remarks today, ty and the questions that are asked and the tone of the answers. they're looking for some sort of negotiation ors resolution. they would like to see both sides get together and right now, as the market is telling us, it doesn't look like that's happening. that will do it for us on "power lunch." >> we'll see you when you get home. "street signs" begins right now. >> you are looking live at the white house press briefing room. at any moment the president expected to make a statement on the government shutdown and expected to take questions from the press corps. welcome, everybody, to "street signs." kind of a special day here. mandy, we're going to be taking the president momentarily, although we know he's sometimes not at the time he's supposed to be on. >> how dare you suggest he could be tardy, the president of this fine country, we will get to him as soon as he comes out into the press briefing room. get to eamon javers at the white house to find out what exactly we are expecting him to say, eamon. do we have any idea? >> we don't, mandy.

we can expect the president to talk for a few minutes and take a few questions from the press corps. usually doesn't take a whole lot of questions. this isn't going to be a full-length press conference from the president of the united states. expect that the questions will be very much focused on this debt ceiling showdown over the next coming days and what can the president say here that's actually new because we don't have a whole heck of a lot of progress in terms of negotiations here in washington. we do know that the president called the speaker of the house at about 10:45 eastern this morning and the speaker and the white house released conflicting statements about what exactly happened on that call. the speaker said the president reiterated he won't negotiate. the white house said the president said he will negotiate but only if the speaker and the house republicans remove the threat of a debt ceiling default scenario from the table. then the president said he's willing to sit down and talk to them over anything they want to talk about. that's kind of where we've been over the past couple of days, that's where we are going into the press conference right now. >> i went through the text of

the october 2nd speech, the first one after the shutdown. and just a little fine feature. he said shutdown, republican 31 times. he's defining the narrative as he should and the republicans have done the same on their side, do you believe this will be something where we're going to get new news and maybe move forward or will it be what we've heard from both parties, which is it's their fault? >> to your point, brian, he called it a republican shutdown. he used both of those words together. >> many times. >> clearly trying to place the blame here on the republican party. the polls show that's working for the president, but they don't show that it's working as well as it did for president bill clinton in the 1990s, the last time we had a government shutdown. that played disastrously for capitol hill republicans. this one the president has an advantage in the polling but a little more marginal thanes last time. i think what we can expect here, i'll be proven wrong in a minute or two, but i think what we can expect is more of the same from the president in terms of laying out what he would like to see

happen here, laying out the fact that this is irresponsible in his view, behavior by the republicans saying the republicans have the votes to pass what's called a clean cr and simply reopen the government in the next five or ten minutes if they wanted to bring that to the floor. they think here at the white house that would have the votes to pass. there's question on capitol hill as to how many republicans would actually vote for it if it went to the floor, but it does seem clear there are some republicans in bay boehner's caucus who would vote with the democrats in that scenario, might be enough tos pass the bill, reopening the government. the question is whether boehner would bring that to the floor. >> sue brought up a very pertinent point that we really need to listen for the tope here. i'm wondering, eamon, what would resonate with the american public? for those that have been watching for the past couple weeks, all these going back and forth, rather than the finger pointing, taking an annoyed or frustrated or militant tone, at this stage in the game they want a conciliatory tone, no?

>> yeah. i think that's right. the white house has been trying to do that. we've had moments of passion from the president as he's spoken about this over the past couple weeks. for the most part, though, he's sort of had a resigned sadness to him when he talks about that. that's the vibe he's been projecting. we've had heated moments as well. we saw speaker boehner last week say this is not some dam game in a very angry moment when he was frustrated with a blind quote in the wall street journal in which white house aides suggested on background they were winning this default scenario and they think that they would be perfectly fine letting this go for a while because politically it's to their advantage. the speaker very, very upset about that and the white house force quickly to disavow that comment which we saw the president do on the record and on camera. so over at the white house here, there's a little bit of hunting who made that comment to "the wall street journal" because in -- >> that was ugly. >> never want the raw politics to come to the surface. >> whoever said that, that was just a stupid comment because it did give the impression they

view it as a game. it would have been dumb coming from either party. eamon javers don't go anywhere, the president will hopefully soon step out and take the speech and get your reaction. bring in larry kudlow and governor howard dean. again, just my apologies if we have -- we cut people off every day, but the president could speak any moment, scheduled to speak five minutes ago. we have to go on here and get your wisdom and insight until he does. >> you have a new -- it's interesting today. the president may disregard all this and say he wants a clean bill, but the republicans have come up with a new offer. it's a bit curious. they want to set up committees, okay, not like the debt commission of a couple years ago, but they want to set up committees that would be bipartisan in both the senate and house which they called discussion committees, conversation committees, that would go through all the issues on the continuing resolution and on the bebts bill -- debt bill

and might discuss other issues on the table like taxes, for example, like entitlements, like spending. nothing formal but they did also say, the house rules committee today, has already or if they haven't they're about to pass a rule that would allow both the cr and the debt bill to be taken up together as one -- as one legislative piece, at least in the house. so the question for this news conference is will the president respond to the house republicans' new offer? >> i would like to know, talking ate this yesterday, you and i, in history, you've been around the blocks, you've seen a number of administrations come and go, have you ever known an administration or rather a congress that has been as immovable as this one? >> well, you know, i've never known a president, okay, never known a president who refused to negotiate. all right. that's point number one. i have seen many stubborn congresses. both democrat and republicans. look, when i worked for reagan, the house was democratic.

and that was very difficult with tip o'neill. but, reagan negotiated. last night, on the kudlow report, i asked former governor howard dean if he would negotiate with his legislature and, of course, howard, being the good chief executive that he was, said he would negotiate with his legislature and i think that the president has taken this whole thing way too far. he has to come down from the heights i don't know, mount olympus and talk to the little legislatures. >> to -- >> governor, let me ask you this, and follow up on larry, but to mandy's point, we've seen this before, nothing new with the united states, we think it is, but in 1912 teddy roosevelt broke with a bunch of republicans formed the bull moose party. this is nothing new. it seems -- >> that wasn't a legislative congressional issue. that was a straight presidential issue. >> do you think -- >> i think this is completely different. i want to let howard come in because i feel look, the shutdown is being blamed on the

republicans. but when you look at the polling data carefully, their blame is not that great, not like 95, 96. they may be blamed by 60%, but 50% blame the president. so this is a tricky political -- >> and so zero percent on this show will blame either party. governor dean, able it to find any solutions here? or is this going to the deadlock? >> i think larry is being disingenuous when he talks about the president negotiating. he has said not that he won't negotiate, he's not going to negotiate about whether or not the united states should pay its bills or not. this committee that's supposedly going to get put together in the house, if their intention is to have a negotiation which we now call the grand bargain about taxes and corporate taxes and expenses, that's fine. but the president should not negotiate about whether or not america will pay its bills. these same republicans were the ones that approved the continuing resolution under which we're acting. they ran up these bills and they got to pay them.

you cannot -- suppose i went to the bank and said i'm not paying my mortgage unless you change the terms. that's weight going on here. sn>> >>. >> a democratic congress from 2006 to 2010 a lot of spending done there. i'm not going to assign blame one to party. i'll assign blame to both parties. on negotiating, republicans never said they won't pay the bills. what they have said, john boehner said this as recently as sunday, the issue behind the debt is the spending behind the debt. and that is why they are not going to give a clean spending bill and that is why they're not going to give a clean debt bill because they believe conditions to slow down spending including the sequester, but there are other conditions also, entitlement reform, for example, should be part. >> governor dean. >> that's not so. what they said we want to get rid of obama care.

the president is not going to do that. it's been passed by the house, by the senate, and affirmed by the supreme court of the united states. a minority of a minority does not get to overthrow multiple elections, the supreme court and the house and the senate. >> larry, just hold those thoughts. we'll keep you around. we are just to recap for our radio listeners and tv viewers, waiting for president obama to come out and make a live statement on the state of the shutdown and how we progress going forward from here. i would like to fill you in on what the markets are up to. a negative day for the markets, sitting around one month lows for the dow and s&p 500. >> i'm going to set my pants on fire and run out of the building. >> the nasdaq is down about 2%. put that in context, nasdaq down about the worst. the biggest one day drop since august 27th. what's also interesting to highlight here, folks, not just stocks but the u.s. dollar.

the u.s. dollar near eight-month lows some feel the chance of default, however small, would obviously threaten the greenback status as the global reserve currency. >> it's not panic stage. >> where will you spend it all, mandy? >> i'm going to earn my sala salary -- >> i'm trying -- the dow is up 13%, the s&p 500 is up 16%. although we have had some weakness as of late, we can't say, right, larry the market is not collapsing. there are some out there -- >> we're about for the dow about 5% away interest record highs. i think for the s&p it's only about 3.5% away. >> i think it's -- no. brian you make a good point. the stock market in a ceps has been relatively stable. the bond market today is trading around 264, 265.

that's been relatively stable. i grant you the dollar has been slumping but if you look at the dxy index, that is heavily weighted by the euro. >> sure. >> the euro has had a nice run up because economic conditions in europe, are believe it or not slightly inproving. i don't see any panic here. maybe i'll change my tune in a week or two. so far i think the markets are taking this washington story in stride. >> we're getting the two-minute warning. we'll be listening in the mean snooim governor dean, what do you want to hear the president say? what would make you happy? >> i would agree with what mandy was saying. we would hope he is going to be conciliatory, draw a firm line over not negotiating whether we should or should not pay our bills. that should not be on the table. i would like to see the president and the house and the

senate agree to a committee, but not a committee to okay increasing the debt ceiling or paying the government's bill. a committee to hammer out the grand bargain. we've had this problem before and it turned out that the republicans made some demands people felt were unreasonable. hopefully people will resume -- we already saw today in the house, this is representative sessions, said who apparently is going to chair the committee, said they could move a bill but not with any taxes in it. if you're taking alternatives off the table that's not serious negotiation. >> what about you, larry, what are you hoping he's going to say? probably 50 seconds from now. >> i would like to see the president have a more conciliatory tone, i would like to see him agree to creating this kind of super conference and i would like to have everything on the table. the gop will pay its bills and the gop does not want a debt default but they want some conditions to lower the future debt.

and i think that's altogether reasonable. >> do youing think we're going to get the president to authorize the minting of a $1 trillion coin. >> you laugh. there's a legal loophole to do this. >> jimmy buffet, not warren, jimmy buffet said it best if we weren't all crazy we would go insane. we need a little humor or alcohol. >> i tell you what, i won't do the alcohol, we haven't done that in 18 years, but if not a platinum coin, i would like to see gold coins linked to the dollar like the 19th century. in fact, the early 20s you were talking about teddy roosevelt wanted the dollar to be as good as gold. so do i. >> okay. all right. guys, governor, please, larry, stick around. the president is at the podium. let's go down to the white house press briefing room and president barack obama. >> this morning i had a chance to speak with speaker boehner and i told him what i've been saying publicly, i am happy to talk with him and other

republicans about anything. not just issues i think are important, but also issues they think are important. but, i also told him that having such a conversation, talks, negotiations, shouldn't require hanging the threats of a government shutdown or economic chaos over the heads of the american people. think about it this way. the american people do not get to demand a ransom for doing their jobs. you don't get a chance to call your bank and say, i'm not going to pay my mortgage this month unless you throw in a new car and xbox. if you're in negotiations around buying somebody's house, you don't get to say, well, let's talk about the price i'm going to pay and if you don't give me the price i'm going to burn down your house. that's not how negotiations work. that's not how it happens in business, private life. in the same way, members of congress and the house

republicans in particular, don't get to demand ransom in exchange for doing their jobs. and two of their very basic jobs are passing a budget and making sure that america's paying its bills. they don't also get to say, you know, unless you give me what the voters rejected in the last election, i'm going to cause a recession. that's not how it works. no american president would deal with a foreign leader like this. most of you would not deal with either a co-workers or business associates in this fashion and we shouldn't be dealing this way here in washington. and, you know, i've heard republicans suggest that well no, this is reasonable. this is entirely appropriate, but as i've said before, imagine if a democratic congress threatened to crash the global economy unless a republican president agreed to gun background checks or immigration reform. i think it's fair to say that

republicans would not think that was appropriate. let's lift these threats from our families and businesses and let's get down to work. it's not like this is a new position that i'm taking here. i had speaker boehner and the other leaders in just last week. either my chief of staff or i have had serious conversations on the budget with republicans more than 20 times since march. so we've been talking all kinds of business. what we haven't been able to get are serious positions from the republicans that would allow us to actually resolve some core differences. and they have decided to run out the clock until there's a government shutdown or the possibility of default thinking that it would give them more leverage. that's not my characterization. they've said it themselves. that was their strategy from the

start. and that is not how our government is supposed to run. it's not just me, by the way, who has taken the position that we're willing to have conversations about anything, senate democrats have asked to sit down with house republicans and hash out a budget but have been rejected by the house republicans 19 times. at the beginning of this year, speaker boehner said what we want is regular order and a serious budget process. senate should pass a bill and house should pass a bill and then a committee comes together and they hash out their differences and they send the bill to the president. that's what democrats did. except somewhere along the way, house republicans decided they wouldn't appoint people to the committee to ri to negotiate. and 19 times they've rejected that. so even after all that, the democrats in the senate still

passed a budget that effectively reflects republican priorities. at republican budget levels, just to keep the government open. and the house republicans couldn't do that either. the point is, i think, not only the white house, but also democrats in the senate and democrats in the house, have shown more than ample willingness to talk about any issues that the republicans are concerned about. but we can't do it if the entire basis of the republican strategy is, we're going to shut down the government or cause economic chaos if we don't get 100% of what we want. so, my suggestion to the speaker has been and will continue to be, let's stop the excuses, let's take a vote in the house, let's end this shutdown right now. let's put people back to work. there are enough reasonable republicans and democrats in the house who are willing to vote

yes on a budget that the senate has already passed. that vote could take place today, shutdown would be over. then serious negotiations could proceed around every item in the budget. now, as soon as congress votes to reopen the government, it's also got to vote to meet our country's commitments, pay our bills, raise the debt ceiling because as reckless as a government shutdown is, the economic shutdown caused by america defaulting would be dramatically worse and i want to talk about this for a minute because even though people can see and feel the effects of a government shutdown, they're already experiencing it right now, there's still some people out there who don't believe that default is a real thing and we've been hearing that from some republicans in congress ta default would not be a big deal.

so let me explain this. if congress refuses to raise what's called the debt ceiling, america would not be able to meet all of our financial obligations for the first time in 225 years. and because it's called raising the debt ceiling, i think at lot of americans think, it's raising our debt. it is not raising our debt. this does not add a dime to our debt. it simply says you pay for what congress has already authorized america to purchase. whether that's the greatest military in the world or veterans benefits or social security, whatever it is that congress has already authorized, what this does is make sure that we can pay those bills. now the last time that the tea party republicans flirted with the idea of default, two years

ago, markets plunged, business and consumer confidence plunged, america's credit rating was downgraded for the first time, and a decision to actually go through with it, to actually permit default, according to many ceos and economists and i'm quoting here, would be insane, catastrophic, chaos, these are some of the more polite words. warren buffett likened default to a nuclear bomb, a weapon too horrible to use. it would disrupt markets, it would undermine the world's confidence in america as the bedrock of the global economy, and it might permanently increase our borrowing costs. which, of course, ironically would mean that it would be more expensive for us to service what debt we have and add to our deficits and debt, not decrease them. there's nothing fiscally responsible about that.

preventing this should be simple. as i said, raising the debt ceiling is a lousy name which is why members of congress in both parties don't like to vote on it. it makes you vulnerable in political campaigns. it does not increase our debt. it does not grow our deficits. it does not allow for a single dime of increased spending. all it does is allow the treasury department to pay for what congress has already spent. but as i've said, it's always a tough vote. people don't like doing it. it has been done 45 times since ronald reagan took office. nobody in the past has ever seriously threatened to breach the debt ceiling until the last two years. this is the credit worthiness of the united states we're talking about. this is our word, this is our good name, this is real. in a government shutdown, millions of americans face inconvenience or outright

hardship. in an economic shutdown, every american could see their 401(k)s and home values fall, borrowing costs for mortgages and student loans rise, and there would be a significant risk of a very deep recession. at a time when we're still climbing our way out of the worst recession in our lifetimes. you know, the american people have already fought too hard and too long to come back from one crisis, only to see a handful of more extreme republicans in the house of representatives cause another one. the good news over the past 3 1/2 years our businesses have created 7.5 million news job, housing market healing, cut the deficits in half since i took office. the deficit is coming down faster than any time in the last 50 years. america is poised to become the number one energy producer in the world this year.

this year, for the first time in a very long time, we're producing more oil than we're importing. so we got a lot of good things going for us but the uncertainty caused by just one week ofs this nonsense so far has caused businesses to reconsider spending and hiring, consumer confidence plunge to the lowest levels since 2008. you've seen mortgages held up by thousands of home buyers who weren't sure about the economic situation out there. all this adds to our deficits, doesn't subtract from it. we can't afford these manufactured crises every few months. as i said this isn't even about deficits or spending or budgets. our deficits are spending at the fastest pace in 60 years. the budget that the senate passed is at republican spending levels. it's their budget. that democrats were willing to put votes on to make sure the government was open while negotiations took place for a longer term budget.

the way we got to this point was one thing and one thing only and that was republican obsession with dismantling ated forble care act and denying health care to millions of people. that law ironically is moving forward. so, americans democrats and republicans agree health care should not have anything to do with keeping our government open or paying our bills on time which is why i will sit down and work with anyone of any party, the not only to talk about the budget but ways to improve the health care system. i'll talk about ways we can shrink our long-term deficits. i'll also want to talk about how we're going to help the middle class and strengthen early childhood education and improve our infrastructure and research and development. there are a bunch of things i want to talk about in terms of how we're going to make sure everybody is getting a fair

shake in this society and our economy is growing in a broad bas based way building our middle class. if anybody doubts my sincerity about that i've put forward proposals to reform our tax code in a way that would close loopholes for the wealthiest and rates for corporations and invest in new jobs. some of these were originally republican proposals. because i don't believe any party has a monopoly on good ideas. i've shown myself willing to go more than half way in these conversations. and if reasonable republicans want to talk about these things again, i'm ready to head up to the hill and try. i'll even spring for dinner again. but i'm not going to do it until the more extreme parts of the republican party stop forcing john boehner to issue threats

about our economy. we can't make extortion routine as part of our democracy. democracy doesn't function this way. and this is not just for me, it's also for my successors in office. whatever party they're from. they shouldn't have to pay a ransom either for congress doing its basic job. we got to put a stop to it. last point i'll make. already this week, i had to miss critical meetings in asia, to promote american jobs and businesses. and although as long as we get this fixed that's not long-term damage, whenever we do these things, be it hurts our credibility around the world. it makes it look like we don't have our act together. and that's not something we should welcome. the greatest nation on earth shouldn't have to get permission from a few irresponsible members of congress every couple months to keep our government open or to prevent an economic catastrophe. let's pass a budget, let's end

this government shutdown, let's pay our bills, let's avert an economic shutdown, let's drop the gimmicks, put aside what's good for any particular party and let's focus on what's good for the american people because they know we've got a lot of work to do. all right. so with that, let me take a couple questions and i will start with julie pace of a p. >> thank you, mr. president. obviously if congress does pass a clean cr and debt ceiling bill those may just be short-term measures. if that happens, does your offer to negotiate with them on issues like health care and spending and deficit reduction still stand in the intervening weeks they pass measures that are just perhaps six weeks or two months long? >> absolutely. i mean, what i've said is that i will talk about anything, what will happen is we won't agree on everything. i mean, the truth is, is that the parties are pretty divided on a whole big -- bunch of big

issues right now. voters are divided on a lot of those issues too. i recognize there are some house members, republican house members, where i got clobbered in the last election and they don't get politically rewarded a lot for being seen as negotiating with me. and that makes it harder for divided government to come together. but i am willing to work through all those issues, the only thing that our democracy can't afford is a situation where one side says, unless i get my way and only my way, unless i get concessions before we even start having a serious give and take, i'll threaten to shut down the government or i will threaten to not pay america's bills.

so, you know, i will not eliminate any topic of conversation and i've shown myself willing to engage all the parties involved every leader on any issue. >> and that applies with how long the time frame is on the bills they would pass? >> the only thing that i will say is, that we're not going to pay a ransom for america paying its bills. that's something that should be nonnegotiable and everybody should agree on that. everybody should say, one of the most valuable things we have is america's credit worthiness. this is not something we should even come close to fooling around with. and so when i read people saying, this wouldn't be a big deal. we should test it out. let's take default out for a spin and see how it rides. and i say, imagine if your

private life, if you decided that i'm not going to pay my mortgage for a month or two, first of all you're not saving money not paying your mortgage. you're just a deadbeat. and you can anticipate that will hurt your credit. which means that in addition to debt collectors calling, you're going to have trouble borrowing in the future. if you are able to borrow in the future you have to borrow at a higher rate. what's true for individuals is true for nations even the most powerful nation on earth and if we are creating an atmosphere in which people are not sure whether or not we pay our bills on time, that will have a severe long-term impact on our economy and on america's standard of living. and that's not something that we

should even be in a conversation about. that is not something that we should be using as leverage. julie ana goldman. >> thank you, mr. president. you laid out the economic consequences of default but if we were to get to that point would you prioritize and pay bond holders first to maintain the semblance of credit or rather than social security recipients or military service men and women and how would you go ahead and make that determination? >> i am -- i'm going to continue to be very hopeful that congress does not put nous in that position. i think if people understand what the consequences are, they will set that potential scenario aside. i do know there have been some

who have said that if we just pay bond holders, we just pay people who have bought treasury bills, that we really won't be in default, because those interest payments will be made and to them, what i have to remind them is, we have a lot of other obligations, not just people who pay treasury bills. we've got senior citizens who are counting on their social security check arriving on time. we have veterans who are disabled who are counting on their benefits. we have companies who are doing business for our government and for our military, that have payrolls that they have to meet and if they do not get paid on time they may have to lay off worksers. all those folks are potentially affected if we are not able to pay all of our bills on time. what's also true is, if the markets are seeing we're not paying all our bills on time that will affect our credit worthiness even if some people are being paid on time.

so again, just to boil this down to personal examples. if you've got a mortgage, a car note and student loan you have to pay, and you say well i'm going to make sure i pay my mortgage but not going to pay my student loan or car note, that's still going to have an impact on your credit. everybody's still going to look at that and say you know what, i'm not sure this person's that trustworthy. and at minimum, presumably they're going to charge a higher interest rate. that's what would happen to you if you made those decisions. the same is true for the federal government. we are exploring all contingencies. i know the secretary lew, secretary of the treasury, will be appearing before congress on thursday and he can address some of the additional details about this. but let me be clear, no option is good in that scenario. there's no silver bullet. there's no magic wand that

allows us to wish away the chaos that could result if for the first time in our history we don't pay our bills on time. and when i hear people trying to downplay the consequences of that, i think that's really irresponsible. and i'm happy to talk to any of them individually and walk through them exactly why it's irresponsible. and it's particularly funny coming from republicans who claim to be champions of business. there's no business person out here who thinks this wouldn't be a big deal. to t not one. anywhere from wall street to main street, ask a business person, if it would be a big deal if the united states isn't paying its bills on time. they will tell you it's a big deal. it would hurt. and it's unnecessary. that's the worst part of it.

this is not a complicated piece of business. and there's no reason why if, in fact, republicans are serious about wanting to negotiate, have a conversation, want to talk, no reason you have to have that threat looming over the conversations. i mean, thing about it. the only reason that the republicans have held out on negotiations up until the last week or so, is because they thought it was a big enough deal that they would force unilateral concessions out of democrats and out of me. they said so. they basically said, you know what, the president's so responsible, that if we just hold our breath and say, we're going to threaten default, then he'll give us what we want and we won't have to give anything in return. again, that's not my account of the situation. you can read statements from

republicans over the last several months who said this explicitly. and for them now to say it wouldn't be a big deal if it happens, that's not how they've been acting over the last couple months. if it's not a big deal why would i give concessions now to avoid it? it is a big deal. nobody should be getting concessions for making sure that the full faith and credit of the united states is retained. sam stein. >> thank you, mr. president. when speaker boehner so far unwilling to hold a vote on the cr, what assurances can you give those affected by a shutdown who are concerned about a longer impasse and how worried are you personally that your preferred slug solution to this is clean cr se questation levels may harm your second agenda. >> you're making an important point which is what we're asking of the republicans right now is to keep the government open, at

funding levels that democrats think are very harmful to the economy and inadequate to make sure that the economy is growing faster, more people are put back to work, and the middle class is growing. we're willing to pass at least a short-term budget that opens up the government, at current funding levels. it doesn't even address the harm that's been done because of sequestration. now, the democrats have a budget that would eliminate sequestration, this meat cleaver approach to deficit reduction, and make sure that we're adequately funding basic medical research and head start programs and va programs and a whole range of things that have been hard hit this year.

but we recognize that there have going to have to be compromises between the democratic and republican position and in the meantime we shouldn't hurt the economy even worse by shutting down the government. so let me give you an example. very specific. because of sequestration, because of the meat cleaver cuts that have been taking place over the course of this year, thousands of families have lost head start slots for their children. all right. you've had parents across the country who have been scrambling trying to figure out how can i find some decent quality child care for my kids. now the government shutdown means several thousand more are going to be losing their slots. if we vote today or tomorrow or the next day, in the house of representatives to go ahead and reopen the government, at least those additional several thousand people will be spared

the difficulties of trying to scramble and figure out where your kid is going to be when you're trying to go to work but it doesn't solve the broader problems. if we were going to have real negotiations the democrats would say, let's solve the bigger problem. what about those thousands that have been hurt by sequester. democrats aren't making that demand right now. we understand there has to be give and take. but we are saying is, don't hurt more people while we're trying to resolve these differences. let's just at least make sure that we keep the lights on while having these conversations. >> do you support back pay for furloughed federal workers some. >> absolutely. that's how we've always done it. >> roberta ramton. >> you talked about the hint to credibility around the world that this impasse has caused. i'm wondering what you and your administration are telling worried foreign creditors china and dejapan who are calling and

asking about whether the united states is going to avoid defaults on its debt? >> well, you know, i won't disclose any specific conversations, but obviously my message to the world is, the united states always has paid its bills and it will do so again. but i think they're not just looking at what i say. they're looking at what congress does. and that ultimately is up to speaker boehner. this will not get resolved. we're not going to calm creditors until they see speaker boehner call up a bill that reopens the government and authorizes the secretary of the treasury to pay our bills on time. and until they see that, there's going to be a cloud over the u.s. economic credibility. but it is not one from which we can't recover. i mean we've been through this before. you know, every country, every

democracy in particular, has tussles over the budget and most world leaders understand it, they've been through it if they're in a democracy, what you haven't seen before i think from the vantage point of a lot of world leaders is, the notion that one party in congress might blow the whole thing up if they don't get their way. they've never seen that before. and that does make them nervous. particularly given what happened in 2011. keep in mind we've been here before, right? we saw what happened in 2011. i think the assumption was, that the americans must have learned their lesson. that there would be budget conflicts, but nobody, again, would threaten the possibility that we would default. and when they hear members of the senate and members of congress saying maybe default wouldn't be that bad, i'll about et that makes them nervous. makes me nervous.

it should make the american people nervous because that's irresponsible. it is out of touch with reality. it is based on a flawed analysis of how our economy works. you cannot pay some bills and not others and think somehow that the fact that you're paying some bills protects you from a loss of credit worthiness. that's not what happens in our personal lives. i don't know why people think that's how it works for the united states government. >> do you think you might have emergency powers you could use after any default? >> we have used a lot of our emergency powers. jack lew has used extraordinary measures to keep paying our bills over the last several months. but at a certain point those emergency powers run out. the clock is ticking. and i do worry that republicans, but also some democrats, may

think that we've got a bunch of other rabbits in our hat. there comes a point in which if the treasury cannot hold auctions to sell treasury bills, we do not have enough money coming in to pay all our bills on time. it's very straightforward. and i know there's been some discussion, for example, about my powers under the 14th amendment to go ahead and ignore the debt ceiling law, setting aside the legal analysis, what matters is, is that if you start having a situation in which there's legal controversy about the u.s. treasury's authority to issue debt, the damage will have been done even if that were constitutional because people wouldn't be sure. it would be tied up in litigation for a long time. that's going to make people

nervous. so a lot of the strategies that people have talked about, well the president can roll out a big coin and -- or, you know, he can resort to some other constitutional measure, what people ignore is that ultimately what matters is what are the people who are buying treasury bills think? and again, i'll just boil it down in very personal terms. if you're buying a house, and you're not sure whether the seller has title to the house, you're going to be pretty nervous about buying it. and at minimum, you'd want a much cheaper price to buy that houses because you wouldn't be sure if you were going to own it at the end. most of us would walk away, no matter how much we like the house, we would say the last thing i want to find out is after i bought it that i don't actually own it. the same thing is true if i'm

buying treasury bills from the u.s. government. and here i am sitting here, you know, what if there's a supreme court case deciding that these aren't valid. that these aren't, you know, valid legal instruments obligating the u.s. government to pay for them -- pay me. i'm going to be stressed. which means i may not purchase them. and if i do purchase them i'm going to ask for a big premium. so there are no magic bullets here. there's one simple way of doing it, congress going in and voting. and the fact that right now, there are votes i believe to go ahead and take this drama off the table, should at least be tested. speaker boehner keeps on saying he doesn't have the votes for it. and what i've said is, put it on the floor. see what happens. and at minimum, let every member of congress be on record.

let them vote to keep the government open or not. and they can determine where they stand and defend that vote to their constituencies. and let them vote on whether or not america should pay its bills or not. and if, in fact, some of these folks really believe that it's not that big of a deal, they can vote no. and that will be useful information to -- for voters to have. if it fails and we end up defaulting, i think voters should know exactly who voted not to pay our bills. so that they can be responsible for the consequences that come with it. harry shapiro. >> thank you mr. president. you mentioned the supreme court and the term startsed with the campaign finance case that picks up where citizens united left off. you called it devastating to the public interest. i wonder if you can weigh in on the latest case. >> the latest case would go further than citizens united.

essentially would say anything goes. there are no rules in terms of how to finance campaigns. there aren't a lot of functioning democracies around the world work this way, where you can basically have millionaires and billionaires bank rolling whoever they want, however they want, and in some cases undisclosed, and what it means is, ordinary americans are shut out of the process. and democrats aren't entirely innocent of this in the past. and, you know, i had to raise a lot of money for my campaign. so i -- there's nobody who operates in politics that has perfectly clean hands on this issue. but what is also true is that all of us should bind ourselves to some rules that say, the people who vote for us should be

more important than somebody who's spending a million dollars, $10 million or $100 million to help us get elected. because we don't know what their agendas are. we don't know what their interests are. and i continue to believe that citizens united united contribu some of the problems we're having in washington right now. you have some ideological extremists who has a big bank roll and they can entirely skew our politics, and there are a whole bunch of members of congress right now who privately will tell you i know our positions are unreasonable, but we're scared that if we don't go along with the tea party agenda or extremist agendagenda, we'll challenged from the right and it was very specific and they toed the line. that's why we see a breakdown of

normal routine business done here in washington on behalf of the american people. and all of you know it. i mean i'm not telling you anything you don't know because it's very explicit. you report on it. a big chunk of the republican party right now is -- are in gerrymandered districted where there's no competition, and those folks are much more worry ed about a tea party challenger than they are a general election where they've got to compete against a democrat or go after independent votes, and in that environment, it's a lot harder for them to compromise. all right? mark. >> thank you, mr. president. this week the president of china has visited several of the asian countries that you were going to visit and have had to skip because of the shutdown. >> right. >> he's also take an big role at

two of the regional summits, both of which you have made a pretty broad part of the pivot. more broadly you've said in general that this hurts the reputation of the united states oversea. are there specific things that you can point to where you already have seen some damage? and one that occurs to me is the trade deal that you've tried to do in asia. the leaders today announced that they still want to wrap it up, but they no longer are able to say they want to wrap it up by the end of this year. had you been there, do you thing you could have gotten that additional push? >> i think that's a great example, and we don't know, but it didn't help they wasn't there to make sure that we went ahead and closed a trade deal that would open up markets and create jobs for the united states and make sure that countries were trading fairly with us in the

most dynamic fastest growing market in the world. i should have been there. but, you know, i can tell you because i had to apologize to some of the host countries that they understand that the most important thing i can do for them and the most important thing i can do for the bilateral relationship in america's reputation is making sure we reopen our government and we don't default, so i don't think it's going to do lasting damage with this if we deal with it the way we should and folks around the world will deal with the usual messiness of american democracy. in the short term i would characterize it as missed opportunities. we continue to be the one

indispensable nation. there are countries across asia who have welcomed our pivot because they want to do business with us, they admire our economy, they admire our entrepreneurs, they know that their growth is going to be contingent on working with us. they care about the security environment that we maintain, help maintain in the freedom of commerce that's so important for them. so it's not as if they've got other places to go. they want us to be there and they want to work with us, but, you know, in each of these big meetings that we have around the world, a lot of business gets done, and in the same way that a ceo of a company, if they want to close a deal aren't going to do it by phone. you know, that i want to show up and look at somebody eye to eye and tell them why it's important

and shake hands on the deal. the same thing is true with rocky mountains to world leaders. and, you know, the irony is our teams probably do more to organize a lot of these multi-lateral forms and set the tone than anybody. we set the agenda and move this stuff forward so when -- it's almost like me not showing up to my own party. i think it creates a sense of concern to the other parties. as long is that understand it, believe we'll still be able to get these deals done. the last point i'd make, though, is we can't do it every three months, right? i mean, you know, back in the '90s, we had a government shutdown. it happened one time, and then after that, the republican party

and mr. gingrich realized this isn't a sensible way to do business, that we shouldn't engage in brinksmanship like this and then they started having a serious conversation with president clinton about a whole range of issues and they got some things that they wanted. they had to give some things that the democrats wanted. but it took on a sense of normal democratic process. so here we went back through this in 2011. then last year right after my election, we went through something similar with the so-called fiscal cliff where republicans wouldn't negotiate about taxes despite the fact that taxes actually went up anyway even though they refused to negotiate and they could have actually gotten some things from us that they wanted if they had

been willing to engage in normal negotiations. so we've got to keep -- we've got to stop repeating this pattern. i know the american people are tired of it, and to all the american people, i apologize that you have to go through this stuff every three months it seems like. and lord knows i'm tired of it. but at some point we've got to break these habits and get back to the point where everybody understands that in negotiations, there is give and there is take, and you do not hold people hostage or engage in ransom taking to get 100% of your way and you don't -- you don't suggest that somehow a health care bill that you don't agree with is destroying the republic or is a grand socialist

scheme. if you disagree with certain aspects of us, tell us what you disagree with and let's work on it. if you're concerned with long-term debt, that's a good thing to be concerned about, but don't pretend as if america's going bankrupt at a time when the deficit's been cut in half. that's what the america people expect. compromise, that's not a dirty word. i think the american people understand i may -- not i may. i have flaws. michelle will tell you. one of them is not i'm not willing to compromise. i've been willing to compromise my entire political career. and i don't believe that i have

the answers to everything and it's my way or the highway but i don't believe in doing damage to ordinary people just to go along with what the house republicans are talking about. >> can i ask a follow-up. i did ask a question specifically to china. i asked what is their loss is our gain. >> i'm sure the chinese don't mind that i'm not there right now. in the sense that there are areas where we have differences and they can present their view and not get as much of a pushback as if i were there, although secretary of state kerry is there and i'm sure he's doing great job. but i've also said that our cooperation with china is not a zero-sum game. there are a lot of area where

the chinese and us agree. on trade in particular, though, here's an area where part of what we're trying to do is raise standards for, for example, intellectual property protection, which sometimes is a big problem in china. and if we can get a trade deal with all the other countries in asia that says you've got to protect people's intellectual property, that will help us in our negotiations with china. richard mcgregor. >> can i go back to the issue of debt deprivation. what legal liabilities -- what is your legal advice that foreign creditors must be paid first particularly since it's a sovereign credit issue? >> richard, you know what i'm going do is let jack lew, the secretary of the treasury, make a formal presentation on thursday before the senate