>> today on "face the nation," major news overnight. u.s. forces got a long-sought al qaeda terrorist in libya and lawrched a bold raid in somalia. the seals were going after ring leaders of the mall attack in nairobi. we'll have the latest on that and the capture of a major terrorist in libya who is a key participant in the 1998 east african embassy bombing. back at home, the house passed legislation to give backpay to the workers furloughed in the government shutdown. defense secretary hagel told more than 300,000 civilian defense employees to come back to work. the latest on that from treasury secretary jacob lew. and the number two republican in want senate john cornyn of texas.

plus, israeli prime minister benjamin netanyahu's take on a potential thaw in u.s.-iranian relations. analysis on that and the rest of the news from the ""newshour's" "gwen ifill. dana milbank of the "washington post." jim vandettei of politico. and our own john dickerson. the government is shut down. but we're not. this is "face the nation." captioning sponsored by cbs from cbs news in washington, "face the nation" with bob schieffer. >> schieffer: and good morning gaining gwen and for the very latest on the terror raids carried out by u.s. forces in weekend we're joined by our national security correspondent david mart and i know former bush motor adviser on terrorism, juan zah rawty. david, what is the latest on what happened? >> who trait sprait operations in two separate countries, both

in africa and libya. u.s. commandos snatched one of the f.b.i.'s most wanted terrorists off the streets of tripoli in broad daylight, and he is now in u.s. custody, probably on a ship in the mediterranean. this guys names was aby abas el-liby. he was want the for his role in the 1998 bombings of the u.s. embassies in kenya and tanzania and one of the original members of al qaeda, one of the few still at large, but he will now, after he's interrogated, be brought back to the united states and almost certainly stand trial in new york city. >> schieffer: this was a big get. >> this was a big get and it was a risky get. you were going into a major metropolitan area. the other operation, the one in somalia, was conducted by u.s. navy seals, and it was-- appears not to have been as successful. they were out to capture a senior leader of al-shabaab, the

group responsible for that shopping mall massacre in nairobi two weeks ago. they got caught in a firefight before they could capture the guy, and had to withdraw to avoid another black hawk down situation, and in withdrawing they were not sure what became of the leader they were after, whether he was killed, wounded or simply got away. >> schieffer: and no americans hurt in that operation. >> no casualties in either operation. >> schieffer: juan what, is the significance of these two things? >> bob it demonstrates the u.s. has a long reach and long memory, particularly with the snatch-and-grab operation of aby abas el-liby in the heart of tripoli, somebody who has been part of al qaeda in the 1990s. in the context of the somali raid, i think it demonstrates the u.s. is growing more worried about the growing power of these regional groups, al-shabaab, and in particular in the wake of the nairobi attack on the shopping mall, what you see is the u.s. demonstrating we need to get into the fight to not only go after the leadership of these

groups but to help our allies to disrupt their reach and capabilities. i think it's an important moment pause both operations signal that the landscape has changed. it's no longer just al qaeda in western pakistan and afghanistan that worries us. it's these regional manifestation, and the u.s. is now demonstrating we're willing to put our boots on the ground in some instances to go after he's leaders. >> schieffer: and probably better to get these people when we can capture them alive than to kill them. >> absolutely. one of the key issues of aby abas el-liby, somebody who has been with bin laden since the 1990s what can we learn from him? he has been in libya for two years, reportedly trying to establish an al qaeda base there in connection to other groups. we'll want to know what he knows, not just hively but currently in terms of what al qaeda is planning. gleefd david, do you think we're going to see more of this now? >> i think the first thing that is going to happen is the terrorists will take more precautions about hiding. i think particularly ellib ehe

was-- he thought he was safe in tripoli because it's become such a lawless city, and i think he just stopped taking all the necessary precautions to hide. and now that two guys have targets in one day, i think you're going to see other potential targets be a lot more careful. >> schieffer: all right, well, i want to thank both of you for coming by this morning. thank you very much. well, now, on to the big story here at home. there are just 10 more days until the october 17, and that's when treasury secretary jacob lew says we will run out of money and could begin to default on our loans unless congress raises the debt ceiling. he is with us here this morning. do you see any hope that this thing can get resolved, mr. secretary? >> good morning, bob. it's good to be with you this morning. you know, i think that the simple answer is there's a majority in congress they believe is prepared to do the right thing, to opponent

government and make sure we don't cross over that abyss that you describe. i hope that mat jort will be given a chance to vote. the stakes are really high. the american people have come out of the worst recession since the great depression. the american economy is showing its resilience. our leadership in the world is the strong-- we're the strongest country in the world. our currency is the world's reserve currency. congress shouldn't be created self-inflicted wounds that hurt the economy and the american people. i think congress can and should act. >> schieffer: let me tell you something, john boehner was just on abc with george stephanopoulos, and he didn't seem to think there's any way to get this started unless you all are willing to sit down and at least talk to him. here's part of what he said. >> we are not going topaz a clean debt limit increase. >> under no circumstances. >> told the president there's no way we're going to pass-- the votes are not not house to pass a clean debt limit, and the president is risking default by

not having a conversation with us. >> under no circumstances will you pass a clean debt? >> we are not going down that path. it is time to deal with america's problems. how can you raise the debt limit and do nothing about the underlying problem. >> schieffer: so he went on to say the president knows my phone number. i decided to stay here in washington. i'm ready to talk. but i'm not going to do anything until we have a conversation. >> let's be clear, bob. congress needs to do the job. it needs to open the government up, and it needs to make it possible for us to pay our bills on time. i think the president's record is quite clear on his willingness to negotiate. for the last three years, he's made every effort, with speaker boehner, negotiating in person, through his budgets, putting proposals out there that many democrats were not happy that the president put serious entitlement reforms in his budget along with serious tax reforms. the problem isn't the president's willingness to negotiate. the problem is we have not yet engaged with republicans who are willing to put everything on the table and want speaker knows

that. i know the speaker well. i know the speaker doesn't want to default. he also department want to shut down the government. he needs to give the majority a chance to vote. >> schieffer: it sound like the two of you are talking past each other. he said the votes are not there. >> why doesn't he put on the floor and give it a chance. i worked fair speaker for eight years. i wonder for speaker o'neill who believed deeply that one thing americans won't tolerate obstructionism. he put things on the floor and sometimes he won and sometilgs he lost put but that's the right thing to do. let the congress vote. >> schieffer: is there some kind of backchannel way, is there any way to nudge this off where it is? >> you know, i think if the question is on opening the government and making sure we don't default, congress just needs to do its job. there's not-- we're not asking for anything from congress. let's remember how we got here. over the summer a bunch of fairly extreme members of the republican party said we're going to use shutting down the government or defaulting on our

debt as a way to go back and reargue the affordable care act. that was-- that was a bad decision. it was bad for the country. i don't know that the leaders decided to do it, but they ended up having the debate where the government is now shut down. in 2011, we saw the same group say that we would rather default than have the kind of honorable compromise where there's real give-and-take. that's no way for the united states to do business. >> schieffer: what do you think the impact on the economy will be if we do go into default? >> nothing good, bob. un, it's kind of a little bit ironic that you look even at the government shutdown, the people who chose to shut down the government are now day by day discovering all the important things and the bad consequences of shutting down the government because it's a really important thing to make sure we do things like provide health care and that we have intelligence and the ability to do what the federal government does. it's a whole different order of magnitude if we default for the first time since 1989.

we've never done-- 1789. can i read what president reagan said about it. i think it really captures very much what i think the risk is. and i quote, "the full consequences of a default or even the serious prospect of default by the united states are impossible to predict and awesome to contemplate. denigration of the full faith and credit of the united states would have substantial effects on the domestic financial markets and on the value of the dollar in exchange markets." why would anyone take a risk with those kinds of consequencewhen it's really just a question of letting a majority vote? >> schieffer: mr., is the i thank you for coming here and giving us that side. but i have to say, in all candor, i don't get any sense from you that we're any closer today to resolving this than we were, what, a week two, weeks, six months ago. >> well, if you're asking when the republican leadership will decide to schedule a vote, that's really their decision. we don't control that. i think if you look at what we've seen in public over the last number of days, what we've seen in public is there is a

majority. there is a clear majority. >> schieffer: would the democratic majority, would they be willing to talk to them? i'm not saying who's right and who's wrong. i'm just saying i don't see how you can get-- when both sides are unwilling-- >> fing you look at this last week, you saw 100 members of the house go out on the steps and say they would vote to open the government at spending levels that they abhor, but they would vote to oi open the government. i don't think it's fair sty that's no reasonableness on the democratic side. what we've seen is demands-- unless i get my way, we'll bring these terrible consequences of shutdown or default. these kinds of threats have to stop. >> schieffer: mr. secretary, thank you for coming by with the administration's side. >> schieffer: now we're going to get thing other side from the assistant republican leader in the senate, texas senator john cornyn. senator cornyn, give me some scenario.

where do you see this ending? how does this end? >> well, the president's got to lead, and do his job. we rejected the concept of a king when our country was founded, and created three co-equal branches of government. the president said he won't negotiate on the continuing resolution and now he said he won't negotiate on the debt. what he needs to do is roll up his sleeves and get to the table and i'm sure we can get past the impasse on both the continuing resolution as well as the debt ceiling. >> schieffer: as i said to mr. lew, i just see both sides talking past one poorpg republicans say they wan want-- they won't vote on this until everybody sits down and talks. the president says vote to and then we'll sit down and talk. somebody has got to give here it seems to me. >> well, 17 times since 1976, the government has temporarily shut down because of an impasse over spending levels. and that's what's happened

again. and we're not going to resolve this without the president engaging. now, the debt ceiling and the continuing resolution have sort of morphed into one another because of the timing of this thing. again mr. lew says the president won't negotiate on that. i think what's happened is in 2011 the president now realizes that republicans who were concerned about spending levels got better of him on the budget control act which is actually cut $2 trillion over the next 10 years. we're on that trajectory, of discretionary spending. and the president realizes he's going to have to give something in order to get what he wants. and he doesn't want to go there. >> schieffer: well, you heard speaker boehner say that he does not think that there are votes in the house right now to pass a clean bill air, bill that doesn't have anything attached to it. do you think that's the case? >> well, he knows the house better than i know the house. but i know there is a lot of concern among conservatives

about actually the level of the continuing resolution. as you know, it came out of senate at $988 billion which is actually above the budget control act number of $967 billion. so i imagine there are a number of different views about this. but the fact is that the continuing resolution has now become part of the debt ceiling negotiation, and the president needs to do 'tis hiz job. so far he's been awol. >> schieffer: well, don't republicans also have to do their job-- >> everybody does. >> schieffer: after all, this law-- this all started because ted cruz, your colleague from texas in the senate, didn't like obamacare, and he worked up this deal that we won't raise-- i mean, we won't fund the government unless we can also get you to agree not to fund obamacare. i mean, which is almost like you know, "i'm going to throw a brick through your window unless you give me $20." >> well, i would look at it a little different way. i would say that ted and i share

the concern about what obamaed care is doing to our economy. >> schieffer: but that's dead bdz the point. let law has been passed. why not keep the government running and then everybody can sit down and decide what they want to do about it. >> well there, should be a negotiation, and this government would still be up and running in full if harry reid had allowed democrats to vote to eliminate the congressional carve-out which treats them favorably under obamacare and treat average americans the same way american has decided to treat business with regard to obamaed care penalties. >> schieffer: senator, isn't there something wrong when you say i won't fund the government unless i can attach my personal wish list to the legislation every time we vote? i'd love to see the government find a cure for cancer, but i don't think you can say i'm not going to pass and passany fund for the rest of the government until n.i.h. finds a cure for cancer. i mean, instant just kind of the same thing here?

>> well, it should be pawrt part of the negotiation. but there's actually more common ground than you might think. we have it's house has passed a provision to open up n.i.h. to do the cancer research and that's been shut down by the democrat gleefs you can't do that every time you get ready to fund the government, it seems to me, somebody comes up with some new thing that is their thing they want done, and you can't fund the government unless you get that. i mean-- >> well, i know you can't reach an agreement and get passed this impasse if the president won't negotiate. and he's not at the table. we've moved from the defund obamacare effort to eliminating this congressional carve-out. and eliminating the penalty on individual americans like the president's done for businesses under obamacare. we would have the government be funded today if harry reid and senate democrats had agreed to vote for that. >> schieffer: what would you like? what do republicans want? >> well, i'll tell what you we want is some measures to address the out-of-control debt and

spending in the country. and particularly, looking at $17 trillion in debt, which is hampering our economy, creating uncertainty. it's helping to contribute to slow economic growth and high unemployment. and the president says he want a clean debt ceiling increase. that's not going to happen. and we can't let it happen if we care about the next generation. >> schieffer: well, where does this end? i guess i've asked that question before, but where does this end? because i don't see either side this morning moving any closer to that than they were six months ago. >> well, i think you're correct this morning. things change rather quickly around here. my hope would be the president would reconsider his decision to sit on the sidelines and be a mere spectator. and he will roll up his sleestles and do the job. i can't imagine coming from texas, i can't imagine lyndon baines johnson as president or any other president-- frankly-- in the 17 times we've had a shutdown sitting on the sidelines and outsourcing these

negotiations to other people. >> schieffer: let me just ask you this-- you've been around fair while. how is it that you wind up with a freshman senator who has been in office less than a year becomes the architect of this thing that has the two sides so gridlocked that nobody seems ton a way out of it? how did that happen? >> well, there is a way out of it. but it's going to take the president's involvement and i'll speak to that. i think what ted and so many others have-- are addressing is the fear in this country that we are careening down a path that unless we stop and correct it in terms of spend, in terms of government over-reach, that our country will become something we don't even recognize. i think they see this as an opportunity. i think they're right. it is an opportunity, but it's going to take the president being a co-equal partner along with congress negotiating the continuing resolution and the debt ceiling. >> schieffer: senator, thank you for coming by this morning. >> thanks, bob.

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story last week was that the reaction to after three decades the united states and iran are talking again. the president called iran's new president who was here for the opening of the annual u.n. session. thraid a friendly chat about iran's nuclear program. no one was more interested in that conversation than israeli prime minister benjamin netanyahu. he says we must not be fooled by iran's friendly words. he blistered iran in his speech to the united nations. and just before he headed home, i asked him what was his main concern now? >> i think we should have a common concern. we all share it. we don't want to see a nuclear armed iran, a nuclear armed iran

would take the preempinent terrorist regime of our time, one that payments in the the mass mferred men, women, and children in damascus and in the cities of syria. one that since 25 cities and five continents in the last three years alone, one that calls for the annihilation of israel, and developing i.c.b.m.sphoz reach the united states-- not us, they already have missiles that can reach us, reach you-- we don't want them to be able to put nuclear warheads on these missiles. we don't want them to have the ability to practice nuclear terrorism that can reach ever america. we want to be sure iran does not have nuclear weapons and my concern and my goal is to make sure the iranians don't dupe us into a deal where we lift the sanctions and they maintain their-- they maintain the ability to continue to develop

at whim nuclear weapons that will threaten all of us-- israel, the united states, and the peace of the world. we cannot allow that to happen. >> schieffer: do you feel that you and president obama are on the same page here? >> definitely on the goal. we talked about that. he spoke about his determination to prevent iran from getting nuclear weapons. he also said that iran's conciliatory words should be met by meaningful action. we spaint lot of time talk pentagon that. >> schieffer: netanyahu is too much the diplomat to get in the middle of the american government shutdown argument but he did pass on how israel solved its problem when it couldn't agree on a budget. >> you know, i contributed once to a change of legislation in israel. we have, i have to tell you, a system that is not good. some say it's lousy. we introduced one change-- if you don't get a budget by the end of the year, an automatic budget goes into place 1/2 each

month of last year's budget. you don't get a budget within six months, you go to elections. guess what, bob? we always get a budget. >> schieffer: well, that may not be such a bad idea at that. we'll have a lot more from the prime minister on part two of our broadcast this morning, and i'll be back in a minute with some personal thoughts.

>> schieffer: writing a commentary is usually the last thing i do when i'm preparing for "face the nation." i want to make sure i take last-minute twements into account. well, i could have written this one four or five years ago. the government is shut down. it's the other guy's fault and into on and on. nothing has changed, yet this time everything is different. this time around they're all talking, just not to each other. it's not just republicans against democrats. it's also republicans against republicans, to the point that a republican senator, ted cruz, a freshman at that, was advising house republicans at one point on how to stand up to their leader john boehner. that's beyond rare. in a legislative body where seniority determines everything from parking places to who chairs committees, we seldom see anyone with less than a year in office having much of an impact on.

anything. but cruz, all sides conditional, crafted the strategy that got to us where we are. in its wisdom the latest democratic ploy is an ad picturing house speaker boehner as a cry baby. >> speaker john boehner didn't get his way on shutting down health care reform, so he shut down the government. >> schieffer: what i'm wondering at this point is whether it would be more productive not to embarrass boehner but quietly help him find a way out of this mess. that would have to be done in the back channels and would require some finesse which by now qualifies as an endangered species. but who knows? nothing else has worked. maybe it's worth a try. back in a minute man: [ laughs ] those look like baby steps now. but they were some pretty good moves. and the best move of all? having the right partner at my side. it's so much better that way. [ male announcer ] have the right partner at your side.

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let's be optimistic. but just in case -- let's be ready. toyota. let's go places, safely. >> schieffer: well, some of our stations are leaving us now. but for most of you, we'll be right back with a lot more "face the nation," including more with our interview with israeli prime minister netanyahu, and our political panel. so stay with us.

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