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AROUND THE WORLD

Winners, Losers in Budget, Debt Ceiling Showdown; World Markets Not Impressed; World Reacts to U.S. Deal; Space Rock Found

Aired October 17, 2013 - 12:30   ET

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


MICHAEL HOLMES, CNN CO-ANCHOR: Welcome back.

Well, the bill has been signed, the partial federal government shutdown is over, and the debt ceiling is raised for now.

But guess what? We're learning more about what's in that bill.

SUZANNE MALVEAUX, CNN CO-ANCHOR: So much for a clean bill. Actually, there's a little bit of pork in this.

Take a look. These are some things, kind of surprising here, some provisions. $2.2 billion going to a river dam project. It's the Ohio River, and that is important because it's bordering Kentucky and Senate Minority Leader Mitch McConnell, that's his home state.

CNN has learned, however, that he says he did not ask for those funds.

HOLMES: And here's one for you. The late New Jersey Senator Frank Lautenberg's widow will get a death benefit equal to one year's salary.

That's traditional in the Senate, but this one's a bit shocking, given the economic climate, because Lautenberg was one of the richest members of Congress, according to The Hill. He was worth more than $59 million in 2011, but his widow's going to be getting about $174,000 more.

MALVEAUX: And if you want to learn of what's in the bill and what is next for the government, you can go visit CNN.com.

HOLMES: Ironic, in a way, isn't it? The whole thing was started because of something attached to another bill and then the thing that sells it has things attached to.

MALVEAUX: To another bill. And it hurt the economy at the same time.

HOLMES: Yeah.

MALVEAUX: Supporters of all of the projects are not ones who have gotten something out of this budget bill. There were some winners, political winners.

The president says nobody won in this. At a news conference this morning, the president insisted, Democrats, Republicans, nobody comes out on top when it comes to the drawn-out budget battle. Listen.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Now, there's been a lot of discussion lately of the politics of this shutdown, but let's be clear. There are no winners hear.

These last few weeks have inflicted completely unnecessary damage on our economy. We don't know yet the full scope of the damage, but every analyst out there believes it slowed our growth.

(END VIDEO CLIP)

HOLMES: The shutdown has had an impact, of course, both good and bad on all of the major political players.

Here's Tom Foreman with a look at that.

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT: Out of the turmoil of the shutdown and threat of a debt default, Washington is sorting out the winners and losers, and in pure political terms, the president appears on the winning side, betting everything that Republicans would blink first, and they did.

OBAMA: You don't get to hold the American people hostage or our economy hostage in order to extract concessions.

FOREMAN: Winning with him, Senate Majority Leader Harry Reid, who relentlessly echoed the White House line, even if now he's softening his tone.

SENATOR HARRY REID (D), MAJORITY LEADER: This is not a time for pointing fingers of blame.

FOREMAN: On the Republican side, traditional conservatives and moderates may have taken the worst shellacking, first pushed around by the tea party, then bested by the Democrats.

SENATOR MITCH MCCONNELL (R), MINORITY LEADER: This is far less than what many of us hoped for, frankly.

FOREMAN: Oddly enough, John Boehner seems to have come out OK, losing the battle, but for now winning the war, by holding on to his position as speaker of the house.

SENATOR TED CRUZ (R), TEXAS: I do not like them, Sam I Am. I do not like green eggs and ham.

FOREMAN: Senator Ted Cruz who held the floor for 21 straight hours with hopes of repealing ObamaCare lost that quest with his tea party pals, but he reportedly raised three-quarters of a million for his campaign war chest. That's a lot of green eggs and ham.

Senate women, Democratic and Republican, get some credit in the winning column, talking up cooperation, even as the crisis deepened.

SENATOR BARBARA MIKULSKI (D), MARYLAND: I think what you saw really led by a lot of the energy created by the women.

FOREMAN: Although it is worth noting, polls say the public disapproved of everyone from the president on down for the handling of the crisis.

Still, in the big picture --

SENATOR JOHN MCCAIN (R), ARIZONA: The only people that are losing now are the people of this country.

UNIDENTIFIED FEMALE: I'm sorry. The park is closed today.

FOREMAN: Americans, far and wide, may have been the biggest losers.

UNIDENTIFIED MALE: Let us do our work.

FOREMAN: Some pushed out of work, others locked out of parks and federal offices, and still more missing out on business related to government.

Altogether it cost the struggling economy billions of dollars.

Sure, fans of the National Zoo's panda-cam will be winners, but that money's gone for good.

Tom Foreman, CNN, Washington.

(END VIDEOTAPE)

MALVEAUX: All right, so we know that there's some political damage that has been done. Is it too late to turn things around for some folks?

We're going to hear about that, up next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: You don't like a particular policy, a particular president, then argue for your position. Go out and win an election. Push to change it.

But don't break it. Don't break what our predecessors spent over two centuries building. That's not being faithful to what this country's about.

(END VIDEO CLIP)

MALVEAUX: Of course, you are hearing the president there, blaming Republicans, his message clearly for them saying, if you don't like this, you can go ahead and win some elections, get folks in the seats, make your own policies, your own laws here. And this, of course, on the day when the debt default was averted, hundreds of thousands of federal employees back to work after six days of being furloughed.

I want to bring in Ron Brownstein, senior political analyst. The president says there's no winners here. Some look at the president and say, perhaps he won in this whole stand-off situation. How do you see it, in terms -- he says economically, nobody's winning here, politically, are there winners, losers?

RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST: Right. For the country, there are no winners in this can kind of standoff.

And by the way, the president's right. What he said echoes what Bill Clinton said during a famous moment during the '95 shutdown when he looked across the able at the Republican leadership and said, if you want to get this budget passed, you have to elect a president.

And I think the same thing is true here. If they want to repeal the Obama health care law, they will have to elect a president.

But I think the president was a winner here because his overriding goal in this confrontation was to delegitimize the use of these tools, threatening default and shutting down the government as a means of trying to extract policy concessions, and I think he's gone a long way toward doing that.

There could be another winner here, too, which is the more pragmatic wing of the Republican Party.

I think, Suzanne, one of the big stories in Washington this year has been really that the conservative vanguard of the GOP, the tea party- affiliated wing, has really seized control of the party agenda.

After the 2012 elections, Republicans were talking about reaching out, broadening the base. This year it's been much more about confrontation, delivering for the base and mobilizing the base, and they've taken that to its kind of logical extreme in this era and really kind of cracked against the rock.

So I think it's provides an opportunity for other voices in the GOP if they assert themselves.

HOLMES: Ron, also, I -- and I know I deal a lot on CNN International, the rest of the world is looking in and seeing some unusual things, some uniquely American politics. I mean, one of --

BROWNSTEIN: Yes.

HOLMES: Yeah, well, one of the them is attaching unrelated things to bills. I mean, you can put up a bill about building bridges and someone will attach abortion to it. And we saw this actually with the bill that ended all of this.

Is that part of the problem? I know it's got a historical precedent with how that all began, but is it something that's practical, particularly in today's partisan politics.

BROWNSTEIN: Michael, I think there's really a continuum here, you know? In fact, there are many people in Washington who say that the city worked better when you could use earmarks as a way of sanding down ideology, giving people a practical reason to support something that might be not in their ideological sweet spot.

And as we've got an way from that, toward a political system based almost entirely on ideology, you know, it's become much harder to get anything done, as party-line voting has gone up.

On the other hand, you know, you kind of see this taken to the extreme with the idea of using either the default or the shutdown as a means of trying to change a law as fundamental as the Obama health care law.

You go back through American history at any given moment. The parties disagree about a dozen things. And if we were going to shut down the government every time they couldn't resolve one of those differences, we'd be moving towards something close to anarchy.

So I think there's a continuum here about how relevant and how big is appropriate to include in legislation.

MALVEAUX: And, Ron, real quick here, go over the losers here, because the president's trying to push forward budget, immigration reform and a farm bill.

Some people say, the political climate, that's not likely going to happen?

BROWNSTEIN: Look, we were polarized, and not a lot has gotten done.

But it is worth recalling that after the last shutdown and the kind of blast crater of that, what followed was the most productive period of bipartisan cooperation we've seen in the last 30 years.

In '96 the Republicans and Bill Clinton agreed on welfare reform. In '97, they did a big balanced budget.

This, I think, has shown the limits of the confrontational strategy. And as I said, if there is a more pragmatic side of the Republican Party wants to take control of the debate and assert themselves more, I think this shows there is a majority for governing with the 87 Republicans who voted for this, you know, not necessarily a majority of House Republicans, but over 218 in the House and that could apply to other issues if the climate develops for that kind of cooperation, as it did in '96, after the last shutdown.

MALVEAUX: All right, Ron Brownstein, thank you so much.

And, of course, we saw the losers that he had mentioned as well, talking about those Republicans. They called them the kamikaze Republicans, those who said the hell-no caucus turned into the I-told- you-so caucus, looking like those just potentially not on the winning side of this. HOLMES: The tea party members, a lot of people point out have no downside in terms of their electoral strength. I mean, they're not going to get thrown out of office because of the redistricting, and so they're safe, electorally.

MALVEAUX: They say they're following their principles.

HOLMES: Yeah, we mentioned it earlier about the markets, the Dow down about 54 points, .35 of a percentage point.

Now internationally not too impressed either, world markets responding to the debt deal, we're going to look at the uncertainty some investors are feeling about what is a short-term fix.

(COMMERCIAL BREAK)

HOLMES: Now China is the biggest foreign holder of U.S. debt worldwide and is obviously thankful this debt ceiling crisis is over for now. They would have been affected the most. But, the credit rating agency, Dagong, which has close ties with the Chinese government, not impressed.

MALVEAUX: So the agency says of the U.S., "the government is still approaching verge of default crisis, a situation that cannot be substantially alleviated in the foreseeable future." Richard Quest joins us from New York.

So, Richard, you know, whatever way you put it, we prefer to say kick the can down the road, a Band-Aid, whatever, right? The government -

HOLMES: I'm over - I'm over the can, by the way.

MALVEAUX: It's the Band-Aid, I guess.

HOLMES: Yes.

MALVEAUX: But, you know, it - we're going to deal with this again, right, the debt ceiling again, another deadline in February. How - how are people around the country reacting to -

HOLMES: People, yes.

MALVEAUX: Around the world, essentially, reacting to this?

RICHARD QUEST, CNN CORRESPONDENT: Well, I think what you're seeing in the Chinese comments is, the truth sometimes hurts. And you can't disagree with that statement. Now, you can obviously put a political spin on it, as the Chinese Shinwa (ph) news agency chose to do so. But if you look at what happened in Europe and the way the indices fell, and you look at what's happening today in the New York market, and the cynicism/skepticism that exists over the deal, even what the president said and what they said last night, everybody knows we will have to revisit all the aspects of this in a very short time frame. So it's not surprising that any euphoria is tempered and the rest of the world is exasperated. HOLMES: What does all this do, Richard, to, you know, what is the benchmark currency, the U.S. dollar? I mean is it being hurt by this? People looking to the euro?

QUEST: Here we have a slightly perverse reaction. I mean just in the last day or so, the dollar has given back some of the gains. It's down, what, 1 percent. Because even though the -- this is the perverse part about it. Even though the U.S.'s full faith and credit was called into question, because the dollar is still the reserve currency, it was still the principal safe haven. I know that seems like two sides of the same coin and a contradiction in term, forgive me for doing it, but that's the truth. Even times of uncertainty about the U.S. government, the U.S. dollar remains strong.

HOLMES: All right, Richard, thanks so much. See you later on CNN International "Quest Means Business." Richard Quest in New York.

MALVEAUX: And we are following this Pakistani teen activist. Malala Yousafzai is being offered an honorary citizenship. We're going to tell you what country is giving her award, up next.

(COMMERCIAL BREAK)

HOLMES: A fire official in Australia is saying this is as bad as it gets. Ninety-eight intense bushfires popping up around Sydney, forcing hundreds of people to flee. At least 30 homes have been destroyed. It is feared that number will be in the hundreds before it's all over. Some officials are saying this may be the most serious fire emergency to hit the state of New South Wales in a decade.

MALVEAUX: The Canadian government says it's going to grant honorary citizenship to Pakistani teen activist Malala Yousafzai. It is a rare honor. She's going to join an elite group of foreign honorees that include South Africa's Nelson Mandela. As you might recall, she was shot in the head by the Taliban, that happened last year, for campaigning for girls' education rights.

HOLMES: Well, Washington may have been the center of the U.S. government shutdown and debt crisis, but the effects have been felt, as we've been reporting, right around the world. Let's have a look at some reaction now.

MALVEAUX: We start with Isa Soares. She is in London, where marks are steady but cautious, well aware that the solution is just temporary.

Isa.

(BEGIN VIDEOTAPE)

ISA SOARES, CNN CORRESPONDENT: European markets were pretty subdued partly because it factored in a deal that was going to be done. Yesterday there was already talk of a deal in the works before European markets closed, so they closed higher. This morning, when traders came in and the markets opened, they did open lower. A bit of risk taking going on. But on the whole, markets were down. I think the reality's sinking in that, you know, for now they've got a bit of a respite, but come January/February, this will have to start on again. So, for now, European markets are upbeat on the U.S. economy but they know what's coming around the corner.

SHASTA DARLINGTON, CNN CORRESPONDENT: I'm Shasta Darlington in Brazil. It's like the old saying goes, the United States sneezes, the world catches a cold. So it comes as no surprise that the media, companies, and investors here and throughout South America were watching in disbelief as this whole fiasco unfolded. The deal comes as good news for regional economies and for stocks, which are up at five-month highs. But the hope that the great giant in the north would somehow lead a renewed economic charge benefiting all of these countries has pretty much faded.

DAVID MCKENZIE, CNN CORRESPONDENT: Leaders and technocrats here in Beijing breathed a sigh of relief because China is the biggest foreign owner of U.S. debt, 1.3 trillion U.S. dollars in Treasury bills, and more than double that in U.S. dollar asset. So the chaos in Washington has made for nervous days here in China. Throughout the process, though, China has used this as a PR war against its rival, the U.S., saying that they must act more responsibly.

(END VIDEOTAPE)

MALVEAUX: All right, we're going to show you some video here. You've got to - remember this? This is a meteor that was striking through -- streaking through the Russian sky. The video went viral. Soon after the craze began, people all over the region searching for that space rock.

HOLMES: Yes, it was a spectacular event. A lot of people were actually hurt. Now scientists believe they have found a big clunk of that visitor from space in a lake in Russia and they say it could be one of the heaviest meteorites ever found. It wasn't easy to get out, either.

(COMMERCIAL BREAK)

MALVEAUX: All right, it's pretty amazing, this video of a meteor streaking through the sky went viral back in February. Now scientists believe they have actually found a fragment of that space rock.

HOLMES: Yes, it's a pretty big fragment, we've got to say. This is in a lake in Russia. Not easy to get it out of there. Here's Isha Sesay.

(BEGIN VIDEOTAPE)

ISHA SESAY, CNN CORRESPONDENT (voice-over): This was the scene back in February as a massive meteor streaked across the sky, turning night into day, the fireball sent shockwaves across Russia, shattering windows, injuring some 1,200 people and causing millions of dollars in damage.

Scientists say fragments of the space rock crash landed here, beneath the ice of this frozen lake near the city of Chelyabinsk. Now, eight months later, the ice is gone. And on Wednesday, in an operation covered live on Russian TV, divers entered the murky water. At the bottom of the lake, they found what is believed to be the largest single fragment of the meteorite. The 1.5 meter long boulder was drag ashore then weighed, where it literally tipped, then broke the scales.

ANDREI KOCHEROV, CHELYABINSK UNIVERSITY (through translator): If it weighs more than 500 kilograms, then the object is unique in itself and is likely to be one of the biggest meteorites ever found.

SESAY: The suspected space rock crumbled into several chunks but still weighed in at more than 570 kilograms. Now scientists want to confirm this is indeed the meteorite they've been searching for.

KOCHEROV: The initial visual survey, which we are talking about now, doesn't give us 100 percent certainty. We still need to conduct more research, a structural analysis and other tests.

SESAY: When it entered earth's atmosphere, scientists estimate the meteor weighed about 10,000 tons. It's just a fraction of that size now, but scientists seem confident they've made an out of this world discovery.

Isha Sesay, CNN.

(END VIDEOTAPE)

HOLMES: As Isha mentioned there, that suspected meteorite weighs 570 kilograms, which, of course, means nothing to you, does it? That's about -

MALVEAUX: Oh, come on, how many pounds?

HOLMES: That's about 1,200 pounds. So it's a - it's pretty big.

MALVEAUX: Yes. Well, it's huge. It's huge.

HOLMES: Because the rest of the world does metric.

MALVEAUX: Oh, yes, you know, I can convert. That's all right.

HOLMES: (INAUDIBLE).

MALVEAUX: Several stories caught our attention today, photos as well. I want you to take a look at this.

Sidney Sea Life Aquarium in Australia, here, of course, (INAUDIBLE) county. Yoga teacher instructs a class while submerged in an oceanarium tank. That's pretty cool, actually. The tank includes sharks and schools of vibrantly colored fish. Very nice.

HOLMES: The question of why leaps to mind. But, anyway, moving along, Coach Harry, let's call him that. The prince visiting some youngsters at a coaching event at the famous rugby home, Twickenham in London. Took part in some action. Tried to avoid getting tackled. Didn't succeed all the time. Prince Harry, of course, used to play the sport. He is a qualified rugby coach. Note the lack of padding and helmets.

MALVEAUX: Yes, pretty cool. That's great.

HOLMES: Yes, tough (INAUDIBLE) that rugby. All right. That will do it for us.

MALVEAUX: Nice to see you. Thanks for watching. CNN NEWSROOM with Wolf Blitzer starts right now.