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Interview With Senator Chuck Schumer; Budget Deal Imminent?; Interview with Congressman Mick Mulvaney of South Carolina

Aired October 16, 2013 - 16:00   ET


JAKE TAPPER, CNN HOST: You can come out of your bunkers. No need to duck. The sky is not falling.

I'm Jake Tapper, and this is "THE LEAD."

Coming to you live from Capitol Hill, the national lead, we have a deal, just not a done deal. The Senate is about to vote on a plan that will end the government shutdown and allow America to start paying its bills again.

And just moments ago, House Speaker John Boehner conceded defeat and promised the House would get in line.

But, to my writers, make this note. Save this script for January, because even if a last-minute deal is reached, we'll likely need another one in a few months and another one after that. Why is Congress just staggering from crisis to crisis?

And as some lawmakers pat themselves on the back for reaching a deal, people out there are still hurting. Just ask the thousands of kids in danger of going hungry in one state because of this gridlock.

Good afternoon, everyone. I'm Jake Tapper. Welcome to "THE LEAD."

We will begin with the money lead, live from Capitol Hill. With just eight hours to go until the debt ceiling deadline, the mere promise of a progress has Wall Street investors partying like it's 1999, when at least we had a pseudo-functional government. The Dow jumped 200 points earlier today in reaction to news that a debt ceiling deal had been reached in the Senate, and that's before the ink on the deal was even dry. We will get to the politics of this all in a moment.

But, first, CNN's Zain Asher is live at the New York Stock Exchange with more on the stock surge -- Zain.


Yes, so much excitement here on Wall Street, so much optimism. You know, not even a ratings agency giving us a warning card was enough to deter investors. Traders have been basically trying to block out the noise and focus squarely on the fact that they know or they believe that they know that a deal is going to get done.

At one point, the Dow actually surged 206 points. I have been speaking to traders all morning. And I have been asking them, guys, listen, there's no concrete deal just yet, so why the optimism? And they're saying, look, we know how Washington works. We know that no politician wants to pick up the pieces of a possible default. And even if we don't see a deal tonight, we know the Treasury has enough money to buy us some time.

However, I will say this, Jake. The worry among some traders is that the markets really haven't reacted strongly enough to force Washington to really act. And so some people are asking me, when we come up against the next deadline, are we going to see the same political brinkmanship? Has Wall Street basically let Washington get away with this, Jake?

TAPPER: All right, Zain Asher, thank you so much.

We had all braced ourselves for the sky to rain frogs and for blood to flow in the streets like rivers, but it looks like we may just avoid the threatened financial Armageddon of a default after all. The Senate made it official earlier today that a deal had been reached to reopen the government and raise the debt ceiling.


SEN. HARRY REID (D-NV), MAJORITY LEADER: The eyes of the world have been on Washington all this week. And that is a gross understatement. And while they witnessed a great deal of political discord, today, they will also see Congress reaching historic bipartisan agreement to reopen the government and avert a default on the nation's bills.

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: This is far less than many of us had hoped for, frankly, but it's far were the than what some had sought. Now's time for Republicans to unite behind other crucial goals.


TAPPER: Even if this deal sails through the Senate, there is, of course -- there still is the question of how House Republicans will react.

Minutes ago, House Speaker John Boehner made it clear that as frustrated as his Republican Caucus might be with the outcome of this bipartisan lovefest in the Senate, he plans on pushing his caucus to support the deal and put this battle behind them.


REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: We fought the good fight. We just didn't win.


TAPPER: The man who's been called the other leader of the Republican Party in recent weeks, Texas Senator Ted Cruz, also pledged not to stand in the way of a vote, but he also chided his fellow GOP members in the Senate for not standing strong in the battle to tie Obamacare defunding the a budget deal.


SEN. TED CRUZ (R), TEXAS: The House of Representatives has taken a bold stance, listening to the American people, but, unfortunately, the United States Senate has refused to do likewise. The United States Senate has stayed with the traditional approach of the Washington establishment of maintaining the status quo and doing nothing to respond to the suffering that Obamacare is causing millions of Americans.


TAPPER: Cruz also declared House Republicans victorious for their -- quote -- "profile in courage," although his attaboy may do little for those staring at the grim reality of more than 70 percent disapproval ratings for the Republican Party in Congress.

We don't want to get ahead of ourselves. But it looks as though this sordid ordeal could be nearing its end, at least until it all comes up again in a few months.

Let's bring in CNN chief congressional correspondent Dana Bash.

Dana, are there any indications yet on what the House might do once the bill makes it to them?

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Well, I just came from standing outside of a House Republican meeting where we're told that the speaker did make the case in private that you just described that he made on that radio show, to live to fight another day and to please support this bipartisan deal that's coming out of the Senate.

Yes, he actually did urge Republicans to support it. The way that this meeting that just went down was described by several Republican congressmen who were in there, just it feels like there was a lot of wound-licking going on and trying to sort of pick up the pieces from what everybody agrees has been very bruising, not just when it comes to the public perception of Republicans, specifically House Republicans, but also the divided nature of the Republican Party right now.

In fact, John Boehner, I'm told by one congressman, told the rank and file, we send the best messages when we are united, meaning, please vote for this.

Now, there could be several reasons that he's urging them to vote yes. Maybe the most important is he doesn't want to have a vote count at the end where it is a majority of Democrats and a minority of Republicans. It's not that he's not going to let this on the floor. He will, but it certainly will be better for him when it comes to his leadership, when it comes to the way he can, you know, be perceived as the head of the Republican Caucus in the House, as somebody who can at least get the majority together.

The other interesting note that I was told is that the House majority leader, Eric Cantor, was very specific and honest about the divisiveness inside the Republican Caucus. He said, I'm told, "We have disagreements in this room about tactics," but he told them, he should, "We Republicans have lost ground when people started talking about who's a better Republican, who's a more pure Republican." He said, "Those are not the conversations that we should be having. We should not be talking about tactics. We should be talking about principles."

So a lot of bucking up and again trying to heal the real divisions inside the Republican Party, and particularly among House Republicans.

TAPPER: All right, Dana Bash, thank you so much.

And here to talk more about the deal, Senator Chuck Schumer, Democrat of New York.

Welcome, Senator.

You see this school here, McCaffrey Middle School from Galt, California. They're here. They wanted to go see museums, they wanted to see exhibits, they wanted to see what any middle school kid wants to see when they come to Washington, D.C., and they're upset. Their government is not open for them.

SEN. CHARLES SCHUMER (D), NEW YORK: They should be. This should not be a day of exultation and happiness, because look where we ended up, just where we started.

We Democrats said three things, open the government, pay our debts and then we will negotiate. That's exactly what the agreement calls for, but it took millions of people being hurt, some much more than these schoolkids, families not getting paychecks and so many other things, all because a small group of people thought that they were right to do what -- to hurt anybody they wanted to get their way.

And, unfortunately, not in the Senate, but in the House, Speaker Boehner, for too long, went along with them. The hope here, the silver lining in this cloud is that mainstream conservative Republicans realize that the politics of confrontation, of reckless brinkmanship doesn't work, and we won't go through this on February 7 or on into the year.

TAPPER: Well, I want to talk about brinkmanship, because it seemed clear to me, when it came to the Senate negotiations last night and this morning between Harry Reid and Mitch McConnell, that Democrats did not think that the Republicans had any leverage, that Democrats did not think that they had to give anything to Republicans.

I guess there's this provision to make sure that those who get stipends from the government are actually deserving of them because of their income level. But, beyond that, there wasn't really a give and take.

SCHUMER: There was not.

TAPPER: It was, we're not giving you anything. You have no leverage and you're wrong. Could this not have ended sooner if Democrats had not taken such a hard line?

SCHUMER: Well, it was not a hard line on the substantive issues. It was a hard line saying, unless I get my way, I'm going to shut the government down, I'm going to risk default for the nation.

Now, anyone can do that. I believe in immigration reform. What if I persuaded my caucus to say, I'm going to shut the government down, I am going to not pay our bills unless I get my way? It's a politics of idiocy, of confrontation, of paralysis.

And so finally what happened, Barack Obama and Democrats said, we're not going to give in to this kind of brinksmanship, where basically a gun is put to your head.

TAPPER: How much did Obama and Harry Reid have to buck up Democrats?

SCHUMER: Didn't. We were united. We have seen this brinksmanship over and over again. And we realized, if we didn't stand up now, we'd be playing the same politics of brinksmanship every quarter.

And here is what I believe. I believe that certainly in the Senate and even in the House, the hard-right Tea Party group of Republicans has been discredited, not only by the poll numbers, but because they really didn't have a strategy. And once everyone has learned that we Democrats are no longer going to cave to this kind of brinksmanship, they won't try it again. So we will have a much, much better next year than we did this year.

TAPPER: Tactically, was -- President Obama seemed to be sitting out, at least publicly talking about this. What was going on behind the scenes? How involved was he, or was Harry Reid really just driving the show?

SCHUMER: No, President Obama, Harry Reid, Democratic leadership, we were all on the same page. We said --

TAPPER: Yes, but who was in charge of driving it?

SCHUMER: Well, it was a consensus. No one had to persuade the other. We both came to the conclusion early on that we could no longer cave to this kind of brinksmanship: I will hurt everybody else unless you give in to me.

And so it was easy. And no one blinked at any one point. We knew that, if we stood firm, because these Tea Party folks were so out of the mainstream -- I love when Ted Cruz says, you know, the American people lost. Well, fewer than 20 percent of the American people advocate his policy, which is, shut the government down, don't pay your debt unless we end Obamacare.

Some people want to do that, but not a majority, not even close. And so, what's happened here is that this extreme group has finally been stood up to. And now maybe, in an ironic way, Democrats have given mainstream Republicans some of the strengths to go forward and negotiate on a reasonable basis, where you get something and not everything. TAPPER: The debt is $17 trillion. And I understand that the annual deficit has gone down. But the debt is still a staggeringly high number. And you know, if you look at projections for future years, with baby boomers retiring and health care costs continuing to rise, it's going to get worse.

Is this now a time, for whatever reason, whether it's because the Tea Party is so active and they're not going away, but is this now a time for Democrats, Republicans to actually sit down and say, we really need to take this seriously; OK, we don't approve of the tactics of the Tea Party, but they're right to shine a light on the serious problem of our debt?

SCHUMER: In all due respect, we have made big progress on the debt. The deficit is about half of what it was several years ago.

TAPPER: Partially because of the sequester, right?

SCHUMER: Partially because of the sequester, partially because we raised revenues. We have made progress there.

And it's a very important issue. But I would mention there's another issue which I think is even more important. And that is that middle- class incomes in America are declining. It has never happened. In the last decade, it has, and we ought to give as much focus to that as to debt reduction.

I am not belittling the importance of debt reduction. I believe in it. But it is not the only issue. And with again the peaking of the Tea Party, I think other issues will come into play. For all we know, we may get a good immigration bill now because -- same thing. Small group of outliers said, I am not going to go for that. And in the past, too many Republicans in the House went along.

TAPPER: So, Jay Carney and the White House have used the term ransom, we're not going to pay ransom, we're not going to do anything that the Tea Party wants us to do or the Republicans in the House want us to do just because they're the shutdown.


SCHUMER: Threatening to hurt innocent people.

TAPPER: I understand. My question is, this provision to allow income verification before Obamacare subsidies are granted, is that not some sort of concession?


SCHUMER: Right. No, it is not. It's no change.

There's a report from the secretary of HHS to see if it's working, but there was verification, we believed in it, in the bill even before these negotiations began. It is frankly a bit of a fig leaf which we were happy to give, but that was not a negotiation. That was not what Ted Cruz and the others started to demand at the beginning. (CROSSTALK)

TAPPER: And why not take the opportunity also to look at some of the problems with Obamacare that are clearly there and would have been covered a lot more in the last couple of weeks if it were not for this mess? We have serious problems with the Web site. There are other issues. There are serious questions about restauranteurs, and whether or not they're going to have to reduce hours for employees.

Are those not serious concerns?

SCHUMER: The president himself has looked at -- when you pass such a major law, which in my view will do so much good, there are always going to be changes that have to be made. That happened with Social Security. That happened with Medicare.

But we didn't repeal them. We didn't try to find ways to thwart them. We tried to improve them. There will certainly be efforts to continue doing that at both ends of Pennsylvania Avenue, and there's nothing wrong with that.

TAPPER: Final thoughts on the last few weeks?

SCHUMER: Well, again, a hope and a prayer. And that is that when I first got here to the Congress and even my first several years in the Senate, Democrats and Republicans sat down and negotiated. And we realized we would have to meet somewhere in the middle.

I hope and pray that can be restored. We have had a politics of brinksmanship. Two faults, one, obviously, the Tea Party hard-liners, but the real fault lies in too many mainstream conservatives willing or being frightened, frankly, by them. Hopefully, those days, they're never going to be over, but those kind of policies are diminished, and we will see much more productive legislating in the next few years.

TAPPER: All right, Senator Chuck Schumer, Democrat of New York, thank you so much for being here.

Coming up: Senator Ted Cruz of Texas says he will not hold up a Senate compromise to reopen the government, but I will talk to a lawmaker who says he's still voting no, no matter what.

And he couldn't get the votes from his own caucus last night, but House Speaker John Boehner just got a standing ovation from House Republicans. So where does his leadership go from here? Stay with us.


TAPPER: Welcome back to THE LEAD. I'm Jake Tapper, live from Capitol Hill for our continuing coverage of the government shutdown.

Now that we have a tentative deal to reopen the government, the hope is that the Senate can, in words of Minority Leader Mitch McConnell, wrap it up today. McConnell and Senate Majority Leader Harry Reid announced the compromise on the Senate floor earlier, and the Senate is expected to vote on it some time this evening.

But do you remember that 21-hour quasi-filibuster from a few weeks ago? Remember? Ted Cruz?

Well, Ted Cruz now says he has no plans to slow things down and he never did.


SEN. TED CRUZ (R), TEXAS: I have no objections to the timing of this vote. And the reason is simple. There's nothing to be gained from delaying this vote one day or two days. The outcome will be the same. Every senator, every member of the House is going to have to make a decision where he or she stands. But there's no benefit, I've never had any intention of delaying the timing of this vote.


TAPPER: Joining me now is Republican representative from South Carolina, Mick Mulvaney.

Thanks so much for joining me, Congressman.

First of all, my understanding is that when Speaker Boehner introduces the Senate compromise on the floor of the House, you are going to vote against it?

REP. MICK MULVANEY (R), SOUTH CAROLINA: Yes, there'll be a small group that votes against it. My guess is that it will pass overwhelming out of the house tonight with both Republican and Democrat support.

TAPPER: Do you think it will have a majority of Republican support?


TAPPER: You do?


TAPPER: Well, I think there are a lot of people out there, these kids from McCaffrey Middle School in Galt, California, who came here for a field trip and all the museums and parks are closed, they don't understand it, they're frustrated. A lot of people who think, I can't speak for them, but I would wonder if I was them, what was this all for?

MULVANEY: It was for equal protection under the law. One of the things that got lost in this, Jake, from the very beginning, was that the narrative is that we were trying to get rid of Obamacare, completely defund it. The last offer that we sent the Senate before tonight was simply a one-year delay to the individual mandate. To reach out to people and say, look, the president has issued 1,100 special exemptions to his friends, most recently, about a month ago, to corporations. We thought our families should get the same treatment under the law as those politically protected entities. That's what the fight was about. That's why I can look these kids in the eye and say, do you want to live in a country where folks who are politically powerful get better treated than those who are not? And I think they would say no and, hopefully, as they get older and they realize that, they'll realize that this was fought for the right reasons and it was worth coming to see this instead of seeing maybe the Smithsonian.

TAPPER: To play devil's advocate for a second, I would say that the White House says when I've asked them about the different treatment, the delay in the employer mandate of corporations --


TAPPER: -- and not delaying the individual mandate requiring individuals to get insurance, they say -- well, this is not what they officially say, but the truth is that Obamacare depends on more people joining the system, so that more people can have health insurance and that's how it works, and it's not as dependent upon corporations, since 85 percent of the country already is insured.

MULVANEY: Sure enough, and that's what I expect them to say. But the follow-up question to that, Jake, and maybe get a chance to ask them sometime is, why do the insurance companies in Nevada get treated differently? Is it because Harry Reid is from there? Why do the restaurants and nightclubs and bars and restaurants in San Francisco get treated differently than the ones, say, in South Carolina? Is it because Nancy Pelosi is there?

That's what we're talking about. That's simply just wrong.

So many times, my Democrat friends have said to me, you know, it's the law of the land, what's your problem with it? I say, well, it is the law of the land, but it should be applied equally to everybody, regardless whether you've got connections.

TAPPER: But what Republicans have been saying, a lot of Senate Republicans and some House Republicans is -- we agree with the plan, and the hope of ending Obamacare or changing it significantly, we're with you on that. This tactic isn't going to get what you what you want.

And ultimately, they were right.


TAPPER: There just weren't the votes in the Senate. The president was going to veto it.

And at the end of the day, the Republican Party, the congressional disapproval ratings are in the 70s. They're not great for Democrats, in the 60s, and they're not great for President Obama, 53 percent, I think, disapprove. But they're really bad for Republicans.

Was it worth it on a tactical level? MULVANEY: Ultimately, you have to believe. I mean, you have to really believe. You're going to be in this business for a living, if this is what you choose to -- if you're going to leave your family and come up and do this in Washington, D.C., you have to believe that good policy is good politics. You might as well go home if you start making your decisions based upon political polls, you shouldn't be here in the first place.

We believe that what we did was right. We did it for the right reasons. We did it for these kids here. They might not recognize that right now, but we really do believe that this was worth having the fight.

We lost. That's it, you're absolutely right. And the folks who said we were going to lose turned out to be correct, I can't argue with that.

But we do believe that what we were doing was for the right reasons. Not doing it to hurt people.

I saw Chuck a few minutes ago. That's no more accurate than me saying he passed Obamacare to try to hurt people. That level of rhetoric, that doesn't help the discussion.

We believe that folks should be treated the fairly and equally under the law and this was the right battle to have.

TAPPER: But I think -- I'm not going to speak for Senator Schumer, but in terms of people being hurt by the government shutdown, I think the idea is, John Boehner himself said in March, what's going to happen if we tie Obamacare defunding to the government spending bill is we'll get a shutdown, we'll be blamed for it, ultimately, Obamacare will not be defunded.

You yourself said defunding the Affordable Care was, quote, "never, ever, ever, ever going to happen" after the election. And people have been hurt. Not just these kids whose field trip to Washington, D.C., was ruined, but the hundreds of thousands of individuals who weren't paid. The people who run bait and tackle shops near national parks and monuments, the people who are depending on fishing licenses to go crabbing in Alaska, the kids in North Carolina who depend upon WIC money.

Now, I understand there were efforts to piecemeal fund --


TAPPER: -- all of these efforts by House Republicans, I hear that. But that wasn't going to work. And ultimately, people were hurt by this.

MULVANEY: Keep in mind, your premise to that, in your question was to defund Obamacare, which is not what we did. Yes, we said that over the very earliest part of our negotiation. But the last thing we sent them right before the government shutdown was simply the one-year employer delay mandate. That was it. That was all we were asking -- TAPPER: Individual mandate.

MULVANEY: Individual mandate, I'm sorry. I misspoke.


MULVANEY: But, were people hurt by this? Sure, 85 percent of the government was open, but that's not much consolation to you if you were in the 15 percent -- if you needed the 15 percent of the government was closed.

But you hit the nail on the head. We actually -- we tried to fix that. We passed, I think, 20 bills in the House to say, look, if you're a veteran, we want to help you. If you're going to a national park, we want to help you. If you want to go to the museums -- I don't know if these kids know the House passed a bill that would have had these museums open today.

The Senate took one recorded vote in the last 17 days. They did not take up a single one of those bills. And that's -- people say, how did you get here? I don't think we ever would have been here if we'd have had a dialogue before now.

The president is saying, now he's willing to talk to us. The reason we're here is he's not been willing to talk to us for the last three years. The only time the president talks to us is when we get in these crises. I hope he changes his mind. I hope we talk from now until January and February.

But the reason we're here was that nobody would talk to us until we did this. It's a shame but that's what you have to do to get the other side to speak to you.

TAPPER: Last question, very quickly, sir -- Speaker Boehner, stronger now?

MULVANEY: A hundred percent stronger. No one blames him for this. We didn't have the votes. We did not have the votes yesterday.

I supported the compromise that the speaker offered yesterday, so did really good conservatives, myself, Jim Jordan, Raul Labrador, Justin Amash. We supported that compromise. We could not get him the votes.

That was our failure. We did not deliver the votes in the House. It wasn't the speaker's fault.

TAPPER: All right. Congressman, thank you so much for your time. We appreciate you coming and answering our questions.

Coming up next, he couldn't the close a deal in the House, so the Senate had to take the lead instead. So what is Speaker John Boehner's next move and how does the Republican come back from this?

Plus, the youngest victims of the shutdown, one state cuts off welfare benefits to low-income families, even though critics say it has the money to cover the costs. So, why won't state officials dip into emergency funds? Coming up next.