Return to Transcripts main page
Time Running Out on Debt Ceiling Talks; Warren Buffett on Debt Ceiling Fight; Sources: "Deal Reached"; Ugliest Moments of the Shutdown
Aired October 16, 2013 - 10:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ATHENA JONES, CNN CORRESPONDENT: You've got a deal. They're still working out where it's going to start. And so we'll have to see how quickly it can get through.
The thinking of it is that if it starts in the House, it might expedite things. But it just hasn't been -- no decisions have been made. It's very, very fluid; this is something that's changing on the half hour practically.
CAROL COSTELLO, CNN ANCHOR: So -- so the answer for Steve King is, Wall Street, I mean the markets just have to dip and then they'll do something? That's just weird. But I know Athena Jones, you cover that every day.
Thank you so much. I appreciate it. We'll get back to you.
JONES: All right.
COSTELLO: The threat of hitting the nation's debt ceiling could be the second blow in a vicious one-two punch to American's farmers. Keep in mind you will share in their hardship. Many of us are already seeing food prices on the rise. And Washington warns that milk could be twice as expensive if Congress cannot pass a farm bill. More on that in a minute.
We could also see meat prices grow volatile as the partial government shutdown has stopped the feds from measuring supply and demand. And farmers are not getting loans processed making it tough to harvest current plants and plant next year's crops.
For Ron Slaba, it's the latest layer of misery. He and other ranchers in South Dakota are still reeling from last year's historic drought. And the Washington gridlock is delaying the help they so desperately need. Thank you for joining us, sir.
RON SLABA, OWNER, SLABA RANCH: Thank you for having me.
COSTELLO: So Ron, what's your level of anger this morning?
SLABA: You know, the disappointment and the anger, is probably at a 10.5. You know the last two years, the -- for the livestock producers in this area, first we go through the worst drought in the history of the United States. We had less rainfall last year than we did in 1936. We turn around and we have the worst October blizzard ever in the United States, in part of the United States. Devastating losses, you know the stories you see on Facebook and on CNN and Fox News and places like that, I mean it's -- it's phenomenal. You can't even imagine until you see it with your own eyes.
And here we are; we have our shutdown. The FSA offices are shut down. We have no idea how many losses we do have because the FSA offices are the ones who track those losses. The state of South Dakota is doing the best job they can in trying to get those losses reported. But with no farm bill, we could go and report our losses and we're still not gonna get any help. The farm bill (inaudible) all the policies.
COSTELLO: Let's talk more about this snowstorm. Because it killed what -- 100,000 head of cattle?
SLABA: That's the estimate right now.
COSTELLO: How are you dealing with that?
SLABA: Well you know, we deal with it like we deal with anything else. We put our over boots on. We put our carhatts on, and we go out and we clean it up. You know, we don't sit on the sidelines waiting for the government to come in and clean it up. We took our tractors out, and we're -- we're digging holes, and we're calling rendering plants and we're getting the fences fixed ourselves. We're running our generators.
There's people without power. They're probably going to be without power for another two weeks. There's 1,500 poles down in our area yet.
COSTELLO: So there's only so much you can do though because you in part depend on the federal government to help you through natural disaster. And that's not happening because of this partial government shutdown, right?
SLABA: Well you know, I guess I agree with that to a point. Last year we got through the disaster. We stood on our own two feet and did it ourselves. Should we be able to be helped? Yes. These people deserve help because we pay taxes just like everybody else. And sooner or later you will have a natural disaster in your backyard. And that's what we pay taxes for, for the better government to come up and give us a hand up. We don't want a handout. We just want to get back on our feet.
You know we lost everything. The factory is gone. The cow is gone. Our ability to make income is gone. And so you know if we could get back on our feet and just get a little bit of a shove, or even if somebody would stand up and say hey we're behind you, don't worry about it, we got your back.
We haven't heard anything besides our local senators, our adjacent senators that are representatives from our state and the adjoining states are the only ones talking. Nobody else is talking.
COSTELLO: So do you have any use at all for your federal representatives?
SLABA: Oh, you know actually our -- our representatives and our senators they have both been out and flown over the area. They have been on the House of the Senate -- they have been on the house -- or the floor of the Senate they've been on the floor of the House. They have tried to get people to understand how important it is to get a farm bill passed. And we do have disaster aid in the farm bill. We have feeder system it is in the farm bill that's where our disaster comes from, that's where our aid comes from. If we don't have that, we don't have anything. We'll do it again, we'll do it again ourselves.
And we don't think that's right. You know like I said, these people deserve to get some help. They don't want any help, but they deserve to get the help.
COSTELLO: Absolutely you're right because they do pay taxes and a lot of taxes at that. Thank you so much for joining us this morning Ron Slaba.
SLABA: Thank you very much for having me on.
COSTELLO: Thank you. We'll be right back.
COSTELLO: Yes we scored a bonus for you. At least Poppy Harlow scored a bonus for us this morning. Warren Buffett is weighing in on the debt ceiling showdown calling it a weapon of mass destruction. So let's head to Washington and Poppy Harlow and Mr. Buffett. Good morning.
POPPY HARLOW, CNNMONEY.COM: Good morning Carol, good morning everyone. Let's get right to it.
Warren Buffett, thank you for joining us. We appreciate it especially on a day like today. A day that I think a lot of us didn't think we would get to. So let's get right to it. What happens if we do not see a deal in Washington today?
WARREN BUFFETT, CHAIRMAN AND CEO, BERKSHIRE HATHAWAY: Well it'll be one of the most stupid things that's ever happened. But the idea that we should take 237 years when we built upper reputation for behaving properly in financial matters and blow it because of 535 people in Washington, you know, it's insanity. But I do think it will get resolved.
HARLOW: In the next 16 hours?
BUFFETT: I think it's likely too Poppy, yes.
HARLOW: What tells you that?
BUFFETT: Well I just think that people play brinkmanship games sometimes. But it is totally asinine to have a debt ceiling at all and to use it as a means to try and get your way out of anything else, whether it's abortion, gun control, Obamacare, you name it. It's -- it's a political weapon of mass destruction that shouldn't be used. And it's being used, and I think by the -- I think it will get resolved. But I think it never should be used again. I think both parties should say, "This is ridiculous. Why worry the world? Why worry the American people?" It was something that's unthinkable, basically.
HARLOW: I want to talk about Main Street. All the people outside of the Beltway, outside of the Washington, the people that this is really hurting -- I wonder as a businessman who runs 70-plus companies who knows the economy better than almost anyone and the implication on jobs and hiring, do you think that the politicians that are dealing with this right now really understand the implications of what this means for the average person in their life?
BUFFETT: Well some of them don't. I mean, this is not being done by all 535.
HARLOW: OK, but the ones that are making the headlines.
BUFFETT: But they are playing -- they are playing games, you know, while millions of people, hundreds of millions of people are wondering how it's going to affect them. And they don't have any business doing that. The debt ceiling should not be used as a weapon. If you want to argue about gun control, abortion, immigration, argue about those matters.
But to hold the American -- to hold the full faith and credit, I say something we spent 237 years building up a reputation on, to hold that up in jeopardy is nuts.
HARLOW: But also to the argument and we've heard many saying this in recent days from the right, "You're just kicking the can down the road. We're not going to write a blank check to the President. We have to solve this." Aren't we just kicking the can down the road by raising the debt ceiling again -- a temporary deal?
BUFFETT: Congress isn't -- Congress isn't -- Congress appropriates money. It isn't the president of the United States. So it is Congress that can argue about how much to tax, how much to spend and all of that. And the president signs bills when they come to him or he doesn't. But it is not the president that's spending money. The Congress is spending money.
HARLOW: So you're not concerned about kicking the can down the road?
BUFFETT: Well I am concerned about kicking the can down the road --
HARLOW: But you're more concerned about the immediate --
BUFFETT: But the can should disappear. I mean in terms of the debt ceiling. You can argue about budgets. That's the job of Congress to argue about budgets. But the idea that you're going to just reenact this present scenario two months from now is crazy. HARLOW: I want to read some comments to you. These came from Representative Steve King this morning on CNN's NEW DAY. And he said in part, quote, "I'm not worried about this thing, they termed "'default'". He went on to say, "I'm concerned that the president's remarks will scare the markets." Saying that a default is a date on the calendar and that the rhetoric is what's concerning right now -- your reaction.
BUFFETT: Yes, if you build a reputation for 237 years like the United States has for being the bastion of soundness, I mean we're the reserve currency of the world. And it isn't the president that's causing the problem. I mean they are -- simply enact -- get rid of the debt ceiling would be the best thing. But enact a long-term debt ceiling with a big number if they want and then get back to arguing about the other thing.
HARLOW: But how -- how worried should we be to quote here about this thing day term default. I mean the real implications?
BUFFETT: Well you certainly have to worry if there's 535 seats taken, that's for sure. But I personally think a majority will do the right thing before very long. If they don't, they're out of their minds. But I don't think they are, I think they will do the right thing. But I don't think Steve King will.
HARLOW: I want to talk about this argument also that we're hearing it from some, some on the right saying that if this country's goes ahead and pays the interest on its bonds, that nothing bad is going to happen.
BUFFETT: You can't to start writing checks to some of that check starter (ph), I mean you either -- you either pay your bills or you don't pay your bills. You're either a dead beat or you're somebody that whose credit can be counted on. And like I say we've build up a wonderful reputation over 237 years and to have these people blow it would be a terrible mistake.
HARLOW: You -- we know you're a Democrat and a big supporter of the president. Have you had discussions with President Obama in the last two or three weeks?
BUFFETT: I had one very short phone call. Yes.
HARLOW: And can you tell us about it?
HARLOW: So I will ask you this. You also told me that you've been getting sent talking points from some folks in Washington. Who is sending you talking points -- don't bring your talking points on this show.
BUFFETT: No, I don't -- I don't, I don't even look at them.
HARLOW: Who's sending?
BUFFETT: I don't look at them.
HARLOW: But you are getting them from -- from whom? One party?
BUFFETT: Yes. Well, I'm not sure whether it's from the party. But I don't read them.
HARLOW: You don't even read them?
BUFFETT: No I don't read them.
BUFFETT: Absolutely. I never read talking points.
HARLOW: I want to talk about the potential downgrade. 2011 seems like yesterday. Here we are, the perfect credit rating of the United States is downgraded by S&P, the market falls you know and that was in a very different time when Europe was really in crisis.
So the U.S. in terms of investment was still like the cleanest shirt in a dirty laundry bag if you will, right. But we're in a different state now so I'm wondering if we do see another default from Fitch which they warned about and called because of this political brinkmanship, what does that mean for our economy?
BUFFETT: As long as we pay our bills on time, it doesn't mean anything.
HARLOW: It doesn't mean anything?
BUFFETT: No. The U.S. is AAA no matter what.
HARLOW: No matter what Fitch says?
BUFFETT: Yes, absolutely -- as long as we pay our bills. And I think we're going to. But if we don't, then it's a new game.
HARLOW: But do you think that it matters for our reputation and our standing in this global economy?
BUFFETT: It matters enormously for our reputation if we miss a single bill. But if we pay our bills, no I think that the United States is still a remarkable country. And I don't really think 535 people can screw up what 315 million people are doing.
HARLOW: All right Warren Buffett, stay with us. We're going to go to a quick break. We will be right back with more from Warren Buffett.
Stay with us.
COSTELLO: So all morning long we've been hoping and some have been praying that the Senate would come up with some sort of deal to get us out of this fiscal mess that we're in right now. Dana Bash covers Congress like no other political. She has some news for us this morning. Good morning.
DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Good morning Carol.
Well it appears that the Ts are crossed and the Is are dotted. That is according to sources in both parties here in the Senate on a deal to fund the government and to raise the debt ceiling. The issue now is really just how are they going to announce it? They -- meaning the Democratic leader, the Republican leader.
I'm told that it could come soon -- sooner than when the Senate comes in which is not until noon or maybe we will wait until the Senate leaders formally announce it on the Senate floor.
But the Republicans in the senate are meeting in ten minutes or so at 11:00 a.m. And some Republican senators including Kelly Ayotte of New Hampshire was walking in to a meeting and told our congressional producer Ted Barrett that she understands that they are going to be briefed on the details of this deal.
Now, we already have a sense from our sources, and we've been reporting this since last night, of what the parameters of this deal are. And it is to re-open the government immediately and fund it until January 15th; to raise the debt ceiling and extend that until February 7th; to appoint budget negotiators or known around here as conferees to actually start having discussions about what should be going on here, which is real budget talks for the long-term and the rest of the fiscal year and beyond.
And then the one item with regard to Obamacare that Republicans seem to have gotten is income verification for Obamacare, meaning anti- fraud measures, to make sure that people who are getting subsidiaries are at an appropriate income level. Those are the outlines of the deal as we understand it. And again, we're just waiting for it to be formally announced.
Then the obvious question is what happens? How are they actually going to vote on this? The prevailing thought here among the Democratic and Republican sources is that the House would actually take up the Senate deal. That's right. John Boehner would put the senate deal on the House floor for a vote there first because procedurally it would expedite the process.
We are warned that that is not 100 percent. In fact as we speak, Carol, John Boehner is in with House Republican leaders to try to figure out if that's the way that they're going to go to finalize that plan. So we could have news on that as soon as they come out of that meeting. So things are moving pretty fast this morning. But that is the headline.
COSTELLO: OK. So Dana, I'm going to let you get back to work. Thank you so much.
I want to head back to Washington to a different location and Poppy Harlow because she's standing by with Warren Buffett. We'd just like to get his reaction to this possible deal, Poppy. HARLOW: Absolutely. So you just heard from our Dana Bash reporting the outlines of what it appears is a potential deal that will now go for a vote. What is your reaction to that? It would fund the government until January 15, extend the debt ceiling until February 7. This is short term if it makes it through.
BUFFETT: That's true. My guess is it will make it through but I think the first thing should be done after -- assuming it passes -- I think the first thing that should be done is that both sides should say we will not use the debt limit as a -- as a weapon anymore.
In fact, we should get rid of it entirely. We can't just keep playing this sort of game. And it's detrimental to the economy and worries people unnecessarily. If they want to keep the debt down, just don't spend more than they raise in revenue.
HARLOW: What does the short-term deal do in terms of the confidences of businesses in terms of hiring and the American people? Howard Schultz, the CEO of Starbucks -- someone you know and talk to -- said to me last week a short term deal means nothing. It's foolish and it doesn't help in the confidence of businesses or Main Street or hiring.
BUFFETT: Yes, I think if they said that they would not use it as a weapon anymore, both sides said that, I think that would be terrific. I think otherwise --
HARLOW: Do you think they will?
BUFFETT: I don't know. Maybe --
BUFFETT: -- they should. They should. But I have no insight as to whether they will. I will say this, our business is continuing as usual. We announced a $1.1 billion acquisition this morning. We don't have anything in there about the debt limit or anything like that. We're going to close it whenever it closes. We're going to hire people --
HARLOW: But you're -- Berkshire is a multibillion dollar business right?
HARLOW: Mom and pop shops -- they're on the brink.
BUFFETT: Well, some are and some aren't. But I think it's terrible to put people through unnecessary worry in any respect. And to do it en masse through something like this, which almost becomes a game, I think it should be beneath the level of our Congress.
HARLOW: I want to ask you one more question and then we will wrap it up. You've been generous with your time. There were comments out of China, the official Chinese news even in recent days and in an op-ed. And it talked about given what this government is going through right now and the situation it's putting this country in, we should look to a de-Americanized world.
We are the reserve currency of the world, the U.S. dollar. But that news agency of China saying that perhaps it should be a de- Americanized world -- that we should look away from the United States right now. What is your take? What is your reaction to that.
BUFFETT: The rest of the world will look at us and my guess is the U.S. collar will be the reserve currency of the world for a very, very long time.
HARLOW: Warren Buffett, appreciate your time very much.
BUFFETT: Thank you.
HARLOW: Thank you very much. Carol -- back to you.
COSTELLO: Thank you, Mr. Buffett. We appreciate it.
COSTELLO: And thank you very much -- thank you very much, Poppy. We'll see you later.
Let's go to Washington again and check in with Wolf Blitzer and talk about what Warren Buffett said many, many times that the debt ceiling should be eliminated as a political weapon. As we all know, this plan developed by the Senate puts things off until next year. So do you think lawmakers will again use the dealt ceiling at that time?
WOLF BLITZER, CNN HOST: Probably they will. Some of them will -- I don't know how far they'll get the next time. But they've been doing it since the Eisenhower administration. Every time there's a debt ceiling that comes up, there are some people who say, you know what, we can raise the debt ceiling but we want something in exchange. We want promises that you'll be more fiscally responsible, that you'll work harder to balance the budget.
This has come up repeatedly over the years. And a lot of those Democrats in fairness right now, who say that the Republicans were playing with fire, they should vote immediately, unconditionally to raise the debt ceiling, they themselves during the Bush administration for example, they voted against raising the debt ceiling.
And as all of us know, President Obama back in 2006 when he was the U.S. Senator from Illinois, he voted against raising the debt ceiling. He later said he regretted that vote and it was a mistake on his part. But he did do that back in 2006.
And a lot of these other Democrats who now rail against the Republicans for refusing to go ahead and simply raise the debt ceiling with no strings attached -- they voted against raising the debt ceiling in earlier times.
So maybe people will learn lessons out of this. I sort of agree with Warren Buffett. I'm basically an optimist by nature. If I take a look at the span of American history and see where we've been, what we've gone through, where we are today, I think these things will sort themselves out. But don't be surprised -- and I don't think our viewers will be surprised Carol -- if in January and February we go through this ordeal once again.
COSTELLO: OK. So we'll just think positively in the now. Shall we?
COSTELLO: Wolf Blitzer -- thank you so much.
We've got to take a break. We'll be back with much more in the NEWSROOM.
COSTELLO: So here we are less than 14 hours before the country possibly defaults. It has been an ugly road up to this point and I mean ugly. At times, it's been embarrassing. I mean come on, after this do Americans really believe our elected officials have dignity, class, or true love of country?
This morning we present the ugliest moments along the road to possible defaults.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Hello, America.
COSTELLO: Let's begin with perhaps the ugliest. Politicians capitalizing on World War II vets trying to visit their memorial. They were met with barricades, so protesters tore them down and piled them up in front of the White House.
SEN. TED CRUZ (R), TEXAS: This is the people's memorial. Why is the federal government spending money to erect barricades to keep veterans out of this memorial? Our veterans should be above politics. Enough games.
COSTELLO: But Senator Ted Cruz did not address what came after -- confederate flags and hate.
LARRY KLAYMAN, FREEDOM WATCH: I call upon all of you to wage a second American nonviolent revolution, to use civil disobedience and to demand that this president leave town, to get out, to put the corrupt -- to put the Koran down, to get up off his knees and to figuratively come up with his hands out.
COSTELLO: Actually, there were a lot of ugly moments surrounding the nation's monument to our heroes. Park rangers who were following orders to close the monument experienced the nastiness themselves.
UNIDENTIFIED MALE: Park service should be ashamed of themselves.
UNIDENTIFIED FEMALE: I'm not ashamed.
UNIDENTIFIED MALE: You should be. COSTELLO: Never mind. It was Congress that caused the government to shut down. And that the park ranger was working for free because technically she had been furloughed.
Which sets us up nicely for Congressman Steve Pearce's idea -- he writes on his Facebook page, quote, "If you are a furloughed government employee, we encourage you to reach out to your financial institution as soon as you worry you may miss a paycheck. Financial institutions offer short-term loans and other resources. Don't wait until you're behind on a bill, call now and explore your options."
Things got even uglier when lawmakers blamed one another for not funding NIH clinical trials for children. A message delivered in, yes, white lab coats.
UNIDENTIFIED MALE: Let us help people. Let us help children, please.
COSTELLO: Democrats said they were outraged by all of this ugliness, but not angry enough to stop them from using it to raise money. The Democratic National Committee raised $850,000 the first day of a shutdown at a fund-raiser for Charlie Rangel of New York. That's according to "The Hill." But at least our elected leaders get to work out.
As Democrat Bruce Braley pointed out, quote, there's hardly anybody working down there. There's no towel service. We're doing our own laundry down there. And we pay a fee to belong to the house gym. This is no different than if you're working for an employer that offers a wellness program."
Maybe he forgot the taxpayers paid for his extracurricular crunches.
(END VIDEO CLIP)
COSTELLO: But hey, the Senate says, "Come up with a deal."
Thank you for joining me today. I'm Carol Costello.
"LEGAL VIEW" with Ashleigh Banfield starts now.
ASHLEIGH BANFIELD, CNN HOST: I want to welcome our viewers in the United States and around the world. Twelve hours, 59 minutes and counting to the default deadline for the United States of America.