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Kelly File

Questions raised over Melania Trump and US immigration law; Clinton and Obama emphasize Iran payment is 'old news'

This is a rush transcript from "The Kelly File," August 4, 2016. This copy may not be in its final form and may be updated.

MEGYN KELLY, HOST: Breaking tonight. After days of campaign trail turmoil from battling a Gold Star family to rehashing old controversies, Donald Trump's closest advisers say big changes are coming as a huge haul of new polls give us a revealing new look at the state of this race less than 100 days out from the election.

Good evening and welcome to "The Kelly File," everyone. I'm Megyn Kelly.  Exactly seven days after the end of the Democratic National Convention in Philadelphia, Hillary Clinton is seeing her biggest polling bounce in nearly six weeks. And that is not all. In multiple battleground states, critical to winning the White House, new polls now show Mrs.  Clinton is leading. In Florida, she's up by six points. In Pennsylvania, a state Trump wants, she's up by 11 points. Michigan, she has a nine-point lead.

Lots of white working class voters there, considered to be Trump voters, but she's up 41 to 32 percent. And in New Hampshire, a whopping -- yes, wow. Seventeen points in that state there. We have a big lineup for you tonight including Larry Sabato from the University of Virginia Center for Politics. He's got new projections state by state. And then Bill Bennett, former education secretary and host of "The Bill Bennett Podcast" weighs in on the state of the race.

But we begin with senior national correspondent John Roberts reporting from Portland, Maine, as a Trump rally there is just wrapping up. John.

JOHN ROBERTS, FOX NEWS SENIOR NATIONAL CORRESPONDENT: Megyn, you know, the campaign was really pushing back hard against this idea of some sort of intervention. I mean when we were with you last night, we cast it more as sort of a strategic recalculation or redirection of the message. But it's clear that somebody has gotten into Donald Trump's ear because in two events that he had in Florida yesterday and again here in Portland, Maine, today he was absolutely for the most part strictly on message.

No forays into those tangential impulsive eruptions that have gotten him in to so much trouble since the convention. What he did today really was he told people here in the crowd what he would do, should he become president.  And then as Republicans have been asking of him time and time again, really kind of laid into a prosecution of Hillary Clinton's record and that of the Obama administration. Particularly zeroing in on a couple of issues, one of them being the creation of ISIS. Listen to what he said.

(BEGIN VIDEO CLIP)

DONALD TRUMP, R-PRESIDENTIAL NOMINEE: The Obama/Clinton foreign policy has handed huge portions of Iraq, Libya, Syria, and other areas to ISIS.  Okay. Huge portions. We don't know. Is ISIS coming into our country?

(END VIDEO CLIP)

ROBERTS: Another area that Trump focused in on was Hillary Clinton's interview with Chris Wallace on "FOX NEWS SUNDAY" over the weekend and how what she said didn't really seem to match what James Comey said she did.  Listen to how Trump cast it.

(BEGIN VIDEO CLIP)

TRUMP: If I ever did that interview and if I ever gave that answer, I want to tell you I think I'd get the electric chair, I swear. I think I would.  It would be headlines all over the world. It's true. Double standard.  This is a quadruple standard.

(END VIDEO CLIP)

ROBERTS: One ardent Trump supporter came up to me after the speech and said the headlines should be that he stuck to the script. Another fellow who told me before the rally that Trump is his best hope, he believes, to win the presidency over Hillary Clinton, but he's just not looking presidential. He came up to me and said he really did a good job. And, Megyn, he even managed in the speech here in Portland today to not mention you. So that is an improvement over yesterday -- Megyn.

KELLY: Excellent. John Roberts, thank you.

Joining us now with more, Larry Sabato, who just updated his projections for the Electoral College vote, which his crystal ball has been looking at for months now. Larry, good to see you. And really the shocking thing about your update is it hasn't changed. Your projection has not changed in months now. Some states moved a little like, this one's more likely Trump.  This one's more likely Clinton. But tell us what the bottom-line is.

LARRY SABATO, DIRECTOR, UVA CENTER FOR POLITICS: The bottom-line is Hillary Clinton, 347 electoral votes. Donald Trump, 191. And, Megyn, you're absolutely right. While we've fiddled with a few states and increased or decreased their likelihood to vote for one or the other candidate, the bottom-line numbers have been the same since March. We don't rely simply on polling. Polls go up, and polls go down. And right now Hillary Clinton's got an incredible convention bounce. But some of that will fade quickly.

KELLY: Mm-hmm. And so I mean obviously you need 270 to win. So you have her winning by a lot. I mean would that be considered a landslide if she pulled in those numbers?

Not a landslide, but a very healthy win, no question about it. And, remember, it's early August. Lots of things happen. But Donald Trump has got to make some things happen.

KELLY: Yes. So that's my question to you.

SABATO: Yes.

KELLY: The only states that you moved like this one is looking maybe a little bit more Trump, was Pennsylvania, like a little, you thought. And then you thought Virginia, Arizona, Georgia, and Utah and Colorado all moved a little closer to Hillary. So what does Trump need to do? I mean what kind of -- given what you put into your mix, what does he need to do to change these numbers?

SABATO: Megyn, I only see two issues that can actually elect him and a couple of paths in the Electoral College. The two issues are the economy, which he should be talking about morning, noon, and night, but somehow doesn't get around to half or more of the time. And, of course, terrorism.  Those are the two things that can elect him because the incumbent administration is held responsible for both of those.

KELLY: Mm-hmm.

SABATO: He's got to focus like a laser on both of those every day. Today was a good start, but is it going to continue, or is he going to lose focus again?

KELLY: In your history of studying these elections, Larry, has somebody who is, you know, looking at the type of polling that Trump is looking at and looking at these likely projections on an Electoral College map as you were showing, can they turn it around? Has that happened? Well, you know, he's got 100 days left, but he's got some time.

SABATO: Yes. The patron saint of losing candidates, Harry Truman, turned it around in 1948.

KELLY: Mm-hmm.

SABATO: So, you know, if we hear in late October Donald Trump invoking Harry Truman, well, we'll know that that's his chance to win and also that he probably isn't going to.

KELLY: We'll wait and see how that folds out. Larry, wait, before I let you go, I've been wanting to ask you this question. Are you related to this My Pillow guy? Look. Look. Do you know him? Every time I see him, I think of you.

SABATO: I think he's a distant cousin, and he has never even given me a free pillow, Megyn.

(LAUGHTER)

I'm also distantly related to Antonio Sabato who was at the Republican convention. We are almost twins. We've got the same six-pack and everything.

KELLY: I was thinking the same thing when I saw him and you. Larry, thank you.

SABATO: Thanks.

KELLY: I've been dying to ask him that.

Joining us now with more, Bill Bennett, who looks nothing like Larry.  Great to see you, Bill. So, here's my question for you. So you heard Larry. He's a straight shooter.  

BILL BENNETT, HOST, "THE BILL BENNETT PODCAST": Wait, wait.

KELLY: What?

BENNETT: Wait. Three mypillows.com. Three.

KELLY: Are they good? Do you recommend them?

BENNETT: They're fabulous. I don't look like anybody, but I love my My Pillow.

KELLY: Who knew? There you go. And like, they pay for ad space, and they didn't even pay for this. All right. So the question is whether, you know, you heard Larry say what he thinks Trump has to do to turn around those polls and get himself back on the streets. But many people believe Trump should not do that. Trump should be Trump. Your thoughts?

BENNETT: Well, Trump should be Trump, but Trump should be Trump on the issues. And I would remind everybody that no one has voted yet. Hello?  The thoughts of his demise, the announcement of his demise and political death are premature. I was talking to your researchers, too, before the show, Megyn, your excellent people. About July 25th, Donald Trump had a lead, according to 538, you know, Nate Silver, 51 percent chance of winning the election. Now it's what? August 4th, August 5th. I mean things change, and things change fast.

KELLY: Right.

BENNETT: So let's remember that.

KELLY: That's absolutely right. I was just looking at that myself. One week ago, the Real Clear Politics average had Trump up two points. Now, eight days later, he's six points behind. So it's an eight-point swing in the average of polling, which means Trump had a very bad week, but it doesn't mean he's done.

BENNETT: Right. That's because a lot of the American people are saying, I don't like him, and I don't like her. And there's a lot of people in the middle. And what Trump needs to do is -- I agree with Larry -- stick to those two issues about ISIS and the economy. 1.2 to five percent growth in the second quarter. The only president in history not to have more than three-and-a-half percent growth in any single year. And I would add a third I to that, and that's immigration. But what he has to do is stop making people pay attention to his liabilities and make them pay attention to her liabilities.

KELLY: Mm-hmm. If we see sort of a straight and narrow Trump, right, for the next couple of months, like on those issues, not making, quote, unquote, "gaffes," is that all it takes? You know, do you think that's all it will take for him to change his numbers and win?

BENNETT: No. I think it will take some argument, some serious arguments about those issues. And I think, as I was saying to somebody the other day. He said, you know, you wrote the book of virtues Bill Bennett. How can you be supporting Trump? And what I say is, I understand how you feel about some of the things he said. But it may be better to lower your standards on things the guy says temporarily than to lose your country permanently.

Just think what the stakes are. Think about the Supreme Court. Think about foreign policy. Think about the economy. These are very serious matters. Our friend Paul Ryan reminds us we only have a very few years to turn back this economy. So he needs to make the case on those issues. But he can still be Trump. I don't think Trump ever stops being Trump.

KELLY: Mm-hmm.

BENNETT: -- said of Edmond Burke, he had the gift of always being himself.  I mean, if he starts acting like George Herbert Walker Bush, it won't happen.

KELLY: We're going to know, yes. Good point. Bill, it's a pleasure.

BENNETT: Always. Thank you, Megyn. Thank you.

KELLY: Sweet dreams. I'm just picturing Bill tonight. I'm getting one.  My pillows are too, like big. Do you ever have -- they're like overly fluffy. It's like this is unnatural. You know, he should send me one for free after all this. I don't think I'm allowed to ask for that.

Moving on, we are also tracking new questions tonight about whether Hillary Clinton's fingerprints are all over one of the more controversial deals of Mr. Obama's entire presidency. The reports that we paid 400 million bucks in cash to Iran in a cash-for-hostages trade.

Charles Krauthammer is here on that.

Plus, the larger media today lost its mind over questions of whether Melania Trump is an illegal immigrant. Howie Kurtz and Governor Mike Huckabee are next on how this started and what it's all about.

(BEGIN VIDEO CLIP)

MELANIA TRUMP, WIFE OF DONALD TRUMP: I follow the law. I follow a law the way it's supposed to be.

(END VIDEO CLIP)

KELLY: Developing tonight, we are watching the fallout from a day long media frenzy over the question of whether Donald Trump's wife, Melania, is in this country illegally. Ironically the investigation started after "The New York Post" dug up some decades old nude pictures of Melania from when she just started her modeling career in New York City. Then some journalist said, that's a story I would like to be assigned to, and started digging and digging and digging.

And Trace Gallagher was one of the ones who raised his hand. And he is here with the details tonight. Trace.

TRACE GALLAGHER, FOX NEWS CORRESPONDENT: Only looked at them once, Megyn.  Look, there is still no concrete evidence that Melania Trump has ever misrepresented her immigration status. And in fairness, one of the reporters bringing this information to light has had issues with Melania Trump before. But there are certainly inconsistencies in the various statements Melania has made over the years. For example, Trump says she first came to New York in 1996, but that nude photo shoot you talked about of then Melania Knauss, was taken in New York in 1995 for the January '96 edition of the now defunct Max Magazine.

For Melania Trump to have legally worked in the U.S. in '95, she would have needed an H1 B visa, which is valid for at least three years. But in her own words, Melania Trump suggested she wasn't here on a long-term visa but rather a temporary visa, telling Harper's Bazaar Magazine, quote, "you follow the rules. You follow the law." Every few months you need to fly back to Europe and stamp your visa. After a few visas, I applied for a green card and got it in 2001. But immigration lawyers say if she truly was here on a visa that needed to be stamped in her own country every six months, she would not have been authorized to work in the U.S.

And if she lied about intending to work, it's visa fraud, which could jeopardize her current citizenship even though she's married to a U.S. citizen. The Trump campaign is standing by Melania's statement, which reads, quote, "I have at all times been in full compliance with the immigration laws of this country, period. Any allegation to the contrary is simply untrue." And tonight, a partner in the Paris modeling agency that Melania worked for in the mid-90s is backing up her claim, saying Melania was working in the U.S. on a legal, long-term H1B visa and that she's mistaken about needing to get it stamped every few months.  Immigration records could clear this whole thing up, but they cannot be released without Melania Trump's permission -- Megyn.

KELLY: Wow. Trace, thank you.

Joining me now, Howie Kurtz, host of FOX News "MEDIA BUZZ." So they're hot on the trail of the most relevant issue to voters. You know, you got to tip your hat, whether she had the thing stamped or had an H1B visa. And you know, America awaits the answer.

HOWIE KURTZ, HOST, "MEDIA BUZZ": What? Sorry, I was distracted by those old modeling photos.

KELLY: Well, she's a beautiful woman.

KURTZ: This Melania story is so totally overblown. And we were actually having a debate about what kind of visa she had in 1995 and whether she was allowed under the terms of that visa depending on what it was to do some modeling work on the side. Who cares? There's no evidence that she didn't become an American citizen legally, and it's kind of sad that it grew out of this sheer exploitation of publishing these old nude photos.

KELLY: And there's only going to be more of this, right? I mean you tell me whether this is just about politics and trying to get him for his stance on illegal immigration, and it's only going to get uglier between now and November.

KURTZ: Right. Look, I get that illegal immigration is one of Donald Trump's signature issues and if it could be proven that his wife, who he didn't know at the time, of course, didn't come here legally, that would be news. That has not been proven. And you know, it's all about some anti- Trump animus in the press and getting at her husband. And you don't have to take my word for it. I've looked at a piece from Slate about this which actually just coming out and says, the story isn't about Melania. It's about her husband spewing hate against foreigners. In other words, we're using this somewhat overblown issue to get at him and Melania is just sort of a collateral damage.

KELLY: A question for you about the nude pictures which appeared in "The New York Post." What's up with that because I mean did the Trump campaign complain about that? Do we know why those are appearing right now?  They're from, you know, a couple decades ago.

KURTZ: I can't figure out who leaked it, how it got to "The New York Post." It didn't seem to draw a vociferous complaint from the Trump campaign, perhaps because they didn't want to draw attention to it. And I understand, you know, it's a tabloid and it sells on the newsstand, but she was a model. She sometimes posed a racy photos. We know this about Melania Trump. She is now a very different person, an asset in his campaign. And, you know, I guess some in the media just can't resist going back to those days, whether it's questions about her body or questions about, you know, the details of the visa.

KELLY: Howie, great to see you.

KURTZ: Thanks, Megyn.

KELLY: Joining us now with more, Governor Mike Huckabee. Fox News contributor and a Republican presidential candidate. Governor, great to see you.

MIKE HUCKABEE, FOX NEWS CONTRIBUTOR: Good to see you.

KELLY: I mean, honestly, because there's not enough to discuss about what Donald Trump does.

HUCKABEE: Yes.

KELLY: They had to dig into Melania's visa history.

HUCKABEE: Well, and she has been very clear that she did everything legally. They have not proved that any of that is untrue. This is just allegations. This is the dumbest thing I've seen the press do, and the press does some pretty dumb things. This may be up there at the top.

KELLY: There, she for some reason has become some folks' favorite target.  You remember "The New York Times" had an article calling her a mannequin and a trophy wife. She's gotten hit before. Remember one of those Super Pacs put out the ad saying, is this what you want for your first lady? Now this with the nude pictures. Now they're going after the immigration status. What happened to just like what you leave the spouses alone?

HUCKABEE: First of all, she's not the candidate. Second of all, she is an absolutely lovely human being. If you've ever been around her, you know that she is charming. She's amazingly intelligent. She's run businesses.  She's raising a son in a very responsible way. What more do you want out of somebody who could be the first lady of the United States?

KELLY: So they don't like her.

HUCKABEE: And she is a citizen.

KELLY: Some on the mainstream press don't like her because, A, she's married to Donald.

HUCKABEE: I hadn't noticed that. You're kidding.

KELLY: They don't like her because she's married to Donald. Right?

HUCKABEE: And I mean if we have to hate the spouse, I guess according to American politics, and also because she -- a lot of people don't like somebody who has chosen to be a full-time mom, unapologetically. She owns that she plays a more sort of deferential role in her marriage. They have a more traditional arrangement. Donald never changed a diaper. You know?  And that actually bothers some people, I would say some feminists on the far left in this country who feel like that somehow undermines the choices other women make.

HUCKABEE: Well, one of the dumbest things about this is that they're talking about something that happened over 20 years ago, and she was in her 20s. As I say, she's not the candidate. Why don't we talk about Obama's college transcripts?

KELLY: Or why don't we talk about Bill Clinton if we're going to talk about spouses.

HUCKABEE: Yes. Or Obama's being in the chum gang, you know, when he was going --

KELLY: I don't know what that is. Isn't chum what you give to the sharks to try to get them --

HUCKABEE: No. It was back when he was in high school and college and they really, you know, smoked marijuana a lot, and it was a little group of guys.

KELLY: Look at the governor, educating me on the Mary Jane.

HUCKABEE: I'm going to have to help you out on this.  

KELLY: Doesn't it usually go on the other way around when we're on this set?

HUCKABEE: I'm more savvy than you think I am, Megyn.

KELLY: I can see that.

HUCKABEE: You'd be shocked at what I know.

KELLY: See, I'm saucy, but I never did the drugs. That was never my --

HUCKABEE: This whole thing about Melania, this is an absolutely manufactured story. It's ridiculous, and I don't think it's going to do anything but make people more supportive of Donald Trump and more sympathetic toward Melania.

KELLY: Yes. That's right.

HUCKABEE: And so --

KELLY: That's right. Even if they could -- even if they could prove that she was in the country illegally back then, which it doesn't sound like they've got it at all, is that going to change a single vote? You think a single Donald Trump voter is going to say, he's a hypocrite. He didn't know her visa wasn't perfectly in order before he married her and made her a legitimate American citizen. Aha!

HUCKABEE: That's the biggest thing that they have a responsibility to do is prove it. Prove it. And they haven't done it. She has categorically stated that she was here legally. We know now she's been a citizen since 2006. So what's the issue?

KELLY: Yes.

HUCKABEE: There isn't one. This is nonsense. It's classic reason why people hate the media.

KELLY: Maybe we could talk about ISIS. You know, that actually might change some votes one way or another.

HUCKABEE: Four hundred million dollar, you know, blood money with the Iranians in an unmarked airplane. Gee, that might be worth talking about.

KELLY: Speaking of which, Charles Krauthammer. Great to see you, Gov.

HUCKABEE: Good to see you, Megyn.

KELLY: So, one of the biggest legends in Hollywood just waded into this presidential race. And Clint Eastwood did not hold anything back when it came to Mr. Trump, Mrs. Clinton and the state of this country.

Brian Kilmeade joins us on that.

Plus, the former secretary of state took a bit of a victory lap about the Iran deal during the Democratic National Convention. But now there are questions about this possible cash for hostages deal. Is she proud of that piece too? Charles Krauthammer is here on how she's handling that, next.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Did you know that was coming, and do you approve of it?

HILLARY CLINTON, D-PRESIDENTIAL NOMINEE: Well, the White House has addressed this, and I think actually this is kind of old news.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

ANNOUNCER: From the World Headquarters of Fox News, it's "The Kelly File" with Megyn Kelly.

KELLY: We are tracking a new headache for Hillary Clinton tonight as she deals with questions this week on whether there was a cash for hostages deal with the nation of Iran. And this takes on a whole new dynamic when you consider that last winter in the height of her campaign, she was letting people know just how fond she was of her role in that deal.

(BEGIN VIDEO CLIP)

CLINTON: I spent 18 months putting together the sanctions against Iran so that we could force them to the negotiating table.

(END VIDEO CLIP)

KELLY: And it wasn't just last winter. She was even taking a victory lap on the Iran deal just last week at the DNC.

(BEGIN VIDEO CLIP)

CLINTON: I'm proud that we put a lid on Iran's nuclear program without firing a single shot.

(CHEERS AND APPLAUSE)

Now we have to enforce it, and we must keep supporting Israel's security.

(END VIDEO CLIP)

KELLY: But now that controversy has exploded over this $400 million middle of the night cash payment to Tehran, Mrs. Clinton doesn't seem quite so eager to embrace the deal. Watch.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Today America learned there was a shipment of $400 million worth of foreign currency on a secret air cargo flight to that country. Did you know that was coming, and do you approve of it?

CLINTON: Well, the White House has addressed this, and I think actually this is kind of old news.

UNIDENTIFIED MALE: That being said. Do you approve of it?

CLINTON: Well, look, I think we know that the agreement has put a lid on Iran's nuclear weapons program.

UNIDENTIFIED MALE: Republicans will say no way, no, how do you fork over cash to that regime?

CLINTON: Well, that's because they want to continue to criticize the agreement.

(END VIDEO CLIP)

KELLY: Charles Krauthammer is a FOX News contributor and a syndicated columnist. Charles, great to see you. So, she wouldn't go so far as to say I disapprove of it. She just went to the same old thing that we've heard from President Obama these past 48 hours, which is, this is old news.  This is old news.

CHARLES KRAUTHAMMER, FOX NEWS CONTRIBUTOR: Well, she's obviously hiding from the issue, and it's because it brings up the larger issue of the Iran nuclear deal. But I mean you can pin a lot on Hillary but it's hard to pin the cash-for-hostages deal on her. It happened long after she left office, and I can't even imagine that she was in on any of that negotiation. What you can accuse her of, what you can pin on her is that she began the whole process years before with secret negotiations in Gulf states with Iran that led ultimately to negotiations taken over by John Kerry where he and Obama gave away the store, gave away everything.

This, the cash-for-hostages deal was an addendum thrown in at the end. At the end, they were giving up everything. They were so desperate to get a deal, they were giving away all kinds of positions and demands that they had insisted on. I'm talking about Obama and Kerry, and one of them in the end was to give over cash and what was not even mentioned, a lot of Iranians who were spies and who were supposed to be jailed or we were asking for extradition were released in exchange for our hostages. So they got their hostages or their spies plus...

KELLY: Yeah.

KRAUTHAMMER: ...plus the cash.

KELLY: But why do we have to keep pretending that it's not clear, that it was for hostages when we have the middle of the night payment, not in U.S. currency because of our sanctions, and then this testimonial from one of the hostages, Saeed Abedini, who came out today and said, guess what happened when we were waiting to leave Iran? Watch.

SAEED ABEDINI, CHRISTIAN PASTOR RELEASED FROM IRAN: And you know, they told us, you're going to be there for 20 minutes, but it took like hours and hours. We slept at the airport and then I asked them why you don't let us go because the plane was there, pilot was there. Everyone was ready that we leave the country. They said we are waiting for another plane, and until that plane doesn't come, we never let you go.

(END VIDEO CLIP)

KELLY: And the understanding as we know what was on that plane, $400 million in cash.

KRAUTHAMMER: Well, that's what happens when you exchange hostages for cash. It's called a ransom. We've all seen it in the movies. You wait for the other car to arrive with the cash, and then you do the exchange. This is very simple, and the fact that they deny it -- Obama did it with a straight face and with a kind of mocking tone -- shows utter contempt for the intelligence of the American people.

KELLY: It's also a sign of deception. The "Spy the Lie" guy (ph) say, when you start mocking the question, that's one of the many tells that there's dishonesty or potential deception.

KRAUTHAMMER: And the idea that it's old news, nobody knew until now that there was a secret exchange of cash. And, again, why cash? Number one, because it broke the law. We're not supposed to deal in dollars with Iran. It was a way to launder the money through Switzerland. And, second, because when you are distributing the money to terrorists, Hezbollah, Hamas, who would be killing Jews, and Americans and Europeans and others with that money, you give it out in cash it's completely unaccountable. This is obvious what's happened, and the denial, I think, is a real insult.

KELLY: So, how big a deal do you think this is? You know, how big a deal is it, and how big a deal will it be, if any, in this election now for her?

KRAUTHAMMER: I don't think it will have any effect on the election. As I say, her connection with this particular transaction, disgraceful as it is, is too --

KELLY: But she's a Democrat. She was in the administration, you know, does what he does affect her, he, president Obama?

KRAUTHAMMER: When he gave his speech at the DNC, which was the best speech of the whole convention, and then she came out and embraced him, that's when she locked herself into his legacy in an indelible way. That image did it. She is running as his successor. She is actually running way to the left of him on some issues because of Sanders, but she is running as the status quo candidate for the third term. That was an image that we saw. There's no getting out of it.

So, in that sense, everything that happens that embarrasses the Obama administration or that elicits opposition and distrust by the American people is going to harm her. But of all the issues, there are a hell of a lot of others, the economy, the dealing with terrorism in general, the collapse of our position abroad, all of that, I think is far more telling than this particular incident just in terms of her political fortunes.

KELLY: Charles Krauthammer, always great to hear from you. Thank you, sir.

KRAUTHAMMER: My pleasure.

KELLY: Also tonight, what's up with the guy dressed in a soiled clown suit, parading around at night with a bunch of black balloons? Well, we'll show you what's up. Hide the children.

Plus, president Obama had to answer questions today about why he gave a get out of jail free card to hundreds of inmates who still had years to serve. His answers, next.

(COMMERCIAL BREAK)

KELLY: Everybody on this set loves my pillow. I am the only one who hasn't -- our director, Scott, has six. Oh, they want me -- they want me to do the news. So developing tonight, there's new reaction to president Obama after he had to face the media and the music today about his record-setting release of hundreds of federal prisoners.

Mr. Obama cut their sentences in a move that means he's now granted more commutations than the previous nine presidents combined. Trace Gallagher is covering the news conference for us. Hey T.G.

GALLAGHER: Megyn, almost all of those set to be released are men. Most were serving time for non-violent drug crimes, and 67 of them were serving life sentences. Now, certainly toward the end of their terms, presidents tend to commute sentences and issue pardons at a much higher rate. But with an additional 214 commutations, president Obama has now cut the sentences of more felons than any president in the past 100 years.

Obama has long stated that non-violent drug offenders should be given second chances, and that most were sent to prison under outdated and harsh sentencing laws. But the president, who favors much stricter gun laws, also gave clemency to some convicted firearms violations. Today the president was asked about that. Watch.

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: The fact they had 20 years earlier an enhancement because he had a firearm is different than a situation where somebody is engaged in armed robbery and shot somebody.

(END VIDEO CLIP)

GALLAGHER: Critics also point out there is still 11,000 petitions for commutations pending, and the president hasn't moved as quickly as he'd promised in his 2014 clemency initiative. They also say that unlike a pardon, a commutation does not mean full legal forgiveness, which makes finding a job and restoring voting rights much easier. Mr. Obama says before he leaves office, he will pardon about the same number of felons as other presidents do. Megyn.

KELLY: Trace, thank you. Joining me now with more, Heather McDonald, fellow at the Manhattan Institute and author of "The War on Cops" and Nomiki Konst, host of "The Filter" on Sirius XM Progress and founder of the Accountability Project, great to see you both. So Heather, let me start with you on this. So, what does this mean, 214 inmates, sentences commuted, including 67 life sentences?

HEATHER MCDONALD, MANHATTAN INSTITUTE FELLOW: What it means, Megyn, is it completely explodes the lies that the president has been telling about the criminal justice system for the last several years. We've been hearing endlessly that there's a racist move afoot to lock away thousands of harmless sad sacks for nothing more than possessing a few grams of pot.

The fact that there are so many of these commutes (ph) with federal gun convictions on their record, shows that in fact, it is very difficult to find the prototypical pot smoker out there. You ask an elderly resident of Harlem what she feels about a drug dealer on her corner with a gun in his waistband, and she feels completely threatened. She feels like she's under the threat of violence.

KELLY: Nomiki?

NOMIKI KONST, SIRIUS XM PROGRESS THE FILTER SHOW HOST: Well, Harlem is a very different place today. I don't know if you've been to New York recently, but the average prisoner in New York City -- we are spending $168,000 a year on the average prisoner. And a lot of these prisoners were locked up in the early '90s due to three strikes laws because they were caught with an ounce of weed. The majority of them where...

KELLY: Heather's point is those are not the people who are being let out. These are people with violent -- with gun crimes on their records.

KONST: They had gun possession, and it was a different time. It was 20 years ago. They weren't robbing banks. I mean, listen, the facts are the facts. This is a bipartisan issue now because we know that the costs of keeping people in prison are $80 billion a year. We know that the majority of these offenders are minor drug offenders that were locked up due to three strikes laws. It's a bipartisan issue.

KELLY: Is that true, heather?

MCDONALD: This is changing the subject. Again, if it were the case that we had so many of these truly non-violent drug offenders in federal prison, that would be the exclusive target of these commutations. You can't find them. In fact, drugs make up a minute portion of our prison population.

KONST: Fifty-one percent of our prison population is made up of drug offenders due to marijuana use.

MCDONALD: In the federal -- in the federal system, one percent are there for possession and that's only 12 percent of our nation's...

KONST: That is not true at all.

(CROSSTALK)

KELLY: Heather's been saying this issue. She's been studying this issue.

MCDONALD: ...of the federal populations there for drug possession and most of those have been bargained down. That's only 12 percent of our federal -- of our prisoners, however.

KELLY: But let me ask you this Nomiki, let me ask you this. OK, so this criminal justice reform has become an issue for both sides. You're absolutely right. Even the Koch brothers are -- they work with Van Jones and president Obama on criminal justice reform, right? But they seem to be more focused on not criminalizing minor drug crimes or not, you know, locking somebody up for -- especially addicts who, you know.

But I don't know if that means we commute the sentences of people who are in prison for life, who have, you know, violent gun crime issues on their record.

KONST: Well, I think the president was very clear that these weren't violent guns. These are people who are holding guns -- had guns in possession, you know, at a time when they were locked up in the 90s.

KELLY: I thought the (inaudible) said that's violent. Don't they say that's violent when they say we have to ban all guns?

KONST: Well, I completely agree with you. But let's keep in mind that in the early 90s, our crime record is half of what it was in the early 90s -- in 1990. We are in a completely different world today.

MCDONALD: I don't understand the argument.

KONST: Well, one thing to keep in mind here is in the early 90s when...

MCDONALD: A drug dealer with a gun is terrorizing that community

KONST: Hang on a second, Heather. Heather, hang on a second.

KELLY: Quickly, Nomiki. I got 10 seconds on and I'm coming up a break

KONST: Crime is down by half. The prison companies who lobby for this...

MCDONALD: Because it's not going to weigh (ph), that's why.

KONST: With $5.5 billion lobbying for this.  

KELLY: Well, we didn't solve it, but I did learn something, so I thank you both. Brian Kilmeade is up next. Just don't miss it. Hot mess, it's going to be good.

(COMMERCIAL BREAK)

KELLY: Developing tonight, one of the most legendary names in Hollywood is handing an epic schooling to what he called the entitled millennials. In a new interview with "Esquire," Clint Eastwood says we are living amongst a generation of scaredy cats, overly concerned with being politically correct.

Eastwood also throws support a little bit behind Donald Trump saying, "He's on to something because secretly everybody is getting tired of political correctness, kissing up. That's the kiss blank (ph) generation we're in right now." Joining me now, Brian Kilmeade, co-host of "Fox & Friends" and the host of "Kilmeade & Friends" on Fox News radio.

BRIAN KILMEADE, "FOX & FRIENDS" CO-HOST: We're going to have to say blank a lot

(CROSSTALK)

...because Clint uses so few profanities. That's what happens when you're 86.

KELLY: You just don't care.

KILMEADE: Yeah. I mean he has his -- he talks to "Esquire" magazine with his son and at the end of it, they said let's talk a little bit of politics. At which time he makes it clear that he is not a Hillary Clinton fan. He says, "I can't see hearing that voice for the next four years." He doesn't want more of the same, and does like the fact that Donald Trump tells it like it is.

KELLY: Yeah, but says he's not endorsing him. He said stupid things, but they all have, he says. And then he goes on to say that this is the -- it's another word for cat -- generation.

KILMEADE: How about this? The Russian band had a first name that was jailed for a while. Look it up. It's the same...

KELLY: I think another name for cat gets it done.

KILMEADE: OK.

KELLY: Yes, in any event...

KILMEADE: Well, we have varied judges here.

KELLY: He talks about, for example, Trump's comments about the judge whose parents were from Mexico and he said, look, it was a dumb thing to say, but Clint said effin get over it. I mean he lays it on the line in a very plain spoken way.

KILMEADE: Right. You know what this reminds me of Megyn, as much as he's Clint Eastwood, the Hollywood legend, he is like every senior person in our lives. You notice your mom, your dad, your grandparents, wherever they are, they tend to all of a sudden just say it like it is.

KELLY: Yeah, it's true.

KILMEADE: They're not stressed. They're relieved. They don't have any type of regrets. They let it fly.

KELLY: Can I tell you this, so my 100-year-old nanna just had to go in the the hospital because she wasn't feeling well. And the first thing she reported back was, that male nurse is looking at my can. So you're right.

KILMEADE: Right. By the way, was he? We don't know. We need to check him first.

KELLY: We're still looking into it. All right, so that's Clint. Secondly, you may be aware that the Olympics are starting in Rio, but not without controversy.

KILMEADE: Yes. Let's start with soccer -- women's soccer. I think they're going for their fourth straight gold medal. They beat New Zealand 2-0, but that's not the story. Hope Solo is the story because she wants to be a mom and she's worried about the Zika virus. For a while she said I don't think I'm going. Then she finally does show up.

But I don't know if you guys have it, if not, just picture somebody in a beekeeper outfit. Hope Solo had fun with all of the inoculations on her bed. The people of Brazil didn't like this.

KELLY: Come on, it's not her fault they have mosquitoes that carry Zika.

KILMEADE: Right. But they really got back at her, and it really made history. For the first time in the history of sports that I know of, modern sports, they might have done it in Greece, they chanted the word of a virus. They chanted "Zika, Zika, Zika" in the stadium.

KELLY: Let's listen to it. Do we have that? I want to hear that.

(BEGIN VIDEO CLIP)

(CROWD CHANTING)

(END VIDEO CLIP)

KELLY: Wow.

KILMEADE: It's as if they're cheering on the virus.

KELLY: The mosquito.

KILMEADE: Right. I mean the first time I ever heard a cheer for a virus.

KELLY: But she -- look, so she played -- to her credit, she was able to laugh it off. Not so much these athletes who are going to have to perform on the open seas in Rio where viruses, bacteria, and human feces are swimming around in what has turned out to be human sewage, you know, teeming through the waters.

KILMEADE: In 2009, when they got this, Brazil said I'll fix all that and don't worry about it, and bottom line is we tried for these Olympics. We couldn't get it. Remember when Barack Obama flew over when he was just president. We lost it to Rio, who they said the only thing worse than the water is the air. They say three teaspoons of this air will cause you to get violently ill.

KELLY: The air?

KILMEADE: Worse than Beijing -- the air, the water. And by the way, they tell the tourists, don't put your head in the water. How do you feel if you're a swimmer and you're competing in the water?

KELLY: I don't know, and there is some basketball team -- our basketball team is staying out on some luxury liner. They're like forget this. We're going to stay on a ship.

KILMEADE: Really, it's Team USA. They're staying at the Silversea Silver Cloud. It's a 196-cabin, nine-deck super ship.

KELLY: And I know, you got to say, we need to make lemonade out of lemons.

KILMEADE: Right. It has seven-foot beds. These are multimillionaires. They're putting their career on the line for this. They don't want to walk out with problems. Australia for example has Andrew Bogut who's an NBA star. He is staying in the rooms without lights. He had to use Saran wraps to hang his own shower curtain. There he is.

KELLY: OK, wait. But, listen, it could be worse because he could be living in Green Bay, Wisconsin, where they have a major issue right now, and, no, it's not Chucky.

(VIDEO PLAYING)

KILMEADE: It's Gags, The Green Bay clown. It is. It's true. It started at 2:00 a.m. on August 1st. Gags the Green Bay clown was spotted. He has sallow, empty eyes. He is walking around in a soiled unitard, and he has a wrinkled collar. He is scaring people, but according to the sheriff, he's not doing anything illegal. He looks like he will, but he hasn't struck yet. So here's the deal. I went to doing this called -- what's it called again?

KELLY: Research.

KILMEADE: Yes. I tried to research this. I'm going to start doing this all the time. And find out what is the fear of clowns? What's it about? It's actually got a name (inaudible) coulrophobia, that's it. Coulrophobia if you have a fear of clowns. The number one fear for Americans, public speaking. Second is -- second is --

KELLY: Death?

KILMEADE: Second is death. Third is fear of clowns. It's about fear of ghosts. Second is zombies. We fear zombies.

KELLY: Really.

KILMEADE: So if you're walking around and you see a clown and you shudder, don't worry about it. You have the third most common fear in America.

KELLY: And yet we subject our young children to these guys, right? Like, here, he's going to touch your face and paint it. You're going to love it.

KILMEADE: Don't worry, the big guy with the scary face has shoes that will explode, and we pay him to do that to infect your kids forever.

KELLY: Gags is his name? Gags, that's the Wisconsin guy?

KILMEADE: Stay away. Even though he hasn't struck yet, he could. Gags, the Green Bay clown.

KELLY: Be afraid. Be very afraid. Brian Kilmeade, great to see you. We'll be right back.

(COMMERCIAL BREAK)

KELLY: So, speaking of scary clowns, a few years back a bunch of people were visiting "Fox & Friends" and they were celebrating the anniversary of Chucky and they put on the mask and ran all over the building. Everybody was scared. I am running off to vacation for kind of two weeks, and it is a vacation, and I'll see you when I come back.

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