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Congress Struggles to Reach a Shutdown Compromise

White House press secretary is pressed on when the government will officially default.
3:00 | 10/15/13

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Transcript for Congress Struggles to Reach a Shutdown Compromise
This is a special group. I'm -- -- -- ABC news digital special reports more than two weeks into the federal government shut down and with less than two days now until the country hits its borrowing limit. Mixed messages from Capitol Hill today as negotiations in the house and the senate stop and starts with more from Washington let's go to ABC's Karen Travers Karen. Good afternoon Dan they keyword right now here in Washington is tentative there's a set -- is a bipartisan deal emerging in the senate. There's -- -- house Republican plan but it's unclear right now if anything could pass both sides and of course the clock is ticking. Sense of urgency seemed to -- in on Capitol Hill. To separate plans to and a shot down -- raise the debt ceiling are emerging. I'm confident we'll be able to reach a comprehensive agreement this week -- times over a catastrophic default. And the nation's bills. The Senate's working towards a tentative deal that would reopen the government but only until January 15. Avoided default by extending the nation's credit. Only until January 7 and here's the key no major changes to the health care law. But conservatives in the house were not happy with that last point forward and other members on -- way forward. Animation that it provides fairness for the American people. Planned tracks closely to the senate when it comes to the short term funding to reopen the government. And the extension of the debt ceiling but it will also include several obamacare provisions including eliminating health care subsidies from members of congress. And suspending the medical device tax for two years. The White House called the house plan a partisan attempt to appease a small -- -- Tea Party Republicans. Who forced the government shut down in first place and -- speaker Boehner did not indicate if or when and the house would vote on this possible plan. That means right now everything is still very much up in the -- Very much in the -- very much changing by the minute it seems as if that's on the house side but what is the latest situation in the senate as far as negotiations are concerned. And there exactly where we were last night there are meeting this morning there is an 11 o'clock meeting with house -- senate Republicans that was actually canceled. They're having a policy lunch with their caucus this afternoon so -- that would be the time when they sit down and discuss all of this. As senate majority leader Harry Reid though after house speaker John Boehner came out now he -- talk about any of the details about possible plan but of course reporters are learning a lot of those details. And senate majority leader said that -- the senate was completely blind sided by the house now. A lot of that is a bit of bluster but of course they're trying to work on something that the Democrats and Republicans in this and it can agree on and they feel that house Republicans are just storming ahead on their own path. On a plan that has no chance of getting any democratic support in the house and certainly would not have any chance of passing in the senate so right now -- jockeying between both sides but as we -- the clock is ticking. But Danny -- how things go here in Washington it's only Tuesday and -- -- -- thinking and his deadline as Thursday so we're looking -- probably a lot of back and forth in some long hours until that magic deadline comes over the next 48 hours. You know what I almost wonder if it's silly at this point that we even have it countdown clock up there because he's an issue no sense of urgency to anyone in Washington DC right now. Karen thank you so much for that appreciate that I want to bring in ABC's -- are also in Washington DeVon let me ask you what's going on now right inside that House Republican Caucus. That's -- it's pretty much -- -- and right now we're hearing now from sources on the hill that. House speaker John -- having some difficulty trying to to unify his -- -- a proposal. What is clear is that the senate plan which isn't even a plan -- I mean let's take a step back here's Karen -- it was just talking about none of this is set in stone on either side. But the house today sort of reacting to what they were hearing from the senate. They don't like any of it. The house is not able to kind of come up with its own subsequent plan of course the White House -- -- so it's a big mess right now -- bottom line is there is not even a deal anywhere. And even in the senate we keep talking about the senate there's nothing on paper there's nothing they have coalesced around even there. Well we heard an optimistic. -- senate majority leader Harry Reid but unfortunately there was a little less happiness. After he learned about the potential house proposal let's listen. House Republican leadership's plan that is now and people. They can look at it. It's a plan to advance in the extreme piece of legislation. -- nothing more than a blatant attack on bipartisanship. The past several days we've been engaged in productive. Bipartisan negotiations and sent. Everyone knows that. We've been working crossed party lines. Making steady progress to achieve an agreement that reopens a government protects a full faith and credit of our great country. And opens talks to put this country on the -- fiscal fourth. Everyone needs to know but the major under discussion the house. There's no part of what was negotiated -- So did the question as this seems to be some movement back and forth in the senate and this is to be support from house Democrats -- Howard both sides going to be able to reconcile. It with easing -- deals. So it's it's it that's just the big open questions and they wish I had an answer we've been here now. And really at this juncture for since the beginning -- -- they can't even agree on whether to include provisions of obamacare and any sort of a deal. Interesting thing that Reid said there on the house towards that we will have a deal he's confident we'll have a deal this week. Notice he didn't say by that Thursday deadline which were all talking about he did say this week. Of course the deadline in the clocked -- that you see on the screen a little bit Fuzzy about what exactly happens. On the seventeenth midnight. The eighteenth. From what were hearing from sources the government won't default instantly at the stroke of midnight there is a little bit of wiggle room there I suspect. That might behind it could be behind some of the lack of urgency here and one reason why the markets may be taking this. So well at this point really is that the money won't run out the default itself. What actually hit 'til later this month although no one really knows exactly what day. But the closer we get to the seventeen that's the marker that's been put down at the deadline that everyone's working towards right now. Eyewitness about the devil in the details something like I don't know art -- stay with us because I want it went out of the White House. Where Press Secretary Jay Carney briefing reporters. The president is pleased with the progress that we've seen in the senate. It is important to note that. The process that's been undertaken in the senate is bipartisan senators Reid and McConnell have been engaging one another. Democrats and Republicans have been. Engaging on this issue and and it's all built around -- fundamental premise that we should. Not have shut down the government that we should reopen the government and we must ensure that the United States pays its bills on time has -- always had and we should do. That congress should take those actions. In a way that does not have partisan strings attached and it. Ensures the kind adds stability for our economy and -- middle class that they need so we're pleased with the progress that I would refer you to. Senate leaders for the status of those. Discussions. But we certainly believe this. There's -- potential there for. A resolution to this unnecessary manufactured crisis. They can. Allow us to get back to the important businesses. Helping grow the economy create jobs and -- taking action to improve the lives of middle class Americans. Then elected officials were sent here to do. We're confident that that resolution passed. The senate and the house ahead. Thursday deadline for the necessary. For. Congressional timing and how. No question that we are very close to a very important deadline. And time is of the essence. So. I think that is why you see some. Very serious minded efforts being undertaken in the senate. And we would hope that. That house would also. Approach this important deadline thing with the same understanding of just how serious it is. And -- US credit rating was downgraded just because. They got -- got so close to a default. In the White House -- -- hearing from any region. He's got that we are -- get very close to that deadline about a resolution. I would refer you to the treasury department for the those kinds of conversations if they're taking place that wouldn't be something I would. Not briefed on from here. We know from past experience the difficult lessons learned from 2011 that. The serious flirtation. With default. -- house Republicans. Engaged in in two years ago led to some pretty negative consequences for our our economy including as you noted. The United States being downgraded for the first time so. -- -- Officials -- -- ratings you know that that would not be something that I would -- fun from here. Because the obviously issues that have to do with market sensitivities are not not once that I would address here. And lastly the president says worst case scenario very different things -- book. And what it Thursday Cox news -- -- -- -- -- the way started implementing any of those contingency plans already. Exclusive. Well I would not go further than what the president or the Treasury Secretary said about that and I -- -- treasury. He tested Treasury Secretary Jack Lew testified as you know last week. Where broadly this issue was discussed but we are obviously focused on. Working with members of congress leaders in congress. On an effort to do what we said was essential all along which was open the government. And and make sure that the United States pays its bills by extending the -- in and and doing that in a way that we don't. Simply put us on a trajectory to re create this crisis again and a few weeks so. Were. You -- encouraged by the progress that we've seen in the senate. -- -- far from a deal at this point and so we hope that. We hope that progress continues. -- Pre crisis and a few months. What is there it doesn't work weekends -- There's there's not. The bill for -- to analyze where you right now what I would it but I hate -- Every participant in this exercise. Would hopefully. Understand did. It should not be repeated. Not in a few weeks and -- a few months and when it comes to the fundamental responsibility of congress to ensure that the United States is not the fault not ever. That's certainly the president's. That is why he has been so insistent that. We cannot engage -- them. Process here. -- -- becomes. Normalized. Where. A minority. In congress a faction of one party in one house can. Threaten the full faith and credit of the United States. If it does not get what he could not get through the normal legislative process or through. Election so. -- that's those are the stakes when it comes to the essential responsibility of congress to ensure that the department of treasury can pay our bills. It and feed us strength tax deal. As it appears to be typical us. What is the -- make -- strengths. Again I'm not gonna analyze the details of bill that we haven't seen yet and that has not emerged -- Jason. It seems like keep our state senate bill reinsurance in there he president Obama's. -- rightful credit the United States just to extract political concessions. But if you're open to that it was in the White House is because they're talking senate Democrats isn't that. Isn't that concessions. Again I think I think what we have seen people. What we've seen in the process thus far that senator Reid has engaged in. Is. A proposal that would reopen the government and remove the threat. Of -- first ever US default. By raising. The debt -- you know we don't need any more self -- problems. From congress. The economy is already paying the price -- outside analysts have noted. There is already -- cost to the economy and -- to growth and jobs. From this behavior. And it's it's important as I think so many Americans. Believe that its stock that congress simply fulfill its. Basic responsibilities to open governments to -- it again levels. Dates were set high Republicans. So that we can get about the business. Negotiating in good faith over a longer term budget proposals I'm not benign view. There provisions on OK you are talking not charge an increase in the debt ceiling and -- you are not going to talk about. You on -- provisions which -- -- which are also on the table and you're talking about the short term debt ceilings -- Even if these -- sort of small -- views on obamacare doesn't violate the principle that the president set out that he Wilma who -- Again keep it until we have. A proposal that -- emerge from these negotiations in the senate I'm not going to you know. Analyze it with you. Piece by piece what I can say is we've been encouraged by the progress. And you know we believe in the president believes it's very important that when it comes the debt ceiling that we not. Do what it. A previous effort in the house would have done which is -- to. Create a scenario where. The budget negotiations and the renewal. Government funding are once again tied directly to. The essential responsibility of congress to pay our bills and the right before the holidays which would have been would be. A terrible outcome to this process as every business owner will tell you. And and and I think many of them have told you in many of them have told. Their representatives in congress and -- people and fast action you will opt to negotiate. -- -- -- -- -- -- -- He has he has made clear that he's made clear two things -- as you now. He is willing. Within the context of broader budget negotiations within the context. Serious minded and earnest discussions about how to improve the Affordable Care Act to look at any proposals. There might do that going to -- -- And and that's true on broader budget issues but. With -- what way as some of the ideas that we've seen this morning when it comes to sort of demanding ransom to try -- -- you know rally. Tea Party members in exchange for opening the government or raising -- debt ceiling that's that's not acceptable and it has not been through this whole process. Help me it's nothing in the -- -- something. Reopening the government -- extending the debt ceiling that's acceptable. The -- the end I think two things one as I understand it there's not a there's not a proposal in the house. Talk about now based on -- press conference given by house Republican leaders. And based on some of the reporting I've seen. Since then that's because they're now going back to try to add some sweeteners for Tea Party members. And that the better course of action is the one being undertaken by. Democrats and Republicans in the senate. Instead of trying to. Once again. Craft a measure to ensure full. Republican support in the house. Why not -- -- -- measure that could get bipartisan support in the house the -- it. Republicans and Democrats are trying to do in the -- that's certainly what I think is best for the American people it's what. It's that's the kind of process that the president supports so. With with regards to. You proposals that we haven't seen it's hard to. -- -- -- talking watch Capriati. Ceiling increase on top. Talking about the shut down and the need raise the -- studio that's the that's and that's what we've been talking and several weeks. Now we've -- we've said all along there it. We want -- debt ceiling increase. For as long as possible because the need to remove uncertainty from this process -- the very. You know the various. Uncertainty that has been created by this. Manufactured crisis is what we need to avoid as an economy going forward. And and that and what Washington needs to -- because it is already causing harm. To the economy is already causing uncertainty. Among. Americans which in turn has them making decisions about how they spend their money. Which has a negative impact on potentially on the economy and that. Creates a cascading effect it can only be that which is why we need to. Here in Washington -- congress needs to fulfill its basic responsibilities reopen the government. And make sure that the full faith and credit of the United States is upheld as it has been in the past -- -- what exactly is the one. War. -- -- -- Well those -- 22 different things as we didn't explicitly clear about on October 17 as the Treasury Secretary has noted many times. The United States runs out of borrowing authority. And beyond that point. We only have cash on hand and available to pay our bills. Treasury Secretary has testified to this on Capitol Hill and is obviously far more an expert and I so I would point two his testimony in public statements about. About that fact but as everyone knows in order to meet all of our obligations. As a country. The United States needs borrowing story. In order to make sure they -- all of our bills are paid all of the obligations that congress has made all of the bills that congress has incurred. Will come due if we can only pay those bills with cash on hand. That is a problem and that is what. There's regular every hazard countdown clocks are doing on the CB countdown to midnight. Tomorrow -- -- easy it is midnight tomorrow night calorie lists the seven perforated. I don't I don't I don't -- as much as I'd like to improve the quality of the countdown clocks I would have to. He -- treasury on the on the nick and -- Allentown box where does congress need to act why -- they need to pass something by tomorrow consulting pass on Thursday. -- sky fault doesn't pass on Friday way is that deadline they have got to produce well he's he's more. John the deadline for avoiding uncertainty has passed the deadline for. Not shutting the government down has long since passed so congress has already failed to act in a timely fashion. But we hope the congress will. Act quickly to resolve these issues now it's too late and trying to figure out you know I don't I'm not sure what that means that we we date they need to act as soon as possible because. What is. Absolutely true. Is this everyday -- and shut down there is harm done ended. Hundreds of thousands of Americans and -- directly to many many more and there's direct harm done to our economy in every day. That we get closer to the point beyond which we've never been which is where the United States does not have borrowing authority. Creates more. Trouble for our economy and uncertainty global which has a negative impact on our economy obviously a lot of anxiety in the bond market because this can bondholders he -- -- still. I received their interest after tomorrow Jon says are the kinds of questions that I think or best directed to the Treasury Department. What is. On question with -- case is that when people talk about priorities stations they are talking about the fall by another name. When people talk about paying some bills but not others. They are talking about. Entering a realm that this country -- this government has never been -- which is picking and choosing who gets paid. And when they get paid and that has tremendous negative consequences for our economy not all of which are noble beyond the fact that we know -- -- No question but -- game plan I mean obviously this is no longer hypothetical there's a real possibility congress doesn't act. -- -- what exactly is. Q do you have a game plan what to do. Well this is obviously something that the Treasury Department would have jurisdiction over so I would refer you to treasury wants specific question this idea of suspending medical device tax. I believe it's been referred to as a ransom payments -- part of this deal. The the speaker's office is saying that this idea was actually proposed by White House staff in negotiations last week. Is that true or not that is not true. What we have always said. Is -- discussions of the medical device tax or other elements within the Affordable Care Act that lawmakers want to talk about. In an effort to improve the Affordable Care Act. We are willing to have but not as in the context or as ransom for opening the government. That is why. The provision like that appears in the latest proposal it seems be going nowhere from house Republicans. Because it's an effort to try to five votes from. Tea Party Republicans who shut this government down the first place and so. There's tell the -- and again that is not that is think that the conversations that have been had here and up on Capitol Hill about the medical that I sex as far as we're concerned. Have been about our willingness. In the as the president said and others in a broader context not ransom -- Opening the government not ransom for congress doing its job to -- bills but within the context. The president's willingness to hear ideas about ways we can improve as opposed to undermine or dismantle or to fund. Obamacare we -- we're willing to have that but we're not gonna pay ransom presence and pay ransom. Yet from the American people to the Tea Party and Oreo in the government. Let's hope that -- You know more closely there is so we'll look -- New monitoring that press briefing with Jay -- podium there. Some back and forth with our own Jonathan Karl as far as when the actual deadline is whether it is Wednesday night or whether it is Thursday night at midnight. And Jay -- essentially saying that the time has already passed that in facts. -- -- house and the senate to come together agreements to reopen the government and raise the debt ceiling. I want to bring an ABC seven dollars and watching the news conference with us as well and -- and -- in exchange back and forth there as in victory -- that might not. Might wanna be might want to take it rhetorical way -- of that response. That's right -- -- did the White House has been impressed for quite some time to. Pin down exactly -- we're gonna go over that cliff and win this economic catastrophe that they've been talking about now for weeks. And not just the White House -- independent economists as well. Win that is actually going to happen in the White House frankly say -- you've heard from Jay Carney we've heard from the Treasury Department the past few weeks we don't know. Exactly and some of that has to do with. The inflows and outflows of tax dollars over time of course the seventeenth is when. The US can no longer borrow anymore money that's when we hit our credit limit. -- all -- have left his cash on hand at once that's gone. That's when we default you heard -- they're saying we don't know exactly when that's. So -- some rules issues in congress it gave Democrats accusing Republicans of cutting off their ability. To call for a vote on a senate deal. That's right there's a little bit of partisan. And wrangling in little bit there's a lot of partisan wrangling going on here some of the stadium back last week in in the -- and they have rules committee. -- lawmakers were -- trying to figure out changing the rules a little bit to try to prevent. This is Republicans prevented clean funding bill from coming onto the floor of the house to get that up or down vote so there this intrigue is -- going on for. Throughout this process it's really frustrated not only lawmakers on Capitol Hill -- all of us watching this to see these games being played. They gather have been -- some mechanics going on behind the scenes way in the weeds for most of our viewers but. It's part of the reason -- we're stuck here now just hours before that potential. Hitting the the ceiling on the debt and -- borrowing authority. As a White House will be holding on -- meeting this afternoon with some congressional leaders. That's right President Obama yesterday was supposed to meet with. -- the leaders of both parties on Capitol Hill he invited them to the White House that -- postpone that meeting. To give a little more time for a deal to be ironed out now. Everything is on pause on Capitol Hill it seems both the senate and the house are kind of back in their quarters trying to figure our how to proceed. President Obama announced that he will meet this afternoon. With house democratic leaders at the White House try to hoddle again sort of a bucking up if you -- as they begin this final push to hold firm. All along the White House believes there in the best position here with those polls showing -- -- most recent poll out yesterday showing 74%. Of Americans. Blame Republicans more than anyone else for that shut down the potential default. The devil and it is as -- just to kind of entered to revisit that point that we were sort of joking someone about when Jonathan Karl is asking Jay Carney about the actual specific hour when that deadline will be reached there. But what are you hearing with that this thing obviously less than two days away when are you hearing either from those inside the house inside the senate they realistically believe that it is absolutely essential -- -- a concrete plan in place. Well the Congressional Budget Office which is the nonpartisan. Sort of umpire of all things politics or Washington. Budgetary matters that is has pretty much said that we will run out of cash between October 22 and November 1. Said that's -- the consensus window that. Seventeenth eighteenth nineteenth if we get through the week here it's not going to be the end of the world just yet but the scary part is when those first big payments are due from the Treasury Department payments to Social Security beneficiaries the first one of those is on the 23 that's at twelve billion dollar payment. After that there are several big payments out to have military. To other beneficiaries pensions. Once those payments start coming -- that's when that cash. It's in our coffers begins to run out so the farther away we get from the seventeenth the more likely we are -- that default. Are at ABC's Devin Clark in Washington DC watching the back and forth on this very active Tuesday Devin thank you isn't it thanks we have a complete report on abcnews.com. As we are waiting in that meeting at the White House this afternoon. Renowned in New York with this ABC news digital special report.

This transcript has been automatically generated and may not be 100% accurate.

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