Tonights pbs newshour. Major funding for the pbs newshour has been provided by thats health in numbers. United healthcare. Catherine t. Macarthur foundation. Committed to building a more just, verdant and peaceful world. More information at macfound. Org and with the ongoing support of these institutions and foundations. And. This program was made possible by the corporation for public broadcasting. And by contributions to your pbs station from viewers like you. Thank you. Woodruff our lead story tonight the nations political leaders convened for a lateday meeting at the white house, but there was no sign of a deal to get Government Operations back on track. Newshour Congressional Correspondent kwame holman begins our coverage. Reporter with signs of the shutdown evident everywhere the president called in the house and Senate Leaders to talk over the stalemate. Going in, republicans said they assume hes ready to negotiate. But, in an interview with cnbc before the meeting the president insisted that first, congress has to pass a bill to fund the government, with no strings attached. Until we get that done, until we make sure that Congress Allows treasury to pay for things that congress itself already authorized. We are not going to engage in a series of negotiations. Reporter here at the other end of pennsylvania avenue, House Republicans forged ahead with five spending bills designed to reopen parts of the government, despite warnings that Senate Democrats will reject them. The list included National Parks, veterans programs, the d. C. Government, medical research and salaries for members of the national guard. Outside the capitol, protesters greeted house g. O. P. Leaders as they held a news conference. But majority leader eric cantor said they mean to keep up their strategy. We ought to be working as hard as we can to open up thenr government in all the areas that we agree on. No one disagrees that these memorials should be open. No one disagrees that we shouldnt be funding the n. I. H. No one, no one disagrees that we should be helping our veterans and the kinds of services that they need. Reporter inside, on the house floor, democrats, including californias barbara lee, dismissed that approach. Instead of working on a serious option to reopen the government, republicans latest strategy now and this is really cynical, thats to exploit our veterans and to exploit the people of the District Of Columbia by voting on piecemeal bills that will not end impacts of a shutdown that extend across the country. Reporter meanwhile, in the senate, democratic majority leader harry reid telephoned House Speaker john boehner, appealing for a vote on a government funding bill, free of provisions aimed at the president S Health Care law. Hes sitting on a bill that would reopen the government right now. This bill would pass in a matter of minutes if he just let democrats and republicans vote. He doesnt even have to vote for it. Let him vote against it, but let the house work its will. Reporter if that happens, reid promised, the senate will negotiate a longterm budget deal. A spokesman for boehner brushed aside the pitch, calling it not much of an offer. Amid the sparring, National Parks and major monuments were shuttered for a second day, a number of social Services Also were cut off, including head start programs for lowincome children. And nutritional food programs, such as wic for women with infant children. Douglas greenaway is head of the national wic association, based in washington. With the Government Shutdown, theres a level of uncertainty that not only Program Administrators are experiencing, but certainly the women who participate in the program. Reporter the National Institutes of health, meanwhile, turned away patients seeking to enroll in experimental treatments. And there were warnings at a Senate Hearing about national security, from james clapper, director of national intelligence. Ive been in the intelligence business for about 50 years. Id never seen anything like that were already taking, that this seriously damages our ability to protect the safety and security of this nation and its citizens. Reporter with no end in sight, the odds also were growing that the shutdown stalemate will merge with an expected fight over raising the debt ceiling. Leaders of major Financial Firms met with the president today to discuss the potential economic harm. As things stand, the federal government will default on its obligations unless Congress Lifts the Borrowing Limit by october 17. Woodruff well have more on all of this, after the news summary. Ifill wall street spent the day trying to figure out how long the Government Shutdown will last. Defense company stocks, in particular, took a hit. Overall, the Dow Jones Industrial average lost 58 points to close at 15,133. The nasdaq fell about three points to close at 3,815. This was day two of enrollment for the new governmentrun Health Insurance exchanges created by the Affordable Care act. Yesterdays start was a rocky one, as websites and phone lines were overwhelmed by high demand. There was no word on how many people actually managed to sign up. More on this, later in the program. In iran, the Parliament Today endorsed president Hassan Rouhanis diplomatic outreach to the west. At the u. N. Last week, rouhani signaled hes open to new dialogue on irans disputed nuclear program. In a statement today, 230 out of 290 iranian lawmakers backed that effort. Rouhani rejected sharp criticism from israeli Prime Minister benjamin netanyahu, who told the u. N. That iran is not to be trusted. translated the israelis, when they see that their sword has become blunt, when they see that lodge inand reason is dominating the world, they certainly get upset. This is absolutely normal. We shouldnt expect anything other than this of the israelis. I think netanyahus comments show us we are on the right and precise path. Ifill separately, diplomats reported little progress in the latest meetings between iran and the u. N. s nuclear watchdog. There may have been fewer attackers involved in last months kenyan mall massacre than first believed. A senior official said today, closed Circuit Television footage actually shows just four men carrying automatic weapons, not the ten to 15 authorities initially claimed. The Somali Militant Group al shabab claimed responsibility for the attack that killed at least 67 people. Eight people died in an accident it shut down part of interstate chrysler is recalling an estimated 132,000 Sport Utility vehicles, mostly in the u. S. The Company Announced today that its 2014 jeep grand cherokees may have a Software Problem that blacks out the dashboard display. Chrysler said it has not received any reports of accidents related to the glitch. Tom clancy, the author who virtually invented hightech military thrillers, has died. He passed away yesterday, in baltimore. Clancy first climbed to the top of the bestseller lists in 1984 with the hunt for red october. That book and several others featuring c. I. A. Hero jack ryan were later made into movies. Tom clancy was 66 years old. Well have more on him at the end of the program. Ifill also ahead, the price tag for the shutdown; the opening rush and snags for the health care law; the shortage of brides in india; a massive online drug bust. Plus, whats changed and what hasnt for american women. Woodruff and we return to the shutdown of most of the federal government with a closer look at the economic fallout. For that, we turn to a pair of economists who have been watching and writing on this. Diane swonk of Mesirow Financial in chicago and mark zandi of moodysanalytics. Com welcome to the program. Mark zandi, do you first, is there an affect on the economy . Were only in the second day of this. Yeah. Federal employees arent going to work. I was in d. C. Today talking to a taxicab driver who said he had to work 14 hours yesterday and couldnt get the money he normally gets. Tourist destinations are being affected. Independence hall in philadelphia, my hometown, is shut down and thats affecting people. Pretty soon its going to be tougher to get an f. H. A. Mortgage loan, a Small BusinessAdministration Loan for a Small Business, student loans. Its more of a nuisance so far, but its starting to have economic consequence. Woodruff diane swonk, who are you seeing in terms of impact so far . I agree mark. Theres the nearterm impact thats more of an inconvenience but is certainly still a cost to the economy. But as the shutdown gets longer the costs of it tend to compound over time. They get more into the private sector, more spillover effects. We also dont know for sure whether or not these federal employees who are furloughed not by any choice of their own would be paid retroactively. That would be the first time they werent paid retro actively but if theyre not theyll be down that money that they could have been earning if they had been working and the government had been open. Soz we start to see this effect cast cade and the important issue the spillover to the private sector cab drivers, restaurants i know about a case in kentucky where 4,000 i. R. S. Agents didnt show up for work. Usually people dont worry about the i. R. S. But they do now. The president of the chamber of commerce in that little town in kentucky said none of the restaurants, they were all dead and all of the retail establishments were all dead. And each week that this goes on you could see starting to shave real growth off of g. D. P. We could see as much as three tenths with a twoweek is shutdown and up to a percent or more. I know mark has had similar estimates as you go into a month of a shutdown. Woodruff exact sector by sector, mark . As you look at this, is there one sector in particular . We reported the Defense Industry has already taken a hit in investment. What do you look for . Yeah, i think obviously Defense Sector is hit hard. The travel, tourism, leisure, Hospitality Industries are getting hit hard. People dont place much emphasis on this but these are a sector of the economy that creates a lot of jobs. If you look since the recovery began, this is the one sector thats added the most jobs to the economy. Woodruff you mean the so travel destinations, all of the restaurants, everything that caters to people who just go see the liberty bell or see the washington monument. Woodruff what other sectors, diane, would you look at . And geographically how would you look at this . One thinks of washington, weve mentioned that. What about military bases in the area around those . Absolutely. Yes, we also see these workers, census workers all across the country, 85 of federal workers workout side of washington, d. C. So as bad as it is in washington, these are workers that vote all across the country which believe me its having an impact. Like i mentioned, the 4,000 workers in kentucky. We have workers here in illinois that clearly arent working at this stage of the game. The roads are not as clogged and the retailers that get the fallout. But the Auto Industry is concerned. Ive gotten several calls from detroit concerned about the uncertainty created by this, people not knowing what this means. As the events continue fall out as we approach the debt ceiling, that can rock Financial Markets and that causes hesitation. Hesitation in an economy thats already weak is our greatest enemy. When consumers are uncertain they dont buy big ticket items or luxury items. They dont spend on the extra meal out. On the flip side, we also see more importantly businesses not willing to pull the trigger and hire, which is something mark was talking about. Weve seen the largest hiring in the leisure and Hospitality Industries but you wont see much of that at all, that pullback as we enter into the Holiday Season is really critical. Woodruff i think some of the people looking at this, mark zandi, are wondering whats the affect on ordinary people. And, again, this assumes this is a shutdown that continues and we have no way of knowing how long it will last. The effect on ordinary people versus the affect on markets, wall street, investors. Well, you know, as this drags on it will affect people more directly in terms of getting loans, in terms of getting passports. But the key thing here is if this extends for another week the concerns about the debt limit are going to come into play and thats much more significant than the shutdown. The shutdown is no big deal if its few days. But the we get to the debt limit, thats a huge issue. Woodruff now what sectors are we talking about then . Where does the worry show up . Its everybody then. If we hit the debt limit what that means is that the treasury can only pay the bills for which it has enough cash. So it wont have enough cash to pay all the bills and there are a lot of bills. Now theyre going to make their payments to the debt holders, the people owning treasury bonds, that leaves less for everyone else so that means medicare and medicaid recipients. If we dont settle this by november 1 Social Security recipients wont get their check on times. Woodruff diane, how do you distinguish about the worry about what might happens and what happens if the country actually does not meet the debt limit . If we dont raise the debt limit, youre talking about a selfinflicted financial disaster and we already had one five years ago and one may argue it was selfinflicted. However it was Collateral Damage that came from that, came from many areas of the country. This is purely selfinflicted by washingtons own inability to act if we dont raise the debt limit and it has reverberations that go around the world. Its a shot that will be heard around the world again and again because we wont be able to value what many people see as a riskless asset, the riskfree asset which is the treasury bond. When you cant value that, you cant value any other asset in the world. And thats destabilizing to global Financial Markets as well as the u. S. And we saw as in 2008 this was an unprecedented event. This would be another unprecedented event. I dont think we need to go there at this stage of the game. Pelley the cash shortfall is so significant. It is huge. And the bills that wont get paid are so large it will send our economy into immediate recession and investors will know this right away so stock prices are going to decline, Interest Rates will rise. That hurts everybody rapidly. Woodruff again, this assumes the debt limit is not raised. But this scenario is so dark that its hard for me to imagine the policymakers wont come to terms before we actually hit this debt limit because its catastrophic to the economy and you would though their own political futures that they would get this together. Woodruff you both have mentioned consumers but its been pointed out to me that the country has now been in the last few years been through several of these blows where congress has come right up to the brink, has been through the kind of thing that were going through now even though the government hasnt completely shut down. Does there come a point though, diane swonk, when consumers get used to it . Is it possible they could get so accustomed to washington hitting one of these moments when we know its going to take days or weeks to figure it out . Well, you know, weve seen washington turn a deaf ear to capitol hill and they didnt really sorry, wall street already turned a deaf ear to capitol hill where they didnt react initial they much to the Government Shutdown. But i think marks very correct. Its unimaginable what would happen because the recession would be immediate and you would feel it very quickly. And i dont think consumers can ignore it forever. I think theres an inconvenience and if youre in one of these places you feel it right away and those consumers are workers who feel it right away, as the cab driver mark mentioned at the beginning of the show. So i dont think its something you can completely turn a deaf ear to. That said, we are getting wary of this and i think everyone sort of feels that washingtons cried wolf too many times. Look, you know, if all were talking about is a Government Shutdown, this isnt going to affect many consumers. But if we get to the debt limit theyll know it because everything will be going south pretty quickly and theyll be pulling back very rapidly because theyll be scared like everybody else. If they even sense that a Social Security payment is not going to be made on time, can you imagine the bedlam that will l create among people . Theyll stop spending. So theres no doubt in my mind they will pull back. Right. Woodruff we hear you both. Mark zandi, diane swonk, thank you. Thanks, judy. Woodruff we have more about the impact of the shutdown online including patients who have been turned away at the National Institutes of health. Thats on our rundown blog. Ifill as the new healthcare exchanges began their second day in operation, interest remained high a