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ERIN BURNETT OUTFRONT

Cruz Addresses Senate Before Vote; Senate Vote On Shutdown, Debt Moments Away; Senate Vote on Shutdown, Debt Moments Away; Awaiting Vote to End Fiscal Stalemate

Aired October 16, 2013 - 18:58   ET

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


(COMMERCIAL BREAK)

ANNOUNCER: This is CNN breaking news.

WOLF BLITZER, CNN ANCHOR: I'm Wolf Blitzer in Washington.

Senator Ted Cruz of Texas has just started railing against this deal on the Senate floor. He says it's terrible. Let's listen in.

SEN. TED CRUZ (R), TEXAS: -- 200, 300 percent. Because of Obamacare this deal does nothing for them.

And to all of the seniors, to all of the people with disabilities who are right now getting in the mail notifications that they're losing their health insurance because of Obamacare, this deal does nothing for them.

Mr. Obama, this fight was always about the American people who are hurting because of Obamacare. And unfortunately today, the United States Senate is saying, "You don't have a voice in Washington. You don't have a voice in Washington." This is a terrible deal, and I urge my colleagues here to oppose it.

Now, none of us should be surprised that, when the Senate votes, this deal is going to pass, and it's going to pass by a big margin. None of us should be surprised.

But Mr. President, the outcome could have been different. I would ask you, Mr. President, to imagine a different world.

We saw, in the last two months, millions of Americans rise up, sign a national petition, light up the phones to the Capitol, and speak up against the enormous harms Obamacare is visiting upon them. We saw the House of Representatives stand with courage and listen to the American people.

Mr. President, I ask you to imagine a world in which Senate Republicans united to support House Republicans. Imagine that one piece being different from what we saw. Imagine, after the House Republicans stood together with the American people, if all 46 Senate Republicans had stood together and said, "We are united against the train wreck that is Obamacare. We are united with the American people that, if President Obama is going to give an exemption for big business, for members of Congress, that the American people deserve that very same exemption."

I want you to imagine, Mr. President, if Senate Republicans had stood together and simply supported House Republicans, and the American people.

Mr. President, I want you to imagine what would have happened if all 46 Senate Republicans had united and gone together and said, "The House of Representatives has passed a bill funding the V.A. We should fund the V.A., Mr. President." The Senate, the majority leader of the Senate, refused to allow the Senate even to vote to fund the V.A.

I want to you imagine, Mr. President, all 46 Senate Republicans, if we had stood together and simply supported the House Republicans in saying the House of Representatives has voted to reopen our national parks, to reopen our war memorials, and the majority leader of the Senate refuses to allow the Senate even to vote.

Mr. President, I want to you imagine simply that Senate Republicans had stood together and said, "We support the House Republicans in standing with the American people."

Mr. President, if that had happened, this result --

But yet at the same time, Mr. President, to the millions of Americans who rose up in the last couple of months, I want to give a word of encouragement, a word of encouragement about the path forward. A couple months ago Washington establishment scoffed at the notion the American people might rise up. That was viewed as silly, parochial, couldn't happen. A couple months ago Washington establishment scoffed at the notion that the House of Representatives would stand strong saying we should fund every part, but we shouldn't fund Obamacare.

And yet, Mr. President, what we've seen in the last two months has been extraordinary. Millions of Americans speaking up in overwhelming numbers saying Obamacare isn't working. Mr. President, the unions are jumping ship. Democratic members of the Senate and the House weapon to the president and said, we want to be exempted from Obamacare. This law isn't working. And it is worth reflecting on how extraordinary it is to see the American people rise up in such incredible numbers and to see the House of Representatives engage in what I consider to be a profile in courage.

Standing with the American people. Now, a path forward, the way we are going to stop Obamacare. The way we are going to stop the suffering, the harms being visited on millions of Americans, is the path we have seen these past couple of months. Is the American people rising up? The answers are not going to come from Washington. Washington is broken. But the answers are going to come from the American people.

So Mr. President, I am today encouraged. I am encouraged by the millions of Americans who want to get back to our free market principles, back to the constitution and stop this train wreck of a law that is the biggest job killer in this country. That is hurting people all across the country. Mr. President, it is sad that the United States Senate is telling people all across this country who are struggling, who are trying on provide for their kids, and who are getting notifications in the mail, your health care has been dropped.

Make you have an elderly parent, and that health care policy is provided for your family. Maybe you have children facing debilitating diseases and you're getting a notification in the mail, your health insurance has been dropped because of Obamacare. It is sad that the U.S. Senate will do nothing to answer your polite. We created your plight.

Mr. President, it is sad that when you have James Hoffa, the president of the Teamsters, saying Obamacare is destroying the health care of millions of working men and women in this country, and the families who depend upon them, that the U.S. Senate says we're closed for business. The Washington establishment has exempted itself so the problems, the suffering of America, is not the problem of the establishment.

That is sad but at the same time, I am optimistic, I am inspired by the millions of Americans who have risen up. If the American people continue to rise up, I am confident that in time, the U.S. Senate will follow the lead of the House of Representatives and listen to the American people. That is our job. That is our responsibility. This is a terrible deal today.

But it is a terrible deal for the American people. At the same time the path forward if the American people rise up, we're going to turn this around. We're going on restore jobs. We're going to restore economic growth. We're going on restore the ability of people struggling to climb the economic ladder and to achieve the American dream and we're going to stop the number one job killer in this country. That is Obamacare.

ERIN BURNETT, CNN HOST: You're listening to Senator Ted Cruz. He is on the Senate floor and giving a very impassioned indictment of Obamacare and the deal that is about to pass the Senate. Of course, he is calling that deal, which would end the government shutdown, which would extend the debt ceiling. He is calling it a terrible deal, a train wreck of a law and saying that he stands fully by his guns in terms of Obamacare, which he believes is something which should fail and be repealed.

Now, here is the situation. We are in a breaking news situation waiting for votes, the Senate, going to be voting for that deal tonight, as I said, would it extend the debt ceiling and end the government shutdown. That vote will pass the Senate. As you heard Ted Cruz say. Then a vote is going to come in House and we are on standby for these votes this hour. Pass or fail, the world is watching.

Markets everywhere for any sign from Capitol Hill tonight, we are fewer than five hours away from hitting that debt ceiling. As you can see on the screen, the government has been shut for 16 days. Earlier today, in the House, House Speaker John Boehner finally caved to the pressure.

(BEGIN VIDEO CLIP) REP. JOHN BOEHNER (R-OH), HOUSE SPEAKER (via telephone): We fought the good fight and we couldn't win. We did everything we could to get them to the table to negotiate, they just kept saying no, no, no.

UNIDENTIFIED MALE: When will the government reopen?

BOEHNER: I would expect this will happen tomorrow.

(END VIDEO CLIP)

BURNETT: That's what John Boehner had to say. Obviously Ted Cruz trying to rally House Republicans to vote against John Boehner and Boehner does face stiff opposition from his own party, his efforts to pass a deal in the House has failed before. The difference is that tonight there is no second chance.

Dana Bash is on Capitol Hill. Dana, obviously, the bill for all intents and purposes is going to pass the Senate, but we are waiting for that formal vote to make sure that happens, and then it goes to the House. That vote to happen tonight. What happens then?

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Then the bill goes to the president's desk and he signs it. It really does happen after all the drama and the twists and turns. It happens just that fast. If, the big if because there have been so many unexpected twists and turns. We do expect that to happen though. We are waiting for the final debate to finish.

We obviously began the show with Ted Cruz. We're going to hear -- we see Chuck Schumer, the Democrat from New York on the floor now. There will be two votes in the Senate. The final obviously will be the final vote. But the first is going to be the telltale vote to see how big of a bipartisan vote this will be.

Democratic and Republican sources think that they could get upwards of 80 out of 100 senators to vote for this. We'll see and then the next piece of political drama, the last piece of political drama is going to be how many Republicans in the House support what we understand was John Boehner's plea in a private meeting today to vote for this deal even though he doesn't love it.

He knows that a lot of people in this caucus doesn't -- they don't like, but he wants to get as many votes for it because he wants Republicans to be united in a way that they haven't been in the past few weeks.

BURNETT: And Dana, you know, when you talk about the House, I am remembering, you know, the day when I was sitting there. I know you were there. The day everyone thought the deal to save the U.S. economy was a done deal during the financial crisis and then it turned out at the last second, there weren't the votes. And stocks plunged 778 points. That terrified the world.

But that was another situation where everyone thought it was a done deal. And here we are with the House tonight. Everyone saying, it will be a done deal. It took the market tanking to get Congress to pass it. There is no doubt the market accomplished that. I mean, is there any chance this doesn't pass the House?

BASH: Given what we have heard from Democratic leaders and Democratic members in the House, and they make up 200 members of the House, and there needs to be 217 to pass. It is extremely unlikely that we would have that kind of surprise defeat of this vote. But again, because things have gone in so many unexpected twists and turns, I don't want to say definitively, no.

Because of that and because on the other side of the aisle, the majority leader, the House speaker and other leaders on the Republican side are trying to get Republicans to vote for it. It doesn't look like it is likely to fail.

BURNETT: We will see. And obviously, this is countdown we're on tonight. Dana is going to be with us as this news breaks. As we await these crucial votes. As these votes happen, and as I said, we're waiting for this any minute in the Senate then it will go to the House. We also may hear from the president.

So all of these things, as we roll through our coverage tonight, you will hear on this program. Let me explain though what this final bill is, quote/unquote, "that congress is going to vote." This is the bill. It would reopen the government, obviously as you heard John Boehner starting tomorrow, but only through January 15th.

It would raise the debt ceiling but only through February 7th and in exchange, it would set off budget negotiations for a long term spending plan. If you roll your eyes and say I've heard about that before. I know about the super committee, of course, you are correct.

One Republican House member who does not support the deal is Congressman Joe Barton and he is our guest tonight. Congressman Barton, obviously you just heard Senator Ted Cruz with an impassioned indictment of this deal and of Obamacare. You plan to vote no, but do you think the bill will pass the House tonight?

REP. JOE BARTON (R), TEXAS: I think with Speaker Boehner endorsing it in the Republican conference, it probably will pass, but it is going to be a Pyrrhic victory because this isn't the end of the fourth quarter. This is maybe the end of the second quarter. The basic problem still remains. We're borrowing too much money. We need to structurally reform the government. We need to structurally reform entitlements.

And what this is a punt, as you pointed out. Keeping the government open until the middle of January, and borrowing another $200 billion that keeps us until the early February so this isn't the end of the game, this is just kind of a timeout or halftime.

BURNETT: Did John Boehner make a mistake endorsing it? I mean, should we have gone over the line? Obviously who knows what would have happened in the markets. We do know there is enough money to pay everything for some more time. So you know, October 17th, you could argue whether it is a drop dead date or not. Did he make the mistake endorsing this deal today? BARTON: Well, I think the speaker made a judgment call and it was kind of a 50/50 judgment on his part. He decided the risk wasn't worth the possible default, which I don't think it would happen. So I'm not going to begrudge him that judgment call. But again, the main problem is we're spending too much money. The government is too big. Obamacare is not working. And those problems won't go away because we've borrowed another $200 billion and told government workers to come back until the middle of January.

BURNETT: Let me ask you this, sir. Ted Cruz, you know, speaking -- called this a victory. I just wanted to play his words for you first. Here he is.

(BEGIN VIDEO CLIP)

CRUZ: We saw the House of Representatives take a courageous stand, listening to the American people. That everyone in official Washington just weeks earlier said would never happen. That was a remarkable victory to see the House engage in a profile in courage.

(END VIDEO CLIP)

BURNETT: I have to ask you, Congressman, how is it a profile of courage when the government was shutdown and money was essentially thrown away. You have to be upset about this, right? S&P says it cost $24 billion to shutdown the government and you're going on pay everybody who has been furloughed for a vacation when they didn't work. And you haven't gotten a single thing in Obamacare. How is that a profile in courage?

BARTON: Well, I respect Senator Cruz. He is my junior senator, but I agree with you. This is an profile in courage. The House of Representative, the Republican conservatives, we tried to do the right thing. I think trying to defund or repeal Obamacare is the right thing and I think trying get to some budget reforms in exchange for the debt ceiling increase is the right thing.

We haven't gotten it yet, but that does not mean that we are not going to keep trying. Again, this is not the end of the fourth quarter. This is the end of the first half. The problem is going to be there in December, in January, and February, and I still have confidence that eventually we will come together and pass something that gets us to a balance budget in a reasonable period of time and keeps us there.

BURNETT: But let me ask you a final point here on that. How do you have that confidence, right? I mean, it has been 13 times. We've approached deadlines like this since 2011. Every time there's been some sort of, what was the word they used, a conference, a budget negotiations, a conference to have some sort of a big deal. There was a super committee last time. Every time it has failed and at the 11th hour there has been a bad deal made. To me we'll be going through this again in three months.

BARTON: I have confidence in the American people. I have confidence in their judgment. I have confidence that at some point in time people are going to realize that 17 trillion is a huge debt. We don't want it to go to 18 or 19 or 20 trillion with no structural reforms. So I basically trust democracy and I can guarantee you on behalf of the sixth District of Texas, I'm going to be up here fighting. Not to shut the government down. Not to do anything crazy, but to get us the balance and to keep us balanced and I do believe that will happen.

BURNETT: And what about Obamacare itself? You know, you just heard Ted Cruz speaking and saying millions are rising up, rise up and tell Washington, about the failures of Obamacare. The pain that has been visited pound, I believe, might have been -- I'm paraphrasing, but basically the words that he just used to describe it.

I'm confused because Obamacare hasn't really even fully started. Wouldn't it be better for you to let it roll out? And if it succeeds, you could have just backed off. And if it fails, that spoke for itself. You're stuck now.

BARTON: Actually I have a bill I'll introduce next week to make it voluntary for the first year, for the year 2014, and let the American people choose. It's the ObamaChoose Act, OCA.

If it is as great as the Democrats say it is, people will join up. If it is as bad as people like me say it is, they won't join. My guess is the only people that will really benefit are people with preexisting conditions.

Obviously they should join because they don't have insurance now. But I don't think many other people will benefit from it. And if we just make it voluntarily for a year, I think the American people will choose that it is not a good deal.

BURNETT: Congressman Barton, thank you very much for taking the time. We appreciate it.

Of course, as he said, he is going to be a no vote but he does anticipate this will pass the House tonight. There is of course, still that small question of whether that happens or not. And as we await these breaking votes, the vote is expected any moment in the Senate.

Up next, we'll be talking about what was won by Republicans in all of this.

And later, has the shutdown already caused irreparable damage to the United States economy? The man who is in charge of that all important credit rating is OUT FRONT, a guest on this show tonight.

(COMMERCIAL BREAK)

BURNETT: Welcome back to our breaking news coverage, the Senate. You can see you're looking live at the Senate floor. They are just moments away from voting on a bill which would end the shutdown and avoid a possible default.

As you know, this is so crucial, not just because it is a crucial vote that will go to the House but because we are just a few hours away from formally hitting that debt ceiling deadline.

After it passes the Senate, which of course we anticipate it easily will, it will go over to the House. That will be another crucial vote tonight.

OUTFRONT, CNN contributors Paul Begala and John Avlon; also OUTFRONT, former Republican Congressman Tom Davis.

Great to have all of you with us. We appreciate it.

Here we are. Let me just ask you, Tom, here we are. You just heard Representative Barton say, Ted Cruz was wrong that this was not a profile in courage for House Republicans, even though Congressman Barton is going to vote against this bill.

How big of a mistake has this been for Republicans?

FORMER REP. TOM DAVIS (R), VA.: Well, look, the Republicans won the underlying battle. They got the financial number, the continuing resolution spending level that the Republicans wanted, not what the Democrats wanted. They won this thing two weeks ago but they lost the expectations, war, and everything has been retrograde since that.

They have got to learn you can have one quarterback. You can't have the Speaker calling one play and Ted Cruz calling another. So they've lost everything after that. Of course, as Joe Barton said, they'll live for another day, but in the meantime the brand is badly damaged. There is certainly time to recover before the elections.

But they won the underlying fight but they lost the expectations game miserably.

BURNETT: What do you think about that, John Avlon? And by the way, I got to give Tom credit for trying to say that they won any kind of underlying fight. I gave him credit that, fighting the good fight still.

JOHN AVLON, EXECUTIVE EDITOR, "TDB": I guess. But I think what is significant here is how disastrously damaging this fight has been for the Republican brand.

The core appeal for the Republican Party to independents, to centrists, has been that they're the party of fiscal responsibility.

But by making this all about Obamacare at the outset, by making an ideological temper tantrum that shut down the American government for 16 days and almost brought us to default, the Republican Party, courtesy of Tea Party and Ted Cruz has seriously damaged its brand as a party of fiscal responsibility.

They look like a party committed to fiscal irresponsibility in the service of their ideology, and that's not going to go away. That stain is going to stick around for a long time. And when Ted Cruz says Washington is broken, in part it's because he helped break it.

BURNETT: And Paul Begala, to John's point, whatever you think about spending. And say you 100 percent agree with the Tea Party on all of its points, which I know you don't, but let's say you do.

They still have to look in the mirror and say we just cost this country $24 billion. That's the S&P estimate and you have to pay all these people who weren't working for a paid vacation. That is against everything that the Tea Party says it stands for. But that is what has happened.

PAUL BEGALA, DEMOCRATIC STRATEGIST: Which is why they fit Santayana's definition of a fanatic. He said -- he was a philosopher. He said a fanatic is someone who redoubles his efforts after he has forgotten his aims.

And Tom Davis is right. He's served in the Congress. He knows his stuff. He was, by the way, a great congressman -- as a Democrat, it is hard to say that about a Republican -- he was a terrific congressman because he would read the bills. He would actually do the math.

Rewind the tape and go back to what Tom was saying. The President of the United States asked for $1.2 trillion in discretionary spending. Paul Ryan for the Republicans asked for $968. The Democrats compromised all the way down to $988. They gave the Republicans 92 percent of the cuts Paul Ryan asked for.

Instead of declaring victory and saying we want to cut spending, we've achieved it, they went off on this tangent. And this is their own fault. They cost -- I saw a study from the Liberal Center for American Progress that said 900,000 jobs have been cost by this shutdown plus the 24 billion that you cite that Standard and Poor's says.

(CROSSTALK)

BURNETT: That 900,000 sound like kind of a ridiculous number. I'm not speeding. You're saying it's (inaudible).

BEGALA: (Inaudible) and they've got those propellers, beanies on their heads. They're very smart people over there.

(CROSSTALK)

BURNETT: (Inaudible), but I got to say I think I'm going to call out that one. All right.

But John, let me ask you. Ted Cruz calling it a victory, a profile in courage, defending his actions. But now his home state's paper, "The Houston Chronicle," which of course had endorsed him in his Senate run is turning on him. And as you know, his favorability rating surging among Tea Party but plunging among non-Tea Party Republicans. I'm not even talking about Democrats.

So Ted Cruz, is this the beginning of Ted Cruz or the end?

AVLON: No, when "The Houston Chronicle," his hometown paper, says that they made a mistake in endorsing him and then said if only we had someone more like Kay Bailey Hutchison who would have worked with Susan Collins to come up with a bipartisan solution earlier, that is a serious sign of things to come.

Ted Cruz is a demagogue. The reason you know this, is because he is smarter than he sounds. And one way -- he says millions have rushed to the defense, the call that he sent out. He maybe have made millions of dollars through his super PAC but he has put that PAC's interests, he has put narrow partisan interests ahead of the national interests.

And even in Texas that is not a winning formula in the long run, not when you're looking at the demographic changes there.

So watch out. There's going to be -- you know, you reap what you sow. The Republican Party is reaping it, but so will Ted Cruz.

BURNETT: And Tom, what about a no vote? When you hear Congressman Barton say he will vote no. You've been sitting in that seat.

Is that a smart vote? That's one of those votes that comes back where people say you were willing to let the country default.

Is that smart?

DAVIS: Erin, 80 percent of the Republicans in the House are from districts where Romney got 55 percent or better. Their race is their primary election; general elections are almost irrelevant to these people.

And to the Republican base, particularly the Tea Party, a no vote is the safe, safe vote. This is like a TARP vote. I voted for TARP. I was a whip for TARP. That was the Troubled Asset Relief Program. I thought it was the right vote for the country.

But how many Republicans of that vote come back to haunt them in primaries? So the safe vote for many of these members is a no vote.

BURNETT: Right. But when you say that, I think about, we were just showing that picture, because I was there that day watching that vote. And when that didn't pass, I mean, the market almost fell 1,000 points. You can say it doesn't matter. But you cast the vote that did what seemed to be the right thing for the country.

You're saying that people who cast that vote paid the price of their jobs. That's pretty sad.

DAVIS: Erin, it is a group in the caucus that say we want this to pass but not with my vote. And we whip main members -- you said I hope this thing passes but I can't vote for it. They're looking after their own political safety. Unfortunately, as you look at the plates in American politics, these districts have become so polarized for members. They're either safely Democrat or safely Republican.

But the risk is being in the middle and compromising. Senate not so much, which is why you get a bigger vote in the Senate.

BURNETT: Paul, I got to say, I mean, I think what -- everything Tom is saying makes sense. And he is being honest. But it is a pathetic reality that you have people who are casting votes hoping that they don't get what they want because it's smart for reelection. That is against everything Americans would like to think is happening.

BEGALA: Well, that's right. And in that sense it comes back to us, "the fault, dear Brutus, lies not in the stars; it lies in ourselves."

BURNETT: In the voter.

BEGALA: We need to hold -- we, voters, I mean.

BURNETT: Yes.

BEGALA: It also, you know, schmuck pundits like me. But we need to hold these politicians to a higher standard. And a lot of this, though, is the way the districts are cut. Tom's exactly right.

When I served in the White House in 1998, the Cook Political Report, non-partisan analysts, said there were 160 swing districts in the House of Representatives, which didn't seem like very many. It was a very partisan time.

Guess what. That has shrunk down to 90 now. And I'll bet you it is shrinking even more as this rolls on, which is -- that's one of the big reasons the Republicans have gone so far to the far right because that's the only thing they have to worry about is some Tea Party fanatic running against my primary (inaudible).

BURNETT: Well, thanks very much to both of you. It certainly gives us all something to think about. When you get mad, maybe you should think about who you voted for and why you did it.

Well, as the Senate prepares to vote, and you can see we have that live picture of the floor, we are waiting for Harry Reid perhaps to speak. Obviously we're going to be going to that live if it does. We do expect it to pass the Senate and then go to the House. That's the crucial vote.

Just a few moments ago on this program, you heard one Republican congressman who plans to vote no against the deal. And now a congressman who will vote yes, the second highest ranking Democrat in the House, Congressman Steny Hoyer.

Congressman, thank you so much. It's a great pleasure to have you on the program tonight.

REP. STENY HOYER (D), MINORITY WHIP: Thank you, Erin. It's good to follow Tom and Paul.

BURNETT: What's your reaction, though, when you hear Joe Barton say, look. I'm voting against this. And then you heard what Tom just said. A lot of people who are going to vote against it still hope it's going to pass but they're going to cast that no vote any way.

HOYER: Well, I think it is a message vote. And I think it's -- the analysis they made in terms of the districts that they're representing, they think their people think a no vote is a responsible vote.

I think it is a very irresponsible vote. Neither party wins in this scenario. The government ought to be open. It ought to be serving the people. And America ought to pay its debts. That's what we're getting in this vote.

And it is hard for me to believe that people who say they want to keep the government open and they think the government ought to pay its bills, would vote against this for political purposes. But I think there are apparently people who believe that is a good political vote for them. That is unfortunate.

And that, frankly, is what led to the shutdown and led to putting America's creditworthiness at risk and it has hurt us not only economically as you mentioned here in terms of $24 billion of costs, of people out of work, economic slowdown. But it also has hurt our reputation around the world. Very sad.

But we're going to do the right thing tonight and Democrats are going to vote for it and I hope, and I believe that a significant number of Republicans will vote for it as well as Speaker Boehner indicated. There is no reason to vote no.

BURNETT: Now Senator Lindsey Graham tweeted tonight, and I just wanted to read it for you in case you hadn't seen it yet, sir.

(CROSSTALK)

BURNETT: OK. Here's what he wrote.

He said, "To say we as Republicans left a lot on the table would be one of the biggest understatements in American political history."

That's a pretty strong and clear tweet from Lindsey Graham.

You want, Congressman Hoyer, how do you feel?

HOYER: Well, look, I am very please that we're going on open the government. The American people want their government working for them. I am very pleased that we are making sure that America pays its debts and is a credit-worthy nation around the world. The expectation it would be otherwise frankly was unthinkable just a few years ago.

So I'm pleased at that. But I'm going to be even more pleased if we come together in this conference that we've been asking for six months that will now occur and try to get this country on a fiscally sustainable path --

BURNETT: OK.

HOYER: -- and stop this government by crisis. It's bad for the country, bad for the American people and bad for the reputation of our country around the world.

BURNETT: Thank you very much, Congressman. I appreciate it. And Harry Reid is now speaking live on the Senate floor. I want to listen Harry.

SEN. HARRY REID (D), MAJORITY LEADER: (INAUDIBLE) action above with respect to the amendment that the (INAUDIBLE) officiated, and the bill will be returned to the calendar.

UNIDENTIFIED MALE: Is there an objection? Without objection. So ordered.

Under the previous order, the Senate will proceed to the consideration of H.R. 2775. The clerk will report.

CLERK: Calendar number 193 H.R. 2775. An act to condition the provisions of premiums and costs share and subsidies under the Patient Protection and Affordable Care Act and so forth.

UNIDENTIFIED MALE: Under the previous order, amendment number 2004 is agreed. Under the previous order, the clerk will report the motion to invoke cloture.

CLERK: Cloture motion. We the understand senators, and accordance with the provisions, of rule 22 of the standing rules of the Senate, hereby move --

BURNETT: You can hear Harry Reid was getting toward set that bill up. They're getting ready for the votes. They're going through procedure step by step.

I want to bring in Dana Bash, our chief congressional correspondent.

And, Dana, can you explain? Because my understanding is there's -- tell me if I'm wrong -- essentially two votes to get this formally through the Senate that we'll be watching in the next few minutes.

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: That's exactly right. The first vote will be the telltale vote. It is a vote on the compromise. It actually, our understanding is that that first vote will need 60 votes to pass, but the expectation, according to Democratic and Republican sources is that that won't be a problem. It should be well north of 60 votes at the end of the day.

So, that is first vote that we're going to see. It looks like the president pro tempore is getting ready to begin the vote. There it is. The vote has begun.

So, this is technically a 15-minute vote. Sometimes it goes a little longer because they wait for senators to straggle in. So, we're going to watch and see how this goes.

But there will be two votes. The last one will be the final one that sends this to the House. But the first one is going to be the one that tells us what the threshold is of what we expect to be approval by the Senate.

BURNETT: Right. And an important distinction, as you said, Dana. So, the first vote, the one that matters because it's all the words and the language of the deal would need 60 votes. Once that passes, though, the actual deal itself needs a simple majority, right?

BASH: That's our understanding, yes.

BURNETT: What's your understanding of the timing in terms of going over to the House and what has to happen then in terms of when that vote might actually go down?

BASH: What has to happen is the house technically, the House rules committee, which is the committee that dictates the procedure on the House floor, will meet and there was some talk about making the process expedited in the House. Because members want to do this before midnight and they want to get home and also, they realize that it's all over, but -- basically it's almost all over. So, we're going to see how fast it goes in the House, but it could go relatively fast by congressional standards. BURNETT: Right. By congressional standards.

And, of course, as Dana says, this whole countdown, and when is October 17th the date. Is it midnight? It is so crucial.

Dana will be standing by as we watch this vote over the next few minutes coming through. The minute we get a sense of how things were going, we're going to break in on that.

But, obviously, all eyes are on the markets. And when Dana talks about why they're so eager to get this done in the Senate and the House by midnight, it is because of the view that if this vote fails tonight, the entire world will feel it.

Now, the man at the center of all of this is not on the floor and not in the House of Representatives. He works for the credit rating agency Standard and Poor's. His rating of America's debt determines how much we the people, the taxpayers, pay an interest on our national debt, your home, your credit card and beyond.

His name is John Chambers and he is OUTFRONT tonight.

Thank you very much for taking the time.

Let me just start with that basic question. And, you know, I've been talking to investors over the past few days. You get differing views on this. But this deadline of midnight in terms of, oh, my gosh, the world will change then. Cinderella will turn back into a pumpkin.

Is that a real deadline?

JOHN CHAMBERS, STANDARD & POOR'S: I don't think I would think of it that way. This vote is very important. But once we get past this day, the government will still have some cash on hand and cash, of course, will be coming in.

You don't want to get to the point where you have to have a sudden unexpected contraction of either current spending in the order of a quarter of all government spending because that's what it would take to balance the books this quarter overnight, or to default on your debt. That would be extremely damaging to the world economy, aside the United States economy. That would be an event worse than Lehman Brothers.

BURNETT: And, obviously, to remind people, Lehman Brothers was the event which caused that huge bailout which was needed, which caused the markets to fall nearly a thousand points when Congress did not pass that bill, at first.

John, as you know on the show, we have tracked your move, 802 days since you cut the United States top credit rating, in large part do to what we're seeing on the screen, fighting in Washington. And as you know, we've been keeping track of this.

Let me just put this question to you point blank, are you considering another downgrade?

CHAMBERS: We have a stable outlook on the AA-plus rating. We said back in June that we thought raising the debt ceiling would be acrimonious which it has been. So, this is in line with our thinking. We said that we would get a deal at the 11th hour. We're getting that deal now at the 11th hour.

So this is kind of baked into our AA-plus rating. The reason we're at AA-plus and not AAA, there's a couple reasons. But the main reason is that the fact that you have to worry about the U.S. government paying its debt on time would indicate that the government is not worthy of a AAA rating.

BURNETT: All right. And one final question to you. The deal tonight is simply going to delay for a couple more months. It's pretty that static in and of itself, right, better than defaulting in the next few weeks, sure, but still not good.

Is this something would you see as a positive? I would imagine it doesn't -- not at all.

CHAMBERS: Well, we think it will be back here in January, debating the same issues, and that given the composition of Congress, that it will be probably still acrimonious. And we'll have to see. We'll have to see where we are then.

But this is, I fear, a permanent feature of our budgetary process.

BURNETT: Well, thank you very much, John. We appreciate your time.

And, of course, when you hear John Chambers say what he fears is a permanent feature, the translation is: you're not going to get that top credit rating back until that changes. It's a Washington problem.

Our next guest controls nearly $2 trillion worth of your money. OUTFRONT tonight, Bill Gross, founder and co-CIO of PIMCO.

Bill, great to have you back -- manager of the world's largest bond fund.

BILL GROSS, FOUNDER & CO-CIO, PIMCO: Thank you, Erin.

BURNETT: So, you're watching these votes. We are watching the first of these two crucial Senate votes right now, as you and I are talking. And then, of course, this will go to the House for -- we believe it will pass easily, but that is the more questionable vote tonight.

So, we're counting down again to a last-minute vote by Congress a few hours before a deadline. You know, I remember here, sitting here during that vote to bail out the banks, when they didn't pass it, and the market fell 778 points in a period of a few moments.

What would a failure tonight mean?

GROSS: Well, it would mean the same thing. I don't know how many hundreds of points it would take out of the S&P 500 or the Dow but it would take a lot. It would basically represent a dysfunctional government. And, you know, since the United States is the world's reserve currency, since many of the transactions on a daily basis are based upon the sanctity of treasuries, and obviously, the markets not only stock markets but bond markets would tank.

I think though, and we all agree that there's almost certain passing of this continuing resolution and debt ceiling legislation, the important thing, Erin, is that the world's view of the United States, the political process, the currency and ultimately the economy has been damaged by all of this. And much of the world looks at us, at Americans like "The New York Times" mentioned this morning, Mexicans do as (INAUDIBLE). We're spoiled little rich kids.

And as we kick this can from October 17th to early next year, there will be a cost to us in the form of higher interest rates and lower stock prices than otherwise would be the case.

BURNETT: It is pretty You look at so many countries in this situation, they can't pay their debt. We can and choose not to. There is something deeply offensive about that.

But, Bill, what would success tonight mean? Given that success in this case, in passing this bill, is simply delaying a moment like this for another three months.

GROSS: It doesn't mean much. It means basically, the hanging will be delayed until early next year. It also means, I think, and it is hard to put an estimate on this, Erin, but it means our interest rates will probably go up by five or ten basis points because of this delay and because of the repercussions of what we're seeing for the past several weeks.

If we pay, for instance, 0.1 percent more on our treasury debt, treasury bills and treasury bonds, than we would otherwise, then basically that means the United States would pay $15 billion more per year in interest cost. This is an expensive proposition kicking this can down the road for another three months and then another three months. We need to wake up.

BURNETT: I think that's pretty amazing the way you explain. People hear 0.1 percent, they think that's not a big deal. And there might be some people if they just heard you say that, see, Bill Gross made our point. It doesn't matter. But those are the same people who would care about the extra $15 billion.

I mean, Bill, clearly, we have problem in this country with our finances, with paying them, for whatever reason. The question I have for you, should we even have a debt ceiling? Does it do anything good for this country or not?

GROSS: Obviously, in the past few years it hasn't done much good. It has resulted in lower credit ratings and higher costs in terms of interest. So, you know, ultimately, to abolish the debt ceiling, I think it would be a good thing. I think Republicans and Democrats in Congress, they need to wake up and in terms of what they budget, they need to pay for it.

So, the process begins with the budget and not with the debt ceiling as opposed to reverse order.

BURNETT: And, Bill, before we go, right now, obviously, we're here in primetime in United States, but people are watching around the world, and, obviously, investors are watching around the world, watching this vote going on on the other side of our screen. What would you say to all of those investors had a have put their hardest earned money, the most money they have from all the country's treasuries into the United States? Is that still the place to go?

GROSS: Well, it is the place to the extent that our economy can grow faster than the rest of world. That's a legitimate debate. In some emerging countries like China and elsewhere, they're growing faster than we are.

But to the sentence we can grow at 2 percent, 3 percent, it's still a legitimate investment. It's just not the same investment as it was before, to the extent that we have a high debt to GDP ratio, to the extent that we have a 100 percent debt relative to our GDP, $15 trillion worth of debt.

BURNETT: All right.

GROSS: That slows down the economy and it makes it less of an attractive investment going forward.

BURNETT: Bill Gross, thank you very much, we appreciate you taking the time, the founder of the world's biggest bond fund, and his views -- 0.1 percent more, cost and borrowing because of what you're seeing costs $15 billion to the people watching this show tonight in the United States in interest costs. That makes you realize how important a small number can be.

Well, we're going to take a break because this vote is ongoing. We do anticipate. We have a few more minutes until the first results come in.

Dana Bash, our chief congressional correspondent, is right there, talking to those senators as they're coming in and out. You can see Harry Reid there on the center of the floor. We're going to take a break and we'll be back as these vote results come in in just a few minutes.

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ANNOUNCER: This is CNN breaking news.

BURNETT: Our breaking news coverage continues.

You are looking at a live picture of the Senate floor. That is where votes are being cast on two crucial votes in the Senate that would pass a deal that would temporarily extend the debt ceiling for the United States, end the government shutdown, and create a budget conference that would supposedly deal with broader budget issues.

The first of two crucial votes, as I said, and there are different margins of victory needed for both, but these both must pass and handily for this to go over to the House of Representatives.

Our Dana Bash, chief congressional correspondent, has been standing by every moment of everyday, and we are finally here at these crucial points, Dana.

You just heard Bill Gross, head of the largest bond fund in America, controlling the money you and I have socked away, our viewers have socked away, saying -- he has not been a fear monger -- saying, look, midnight may not be the real deadline but if this does not pass, markets will tank, quote/unquote, "I don't know how hundreds of points."

BASH: Well, it looks like certainly in the Senate, that is not going to happen. While we were in commercial break, they just went through the votes as they have been cast so far and it only sound like so far, a dozen Republicans have voted no. It's not complete but that is the case and it doesn't go up that much, it means this is going to pass by 70-plus votes, which is obviously a very big bipartisan vote, particularly for this kind of divisive issue.

This is the first vote. I was told by a couple Senate aides the second vote is likely to mirror this vote. So this is one to look for to have a marker of where the Senate is going to stand on this deal. Now, whether that will pressure any Republicans in the House who may be on the fence about whether they will vote yes or no, unclear.

Frankly, House Republicans at this point really don't care much about what the Senate say or feel on this issue. But I think the way the House vote will go, again as we talk about earlier on the program is probably the most important political drama to look for.

Not substantive drama, because we do expect this to pass the House because there will be enough Democratic votes to give majority that it needs in the House but political drama because John Boehner is such a focus of this, the way he has -- he stood with conservatives and said he wouldn't let this bipartisan vote happen in the past, to see if he at least gets the majority of his Republican caucus. BURNETT: Now, Dana, you're talking about the 70-plus votes, being a positive surprise. You knew it would pass. That's a significant margin. I believe you mentioned there were ten Republicans who voted no --

BASH: More actually.

BURNETT: What can you tell us who they are? I don't expect you to rattle off all the names, but are there any in particular that you would highlight, that you actually stood up and voted on this in the Senate so far.

BASH: You know, the people who -- anybody following this debate and following the most vocal conservatives in the Senate and House, but particularly in the Senate, wouldn't be surprised at the names. Senator Ted Cruz, you've heard at the beginning of the program, Mike Lee, David Vitter, others some of whom I'm looking at the list were elected with the help of Tea Party support in 2010 and other who have been here a little bit longer and count themselves as what they consider to be true fiscal conservatives.

So, nobody who is a real surprise. I think frankly, the surprising I'm seeing as I listen in my other ear to the votes being called out are some of the people who were elected in the same 2010 Tea Party wave voting yes, for example Senator Scott of South Carolina, I just heard he voted yes. Kind of interesting.

BURNETT: So you have seen some of them come over, under premise sure of whatever kind they want to go on the record voting yes on this?

BASH: Exactly. You know, I think you're sort of alluding to an interesting point, which is the terminology around here is free vote, meaning if senators think that something is going to pass and they don't feel they want to take a tough political vote, they might, you know, vote the opposite of how they feel, just to have a safe vote politically. And you are seeing some senators who might have a potential primary, Senator Scott, might have a challenge for taking this vote, but still voted yes anyway.

BURNETT: That's interesting, because we've heard the argument, Dana, right, that -- well, if you have a primary challenger and you're in the Tea Party, that's who's going to vote no. That's the kind of the predictor, right, the conventional wisdom because otherwise you would be pilloried for this vote and you'd lose. That's pretty incredible you are seeing people do this.

I mean, do you think we'll see more of that?

BASH: Perhaps. The other thing I wanted to point out since we're talking specifics here, and I just also want to say that sometimes when the vote is over or before the vote is over, some senators, you know, switch their votes. So, what I'm about to say might change by the time we see the final vote but John Cornyn is the number two Republican in the Senate. He is somebody is sort of in a squeeze in Texas because his junior senator is Ted Cruz, but he is a member of the Republican leadership, the establishment. He voted no. So that maybe shows you a good example of somebody whose got a push and a pull and a tug with their own constituencies within the Republican Party.

BURNETT: Pretty interesting that he would vote no, and, of course, as we said, "Houston Chronicle" that endorsed Ted Cruz, everybody came out today and he said -- criticized him for how he handled this saying it didn't make sense.

All right. Well, as Dana watches that vote, we'll go back to her the second we start to get these final numbers in. Some of the votes could switch with Senator Scott and Senator Cornyn, you got to pay attention to that.

I want to go to Brianna Keilar who's at the White House.

And, Brianna, is the view they are getting 100 percent of this is what they want, a full victory untainted or not?

BRIANNA KIELAR, CNN SENIOR WHITE HOUSE CORRESPONDENT: You know, if not 100 percent, Erin, when they look at the substance of what is in this legislation. They basically feel like it's 99, 98 percent and that's good enough for them to feel like they really didn't give anything, because the president's posture on all of this was that he wasn't going to negotiate when it came to funding the government and increasing the debt ceiling. The one thing that the White House did give a little bit on was that income verification in Obamacare.

So, it's a little bit of an Obamacare give but here is the thing that I think they are pointing to that they feel like means they didn't really give much away. It was something negotiated between Senate Democrats and Senate Republicans, and in a way they sidelined. They really did sideline the House GOP even in the negotiation over that mini-concession.

It was sort of this message to not only the House GOP but really Tea Party Republicans, we're not going to negotiate to any of your demands and we're not going to negotiate with the House GOP which is kind of being pulled along by Tea Party Republicans. So, they were really cutting them out of the process.

KEILAR: I will tell you, we just got this. It's a statement of administration policy and let me tell you, you know, we've been talking so much in the last couple of weeks about veto threats. You'd see the House passing a bill. We would get one of these statements of administration policies, they would normally say if the president is presented with the bill, he will veto it.

Well, this one says quite the opposite. This is about the Senate bill currently underway on the floor now. He says -- this says administration strongly supports Senate passage of this bill and ends by saying, Erin, administration looks forward to working with the Congress on fiscal year 2014 appropriations legislation for the full year.

So, this is really the statement we've been waiting for, that the White House supports a piece of legislation, that looks to pass the Senate and hopefully the House.

BURNETT: It looks for both right now. As we wait for the final votes to come in, we're going to take a brief -- there is the first finals you can see 83-16, 83 ayes.

And I want to emphasize that is from the Senate. It's the first of two votes. The more important of the two votes as our Dana Bash has made clear because it's the one they agreed to language, and then they will formally vote to pass that and send it to the House. The formal vote only needs 51 votes.

So, obviously, they have the votes they are going to need, the 83, an even bigger margin that Dana just reported. She thought it would be 70 plus and suggesting that would be strong and indicate a lot of Republicans have come over, but obviously, doing even better than that at this moment.

We're going to take a brief break. We'll be back.

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