KELLY FILE

Rep. Nunes: Dems opposing Gen. Mattis are 'playing politics'

This is a rush transcript from "The Kelly File," December 2, 2016. This copy may not be in its final form and may be updated.

SHANNON BREAM, FOX NEWS HOST:  Breaking tonight, it was all out war, staffers from the Trump and Clinton campaigns clashed publicly and poignantly just 24 hours ago.  And it all comes as we see new signs that the Democratic Party itself may be coming apart at the seams.  

Welcome to "The Kelly File," I'm Shannon Bream in for Megyn Kelly.  Trump campaign manager Kellyanne Conway and Clinton's Communications Director Jennifer Palmieri were just a few of the participants in a Harvard forum last night where they and other 2016 aides traded some vicious barbs showing the wounds to make contentious 2016 race are still fresh.  

Palmieri suggesting that the Trump campaign was based on a platform of white supremacy.  Conway said, the Clinton campaign was simply, quote, "bitter."  And while things were a bit more calm when Conway appeared with Clinton campaign manager Robby Mook just a short time later, that didn't stop either one from continuing their attacks.   

(BEGIN VIDEO CLIP)

ROBBY MOOK, FORMER CLINTON CAMPAIGN MANAGER:  I think there's a lot of things we need to examine coming out of this.  And you just name a lot of them.  Congress has got to investigate what happened with Russia.  We cannot have foreign aggressors I would argue intervening in our elections. And we know that the Russians were promulgating fake news to Facebook and other outlets.  

KELLYANNE CONWAY, DONALD TRUMP'S ADVISER:  I think the biggest piece of fake news in this election was that Donald Trump couldn't win.   

(END VIDEO CLIP)

BREAM:  Mollie Hemingway of The Federalist, Attorney David Wohl and Fox News contributor Julie Roginsky joining us in a moment.  

But first, we go to Trace Gallagher live in our West Coast Newsroom with more.  It got heated, Trace.   

TRACE GALLAGHER, FOX NEWS CORRESPONDENT:  You know, Shannon, Harvard has done this forum after every presidential elections since 1972 and they've all been very civil until now.  In fact the moderator at Harvard kept reminding the campaign this was meant to be a first draft of history for generations to come.  Well, future generations will certainly know just how bitter this campaign was.  One of the most contentious back and forth came when Clinton Communications Director Jen Palmieri condemned Trump adviser Steve Bannon who wasn't even there for providing a platform for white supremacy.  Watch.

(BEGIN VIDEO CLIP)

CONWAY:  Do you think I ran a campaign where white supremacists had a platform?  You're going to look me in the face and tell me that?

JEN PALMIERI, CLINTON COMMUNICATIONS DIRECTOR:  It did, Kellyanne, it did.   

CONWAY:  Really?  And that's how you lost?

(CROSSTALK)

Do you think you could have had a decent message for the white working class voters?  You think this woman who has nothing in common with anybody--  

(CROSSTALK)

These countless, we flipped it over 200 counties that President Obama won and Donald Trump just won.  Do you think that's because of what you just said or because people aren't ready for a woman president.  Really?  How about it's Hillary Clinton.  She doesn't connect with these people.  How about they have nothing in common with her?  How about you have no economic message?  

(END VIDEO CLIP)

GALLAGHER:  Did you hear that you guys are pathetic in the background? Well, Clinton Campaign Manager Robby Mook acknowledge there were mistakes and miscalculations in the campaign saying things like younger voters either didn't turn out enough or migrated to a third party.  But Mook also pointed fingers at FBI Director James Comey for reviving the e-mail controversy at the 11th hour.  And things got heated again when Clinton Chief Strategist Joel Benenson reminded the Trump team that his candidate won the popular vote.  Watch.   

(BEGIN VIDEO CLIP)

JOEL BENENSON, CLINTON CHIEF STRATEGIST:  Don't act as if you have some popular mandate for your message.  The fact of the matter is that more Americans voted for Hillary Clinton than Donald Trump.   

CONWAY:  And there was nothing that said the road to popular vote anywhere.  

BENENSON:  Kellyanne, I'm not --  

CONWAY:  It's the road to 270.  That's where we all competed.   

BENENSON:  I premised my statement by saying that.   

CONWAY:  Hey guys, we won.  You don't have to respond, I mean, seriously.   

(END VIDEO CLIP)

GALLAGHER:  By the way, Bernie Sanders campaign manager was also there.  He talked about voters' concerns that about Hillary Clinton being truthful and forth right and both for Clinton and Trump campaigns no surprise Shannon said the media wasn't fair to either one of them.  

BREAM:  Hmm.  Well, we'll leave that to be debated even further.  Trace, thank you very much.  

GALLAGHER:  Yes.

BREAM:  As if the sore loser syndrome wasn't enough, we are seeing more and more signs every day that the future of the Democratic Party itself may be in trouble.  

Senior editor of The Federalist Mollie Hemingway, Trump supporter and Attorney David Wohl and Fox contributor and Democratic analyst Julie Roginsky joining us live now.  Good to see all of you tonight on this fine Friday evening.  

DAVID WOHL, ATTORNEY:  Hi, Shannon.

JULIE ROGINSKY, DEMOCRATIC ANALYST:  Great to see you.  

WOHL:  Good to see you.

BREAM:  All right.  To that point I want to play a little bit of something that Congressman Emanuel Cleaver had to say.  This is coming from a Democrat and then I'll have your response.   

(BEGIN VIDEO CLIP)

REP. EMANUEL CLEAVER, SENIOR WHIP, DEMOCRATIC CAUCUS:  At the present time I got to say we had no strategy, and we have no plan.  But at least we have some proven leadership that can, you know, take us into what's going to be a new era.   

(END VIDEO CLIP)

BREAM:  Julie, okay.  So, no strategy, no plan.  He does say proven leadership.  They did re-elect Nancy Pelosi for a leadership in the House this weekend.  A lot of people, including Democrats rolled their eyes over that and said, that just proves they don't get what just happened in this election.   

ROGINSKY:  Well, I don't really get that interview.  On the one hand, Congressman Cleaver saying that we don't have a plan or a strategy.  He may be right about that.  If that's true, in the House caucus, that makes me incredibly fearful.  But then he's saying we have to stick with the people that don't have a plan or a strategy.  That this kind of Congress to me. Look, if you don't have a plan or strategy with all due respect, got to change the general on the field.  

And Nancy Pelosi has served for a long time with distinction.  But if she can't get it done, and she hasn't been able to get it done in several cycles, it may have been time to look in a different alternate direction. The House caucus decided not to do that.  I would have urge him to take a look and see whether if the person that can't get you over the finish line time after time is the person that is leading you, you might want to try to find a new leader.   

BREAM:  Yes.  And that didn't happen this week.  Although there was a significant challenge.  It wasn't just a couple of votes here and there. There were dozens of votes that didn't go to Nancy Pelosi.  So, David, let me talk to you.  Because this thing has gotten really ugly.  We heard a lot of the back and forth from that conference, that forum that happened yesterday.  There's been a lot of talk about white supremacy, about Bannon. About what was leveraged in a, you know, unseemly way in order to get people to the polls to vote for Trump.  I know that you know some of these people and have worked closely with some of the folks.  So, what is your response?

WOHL:  And you know Kellyanne Conway.  I mean, if something like that had been going on, she would have left the campaign in one second.  To spew that kind of defamatory toxic venom at her at a forum like that was just disgraceful.  You know, here's the example Shannon, I mean, do you know how many times that I tried to get to a court hearing in L.A. for a client and couldn't get there on time because roads and streets were closed because President Obama or Hillary Clinton or some other Democrat was hobnobbing with celebrities and movie stars.  

And at the same time Mr. Trump was in Iowa, Indiana, Ohio, hobnobbing with the people who really counted.  It was strategy and Bannon is a great strategist, he is a good guy.  I met him at Trump Tower.  Super guide.  Not one shred of racism in his bones.  And they just didn't get it.  They didn't have a plan, they didn't have a platform.  They didn't have ideas. They lost and now they're reeling.  And that's, the result of reeling, is to spew that kind of venom at Kellyanne Conway who is just an absolute unbelievably graceful person who handled it very well.  I wouldn't have been surprised if she stood up and slapped that woman for saying that.  But good for her --  

BREAM:  We're not advocating physical violence here.  

WOHL:  He won, get over it.

BREAM:  Yes.  We're not advocating any physical violence here.  But Mollie, I got to think, if Kellyanne Conway was on the left, I'd be seeing her on the cover of vogue.  I mean, this is a mother of four who just ran an upset presidential campaign.  One of the most powerful women you could argue now in the country, if not in Washington but the left is not big fans.   

MOLLIE HEMINGWAY, SENIOR EDITOR, THE FEDERALIST:  It's really amazing.  I mean, she's done this historic fete of being the first female to win a presidential campaign.  She did it through such remarkable strength and resolved.  She handled sort of all comers very well and it really is interesting.  You know, this whole -- ever since the election was over we've been talking about, oh, how is it possible that Hillary Clinton lost? I think really people are starting to realize the question is more about what were the things that the Trump campaign did so well.  And that Harvard forum mixed in with all the blame game and the conspiracy theorizing that you heard from the Clinton people, we also learned a lot more about the smart things that the Trump campaign did.  

You know, they had some sort of innovative approaches to advertising, relying less on television advertising, far more on digital campaign advertising because they were able to get their message out without alerting the opposition to exactly what their messaging lies and who their targets were.  I mean they were really doing some interesting things that go completely against the narrative that they were a mess of a campaign and the Clinton campaign was this well-oiled operation.  And, you know, three weeks out from this victory for Trump, you would expect the Democrats to kind of come to terms with it and start learning some lessons.  They don't really show any signs that they are learning.  What went wrong and how they need to reform.

BREAM:  I mean, Julie, what do you make of that?  Because there are people who, when they heard that back and forth from last night, said this is exactly why Trump won.  They don't get it.  They think that it's, you know, leveraging of, you know, the extreme alt-right.  I mean, you can't win an entire election on that alone.  Do you think Democrats are doing any soul searching, like the Republicans did?  They have the internal autopsy after the last one.  Do you think Democrats are going to take some lessons from this or are there lessons there?   

ROGINSKY:  Well, let me take that one by one.  First and foremost, the autopsy, that was -- autopsy after this lost was thrown entirely out the window.  

BREAM:  Uh-hm.

ROGINSKY:  I seem to recall that Donald Trump did everything completely contrary to what the autopsy that Reince Priebus commission in 2012 recommended.  Secondly, look, I spoke at great length today to one of the people on that panel on the Democratic side who told me and I've read in reports as well, it wasn't, you know, the headlines they're talking about the racist allegations and other things.  They took a lot of ownership of things they could have done better, including reaching out to working class white voters, focusing on other states that they didn't focus on.  So, I think there was a lot of responsibility taken.  You know, I know the media loves to sensationalize these allegations.

The third thing I will say is, I've known Kellyanne Conway an awful long time.  She's a good Jersey girl like I am.  She is lovely and I like her a great deal.  But Steve Bannon ran a website that he said himself was the leader of the alt-right.  To me the alt-right is not the alt-right.  That's just another word for Neo-Nazi.   

BREAM:  Okay.

ROGINSKY:  And when you have --  

WOHL:  Oh, please!

ROGINSKY:  Excuse me but let me just say this.  

WOHL:  Come on, Julie.   

ROGINSKY:  You're saying he's not racist.  Listen, he had for example, Breitbart had a section entitled black crime, not crime in general but just black crime.  That's racist.   

BREAM:  Let me go back a little bit here because Steve Bannon has rebutted and said, he's not part of this.  

ROGINSKY:  He said he's the leader of the alt-right.

BREAM:  So, listen, I want to let Julie -- because I know David he's worked at Breitbart and you know Bannon and you have the same experience there.  

WOHL:  Yes.  I mean, I was good friends with Andrew Breitbart before he passed away.  I've written a number of articles for Breitbart.  I've met all kinds of people who work there.  Not one shred of racism among any one. Steve Bannon is a good guy.  Steve Bannon -- remember, Donald Trump's son- in-law is Jewish, his daughter is Jewish.  His grand kids are Jewish.  He's going to hire a white supremacist to work as his top campaign associate?  I mean, it's absolute garbage.  

And by the way, early on in the campaign Donald Trump made this very clear. He was going to be an inclusive president of the United States.  Immediate choice to ignore.  The non-Fox News mainstream media ignored it.  But look what's happening.  He is inclusive.  He does believe in diversity, wala, here we go.   

BREAM:  Let me ask you.  Were you reassured at all by the comments we heard from them last night.  This first big speeches given since being elected where he said, we are going to be diverse and inclusive, I am absolutely denouncing  anything other than that, or anything that is racist or extreme and that's not part of what I want to do.  Did that reassure you at all last night?

ROGINSKY:  You know what I would love for Donald Trump to do and I say this sincerely, this is not nitpicking.  When he was asked specifically about that march that took place or that rally that took place just mere feet away from the White House of neo-Nazis doing the salute of the Nazi, the Nazi salute -- he said I disavow and he consistently said, I disavow.  But he's never actually said what he specifically disavowed.   

BREAM:  But what about what he said last night which was very specific?   

ROGINSKY:  He said -- he specifically said I want to be inclusive and then yesterday and then he precede to follow that up with, you know, we beat Hillary Clinton and everybody started chanting "lock her up".   

BREAM:  That's not racist.   

ROGINSKY:  Wait a second.  You're talking about inclusive.  Listen, you're talking about inclusive.  As long as -- and this is not directed at Andrew Breitbart.  This is directed to Steve Bannon.  As long as Steve Bannon ran a website that had subject called black crime on it --  

BREAM:  All right.  We're going to leave it there.  

ROGINSKY: -- that's racist to me, that's the definition of racism.   

BREAM:  Okay.  But Donald Trump in his remarks last night made a very clear statement and hopefully for many people that will lead us to the next step because he is going to be the president.  Thank you all very much for you time.   

ROGINSKY:  Thanks very much.

BREAM:  Good to see you.

WOHL:  Thank you, Shannon.

BREAM:  All right.  Less than 24 hours after it was announced that one of the most distinguished generals of our time is nominated to be Secretary of Defense, some Democrats are suggesting they may block him.  We'll get reaction to that from a member of the Trump transition team when Congressman Devin Nunez joins us coming up.   

Plus, with President-Elect Trump's Carrier deal on the way and jobs numbers out today, new questions on what the Trump White House economy will look like and how the media is already spinning the success that the President- Elect may have.  

Chris Stirewalt and Rich Lowry are here on that.   

Plus, American Lit Classics could soon be banned from a school district near you.  That report coming up.   

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE:  I was a little disappointed that we would go that far and it scares me, how much further are we going to go?  What else are we going to ban?

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BREAM:  Developing tonight, some 24 hours after President-Elect Donald Trump announced his intention to name a celebrated retired four star general as his Secretary of Defense, General James Mattis' nomination is getting some serious pushback from Democrats and the media.  

In moments, we will get reaction to that from Republican Congressman Devin Nunez, chairman of the House Intel Committee.  But we begin with Trace Gallagher reporting from our West Coast Newsroom.  Trace?   

GALLAGHER:  -- battle of Fallujah that marines serving under General James Mattis' began calling him Mad Dog behind his back.  In marine culture, that is high praise.  And though the general doesn't much like the nickname, it's stock.  From 2010 to 2013, Mattis led the U.S. Central Command or CentCom which oversees the Middle East and Southwest Asia.  During that time, he was critical of the Obama administration's, quote, "disengagement policy in the Middle East."  Saying, it contributed to the rise of ISIS.  

Mattis also butted heads with the current administration over his hawkish stance on Iran.  But General Mattis and President-Elect Trump have their own disagreements, for example, Mattis does not think torture is effective and does not support Trump's conciliatory statements toward Russia.  The General also thinks ripping up the Iran deal would hurt the U.S.  

James Mattis would be the first former ranking general to become defense secretary since George Marshall in 1950.  And because the law requires the Pentagon chief to be out of uniform for seven years, Mattis would need a special Congressional waiver.  Some Democrats, including Senator Kirsten Gillibrand, a member of the Armed Services Committee would oppose the waiver saying, quote, "Civilian control of our military is a fundamental principle of American democracy."  

Despite the opposition, experts believe Mattis will be confirmed.  The man known as Mad Dog is also known as the warrior monk for his lack of family and depth of knowledge.  In 2003, the general wrote about the importance of reading saying, quote, "By reading you learn through other's experience.  
Generally a better way to do business, especially in our line of work where the consequences of incompetence are so final for young men."  

Mattis is also known for turning a compelling phrase like, quote, "be polite, be professional but have a plan to kill everybody you meet." Mattis also finds himself defending accusations that as a brigadier general in Afghanistan in 2001, he repeatedly refused to send helicopters to rescue a group of green berets trapped by enemy fire.  The army captain who led the mission says, Mattis betrayed them, the general has not responded --
Shannon.   

All right.  Trace Gallagher, thank you very much.  And joining us now, California Congressman Devin Nunez, member of President-Elect Donald Trump's transition team, the executive committee and also chairman of the House Intelligence Committee.  

Chairman, thank you for joining us tonight.  

REP. DEVIN NUNES, R-CALIFORNIA:  Thank you.  Thank you.  Great to be with you.  

BREAM:  Any surprise to you that General Mattis, although it seems he has wide praise across the aisle and all up and down, you know, the ranks, inside and outside the military, there are those detractors who are now coming forward immediately with questions about his ability.   

NUNEZ:  Yes.  It's a little shocking.  And Donald Trump's transition team and his folks asked me shortly after the election who I thought would be the best secretary of defense.  And they asked to go out and recruit the very best people.  And I said without a doubt that Jim Mattis would be the very best person.  And I think he has a broad cross section of both Republicans and Democrats that support him and I think those that do not support him are probably just playing politics at this point.   

BREAM:  What do you make of Democratic Senator Kirsten Gillibrand's discussion that she's going to oppose him, this waiver they has to get from Congress if he is going to move into this cabinet position and that she may push for a 60-vote threshold which of course it mean that Democrats, every Republican would have to stick together but Democrats would have to cross over, a handful of them as well in order to get him across the finish line.   

NUNEZ:  Well, I would say it's a rather pathetic because she has not yet heard General Mattis testify before the Senate.  So, you know, he should at least get that chance.  We should have a debate in the Senate in terms of whether or not he should get a waiver, just like we'll have in the House. But, you know, my guess is and the House representative, this will overwhelmingly pass.  And if the Senate really wants to stop a four-star general who was one of the most revered generals in our nation's history and at least in modern history, at a time that's very, very difficult overseas, especially in the Middle East,  and a man who's been right.  

He was right on Iran, he was right on Iraq, he was right on the problems that we're going to face with al Qaeda's growth in Syria which became ISIS and he was right in drawing to many troops down from Afghanistan and Afghanistan would lead to problems.  So, you know, I hope that the Senate just sticks with the facts and Donald Trump asks us to go out and find the very best person for the job and that's what we did.  And I think that Donald Trump made a very, very wise decision in selecting General Mattis to be the next secretary of defense.   

BREAM:  There are hot spots around the world, there are domestic issues as well within the Pentagon that if he is confirmed he's going to have to deal with right away from budgetary issues and dealing with ISIS.  What do you think is the most pressing concern as chair of the House Intel Committee? You know more than we do.   

NUNEZ:  Well, just quickly, China, Russia, the Jihadist problem, Iran and North Korea that are trying to get nuclear weapons and other types of large scale weapons, weapons of mass destruction.  And then between all of that you have the cyber activity that all of those bad actors can use on and off.  

BREAM:  Listen, I want to make sure that we have you as well because you're part of the Trump transition team, one of his very bold initiatives, there's been a lot of talk in the House and with House leadership as well about overhauling the tax code.  A lot of folks think, you know, they are giving him applause for what happened with Carrier yesterday and saving those 1100 jobs.  But say that getting to the tax code is much tougher, much more involved process would be which you really need to be able to do this more broadly.  

NUNEZ:  Well, part -- my advice to the Trump team has been to focus on two issues at the highest level.  One is the tax code because we need to reform the tax code in order to fix our economic problems.  Secondly focus on health care, let's reform, replace and repeal ObamaCare but make health care better for the American people.  But specifically like you heard Donald Trump talk about last night in Cincinnati, he talked about how the tax code was unfair, how other countries are able to charge a tax and at the same time they're shipping stuff into our country without the tax while it puts or manufacturers, local manufacturers at a disadvantage.  And so, I'm excited about Donald Trump trying to repair the tax code and I think that it's going to be very, very difficult and they're going to have to focus on it but we have a lot of people that are going to help him.   

BREAM:  All right.  Chairman Nunez, thanks for dropping by "The Kelly File." Good to see you tonight, sir.  

NUNEZ:  Thanks, Shannon.  

BREAM:  And coming up, a religious freedom case out of Arizona where some vendors say, they're being forced to serve same-sex weddings against their Christian beliefs.  And they're being banned from talking about it.  We have the attorney to join us, telling us about one set of business owners who say tonight, enough is enough.   

Plus, some of the media already running stories about the impending Trump economy, arguing that any success comes under the President-Elect is going to be due to this guy, President Obama.  Chris Stirewalt, Rich Lowry here with reaction to that.   

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA, D-UNITED STATES:  The thing I didn't anticipate up until a few months before my election was in fact that we were going to be in such a deep crises, that I would be inheriting --

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BREAM:  Breaking tonight, days after President-Elect Trump brokered a deal with Carrier that saved hundreds of American jobs, new questions as to what exactly a Trump economy could look like.  One thing the media is confident about tonight, who deserves the credit in the case of any Trump economic success.  From Politico, Trump inherits Obama's boom.  The New York Times, writes, "President Obama is handing a strong economy to his successor."  

And from CNBC, "Obama's biggest parting gift to Trump may be the economy." Of course if the language from President Obama, the last eight years has thought us anything, it is that only the current occupant in the White House deserves the credit for any success.  Watch.   

(BEGIN VIDEO CLIP)

BARACK OBAMA, UNITED STATES OF AMERICA PRESIDENT:  We helped stop a recession from becoming a depression.  The things I didn't anticipate up until the few months before, my election was the fact that we are going to be in such a deep crisis that I would be inheriting.  There are things have problem.  The same thing the world - saving economy from the great depression.  That was pretty good.  The economy was contracting faster than it did during the great depression.  

(END VIDEO CLIP)  

BREAM:  The (inaudible) Media now echoing the Obama Administration take. They're leaving Mr. Trump with a gift compared to the economy Obama received from President Bush.  Chris Stirewalt is our Fox News Digital Politics Editor and Rich Lowry, the Fox News Contributor and the Editor of National Review, gentlemen a good Friday evening to you.  

CHRIS STIREWALT, FOX NEWS DECISION DESK CORRESPONDENT:  Hi Shannon.  

RICH LOWRY, EDITOR OF NATIONAL REVIEW AND FOX NEWS CONTRIBUTOR:  Hello to you Madam.  

BREAM:  All right Chris, I'll start with you.  It seems to me that everything bad that happened during his presidency was President Bush's fault, but all of the good was President Obama's fault, to his credit.  And now he is getting credit for if something good happens to Trump with the economy while it was because of what he had left.  Is that fair?  

STIREWALT:  Well fair is sort of an unimportant word when we talk about politics.  The cock that crows and takes credit for the sunrise that is a thing in politics and President Obama certainly did that.  And it also of course it is certainly fair to point out that the economy that Donald Trump is inheriting from Barack Obama is a heck of a lot better than what was basically a garbage scowl on fire and sinking to the bottom of the Hudson River in 2009.  So that is partly true.  But it's also part of a narrative that you can tell that the press is setting up so that what Trump gets that is good at the beginning has a mar in the fender.  It's not showroom fresh.  

BREAM:  Yeah and Rich, we only read some of the headlines, there were many others that said the same thing, that basically like, you're welcome Donald Trump.  

LOWRY:  Yeah.  This is -- Chris is absolutely right.  This is about preparing the ground for the next year and the years ahead, if the economy is good and the markets indicate that investors expected to be good and Trump's policies is to be pro-growth that it's all going to be you know what, he just got lucky, he happened to inherit this great growing economy from President Obama.  And it is true, we've had a recovery for years now, but it's been the slowest growing economic recovery since World War II, averaging about 2 percent growth.  There have been all of this Electoral and economists theorizing about, this is the new normal and recounting so called secular stagnation.  And what Trump is saying he is not going to accept that baseline of mediocrity.  And he wants to change that baseline and ratchet it upwards.  

BREAM:  Well and today we got new on important numbers, but again the unemployment rate has dropped and yet you and I know, even if you were seeing family and friends around thanksgiving, people are still struggling economically.  And there are a record number of people who simply jumped out of the labor force, they have given up, they are not even part of the calculation, more than 95 million people, Chris.  

STIREWALT:  So, broadly speaking yes.  One of the reasons that the unemployment rate is so low is because we have the lowest labor force participation since we got the full participation for women.  So yeah, that is part of it.  But we have seen something that is important and that is wages finally started to grow.  The unemployment rate is sort of -- I'm going to dare say meaningless at this point.  What really matters is wage growth.  And we have finally, after eight years almost, started to see wage growth.  That is the thing that means people go on a week of vacation that means people feel they can buy extra Christmas presents.  That is the thing that makes people better.  If that accelerates, Donald Trump is going to have a very happy first quarter of his presidency.  

BREAM:  Yeah and Rich, how much pressure is on him to deliver when he talked about just blowing up the GDP and growth and making unforeseen things happen?  

LOWRY:  A lot.  You know we're going to enter a phase, Shannon where the tweets don't matter, the message doesn't matter, the spin doesn't matter, and it is performance ad results that matter.  And if he delivers higher economic growth, especially as Chris underlining there, wage growth, it's not going matter what the Democrats say.  He is going to be a popular president.  And I think the general strategy is to try to create a tighter labor market by policies that create stronger economic growth generally at the same time he tries to tighten up on foreign competition, foreign outsourcing and immigration.  So you get the tighter labor market especially further down the income ladder and people actually see their wages go up which is what they need to really feel better about this economy.  

BREAM:  Which means I'm getting more bacon for Chris as a Christmas present.  And I think its hockey tickets for Rich, I don't know.  

STIREWALT:  Tell the truth, you are going to give me more bacon anyway.  

BREAM:  Bacon and Hockey tickets for you two.  Thank you very much.  

(LAUGHTER)  

LOWRY:  You know us well, thank you Shannon.  

BREAM:  All right, coming up, some more campus cuddling for the poor little cupcakes ahead of exam time from therapy dogs who I totally wrote for me to have on the show to massages.  We're going to show you the absurd lengths that some colleges are going to make their students feel relaxed and ready for their test.  

Plus, local Christian business owners in Arizona challenging an ordinance saying they violates their Religious freedom.  We're going to hear from one of the attorneys representing one of the challenges to that law, next.  

(COMMERCIAL BREAK)  

BREAM:  Developing tonight, a free speech case out of Arizona filed back in May, back in the spotlight tonight.  A pair of Christian business owners is part of a group challenging a local ordinance in Phoenix.  The law in place requires them to do business for same-sex wedding ceremonies.  Joanna Duka and Breanna Koski are the co-owners of Brush and Nibs Studio where they create custom wedding invitations and they say the law represents a clear violation of their first amendment rights, the vice mayor of Phoenix however standing by the law as necessary to keep the businesses in that area.  

(BEGIN VIDEO CLIP)  

KATE GALLEGO, VICE MAYOR OF PHOENIX:  You've seen companies such as pay pal leave communities that don't stand up for all of their residents.  Major events like The Final Four will not come to communities that discriminate. So this ordinance is an important economic development tool and we'll defend this.  

(END VIDEO CLIP)  

BREAM:  Kristen Waggoner, Senior Counsel for Alliance Defending Freedom which represents the business owners and joins us now, live.  Kristen I want to sort of, I know this has gone to the trial level and they lost there.  I want to read a bit of what the judge said.  The purpose of the wedding invitation is simply to convey the details of the date, time and place of the wedding and to identify the person getting married.  Judge (inaudible) went on to say, listen, they're not endorsing this ceremony, and they're simply crafting something that would tell people where to go for the wedding, your response.  

KRISTEN WAGGONER, SENIOR COUNSEL FOR ALLIANCE DEFENDING FREEDOM:  This case involves artistic expressions.  The issue here is whether the government can force artists to create art in violation of their convictions.  And this ordinance actually imposes jail time potentially on artists and as wells as fines.  Six months in jail for every day that that Joanna And Breanna are not in compliance.  We don't force artist to create artistic expression under threat of jail time.  

BREAM:  Yeah.  Something interesting as well, it says that as part of the ordinance that they can't directly or indirectly display, circulate, publicize or mail any advertisement notice or communication which that states are implied that any service would be refused or restricted.  So essentially now why you're here and not your clients is because they're worried that this ordinance says if they speak out about why they would refuse service or refuse to take part in this, that they too would be facing jail time for sharing their convictions and opinions?  

WAGGONER:  Right.  That is exactly what the law says, that if they in any way directly or indirectly suggest that they may have beliefs that are based on marriage between one man and one woman, then they can face the six months in jail for every single day they're not in compliance.  It's an extreme penalty.  Our clients would love to be here to talk about their beliefs and their art.  

BREAM:  Ok.  Now, I got a reference back to a case in New Mexico, I went back and read this the other night.  This one involves Christian photographers, who again declined to take part in the same sex ceremony. And one of the concurring judges in that opinion said basically, get over it.  It's the price of citizenship.  If you want to be in the commerce stream and you want to be a business, that is the price of citizenship and you are going to have to do it.  

WAGGONER:  Americans don't give up their constitutional rights, because they want to earn a living and feed their children, nor do artists.  The suggestion that you would not be able to create art and sell it and be protected under the first amendment is not supported by the Supreme Court precedent.  And the first amendment protects this kind of expression.  

BREAM:  How do you feel about the appeal?  Because I know that where you are going next, are you confident that another judge may see this differently?  

WAGGONER:  We are confident that another judge will see it differently. There are hundreds of years of precedent on our side in this case.  And again we go back to the basic principle.  Free speech is a bedrock principle in the first amendment.  This law can just as easily or laws similar to it force a Democratic speech writer to have to write for a Republican.  It supports an atheist singer to have to sing at an Easter Worship service.  And we know that some of the liberties travel together. So, if we're allowing a bedrock principle of the first amendment to be compromised, then we know that other civil liberties are sure to follow.  

BREAM:  All right we will keep up to date on the case and we would love to talk to the artists at whatever point that becomes possible.  But we will keep tracking the case.  Kristen, thank you very much.  

WAGGONER:  Thank you.  

BREAM:  All right now to react to that discussion, and give us another view point, attorney Eric Guster, ok, what say you, Eric?  

ERIC GUSTER, ATTORNEY AND LEGAL ANALYST:  I don't know about this argument. It's very interesting.  You have -- when there's a business, they are in the stream of commerce and must treat everyone equally and that is what they business is.  They're not painting two women together in bed or two men together in bed.  This is writing wedding invitations.  That may be considered art by many, but I call that printing an invitation.  So what this judge is going to rule, I believe the appeals court, they're going to rule that the business is wrong and on several issues.  Number one, Shannon, a business cannot discriminate.  A person can say things all day long.  But as a business you can't.  You can't say I'm not going to serve your because you're a gay couple or I'm not going to serve you, because you're black or because you're white.  They can't do that.  

BREAM:  Ok.  Let me talk about that, because I've talked to a number of the businesses, the florists and the cakes, that kind of thing.  Who says, listen, I have gay customers, I have gay employees.  I have no problem serving people.  I'm not denying them service on the base of their characteristics like their gender identity or sexuality.  I'm just saying, I don't want to take part in a ceremony that offend my deeply, holy, religious beliefs.  I mean this is something that we are seeing now.  Chip and Jojo from HGTV are being dragged into this.  Is there room for people to say, I'll serve you, I am happy to do that, but I won't take part in the ceremony, that is against my belief.  

GUSTER:  But this business is saying.  I'm not going to serve you.  

BREAM:  No, no, no.  They are saying, they are saying they will serve gay customers and they have done that, they are just saying, I am not going to craft an invitation with my artistic abilities to your same sex ceremony.  

GUSTER:  But that is part of their business.  Their business is writing the invitations.  That is what their business is.  So, they are refusing to provide a business service based upon those couples being homosexual couples.  That is their problem.  And that is why it's constitutionally incorrect.  

BREAM:  I want to ask you about this whole Melania Trump, the designer say that they won't serve her, because they don't like the viewpoint that, they believe she is connected to because of her husband, so if we can say, that those the designers don't make dresses for her.  She doesn't have to buy their stuff, they don't have to make anything for her, and then can we say that artist, florists and bakers don't have to do some things they don't want to be aligned with.  

GUSTER:  Well Melania Trump is not a protected group.  You have protected groups, you have race, gender.  

BREAM:  They're not denying service on the basis of being a protected group, because they are saying, I have gay customers and employees, I do serve them.  It's that next step, the viewpoint which is why these designers are saying I don't like the viewpoint of Mr. Trump.  It is about that.  

GUSTER:  Well the designer is saying, yeah, I don't want to dress her but if she walked in the shop I'm sure they would sell her a dress.  That is the major difference of what this two things are.  If they said I'm not going to serve Melania, because of her race or I don't agree with her racial identity.  That would be a problem.  

BREAM:  We got to leave it there, Eric, great to see you tonight, thank you so much.  

GUSTER:  Thank you.  

BREAM:  More news right after this.  Stick around.  

(COMMERCIAL BREAK)  

BREAM:  Developing tonight, here's a fun one.  A writer for Cosmopolitan magazine is facing criticism for suggesting that Victoria's Secret designs racist lingerie.  It all started with chain Daniel Fashion Show, of course I got to show it to you in Paris were models flaunting Asian and Mexican inspired fashion.  One writer not amused.  Arguing the lingerie chain is guilty of cultural appropriation.  After the article mad waves, the link was removed from the magazine's website.  

Schools across the country are coming under increased scrutiny tonight as they take sensitivity and accommodation to towering new heights.  First at the college level, remember that crunch time before your exams?  Did your school bring in these cute puppies to help you manage the stress?  How about a massage?  And secondly at a high school level, some of America's most beloved important classics have been banned from classes.  Trace Gallagher have post those reports tonight from our west coast newsroom.  I want a dog, Trace.  

TRACE GALLAGHER, FOX NEWS CORRESPONDENT:  Shannon, the adventures of Huckleberry Finn was written 130 years ago, to kill a mockingbird, nearly 60 years ago.  Both have been required reading in schools for decades and now both have been yanked often of the shelves in Accomack County Public School in Virginia.  The district superintendent made the call after a parent complained during a school board meeting about the books having racial slurs.  Listen.  

(BEGIN VIDEO CLIP)  

UNIDENTIFIED FEMALE:  Right now we're a nation divided as it is.  So what are we teaching our children?  We're validating this is words are acceptable and they're not acceptable by any means.  

(END VIDEO CLIP)  

GALLAGHER:  Not everyone agrees with the move with one resident saying quote, I don't want to see it happen, because if you start with one racial word in a book and have to go on and on, pretty soon you'll be burning books left and right.  A committee of faculty and parents will make a formal recommendation as to whether the books can come back or not.  For the record, there are 219 racial slurs in Twain's novel, 48 in Harper Lee's.  

And have you heard this?  Some college campuses like the University of North Carolina are so concerned about the stress of final exams?  They're now offering free food, acupuncture and massages for students of so called relaxation stations.  At the University of Louisville, you can engage in puppy therapy, and at the University of Missouri, Kansas City, you could take a break from studying for a stress buster event featuring coloring meditation and some knitting workshops, Shannon.  

BREAM:  Thank you, Trace.  We're going to get a relaxation station set up in here, guys that sounds good, complete with dogs.  

Up next, Megyn's "Settle for More" book tour makes a stop at the villages in Florida.  They loved her.  We are going to take you behind the scenes, next.  

(COMMERCIAL BREAK)  

BREAM:  Earlier today Megyn Kelly went to The Villages in Orlando on the final leg of this week's "Settle for More" tour.  She said a bog thank you to all of our Fox News fans for the huge out pouring of support that you've given her all throughout the week.  Chicago, Kansas City, Fort Hood, and especially check it out today at the villages, watch this.  

(BEGIN VIDEO CLIP)  

MEGYN KELLY, "THE KELLY FILE" HOST:  The Villages. Here we come.  

(APPLAUSE)  

(CHEERS)  

KELLY:  Great to see you again.  

UNIDENTIFIED FEMALE:  Hi, nice to meet you.  

UNIDENTIFIED MALE:  Hi, Megyn.  

UNIDENTIFIED MALE:  How are you?  

UNIDENTIFIED MALE:  Nice seeing you.  

UNIDENTIFIED FEMALE:  She is beautiful.  She is a beautiful girl, yes, yes, yes.  

KELLY:  Hi there.  How are you?  What's your name?  

UNIDENTIFIED FEMALE:  Olivia.  

KELLY:  How old are you?  6?  

UNIDENTIFIED FEMALE:  7.  

KELLY:  Hi.  

UNIDENTIFIED MALE:  Hello.  

KELLY:  Nice to meet you.  I hope you learn something from the book. Pardon the swear words.  There are a couple of them in there.  Just read right by those.  

UNIDENTIFIED FEMALE:  A picture.  

KELLY:  Thank you.  

UNIDENTIFIED FEMALE:  It was a lot of fun.  I enjoyed it.  

UNIDENTIFIED MALE:  I just got to tell her we watch her all of the time. Love her show

UNIDENTIFIED MALE:  Oh my god, Megyn Kelly.  

KELLY:  Hi.  You look like a man with style.  

UNIDENTIFIED MALE:  I watch the show a lot so it's a great experience to meet her.  

UNIDENTIFIED MALE:  I've watched Megyn through the entire election.  I kind of got to know her.  

UNIDENTIFIED FEMALE:  I loved it.  She is just as beautiful as I thought she would be and she is so nice.  

KELLY:  Thank you.  

UNIDENTIFIED FEMALE:  Hi, nice meeting you.  

KELLY:  I love that.  That makes me happy.  Good for the soul.  

(APPLAUSE)  

(CHEERS)  

(END VIDEO CLIP)  

BREAM:  How fun is that.  Oh my gosh, we got a round of applause here in the studio.  That looks like a really fun week.  Although I'm sure it was a long one out there on the road.  Do not forget to go on and buy your copy of "Settle for More" right now, thanks for watching.  I am Shannon Bream, this is "The Kelly File" and Ms. Kelly will be back with bestselling author herself, back here, next week with you on Fox News.  

END

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