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The Situation Room

Congress Reaches Budget Deal

Aired December 10, 2013 - 18:00   ET

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

ANNOUNCER: This CNN breaking news.

BLITZER: I'm Wolf Blitzer in THE SITUATION ROOM. We're following breaking news. Members of Congress strike a crucial budget deal only days before their deadline. We're standing by for the formal announcement from Capitol Hill.

You're looking at live pictures, Patty Murray, the senator from Washington state, Paul Ryan, the congressman from Wisconsin. They've been working with the House, Senate conferees to come up with a budget deal. We've got the details, our correspondents and analysts are standing by.

Now all of them, John King, Gloria Borger, Dana Bash, Brianna Keilar is over at the White House.

Dana, let me start with you. What are the headlines out of this? What do we know?

BASH: Well, first of all, we know that this is not a grand bargain. This is not going to address the big things that really are eating away at the country's economy, the debt and the deficit. But it is a deal. And it's something that we haven't seen in a very long time.

BLITZER: And it will keep the government going. There won't be a shutdown.

(CROSSTALK)

BASH: Exactly. It will keep the government going. The deadline for that is January 15. They still have some work to do before that. But that is really a key.

We have not seen anything that has not gone down to the wire when it comes to keeping the government running in a long time. That is a plus. We have to take it where we can get it. What are we talking about?

Let's just go through some of the details. It is going to eliminate the arbitrary forced spending cuts for two years and instead allow Congress to choose the cuts. It won't be again arbitrary.

BLITZER: The so-called sequestration.

BASH: Right. Exactly, the forced spending cuts. How are they going to do that? They're going to pay for it with an increase in airline travel fees and also an increase in the worker contribution to federal pensions. So that is the sort of outlines of the deal. Again, it's not global. It's not going to really attack the debt and deficit, but it is going to keep the government running and it will address some of the concerns by Democrats and Republicans about these forced spending cuts.

Republicans were upset about it because it ate too much into defense, Democrats for the most part because it ate too much into domestic programs. Now Congress will have more of a chance to decide what gets cut.

BLITZER: They will have more leeway to figure it out.

It's got to still -- even if the House-Senate conferees, Gloria, pass this, agree to this, it's got to pass by a majority of the House of Representatives, and it's got to pass in the Senate. I suspect it won't have much trouble in the Senate, but in the House of Representatives, potentially with a Republican majority, will they go along with Paul Ryan?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: It's very hard to say, because these automatic spending cuts have been very popular with lots of conservatives who believe that actually it's been one way to restrain spending.

There have some conservatives who say you need to raise the spending cuts for the military because it's put us at a disadvantage globally. So you're going to have all points of view, I would think, Dana, in the Republican Caucus.

(CROSSTALK)

BASH: Just to underscore what Gloria's point is, tomorrow morning there's going to be a meeting, Wolf, of House Republicans, and they are going to have to bless this or at least leaders are going have to make sure that they do have enough votes because a lot of conservative groups have already come out, many of them and said, conservative Republicans, do not vote for this, for the reason you...

(CROSSTALK)

BORGER: So you could see liberal Democrats siding with conservative Republicans to oppose this, Wolf, because the liberal Democrats are saying, you know what? We just wanted to lift these automatic spending cuts totally, and this isn't really good enough for us. And, by the way, we don't want our constituents, some of whom are federal employees, paying for this.

BLITZER: John King has been watching what's going on.

John, I suspect that there will be plenty of conservative Republicans who won't be very happy with this deal.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: When you lay over this, Wolf, the coming 2014, we're here now in early December heading into the 2014 midterms and many Republicans, including the Senate Republican leader are facing conservative, many of them Tea Party- inspired challenges back home.

Just had another one of those yesterday to the number two Senate Republican John Cornyn in Texas. Watch how this plays out. Watch for the key voices in the Tea Party and what they say about this and see if there is a conservative revolt, if you will, against the deal, even though the man brokering it from the Republican side is a man who six months or a year ago was the hero of many of these same people.

They trusted Paul Ryan on these issues. But now in part he is viewed suspiciously as part of the establishment. And so watch the voices. Watch what Leader McConnell says about this. Watch what many others with Tea Party challengers face this. This could become, and Gloria's dead right, there will be liberal opposition as well -- but this could now become the latest exhibit, if you will, in what is a philosophical civil war in the Republican Party over the roll of government spending levels and their own leadership figures.

BLITZER: And Brianna Keilar, our senior White House correspondent, is standing by.

Brianna if it does pass the House and the Senate, the president then has to sign it into law. Are you getting any reaction yet from White House officials to this deal?

BRIANNA KEILAR, CNN SENIOR WHITE HOUSE CORRESPONDENT: We don't have any reaction from the White House yet at this point.

Wolf, I think they're waiting for the formal announcement of exactly what is in the deal and what is not in the deal. But I do think that President Obama and White House officials are going to feel that this reinforces the strategy that he took during that battle with the government shutdown, that he wasn't going to give when it came to funding for the government or when it came to the debt ceiling. He wasn't going to give on Obamacare.

He was in -- a little bit, you could argue, sort of intransigent. He basically said, no, I'm not negotiating on this. And once this was all said and done in October, he said that he didn't think there was going to be another fight. So if that is the case, I think they're going to see that as justifying his strategy and that ultimately it did work.

I will tell you, Wolf, though, President Obama has dedicated a lot of time recently to talking about unemployment insurance, and it appears that that is not going to be part of this. You have unemployment insurance benefits expiring for about 1.3 million people at the end of the year. A lot of Democrats wanted that to be in this bargain.

President Obama urged Congress to take that up last week. He dedicated his weekly address to that and it appears at this point that that's still going to be an issue hanging out there unresolved from this agreement. BLITZER: I just want to be precise, Dana, because I know you have been checking. This is a deal to keep the government going. There won't be a government shutdown. There's going to be controversy, as you point out, but it has nothing to do with raising the nation's debt ceiling which has to be raised in the next couple months or so as well.

BASH: Right. The deadline for that is February. That's going to be a whole different fight. And that is certainly an important fight and it is one that Republicans have continued since they were elected in the majority of the House, champ at the bit to make it a fight, because they want to use it to cut spending, but unclear if they're really going to do that, given the fact that the president really held the line, and the reason he did it was in his words to break the fever the last time around.

So it's really uncertain how big of a challenge that is going to be.

BLITZER: Gloria, step back a moment. Talk about Paul Ryan, the vice president nominee with Mitt Romney in 2012, certainly a potential presidential candidate if he wants to run for the presidency in 2016.

Where does this put him? Because he's clearly going to irritate some of his conservative friends.

BORGER: He's straddling that line, Wolf. I remember the night of the budget shutdown, remember that, Dana, where Paul Ryan actually voted for the shutdown, and we were all surprised about that.

But he's somebody who also voted on the fiscal cliff to not go over the cliff. He got a lot of conservative pushback on that. It's clear that he's interested in national office, and I think he wants to be seen as a conciliator right now.

Don't forget he ran with Mitt Romney who saw him as kind of a junior partner in that campaign, and I think Paul Ryan is trying to put his stamp on the budget. He's the chairman of the committee. He's respected in the Republican Party, but he may not be far right enough on this issue for lots of Republicans.

BLITZER: All right, so we're waiting for Congressman Paul Ryan, the chairman of the House Budget Committee, Senator Patty Murray, the chair of the Senate Budget Committee. They're going to be making a joint announcement momentarily.

It's called the Bipartisan Budget Act of 2013. If they get this passed in the House and Senate and the president signs it into law, it will keep the government operating without any problem, at least in the short-term. We will watch what's going on. We will take a quick break. Much more on the breaking news right after this.

(COMMERCIAL BREAK)

BLITZER: And we're watching the breaking news. You're looking at a live picture from Capitol Hill. There's going to be an announcement momentarily by the respective chairs of the House and Senate Budget Committees, Paul Ryan on the House side. He's a Republican. Patty Murray on the Democratic side, she's the senator from Washington State. They are going to announce an agreement, what they call a Bipartisan Budget Act of 2013.

They're coming to the microphones right now. Let's listen in, Paul Ryan and Patty Murray.

REP. PAUL RYAN (R), WISCONSIN: Good evening.

I am happy to report that Senator Murray and I have reached an agreement. We have been talking all year. And this week that hard work of the two of us sitting down and talking to each other all year has paid off.

First, it started because we passed budgets. And Senator Murray deserves credit for passing a budget through the Senate. That got the ball rolling so that the two of us started talking. And the reason we're here tonight is to explain what we have agreed to.

This bill reduces the deficit by $23 billion, and it does not raise taxes and it cuts spending in a smarter way. From the outset, we knew that if we forced each other to compromise a core principle, we would get nowhere.

That is why we decided to focus on where the common ground is. And That's what we have done. That means to me a budget agreement that reduces the deficit without raising taxes and replaces some of the arbitrary across-the-board spending cuts with smarter permanent reforms that pay for this relief.

The House budget reflects our ultimate goals. It balances the budget within 10 years. It pays off the debt. But I realize that this is not going to pass in this divided government. I see this agreement as a step in the right direction. In divided government, you don't always get what you want.

That said, we still can make progress toward our goals. I see this agreement as that kind of progress. It is a step in the right direction. Instead of the arbitrary cuts, we make smart, targeted reforms. We eliminate waste. We stop sending checks to criminals. We cut corporate welfare. We reform some mandatory programs.

And we start to make real reforms to these autopilot programs that are the drivers of our debt in the first place. I think this agreement is a clear improvement on the status quo. This agreement makes sure that we don't have a government shutdown scenario in January. It makes sure that we don't have another government shutdown scenario in October. It makes sure that we don't lurch from crisis to crisis.

It also allows Congress to finally exercise the power of the purse. We're both from the legislative branch. The Constitution says that the legislative branch should exercise the power of the purse and we want to reclaim that from the administration, instead of having all of these continuing resolutions.

This also shows that we can work together to get our government functioning at its very basic levels. That, we think, is a step in the right direction. That, we think, gives us some confidence. That brings some normalcy back to our government.

I want to take a moment to thank Senator Murray. She's a tough and honest negotiator. She's fought hard for her principles every step of the way. And I want to commend her for her work. All of the summary documents and the legislation will be texted, will be placed upon our budget Web sites by the end of the night.

With that, I would like to offer Senator Murray.

SEN. PATTY MURRAY (D), WASHINGTON: Thank you.

Well, for far too long here in Washington, D.C., compromise has been considered a dirty word, especially when it comes to the federal budget. Over the past few years, we have lurched from crisis to crisis and from one cliff to the next. And when one countdown clock was stopped, it wasn't long before the next one got started.

That uncertainty was devastating to our fragile economic recovery. The constant crisis cost us billions of dollars in lost growth and jobs. And the continued across-the-board cuts from sequestration cuts were forcing our families and communities to pay the price.

So I am very proud to stand here today with Chairman Ryan to announce we have broken through the partisanship and the gridlock and reached a bipartisan budget compromise that will prevent a government shutdown in January.

Our deal puts jobs and economic growth first by rolling back sequestration's harmful cuts to education and medical research and infrastructure investments and defense jobs for the next two years. Now, I know there were some people who thought these cuts should continue, but I'm glad that we increased these key domestic investments and that we averted the next round of scheduled cuts to military programs, bases, and defense jobs in our country.

This deal builds on the $2.5 trillion in deficit reduction we have done since 2011 and continues the precedent that we set in the fiscal cliff deal that sequestration shouldn't be replaced with spending cuts alone.

This bipartisan deal will help millions of Americans who were wondering if they were going to keep paying the price for D.C. dysfunction, from the workers at our military bases and construction projects who were furloughed or laid off to the kids who lost their slots in Head Start programs to the seniors wondering if they were going to have Meals on Wheels and to the families praying for halted medical research programs to get back to work on a cure and so much more.

Because of this deal, the budget process can now stop lurching from crisis to crisis. By setting bipartisan spending levels for the next two years, this deal allows congressional committees to proceed under regular order and gives government agencies and the companies that do business with them the certainty they need to hire workers and make investments.

This isn't the plan I would have written on my own. I'm pretty sure that Chairman Ryan wouldn't have written it on his own. And there are obviously differences between our parties when it comes to our budget values and priorities.

I was disappointed that we weren't able to close even a single corporate tax loophole. I know many Republicans had hoped this would be an opportunity to make some of the kinds of changes to Medicare and Social Security they have advocated for.

But Congressman Ryan -- have set aside our differences. We have made some compromises and we have worked together to get something done. Now, this deal doesn't solve every issue in front of Congress. We made a conscience decision, as Chairman Ryan said, in the few short weeks we have had to focus on where we can agree and not get bogged down in the larger issues that, while important, are not going to get solved right now.

But we need to acknowledge that our nation has serious long-term fiscal and economic challenges this deal doesn't address and our budget process has been broken. Many people believe that Congress is broken. We have spent years scrambling to fix artificial crises, while our debt piles up and the economic foundation middle-class families have depended on for generations continues to crumble.

We have budget deficits that have improved, but they have not disappeared. And we have deficits in education and innovation and infrastructure that continue to widen. We know we need comprehensive tax reform. We need comprehensive immigration reform. There is a lot more for Congress to do.

So this deal doesn't solve all of our problems. But I think it is an important step in helping to heal some of the wounds here in Congress, to rebuild some trust and show that we can do something without a crisis right around the corner, and demonstrate the value in making our government work for the people that we represent.

So when all this is done, I am very proud to stand with Chairman Ryan or anyone else who wants to work on this bipartisan foundation to continue addressing our nation's challenges. Nothing is easy here, but I know the American people expect nothing less.

I want to take a minute to especially thank Chairman Ryan. He and I do have some major differences. We cheer for a different football team, clearly. We catch different fish. We have some differences on policies. But we agree that our country needs some certainty and they need to that we can work together.

And I have been very proud to work with him. I also want to thank Congressman Van Hollen, who's worked very hard to help make sure this deal reflects the values that he cares a lot about. And all of our budget conference committee, everyone who's been involved on the committee has been working very hard with us to get to this deal.

I'm hopeful now that we can get this bipartisan deal through the House and then through the Senate and get home in time for the holidays that I think everybody deserves this year.

RYAN: Questions.

QUESTION: (OFF-MIKE)

RYAN: Well, look, as a conservative, I think this is a step in the right direction.

What am I getting out of this? I'm getting more deficit reduction. So the deficit will go down more by passing this than if we did nothing. That's point number one. Point number two, there are no tax increases here. Point number three, we're finally starting to deal with autopilot spending, that mandatory spending that has not been addressed by Congress for years.

Look, this isn't easy. This is the first divided government budget agreement since 1986. The reason we haven't done a budget agreement when both houses were controlled by other parties since '86 is because it's not easy to do.

So we know we're not going to get everything we want and she's not going to get everything we want.

QUESTION: (OFF-MIKE)

BLITZER: All right. So there you have it, a major, major deal, words you don't often here in Washington, D.C., right now, compromise, bipartisanship. But that is exactly what these House and Senate conferees have done, and, as you heard Paul Ryan say, a step in the right direction, although there will be plenty of conservatives who won't be happy with this deal.

There will be some liberals as well who won't be happy with it as well. It's still got to pass the House of Representatives, pass the Senate, go to the president for his signature.

We will continue the breaking news coverage.

If it passes, there will not be a government shutdown in January. We will be right back.

(COMMERCIAL BREAK)

BLITZER: All right. So there's a historic two-year budget deal that's on the table now. It's got to pass the House, pass the Senate, go to the president.

Let's bring in Brianna Keilar over at the White House.

I assume, Brianna, if it passes the House and the Senate, the president will speedily sign it into law.

KEILAR: That would be the expectation, Wolf, especially we know that the White House has been in such close consultation with Senate Democrats. You wouldn't expect that Senator Murray would announce a deal without knowing that this is something that President Obama would sign. That said, I think his preference would be for it to include an extension of unemployment benefits, which we now know that it does not include. This is something President Obama has been pushing for, but Jay Carney was actually asked last week, Wolf, would he would sign it if it doesn't include this?

He sidestepped that question. And he's recently said that it's more important that unemployment benefits are passed, not necessarily what the vehicle is.

But, of course, you know there was some leverage that Democrats had in these negotiations they no longer have, Wolf.

BLITZER: It doesn't look like the extended unemployment benefits will be included as part of this deal. There will be other opportunities down the road.

Brianna, thanks very much.

Our continuing coverage of the breaking news resumes right now with "CROSSFIRE."