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Deal on Debt; Government Shutdown Impact; Second Dry Ice Bomb Goes Off in LAX; Interview with Former U.S. Senator Tim Hutchison

Aired October 15, 2013 - 09:00   ET


CAROL COSTELLO, CNN ANCHOR: Good morning and thank you so much for joining me. I'm Carol Costello. Washington by the numbers: Day 15 of the partial government shutdown and less than 40 hours until a potential economic disaster of a debt default. Right now on Capitol Hill, an eleventh hour deal taking shape behind closed doors. The Senate's two top men, Democrat Harry Reid and Republican Mitch McConnell say they're both optimistic they can finalize a deal today.

Later this morning, McConnell will meet with his fellow GOP senators to present a tentative agreement. But the biggest challenge is likely in the GOP-controlled House. Right now, Republican House leaders are summiting their troops to discuss what's in the plan and what their next move is.

This morning there are a lot of moving parts and not much time. Let's get the latest from CNN's Jim Acosta. He's at the White House this morning.

Good morning, Jim.

JIM ACOSTA, CNN NATIONAL POLITICAL CORRESPONDENT: Good morning, Carol. President Obama appears to be quietly working the phones in search of a deal. A GOP source confirms to CNN that the president called Senate Minority Leader Mitch McConnell yesterday about this compromise agreement.

One thing we should also point out is that the White House is now also signaling that the president does support this budget deal that's been worked out by the Senate leaders, in part because it includes a debt ceiling increase potentially for four months. That would give both sides, Democrats and Republicans, some time to work through this budget night nightmare.


SEN. HARRY REID (D), MAJORITY LEADER: Mr. President, we know it's been a difficult time for everyone.

ACOSTA (voice-over): Lo and behold, two experienced Capitol Hill brawlers -- Senate majority leader Harry Reid and minority leader Mitch McConnell -- may have actually found the path to budget peace in Washington.

REID: We are not there yet, but tremendous progress and everyone just needs to be patient. ACOSTA: Both men shared the news on the Senate floor that they are close to a deal that would both reopen the government and raise the nation's debt ceiling before potential default in less than two days.

SEN. MITCH MCCONNELL (R) MINORITY LEADER: I think it's safe to say we've made substantial progress. And we look forward to making more progress in the near future.

UNIDENTIFIED MALE: Is there a deal?

ACOSTA: But as Vice President Joe Biden indicated by staying mum on the subject, it's not over yet.

Here is how the deal would work. The government funded through mid January, the debt ceiling, extended to early February. In a nod to GOP opposition to Obamacare, changes to that law are also under consideration. Including new income verification requirements for health care subsidies.

Those are tweaks to Obamacare the president may not support. But he is all but pressuring Republicans to take the Senate deal.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: If Republicans aren't willing to set aside some of their partisan concerns in order to do what's right for the country, we stand a good chance of defaulting.

ACOSTA: A new ABC News/"Washington Post" poll finds the public is furious with the GOP, with 74 percent saying they disapprove of how Republicans have handled budget negotiations, versus 53 percent who feel the same about the president. But some House Republicans are holding their ground, still demanding concessions.

REP. RAUL LABRADOR (R), IDAHO: I like to do something that he gets something, and I get something.

ACOSTA: Democratic Senator Barbara Boxer compared the GOP's tactics to acts of violence.

SEN. BARBARA BOXER (D), CALIFORNIA: But I have to say when you start acting like you're committing domestic abuse, you've got a problem. I love you, dear, but -- you know, I'm shutting down your entire government.


ACOSTA: Now that kind of rhetoric is not going to go over well with Senate Republicans who meet later this morning to go over the details of this potential agreement. Meanwhile, in the House, House Republicans are talking about this agreement right now, Carol. And, of course, that is where all eyes will be turning shortly if this agreement does get out of the Senate. And that is because House Speaker John Boehner has a very difficult task on his hands.

Many conservative Tea Party-backed Republicans are, of course, complaining out loud about this deal and some, as you know, even doubt the effects of a potential default that would be present in the economy here in the United States and around the world. They just don't think it's going to be as bad as the White House and even some in their own party say it will be -- Carol.

COSTELLO: So, Jim, it just sounds like the same thing over and over. Do you know how many times we've told our viewers about closed-door meetings and they're close to a deal and this time might be it? And -- it's depressing.

ACOSTA: Yes. Right. But this time there's only -- there are only two days left, less than two days left. And, you know, the way this has worked -- and you've seen this before, the fiscal cliff. The -- you know, the debt ceiling -- the debt deal back in 2011. It's when their backs are up against the wall and their shirttails are on fire that they start to get serious. And that might be why they're getting close at this point.

I think that the odds are that they're working towards an agreement at this point, Carol, better than the odds were about a week ago.

COSTELLO: OK. Well, that ain't saying much, but it's saying something.

ACOSTA: Got to be optimistic.

COSTELLO: That's right. Jim Acosta, reporting live from the White House this morning.

Later this morning angry veterans will protest at the World War II Memorial. They'll call for an end to this partial government shutdown, as in like right now, adding to the anger we've already seen at the White House.

Conservative protesters dismantled barricades that had closed off the World War II Memorial and the Lincoln Memorial. And it was a picture perfect moment for one senator. Even though Ted Cruz has actually been pivotal in the Washington gridlock, he says the politics are just plain un-American.


SEN. TED CRUZ (R) TEXAS: Why did the federal government spend money to erect barricades to keep people out of Mt. Vernon? Why did the federal government spend money to erect barricades to keep people out of Mt. Rushmore?

Look, our veterans should be above politics. Enough games.


COSTELLO: Let's have a real conversation about our veterans and what this partial government shutdown means to them. Because veterans and their families could pay a much higher price. According to the V.A., if the shutdown drags on, it will not be able to send out more than five million benefit checks on November 1st.

That includes disability and pension payments for veterans and special benefits for their families. In all, those checks add up to about $6 billion in payments. It's that potential loss of financial support that mobilizes the vets for next hour's protest.

And millions of other Americans will also feel the economic sting of Washington's gridlock, if they haven't already.

Christine Romans joins us live from New York to tell us about that side of the story.

CHRISTINE ROMANS, CNN BUSINESS ANCHOR: About $20 billion so far, that the analysis of Mark Zandi from Moody's Analytics. He's been watching this very, very closely -- $20 billion so far.

When you think about that, Carol, put it into context. That's like the economic damage caused by, say, a hurricane or a big storm except this is a hurricane or big storm, a national disaster caused by Washington.

Now you can make up that lost economic activity if it's just a brief pullback and then things get back to normal. But it hasn't been normal for a couple of years. In fact, when you look at the budget battles all together since 2009, here is the analysis for how many jobs have been lost, how much economic activity has vaporized and jobs lost.

Economic advisers, 900,000 jobs since the budget battles began in 2009. Mark Zandi from Moody's, he says it's about a million jobs. That job loss tied directly to the fighting over the debt situation in Washington. So in the very near term, $20 billion just from this particular skirmish. Longer term much. much more than that.

And we're seeing everything from veterans benefits to you're starting to hear people talk about using payday lenders, federal workers using payday lenders trying to get money so that they can keep their mortgages going. We know that the -- there's been some paperwork tie- ups with mortgage origination. We know that all kinds of different businesses from fishing to tourism to you name it have said that this has impacted their bottom line already, Carol.

So this is something that is not just in the process, in the halls of Congress. This is something that is at our kitchen tables right now, no, question, Carol.

COSTELLO: Well, let's talk about this, too, because some states in our great nation are taking matters into their own hands. They're not waiting for the federal government to get it together. In fact in Arizona they're thinking about -- they've reopened the Grand Canyon, right?

ROMANS: Right.

COSTELLO: But it will cost the state of Arizona $93,000 per day.


COSTELLO: The Statue of Liberty reopened but it will cost the state of New York, what, $61,000 per day? In South Dakota, they've reopened Mount Rushmore, $15,200 per day. In Utah they decided let's open our national parks, but it will cost Utah $167,000 per day.

Now those are state -- those are state taxpayer monies, right?


ROMANS: Yes. And --

COSTELLO: We think this federal government is going to pay them back. But will it?

ROMANS: Well -- now, look, and that -- those are symbolic things, too, right? Those are -- those are sort of tourist Meccas, of course very important for motel owners and very important for tour operators around the region.

But when you're talking about Social Security checks, when you're talking about getting certain licenses so that you can keep your business going, so you can legally operate, when you're talking about actually putting food on the table, wow, I mean, some of these numbers are really stunning.

Now what the markets are telling us, Carol, is that -- you know, you look at stock. Stocks are up 500 points in the last four days because investors are thinking there is no way, there is no way in Washington they could be so stupid to allow this to get worse. There's -- you know, I mean, the people who are running money in this country are saying no way could they -- could this go on forever.

But people at home, federal workers and people who rely on the federal government for paychecks, they're saying, yes, they could be so stupid because we feel it already.


COSTELLO: We do. And, you know, sadly, a lot of people believe, yes, Congress could be that stupid. The president could be that stupid. Because they can't get it together.

ROMANS: Horrible to laugh about, but what can you do?

COSTELLO: I know. You've got to laugh or you'll cry. Christine Romans, many thanks.

Another unintended victim of the shutdown. Get this, it's the ladies. That's the first lady's garden. It sprawls across some 1500 square feet on the grounds of the White House. Once carefully and beautifully manicured, it's now neglected and choked with weeds. That's according to a foodie Web site that carefully monitors such things. And yes, there is such a thing.

According to Obama Food (ph), Orama (ph) vegetables are rotting on their vines because of the drastic cuts to the National Park Service gardeners. Just a lot of rotting potatoes in that garden this morning. Just keeping you ever informed. Still to come in the NEWSROOM, a giant waste of time. That's how some Republicans are characterizing the fight against Obamacare. So why are some party faithful still pushing to defund the law?

I'll talk to one former Republican senator next.


COSTELLO: Checking our top stories at 14 minutes past.

We are expecting Al Qaida terror suspect Abu Anas al-Libi to appear in federal court in New York City today. He's accused of playing a role in the deadly U.S. embassy bombings in Africa in 1988. Al-Libi was snatched 10 days ago during a raid in Tripoli, Libya and is now undergoing medical treatment in New York for hepatitis. His wife says he has a severe case of hepatitis C, a liver disease that can result in long-term health problems, even death.

A heartbreak on a Carnival cruise ship. A 6-year-old boy is dead after drowning in a swimming pool. Passenger jumped in and tried to save the boy, but his efforts failed.


SHAINA SHAW, PASSENGER WHO TRIED TO SAVE THE BOY: Out of nowhere, I heard all of this commotion. Actually lifted the boy up. I actually helped to prop his body up in the proper position so they could perform the CPR. Everyone was crying. The family was distraught. They had to pull the mother away. And the father. The father was next to his son, pleading and begging his son to stay alive.


COSTELLO: Drownings on cruise ships do not happen often and cruise ships are not required to have lifeguards on duty.

The NSA under fire again, facing allegations of collecting hundreds of millions of personal contact lists every year from e-mail and messaging accounts worldwide, including those of many Americans. The leak comes from Edward Snowden, who shared documents with "The Washington Post." The NSA says it's focused on foreign targets and is not interested in personal information about ordinary Americans.

BlackBerry wants you to know it's not dead. Today, the Smartphone maker published an open letter stressing their profits and commitment to get back on top saying, quote, "These are no doubt challenging times for us. We don't underestimate the situation or ignore the challenges we're facing. We are making the difficult changes necessary to strengthen BlackBerry."

The letter does not mention BlackBerry is for sale and has received a preliminary $4.7 billion buyout offer.

For the second time in two days, a dry ice bomb exploded in a terminal at the Los Angeles International Airport. Police say the device was found in an employee restroom along with several others that did not go off.

CNN's Rene Marsh is in Washington to talk more about this.

Good morning.


It happened again. Who was behind this second dry ice bomb that went off at LAX Airport? That's what investigators are working to answer this morning.

Now, last night, the explosion happened at the Bradley Terminal. It triggered a massive response. We're talking about the bomb squad as well as police arriving on the scene there.

Now, there were no injuries that have been reported so far. But police say the restricted area where last night's dry ice bomb went off was not accessible to the gate area in the terminal. Police also telling CNN it's still early in the investigation, but at this point they believe there is no link to terrorism.

But what's so peculiar about all of this is this is the second dry ice explosion that was set off in the very same airport, second straight day. The day before, Sunday night, dry ice was placed in a plastic bottle and exploded in an employee restroom that caused a brief shutdown in terminal two. No injuries in that incident as well -- Carol.

COSTELLO: Rene Marsh, reporting live from Washington -- thank you.

Still to come in THE NEWSROOM: Congress searches for a debt deal as the House and Senate huddle on Capitol Hill. I'll talk to a former lawmaker who is part of the push to find a bipartisan fix to the nation's financial problems.

Is there one? Could it be possible? I don't know.


COSTELLO: The fight over the debt ceiling and the government shutdown exposing not only cracks in Congress, but within the Republican Party. A growing number of party members are now speaking out, slamming the Obamacare defunding strategy at the center of this fight, along with the man at the center of that strategy, Senator Ted Cruz.


SEN. BOB CORKER (R), TENNESSEE: There's been this defunding effort, which was never realistic. You're not going to have a moment like this to leverage doing away with the central agenda item of the president. It's just not going to happen. So we basically wasted two months.

REP. PETER KING (R), NEW YORK: We allowed 35 or 40 people, basically, to threaten to bring the House down. As a result of that, we're in this position. Ted Cruz was the one behind it. This was a stunt by him. As a result of that, the country is on the verge of default and the government is shut down.

REP. MICHAEL GRIMM (R), NEW YORK: To change this law you'll neat a supermajority to get rid of it. We can tinker around the edges where there's bipartisan support. But there's very little bipartisan support. And we're going to have to explain that to the American people and say, we've done the best we can but we can't ruin or destroy the country because of it.


COSTELLO: Joining me now, Tim Hutchinson, a member of Fix the Debt, a bipartisan group of former lawmakers pushing for a comprehensive plan to fix the nation's finances. Good morning.

TIM HUTCHNISON, FIX THE DEBT: Good morning, Carol. How are you?

COSTELLO: Well, I'm doing a little better, depending on what the answer to -- your answer to my question will be.

So, the Senate supposedly has come up with a potential deal. But essentially what this deal does is it just sort of -- let's use that old tired term, it just kicks the can down the road. We'll have another budget fight, we'll have another debt ceiling fight in 2014.

So, some Americans might say, why bother?

HUTCHINSON: Well, I, like most folks, like you, were glad that there's some kind of deal in the works. I hope it will pass the House of Representatives. I'm disappointed that our leaders continue to take us down this path of lurching from crisis to crisis, coming right to the edge. Doing an 11th hour small ball deal that doesn't really address the underpinning problem -- the great threat to our country, which is this unsustainable national debt.

COSTELLO: OK. Let's start there. We heard what you said. So this whole fight this time around was over Obamacare. Was that a waste of time?

HUTCHINSON: It was a big distraction from the great threat -- I think most of us see -- which is the national debt. We were focused on Obamacare. All the attention was on Obamacare.

When we got to -- we've got to reform our entitlements. I was there in the '95-'96 shutdown. One of the big differences is as bad as that was, there was a lot of negotiation from the very beginning and it was totally focused on the budget. This time we were off talking this Obamacare policy issue and not focused on the real problem, which is out of control spending.

COSTELLO: OK. So maybe we should focus on out-of-control spending. I don't think any American would disagree with you there. But should those issues be tied to the debt ceiling? Or should we, you know, talk like grown-ups in the halls of Congress and come up with a budget, which we haven't had in five years?

HUTCHINSON: Well, Carol, we are where we are. I think that we can -- there's plenty of blame to go around in Washington, D.C.

I hope that this deal goes through and that the ensuing few - months that we have before we reach our next big deadline will be focused on a thoughtful and comprehensive entitlement reform plan that will have bipartisan support.

That's what Fix the Debt is all about. That's where we want the focus to be the next two months so that no one ends up coming to the cliff again with another small ball deal and not really addressing the great threat to my grandchildren, to millions of young kids around this country who are going to inherit our reckless -- the results of our reckless spending.

COSTELLO: Just another thought about this potential deal in the Senate. It has to pass the Senate, right, and goes to the House. A lot of House Republican, especially conservative Republicans are upset that there's nothing in the deal that really addresses Obamacare in a big way. Right?


COSTELLO: Erick Erickson on this blog this morning, he strongly opposed to this current plan. He writes in part, quote, "Americans need house Republicans to fight. Senate Republicans are openly hoping to blame a debt default on Ted Cruz. They want to blame him for everything. They hate being seen as the capitulators that they are."

Do you think the House will derail this deal?

HUTCHINSON: Well, my great worry is that we'll stumble into what's called an accidental default. Everybody says they would like to find a way out of this. But one small miscalculation when you're less than two days away could result in an accidental default that could have calamitous consequences.

So, yes, I worry about the House. I think if it passes the House, it will require a lot of Democratic votes for it to happen. They're definitely going to be some broad Republican opposition to the plan the Senate is talking about.

So it's pretty worrisome with lots of two days left.

COSTELLO: Who needs to be the leader in this? Who needs to come out and make this happen?

HUTCHINSON: There's been a real vacuum of leadership, I think, all the way around. At this point, the pressure on John Boehner -- and I love John and I wouldn't want his job for anything. But an awful lot of the responsibility now is going to fall on his shoulders, on what direction the House goes.

They're having a conference as we speak. And I hope that he is successful in persuading cool heads to prevail. COSTELLO: Does it come town for him -- is it between keeping his job and doing what's right for the country?

HUTCHINSON: I don't know if it's a matter of keeping his job. But it certainly will put his job in jeopardy. And he knows that.

But I know John Boehner and I believe he loves this country and he's going to ultimately do what's right for this country.

COSTELLO: Senator Tim Hutchinson, thank you for joining me this morning. I appreciate it.

HUTCHINSON: Thank you, Carol.

COSTELLO: Still to come in THE NEWSROOM, for Republicans, it is a critical day on Capitol Hill as lawmakers in the House and Senate try to find common ground on a debt deal. A live report from Capitol Hill next.


COSTELLO: Good morning. Thank you so much for being with me this morning. I'm Carol Costello.