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CNN LIVE EVENT/SPECIAL

Shutdown Showdown Day 14

Aired October 14, 2013 - 23:00   ET

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


(BEGIN VIDEOTAPE)

JAKE TAPPER, CNN ANCHOR: Tonight, a CNN special.

SEN. HARRY REID (D), MAJORITY LEADER: I'm very optimistic.

SEN. MITCH MCCONNELL (R), MINORITY LEADER: I share his optimism.

TAPPER: After two weeks of paralysis.

SEN. BOB CORKER (R), TENNESSEE: Yes, there's a deal to be had here.

TAPPER: There's finally movement. But the clock is still running down.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: If we don't start making some real progress both in the House and the Senate we stand a good chance of defaulting.

TAPPER: Will the House rank-and-file play ball? Don't count on it.

If there are no systemic changes to the -- our debt I would vote no.

TAPPER: Our guest, a Republican lawmaker from a swing district. Already getting hammered by Democrats.

UNIDENTIFIED MALE: Jeff Denham joined with Tea Party Republicans in Congress and shut down our government.

TAPPER: California Congressman Jeff Denham joins us live, and fires back.

This is SHUTDOWN SHOWDOWN.

(END VIDEOTAPE)

TAPPER: Good evening, everyone. I'm Jake Tapper. Welcome to this special half hour of CNN's SHUTDOWN SHOWDOWN.

Keep your eyes on the clock. On the right of your screen, we're closing in on the 48-hour mark before we set off what billionaire investor Warren Buffett has compared to a nuclear bomb, a potential default on our country's sprawling national debt.

We're also approaching day 15 of the partial government shutdown, which has left more than 400,000 government employees sidelined, not to mention the hundreds of thousands working without pay, or all of the individuals whose livelihoods have been impacted or about to be, whether in the tourism industry near national parks, or low-income mothers who need WIC funds to buy formula for their babies.

Tonight progress. Even -- dare I say it -- a tinge, a surge, a hint of optimism. On the Senate floor today, Senate Majority Leader Harry Reid channeled Jimmy Cliff, waxing poetically that tomorrow could be, quote, a bright day. A slew of back and forth negotiations were supposed to end with congressional leaders and the president meeting at the White House this afternoon. But that meeting never happened.

However, we're told that's a good sign. That it means negotiations are intensifying and the very rough structure of this deal is starting to take shape. It hinges on extending the U.S. government's ability to borrow money to pay our bills through February 7th and the reopening of the government until January 15th. But of course there are strings attached.

In any negotiations we'll have to clear a high bar in the House before there's any bright sun-shiny day to sing about.

Speaking of the House and whether Republicans will accept the Senate deal, we're happy to be joined this evening by Republican Congress Jeff Denham of California. And as always our dream team, chief political analyst Gloria Borger and chief congressional correspondent Dana Bash.

Congressman, thanks so much for being here. I know that you're -- it's only 8:00 where you're from. So it's not actually that much of a hardship to be up this late.

(LAUGHTER)

But thanks so much.

Before we begin, Dana, get us up to speed on where the Senate negotiations are.

And then, Congressman, I want to see if it's anything you can live with.

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Our understanding is that they are pretty much almost there. The question is whether Senate Republicans -- they're going to have a meeting tomorrow morning -- whether they agree to it. And the gist is that the government will be reopened and will be funded until the middle of January. The debt ceiling will be raised until probably the first week in February.

And you know, the idea is that Democrats gave a little bit, perhaps they think a lot, because they wanted the debt ceiling to be raised all the way through the end of 2014. It's going to be earlier. And Republicans think that they gave a little bit because they wanted to have the government open and move all the way into next year because, you know, the sequester levels, another round of cuts kick in as far as spending cuts in 2014. But that's not going to happen now. So that's what they think the sort of give and take -- TAPPER: So they would keep the level of funding the government at the lower sequester now but not the even lower level that kicks in next year.

BASH: Exactly.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Right.

BASH: Right. January 2014. That would be the case.

TAPPER: Is there any -- what about Obamacare or anything else?

BASH: They say -- at this point they're sort of -- I guess nibble around the edges. It's not anything big like defunding Obamacare as you all had voted for or delaying as you all have voted for, or the other things that you all voted for that didn't go in the Senate, things like making sure that the -- that there's employer -- that there's verification of people's income levels, that they're getting subsidies for Obamacare.

BORGER: I thought that was in it, actually.

BASH: Well, yes, I mean, the White House says that there is something in there already. But they want to make sure.

TAPPER: And there's another tax that might be delayed.

BASH: Tax that might be delayed for -- which actually it's an employee fee which unions hate. So that's actually something Democrats want.

TAPPER: So, Congressman, can you live with that? Is that enough? Would that be enough for you to vote to open the government?

REP. JEFF DENHAM (R), CALIFORNIA: Well, I'm hopeful that it is actually going to be a brighter day tomorrow. That we see both parties working together. Certainly I think it's good news to hear that there may be an agreement in the -- in the Senate. But really, it's going to depend on those details. You know, I'm somebody who very strongly believes that we've got to get this $17, going to $18 trillion in debt under control.

So I want to see a long-term plan which I think the American public wants to see, too. We haven't had a budget for five years now. So, you know, absent a budget or appropriations bills that continue to sit over in the Senate, we have to have some type of blueprint to show the American people what our priorities are.

BORGER: But what about this -- the whole strategy originally tying this to defunding of Obamacare, effectively promising people who don't like Obamacare something that you couldn't deliver? If you had to do it all over again would you do it that way?

DENHAM: I think doing it all over again we had originally anticipated that the debt ceiling was going to come up first. And we'd be dealing with spending issues right now and that was always our focus. The timing --

BORGER: So that's a no?

BASH: That's a no.

(LAUGHTER)

DENHAM: The timing got structured --

BORGER: That's a no.

DENHAM: Structured on so.

BORGER: So you wouldn't have done it this way. Because I mean you look at the polls. You know, you're being targeted in your district. Two-thirds of the public blames Republicans.

TAPPER: There aren't huge amounts of swing districts left in this country.

BASH: That's true.

DENHAM: No.

BORGER: Right. Right.

TAPPER: But you're in one of them. And, I mean, if we can just pull up the poll numbers, there's a new poll from "Washington Post"/ABC News showing that -- how Republicans were handing -- handling negotiations disapproval in September, it was 63 percent disapproval. Then in -- early October 70 percent. Now it's 74 percent.

The public is turning against Republicans. Numbers are bad for Democrats also, in the 60s and for President Obama above 50 percent. But really bad for Republicans and that's got to be of concern to you.

DENHAM: Even lowers -- lower for members of Congress.

TAPPER: Yes.

DENHAM: Yes. I mean, it's -- we're at an all-time low right now. That's horrible for us and certainly even worse for the country. We've got to find ways to work together. And, you know, on a variety of different issues, including this, we've been able to get Democrats to come together with Republicans and start working on no labels types of ways to solve this problem. Getting rid of the party and focusing on American solutions.

BASH: You know, I was in the hallway as the Senate was voting tonight. And John McCain had a classic John McCain moment where he was actually holding a copy of that poll that you just read in his hands. And a reporter asked, do you think Republicans are going to give on this? He said of course they are. And somebody said, why? And he said, right here, 74 percent of Americans are blaming us.

TAPPER: Yes. BASH: Meaning Republicans. I mean, you're feeling that, right? I mean, do you feel like at this point like enough already? We've got to move on?

DENHAM: We should never have got to this point. We should have had this done --

BASH: You know, it was a Republican strategy in the House.

DENHAM: It was a strategy to actually get both sides to talk. That's why we passed so many different funding bills. You brought up WIC. An important issue. I mean, we passed a funding bill for that. But the whole opportunity was to get both sides, both Houses, actually get the president engaged on some negotiations on some of this stuff.

BORGER: But isn't that like saying you knocked Humpty Dumpty off the wall? And then you tried to put him back together saying that you were voting to refund the government in certain pieces and you couldn't quite them back together? Does that mean --

DENHAM: We're trying to find any opportunity that we can --

BORGER: But you can't --

DENHAM: -- to get this president to engage. I agree --

BORGER: So what's going to happen tomorrow? OK. Let's ask you that. I mean, I -- there's going to be this caucus --

(CROSSTALK)

TAPPER: Yes, you talk -- talking to your colleagues, is there -- I guess that the big question right now in Washington is not whether Mitch McConnell and Harry Reid are going to be able to strike a deal similar the one Dana outlined. I think people think that's going to happen and it could pass the Senate fairly overwhelmingly. Will House Republicans go for it? Could they go for something like what Dana outlined?

DENHAM: I think it's in the details. And when I say the details it's not so much what are the different pieces that each party may contribute to the overall negotiation. The real details are what is the long term solution? Are we actually going to have a conference committee? Is there some type of guarantee that both parties are actually going to work together?

BORGER: They say yes.

BASH: It'll be part of it.

DENHAM: That -- but there should be teeth in there. We've had budget committees in the past --

BORGER: What are -- OK. So what are the teeth?

DENHAM: Some things that would force both parties to actually come together. No budget no pay was a good example of a way to get the Senate to actually provide some action. We need to have that same type of action. To get not just both Houses but both parties to work together on a compromise.

BASH: So if they don't have that you're not -- you don't think you would be able to vote for it? Or do you feel so much pressure back home to, like, you know, reopen the government --

DENHAM: No, my concern is always with the debt. The debt that my kids are going to have to take on. So it's a big issue for me.

TAPPER: And let's talk about that right after this break.

When we return now it's getting personal. Congressman Denham is sticking around. I'll ask him about one very targeted ad that's running in his district back home. Will the shutdown cost him his job?

(COMMERCIAL BREAK)

TAPPER: We're now just over 48 hours away from the federal government not being able to pay all its bills and the clock continues to tick down. The big question, are members of Congress more concerned about saving their jobs or your retirement savings?

Stay with us.

(COMMERCIAL BREAK)

TAPPER: Welcome back to SHUTDOWN SHOWDOWN. We're back with Congressman Jeff Denham.

And before we go into the show, you have a special message for your mom who just got out of the hospital, Geri Strand (ph)?

DENHAM: I just wanted to say, welcome home, mom. Sorry, I couldn't be there this weekend.

TAPPER: All right. Now let's go back to the serious political discussion. Because you, sir, are one in 10 Republicans already being targeted in a new round of ads that blame the GOP for the government shutdown.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Jeff Denham joined with the Tea Party Republicans in Congress and shut down our government. Putting hundreds of thousands of Americans out of work.

(END VIDEO CLIP)

TAPPER: Also joining our political panel this evening, John Harris, the editor-in-chief of "Politico." Of course we're joined as always by Gloria Borger and Dana Bash.

So, Congressman, these ads paint you as a Tea Party Republican. They have a picture of Ted Cruz. This could hurt you in fall of 2014 or not?

DENHAM: I'm not concerned about it. I've got a job to do here. And that's to represent the people of my district and, you know, I go home and we hold the town halls. I want to listen to everybody. But we've got to -- we've got a job to do here. That huge amount of debt that we have is a big concern as well.

TAPPER: John, you want to get in here? You feel free to ask a question if you want.

JOHN HARRIS, EDITOR IN CHIEF, POLITICO: Well, there's -- no question that Democrats are going to try to make you, even though you're not a primary sponsor of this strategy, try to make you pay with ads again and again. So even your mother Geri Strand will be saying, I'm not so sure about this guy. I mean, is that going to --

BASH: She'll never change her mind.

(LAUGHTER)

HARRIS: You must be frustrated that members of your own party don't seem to have a sensitivity to people like you in your situation in California.

DENHAM: You know, a lot of people go out there and say a lot of different things and certainly that gets frustrating. The most frustrating thing is you can't get both parties to work together at a time when -- you know, this isn't a Republican or Democrat. This is about America, our jobs, our full faith and credit to other nations. I mean, this is something that is a worldwide issue. It's a big issue.

(CROSSTALK)

BASH: No. But you have so many of your colleagues, in all fairness, they don't want to work together. They don't have to work together. In fact, their pressure is not to work together because they're most concerned not with being beaten by a Democrats, but being primaried by a Republican. You hear that all the time on the floor of the House.

DENHAM: I do. On both sides of the aisle. I mean, there are very few blue dogs left. And that creates a challenging dynamic.

BORGER: Can I ask -- you and we can talk about this, is this sort of moment John Boehner is having? I mean, tonight, he might be worried about what's going to happen in his caucus tomorrow. He probably -- I mean, John Boehner is not a guy who seems to carry his problems around with him. He's kind of low key, he goes out and smokes a cigarette when he gets nervous.

But is -- could this be sort of a moment that defines him? Do you think? Particularly if he decides to go without a majority of his own Republicans?

DENHAM: You know, when you're speaker I think there are a lot of big issues that will come up during his speakership and a lot that are already now.

BORGER: Not a lot bigger than this.

DENHAM: This is a -- this is a big deal. The amount of our debt is a big deal. That's a big deal to our conference. That's something we're going to have to explain tomorrow. And certainly if this is going to be a short-term agreement what is going to happen in the next three or four months to make sure that we're in a different place four months from now.

TAPPER: Should Speaker Boehner bring this up, bring up the Senate bill, assuming it passes the Senate? Even if it will only pass because of Democrats and not because of Republicans?

DENHAM: I think it's a discussion we have to have. I mean, again, you know, whether or not --

TAPPER: How important is it to you that it -- that he get the majority of the majority as oppose to just the majority of the entire House? To you personally.

DENHAM: To me personally it's extremely important that we actually stop the shutdown and that we avoid the debt ceiling cliff. So I think we have to have serious discussions about that. And it's unfortunate that finally after, you know, over two weeks of the shutdown we are finally engaging in those types of conversations.

HARRIS: But, Congressman, a crisis and even a government shutdown would be one thing. If the crisis led to some kind of resolution, if it somehow clarified the issues or settled the issues, what seems so frustrating about this is at best the resolution is going to be let's kick the can for two more months. In other words, nothing is resolved.

DENHAM: That will be the biggest frustration in our conference guaranteed tomorrow. We want a long-term resolution. We want a path to know that this $17 trillion --

(CROSSTALK)

BORGER: How about guaranteed negotiations? Sort of, you know, what they --

DENHAM: Yes.

BORGER: OK. We're going to negotiate and we're going to get done by December --

BASH: And that is what's allegedly in this deal.

BORGER: Yes.

BASH: It is to say that the budget negotiations have to start and they have to finish by December 13th. Now we all know that they made deadline for themselves.

(CROSSTALK)

HARRIS: Well, Dana, you're up there all the time. Is there any dynamic? I feel from afar as an editor what it always looks like there should be a deal and in fact, if you could get the parties in a room, no cameras it would take them maybe 30 minutes to get the deal.

BASH: That's (INAUDIBLE).

HARRIS: But how many times can we be tricked by this? You would think 2011, time after time after time, OK, there's going to a grand bargain sometime this year. Never happened. 2012 after the election the conditions will be right. Didn't happen. When is it going to change?

BASH: I mean, you would think that it would change relatively soon because Barack Obama's time is running out for his legacy. And if he wants to have big changes, he's got to do it pretty soon but he might want to wait until after the 2014 election --

(CROSSTALK)

BORGER: Immigration reform. Your favorite issue, right?

TAPPER: We'll have you come back for immigration.

(LAUGHTER)

Congressman Denham, thanks so much and of course we're wishing the best to your mother, Geri Strand, out there.

DENHAM: Thank you.

TAPPER: And thank you so much.

When we return, "Tomorrow's Playbook." Tonight what's going through John Boehner's head right now. Is he leaning toward accepting a deal? A new reporting on what the speaker of the House may or may not accept. Coming up next.

Thank you, sir.

(COMMERCIAL BREAK)

TAPPER: We're just over two days away from the debt ceiling deadline and although leaders on both sides at the Senate say they're optimistic, what will it take to actually get us there? We have a sneak peek at where the debate will go tomorrow. And that's coming up next.

(COMMERCIAL BREAK)

TAPPER: Welcome back to SHUTDOWN SHOWDOWN. I'm Jake Tapper. Back with "Politico" editor in chief, John Harris, and our own Gloria Borger and Dana Bash.

John, give us a sneak peek at what "Politico" has planned for tomorrow morning?

HARRIS: We actually put our sneak peek up just a few minutes ago. It's a look at John Boehner and his choice. What we were discussing earlier in this show. Jake Sherman, who's been on the story, particularly on Speaker Boehner like saran wrap from the beginning of this.

The Senate is going to presumably, as you say, come forward with some compromise that House members, the most conservative House members will hate. So the choice for Boehner is, look, do we say no to this, do we more likely try to amend it and send it back just to prove once again that he is giving up very reluctantly to the sort of imperative of a deal, or does he say, look, guys, it's time to fold our hands and we've got to pass it?

The problem is, if he does the amendment route there's not that much time.

BASH: Not enough time.

BORGER: Sure.

BASH: Yes. And the bottom line is that he has built a lot of goodwill. A lot of goodwill. If he would have said, I'm going to just try to pass something with Democratic votes three weeks ago it would have been hard. And he would have had a real revolt. Now -- yes, and now no. I mean there are a lot of people who said -- who say you took us down this road because we wanted you to. We wanted you to fight. You fought the good fight, we actually do know that two plus two equals four.

We understand the math here. We're not going to win. Thank you for trying. And he actually has a lot more, I think, support and trust as a leader than he did before.

(CROSSTALK)

BORGER: So he -- so he could have effectively say, I gave you enough rope, and you hung yourself and so now it's time to kind of move on and get the deal done here?

BASH: Yes. But I -- I'm not sure that --

TAPPER: The clock is really ticking. As you know, Ted Cruz or any other Tea Party Republican --

BASH: Exactly.

TAPPER: -- in the Senate could hold this up if --

BORGER: Right.

BASH: Sure.

TAPPER: You know, a lot is going to depend on unanimous consent.

(CROSSTALK)

HARRIS: Right.

TAPPER: And there may not be unanimous consent.

HARRIS: The markets said, OK, it looks like they're going to get this done, might go into panic again, which in turn would send a real message of urgency, I think.

(CROSSTALK)

BORGER: And Ted Cruz --

BASH: As has happened in 2011.

BORGER: Right.

HARRIS: Right.

BORGER: And if Ted Cruz did that, John McCain --

BASH: I don't even --

BORGER: It would beyond -- be beyond whacko bird. Right?

TAPPER: But Ted Cruz doesn't care about annoying John McCain.

BORGER: No.

TAPPER: Ted Cruz likes annoying John McCain.

BASH: We have seen --

BORGER: Right.

BASH: No, I'm not going to -- I was going to say we have -- in history books we have seen McCaining and things on the Senate floor.

TAPPER: OK.

(CROSSTALK)

BASH: I don't want to witness that --

(LAUGHTER)

TAPPER: That's it for us. Dana and Gloria and John Harris, thank you so much for coming in.

Thank you for watching. "CROSSFIRE" starts now.

NARRATOR: Tonight on "CROSSFIRE," the pressure is on. There are hopeful signs.

SEN. HARRY REID (D), MAJORITY LEADER: I'm very optimistic.

SEN. MITCH MCCONNELL (R), MINORITY LEADER: And I share his optimism.

NARRATOR: But what if they can't make a deal?

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We stand a good chance of defaulting.

NARRATOR: On the left, Stephanie Cutter, on the right, Newt Gingrich. In the "CROSSFIRE," Austan Goolsbee, who was one of President Obama's top economic advisor. And Carly Fiorina, a former CEO and Republican Senate candidate.

Can they get a deal? Are both sides demanding too much?

Tonight on CROSSFIRE.

NEWT GINGRICH, HOST: Welcome to "CROSSFIRE." I'm Newt Gingrich on the right.

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

The Senate has been abuzz all day with bipartisan meetings. And tonight it seems clear, cooler heads are prevailing. The adults are stepping in which means Ted Cruz has been benched, John Boehner has been bypassed. The adults and Senate veterans are trying to prevent the country from defaulting and will reopen the government.

Newt, I'm sorry that it has come to this, but I'm glad that we're on the verge of a deal. There is a report out earlier today by an economic forecasting, macroeconomic advisors, that these self- inflicted wounds, these cause crises in Washington has cost the country about 900,000 jobs.

GINGRICH: Well, first of all, it's a pity that the president hasn't shown leadership and tried to bring people together. But, A, anybody who thinks John Boehner has been bypassed continues to misread the Constitution. If the Senate doesn't pass something that Boehner can pass in the House, it's just a press conference.

But second after all the weeks you and I have been here debating and debating about whether or not the president should negotiate, the number one thing that's happening today is they're negotiating. Now I think that's good for America. I'm delighted that finally we are seeing some negotiation. And I hope that they will in the next 24 hours.

CUTTER: Right. You know why?

GINGRICH: Get a deal.

CUTTER: Because it's not all or nothing.