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The Situation Room

Government Shutdown; Interview With Senator John McCain

Aired October 09, 2013 - 18:00   ET

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

WOLF BLITZER, CNN ANCHOR: Happening now: shutdown crisis talks at the White House. We're digging for details about the president's meeting with lawmakers and his concerns about image control.

Also, shutdown outrage. Members of Congress are working out while federal workers are doing without. We have new examples of a system that many Americans find random and unfair.

And Senator John McCain joins us. He's pleading with both parties right now to sit down and try to negotiate a way out of the madness.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: Stop. Stop attacking each other.

(END VIDEO CLIP)

BLITZER: We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer, and you're in THE SITUATION ROOM.

Every day, every minute, the United States of America is getting closer to a potentially a disastrous double whammy, a possible default on the nation's debt on top of a partial government shutdown. President Obama has been meeting with House Democrats, as he works for a way out of this crisis and his standoff with Republicans.

He faces a much tougher crowd tomorrow when he meets with the House GOP leaders.

Our senior White House correspondent, Jim Acosta, is following all of these late-breaking developments for us.

What is going on, Jim?

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: Wolf, White House officials say President Obama is meeting with as many members of Congress as he can before next week's debt ceiling deadline. First up this evening are the House Democrats. The meeting should break up at any moment now, but the most important message this White House is trying to get out today is that military service members and their families are not left behind in the shutdown.

(BEGIN VIDEOTAPE)

ACOSTA (voice-over): With the Obama administration warning of an economic catastrophe if the U.S. crashes through the debt ceiling in eight days, the president is inviting every member of Congress to the White House this week. The first group on the invite list, House Democrats.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: This is about the president meeting with as many members of Congress as he can to talk about these very important issues and the need to make sure that we don't inflict severe damage on our economy and on our middle class unnecessarily .

ACOSTA: But both sides can't even agree on who will attend the meetings. House Speaker John Boehner notified the White House Republicans will send their leadership and key committee chairmen, but not every member.

A Boehner spokesman said in a statement, "A meeting is only worthwhile if it is focused on finding solution."

White House Press Secretary Jay Carney fired back, saying "The president is disappointed, and he will talk to anyone anytime and looks forward to their visit to the White House, but will not pay the Republicans ransom for doing their job."

That kind of bickering explains why the favorability of the GOP has plunged to just 28 percent in a Gallup poll, not much better for Democrats at 43 percent. The growing public outrage explains why both parties were moving frantically to restore death benefits to military families with the White House announcing it was handling it administratively, as the House prepared to approve its own fix.

(CROSSTALK)

CARNEY: The president, he was not pleased to learn of this problem, and he has directed the OMB and his lawyers to find a solution. He expects to have one today.

ACOSTA: But the Defense Department warned of this painful side effect of the shutdown days ago.

BOB HALE, UNDERSECRETARY OF DEFENSE: We would also be required to do some other bad things the our people. Just some examples, we couldn't immediately pay death gratuities to those who die on active duty during the lapse.

ACOSTA: One optic the president could control, his selection of Janet Yellen as the next chair of the Federal Reserve, a move expected to calm global financial markets, at least for now.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We have made progress, and we shouldn't do anything to threaten that progress, for these hard-won gains have made a difference to millions of Americans.

(END VIDEOTAPE)

ACOSTA: As for Janet Yellen, she is widely expected to be confirmed by the Senate. And as for those military benefits, a White House official tells CNN that the Defense Department's arrangement with the military charity to provide those payments until the government reopens should resolve the issue.

BLITZER: Let's see what happens on that front. Jim Acosta, thank you.

On this, the ninth day of the partial government shutdown, there are plenty of new reasons for Americans to be outraged. While some people are feeling the pain, others are still getting perks.

Let's bring in CNN's Erin McPike.

What's going on, on this front, Erin?

ERIN MCPIKE, CNN CORRESPONDENT: Wolf, with some of these services shut off, some people are starting to fill in for the government.

(BEGIN VIDEOTAPE)

MCPIKE (voice-over): Is this what it's come to?

CHRIS COX, RESIDENT OF SOUTH CAROLINA: It's like a golf course around here. I have over 100 hours logged in eight days.

MCPIKE: With the National Mall shut down, Charleston, South Carolina, resident Chris Cox trekked up to Washington to clean it up himself.

COX: I brought the blower and the lawn mowers, and I started cutting the grass this morning. At the end of the day, the citizens are the stewards of the memorials.

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

MCPIKE: Inside Grand Canyon National Park, another problem. The park is closed and seasonal workers without pay are running out of money to buy food. Local food banks are pitching in to help out.

MCCAIN: Thousands of people inside the park without food or pay. In this great nation, we're having to have charities deliver food to people who are trapped in the Grand Canyon.

MCPIKE: And back on Capitol Hill, the gym where members of Congress can work out? Open for business. It was deemed essential for the members who voted to shut down the rest of the government.

REP. EARL BLUMENAUER (D), OREGON: The electricity, the hot water, the towels, they're not provided by gym fairies. They're provided by taxpayers.

MCPIKE: Though some want to hold onto their exercise routine.

REP. BRUCE BRALEY (D), IOWA: I find it ironic there's a big push to shut down the House gym, when it's one of the rare places people come together and actually talk about how we can build relationships. There's hardly anybody working down there. There's no towel service.

MCPIKE: Meanwhile, federal workers are getting whiplash from who is in and who is out on the essential list. Tens of thousands have applied for temporary unemployment insurance. The intelligence community, which furloughed 70 percent of its staff last week, decided some CIA staff are necessary after all.

UNIDENTIFIED FEMALE: Thanks for your service.

MCPIKE: But over at the Nuclear Regulatory Commission, the money ran dry. And today they furloughed thousands, with Congress yet to guarantee they will be paid for the missed work.

UNIDENTIFIED FEMALE: Take care.

(END VIDEOTAPE)

MCPIKE: Now, like the congressional gym, some things that seem like extras are beginning to cause outrage. The Utah National Guard apparently placed an order for a $47,000 mechanical bull, which they say was for recruiting purposes. They have since told us that they delayed that order.

Also, the State Department, the day of the shutdown, the day it began, apparently awarded a $5 million contract -- this is what "The Daily Mail" reported today -- for stemware for U.S. embassies. They say that contract may be for a lot less and they haven't cut the check yet.

BLITZER: There's a lot of outrageous things going on here in Washington right now.

Thanks very much, Erin McPike, for that report.

Still ahead, I will speak live with Republican Senator John McCain and ask him how he would break the painful deadlock here in the nation's capital.

If you have a question for the senator, tweet that question to us. Don't forget to use the hashtag SITROOM.

We're also learning about early warnings that the Obamacare enrollment Web site had some serious problems, but that the White House decided to launch it anyway.

(COMMERCIAL BREAK)

BLITZER: New Jersey Governor Chris Christie says he doesn't like Obamacare, but he's learned to live with it. The possible presidential hopeful is distancing himself from the tactics of some House Republicans on Obamacare and the government shutdown. Here's what he said in a reelection campaign debate last night.

(BEGIN VIDEO CLIP)

GOV. CHRIS CHRISTIE (R), NEW JERSEY: I don't agree with the law, but we have complied with it, and that's the job you have as governor. You don't always agree with every law you have to enforce. But I have enforced this one and I'm proud of our record on health care. I think we have done a great job.

(END VIDEO CLIP)

BLITZER: More on the politics of Obamacare and the shutdown right after this.

(COMMERCIAL BREAK)

BLITZER: Today, the White House is standing by its explanation for the glitches with the Obamacare Web site, blaming them on the large number of people trying to log on and enroll. The administration apparently was warned in advance that the system had some serious problems, but went ahead with the rollout anyway.

Brian Todd has been taking a closer at what happened.

What are you finding out?

BRIAN TODD, CNN CORRESPONDENT: Wolf, we're hearing of contentious meetings between insurance execs and the White House in the months leading up to this rollout where warnings were issued that the system just wasn't ready.

A short time ago, one computer data expert took us through his own frustrations with the system.

(BEGIN VIDEOTAPE)

TODD (voice-over): Luke Chung operates a database company in Northern Virginia. He is an expert on heavily trafficked Web sites, but even he is frustrated navigating healthcare.gov.

LUKE CHUNG, PRESIDENT, FMS INC.: Oh, this is interesting.

TODD (on camera): What do you got?

CHUNG: I don't know what I have. I just tried to log into my account that I have already established.

TODD: And?

CHUNG: And it says unexpected error.

TODD (voice-over): Since the Obamacare rollout last wee, Chung has been trying to only get quotes on prices, not even to enroll.

(on camera): Error messages, slow connections, getting booted out of the system, other problems have exasperated hundreds of thousands of uninsured who have tried to log on. And now we're hearing the Obama administration was warned well ahead of the rollout that the online exchange had big problems.

(voice-over): One Democratic ally of the administration, Congressman Robert Andrews, says he spoke to the White House months before the unveiling.

REP. ROBERT ANDREWS (D), NEW JERSEY: I discussed with White House people things they already knew, which was that an undertaking of this size was going to be very complex.

TODD: Andrews believes the White House was on top of the situation.

Robert Laszewski, a health care consultant, disagrees. He says many of his clients, major insurers, had contentious meetings with the administration ahead of the rollout.

ROBERT LASZEWSKI, HEALTH CARE CONSULTANT: Insurance executives had been warning the administration bluntly that this whole system is not ready for prime time. It wasn't going to be ready on October 1 to appropriately enroll people.

TODD: But he says the White House ignored them.

LASZEWSKI: The administration didn't seem to understand the seriousness of it. They were blase about it. They continued to assure the industry that there weren't going to be any problems.

TODD: And Laszewski says that they were not about to delay the rollout. The White House insists it listened to insurers and knew about the problems.

CARNEY: Everyone was aware and we told you that there would be glitches.

TODD: What they're not telling us is exactly how many people have enrolled. They say they don't know the precise numbers. Luke Chung says:

CHUNG: The data exists. This system, I would hope, has a database inside it that would be able to tell you everybody who's enrolled, much less the number of people who are enrolled.

(END VIDEOTAPE)

TODD: We just got off the phone with White House officials who tell us it's a little more complicate than that. They say they have to collect those numbers from several different sources, and they have to make sure the numbers are accurate.

So they are sticking to a plan to release the number of enrollments and other Web site data to once a month so that they can ensure that accuracy -- Wolf.

BLITZER: It would be precise.

We have done a little tallying of our own here at CNN. What are you finding out?

TODD: That's right.

We found out that 112,000 people in nine states and the District of Columbia have created accounts on the Obamacare Web site to at least get information. That's going on and logging on. The first states reporting actual enrollments into the health care plan, Kentucky, Maryland, Washington state, have reported more than 16,700 people have enrolled in Obamacare so far

Those are just three states of actual enrollments. And again White House officials -- just on the phone with them -- they are insisting they are working out these glitches, they're working hard to streamline the problem. They say it's getting better by the hour. They are at it 24/7.

(CROSSTALK)

BLITZER: Do they say when it will be perfect?

TODD: No, they didn't give an indication of perfection, but they say they are really working very, very hard and furiously to smooth over these glitches.

BLITZER: All right, Brian Todd, thanks very much for that report.

Coming up, Republican Senator John McCain, he is standing by live. I will ask him who he blames for all the gridlock here in Washington.

And you still time to ask a suggest a question for the senator. Tweet that question to me. Use the hashtag SITROOM.

(COMMERCIAL BREAK)

BLITZER: A mixed day on Wall Street after the president nominated Janet Yellen to be the first woman to head the Federal Reserve, the Dow closing up 26 points, following two days of losses. The S&P 500 also inched up, but the Nasdaq fell slightly.

Fears of a possible default on America's debt still weighing heavily on investors. I will ask Senator John McCain about that and a lot more when we come back.

(COMMERCIAL BREAK)

BLITZER: Senator John McCain has been venting his frustration with the government shutdown, the failure of both sides to get into real negotiations. The Arizona Republican is joining us live from Capitol Hill right now.

Senator, thanks very much for coming in.

MCCAIN: Thanks, Wolf.

BLITZER: I know you're active on Twitter. I'm active on Twitter. I asked our Twitter followers to send us suggested questions. This one just came in from Robert Snyder. "What does the senator honestly believe POTUS -- the president of the United States -- should do that would stop this from happening over and over again?" Senator?

MCCAIN: I think the first thing the president should probably do, what Bill Clinton did back in '95 when we went through this kind of crisis again, before. And that is to call people over and sit down and talk and talk and talk and talk. It may not lead to breakthroughs, but you don't lead to breakthroughs unless you do have conversations. So, in that area, I wish the president would do a lot more.

But second of all, I think that the members of Congress have got to understand how terribly offensive this is to the American people and also sit down with the president and talk seriously and put real literally everybody on the table.

BLITZER: Because as you know, the Democratic caucus in the House, all 200 members basically were just at the White House right now. The president invited all 233 Republicans in the House to come over tomorrow. But the House leadership, the Republican leadership, said only the leaders, the chairmen of the key committees should go over. Was that smart?

MCCAIN: I don't know, Wolf. It's hard for me to critique what my friends in the House of Representatives do. I know they resent it a lot if I do. So, I can't really respond to that.

I do know that if the president invited all of us together in the Senate, I think it might be helpful so we could have a healthy exchange.

By the way, conversations are going on today that I think are at least heading in the right direction amongst Democrats and Republicans, Republicans and Republicans, Democrats and Democrats. Rarely have I seen so many conversations going on at once.

BLITZER: So how do you resolve this? Because there are still, as you know a lot of Republicans out there, Tea Party supporters that say any deal to reopen the government fully or to raise the debt ceiling has to include something involving Obamacare, which from the president's perspective is a nonstarter.

MCCAIN: Well, remember, we started this on a fool's errand, convincing so many millions of Americans and our supporters that we could defund Obamacare, which obviously wouldn't happen until we have 67 Republican senators to override a presidential veto. So, we started out on a fool's errand.

Now we are down to proposals such as a repeal of the medical devices tax. The reason why that's so attractive is we voted in the Budget Act by 70 to 30 roughly to repeal that tax, which is really onerous and has driven many jobs overseas.

I think there's a number of other ways and things we could look at that have been out there on the table that I think could help us to come to a conclusion. At least we're in the same ballpark now in our conversations.

BLITZER: Who is to blame for that fool's errand?

MCCAIN: Well, I think the people that convinced so many millions of Americans, Tea Partiers who we're specifically talking about, that there was some way we could defund Obamacare. We can't. And the 2012 election, was -- at least in my campaigning and I know Mitt Romney's -- was repeal and replace Obamacare. It didn't happen.

I fought against Obamacare on the floor of the Senate for 25 days. So, it wasn't going to happen. And I think the American people should not -- or a lot of Americans should not have been told it was possible.

BLITZER: There are a lot of Republicans -- not a lot, but there are some Republicans out there who say if the U.S. doesn't raise the debt ceiling by October 17, there wouldn't necessarily be a catastrophe, an economic, financial catastrophe out there. What say you?

MCCAIN: I say that I think technically they may be correct, because there is tax revenues coming in and there's other aspects of it from a technical standpoint. But I know some people on Wall Street that are telling me that the markets would react in a very, very negative fashion. Not because we couldn't continue to fund the government, but because we are sending a signal that our good faith and credit, at least over time, would not be something that borrowers and creditors and lenders, include the Chinese who we owe a trillion dollars to, would believe that it is safe investments.

BLITZER: Should there be a clean vote in the House of Representatives without any strings attached to reopen the government? Just an up or down vote?

MCCAIN: Well, I would like to see that myself. But I also, again -- I really am hesitant to pile on to the members of the House of Representatives. I try to keep in mind that many of them ran in 2010 promising their constituents that they would do everything in their power to repeal Obamacare. I respect that.

And so what I'm trying to convince them of is let's try to sit down, negotiate, get something out of this, which I think we can. Because I think the president and the Democrats over here realize you don't want to humiliate your enemy, your adversary. And then let's get this thing behind us.

The American people are disgusted. I saw another poll today that the approval rating is five percent now of Congress. And that's Republicans and Democrats. They don't want that. Republican approval ratings are going down, but so is the president's and the Democrats. Not as rapidly, but they are going down. So let's stop it.

Could I just mention one thing? We focused on the death benefits and how horrible that was. And as you know, I spoke on it yesterday.

Let me give you another example. The Grand Canyon. One of the jewels of our national park system. People up there who work for the concessionaires who are not government employees, who won't get back pay, we're now having to ship food up there. Now what -- isn't that outrageous?

BLITZER: There's so much outrageous stuff going on. And you point out that the families of those troops who were killed in Afghanistan, to come back, and at least for now the government is not pay for their funeral experiences. They'll have to go to the Fisher House Foundation. There's a lot going on that's pretty awful right now.

Senator, thanks very much for coming in. We'll continue this conversation.

MCCAIN: Thank you, Wolf.

Remember, you can always follow what's going on here in THE SITUATION ROOM on Twitter. Tweet me @WolfBlitzer. Tweet the show @CNNSitRoom.

Thanks for watching.

"CROSSFIRE" starts right now.