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Senate Deal Reached to End Government Shutdown and Raise Debt Ceiling

Aired October 16, 2013 - 15:30   ET

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


MATT KIBBE, PRESIDENT, TEA PARTY GROUP: You know, this whole thing feels a lot like the Wall Street bailout, when John Boehner and Nancy Pelosi walked arm in arm and forced some of their caucus to support that really bad piece of legislation. It wasn't popular to oppose it in this town. That's how we feel today.

I think, moving forward, we need to keep focusing on spending. We need to keep focusing on repeal of the individual mandate. Since Barack Obama has already let big business off the hook, we should let the rest of the Americans off the hook and we need to force Congress to actually live by its own laws.

ANDERSON COOPER, CNN ANCHOR: So, will they play a political price? I mean, primary challenges and the like?

KIBBE: Oh, I think absolutely. You saw that happen, and you're seeing a repopulation of the Republican Party.

You're going to see a number of Democrats back away from the president's position on this. It's going to happen because the reality is Obamacare isn't working for Americans.

COOPER: I appreciate your time. Thanks for being with me.

KIBBE: Thank you.

COOPER: Appreciate it.

All right, up next, I'm going to speak live with Timothy Geithner's former chief of staff at the Treasury about his concerns that Congress keeps moving from crisis to crisis and this means for everybody.

This is CNN's live special coverage from Capitol Hill. We'll be right back.

(COMMERCIAL BREAK)

COOPER: And we've just received a statement from John Boehner's office. This is his first comment on the Senate deal while he's meeting behind closed doors with House Republicans. I'm going to read it to you as I got it.

"The House has fought with everything it has," he says, "to convince the president of the United States to engage in bipartisan negotiations aimed at addressing the country's debt and providing fairness to the American people under Obamacare.

"That fight will continue, but blocking the bipartisan agreement reached today by the members of the Senate will not be a tactic for us.

"In addition to the risk of default, doing so would open doors for Democratic majority in Washington to raise taxes again on the American people and undo the spending caps in the 2011 Budget Control Act without replacing them with better spending cuts."

So he's saying he's not going to fight the Senate deal. Also, he made comments to a radio show. Let's listen to those.

(BEGIN AUDIO CLIP)

REP. JOHN BOEHNER (R-OH), HOUSE SPEAKER: Well, listen, we've been locked in a fight, trying to bring government down to size, trying to do our best to stop Obamacare. We fought the good fight. We just didn't win.

UNIDENTIFIED MALE: Can you win December 15th when Ryan and Patty Murray get together and do this deal? Is this like a step on the ladder?

BOEHNER: Well, I would hope so, but we'll see.

You know, every time I've gotten into a discussion with the president, vice president, the Democrats here in Washington, and talk about entitlement changes, trying to make the programs sustainable, all they want to do is raise taxes. Well, we can't do that unless you're willing to raise taxes.

And so if they're going to hold on to their position that we're always going to raise taxes, then we're not going to come to an agreement, but hope springs eternal.

UNIDENTIFIED MALE: Why did you wait -- why didn't you kick it off a year? Some say Obamacare is kind of falling under its own weight with all the disasters, and if you kick it off a year, the mainstream goes after Obama and goes after Obamacare and you provided, John Boehner, a nice target for the mainstream media and again the weapons of mass distraction used by Obama have worked, but now you have only kicked it off 60 or 90 days. Why not longer?

BOEHNER: Well, you're talking about the c.r. or the debt limit?

UNIDENTIFIED MALE: Both.

BOEHNER: Both?

UNIDENTIFIED MALE: Yeah, both.

BOEHNER: Well, it's expected that we'll fund the government through January 15th and fund the debt limit through early February, an agreement reached over in the Senate. And it gives us a chance to sit down in the budget process and see if we can't work something out. I just think that we're on a spending trajectory that's unaffordable for the American people. It will create more debt. It needs to be dealt with.

UNIDENTIFIED MALE: Are you going to allow the whole House to vote even if the majority of Republicans won't vote for it?

BOEHNER: Absolutely. I'm going to meet with the Republicans in about 20 minutes and I'm going to encourage them.

We fought the good fight. We did everything we can could to get them to the table and to negotiate. They just kept saying no, no, no, no.

And so we fought the good fight. There's just no reason for our members vote no today.

UNIDENTIFIED MALE: When will the government reopen?

BOEHNER: I would expect this will happen tomorrow.

UNIDENTIFIED MALE: So the government will reopen on Thursday or Friday at the latest?

BOEHNER: I think it will happen tomorrow. There's really no reason for it not to.

UNIDENTIFIED MALE: Do you have ill feelings toward Senator Cruz?

BOEHNER: No. Listen, we got -- Republicans up here, because we're Republicans, we're a little more independent-minded than our friends across the aisle. Some are a little more independent-minded than others.

UNIDENTIFIED MALE: John Boehner, I said this earlier on the show that sometimes you want to be a soldier at the Alamo, and sometimes you want to be the French when the German army comes.

I like soldiers at the Alamo who say, I think I'm going to get killed, but I plant my flag here. I will die in the Alamo rather than surrender and give up.

And I sense that you and the others in the House were like soldiers at the Alamo. You thought Santa Ana had 2,000 soldiers, the ending wasn't going to be good, but you're going to fight the good fight.

And if you have to live to fight another day so be it, but --

BOEHNER: Listen, there's no giving up on our team, none. And there's no giving up in me.

Take care of yourself and I'll talk to you soon. God bless you.

UNIDENTIFIED MALE: John Boehner, you're a great American. Thank you.

(END AUDIO CLIP) COOPER: Let's bring in chief congressional correspondent, Dana Bash.

Dana, you heard there from Boehner saying that there's no reason for his members to vote no.

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Exactly. And I just came from the basement of the capitol where John Boehner, it sounds like he was saying exactly what he said in public on that radio show to his caucus in private in the meeting.

It was a pretty short meeting as these Republican caucus meetings tend to go. It was less than a half hour, and no member of the rank-and- file got up and spoke.

We're told that it was just the House speaker and the two other Republican leaders. And we're told, first of all, that John Boehner got a standing ovation at the end of his speech, which is telling and sort of illustrative of how he seems to have, despite the fact he has angered a lot of Republicans, angered a lot of Democrats, and maybe even a lot of Americans with sticking to the strategy to keep the government closed, and to keep trying to defund or delay Obamacare, the caucus as a whole seems to be behind him in what he says, which is we have fought the good fight.

I'm told he said that again privately to his fellow Republicans in this meeting just now, and maybe most importantly, he urged them to support this deal.

That's right, he urged them to support this deal. So did Eric Cantor, the House majority leader. So did Kevin McCarthy, the House majority whip. They're not going to twist arms, say please, please, please, come down to my office and let me tell you how great the deal is.

But the fact they told Republicans they thought this was a good deal, at least for now, that they're going to go on to fight another day, which is another thing I'm told Boehner said, is quite telling and quite interesting, especially since talking to a lot of these lawmakers, these conservatives particularly, walking out of the meeting that just ended, they might not have spoken up in private, but it's pretty clear it's going to be a big question mark how many of these Republicans are going to vote yes, that this is going to be a bill that is going to rely on an approval that is going to rely on significant Democratic support to pass.

So we'll see how it goes. The only other thing I wanted to report to you is that the House majority leader, Eric Cantor, I'm told in private in this meeting sort of implored the rank-and-file Republicans to stop the infighting. That's sort of paraphrasing.

He said, look, it doesn't help for people to say, you're not a good enough Republican because you don't support defunding Obamacare. You're not a good Republican because you do support it.

Stop. It's not going to help us. That has become the storyline. Let's end it there. Very interesting. They're so aware of the way the Republican division has been perceived, never mind the strategy that, you know, John Boehner himself knew despite what he's saying now, going into it, was questionable.

COOPER: A big development. We'll continue to cover it. Dana, thanks.

Up next, we'll speak to Timothy Geithner's former chief of staff at the Treasury. We'll be right back.

(COMMERCIAL BREAK)

COOPER: And welcome back to our continuing coverage live from Capitol Hill, John Boehner just a short time ago saying that the government will most likely reopen tomorrow, saying there's no reason for members in the House to vote no against the bipartisan agreement that's been made in the Senate.

Vote in the Senate we're expecting this evening. We'll be following this very closely in this fight over America's credit limit.

Congress is in a sense putting off until winter what they could be doing today and we could end up right back here again in a matter of months.

Mark Patterson, chief of staff under former Treasury Secretary Timothy Geithner, are you concerned the Congress is kicking this down the road?

MARK PATTERSON, FORMER TREASURY SECRETARY CHIEF OF STAFF: Absolutely, and I think it's a mistake, Anderson.

It's good that this is happening, obviously. We would much rather have this than a default right now.

But a brief extension like this is really not an accomplishment that anybody can be proud of.

COOPER: What -- how does it actually impact to go from crisis to crisis like this?

PATTERSON: Well, for one thing, all of you guys wouldn't be out here on the lawn all night every night.

But look, already in the last couple weeks, it's cost the treasury department more to do the normal borrowing than it needs to do to run the government.

The question will be, and what people at treasury will be focused on in the coming days is, does that risk premium that's been attached recently, is there a residue of that? Does that stick around a while?

Does it cost us more money over time, add to the deficit, which is the reverse of what are the proponents of the strategy.

COOPER: Why does it cost more? PATTERSON: Because when people develop doubts about whether the treasury will pay them back when they put their money in a treasury bond, they demand a higher interest payment from the treasury.

COOPER: There's greater risk.

PATTERSON: That's right. They perceive a greater risk. The reason they perceive a greater risk is because of what's been going on in Washington. People begin to doubt the government can get its act together and work properly.

We're going to February with this debt limit extension. I think it's a terrible mistake. Congress really -- at this point, I'm glad it's getting done. It's much better than the alternative, but Congress ought to focus right away on a longer-term solution to the dent limit.

The right solution is to go back to an idea that Senator McConnell had a couple years ago, which is allow Congress to vote to disapprove borrowing when it's necessary, but not to have a ceiling that you bump up against and default could take place. That's the right way to handle this.

No other industrialized countries have a debt limit that operate this way. It's unique to the United States and goes back to the history of the thing.

The only reason we have one is, before 1917, Congress used to vote every time there was a need to borrow. If there was a need to build a ship, they would take a vote.

They realized this is silly. We can't do this all the time, so let's set some limit and revisit it every once in a while.

COOPER: Can you put a dollar limit on how much it's already cost?

PATTERSON: No way to know that yet. Moody's and others are looking at that, but you'll have to judge it over some period of time and get a sense over some period of time, what was the difference in interest that Treasury had to pay for the same things times their face value over whatever period of time?

I'm sure it's in the millions already and there are some estimates that it could be in the billions just for this episode that we've just been through.

COOPER: I hope we're not back here in a couple months with you sitting here. Mark, appreciate it. Thanks very much.

Coming up, more on the breaking news, Speaker John Boehner just said the fight is over. The government will reopen tomorrow.

But politically speaking, what happens to him, to his party? Our panel debates, next.

(COMMERCIAL BREAK)

COOPER: Back now to our special live coverage. The Senate has reached a deal to raise the debt ceiling and end the government shutdown.

House Speaker John Boehner says the shutdown should be over as early as tomorrow. The vote should happen tonight in both the Senate and the House.

Republican Senator Ted Cruz says he will not block a vote on the agreement, but he still opposes it because it doesn't address GOP objections to Obamacare.

CNN political commentator Alex Castellanos told me last night his friend explained to him just why Cruz was speaking out.

I still don't know what he was talking about. Maybe you will understand what he's saying. Listen to what Alex said.

(BEGIN VIDEO CLIP)

ALEX CASTELLANOS, CNN POLITICAL COMMENTATOR: Finally what Ted Cruz is doing, and I finally understand, he's having bunny sex.

COOPER: Wow. This is the late-night edition of "360."

CASTELLANOS: In nature, there are boom-and-bust cycles. The snowshoe hare, every 10 years, multiplies sixfold.

COOPER: Are you high? What are you talking about?

CASTELLANOS: I am high. I wish I was. Let me explain.

The bunny -- the snowshoe hare -- I thought it's a marvelous explanation -- every 10 years, multiplies sixfold. Bunnies like sex, apparently.

But their boom produces a bust. They press their food supply. They invite predators.

Right now, Ted Cruz, what he's doing feels good. He's growing his supporters. It's leading the Republican Party, I think, into a bust.

COOPER: You're just digging a ditch, Alex.

CASTELLANO: I love to dig ditches.

(END VIDEO CLIP)

COOPER: Commentator and Democratic strategist Hillary Rosen joins me and Michael Hirsh, chief diplomatic correspondent at the "National Journal."

First of all, Hillary, what do you make of what Senator Ted Cruz said earlier today. He says they've accomplished something.

HILLARY ROSEN, DEMOCRATIC STRATEGIST: For Ted Cruz, this was never about getting something done, it was going to be a failed strategy from the outsight. He probably has accomplished what his goal was, which was to give himself a couple of more million e-mail names and a better fundraising platform for whatever his future political ambitions are.

I think our mistake is to try and put this in the context of what his goal was. You know, his goal was never to actually do something. He knew he wasn't going to be able to use the government shutdown to accomplish any changes in Obamacare. That was never going to happen.

COOPER: Do you think something has been accomplished?

MICHAEL HIRSH, CHIEF DIPLOMATIC CORRESPONDENT, "NATIONAL JOURNAL": I think that, you know, for pure political brazenness, there are few in memory to match Ted Cruz. A year ago, no one really knew his name, now he's a national figure, likely to stay that away; a hero to the tea party base, likely to stay that way.

So certainly for his political career, I think he's accomplished turning himself, you know, changing from basically a nobody into a somebody.

In terms of policy, no. I mean, it has to be seen as a huge setback, and I think that most political observers think this was a very big miscalculation, to try to do what he did with Obamacare.

ROSEN: Yes, three central figures in this entire thing, you have Ted Cruz, you have John Boehner, the speaker of the House, and you have President Obama.

John Boehner went down this path of trying to accommodate Ted Cruz and his tea party colleagues, because he decided that he was the speaker of the Republicans, not the speaker of the House, a bad strategy. And he loses badly today, because of it. And his Republican friends tried to warn him not to do this.

And President Obama, who I think, despite, you know, the cynicism at the outset of this, when people said, oh, let's just put enough pressure on him, and he's going to cave, he's going to negotiate, they'll do something.

You know what he said? I'm standing on principle, I'm not going to move, and he actually didn't. So what we have today is kind of a bad compromise, as we just heard from Mark Patterson, because it's short- term.

But what we have is, nothing gained by the disruption that the Republican --

COOPER: I mean, do you -- is this just kicking the can down the road? Is this really any way to govern?

HIRSH: Well, not very far downed the road. And that's why I think if Democrats are going to declare victory, they're getting this wrong. It's extremely naive, you know?

We have another deadline in February. If you look back at the past decade or so of debt ceiling increases, they've tended to be for a year or more, and we've shortened the time frame. That has to be seen as something of a tea party victory here.

And I think, you know, we have to sort of heed what John McCain said the other day, what goes around comes around.

If Democrats think or the president thinks that the Republicans are simply going to go away or fly the white flag, I think they're seriously wrong.

When these budget negotiations start, it's going to get very tough.

COOPER: What are the Democrats willing to give on? There are going to be negotiations, there has to be give-and-take. What would the Democrats give on?

ROSEN: Well, I think, when you have a budget conference, as contemplated -- and look, I don't think this is an ideal scenario for anyone and I don't disagree with everything Mike said.

But at least you're starting with some zero base budgeting, where you've got, you know, some credit that the Democrats get for the $800 billion that have already been cut off the budget over the last year, which are the sequester levels, as people have talked about them.

So, we get some extra credit for having already cut spending. I think then you go and say, already, now, what are the funding priorities and what are the cut priorities? You're negotiating in an entirely different environment.

COOPER: We've got to leave it there. Appreciate both of you being with us. Thank you very much.

Still a lot to cover. Our special coverage continues in just a moment.

(COMMERCIAL BREAK)

COOPER: We expect votes here tonight. I'll be live back on Capitol Hill at 8:00 for "AC360" and then at 10:00 Eastern for "AC360 LATER," both live shows. I hope you join me for that.

"THE LEAD" with Jake Tapper starts right now.