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Senate Test Vote Fails; Both Sides Taking Heat Over Shutdown; Rabbis Arranging Kidnappings?; Dangerous Tropical Cyclone Hits India; Protecting Investments during Government Shutdown; Consumer Sentiments Slips; An Affordable Life after Retirement

Aired October 12, 2013 - 13:00   ET

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


MIGUEL MARQUEZ, CNN ANCHOR: Hello. I am Miguel Marquez. Here are the top stories we are following in the CNN NEWSROOM. Twelve days in the government shutdown. Moments ago, some action on Capitol Hill, Senators do a test vote to move the bill forward, but it failed. Meanwhile, in the House, a lawmaker says they hit a brick wall. We'll go live to Washington to find out where we are now straight ahead.

Plus a monster storm roars ashore in India's eastern coast. Hundreds of thousands of people scrambled for safety as a deadly typhoon approached. But millions are preparing for the worst.

And planning for your golden years can be tough when the economy is in crisis. We'll tell you about the top five places for making your retirement dollars stretch ahead on CNN NEWSROOM.

Well, just last hour on Capitol Hill, the Senate defeated a procedural vote to -- by majority Democrats to bring up a clean debt limit bill. The vote was 53-45. Meanwhile, in the House, not much may get done today. That's because members may go back to their districts, leaving only the GOP leadership in town, as Republican congressmen put it, talks between the president and House Speaker Boehner has hit a brick wall.

Athena Jones is live on Capitol Hill.

Athena, you're standing on the brick wall there. Seems the talking points remain the same and we aren't very much further today than we were at the beginning of the week. What's going on?

ATHENA JONES, CNN CORRESPONDENT: Hi, Miguel. You know, it's looking a lot less clear by the minute how this is all going to be resolved and when. You mentioned the House finished its legislative business for the day. A lot of House members are heading home. The Senate is also in recess. Some folks, some senators have said they're going to stick around. We know the House leadership is here.

But you know, this is going to seem outrageous, especially to people who are furloughed workers, for instance, being ordered to stay home during the shutdown, or all the people who are worried about the consequences of a debt default. Here we are just a few days away, it's next Thursday, and -- businesses big and small worried about what this could do to their borrowing cost. Senior citizens, military troops worried about whether they'll get their paychecks or their Social Security checks. So a lot of folks are going to be angry to see the folks on Capitol Hill heading home.

I can tell you right now you heard what one of the Republicans described talks between the president and House Republicans, now it looks like the focus is more and more on this deal, on this plan that was presented to the president by Senate Republicans that would both raise the debt ceiling and reopen the government.

But even on that front, it's unclear -- whether that's going to satisfy Democrats in the Senate and where that could go. So we're really at a loss here, trying to figure out how this is all going to be worked out -- Miguel.

MARQUEZ: You've been watching this day by day. Is there any sense that things are moving -- that the trend is positive, that we're moving in some sort of positive direction?

JONES: Well, it's interesting you say that because just a couple of days ago it seemed like there were people who were pleased that the sides had started talking, the president sat down with members of both parties and both chambers, and a lot of the rhetoric had been toned down. But then earlier today we saw a lot of anger coming out of the GOP conference meeting with their members mad that the president had rejected their offer that would raise the debt ceiling just until November 22nd, but not attached to that an immediate reopening of the government.

And we've seen today just battling press conferences. I've been here, right here, and seen three of them. There are a couple of more on the Senate side that may or may not be as feisty as the ones we saw on this side. So it's really not clear how this is going to play out and when. And as I mentioned, sure, the House could be called back. There are some senators sticking around. But as of right now, no votes are scheduled for tomorrow, and votes in the House aren't scheduled until Monday evening -- Miguel.

MARQUEZ: All right. Well, good luck. Keep up the good work there, thanks very much.

JONES: Thanks.

MARQUEZ: There's at least one concrete plan to end the standoff. Here is what Senator Susan Collins has presented to the president. It would end the government shutdown, extend government funding for six months with sequester level spending cuts, repeal a tax on medical devices and raise the debt ceiling.

Senior White House correspondent Brianna Keilar is live from the White House.

Brianna, that cautious optimism over striking a deal with Republicans seems to have gone away. Are we back to square one now?

BRIANNA KEILAR, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, certainly when it comes to House Republicans I think Tuesday we saw President Obama indicate a willingness on a short-term deal. We saw Republicans back away from their Obamacare demands, then on Thursday we saw they had a good meeting here at the White House.

Yesterday, though, we saw the White House briefing delayed beyond when the markets closed, when we heard Jay Carney essentially say that they didn't like this idea from the House Republicans, which was just a six-week extension of the debt ceiling.

So by all appearances, it appears at this point substantive outreach to House Republicans at least has dried up, at least temporarily at this point. White House officials are insisting that there are open lines of communication when it comes to the House and the Senate, but this also appears to be dealing with an appearance problem they had because President Obama's whole we cannot negotiate or we will not negotiate stance -- was making him look a little obstinate. And certainly the White House didn't want that appearance out there.

It's really Senate, though, that the White House is watching at this point as we are hearing some different proposals that are being floated. And also the fact that I think some Senate Republicans are frustrated, they want to move forward, they want to put this kind of battle behind them, and the White House thinks that that area at least is going to hold more promise than say the House at least at this point -- Miguel.

MARQUEZ: Yes. But this failure of the Senate to get cloture, to put forward a clean CR, I take it that -- the 53-45 vote doesn't surprise anyone I take it, but we don't seem any farther along. The ball seems to be in the same place it was as earlier in the week, no?

KEILAR: Well, it does, but I think what you're seeing is the House Republican proposal, which is very much kind of, you know, to the right and then this idea of just a clean one-year debt ceiling extension or more than a year, because it would have gone beyond the midterm elections is very much to the left.

So now they start this process of kind of inching towards the middle. Now where is that, though? The White House feels very much that it has more leverage and polls back that up that the White House has more leverage. Because there's a significant margin when you're looking at who Americans are blaming. They are blaming Republicans far more than they are blaming the White House.

And you're going to start to see pressure increase. Right now, this weekend there's a little wiggle room. Why? The markets aren't open. But as we get closer to Tuesday which is where at least in the U.S. the markets open and as we inch closer to Thursday, we're expected to hit the debt ceiling, the pressure mounts. It increases exponentially.

And what gives? Well, if you're thinking of it like a stool, it's the weakest leg, right? And at this point, the polls are showing Republicans are the weakest leg. And that is why I think you're seeing the White House kind of feeling that they have the upper hand here over Republicans. They're of course getting dinged, too, the president taking a hit in the polls as well -- Miguel.

MARQUEZ: Brianna Keilar, giving us all heart palpitations here. Thank you very much.

She's been standing out there in New York Harbor for 12 lonely days without any visitors. Now the Statue of Liberty and other federal landmarks will be reopening, at least some of them. The state of New York says it's losing too many tourist dollars because of the shutdown. It will pay the National Park Service $61,000 a day to operate Liberty Island.

Arizona has struck a similar deal with the federal government to reopen the Grand Canyon. It will pay the National Park Service more than $650,000 to operate the park for at least a week.

And tourists in South Dakota will soon be able to gaze upon the famous faces again, at least for a little while. The state government will pay to keep Mount Rushmore open for 10 days starting on Monday.

Just over an hour ago, a huge tropical cyclone made landfall in India. Phailin came ashore along the country's east coast near Gopalpur. Several deaths have been blamed on the monster storm, which could be a category four hurricane in the U.S. The cyclone is packing 140 miles per hour winds and tropical storm force winds stretch were nearly 270 miles. That's about the distance between Philadelphia and Boston.

About 12 million people live in Phailin's path. Disaster officials evacuated more than a half million people before it hit. And that is one of the poorest provinces in India. Terrible.

A top general in charge of nuclear ballistic missiles has been fired. The Air Force says it's relieved Major General Michael Kerry of his command due to a loss of trust and confidence in his leadership. He's been under investigation over reports of misbehavior. The Air Force says the firing is not related to the security of the country's nuclear weapons.

Also this week, the deputy chief at U.S. Strategic Command was demoted reportedly over gambling allegations.

The whereabouts of this man remained unclear. Scott Chandler is the director of a ranch for troubled kids in New Mexico. An Amber alert was issued for nine teenagers whom police say were abducted from the ranch. Authorities says one of the teens has returned home and is OK. And Chandler's lawyer says all the teens are safe but that Amber alert remains in effect.

The debt crisis is coming and the government remains partially closed. So why is there talk that the House may go home without reaching a deal with the White House today? We'll dig deep into that with our experts coming up next.

(COMMERCIAL BREAK)

MARQUEZ: So while talks in Washington have hit a brick wall and the House may go home before reaching a deal to reopen the government, hundreds of thousands of federal workers remain off the job.

And as our political editor Paul Steinhauser explains there's plenty of blame to go around for now we got -- for how we got here. Pardon me.

PAUL STEINHAUSER, CNN POLITICAL EDITOR: Hey, Miguel. First things first. There are no winners in the showdown over the shutdown. Both sides are feeling the heat in the latest polls.

Check out our CNN/ORC survey. Sixty-three percent said they were angry at the way Republicans were dealing with the shutdown, 57 percent said the same thing about Democrats and 53 percent said they were angry at President Obama over the shutdown.

Nothing for anyone to brag about. But while both sides are getting blamed, it seems more people are pointing fingers at the Republicans and that's showing up in the latest polls. Forty-three percent questioned in the Gallup survey say they have a favorable opinion of the Democratic Party, not great, but better than the 28 percent who gave the GOP a thumbs up.

That number was down 10 points from last month before the shutdown, and it's an all-time low in Gallup polling -- Miguel.

MARQUEZ: Over in the Senate, an effort to pass a no strings attached bill to reopen the government has failed, and as we said, the House GOP and the president are not seeing eye to eye. Take a listen.

(BEGIN VIDEO CLIP)

REP. DARRELL ISSA (R), CALIFORNIA: The president is freezing out America and we'll do everything we can to make the point that we want to negotiate and he took no offers.

UNIDENTIFIED REPORTER: Is there a worry now that you guys are being flanked, the Senate is going to pass their own bill over their own agreement with the White House?

ISSA: The president -- the president didn't accept the offer that was from the Senate, which also was for real reform. So it doesn't appear as though the president wants anything except more tax revenue with tax increases yet again.

(END VIDEO CLIP)

MARQUEZ: Amy Holmes is a conservative CNN political commentator, anchors the "Host List" on the Blaze.com, she's in New York, and Crystal Wright is the editor of conservative blackchick.com. She's in Washington.

So the House members, both Democrats and Republicans, are going home with no debt deal, no deal to reopen the government. What message does that send to the country and all those furloughed federal workers, well, presumably they ain't going back to work?

AMY HOLMES, ANCHOR, THE HOST LIST, THEBLAZE.COM: Well, I guess I'll just jump right in there. That's actually one of the pressure points that Republicans have sort of been leaning on, which is that federal workers missing their paychecks is bad for the Democratic Party since most of those workers tend to lean to the left. But going home without a deal clearly is only going to make the public even more angry.

You just reported on this CNN poll that had 63 percent angry with Republicans, 57 percent angry with Democrats. Another pressure point on both parties, as in your same poll, independents basically blame both parties evenly, 60 R, 59 D.

CRYSTAL WRIGHT, BLACKCHICK.COM: Right.

So I think these politicians are going to be under a lot of pressure to put together a deal, not to mention the debt ceiling deadline.

MARQUEZ: Crystal, what sort of pressure is there in Washington today?

WRIGHT: Well, I think Amy is absolutely right, but I am going to take it a step further. I think the House Republicans have really dug themselves into a deep, deep hole here. I mean, I'm just shaking my head. I talked about this a couple of weeks ago on the program.

House Republicans look like a bunch of spoiled children and they're without leadership. Speaker Boehner cannot get his caucus in line. And really -- I think the real reason they backed themselves into a corner is they got sideways on this -- you know, they were obsessed with defunding Obamacare.

Well, folks, the way to defund Obamacare or repeal it is to focus on the Republican Party's brand, win a presidential election sometime in the near future, and try to maintain control of the House and the Senate, and frankly they're just not on a path to do that.

Government is about compromise. And like Amy said, nobody is blameless here. We know the American people are mad with the president, they're mad with Democrats and they're mad with Republicans, and frankly government is about compromise. It's about negotiating.

I am glad the president has gotten off his "I will not negotiate" soap box and actually is talking to both sides of -- you know, the political spectrum, but at the end of the day, I think the House Republicans are going to have to come more in line with what the Senate Republicans are doing and really stop this -- you know, I think everybody seems to be addicted to these crises, right?

It's like we haven't had a budget -- a budget to work with since 2010. So I think everybody needs to come to terms with the fact this is not child's play. We elected these people to come to Washington and govern.

MARQUEZ: All pressure on John Boehner, though. Very quickly, yes or no, will he bring this to a vote, will he basically cave in the next week?

HOLMES: I don't think that he will, no. I think what you're seeing still is --

MARQUEZ: Crystal?

HOLMES: -- this delay on the Republican side that you have two different plans being forwarded. You have Paul Ryan's plan that would look at tax reform and entitlement reform. But then you still have the Tea Party that wants to see action on Obamacare delaying that mandate, that individual mandate for a year.

WRIGHT: Right.

HOLMES: So I think John Boehner is going to need to , you know, something for the Tea Party --

MARQUEZ: Yes, yes.

HOLMES: -- because that poll that you cited with all those folks -- rather who have a disapproval of Republicans, a lot of the reason why that number has been driven down is because of the Tea Party, because of the right-wing of the Republican Party.

WRIGHT: Right.

HOLMES: Not necessarily the general public.

MARQUEZ: Crystal, Crystal, yes or no.

WRIGHT: Yes, well -- I don't think sadly Speaker Boehner is going to cave in.

MARQUEZ: All right.

WRIGHT: I mean, that's the problem. And as Amy pointed out, you know, this is -- the approval for the Republican Party is the lowest in 21 years, folks. Time for you to come to the table and force the president to reduce spending. I get that. But let's get the government funded and let's talk about reducing the debt and deficit in the next juncture.

MARQUEZ: All right. Well, let's hope there is that talk at some point down the road.

Crystal Wright, Amy Holmes, thank you both very, very much.

HOLMES: Thank you.

WRIGHT: Thanks.

MARQUEZ: Now taking a brief break from hardcore politics, President Obama and the first lady welcomed a special guest to the White House. They met with Malala Yousafzai yesterday. The president proclaimed Friday the International Day of the Girl.

Malala is the Pakistani teenager who was shot by the Taliban and who was in the early running for the Nobel Peace Prize and could have very well won. The first family thanked Malala for working so hard for girls' rights to get an education. Just an amazing story.

You can see much more about Malala and her fantastic story coming up tonight -- tomorrow night as Christiane Amanpour presents a special report, "The Bravest Girl in the World." She certainly is. That's at 7:00 p.m. Eastern, only here on CNN.

Getting a divorce can be an ugly process, but when things start out with a kidnapping, where does it go next? Ahead on NEWSROOM, why a group of New York rabbis are accusing -- accused of abducting an uncooperative husband.

(COMMERCIAL BREAK)

MARQUEZ: The chase, the beating, all caught on video. Now three bikers have been indicted in connection with that violent clash involving an SUV driver in New York.

Craig Wright, Reginald Chance, Robert Simms are all accused of attacking Alexian Lien in front of his wife and child. Four other people have been arrested, including one New York police officer who was riding with the group. Two other undercover cops are also believed to have been at the scene. One of them worked for Internal Affairs. The very same department that is investigating this matter.

Two orthodox rabbis are under arrest, accused of kidnapping and torturing Jewish husbands who refuse to grant their wives divorces. They were detained in an FBI raid following a month long sting operation. According to a criminal complaint, the rabbis charged the wives tens of thousands of dollars.

CNN's Rosa Flores has the details.

ROSA FLORES, CNN CORRESPONDENT: Well, it sounds like a movie plot. A wife wants to divorce, the husband doesn't want to grant it, so she talks to her rabbi who helps her hire a few, quote, "tough guys," to get the job done. Well, unfortunately, folks, this is a real-life description of alleged events, described in detail in court documents that reveal 10 people, including two rabbis, now face kidnapping charges.

Now take a look. The FBI raided two New York locations Wednesday night, exposing what undercover FBI agents have been working on for months. One agent posing as an orthodox Jewish wife, who wanted a divorce. Now court documents know a conversation with one of the rabbis went like this. Quote, "Basically what we are going to be doing is kidnapping a guy for a couple of hours and beating him up, and torturing him and then getting him to give the get."

According to Orthodox Jewish law, a get is a document that a husband must provide his wife to obtain a divorce. And the price for getting this forced get was pretty high. Court documents say it cost $10,000 for the rabbis to approve the kidnapping first, then an additional $50,000 to pay the, quote, "tough guys," who do the beating and obtain the get. It is key to note, however, that the importance of the get within the Orthodox Jewish community is extremely important. For a woman, for example, it's a huge implication if she doesn't get one, she risks being shunned, even labeled as adulterous if she moves on and has children.

Now there's been huge debate over men that don't grant gets as well. In the past, they have had -- they have been shamed in the Orthodox Jewish community newspapers.

(BEGIN VIDEO CLIP)

AARON FORD, SPECIAL AGENT FBI NEWARK OFFICE: This is just unspeakable crime. Any time you have individuals who go against other legal, lawful people who are just living their lives and violence is committed.

MARTIN AGNIFILO, ATTORNEY FOR RABBI WALMARK: We don't think all of the defendants are equal. We believe some of the defendants might have been motivated by money. We don't believe that that will end up being proven to be the case with Rabbi Walmark.

(END VIDEO CLIP)

FLORES: Two named rabbis alleged involved are Mendel Epstein and Martin Walmark. One of their attorneys tell CNN all 10 defendants pleaded not guilty to kidnapping charges. If convicted, they face a maximum sentence of life in prison.

Rosa Flores, CNN, New York.

MARQUEZ: Thanks to Rosa for that.

A deadly cyclone is hammering the eastern coast of India. A half million people have already fled for safer ground, but millions are still in the path. What could be the worst storm to ever hit the area. We get a live report next on CNN NEWSROOM.

(COMMERCIAL BREAK)

MARQUEZ: Welcome back. I'm Miguel Marquez.

Capitol Hill is buzzing with activity today, or not buzzing at all depending on what side of the House you're on -- the capital you're on. With both parties negotiating on the shutdown and the debt ceiling.

In a few minutes, the Democrats are expected to be holding a news conference. But for those of you who are just joining us, here's what's been happening so far.

The Senate defeated a procedural vote by majority Democrats to bring up a clean debt limit bill. The vote was 53-45. Meanwhile, in the House, not much are getting done today. That's because members have left and they go back to their home districts, leaving only GOP leadership in town. As a Republican congressman put it, talks between the president and House Speaker John Boehner have hit a brick wall.

We'll bring you that news conference from Senate leaders when it happens.

And now to that massive tropical cyclone in India. Phailin made landfall about two hours ago with winds as high as 140 miles per hour. Tropical storm force winds stretched for nearly 270 miles, about the distance between Philadelphia and Boston. This catastrophic cyclone is expected to continue to move inland, bringing flooding and high winds with it.

New Delhi bureau chief Lonzo Cook is live on the phone.

Lonzo, give us an update on conditions as you've seen so far.

LONZO COOK, CNN NEW DELHI BUREAU CHIEF (via phone): Well, the winds have picked up yet again. There was a brief lull. The city of Bhubaneswar is in darkness. A lot of the coastal districts have actually their power cut deliberately as a precautionary measure to prevent death from electrocution or from fires.

But about an hour and a half ago, Phailin made landfall at Gopalpur where we were -- we spent about three hours this afternoon. The town is actually a resort town for Indian tourists, all those had been evacuated, the hotels were effectively closed. However, some of the local inhabitants were still waiting there. Some told us that they're waiting until the last possible moment, i.e., mid afternoon, before moving up the hill to evacuation centers which had been set up in 30 concrete based structures, such as local schools.

MARQUEZ: And how are those evacuations going? This is a very poor area of India. Is there a sense that the government is prepared for this?

COOK: I am afraid the wind has really picked up. But I heard you -- I did hear you mention something about the -- the state of the area. This is in fact, you know, an agricultural based state. The areas is close to the sea, are dotted with various fishing communities that often these are not the most affluent, so quality of the construction work, that and there are some farming communities, both rice and cotton farmers. So a recent status, as it's felt, is not the most affluent.

But these communities, they were low-lying areas, are the most vulnerable. But that having been said, this time around, national and regional officials say they got out in front ahead of the curve, they didn't want repeat of 1999 where 10,000 people died, and in fact they've succeeded in evacuating over half million from those low-lying coastal areas.

MARQUEZ: Lonzo Cook, thank you very much. Keep yourself and your team out there safe. And we hope to see you back here soon. Thanks.

The evidence is starting to trickle in. People are starting to worry gridlock in Washington will hurt the economy. Find out how you can get ready for it next on CNN NEWSROOM.

(COMMERCIAL BREAK)

MARQUEZ: We are eagerly anticipating a press conference from Senate Democrats and Republicans coming up. When we get word that they're going to step up to that podium there, we will let you know and we will bring it to you live.

Day 12 of the government shutdown is making Wall Street jittery and the situation also has small investors wondering what to do to protect what they've got, so they don't go over a fiscal cliff themselves.

For some answers, we turn now to CNN business anchor Christine Romans in New York.

CHRISTINE ROMANS, CNN BUSINESS ANCHOR: Miguel, one day a sell-off, the next day a rally. It's enough to make the average investor swear off stocks and bonds and hide their nest egg in the mattress.

The memories are still fresh, of course, of the depths of the 2008 financial crisis, stocks crashed almost 50 percent. Fast forward to today, and the Washington wrangling, bringing up nightmare scenarios that conjure up the same fears.

To stay on the safe side of a Black Swan event, some areas say increase the cash portion of a portfolio from 10 percent to 20 percent. But one adviser says have a plan first.

(BEGIN VIDEO CLIP)

DOUG FLYNN, FLYNN ZITO CAPITAL MANAGEMENT: I don't think you ever want to make today you exit the market in cash unless you have a clear cut plan on when you're going to get back in. And most people don't have that clear-cut plan because if the market drops precipitously from here, most people aren't going to feel, you know, that's the time to get back in.

(END VIDEO CLIP)

ROMANS: Concerned you're not rebalancing enough? Just don't stand there and do nothing, says mutual fund legend Jack Bogle. Bogle compared performance of a 70 percent stock, 30 percent bond portfolio balanced annually with one that was never touched. Guess what? There wasn't much of a difference.

That's not to say you should always leave the portfolio in auto pilot. Experts say always consider lower risk options like a core intermediate term bond fund or even dividend paying stock fund.

One thing is clear. Don't try to invest by playing off the headlines.

(BEGIN VIDEO CLIP)

NED RILEY, RILEY ASSET MANAGEMENT: For the average person, I would just try to take a vacation from the market for about two to three weeks. Don't do anything rash or silly by selling when it appears that the news is bad.

(END VIDEO CLIP)

ROMANS: Riley thinks the good news is we're in a multi-year bull market for stocks. He thinks profits are going to be excellent for American companies next year -- Miguel.

MARQUEZ: Thanks there, Christine.

If you weren't sure gridlock in Washington is trickling to main street, the first piece of evidence is in. A new survey shows U.S. consumer sentiment is at its lowest level in nine months. People seemed worried about the economy that it could take a hit.

I want to bring in a few people to talk about this.

Scott Bleier is an investment strategist, he joins us from New York, and Karen Lee is a certified financial planner here with us in Atlanta.

So let's start with what we know. Consumer confidence is slipping, Scott. What's the immediate consequence of lower consumer confidence?

SCOTT BLEIER, INVESTMENT STRATEGIST: Well, consumer confidence is tied directly to the stock market. And if you want to know when this civil war will end, when the market says it ends by tanking and dropping and making everybody upset and afraid. When that happens, all our representatives will be forced to make a deal to get things going.

Somebody in the administration once said we never let a good crisis go to waste. One side is trying to break the other. The market will break the impasse. And over the past couple of weeks, the Dow dropped a thousand points, but this week when the president appointed Janet Yellen to the Fed -- as the head of the Federal Reserve, the market rally 500 points in two trading days kind of taking the pressure off the politicians just for the moment, though.

MARQUEZ: And, Karen, you're doing financial planning here in Atlanta. Are people coming into your office just freaking out?

KAREN LEE, CERTIFIED FINANCIAL PLANNER: Well, strangely they're not, Miguel, but I think it's because we've been there, done that. I mean, '08, '09, yes, it was scary. But we made it through, stuck with our investment strategies and we made it through it. So I can't say people are terribly nervous. Are they upset with the government, yes.

MARQUEZ: And, Scott, I take it this -- what you seem to be saying is stay calm for now, keep your money in the market, don't do anything crazy.

BLEIER: Well, listen, you have to constantly review your portfolio, whether you're a small or a large investor. And remember this year has been front loaded. Most of the gains have come early in the year. And we've been kind of marching, doing a little dance, a sideways dance for the past couple of months. But historically the market tends to rally at the end of the year from Thanksgiving into the new year, and a lot of people want to bet on that and they're going to chase performance to try to catch up to the markets. But you still need to review your own personal portfolio, and decide what's best for you without doing anything rash or brash because of headline risk.

Listen, this too shall pass. Do what's best for you and don't let your emotions run away with you.

MARQUEZ: You're an optimist, my friend.

Karen, you -- my heart is palpitating. I'm sweating here. Should I take all my money out of my 401(k) and put it in my -- under my mattress.

LEE: I would go back to our investment basics. First of all, we all should be having three to six months minimum cash set aside to pay our bills. That includes our government nonessential workers. You have to have that to rely on. Two, you shouldn't have money in the market that you need over the next three to five years.

So, Miguel, I would ask you, are you planning on using your 401(k) in -- sooner than five years? My guess is the answer is no.

MARQUEZ: I hope not.

LEE: Exactly. So I agree with Scott. We've got to stay consistent with our investment strategies. Do not panic. Stay calm. If you're the little guy investing in your 401(k) and this market turns south, you invest right into that downward spiral and you're going to get your best upward potential when it turns around.

MARQUEZ: All right. Scott Bleier, Karen Lee, thank you very much.

In just a minute, we're going to put these guys on the hot seat to get their best advice about what you can do to get ready in case the economy hits the skids again.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Get to resolve the (EXPLETIVE DELETED). You know, power struggles, money struggles, it's ridiculous. People are suffering, you know. You know. So what could you say?

UNIDENTIFIED REPORTER: What message would you send to Washington?

UNIDENTIFIED MALE: That they need to work for us and listen to us and work together, both parties have to work together and quit blaming each other.

UNIDENTIFIED FEMALE: Feel what the people feel. You know, put yourself in our shoes.

(END VIDEO CLIP)

MARQUEZ: Unhappy voters. Before the break, we were talking about how gridlock in Washington is actually starting to trickle down to main street. We're now starting to see consumer confidence slipping.

Joining me again is investment strategist Scott Bleier and certified financial planner Karen Lee. Let's talk about what people should do to get ready for a jolt to the economy.

What do you think that should be, Scott?

BLEIER: Well, the first thing you should do is, as Karen said, always have some cash. Now not everybody can give themselves a cushion of cash. What's happening in Washington, if you're not tied to the 22 percent of the GDP that the government spends, for your bread and butter, you should just sit back and watch, and enjoy the show, and know that eventually it's going to be settled, but it's going to be rancorous and it's going to continue to make lots of headlines.

Again, the market is ignoring this mostly because the Federal Reserve is the greatest enabler of a dysfunctional government by printing money and buying assets, and as long as they do that, they're giving cover to politicians. As long as they do that, the politicians can continue to be dysfunctional.

If you're an individual investor, get your dollars ready and lots of people like to buy what's new and what's hot and what's moving. I advise against that because that's a very good way to get confused, especially in volatility.

I have two words. Health care. Health care. This is what this fight is about. That's part of what the fight is about. And that is an area in the market that is virtually recession proof if the market and the economy should slow down. Big yields, lots of innovation, and government will spend on medicine and medicines, no matter what.

MARQUEZ: And, Karen, one thing you say is to have three to six months cash reserve in case of emergency. Most people don't have that, are not able to have that.

LEE: Right.

MARQUEZ: Is the message is just to stay calm, try to keep things where they are right now and wade through this?

LEE: Well, absolutely. And if you can't get that three to six months, then make sure you have some credit available that you haven't used, whether that's a home equity loan, your credit card. I hate to say that, but you're right, some people can't get it together. But I agree 100 percent with Scott, stay calm. Don't panic. This, too, shall pass. We have been here before and we'll have more of this in our future.

MARQUEZ: All right, Karen Lee, Scott Bleier, thank you very for joining us. And good luck everybody in the market. All right. We have a response from the White House to the Senate vote, that failed Senate vote today. We will have that coming up. We go live to the White House and have a report on that coming up after the break.

(COMMERCIAL BREAK)

MARQUEZ: Well, the White House has just released a response to the Senate vote today.

Brianna Keilar is live at the White House with more.

Brianna, what's the White House saying?

KEILAR: Hi there, Miguel. Well, as you know, the Senate vote failed on pretty much a party line vote. And this was an extension of the debt ceiling for more than a year. It would have taken us past the midterm elections.

This coming from Press Secretary Jay Carney. It says Congress must do its job and raise the debt limit to pay the bill we have incurred and avoid default. It is unfortunate that the commonsense clean debt limit increase proposed by Senate Democrats was refused a yes or no vote today. Because this was a test vote, remember.

Now this bill would have taken the threat of default off the table and given our nation's businesses and economy the certainty we need. And it goes on to urge Congress to basically increase the debt ceiling, and to reopen the government.

So this vote obviously in the Senate, Miguel, showing us that a -- what's called a clean debt ceiling increase without conditions on it isn't going to get past consequence. The Senate obviously is a little more easy, I think, for Democrats in the White House to push something through than the House at this point. It's not even getting through the Senate.

So it sort of -- is indicating what I think a lot of Democrats and the White House realized at this point, that there have to be some sort of condition -- some sort of conditions that Republicans are trying to work out at this point on increasing the debt ceiling and reopening the government. Senate Republicans have proposed some at this point but there's certainly no agreement and the sides are very apart -- Miguel.

MARQUEZ: Dear, it sounds like we're no farther along down that trail today than we were at the beginning of the week.

Brianna Keilar, thank you very much there at the White House.

And to remind you, we are awaiting Senate leadership press conference that was supposed to start at 1:30. Perhaps they are discussing who goes first. We understand Democrats will start and then the Republicans will come up and chat about where we go from here.

(COMMERCIAL BREAK) MARQUEZ: Well, in just a few minutes Christine Romans is up with "YOUR MONEY." Here's a preview.

ROMANS: Hey, Miguel. Consumer Confidence has just registered the sharpest drop since the Lehman Brothers collapse. -- Can this recovery will stand the government shutdown, this sequester, and maybe new sharp budget cuts? Is this the time for austerity in America? That's coming up at 2:00 p.m. Eastern on an all-new "YOUR MONEY."

MARQUEZ: All right. Thanks very much, Christine.

Stay with us. "YOUR MONEY" starts in just a few minutes.

If you're thinking about making your office exit, you're probably wondering how to get the most out of your retirement. The change of pace may mean a change of location. And if you're concerned about the change in your bank account, a lot of change there, then you'll want to watch this.

Gabrielle Redford is the editorial projects manager for "AARP, The Magazine."

Gabrielle, you've got a list of the best places to retire. Affordability?

GABRIELLE REDFORD, AARP THE MAGAZINE EDITORIAL PROJECTS MANAGER: Yes. Well, every year we come up with the best places to retire. This year we focused on affordability. Specifically where can you retire for less than $30,000 a year.

Well, mostly these are places where you can retire on-- in places that have a median home price of $130,000 or less. That puts you at a monthly mortgage payment of $500 a month.

MARQUEZ: And where are we talking about? What sort of places are we talking about there?

REDFORD: Well, Daytona is the first one on our list.

MARQUEZ: Love that. Love Daytona.

REDFORD: House prices fell 47 percent in Daytona since the recession began.

MARQUEZ: Wow.

REDFORD: You can actually buy a condo on the beach for $100,000 or less. It has great fishing, great boating, for NASCAR fans there's the International Speedway. And it has easy access to Orlando and some of the attractions there.

MARQUEZ: And where else -- if you're not into the sunny climbs, you want mountains, you have choices there?

REDFORD: You do. Pocatello, Idaho, is next on our list. Pocatello is one of the smallest cities on our list, and yet it has so much to do. It's the home of Idaho State University. It's also surrounded by so much natural beauty. A thousand square miles of hiking and biking trails, while water rafting and lift tickets you can get a lift ticket for $26 a day or less.

MARQUEZ: Hey, that's not bad. Where else are you looking at?

REDFORD: Well, Bangor, Maine, is next on the list. Bangor, Main, is a small city. It's called the queen city of the east for its Victorian architecture, and some of its beautiful buildings, has the Bangor Symphony Orchestra. The Bangor band has free summer concerts. And it's also on the Penobscot River with a lot of fishing and boating.

MARQUEZ: Well, we love Maine, the food is just delicious up there. We love Idaho, too. Where else you're looking at?

REDFORD: Greenville, South Carolina, was next on our list. Greenville, South Carolina has something for everyone. It has a 14- mile hiking and biking trail through downtown. It's becoming known as a foodie city. And it also has some culture, some symphony, a ballet, the Peace Center for the Performing Arts.

MARQUEZ: All right. And rounding out the top five?

REDFORD: Grand Rapids, Michigan. It's the home of the Ford Presidential Library. It hosts an annual blues on the mall festival. And it also was recently named beer city for all of its craft breweries.

MARQUEZ: Well, there's nothing I love more than a good beer.

Gabrielle Redford, thank you very much. With AARP magazine, thanks for coming in.

REDFORD: Thank you so much.

MARQUEZ: There's much more to come when NEWSROOM returns in just 30 minutes. We'll get the latest on the debt crisis talks and Tom Hanks' latest movie depicts the drama of -- of 2009 hijacking off of Somalia.

Christiane Amanpour sat down with the Oscar winner to talk about Captain Phillips.

Plus, do you love "Candy Crush"? Even if you don't know what it is, you'll want to stick around to hear about an addictive online game that could be worth billions.

Later on CNN NEWSROOM.

And to remind you, we are waiting for that press conference from the Senate. When it happens, we will bring it to you.