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CNN NEWSROOM

Senate Democrats Now at the White House; Washington, Wall Street Alliances Changing

Aired October 12, 2013 - 16:00   ET

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


DON LEMON, CNN ANCHOR: It is so good to be with you on this Saturday. I'm Don Lemon. You're in the CNN NEWSROOM.

So, there are new developments to tell you about right now in Washington. We are working on all of it for you. The House of Representatives like most of the government today, not working. Talks between the Republican House leadership and the White House are going exactly, here's a quote, "nowhere." So now the Senate is trying to give it a shot.

So, as I say, we have a lot to cover for you. Our chief political correspondent, of course, is Candy Crowley. Candy is in Washington. And then at the White House is CNN's Brianna Keilar.

Brianna, I under that you just got back from a little bit of an update on the situation in Washington. Fill us in. What did you learn?

BRIANNA KEILAR, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, yes, don. Basically as we said, Senate Democrats are meeting here at the White House with President Obama. You have the top -- I should say Senate Democratic leaders, the top four, so you have Harry Reid, Dick Durbin, Chuck Schumer and Patty Murray. They're in, I'm told by White House officials, just basically doing a check-in with President Obama, kind of comparing notes and getting on the same page after a lot of developments here in the last couple of days. After the White House rejected a House Republican proposal that would have extended the debt ceiling for just six weeks right up to the beginning, really right before Thanksgiving, which you could imagine that would have put us in this whole situation all over again in just a month and a half.

And then Senate Democrats rejecting now a proposal by Senate Republican Susan Collins, and you also had a vote that failed in the Senate. It would have been a clean as they call it without anything attached to it bill to reopen -- or I should say extend the debt ceiling beyond the midterm elections.

So, everything kind of back to the drawing board at this point, and really the focal point is now on the Senate, Don, and it's on Mitch McConnell, the Senate minority leader. He is talking with Senate Majority Leader Harry Reid and the point person in negotiations as well as Senator Lamar Alexander, so a lot of attention -- a Republican, a lot of attention there.

But at this point, we don't have any sense of what a deal might look like. When this might be struck, and even if anything can really progress so that we see something before the markets open on Monday and no doubt react one way or another, depending on this weekend's developments.

LEMON: Well, the way things have been going, not keeping my fingers crossed and I'm sure most of America is not doing that either. Again, the president meeting with leaders. But no Republican leaders invited to this meeting?

KEILAR: No, that's right. I mean, think of this as sort of a time- out, you're meeting with your team, you're not really going to invite, you know, players from the opposing team?

LEMON: Gotcha. Gotcha. Stand by, Brianna, because I want to bring Candy in.

Candy, Senators Reid and McConnell said they are cordially negotiating an extension of the debt ceiling. If they agree on some terms, what happens when the House reconvenes?

CANDY CROWLEY, CNN CHIEF POLITICAL CORRESPONDENT: Well, having said "if" is a really big if here, but if they come up with something, and it passes muster in the Senate, it goes to the House and we see what happens in the House. But clearly, I think from the very beginning you could see that the president was -- it was kind of the divide and conquer approach. You know, how the president always said now a handful of Republicans in the House are doing this and doing that.

There's, you know, sometimes he would say, you know, they're like- minded, you know, good Republicans, you know, country loving, you know, patriotic Republicans, but a small group of members of the House. So, there was sort of always this division. And then institutionally there's a division.

And the Senate generally is a little more accommodating, the parties are a little more accommodating to one another simply because they have to be to get anything done.

So, it is now as Brianna said, up to the Senate. But the question is, is whatever the Senate comes up with going to pass muster in the House. Will John Boehner, the speaker, look at it as, hey, this is what we've got, folks, and then just put it out on the floor. Or will his -- those -- that small group of Republicans the president keeps talking about say we don't want to do this?

So, I think it's anybody's guess. Because what the House will do depends on what the senate gives them, if they give them anything.

LEMON: Candy, it feels like -- a lot like Groundhog's Day. I remember being here --

CROWLEY: It does.

LEMON: -- I think you and I and we were talking two-on-three Saturdays ago and they were getting on this thing that wasn't going to happen or going to pass. And it just seems like the same thing keeps happening over and over and over again, to the average American. You are there in Washington. You're immersed in this stuff. I'm not as much as you are.

But, I mean, what's really going on? Is this really sort of the same thing that's been happening week after week after week?

CROWLEY: Really not -- yes, it is. I mean, not much has happened. I mean, if you go back and listen to what Harry Reid, the Democratic leader in the Senate, said today was, I hope that the American people and the world will take heart in the fact that Mitch McConnell and I are talking to each other.

Really? I mean, you know, these two people work in the same place over the same problems, so that's not, you know, not exactly comforting, I don't think. You saw the markets, you know, just loved it when the president invited Republicans down to the White House and said, well, tell me -- tell me what it would take to get the government open, so the House tells him and he goes no, and that goes nowhere.

It's just really -- we're treading water except for the people who have been furloughed and all of those people who aren't government workers whose own businesses are affected by this. They're not treading water. They're kind of losing ground.

So, look, here's the good news -- they have to solve this at some point. So, every day we are a day closer. But this is a lot farther along than I thought we'd ever get. I thought it would be solved by now.

LEMON: Can you talk to me about the House members who are leaving Washington, who are going back to their own districts now, is this the time to do that, I mean, when Congress is under so much scrutiny right now?

CROWLEY: Optically if that's a word, the optics of it, the way it looks, not good. Here are, you know, again, 100,000 -- hundreds of thousands of workers, government workers, laid off. Lots of things closed. And does it look good to say, "Oh, we can't solve this problem so we're going to go on home for our holiday weekend"?

No, it doesn't. But can I tell you just practically speaking? This is up to the leadership. If you're, you know, a congressman from Utah who's just arrived, you know, in Congress, you're not making policy here. You're waiting to talk to your leader to see what he has.

Now, you get to vote. I mean, everybody's vote is equal, but when it comes to putting it together, it really is about the leadership and, you know, they have phones.

LEMON: OK. Optically it's not optimal.

CROWLEY: Horrible. No, it's not -- it's not optimal, it's horrible, you know, I agree, totally.

And you've seen Twitter. It offends people.

LEMON: Yes. CROWLEY: It looks like they're not doing their job because they're -- they're not. They haven't, the government shut down and they're about to run out of money.

LEMON: And we've all seen the polls as well, Candy.

And I want to get back to Brianna right now. Brianna, as you stand there at the White House and the president's meeting with leaders, John Boehner's doing whatever he is, he says he wants to have a deal within 48 hours.

I mean, so what gives here? What are they hoping to accomplish tonight, if they can? What is going on?

KEILAR: Do you know what's really unclear what they're hoping to accomplish. There is a lot of focus, though, right now, as I said, on whatever sort of situation Mitch McConnell and Lamar Alexander, two Republican senators, can sort of strike with Senator Reid, if that is possible at this point.

But, Don, it is very clear that the White House feels they have the upper hand here. The polls reflect that, right? You have recent polls that appear to have swayed Republicans as well that show that Republicans are being blamed for this, much more than the White House, much more than Democrats, that the Tea Party approval rating is at an all-time low.

And so, I think what you see, you're going to be seeing here in the coming days is more and more pressure. It's going to happen exponentially, Monday if this isn't resolved, the markets will react. That exerts a tremendous amount of pressure. Congress frequently responds to that, the march towards Thursday, that deadline October 17th, pressure.

And what happens when you press on let's say, a stool, well, the weakest leg gives and the way the White House reads this is that Republicans are the weakest leg of that stool, if you will, so they sort of I think feel that ultimately as the pressure builds, their situation gets even better and they'll have to give even less and they really don't want to -- they really do feel that negotiating on this sets a precedent of here we are all over again, anytime there's a debt ceiling or there's government funding that comes up.

LEMON: Right, right. It's interesting you said the Tea Party's approval rating at an all-time low.

CROWLEY: It is.

LEMON: And yet, Candy and Brianna, they are really controlling what happens with the Republican Party and yet they're at an all-time low. We'll talk much more about this.

I appreciate you, Candy.

I appreciate you, Brianna, as well. And I want to tell you, make sure you tune in. Candy Crowley is going to have an exclusive interview with one of the key players in the shutdown. Kentucky Senator Rand Paul joins Candy on "STATE OF THE UNION" tomorrow, 9:00 a.m., and then again, at noon Eastern, only here on CNN.

This week, Wall Street cheered news of a possible debt limit deal. On Friday, the Dow was up more than 100 points and Thursday was its best day in nearly two years. But, again, today, no real signs of a deal. Is big business beginning to lose its patience? Next.

(COMMERCIAL BREAK)

LEMON: All right. We want to get you now back live to Washington. Live pictures of the White House now where the president is meeting with Senate Democratic leaders right now trying to come up with some sort of compromise, some sort of deal, something to do, at least so that Democrats are on the same page.

They rejected earlier a compromise, a deal, by Republican senator from Maine, Susan Collins, so that is not going to happen. So, we don't know when there is going to be a deal.

And as our Brianna Keilar has been reporting standing in front of the White House, if something doesn't happen by this weekend or at least by Monday, the markets will react and probably will react poorly. And so all week long, you know, people were talking about the possible disconnect between Washington and Wall Street.

But then the Dow soared Thursday after news of a possible deal, and then yesterday the Dow closed up another 111 points. Apparently not freaking out over Washington's political stalemate, right? But how long is this going to last? How long can this last?

Ben Feller is a media strategist for Mercury Public Affairs. He joins me now from New York.

So, Ben, do you believe there's a disconnect between Wall Street and Washington?

BEN FELLER, MEDIA STRATEGIST, MERCURY: Oh, there's a massive disconnect. And I think what's happening this weekend is the perfect representation of that. You know, in Washington you see the mess that's unfolding by the hour with the House and the Senate and the White House and their focused on what's the deal going to be to try to get us out of this and it's playing out by the hour.

In New York, the titans of Wall Street are incredulous that we're even that close again. You know, you mentioned so far the market so far has been pretty stable and I think that's because in New York the thinking is we've seen it play before and it will together at the end. But this time it might be different as the president warned and when the markets open on Monday you might see the freaking out as you mentioned.

LEMON: Why did you say that the titans are incredulous that this is going on?

FELLER: Because we're a few days away from a potential default and the way that Wall Street looks at it there are outside forces that the market has to respond to that makes it difficult to react. But in this case it's a self-imposed problem. You have the Congress and the White House unable to reach a deal about paying their bills and that could mean the end of credit, it could mean the stock market plunging. It could mean, you know, people unable to see that the values of their homes or 401(k)s is anywhere close to being stable.

And we're really close to that line once again, Don, and I think that's why they are thinking how could we be going through this once again? And they are trying to influence the debate but it's not really their debate to have just yet.

LEMON: So, Ben, we often hear tell of it that the White House, Washington, Wall Street, they're cozy, they're sort of bedfellows. How cozy are Wall Street and the White House specifically?

FELLER: Well, this is a complicated relationship, Don, as a lot of relationships are that revolve around politics and money. You know, right now the president is in line with Wall Street because of that concern about default and, in fact, he's looking for Wall Street leaders, the bankers, the people that he's now in touch with and talking to a lot to help make the case for him about the catastrophic threat of default.

But it goes back and forth, you know, when the president ran for re- election -- ran for election, I'm sorry, the first time he did very well by Wall Street. They pumped a lot of money into his campaign and once he got elected and the recession hit in force, he went after Wall Street and talked a lot about how there needs to be reform passed, the Wall Street reform law, and the relationship soured.

In fact, after the midterms, the president acknowledged, I've got a strained relationship with the business community, I need to do something about it. And, in fact, you know, that's been up and down. Right now as this fight plays out, he really needs Wall Street on his side. But the cozy relationship, you know, kind of goes by the month.

LEMON: OK. Listen, for decades the Republican Party has cast itself as the business friendly party and an expert who studies Wall Street and Washington Greg Valliere wonders if it's the case. I'm not going to play this sound byte, because he spoke about it.

I'm just wondering -- is the Tea Party complicating this relationship?

FELLER: Oh, absolutely. The Republican Party as you said has been the haven for the business community and been the party most aligned with that side of the debate. It's really not the case anymore. When you talk about the Wall Street leaders who are trying to influence this debate, they're not really speaking to the people who are leading the charge, and that's the minority in the House. Those are folks that are aligned with the Tea Party who very much want to listen to their constituents and aren't influenced by big business as much anymore. LEMON: Ben Feller, appreciate your expertise on this. Thank you. Have a good evening.

FELLER: All right, thanks, Don.

LEMON: You're welcome.

You know, one business is, again, stepping into the political fight. Starbucks as a matter of fact, their customers can sign a petition that puts pressure on Washington to work it out, 11,000 stores, millions of customers, will it make a difference? That's next.

(COMMERCIAL BREAK)

BROOKE BALDWIN: We're calling her the bravest girl in the world, one year now after being shot by the Taliban at point-blank range, Malala Yousufzai shares new exclusive details with us, do not miss it.

Also, sex and expert relationship Dan Savage will make the case that monogamy not always the best policy. Wait for that.

And if you think you're healthy? You will not believe how much sugar is in the so-called super foods, the stuff you are eating and drinking and you are thinking you are being healthy. I'm talking more than that is in multiple doughnuts.

We've got it ahead at 4:30 Eastern, we'll you then.

LEMON: All right. Until then our live coverage, though, will continue and we're going to talk about Washington.

Let's get you out to the White House now and give you a live picture showing you that the president meeting with Senate Democrats strategizing and trying to figure out some sort of strategy to end this stalemate in Washington. What they're going to come up with, when knows, but we certainly hope that it will help out.

There was a deal to be struck earlier, a bipartisan compromise by Maine senator, Republican senator, Susan Collins. They rejected that. The president rejected that. Senate Democrats rejected that. And so that is not going to happen.

Fingers crossed. We'll keep you updated.

And we're going to talk a lot more about this, right? Because a lot of disagreements have been solved over a good cup of coffee. But the shutdown standoff will take more than that, so Starbucks CEO stepping into the fight with a petition customers can sign urging compromise.

CNN's Nick Valencia spoke to some coffee lovers who hate this crisis.

(BEGIN VIDEOTAPE)

NICK VALENCIA, CNN CORRESPONDENT: We've been out here all morning long talking to customers at Starbucks of what they think of Starbucks CEO Howard Schultz petition to Washington trying to end the gridlock and the bipartisan agreement he's looking for in order to end the partial government shutdown.

Customers have had a varying range of opinions. Some say that this petition doesn't make any sense. Others think that it's exactly what's needed right now.

One of those customers is David here. He's all the way from New York. But he's in here in Atlanta.

Come on. Step on here.

What do you think about this petition that the CEO has started?

UNIDENTIFIED MALE: I think the petition itself is a good idea. At least someone is making an effort to do something. An effort that's apparently not being done in Washington itself or by Congress.

VALENCIA: Now, a lot of people look at this partial government shutdown and they say, how did we even get in this mess to begin with? Do you look at this issue and blame one side over the other, or do you think that both parties and both politicians on either side have some blame to share?

UNIDENTIFIED MALE: I tend to lay the majority of the blame on the Tea Party faction of the Republican Party because they're narrowly focused. They're unwilling to compromise, which is something we've traditionally had in government. And it's -- it's -- I think it's just real a monkey wrench in the whole works of the political scene.

VALENCIA: David, what do you think, will it take a petition like this? I mean, they've already got over 1 million signatures, is it going to take something like this in order for that message to be sent to those politicians in Washington?

UNIDENTIFIED MALE: I think this will make an impact, but I think the message has already been sent and hopefully in 2014 things will change.

VALENCIA: Thank you very much for your input and taking the time with CNN. A wide range of opinions we've seen out here all day long, 11,000 stores, Starbucks locations throughout the United States, and they average about 20 million customers. Starbucks CEO Howard Schultz is hoping that every single one of those customers signs this petition.

Nick Valencia, CNN, Atlanta.

(END VIDEOTAPE)

LEMON: All right. Appreciate that, Nicky.

You know, a tourist says his rental car's GPS system led him onto train tracks and nearly got him killed. A Philadelphia man visiting San Diego says he was using his GPS when he took a wrong turn and ended up getting stuck on the tracks. The tourist was able to get out of the vehicle and unload his belongings but a train came and pushed the car half a city block. An Amtrak machinist said he's seen it happen before.

(BEGIN VIDEO CLIP)

MIKE GETZ, AMTRAK MACHINIST: It was an older couple was using their GPS and they brought their Lexus straight down this alley, following GPS, and it almost ended up on the MTS tracks. Somebody's eventually like I said is going to end up coming down here and nobody is going to be here to stop them and there's going to be a train coming and they're going to end up dead.

(END VIDEO CLIP)

LEMON: Wow, unbelievable. No one was hurt this time but let's hope they get that GPS issue worked out, right?

It's a storm as big as hurricane Katrina. That's what we're told, but the death toll could be far, far worse in this storm. The details are next.

(COMMERCIAL BREAK)

LEMON: White House is a busy place on a Saturday because the president meeting right now with senate Democrats and they're trying to come up with some sort of strategy to end this government shutdown, to come up with a deal to raise the debt ceiling. What will they come up with? Will it be a strategy that the Republicans will go along with? We shall see. We'll keep you posted.

In the meantime, there's other news to tell you about here on CNN. A massive storm pounding the coast of India. Cyclone Phailin made landfall about four hours ago and this is no ordinary cyclone. This storm is the equivalent of a category 4 hurricane and the U.S. Navy is forecasting maximum sustained winds of reaching, get this, nearly 200 miles per hour.

Forecasters say a storm surge of 23 feet is possible. Half a million people were evacuated ahead of that giant storm. We'll keep you updated on that as well.

Taking a brief break from the government shutdown worries, President Barack Obama and the first lady welcomed a special guest to the White House. They met with Malala Yousafzai yesterday. Malala is a Pakistani teenager who was shot by the Taliban and was a top contender for this year's Nobel Peace Prize. The first family thanked Malala for working so hard for girls' rights to an education. And president proclaimed Friday that the International Day of Girl in honor for that work.

I'm Don Lemon here in Los Angeles. I'll see you back here at the top of the hour when our live news continues. In the meantime, it's time for Dr. Sanjay Gupta.