updated 10/17/2013 3:18:04 PM ET 2013-10-17T19:18:04

ALL IN with CHRIS HAYES
October 16, 2013
Guests: Bill Burton, Jack Kingston, Sherrod Brown, Heidi Heitkamp, Chuck
Todd, Joaquin Castro, Gwen Moore

CHRIS HAYES, MSNBC HOST: Good evening from New York. I`m Chris
Hayes.

At this very moment the Senate is in the middle of a final vote to
pass the bill that will end the government shutdown, raise the debt ceiling
and prevent a government default. Following the vote, we expect Senate
leadership to speak to the House of Representatives, plans to vote on the
Senate bill later tonight.

Joining me here is Bill Burton, who worked in the White House for a
good many years and was also in the Obama campaign.

What is your reaction to the fact that we are now in the ending on a
whimper stage of this process?

BILL BURTON, FORMER DEPUTY WH PRESS SECY.: Well, it is great for the
country that we`re finally opening up the government. We`re not going to
default on our debt. You know, frankly, I don`t understand why we had to
even get to this point in the celebration about getting here.

But I will say that I have some concerns as a Democrat that this is
not all good for the Democratic Party. I think there is some reasons for
us to be cautious about what happens next here. And this is counter-
conventional wisdom, but I actually think that Boehner may be stronger,
because if he has support of his conference that he didn`t have before,
that means that he probably --

HAYES: Well, here`s remarkable to me. Right now, you see the Senate
is going through a roll call vote. This is the second vote they have taken
tonight. And the first was a procedural vote because, of course, you have
to clear cloture even when everyone knows that it`s a fait accompli.

The cloture vote happened just before you joined us on air. And now
there is an actual vote on the resolution that is being offered. It is
about 35 pages long, and includes a nice little bit of pork for the army
project that happens to be in Kentucky, where the good Senate Minority
Leader Mitch McConnell is from.

I want to go now to Congressman Jack Kingston, who is a Republican
from Georgia.

Congressman, this could have happened two weeks ago. What the heck
was all of this for?

REP. JACK KINGSTON (R), GEORGIA: Well, you know, people need to
exhibit their beliefs and have the opportunity to debate, which is what we
have been able to do in the last two weeks. I think you could -- you know,
from a pessimistic standpoint, you could say you guys, the Republicans
didn`t get anything out of it.

But on the other side, I think it was important to us to reestablish
other brand as being against Obamacare. And from what we`ve seen so far,
Obamacare is not going to be a winner, it has not decreased the cost of --

HAYES: Congressman, do you think anybody going into this was confused
about the Republicans` stance on Obamacare?

KINGSTON: You know, you would be surprised. I`m telling, sometimes,
our base thinks that we haven`t driven the point enough, even though we`ve
had 40 different votes to defund it in one form or another, we still get
complaints that we`re not anything to defund Obamacare.

HAYES: Congressman, I want to stop you right there, because this is
pretty remarkable to me, what you just told me. There is an estimate that
this has cost, this two-week shutdown, has cost $25 billion in lost
economic activity. That`s not $25 billion to the Treasury, that costs is
probably somewhere around $2 billion -- or $25 billion in GDP growth. An
economic activity has been lit on fire for all intense and purposes, and
you`re telling me the reason for that, the plus side was that Republicans
got to, quote, "exhibit their beliefs" and also convince their base they`re
really against Obamacare.

KINGSTON: Well, let me say this, the big part of it was the
Obamacare, the big picture is that we showed we are really concerned about
the national debt, which as you know is 100 percent of the GDP. For every
dollar we spend, 42 cents is borrowed, and I think that`s something worth
fighter over.

The spending gap, the levels between the Senate and the House right
now, $90 billion difference.

HAYES: Congressman, I`m sorry, Congressman, the continuing resolution
that was on table two weeks before you shut down the government, that was
never a debate. The base line was never up for debate, that was going to -
- that passed the Senate and would have passed the House, the number you`re
getting in terms of the deficit was the same number.

KINGSTON: Well, actually, that`s not really case. I know that that`s
what the Democrats said, that we agreed on the number. There was a truce
on the number, and the truce on the number was only as long as the C.R.

Our number $967 billion and the Senate number is over a
$1,058,000,000,000. So --

HAYES: And you`re getting 986.

KINGSTON: Well, we don`t know that we are. Right now, that`s not
decided, because the sequestration, to quote Democrats phraseology, is the
law of the land. So, it may go to 967, we`re not certain.

HAYES: Wait a second --

KINGSTON: I want to say this, with the deficit being 100 percent of
the GDP, don`t you think these issues are worth us fighting over? And I
think we would agree, they do.

And the sad part about all the shutdown frenzy is the focus has been
on the shutdown, and the short-term inconveniences and problems with the
shutdown -- with the government closing. But there is no focus on what the
real problem is. And the real problem is that America is going broke. And
we`ve got to do something about that.

And Democrats and Republicans together should be losing sleep over
what our deficit is looking like.

HAYES: That has been cut in half over the past year. The
Congressional Budget Office is predicting the debt to GDP will stabilize at
70 percent if we do nothing different in the current trajectory.

Congressman Jack Kingston, thank you so much for your time.

Joining me now is Senator Sherrod Brown, Democrat from Ohio.

Do you understand why we should shut down to government for two-plus
weeks?

SEN. SHERROD BROWN (D), OHIO: I just heard Jack say there was a short
term inconvenience of the shutdown. It was an inconvenience for the 97
percent of NASA employees in Cleveland that got furloughed, and not to
mention Head Start and all the services that the government provided.

I understand they tried something that surely didn`t work. I mean,
the House resisted every chance to do this bipartisanly. The Senate did it
bipartisanly from the beginning.

The House could have passed it before the shutdown, could have passed
it the week after the shutdown and reopened the government if they were
willing to try to do it bipartisanly. They even tried last night to jam it
through a one-party rule. And it`s that kind of ideologically fervor that
so offends people, Chris, in this country, as you know, instead of trying
to work things through and do it right the first time.

HAYES: Bill Burton said at the top of the show that he was concerned
about this deal from the Democrat`s perspective. One of the issues is what
I was just talking to Congressman Kingston about, which is the number --
the baseline budget is set by. And we should be clear here. We`re talking
about the discretionary budget, not the social insurance programs that are
funded through alternative means.

Do you worry that this is now locked in, this base line, the
sequestration number that is very close to the budget, the handicap
Democrats negotiation when we go run this whole experiment again, leading
up to the expiration of this continuing resolution?

BROWN: I don`t think -- I mean, it`s in place until January, but
sequestration was already in place, and sequestration is going to get worse
for the country, and worse for the kinds of values that most of us hold
dear in January. But this gives the opportunity to actually negotiate it.
But you also heard a number o far right conservative members of the House
and Senate say that well, you know, I would be willing to reopen the
government if you go after, they say entitlements. But what they mean are
cuts to Social Security and Medicare, more shifts of cost to Medicare
beneficiaries, more cuts to the cost of living and Social Security, all the
things they want to do.

But in the next six weeks, you`re going to see more and more clearly
that the Ryan budget and the Republican efforts are going after the social
insurance, which they really don`t like, the social insurance you
mentioned, Medicare, Social Security, the two pillars that have really
protected so many millions, tens of millions of seniors and their families
in this country, Medicare for 30-plus years, Social Security for three
quarters of a century.

HAYES: Senator, let me just cut in there, because I`m told that while
this vote is still open, there are enough votes to pass the resolution, as
expected, which means this is very likely to come out of the Senate and
head over to the House tonight, which means we are on the glide path
towards a resolution and denouement to this entire ridiculous spectacle.

Speaking of which, in your career as a politician, have you ever seen
a political strategy fail as humiliating as abjectly as this one has?

BROWN: Probably not, but I might add to that, Chris, that the real
issue and that is they did they learn anything from it? And might they be
tempted to do it again, because I was watching the one-minute speeches from
the House of Representatives this afternoon and this morning, whenever they
were on, one minute after another, they alternate parties.

And there was no contrition and little lesson to be learned, it
seemed, from so many of these mostly Southern, mostly far-right
conservative members who, far right members who have districts that look
and sound and apparently think like they do.

Are they going to put aside what they`re thinking in South Carolina
and Texas and instead look at the nation`s interest? So far, they haven`t
done that. They don`t just have enough votes to continue the little
mission they have into the end of next week.

HAYES: That is absolutely the operative question going forward,
because as we learned tonight, while this immediate crisis is over, we are
set up for another budget battle in January.

Senator Sherrod Brown from the great state of Ohio -- thank you so
much.

BROWN: Thanks.

HAYES: Joining me now is NBC News White House correspondent Kristen
Welker.

Kristin, what are you hearing from the White House? Is this going to
be wrapped up this evening?

KRISTEN WELKER, NBC NEWS WHITE HOUSE CORRESPONDENT: Well, it
certainly looks that way at this hour. I think the White House is
certainly feeling pretty optimistic. They administration just released
this statement of administration policy essentially saying that they
strongly support the Senate bill that is being passed right now and then it
also says the administration urges the Congress to act swiftly to pass the
bill in order to protect the full faith and credit of the United States and
end the government shutdown. So, they`re essentially calling on the House
to follow suit.

As you just pointed out, the bill is expected to pass through the
Senate. I think the White House likes its chances right now. House
Speaker John Boehner earlier today essentially capitulated. He said we
fought the good fight, he just didn`t win. It`s an indication that he
believed he does have enough votes to get this through the House.

But, of course, Chris, this isn`t over until it is over, and it`s not
over yet. You`ve noticed that President Obama has sort of been in the
background for the past several days. We haven`t seen or heard from him
much, because he wants to let this political process play out, allowing the
political pressure to build up on Republicans.

The White House officials thought they would blink, that is
essentially what happened. The White House pretty much got what they
wanted out of this deal. The government will reopen, the debt ceiling will
be raised, and only sort of a small concession on Obamacare which has to do
with income verifications.

HAYES: Kristen, let me cut in there, because I believe the final vote
tally maybe being read on the floor of the Senate right now. Pat Leahy who
is on chair seat. And I believe we do actually have a vote. Take a
listen.

SEN. PAT LEAHY (D), VERMONT: Without objection, the motion is agreed
to. Under the previous order, the Senate will proceed to the
consideration, resolution 25, which the clerk will report.

CLERK: Calendar number 33 --

HAYES: Harry Reid speaking to reporters right now.

SEN. HARRY REID (D-NV), MAJORITY LEADER: The shutdown has hurt our
economy to a significant degree. But we were able to work it out, so we`re
here and no need to have anymore losses.

We have been able to come together for a lot of different reasons. I
appreciate the work of a number of senators. But I think one of the most
important things that we have been able to do is get Senator McConnell and
I together.

I`m very grateful that Senator Lamar Alexander reached out to Senator
Schumer, and being the peace maker he is, Lamar Alexander, suggested that
they start doing what they could to engage Senator McConnell and I.

And as a result of that, I think we were able to talk and hopefully
develop a strong relationship. We -- Senator McConnell and I have worked
together for many years. The last little bit is no surprise it has not
been too good.

So, anyway, I appreciate the work that Senator Alexander and Senator
Schumer did. I`m grateful for Senator Pryor and that gang of senators that
did some things that helped us.

So I would hope that in the future, the work that was done by Senator
Pryor and Collins, they will be able to get together to create some
separation here from all this shrill voice -- these shrill voices that we
hear, I agree that are not helpful.

Bringing this crisis is historic, let`s be honest. This was pain
inflicted on our nation for no good reason, and cannot make -- we cannot,
cannot make the same mistake again. So, as we move into the next round of
negotiations, I`m depending on stable hard-working, always available Patty
Murphy. She is the stereotype of what I believe a senator should be.

I am very, very grateful to her for being willing to take the
leadership of trying to work something out, to make sure that we don`t have
another one of these crises, manufactured crisis. She was called upon by
the Democratic Caucus to be the chair of the super committee. And she
worked so hard, and we were so close.

But as you know, from all the experiences that the president had and
I`ve had with Speaker Boehner, he was never able to take that step to
accomplish this.

I want to express here, probably the right place to would be on the
Senate floor, but the support of my three leaders. As everyone knows, my
caucus has been lock strong together. We`ve worked with the president. We
have been a real team.

But when we have been able to be a big team, is my team made the
bigger team work. So I`m really grateful to them. No one will ever know
the work that we do off the floor, behind the scenes, and I`m not a one-man
show. I depend on these three good senators for virtually everything that
we were able to accomplish.

There is a lot more to do. As the president said yesterday, and I say
today let`s move on. What is the big issue out there? People complain
about the deficit? How about let`s doing immigration? A trillion dollars,
something that`s fair and reasonable that this country has needed for a
long time.

So I look forward to the next venture, is making sure we do
immigration reform. We`re going to continue extending our hands to the
Republicans and hope they will come to the table in good faith with the
desire to compromise.

Senator Durbin?

SEN. RICHARD DURBIN (D), ILLINOIS: So many times throughout the
history of the United States, it has taken the United States Senate to
resolve national challenges, and to resolve a national debate. It happened
again tonight, on the floor of the United States Senate. More than 80
senators from both political parties stood up and ended this 15-day ordeal
that has been suffered by the people of the United States of America, by
federal workers and by those who depend on their good service.

I can`t describe to you the feeling on the floor during the course of
these two votes. The bipartisanship, the camaraderie, the friendship that
I felt, it was such a relief from what we have been through. Let`s pray
that this is just the beginning, and I think it is.

I think there`s a determination here to take this bipartisanship even
further. We`ve seen it during the course of this year in a prefer
immigration bill, the passage of a farm bill. And now the Senate, the
bipartisan Senate rose to the occasion and broke this deadlock.

It took the leadership of the Senate to do it. We`ve got to continue
to show that leadership. And we have to hope that the speaker of the House
of Representatives and other members, as well, will watch carefully, as the
American people react. Watch carefully and understand their responsibility
now to work with us in a bipartisan fashion to solve our problems.

One of the saddest parts of today was to pick up in the morning paper
and read Republican House members say, well, we won this battle. Honest to
goodness, how can they possibly say that? This is not a win when it comes
to the losses of federal employees and the services across our country.

We have to come up with real victories for the American people, to
help this economy move forward and create jobs, to solve the problems that
face us. That is why we were sent here.

I want to thank Harry Reid and my colleagues, Senator Schumer and
Murray, many of take credit, but the line sure of the credit goes to this
man from Searchlight, Nevada, I can`t get over his determination, his
patience and his energy throughout this. You`ll never -- you will never
know how much he put in to make this a success. And Senator McConnell, who
stepped up to be his partner when it really counted.

So I`m happy for the Senate tonight. I`m happy for the nation, but
let`s make sure that this is just the beginning.

SEN. CHARLES SCHUMER (D), NEW YORK: Well, thank you, today is not a
happy day, an ebullient day, it is a somber day. We finally achieved our
goal.

But frankly, we ended up where we started. When we started, we said
we would do three things: fund the government, pay our bills and agree to
negotiate. We started there, and that is where we ended up. That`s
exactly what the law does, no more, no less.

And so the bottom line is, millions suffered. Millions didn`t get
paychecks. The economy was dragged down. And confidence in faith in the
United States` credit and in the United States itself around the world was
shaken.

So, this is not a happy day. It`s a somber day, because at the end of
the day we never should have gone through what we went through. We started
here, we ended here.

Second point, there are three people I think who I would like to
praise, who can`t do it enough. The first, of course, is our leader, Harry
Reid, he stood so firm from the beginning, it was his resolve we could not
bow to the kind of tactics that were being used by the small minority on
the other side.

He was stalwart, he never buckled, he never flinched, he never
doubted. He gave strength to the rest of us. And the whole caucus was
united behind him.

Second, I`d like to praise the president. The president, again, in
every time that we saw him, and every time that we dealt with him, was
stalwart from the beginning, realizing that the kind of tactics, if used by
the other side and permitted to be used by the her side, would be used
again and again and again.

And finally, my hat goes off to Senator McConnell. He is in a very
difficult situation politically. And once he saw that Speaker Boehner and
the House were tied in a total knot, he knew he had the obligation to step
up, even if it might hurt him in his campaign. I respect that, I think
every one of my Democratic colleagues respects that. And it is something
that I`ll remember.

Final point, if there is a silver lining in this gray cloud, it is
that --

HAYES: The Democratic leadership team addressing the bill has just
passed the Senate, now headed to the House that reopens the government and
raises the debt ceiling and avoids the crisis that was bearing down on the
United States.

Joining me now is another Democratic senator, Heidi Heitkamp, Democrat
from North Dakota.

And, Senator, you represent a state that is a red state. You had a
very, very narrow victory in your first run for statewide office, for the
Senate. And yet, like many of your other colleagues who represent red
states, did not buckle during these 16 days. You didn`t say maybe we`re
doing the wrong thing here -- maybe we need to pursue negotiations, why
not?

SEN. HEIDI HEITKAMP (D), NORTH DAKOTA: Well, if you followed the
campaign you know that the health care law was a big topic of conversation.
And I said something I truly believe. There is good and there is bad in
this health care law. And we need to fix what`s bad.

But we can`t go back on what progress has been made on pre-existing
conditions, on putting kids on our health insurance, on making sure we get
rid of caps, making sure that we have access to the exchanges, although
they are having a little bumpy ride right now. But, you know, so this was
not a big surprise. I mean, this was something that I talked about during
the campaign. I think the voters of North Dakota knew my position. I
thought it was a complete overreach, for people to think that we were going
to defund or somehow eliminate the health care law in the budget process.

I think one of the concerns I had on doing that is, what`s the
precedent here? What do we take on? Because I would love the farm bill,
but I didn`t stomp my feet and say I`m not going to vote to fund the
government until you give me a farm bill.

So, you know --

HAYES: But here`s my question, Senator, I have watched -- I have
covered politics and watched other scenarios in which Republicans basically
bet the farm on the fact that Democrats would buckle or they would break up
or be able to peel off some, quote, "vulnerable Democrats," whether they`re
in swing districts in the House or represent them in the Senate.

And, often, that strategy has worked. It didn`t work this time. What
were you hearing from your constituents during this shutdown that made you
feel confident you were aligned with the voters in your state on this?

HEITKAMP: Well, I mean, obviously we heard a lot of complaints, a lot
of folks writing in, please follow the House lead, defund Obamacare. I
mean, I wouldn`t tell you we didn`t in part, it was kind of hard because we
were down to minimal staff, but the calls we got were clearly geared in
that direction.

And my response to the staff is, I made clear my position was in the
election. The people who voted for me knew that position. I have an
obligation to those commitments that I made to carry on, and carry through.

And so, it wasn`t the tough choice for me, to stick with what I told
the voters I would do when I got here.

HAYES: Senator, you`re also one of a group of senators that was
covering "The New York Times," who happened to be women senators who helped
broker this deal or begin the process of brokering this deal. How did that
come about?

HEITKAMP: Well, it was really kind of initially by invitation. We
have great relationships. And I think that we have had a lot of
discussions over the months about things we would love to do in a
bipartisan way. And this was basically stopping a lot of that progress.

And I think it came to that point when you hear the stories about 600
Native American families not getting food or fuel assistance. And you say
I can`t just sit back in a stare down. I promised my voters that I would
do everything I could to work across the aisle and come together. And
that`s really how this group came together.

And I think what was so amazing is, the discussion wasn`t about poll
numbers, wasn`t about anything else, it`s about helping people.

HAYES: Senator Heidi Heitkamp, thank you so much for your time
tonight.

HEITKAMP: You bet.

HAYES: You`re standing by to hear from the president, momentarily,
who will be address the bill just passed out of the Senate by a wide
margin, 81 aye votes, to reopen the government, extend the debt ceiling,
reopen the government until January, extend the debt ceiling towards
February, with essentially will have no concessions.

It looks remarkably like, Bill Burton, it looks remarkably like what
was on offer 16 days ago, what do you think the political consequences of
this are? There`s lots of policy consequences. We`re going to talk about
that. We`re going to talk about what`s next.

But, right now at his moment, as the end of this near, as the
president prepares to come out, what are the political consequences here?

BURTON: Well, if you go back to what Jack Kingston was saying, that
is a man who you feel is in a Republican primary right now because all the
words that came out of his mouth were things like base, and Republican
brand. The brand was badly damaged.

And the fact that he felt like this was something necessary, they
should do just so they could tell their base what it was that they believed
in, where was it they stood? I think it was a real problem.

HAYES: Congressman Jack Kingston said to me on our air, when I asked
him, what this was, he said it was that people need to exhibit their
beliefs.

You can put a Facebook status update or get a blog. You do not have
to be a member of Congress to exhibit your beliefs.

BURTON: Right. Now, your point that they basically lit $25 billion
on fire and flushed it down a toilet so they can show that they cared about
government spending -- I mean, the hypocrisy is phenomenal on that.

HAYES: Here is the big question about the politics, though. I
remember when we were in the knife fight that was that Syria vote --
remember, this may seem like ages ago but it was a little more than a month
ago. The president was heading towards a vote in Congress that many
thought he was going to lose, there was a miraculous, last minute
diplomatic solution -- that seems to have not political consequences, and
at that time, people are saying, oh, the president loses this vote, his
presidency is over.

Right now, it looks to me like the GOP is badly wounded, like the
House Republican caucus is cowed, they have no power and no leverage and no
bargaining position. But maybe all that changes in a month.

What do you -- what do you expect to see in terms of public opinion
and their political potency a month, six months from now?

BURTON: Well, there is a human cost to this shutdown, that I think
that you cannot deny the political consequences, as well. And I think when
you add up all over the country, all the people who are affected it was
twice as many as the 1996 shutdown when you looked at the polls. Now, a
big difference here between the shutdown and 1996, is that in 1996, after
the shutdown, Newt Gingrich and everybody, they were kind of cowed, saying
we wouldn`t do anything that upsets the apple cart and be whiny and all
that.

HAYES: Right.

BURTON: The big difference is now between the election of 2012, you
were going to have a fight every six weeks that was going to go on and on.
And I think that the consequences for the Republicans is going to be very
bad and they opened a door for the Democrats to actually take control of
the House that was open for. It`s not done. I think it`s too early to --

HAYES: The president is speaking right now.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Good evening,
everybody.

Tonight, the Republicans and Democrats in Congress have come together
around an agreement that will reopen our government and remove the threat
of default from our economy. The Senate has now voted to approve the
agreement, and Democrats and the Republicans in House still have an
important vote to take.

But I want to thank the leaders of both parties for getting us to this
point. Once this agreement arrives on my desk, I will sign it immediately.
We`ll begin reopening our government immediately. And we can begin to lift
this cloud of uncertainty and unease from our businesses and from the
American people.

I`ll have more to say about this tomorrow. And I`ve got some thoughts
about how we can move forward in the remainder of the year and stay focused
on the job at hand, because there is a lot of work ahead of us, including
our need to earn back the trust of the American people that`s been lost
over the last few weeks and we can begin to do that by addressing the real
issues that they care about.

I have said it before, and I`ll say it again -- I`m willing to work
with anybody, I`m eager to work with anybody. Democrat or Republicans,
House or Senate members, on any idea that will grow our economy, create new
jobs, strengthen the middle class and get our fiscal House in order for the
long-term.

I never believed the Democrats had had a monopoly on good ideas. And
despite the differences over the issue of shutting down the government, I`m
convinced that Democrats and Republicans can work together to make progress
for America. In fact, there are things that we know will help strengthen
our economy that we could get done before this year is out.

We still need a lot to pass our broken immigration system. We still
need to pass our farm bill. And with the shutdown behind us and budget
committees forming, we now have an opportunity to focus on a sensible
budget that is responsible, that is fair and that helps hard working people
all across this country.

And we could get all of these things done even this year if everybody
comes together in the spirit of how are we going to move this country
forward, and put the last three weeks behind us. That is what I believe
the American people are looking for -- not a focus on politics, not a focus
on elections, but the focus on the concrete steps that can improve their
lives.

That`s going to be my focus.

I`m looking forward to Congress doing the same; but once again, I want
to thank the leadership for coming together and getting this done.
Hopefully, next time, it will not be in the 11th hour. One of the things
that I said throughout this process is we got to get out of the habit of
governing by crisis.

And, my hope and expectation is that everybody has learned that there
is no reason why we cannot work on the issues at hand. Why we cannot
disagree between the parties, while still being agreeable. And, make sure
that we are not inflicting harm on the American people when we do have
disagreements. So, hopefully, that is a lesson that will be internalized
not just by me, but also by democrats and republicans, not only the
leaders, but also the rank and file. Thanks very much everybody.

UNIDENTIFIED FEMALE SPEAKER: Mr. President, do you believe this is
going to happen in a few months?

(END VIDEO CLIP)

HAYES: The president of the United States addressing the press from
the press room at the White House in the wake of the senate passing a bill
to reopen the government and avoid default by extending the debt ceiling
for about two months. Bill, the president sounding quite gracious, not
particularly partisan, let`s put this behind us. We need to come together,
tremendous amount of equanimity.

BILL BURTON, FORMER DEPUTY WHITE HOUSE PRESS SECRETARY: Yes. The
president is not the kind of guy who spikes the ball in the end-zone --
what he really wants --

HAYES: Well, technically he is the one-yard line because the house
has not voted yet.

BURTON: Right.

HAYES: So, there is no spiking --

BURTON: He also does not spike on the one-yard line.

HAYES: Yes. Right.

BURTON: That is not his line.

HAYES: This is a little more like the hugs during the kneel down with
the 40 seconds running on the clock --

BURTON: May be it is the prayer or a halftime -- what the president
likes is to get things done. And, so, now that we are moving past this,
what the president has on his mind is, "Well, how are we going to get to
immigration? How are we going to get to the other pressing concerns for
the middle class in this country to actually make some progress?"

HAYES: I was struck by the last part of that statement, the president
said and this is something he said. Since 2011, which is the kind of
initiation of this whole crazy process we have been on for the last 2
years; 2011, of course was when the first threat from the new Republican
Tea Party congress in the house to not raise the debt ceiling led to what
is the budget control act, which led super committee, which led to
sequestration, which led to a series of short-term bills upon the
government, which led to perpetual and habitual budgeting and governing by
crisis. That has not been broken tonight, and we should be very clear
about that.

BURTON: No. That is right. That is right. No. It, absolutely, has
not. And, so, I think what republicans are going to look for more crises
in order to make political points. It does not matter what the costs are
to the U.S. government.

It does not matter what the human cost are because Head Start or WIC
could shut down, because federal employees cannot pay their rent, because
they are not getting paid. What they care about is making political
points. On the one hand, you sort of want to give them credit because they
said that they are going to be crazy when they got to Washington and do
things to shake things up and --

HAYES: They had this terrible impact.

BURTON: That is exactly what they have done.

HAYES: They promised to come to Washington and to ignore the norms of
the place and to violate them every which way and they have done that. In
fact, I have a bizarre admiration for the fidelity they have shown --

BURTON: Right.

HAYES: -- to their incredibly misbegotten approach.

BURTON: But, it is not just to ignore the norms, it has ignored the
cost to the American people of what they are doing.

HAYES: They have also said they got elected to impose austerity on
this country, and they have succeeded to a certain degrees. You and I were
talking about the baseline spending figure we are dealing with as a
spending figure that is just a nose above the Ryan Budget. Speaking of
people that came to Washington to shake things up, take a listen to what
Sen. Ted Cruz said when he got the floor in the senate, just shortly before
the senate voted. Take a listen.

(BEGIN VIDEO CLIP)

SEN. TED CRUZ, (R) TEXAS REPRESENTATIVE: Mr. President, this fight
was always about the American people who were hurting because of Obama
Care. And, unfortunately, today, the United States senate is saying you
don`t have a voice in Washington. You don`t have a voice in Washington.
This is a terrible deal.

(END VIDEO CLIP)

HAYES: Does Ted Cruz believe what he is saying?

BURTON: Well, I actually take him at his word that he does. I think
that he is as disconnected from the reality that you and I are familiar
with, that he actually potentially believes what he is saying. Now, I
think that if you kick this forward, and you look at what -- so, if we are
just going to shut the government down every time Republicans and the Tea
Party don`t agree with something, like what is next. Like aren`t there
other things that they would shut the government down for --

HAYES: Right.

BURTON: -- besides just spending, is it pro-life bill? Is it an
anti-contraception bill? Is it, you know, the EPA regulations? What is
next?

HAYES: I wish that I have the ability to whip up a chart, that showed
a pie chart of media cover for the last two weeks and one part would be Ted
Cruz. The other people would be people affected by Obama Care.

And, I would guarantee you that pie chart would be massively
overwhelmingly in the color of Ted Cruz because of the shutdown --

BURTON: Right.

HAYES: -- rather than people affected adversely or positively by
Obama Care. We will take a break. Lots more to come, so stick around.

(COMMERCIAL BREAK)

HAYES: Tonight as we await a house vote on the bill to reopen the
government and extend the debt ceiling, we are watching almost total
capitulation by republicans. The hostages are being freed and no ransom is
being paid, a resounding victory for the President. A dramatic reversal of
fortunes for republicans from just two short years ago, and to understand
the magnitude of what just happen today, you have to go back to the summer
of 2011.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE REPORTER: Good morning. Crisis averted. President
Obama and congressional leaders agree on a plan to raise the nation`s debt
ceiling, but not everyone on Capitol Hill is happy.

UNIDENTIFIED FEMALE REPORTER: The president of the United States
saying that the leaders of both chambers and both houses have agreed to a
deal to avoid the first-ever default in the history of the United States.

UNIDENTIFIED MALE SPEAKER: A modest victory for the forces of
compromise and centrism.

HAYES (voice-over): Two years ago, faced with a similar debt ceiling
hostage situation, the president cut a deal with republicans.

JOHN BOEHNER, (R) U.S. HOUSE OF REPRESENTATIVES SPEAKER: You know I
got 98% of what I wanted. I am pretty happy.

HAYES (voice-over): In exchange for raising the nation`s debt limit,
democrats agreed to sharp cuts in government spending. It was a huge
victory for republican extortion.

PRES. OBAMA: I want to thank the American people. It has been your
voices that have compelled Washington to act in the final days.

JON STEWART, LATE NIGHT SHOW HOST: Let me just stop you right there.
You are not pinning this turd on us.

HAYES (voice-over): This week, the "New York Times" reports that in
the summer of 2011, after that historic compromise, the president pulled
together his inner circle of senior advisers and told them, quote, "I`m not
going through this again. It is bad for democracy. It is bad for the
presidency." For the better part of two years, the president has repeated
in public what he told his staff in private.

PRES. OBAMA: I have been very clear. We are not going to negotiate
around the debt ceiling. We are not going to negotiate under the threat a
further harm to our economy of middle-class families.

You don`t negotiate by putting a gun to the other person`s head.

HAYES (voice-over): And, today, what appears to be a resounding
republican defeat seems like it was inevitable, but it wasn`t. Yes,
today`s victory for democrats was due in part to MacGruber-like planning on
the part of republicans.

WILL FORTE, AS MACGRUBER: Vicki will walk in dressed as Hoss, and
then we`ll just, you know, see what happens. You ready?

RYAN PHILLIPE, AS LT. DIXON PIPER: Wait. Wait. So, we are just
going to wing it?

FORTE, AS MACGRUBER: Piper, there is a big difference between winging
it and saying what happens. Now, let`s see what happens.

HAYES (voice-over): But, today`s victory was also a product of
democrats holding the line.

SIR IAN MCKELLEN, AS GANDALF IN LORD OF THE RINGS: You shall not
pass!

HAYES (voice-over): Every time republicans threw out a new piecemeal
plan to fund the government, the democratic response was singular.

UNIDENTIFIED MALE SPEAKER: You get nothing. You lose, good day, sir!

HAYES (voice-over): When house republicans voted to fund the NIH,
democrats didn`t bite.

ERIC CANTOR, (R) VIRGINIA REPRESENTATIVE: I believe that Sen. Reid
must take up this legislation today for the sake of those children and
their health.

HAYES (voice-over): The republican stunt to reopen the national parks
that republicans closed was re-buffed.

MICHELE BACHMANN, (R) MINNESOTA REPRESENTATIVE: For political
purposes, President Obama and Harry Reid wanted the government to shutdown.

HAYES (voice-over): The president and democrats never took the bait.

NANCY PELOSI, (D) MINORITY LEADER OF U.S. HOUSE OF REPRESENTATIVES:
Let us reject this because this is -- you know, they took hostages by
shutting down the government. And, now they`re releasing one hostage at a
time.

SEN. HARRY REID, (D) NEVADA SENIOR U.S. SENATOR: What right do they
have to pick and choose what part of government is going to be funded?

PRES. OBAMA: We don`t get to select, which programs we implement or
not.

HAYES (voice-over): And, as the democrats refused to cave,
republicans were banking on winning the media war.

SEN. RAND PAUL, (R) KENTUCKY SENATOR: I think they can`t -- we are
going to win -- we, I think, well I know we don`t want to be here, but
we`re going to win this, I think.

HAYES (voice-over): But, in end, the polling told the different
story. The latest NBC News poll found the Republican Party has their
lowest favorable numbers in the history of the poll. With the party in
disarray, republicans rushed to cast blame.

STEVE STOCKMAN (R) TEXAS CONGRESSMAN: This president is determined to
destroy the Republican Party.

HAYES (voice-over): Today, democrats defended the democratic
principle, one party in one house of congress does not get to threaten
destruction in order to dictate terms of policy they lost in a national
election. One can only hope that chasing Republican Party have learned
their lesson, as well.

BOEHNER: We fought the good fight. We did everything we could to get
them to the table and to negotiate. They just kept saying no, no, no.

(END VIDEO CLIP)

HAYES: Joining me now is NBC News Chief White House Correspondent
Chuck Todd. Chuck, what is the feeling inside the White House tonight?

CHUCK TODD, NBC NEWS CHIEF WHITE HOUSE CORRESPONDENT: It is -- It is
not a celebration, let me put it that way. I think they feel vindicated
that they held the line on this and their strategy. They feel like they
were doing the right thing. I talked to some aides, who they believed --
they told me that the president was doing this for future presidents.

I even had one of them use an example -- imagine this -- you know,
liberal congressmen, a group liberal congressmen hold up things for a
republican president. That is the type of president that they say
President Obama was worried about setting. So, there is some vindication,
but I wouldn`t call it gloating and I wouldn`t call it celebrating.

And, Chris, you heard the president earlier that there is this -- They
know that as badly as republicans are damaged in this politically, the
entire aspects of the federal government right now is in a bad place,
right?

HAYES: Yes.

The entire political system is viewed negatively. And, the president,
himself, addressed that remark saying -- you know, "It is on me, too. We
got to rebuild the trust with the American people, trust in Washington."
But, also trust in the federal government.

I tell you one of the things -- one of the things that has bothered me
tonight and I just know this guy, some friends that are hurting personally,
there has not been an apology by anybody that a bunch of government workers
and government contractors were essentially used as political pawns for the
last 16 days and --

HAYES: For absolutely no reason.

TODD: -- And not only that, and some of them are going to take weeks,
if not months, for their own finances --

HAYES: Yes.

TODD: -- to sort of get squared away. Some of them get back pay, but
government contractors don`t --

HAYES: Yes.

TODD: -- And, before people think, "Oh, government contractors, they
only build -- it is the CEO -- no, there are a lot of working class
government contractors out there.

HAYES: You know, that is a really good point. Chuck Todd, thanks so
much for joining us tonight. I really appreciate it.

TODD: You got it, Chris.

HAYES: Joining me now is Ben Domenech, Publisher of the "Federalist"
a web magazine and senior fellow at the Heartland Institute, A Conservative
Think Tank. All right, two things I want to get to you -- with you Ben.
First, is this fascinating strategic question.

We all now know the famous story of Mitch McConnell, and a bunch of
republicans meeting on inauguration night in 2009 in which they, basically,
devised their strategy, which was, "We hold firm. We do not break. We are
not going to allow the president or the democrats to low us into
negotiations on any of their priorities. Our policy is no."

And, that proved in some ways very effective between 2009 and 2010.
It held usher in the political wave of the Tea Party. I think you have
seen the democrats learn that from the republicans. Do you think
republicans were surprised by the unanimity, the solidarity that the
democrats presented during the past 16 days?

BEN DOMENECH, PUBLISHER OF THE "FEDERALIST" MAGAZINE: I think what
you saw was really a unified democratic front running up against the
republican front that is not unified at all. I mean if anything, I think
what we have seen sort of during the course of this is that while
conservatives are still very much dedicated to the sort of seek and destroy
mission that they have when it comes to Obama Care, they never really
trusted the republican establishment or the leadership in the house to
actually fight the fight.

The reason that you got to this point is that you had essentially on
one side a plan being advocated for by Ted Cruz and people of his
persuasion, and then you had leadership sort of saying well, don`t do that,
without offering them an alternative, in terms of an approach.

And, then on the other side, from the democrats you saw a unified
front. And, I think that we saw the power of that. In the 1990 shutdown,
you had a unified front because Newt Gingrich had led the republicans out
of the wilderness effectively. You had a united front because they were
coalescing around a series of policies. But, you don`t have that on the
republican side now in Capitol Hill and I think you are seeing the effects
of that way out --

HAYES: And, the huge difference in 1995, which I felt was under --
articulated was that they just won an election. There was reason to
believe that there was some popular mandate after the republicans had taken
the house, after -- I don`t know, what was it, 40 years or something like
that? --

DOMENECH: Yes.

HAYES: -- And, there was this huge historic thing. And, they thought
we have this mandate. There was no mandate here. I mean that is what is
so remarkable about this fool`s errand that the republicans` rushed into
was that we just had an election that republicans demonstratively and very
clearly lost.

DOMENECH: You know, it is more comparable I think to sort of the
post-1984 election that obviously Ronald Reagan won definitively, where
democrats only had one -- they only controlled the house.

HAYES: Yes.

DOMENECH: And, they sort of set these debt ceiling fights over series
of months. But, I think that what you saw is, again, there, you had a
unified democratic party facing off against the president. So, even coming
out of an election where he had been overwhelmingly re-elected, they were
able to hold the line.

You don`t have that with the Republican Party today on Capitol Hill.
And, I think that you are seeing the damage of it now. And, frankly, I
think you are going to continue to see the damage done because of it in the
future months because this is not a situation where we are coming out of
this and it is dramatically transformed the way that they are going to deal
with this --

HAYES: So, here is my question, the conservative grass roots, which I
would say you are a member of. And, there are many people I think, you
know, rank and file members of conservative grass roots who I just
substantively disagree with, find even their views dangerous and
contemptible, but just good citizens like you and I, right? People of
different backgrounds.

And, I just want to say you are being played for a con. These
hucksters tell you things that are false. They lie to you. Ted Cruz lies
to you. Heritage Action lies to you. Everybody lies to you. There is a
whole cottage industry before the election to tell you, you are winning the
election, they are losing. They tell you, your ideas are popular when they
are not. They tell you your party is winning when it is not. They tell
you the president is losing this and he looks terrible because people are
stronger -- At what point do grass roots conservatives stop allowing their
leadership to lie to them?

DOMENECH: Well, I think that you have to keep in mind, the leadership
lies to themselves, as well. They lie to themselves about their ability to
control the situation. They lie to themselves about the ability to offer
an alternative approach from the senate side that they could take it up by
the house at the get-go. I think that essentially you are seeing a lot of
people who are lying to each other about the nature of the policies and
nature of the political strategy that they are employing.

And, I think that in a sense, they got distracted from what I think is
one of the biggest lies after all that was told to anybody in Washington,
told to themselves, and that is frankly the idea that Obama Care was ready
to go. By getting off the ball on that, they distracted it. And, I think
they got to a point, frankly, where -- you know sometimes it is pretty
profitable to tell lies, to tell people what they want to hear. The only
problem is when it runs into smack dab into hurting them.

HAYES: Yes. Ben Domenech from the Heartland Institute. Thanks a
lot. Stick around.

DOMENECH: Thanks.

HAYES: We will be right back for more.

(COMMERCIAL BREAK)

HAYES: We are back and joining me now is Bill Burton, former deputy
White House Press Secretary in the Obama Administration, co-founder, senior
strategist of Super PAC Priorities USA Action; Congressman Joaquin Castro,
democrat from Texas and Congresswoman Gwen Moore, democrat from Wisconsin,
a member of the house budget committee. And, congresswoman, how are you
feeling about the resolution to this whole thing on this evening as you are
about to vote on something to finally get the government open in the debt
ceiling extended?


GWEN MOORE, (D) WISCONSIN CONGRESSWOMAN: Chris, it is a relief, but
it is very sobering, realizing that this is a short-term solution. And,
then come January and February, we will be back with some real hard
decisions and choices to make. For one thing, we`re going to have the same
group of people and as John Boehner said, you know, he is still going to
try to split up the legislative coalition that created the affordable care
act.

They are still going to be gunning for the affordable care act, in
addition to which we will be operating at the sequester level funding where
even the chairman -- the republican chairman on the appropriations
committee has indicated that it is $70 billion below the bare minimum at
which we need to operate the government.

We clearly have not talked about a job stimulus. You know, you here
the mantra of jobs, jobs, jobs, but my God, it is a stingy sequester level,
and we can`t -- we can`t even think about creating jobs. And, immigration,
gun control, all of these things may fall by the wayside.

So, it is a relief to get the government back opened temporarily.
But, it is very sobering to think that we still are going to have these
challenges. Those same 40 obstructionists will be right there.

HAYES: Yes. Congressman Castro, do you view the priority for the
Democratic Party, the White House, the senate majority leadership, which
will be the most involved in this, but also the house as we enter a formal
budget negotiation, do you view lifting the sequester as a Democratic Party
priority?

JOAQUIN CASTRO, (D) TEXAS CONGRESSMAN: Well, absolutely, that is
something that we will argue for. As Gwen mentioned, democrats have not
been happy with the fact that we are right now at the Sequester level
funding. So, that is going to be something that we are pushing for.

HAYES: And, is there also -- Congressman Moore mentioned something
that is remarkably absent in the political conversation, which is some kind
of job creation or some attention to the fact that we continue to struggle
through recovery that has massive amounts of unemployment. We are very far
from full employment. Do you imagine anything on the agenda in these
budget negotiations that can address that?

CASTRO: Well, you know, certainly, I hope that republicans will work
with us on the president`s jobs bill. And, the remarkable thing about this
is that the economy was picking up steam. And, it seems that when we get
to the point where we are just about to take off and fully bounce back, we
have another self-inflicted wound like this.

And, we are all hopeful, I think all Americans are, that, that it
wouldn`t be the case a few months from now. The best thing that we can do
right now is let the economy bounce back and make sure people are going
back to work. Create jobs. And, then when we get to a balanced budget and
start to pay off our debt, we will be at a place where everybody will be
satisfied.

HAYES: Do you think that balancing the budget in the short-term is
something that needs more to be leaned into more? Are you confident that
the current it will lead us to something that gets us to a sustainable
level?

CASTRO: Well, as you know we brought our deficit down at a dramatic
rate. So, we were very much headed in the right direction. And, then we
keep hitting these walls that are brought about by the Tea Party
republicans. So, if we keep hitting these walls, then we are just going to
fall back.

I think that these guys need to realize the damage that they are doing
to the American economy. We have come to a point now where our greatest
challenge is and our greatest obstacle is not another nation, but really,
it is all of these in-fighting within the congress and specifically this
group of Tea Party republicans who insist on engaging in hostage politics,
who are aided by the speakers used of the rule and who have really damaged
the country.

HAYES: Congressman, I couldn`t help but notice that Harry Reid and
his remarks tonight in the wake of the senate vote, the president in his
remarks tonight both mentioned immigration reform. The president talked
about the immigration reform in his interview yesterday. The drudge report
today was battering the fact that immigration reform was back, Raul
Labrador, a republican colleague of yours said absolutely no chance. What
do you think about the prospects of immigration reform?

CASTRO: I think we are going to make a full court press, to pass
comprehensive immigration reform in 2013. I think you are going to see the
president engaged -- as engaged as he has ever been on this issue and so --
you know, it is time that we get about the business of dealing with real
substantive issues and not just hostage politics and in-fighting.

HAYES: Congresswoman Moore, do your constituents feel like they have
a voice in Washington? Ted Cruz who is talking about the voiceless
Americans being impacted by Obama care and not having the voice. Do your
constituents feel like they have a voice from Washington?

MOORE: I can tell you, I have really been buoyed by my constituents
calling me to let me know that they appreciate the role in the stance that
I have taken in the last 16 days. And, it is such an honor to represent
them. You know, during these times, my worst day, I have really been
honored to be here to represent their voices.

Just because, they are -- you know, my constituents are not frightened
by the future. And, the future, you know, holds a lot of promise with
regard to -- you know, filling that void for 32 million people who have no
health care, for welcoming new immigrants, for really making the kinds of
changes that can only be made in a real democracy.

HAYES: Bill Burton, quickly, it is amazing to me that the house
republicans used to call the Sequester the Obama Sequester. Now, they are
claiming credit for keeping it.

BURTON: Right, they are claiming it as a victory. And, what you also
see is that -- You hear these democrats, you hear the president, ready to
move on, ready to do immigration, ready to get things done. You know,
republicans are going to be back to Benghazi and fast & furious, and all
the same old crap that they have been focused on this last year. There is
going to be a real difference going in the election year.

HAYES: That is "All In" for this evening. For now at least, we will
be back live on 11:00 PM, Eastern with the latest from the debt deal, which
is on its way now to the house where they are expected to vote on it
tonight, probably in an hour. Our coverage continues now with the "Rachel
Maddow" show. Good evening, Rachel.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY
BE UPDATED.
END

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