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THE SITUATION ROOM

Shutdown Negotiations; Interview With Congressman Darrell Issa

Aired October 14, 2013 - 18:00   ET

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


WOLF BLITZER, CNN ANCHOR: Happening now, all eyes on the U.S. Senate, where leaders may be close to a deal to reopen the government, and avert a debt default. But the real action may eventually wind up in the House of Representative. I'll talk about that with Republican Congressman Darrell Issa. He's standing by live this hour.

Ranchers feeling the pain of the shutdown as a blizzard kills thousands of cattle in the agriculture department. Much of it is closed.

Plus the public relations war. The Tea Party ratchets up the rhetoric, but is it really hurting the GOP?

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. This is a SITUATION ROOM special report. Government shutdown, day 14.

Day 14 of the government shutdown, less than 54 hours until a possible U.S. debt default. The stakes could hardly be higher, as Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell, they continue to try to hammer out a deal to end this crisis.

They were supposed to meet with President Obama over at the White House earlier this afternoon, along with the House leadership, but that meeting was postponed to give them all a little bit more time to work on their plan, and we're now told a meeting with the president today is unlikely. McConnell will present the plan to Senate Republicans, we're told, tomorrow.

Let's go straight to Capitol Hill right now. Our chief congressional correspondent, Dana Bash, is standing by.

All right, Dana, let's talk about specifics, the back and forth. What is going on? Where is the middle ground right now?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, first of all, I can tell you that senators are just arriving back for their first and only vote of the day.

So, I was just over off the Senate floor talking to a lot of senators in both parties, and they are learning the information as we do. So it's really unclear where this is going to go, but the bottom line is that if the Democratic leader and Republican leader have worked this out, it looks it's very likely to go forward. What is it we're talking about? If you take a look first at all at the whole question of reopening the government and funding the government, the framework of the deal would be to do so until January 15, and that would also be precluded -- or the preface of that would be to have budget negotiations start and finish by December 13, so the idea is we wouldn't be running up against this crisis that we're in right now. That would be the goal there.

And then the debt ceiling, which, of course, we are supposed to hit this Thursday, that would be lifted and extended through February 15. You might ask what are the give-and-takes there? First of all, Republicans certainly gave on the question of continuing to fund the government. They wanted to do so well into next year. Why? Because that would have put the forced spending cuts that will kick in, in January into place and keep them in place. So they gave on that.

And then Democrats gave on the debt ceiling. They wanted to extend the debt ceiling, raise it so we don't have this potential crisis up until and through the next election, through the end of 2014. They gave on that. But there's something else that is up for discussion that it looks like Democrats will give at least a little bit on, and that's changes in Obamacare, Wolf, the idea of making sure that people who get subsidies for insurance under Obamacare, that there's no fraud there, that they actually deserve them, so verify their income.

And then also something that actually would help unions, who have been begging Democrats to do this, it's delay a fee on employees receiving insurance. You have heard the president say so many times, the Democratic leaders say so many times they won't do anything to change Obamacare if it's ransom for anything else, but it look like they might give just a little bit, especially in areas that they think will help their constituencies.

BLITZER: Let's say this passes by the Senate, if you have been Mitch McConnell and Harry Reid on board. It goes through and even 70 or 80 senators out of 100 approve it. What's the guarantee that the speaker of the House will allow it to come up for a vote in the House of Representatives without any changes?

BASH: The guarantee, at this point, House Republican sources are saying there's no guarantee, not even close. Certainly it will be a lot harder for John Boehner to sort of listen to the conservatives in his caucus who are saying, don't do this, don't do anything that doesn't have -- get more from the Democrats than this particular deal would, particularly because we're going to be heading right into the debt ceiling in just a couple of days, but even for example, Saxby Chambliss -- he's a Republican senator who is very tight personally with John Boehner.

I just spoke with him just moments ago, and he said based on what he's heard, it will be very hard for John Boehner to get this through the Republican Caucus. Look for them to at least put some changes, at least their stamp in some way on it, and certainly look for them to pass this with Democratic support, which John Boehner didn't want to do from the get-go. BLITZER: If they pass something else in the House of Representatives, then it's got to go back to the Senate, back and forth,-House Senate conferees, could get implicated.

(CROSSTALK)

BASH: Yes, that's not going to happen.

BLITZER: There's no deal until there's a deal. Let's see what happens. Dana, thank you.

Let's get the reaction from the White House to what is going on.

Our senior White House, Brianna Keilar, is joining us.

What's the feeling over there, Brianna?

BRIANNA KEILAR, CNN SENIOR WHITE HOUSE CORRESPONDENT: Wolf, there's some optimism. But I also think it's still rather murky, exactly how all of this ultimately will work out.

I will tell the meeting was postponed here at the White House today. We're told that is sort of the positive. The president felt like there was momentum in the Senate negotiations. He wanted that to continue uninterrupted, really a lot of focus now up on Capitol Hill.

We did get a glimpse at Vice President Joe Biden, who would have been in that meeting. He came out on what I think is the balcony of his ceremonial office in the Eisenhower Building right next to the West Wing. Some internal discussions obviously going on here at the White House about this, but right now, today we saw President Obama really, he was visiting a soup kitchen today.

This was a soup kitchen where some furloughed workers have been spending some of their free time during the government shutdown helping feed less fortunate folks here in Washington, D.C. President Obama used this as an opportunity to ratchet up pressure on Republicans. Here's some of what he said.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Not only is it untenable for us to continue this shutdown. This week if we don't start making some real progress both in the House and the Senate, and if Republicans aren't willing to set aside some of their partisan concerns in order to do what's right for the country, we stand a good chance of defaulting.

(END VIDEO CLIP)

KEILAR: Now, Wolf, White House officials still insist their stance is that the president is not negotiating on Obamacare when it comes to increasing the debt ceiling or reopening the government.

However, in the same breath, they won't really dismiss out of hand some of these ideas that we're hearing come from the Senate negotiations. One example would be that income verification. Republicans say you verify the income of folks who are applying for these subsidies to stop fraud. The White House really just saying in discussions, they would want to know what the mechanism is for doing that.

They don't want to discourage people from getting those subsidies, so not completely dismissing it, Wolf.

BLITZER: Brianna Keilar over at the White House, we will stay in close touch with you. Thank you.

Still ahead, potentially defective cars on American roads, and guess what? There's no one to order a recall because of the government shutdown.

Are Republicans losing the public relations war? I will talk about that and a whole lot more with Republican Congressman Darrell Issa of California. He's standing by.

(COMMERCIAL BREAK)

BLITZER: Stocks were pushed higher by hope of an imminent deal to raise the debt ceiling and reopen the federal government. The Dow Jones industrial average, the S&P 500 and the Nasdaq were all up moderately.

More news right after this.

(COMMERCIAL BREAK)

BLITZER: Day 14 of the government shutdown, only a couple or so days away from a possible U.S. debt default. The World War II Memorial here in Washington has become a key battlefield in the public relations war between Democrats and Republicans over this fiscal crisis.

CNN's Erin McPike is joining us now. She's got more on what is going on.

And part of it are very ugly. Erin, what's the latest?

ERIN MCPIKE, CNN CORRESPONDENT: Wolf, a brand-new poll from ABC and "The Washington Post" today shows three-quarters of those questioned disapproved of how congressional Republicans are handling this budget fight.

But perhaps the most interesting finding in this poll is that even self-described Republicans are torn about how Republicans in Congress are doing and about half of the Republicans questioned disapprove. That seems to be becoming a trend.

(BEGIN VIDEOTAPE)

KEILAR (voice-over): The rhetoric is Washington has boiled over. Protesters gathered outside the gates of the White House on Sunday. Longtime Republican Party activist Larry Klayman issued this inflammatory message to the crowd.

LARRY KLAYMAN, RIGHTMARCH.COM: To demand that this president leave town, to get out, to put the Koran down, to get up off his knees and to figuratively come up with his hands out -- up.

KEILAR: It was billed as a march for veteran, but it had a hint of a political rally, with some surprise high-profile guests, like new Tea Party star Senator Ted Cruz.

SEN. TED CRUZ (R), TEXAS: Why is the federal government spending money to erect barricades to keep veterans out of this memorial?

KEILAR: And firebrand Sarah Palin.

SARAH PALIN (R), FORMER ALASKA GOVERNOR: We will not be timid in calling out any who would use our military, our vets as pawns in a political game.

KEILAR: Some of the veterans who organized the rally took to Facebook to complain. Meanwhile, on Capitol Hill, more Republicans are starting to feel that way about the far right in general.

SEN. BOB CORKER (R), TENNESSEE: Certainly, Republicans have been in a place that was not going to lead to success for, you know, the last six weeks or so.

KEILAR: All of this is taking a toll on the party's image. This week's "New Yorker" cover features the ghosts of Boehner and Cruz haunting the Capitol. The veteran Republican strategist Ron Bonjean says this time the Tea Party strategy isn't working.

RON BONJEAN, REPUBLICAN STRATEGIST: We have shut down the government basically for nothing. And it hasn't made a lot of sense strategically. And Republicans in Washington are frustrated, but the Tea Party, it has not been helpful to link delaying or defunding Obamacare to shutting down the government.

KEILAR: Also on the Hill, Democrats can't resist partisan trash talking themselves.

SEN. BARBARA BOXER (D), CALIFORNIA: When you start acting like you're committing domestic abuse, you have got a problem. I love you, dear, but, you know, I'm shutting down your entire government.

(END VIDEOTAPE)

KEILAR: Now, we reached out to Senator Cruz's office to see how he took Larry Klayman's inflammatory remarks yesterday. His spokesperson, Catherine Frazier, told me: "It's unfortunate the media has allowed one person's misguided actions to distract from the real purpose. for countless veterans to rally in D.C. to urge their government to fund veterans, which Senator Cruz continues fighting for" -- Wolf.

BLITZER: All right, thanks very much, Erin McPike reporting. Meanwhile, the effects of the government shutdown, they are spreading and spreading. Many people are feeling the pain. It's getting deeper

CNN's Rene Marsh is here in THE SITUATION ROOM working this part of the story.

What are you learning?

RENE MARSH, CNN CORRESPONDENT: That's right. Well, you said it up on the top, 14 days and counting here. Some furloughed workers say they can't feel their families without help. Some in the heartland say they can't get the federal disaster help that they need. We are talking about the ripple effect of an ongoing government shutdown.

(BEGIN VIDEOTAPE)

DEE ALEXANDER, DEPARTMENT OF AGRICULTURE: I'm not essential.

MARSH (voice-over): The day before the government shutdown, CNN met Dee Alexander, a secretary at the Department of Agriculture.

ALEXANDER: You never really know what might happen because you don't know how long it's going to last.

MARSH: Two weeks later, the shutdown is still in effect and Alexander has stopped paying her car loan.

ALEXANDER: Do you decide that I'm going to have somewhere to live at or do you decide that I'm going to pay my car note? And then you also have to figure out, what about food?

MARSH: On Saturday, she received the last paycheck she will get until the government reopens, $600 less than usual. Some of furloughed have turn to food banks for help, like this one in Maryland.

UNIDENTIFIED FEMALE: What I keep hearing over and over is, I never thought I would need a food pantry, but here I am.

MARSH: The ripple effect of the shutdown also means no more car recalls. The National Highway Traffic Safety Administration has stopped looking for automobile defects. And the Centers for Disease Control has stopped tracking infectious diseases like the flu, something the agency's former director says could have dire consequences -- quote -- "I can attest to the very real potential for unnecessary pain, suffering and death when the work of public health officials is curtailed," he wrote in a op-ed.

And in South Dakota, ranchers digging out after an unexpected blizzard are dealing with tens of thousands of dead cattle. Call the U.S. Department of Agriculture for disaster assistance, and this is all they hear.

UNIDENTIFIED MALE: The U.S. Department of Agricultural offices are currently closed due to the lapse in federal government funding. The office will reopen once Congress restores funding.

(END VIDEOTAPE)

MARSH: OK. Well, at that one food pantry that we showed you in the piece there, roughly 200 people received food. That's on top of the food that the group passed out to families last week. Clearly, after receiving that final skimpy paycheck in the mail, some families are now beginning to feel the pinch -- Wolf.

BLITZER: Yes, they certainly are.

Rene, thanks very much, Rene Marsh reporting.

Up next, we will get reaction to all of this from Republican Congressman Darrell Issa. Is he ready to accept a deal that doesn't include anything involving Obamacare? Guess what? He's standing by live, and I will ask him when we come back.

(COMMERCIAL BREAK)

BLITZER: Massive global consequences from a U.S. debt default, now only just two days or so away. The head of the International Monetary Fund says the world is watching. Listen to what Christine Lagarde guard told CNN's Richard Quest.

(BEGIN VIDEO CLIP)

CHRISTINE LAGARDE, MANAGING DIRECTOR, INTERNATIONAL MONETARY FUND: I have just spent the last two days with representatives of about 188 countries around the world. I wouldn't say they are confident. I would say they are concerned and they are very anxious to see this crisis resolved.

(END VIDEO CLIP)

BLITZER: So will there be a deal? I will ask Republican Congressman Darrell Issa. He's standing by live on Capitol Hill right after this.

(COMMERCIAL BREAK)

BLITZER: The government shutdown now entering its third week, and we're only just 54 hours away from the U.S. hitting its debt ceiling, possibly, possibly defaulting on its financial obligations at home and around the world.

The Senate is said to be close to a deal that would reopen the government and raise the debt ceiling, averting what so many people say would be a fiscal catastrophe.

Let's talk about this and more with Republican Congressman Darrell Issa of California. He's chairman of the House Oversight and Government Reform Committee.

Congressman, thanks very much for coming in.

REP. DARRELL ISSA (R), CALIFORNIA: Well, thanks, Wolf.

And I look forward to the government reopening and getting back to really dealing with entitlements and with waste in government.

BLITZER: Well, all of us do, indeed.

Let's talk a little bit about some of these issues. We asked some of our Twitter followers to send some suggested questions. I will one up on the screen right now. "Will House Republicans pass a deal that does not have changes to Obamacare?"

What do you think?

ISSA: I think House Republicans need to vote for something that deals with entitlement, deals with, if you will, the excesses that need to be reined in.

That's what sequestration was about, even though it was a bad solution. So I think as long as we're dealing with entitlements, Obamacare being an entitlement, but there's a lot of other entitlements and a lot of waste in government that we keep showing, but not dealing with.

BLITZER: Well, let's talk about what is on the table apparently in the Senate. And if it were to pass the Senate, would you support it? You fund the government through January 15. You have House/Senate Budget Committee conferees meet to try to deal with some of these long-term budget issues by December 13. You raise the nation's ceiling until February 15.

If that's the deal, are you ready to go along with it?

ISSA: Well, Wolf, as you know, you have to read the whole deal.

We have a 124-page law called Obamacare as a result of people not reading some of the details. But the basic idea of creating a breathing room, a cooling-off period, and going into negotiation not on the budget number, but on really dealing with the entitlement and other excesses, so we can intelligently cut waste and excess in government, absolutely.

And I think you are going to find overwhelming support if that deal is defined in a way in which we know it will happen.

BLITZER: Well, that's pretty encouraging. If the Senate were to pass it and if the House were to pass it, then the president would sign it, and then, at least, as you point out, there would be some breathing room.

But here's what the president today. And I'm going to play this clip. The president, he was a little gloomy as far as what would happen if you don't pass this deal.

(BEGIN VIDEO CLIP)

OBAMA: Not only is it untenable for us to continue this shutdown. This week if we don't start making some real progress both in the House and the Senate, and if Republicans aren't willing to set aside some of their partisan concerns in order to do what's right for the country, we stand a good chance of defaulting.

(END VIDEO CLIP)

BLITZER: Does he have the right point over there?

ISSA: Well, you know, he misses points all the time.

The House passed a bill to open up the District of Columbia to use their own money, and the president issued a vetoed threat, saying he wouldn't do it. Both sides can be unreasonable at times. Obviously, the president has to meet the Congress halfway.

And where we can agree and should agree, like letting the District of Columbia spend their own money, some of which, by the way, is picking up trash on federal property as you and I speak, then the president needs to show a good faith that he's willing to do. So, hopefully the president is not playing games with the District and not playing games with Republicans intending on holding him to his promise that we are going to make real entitlement reform, and drive down the budget -- or the deficit by something other than huge tax increases.

BLITZER: Everybody seems to be suffering politically as a result of this mess here in Washington, but Republicans a little bit more.

This new ABC/"Washington Post" poll has disapproval numbers as far as handling of the budget negotiations, 74 percent disapprove of Republicans in Congress, 61 percent disapprove of Democrats in Congress, 53 percent disapprove of President Obama's handling of these budget negotiations

But the Republicans, as you see here, are suffering more than the Democrats or the president. What do you think about that?

ISSA: Well, Wolf, when the majority of Americans disapprove of the House, the Senate, Republicans, Democrats and the president, that says that we're not doing the right thing in Washington. I don't think you nuance the difference between 60, 50 and 50 -- 70, 60 and 50-some percent negative.

I think what you say is, look, the president should be an adult at the table. He has huge power, and he has the power, as one person, to offer counterproposals, which he hasn't done. The Senate with Harry Reid repeatedly essentially doing nothing, not allowing the negotiation process to go forward, wrong.

And we in the House, as Republicans, we have to deal with the fact that we have a divided caucus of Republicans. Some want much more than what's being talked about. Some, of course, would vote for less than what was talked about. But I think when you look at the internal problems that I deal with in my conference, by definition it's small in comparison to a president who won't even allow the things we agree on to go forward, who closes the World War II memorials, who closes, by the way, parks that are not even federal -- not one federal penny is being spent. Those are the kinds of things where I think the president is driving down his numbers, but I'm not saying for a moment that Republicans in the House don't deserve some blame. We should have been better in handling this.

BLITZER: Well, if there wouldn't have been a government shutdown, all those things would have been open, but that's another subject that -- we can discuss that down the road. Unfortunately, we're out of the time.

Hey, Congressman, thanks very much for joining us.

ISSA: Thank you, Wolf.

And, remember, under sequestration, they closed a lot of things that should have been open too.

BLITZER: That's another matter as well, which we can discuss on another occasion.

ISSA: Thanks, Wolf.

BLITZER: Darrell Issa, thank you very much.

That's it for me. Thanks very much for watching.

"CROSSFIRE" starts right now.