Face the Nation transcripts October 13, 2013: Schumer, McCain, Ayotte, Huelskamp

(CBS News) Below is a transcript of "Face the Nation" on October 13, 2013, hosted by CBS News' Bob Schieffer. Guests include: Sens. Chuck Schumer, D-N.Y., John McCain, R-Ariz., Kelly Ayotte, R-N.H., and Rep. Tim Huelskamp, R-Kan., plus a panel featuring former House Speaker Newt Gingrich, Dee Dee Myers, Dan Balz, and Kimberley Strassel.

SCHIEFFER: And good morning again. Well, it is day 13 of this shutdown. The debt limit's set to expire in just four days. We're going to start this morning with New York Democratic Senator Charles Schumer. We'll hear next from Arizona Republican John McCain. Senator Schumer, I want to start with you because yesterday -- I mean, you were in all the meetings. You met with both the president and the Senate Democratic leadership, the Senate and Republican leaders. You were there to talk to Mitch McConnell on the Republican side. Where are we?

SCHUMER: Well, Bob, I'm cautiously hopeful, optimistic, that we can come to an agreement and open up the government and avoid default based on the bipartisan meetings that are going on.

SCHIEFFER: Well, what's the sticking point?

SCHUMER: Well, at those meetings -- I said just the good stuff -- is that Senator McConnell and Senator Reid both understood the gravity of default and how we had to avoid it. And while I don't want to get into details, the frameworks they each had were not that far apart, a lot closer than, say, House Republicans and the president. It's also very good that there are bipartisan groups meeting. I really respect what Susan Collins is doing. And that will -- that will help bring things about. So here's what I'd say. With the president, with Senate Democrats, with Senate Republicans, there's a will. We now have to find a way. We know the House won't find that way, so the whole -- all of it rests on our shoulders. But finding that way is hard, but we're not out of the ballpark in any way.

SCHIEFFER: Well, what about this undoing the sequester? I keep hearing that's the most important thing to the Democrats. What does that mean?

SCHUMER: That's one of the sticking points. Look, neither Democrats nor Republicans like the sequester. And one of the strongest voices against it has been ?Senator McCain, correctly, because of what it would do to defense, which he defends so dearly. The dispute has been how to undo sequester. Republicans want to do it with entitlement cuts -- in other words, take entitlement cuts and then put that money into undoing at least part of sequester. Democrats want to do it with a mix of mandatory cuts, some entitlement, and revenues. And so how do you overcome that dilemma? We're not going to overcome it in the next day or two. But if we were to open up the government for a period of time that concluded before the sequester took place, which is January 15th, we could have a whole bunch of discussions. And I am more optimistic than most we could come to an agreement. That was one place where the House Republicans and the president were not, you know, at total loggerheads. And a lot of it depends on how you define revenues and how you define entitlement cuts. So the plan would be open up the government immediately for a period of time before the sequester hits and then have serious discussions where we might be able to undo the sequester. I'm optimistic that could work.

SCHIEFFER: Aren't you going to have to find something that you can give to Speaker Boehner that he can take to those on the right side of his party and -- and -- to bring them along? I mean, I'm not sure what that is, but...

SCHUMER: Yeah, well, that's -- you hit -- you hit the nail on the head. No one's sure what will bring those people along. I think there's a feeling among Senate Republicans, whether it be Senator McConnell, Senator McCain, Senator Collins, that if we can get a broad, bipartisan majority to pass something in the next few days, it may help crack the logjam in the House. And of course Speaker Boehner wouldn't get the 40 or so people on the hard right to go along but could get a lot of his mainstream Republicans. I'd say this. I think these mainstream Republicans are getting fed up with the Tea Party and Ted Cruz. They see where it's leading them, to very low poll numbers. This idea that, unless I get my way, I'm going to do huge damage to our credit rating, to millions of people who depend on the government, isn't working. And I think there probably is a new mode in the House, Speaker Boehner can't lead, but if the Senate leads, I believe he could follow our lead.

SCHIEFFER: Because, I mean, the reason I brought that up is I hear Republicans saying to me, "Look, you may not like Speaker Boehner. You may have all kind of differences with Speaker Boehner. But if he is toppled" -- and some of them are saying to me he could be toppled this weekend if things don't go exactly right -- that "what you'd get after Boehner would be worse to deal with than trying to strike a deal with Speaker Boehner."

SCHUMER: Well, John and Kelly would know, and Tim would know this better than me, but my view is, when your party is doing as poorly as it has, mainly because they've let Ted Cruz and the Tea Party-type thinking lead them around, you break from that. And you may not have the ability to put together your own plan and move forward, but you might have the ability to follow a bipartisan plan, such as we're trying to come up, Senator McConnell, Senator Reid, Senator Collins and all of us in the Senate.

SCHIEFFER: Let me tell you the other side of that. I heard from people -- nobody will say this on camera -- but I was told that you were very close to a deal Thursday night, or maybe early Friday morning, and then that Wall Street Journal/NBC poll hit and showed that the public was overwhelmingly blaming Republicans, and it gave some on the left, to the far left, more backbone. And they said, "Hey, we've got the Republicans down. What we need to do now is put our boot on their throat and break 'em." Is that right?

SCHUMER: I don't think -- no, I don't think we were close to a deal is the problem. The issue that you brought up of -- of...

SCHIEFFER: But you don't disagree that you heard people say that?

SCHUMER: We have one other issue that's very seriously out there where there's a disagreement, and that is how long the debt ceiling should go. We think it should go for as long a period of time as possible so you don't go through this every few months. And the plans that have been brought to us either have it in January or even earlier. That's not good enough. So there are real issues, but they're overcomeable.

SCHIEFFER: All right. Senator, thank you so much. Well, I'm going to the other side of the table here and Senator McCain. Senator McCain, do you see any kind of a path to a deal here?

MCCAIN: I'm glad that negotiations are going on. I'm disappointed that twice they were close to a deal and the Democrats moved to go oppose, in light of the polling data. I'm very disappointed that the president of the United States has not played a more active role in this as Bill Clinton did back in '95. I am very disappointed that the 12 of us, led by Senator Collins, Senator Ayotte, Senator Murkowski, Senator Klobuchar, Senator Manchin -- we had a plan, and we wanted to present that plan. And the Democrat leadership squashed it. We were ready to go to the press gallery, OK? And the Democratic leadership said no. And I still wonder why, unless maybe it was too generous. So I'm hopeful that we will get negotiations. I hope the president will become engaged. Maybe we need to get -- maybe we need to get Joe Biden out of the witness protection program because he has good relationships with...

SCHIEFFER: We haven't heard very much from him.

(LAUGHTER)

Let me -- let me ask you this, Senator. Do you think it is possible to get a deal that does not get a majority of the Republicans in the House of Representatives?

MCCAIN: You know, I don't know, and I hate to tell the House Republicans what they should to. They resent it, and I understand that. I was once in the House and thought we were a bunch of snobs, which is probably true. But the fact is that -- that they're going to have to understand that we're on a fool's errand when we say that we're going to defund Obamacare. Now that has all -- that has all changed. And could I just mention one other thing? The director of national intelligence said that the shutdown is extremely damaging to our ability to defend this nation. Look, Al Qaida's not in shutdown. And when I saw, as you did, these death benefits not being given to families, I'll take -- everybody take the blame. But it's not acceptable to the American people. It's not acceptable. And -- and we should be sitting down, and the president should be engaged, and the Democrats, they better understand something. What goes around comes around. And if they try to humiliate Republicans, things change in American politics, and I know what it's like to be in the majority and in the minority, and it won't be forgotten. Now is the time to be magnanimous and sit down and get this thing done.

SCHIEFFER: Let me ask you this, Senator. How is it -- I've been in Washington a long time; you've been in Washington a long time -- that a freshman senator, less than a year in office, Ted Cruz, was able to lead your party into what some in your party are calling a box canyon here? How did this happen?

MCCAIN: I think the very extreme dissatisfaction that many people feel. There was already fertile ground because of those many members of the House who were elected in 2010 on the promise that they would repeal and replace Obamacare. And by the way, there are many of us who fought it back to 2009. We still want it changed. But to say that we were going to defund it just -- after the 2012 elections, every speech I gave all over the country, we'll repeal and replace Obamacare. Well, we lost. So, we still can fight provisions of it. And the irony of all this is, the roll-out is a fiasco. That should be on the front page of newspapers.

SCHIEFFER: But what about Ted Cruz and the impact that he's had? Is that a positive for Republicans?

MCCAIN: Oh, obviously it's very divisive in our party. But Ted Cruz is entitled to his views, and he's very articulate. He's very intelligent. And what we need to do is to have this debate within the Republican Party. And it's going to be a serious debate. And, look, I respect Senator Cruz. He didn't make any bones about what he was going to do when he came to Washington. The question is, is should we follow that leadership or should we go in other directions and coalesce the majority of the American people? Look, I guess we can get lower in the polls. We're down to blood relatives and paid staffers now. But we've got to turn this around. And the Democrats had better help us rather than do what they've done -- turn down two good proposals that they were about to agree to, and then, of course, this proposal that they just scuttled yesterday.

SCHIEFFER: What do you think the sticking point is?

MCCAIN: The major sticking point, of course, is sequestration as you mentioned, which -- that's the key element, and I'm very worried about the devastation to our military and our defense. But at the same time, we do have to reign in spending. That's a major sticking point here. Senator, thank you so much. I want to go now to New Hampshire, Republican Senator Kelly Ayotte who is in Manchester this morning. She was one of those working with Susan Collins who came up with the plan that a lot of people thought was going to be the plan to kind of break this stalemate and then it kind of all fell apart. Senator, where do you think this is right now?

AYOTTE: Well, unfortunately, Bob, I did think we had a framework for a plan. We had six Democrats, six Republicans, something that would get the government open, address the debt ceiling, also some things we could agree on around Obamacare. And I have to agree with what Senator McCain said that the Senate -- we were close and then the Senate Democratic leadership -- and I believe the White House -- pulled back. And where I'm concerned, Bob, is where we are now is that the defunding strategy was a zero sum strategy. And now we have a zero sum response. And the American people lose. So it's time -- I'm tired of the politics on both sides, time for us to resolve this. But again, the Democrats did pull back from this. And it's unfortunate. I thought we were close to getting an agreement.

SCHIEFFER: Do you now believe that the government will go into default, that you won't be able to come to an agreement? When is it? When is your Thursday that we -- that the deadlines right out. Thursday, I guess it is.

AYOTTE: Bob, I hope not. We can't do that. It's time to put-- get out of our trenches and resolve this. And we need presidential leadership to resolve this. I can understand the American people are tired of this. And, again, I think the zero sum politics is not good for anyone. It's not good for the American people. So I hope that this bipartisan agreement can be resurrected. We can get this resolved. We can get the government open, and obviously also deal with the debt ceiling issue while talking about our underlying fiscal challenges. We still have $17 trillion in debt.

SCHIEFFER: Do you think -- the same question I asked Senator McCain -- do you think there could be a deal that could come through the House that does not enjoy the majority of Republicans in the House? Do you think that such a deal is possible?

AYOTTE: Well, I think that's the challenge for the speaker of the House. And, obviously, in terms of his leadership, it's important that he stay leader because who comes next in the House of Representatives? We need to govern this nation and solve the problems of this country. So I'm hopeful that the House can get their act together and come up with something that can pass the Senate. If not, then the Senate's going to have to do it. Again, we were close to a bipartisan agreement. And I hope that the president leads on this, that it doesn't just become this political game.

SCHIEFFER: What do you think the fallout is going to be from Ted Cruz? Some people say he has led your party into what amounts to a box canyon here, into a place where there doesn't seem to be anything out. Do you -- what's your evaluation of the impact he's had?

AYOTTE: Well, I believe the defunding strategy was a failing strategy from the beginning. It's not something that I supported. Although, I oppose the health care law, and we've seen the flaws with the law as it's been rolled out. But look where we are. From the beginning, the government is shut down, Obamacare exchanges have still opened. So I just disagreed with the strategy. I think it's time for conservative problem solvers to move forward, to govern the nation, to get things done. That's what Ronald Reagan did. And I think that's what we need to do as a party.

SCHIEFFER: All right. All right, well, senator, I want to thank you very much for being with us this morning. And I wish you the best of luck. I really do. We'll be back in one minute to get a Tea Party analysis of all this.

SCHIEFFER: Well, we're back now with one of the House Republicans who is still encouraging his Republican colleagues to stand firm on postponing Obamacare, Tim Huelskamp is in his district in Wichita, Kansas, this morning. Well, congressman, you have been a key player in all of this from the very beginning on the House side. What do you think you have now accomplished?

HUELSKAMP: Well, Bob, we're still debating, hopefully, the issue of Obamacare, which is exceedingly unpopular, and clearly unworkable and remains unfair. The last offer we sent to the Senate was two weeks ago. They have yet to have a recorded vote. And I find it interesting listening to senators talk about what they might do. The House has passed 15 appropriations bills to keep the memorials open, take care of the veterans, take care of our troops, and the Senate just sits there. But at the end of the day what we have accomplished is not much yet. But we have to focus on Obamacare. And we also have to focus on the underlying problem that's been ignored for years, and that's too much spending.

SCHIEFFER: But, congressman, don't you have to focus on keeping the government running? Nothing can happen until the government is running. And this idea -- I mean, people do this from time to time, but the idea that you can kind of put a wish list, attached to legislation to keep the government running, why is that a good idea?

HUELSKAMP: Well, Bob,we've sent bill after bill to the Senate. And they've rejected it. hey chose to shut the government down over two issues -- they did not want to extend the same break that the president gave to big business, did not want to extend that to the rest of America. And they also wanted to maintain their gold-plated health care system just for members of congress. I think those are two very unpopular approaches from the Senate. But at the end of the day, we've got a spending problem. And we have a debt ceiling that's approaching. The debt ceiling is not the problem, Bob. It's the fact they've been spending about $1 trillion more than they're take next. I think most folks are tired of not only the games in Washington, shutting down the World War II memorial, but more importantly, which is why the Tea Party took office, because they think Washington is ignoring the underlying problems of spending too much money.

SCHIEFFER: Well, if I could just interject here, I think you may have got a problem coming that may be worse than all of that and that is if the government has to default on its debts and the term, "Full Faith and Credit of the United States Government" is no longer operative, I mean, if that happens we're going to plunge off into the unknown. Nobody knows what the impact of that will be on not just our economy but the world economy. Would you be willing to let that happen in order to postpone Obamacare, which you haven't been able to do -- Obamacare marches on, not marching very well right now, but Obamacare has started. And all of the rest of this is happening. Are you willing to let that happen to prove this point?

HUELSKAMP: Bob, I know you are probably surprised to hear me say this, but I agree with Joe Biden in August of 2011, the last time we had this type of crisis, Joe Biden admitted in China to our folks over there that there will be no default. It's not going to happen. There are no payments due on October 17 to pay our creditors. There are no payments due until November 15. That's why Moody's has indicated it's not going to have a major impact.

SCHIEFFER: But, Congressman, Congressman, I don't want to interrupt you here, but that's not what the secretary of the treasury says. That is not what he reported. That just is not -- you tell me.

HUELSKAMP: Well, he said a lot of things a week ago. I think clearly the White House is trying to scare the markets. I think that's unfortunate. But at the end of the day, the reality is October 17th is a date that will not have a major impact unless the White House is able to create concern about that. But the real concern is not raising the debt ceiling, Bob. It's, as Senator Obama said in 2006, it's an idea, it's the result of failed leadership. They're spending too much money in Washington, and this idea that we're going to continue to maintain a $700 billion deficit, that's the current position of the Senate and the president, is to continue these massive deficits. I mean, the frustration I have, and I think most Americans have is not only the games but more importantly the ignorance of the major problem, a $17 trillion debt, trillion dollars worth of deficits every year for the first four years of this administration, another $700 billion. That's why during the debt ceiling proposal last week was to say, let's talk about entitlements, let's talk about how we can get our spending under control, not in the short term, not this week, this year, but in the next decade. And that's why the House Republicans are pushing for a plan to balance the budget in 10 years, and Obamacare cannot be part of that plan because it blows a huge hole in our deficits.

SCHIEFFER: All right. I think you've made your point. You're not backing off. You're not budging a bit. All right, well, thank you very much, Congressman. We'll be back in a moment with some personal thoughts on another very strange week in Washington.

SCHIEFFER: I've lived a long time, but I never thought I'd live to see what I saw around here last week. I come from the generation whose grandmothers aspired for their grandchildren to become president. So it was hard to believe last week's poll showing the country has become so disgusted with its politicians that six out of 10 Americans would like to see every member of Congress, Democrat and Republican, defeated. Most people don't like the way the president is handling his job, either. But Congress now gets the approval of only 11 percent of the people. I heard several people ask, and who do you suppose comprises the 11 percent who are pleased with them? When New Jersey Governor Chris Christie was asked what he would do if he were in the Senate, he said, if I were in the Senate right now, I would kill myself. I never thought I'd see a private citizen doing yard work around the Lincoln Memorial because Congress had shut down the government mowers, which was just after it dawned on Congress that they had inadvertently cut off death benefits for soldiers killed in battle. So I guess I shouldn't have been surprised when the 200-year-old clock outside the Senate Chamber finally stopped ticking because there was no one there to wind it. The first time that has ever happened, I think. But I can't say for sure. The only people who know have been furloughed. Back in a minute.

SCHIEFFER: Some of our stations are going to leave us now, but for most of you we'll be right back with a lot more FACE THE NATION, including our panel with former Clinton Press Secretary Dee Dee Myers; former House Speaker Newt Gingrich; Kimberley Strassel of The Wall Street Journal; and Dan Balz of The Washington Post. So stay with us.

SCHIEFFER: Welcome to "FACE THE NATION Page Two." Dee Dee Myers was President Clinton's press secretary. She's now a contributing editor at Vanity Fair. Former House Speaker Newt Gingrich is the co- host now of CNN's "CROSSFIRE." We want to welcome Wall Street Journal columnist and editorial board member Kimberley Strassel. This is her first FACE THE NATION. We're glad to have you. And rounding out our foursome, someone who has been here many, many times, the chief correspondent of The Washington Post, Dan Balz. Let me just throw this out there. Does anybody think a deal will be cut in the next 48 hours or are we headed for default? Mr. Speaker, why don't you start us off?

NEWT GINGRICH, FRM. SPEAKER OF THE HOUSE: I don't think we're headed to default, but I doubt if a deal will be cut in the next 48 hours. I think it's much too complicated, and I think that the very fact you only had Reid and McConnell meet yesterday for the first time in 17 days tells you how big a mess this is, and how much the personal hostility is a part of this.

SCHIEFFER: You know, I was very struck this morning, John McCain and Chuck Schumer sitting here across the table, two people who are very different ideologically, but they're both smart people. They're people of good will. And you sit here and wonder how is it that these two people, people like this, cannot be the ones to get this thing done? And yet, somehow or another, there seem to be all these pressures, Dee Dee, on the leaders on both sides that is keeping this from happening.

DEE DEE MYERS, VANITY FAIR: Well, you have all these processes that begin, and then they die, and it throws it back leadership. But it hasn't just been that Reid and McConnell haven't met in the last 17 days, they haven't immediate met since July. And so you have a leadership that's not talking to each other. And then you have members that aren't controlled by the leadership, particularly in the Republican Party and the House. And so now it's back to Reid and McConnell, being the last gasp between a deal and default. And we'll see whether they can get it there. I agree with Speaker Gingrich, that at the end of the day, there will be a deal because I think cooler heads will prevail. We cannot allow this to happen. But until then, it's a high-wire act.

SCHIEFFER: Kimberly.

KIMBERLEY STRASSEL, WALL STREET JOURNAL: But you strip out all the nonsense that's been going on, and in particular the big discussion about defunding the president's health care bill, the back and fourth, what you've really come down to and what we are at is sort of a repeat of 2011. This has become a fight again over the debt and deficits and spending. And you have a repeat again of Democrats saying we don't want to give a dollar, and Republicans saying you have got to have a plan before we raise the president's spending authority again with the debt limit. Now, when you look at it in that regard, there shouldn't be any reason that you can't come to some sort of solution, but it's all been mired down in these extraneous sort of debates about everything, which is getting in the way of getting a final answer.

SCHIEFFER: And it's not just Democrats versus Republicans, Senate versus House, it's everybody against everybody. Republicans against Republicans, especially, in the House, Dan.

DAN BALZ, WASHINGTON POST: Well, that has been a lot of this, Bob. And as we know, the Tea Party faction in the House drove this battle for a long time. And the question now is the degree to which the Republican leadership can pull back from that and find some kind of agreement with -- it will have to start in the Senate, between McConnell and Harry Reid. Can they then resell that in the House? And I think that that's why the speaker says, this is not going to come quickly. It's going to take a little while for it to happen.

SCHIEFFER: Mr. Speaker, what would you have done back in the days when you were speaker if a Republican senator had called up some of your folks and said I know where Gingrich is headed, but here's why you shouldn't follow him and that's exactly what Ted Cruz did.

GINGRICH: This stuff happens all the time. People forget, the president owns the executive branch. The president appoints the cabinet. The president is surrounded by staff. In the House and Senate, the leaders are actually elected by the people they are leading. So the people who do the elections have enormous authority to run around -- I mean, back when Reagan was trying to pass his tax bill at one point, Packwood, who the chair of the finance committee, was totally off the reservation, doing whatever he wanted to. I mean, we don't do the American people a service when we pretend that the congress is supposed to be orderly and rational. It is not. It's not the nature of it.

MYERS: One of the problems from the beginning is it's unclear what this fight is about, right? I mean, it was about defunding Obamacare, or at least delaying the individual mandate or whatever. The ball has kept moving. The American people don't know what this fight is about. They're not going to get their way. The Republicans went into a fight they could not win. Everyone around them except for a handful of the people in the middle of it it knew they could not win it. Now what is it about? Kim you make the point that we have to -- we have to focus on -- now we're into a debt ceiling fight, and that should be about spending. But this has not been about that at all. And so now the sides are trying to revamp, focus on what this is about, and come back with some reasonable proposals.

STRASSEL: But it is now. And I think what's actually interesting, we've been talking a little bit about Republican divisions, I think-- and you alluded to this in your earlier interview -- there's now become a Democratic division on this. What you have is you have a White House who was talking to the House GOP and did seem to realize -- there is a benefit for them of sitting down and getting this done. If the president does not get some long-term solution on the debt ceiling, if he does not get this budget question out of the way, he it going to be dealing with it for the next three months, six months, years, and then you can kiss good-bye to all of his other priorities -- immigration reform, a focus on the economy. The problem is you have Senate Democrats like Harry Reid have been stopping that and stopping that and stopping that, one, because they seem to want to make a political point and crush Republicans, as it were. But, two, a lot of them don't want the president to do a deal on entitlements. They like having it as a campaign issue. They like going out and saying Republicans are the people throwing granny off the cliff. If the president does something longer term on entitlements, it makes it harder for them to do that. And so there's a lot of resistance among the more liberal wing of the Democratic Party to do a deal on that now.

SCHIEFFER: Dan, where does this go now? Put aside all the things that are right, because people on both sides are right on some things and wrong on other -- but we're into this process no It's like World War I. I mean, it started going down the tracks and nobody really wanted it but nobody knew how to stop it.

BALZ: I mean, the remarkable thing is how long we have spent talking about process, and now you're beginning to see at least some sign of a substantive discussion, but it seems to me that the way out is probably solve process piece first, and then get to the substantive discussion. And I think that's where the negotiations are going to have to be over the next several days. How long do you extend the government spending authority in order to then have the larger discussion that Kim is talking about? But there's also the question about the politics of it. And, clearly, the Democrats feel they are in a very strong position right now, and by all measures, all the polling we've seen in the last five days, tells them that. And Republicans are waking up to that as well. And so Republicans have a decision to make about how far they want to press this at a time when their situation is pretty bad.

GINGRICH: I would just remind everyone, it's 390 days to the next election. I mean, at this stage in 1983, both Margaret Thatcher and Ronald Reagan were in deep trouble. In 1995-96, people thought we were in deep trouble. We picked up two Senate seats and became the first re-elected House majority since 1928 while Bill Clinton was elected president. I'll take that kind of trouble every week. So I think House Republicans face the real challenge -- and I may be the only person at this table that believes this -- I think the president deliberately wants to strip the House of the ability to negotiate in these kind of environments because he understands he has three years of dealing with them because they're going to keep the House. And I think he is really worried that they're going to come back at him every 90 days and get one more bite, and he is prepared to go to the wall. That's why when Boehner walks in and says I'll give you a clean debt ceiling for six weeks, he says no. Now Reid has actually upped the ante, and said I won't accept it unless you start getting rid of the sequester. So Reid is saying to fiscal conservatives I want more money in order to let you pass a bill to reopen the government.

MYERS: This is why the definition of success is very odd here. How is it a White House victory to push this off for 90 days or push this off for three months, or six months or however long it is? The only way you really make this go away is do exactly the opposite of what they're doing, is to sit down and negotiate and come to sort of long-term deal on a budget deal.

BALZ: But I think the issue for the White House is how do you get some kind of relief from sequester, which is to say, rearrange the way the spending is, and the numbers that they're looking at decline as of January, and so that was one of the problems that they were seeing in what was being talked about over the last couple of days, which is that in January, the numbers actually go down and get locked in, and I think they want some flexibility on that to be able to say is there a way to rearrange the spending, even at an agreed upon level, that makes these levels less onerous, particularly on Defense and some other areas.

MYERS: Well, you know, I think the president has said as much that he wants to break the fever, right. I mean, this isn't a secret. He just -- so I think that's part of where the process has to go for now. He is not going to allow -- he's not going to go along with a process that loads up the debt ceiling, go with a lot of non -- extraneous issues as far as he is concerned. And he's sort of stuck between two very unappetizing alternatives, right. On the one hand, a government that's going to lock in dysfunction, on the other hand, a debt ceiling that if he breaches it sends the economy into a tailspin. So, I mean, at some point he's going to have to give, but negotiating with a gun to your head every few months, as Kim said, is unsustainable. How do you stop it? You get passed it.

GINGRICH: Look, I think this a very audacious -- to use one of the president's favorite words -- this is a very audacious strategy. He wants to repeal 60 years of tradition going back to Eisenhower of putting things in the debt ceiling, and he wants to pretend that the 18th government shutdown since 1976 is somehow radical and different. And if he can pull off this alternative reality, he's then free for three years to do virtually whatever he wants. The House Republicans, on the other hand, want to make sure that the president has to pay a price every time he gets a debt ceiling and every time he gets an appropriations bill. And that's why this is actually a legitimate, historic struggle, not just a problem of personality defects.

SCHIEFFER: Do you think that Boehner is going to survive this?

GINGRICH: Sure. I think Boehner's probably stronger now than he was three months ago, inside the conference.

SCHIEFFER: How so?

GINGRICH: I think every conservative who had doubts about Boehner has watched Boehner now very resolutely keep moving the system down the road and stand by the values that they -- that they told him they cared about. And I think John is probably closer to his conference today than he was three months ago.

MYERS: But he can't move a bill.

(LAUGHTER)

GINGRICH: But, on the other hand, they may be comfortable saying, "OK, the president gets to choose. Does the president of the United States really want to default? The president of the United States really wants to leave the government closed?

STRASSEL: There's no bill to move. I mean, look at what Republicans proposed to the president.

MYERS: But partly because no bill can be moved.

STRASSEL: Well, yeah, but what -- the Republicans' proposal to the White House was eminently reasonable. It said short-term debt ceiling increase, everyone appoint budget conferees for a long-term talk. And then you guys -- you want to ease the sequester caps, we'll do that for one or two years, and let's do it in exchange, dollar for dollar, with some long-term entitlement reform that the president himself has already committed to and has agreed with in his own budget. I mean, what would not be to like about that from the White House? And they still came back and said no. So that suggests that there is politics behind this, driving this. Because that seems to be the sort of agreement that would be eminently acceptable by both sides.

SCHIEFFER: Dan, I've said earlier that wouldn't it be smarter for Democrats to give Boehner a little something that he could go back to these folks in the Tea Party and -- and help them understand that what they've done here is not for naught, rather than trying to get him down and choke him, as some on the president's side seem to do? My thought is that, if Boehner is toppled, what comes after Boehner will be much more difficult for the White House to deal with.

BALZ: I think that's probably correct. And I would assume that the president and the White House team would much rather have Boehner there than not have Boehner there. I think that they are as dug in, in some ways, as some of the House people have been on the particulars of this, i.e. not allowing these decisions to be made against these kinds of deadlines. Now, the speaker says this has happened many times in the past. But at this point in our politics, they are holding out as long as they can on trying to finesse that question.

GINGRICH: Yeah, and look, I think, first of all, politics in the large sense is what this country is all about. I mean, this isn't a minor game. This is the president of the United States who is dramatically trying to change the country in a variety of ways, Obamacare, the stimulus, you name it, making a decision that he wants to be legislator in chief and that he's prepared to run a very tough fight. I mean, any normal, traditional president would have taken the deal that Kimberly outlined. This president has no intention of being normal. He wants to dramatically change the country. The House Republicans are the great barrier to doing that. And there's a danger, as the House Republicans get better at this, that they're going to cause more and more problems for him. This is the moment, I think, in his mind, to try to solve it. And I think -- I would not be at all surprised to see us technically have a huge problem Wednesday and Thursday.

SCHIEFFER: All right. We're going to take a break. We'll come back. A lot more to talk about.

SCHIEFFER: We're back now with our panel. Kimberly, you just brought up something we haven't talked about. Just from a standpoint of -- a technical standpoint, they have got to get something done here pretty quick or the process won't allow them to solve this before we hit that debt ceiling.

STRASSEL: Well, this is now the center -- this is in the Senate, and as we know, the Senate doesn't move very quickly. It needs two or three days just to get something passed and then it needs to go back over to the House, where there's no sure agreement that that's going to -- it may not be amended or changed and sent back to the Senate. This is going to be a long process. And if they don't get something done, started soon, then it may not be finished by the Thursday deadline.

SCHIEFFER: Does anybody at this table think that what we're seeing here is helping the perception that people have of America around the world?

(LAUGHTER)

MYERS: Well, no. I mean, clearly, it's not. It's not helping the perception people have of America in America, right? I mean...

(CROSSTALK)

MYERS: ... the lack of confidence in the United States among consumers, I think, radiates all around the world. Then you had Christine Lagarde saying just this morning that it would be devastating if the United States, you know, the go-to country in the world financially, were to breach the debt. Now, you can argue that some of that spending is flexible, but the problem is perception is as important as reality. And if the markets think that the government can't get its act together -- which they already think -- it will have a very devastating effect. In 2011, we didn't go over the debt ceiling; we didn't breach it, and it still had tremendous consequences. Consumers paid $1.3 billion more in interest in a short period of time. And it cost the economy some $16 billion in other ways. And that was by not going over. Christine Lagarde again said this morning that she thinks it would cause a global recession.

GINGRICH: Let me say, first of all, being lectured by a French leader, given Europe's inability to solve any of its major problems, doesn't overwhelm me.

MYERS: She's not the only one.

GINGRICH: I know. I know. But I'm just saying I watched her clip this morning and thought, this is what we need, is to be lectured by somebody who represents a eurozone that has totally failed to solve its problems outside of Germany. But, in addition, I think it's very important to understand two things about this. One, if they really had to, you can by unanimous consent move in two hours between the House and the Senate. Now, that requires a level of agreement that's pretty amazing...

MYERS: Well, a level of panic, probably, too.

GINGRICH: And a -- or a level of panic. But the truth is the American system, when it absolutely has to, can move much faster than people think. The other thing I'll say, since I represented the House and have the usual House attitude towards the Senate...

(LAUGHTER)

... anybody in the Senate who believes they can get a deal done without Boehner's approval and send it to the House and have it pass the House is totally out of touch with reality. I mean, if Reid thinks he can maneuver the House Republicans into accepting his version, they will defeat it just because of the traditional institutional hostility.

BALZ: But Boehner is still going to have to make the choice, I assume, of whether he has a totally united conference or if the hard liners are split off in a final vote.

GINGRICH: But he's -- look, it's pretty clear that John -- if John gets a reasonable deal, he'll take some heat on the right, and the right has given him -- I think they now believe in him enough that they would tolerate that. That's not the -- the question is, is he in the room helping make the deal? Because if it's clear he's isolated, he will have no ability to pass anything in the House.

SCHIEFFER: What -- what is the impact on the Republican Party from all of this? I mean, this poll done by The Wall Street Journal, or the NBC/Wall Street Journal poll, I mean, it was stunning. I mean, it set people back on their heels. And I've talked to Republicans and Democrats who both said the same thing to me. In fact, as I said earlier in the broadcast, one of the reasons that the Democrats suddenly got an idea of taking a harder line is they realized the Republicans were being blamed for all of this.

STRASSEL: Well, as the speaker said, it is a long way off, the election next year. So I don't necessarily think that this immediately translates into some answer about what happens in the next midterm election. I think the Republican calculation, as they go forward, is, having taken this step and got where they are and, sort of, said that they do insist that something come out of this in terms of the debt limit, that what they're hoping is that they can, in fact, get a deal that they can come back and say, "Look, we did make some progress on entitlements; we did make some progress on spending," which is something that, by the way, the vast majority of the public actually backs them on. The debt ceiling fight, in contrast to the Obamacare health care fight, is one in which, you know, every poll shows that Americans think that there ought to be some sort of negotiation and deal if you're going to raise the president's spending authority.

SCHIEFFER: One former Republican senator -- I won't give his name -- said to me yesterday, if there's one good thing that will come out of this, it is that Ted Cruz will never get another thing done.

(LAUGHTER)

Do you think so?

STRASSEL: Well, I think everyone's going to have to step back and ask what the tactics were here. Look, every Republican is united; every conservative is united that they dislike this health care law and that they want to see...

SCHIEFFER: Yeah.

STRASSEL: This was a tactical fight from the start over those who thought it was better to let the health care law go into effect, use it the way that Republicans did in 2010 to win a greater election in next year's midterm, take back over the Senate, and have a sort of united House and Senate to push back against the president, versus those who felt you had to take a stand now. And I don't necessarily think that that has proven to be such a swift strategy.

SCHIEFFER: What do you think the impact of Ted Cruz has been?

GINGRICH: I think Cruz, much like Rand Paul and much like Mike Lee, represents a new generation of outsiders who speak for millions of Americans who deeply dislike this city, deeply dislike the bureaucracy, and for a variety of different reasons, want very dramatic change. I actually think the parallels to them are people like La Follette and Borah, and the people who were all, by the way, bitterly disliked by the establishment. I mean, if you come in -- if you represent the second-largest state in the country, you beat a multi- millionaire incumbent lieutenant governor, and you arrive with all the certainty of being a Texan, and then you behave like a Texas and you aggressively go straight at the entire establishment, they're going to dislike you, and you're going to wear the label proudly. And Cruz will be a bigger figure two years from now than he is today.

MYERS: But the thing that is so surprising though is not that Cruz acted that way when we got here, right? He cut a wide swath and he meant to. Is that people followed him into a "box canyon," to quote The Wall Street Journal, when there was no way out. They didn't have any leverage to do what they sought to do and they had no exit strategy for when that failed, how they were going to get anything other than, you know, terrible poll numbers, declining poll numbers, business community against them, people saying they're no longer going to fund tea party candidates -- you know, not Democrats saying that. Republicans saying that, and an increased bitterness and infighting in the Republican Party. His greatest accomplishment is uniting Democrats so far.

BALZ: I think that the problem for the Republican Party now is which part of the party is going to actually be more dominant. I think the speaker is right that Ted Cruz and others have a following around the country. But this is not anywhere close to a following that could command a majority, certainly in a presidential election. And at some point, whoever the people are who are thinking of running for president in 2016, are going to have to figure out how you create a coalition that includes the people like Ted Cruz and the people around the country who agree with him, but with a different focus, a different edge, a different look, a different message. I mean, not an abandonment of it, but it has to be put in a different way. And if it looks like the Cruz part of the party is in fact the dominant party, then the Republicans will have longer-term problems.

SCHIEFFER: Thirty seconds.

GINGRICH: Well, two quick things, one, we're in so much trouble as a party that I think Christie will win by more than 20 points, just a reminder about how complicated this is. Two, what you're looking for ultimately is Reagan not Goldwater, and my guess is it is going to be a governor, and that the governor -- we're going to nominate a governor who will in fact bring together a unifying message, largely of economic growth, getting rid of all the bad parts of Obamacare, and beginning to get us back to a balanced budget.

STRASSEL: Showing they can get stuff done, too.

SCHIEFFER: We will end it there. Thank you all very much. Back in a minute.

SCHIEFFER: Well, that's about it for us today. We hope you will tune in tomorrow morning for the latest on the shutdown slowdown on "CBS This Morning." We will be back right here next Sunday on FACE THE NATION.