CNN CNN


 

Return to Transcripts main page

CNN LIVE EVENT/SPECIAL

Shutdown Showdown Day 15; Interview with Rep. Charlie Dent; Interview with Sen. Bob Casey

Aired October 15, 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.

REP. NANCY PELOSI (D), MINORITY LEADER: The truth is, the whole world is watching.

TAPPER: Running in place in the nation's capital.

REP. JOHN BOEHNER (R), HOUSE SPEAKER: There have been no decisions about what exactly we will do.

TAPPER: Day 15 of the partial government shutdown, one of the most frantic since the crisis began. Yet we're right back where we were this morning. A House plan rejected before it was even written.

SEN. HARRY REID (D), MAJORITY LEADER: This bill that they're sending over here is doomed to failure.

TAPPER: Derailing hope for compromise in the Senate and falling apart all together.

SEN. JOHN MCCAIN (R), ARIZONA: Let's sit down together and get this thing done.

TAPPER: And breaking tonight, the Senate stepping in again. Can they salvage a deal before it's too late?

We're live with Democrat Bob Casey of Pennsylvania as the Senate rolls up its sleeves.

SEN. BOB CASEY (D), PENNSYLVANIA: I think that there are lots of Republicans and certainly lots of Democrats and independents who want to move forward.

TAPPER: And reaction tonight from a man literally in the middle of all of this.

REP. CHARLIE DENT (R), PENNSYLVANIA: I like to look at it as a glass half full right now.

TAPPER: Republican Congressman Charlie Dent tells us what it will take for his party to sign off on something, anything. Plus, as the United States government tick tocks towards possible default America gets a dire warning with just 25 hours until an economic unknown.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: There's no question that we are very close to a very important deadline. And time is of the essence.

TAPPER: This is SHUTDOWN SHOWDOWN.

(END VIDEOTAPE)

TAPPER: Good evening, everyone. Welcome to this special hour of CNN SHUTDOWN SHOWDOWN. I'm Jake Tapper and I'm live from Capitol Hill where the race to beat the debt ceiling clock somehow has Congress right back at the starting line.

The Senate tonight once again wheeling and dealing to put together a bill that would reopen the government and raise the debt ceiling. They did not wrap up until a little less than an hour ago.

Under this latest deal, the only Obamacare-related issue would be income verification for people getting health care subsidies, to make sure they qualify. Democrats will also try to appease Republicans by nixing a plan that would delay a health care employee fee for unions. But that has been stripped from the bill. This all comes after House Republicans twice failed to rally around plans proposed by their leaders.

And as if nerves were not already frayed, the credit rating agency Fitch put the U.S. on notice today for a possible downgrade of its AAA rating. The agency released a statement which reads, quote, "Although Fitch continues to believe that the debt ceiling will be raised soon, the political brinksmanship and reduced financing flexibility could increase the risk of U.S. default."

Translation? We might downgrade your government's credit rating because of this mess. And that will only drive you deeper into debt.

If the downgrade does happen, some analysts predict a catastrophic ripple effect across the U.S. and even global markets. This at the same time that we've learned that rates on treasury bills due this month soared and attracted the least demand since some of our bleakest economic times in 2009.

And while for some that's enough to make you want to grab the money under your mattress, scoop up the kids, hide under a blanket in the basement, there are some House Republicans who still seem uninterested. And the shouts coming from economists, left, right and center, who are warning about what might happen to the stock market and to your retirement savings should this go on much longer.

These House Republicans are saying they don't think missing the debt ceiling deadline will be as bad as analysts predict.

(BEGIN VIDEO CLIP) REP. TIM HUELSKAMP (R), KANSAS: I just think most folks understand October 17th is not the drop dead date. There are no payments due for a couple of weeks. But it's time to get our act together and move forward on facing the fundamental problem of spending too much money.

(END VIDEO CLIP)

TAPPER: With that sentiment so strong within at least one faction of the House Republicans, the question remains even if the Senate gets a deal done, will House Speaker John Boehner bring it to the floor for a vote?

Joining me tonight to discuss the latest one man caught in the middle of the madness, House Republican Charlie Dent of Pennsylvania. And of course it would not be SHUTDOWN SHOWDOWN without chief political analyst Gloria Borger and chief congressional correspondent Dana Bash.

Congressman Dent, thanks so much for being here. So I guess the big question is, assuming that McConnell and Reid are able to come up with a bill that extends the government, funds -- opens the government until January, extends the debt ceiling until February, and has that income verification, will John Boehner bring it up tomorrow?

DENT: I believe that John Boehner will likely be in a position where he will have to essentially pass the bill that is negotiated between Senators McConnell and Reid. And I believe that the House would first pass it, then send it to the Senate.

TAPPER: So they wouldn't even wait for the Senate to take it up and send it to them?

DENT: For a whole host of procedural reasons, I believe it would be much quicker if the House were to take the existing vehicle, that's the continuing resolution bill, load it up with the agreement just described, and then send it back to the Senate. And the Senate then would vote on it. That's it.

TAPPER: So one of the big sticking points on this, you've been saying for a long time that you wanted to pass a clean government spending bill. One of the big sticking points is, would John Boehner bring up a bill that does not enjoy the support of the majority of the Republican Party? How many Republicans -- there are 217 Republicans or something like that?

DENT: That's 233.

TAPPER: Two hundred thirty-three Republicans, I apologize. As they have a 17-vote majority.

DENT: Right.

TAPPER: So how many Republicans will vote for the Senate bill, assuming it is what we think it's going to be? DENT: There will be fewer Republican members voting for the bill than who actually support it. We're going to be seeing a lot of what I would call hope yes, vote no. There will be many Democrats voting for the agreement. There will be some Republicans voting for the agreement, certainly enough to put it over the top.

TAPPER: You.

DENT: Yes, I will. And -- and -- but there will be many more who support it but will be voting no.

TAPPER: So a minority. So it will pass with majority Democratic support and minority Republican. You predict?

DENT: That's -- that will be my guess. The question is how many Republicans, will it be closer to 20 or closer to 75, I don't know. I hope I'm wrong.

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: And just to be clear, they would be voting no because it would be politically dangerous for them to vote yes for something that -- some -- many conservatives in their districts, maybe potential primary challengers, think isn't strong enough.

DENT: Yes, Dana, we've seen this before. We saw this on the fiscal cliff, Hurricane Sandy relief, the Violence Against Women Act. The no budget no pay as related to the first debt ceiling agreement. And that -- so you're going to have bipartisan coalitions to pass these bills. That's what's going to happen on the C.R. debt ceiling tomorrow or perhaps Thursday.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: So could we -- can we just talk about you Republicans for a moment in the House?

DENT: Sure.

BORGER: Because there is going to be a group of people, maybe 40 or so, that are going to vote against this because it doesn't kill Obamacare. Right? And then there's going to be that group that is afraid to vote against it because they think they're going to get killed if they do, right? So they're different. They're --

BASH: Well, there could be some overlap. Maybe a lot of overlap.

BORGER: There could be some overlap. But talk -- tell us a little bit about how John Boehner, your friend, whom you met with today --

DENT: Yes.

BORGER: -- is dealing with these two different groups and trying to get to yes here?

DENT: Well, the speaker's in a tough -- he's really in a tough bind. We all know that. You know, you mentioned -- somebody mentioned the Hastert rule here already. And it's very clear that there's going to be -- the speaker knows he has 180 to 200 members of his Republican conference who believe in affirmative governance, that they have -- they believe they have an obligation to govern, and on most occasions will be there, you know, on those big issues.

The challenge is there are two to three dozen members of the House Republican conference who do not share that same affirmative sense of governance. And it only takes two to three dozen to obstruct the will of the majority. So while the speaker --

BASH: What does affirmative sense of governance --

DENT: Well, it means that --

BASH: I mean, what does that mean?

DENT: Meaning you have to vote yes. That there's certain -- as a member of Congress, I feel there are certain things I must do. We must pass a budget. We must fund the government. That's our most basic, fundamental responsibility. We have to deal with the debt limit, we have to deal with -- you know, various issues that are essential to the functioning of the government. And so that's an affirmative sense of governance.

And I think most of the members have that sense, but some, you know, I think kind of have a minority party mentality. And it's much easier to vote no. But you really don't need to be doing that on these big issues when we're in the majority.

TAPPER: How do these few dozen Republicans convince 235 Republicans to go along with this plan when people like Speaker Boehner in March said he thought it would be a bad idea? So --

BASH: And -- and Let's get real. Speaker Boehner now still thought it was a bad idea.

TAPPER: Bad idea to link defunding Obamacare to the government spending bill, because it was not possible to be achieved. There's individuals like you. How is -- I mean, is it just if you don't do this, then when it comes time to vote for speaker again in January 2015, you won't be re-elected speaker, John Boehner? How exactly does it play out?

DENT: No, I think the speaker's position is actually secure.

TAPPER: Was it three weeks ago?

DENT: Yes. I just think what happened here is the -- some of the leadership got pulled over by this really poorly thought-out tactic, you know, led by Senator Cruz to defund Obamacare as part of the C.R.

Now many of us -- I went around my district in August and said that you would end up shutting down the government and you would still be funding the health care law, and you might end up losing the sequester in the process. That was always -- that was my prediction. Now at least on two or those three things, they've come to be true, that is the government is shut down, and the health care law, Obamacare is being funded.

But I think most of the members of the Republican conference understand that we have to get some things done. Even those who will be voting against the final agreement I think understand the speaker's predicament and would still support him.

BASH: But on -- I was talking to one of your colleagues who is -- considers himself a moderate Republican, I guess like you do, who's really frustrated, saying, well, I don't understand why the speaker takes the importance of that small minority like you said the couple dozen of the hard-core conservatives over me and you and the majority of the caucus.

Why is he allowing them to rule? And to what end? Because now look where you are.

BORGER: Right.

BASH: I mean, you -- at the end of the day you're going to get exactly what you started calling for a week and a half ago, which is almost a clean bill to fund the government and raise the debt ceiling.

BORGER: And they're getting nothing.

BASH: And they're getting nothing.

DENT: Well, I made it very clear --

BASH: Except a fight.

DENT: I've made it very clear to the House Republican leadership that we have to establish bipartisan coalitions to enact must-pass pieces of legislation, that whatever we have -- you know, whatever the number is 150 to 200 members who will vote yes, then how do you find the balance of Democrats? And then marginalize those who just can never be counted on the Republican side to vote for anything.

So how do you establish bipartisan coalitions? They said we saw it on several bills this year, we're going to see it again. And we'll likely see it --

BASH: Do you think this will be a lesson that maybe they'll listen to you now?

DENT: Well, they have to.

(LAUGHTER)

I mean, how many -- what's that old saying, you know, there's no wisdom to be gained from the second kick of the mule?

BORGER: Right.

DENT: And there sure as hell is no wisdom to be gained by the third or the fourth kick of the mule. So --

BASH: I think we're up to like several digits.

BORGER: So can I just clarify something Jake was asking you before? So are you saying that the speaker was somehow dragged into this by other members of the leadership?

DENT: No, no, I said --

BORGER: This wasn't his idea? That -- I mean --

TAPPER: Well, clearly it wasn't his idea.

BORGER: No. But I think the sort of basic question is, he said in March no, I'm not going to do it this way. And then suddenly he does it this way. And people are scratching their heads. Is it to save himself? Or you say not?

DENT: No. Majority Leader Cantor -- the plan was when we came back in September to basically put the defund Obamacare into the C.R. and send it over to --

TAPPER: That's the government spending resolution.

DENT: Yes.

BASH: Right.

DENT: Yes, I'm sorry. Yes. Basically the short-term government spending resolution. Send it over to the Senate. Then the Senate would have to vote on the defund language first, if that was rejected as predicted then they would vote directly on the continuing resolution.

I thought that was a good plan. Problem solved. But that wasn't good enough for a few members. And they insisted that the -- you know, that the Senate had to strip it out and send it back. And then after the second launch, which was the delay of -- one-year delay of Obamacare and the medical device tax, which I'm very concerned about because it's a big issue where I live.

When that one failed then that's -- that was like on Saturday night the 28th, I said OK, no more launches.

BORGER: Done.

DENT: Done. Now do the clean bill. And I was frankly surprised that we were never given an opportunity on September 30th or early on October 1st to vote on the clean bill. That still is a mystery to me as why that never happened.

BORGER: OK.

TAPPER: So let me ask you another question just about the news that you shared at the top of the show. You're saying that Speaker Boehner you think will take up the compromise that McConnell and Reid are working out.

DENT: Yes.

TAPPER: And just take it and put it on the floor and it will pass likely with the majority of Democrats support and minority of Republicans support. I assume that this is more than idle speculation, you are somebody who has met with Speaker Boehner. This is informed.

DENT: He did not tell me that. But, you know, I've been around here long enough to understand how this process is going to work, that the Senate for a variety of reasons, timing reasons, I don't think they could really take it up quickly. I don't know if they have an appropriate legislative vehicle to launch back to the House so the House would have to take it up.

TAPPER: But this isn't just conventional wisdom. You're saying that you believe this is going to happen --

DENT: Absolutely.

TAPPER: -- because of some things people have told you.

BASH: Yes. And there -- and there is a rumor --

DENT: Absolutely. Yes. Yes.

TAPPER: OK.

BASH: And there is a rumor in the --

DENT: Yes.

BASH: In the Democratic leadership in the Senate, maybe even more than a rumor, that this is exactly what's going to happen.

DENT: Yes.

BASH: The initial thinking earlier tonight was that the speaker would send over sort of a vehicle to expedite the process.

BORGER: And can I ask you? What do you think happens --

DENT: We can do that, too.

BORGER: -- when we're back at this in a few months?

TAPPER: In January or -- yes.

BORGER: In -- you know, because we're kicking the can down the road.

DENT: Yes.

BORGER: Everybody kind of gets that. So do you go through this again? Are there any lessons learned here by the folks who say they don't want to govern affirmatively or --

DENT: Well, I -- I certainly hope there are some lessons learned. One thing I hope happens between now and the next -- the next --

BORGER: Crisis?

DENT: -- alarm clock is as an appropriator, I want to see some of the appropriations bills passed and enacted into law.

BASH: Can you imagine if Congress actually did their job?

DENT: Yes. I mean, that's what we're supposed to do. And --

BORGER: That would be shocking, by the way.

DENT: I think we can get this done. We can get somebody's appropriations bills done and then we won't have to deal with the C.R. again hopefully. But we may have to deal with at least partial C.R. funding for some of the government.

So I think that's part of it. And I hope that the -- many of the members understand, too, that, you know, we have to talk about these issues realistically. I've often said to some of my colleagues, you know, the Republicans, some of the Republicans, have to stop pretending that Mitch McConnell is the majority leader of the Senate and that Mitt Romney is the president.

(LAUGHTER)

And President Obama has to stop pretending that Nancy Pelosi is the speaker and start talking to Speaker Boehner. So -- so, I mean, there's -- we have to have this big reality check and talk about, you know, political math, very basic numbers, you need over 51 votes or 60 votes in the Senate to get what you want. And you simply don't -- we don't simply have them for defunding Obamacare or you --

BORGER: Do you think this will give it to them given the public opinion polls and all the rest? I mean, some of these districts they're not suffering at all. You know, it's fine. I'm -- Ted Cruz isn't suffering for this. And --

DENT: Well, I guess, you know, a lot of members in both parties come from very safe seats. I happen to come from one that's pretty marginal. I always have. And so I have to look at the world a little differently than some others do, I guess. But hopefully this experience has taught even those members in the very safe seats that no one's that secure. I mean, we just can't, you know, ignore reality. And pretend that the American public won't notice.

TAPPER: That's all the time we have. I'm sorry. You hear that music it's like the end of the Oscar speech.

(LAUGHTER)

So thank you so much, Republican Congressman Charlie Dent of the great Commonwealth of Pennsylvania. Thanks so much.

Dana, Gloria, stick around.

When we come back, while Senate staffers are still working, where does a potential deal stand right now?

And are Democrats ready to give into any Republican demands on any parts of Obamacare? I will ask one Democratic senator next.

And later, threats of a possible credit downgrade if we do hit the debt ceiling. Just how disastrous could this be for the economy and for your savings?

(COMMERCIAL BREAK)

TAPPER: Welcome back. If you notice the clock on the lower right of your screen, we're just over one day away from when the Obama administration says the U.S. will smack the debt ceiling.

All attention is now on the Senate and the hope that senators Mitch McConnell and Harry Reid can hammer out a deal that a deeply divided House could rally behind in some way.

Here to tell us more about the deal, Senator Bob Casey, from the great Commonwealth of Pennsylvania. He just came from the Senate floor. Along of course with our own Gloria Borger and Dana Bash.

So, Senator Casey, good to see you again.

CASEY: Jake, good to be with you.

TAPPER: It's an all -- an all Pennsylvania evening here.

So Congressman Dent from your state said that he thinks -- based on informed conversations -- that tomorrow what will happen is whenever McConnell and Reid are done with their compromise, Boehner will just take it and he will just put it on the floor of the House and it will be an open vote even though it looks like the majority of the Republican Party in the House will not support it but it will still pass likely with Democratic votes.

CASEY: Well, I hope that's true. I don't -- I don't know that for certain. But I hope that whatever is arrived at as a -- as a strategic kind of pathway that we get there in short order. Because we don't have enough time obviously to do things the way they're normally done. We've got -- we've got a 24-hour window or even less. So I hope that's the case.

But the good news here I think is that -- and I could sense this tonight, having been in the Senate, that Majority Leader Reid and the Republican leader Mitch McConnell spent many hours today. And as soon as the House had the news that they weren't going to vote they both went back into -- back into action, so to speak, sitting down and working together.

So it's good news that they've met that long. I don't think the agreement is completed, but we hope it's an agreement that can open the government, make sure we pay our bills, and don't default. That's very significant.

(CROSSTALK)

CASEY: And then getting on a track to have negotiations for short and long-term budget issues.

TAPPER: I heard Senate Democrats complaining about the fact that they thought today was a lost day. That McConnell and Reid were dealing. They're coming up with a compromise. Then Boehner said hold on, stop doing that. I have some things I want to do here in the House. Boehner and his leadership team twice tried to introduce legislation to the House Republican caucus, twice were rejected. At the end of the day McConnell and Reid start dealing again. But it's a lost day.

CASEY: Yes. I'm an optimist by nature. So when I heard the good news that the two Senate leaders had spent that much time together prior to that time period, I was optimistic that it was moving in the right direction. I was a lot more optimistic before noon than after noon. But it seems like it's back on track now. So that's -- that's good news.

BASH: What was so amazing is that Speaker Boehner, it seemed as though the reason why he tried to bring up one last bill that the House Republicans put together was to hand one last olive branch to conservatives. And they took the olive branch and they just kind of stuffed it back in his face. I mean, they were the ones who wouldn't allow this to come up. They were the reason why he had to pull the bill in a really tough way, an embarrassing way tonight.

And I'm just curious, sort of going forward, I know maybe I'm taking it a couple of steps forward. But do you think that given all of the animosity and the tough situation that we've been in, that he is a negotiating partner that Harry Reid can really have going forward? Because there are those big, big issues that still need to be dealt with.

CASEY: Well, I think there does come a time when -- it's so late in the game and the stakes and the consequences are so high that people can rise above some of the disagreements and even rise above pressures that normally they would -- they would succumb to or be more reactive to. So -- I mean, we're hoping for that. And I think it's critically important for the country.

I mean, the consequences of default are bone crushing for the country. We cannot allow it to happen. So I think at least you're getting that kind of consensus now.

BORGER: So do you think you're actually going to make this deadline or you're just going to tell everybody you're going to cut the deal so that the markets don't tank and to say we're optimists, we're optimists, we're optimists, but actually let it slide?

CASEY: Well, fortunately for the country, there are people working on the procedural pathway here that know a lot more about Senate and the House procedure than I do.

(CROSSTALK)

BASH: I've seen you in that --

BORGER: So you think they have a way they can get -- do you think they have a way that can maybe get a --

CASEY: I think -- I don't think you'd see the kind of effort you've seen in the last 12 hours if there wasn't a pathway.

BORGER: And I want to ask you this. Because what's been striking to me is that you guys are usually pretty nice to each other in your caucuses. I mean, Republicans and Democrats may disagree and -- but in your own caucus whether it's the Democrats or the Republicans, you kind of treat each other nicely.

We heard last week about a Republican caucus in which Ted Cruz, almost every Republican member of the Senate stood up who was there, and criticized him and said, why are you running ads against me in my state? If I lose you're never going to get another Republican senator in my state.

Have you seen evidence of this? And does it sort of surprise you as you watch it from the other side of the aisle?

CASEY: I've only heard about it.

(LAUGHTER)

BORGER: Well, what have you heard? Tell us.

CASEY: No. I'm just -- a lot of -- a lot of division, a lot of acrimony. And that's -- I mean, that's one of the problems here. Until that is resolved, we're going to continue to I think have these kind of problems.

BORGER: But in this particular case.

CASEY: Resolved within the Republican Party.

BORGER: But can you talk to us about that and how it plays out on the Senate floor in your observation?

CASEY: Well, you could see it -- I think really you could see it in plain view that the divisions that one particular moment when Senator Bob Corker from Tennessee was standing not too far away from Senator Cruz and actually disagreeing with him on the floor in public. That's -- you know, you don't see that very often within a party. But having said all that, I think there's a consensus now among Senate Republicans that we've got to make sure we don't default and we should open up the government.

So those two imperatives alone I think allow us to move forward.

TAPPER: Let's backtrack to this morning when House Republicans announced that they had this plan. It would reopen the government for a short amount of time. It would raise the debt ceiling. But it did two things. First of all, it would require that all members of the House, Senate, the president, vice president, and Cabinet officials, all of them had to enter the Obamacare exchanges with no subsidy, and then also it would repeal the medical device tax which I know a lot of Democrats in the Senate as well as Republicans would agree --

CASEY: For repeal.

BASH: Yes.

TAPPER: You're for repeal. Yes, of course. Because there's a lot of medical device companies in Pennsylvania. So I heard liberal commentators say, that seems like a reasonable counter offer from House Republicans. Good. Maybe this will be done. But immediately the White House, and I believe Harry Reid, said no. We're not going to do that.

Ultimately, I guess, that bargaining technique worked to a degree. But I think if you could explain why no was the -- was the default there for the president and Harry Reid when -- like I said a lot of liberal commentators said that's not so crazy.

CASEY: Well, I can't -- I can't speak for how they arrived at it. But do I know that sometimes you're reacting to one part of an agreement or several parts. The part of the proposal that the House was pushing and I think some Senate Republicans was the so-called extraordinary measures, that every president should have in place so that when you're getting close to the end of a period of time when the debt ceiling is at risk, or the debt level is at risk, that the Treasury Department can have those extraordinary measures to go beyond and have maybe even months of time instead of just days or weeks.

So the fact that that provision was prominent today I think caused a lot of opposition I think on our side.

I would hope that people in both parties would object to that. Because you never want to have a president and a Treasury secretary without options when you're getting closer to a -- closer to a deadline. So I think that was as prominent as anything today in terms of what would -- what would trigger opposition.

TAPPER: Interesting. Because I didn't really -- I didn't really hear that as the issue.

Senator Bob Casey of Pennsylvania, thank you so much for coming in.

CASEY: Jake, good to see you.

TAPPER: We really appreciate it.

CASEY: Thanks for making it a big Pennsylvania night.

TAPPER: It is. It's huge. It's huge. I hope the state --

BORGER: OK. It's a Pennsylvania (INAUDIBLE).

TAPPER: The entire state is watching.

CASEY: I hope we did it right because we know you're good.

TAPPER: Thank you very much. I appreciate it.

Coming up next, where do John Boehner's loyalties lie? As the end game approaches, will the speaker stand up to the demands of the hard liners in his caucus? Coming up.

(COMMERCIAL BREAK)

TAPPER: Welcome back to the SHUTDOWN SHOWDOWN. I'm Jake Tapper and I'm here right outside the House and Senate Congress. You see the clock on the corner of your screen there? Twenty four hours and change until we hit what the Obama administration says is the debt ceiling. Here on Capitol Hill tonight, it's once again up to the Senate to come up with a plan to avoid default and re-open the government. For most of the day, it looked like a plan would come out of the House.

It did not so we're waiting along with our Dana Bash and Gloria Borger. The question hovering with all this of course is what is John Boehner going to do?

Dana, you heard Congressman Charlie Dent, a Republican say that he thinks Boehner is going to bite the bullet, take whatever the Senate negotiates, put it on the floor of the House and it will pass with mostly Democratic support, and not Republican support. That's not going to be easy for him to do.

DANA BASH, CHIEF CONGRESSIONAL CORRESPONDENT: Well, it's not going to be easy for him to do.

TAPPER: Politically.

BASH: Politically.

TAPPER: Principled-wise it will be. Yes.

BASH: Right. Both of those things are true. But what I think is that it will be a lot easier for him to do after three weeks of fighting. Because he has built goodwill. He has built trust among the conservatives because he did fight the good fight, even against as Charlie Dent was saying like basic math, knowing that the math just doesn't add up, that the Senate is still controlled by Democrats, that there's still a Democrat in the White House.

So, I think that he still is going to be in pretty good shape with conservatives. But what I'm hearing more of is, are that moderates, which are pretty big in number. You know, the people not as huge, not like they used to be, but biggish, saying what about us? Why are you listening to them? What about us? The people who actually want to work with the Democrats like Charlie Dent. GLORIA BORGER, CHIEF POLITICAL ANALYST: Yes. It was interesting. Because I thought I heard you guys tell me if you heard the same thing, I thought I heard Charlie Dent essentially say that the speaker got dragged into this by Eric Cantor and his southern leadership?

TAPPER: Other members of the leadership.

BORGER: Other members of the leadership. And so, it kind of explains it a little bit that I think Boehner felt an assault coming on his right flank which he's, you know, felt for quite some time and did this but didn't expect it to drag on the way it's dragged on as Charlie Dent explained.

BASH: I have to tell you, saying in there right outside of Boehner's office, I guess a few hours ago, I don't know, losing all sense of day and time, and watching him before he actually officially killed their own bill. Pull all of these conservative members who are never going to vote for this in one by one watching Steve King and Congressman Massie and others, clearly he or Cantor or both of them were saying, come on, guys, you've got to give this to us, and still not getting the votes was so stunning. After all of this. After he put his neck on the line for those conservatives, they wouldn't give him this last hurrah. Which as I said before, he basically did for them and they said, no thanks.

TAPPER: Sure.

BORGER: But there's ingrates, right? But there's nothing he can threaten them with. I mean, that's the reality of being a leader now. Which is, he didn't create them. They created themselves. He wasn't a part of the Tea Party. He's an establishment Republican.

TAPPER: He helped a lot of them get elected.

BORGER: Sure. Sure. But they don't kind of owe him in the old way where the speaker could say, OK. You know, it's not that he doesn't have any authority.

TAPPER: Let me just interject one thing, which is this is blowback from the elimination of earmarks.

BASH: Totally.

BORGER: Exactly.

TAPPER: We all badmouth -- we in the press are the worst at it or the best. But we badmouthed pork barrel projects. We badmouthed earmarks --

BORGER: We backed bring back the smoke-filled rooms.

BASH: I'm ready for that.

TAPPER: -- were away to control cajole, encourage members to behave. BASH: Right.

TAPPER: Because there's what you could give him a carrot and stick.

BORGER: Right.

TAPPER: Now they don't have it anymore.

BORGER: So, I mean, and so he's lost a lot of that authority. Bring back those earmarks. And there's no more smoke-filled rooms. I mean, these people are playing out the politics of this that used to be in the back room in political ads on television in other people's districts, right? I mean, this is also the strings on this, the master puppeteers of all of this are outside on K Street. Right? There, you know, conservative lobby Hariet Jackson (ph), very involved, Jim DeMint very involved in this which we don't see and they have as much power in anyway.

BASH: Absolutely. And in fact, when the Heritage Action Fund which is a pretty powerful grassroots conservative group came out with an alert about 5:00 today saying don't do this?

TAPPER: Yes.

BASH: I mean, the fought is still big --

TAPPER: Don't support the Boehner bill.

BASH: Yes, I mean, nobody needed glasses to read it. And it was very quickly after that that the thing went down. I think Jake, you're so right. That just, you know, Newt Gingrich and other former speakers like Danny Hastert talking about, you know, what went on, it's just different now. The speaker doesn't have that kind of power. A big part of it is the earmarks.

TAPPER: Earmarks is a big part of it. Also I think, you know, there's the rise of grassroots activists, rise of third party groups. You could go back to the Supreme Court over there and talk about Citizens United and the empowerment of independent groups. There are a lot of things going on that make somebody like Speaker Boehner not as powerful as he would have been a decade ago.

BORGER: You're not speaker for life. You're just not speaker for life anymore.

BASH: If you're John Boehner, you don't want to be.

BORGER: You don't want to be speaker polite. But Tip O'Neill, you know, the thought of unseating Tip O'Neill among Democrats would have been unthinkable when I was covering this place. Really.

TAPPER: In a primary you mean.

BORGER: Well, no, I mean --

(TALKING OVER EACH OTHER)

Internally nobody would challenge Tip O'Neill even if he made mistakes.

TAPPER: One thing that I know all of us heard from different members of leadership and different aides was two or three weeks ago, because we all knew Boehner was against this plan, even though I'm not trying to absolve him of it but he didn't think it was smart, was our members need to learn that if you touch a pot on top of a stove it's hot and it will burn you.

BORGER: Don't they know that --

TAPPER: I asked someone who was smart about this group of Republicans, and I said, so do they now think that? And this individual said, well, the core group of three dozen or so, they do not.

BASH: Right.

TAPPER: But the rest of the Republican caucus, the rest of the Republicans in the House, they have learned that if you touch it you get burned. Because Republican disapproval numbers are very high and the country right now is very anxious.

BORGER: But here's the other thing too, they're not career politicians. So if they touch it and they get burned they're like fine I'll go back to my life. I came here to defeat ObamaCare is what I've been told over and over again. That's my job. If I can't do it it's not my job anymore. Right.

TAPPER: At least I've tried. At least I've tried.

BASH: And like I've said, those people, a lot of the people who they were hoping would touch the stove and get burned are not getting burned, they're getting applause.

TAPPER: Oh, absolutely.

BASH: Rewards from their constituencies back home because they're so gerrymandered that those are the people who elect them.

TAPPER: Guaranteed Ted Cruz is not going to be invited to some cocktail parties in this town. Guaranteed also he has propelled himself to much likelier a presidential candidate, not nominee but candidate, in 2016. And I think a lot of these Tea Party Republicans, even if they're not happy with what happens tomorrow, are going to have a lot of supporters across the country among the Republican conservative grassroots.

BORGER: I think this helps Ted Cruz in Texas. I think it might help him raise money in Texas. I don't think he's going to get a lot of money from Wall Street.

BASH: He's got the grassroots. He doesn't need as much.

BORGER: Well, that's right.

BASH: Yes.

BORGER: That's right. He does but you kind of can see it shaping up. In Iowa, in the Iowa caucuses, Ted Cruz is -- he's probably --

TAPPER: I don't know about the Wall Street thing. He obviously has some very wealthy backers. And at the end of the day, we'll see if he does anything tomorrow. We'll see if he objects and prevents a unanimous consent from happening. But it's possible.

BASH: And delays this passing.

TAPPER: It's possible that Wall Street at the end of the day he just took it as far as he could and now he backs off and Wall Street is still OK with him. We'll going to take a quick break.

Coming up. We won't get a real sense of what this all means for your retirement accounts until Wall Street opens up. Shop in the morning. But in China, the traders are already wide awake. What does Beijing think of the chaos on Capitol Hill? Well, we'll get a live report.

(COMMERCIAL BREAK)

TAPPER: They're burning the midnight oil here in the nation's capitol as the clock ticks down towards the moment Warren Buffett has compared to a nuclear bomb. I will ask a Wall Street insider and former top treasury official how long we really have before impact. Stay right there.

(COMMERCIAL BREAK)

TAPPER: Welcome back to our CNN special SHUTDOWN SHOWDOWN. I'm Jake Tapper live here on Capitol Hill.

We're joined by Mark Patterson, formerly chief of staff at the Treasury Department. Mark, the markets could really be driving the story tomorrow morning. And on the other side of the globe, you can bet traders overseas are watching the chaos here on the capitol with more than casual interest.

So, I want to check in before we go to you, Mark, with CNN's David McKenzie, he's live from Beijing where the markets are already open. It's almost lunchtime there in fact. David, the United States owes China about $1.3 trillion. Is there any sign of tremors in the Asian markets?

DAVID MCKENZIE, CNN INTERNATIONAL CORRESPONDENT: Well, looking at the markets right now, Jake, the Nikkei, the Japanese exchange, up marginally as well as the Australian exchange. Shanghai down, the Hong Kong exchange down. But not a lot. So, really it's a wait and see approach. I think many would say it's the calm before the potential storm. And what a storm it would be. $1.3 trillion of ownership just China has of U.S. Treasury bills. Jay Kang (ph), one economist I spoke to today said it would absolutely catastrophic for this region if the U.S. defaults on its debt. He also said that this would be ten times worse than the collapse of Lehman Brothers that kicked off the financial crisis. So very nervous eyes here in Asia looking at the situation going on in Capitol Hill -- Jake.

TAPPER: And David, how's the Chinese media reacting to the American political breakdown?

MCKENZIE: Well, you have to also look at those soft power battle between the U.S. and China. One analyst I spoke to today say, it's a battle that Beijing is currently winning. In a state media editorial, Shenghua, the main state media here in China, they said that quote the U.S. fiscal failure warrants a de-Americanization of the world. They're saying it's time to people turned their back on the U.S. dollar, moved towards other currencies and other standard bearer, obviously hinting they should be the ones. Reality is that they couldn't do that now.

China just doesn't have the currency or the setup to become new U.S. dollar with its own currency. But certainly the fact that the Beijing is reveling in the fact that the Congress is in this chaos from their perspective means that China is using this opportunity as a p.r. battle. Because it owns so much of the U.S. debt, though, a default would be terrible for the economy here. So certainly they don't want that to happen -- Jake.

TAPPER: All right. David McKenzie, thank you so much. Mark, I want to bring you into this. You just heard David McKenzie's report. Is it overstating the case to say that if this default were to actually happen it would be ten times worse than the collapse of Lehman Brothers or is that about right?

MARK PATTERSON, FORMER TREASURY DEPARTMENT CHIEF OF STAFF: Nobody really knows because we've never had a default on government debt, we don't have a default on any payment that the U.S. government has made. Congress is always been smart enough to avoid that. So, nobody really knows. But most economists believe we'll be very bad, and the rest are hard to qualify because the financial system is interconnected. And most of it is based in some way on the U.S. treasury and U.S. dollar as foundations for the way the whole system works. So, you don't want to start unraveling that.

TAPPER: I want to ask you about a statement that our own Brianna Keilar at the White House got from a senior administration official. I'm not going to read the whole thing. But one of the things that the senior administration official said, trying to encourage this compromise process to go along, was that Thursday is important but not a drop dead moment as long as things looked positive. Congress is working on a resolution. We are OK if things start to drag into next week, the House is still intransigent and messes around with another counter proposal that is going nowhere that the wheels come off. Why were we told October 17th?

PATTERSON: Yes.

TAPPER: Then why are we told October 17th? PATTERSON: I would say this about that. One, the date, the 17th is the date after which treasury can no longer guarantee it can make all payments. The Treasury Department has never said it has no cash on that date. OK? They have said they'll probably have about $30 billion in cash available on that day, plus whatever comes in over the transom in normal tax payments.

TAPPER: Right. Tax payments.

PATTERSON: So, it is possible for the treasury to limp along. That's fumes for the Treasury Department, OK? On a $3.6 trillion budget, $30 billion is like you or I having $3 in our checkbook when we have a lot of checks outstanding. We wouldn't want to do that and the government shouldn't operate this way, either. The problem that could come, the risk that could come is that during that period when we have no ability to borrow, something would happen called rollover risk. And that means that people who hold treasuries now might decide to cash out of them and take their money elsewhere.

TAPPER: About a 100 billion --

PATTERSON: Hundred billion a week. Right. You're familiar with this. Yes, this is an important risk and I wouldn't understate it. Because nobody knows whether investors -- if they are spooked they might decide to take their money elsewhere. And if they did that, the crisis would be immediate. It's an immediate lights out moment. Because the treasury does not have an extra $100 billion laying around in a vault somewhere to pay off a treasury auction.

BASH: Isn't the issue also that even if it's not an actual practical problem it's perception?

PATTERSON: Absolutely.

BASH: And I mean, I was talking to some Republicans here, some of whom don't believe this data is true. But what they do believe is that the perception that it is true is enough to roil the markets here in the United States and around the world and that is very dangerous.

PATTERSON: Yes. Again, I think people get confused about what the date means. The date just means we can't borrow anymore after that date. It doesn't mean we have no cash.

BASH: Right.

PATTERSON: But the problem is the cash we have is not enough to sustain the government for any length of time. So, it's basically the government is naked. It is sort of like, if all your credit was cut off at home and you could get no ability to borrow and the bank suddenly said, by the way, we want you to pay off your entire car payment now. Pay-off your whole card right now. You have nowhere to turn to get that cash. That's when the car company comes and seizes your car. That's when other bad things start happening to you.

BORGER: So, can I ask you this question? Assume the government, let me be an optimist for a change, assume the government reopens, we get through the debt ceiling crisis whether we do it exactly on the 17th or a couple days later. Can you at all estimate how much this has cost the American people?

PATTERSON: Not yet. But like --

BORGER: But like can you give us an idea of how you calculate it?

PATTERSON: I assume it will be in the billions. You've already seen over the last week the cost of treasury borrowing rising day-by- day. And so, that has a cost. That means bigger deficits. That's what happens when treasury borrowing costs go up. So, I can't quantify it at this point. But I think what you're going to see it will be significant.

BASH: And of course, you Republicans who argue that that short- term pain for what they would hope would be long-term gain, meaning, you take some hits now in order to solve the bigger problems that will ultimately really hurt the economy, entitlements and things.

PATTERSON: But I'm optimistic, too, Gloria. I think there will be an agreement. I think the Senate will pass something. And I think pursuant to what your previous guests said, I think the House will go ahead and pass it and probably be with, you know, probably more than Democratic votes or not. And that will be a good for the short term. But the problem is guys, we're doing this until February.

BASH: Yes, exactly.

PATTERSON: We have to do this whole thing over again. So somebody has to -- people have got to learn a lesson from this. This will be the second time if this goes as everybody expects, this will be the second time that Congress raised the debt limit and was unsuccessful in extracting a big demand out of President Obama. Because he laid down a marker on this before the last one and he said I'm not going to negotiate and they drop their demand for dollar per dollar spending cuts. And the price they asked for was the Senate pass a budget resolution. So, if they do it again here, and this bill passes what it looks like virtually clean, it's got a maybe fly specks on it but it's virtually clean, right? So, the lesson ought to be that you can't keep doing this over and over again. It's unhealthy for the country.

TAPPER: All right. Mark, thank you so much. I appreciate you coming.

PATTERSON: Thank you so much, Jake. Good to see you.

TAPPER: All right. Coming up. If you thought today was a wild ride, wait until you hear what we could be in for tomorrow. And that's still if the Senate deal gets a green light. Stay with us.

(COMMERCIAL BREAK)

TAPPER: We're just about at that point where we can stop counting hours and start counting minutes until the debt ceiling deadline. What does tomorrow hold as the clock continues to tick down? Stay with us.

(COMMERCIAL BREAK)

TAPPER: Welcome back to the special hour of CNN coverage SHUTDOWN SHOWDOWN. I'm Jake Tapper and of course, I'm live on Capitol Hill.

Still with us, chief political analyst Gloria Borger and chief Congressional correspondent Dana Bash. So, Dana, optimistically reviewing the hour we've had.

BASH: Am I able to be optimistic at this point?

TAPPER: Yes. You do get the rag when -- you're optimistic in this town. But it does seem as though Congressman Charlie Dent, Republican of Pennsylvania seems confident that Speaker Boehner will take a compromise from the Senate, introduce it and it will pass with majority democratic support.

BASH: If that doesn't happen and if there's another procedural hocus pocus if they do, I think the big picture thing to keep in mind is that, what he said and what I was told by other members of the House Republican leadership is that John Boehner will now bite the bullet. He's going to put this on the floor, whatever the "this" is and it is unlikely to get -- maybe it won't get the majority of Republicans but it won't be in a bipartisan way, something he hasn't been willing to do for three weeks.

TAPPER: Fifteen seconds, Gloria.

BORGER: Two weeks plus later where are we? We're kind of back where we started. And there's no defunding of ObamaCare. The huge issue that was on the table vaporized.

TAPPER: Vaporized. And what you get is more security to make sure that people who receive ObamaCare subsidies are actually at the income level they promised.

BORGER: Right. Right.

TAPPER: That's where we will land. And that's not going to go down well with a lot of Tea Partiers.

Dana Bash, Gloria Borger, thanks for joining us. I'm Jake Tapper. I'll be back here tomorrow night for another live SHUTDOWN SHOWDOWN, 11 p.m. Eastern, 8 p.m. Pacific. Hope we have lots of news for you.

Plus, of course, you can check out "THE LEAD" weekdays at 4:00 p.m. Eastern. Have a great night. Piers Morgan starts right now.