tv Your Money CNN October 12, 2013 11:00am-11:31am PDT
waiting for that press conference from the senate, when it happens, we will bring it to you. the full faith and credit of the united states may be safe for a few more weeks. i'm christine romans, this is "your money." house republicans offering a short-term fix. wall street celebrates with a sharp rally. both sides are finally talking. but this isn't over yet. behemoths of big business speaking with one voice independents shouldn't use the threat of causing the u.s. to fail on its obligations to remay its debt as a can thisle. >> it ought to be banned as a weapon. >> both sides deserve a spanking for this. >> small businesses questioning as well. >> over and over they say the same thing. why is this happening, we can't risk a default? i the administration foretelling economic chaos.
>> every american could see that 401 ds and home values fall, borrowing costs for mortgages and student loans rise. >> our systems were not designed to not pay our bills. the world watching and warning. >> if there was a problem lifting the debt ceiling, it could well be that what is now a recovery would turn into a recession or even worse. >> but on the right, a vocal handful of debt-default deniers. >> my brother had a managed ka tars troir notify, which i don't think will be there i want i think this is the 11th time i've been through this discussion about the sky is falling and the earth will erupt. florida republican ted yoho insisting not lifting the debt ceiling would, quote, bring stability to the world markets. in fact, if america for the first time in history is not able to pay all of its bills, the forecast is for financial fallout worse than the collapse of lehman brothers. fact -- forecasts are on which
wrong, but is it a risk worth taking? candy crowley on host of "cnn's state of the union." ken rogoth is a world renown expert of all things financial crisis. candy, let me start with you. gallup shows the lower approval rating ever, 28%. how badly has all of this hurt the gop? >> certainly we can say definitively in the short run, it doesn't take a genius to know this has hurt republican and the republican brand greatly. do i know that will live through i don't know. it's a long time between now and then. there's a big surety it's stuff
an uphill climb, but speaker boehner warned his caucus. and it game clear what was going to happen. he did say we could lose the house over this. it doesn't come as a surprise to republicans, but it certainly is, when you put numbers to it, it's a huge slapdown. >> you saw the poll numbers falling. ken rogoth, registers the sharpest drop. can this recovery right now withstand a government shutdown, a sequester, and then assuming you get over this debt ceiling drama and you go into a budgetary process, maybe sharp budget cuts and entitlement reform, is this the time for austerity in america? >> it's clearly not. i think this is a time when we need to sort of balance the budget over the long run, but for the -- i think it's a mistake. there are things they should be
doing like infrastructure investment where they could be spending vastly more. i think that concerns me most is the pa razz here. this is an effort to diminish the presidency. they're going to put a six-weeks extension, then another, and it's just no way to run your country. >> you're there at the imf meetings in the country, what is the rest of the world saying about how we're running this country? >> well, on the one hand they're terrified. on the on the other hand they really don't believe it. but actually at these meetings, the imf is always beating up on them, so they somewhat delight in pointing at the u.s. and saying they're a lot worse than we are. >> candy, president obama won the election, but the makers verse takers argument is back again, only now it's the wagon pullers and the wagon riders. this sound bite caught my
attention in the questions of secretary lew this week in his hearing. let's listen. >> government keeps growing and growing. when it grows that means there's more people in the wagon and less pulling the wagon. >> if we get back to real budget negotiations, assuming eventually they will resolve the debt ceiling crisis and talking about budgets, that's going to be at the core, isn't it, of the fighting between the democrats and the republicans? >> the fact is that republicans do this as an aging population needing more, you know, looking for the services that an aging population has always seen as their, which of course is social security, medicare. they see more and more people than going to join in to obama scare, the affordable care act, which will cost the government more money. so they seek a work it's not the
old mitt romney 47% argument. just gnome -- the current chief member has openly scolded congress for its approach to fiscal policy to no avail. does janet yellenbring anything different to the table. >> i think she's a creative and smart person. i think she's a good appointment now, in the sense that she clearly cares a lot about employment. you don't have to ask if she cares a lot about employment. but she can't solve these problems, these -- this better necessaryian war fare. i think the fed needs to sort of step back, try to provide some stability, but it can't cover up all these problems. >> ken, there's no way the fed can start tapering the stimulus if you have this nonsense going
on. can they start pulling back the money if -- if you've got this kind of stuff going on? >> there might not be any bonds -- that, yeah, they certainly aren't going to do anything in the middle. they don't even have any data to go on. because the labor statistics aren't coming out. >> a world without economic data is a dark, dark place, no question. i know you agree. thanks, ken. thanks, candy. candy will have an exclusive interview with senator rand paul about the possible deal to end of government shutdown, tomorrow on "state of the union just 9:00 a.m. eastern right here on cnn. coming up on this emergency edition of "your money" richard quest explains the debt ceiling like only he can. the global reaction, next. ] at humana, understanding what makes you different is what makes us different. we take the time to get to know you
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>> this morning at 9:00, i met with senator mcconnell the meeting was set up last night late senator mcconnell indicated that senator alexander, as ranks member of the rules committee had worked for a number of years with senator schumer. i was concerned, as you all know, there were different republican offering going around or discussions with my senators, so i called senator alexander and said what's going on? anyway, to shorten the story a bit. he said i'm representing senator mcconnell. later he asked if i would meet with him and senator schumer and
senator mcconnell. i said yes. we met at 9:00. the conversations were extremely cordial, but very preliminary, of course. nothing conclusive but i hope our talking is some solace to the american people and the world. this hasn't happened until now. senator mcconnell asked to meet with me. i was happy to do that. this should be seen as something very positive. even though we don't have anything done yet, and a lot ways to go before anything like that will happen. and i say that's a relative term in minutes, hours, days, we're trying to figure out a way to go forward. susie collins is one of my favorite senators, democrat or republican. i appreciate her efforts, as always, to find a consensus, but
the plan that she suggested that i've seen in writer is not going to go anyplace at this stage. there are two good things in it. i want to make sure that people here understand that we have some problems with a, as i explained to senator mcconnell and senator alexander this morni morning, they're not doing us a fav favor, they're not doing a favor by extending the del crease. that's part of our jobs. that's why we've said let's pay
or bills. and we need to do that -- this is not a concession. this is basically doing our jobs. the default is four days away, and i say again, i'm grateful that senator mcconned -- you know, i had a piece of legislation on the floor today from the debt ceiling for a year. it's hard for me to comprehend. but every republican voted against this. this was a motion to proceed to the measure so we could debate it. if they had allowed clot injure, we would have -- to see if we
could come up with something. they just voted now. you know how it works around here. that's not easy to move forward. i can't imagine why they did that. defaulting our debt will risk millions of jobs, not thousands, not tens of thousands, not hundreds of thousands, millions of jobs. social security checks, medicare payments, even or military. and then we have people in the house saying that's okay, we can prioritize them. there isn't a reasonable person in an economy anyplace that thinks that would work. that's what senator mcconnell and i are working on. senator durbin.
>> the people of america have seen this movie several times. the american damsel is tied to the tracks, and the engine is bearing down, and the question is whether or not congress at the last minute will come to the rescue and save this country. i think some of them have said ultimately they'll work it out. you willy it will work it out, but let's be honest where we are. we saw it today on the senate floor. first we ended up with a sat yow come. troubling to me -- on would we avoid the debt ceiling default in just four days, as senator reid has said. not a single republican would step forward. in fact, some had said we're looking forward to this vote to vote no.
i don't understand their logic, but that's what they said. but before people give up hope, and hear the train whistle and wonder if this will end up in the right way, at the same time if you within the floor of the senate, there were active conversations going on between senators of both political parties. beyond what senator reid mentioned in his earlier meeting with senator mcconnell, there's an active conversation between republicans and democrats in the senate. why? we understand how importanting this. we understand how much damage has been done already to 800,000 furloughed federal employees, and all the people wo rely on government services, and we realize the potential damage to 300 million-plus americans if we default on this debt for the first time in history. it's been spelled out, and only those flat-earth economists who somehow inspire a handful the extreme republicans, aside from
them, the economists have told us in clear terms, we're dealing with increases in interest rates for everybody. every individual, every family, every business, and our nation. and the reputation of the united states is going to be damaged in a way it's never been damaged. that's how serious it is. that's why i believe these conversations are under way and why they must proceed. we're going to continue to open up these channels and try to find a way to dealing with this. it is troubling, it is heartbreaking to think we have reached this point. we are motivated by not only what's going for the nation, but by the fact that the house republicans have failed, utterly failed in leadership in terms of coming forward and coming up with a solution. now, we have to accept the responsibility, and i hope we can rise to it. >> first, i'd like to say we had a very good caucus today. democrats were unified, and we're all united around the principles of opening the government, pay our bills and
let's negotiate. so today brings bad news and good news. the bad news is that the motion to proceed so that we could pay or bills failed. it didn't get the 60 votes, the bipartisan support that we had hoped. this is playing with fire. we don't know when the markets will react to this. you you can't say it will be no sooner than next thursday. i worry on monday that when the american markets open, maybe because of this vote, that they will start worrying and not only will the stock market go down, but interest rates go up, the value of the u.s. treasurys decline. it's very serious the it would have been a whole lot better if we just put this aside and 100-0 vote to pay our bills. that didn't happen.
the good news is that the meeting that senator reid and i had with senator alexander and senator mcconnell give me a bit of cause for optimism. clearly the talks are. these are the senate democrats discussing the failure of the senate to get clot injure today. susan collins, republican from maine, will be speaking at that same podium soon. i want to bring if brianna keilar, who is at the white house. brianna, senate democrats clearly trying to tell the american people that we reached out, we tried, they won't come to the table. what's going on here? >> well, right now the future of whether the debt ceiling will be increased and how perhaps the government will be reopened is very uncertain. this is a sort of bad turn of events today here in terms of moving towards a solution miguel. you have one bill, which would
have just extended the debt ceiling for more than a year, pushed it beyond the midterm elections, because it is such a political hot potato issue, it becomes different to deal with. that bill failed on basically a party line vote in the senate. you have that, but the other thing we're hearing that's making sinus, as we heard from harry reid, they are rejecting this plan that is sort of spearheaded by susan collins, one of the moderates who actually will break with her party at times to i guess see things more from the perspective of the white house or democrats. she had proposed funding the government for six months, extending the debt limit just until january to give a little breathing room. that was rejected. democrats were called in the white house as well, didn't like some of the provisions. they wanted that debt ceiling to be extended further, but also
there was the issue of how to deal with spending cuts, more spending cuts that are due to kick in in the new year. one of the proposals, one of the provisions in her plan was to allow agencies to have more flexibility in how they adjust to across the board spending cuts from what we call the sequester. well, democrats had concerns that perhaps republicans who are very worried about defense cuts would end up supplementing -- substitu substituting, i should say, cuts to perhaps safety net programs, the democrats value. so at this point we're hearing that harry reid is talking to the senate minority leader mitch mcconnell, but we don't know what really will be yielded from that, though we're being told to be optimistic. however, this is up in the air and pretty much a mess. >> harry reid looked downright depressed, despite the cordial discussion with mitch mcconnell, he said, but it does not look well.
we are now awaiting susan collins, who will be speaking here at the senate shortly. we're going to get to that, coming up after the break. that's a good thing, but it doesn't cover everything. only about 80% of your part b medical expenses. the rest is up to you. so consider an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company.
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well, the senate has just held a news conference. they're in the middle of it now. harry reid is speaking once again, but the news is a compromise deal w0rkd out by susan collins and offered up is d.o.a. the senate will not accept that bill, harry reid saying they agreed to open the government, agree on raising the debt ceiling, but didn't seem to have much love beyond that. democratic senators now talking
about where they go from here, but it's very clear from the tenor at this press conference that there doesn't seem to be a lot of room to move and maneuver for both sides. we are expecting susan collins. as soon as the democrats are finished, to come up and take the mike. she will have some words about what happened to her deal that she offered up. we want to bring in athena joans, who is watches all this. so much workers aren't working, congress is sort of working. can you put this in any context for us? >> reporter: hi, miguel, the context is a few days ago we thought there was progress, of course, being defined by the fact that the sides were talking, that the president was holding meeting with house and senate republicans. it at least that appears debt
now. on the senate side, this proposal by susan collins and joe manchin that would both reopen the government and raise the debt ceiling in exchange for a few other items. that appears dead, too, so now the big question is how do we move forward? during that press conference we're still watching now, we heard from senator durbin who said americans have seen this move before. in the end end they'll work it out. we know what happened in 2011, when the debt ceiling debate got down to the wire. we saw a downgrade, and that has huge effects, not to mention what would happen if they don't get an agreement. >> but the overwhelming message is, look, we've reached out, we
did everything we could. we are working on your behalf, but they're not coming to the table. are both sides now in the situation where they're just trying to blame the other? >> the blame game has been going on all along. we've seen a lot of press conferences today, a lot of activity earlier in the day. but it doesn't mean a lot of folks weren't here until they did leave. the point harry reid is making is that we want to see the government reopened, the debt ceiling raised and we'll rather than members of congress simply doing their jobs. so that's the issue here. we'll hear from senator collins, but right now it's not at all clear what will happen next, especially because you have members of the house headed home, not due back at this point
until monday night. the senate is also in recess. that could change, but right now at least as a body, it doesn't look like they're working very hard. very, very high stakes. athena jones, thank you very much. >> thanks. for those of you just joining us, senate democrats justhood a news conference on the negotiations and the shutdown on the debt ceiling. senate majority leader reid said there is a long way to go with fiscal talks with rep leader mitch mcconnell. he also said the government must be able to pay its bills. let's bring you up to speed with what's happening today. the senate defeated a procedure move by majority democrats to bring up a clean debt limit bill. the vote was 53-45. the white house responded with this statement -- congress must do its job and raise the