reduce government spending by $2 trillion over the coming decade, half from the pentagon budget. joying us to explain what is next is the congressional reporter and a former defense budget chief at the office of management and budget now with american university. welcome back to the program. >> thank you. >> let me start with you. what are the issues and how is this likely to unfold? this crisis is something that's going to be spanning over the coming weeks and months. >> we are just over nine months away, the fiscal cliff and that drama that played out. what we are headed for now, imagine a triple cliff where over the next month to three months, we're going to have at least three big dramatic washington fights. the first, the ongoing show down over what is called a continuing resolution, keep the government funded and a possible government shut down. and come back in mid-october with a fight over the nation's borrowing limit. you think this shut down drama

is politically nasty, just wait for the debt ceiling fight. and senate democrats want to then set up a month after that a battle over what's called a mini spending bill that would spend the rest of the fiscal year but they would, in that bill have to deal with things like sequestration, additional federal spending cuts, maybe entitlement reform. and that could get nastier. some say than the debt ceiling fight. it's going to be a very testy couple months. >> and if we don't get through those three, wait because you will see sequester version two in january. if they can't free on a budget deal that eliminates sequester, they have a continuing resolution, what we will get is another sequester. so it is groundhog day all over again. but it's on steroids. >> let me ask you, what is the government doing to prepare for a possible shut down? >> well, the typical things.

omb put out a memo to all the federal agencies saying here's the bills you can pay. here's the people you can keep on, can't keep on. and there's accepted personnel. and the pentagon is full of accepted because they are in the national security business. the military is going to stay on point and on station. a lot of the civil servants will be furloughed as long as the government is shut down. no drawing checks. the you're a contractor and you have got a contract and the money is coming in, you keep working, doesn't affect the contractors but they'll lay this all out in great detail. and who is going to be there, who is not going to be there. and some of the lights getting turn offed and for a while, nobody draws a paycheck. >> you were there in '94. what's different from this time? >> i don't think it's terribly different. in fact, it's a lot less significant than the second battle john talked about which is the debt ceiling fight. they'll find a way to get

through the mess they're in. pass either a short-term cr so they continue talking or pass one that goes through mid- november. and keep on talking. i think we will have maybe a few days of shut down. the markets aren't going to reth. the industry isn't going to react. it's the debt ceiling fight that is where the rubber hits the road. >> house republicans are putting together a debt ceiling bill that has, it's chalk full of, it was described in one report as a conservative wish list of items. over 20 things already that you can see the senate probably would not pass. so if the house passes a bill like that -- >> keystone pipeline. >> again, going after the president's health care law -- >> tax reform. just the consumer finance agency, a whole series. >> medicare, associate security. >> everything that we sent to the senate and they rejected in the past two years is becoming

on this letter. >> last time around, folks came close to saying, well, you can have a temporary default. wall street is going to look as a bine ring leader thing, it's like pregnancy, you are or you aren't. are folks actually using different language this time around? or people who think, we can do a partial default or temporary default? >> democratic leaders beginning to explain the consequences of a default, the economic harm it would do. but again, the same conservative tea party house members, they don't seem to be that concerned that they just see the word debt and that it's such a bad word for them that they're willing 20 do just about anything to not raise the debt ceiling. >> there's no incentive to come prom. i don't see the incentive. >> so grand bargain, you tonight see a grand bargain. >> not even on the radar

screen. lucky to get a cr. >> grand bargain talks fell apart earlier in september. coming as congress coming out of recess, the senate republicans talking with white house officials but those talks fell down. and republicans say it's because the white house -- >> and they weren't talking to the right people. they weren't talking to the leadership. they were talking to other well intentioned senators. >> and the $500 billion is now an accepted cut, right? the sequestration level is now official. >> i think we have entered the land where the numbers that are driven by the budget control act are the numbers that are going to be there when the rubber hits the road as well as the foreseeable future, two, three years. they're going to pass the cr at the level for defense. and they're going to pass a budget not -- >> that's all we've got time for. the impact of sequestration on the u.s. air force.

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the pacific air force is the largest command in the world. more than 450 fighter, bomber, tanker transsport other aircraft. headquartered in hawaii, it's the u.s. pacific command, spanning the globe from california to india and australia. or as the chief likes to say, from hollywood to bollywood and polar bears to penguins. washington is renewing its focus as north korea continues the threatening antics and china becomes aggressive in asserting its territorial claims. we met with the general at the

air force association's exposition outside washington, d.c. i asked him how it's affecting his command and what he is telling alleys in the region. >> it's been a big factor for us. and we are called the operations and maintenance. we don't procure things. our whole budget is basically our operations and maintenance. out in the pacific, the biggest problem has been the engagement that we do the exercise in the pacific, more than just training, their presence in different area, building the partnership capacity up, being places, it's flying hours. and in the pacific, flying anywhere takes longer than anywhere else in the world. so it's a lot of flying hours. and it's just that cut is magnified. when we cut a percentage, it's magnified in the pacific.

so the biggest thing, we had to cancel exercises. one example of a challenge would be a lot of the west pack units, places like that have to do the drops back in the united states. well, that red flag alaska got canceled. so their live drops or ready air program events that they need to do to stay ready, they were unable to do. so it's been significant. if we stay this way for a while, stays on this course, it will take a longtime to recover. >> are there novel ways to do engagement to try to make that up? some of the stuff you're losing and make up in other sorts of ways. >> there is and there suspect. we can scale and it shrink the footprint and go from flying exercises to maybe table tops and command post exercises. but it doesn't have the same effect. and there is a value and presence in just being there. and we get to that as whatever

level we can. but to have them train and interoperate with us, that you can't do if you don't actually have the systems there. >> let's talk about the region. it's a national priority. but critics saying there hasn't been an increase in resources, too fewer fighters and bombers and assets, too few long-range assets and command and control. what does it mean to you? and do you have the right resources to do your job? >> it's a two-fold question. i guess with respect to the asia pacific, we have 10 wing, nine bases, that's not going to increase. we're not going to build more bases. what we do like to do is row nate forces into the asia pacific area so they train and learn the area and train with allies. is that's what we're looking for. do we have enough resources for that? the demands on the air force today? no. if you look at the demands and

look at the air defense alert requirements, we don't, what he would like for him in his ar, we don't have enough. but you know the fore size construct, how do you determine how many squads you need. and that's one being decided. today we're short. >> china has emerged as a concern given the increasingly assertive behavior. laying claims to the south china sea. it's invaded philippine territory. they're increasing tensions by the day with gentleman. concern ready you by the actions? something that keeps you awake at night? >> how they're acting, in some ways, they're a rising power. there's no doubt. they're a military capabilities and technology capacity and

capability are increasing. pretty significantly. and that is something and they're not transparent about it. so we don't get to see what they're doing. they're a rising power the way they act and some of the things they're doing, it has a two- fold effect. it gives us concern because they are aggressive and assertive. on the other hand, in some ways, it doesn't always work in their favor because some of the nations see that behavior and they want an option. they'll turn to us. but it's really, you know, one where we have to continue and engage. we have to think about what they're doing and try to get a better understanding and better contacts. but at the same time, their actions are in my opinion in many cases destabilizing to the area pgh and china is developing a whole series of capables. there are long-range missiles like the df-21 mistoll hold at

risk target far from seoul. new fighters like the j-20. as you look at the suite of systems that are coming online, how concerned and confident that we are developing capabilities to could wanter the stuff they're designing. >> a combination of things. it's procurement of some new systemmings stealth capability, different weapon category, stand-off weapons but also tactics and techniques and procedures, it's integrated air and missile defense. how we train together to bring many the alleys and partners up to better capability. a come by approximate nation of many things. and i would say we are on a fairly food path until sequestration put a lot of things in jeopardy and question. so in my case, some of the things that i planned to do and i was trying to do in procurement of systems as well as training and advance opportunities to engage with partners, other things we're doing in techniques and

procedures, we haven't ban able to do because we have been hit hard. we got 9 a lot of work to do to get to where we need to be. >> up next, more with general t general on the state of u.s. china military relations.

we wwhen we realized we'd ome left gear behind. rain we were up the creek without a paddle. i mean, we literally needed paddles!

campbell had left 'em in his garage. thankfully i had my navy federal credit union credit card on me, so we got new paddles and earned cash back. next time we'll remember the paddles. seriously? and forget campbell. 4 million members. 4 million stories. navy federal credit union. we're continuing our conversation with the commanding general of the pacific air forces.

i asked him how he would character rise the military to military relationship. >> well, it's a little bit on again off again. we do engagement and then something will happen or a pause for some reason. >> and they have a tendency of break breaking it off. >> yeah, it's not us because we really want to increase it. we have a relationship with every nation in the region. and they are distinct relationships and creating trading partners. relationships with every country. when we have relationships and engamements, most of the other nations see that as a stabilizing sign. so obviously for us, we think that increases security and stability in the pacific. the approximate prc knows we value it and they use it as a carrot and a stick. it's one we are trying to

continue to get better on. we made great advances recently. we will see how it goes. we are supposed to go, the chief is supposed to go there soon with me. we will see what 7 has. we're trying. >> hopefully we can get to you after you get back from the visit to get your take on it. a key part of it as you discussed earlier is engagement and some is reengaging with old alley, for example, japan and building new bridges where once we had a significant presence. what are you doing across the region? they going to end up in places -- >> well, they will to some extent. we talk about engagement, expand in the pacific. folks back here in the united states need to rotate out there. it goes back to the late great days of the cold war. a rotational presence and moved people in and out to get familiar with it. we need to do with the same

thing to gain relationships with partners to understand how to operate with them. and to understand the epa epa environment. so we will continue to try to increase that rotational presence. some of the places northern australia is one, there's a couple bay bases that we go there now and probably will continue to do that. and there's other places where we fly with them. moving further into south asia. and obviously, thailand. we will increase. and that increasing with the philippine, working on the vietnam. singapore obviously has been a place where we engage often. and even over to india in the future. >> one of the top points of discussion in washington is the air sea battle concept. forge closer operational, cooperation between the air force and the navy in the region to maximize the impact. what does it mean to you at the

plan? and are what are you doing coordinate and better cooperate? >> it's navy but actually also army and evens. it includes all the capabilities. and it's across the spectrum. procuring some things that make us more operable. networks, some of those things are a part of it. the ability to operate and pass information between all players in an engagement. and get inside what would be a potential web. so we are making decisions, seeing information and rething faster than he can. the integration. and it's taking joint and getting better at it. that's what it's about. but includes some things and includes training opportunities and organizations and how you work. 7th fleet and us are working

close on how we do sector air defense controls and regional air defense controls. so training. doctrine, organizations. includes just about everything that allows services to work and take advantage of both approximate services capabilities to support each other. a submarine support and f-22 is a classic example. and interact together and get inside of and carry out or get a battle space with nobody knowing there they're. >> are you doing enough? >> we are. we're trying. again, we got hit by sequestration. so some of the things we had planned were not able to occur. there's a huge exercise in northern alaska where we do a lot of experiment mennation. we had to cancel it this year. but we are trying to continue to do that.

we could always do more. and in cases where we have to cancel, that sets us back some. but we're working on it. >> let me ask you about your theater, what do you want folks in washington to understand about the channels you face? >> i think the distances and the differences in the size of the aor is one that needs to be remembered. it's important to the united states. if you think about trade and cultural ties and international investment and everything that goes on, this region is incredibly important. and presence, having the american presence in there in this vicinity is just so important. and one of the ways to do that is through military forces and we rotate through different nations in the vicinity, it really pays huge dividends with respect to building relationships, building security and stability for the good of basically our nation as well as all the nations within

this aor. so really a question of you know, seems a long ways away but we know it's not. and in today's world we're in, we really just have to maintain a presence here. and maintain these relationship building opportunities so we can continue to provide that to the nations within the region. >> thank you very much. >> appreciate your time. thank you. great to be here. coming up, my notebook.

the last major budget battle in 2011 left us with a debt ceiling increase and sequestration. it's unclear how events will unfold this time. and now we will run out of borrowing authority on october 17th. it would be a disas for the record united states. you would think that this time all the actors in this drama would work together to map a plan that gradually addresses the financial challenges from debt reduction to entitlement and tax reform. instead, congress must act quickly to pass a temporary funding measure and then raise the borrowing limit. and finally abandoned the games and negotiate a long-term plan. it must include clear defense spending targets allowing the industry to plan accordingly. continuing uncertainty is a

wasteful recipe for disaster. everyone knows we're in the draw down and while everyone would like more money, they realize deep defense cuts are here to stay. all they ask for is enough certainty and flexibility to plan wisely. thank you for joining us. i'll be back next week at the same time. until then v a great week. you woulda thoughtalked from the name of it, it was gonna be packed with sailors. so i immediately picked out the biggest guy in there.

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will affordable care start with a bang or a wimper? welcome to biocentury this week. on tuesday, the affordable care act's insurance exchanges are supposed to open for business across the country but in washington, d.c., house republicans have launched a final effort to derail obamacare. whatever happen, this story isn't going way. starting this week, we are ladies and gentlemenning a weekly update. two, two affordable care act insiders will handicap the political battles. a partner at government relations firm. she helped draft the aca and held senior positions in the white house.

on the republican side, chuck with the senate staffer where he negotiated with democrats on the obamacare. i am joined by the two insiders who helped shape the affordable care act. next week, the exchanges are supposed to open. it's going to be a tremendous amount of noise around that. and coverage of whatever glitches there are that happen. what should people be looking for? what are the measures of success in the next week? weeks to come? >> yeah, that's a good question. initially as you point out, there will a bunch of processed stories about whether the website is functioning correctly, see all the relative pricing, whether they're able to enroll and select a plan. i think all of those processed measures will be, they'll resolve themselves within the first three months and by january 1st when people actually start to get coverage, they'll be ad