>> schieffer: today on "face the nation," an interview with a senate republican leader, mitch mcconnell, who brokered the deal with democrat foz get the government running again and keep the u.s. from going into default. wall street responded with relief and stocks went to record highs just hours after the deal was struck. but how badly about the shutdown hurt the government and was it just another case of kicking the can down the road? >> let's be clear-- there are no winners here. >> this is far less than many of us had hoped for, frankly, but it is far better than what some had sought. >> schieffer: in his only sunday interview we'll ask the senate republican leader what he sees as the next step in this continuing drama. plus we'll hear from republican senator lindsey graham, who urged republicans not to shut down the government.

and democratic senator mark warner will be a key player as the two sides look for answers in the days ahead. we'll get analysis from mark zandi of moody's analytic. stuart rothenberg of the "rothenberg political report." gerald seib of the "wall street journal," and michael gerson of the "washington post." the government is back in business, and compg it all is our business because this is "face the nation." captioning sponsored by cbs from cbs news in washington, "face the nation" with bob schieffer. >> schieffer: and good morning again. we welcome to the broadcast the senate republican leader mitch mcconnell. senator mcconnell, jim baker, the former secretary of state who led five republican presidential campaigns, described this recent brawl over trying to tie the defunding of

obamaed care to shutting down the u.s. government, he described it by recalling the words of a long-ago candidate who lost a senate race in texas who said, "we shot ourselves in the foot, and then reloaded." will you ever let something like this happen again jew know, one of my favorite old kentucky sayings is there's no education in the second kick of the mule. the first kick of the mule occurred back in 1995 when the republican house shut down the government. look, shutting down the government, in my view, is not conservative policy. i don't think a two-week paid vacation for federal employees is conservative policy. a number of us were saying back in july that this strategy could not and would not work, and of course it didn't. so there will not be another government shutdown. you can count on that.

>> schieffer: well, how badly do you think the country was hurt by all of this? >> well, it certainly didn't do the country any good. both a government shutdown and a pending fiscal crisis right on top of it. but, look, we're a big, resilient country. you just pointed out how the stock market bounced back immediately. i was pleased to play a role in keeping us from going to the brink. i think it was important to do the right thing for the country. and we did it. >> schieffer: you know, people here were giving you credit for being the one who was able to get together with the democrats and broker this deal, back in your home state of kentucky, the tea party folks went nuts. i mean, you are going to have a tea party candidate opposing you in the republican primary. they are-- they say they are now more determined than ever to beat you. they even accused you of taking a kickback. they said in this legislation there is a provision that provides a way to get $2 billion

to fund a dam project in kentucky. what is that all about? >> well, as has been widely reported, it was a provision "by the president and the core of engineers and suggested by a senator from tennessee and a senator from california that actually saves the taxpayers $160 million. rarely, in a spending bill, do you have a provision that saves $160 million for the taxpayers. >> schieffer: but did you have anything to do with putting that into this legislation? >> it was put in by senator alexander and senator feinstein, senators from tennessee and california because it saved $160 million for the taxpayers. >> schieffer: you have lobbied for that project before. i mean, it is a kentucky project. >> in past years, yeah, in past years. it's a dam that-- in-- an important inland waterway

passage between the mississippi and ohio. it has been a long-standing project. doesn't just benefit kentucky. it benefits the withhold indland waterway system. it is extremely important to the commerce that slow floes down the central part of the united states, yes. >> schieffer: let me ask you about senator ted cruz. he led this effort to tight funding of obamacare to shutting down the government. he said he is not backing away. he says he will continue to do-- and these are hid words-- "anything he can to stop" what he calls the train wreck that is obamacare? how are you going to deal with that? >> well, i certainly agree with senator cruz that obamacare is indeed a train wreck. a visit to the web site is kind of like a trip to the department of motor vehicles in your state. even if people can access the web site, there's no way to-- to get quotes. even those who may be fortunate enough to cip sign up are goingo

find the premiums are hiring and choices are fewer. one thing all republicans agreed on in 2009 was we thought obama p obamacare was a terrible mistake for the country. we still think that, and we're going to do everything we can in the future to try to repeal it. but that requires a republican senate and a different president. we have a math problem in the senate in getting rifd obamacare. it's the following math problem-- 55 democrat explz 45 republicans. we only control a portion of the government, and so that limits our ability to get rid of this horrible law. >> schieffer: but let me get back to what do you do about senator cruz? how do you deal with him? trent lott, your predecessor, the very conservative republican from mississippi, was asked by the "washington post," and he said, "you gotta roll him. he said we've got to have more pushback against these people who come to washington and suddenly announce thaif all the

answers. when senator cruz does this again, how will you respond to that? >> look, we've got a big conference with 45. i'd like to have 51. that would make me the majority leader instead of the minority leader. we have a lot of people with different points of view. we had tactical differences about how to get at the repeal of obamacare. the fact that we have some tactical differences doesn't mean we don't all share the same goal. obamacare is the worst piece of legislation passed in the last half century. the single biggest step in the direction of europeanizing our country. we need to get rid of it. if the american people will give us a majority in the senate and new president, that's exactly what we're going to do. >> schieffer: i have to tell you the white house as late as last night was telling me that one of the reasons for all these problems with this web site is édat it has been overwhelmed with people that want this insurance, and they're saying that they are enrolling people into this program. and that, like all new programs,

the glitches will have to be worked out. >> well, let me quote robert gibbses, the president's former press secretary, who said it's excruciatingly embarrassing for the administration. in oregon, no one has signed up. in alaska, seven. they've had three or four years here to get this ready. god only knows how much money they've spent. and it's a failure. you know, the government simply isn't going to be able to get this job done correctly. and even if you were lucky enough, bob, to get on to sign up, you're going to find you've got fewer choices and higher premiums. this is a very bad deal for the american people. >> schieffer: you have primary opposition. you have tea party people who now say you are public enemy number 1. it seems to me, though, this is something that goes beyond mitch mcconnell and the right side of the republican party in

kentucky. are we seeing a war now for the soul of the republican party? >> well, just let me say this about the primary in kentucky-- i've endured millions of dollars of attack ads that have been calling me a right wing fanatic over the years. i think my opponents in the primary are going to have a hard time convincing kentucky primary voters that i'm some kind of liberal. you know, i enjoy the support of the most famous tea party senator in america, rand paul. i'm supported by marco rubio. pat toomey. two other tea party favorites who were elected in 2010. i have the support of mike huckabee and bill bennett. i think they're going stro a hard time convincing kentucky primary voters that mitch mcconnell is some kind of liberal. in fact, we took a poll last month to check that out, and only 2% of kentuckians thought i was a liberal. i think that's a pretty hard sell. and it's almost certainly going to fail. >> schieffer: what do you want now from president obama? what do you want him to do now?

you're facing the same problems that caused this government shutdown. what would you like the president to do now? >> my first choice would be to take advantage of the opportunity present bide divided government. you know divided government has historically done things. i think ronald reagan and tip o'neil doing the last comprehensive tax reform. i think of bill clinton and a republican congress doing welfare reform and actually balancing the budget multiple years in the late 90 pps divided government san opportunity to tackle tough stuff, and we all know the unsustainable growth rate of entitlements is the single biggest challenge confronting america's future. if we don't fix that, we're not going to leave behind for our children the same kind of country our parents left behind for us. i wish president obama would lead and take advantage of the opportunities presented by

divided government. >> schieffer: what are the first steps in doing that? do you want him to call you on the phone? do you want him to set up some kind of a meeting? do you want to let it be settled up there on the hill? because some-- even some democrats say the president has not been active enough in this fight. would you like more contact with him, or is that a waste of time? >> well, we've talked about this. what i'd like for him is to step up to the plate and do it. unfortunately, every discussion we've had about this in the past has had what i would call a ransom attached to it-- $1 trillion in new tax revenues. look, we don't have this problem because we tax too flilgt this country. we have it because we spend too much. we currently have a $17 trillion national debt, and that pals in comparison to what's coming our way if we don't make the eligibility for entitlements fit

the demographices of today and tomorrow. i do expect this kind of presidential leadership in the near future? honestly, no. but let me say what i do expect to come out of the next episode that we have in january and february. we have, as a result of the budget control act, which of the passed in 2011, which the president stiend and was supported on a bipartisan basis, actually reduce government spending for two years nay row for the first time since right after the korean war. it is reducing government spending. our democratic friends want to bust the caps-- in other words, spend more-- and they want to raise taxes. for me, the bottom line, when we reengage early next year, is i don't want to bust the caps. and i don't want to raise spending because we are, in fact, reducing government spending. not as much as we need to, but it is a success. >> schieffer: but wouldn't it be a good idea, maybe, to start reengaging before early next year to try to lay some groundwork for that? i mean, have you given any

thought to calling the president or if he called you, would you take the call? i mean, what happens right now? >> oh, yeah. >> schieffer: what ought to happen right now? >> well, what's happening right now is there is a budget conference with paul ryan and 58 murray. and they're going to see if they can come up with a proposal. look, we interact with the white house whenever they would like to. my preference would still abe big deal. but let me say at a minimum, at a minimum, we ought not to bust the caps that are actually reduce, government spending and we ought not to raise taxes, at a bare minimum, it seems to me, that's the best way to go forward as we go into the discussion that we will have in january and february. >> schieffer: all right, well, senator, i want to thank you very much for coming out and talking to thus morning. we appreciate it. we're going to turn now to two key senators, republican lindsey graham, democrat mark warner of virginia. he'll be a key player and he is with us here in the student.

senator warner, let me just start with you. you heard what senator mcconnell said. where do you think this is headed? >> well, bob, i think we need to step back a moment and say we just went through an awful period for our country. >> schieffer: he basically agrees with that. >> listen, the numbers are coming in. $24 billion hit to the economy. we actually increasedly the deficit. you can't start and stop the largest enterprise in the world, the federal government, without adding costs. we actually built in higher interest rates because any time we get close to a potential default, we're going to have higher t. bill pricing. that's been built in. that passes through to mortgage costs, car loans, student loans. what we need to do now is-- i'm an advocate of a big deal, but weitute at least first start and make sure we actually operate the government for a year going forward with a solid budget. and find ways to alleviate some of the damage also being done by sequestration, which is this automatic spending cuts which lindy and i and a whole group of

others say was the stupidest way possible to go about cutting government. >> schieffer: senator graham, you heard your leader. where do you think this is going no? >> i think what would be good for the country is if the budget committee reported out a bill by december 13 that $dthree things-- fund some infrastructure. there's a lot of bipartisan supporter for infrastructure funding for our roads, or bridges and our ports. and the president should give democrats some political cover to reform entitled, and republicans need to be courageous enough to flatten out the tax code. if we did those three things and replaced sequestration we could end this year on a very positive note. >> schieffer: do you think there's any chance something like that could happen? >> with presidential leadership-- well, i think it would take leadership. the public is ready for the congress to behave better. this is a second changs. it would help us all. 60% of the people in the united states want to fire every one of us. i understand that. but if we could come together

and pay for an infrastructure bill-- mark is working on infrastructure system of funding. if the president would give cover to democrats to enact c.p.i. changes that he's already embraced, and people like me would agree to bring in revenue, not by raising taxes by flattening out the tax expoad bring in some repatriated corporate earnings at a lower rate, apply that money to infrastructure, we could replace sequestration andn whole or in part and help us all and the country but it's god to be head with some leadership. >> schieffer: senator graham, what do you think the impact of all this has been on the republican party, your party? >> it's a wake-up call. conservatism san attest t is ane republican party. i think we've learned this was a political gift to the president by the republican party at a time he needed it the most. the tactic of defunding the government, unless he repealed his signature issue, was as

poorly designed as obamaed care itself, almost. i can't imagine president bush agreeing to repeal the bush tax cuts with the democrats have challenged him with the following proposition-- we will fund all the government, mr. president, if you, president bush, would give up on your tax cuts. president obama was never going to give up on his signatory issue. as a party we have to do soul-searching and i hope our house colleagues will follow speaker boehner. the only way the government can shut down is not what ted cruz. senator reid stop moving the goalpost on speaker boehner. to my house republican colleagues, follow speaker boehner. he's a good man. >> schieffer: we're going to come back to both and you senator warner and talk some more about this in one minute. i'm beth... and i'm michelle. and we own the paper cottage. it's a stationery and gifts store. anything we purchase for the paper cottage

goes on our ink card. so you can manage your business expenses and access them online instantly with the game changing app from ink. we didn't get into business to spend time managing receipts, that's why we have ink. we like being in business because we like being creative, we like interacting with people. so you have time to focus on the things you love. ink from chase. so you can. ♪ [ male announcer ] 1.21 gigawatts. today, that's easy. ge is revolutionizing power. supercharging turbines with advanced hardware and innovative software. using data predictively to help power entire cities. so the turbines of today... will power us all... into the future. ♪ senators graham and warner.

senator warner, you heard senator graham lay out what he thinks the path is here. he also talks about how badly republicans were hurt. was your party hurt by this? and where do you think this all goes now? >> bob, there were really no winners. i mean, our country took an economic hit. we also took, i think, a confidence hit in terms of the american public. i understand why people are madder than heck at all of us. and we took a hit on the world stage. look when you see china and russia saying let's de-dollarize the world. let's move away from an american-driven economy. so i think-- and lindsey and i, we have a lot of common agreement. we're working on infrastructure together. wyatt to put this in an order of three things. first, we've got to show we can govern. basic governments means we've got to put a budget in place where we go at least for a year without any threat of a fiscal crise. ... then on top of that, we ought to find common agreement where we can make these investments in infrastructure

and replace some of the damage being done on the defense side and on the scregzary side around sequestration. there are smarter ways to cut government than sequestration. i believe that the single biggest thing we could do for our economy, single biggest job creator would be to put together a bigger bargain that includes revenues, that includes entitlement reforms. we all know at the end of the day, republicans are going to have to give on revenues, democrats are going to have to give on entitlement reform. we do, that the confidence building that would take place i believe would do more for job creation than any other program we talked about. >> schieffer: senator graham you talked about what is going on nowrt. do you think speaker boehner will survive this? >> i hope so. i hope people really around john and learn from the tactical mistake they made regarding defunding obamacare. john is ready to do a big deal. they were $150 million a part, he and president obama. as we go back into the budget negotiations, i hope under paul

ryan's leadership and with some presidential leadership we can do what mark just talked about-- an infrastructure bill that would allow to us create jobs. entitlement reform and tax code reform. and john boehner is a willing participant. so is mitch mcconnell. we have a unique opportunity here after this debacle called the shutdown to reengiles the congress and maybe get in better standing. but john boehner, please, follow john. >> schieffer: what about senator ted cruz? i asked senator mcconnell six ways from sunday about how he was going to handle that part of it on-- from hereon in, and he didn't really give me any specifics. has ted cruz hurt your party? >> i think the tactical choice that he embraced hurt our party. ted is a smart guy. but ted cruz can't shut the government down. what shuts the government down is when the house and senate can't agree on a funding number. and our president has been virtually awol. this idea i won't negotiate, the president of the united states

needs to get involved with expwairn senator reid to try to bring us together. the political marketplace will determine ted cruz's future. we helped president obama when he needed our help the most. after this debacle called the shutdown, our party's been hurt. or brand name is at its lowest ever. obamacare got a bump in polling, and we got in the way of a disastrous roll-out. from my point of view, this was a tactical choice that hurt us, but the good news for the republican party is that of the debacle is over, if we don't do it again sphp and obamacare is a continuing debacle. one quick story. a friend of mine owns 52 wendys. he has 40% of his workforce ensured today. under obamacare, if 20% choose insurance his insurance costs will double. that story is repeating itself throughout the economy. obamacare is a debacle that will go into 2014. the shutdown should be in our rearview mirror as republicans. >> schieffer: i will just respond that the white house

says it won't happen that way. i'm sorry, we're out of time. but i want to thank both senators for being here. [ male announcer ] the founder of mercedes-benz once wrote something on a sheet of paper and placed it in his factory for all to see. ♪ four simple words where the meaning has never been lost. the challenge always accepted. and the calling forever answered. ♪ introducing the all-new 2014 s-class. mercedes-benz. the best or nothing. but at xerox we've embraced a new role. working behind the scenes to provide companies with services... like helping hr departments manage benefits and pensions for over 11 million employees. reducing document costs by up to 30%...

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but i am so stuffed up, i can't rest. [ male announcer ] nyquil cold and flu liquid gels don't unstuff your nose. they don't? alka seltzer plus night fights your worst cold symptoms, plus has a decongestant. [ inhales deeply ] oh. what a relief it is. while before we know for sure how much the shutdown cost. best estimates so far it book about $24 billion out of the economy. the furloughed government workers will get their backpay, and they should. but how does my friend who owns the carry-out around the corner from our office get back what it cost him? his business is next door to a federal agency that employs about 700 people. only 28 were declared essential. the rest stayed home. during the shutdown, he had more people behind the counter than in front of it ordering sandwiches. and guess what? he's not too interested in whether democrats or republicans won the partisan showdown. but he knows who got the short end-- him.

there is another part of the cost that won't show up on the accounting books. a big story like the shutdown tend to push things that often matter off the front pages and tv. here's just one that got almost no attention-- a survey out last week showed nearly half the students in our public schools, 48%, come from families so poor, they qualify for free or reduced-price meals. even more disgraceful-- a majority of student now qualify for food subsidies in 17 states across the south and west. i'd like to see our elected officials begin to focus on how we fix things like that. like my friend at the carry-out, i'm losing interest in who wins the partisan games. back in a minute. of project man. baron of the build-out. you need a permit... to be this awesome. and you...rent from national.

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