COKIE ROBERTS: And how long do you expect it to stay closed?

ALICE RIVLIN: All of us hope that it isn't closed for very long, but this is a difficult negotiation, and it's very hard to tell. It might be one day, it might be two or three, or more.

COKIE ROBERTS: Now, you heard John Cochran just say that there was a plan being circulated of pulling out the Medicare part of it and insisting on the President signing onto a balanced budget in seven years. Was that what you were hearing in the meeting?

ALICE RIVLIN: There was some of that in the meeting. I think the one thing that is clear is that Medicare is now off the table. The Republicans tried to attach a premium increase to the continuing resolution. It was vetoed by the President and they certainly don't have the votes to pass that over veto.

COKIE ROBERTS: So- so the argument now is back to this fundamental balancing the budget argument?

ALICE RIVLIN: It's back to what conditions, if any, should there be on a continuing resolution? Now, we don't-

COKIE ROBERTS: A continuing resolution meaning that piece of legislation to keep the government going?

ALICE RIVLIN: Exactly. And since all we're talking about - we're not talking about the budget here - we are talking about keeping the government going while the budget debate goes on. The Republicans haven't sent us a budget yet, they haven't finished their job. So we are only talking about how to keep the government open, and extraneous matters like Medicare premium increases don't belong on that kind of legislation.

COKIE ROBERTS: Ms. Rivlin, you have been- now you're at the White House end of Pennsylvania Avenue. You have been at the other end, as head of the Congressional Budget Office. You have watched these shutdowns, where the government runs out of money, and all of that, for many years. The American people are saying, in all of the polls and all of the interviews, 'We're sick of this. We think that this government should do better than that.' I mean, what do you say to them? Why is this going on? Why are you all meeting in the middle of the night and not able to keep the government open?

ALICE RIVLIN: Well, I wish we weren't, and I think it's really quite stupid and counterproductive to be closing down the government. For reasons best known to themselves, the Republican majority in Congress decided they wanted to do that. They had a simple way out. They could have signed a clean, simple bill that would keep the government open, but they chose not to do that. They chose to attach to that bill conditions that they knew the President could not accept. They wanted him to veto, they wanted to close down the government.

COKIE ROBERTS: But you've seen that happen over the years, too. I remember Democrats putting aid to the Contras on bills that they wanted President Reagan to sign. You've seen all of this go on, and apparently, what we're seeing now in the polls is a cumulative disgust over the years with what's been going on here.

ALICE RIVLIN: Well, that's not surprising, but the President feels very strongly that- not that we should close down the government, clearly we should not. But he cannot accept conditions that are simply against the values that this administration holds, and raising Medicare premiums is one of those, and accepting other conditions on the budget right now just cannot be done.

COKIE ROBERTS: Of course, there are those who say that he is just playing politics with Medicare. Very quickly, do you have an answer to that?

ALICE RIVLIN: Politics is what presidents are elected to do, but politics is a very important thing. It is reflecting the values of the American people. There are two budgets before the Congress and before the public. The one that we are in favor of, we believe reflects the values of the American public, the common ground on which we stand. It is not extreme and it does get to balance.

COKIE ROBERTS: All right. Thank you very much, Alice Rivlin.


COKIE ROBERTS: Joining us from Capitol Hill, Representative John Kasich, chairman of the House Budget Committee. Congressman Kasich, first of all, thank you for staying up so very late. You've just heard Alice Rivlin saying that they- that the President won't back down on basic values. Is there any backing down on the Republican side?


REP JOHN KASICH, (R), CHAIRMAN, BUDGET COMMITTEE: Well, the most basic value, Cokie, is that we, frankly, balance the budget so that the next generation is going to have decent jobs and be able to buy a house. I mean, when mothers and fathers think about what their children are going to have in 15 years, they're very worried about it, and if we don't balance the budget, there will be a erosion of fundamental American values.

COKIE ROBERTS: Well, is-

REP JOHN KASICH: So we're not going to back down from balancing the budget and saving the next generation.

COKIE ROBERTS: But what about on this question of adding a balanced budget to this just short term, 18 day, by tomorrow 17 day, resolution to keep the government going, so that you don't have to go through all of this mess?

REP JOHN KASICH: Well, the continuing resolution is- is absolutely consistent with our plan to balance the budget. What we say in there is for programs that we flat out zero out, like the Interstate Commerce Commission, the oldest bureaucracy in America, we want to zero that out, we want to get started on that, and the administration says no. We didn't even zero it out in our continuing resolution, we funded it at 60 percent. They said, well, that's not good enough. Look, what we're doing in the short term is entirely consistent with what we want to do in the long term, and we want to stop the politics as usual. Cokie, look-

COKIE ROBERTS: But-

REP JOHN KASICH: -two years ago, Tim Penny, a Democrat from Minnesota, and I fought the fight to cut one penny out of every dollar. The same special interests and the same administration worked us over, they defeated this bipartisan effort. We couldn't even cut a penny-

COKIE ROBERTS: But you-

REP JOHN KASICH: -and I'll tell you, it's time for change.

COKIE ROBERTS: -but you say you want to stop politics as usual. The voters clearly think this is not only politics as usual, but it's Washington as usual, and the same old mess that they hate in Washington, and in our poll tonight, it's Republicans, 64 percent of the people say Republicans are playing politics with this.

REP JOHN KASICH: I know. Cokie, the easiest thing to do in this city is pass out money. That's why we're $5 trillion in debt. That's why the next generation is in trouble. That's why a kid born today is going to give government 82 percent of everything he or she earns. We're-

COKIE ROBERTS: But nobody- but you know, people don't disagree with you on that. People want to balance the budget, but they are saying they don't, in all of the polling, that they don't want to balance it your way.

REP JOHN KASICH: Look, the problem is, we're- our- under our plan to balance the budget, federal spending will increase by $3 trillion over the next seven years more than what we spent in the last seven years. If people knew that, they would go and say, 'Why are you spending so much?' Our problem is, the President runs around and uses the word 'extreme' and 'cuts' and everything else. We're not cutting spending, we're slowing the growth. The President, he doesn't have any budget. We sent his budget to be analyzed by the budget office here in Washington, and guess what-

COKIE ROBERTS: Well-

REP JOHN KASICH: -they said he's got deficits of $200 billion in the out years.

COKIE ROBERTS: Well-

REP JOHN KASICH: So, look, we're willing to sit down and negotiate priorities. We're willing to be flexible on that, but Cokie, this is the last best chance we have to save this next generation by just putting ourselves on a slight diet. When the people find out what this is, we're going to be fine.

COKIE ROBERTS: Well, give me your sense of what happens now. There was a meeting in the middle of the night tonight. It broke up with everybody saying, 'We're nowhere.' Now what?

REP JOHN KASICH: Well, Leon Panetta and Alice Rivlin are going to come up here tomorrow and they're going to meet with Pete Domenici and- and me, and we're going to have a discussion about is there any common ground. And-

COKIE ROBERTS: And meanwhile, the government's shut down, and it's costing us all money.

REP JOHN KASICH: Well, I've just to got to tell you, Cokie, that, you know, maybe we can work something out on a continuing resolution, but it's got to be consistent with the plan to balance the budget. We know that there's going to be some political hits we're going to take in this, but frankly, Cokie, in my career, this is the best chance I have to serve America. This is not about politics and trying to blame the other side. I've done more deals with Democrats, putting things together like Tim Penny, than any Republican, and you know that. This is about the principle of finally saying no to special interest groups, balancing the budget, and saving the children of the next generation and doing ourselves some good by lowering interest rates.

COKIE ROBERTS: Thank you, John Kasich, chairman of the Budget Committee. We'll see if we get any kind of deal, and I'll be back-

REP JOHN KASICH: Well, I hope we will.

COKIE ROBERTS: -and I'll be back with a special program note in a moment.

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COKIE ROBERTS: Tomorrow night, Ted Koppel moderates a special Nightline town meeting from Jerusalem, 'Thou Shalt Not Kill.' Among the guests, acting Israeli prime minister Shimon Peres and Leah Rabin, widow of the assassinated prime minister. That's our broadcast for tonight. I'm Cokie Roberts in Washington. For all of us here at ABC News, good night.