Default Hits Markets; Interview with Senator Joe Manchin of West Virginia
CHRIS CUOMO, CNN ANCHOR: And while the government is partially shut down, so is the Obamacare website. It's been live for weeks and trying to sign up is a real headache. Our correspondent has been trying to get on for days at the all hours and she will tell what you she found. So with each passing day there's still no apparent end to the government gridlock, even as the potential stakes get higher. The focus of the deal making on the debt ceiling and a shutdown did shift, however, from the House to the Senate so could that lead to some kind of progress? We don't know, but Jim Acosta reporting live from the White House is watching it for us. What do we know, Jim?</s>JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: Chris, in a sign of just how desperate things are becoming in Washington the only movement was between the phone call with the Senate's top two leaders who haven't always gotten along with each other but have to work together to avert a crisis.</s>ACOSTA (voice-over): With the clock ticking down to debt ceiling day, it's come down to Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell, who have started horse trading over the deal to reopen the government and avoid a default.</s>SEN. HARRY REID (D-NV), MAJORITY LEADER: I've had a discussion with the Republican leader this afternoon. Our discussions were substantive and will continue those discussions.</s>ACOSTA: The question is whether they can get there in time.</s>SEN. CHARLES SCHUMER (D), NEW YORK: Both leaders realize how difficult default would be; the devastation it would cause to America.</s>ACOSTA: But talks over the weekend appeared to stumble again as Republicans accused Reid of overreaching, by seeking additional concessions from Republicans over those forced budget cuts in the sequester.</s>SEN. JOHN MCCAIN (R), ARIZONA: Now is the time to be magnanimous and sit down and get this thing done.</s>ACOSTA: The White House said President Obama was standing firm in a phone call with House Minority Leader Nancy Pelosi, that there must be clean bills to extend the debt ceiling and end the shutdown with no strings attached. Tensions are boiling over.</s>SEN. TED CRUZ (R), TEXAS: This is the people's memorial.</s>ACOSTA: Texas Senator Ted Cruz led a protest over the closing of the World War II Memorial on the National Mall, that drew this verbal attack on the president.</s>LARRY KLAYMAN, FOUNDER, FREEDOM WATCH: I call upon all of you to wage a second American nonviolent revolution, to use civil disobedience and to demand that this president leave town to get up, to put the Koran down, to get up off his knees and to figuratively come up with his hands out.</s>CROWD:  USA!  USA!  ACOSTA: Veterans and Tea Party activists grabbed monument security barricades and dumped them in front of the White House, before a rowdy face-off with park police in riot gear. One man waved the Confederate flag. Others called for impeachment.</s>UNIDENTIFIED MALE: They gave them back to President Obama by piling them in front of his house -- our house, I'm sorry, in front of our house.</s>ACOSTA: While another Tea Party-backed senator was calling for compromise.</s>SEN. RAND PAUL (R), KENTUCKY: I think it's not a good idea to go through the debt ceiling deadline. I think we should go ahead and have an agreement in advance.</s>ACOSTA: Now the only deal that's been struck in recent days has been between the federal government and a variety of state governments to reopen some of the closed national parks, things are back to normal here at the White House after all that commotion yesterday. And we should point out the Senate is back in session later today, so we do expect further conversations between Senate leaders, but any deal that goes down to reopen the government and lift the debt ceiling. If you can just go by the rhetoric in the piece we saw outside the White House yesterday is not going to go over well with everyone, and that is not a good sign as to how things might go over in the House, where obviously House Speaker John Boehner has a conservative caucus to deal with -- Chris, Kate.</s>BOLDUAN: All right. Jim, thank you so much. So, the debt ceiling deadline hits Thursday, giving Wall Street a bad and understandable case of the jitters at this point. Stock futures down this morning. Last week's optimism over a possible deal now just seems a distant memory. Alison Kosik is keeping an eye on your money. How's it looking?</s>ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Well, it is Columbus Day holiday, so the bond market is closed but the stock market is open and what you're probably going to wind up seeing is it a market trading on the headlines coming out of Washington, depending on whether or not there is a deal. And Wall Street may look to send a signal to Washington, D.C., if the U.S. wind up defaulting it wouldn't only hurt our fragile recovery here, it could also cause chaos in the global markets.</s>KOSIK (voice-over): The U.S. is three days away from the debt ceiling deadline, the possibility of default, sparking concern of potential economic turmoil around the world.</s>OLIVIER BLANCHARD, IMF ECONOMIST: 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.</s>KOSIK: Here at home, a default could mean a serious hit to your investment, like your 401k, Wall Street now waiting on Washington to dictate the trades as banks are predicting the S&P; 500 could see painful losses, as high as 45 percent if an agreement isn't reached.</s>GEORGE HOWELL, CNN CORRESPONDENT: Here in Chicago, we have seen the housing market really pick up in the last year and like many places, that has been helped by low interest rates for people looking for loans. But all of that could change if the government defaults because interest rates could spike or even worse we could see another credit squeeze making it much harder to borrow.</s>KOSIK: A default also means interest rates for credit cards and student loans would spike as well and payments from the government would dry up.</s>SHANNON TRAVIS, CNN CORRESPONDENT: Washington meets Main Street. We are outside a local Social Security Benefits Administration Office here in Washington, D.C. Could we be seeing worried recipients of those benefits show up at offices all across the country? Roughly 58 million Americans rely on those benefits, but Treasury Secretary Jack Lew, he says if the debt ceiling isn't raised, it could be a problem paying them.</s>KOSIK: The ripples of a default would be far reaching, the global marketplace feeling the effects of the weakening dollar. The U.S.' current debt limit sits just under $16.7 trillion.</s>UNIDENTIFIED MALE: Our systems were not designed to not pay our bills.</s>KOSIK: Despite some cries of impending chaos, some Republicans say sounding the alarms is a bit sensational.</s>UNIDENTIFIED MALE: I'd rather have a managed catastrophe now, which I don't think we'll be there.</s>SENATOR MIKE ENZI (R), WYOMING: I think this is about the 11th time I have been through the subject of the sky is falling and the earth will erupt.</s>KOSIK: More recently, the U.S. petered dangerously close to the debt ceiling deadline in August 2011, where a deal was struck in the 11th hour.</s>KOSIK: The exact day when the U.S. government will run out of cash to cover its bills isn't certain but when the deadline hits revenue will continue to come in. Lawmakers have also been negotiating a plan that includes a temporary fix to increase the debt ceiling though many critics say what we really need now isn't a Band-aid fix, but we need a permanent one -- Chris.</s>CUOMO: All right. Alison, thank you very much. Joining us now for more on the gridlock in Washington is Democratic Senator Joe Manchin of West Virginia. Senator, thank you for joining us. Appreciate it.</s>SEN. JOE MANCHIN (D), WEST VIRGINIA: Thanks for having me, Chris.</s>CUOMO: So, today, we commemorate the discovery of the new world and Columbus Day. Is that incentive for you all down in Washington to search for a solution?</s>MANCHIN: It sure is. You know, Chris, we weren't sent here basically as public servants to inflict self-inflicted pain upon the people we take an oath to serve. I don't think a Democrat or Republican came here for that purpose. And how we've gotten ourselves into this situation, I will say this -- the good news is there are 12 of us, six Democrats, six Republicans, who have been talking for two weeks. We've got a good template. We believe the template we put together is something that both leaders are looking at, leader Reid and leader McConnell. They need to put the numbers to it. They need to basically put the dates on the C.R. and the debt ceiling, but this is a good compromise that works well and basically can move our government forward, and that's what really needs to be done.</s>CUOMO: You think you can get a short term deal done or is that too scary even to your own leadership?</s>MANCHIN: Well, here is the thing about the short term. We need to get into a budget conference. We need to go back to regular order. To get a big deal to get rid of the sequestering and all of the things, and operate the way we should, to let appropriations operate the way it's designed to operate, you've got to have a budget. We can't get to the budget conference. Our Republican colleagues have not allowed that to happen. I think they're looking at it differently now. We put this, the 12 of us, six D's and six R's, have put that as part of our compromise, you must go to budget conference to work out a bigger deal and a more fair number realistic of how we keep government moving forward.</s>CUOMO: So we're told there are two big blocks, one is theoretical, one is practical. The theoretical one is that there is a significant faction of people, mostly in the House, but some in the Senate, who believe that this is necessary to continue to show that government is broken. Are you dealing with any of that there, where people are saying, "I don't want to make a deal, I want people to see that this government is dysfunctional, I want it to stay this way"?</s>MANCHIN: I will still say that is the extreme, Chris. That's the extreme elements, OK? And I understand that. The bottom line is there's enough of us still in the middle -- common sense to know the purpose that we're here. I'm not here to call Republicans names or to say disparaging things about them. I'm here to work with them and basically we have a divided government. I understand as a Democrat in the majority party that basically you have to work with your colleagues, not against them. And that's what I've been trying to do as governor of West Virginia, my great little state. We work together. We didn't put people in difficult positions or try to embarrass them. So, we've got to work through it, and that's all we're trying to do. Susan Collins has been great to work with. We've been there. We got people together and we're going to meet again this morning at 9:00. We've given a good outline in the template to the leadership, I think they received it and I think they received it in a positive manner. Let's see what they do with it, because it is the crux of having a bipartisan agreement. It's the only thing that has a bipartisan buy- in right now.</s>CUOMO: Let me ask you something else. Up until this point, the Democrats have been saying, you know, the Republicans are saying they want to sit down and compromise. We went to them dozens of times asking them to sit in conference on the budget. They didn't want to do it. This is just talk. Then, you come up with this deal, and we're told in the deal is this provision to allow agencies to deal with the sequester cuts the way they want to. Now, is that a little bit of sneaky political move at this time when you're supposed to be above board?</s>MANCHIN: Not really Chris, basically because what we've said is get flexibility, get a normal accounting procedure so they can move from account to account so that the pain won't be this draconian pain. But they have to do it with the approval of Congress. So, it has -- if they have a decision, do they want to move, they've got send it back to appropriators, the appropriators will look at that and see if it makes sense and if they can agree with it. So, we still have the oversight of Congress.</s>CUOMO: But are you concerned that it looks like you're adding something to it, that the Republicans will see this as, oh wow, you want us to give on Obama care and now you want us to give on the sequester, too? Are you asking for too much?</s>MANCHIN: No, no, I understand the concern they have. You know, the healthcare law, Obamacare, is the law of the land. Sequester is the law of the land. The only way any of those laws can be changed is through the Congress. So, if we're saying you have to set down and meet, you have to discuss, you have to come back with us -- two weeks prior to the debt ceiling, whatever date our leaders agree on -- when you come back with us, what agreement do you have? Are you changing the numbers so we don't have a readiness problem with our military? Are you changing the numbers so we don't cut Head Start from our children? I mean, these are the things we need to do and live within our budget. We've got to have a grand deal, a grand -- and Bob Corker, dear friend of mine, has been working with us very closely. We're looking at basically how do we get a Bowles-Simpson approach, where you look at revenue, and you look at spending, and you look at reforms? It needs to be done. It's tough love. It's got to be done.</s>CUOMO: So, Senator, for those who got to enjoy their weekend and haven't been paying attention, do me a favor -- give me the bullet points of what's in the deal as proposed.</s>MANCHIN: Well, the bullet points in the deals proposed: basically, we look from the Affordable Healthcare Act, postponing for two years the medical device tax, not delay -- not expending it. Basically, just postponing it, that's a compromise. Also, verification -- verification of people signing up to make sure they're not scamming or frauding the system. We've all agreed, Democrats and Republicans. Also, we've agreed that you have to go to conference. We couldn't even get them to sit down in budget conference. We've done that. We've agreed to C.R. and the debt ceiling being extended out. That's up to the leadership. We've got a template that works. We've agreed on the template, just the facts as far as what the details are needs to be worked out by leadership and we want to be able to help them.</s>CUOMO: What percentage do you think you are in terms of getting toward 100 percent, meaning you have a deal? Where do you think you are right now?</s>MANCHIN: Well, basically, the template -- I think we're 70 percent, 80 percent there, putting the extra 20 percent, 25 percent to it, Chris, is OK. When should the C.R. come due? When should the debt ceiling come due? And does that give that time for the budget conference, the budget committees to set down and work through this? So those are the details that have to be worked out. We don't want these draconian cuts to go in that really might affect how we take care and serve the people of this great country. That happens January 15th. That's the law. Can we meet before that, have an agreement and move forward? The C.R., there's no reason, this is self-inflicted pain. There's not a person I know of, Chris, that signed up for self-inflicted pain upon the people they took an oath to serve. Now, if you have the extreme to say "I just don't care," maybe they better have a gut check of why they're really here. And I'm not calling anybody, these are people I know, to have a gut check of why you're here. We're here basically as -- public servants should be the most honorable professions, and we've got to hold ourselves to higher goals than what we're expending right now. Just -- I'm ashamed and I want to apologize to the American people. This is not what we signed up for. This is not what I'm going to sit back and let happen if I can help it.</s>CUOMO: Well, certainly, there's need for leadership right now, and I remember as governor, how you helped your people through very tough times down there in West Virginia. So thank you for joining us on NEW DAY and good luck getting it done, Senator.</s>MANCHIN: Thanks, Chris. Thank you.</s>CUOMO: Kate, over to you.</s>BOLDUAN: All right. Chris, thanks so much. Gunmen have abducted seven aide workers in Syria, a story developing this morning. We want to tell you more about Red Cross officials say the team was trying to get medical supplies to people in the northwestern part of the country when they were kidnapped. Mohammed Jamjoom is following the story live from Beirut for us this morning. What's the latest, Mohammed?</s>MOHAMMED JAMJOOM, CNN INTERNATIONAL CORRESPONDENT: Kate, it is an extremely worrying development -- seven aide worker, six of them working for the Red Cross, one of them a volunteer for Syria's Red Crescent. They were in Idlib province, in the north of the country, on Sunday, they were ambushed by armed gunmen and kidnapped. They have not been heard from since. They were trying to distribute medical supplies there and had been out in the field since October 10th. Now, the Red Cross is calling for their immediate and unconditional release. We've heard from the Syrian government, the Syrian government has stated through Syrian state television that they believe that armed terrorist groups are behind this kidnapping. That's sort of the catch-all terminology that the Syrians use when referring to Syrian rebels. But I must stress that nobody has claimed responsibility for this kidnapping as of yet. CNN spokes a short while ago with a spokesman for the ICRC, the International Committee for the Red Cross. He said that the Red Cross has no intention of shutting down their operations there, that it's of vital importance to make sure that Syrians can still get the humanitarian aid and medical supplies that they need as the Syrian civil war rages out of control. Back to you Kate and Chris.</s>BOLDUAN: All right. Mohammed, thanks so much. Mohammed makes such an important point. These are just some of the folks that are trying their best to help with the massive humanitarian crisis that's unfolding in Syria and continues to get worse day by day. And now, they're even under threat throughout this Syrian civil war. We'll keep on it. Thanks so much.</s>CUOMO: A lot of other headlines this morning, so let's get to Don Lemon who's in for Michaela. Hey, Don.</s>DON LEMON, CNN ANCHOR: Yes. Good morning. We're going to start with more news overseas. Making news this hour, another deadly green on blue attack in Afghanistan. A man wearing an Afghan army uniform shooting and killing a member of the NATO international security force. There are reports a victim is an American, but that has not been confirmed as of now. We're checking on that. The attack coming one day after secretary of state, John Kerry, and Afghan president, Hamid Karzai, move closer to a deal to keep some U.S. troops in Afghanistan beyond next year. An American man jailed since August after a car bombing in Egypt has turned up dead at a police station. Officials say James Lunn was found hanging by shoelaces and a belt from a bathroom door. An investigation is now under way. Lunn had been detained since August. He reportedly died the same day he learned he'd been detained for at least another month. An investigation under way into a dry ice bomb at Los Angeles International Airport. Dry ice in a plastic bottle set off an explosion inside a bathroom. No one was hurt, but officials did shut down terminal two at LAX. For a short time was delayed some flight. The bathroom is an area not accessible to the general public. Millions of Social Security recipients, disabled veterans, and federal retirees will see a historically small increase in benefits for the second straight year. Automatic yearly increases were adopted in 1975 and early estimates place next year's at roughly 1.5 percent. That would be among the lowest on record. Officials say it's because consumer prices have been relatively flat. And get ready for an adrenaline rush. Colombian wingsuit flier, Jonathan Florez, crowned the winner of the wing suit flying world championship in Central China. Sixteen fliers braving a 4,700 foot drop above sea level, looping around and landing at a finish line. Florez completed his in 23.4 seconds. Geez! This year's event was overshadowed, though, by the death of Hungarian wing suit flier, Victor Kovats, who died during a trial flight on Tuesday. That is not easy to do. Have you ever seen the guy when he goes -- when he just -- went between the two mountains?</s>BOLDUAN: Yes. We talked to him.</s>LEMON: Crazy!</s>BOLDUAN: One of the more terrifying hobbies. But it's amazing to watch from afar.</s>LEMON: Yes. From afar.</s>BOLDUAN: Yes. That's right.</s>LEMON: Operative word.</s>CUOMO: One of the reasons we're so excited by this because of how dangerous it is. Unfortunately, every once in a while, you get reminded of what the downside is.</s>BOLDUAN: All right. Let's get over to Karen Maginnis in for Indra Petersons this morning for another look at the forecast. Hi, Karen.</s>KAREN MAGINNIS, AMS METEOROLOGIST: Hey, Kate and Chris. Good morning, everyone. If you've got the day off, it doesn't look like it's going to be too messy a travel day across the northeast. That I- 95 corridor fairly quiet. There's going to be a relatively weak weather system that swings across this area, but on the back side of this warm front means some warmer air moves on in as you go towards Tuesday into Wednesday. But Wednesday, there's going to be another weather system that's going to bring in some much needed wet weather, because only half of the precipitation in New York City that you typically see during the month of October. Well, for today, in Denver, 57 but some of those higher peaks in the front range all the way to Yellowstone, into the wind river, the saw tooth mountains. You're looking at pretty some substantial snowfall over the next 24 hours. Here's the reason why, Area of low pressure very big risk for this time of year, but ahead of it, could see the threat for some pretty good thunderstorms. Speaking of thunderstorms, in Texas, they've seen a number of high water rescues but look at this. This out of Hays County, Hays County, Texas, just to southwest of Austin, Texas, this commercial bus overturned, and yes, there were a number of people inside that bus. They were part of a wedding party. No one reported injured, but the bus did try to move over the flooded road there. Some parts of Austin saw as much as 12 inches of rainfall. That rain threat continues a little bit further to the north and to the west, but nonetheless, the next several days, it looks like a pretty soaking rains just about everywhere we look there. Chris, Kate, back to you.</s>BOLDUAN: All right. It looks like we need to dry out now. Thanks so much, Karen.</s>CUOMO: Let's take a quick break. Coming up on NEW DAY, a 72-year-old man survives in remote wilderness for not a day, not a week, 19 days. How did he do it? How is he holding up now? We'll tell you.</s>BOLDUAN: A New Jersey Senate race takes an unexpected turn. What Sarah Palin has to do with the contest?