All In   |  September 13, 2013

The real showdown with Congress that's coming

As both a government shutdown and a government default loom, Chris Hayes takes a look at how we got here and what's likely to happen next, with the Washington Post's Ezra Klein and National Review's Robert Costa.

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This content comes from Closed Captioning that was broadcast along with this program.

>>> good evening from new york. i'm chris hayes . tonight, we could be just five legislative days away from a government implosion, but a shocking 44% of americans agree with republicans that we should send the country into an economic abis. also tonight, herpes infected monkeys terrorize florida, but that's not even the craziest headline to come out of the state alone. plus, a job ad for the " wall street journal " tells you everything you need to know about the state of our economy and journalism. we begin tonight with a new poll that shows a plurty of americans favoring imminent catastrophe. nbc news " wall street journal " poll shows 44% of americans opposed to raising the debt ceiling. but only 22% in favor. that is both an upsetting and staggering finds since not raising the debt ceiling would mean a government default and all the cascading miseries after that. what this poll shows is that no one really understands what the debt ceiling means. the last time we did this in june 2011 , a majority didn't want to raise the debt ceiling either, but a month later after more attention had been brought to the subject, not the least of which president obama explaining what it raem meant, those numbers flipped. public supporting the debt ceiling. no one understands what is really going on with the budget in washington . this is the single biggest issue. the single biggest issue, the president and congress are fighting over now, poised to do battle over and no one understands. so let's just take a moment to look at why we are where we are. all right? there are two deadlines coming up. the first is a deadline for the authority for the government to spend money when it runs out. that's known as the continuing resolution . it's a short-term budget extension that expires on september 30th . that as you will note from this calendar is just 17 days from now. if acr isn't passed, the government can't spend more money, it shuts down. a few weeks later between mid october and november 5th , the country hits a so-called debt ceiling. it's this stupid, artificial thing to allow the government to borrow more money to pay its bills. bills it has already incured. it's a different thing that the continuing resolution , but it's another deadline and the thing to understand about the things threatening to happen is that the republican party 's goal to create as many opportunities for crisis as possible so that in each moment of crisis, they can ask for a hostage. that has been a strategy and the reason they have the strategy is they did it once for a big bang in the summer of 2011 and republicans led by the tea party held up the debt ceiling. what they got was a whole process including what's calling the budget control act that led to the sequester. they really cut government spending . they got cuts in the first budget control act. further cuts when the sequester kicked in and ever since, we have had a series of crisis and there is no accident. republicans came in, broke the normal budget process and replaced it with a series of ad hoc measures each with its own deadline, its own hostage and this time around, the hostage is obama care, of course. the affordable care act .

>> for the sake of our economy, we'll continue to do everything we can to repeal, dismantle an defund obama care.

>> they are insisting on defunding obama care about the pride of continuing the resolution.

>> now, americans face the prospect of another republican manufactured crisis to shut down the government. what's interesting to note proposals republicans are putting forward are not proposals. they are proposals to shut down government. they know what they're proposing is not going to pass the senate or be signed by the president.

>> that's where we are as we head into the fall. as we gear up for this fight we're going to be paying attention to, there's going to be a countdown clock to kris i, that's where we are and when people watch this, they feel washington is broken and they are correct. washington is broken because the tea party broke it on purpose. they broke the normal budgetary process, replaced it with government recuring crisis, also, they can use control of one-half of one branch of government. question now, will it work again? joining me now is msnbc analyst, ez ezra klein . i'm going to confess manager to you.

>> i'm here to hear your confession.

>> you guys write about all this like continuing resolution , debt ceiling fight as well as anyone and i can barely bring myself to read it because it is --

>> thanks?

>> it is both so opaque and so frustrating and so, before we get into where we are now, i want you to tell me this and ek explain this. there is a normal budgetary process, right? it doesn't always have to work like this.

>> no, it doesn't. let's try to make this a little less horrible to think about or more horrible the less boring. so, yes, there's a normal budgetary process and it has nothing to do with any of this. what republicans are doing is very simple, makes a perfect amount of sense, they are trying to get leverage with terrible things happening to the economy to get concessions out of president obama . the debt ceiling, government shutdown , it isn't the end of the world . the government stops working for a few days. polls turn against who ever made it stop working. the debt ceiling is a scary one. we're at the five-year anniversary of the financial crisis . of lehman brothers failing. the way to understand the debt ceiling as s that on steroids. the financial crisis is what happens when the world markets thought they knew how it worked and everything they had done up until that moment, all the trades they had made, all the assets they hold, they had the price wrong, they were incorrect. it was what happened when their housing assets proved to be not what they thought. but even more fundamental than housing to the global economy is the idea that the u.s. government is a safe asset that when you buy our debt, the things when we do this things we do, that you can count on us to do rational things to pay you back your money. if the world has to reevaluate what it knows about the u.s. as a functioning economy, that would be a financial storm higher than the one we had in 2008 .

>> here's what's perverse about that. two different things. when they talk about the rez lugo, there's a buff and that's going. you blow that deadline, you get a government shutdown . you blow the debt ceiling for too long, you get something like default. but these two have both become con plated in the coverage and also in the strategy . every day, there's a new article that says to do this on the debt ceiling. should we take this bluffs seriously?

>> there is no strategy . there is no such thing as a republican strategy . there was a time in 2011 , it was a whole different world. 2011 was an absent storm against the democrats. john boehner and eric cantor , they had a strategy and the reason it kind of worked was because of a lot of people felt in the white house the public really was turning against democratic view on the economy and so there was legitimacy. nobody believes that now includiinclude ing john boehner and eric cantor . there's highly conservative activist groups trying to do a sort of 2011 like maneuver, but the republican leadership knows it won't work. the other day, the republicans tried to solve this problem an put something on the floor that would keep the government funded until mid december. they pulled it off the floor because they didn't have the votes. they had about 200 votes. and so, you have a situation that is different here and that what you have now is not a united republican party . it is a republican party at war with itself as some republicans try to move forward in a way that is somewhat consummate and then some conservatives basically delusionally argue we can just get barack obama to defund. if we just threaten bad enough consequences. that's going to backfire on the whole party.

>> i want you to hold that thought because i want to bring in washington editor for conservative national review , well sourced in the house republican caucus . you heard what ezra just said, that there is no strategy or i think this is more accurate. there is a doomed strategy on the part of the activist base and no strategy on the part of the leadership to avoid doom. is that correct?

>> i think ezra brought up a great point. you saw eric cantor trying to come up with this plan and that would allow conservatives, allow the right to have a vote on defunding, but not really attach it to the continues resolution. the minute he brought this up, the conservatives they revolted. you have a republican leadership that want to fund the government, but they don't have the vote.

>> you've got 233 house republicans . you need 218 to pass something and 33 republicans want to fully defund obama care. you had harry reid today saying about john boehner , i feel sorry for him. everyone's constantly looking at him saying he has essentially the worst job in washington . what is the way out of this box?

>> it's a great question. i think as much it's not a great way out of the box. what you see speaker boehner doing behind the scenes , don't have a shutdown on the government. he is using the 2011 model. he says i was able to get concessions in 2011 . we'll fight for them in december. come with me. let's fight on the debt limit. i don't want to have a shutdown. it's not going to help you with your races in 2014 .

>> the thing about that is, that's an even higher strategy .

>> this is terrifying that this is the argument. this is like trading a bad glue for septic shock. it is the worst trait in the history of all trades you could imagine and what you see this and this is a common criticism of boehner and cantor's leadership strategies. they have a tendency to just get through this crisis today by promising whatever they need to get through tomorrow and when tomorrow comes, maybe by tomorrow, wall street will begin screaming at republicans and everybody will tell them, you can't do this on the debt ceiling, but they have these tendencies to make promises they can't back up later. they can't get president obama to delay obama care for a year to raise the debt ceiling. he's not going to negotiate with them on the debt ceiling and they kind of know it already and they have no way of getting out of that and all they're trying to do right now is live through this next deadline.

>> okay, here's the perverse truth at the heart of this. you end up in this you know, use the metaphor of chicken in these various encounters before, right? and from a game theory perspective, if one party seems genuinely irrationally self-destructive, then they end up winning the you know, the impact because the other party reacts and so, robert, my sense is that there are tea party folks who have convinced themselves, we have won before using this strategy . if we bluff, if we're willing to like take the car over the cliff, like we'll win this one as well.

>> that's exactly right. when i speak to conservative house members, i say how do you really see this unfolding. tell me what your end game is here. they say look, we don't think we're going to get a shut down, but if we push hard enough on the debt limit, the argument is maybe we don't defund obama care, but we could delay the individual mandate, other provisions in the law. that's their hope.

>> ezra , is there any chance that what ends up happening if you get this kind of con confrontation at the debt ceiling, we're headed towards this catastrophic ending, that the white house has some kind of mid way negotiating position like delaying the mandate or picking up different parts of obama care to throw the conservatives a bone?

>> no. the white house has complete religion on the debt ceiling. they believe not just about this negotiation, but about as a matter of presidential legacy. if they are the white house remembered for permitting the debt ceiling to become a routine matter of hostage taking in american politics , imagine you just think there's a 10% chance of any debt ceiling negotiation going on. it's not very big, but over ten years, it's going to go wrong. this white house duh not want their legacy to be they set in motion the chain of events that red to america's role as an economic corner stone of the world being degraded. so they believe not just as matter of this negotiation, but all negotiations going forward. they need to break this habit now and that's why i am scared going into this. nobody believes we're likely to go over the debt ceiling, but if you look at the positions on the table now, the white house 's we will not negotiate and boehner 's, right now, the only thing that is there is the default.

>> not only that, but that boehner and cantor and the house leadership are essentially getting through the continuing resolution fight in the near term by promising a bigger fight down the road on the more consequential thing, this is the debt ceiling. which means they are doubling down. they're painting themselves in a corner to get through this, then they're goin to have their credibility is going to be on the line. gentlemen, thank you both.

>> thank you.

>>> there are good reasons and bad reasons to reschedule an execution. good reasons are new evidence and appeals. we'll tell you about a very, very bad reason. coming up. did