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Is The Senate Close To A Deal?; Top Nuclear Missile Commanders Fired; Costas Joins Chorus Booing "Redskins"

Aired October 14, 2013 - 16:30   ET



JAKE TAPPER, CNN HOST: Welcome back to THE LEAD. I'm Jake Tapper.

Time for our money lead now. The Dow, NASDAQ and S&P all ended on upswings today, a sign that markets may be as optimistic as our Senate leaders in getting a deal. But will the market crumble tomorrow if the deal does as well? And is the president handling this right?

Let's bring in Peter Orszag. He was President Obama's director of the Office of Management and Budget, which by the way, is the office that creates the contingency plans when the government shuts down. He's now chairman of the financial strategy and solutions group at Citigroup.

Peter, good to see you again. You are now at Citigroup. What's the mood with the financial sector? Are they optimistic as the Dow close would suggest?

PETER ORZAG, FORMER DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET: Well, yes, only because it looks like a deal is in prospect. But frankly, we're just playing Russian roulette much too much here. And there's no doubt that the recurring fiscal dramas, which I think will continue even after we have a deal in place, is harmful to the economy.

TAPPER: I'm sure you hold House Republicans responsible for the showdown and the shutdown. Do you have any criticism for how Democrats have handled this? Has President Obama been right to say that he won't negotiate and to not talk to members of Congress, leaders in Congress, until recently?

ORZAG: Look the underlying problem here is the country has polarized. You have two parties that have dramatically different perspectives on the right way forward, and we've just got to kind of figure out how to function despite those significant differences. And so where I would raise a question is whether the debt limit is the right technique to have those differences play out. And I think the answer to that is no.

TAPPER: But as we've seen, there have been any number of mechanisms, whether it was the Simpson-Bowles commission, whether it was the super committee, it just doesn't seem like there's any way for Washington to actually come together with a bipartisan deal. How would you propose doing it? ORZAG: Well, on the other hand, the deficit has come down from about 10 percent of the economy in 2009 to about four percent today. Health care costs, the most important driver of our long-term fiscal gap, have slowed down dramatically the last 12 months and Medicare, a little under 2.5 percent nominal growth, which is unbelievably low.

And so there's actually a lot of forward progress being made on our long-term fiscal gap even without some grand bargain happening. And frankly, I don't think any of that improvement warrants the kind of uncertainty that we're seeing. There's a new report out from macro economic advisors today suggesting these recurring fiscal dramas have cut the number of jobs in the U.S. economy by 900,000 people. 900,000 Americans, according to this estimate, more would have a job today if we weren't having these continual fights and squabbles that aren't very productive.

TAPPER: Just to drill down into one of the points, I thought that one of the reasons why health care costs had slowed was because the economy was slow, even though it's obviously improved than where it was four years ago. Is that not right?

ORZAG: Well, that is true with regard to total health care spending, but with regard to Medicare, which is the figure I cited, there's no reason why the economy would affect Medicare spending frankly at all. Indeed, that's exactly what a Congressional Budget Office technical paper found a couple weeks ago, that economic forces don't really affect Medicare very much.

There's a lot more structural changes happening in the health sector than I think the negotiators down in Washington appreciate. Most hospital executives are anticipating that the way that they're paid is rapidly moving away from fee for service towards a value-based payment system. And frankly, that is the best thing for our long-term fiscal future.

I will give you one statistic. If Medicare costs per beneficiary grow in the future at the same rate they did on average over the past five years -- now I'm not saying that will happen, but if it did -- Medicare doesn't rise at all as a share of the economy for the indefinite future. And that's a huge part of our long-term fiscal gap. We should be spending all of our time and effort trying to perpetuate the recent slow growth in health care costs rather than having these squabbles.

TAPPER: Peter, who are the people on the Hill who you are able to have a conversation like this about? Who are you able to sit down and talk? Can you and Paul Ryan talk about these kind of things, or are you finding people not as, shall we say, conversant in some of these economic issues?

ORZAG: I do speak with Paul Ryan, and I actually consider him -- people may be surprised to hear this -- a friend. But the problem, again, is the middle in Congress is gone. If you look at voting patterns in the House of Representatives, it's bimodal now. There is no middle. And so that was where deals used to get done in the heyday of congressional policy making. It's gone now. It's just much harder to reach agreements on things when you've got two adamantly opposed, much different perspectives on the world.

And again, we've got to figure out a way in which despite those differences of opinion, we don't continually have these dramas that are not productive.

TAPPER: All right. Peter Orszag, thank you so much for joining us. Say hi to Biana (ph) and Jake for us.

ORZAG: I will. Thanks.

TAPPER: Coming up on THE LEAD, a symbol of pride or hate. Depends on who you ask. Why one flag-waving protester really ticked off one of our panelists. We'll talk about that, next.


TAPPER: Welcome back to THE LEAD.

Now it's time for our politics lead. The horror. The horror. If you ask some worried analysts, we're potentially three days away from a sort of fiscal apocalypse. But if you ask conservative columnist for "The New York Times" Ross Douthat, the drama in D.C. is already turning into a scene straight out of the 1979 classic "Apocalypse Now."


MARTIN SHEEN, ACTOR (acting): They told me that you had gone totally insane.

MARLON BRANDO, ACTOR (acting): My methods aren't (INAUDIBLE).

SHEEN: I don't see any method at all.


TAPPER: "I don't see any method at all." That, Douthat says, is basically how reasonable people should feel about the recent conduct of the House Republicans. Ross Douthat, I believe, is a Republican. At least he wants Republicans to thrive.

Let's bring in our political panel. CNN political commentator and Republican strategist Kevin Madden. CNN political commentator and Democratic strategist, Donna Brazile. And chief White House correspondent for Politico, Mike Allen.

Kevin, unfair? Unfair movie analogy from Mr. Douthat?

KEVIN MADDEN, CNN POLITICAL COMMENTATOR: Not really. I think in that movie, there's a lot of analogies right now. You remember at the end of "Apocalypse Now" where there's a water buffalo that's basically cut into a whole bunch of different pieces? Well, in many ways, that's the political system right now. And that's something I said from the very beginning of this whole mess is that there's not going to be a whole lot of people that come out of this very good, in a very good position. Right now, the public, I think, is still casting blame on the whole political system.

MIKE ALLEN, CHIEF WHITE HOUSE CORRESPONDENT, POLITICO: They're not. They're casting blame much more on Republicans. There's a new poll tonight, the Washington Post/ABC -- shocking difference. Twenty-point gap between what people say about Republicans --

TAPPER: Let's bring in the poll. The latest poll from "The Washington Post." Disapproval over the debt crisis, Republicans in Congress, 74 percent, Democrats in Congress, 61 percent, President Obama, 53 percent.

MADDEN: But here's my point, Michael. Those are very high disapprovals across the board. Yes, some are getting more blame than others, but nobody's coming out in a position to really be in a good position.

DONNA BRAZILE, CNN POLITICAL COMMENTATOR: The Republicans prayed for this moment. They wanted to set down. They wanted to prove a point. They did not like Obama --

ALLEN: Some Republicans.

BRAZILE: That's true. Some Republicans. But the truth of the matter is that we need leadership right now. The American people are sick and tired of this conversation. They want the government to reopen, they want Congress to act like grown-ups, and they are ready to get the American people back to work. It's time the politicians listened to their constituents and not listen their pollsters.

ALLEN: And Jake, this is why Kevin is right and this is why everybody comes out of this badly. This is going to be a win for the president if you take the deal that Dana was talking about at the top of your show. That's what the president wants. But it's a weak win, because this is going to be Apocalypse January. It's all just pushed back, and we are going to have this fight again. Exactly what people don't want.

MADDEN: We are going from crisis to crisis now. Every single time that we think we've seen a cliff, we find another cliff. That's a big problem right now. I think that's something that we're going to be seeing all the way through the end of this year. All the way to 2014.

BRAZILE: And that's the point President Obama made early this year during the state of the union. He said let's stop doing these manufactured crises. Let's get a long-term deal, and we need both sides to come to the table. And hopefully the Senate will get us a good framework.

TAPPER: Hold that thought for one second. I want to go straight to Dana Bash, who's on Capitol Hill and has the latest news. What's happening with this big White House meeting we've all been waiting for? DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: It doesn't look like it's going to happen, Jake. We have been talking to Republican and Democratic sources here on Capitol Hill who say that it is now unlikely.

But that is not to be read as something that is a negative or a bad sign with regard to the shape of the deal that we have been reporting on. Perhaps just the opposite. They don't feel -- again, these are sources in both parties -- they don't feel that it would be necessary to sit down with the president and maybe even it would be productive to sit down with the president. In fact, it could have maybe the opposite effect. Especially when you're looking at what needs to happen right now, which is Mitch McConnell, the Senate Republican leader, has got to really sell it to his Republican caucus. And him going down to the White House and sitting with the president might not help that. In fact, it could hurt that process politically.

So, that is why it does not look like this White House meeting which we thought was going to happen at 3:00, then was postponed, is going to be -- is going to happen at all today. Everything could change, but that's the feeling now.

I can tell you also that our Ted Barrett was told that Republicans found out about the invitation to the meeting while Mitch McConnell was sitting in a room with Harry Reid and they sort of went huh? Why do we need to do this? Republicans saw it as a photo op from the beginning. So, that's another reason why it might not happen.

TAPPER: All right, Dana Bash on Capitol Hill with the latest.

Mikey, explain for our audience why this is a good sign. You hear a White House meeting is cancelled, it sounds like bad news, but you're saying no.

ALLEN: No. The president wants to be out there when there's something good to report. And we were hearing, and your reporters are as well, there is progress and he wants to be able to come out and bless a deal when there is one.

Dana is right. This is going to be a very tough sell in the House. I think that it may get a pretty good vote in the Senate, which means it will be very hard for the House to turn it down. You're looking down 24 or 48 hours to economic apocalypse, the leaders are going to push them as hard as they have on anything since they came to D.C.

TAPPER: Kevin, you used to work for House Republicans. If the Senate votes for this first and it goes to the House, can they do that? I know a lot of -- okay. So, they can do it in the Senate first.

MADDEN: Yes. They have to figure out the origination --

TAPPER: Yes, some budget bills have to start in the House. But if that happens, does Boehner then have to open it up just to an open vote even if he doesn't get the majority of the Republicans?

MADDEN: John has not done that all the way through this process; I don't think that's going to change now. I still think that this is a very tough sell in the House. If you remember, when I worked in the House, we had a saying that the Democrats are the opposition but the Senate is the enemy. That is still a very prevailing thought right now inside the conference.

So you know, John I think is still going to meet with his conference on this, and figure out if this is still the right approach, and you heard others like Raul Labrador and others, they talk about what they won't support before they ever talk about what they will support.

BRAZILE: The fiscal cliff with bipartisan support. Let this come to a vote in the House. There are enough Democrats who will join with the Republicans who are willing to reopen the government, so let's go ahead --

MADDEN: Big sticking point with Democrats in the House on the sequester cuts, too. That is still a challenge as well.

TAPPER: One other topic, which is that there was this big protest yesterday with a lot of veterans talking about how they wanted the memorials to be opened. Ted Cruz, Senator Ted Cruz spoke. Sarah Palin spoke. But then there was one person, a protester who had a confederate flag outside the White House who offended a lot of people.

And I wanted to get your reaction. I saw a lot of Republicans on Twitter upset that that individual was undercutting what they thought was possibly a good event for conservatives, for Republicans. Donna, your response? You're from the south.

BRAZILE: Well, it's incendiary. I'm the daughter of a veteran. I have so many veterans in my family both living and deceased. For them to bring that flag at this moment and the kind of words they used, very inflammatory. It had no place. I understand the first amendment right, I understand what the confederate flag means to a very small group of Americans, but it does not -- that was just unnecessary.

MADDEN: Yes. I mean, this is a problem, obviously, when you're trying to communicate a message that's focused on substantive differences and that was not substantive. That's pure pageantry, somebody trying to get attention for themselves. They did, but it should not deflect and I don't think it will deflect from the larger message that Republicans have on their differences over policy with the president and Democrats.

ALLEN: All that and they're just a dope. That's obviously going to undercut what they're saying, and does reflect badly, even though there's no reason it should.

TAPPER: If you look at pictures from that rally, you have all these very moving pictures of veterans, photographs of veterans. I saw one of a veteran with prosthetic legs, carrying a barrier to the White House, but obviously, when you look at all of the pictures, that's the one that stands out in a lot of people's minds.

BRAZILE: There are 3-year-old kids on head start who can't go to school, kids with cancer who can't get treatment. We need to reopen the government because all of America is hurting right now. So that's the message that should be sent to Congress and the White House. Let's get it reopened.

MADDEN: This is a very ugly version of stepping on your own message.

TAPPER: All right, Donna Brazile, Kevin Madden, Mike Alan, thank you all so much. Appreciate it.

Coming up in the "Buried Lead," their job is to watch over the military's nuclear arsenal. So what happened that led to two generals getting canned?

In sports, Bob Costas preaching from the halftime bully pulpit, what he thinks about renaming the Washington Redskins. That's all ahead on THE LEAD.


TAPPER: Welcome back to THE LEAD. I'm Jake Tapper. Now it's time for our "Buried Lead," those are stories we think are not getting as much attention as they should. This one is brass behaving badly. Some of these officers have their hands really close to the nuclear buttons. You would hope their conduct would be as polished as their shoes but lately, that's hardly been the case.


TAPPER: It was on its face, disturbing, even shocking news. Two military officials in charge of the nation's nuclear arsenal, sacked within days of each other. Major General Michael Carey, the two star general responsible for the Air Force's land-based nuclear intercontinental ballistic missiles, fired after misbehavior on a business trip involving alcohol, a source tells CNN.

And in a separate case, Vice Admiral Tim Giardina was formally relieved from his duties as the second in command of U.S. Nuclear Forces amid allegations involving counterfeit gambling chips.

MAJOR GENERAL JAMES "SPIDER" MARKS, U.S. ARMY (RETIRED): There can be no tolerance at all for the world of handling and employing nuclear weapons systems. The readiness has to be at the very highest levels. You have to select only the very, very best.

TAPPER: These are just the latest in a recent rash of firings in the military's top ranks. Last month, two Marine generals were removed for failing to protect their troops from a Taliban attack in Afghanistan that killed two Marines. The string of firings of top level officials comes as the military's leadership is trying to send a message through the ranks about zero tolerance of bad behavior.

MARKS: The overall notion of accountability remains in place, and that's the key message you have to send to your forces all the time, which is we're going to evaluate what you do, we're watching what you do. We need you to do your job.

TAPPER: The military has been here before. Last fall, then Defense Secretary Leon Panetta ordered Joint Chiefs Chairman Martin Dempsey to review ethics standards for senior officers after several incidents of reported improper behavior among the top brass.

GENERAL MARTIN DEMPSEY, JOINT CHIEFS CHAIRMAN: Now is the time for us to recommit ourselves to our profession. Now is the time for character to be valued as much, if not more, than competence. Now is the time for moral courage at every level. There can be no bystanders.


TAPPER: In the case of the nuclear commander fired on Friday, officials tell CNN that his behavior did not impact highly sensitive nuclear weapons operations.

And this just in, he's an alleged al Qaeda operative who is now in custody on American soil. Abu Anas Al Libi was indicted for his role in the 1998 bombing of the U.S. embassies in Kenya and Tanzania. Two weeks ago he was snatched from his home in Tripoli, Libya in a daylight raid and then taken on board a naval ship to be interrogated. He's expected to appear in a Manhattan courthouse tomorrow on terror charges.

Coming up next in the Sports Lead, he's used halftime to call for more gun control and now Bob Costas is making his own opinion known about the name redskins. Stay with us.


TAPPER: Welcome back to THE LEAD. Time for the "Sports Lead," the Washington Redskins might be struggling offensively on the field but off the field, well, to hear Bob Costas tell us, they're one of the most offensive teams in the country. His is the latest voice urging the team to drop its name for something without the racial baggage.

During halftime of the Washington/Dallas game in prime time, the NBC announcer said the nickname is different from others like Braves and Chiefs and Warriors and is a slur with no place in 2013. Costas added that he doesn't think team owner, Dan Snyder harbors any ill will toward Native Americans. Snyder has insisted he will never change the name.

That's it for THE LEAD. I'm Jake Tapper. I'll be right here back at 11:00 p.m. Eastern, 8:00 p.m. Pacific for a special on the shutdown called "Shutdown Showdown." I now turn you over to Wolf Blitzer in "THE SITUATION ROOM."