEIKERT: One more time. The preexisting stayed in law. And you've also seen...

CUTTER: Would be able to...

SCHWEIKERT: Let me finish. You've seen the data that says at the end of the decade, how many of our brothers and sisters are still uninsured? Thirty-one million. So you're going for, what, 44 million to the latest data says 31 million. Because they screwed up the calculations...

CUTTER: I don't think that you do understand...

SCHWEITZER: I'm going to break the impasse right here.

SCHWEIKERT: ... on how many spouses and children will be rolled off insurance.

SCHWEITZER: I've got the solution.

SCHWEIKERT: They screwed up the math.

SCHWEITZER: I've got the solution.

CUTTER: Let's hear it.

SCHWEITZER: So the Republicans first said they wanted to get rid of the one-year mandate for individuals. OK. Let's give it to them. But let's have every member of Congress who votes for it sign the fiscal note that says, "Now we understand, because we understand insurance, that if you have healthy people not enrolling and you self- select for just people with preexisting conditions, that the economics of Obama care will be upside-down one year from now." So just sign the note that you understand that the government will lose about $800 billion in a single year and you're OK with it, and go for it.

SCHWEIKERT: But Governor, that adverse selection is literally designed into the law right now. When the penalties do not come even close to covering the cost and the adverse selection.

Look, for those of us who actually studied to be actuaries, we look at it and say this is going to crash and burn around us. And at least people like me have laid the marker down saying this is going to be bad. We all see the numbers saying it's approaching 2 trillion in additional debt. When it was cast, we were promised by this president what? It would be revenue neutral. It was going to save money. Now the very people that gave us that number now tell us it's going to cost trillions.

CUTTER: Well...

SCHWEIKERT: Who was lying then?

CUTTER: It's actually -- when you look at the numbers -- going to reduce the deficit. Not by -- not by the rate of inflation.

SCHWEITZER: You say Obama care is going to crash and burn? We have a health-care system that already did crash and burn. We get -- we get the results that's worse than 36 countries around the world and we pay, I don't know, two, three times as much per patient as they do around the world.

And then when 52 percent of health-care dollars comes through government before, you'll understand in many ways, it was government that created the distortion in the markets. And there was...

CUTTER: We're going to -- we're going to have to go to break. But I want you both to stay right here. I want our viewers to stay with us. This has been such a great debate we'd like to you stick around and see if there's anything that you two can agree on. And I think there's some glimmer of hope.

SCHWEIKERT: Besides our last names.

CUPP: Besides your last names.

And we want all of you to weigh in on today's "Fireback" question: "Will there be a deal to open the government and avoid default?" Tweet yes or no using hash tag crossfire. We'll have the results right after the break.

(COMMERCIAL BREAK)

CUTTER: We're back with the governor and the congressman. Let's call a "Ceasefire." Is there anything that you two can agree on?

SCHWEIKERT: I'm going to go with a couple things. One as from the federal side and the state side. Let me block grant your Medicaid dollars. And also an agreement that we're never going to use the word "default" again. Because we're not going to walk up to that. We're always going to find some way to make this work. CUTTER: Agreed?

SCHWEITZER: Not exactly.

CUPP: Oh, shoot.

SCHWEIKERT: Oh!

SCHWEITZER: Stealing the love. Debt ceiling should never be negotiated. You shouldn't mess with the markets, and I think we can agree on that.

But the block grant, it works. If you give full flexibility to the states.

SCHWEIKERT: Yes.

SCHWEITZER: I actually propose to have not just Medicaid but send me all the federal dollars that you're spending right now: Medicare, Veterans Administration, Indian (ph) health services. And let me put together a single payer system. I can deliver that health care for half price, and the money that's sent by the federal government will be able to take care of the other half.

SCHWEIKERT: I don't know that it ultimately becomes a single payer system, but it's a single delivery system, because those are all government dollars right now. I would love -- I'd love to get the states that flexibility. I know in Arizona, we can touch so many more lives if you'd let us control those federal dollars instead of all the...

CUPP: You have to like that.

SCHWEITZER: A for-profit health insurance system is not working in the United States. We have five times as many procedures per patient and have a poorer outcome than most of the industrialized nations. It's not working.

SCHWEIKERT: And there's why, by adding individual choice and the right incentives, you actually deal with that.

SCHWEITZER: You don't like Obama care, come up with a plan that works.

SCHWEIKERT: We're close.

CUPP: That sounded not at all like a "Ceasefire." But OK. Thanks for the attempt. And thanks to our former governor Schweitzer and Congressman Schweikert for joining us.

Go to Facebook or Twitter to weigh in on our "Fireback" question: "Will there be a deal to open the government and avoid default?" Right now, 48 percent of you say yes; 52 percent say no.

CUTTER: That's a sad state of affairs.

CUPP: Yes, it is.

CUTTER: The debate continues online at CNN.com/Crossfire, as well as Facebook and Twitter.

From the left, I'm Stephanie Cutter.

CUPP: From the right, I'm S.E. Cupp.

Join us Monday for another edition of CROSSFIRE.

"ERIN BURNETT OUTFRONT" starts right now.