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Budget Crisis; Interview with Congressman Ted Yoho of Florida; Interview with Senator Amy Klobuchar of Minnesota

Aired October 15, 2013 - 16:00   ET


JAKE TAPPER, CNN ANCHOR: Hey, everyone. Remember that light at the end of the tunnel that we thought we saw yesterday? Well, it looks like we're all standing on the tracks.

I'm Jake Tapper. And this is THE LEAD live from Capitol Hill.

The national lead, on day 15 of the government shutdown, and with America headed for an economic buzz saw in just two days' time, the House GOP puts brand-new focus on Obamacare and all other negotiations seem to screech to a halt.

The politics lead. President Obama says he won't pay ransom to reopen the government, but is any negotiating possible? Well, that all depends on what you mean by negotiate, the White House with Clinton- esque parsing, as this crisis drags on.

And on the day one American hero receives the Medal of Honor, countless other veterans say they are literally being left out in the cold. A furloughed vet joins us with a story for the nation for whom she fought and a plea to the government who sent her to Iraq.

Good afternoon, everyone. Welcome to THE LEAD. We will begin, of course, with the national lead, live from Capitol Hill, where it's all taking place.

Just when we thought the Senate was close to spiking the football on a debt ceiling deal that would also reopen the government, House Republicans decided to throw a Hail Mary pass of their own. They put forth a counterproposal today that includes some of the original language from the Senate deal, but with a Tea Party twist. As you recall, the Senate deal would fund the government through January and mandate budget negotiations in December.

It would raise the debt ceiling through February 15 and includes minor Obamacare tweaks, such as income verifications for those who receive Obamacare subsidies. Now, this new House Republican plan would fund the government through December 15, about a month earlier than the Senate proposal, and it raises the debt ceiling through February 7, but it would also remove any health care subsidies for the president, members of Congress and his Cabinet, and all of their staffers.

Plus, it forbids the Treasury secretary from taking any extreme measures to avoid default. We could see this plan go up for a vote in the House literally in the next few hours. It's slightly different than the proposal presented to House leadership this morning, which included a two-year delay on the Obamacare tax on medical devices. That, as you might have guessed, was flat-out rejected by the White House.

And in the Senate, where Republicans and Democrats were working so well together, they seemed a few meetings short of exchanging friendship bracelets and braiding each other's hair, well, once again seeds of resentment took root.


SEN. HARRY REID (D-NV), MAJORITY LEADER: Extremist Republicans in the House of Representatives are attempting to torpedo the Senate's bipartisan progress with a bill that can't pass the Senate, can't pass the Senate and won't pass the Senate.

SEN. JOHN MCCAIN (R), ARIZONA: For the majority leader, and the Democrats in the House and the White House to say absolutely, categorically not, we will not consider what the Republicans in the House of Representatives are doing in my view is piling on. It's piling on and it's not right.

So I urge my Democrat colleagues, let's sit down and work this out.


TAPPER: So the Senate's now on hold while senators wait to see just exactly how things play out in the House.

The bigger mystery, if House Speaker John Boehner can't get the votes he needs, will he essentially drop the mike on trying to work with Tea Party conservatives and put a bill on the floor that his caucus or at least a majority of it might not support?


REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: I have made clear for months and months that the idea of default is wrong and we shouldn't get anywhere close to it.


TAPPER: In D.C., we're all trying to read the tea leaves on that. Does Boehner's statement suggest that he's willing to step on some toes to avoid any sort of possible default? His language was much stronger back in 2011, when he told FOX News that not raising the debt ceiling would be a financial disaster, saying -- quote -- "I don't think it's a question that's even on the table."

He didn't go that far this time.

So let's begin with this very latest development and CNN chief congressional correspondent Dana Bash.

Dana, does it look like this latest version of the House Republican proposal has enough votes to pass the House? DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: I just came from inside standing right outside of John Boehner's office. And the answer is they're not entirely sure.

They hope so, they think so, but they're not entirely sure. And what is fascinating is that what they have done is taken out everything relating to Obamacare, things that you would have thought intuitively conservatives would have wanted to do like repealing a tax, a medical device tax, and some other provisions, and they're keeping just that language that you just described, taking away federal subsidies for members of Congress and their staff.

And I'm told that that's because there was a meeting today among the most conservative House members of the so-called RSC, and they decided that would be a cleaner message just to talk about fairness. The other thing I'm reminded of by some sources in that building is that after all of the months and years that the grassroots have tried to get rid of Obamacare, if they were left with just one thing, getting rid of a tax that really has helped -- would help lobbyists on K Street, they would be furious.


BASH: Right.

TAPPER: So where is John Boehner right now? Where does he find himself in terms of this decision he has? He could bring it to the floor and it would probably pass if Democrats wanted to support it.

But he has said that he doesn't think it's a good idea to bring something to the floor that isn't guaranteed a majority of the majority.

BASH: It's going to be fascinating to see how -- first of all, as you said, how he deals with his fellow Republicans. I just bumped into two conservative Republicans who have been part of the group driving John Boehner to do things he doesn't want to do.

They said they were noncommittal, unclear if they would vote for this. But, look, Boehner does have -- he had a decision to make now and he has a decision to make in the future. The first decision was taking this risk. It appears to be a little bit of a risk right now, we will see where the votes are, in putting this modified bill on the floor. But then ultimately, we do expect when it goes to the Senate, if it passes, Senate Majority Leader Harry Reid cannot stand -- he says over and over he doesn't want to do anything to make it so that his staff and other staffs who make $30,000, $20,000, they don't get help with their health care.

He is going to try to take that out. Assuming he's successful, then it will be a question again for John Boehner whether he is willing to buck his conservatives, anger some of his conservatives and say, look, I tried 10 ways 'til Sunday, I couldn't get it done, the math just doesn't add up.

TAPPER: And we should point out that the subsidies they are talking about is the money, that's just the money that is already being spent on staffers' health care already that the administration said could then be applied to give subsidies to the staffers.

BASH: Right, that other federal workers also get.

TAPPER: Other federal workers already have.

BASH: Yes.

TAPPER: So, Dana Bash, thank you so much for joining us.

How do Republicans in the House feel about all this? We may find out in a vote in the next few hours.

And Congressman Ted Yoho of Florida joins me now.

Congressman, thanks so much. Let's get right to the point. Will you vote for the House bill as it stands now, as it's been changed?

REP. TED YOHO (R), FLORIDA: Jake, I would have to see. I haven't seen the completed language on that. So without reading that, I can't support that.

But taking out the things that we originally wanted in there, no, I can't support that bill at this time.

TAPPER: OK. Just to go through the outline of what Dana said, and I understand it's not the language, the precise language in front of you, but it's the government spending, government would be reopened until December 15, the debt limit would be raised until February, no extraordinary measures would be allowed to be taken by the Treasury secretary, and then what's being called the full Vitter, the amendment saying that members of Congress, members of the Cabinet, the president, vice president and all their staffs would have to enter the Obamacare exchanges and the money that's already being spent on their health care would not be allowed to be subsidized to that, the full Vitter, staffers and obviously the politicians.

That's not enough for you to support this bill?

YOHO: No, it's not.

Actually, I co-sponsored the Vitter-DeSantis amendment. And I think that's a fair thing to do to make sure we pay the same thing everybody else in America does. It's unconstitutional that Congress can pass a law that doesn't apply to them also. That's a commonsense thing. And it's a shame that we have to have another bill to say what the Constitution already says.

But the other things that were in what I saw this morning, I can't support.

TAPPER: Well, just to drive down a little deeper on the thing about staffers, I think the idea is Senator Grassley here in the Senate pushed forward the idea that everybody who is responsible for this bill would have to also enter the Obamacare exchanges, but there was concern since a lot of people on Capitol Hill don't make that much money, they make $20,000, $30,000, $40,000 a year, that the money already being spent on their health care, would there be a way to use that money so that they can buy the health care?

And if you don't do that, essentially you're taking all these staffers who don't make a lot of money, certainly don't make what you're being paid as a congressman, sir, and giving them a huge pay cut. What's your response to that?

YOHO: Well, that's going to happen to the American people, too, because they're going to have to abide by the rules of this, and there's a lot of people out there hurting.

But think about where we're at, why we're here today. We're here because Congresses of the past for the last 25, 30 years, have failed to address this problem. This is a time where we're at, and if we don't deal with this problem now, what good is it going to be to extend it until December 15 or January 15 or even February 15?

We're going to go through this again. We're here. I say let's fix the things that we have to fix now. We have got to address spending. That bill that I have seen does not address any of the spending issues that we have seen. Until we address spending and growing revenues, it's just a nonstarter.

It's not addressing the underlying cause. It's just kicking the can and the American people are tired of kicking the can. I was sent up here to stop the can from rolling, to step on it to keep it from rolling so that we can address these problems. We're at $17 trillion in debt and if we don't get this under control now, we're going to $23 trillion.

TAPPER: Let's look forward. In two days, according to the secretary of the treasury, we hit the debt ceiling and the United States will no longer have all the money it needs to pay all of its bills.

You got a lot of attention for a comment you gave to "The Washington Post" a few days ago. I want to read it and have you explain exactly what you meant. You said -- quote -- "I think we need to have that moment where we realize we are going broke." And then "The Washington Post" writer wrote, "If the debt ceiling isn't raised, that will sure as heck be a moment," and then back to you saying, "I think, personally, it would bring stability to the world markets."

Are you suggesting -- and correct me -- I'm just trying to interpret this quote -- are you suggesting that hitting the debt limit would bring stability to world markets?


Let me -- not raising the debt ceiling is not an automatic trigger for default. That's one thing. The debt -- raising the debt ceiling and default are two different issues. We have got enough money coming in to service our debt, the principal and interest. We have got more than enough to service that. What I'm saying is this is a time to address this and if we take this head on, my feeling is our creditors will be -- they will be thankful that we're finally saying, you know what, instead of kicking the can down the road, instead of having this debate, instead of raising our debt limit to $23 trillion is what it's predicted in the next four years, let's deal with this now, let's get it under control.

And that would bring stability so that we don't go through this every six -- every year or every year-and-a-half. Let's put an end to it. Let's get the regular order, regular appropriations, let's get back to a budget. Those are the things that the American people want, and I say this is the time, because not to do it now, you are going to have to do it at the 1st of the year or six months from now or a year.

The American people are tired of that. It's time that we address this problem head on. And I truly believe that if we do that, our creditors will breathe a sigh of relief and say, thank goodness, they are finally getting this under control, they finally get it. That's what I meant by that.

TAPPER: Sir, are you paying attention at all to what's been going on with Treasury bills? I think there is concern out there that Treasury bills are selling -- it's a tepid market right now.

YOHO: Sure.

TAPPER: And there is concern that not every -- every Thursday, about $100 billion rolls over, and there is concern that maybe it's not going to roll over. Maybe some of those creditors are going to say, you know what, this is not a good investment anymore, this is not a stable economy anymore, not to mention what might happen on the stock market.

And I'm sure you're familiar with what happened the last time we came this close. You are from Florida. There are a lot of retirees. I can't imagine that they're happy about the idea that their nest eggs might shrink because we keep getting closer and closer to hitting the debt ceiling.

YOHO: Well, we do, but there again, hitting the debt ceiling is not the issue, because, again, hitting the debt ceiling or not raising it is not going to trigger an automatic default.

We have got money coming in.

TAPPER: Not a default on our creditors, sir, but there will be a lot of bills that will not be allowed to be paid, and it will send a horrendous message, I think every reputable economist says, to stock markets and to the fact that people's retirement savings is under risk. We lost -- I think they lost -- retirees lost about $800 billion last time we came this close.

YOHO: All right.

But, again, if we don't address it now, Jake, are we going to have to address it again, are we going to go through it again when we're at more debt? What we have got to look at is stabilizing this market so that we can get it under control so it brings certainty to that market.

We hit the debt ceiling in 1985. We didn't raise the debt ceiling. We hit it, we didn't raise it for three-and-a-half months. We're still here. We hit it again in 1995 for four-and-a-half months and didn't raise the debt ceiling. We survived that. We will survive this. A lot of this is media hype.

Of course, you had the market drop about 160 points today. Markets are super fluid. And I predict that if we get this under control, we are heading in the right direction, they will rebound and they will recapture the lost wealth they had and they will recapture that if we get this under control. If we don't get this under control, that's where I would be real concerned about that, because who in the heck is going to lend us money if we can't get our own financial house in order?

And, again, this is the time to address this. This is what I came up here for. And we got sent up here to address these things and these are tough decisions. Nobody wants anybody laid off. Nobody wants anybody furloughed. Nobody wants the markets to be rattled, but those things are going to happen regardless if we don't get this under control.

TAPPER: Sir, I think I have to disagree with some of the comments you're making. You say nobody wants to be furloughed. The House Republicans led by individuals such as yourself decided to attach to the government spending bill a provision defunding Obamacare that was guaranteed to fail in the Senate and be vetoed by the president.

That is basically an action to shut down the government.


TAPPER: And then you talk about the unstable markets. It is the fact that there is this instability about whether or not House Republicans are going to go along with the Senate bill that -- negotiated by Senate Democrats and Republicans, that will raise the debt ceiling, and you're right that it wouldn't automatically mean default when it comes to money that the United States owes creditors, but it would mean default to a whole bunch of individuals who are owed money, whether it's veterans or troops or other individuals who depend on the government.


TAPPER: You can respond, sir. I'm sorry.

YOHO: All right. Well, number one, seniors are going to get paid. Veterans are going to get paid. That's already in -- we have already done legislation for that.

But going back to what you were saying about...

TAPPER: Legislation that didn't pass the Senate, by the way. YOHO: Yes.

Look at what we started with. We started with defunding Obamacare, the Affordable Care Act, and we put that in the C.R. I'm a member of the House. It's a house of the people. We're the voice of the people. We were -- I ran on defunding, burying and getting rid of Obamacare.

We ran on it. We got elected. So for me not to represent that in this C.R. would have been irresponsible for me. And since the House is controlled by the Republicans, a lot of the members of our House, of our conference ran on the same thing.

REP. TED YOHO (R), FLORIDA: Yes. Look at what we started with. We started with defunding Obamacare, the Affordable Care Act, and we put that in the C.R.

I'm a member of the House. It's a house of the people. We're the voice of the people. I ran on defunding, burying and getting rid of Obamacare. We ran on it, we got elected.

So, for me not to represent that in this C.R. would have been irresponsible for me. Since the House is controlled by the Republicans, a lot of the members of our house, of our conference, ran on the same thing. So, for us not to speak up is not speaking up for the American people.

JAKE TAPPER, CNN ANCHOR: No one's asking you not to speak up, sir. But if you want to get rid of Obamacare, the way you do that is recapture the Senate and capture the White House.

And I think there are a lot of Republicans out there who think House Republicans led by individuals such as yourself are actually making that job more difficult in the future because you are painting Republicans in a way that polls indicate the American people find incredibly unfavorable, even more unfavorable than they find President Obama and congressional Democrats.

YOHO: The only poll I'm going to look at is the one that comes in November. Because that's the one that's going to reflect what the people truly want. Again, I ran on that. We got elected on that. And I'm standing up for that and the feedback that we're getting is to stay strong. For us to capitulate, I think, would be wrong.

But look what we did. We sent it over there, they wouldn't look at it. We sent it back to renegotiate it with just a one-year delay in the Affordable Care Act. The Senate wouldn't even look at it.

We sent it back again with an individual delay for just a year, the same thing that the president gave to over 1,600 special interest groups, to unions, to big businesses, and they wouldn't even look at that.

The last thing we sent over there was the individual mandate delay for a year and to go to conference and they won't go to conference.

You know, Bill Clinton went to conference with Newt Gingrich. Ronald Reagan went to conference with Tip O'Neill. They worked through these things.

But when you have one side that says we're not even going to listen to you guys because they don't want to play --

TAPPER: Congressman, we have to end this. We have already gone way long. But you know as well as I do that the Senate, after years of not passing a budget, they did pass a budget in March and the House Republicans have refused to send over conferees.

But you know what? Thank you very much for coming in. I appreciate your sharing your views and your thoughts. Congressman Ted Yoho of Florida.

YOHO: Thank you, Jake.

TAPPER: Coming up, the Senate was working on its own plan, but that's now on hold while the House hashes things out. A would-be peacemaker joins me next with her take on the latest developments.

Plus, what were they discussing? Details of the secret meeting between one Republican senator and a dozen House Republicans.


TAPPER: Welcome back to THE LEAD, live from Capitol Hill.

The women of the Senate, Democrats and Republicans, are getting a lot of credit for putting together a bipartisan deal that's currently on hold while the House hashes out its own proposal. Among some of the key players, Republican Senator Susan Collins of Maine, and our next guest, Democratic Senator Amy Klobuchar of Minnesota.

Thank you for joining us.

KLOBUCHAR: Thank you, Jake. Great to be on.

TAPPER: So, Senator, the House bill as it appears this minute extending -- opening the government until December 15th, raising the debt limit to February, no extraordinary measures can be taken by the secretary of treasury and the "full Vitter" as it's being called by mischievous staffers, which is senators, congressmen, the president, vice president and all their staffers have to do Obamacare and the money already being spent on their health care cannot be used as subsidies. Is that enough? Can you do that?

KLOBUCHAR: Well, I thought -- no. I thought it was unbelievable when Dana was talking earlier about how they saw this as a clean message. This isn't the time for messaging. This is the time for opening the government. This is the time for making sure that we're not defaulting on our bills.

And you have in the Senate a group that's come together under Senator Collins' leadership and there's a few good men in there, too, by the way, Jake, including Senator Manchin --

TAPPER: Thank you. I appreciate the nod to my gender.

KLOBUCHAR: -- Kaine, Pryor.

But, in any case, that group plus the work of Harry Reid and Mitch McConnell, I think we all know they are pretty close there to getting that deal negotiated with bipartisan support and the Senate is ready to go, but for the House to come in today, I think it's just irresponsible.

These are -- the American people are so close to what happened back in 2011 and I was listening to the congressman on before, where he thinks it's not a big deal to default. Look what happened in 2011 -- 2,000 point plummet in the Dow. We saw over $2 trillion in household wealth lost from average Americans.

TAPPER: I think Congressman Yoho's point is that the big issue overshadowing all of this is the debt and deficit that Congress, the House and Senate, President Obama, have not done enough about.

KLOBUCHAR: That is what's so good about this bipartisan agreement we've reached in that it gives us somewhat of a short leash on the continuing resolution to the December, January, we would prefer January, time frame so that the group can come together and specifically, it says that the Budget Committee has to meet and get a budget together.

As you noted, there's a Senate Budget, there's a House budget, and the only way you really do something on the long term budget that's suggested by the debt commission is to get a long term budget.

TAPPER: You talk about the debt commission, that talks into Congressman Yoho's skepticism which I have to admit on occasion, in my darkest moments, I share which is every time there's one of these attempts to, in the words of Congressman Yoho, kick the can down the road, it ends up in nothing.

Jimmy Kimmel said the super committee is to committees what super cuts is to haircuts. The super committee failed. The Simpson-Bowles Commission, that blue ribbon panel, failed. There have been a million blue ribbon panels.

All you see when you look around this town is blue ribbon panels. Yet the debt and the deficit, $17 trillion, $18 trillion. KLOBUCHAR: As you know, we have already made $2.6 trillion in debt reduction. I would like to get to the magic number of four that most economists say if week get $4 trillion in debt reduction over 10 years.

Senate budget does that. I think we do it in the best way. House budget arguably does it in to me not a great way.

But if we can get those two sides together and negotiate something we get it done. That's how our government works. That's how we're supposed to get a long term budget. The public is crying out for this. We cannot keep lurching from financial crisis to financial crisis.

That is what the House is suggesting with what they put forward today. They are basically pulling the rug out from under the American people, and they are saying to the Republicans and the Democrats in the Senate that have negotiated something, forget it.

TAPPER: Let's go to House Minority Leader Nancy Pelosi, who is outside the White House. Let's take a listen in.

REP. NANCY PELOSI (D-CA), MINORITY LEADER: -- what we've heard of the bipartisan legislation being prepared in the United States Senate. We are disappointed that the House Republicans decided to sabotage or at least delay what was happening there, but are hopeful that everybody knows that time is of the essence and that if the Republicans in the House want to put up a bill, they should do it soon.

But they have to know if it is as it has been described, that they'll have to do that with 100 percent Republican votes. We stand ready, our members have signed letters, petitions to open government, that we are there for a clean petition to open government, a clean legislation to open government, clean legislation to lift the debt ceiling that will take us on a path to the budget table when any and all issues can be discussed.

So, that's where we are and I'm optimistic. I believe because of the impact of not lifting the debt ceiling on top of shutting down -- alone, actually, not lifting the debt, is so catastrophic that there will be those in the Republican Party who will see the light. We stand ready to supply the votes, but if they do not -- if they go on the path they're on, they will need 100 percent Republican votes.

With that, I'm pleased to yield to the distinguished whip, Mr. Hoyer.

REP. STENY HOYER (D-MD), MINORITY WHIP: Thank you, Madam Leader. I agree with the leader that this was a very positive meeting, as we expected it to be. The president is very committed to getting the government open. Obviously making sure that America pays its bills and we assured the president that these two objectives have the overwhelming almost unanimous, if not unanimous, support of our caucus.

We have a letter that is signed on the debt limit and we are going to be unanimous on the opening up government. That's our two major objectives. We now have 48 hours to make sure that our country remains solvent and paying its debts, and to make sure that our workers get back to work on behalf of the American people.

I agree with the leader that if the Republican conference wants to offer, we haven't seen text yet, but it has other things in it, one of which we think is very, very damaging to the United States of America, and that is taking away from the president and the secretary of treasury the ability to manage the payment of our debts that we remain a zero risk creditor.

And so with that, let me yield to my friend, Jim Clyburn, the assistant leader.


The last hour has been very, very productive and I would hope that the next several hours will be as such.

I find it kind of interesting that much of the discussion we've been hearing for the last several weeks has been the fact that we can maintain the full faith and credit of the United States of America by prioritizing exactly how we address the debt. Now, all of a sudden, from what we're hearing, legislation is now being brought forward to take away the ability of the president and secretary of the treasury to manage our debt and deficits. That to us is just absolutely the worst possible thing that can be done.

We are very interested in a clean continuing resolution, a clean debt limit, and we can supply a vast majority of the Democratic votes to get that done. We are hopeful that the speaker will allow legislation to come to the floor and we commit to him and the American people that Democrats will be solid in support of that effort. With that, I --

TAPPER: All right, we are going to leave it there with members of the Democratic leadership in the House on the White House lawn.

I want to get your response, Senator Klobuchar.

It sounds as though Democrats are saying we don't want anything attached to this at all. I know that that's been the message from the very beginning but we are now, what does it say on the clock there, 31 hours, 30 minutes and 18 seconds away from hitting the debt ceiling. I don't understand why this hard line is being taken when so much is at stake and people such as yourself, for instance, you oppose the Obamacare tax on medical devices. The House wants to put that in. More than 30 Democrats voted for that along with most of the House -- Senate Republicans.

What's the big deal? Put it in there, there's already majority support for it in the House and Senate, bipartisan, put it in there, let them have their little candy that they get for this, and let's have the government reopen again, hundreds of thousands of people go back to work, and we don't hit the debt ceiling.

What's your response to that? KLOBUCHAR: Well, you know, Jake, it might have been worth something talking about, we talked about it certainly in our bipartisan group. It was one of the things on the table that we suggested. But the issue is that is not in the House bill right now. They have chosen to take a tact to deny kids that come to Washington that are making $25,000 a year and working on adoption issues, they have decided that they're the ones that aren't going to get health care, instead of working on something more pragmatic.

I think you know that Senator Reid and Senator McConnell over on the Senate side have talked about some things that could be in a deal, like some of the income verification rules under the Affordable Care Act. So it's not like people said well, we'll discuss nothing. They simply said we're not going to put partisan poison pills in this. If there are things where there are common ground, we will look at them. And I think that's what you saw going on between the two leaders in the Senate.

That is not the message that we're hearing from the House right now and we need to go back, get that Senate bill in, bring people together because the House just hasn't learned yet you cannot put these partisan poison pills on and then decide that this is going to pass. We need to open the government and pay our bills.

TAPPER: I also hear the House Democrats saying clean bill, clean bill, clean bill. That's their message. I know you have a meeting with the Senate leadership. Help, get us out of this if you can.

KLOBUCHAR: OK! That is our plan.

TAPPER: Get us out of this mess. Work with the Republicans.

KLOBUCHAR: Thank you very much, Jake.

TAPPER: Thank you, Senator Klobuchar.