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Face the Nation transcripts October 6, 2013: Lew, Cornyn, Netanyahu

(CBS News) Below is a transcript of "Face the Nation" on October 6, 2013, hosted by CBS News' Bob Schieffer. Guests include: Treasury Secretary Jack Lew, Sen. John Cornyn, R-Texas, Israeli Prime Minister Benjamin Netanyahu, CBS News' John Dickerson, David Martin, and Juan Zarate, plus Gwen Ifill, Dana Milbank, and Jim VandeHei.

SCHIEFFER: Today on Face the Nation, major news overnight. U.S. forces got a long sought al Qaeda terrorist in Libya and launched a bold raid in Somalia. The SEALs were going after ringleaders of the shopping mall attack in Nairobi. There was a lengthy gun fight. David Martin will 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 bombings. Back at home, the House passed legislation to give back pay 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 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 VandeHei of Politico and our own John Dickerson. The government is shut down, but we're not. This is "Face the Nation."

ANNOUNCER: From CBS News in Washington,"Face the Nation" with Bob Schieffer.

SCHIEFFER: And good morning again. And for the very latest on the terror raids carried out by U.S. forces this weekend, we are joined by our national security correspondent David Martin and former Bush administration adviser on Terrorism, Juan Zarate. David, first just bring us up to date, what is the very latest on what happened?

DAVID MARTIN, CBS NEWS CORRESPONDENT: Two separate operations in two separate countries, both in Africa In Libya, U.S. commandos snatched one of the FBI'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 guy's name was Abu Anas al Libi. He was wanted for his role in the 1998 bombings of the U.S. embassies in Kenya and Tanzania. He was also 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.

MARTIN: This was a big get. And it was a risky get, because 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 which was 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 Blackhawk 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.

MARTIN: No casualties in either operation.

SCHIEFFER: All right. Juan what, is the significance of these two things?

JUAN ZARATE, FRM. BUSH ADMINISTRATION ADVISER: Well, Bob it demonstrates that the U.S.has a long reach and long memory, in particular with the snatch-and-grab operation of Abu Anas al Libi right in the heart of Tripoli, somebody who has been part of al Qaeda since 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 that 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. And I think it's an important moment, because 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 manifestations, and the U.S. is now demonstrating we're willing to put our boots on the ground in some instances to go after these leaders.

SCHIEFFER: And probably better to get these people when we can capture them alive than to kill them.

ZARATE: Absolutely. And one of the key issues of Abu Anas al Libi, somebody who has been with bin Laden since the 1990s is what can we learn from him? He was in Iran with the senior leaders there for 10 years. He's been in Libya for two years, reportedly trying to establish an al Qaeda base there in connections to other groups. And so we'll want to know what he knows, not just historically, but currently in terms of what al Qaeda is planning.

SCHIEFFER: David, do you think we're going to see more of this now?

MARTIN: Well, I think the first thing that is going to happen is the terrorists are going to start taking more precautions about hiding. I think particularly al Libi in -- he 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 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?

LEW: 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 that I believe is prepared to do the right thing, to open the government and make sure we don't cross over that abyss that you describe. I hope that a majority 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 creating self-inflicted wounds that hurt the economy and hurt the American people. So, I think congress can and should act.

SCHIEFFER: Well, 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.

REP. JOHN BOEHNER, (R) OHIO: We are not going to pass a clean debt limit increase.


BOEHNER: I told the president there's no way we're going to pass -- the votes are not in the House to pass a clean debt limit, and the president is risking default by not having a conversation with us.

STEPHANOPOULOS: So, under no circumstances will you pass a clean debt?

BOEHNER: 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.

LEW: Let's be clear, Bob. Congress needs to do its 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 that 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. You know, 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 the speaker knows that. And I know the speaker well. I know the speaker doesn't want to default. He also didn't want to shut down the government. He needs to give the majority a chance to vote.

SCHIEFFER: But it sound like the two of you are talking past one another. In that interview, he all said the votes are not there to pass a clean resolution.

LEW: Well, then why doesn't he put on the floor and give it a chance. You know I worked for a speaker for eight years. I worked for Speaker O'Neill who believed deeply that the one thing Americans won't tolerate is obstructionism. He put things on the floor and sometimes he won and sometimes he lost, but that's the right thing to do. Let the congress vote.

SCHIEFFER: But is there any way, is there some kind of back channel way, is there any way to nudge this off where it is?

LEW: You know, I think that 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 for this. 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?

LEW: Nothing good, Bob. You know, 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 1789. We've never done it. But if I could just read to you 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 consequence when it's really just a question of letting a majority vote?

SCHIEFFER: Mr. Secretary, 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 a week two, weeks, six months ago.

LEW: 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 mean, 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...

LEW: Well, I think if 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 open the government. So I don't think it's fair say that there's no reasonableness on the Democratic side. What we've seen is demands unless I get my way, you know, that we'll bring these terrible consequences of shutdown or default. Those kinds of threats have to stop.

SCHIEFFER: All right. Well, Mr. Secretary, thank you for coming by and giving us...

LEW: Good to be with you.

SCHIEFFER: ... the administration's side. LEW: Thanks, Bob.

SCHIEFFER: And 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?

CORNYN: Well, the president has got to lead, and he has got to 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 says he won't negotiate on the debt. But 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: But I just -- as I said to Mr. Lew, I just see both sides talking past one another. Republicans say they want -- they won't vote on this until everybody sits down and talks. The president says vote on it and then we'll sit down and talk. Somebody has got to give here, it seems to me.

CORNYN: Well, 17 times since 1976, the government has temporarily shut down because of an impasse over spending levels. And that's what has 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. And, again, Mr. Lew says that the president won't negotiate on that. I think what has happened is that in 2011 the president now realizes that Republicans who were concerned about spending levels got better of him on the Budget Control Act, which has actually cut $2 trillion over the next 10 years. We got on that trajectory of discretionary spending. And the president realizes that 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, a bill that doesn't have anything attached to it. Do you think that's the case?

CORNYN: 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. Because, 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 his job. So far he has been AWOL.

SCHIEFFER: Well, don't Republicans also have to do their job...

CORNYN: Everybody does.

SCHIEFFER: ... after all, I mean, you know, 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.

CORNYN: Well, I would look at it a little different way. I would say that Ted and I share the concern about what Obamacare is doing to our economy. And even...

SCHIEFFER: But that's besides the point. The 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?

CORNYN: 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 to treat average Americans the same way the president has decided to treat business with regard to Obamacare penalties.

SCHIEFFER: But, Senator, isn't there something wrong when you say, we won't fund the government unless I can attach my personal wish list to the legislation every time we vote? I mean, 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 any funds for the rest of the government until NIH finds a cure for cancer. I mean, isn't that just kind of the same thing here?

CORNYN: Well, it should be part of the negotiation. But there's actually more common ground than you might think, because we have actually -- the House has passed a provision to open up NIH to do the cancer research that is necessary...

SCHIEFFER: Yes, but that...

CORNYN: ... and that has been shut down...

SCHIEFFER: Yes, but, I mean...

CORNYN: ... by the Democrats.

SCHIEFFER: ... you can't do that every time you get ready to fund the government, it seems to me, as somebody comes up with some new thing that is their thing that they want done, and you can't fund the government unless you get that. I mean...

CORNYN: Well, I know you can't reach an agreement and get past 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 has 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?

CORNYN: 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 mean, 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.

CORNYN: 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 would roll up his sleeves and he would 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 for a 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 to know a way out of it? How did that happen?

CORNYN: Well, there is a way out of it. But it's going to take the president's involvement. But 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 spending, in terms of government overreach, that our country will become something we don't even recognize. And so 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 in negotiating both the continuing resolution and the debt ceiling.

SCHIEFFER: All right. Well, Senator, thank you for coming by this morning.

CORNYN: Thanks, Bob.

SCHIEFFER: We'll be back in a moment.

SCHIEFFER: The other big story last week was the international reaction to that bombshell development that after more than three decades the United States and Iran are talking again.

SCHIEFFER (voice-over): The president called Iran's new president, who was here for the opening of the annual U.N. session. They had a friendly chat about Iran's nuclear program. And 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?

NETANYAHU: 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 preeminent terrorist regime of our time, one that participates in the mass murder of men, women and children in Damascus and in the cities of Syria, one that sends terrorists to 25 cities in five continents in the last three years alone, one that calls for the annihilation of Israel, and one that is developing ICBMs, intercontinental ballistic missiles, to reach the United States -- not us; they've already got 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 every single American. We want to make sure that Iran does not have nuclear weapons. And my concern and my goal is to make sure that the Iranians don't dupe us into a deal where we lift the sanctions and they maintain their -- they retain 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?

NETANYAHU: 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 spent a lot of time talking about 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.

NETANYAHU: 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. But we -- we introduced one change. If you don't get a budget by the end of the year, an automatic budget goes into place, 1/12th 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 developments 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 on and 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, (inaudible) his knowledge, crafted the strategy that got us to where we are. In its wisdom, the latest Democratic ploy is an ad that pictures House Speaker Boehner as a crybaby.


ANNOUNCER: 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.

SCHIEFFER: Well, some of our stations are leaving us now, but for most of you, we'll be right back with a lot more of "Face the Nation," including more with our interview with Israeli Prime Minister Netanyahu and our political panel. So stay with us.

SCHIEFFER: Welcome back to "Face the Nation." When I sat down in New York with Israeli Prime Minister Benjamin Netanyahu, he was preparing to head back to Israel, and the new Iranian president had just sent out yet another tweet, this one critical of Israel. Netanyahu was not amused.

NETANYAHU: What message of peace? Look at the tweets. He's tweeting here, but he doesn't allow the Iranian people to tweet over there in Iran. He's saying all these nice things about Iranian democracy. They're executing people by the -- by the hundreds, jailing them by the thousands, any dissident. I mean, that's double talk and sugar talk. But the important thing is it's part of a strategy. Iran -- Iran's leader, the real leader, is not Rouhani. Rouhani is a servant of the regime. He's a clerk. The real leader of Iran who heads this cult that controls Iran, that controls with an iron fist the Iranian people is the Ayatollah Khamenei. He's the so-called supreme leader, in this case aptly named. And he wants nuclear weapons. This is why they're building these underground bunkers and the ICBMs for, and the heavy water reactor for. That's what they want. The previous president, Ahmadinejad, said, look, we get by hard actions doing all these things, and hard words. Well, the hard words got them into trouble because, as I've advocated a long time, get them crippling sanctions coupled with a credible military threat, you know, they'll be on the ropes. They're on the ropes now. In comes the new guy, President Rouhani, another loyal servant of Khamenei and said let's do it differently. Hard actions, soft words, sugary words, smiles.

SCHIEFFER: What makes Netanyahu so suspicious of Rouhani, is the book Rouhani wrote when he was Iran's chief nuclear negotiator.

NETANYAHU: Did you hear about this book, Bob?


NETANYAHU: I'm quoting you what he says in the book, he says while he was negotiating with the western powers about stopping the nuclear program, he said, "while we were talking to the Europeans in Tehran, we were installing equipment in Isfahan. Isfahan is a plant where they convert Iranian yellow cake to enrichable form. That's what you need to make a bomb. And then he says, "by creating a calm environment," a calm international environment, "we were able to complete the work in Isfahan, we were able to complete a crucial part of Iran's nuclear weapons program." Now they're not there yet. They have to get through a few more phases. And he basically does a fool me once, fool me twice thing. Are we going to be fooled twice? We can't listen to the words -- I mean, we can listen to the words. We can talk. I'm not against talking. But it's actions that we want and what we want is the complete dismantling of Iran's nuclear weapons capability. The whole caboodle, the whole thing, dismantle it completely. What Khamenei is saying, I'll make some tactical concessions, some minor concessions. Give some nuclear material but maintain the necessary material of low-enriched uranium so I can make a bomb and the centrifuges and the underground bunkers. No way. We're not gullible. We're not fools.

SCHIEFFER: But Netanyahu says he's not against talking to Iran, but we must listen very carefully.

NETANYAHU: Look, if we can have a real diplomatic solution, which means a complete dismantling of the program and no enrichment left -- and also, by the way, no heavy water. Not only are they enriching, they have another route to the bomb they're developing under Rouhani, by the way. They want two paths to the bomb. They want to keep it in exchange for the smiles and double-talk that they have here. No way.

SCHIEFFER: You said and you reiterated it again during this visit, that if you have to stand alone, Israel will stand alone. Could Israel destroy Iran's nuclear capability if you had to?

NETANYAHU: Well, you know, I will say that I reveal a state secret by telling you that the American military is bigger and stronger than Israel's. But I wouldn't sell short Israel's capacities.

SCHIEFFER: I think you have pretty well explained what Iran would have to do if they were going to demonstrate they were really serious. But what would be the first step?

NETANYAHU: The first step is I'll say no first steps. Full program. Just the way with Syria. You didn't go and say to Assad, "well, you know, I don't know, send me some fancy speaking diplomat do the U.N. and say nice things and call some -- and tweet in New York." You wouldn't say that. You'd say, "all right, talk is fine. Here's what we want complete dismantling of the Syrian chemical weapons program." That's what I would say to Iran. It's not that I wouldn't talk to them. I'd talk to them, and I'd be very clear and very tough. I would tell them here's the package. If you don't adopt the package, we'll increase the sanctions. And if we increase sanctions, they'll collapse. Now choose. Choose. But it's the whole package -- dismantle your program fully, no enrichment capacity left. SCHIEFFER: For all his deep concern over Iran, Netanyahu told me he is seeing signs of a new mindset in the Arab world where it is recognized that Israel and some Arab countries may share common enemies. That, he believes, could present an historic opportunity. What would that opportunity be? Are you talking about Israel in some sort of an alliance with Arab countries?

NETANYAHU: I don't know if I'd call it an alliance, but I would say there's something I hadn't seen in my lifetime, and that is a real sharp refocusing of priorities in the Arab world. Remember, these societies have been inundated for 60, 70 years with anti-Israeli propaganda. Israel is the source of all your problems. This is why we have misery and so on. That is clearly not the case. I mean, you can see that Israel got has nothing to do with what is going on in Libya or what if on in Syria or Yemen or...

SCHIEFFER: But I mean, you could actually see...

NETANYAHU: They actually -- so they got that.

SCHIEFFER: ...Israel working with say, many some of the Gulf states?

NETANYAHU: Well, I think there is a different perspective now. How that translates into practice will take time. I think that they understand that we have to address the central problem of Iran's nuclear weapons and they understand that perfectly. They're very much concerned with what is happening in Syria. They want to see a durable peace between us and the Palestinians, but a real peace there, too. They don't want fake piece peace. Nobody wants fake things anymore. We want real things that match the situation on the ground.

SCHIEFFER: And we'll be back in one minute.

SCHIEFFER: Now we'll get some analysis on all what we have just heard. Gwen Ifill is co-anchor of the PBS's "The Newshour" moderator of "Washington Week." Dana Milbank is the columnist for the "Washington Post," Jim VandeHei, the executive editor of Politico, and rounding out the group, our own John Dickerson. John Dickerson, where do you see this government shutdown ending? Is there a way out of this mess?

JOHN DICKERSON, CBS NEWS POLITICAL DIRECTOR: Well, there may be but we should -- looking at where things are now, I mean, if you look at the White House positions, they see the Republicans are totally divided, shooting at each other in public and saying things in private unmentionable, particularly the House very conservative caucus...

SCHIEFFER: And you're saying that about Republicans.

DICKERSON: Republicans against Republicans. So, the White House think as long as we're unified and their divided, we're in a good place. They look at the polls, they think they're in a strong position. So, they think we'll just keep this pressure and the House will have to cave. You talk to House Republicans and they say the president cannot on this debt limit question with so much in peril, the president, it is not tenable for him to just say I'm not going to negotiate because the polls show that people want some spending reductions in exchange for an increase in the debt limit, and also they sort of expect a president to do this. So that's kind of where things are. Is there a place, a happy place they can get to because things are pretty grim right now? The model might be, based on some reporting I've done, the debt limit increase that the Republicans voted for in January of 2013. Republicans voted for it. It was considered a clean debt limit increase, which is what the president wants, nothing tied to it. But on the side was an agreement that the Senate would vote for a budget or they would lose their pay. Now, that was a separate agreement, but it was kind of coupled with it. So, the idea is could there be a clean debt limit increase that meets the president's criteria, but also an agreement between Harry Reid and John Boehner that they would have future discussions on a list of specific issues and that way everybody gets to pretend they got what they want and they avoid this calamity of a debt limit breach.

JIM VANDEHEI, POLITICO EXECUTIVE EDITOR: Some day I want to be an optimist, but today I am going to continue to be an extreme pessimist, which is they're probably going to have a solution and it's going to be like every solution we've seen for the last three years -- a bad one, a short-term one. There's no way out of the this box at this point other than Republicans are going to be forced to increase the debt limit. I think John Boehner signaled that privately he's going to do it. They're going to do it regardless of what he's saying over the weekend. The problem is, any solution gets to what you're talking about, doing these broader ideas, let's do entitlement reform, let's do tax reform. They can't. They've tried. They come from different worlds. There is no common ground on these issues. So what they'll do is they'll say, let's punt this another couple of months, let's punt that another couple of months, and we're going to keep re-litigating this exact same debate, I think, sadly, until after the 2014 elections.

SCHIEFFER: You know, Gwen, I was just thinking, I guess you and I were both covering Congress back in the days when...

IFILL: I'm afraid we were.

SCHIEFFER: ... we had the last one of these. How different is this one from that one?

IFILL: It feels more toxic except when you go back and you review what people had to say at the time, it's -- they were using the same kinds of words, about hostages and extortion. All of that was coming out then. The difference was there was an election year that was following hard on the 1995 closure, so people really had to get with the program because there was going to be an electoral consequence. But, Bob, I want to congratulate you for chasing Jack Lew and John Cornyn around the table to try to get them to say something this morning. Because clearly, the reason why they had very little to say that moved the ball is because very little is happening. They're out of town. There are no secret meetings going on. I think Boehner said on another network this morning that there was a backroom but nobody was in it. And so this idea of punting I think is the best possible outcome, and how sad is that? I think they're all hoping for external -- whether it's Wall Street revolting, whether it's the American public, public opinion polls sliding, they're look for something else to force them to do the jobs that they each agree that the other side should be doing.

VANDEHEI: But isn't what is different this time around that in -- if you think back to that '96 debate, there were actually moderates in Washington. Even today when you talk about a Republican moderate in the House, we need to find a new word. They are not moderates, they're not pro-life, they're not pro-environment, they're not pro- labor. That's what a Republican moderate used to be. You could say slightly less conservative Republican who might be willing to wheel and deal, but it's just a different world today in Washington.

MILBANK: There may be two dozen moderates, but not enough to make enough of a difference. But I think that's the dynamic and that's the difference from '95 and '96, is you're not necessarily dealing with reasonable people. They are rational, because they are following their political self-interest. But you have got, you know, maybe 50 diehard conservatives in the House and you've got 150 Republicans who are terrified of being primaried by one of those. And you know what, Americans are opposed to the shutdown, but 57 percent in the CBS poll of tea party members said, they're just fine with the shutdown. So they're responding perfectly rational to their electorate, and they have no reason to budge even if it's doing something bad to their own party or to the country.

SCHIEFFER: You know, I must say, Dana, you must feel like you've died and gone to heaven in one sense in that you write a column about what's going on in Washington, and while I think maybe you kept some of us laughing when we probably would have been crying otherwise, on both sides, because you have pointed out the absurdity of this over and over again.

MILBANK: Yes, for me it's an embarrassment of riches. But unfortunately, sort of what's good for me is not necessarily what's going good for the national interest. So I'd be very happy to sacrifice some of the humor that they're producing if people could behave rationally.

SCHIEFFER: Talk to me about Ted Cruz. This is really unusual in this town that's built on seniority, where you have a freshman senator who has not only emerged as the leader of this in the Senate, but is actually leading the House Republicans, sometimes against their own leader.

MILBANK: And more than that, he's a complete phony. I met Ted Cruz 15 years ago. He wasn't some tea party guy. He was an ambitious kid working for the Bush campaign, Ivy League debater, and basically what he saw is, hey, Sarah Palin can do that in 2010, I can ride this tea party. I can take it to town, and I can get really famous, really fast. He's absolute right. He's a real smart guy. He's playing this game very well. I feel bad for John Cornyn, who is a serious man who actually could cut a deal.


VANDEHEI: You can say Cruz is a political genius to some extent, like, he is the one of the few people who has recognized that politics today is so different than it was 10 years ago. Nobody cares what leadership has to say. We have lots of weak leaders and the grassroots, if you're clever about intervening in primaries, if you're clever about exploiting campaign finance laws, which very much work to the favor of outside groups at the expense of the establishment...

IFILL: Well, then the question is...

VANDEHEI: ... you can have awesome power, and he has got that.

IFILL: ... is Ted Cruz leading the parade or did he see the parade leave and he ran to the front and got in front of it? In fact...

UNIDENTIFIED MALE: A little bit of both.

IFILL: Well, this has been in the works for a long time. Ted Cruz was not the one who came up with the idea, the grand strategy, financed lavishly by conservative groups, to defund Obamacare, and do whatever you could to do it. Whether it's the budget today, whether it's another issue tomorrow, they've never taken their eye off the ball. I don't think the Democrats saw that coming.

VANDEHEI: You rewind the clock to 2010, right? After the minute that health care bill was signed into law, Republicans had every right to say, we're winning. They've cut government. They've won more than seats than Democrats have won. They feel like, and they're right if you look at the polls, that Obamacare is unpopular. That's why their strategy right now seems so crazy because they were winning.

SCHIEFFER: John, why is it so many of these House Republicans have no problems with this? I mean, they see these polls out there, but they're much different than the situation in their home district.

DICKERSON: That's right. Well, one fact, if we go back and look back at 1995, President Clinton at the time could put pressure on some House Republicans. Why? Because he had won in 79 House districts. There were 79 Republicans who -- where Bill Clinton had won in their district. This is from an analysis Ron Brownstein did in The National Journal. Now there are only 17 Republicans who are in districts that Barack Obama won. So they don't feel the pressure from a president. Their constituents, many of them are these grassroots tea party folks who got really energized in 2010 based on the president's health care plan, so they're not going to listen to the president. So they're anxious and they're fine about this with this government shutdown. I think another thing that is a part of this is both in the House and the Senate, the Ted Cruzes of the world, when Hubert Humphrey tried to take his party on immediately when he came to Washington over civil rights with a lot of the southern Democrats, he got slapped back immediately because the leaders had power and his rise in life was going to be determined by those Senate leaders. Ted Cruz's rise in life is determined by the grassroots. And Mitch McConnell, who could, if he had the power of, say, a party leader of 40 years to go, could try to punish him, but Mitch McConnell is looking over his own shoulder with his own tea party challenge in his state in his upcoming election. So Ted Cruz has found a new way to power and the power of the people who might restrain him has been diminished.

SCHIEFFER: Can I add just what I think is one lesson in all of this that I think people on both sides -- never pass a law again that doesn't go into effect immediately. What you have had here with this health care law, you pass it, and nobody really knew what was in it. It's 2,000 pages. It didn't go into effect for two years. So the people who might have benefited and saw some good in this, they -- a lot of them don't even know what those parts of it are. There are also some parts that are not too good that have got to be straightened out. But the fact is the opponents of this have had two years to just go at it from all different angles, and the -- you know, and the law is not on the books yet. I think if this had gone into effect immediately, I think you'd have a very different situation.

IFILL: But a lot of it did go into effect immediately, especially the part that allowed young people to stay on their parents' health insurance plan.

SCHIEFFER: But people don't know that.

IFILL: Well, that's the failure, the failure is the White House saying, hey, we have got it now, let's relax, everybody will know how good it is. And because it was such a huge bill, it wasn't all going to go into effect at once, but the White House, if the ball was dropped, wasn't selling it in a consistent, never taking your foot off the gas pedal way so that people would not be so confused when the big part kicked in, the big, complicated part.

VANDEHEI: Right. We're piling on Republicans here at the panel, but the White House carries a lot of blame here. This is not -- if you talk to Democrats off the record, they would say this is a weak White House, in that the performance of the health care bill has been weak in large part because of the president. They pass this historic piece of legislation and did nothing to educate the American people. They left a huge void. So again it gets to Ted Cruz and being politically smart. What do you do when there's a void? Pump a little bit of money, not even a lot in terms of the politics, pump a bit of little money to change public opinion against it.

SCHIEFFER: It strikes me as if -- we're 50 years this year since Lyndon Johnson became president. And in a funny kind of way, his legacy is being enhanced every day in every way.

MILBANK: True, he had a very...

SCHIEFFER: Because he knew how to deal with a Congress. He knew -- he was one of the politicians...

IFILL: It was a different Congress.

MILBANK: He had a very different Congress to deal with.

SCHIEFFER: Yes, but could he make a difference today if he were here rather than Barack Obama?

MILBANK: A stronger leader would make a difference today. Think about it, when this president has been strong, he got health care passed. When he takes his foot off the accelerator, things fall apart. He's winning this showdown debate now, you know why, because he said, I'm not negotiating, and he's sticking to it. This is a president who likes to negotiate with himself. When he is strong or any president is strong, he gets stuff done.

DICKERSON: So then the question is, if that's true, and the president feels this heat from Democrats who have kind of seen him capitulate in the past, then -- and you hear this from White House aides, they say, you know, we're worried Republicans don't think we're serious about not negotiating on the debt limit. And they insist that the president feels this in his bones that he's not going to negotiate over the debt limit, and in so in that case he would be answering these leadership questions by saying, I'll be the leader here, I'm not going to negotiate. And the ultimate outcome of that, if Republicans hold their position, is...

IFILL: Where we are today.

DICKERSON: ... a debt limit breach, right.

IFILL: Where we are right at this moment.


SCHIEFFER: You know, Gwen, there are some constitutional scholars that say the president really doesn't really need the Congress's permission to raise the debt limit. Do you think there's any chance that he might just go ahead and do it?

IFILL: Let's put it this way, he hasn't ruled it out. It's entirely possible that he could use executive privilege, he could use the tenets of the 14th Amendment to do that, but I think that's up against the wall. Jim just said something interesting, which is whether the country is ungovernable. I would argue the country is not ungovernable. It is possible Washington is right now. In fact, governors are doing the job that the they're not doing in Washington, and they're taking -- they're either stepping forward or away from the health care plan, in ways that affect people's lives, which is not happening in Washington.

VANDEHEI: It goes to that heart of the question for could Lyndon Johnson come in and could he govern here? It's possible the answer is no. I do think we forget about the structural problems that we have right now as a country and that empirically we're extremely polarized. The filibuster has radicalized the Senate. There's not a middle to be had. So, I mean, we'll never know -- like, if you rolled back the clock and the president had engaged people from day one and had relationships and had cut some deals, could we be in a different spot? Maybe. I think what President Obama would say is "No, they will never negotiate with me, never wanted to, never will today, never will tomorrow."

SCHIEFFER: But, you know, both Lyndon Johnson and -- and Franklin Roosevelt had the ability to understand how much the country could swallow at one time. FDR didn't, just the minute that the Germans started moving across Europe, declare war, you know, because...

IFILL: But the country wasn't willing to accept the Civil Rights Act.

SCHIEFFER: ... because the country wasn't ready. And you get to Johnson. He broke it into two parts. You had the '64 Civil Rights bill and the '65 bill. He knew you couldn't do it all at once. Was -- was the president's health care law just too much at one time?

VANDEHEI: Well, I mean, that would be the Rahm Emanuel argument back in time. Remember, there was an argument inside the White House to do this smaller because the country is not ready to do it in a big swoop, just like you talked about. That was rejected by the president and a few of his closest advisers. Then the bill was passed along party lines. I think that's another lesson. When you're going to pass huge legislation like this, if it's done exclusively with one-party vote, it gets really hard to be able to win public support for it until it fully kicks in and people see an appreciable difference in their life as a result.

SCHIEFFER: I -- I want to play something here. I almost forgot about this. The president was asked during an interview if he thought the Washington Redskins...


... ought to change their name. Here -- and here's what he said.

PRESIDENT BARACK OBAMA: You know, I don't think there are any Redskins fans that mean offense. I've got to say, if I were the owner of the team and I knew that there was a name of my team, even if it had a storied history, that was offending a sizable group of people, I'd think -- I'd think about changing it.

SCHIEFFER: What's your reaction -- reaction to that?

IFILL: I don't cover sports, so I can say...


No, I call it the Washington football team. I don't use the name anymore because I think it's unnecessarily offense and what's the point? I have a lot of friends who are big Washington football team fans who are not happy with me about this.


But I -- I just don't understand what the point is. I know it's a nickname. What's the point?

SCHIEFFER: What about you, Dana?

MILBANK: Needless to say, he's on the front page of my newspaper with those remarks this morning. I think it's a fine point that the president should not be making in the middle of a crisis.

IFILL: It was the last question in an interview...


VANDEHEI: As long as the Packers remain the Packers and beat the Redskins every year, I'm a happy man.


SCHIEFFER: Thank you all very much for coming this morning. And we'll be back in a minute.

SCHIEFFER: Well, that is it for us today. We hope you'll tune into "CBS This Morning" tomorrow for the latest on the government shutdown, on those two terror raids. And for us, we'll be back next week, right here on "Face the Nation."

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