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THE LEAD WITH JAKE TAPPER

Cutting a Deal; Interview with Bob Woodward; Interview with Rep. James Lankford

Aired October 10, 2013 - 16:00   ET

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


JAKE TAPPER, CNN ANCHOR: Hey, you know that conversation that House Speaker John Boehner has been demanding to have with President Obama? Well, it's about to happen this hour.

I'm Jake Tapper. This is THE LEAD.

The national lead. It's the most promising news since this partial government shutdown began, a possible deal to raise the debt ceiling, if only for six weeks. We will talk to one House Republican leader who even says defunding Obamacare is off the table. OK. Great. So, what about reopening the government?

The politics lead. Face-to-face -- will the president and the speaker emerge with a deal when they meet minutes from now? We will talk to legendary journalist Bob Woodward, who wrote a compelling account of their last debt ceiling feud.

And the money lead, the closing bell on Wall Street. Every single day this week has been a loser for the stock market, but that changed today. Just a hint of a debt limit deal was enough to send the Dow skyrocketing.

Good afternoon, everyone. I'm Jake Tapper. Welcome to THE LEAD.

We will begin, of course, with the national lead, the Dow closing up over 300 points, the markets surging as word spread about a potential solution to keep the United States government from hitting the debt ceiling, but not necessarily a solution to end this partial government shutdown, which has now lasted 10 days.

For much of that time, House Speaker John Boehner has been saying the same thing. What was it again?

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: The president doesn't want to talk.

We need to sit down and have a conversation.

Sit down and have this conversation.

Have a conversation.

(END VIDEO CLIP) TAPPER: Oh, yes. I remember it now. Now he's about to get that conversation he's been demanding. Less than a half-hour from now, Boehner and the other top House Republicans will meet with President Obama at the White House and they are bringing something to the table, a bill, one that would increase the debt ceiling for six weeks only in exchange for more talks, negotiations.

If they were to push it through in the next few days, it still wouldn't last until Thanksgiving, but without it, well, the U.S. government will hit the limit a week from today, the debt limit, at which point the government will not have all the money it needs to pay all of its bills.

So let's put up our new six-week countdown clock. I'm just kidding. Probably. President Obama's not only open to this, he says. He's happy about it, according to his spokesman.

(BEGIN VIDEO CLIP)

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: The president is happy that cooler heads at least seem to be prevailing. It is certainly at least an encouraging sign.

The president said the other day that if they were to send him a clean debt ceiling extension, no partisan strings attached, he would sign it, but we don't know that that's what we're going to get.

(END VIDEO CLIP)

TAPPER: Carney says that the president would likely sign this clean short-term bill to raise the debt limit.

Earlier, Treasury Secretary Jack Lew told the Senate Finance Committee an early Halloween story about what might happen if the debt ceiling is not raised. But it's not clear what the Senate would do if and when it gets this bill from the House. So, great. Maybe we will see a deal to lift the debt ceiling, if only for a short time, but where does that leave us on reopening the government?

There was one word House Republicans did not use when announcing their bill earlier, Obamacare, remember, the always at the center of this government shutdown?

Our chief congressional correspondent, Dana Bash, pressed the speaker about this earlier.

(BEGIN VIDEO CLIP)

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Will you reopen the government if the president doesn't agree to do anything to change Obamacare?

BOEHNER: If ands and buts were candy and nuts, every day would be Christmas.

(LAUGHTER) (END VIDEO CLIP)

TAPPER: Dana there presiding the setup to a classic Boehner drop-the- mike moment.

Dana joins us now live from Capitol Hill.

Dana, what are the House GOP goals for this meeting happening in just a few minutes?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Before I answer that, I should tell you that the entire team of House Republicans that are heading to the White House literally just walked by me leaving a meeting in the House speaker's office, kind of a huddle, a pre-meeting huddle where they are obviously getting their ducks in a row for those goals.

What I'm told by House Republican sources is that, number one, they want to walk out of the White House with a guarantee that the president is going to sign this short-term debt ceiling increase. You said Jay Carney certainly strongly hinted at that, but they don't want any doubts, because I was told they don't want their members to take what one source called a recreational vote, meaning a vote that is going to be tough for some conservatives and meaningless.

And the second and third goals, immediate goals, are getting the president to agree to actually sit down for these negotiations or, as you have been reporting, conversations, after the debt ceiling is raised for the six-week period, to talk big picture about reducing the debt and deficit, all the things that they have been talking about for awhile, and then, lastly, a promise to appoint budget conferees, meaning negotiators, to come together to deal with the budget, which I don't think will be a tough sell since Democrats have been demanding that for some time.

So, those are the goals. Whether or not Obamacare will be in there, that is a big open question. There certainly is a lot of pressure from Ted Cruz still not to give up on that. They say that they might just try just to say that they tried, but privately Republicans say that they just simply don't think -- they know that that's a nonstarter for the White House.

TAPPER: And, Dana, we know Democrats aren't thrilled that this Republican plan doesn't include reopening the government, but you are hearing now some Republicans are unhappy about that, too.

BASH: Fascinating. Our congressional producer, Ted Barrett, has been combing the hallways, as he usually does. He talked to so many Senate Republicans really that run the gamut in the Republican Party, from John McCain to Dan Coats to Susan Collins, to even John Cornyn, the number two Republican in the Senate, saying that they really do want this whole idea of a debt ceiling extension to be tied to reopening the government, and they are hoping that their friends in the House would do that.

That's what we're hearing from Democrats as well. One idea that Republicans in the Senate are sort of floating is for -- when the Senate gets the bill, that they would maybe add the bill to fund the government, to reopen the government, but Democratic leadership sources I just talked to before coming on say that anything that is being discussed is really just speculation, because they haven't seen this proposal.

It's really, really fluid right now.

TAPPER: All right, Dana Bash, thank you so much.

And Congressman James Lankford of Oklahoma, chairman of the House Republican Policy Committee, joins me now.

So, Congressman, the basic plan is the House Republicans will offer a six-week extension of the debt limit; is that right?

REP. JAMES LANKFORD (R), OKLAHOMA: Right. It's a temporary extension to give us time to be able to finish the negotiations on the debt limit.

TAPPER: What's the rationale for keeping the government closed during this time?

LANKFORD: Sure. Actually, there's not a game that we're trying to accomplish by that. It's a matter of there are two different issues that are happening simultaneously. Let's take one of them off the table and let's finish out the work of the negotiations on the second one and let's get it done.

So, we have been concerned about both. The president is concerned about both. We're meeting him halfway and saying let's take this one element off the table. We all know that there are long-term debt issues that have to be dealt with. We will deal with those as we work into November. Let's deal with what we have right now and let's get that resolved.

TAPPER: Right. But the votes are reportedly there for a clean government spending bill. And that only would last I think until November or early December anyway, so why not let the people who need WIC money, let the people who want to visit the zoo and the national parks, let the people who want to enter the NIH clinical trials, why not let that go forward while you negotiate?

LANKFORD: Yes. You actually know well that all those things you just mentioned, we funded every single one of those already with independent stand-alone votes. We have sent those to the Senate. They refuse to take those up.

So, every single thing on your list, we agree on. We have already sent that over. We said let's find areas where we have common ground, let's pass those things and make sure they are not affected, just like we did with the United States military three weeks ago, and said, let's pass that and make sure that's not an issue during this time, that the Senate and president did agree on that one.

So let's take those things off the table. Let's find the areas we can resolve and let's fix it.

TAPPER: Right. And I get that, although the Senate and the president say they want to fund one bill at once.

But I guess the question I have is, the government spending bill is not a spending bill for another year or another two years. It's just for a few weeks, really, so since you're talking about lifting the debt ceiling, why not also let the people who want these government services, the 800,000 furloughed workers, the thousands, hundreds of thousands of federal employees who are working for no paycheck right now, why not just let that -- solve that problem on a short-term basis as well?

LANKFORD: Yes, we would be glad to. That's part of the reason we're sitting down and negotiating with the president today.

We sent the message over early to say this is where we are with the debt ceiling. We want to try to get that all off the table. We are very willing to be able to negotiate on the C.R. as well, and get all our government funded completely on this.

This is where we have been for 10 days. That's the frustrating part is, 10 days ago, we said if we would sit down together in one room, face-to-face, we could work this out. This is not rocket science. Governments have done this the last 200 years. We can do this if we will ever sit down.

The Senate said no every single day for 10 days, and the president said he won't negotiate. All that we want to do is, let's sit down. I think we can resolve this. We are going to be reasonable in a process. And then let's get it resolved and let's get it all back open and all back functioning again.

TAPPER: Well, it all started, of course, because House Republicans linked the complete defunding of Obamacare to government spending. Whatever happened to that?

In an op-ed in "USA Today" yesterday, you wrote -- quote -- "Republicans have asked for two things on Obamacare and one thing on the debt ceiling," but you didn't mention defunding Obamacare. Is that just off the table now?

LANKFORD: That's currently off the table. We understand that.

I can tell you that's where my constituents are. Overwhelmingly, they are a spot to say they don't want this law to go into effect at all, but that's obviously not going to happen at this point. So we said, OK, let's do this, same thing I mentioned in that "USA Today" op-ed piece. Let's have the first year, the penalties not apply to people if they make a mistake or they don't want to do it this year.

We have already seen problems on the Web site. This law requires you go on this Web site, you buy insurance and it's in place. There are obviously going to be problems with that, not just for the next couple weeks, but it looks like for the next couple of months as they get this resolved. Take the penalties off the table for the first year and apply the effects of Obamacare the same to members of Congress and the White House as it does to everyday citizens.

TAPPER: Yes. The problems with Obamacare is something I would be covering much more if I weren't covering the government shutdown and this threat of default.

LANKFORD: We feel like that's a very reasonable position to say businesses have already been given a break for the first year from penalties. Do that for individuals. The exchanges still go into effect, everything is still moving forward, but we have told individuals you're not going to have to worry about the penalties of it if you make a mistake.

(CROSSTALK)

TAPPER: Just take the fines off the table?

LANKFORD: Correct.

TAPPER: For the first year.

The last time, as you know, we got this close to default, the stock market fell 17 percent, household wealth declined by more than $2 trillion, retirement accounts took a major hit, falling $800 billion. The U.S. was downgraded.

Obviously, you and the House Republicans, the Senate Democrats, President Obama working right now to have this short-term bill to make sure that doesn't happen over the next week. But why are we even here talking about this, knowing what happened in 2011, when we came so close to hitting the debt ceiling?

LANKFORD: Yes, I can give you a couple things on that. One is that the premise of the reason we were downgraded was because of the fight around the debt ceiling. That was part of it.

The main part of the issue was the amount of debt and that there was no solution, that the bondholders looked out on the horizon and said no one's serious about trying to resolve the debt issue. This continued to climb, and so they downgraded us.

Part of it was the political, but the biggest part of it was the size and the growth of our debt and deficits and no results for it. So, that's part of it. The other part of it is, is that right now, the House and Senate have not worked together to be able to resolve a budget, have not been able to plan. There have been zero appropriations bills done by the Senate. There has been only four done by the House. We are not able to get the normal process to get all of our budget together, so now we're stuck with this very bad process of cramming it all together at the end of the year before a continuing resolution or around a debt ceiling.

It's by far second, third best. Best thing that we can do is do the normal appropriations process and get this resolved. Since we don't have the normal appropriations process working, we have to do it like this.

TAPPER: As you know, the Senate passed a budget in March.

LANKFORD: Right.

TAPPER: Democrats say, the White House and Senate Democrats say that they have requested, I think they say 19 times that House Republicans send what are called conferees, members of the House, to sit down with the Senate and work out the differences between budgets.

What's your response to that? Why have House Republicans, at least according to the Democrats, not done that, not sent the conferees?

LANKFORD: Right. We have done informal conference for the last several months. Paul Ryan and Patty Murray have continued to meet, continued to try to work through some kind of resolution.

Very typical in a conference when you're this far apart, and we are a long way apart, is to try to do informal conference. Once you get some basis of that agreement, you sit down and do a formal conference and try to resolve it. They haven't been able to get a resolution in the informal conference part of it.

I know it makes good politics to say, we sent all these other votes and say you won't conference here. They are trying to make up for lost time for, quite frankly, when the House said for three years to the Senate you won't even do a budget year after year, so they're having a little payback time on that.

The reality is, there have been behind-the-scenes conversations. Those were appropriate to happen. And then let's get into a formal conference. I would be willing to have that formal conference even right now if we are willing to be able to get everybody into one room and get it resolved.

TAPPER: Before you go, Congressman, I just want to ask you about the politics of this, rather than the policy. The AP puts congressional approval rating for Congress, the public's approval rating for Congress, at 5 percent.

Gallup puts Republican favorability at 28 percent. Surely, as somebody who wants the House Republicans to keep their majority in 2014, to pick up the Senate in 2014, to win the presidency in 2016, surely these numbers must bother you.

LANKFORD: Oh, sure they do. Yes. But they bother everybody. The president in that same poll I think came in at 37 percent approval rating. That's an incredibly low number for a president of the United States as well. It's painful for all of us.

Everyone wants to look at it and say who's to blame, and that's a good game to do on it. Ultimately, everybody is mad at everybody.

TAPPER: Sure.

(CROSSTALK) TAPPER: But the president's approval rating is bad. The Democrats' approval rating is bad.

LANKFORD: Right.

TAPPER: But the Republicans' approval rating is horrific.

LANKFORD: Sure it is. Yes, it is. And we get that.

For us, we have tried to approach these issues for a long time. The people in our districts, I can tell you, don't want to do a government shutdown. Neither do we. They also don't want to have face some of the issues in the Affordable Care Act that they are actually legitimately concerned about and they want to get some resolution.

The challenge is, we are at a spot where we are trying to keep the government open at the same time we are actually trying to deal with the Affordable Care Act and that's hitting an impasse at this point.

TAPPER: All right, Congressman James Lankford, Republican of Oklahoma, we thank you for your time. We wish you luck in the negotiations. We hope these problems are resolved soon.

LANKFORD: Yes. Hopefully, we can get this done. Sitting down face- to-face should expedite the process. Glad we can finally get that started.

TAPPER: Thank you, sir.

Coming up next, legendary newsman Bob Woodward wrote a blow-by-blow account of the tense 2011 debt ceiling talks. Will it go any better this time? We will see what he thinks.

And remember Edward Snowden, the man who fled the U.S. with spy secrets? Wait until you hear what he's up to now, besides coat- shopping for the long Russian winter.

(COMMERCIAL BREAK)

TAPPER: Welcome back to THE LEAD.

In our politics lead -- House Speaker John Boehner and the Republican leadership just arrived at the White House for their meeting with President Obama. Earlier today, Speaker Boehner previewed the difficult road ahead for him and the president and even found something that they can both agree on. Negotiating sucks.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: You know, the president is fond of saying that no one gets everything they want in a negotiation. And frankly, I agree with that. Nobody gets everything they want.

(END VIDEO CLIP) TAPPER: Bob Woodward is probably having deja vu. He wrote about the intricate negotiations between Obama and Boehner over the debt ceiling in 2011 and the fiscal cliff last year, in a book called "The Price of Politics." The paperback version is out now.

Bob, thanks for joining us.

BOB WOODWARD, JOURNALIST: Thank you.

TAPPER: Good to see you.

So, in this afterword, you write about the 2012 negotiation.

WOODWARD: The most recent one.

TAPPER: The most recent one. Now having covered the 2011 one as a White House correspondent, I was hoping it would get better between Boehner and Obama, but as you read the 2011 and the afterword about 2012 and then you see this, it seems to be getting worse.

WOODWARD: Yes. It makes your head hurt, because I mean, the speaker's chief of staff is quoted in the book saying that, "We, the Republicans in the House, are primarily a blocking majority." That means in playing defense, they are going to stop things and you see now, they tried to reach down to something that wasn't just blocking, but to change Obamacare.

They have backed off from that strategy. I think that is the good news here. And they're willing to do something on the debt ceiling at least for six weeks.

The problem is I'm not sure Boehner and the president have closed the deal so they have a working relationship, which is what you need in a sensitive negotiation like this.

TAPPER: And what fell through? You paint a very vivid picture and I remember this from 2011, of Boehner looking at Obama and thinking he's constantly moving the goalposts in the negotiations, he says he wants $800 billion in new taxes but he actually -- then he comes next time and asks for $1.2 trillion. Then, Obama looking at Boehner and saying this guy can't deliver his caucus, he's negotiating but he doesn't really speak for his group, and these problems are infecting this relationship.

WOODWARD: They are, and if you have ever been in a negotiation, if you're married and that's a negotiation --

TAPPER: I just fold on everything.

WOODWARD: No, no, but you don't. But what you learn is that the person on the other side of the table is your best friend because that's the person who can give you what you want and what you have to have. But to get to that point, you need to spend lots of time and, unfortunately, they have not spent the time on this.

And what we're in now is the third round. It was 2011 and 2012 and what happened, if we can kind of slow this down for a moment, in 2011 the first debt ceiling negotiation, Boehner swept the table. He got all win, $2.4 trillion in spending cuts. Obama essentially got nothing.

In the second round in 2012, Obama swept the table and got $625 billion in new revenue, and there were just minuscule, almost unmeasurable spending cuts.

So you have an environment that is winner take all. First round, it's Boehner. Second round, it's Obama. And they're in this face-off where they don't sit down and say like other people do in negotiations -- one for you, one for me.

TAPPER: You write in the book kind of predicting what we're going through right now. You write that aides who were involved in previous conversations, quote, "are frightened because there are too few conversations between the White House and the Republicans and there is insufficient framework or history to suggest how they might succeed in the next round, which is sure to come by the end of 2013."

Tell me where you see an opening for there to be a solution here.

WOODWARD: Well, first of all, what's happened here, they were trying to blackmail Obama on Obamacare, and he rightly drew a red line on that, and that's off the table. And so what you're going to see here is, and this is kind of at the core of what a president has to do, he has to govern. And he -- and if this is a calamity, if we run into some sort of economic meltdown, it's going to be in the Obama presidency that this occurred.

And I write -- there's a scene that Ruth Marcus at "The Post" wrote a column on yesterday about Obama realizing it's kind of the King Solomon moment. You can't be the mother who divides the baby. That a president, because he has to lead the whole country, Republicans and Democrats, is constrained and he acknowledged to his aides and when I interviewed him, he said well, I didn't say this publicly, but the reality was he was in a weak position because he knew he had to make a deal. The Republicans at least up to this moment have kind of said, oh, no, we're going after Obamacare.

The taking that off the table is a big moment in this, so you see the stock market, people are smart about that. There's hope -- light at the end of the tunnel.

Now, you know, who knows, these people don't have, and this is where I take kind of a view right in the center, they have not established the kind of relationship where they can call each other, where they can meet, where they can kind of bare their soul, where they can kind of say, look, I have to have this, I understand you've got to have that.

In this book, you can see there are some ideas that they both have, believe it or not, that would be good for the country, be good for everyone. For instance, entitlement cuts.

TAPPER: Right. Everybody agrees that the current state of these social safety net programs is on an unsustainable path. WOODWARD: Totally unsustainable. When I interviewed the president about this for the book, he said, oh, yes, it's bad politics for Democrats but then he went on to say it's untenable to not do this.

Now, how much have we cut or reformed entitlements in the Obama presidency? Zero. They need to get on with that task. This is where Paul Ryan, maybe has come up with a good idea.

TAPPER: Big bargain, yes.

WOODWARD: Yes -- well, at least do some reform on entitlements and do something that's really serious about tax reform. That's what needs to be fixed.

TAPPER: All right. Legendary "Washington Post" newsman Bob Woodward. Thank you for coming in. We really appreciate it.

And the book, of course, "The Price of Politics".

He lined his pockets as a city became a burnt-out shell of its former self. And today, former Detroit Mayor Kwame Kilpatrick learns how long he will spend in the slammer.

And in the money lead coming up, is it a band-aid on a sucking chest wound? What a short term deal could do for your 401(k) and your family budget.

Stay with us.

(COMMERCIAL BREAK)