'This Week' Transcript: Former President Bill Clinton; Iranian Foreign Minister Javad Zarif

PHOTO: Iranian Foreign Minister Javad Zarif is interviewed by ABCs George Stephanopoulos for "This Week" on Sunday September 29, 2013.

READ the full transcript of George Stephanopoulos' interview with former President Bill Clinton here.

A rush transcript of "This Week with George Stephanopoulos" airing on Sunday morning, Sept. 29, 2013 on ABC News is below. This copy may not be in its final form and may be updated.

(BEGIN VIDEOTAPE)

STEPHANOPOULOS (voice-over): Good morning and welcome to "This Week." Breaking overnight, shutdown showdown. The House takes a hard line on Obamacare, all but assuring a government shutdown just one day from now. This morning, all the breaking details and what it means for you.

President Clinton weighs in.

CLINTON: There are times when you have to call people's bluffs.

STEPHANOPOULOS: Plus, Paul Krugman and Bill Kristol join the debate on our powerhouse roundtable. And a bombshell breakthrough.

DIANE SAWYER, ABC NEWS: Today President Obama surprised everyone.

STEPHANOPOULOS: The president's historic phone call with Iran's new leader.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We have a unique opportunity to make progress.

STEPHANOPOULOS (voice-over): But is Iran really ready to reject nuclear weapons? Or is this charm offensive cover for building the bomb? We put the tough questions to the Iran's foreign minister live. It's an ABC News exclusive.

All that, plus President Clinton's surprising take on Hillary's presidential run, right here this Sunday morning.

ANNOUNCER: From ABC News, THIS WEEK WITH GEORGE STEPHANOPOULOS starts now.

(END VIDEOTAPE)

STEPHANOPOULOS: Two breaking stories this morning and we begin with that tense scene in the House overnight.

(BEGIN VIDEO CLIP)

REP. STENY HOYER (D), MD.: A shutdown is not a tactic. It is a failure for this country.

REP. DANA ROHRABACHER (R), CALIF.: Please accept the compromise and keep the government open.

(END VIDEO CLIP)

STEPHANOPOULOS: When it all wrapped up, House Republicans passed a bill that would keep the house open only if ObamaCare was delayed for a year. That is a non-starter for Democrats. So let's get more on what happens next from our chief White House correspondent Jon Karl.

And, Jon, hard to say how long it will last, but this makes some kind of shutdown late tomorrow all but certain.

JONATHAN KARL, ABC NEWS CHIEF WHITE HOUSE CORRESPONDENT: Oh, that's right, George, positions have hardened. Time is running out. I would now put the chances of a government shutdown at 99.9 percent. It was after midnight at a raucous session last night that the House did what they did.

The bill, what it would actually do, it would fund the government until December; it would delay ObamaCare for one year and it would repeal a tax on medical devices that's part of the health care law. They also separately passed a provision that would fund the troops regardless of a government shutdown.

The White House response was swift, George, Jay Carney saying "Today Republicans in the House of Representatives moved to shut down the government."

And it's hard to disagree with that because the Senate absolutely will not pass what just passed in the House. And, George, the Senate doesn't get back into session until 2 o'clock tomorrow afternoon. That is 10 hours before the government shuts down.

STEPHANOPOULOS: So they sent their bill right back to the House.

What happens next?

KARL: But what I'm hearing this morning from Republicans is they will still attempt to put provisions in there dealing with the health care law and send it back to the Senate. This ping-pong back and forth will go no signs of compromise on either side.

STEPHANOPOULOS: And then the question is, how long does that go? A couple of days? Or does it stretch on, maybe up to the point where we reach that second major deadline, the debt limit reached on October 17th?

Far more serious, does this back-and-forth make it more likely that we'll avoid a confrontation over a deadline?

KARL: Well, there are two schools of thought on this. One is that this works out so poorly for the Republicans that they realize they can't go to the brink again over the debt ceiling.

On the other side of this, George, positions have gotten so hardened here and there's such division that it's hard to imagine a compromise on the debt ceiling. Either that said, I should tell you that aides to the Speaker of the House tell me that they are confident that the debt ceiling will be dealt with and there will not be a default.

I just can't see exactly how we get there by October 17th.

STEPHANOPOULOS: Thanks, Jon and we'll have more on that with the round table coming up. But now today's other top story, what could be an historic (inaudible) with Iran.

The man in charge of negotiating with nuclear deal, Foreign minister Dr. Javad Zarif is here live for an exclusive interview.

First, let's go to ABC's chief foreign correspondent Terry Moran for more on a dynamic week of diplomacy.

TERRY MORAN, ABC NEWS CHIEF FOREIGN CORRESPONDENT: Absolutely, George, what we have seen this week represents the possibility of a development of stunning diplomatic breakthrough. But there is a lot of work to do.

MORAN (voice-over): It was a week of head-spinning history in the making.

OBAMA: Just now, I spoke on the phone with President Rouhani of the Islamic Republic of Iran.

MORAN (voice-over): And so with a 15-minute phone call, 34 years of bitter relations thawed ever so slightly.

1979 was the turning point, the shah of Iran, a key American ally, toppled in a revolution, replaced by the fiercely anti-American Ayatollah Ruhollah Khomeini. And a few months later, the storming of the U.S. embassy in Tehran, enemies ever since.

But the election of 64-year-old Hassan Rouhani in June has sparked hope. Rouhani has leashed a charm offensive toward the West, in speeches, on Twitter and in interviews, including with Christiane Amanpour on CNN.

HASSAN ROUHANI, IRANIAN PRESIDENT: I bring peace and friendship.

MORAN (voice-over): So when he arrived in New York this week for a meeting at the U.N., anticipation was running high and Secretary of State Kerry met with his Iranian counterpart Javad Zarif.

But this new chapter is fraught with risk for both sides. After years of deceiving international agencies about its nuclear program, can Iran be trusted? President Obama seems skeptical.

OBAMA: So the test will be meaningful, transparent and verifiable actions.

MORAN (voice-over): Another problem, Rouhani is not the ultimate power in Iran.

Supreme Leader Ayatollah Khomeini is, as Rouhani made clear in his CNN interview.

ROUHANI (through translator): The Supreme Leader has, I can tell you, has given the permission for my government to freely negotiate on these issues.

(END VIDEOTAPE)

MORAN: The next steps in this diplomatic journey are likely to be small ones, not big ones, confidence-building measures in advance of a meeting in October. Iran might agree to halt the enrichment of uranium to 20 percent, considered a dangerous threshold; could agree to release Western prisoners including the American Christian pastor Said Abedini, and the U.S. could ease some sanctions.

But, George, the bottom line is, after these historic headlines this week, now comes the hard part, the really hard part.

STEPHANOPOULOS: Let's get more on that hard part now -- thank you, Terry -- from Iran's foreign minister, Dr. Zarif. He joins us now.

Thank you for joining us.

MOHAMMAD JAVAD ZARIF, IRAN FOREIGN MINISTER: Good morning.

STEPHANOPOULOS: Good morning. Welcome back to THIS WEEK, your first in 26 years.

ZARIF: Yes.

STEPHANOPOULOS: It's been a long time.

This week, analysts in the Middle East have called the events a game-changer, one even likening it to the fall of the Berlin wall.

Is that your view? Has there been a fundamental shift in the relationship between the U.S. and Iran?

ZARIF: Well, I think we have taken the first steps to address an important issue, both for Iran, for the United States and for the international community, an issue which I believe should not have been, should not have become an issue in the first place.

But I has unfortunately become a global problem and now we need to resolve it and the resolution of that issue will be a first step, a necessary first step towards removing the tensions and doubts and misgivings that the two sides have had about each other for the last 30-some years.

STEPHANOPOULOS: That is, of course, the nuclear issue, but there's a lot of skepticism as you know about the ability of President Rouhani and you to deliver on any deal. Analysts look at the fact that there wasn't a handshake, only a phone call, as a sign of weakness. There have been demonstrations greeting President Rouhani when he returned to Iran. And many Western observers believe that your Supreme Leader simply will not do what it takes to back up a deal.

Can you assure Americans that he will indeed back a deal you negotiate?

ZARIF: Well, Iran and the United States are similar in many ways. And one is that we both have pluralistic societies where difference of views exist and difference of views are aired. And I think it's very healthy, of course --

(CROSSTALK)

STEPHANOPOULOS: But he has the final say?

ZARIF: Of course, we have to do it with an (inaudible) of mutual respect and mutual interest. We believe that, if the United States is ready to recognize Iran's rights, to respect Iran's rights and move from that perspective, then we have a real chance and we negotiate with the full authority of the Leader.

We know what we want to achieve. We know that Iran is not seeking a nuclear weapon. In fact, what I told the foreign ministers and the secretaries of state, in the meeting of E.U. 3+3, or as you want to call it 5+1, I told them that having an Iran that does not have nuclear weapons is not just your goal, it's first and foremost our goal.

STEPHANOPOULOS: As you know, there's a lot of skepticism about that. But Secretary Kerry, in an interview that's going to air tonight, has laid out some concrete steps that Iran could take in order to prove they don't want a nuclear weapon. Here's what he had to say.

(BEGIN VIDEO CLIP)

JOHN KERRY, SECRETARY OF STATE: They could immediately open up inspection of the Fordo facility; they could immediately sign the protocols, the additional protocols of the international community regarding inspections. They could offer to cease enrichment above a certain level.

(END VIDEO CLIP)

STEPHANOPOULOS: Is Iran prepared to do that?

ZARIF: But Iran is prepared to start negotiating. I'm sure Secretary Kerry does not want to dictate to us what we should or shouldn't do. We are willing to engage in negotiations. Of course the United States also needs to do certain things very rapidly. One is --

STEPHANOPOULOS: What do you need from the U.S.?

ZARIF: One is to dismantle its illegal sanctions against Iran that are targeting ordinary Iranians. Now, in spite of all of the claims to the contrary, it is impossible to open a letter of credit from a bank to buy medicine for Iranian patients because there has been, in fact, blind sanctions against banks dealing with Iran. There has been a lot of arm twisting by the United States, by -- not by the entire government, by certain elements within the U.S. government which have tried to put pressure on ordinary Iranian people.

And ordinary Iranian people showed during the last election that they put their trust in the ballot box, they put their trust in the government. They want the government to deal with the rest of the world from a position of strength, through flexibility, but insisting on their rights.

(CROSSTALK)

STEPHANOPOULOS: And that is what --

ZARIF: Sanctions are not a useful tool of implementing policy. And the United States needs to change that.

STEPHANOPOULOS: I understand that's your demand. But in return, is Iran prepared to stop enriching uranium at the levels they are now enriching it?

ZARIF: Iran is prepared to negotiate. You know no country does or should negotiate on the --

STEPHANOPOULOS: But that's on the table?

ZARIF: Negotiations are on the table to discuss various aspects of Iranian's enrichment program. Our right to enrich is nonnegotiable.

STEPHANOPOULOS: But you don't need to enrich above 20 percent, which is only used for military purposes.

ZARIF: We do not need military-grade uranium. That's a certainty and we will not move in that direction.

But what is necessary is for the two sides to sit together and reach a common objective. We should not have two competing objectives.

You see, let me explain to you, that after the breakup of the Soviet Union one of the concerns that you had and in the west -- and I was living here and I shared those concerns -- was that all of these scientists that were involved in the nuclear program were now unemployed and they could go to the black market, seeking employment opportunities.

Now, we have a large pool of Iranian scientists. We have an indigenous Iran nuclear program. Israel cannot kill all of our scientists. They have unfortunately assassinated some of them and nobody has raised an eyebrow about it, which is a source of great concern for us that the world, the United States which is supposed to be against terrorism is allowing terrorists to kill innocent Iranian scientists.

But now let me go to the issue and say that all these scientists, the best way to ensure that Iran's nuclear program will always remain peaceful is to make sure that these scientists operate in a facility or facilities that are observed by international observers, monitored by the International Atomic Energy Agency.

STEPHANOPOULOS: Including surprise inspections?

ZARIF: Oh yeah. We already have surprise inspections. We are moving in that direction.

As you know, when I was negotiating our nuclear issue in the early 2000s, we had -- we were implementing thee additional protocol on a voluntary basis, which provides for surprise inspections. Unfortunately at that time, the U.S. administration, at that time, had different views...

STEPHANOPOULOS: But there were some facilities that were hidden.

ZARIF: ...different objectives.

No, all facilities at that time -- we're talking about 2003 to 2005 when we were negotiating -- all facilities were open to the IAEA. The IAEA was able to observe the mall...

STEPHANOPOULOS: Only after you were caught.

ZARIF: And the IAEA said that although Iran had not declared its activities, now that we see those activities none of them have been diverted to military use. So there is no question that Iran ever had military intentions. There may have been technical problems. They may have been problems of transparency and we are prepared to address those problems.

But we need to see -- you see lack of confidence is unfortunately mutual. As the president said, both President Obama and President Rouhani have said, there has been 34 years of building up of this mutual distrust. We need to move in that direction of removing some of that mistrust through mutual steps that each side needs to take in order to convince the other side that it's intentions are positive and for a better future for all of us.

STEPHANOPOULOS: And a big player in all this, of course, is also Israel. Prime Minister Netanyahu is on his way to the United States right now to meet with President Obama, to speak at the U.N. general assembly.

On his way, he -- at the airport, his departure, he called the moves by you and President Rouhani this week a smile attack. And the British Sunday Times is reporting that he'll be presenting intelligence to President Obama that says Iran already has enough enriched uranium to produce some nuclear weapon, is developing a nuclear detonator and is testing missiles that could carry nuclear warheads.

Your response?

ZARIF: Well, a smile attack is much better than a lie attack. Mr. Netanyahu and his colleagues have been saying since 1991 -- and you can refer to your records -- that Iran is six months away from a nuclear weapon. And we are how many years, 22 years after that and they are still saying we're six months away from nuclear weapons. I think this six-month time limit is something that is...

STEPHANOPOULOS: So you're not six months from a nuclear weapon?

ZARIF: We're not seeking nuclear weapons. So, we're not six months, six years, sixty years away from nuclear weapons. We don't want nuclear weapons. We believe nuclear weapons are detrimental to our security. We believe those who have the illusion that nuclear weapons provide them with security are badly mistaken. We need to have a region and a world free from nuclear weapons.

I appeared before the international court of justice about 16 years ago and argued for 90 minutes that the use of chemical -- nuclear weapons under any circumstances is illegal.

Our leader has a religious verdict that the use of nuclear weapons, even possession of nuclear weapons, is contrary to religious doctrine.

So, these are our positions. Israel has 200 war -- nuclear warheads. Israel is the source of insecurity in our region. Israel is the source of aggression and violation of human rights of the Palestinian people. It should not have the audacity to continue to lie to the American people and to the world by -- and mislead everybody.

STEPHANOPOULOS: But if you don't want nuclear weapons why enrich uranium to the levels you're enriching uranium?

ZARIF: Because that's our right. We needed -- you see, we came to the market requesting, we own 10 percent of a European company that produces enriched uranium called Eurodif. We have not been able to get a gram of uranium from them for the past 30-some years. We have not been able to get the uranium that we need for the Tehran research reactor, which was accidentally -- not accidentally, in fact intentionally built by President Eisenhower under the Atoms for Peace program.

But not only the United States is not providing the fuel for that reactor that itself built in Iran in the 1950s, it is preventing others from providing us with fuel.

So what should we do? Should we lay down and die? No. We don't do that. We go and we rely on our own scientists, rely on our own capabilities and we produce them.

Now after -- they were hoping we can't -- we couldn't produce them. Now after we were able technically to do it, now they say you shouldn't. You see, we need to -- we cannot start history at the time of our choosing. The background has to be addressed, the historical aspects have to be addressed. The historical sources of Iran's very serious and deep mistrust of the behavior of the United States needs to be addressed and we should take concrete steps, concrete steps, one after another.

We have not forgotten the fact, that when Iraq used chemical weapons Iran, not only the United States didn't condemn it, it went out of its way to blame us for the use of chemical weapons.

So, these are all facts of history which are very fresh in the minds of Iranians.

We are willing to show flexibility, not forget that. We may be willing forgive as President Mandela said once, but we're not going to forget.

STEPHANOPOULOS: You mentioned history. Both you and President Rouhani have gone farther than your predecessors in acknowledging and condemning the massacre of Jews during World War II.

In fact you had a tweet at the beginning of the Jewish new year where you said that Iran has never denied the holocaust. The man who was perceived to denying it is now gone. Happy New Year. This was speaking -- House Leader Nancy Pelosi's daughter.

Yet, the website of the Supreme Leader Ayatollah Khamenei, right now, on his website right now in English, he refers to the myth of the massacre of the Jews known as the Holocaust? So, you endorse or reject the Ayatollah's belief that the Holocaust is a myth?

ZARIF: I have spoken to the leader on this issue. He rejects and condemns the killing of innocent people.

STEPHANOPOULOS: But is the Holocaust a myth?

ZARIF: No, the Holocaust is not a myth. Nobody is talking about the myth. It's a -- if it said...

STEPHANOPOULOS: It says it right there.

ZARIF: If it said it, it's a bad translation. And it is translated out of context that they have, they are using it. He was talking about the reaction to somebody talking about the historical incident and requiring research about that historical incident and said, what is it that people are so upset that somebody is simply asking that we should do some studies of that.

STEPHANOPOULOS: The word "myth" upset people...

ZARIF: But -- but -- you see, this is the problem when you translate something from Persian to English you may lose something as the film goes, lost in translation. You may lose some of the meaning. This has been unfortunately the case several times over.

The point is, we condemn the killing of innocent people, whether it happened in Nazi Germany or whether it's happening in Palestine. One crime, however heinous -- and holocaust was a heinous crime, it was a genocide, it must never be allowed to be repeated.

But that crime cannot be, and should not be, a justification to trample the rights of the Palestinian people for 60 years. We should have abandoned this game and start recognizing the fact that without respect for the rights of the Palestinians we will never have peace in our region.

STEPHANOPOULOS: Can the translation be changed?

ZARIF: I'll talk to them.

STEPHANOPOULOS: Let me ask you one final question. You've spent a good part of your adult life in the United States, your children were born here, as I mentioned, you were on This Week 26 years ago.

When you hear those chants the come up so often in Iran, "death to America. Death to America," what do you think about that? And what can you say to those Iranians who say "death to America."

ZARIF: Well, I think they're talking about the policy, they're not talking about the American people. We have been time and again -- the leader, various presidents on the record, that we have no quarrel with the American people.

American people are nice, peace loving, generous people who come to the aid of people in need all over the world and this is what we respect and have a lot of admiration for.

It's the policies of the U.S. government which has unfortunately been the source of instability in our region for many years. The United States supported dictators. It would be amazing for American people to know what types of governments in our region have been supported by the United States.

STEPHANOPOULOS: So, we have a ways to go.

ZARIF: But the Iranians -- but the Iranians feel it with their flesh the type of regime that govern them because of the support of the U.S. Some of the countries in our region continue to experience this.

The fact that the United States supports whatever policy is followed by Israel is another indication that the United States needs to revisit some of its policies and move forward.

STEPHANOPOULOS: Dr. Zarif, thank you very much for your time this morning. Welcome back to "This Week."

ZARIF: Thank you.

STEPHANOPOULOS: Coming up, there is the clock. Less than a day to the government shut downs. Paul Krugman and Bill Kristol debate on the powerhouse roundtable next. Plus, President Clinton weighs in.

(BEGIN VIDEO CLIP)

BILL CLINTON, 42ND PRESIDENT OF THE UNITED STATES: They're mad because they don't want to negotiate. It seems almost spiteful.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

STEPHANOPOULOS: Up next, the roundtable debates the shutdown. Plus, President Clinton's candid take on Hillary's loss.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

STEPHANOPOULOS: And that was the scene in the House overnight.

Our powerhouse roundtable here to weigh in on what's next in the shutdown showdown.

First, the take of a president who has been there. Bill Clinton was in the White House the last time the government shut down in 1995 and 1996. And when it was over, he was on a smooth glide path to re-election.

His advice to President Obama: stand firm.

(BEGIN VIDEO CLIP)

CLINTON: The president has to take the position he's taken which is, you, not me -- you voted to spend this money. America's one of -- maybe the only country in the world that requires two votes to spend money, first, they vote to spend the money and then they got to vote again to issue the bonds to, in effect, borrow the money from the American people to cover the spending they have already voted for.

You can't negotiate over that. And I think he's right not to.

STEPHANOPOULOS: But as you know, one of the Republicans say is that you did that, you did negotiate over the debt limit back in 1996. They do control the House, so doesn't the president have to negotiate and they're banking on it.

CLINTON: Well, but the negotiations we had were extremely minor. And keep in mind, there were two different things, number one is, the economy's growing and the deficit was going down.

We didn't give away the store. And they didn't ask us to give away the store. It was more like, we got out here on this ledge, please give us something. Face saving way to walk back.

And we didn't stop negotiating. When we passed the balanced budget bill for example, there's no opportunity for that in this forum. We don't have enough time. They don't want. They're mad because they don't want to negotiate.

STEPHANOPOULOS: This deadline is coming. October 17, says Jack Lew, we hit that debt limit. The consequences of not negotiating are so high -- default.

CLINTON: Yeah, but there's nothing to negotiate with, he shouldn't delay the health care bill. It's the law. And we're opening the enrollment on October 1.

So, I think that's a nonstarter. If I were the president, I wouldn't negotiate over these draconian cuts, they're going to take food off the table of low income working people while they leave all the agriculture subsidies in for high income farmers and everything else. I just think it's chilling to me. It seems almost spiteful.

STEPHANOPOULOS: But doesn't it come undone if there's a default? I mean, obviously, if you're not going to negotiate, you're betting on the other side simply caving.

CLINTON: That's right.

This is the House Republicans and the Tea Party people saying we don't want to negotiate with the Democrats. We want the dictate over the senate, over the House Democrats, over the speaker of the House of our own party and over the president, we insist on dictating the course of the country.

STEPHANOPOULOS: So you're saying you just have to stand up to that no matter what the consequences?

CLINTON: I think you do. It's terrible, because all over the world, people see, like, you know, I listened to some of Senator Cruz's filibuster on the health care bill and he just kept making all of these claims that just aren't so. And everybody knows they're not. And in other parts of the world, where we draw investment from, they think, why is America majoring in the minors?

But at some point, if they're going to change the way the constitution and fundamentally alter the character of our country and damage the future of a lot of kids you just got to say no. And then hope that there will be a basis for some agreement.

(END VIDEO CLIP)

STEPHANOPOULOS: Let's get to this with the roundtable now. We're joined by ABC Matthew Dowd, former governor of Michigan Jennifer Granholm, now teaching at UC -- University of California's system. Bill Kristol of the Weekly Standard, Paul Krugman of the "New York Times" and Princeton. And Paul you're looking great since the last time you were here.

PAUL KRUGMAN, NEW YORK TIMES: Less of me, anyway.

STEPHANOPOULOS: Well, welcome to all of you.

And Bill, let me begin with you. If we were to have been here two months ago, who would have thought a shutdown was possible. But all of the leaders, Republican leaders in the House and Senate against it, yet it's happening?

BILL KRISTOL, WEEKLY STANDARD: Well, these people are electing individually. They're not elected to rubber stamp decisions by Speaker Boehner or by Leader McConnnell. So, they have decided they would like to delay the implementation of a bad law, that is in fact the president himself has had to delay parts of it.

If we were sitting here 11 months ago, though, and the Republicans were in total disarray, Romney had lost, very demoralized party, I think it's impressive with what the Republicans have done. And the Republican House deserves credit for -- the Republican House deserve credit for it.

The party has rallied. The party is doing fine in the polls. The congressional ballot is about even. President Obama has not succeeded, except for that tax hike on the wealthy they had to give him right at the beginning. He's not succeeded in getting his legislation passed, which is a good thing.

STEPHANOPOULOS: But isn't a shakedown going to backfire?

KRISTOL: Not necessarily if it's a day or two or three. There have been shutdowns throughout the last 25 years. As you know, they don't always backfire.

It's a little delicate. But look, it's why not delay at least parts of Obamacare for a year?

KRUGMAN: Because it's the signature achievement. Its funny--

KRISTOL: Is that a good reason? A political reason like that?

KRUGMAN: It's a good thing. It happens in fact to be a very good law. One of the things I think that's going on here is just a failure on the part of the Republican caucus to actually understand anything about this thing. That they, you know, not they, they haven't done the policy. They haven't understood.

In fact almost all of the substantive news about Obamacare over the last couple of months has been good. The premiums are coming in well below expectations. Healthcare costs are moderating. Probably there will be some technical glitches with computer systems. But those are not fundamental. So actually people who support this law are looking forward, they're actually almost hearing, I think, the preliminary results.

So the odds are that this is going to do a lot of good for a lot of people. Why not put it into effect now?

KRISTOL: Should the president delay the employer mandate?

KRUGMAN: The employer mandate was--

KRISTOL: Wait should he? Yes or no?

KRUGMAN: Yeah actually because--

KRISTOL: But not the individual mandate.

KRUGMAN: They are completely different--

KRISTOL: Business gets the delay but individuals don't.

KRUGMAN: That's what I'm talking about, this policy ignorance. Not understanding. That the employer mandate is basically a trivial add-on to the law. While the individual mandate is essential to that. You don't understand that. You don't understand--

STEPHANOPOULOS: Intellectual and political argument I guess the bottom line though is that they don't have the votes to delay Obamacare right now. I think a lot of the country looks at this and sees both sides saying, what are they doing right now?

DOWD: Well first I want to say after watching your interview with the Foreign Minister of Iran. It's somewhat amazing and ironic that more reasonable and enlightenment is coming out of the Middle East than is coming out of Washington D.C. these days. With everything that's happened with Syria and the chemical weapons and all that, it's like we're now in a situation where we have to look at ourselves and say, why isn't our own act in order?

One of the biggest problems that's going on I think in this country today, this government shutdown, which everybody knows is a bad idea and ultimately will be bad for the Republicans and they only hope it's only temporarily bad.

That is that way is, there's a large part of both parties that refuses to accept what actually is going on. So they don't, if they don't like the result of an election, the contest the election. If they don't like the result of a legislative something passing the Senate, passing the House, signed by the president, which is the Affordable Care Act or Obamacare, we actually have a situation, we should accept it.

I have some disagreements with it. I think there's great parts of it. I think there's great parts of it. I think there's some parts of it that could be problematic. But it is the law and we should accept it. But part of the problem is in our politics today is that we refuse to accept our institutions, our legislation and our elections.

KRUGMAN: (inaudible) Democrats doing something comparable. I just, you know--

DOWD: Of accepting elections?

KRUGMAN: Of refusing to accept the results of an election.

KRISTOL: Democrats thought the Iraq War was wrong right?

KRUGMAN: But they didn't cut off the funding for it.

KRISTOL: They did try to cut off the funding throughout 2007, 2008. Oh not seriously? What were all those votes about?

KRUGMAN: Where was there a confrontation like the one we're about to have, the scary one about the debt limit.

STEPHANOPOULOS: And that's what I want to get to. It wasn't tied to the debt limit at the time, but the president seems to have made the judgment, Governor Granholm, that negotiation over the possibility of default is even worse. The consequences of negotiating are even worse than the default itself. If he means what he's saying right now.

GRANHOLM: Right because that means every single time they put it off for another month, the debt limit, they will be taken hostage again. And we saw that in 2011 and in fact that's the lesson that people are taking from what happened the last time the negotiation occurred.

It, to me, it is mind blowing this week that we see leaders of our most, biggest global adversaries, Iran, Syria, to your point, acting more rationally than the House Tea Party Republicans. That they are willing to take the whole country, the whole economy down for an issue that they lost in the election, the lost 45--

STEPHANOPOULOS: You know what the counter to that is; they say the president is willing to talk to the Iranians, why doesn't he talk to the Republican Leaders in the House?

GRANHOLM: Well he said that he would negotiate with the leaders in the House, just not a point where you break down the entire fiscal system in the country. I mean if he wants to negotiate, if the House wants to negotiate over the budget, then meet with the Senate. The Senate's past a budget, the House has passed a budget. Do it in the normal--

KRUGMAN: Negotiating is, you give us something, you know, we want, we'll give you something you want. Everybody wants the debt limit raised because no one wants financial catastrophe. So saying give us what we want in return for not provoking this catastrophe which will hurt everybody, that's not a negotiation.

STEPHANOPOULOS: So how does this end?

KRISTOL: With a very short government shutdown and I think it ends with the debt limit actually being raised. And hopefully the president will decide to (inaudible) as previous presidents have on the debt limit. One reason the House Republics are pushing for a negotiation is that the Senate does not take up (inaudible) House Republicans past.

They past (inaudible) the individual mandate (inaudible) to Obamacare. That's why it's a good thing to delay it for a year. And it's not ready to go into effect. They passed a delay of that for one year, 22 House Democrats voted for it. Speaker, Majority Leader Harry Reid just hasn't taken it up.

GRANHOLM: The Senate has passed a budget--

KRISTOL: They haven't taken it up.

GRANHOLM: The House has passed a budget.

KRISTOL: They haven't taken it up.

GRANHOLM: The place to negotiate this--

KRISTOL: Suddenly this great approval of the Foreign Minister of Iran and Syria, I think you guys really want to rethink before you start praising a guy who sat here and just lied to George about whether they have a nuclear weapons program or not. That is not like oh gee they're so wonderful--

GRANHOLM: No, the point is that people are willing to sit down and be rational for people who we have been adverse to for long periods of time. And you've got the House Republicans who will not act rationally.

KRISTOL: Do you really want to take that position--

GRANHOLM: One more point about this--

KRISTOL: That the Iranian Republican Guard is more rational than the House Republicans?

GRANHOLM: The show--

KRUGMAN: The way this ends, or at least the theory is that it ends with, believe it or not, Wall Street coming to the rescue. That we have a government shutdown and Wall Street suddenly says, oh my God, this is real. These people really are that crazy and they put pressure on the Republicans--

DOWD: That's to me, that's one of the biggest unfortunate things in all this is because I think so much of what's going on in Washington D.C. is we're taking our cues from Wall Street which is only affecting, by and large, people own stocks.

But by and large 10% of the country is the only part of the country that has grown in the last 20 years, mainly by Wall Street. And so much of what's going on with the Republicans and the Democrats is their cues are coming from Wall Street.

But what I want to say one thing, I think the Republicans are being unreasonable and they're doing things that could politically hurt them in this and they should be in a process of getting this deal done.

But the Republicans that, it's not just Tea Party, 70, 80 members. That part of the Tea Party Caucus or whatever you call it represents a large segment of the country which does not trust the federal government at all to do anything efficiently and effectively.

The president has not done any job at all in convincing the public that the government should be involved in stuff and it can do it well. And I think the Tea Party or whoever is a reflection of the country does not trust Washington D.C., it does not trust the Federal Government.

STEPHANOPOULOS: That's true but let me then bring this question back to Bill Kristol. You say you think this is going to get resolved. It appears though given the factions in the Republican Party who don't want to approve anything, that the only way this gets resolved is Speaker Boehner says I'll do it with Democratic votes. Doesn't that cost him the Speakership?

KRISTOL: It doesn't cost him the Speakership if he has to do it. But look, here's what's going to happen. Reid, the Senate will strike, (inaudible) tempted to delay Obamacare for a year. I think Republicans might then come back and say back, how about striking the Congressional exemption that the president just decided to give members of Congress and their staff. Maybe that the Congress will accept on the debt, on the continuing resolutions.

What about the medical device tax which the Republicans added with Democratic votes last night which most Democratic Senators are against?

(Inaudible) Democrats were being utterly intransigent in negotiating.

GRANHOLM: To proof how non-serious this is though, they also added the ability of employers to deny contraception to women which is also something which is also completely politically ridiculous for them. And John Boehner as Speaker, I think he has already ceded that territory. The real Speaker of the House is Ted Cruz.

STEPHANOPOULOS: Are you confident this gets done?

KRUGMAN: No, I'm not at all. I think we may, we're running 30% chance of, I mean government shutdown is a given. But that is, we're all kind of feeling, OK that's all right. Which tells you what kind of a state we're in. But no, I think there's a 25, 30% chance of default. And God knows what happens then.

STEPHANOPOULOS: And given that, you still endorse the president's position of not negotiating--

KRUGMAN: Because his choice is not whether there will be a default. His choice is whether you just put off this issue a month or two. It's just going to keep coming back unless it's resolved. Why not do it now?

DOWD: And also the politics of all this will be the implementation of Obamacare. If the implementation of Obamacare actually happens and people save and people see savings, they see some wrinkles in it and it goes about reasonably well, the president and the Democrats are going to be fine with that.

If it does not go about reasonably well, somebody's going to address in 2014 or 2015 and fix the problem. But ultimately it's the implementation of the act and I think the Republicans just should have said, go for it. Implement the act and let's see how it goes.

STEPHANOPOULOS: Ted Cruz came close to saying that was his fear this week. That Obamacare would take hold and people would never want to get rid of it.

KRISTOL: Yeah I think he's wrong about that. I think when it takes hold people will want to get rid of it. It doesn't benefit that many people as Paul knows. In the first year, the red numbers are rather small. I said I think it will damage more people as their premiums go up and as families lose coverage as businesses cut back to covering simply the employee himself or herself and families have to go into the exchanges.

So I think its bad law. We'll see how it plays out. But you can't really blame the people who ran saying they would do their best to delay their bad law from happening, from trying to do that. Its like (inaudible) Democrats ran in 2006 saying they were going to get out of Iraq. And they spent all of 2007, 2008--

GRANHOLM: But--

(CROSSTALK)

DOWD: But Bill this law passed, was signed by the president. Then the president ran a re-election campaign, the public voted for him overwhelming. Republicans need to fold their tent and say it's the law.

KRISTOL: I disagree totally.

STEPHANOPOULOS: On that we're going to have to end right now. Thank you all very much. Much more from President Clinton coming up. What's the big lesson he took from Hillary's loss in 2008? And Matt brings us the dramatic story of the Army Ranger who survived "Black Hawk Down" in our Sunday Spotlight. STEPHANOPOULOS: Our Sunday Spotlight shines today on Jeff Struecker, an Army Ranger caught in the firefight with Somali warlords that inspired "Black Hawk Down." The battle took place 20 years ago this week. A life shaking experience that moved him to return to Mogadishu for a dramatic documentary. ABC's Matt Dowd is back with Struecker story.

DOWD: In 1993, Jeff Struecker was a 24-year-old Army Ranger Sergeant tasked with leading a squad of men through the hostile streets of Mogadishu. There harrowing journey, the inspiration for the film, "Black Hawk Down."

Somalia had descended into chaos. The U.S. sent an elite team to help restore order. But on this day, the routine mission went horribly wrong. A Black Hawk helicopter was downed by warlord militia men. An assault mission turned quickly to a rescue mission.

STRUECKER: I went through what is still to this day the most intense gunfight I've ever been in in my life. One of the men that I was responsible for was shot in the head and killed instantly, right behind me. And there was nothing that I could do about it.

DOWD: Then you're told you're going to have to go back out because there's another rescue that has to be done. Did you think you were going out now like on a death mission?

STRUECKER: All of us were thinking, OK this is a suicide mission. If we go back through what we just drove through, every one of us are going to die. Ranger Creed says "I'll never leave a fallen comrade to fall into the hands of the enemy."

Listening over the radio, people's voices were just getting more and more terrified. I started thinking about my family and I started praying.

DOWD: A moment so intense, so powerful, it changed everything.

STRUECKER: It was a life transforming event for me. I think many people think, oh Jeff got shot at and he got scared and he's different because of it. And really that wasn't it. I've been in firefights in previous combat tours before this.

I had a very, very strong faith in Jesus Christ, before I went. But my faith became so real, it became so significant.

DOWD: So much so that Sergeant Struecker became an Army Chaplain and now a Minister.

STRUECKER: Instead of raising children to be spiritual warriors--

DOWD: A dramatically new life but an incomplete journey. The resolution found when he returned to the site of the grisly battlefield this past spring. An incredible trip captured all on camera.

STRUECKER: I'm wishing I had some more guns around me.

DOWD: As you're driving through the streets and driving through the market, you can almost feel your heart pounding. Are you at this point like wow, something could happen actually again?

STRUECKER: Even watching the movie "Black Hawk Down" for the first time, I didn't relive the emotions of Mogadishu until I went back there this spring. Immediately the emotions, the smells, the thoughts from Mogadishu came flooding back like I was just there yesterday.

This is what the roads looked like with people, except for the people all had guns. It was very dangerous. No don't turn back. It's OK keep going. Keep going.

DOWD: For Struecker it was a journey from fighting to family to faith.

Are you glad looking back at your trip, that you went back?

STRUECKER: I don't know if I'd use the word glad. I learned a little bit about myself that I didn't even realize. Would I do it again, a third time? Absolutely not. But I'm glad it's over.

DOWD: For this week, I'm Matthew Dowd in Columbus, Georgia.

STEPHANOPOULOS: And you can see all of "Return to Mogadishu" on our website at abcnews.com/thisweek.

And now we honor our fellow Americans who serve and sacrifice. This week the Pentagon released the names of seven service members killed in support of the war in Afghanistan.

And that is all for us today. Thanks for sharing part of your Sunday with us. Check out "World News with David Muir" tonight and I'll see you tomorrow on GMA.

END

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