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CNN LIVE EVENT/SPECIAL

U.S. president Barack Obama has signed a bill to end the government shutdown and raise the country's debt limit; Republican Party Anger; Political Fallout; Iran Nuclear Talks; Star of the Shutdown; House Breakdown

Aired October 17, 2013 - 01:00   ET

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


(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE REPORTER: What could the back lash mean for the party and the country?

Markets seem happy with the deal.

SEN. HARRY REID (D-NY), MAJORITY LEADER: The eyes of the world have been in Washington all this week. And that is a gross understatement.

UNIDENTIFIED FEMALE REPORTER: But had the damage already been done overseas?

(END VIDEO CLIP)

JOHN VAUSE, CNN ANCHOR: Hello and welcome to our viewers in the United States and around the world. I'm John Vause.

HALA GORANI, CNN ANCHOR: And I'm Hala Gorani. And this is CNN NEWSROOM.

Of course, one story today, U.S. president Barack Obama has signed a bill to end the government shutdown and raise the country's debt limit.

VAUSE: The bill passed both houses of Congress Wednesday night including the Republican-controlled House of Representatives. The measure will fund the government until January 15th, and raise the U.S. debt limit until February 7th.

GORANI: So this is short-term, just a few months, but by tomorrow, federal workers are being told to expect to return to work. Mr. Obama spoke with reporters after the Senate vote. Listen.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I have got some thoughts about how we can move forward in the remainder of the year and stay focused on the job at hand. Because there is a lot of work ahead of us, including our need to earn back the trust of the American people that has been lost over the last few weeks. And we can begin to do that by addressing the real issues that they care about.

(END VIDEO CLIP)

VAUSE: Now, this 11th hour compromise came after talks between Senate leaders on Tuesday night. And it is a process that the majority leader Harry Reid says he never wants to go through again.

(BEGIN VIDEO CLIP)

REID: Let's be honest. This is pain inflicted on our nation for no good reason, and cannot make, we cannot make the same mistake again.

(END VIDEO CLIP)

GORANI: While we have this story covered from all the angles, from the political to the financial. Our team of reporters and analysts to break down the deal the details of the debt deal and what impact this fiasco has had internationally -- John.

VAUSE: OK, let's get all the details of the deal itself. Erin McPike is live in Washington at this late hour.

So Erin, do we have a deal here or do we just have a delay? Are we going to go through this all again 90 days from now?

ERIN MCPIKE, CNN GENERAL ASSIGNMENT CORRESPONDENT: Well, it is somewhere in between a deal and a delay. You hear it quite often. People saying here in Washington that the vote to raise the debt limit is something that happens routinely. And we have seen this quite a bit since 2001.

This is the 13th time that Congress has voted to raise the debt ceiling since 2001. But we're seeing it happening more frequently. And that is part of the problem here that we're going to have to go through this all over again.

Now, President Obama did say tonight that he doesn't think we'll see the same thing happen when it comes up again in January and February. But of course, it is too early to be seen. Republicans have made clear that they want to use the debt limit as leverage, but some Republicans are saying that strategy just is not working anymore.

VAUSE: OK, so what is the timing here? When does the government actually get back to business? When do the workers actually turn up for their jobs?

MCPIKE: Well, as you said at the top of the show, President Obama signed this bill within the last half hour or so. And the federal government is now actually reopened. One national park said that they were reopening tonight. And federal workers will return to work in the morning in the next eight hours or so. So we're already seeing the government begin to reopen, John.

VAUSE: OK, 16 long days, a lot of bitterness, a lot of nastiness and a lot of tears, what did the Republicans actually end up getting?

MCPIKE: Not much at all, actually. And I want to show you something that Lindsey Graham, a senator from South Carolina, who has been urging Republicans, essentially to give up this fight and reopen the government and stop making these demands. He took to twitter earlier tonight and said and I want to read this to you. To say we, as Republicans left a lot on the table would be one of the biggest understatements in American political history. And I'll tell you the few little things they got, one small change on Obamacare. It was a fraud protection measure, but certainly not the delaying or de-funding that they wanted, and even a repeal of the tax that they thought at the 11th hour they may get.

One other thing that they did get is a smaller level of funding for the government than Democrats wanted or were comfortable with. That is something you hear a lot about, but they did get two small things but certainly not much.

VAUSE: OK. Erin, thank you.

Erin McPike, the late night duty -- early morning duty for us there in Washington D.C. -- Hala.

GORANI: Well, it is a -- we're about what, 12 hours ahead of Hong Kong here in -- on the east coast of the United States. So markets have been opened in the Asia-Pacific region, and they're reacting to this last minute Washington compromise.

Here is a look at the indices for you. And you can see overall it is positive picture, but not a wild move in that direction. The Nikkei 225 and Japan, for instance, is up half a percent. Wall Street rallied Wednesday on the news that a deal had been reached. The Dow Jones industrial average closed up triple digits more than 200 points, or nearly one and a third percent, same thing for the other major indices, the Nasdaq composite and the S&P 500.

All right, let's talk a little bit more about the economy, the impact that this will have on the economy, not just in the United States but around the world. The financial rating in the Standard and Poor's says at least $24 billion is what this is going to cost the U.S., that's about one and a half billion for each day of the shutdown, and Standard and Poor's also warned that the impact is not over. It says consumer confidence has been hurt by the shutdown. And if the issue resurfaces, people will be jittery and they will be afraid to open up their checkbook.

Now, it was two years ago that S&P downgraded America's credit rating. They did that despite a last minute Washington deal to raise the debt ceiling. Remember that?

VAUSE: I remember that, well, yes.

So what is S&P thinking right now in the wake of yet another 11th hour deal?

Well, CNN asked the managing director, John Chambers.

(BEGIN VIDEO CLIP)

JOHN CHAMBERS, MANAGING DIRECTOR, S&P: The reason that we're at AA+ and not AAA, there is a couple of reasons, but the main reason is that the fact that you even have to worry about the U.S. government paying its debt on time, but indicates that it is not -- the government is not worthy of a AAA rating.

We think that we'll be back here in, you know, in January, debating the same issues and that given the composition of Congress, it will probably still be acrimonious and we'll just have to see. We have to see where we are then. But this is I fear a permanent feature of our budgetary process.

(END VIDEO CLIP)

GORANI: A permanent feature. Well, this is something that has people concern. That it could be going from crisis to crisis. Washington has not solved the problem definitively, essentially they just bought some time until early next year.

Let's bring in Richard Quest, my colleague, live at CNN New York with more on that.

So, international reaction now we're seeing a mild uptick for Asian markets, for instance, this was expected. Essentially investors saying look, Washington is not crazy enough to allow the U.S. to default, for instance. So this is why we're not seeing major gain.

RICHARD QUEST, CNN INTERNATIONAL ANCHOR: Yes, and not only that, Hala. Washington has behaved exactly as the markets thought that they would. In other words, at the last possible moment, they pulled themselves back from the brink. And in doing so they will have reinforced that feeling in the markets so that come January and February, the markets will once again say oh, well, we know how this game plays out.

But it is a very dangerous game to play. As both Fitch, in their statement yesterday, and S&P in their statement today made clear because this is what they have done. Spot what I have got in my hand. It is old, it is battered, and it has been kicked down the road many times. This is the proverbial can. And what the markets and the rest of the world says, we are used to the United States kicking the can down the road. In 2011, they did it eight times. In 2012, they did it six times. They did twice in 2013. And all that happens is that nothing really ever changes.

GORANI: Right. I say the first person to say kick the can down the road in this hour would have to put a dollar in the jar somewhere. So, it is you officially, Richard Quest.

Listen. Are these scenarios doom and gloom exaggerations really that the United States will lose its standing, that the dollar is going to be weakened. When essentially look at the numbers, still very much the richest country in the world. The GDP of the next three countries combined, practically, are people exaggerating here?

QUEST: No, they are, and yes they are. It is not going to happen overnight. There is no question, of course, where does the 600-pound guerillas sit? Wherever it wants to. That effectively means that, of course, if you have got to largest most liquid markets in the world, which is what the U.S. has, particularly on treasuries, that means people will still need to buy them.

But it does mean people start to look for alternatives. You start to look maybe, at the Eurozone that has its act together, and they're starting to put their act together.

China, it is not going to happen overnight by any means. But there is no question that the credibility has been called into doubt. And more importantly, the frustration has risen to levels not seen before.

GORANI: Well, it is like the movement of tectonic plates, when it happens, it happens. But it takes a long time.

QUEST: Yes, exactly, that will cost you a dollar.

GORANI: Thanks. Richard Quest, good talking to you. We'll see you a little later as we continue to remain live covering this important story in Washington D.C., an important story not just for Americans as we have been seeing there.

VAUSE: Global implications.

GORANI: But for the rest of the world.

VAUSE: Absolutely. And stock markets in Asia have been reacting to this debt deal. We looked earlier.

GORANI: Right, from Tokyo, to Shanghai to Seoul. We will tell you if investors are grieving aside relief. And they are, but we will tell you why perhaps people were, as Richard were saying, expecting this outcome and what they are looking forward to go next.

VAUSE: OK. And Chinese state media cooperated the Americanize world in the midst of this debt debacle. We'll go live to Beijing, the largest holder of foreign debt in just a minute.

(COMMERCIAL BREAK)

GORANI: All right, welcome back everyone as we continue our live coverage on CNN and CNN international. What happened in Washington today, the U.S. government's debt ceiling crisis is over for now.

VAUSE: Yes, the question is will we all have to go through this again in January? Was this really all just about a 90-day extension?

Richard Quest spoke with the Harvard economist, Ken Rogoff.

(BEGIN VIDEO CLIP)

QUEST: We got the deal now to January 14th, the middle of January, on the budget, February on the debt ceiling. You know how he said it on this program. Our viewers know this is just more than just kicking the can down the road, isn't it? There is an inability to get this grand bargain. KEN ROGOFF, PROFESSOR OF ECONOMICS, HARVARD UNIVERSITY: I think the odds are as bad when it comes up in January and in February are actually less, I think this was sort of a small win for are certain among many loses that there is certain crazy places you just don't go. Some of a little more optimistic on the outlook from this. But again, there are still all this deep divisions across the house and Senate. It doesn't solve them, and so, it doesn't mean the government will suddenly going to turn very productive.

(END VIDEO CLIP)

VAUSE: Many countries around the world have been keeping a very close watch on this debt drama playing out in Washington.

Kai Ryssdal is the host of public radio's "Marketplace." He joins us now from Los Angeles to talk about how reaction around the world.

Kai, good to speak to you, a lot of people around the world are wondering if this is any way to run the country. So apart from the fear, of the absurd which has played out more than two weeks now, what has been the real damage done to the U.S. economy, especially in the eyes of international investors.

KAI RYSSDAL, HOST, MARKETPLACE: Right. It is absolutely not a wait around economy. And I think it is one of the soft powers that you have seen developing over the past two years really. If you remember in 2011, we went through the same exact thing. And that's when the damage started. That's when the credit rating agencies started saying no. It is not the American economy that is bad. There is plenty of strength in the American economy. It is the American political system that is bad.

They said it two years ago, Fitch said it again yesterday in their notes. And so, now, international investors, I think, they're looking at us slightly cockeyed, Now, I have to back up what Richard said, right? We're the biggest, most liquid market in the world. So, if you are say, the Chinese, and you have a lot of cash flowing around in your economy and the new place to park it, the United States is where to park it. The dollar is where you go. But that doesn't mean as you guys remarked on earlier that the Chinese and others are not thinking about maybe diversifying, you know, de-Americanizing and de- emphasizing their American foreign circles.

VAUSE: And China takes a long view here where Congress seems to take 90 day-view in all of this. But talking about the politics in all of this, does it help in any way with that perception that President Obama managed to stare down the tea party. There is all through Republican conservatives and he gave for concessions?

RYSSDAL: Here is why that matters, and I completely agree with Ken Rogoff. I think in February, when we go through this again, and let's be clear about what that date means, right? The February 7th date means the United States can't borrow after that date. But there will be some moving around money. So, it is not like we're going to be doing this on the sixth of February. It will be next summer sometime. But I think the fact that the Republicans proved that they knew where the out of bounds was, that they knew that the debt limit, the full faith and credit of the United States was not something to be messed with, that makes it less likely that this debate is as acrimonious next time. It doesn't mean we are not going to have it, but everybody knows how it is going to end next time.

VAUSE: And also, coming up is the mid-term election. And so, they will eager now to repeat. This is well at the political context.

Bigger picture here, though, the United States likes to have a moral authority, if you like, when it comes to lecturing other countries about how they should run their economies. Keeping the events, not just in the last 16 days, but you mentioned the 2011 debt ceiling debacle back then. It is going to be hard for the U.S. to maybe lecture the EU about their debt, isn't it?

RYSSDAL: Let's go even further back. Let's go down to -- go back to 2008, in the beginning of the financial crisis which started in this country and was exported to Europe. They're still dealing with it over there. It is very tough now for us to say, I think, listen. You have to get your house in order. I think it is interesting that Christine LaGarde, the managing director of the International Monetary Fund, felt oblige today to come out and say, yes, it is finally a good thing that the American Congress and the American government has decided that they are going to fix this. It is not a position that the United States likes to find itself in. You know? And I think it is kind of a problem.

VAUSE: Yes. Congress has found a solution to a crisis which Congress created. Talking about the U.S. debt, very quickly. This essentially comes down to the debt issue here, Republicans versus Democrats on that. But the U.S. debt burden, as the percentage of GDP is actually coming down, that there is not a short term debt problem here, the United States is not Greece, right? They need a long-term budget deal.

RYSSDAL: That is absolutely correct. In the short term, it is not a problem. We have lots of debt coming up that we need to figure out how to deal with. Our social safety net has some problems in it. But in terms of what we have to do right now, reducing the deficit, annual deficit is not really ought to be on the top of the list.

VAUSE: OK, Kai Ryssdal, Host of "Marketplace," a great radio show. We always listen to it at our house, 6:30 eastern.

We appreciate you being with us. thanks,. Kai.

RYSSDAL: Good to talk to you, guys.

GORANI: All right. And now, let's take a look at how markets are reacting. We told you about the Asian markets just a few minutes ago and how they're reacting positively, although the uptick is mild.

Take a look at the numbers here, and as you can see there, we are seeing the Hong Kong actually down from the session highs, flat there, but The shanghai Compose there up more than half a percentage. The Nikkei 225 also up. I believe we can go to our emerging market there John Defterios who joins me live now from Abu Dhabi with more on this reaction.

So the expectation was, John, that this deal would be reached, even though it would be a last-minute deal. So there is relief, but not surprise.

JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: Indeed, and Hala in Hong Kong after spending time at the world energy Congress in South Korea, where we spoke to some major leaders about this debt crisis, I will get to that in just a moment.

So, we've seen an Asian market rally, but this is well off the highs for the day. Let's take the screen shot again. The Nikkei was trading better than one percent, and most of these markets were trading a half if not three quarters of a percent, going back to the opening hours in Asia. We saw dollar-backed assets rising, as well. Gold up $5 an ounce, and that is trailed off. We saw the dollar stronger against the Japanese yen. That has trailed off. What is that China's even oil coming off of the highs for the day.

There is relief about the rally, but it is not helping the dollar- based assets right now. Investors were not surprised the deal was done, but they are going to be pushing that problem down into January and February again, consternation that the U.S. cannot get its House in order is the buzz word here, in Asia. It is the same thing throughout the emerging markets, as well, Hala.

A disappointment that time and again, this comes back to the table. Now, if you're looking for a silver lining ahead of this deal, is that the Federal Reserve has been very supportive, accommodating for a quantitative easing over the last three years during the financial crisis. There is talk of them pulling back at the end of September, maybe October, maybe November. With this sort of uncertainty in January and February, it is very unlikely that the new chairwoman of the Federal Reserve, Janet Yellen, can come forth and pull out that quantitative easing with so much uncertainty. There is a report this week that global developed market growth is just one percent in 2013. U.S. is going just over two percent. They can't afford to create that sort of uncertainty after this budget debacle, Hala.

GORANI: All right, John Defterios. Thanks very much with international reaction -- John?

VAUSE: OK. Hala said that is how the markets in Asia have been reacting. The bigger question, though, what about the world's second largest economy? We'll go live to Beijing, coming up.

(COMMERCIAL BREAK)

VAUSE: Welcome back as to CNN NEWSROOM. Our continuing coverage of the debt ceiling resolution now. The world has not ended.

GORANI: No, it has not. That say, we were sort of against it there. We were almost over the precipice over the cliff, but finally in the end, as expected, a last-minute deal.

China, of course has been closely watching this debt drama, China is the biggest foreign holder of U.S. debt. So the stakes for Beijing are very high.

And as David McKenzie reports, the world's second largest economy may have realized some unexpected dividends because from the U.S. shutdown.

(BEGIN VIDEOTAPE)

DAVID MCKENZIE, CNN CORRESPONDENT (voice-over): The threat of a default has given the Chinese state media a huge PR opportunity, seeing live proclaiming that the U.S. fiscal failure warrants de- Americanized world.

WILLY LAM, THE CHINESE UNIVERSITY OF HONG KONG: For the past several years, Beijing has been trying to project this power, namely that the China model perhaps is the best one of all, particularly for the developing countries. So this fiscal mess, which Washington has gotten into, I think, has provided them with a good excuse, for ammunition, to shut down the so-called American consensus.

MCKENZIE: It is a message that the communist party hopes pays well at home and abroad. They had pushes their agenda as the world's second largest economy to have more fiscal clout on the world stage. China's wildly successful export driven economy creates enormous cash surpluses. And for decades, the U.S. has been the only market big enough and safe enough for China's technocrats to park much of their cash and have their own export market thrived.

Even with the debt ceiling shambles, China doesn't have a quick fix alternative.

YONGHAO PU, HEAD, WEALTH MANAGEMENT RESOURCES APAC, UBS: Unless the Chinese government is willing to switching from exported driven model towards more consumption or more balanced growth model, you don't have much choice, in fact.

MCKENZIE: A long-term goal of the Chinese government, yes, and in the short-term and even the medium term, China will have to put up with D.C.'s dysfunction, because it still needs U.S. debt just as much as the U.S. needs China's cash.

(END VIDEOTAPE)

VAUSE: David joins us now live from Beijing.

And David, if Beijing is complaining about all of this, really, the Chinese only have themselves to blame, don't they, because essentially they have been gorging on U.S. treasuries for years.

MCKENZIE: Well, decades, and the Chinese leaders might disagree with you, saying in fact it is the U.S. politicians who are to blame for the mess, not them. But yes, China, over this decade, has used the U.S. treasury bills to park their money, the trillions of dollars that they have earned in the trade surplus, with the U.S. particularly. The exchange has been such that China's exported goods got cash in return, and then wants a place to put that cash.

Unlike the U.S., China has a massive cash surplus, trillions of dollars. And it is not just the U.S. treasury bonds that is just part of the picture. They earned more than double that in the U.S. dollar assets.

So, this whole period has been very nerve rocking for Chinese authorities, though it is clear that they will continue putting money in U.S. treasuries because it is a large market, relatively safe, in spite of this wrangling in Washington. And also, a liquid market so they can move money in and out with some ease -- John.

VAUSE: Exactly. So, if China wants to wean itself off the U.S. treasuries, essentially, they're going to have to change their entire economic system. And right now, there doesn't seem to be an appetite for that.

MCKENZIE: Well, certainly nothing that is going to happen in the short or medium term. They can't just flip a switch and change the way they operate this country. Jobs have been gotten for people here in China because of that export-driven economy. They want to shift towards a more consumer or normal economy, but that is going to take years, if not decades.

So really, there is very little room for the communist party to maneuver. They have looked at other options, one economist telling me that there is an active discussion going on in Beijing of how to wean itself off these U.S. dollar assets and U.S. treasury bonds, in part because of the chaos they receive in Washington. But also more importantly, probably, so that China can push its own agenda on the world stage, should become the dominant fiscal player in the coming years and decades. But this is no way they can do that in next few years, at least.

VAUSE: As the crisis played out in Washington, has there been any blowback for the economic planners in Beijing from within China?

MCKENZIE: Well, this is interesting, actually. On social media, particularly waiver, the twitter-like site here, John, people have been complaining, asking pretty straightforward questions, which is if we have all of this money, why are we putting it in a country where there is this dysfunction? And where we could have lost massive amounts of our own money because of a country that we are economic rivals to.

So certainly, because there are around two million citizens who look at the internet, the government is allowing this discussion to happen. So, it all plays within, I think, their ultimate strategy. Throw pie at the face of the U.S. but hope they come up with a deal, which they did, because the U.S. and China need each other like never before.

VAUSE: Like two drunks, stumbling down the street, keeping each other up.

David McKenzie in Beijing live for us, thank you.

GORANI: Well, with the deadlock in Washington resolved, time now for the blame game, just ahead, moderate Republicans point the fingers at their own hardliners.

And while some are being blamed, others are being praised for their role during the Washington shutdown, like this man of the cloth.

That story is also coming up.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Agreements arrives on my desk, I will sign it immediately. We'll begin reopening our government immediately and we can begin to lift this cloud of uncertainty and unease from our businesses and from the American people.

HALA GORANI, CNN ANCHOR: President Obama there, welcome back to CNN NEWSROOM to our viewers in the United States and around the world. I'm Hala Gorani.

JOHN VAUSE, CNN HOST: Yes, I'm John Vause. And of course, the president was speaking a little earlier today. He has now signed the bill and made it at about 28 minutes past midnight. He actually put his signature on that deal which has reopened the government and allowed the Treasury to go out and borrow more money.

GORANI: So we continue our coverage of the drama and chaos in Washington. U.S. federal employees sent home without pay over two weeks ago will finally be returning to work today, Thursday.

VAUSE: That is all because of this congressional compromise, that raised the debt ceiling, avoiding possible default, but as Shannon Travis reports, the joy, the happiness, the relief, it may not last long.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Without objection, the motion is agreed to.

UNIDENTIFIED FEMALE: The motion is adopted.

SHANNON TRAVIS, CNN CORRESPONDENT (voice-over): And with minutes to spare, the U.S. economy dodged a bullet, first, the Senate passed its bipartisan plan with overwhelming support, then hours later, the House with mostly Democratic votes did the same.

Following the vote, the president thanked Republicans and Democrats.

OBAMA: Once these agreements arrives on my desk, I will sign it immediately. We'll begin reopening our government immediately and we can begin to lift this cloud of uncertainty and unease from our businesses and from the American people. TRAVIS (voice-over): Coming this close to a possible default, the president said he hopes all parties learned a lesson. The details of the plan, fund the government until January 15th. Raise the debt limit until February 7th. Set up budget negotiations between the House and Senate in hopes of reaching a long-term deal, strengthen verification measures for those seeking federal subsidies under ObamaCare and provide back pay for furloughed federal workers.

SEN. LINDSEY GRAHAM (R), S.C.: We'll have a second chance between now and January to prove to the American people that the Republican Party can govern, and the Congress can address the problems that face us.

TRAVIS (voice-over): Now, the focus shifts to a larger budget deal. The clock is already ticking to the next economic showdown, where we could do this all over again.

Or will we?

QUESTION: Mr. President, is this going to happen all over again in a few months?

OBAMA: No.

TRAVIS (voice-over): Shannon Travis, CNN, Washington.

(END VIDEOTAPE)

VAUSE: Opinion polls show that Americans place much of the blame for what happened on the Republicans. And as Brian Todd reports, some moderate Republicans feel the same way towards hard-line conservatives within their own ranks.

(BEGIN VIDEOTAPE)

BRIAN TODD, CNN CORRESPONDENT (voice-over): On the Senate floor, John McCain slammed the partisanship on both sides during this shutdown.

SEN. JOHN MCCAIN (R), ARIZ.: It is one of the more shameful chapters that I have seen.

TODD (voice-over): But in print, he was tougher on his own caucus, telling "The New York Times," "Republicans have to understand we have lost this battle as I predicted weeks ago that we would not be able to win."

McCain's Republican ally, Lindsey Graham, says the GOP "really did go too far. We screwed up."

Former Republican congressman Mickey Edwards says while he believes President Obama was too inflexible in the standoff, it was the Republicans who over-reached by hammering on ObamaCare.

MICKEY EDWARDS, THE ASPEN INSTITUTE: The public is not going to believe that the president is responsible, especially when they're trying to undo a law that's already been enacted. So when you tie it in with also the threats about the debt ceiling and possibly reneging on the money the American people have already spent and owe, I don't think it is a message Republicans can win.

TODD (voice-over): Senator Ted Cruz has been skewered from more than the party and by his hometown newspaper, which had endorsed him, comparing him to his predecessor, Kay Bailey Hutchison. "The Houston Chronicle's" editorial page says, "Cruz has been part of the problem in specific situations where Hutchison would have been part of the solution."

Another conservative group whose tactics are now under fire, Heritage Action for America, it pressured wavering Republicans to keep fighting against ObamaCare, keeping tabs on those who didn't by blasting out scorecards.

Their leader dismissed McCain's criticism that this was a losing battle.

MICHAEL NEEDHAM, CEO, HERITAGE ACTIONFOR AMERICA: I think Republicans should spend their energy focusing on ObamaCare and the way it is ruining millions of American people's lives, and not trying to settle scores about policy -- tactical differences that they disagree with.

TODD (voice-over): But analysts say the party will still question the tactics of its own hardliners.

RON BROWNSTEIN, CNN SR. POLITICAL ANALYST: Has that line of argument, that political strategy been discredited by this defeat? There is no other word for it. And does that then allow other voices in the caucus to argue for a different direction?

TODD (voice-over): Another big question coming out of this, does John Boehner keep his speakership? GOP strategists we spoke to say he likely will, that he has got the votes to stay in. And who would want the job anyway, especially after this? Brian Todd, CNN, Washington.

(END VIDEOTAPE)

GORANI: Let's take a closer look at the political fallout from all of this. Paul Singer is political editor for "USA Today" and he joins me now live from Washington, D.C.

The rest of the world is looking at Washington and saying what is this chaotic crisis-to-crisis management of the U.S. government. But in the end, were there winners and were there losers this evening in D.C.?

PAUL SINGER, POLITICAL EDITOR, 'USA TODAY": Well, I think you know, President Obama won. He went into this negotiation saying they were not going to negotiate, there were not going to be any changes to ObamaCare, and we are going to raise the debt ceiling, we are going to extend federal spending. And then we'll have a longer conversation about the budget.

That is what happened in the end, and so he wins and he looks like he is a man of fortitude at this moment.

I think the Republican Party may have lost because they look like they couldn't basically run a two-car train. I mean, it was such a chaotic mess in the House, and the Senate Republicans were at war with the House Republicans and the House Republicans were at war with themselves, it did not look like a well managed operation. And I think it is bad for them in the public eye.

GORANI: (Inaudible). So how is this going to change strategy for the GOP, because as we mentioned this is a short-term deal, we talked about reopening the government and raising the debt ceiling for another few months. So next time around, what will the Republicans do differently?

SINGER: I don't know, and I don't know because the Tea Party wing of the Republican Party that really was driving a lot of this argument, that said we're not going to pass these bills until we get changes in ObamaCare, they believe they won. They believe that they have succeeded in making their case, and in standing up for their people or the grassroots that they represent.

And they may very well want to do it again. And they may not be easily convinced to lay that argument on the table in order to have a more graceful transition or a more graceful negotiation for the party in a couple of months.

GORANI: So what does that mean for the party then, a party divided, where more moderate Republicans that perhaps were more vulnerable in their districts now, are going to have to find a way to navigate this?

SINGER: You know, the problem is there are not a lot of Republicans who are vulnerable in their districts. The way Congress is redistricted, if you're a Republican your biggest concern, really, is running -- is having a primary challenge from your Right, not having a general election challenge from the Left, from a Democrat.

And so for a lot of these folks you will see they vote this way in part because they're trying to fend off a primary challenge from the very conservative Tea Party back in their district, that is where their real argument is, they're not really worried about the November ballot.

GORANI: So this was as you mentioned, a victory for the president, Barack Obama, but what about his second term now?

All the goals that were outlined in the State of the Union address at the beginning of the year, I mean, it has not been in terms of the accomplishments for the president, the most successful year.

SINGER: Right, and tomorrow he will come up to the podium and talk about the other agenda items he would like to address, particularly immigration.

And there are a lot of Republicans who are very angry about the way this particular debt went on, about the debt ceiling, and frankly they may not want to play along.

Another thing to keep in mind is now we're going to have a long period of discussion about eight weeks, about a long-term fiscal plan, including probably talking about arguing over tax increases and spending cuts and possibly entitlement cuts. That is going to be very hard to try and do that and also pass a big immigration bill or something else. Very difficult to get any other agenda items through.

GORANI: But it looks like perhaps more paralysis in the works then?

SINGER: That is what I anticipate, is more paralysis in the works. I mean, frankly, you have to look at the way the American political system is set up at this point. There is no way to drive major change.

The minority, the Republican Party minority, is strong enough to block most things the Democratic majority in the Senate wants to do. In the House, there is a Republican majority. But it is divided over what to do. And they can't get things through the Senate. Paralysis is sort of the way we do things around here, and I expect to see more of it.

GORANI: Paul Singer, really appreciate your time. Thanks very much, political editor for "USA Today," joining us at this late hour, we appreciate you staying up as well, Paul Singer, thanks for being with us.

SINGER: Thanks, Hala, my pleasure.

VAUSE: And there is a new senator heading into that congressional gridlock, Cory Booker, the Democratic mayor of Newark, New Jersey, has won a special election to fill the seat of the late senator, Frank Lautenberg, who could become the first African-American elected to the U.S. Senate since Barack Obama in 2004.

Booker defeated Republican Steve Lonigan. He received a little campaign help from the former Alaska governor, Sarah Palin.

GORANI: (Inaudible) fourth African-American senator elected, Cory Booker. So there you have it.

Now, before the Washington shutdown, few knew the name of the U.S. Senate's chaplain.

Why that is not the case anymore for Chaplain Barry Black.

Also ahead, Japan is beginning a very big cleanup operation after Typhoon Wipha.

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VAUSE: Welcome back to CNN NEWSROOM. You know, (inaudible) say something when negotiations with Iran are going a lot more smoother --

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VAUSE: -- the negotiations in Congress. But that's exactly what's happening right now (inaudible) they're pretty optimistic about talks over Iran's nuclear program.

GORANI: Right. There were smiles all around the table in Geneva. Tehran says a deal could be reached within months.

Jim Sciutto has more on the talks in Switzerland and what will happen next.

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JIM SCIUTTO, CNN CHIEF U.S. SECURITY CORRESPONDENT: After two days of meetings here in Geneva, a clear sense that these talks were unlike any other between Iran and the West in recent memory. A senior U.S. official saying that this official had never seen such intense, detailed, straightforward and candid conversations with the Iranian side.

The Iranians also expressing hope and satisfaction. The Iranian foreign minister, Javad Zarif, saying that these talks could usher in, quote, "a new beginning in our relations with the West."

Even the timeframe that they're talking about for final agreement here, the Iranians saying they believe they could come to a final agreement within a year. The deputy foreign minister moving that up a bit, saying possibly even within 3-6 months. Other U.S. officials, European officials expressing more reservations, but it gives a sense of a new hope here in how these things could proceed and how quickly.

And they have already planned the next round of talks, they will meet again here in Geneva November 7th and 8th, and in the meantime, experts from both sides will meet to discuss the details of Iran's plan.

There are still, though, substantive disagreements, U.S. officials saying that there are differences, for instance, over how quickly and how substantively the sanctions against Iran's economy would be eased, also saying that Iran has to provide much more detail still on its plan for reining in its nuclear program. As one U.S. official said, the work is hard and agreement is not guaranteed. But clearly the start here in Geneva, very hopeful -- Jim Sciutto, CNN, Geneva.

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GORANI: Now a small island off the coast of Japan got the brunt of Typhoon Wipha when it lashed the Tokyo area on Wednesday.

VAUSE: At least 18 people were killed, mostly on Oshima Island. Officials say dozens are still missing after houses were swept away by torrential rains, heavy flooding, as well as mudslides.

GORANI: Well, the storm disrupted millions of lives in Tokyo as well.

VAUSE: Pedram Javaheri standing by at the International Weather Center with all the details on this.

Hey, Pedram. PEDRAM JAVAHERI, AMS METEOROLOGIST: Hey, guys, yes, the storm system was a category 4 equivalent just a couple of days ago, so we were talking about a menacing storm that was approaching a city of Tokyo, population roughly 9 million people. And this was the track on Thursday last week into Friday, and eventually as it pulled up to the coastline on Tuesday, within 100 kilometers or 60 miles away from a population center of about 9 million people there.

But these were the scenes Wednesday afternoon across Tokyo, wind gusts, hurricane force across this region, keep in mind with a major city like Tokyo, you've got these tall buildings, what we call the Bernoulli effect takes place, where the winds are really funneled and strengthened through these high structures there, causing substantial damage.

Some 500 domestic flights, international flights cancelled across the Tokyo airports, bullet train services also halted. They've all now been restored across that region, but now power outages across the region as well. But the damage done across Oshima, this being about, say, 120 kilometers or 75 miles south of Tokyo, the island there, with the city of Oshima, population 9,000 people, the amount of rainfall that came down here on Wednesday, literally it was hell on Earth Wednesday across this region, 823 millimeters of rainfall, that is 32 inches of rainfall in just one day. Take the city of London, dubious distinction for rainfall; take the city of Seattle in the U.S. state of Washington, that is the amount of rainfall they see in an the entire year, Oshima saw on Wednesday afternoon. That is why we have about 40 people missing across this region, at least 17 fatalities. And of course, the rainfall still continuing in this region. They have set daily records, 24-hour records, most rainfall in a two-hour period occurring here in the past 24 hours.

And John and Hala, we do have another typhoon, this is the 26th one of the season sitting out there in the western Pacific. The track could get very close to Oshima and also Tokyo, so we'll watch this all weekend across this region.

VAUSE: It has just been one storm after the other.

JAVAHERI: The busiest since 1995 in the western Pacific, yes.

VAUSE: OK, Pedram, thank you for that.

JAVAHERI: You bet.

VAUSE: We'll take a short break here on CNN NEWSROOM, but just ahead.

GORANI: Well, call it "Let's Make a Deal" D.C. edition, the lighter side of the U.S. budget battle.

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GORANI: The U.S. government shutdown made him perhaps the most famous chaplain in America. VAUSE: Yes, we're talking about Barry Black, he officially opens each session of the U.S. Senate. He used his daily prayers over the last couple of weeks to scold senators for shutting down the government.

GORANI: Here is what he said Wednesday as the deal to end the shutdown was taking shape.

(BEGIN VIDEO CLIP) REAR ADMIRAL BARRY BLACK (RET.), U.S. SENATE CHAPLAIN: Lord, we see a faint light at the end of a long, dark tunnel. Thank you for lawmakers who understand that when everyone loses, America loses. Lord, keep them from making any decision that will seem reckless in the sober light of hindsight. We pray in Your mighty name, amen.

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VAUSE: A great orator and voice, as well, makes you wonder what he would have said if the deal had not worked out. But of course it did.

And Senate Majority Leader Harry Reid paid tribute to the outspoken chaplain.

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SEN. HARRY REID, MAJORITY LEADER: Admiral Black has, for me during this long period of crisis we've had in the country, been a voice of stability, a voice of inspiration to me, and I'm being very selfish in saying me; it has been for the entire Senate and for the country.

His heartfelt prayers are so timely and so sensitive to the needs of our country and the need that we all have to call upon our spirituality to get us through periods of difficulty.

(END VIDEO CLIP)

GORANI: High praise there, but perhaps the chaplain's highest honor came last weekend when he was portrayed in a very funny parody on TV's "Saturday Night Live."

VAUSE: Yes, indeed, that's high praise, I guess

The ink is still not dry on that deal to restart the government. But it doesn't mean we can't have a bit of a laugh.

GORANI: No, you can't. Jeanne Moos, of course, doesn't think so and she's not alone.

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JEANNE MOOS, CNN CORRESPONDENT (voice-over): Senator Ted Cruz, poster boy for the shutdown, lead the press pack as he headed for -- wait a minute, the microphone's back there, about face, but not much saving face as Uncle Sam turned around the boat before it went over the falls, say goodbye to all those shutdown jokes.

JIMMY KIMMEL, ABC HOST: Our Congress today, in case you haven't heard, continued to play America's least favorite game show, "No Deal or No Deal."

UNIDENTIFIED MALE: It's time for "Let's Make a Deal."

UNIDENTIFIED FEMALE: There is a deal in the works.

UNIDENTIFIED MALE: This is a done deal.

WOLF BLITZER, CNN HOST: It's not a deal until there's a deal.

RICHARD QUEST, CNN HOST: The mere scintilla of a deal.

UNIDENTIFIED MALE: Get this puppy, like Stevie Wonder once said, signed, sealed and delivered.

MOOS (voice-over): Or as the Senate chaplain put it:

BLACK: Lord, we see a faint light at the end of a long, dark tunnel.

MOOS (voice-over): Amen.

Now that the shutdown and possible default are behind us, in the rear- view mirror, so to speak, so are some of those special moments.

DEFAZIO: I'm going to demonstrate if the Republican side will look at me, I will show you who is responsible. Right here, here you are, who is responsible for shutting down the national parks.

MOOS (voice-over): But what are we going to do without all of those weird metaphors?

Senator Cruz was compared to a rabbit by a Republican consultant.

ALEX CASTELLANOS, REPUBLICAN STRATEGIST: He is having bunny sex, the snowshoe hare, every 10 years, multiplies sixfold.

ANDERSON COOPER, CNN HOST: Are you high?

(LAUGHTER)

MOOS (voice-over): Just hours before a deal was struck, a FOX News psychiatrist used President Obama's tough talk.

OBAMA: You do not hold people hostage.

MOOS (voice-over): To psychoanalyze the president.

DR. KEITH ABLOW, PSYCHIATRIST: There's a real victim mentality here. I think the president, going back to when his dad abandoned him, when his mother left him with his grandparents, the president sees himself as the victim-in-chief.

MOOS (voice-over): It is enough to make your head explode. Cartoonist Nate Dealer (ph) turned the movie "Gravity" into "Insanity," with the spaceship labeled Shutdown exploding, and the voters untethered, floating off into space.

The most succinct announcement of crisis averted was a tweet by Pee- Wee Herman, "No government default, 15 more days till Halloween."

Maybe Congress deserves a prize for making a deal.

UNIDENTIFIED MALE: It's a trip to Puerto Rico...

MOOS (voice-over): Make it one way, why stop at finger pointing when you can point mirrors? Jeannie Moos, CNN --

DEFAZIO: ... who's responsible--

MOOS (voice-over): -- New York.

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VAUSE: (Inaudible) of course, was a very long day for lawmakers and everyone else on Capitol Hill.

GORANI: One of the House stenographers reached her breaking point apparently. She stormed the floor while members were voting. Take a look.

It is hard to see and hear her with all that is going but she is there at the center of the podium. You see her highlighted there. She yelled, "Do not be deceived. God shall not be mocked," and quote, "A house divided cannot stand."

VAUSE: She was escorted by the sergeant-at-arms, people who know her though say they were very surprised by her actions.

Well, I'm John Vause.

GORANI: And I'm Hala Gorani. Another hour of CNN NEWSROOM, straight ahead, stay with us.

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VAUSE: Hello again, you are back in the CNN NEWSROOM. I'm John Vause.

GORANI: I'm Hala Gorani. We want to welcome our viewers in the U.S. and around the world, we continue our live coverage of what happened in Congress today, and that is of course Congress reauthorizing the opening of the U.S. government and raising the debt ceiling after 16 days of furloughs and failures and a $24 billion hit to the American economy, according to S&P, the U.S. government is once again open for business.

VAUSE: Indeed, President Barack Obama signed the bill earlier today that ends the partial government shutdown and avoids what could have been a catastrophic default on U.S. debts.

GORANI: Here are the nuts and bolts of the deal. It was approved by bipartisan majorities, in both the House and the Senate. It will fund the government until January 15th. VAUSE: The plan would also extend the debt ceiling until February 7th and in the end, it may earn a very small change to ObamaCare, what sparked this crisis in the first place, including a provision for income --