SUNDAY MORNING FUTURES

What Trump may do in DC that will surprise some Republicans

This is a rush transcript from "Sunday Morning Futures," December 24, 2016. This copy may not be in its final form and may be updated.

MARIA BARTIROMO, HOST: Good morning.

A new year brings a new administration and a shakeup to the White House.

Hi, everyone. Thanks for being with me. Merry Christmas. I'm Maria Bartiromo. This is "Sunday Morning Futures".

President-elect Donald Trump putting the final touches on his administration with just a few weeks until the inauguration, what can we expect in 2017? I'll ask former House Speaker Newt Gingrich in just a few moments.

Plus, what is next for the Democratic Party after Hillary Clinton election night defeat and a failure to gain a majority in the Senate? A former spokesperson for the Clinton campaign will join me.

BARTIROMO: And what will changes to tax rates and regulations do to the economy under the president-elect? I'll sit down with these picks for Treasury and Commerce secretaries, Steve Mnuchin and Wilbur Ross, as we look ahead on "Sunday Morning Futures" right now.

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BARTIROMO: President-elect Donald Trump's victory on election night turning the nation's political landscape upside down, marking a victory for the millions of Americans angry with the political establishment.

So, what can we make of Mr. Trump's incoming administration so far, and what does 2017 hold for him and the country?

Former House Speaker Newt Gingrich is the author of "Treason". He is a Fox News contributor.

And it is good to see you again, Mr. Speaker. Thanks so much for joining us.

NEWT GINGRICH, FOX NEWS CONTRIBUTOR: It's good to be with you and it's a very exciting time to watch the development of the new Trump administration.

BARTIROMO: It really is. It's been fascinating to see the picks that he has chosen, in terms of some key roles.

Let's talk about 2017 what it looks like. We're now less than a month away from the inauguration.

What do you expect to happen once President Trump takes office?

GINGRICH: Well, first of all, I think the opening couple days he's going to repeal 60 percent or 70 percent of Obama's legacy by simply vetoing out all of the various executive orders that Obama's used because he couldn't get anything through Congress.

I think, second, Republicans will be a little surprised, I think that President-elect Trump is going to reach out to Democrats and try to form a Trump majority in the House and Senate on things like infrastructure, on health reform, to see whether or not we could break out of the gridlock of the past. And I think he'll have the active support of both the Speaker Ryan and Senate Majority Leader McConnell to reach out and see in the Senate if we could get seven or eight Democrats hanging out with us, we'd really be in great shape.

In the House, they don't need them as much because of the difference in the rules. But Speaker Ryan has always felt that bipartisan achievements last longer, they're better. They're harder to work out. You have to think them through more.

If you look at the mental health bill which just passed, which was a huge bill and the 20th Century Cures bill which has enormous impact on the National Institutes of Health and the Food and Drug Administration these are bipartisan. Only a handful of people voted against him and that's because the homework had been done on a nonpartisan basis to get a really good bill.

Well, take infrastructure, there ought to be a way for Democrats and Republicans to come together to try to make America's railroads and America's highways and America's water systems dramatically better. You look at Flint, Michigan, over 100-year-old water system, genuinely hurting the health of people. There ought to be you away to come together deep that. T

here are a number of other issues where I think President-elect Trump will turn out to be an American president, not just a Republican president, and it will be conscious, I hope he'll meet in the near future with the Black Caucus, with the Hispanic Caucus and really extend an invitation to them to come to the White House to sit down together and define ways to help people who genuinely need help.

BARTIROMO: He's also made a promise to begin tax reform, first 90 days in office. That's what Mnuchin has said, that's what Donald Trump has said.  Will he keep that promise?

GINGRICH: Well, I think you've got a huge advantage in that Chairman Brady of the Ways and Means Committee and Speaker Ryan worked together, when Ryan was head of Ways and Means. And that's where the bill will originate, and they have strong, clear ideas that are very compatible with Trump and I'm sure Mnuchin is sitting down with them trying to work out a really powerful, strong bill.

Remember, one of the great challenges for President-elect Trump is to take the Trump rally on stock market and turn it into a Trump reality in the economy, and that means things like passing a very powerful, very dynamic tax bill that liberates American business and starts creating a lot more jobs here at home.

BARTIROMO: Yes, for sure. That's what this market has been rallying on.

Now, then, there's the repeal and replace of Obamacare and then there's securing the borders. Will they keep the promises?

GINGRICH: Oh, I think overall he will. Look, we're going to repeal Obamacare, but we're going to keep key things that people really like, for example, the ability to make sure that you can retain your health insurance once you're in the system, no matter what your precondition might be, the ability to stay on your parents' insurance until you're 26.

Although I think the president-elect wants to have an economy so robust and so exciting that, you know, we're at a 75-year high of young people staying and living with their parents. Not in 75 years have we seen this many young people who can't find jobs. Let's be clear, the number one reason they're staying with their parents is they're not earning enough to move out.

BARTIROMO: Right.

GINGRICH: I think with all fairness, having two grown daughters, I can say you get to a point where your parents would like you to be able to have your own place.

BARTIROMO: Oh, you love it.

GINGRICH: And I think -- yes, I think Trump will make both the kids and the parents happy, if he can get that economy moving.

BARTIROMO: Yes, you're not kidding there.

All right. In terms of challenges, Newt, what do you see as the challenge for Donald Trump? I recognize he's got both chambers with the Republican majority, which is good. He can get a lot done in that regard, but what will be his challenges for 2017?

GINGRICH: I think he's got three immediate big challenges.

The first is just the nature of the world. Every morning, he's going to get up with very important things in mind, and lots of little things are going to come piling on. And he's going to have to learn to pass out and ignore the little things given to cabinet officers, given the staff, and stay focused on the big things. Reagan did it the best of anybody I've seen in my lifetime and I think that Trump has to, if he's going to get stuff done, he has to come back with real focus on the big things.

Second, I think, he's going to discover that the whole process, the bureaucracy, the red tape, the degree to which the government employee unions stop you from doing things, all these guys who run these big companies are going to suddenly find out, they're surrounded by all this red tape. Cutting through that, getting civil service reform, getting control of these big bureaucracies will be an enormous challenge. Nobody's done in my lifetime and I think this is a cabinet that could do it. But they're got to stay focused on that.

And third, I think you're going to have a permanent opposition, sort of a combination of the news media and the Elizabeth Warren hard left and they're going to attack every single day, and they're going to find something to attack all the time, and they've just got to -- Trump's got to get used to the idea that's OK, that's just noise. His job is to produce for the American people and frankly, to the degree that the Democrats decay into being just the anti-Trump party, they will keep themselves in the minority for a long time.

BARTIROMO: Yes. You're making a lot of good points. Well, that attack from the sharp left is probably one of the reasons he got elected. I mean, there's this pull going on, and now they're talking about Keith Ellison, not listening to voters still on the Dem side. We're going to speak with Karen Finney about that coming up.

Newt, it's been such an incredible pleasure and an honor to talk with you this year, on such an unbelievable year. What's your big takeaway from 2016?

GINGRICH: That America is still an unbelievable country and the American people are still in control of their destiny and they didn't do what they were told to do, they didn't do what the media thought they would do. They created history on their own, despite all the elites. What makes America the most unique country in the world for individual liberty.

BARTIROMO: I like it. Mr. Speaker, good to see you. Thanks so much.

GINGRICH: Take care.

BARTIROMO: Merry Christmas. Happy New Year to you, Newt Gingrich.

What is next for Hillary Clinton and who will emerge as the leader of the Democratic Party? I'll be speaking with the former Clinton campaign spokesperson on that next.

Then, more on Donald Trump's economic plan with Treasury Secretary Nominee Steve Mnuchin and Commerce Secretary Nominee Wilbur Ross.

Follow me on Twitter, @MariaBartiromo, @SundayFutures. Let us know what you'd like to hear from our guest line-up today. Stay with us, as we look ahead right now on "Sunday Morning Futures."

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BARTIROMO: Newly released court documents the FBI seized and searched the computer of top Hillary Clinton aide Huma Abedin, owned by her estranged husband, Anthony Weiner. That's to continue the email investigation into the Democratic presidential nominee.

The FBI discovered Abedin and Clinton were emailing one another. But what exactly the messages were about was unclear at the time. This further angering Democrats who feel the reopening of the FBI investigation into Clinton's emails a few weeks before the election hurt her chances to win against President-elect Donald Trump.

Karen Finney is a former spokesperson for the Clinton campaign. She's also a former Democratic National Committee spokesperson.

Good to see you, Karen. Thanks so much for joining us.

KAREN FINNEY, FORMER DEMOCRATIC NATIONAL COMMITTEE SPOKESPERSON: Great to be with you, Maria.

BARTIROMO: So, first, let me ask you about these unsealed search warrants in Hillary Clinton's campaign probe and what it reveals. What's your reaction?

FINNEY: Well, I think they revealed what we said all along. I mean, it shows that there was incredibly flimsy information that Director Comey was going on. At the time, there were reports that part of the reason Director Comey made the announcement that he did ten days out from the election is that he was afraid of the possibility of leaks coming out of his New York office, so he went ahead and made this announcement.

And as we said then, and as we discovered ten days later, there really was no there there. There were no duplicate emails or information. It's very troubling what that says about Director Comey and his ability to run the FBI.

BARTIROMO: Well, let me ask you about this, because maybe, could it be that it was just the fact that it was on, her emails were on Anthony Weiner's computer that unnerved Comey. Basically, more carelessness to have national secrets or important emails on Anthon Weiner's computer when we know he was sexting and doing all sorts of -- well, whatever he was doing.

FINNEY: Right. Well, look, here's the thing I would say about that -- what concerns I think a lot of people, and I think still is the open question, is that Director Comey made a decision to do something that was unprecedented and sort of without actual previous precedent I guess is the way to say it.

And what's interesting about that is consider that when we were talking about Russian hacking, there were 17 of our intelligence agencies had just about a month or so earlier agreed that among the intelligence that there was evidence that the Russians had been hacking, and that's when DNI and homeland security came out and made a statement, and the FBI Director Comey didn't want to join that statement because he thought it would be too political. And so, for him to break with precedent and break with sort of the norms of the FBI, ten days before an election, to do something that was clearly very political, I think it's troubling.

And look, here's the thing, Maria, that I think is important. At this point the election is over, the results are in, Donald Trump is our president-elect but I do think there are questions raised going forward about the FBI that are legitimate and I think things we need to look into, and I can just tell you from having been on the ground that there was absolutely a chilling effect in terms of the momentum from being in some of the same states, some of those key states just a few days before that letter came out, to a few days after that letter came out.

BARTIROMO: Right. Let me move on, Karen, because there's a lot of debate about where the party goes now, and I know that voters recently voted back in Nancy Pelosi, you've got Elizabeth Warren pulling from the left of center, you've got Bernie Sanders and his very leftist policies pulling the party toward the left from the center, same with Barack Obama. Do you think that's what the people want? I mean, based on what we just saw in this election, do you think that voters want to see the Democratic Party all the way to the left, the way that these folks are pulling the party?

FINNEY: Well, I take a different view. And what I see in terms of the leadership here in Washington is, kind of an array, frankly, of voices and faces. Don't forget, there's Joe Manchin. Don't forget Mark Warner of Virginia, and there are -- so I think that is actually a good thing to say, let's open this up and hear from more parts of our party.

Look, I also think, Maria, let's be clear about what the results of the election really told us. I mean, Hillary Clinton has 2.8 million more votes in the popular vote than Donald Trump. So, my question is, what about those people? We know that some 3 million or more people voted for third party candidates. What about those people?

So, when we talk about what did Americans want I think we need to look at the full picture and I think when we look at that full picture, I think the issue here is making sure that we hold Donald Trump accountable to the promises that he made to the American people, because I think what people wanted, it wasn't just about anti-establishment, although I think that was very clear head wind, no question.

At the same time, people wanted to be heard. It was about jobs. It was about protecting Medicare and Social Security, and infrastructure, building, creating --  

BARTIROMO: That's my point.

FINNEY: So, all of those things, but this is my point. So, my point is, all of those things are things that Democrats have been also talking about for a very long time. President Obama tried to get many of those things done. He was, you know, rebuked, frankly, at every turn, by Republicans who basically said anything from Obama is going to be a negative.

So, let's see --

(CROSSTALK)

BARTIROMO: The first two years of his administration, he had both chambers. He could have gotten anything done for the first two years, and he chose to push through Obamacare.

FINNEY: That's not exactly how it works, and again, if the Republicans had been interested, though, at the time in getting infrastructure done, we could have gotten that done. So, my point here is, I think what you're seeing inside Washington is an attempt to try to broaden out sort of who are the leaders or who are the -- of the party.

But, look, I think there's a bigger challenge for the party going forward and that is, we need to be much more broad in the voices and faces of our party. You know, we have people in our party from all walks of life, from all parts of this country, from, you know, people who serve in the military, people who, you know, work in restaurants, people who are small business owners. So, people in all facets of life and I think what we need to do is represent those folks.

And I think part of the issue here is, we need to have a stronger presence out in the states, have a real 50 state strategy like we had under president, I'm sorry, Chairman Howard Dean was trying to bring to fruition, which was to really make sure that we showed up everywhere and ask people for their votes, but that we were engaged in communities around the country, all throughout the year, not just a few days before the election, and that we were really strengthening and building on the talent that exists in our party in the states, and where people really live and really listening to people at that level.

BARTIROMO: Yes, for sure. I mean, I think when you look back at the election, that was it was all about. You had a lot of people on the left talking about transgender bathrooms and police brutality and climate change, and you had Donald Trump's team talking about jobs. That was the big missed opportunity.

FINNEY: Although I take issue with that. I mean, there had been a couple studies that showed that Hillary Clinton talked about jobs more than anything else, and what I would tell you is that, you know, some of the coverage did not always reflect that. I mean, there was a lot more coverage about other topics than necessarily her jobs plan or plans to bring back manufacturing or her plans to revitalize, you know, not just urban areas but rural areas, and looking at sort of how do we make sure that we increase incomes for people.

So, there was a lot that we were talking about, that she was talking about that didn't get the same kind of coverage as let's say emails and I think what's important here --

BARTIROMO: So, she should have done more press conferences, she should have done more interviews and you should have done more debates.

FINNEY: Well, look, I think we would have loved to do more debates but again, I mean, there's an element to what gets covered. I think it certainly does impact what people here and that's one of the other telling things of this election, felt like to some degree, there was a conversation going on in the national media --

BARTIROMO: Sure.

FINNEY: -- that I think what we know now from sort of Facebook and sort of fake news and the alt right, and all of that. There was a whole other conversation going on that I think we need to understand better.

BARTIROMO: Right. Karen, great to see you. Thank you so much. We'll be watching.

FINNEY: Take care.

BARTIROMO: Karen Finney joining us there. And we'll be right back.

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BARTIROMO: Welcome back.

President-elect Donald Trump preparing to take the helm at 1600 Pennsylvania Avenue. But many of his critics are still questioning his ties to his own organization. Has he done enough to separate himself from his businesses? And is there any cause for concern?

Judge Michael Mukasey is with me. He's a former attorney general under President George W. Bush.

And, Judge, it's always an honor to talk with you.

MICHAEL MUKASEY, FORMER ATTORNEY GENERAL UNDER GEORGE W. BUSH: Pleasure being here.

BARTIROMO: Thank you so much for joining us.

What do you think about this? It seems to me this is an area that Donald Trump really has to get right, and there could be some blind spots around.  Do you think he's done enough to separate himself from his business?

MUKASEY: I don't think we can tell, because he hasn't really gotten up and described what it is that he intends to do to separate himself from his businesses, and it's potentially a problem, in part because there are no laws that apply here.

Now, in a way that creates a lot of freedom, but it also creates a lot of freedom for critics who can simply get up and say, you know, this creates an appearance problem and not have to define any order which it relates.

BARTIROMO: Right. And that's what's going on right now.

MUKASEY: That's what's going on right now, right.

There is a clause in the Constitution that says that a president is not allowed to receive among other things emoluments from foreign governments.  That's never been delved into or applied as far as I know.

BARTIROMO: It didn't have to be dealt with, right?

MUKASEY: Correct, because we've never had a situation like this.

BARTIROMO: Totally different.

MUKASEY: Right. And so, the question is, if a foreign government buys something, and pays the same thing that everybody else pays for it, like for example, space at a Trump hotel, and any of that proceeds goes to him, is that an emolument? I don't know that it is.

BARTIROMO: Is it -- I mean, in past presidential situations, they would just put their money and their assets in a blind trust. Here he can't do that. He's got his kids running the business.

Is it enough for him to say, my sons will run the business, we're not going to have discussions about what's going on in the business?

MUKASEY: I don't know that it is, because part of it relates to where the money and the business goes, and obviously, he's going to go back to the business. So, to the extent they're creating an interest for him to go back to, there are questions about that. In addition to which, if people are doing things and/or doing business with those companies in the hope of getting access to the family, and to him, that also creates the appearance problem.

BARTIROMO: And you don't want that appearance.

MUKASEY: Right.

BARTIROMO: He said that he's going to have a press conference early January to tell us about this so let's just say more to come on that subject. Let's switch gears and ask you about the executive orders. I think part of the repudiation that voters felt in this election was no more executive orders to President Obama. Now, President-elect Trump has said as soon as he gets into office, he's going to start using his pen to reverse some of those.

What are you expecting on day one and two?

MUKASEY: I'm expecting that there will be a list of executive orders, I'm sure there are people who are working on that even as you and I are talking, to draw up a list of executive orders that ought to be repealed, and ought to be repealed on day one. They may include things like for example the order closing Guantanamo. I would expect that would be an early candidate.

They may include things like an order saying that we're going to limit interrogations to the army field manual, other things of that sort.

BARTIROMO: Let's talk about the Guantanamo Bay for a moment. Was it day one that President Obama signed an executive order, I will close Guantanamo Bay?

MUKASEY: Actually, it was day two.

BARTIROMO: Day two, okay.

MUKASEY: Day two and there was this wonderful ceremony. He signed three or four of these relating to prisoner treatment and to Guantanamo, and I can remember the scene when he signed the one relating to Guantanamo, because he read it out, sort of staggered through it, frankly, by the power vested in me, consistent with the national security interests of the United States, closing Guantanamo, he signed it with a great flourish, and then he said, and I think you can still watch this on YouTube.

BARTIROMO: It's on YouTube right now?

MUKASEY: Yes.

BARTIROMO: OK.

MUKASEY: He said "Greg" which was a reference to Greg Craig, who was then White House counsel, is there another order saying what we're going to do with these people? Which meant he hadn't thought through something that was the centerpiece or a centerpiece of his campaign.

BARTIROMO: He didn't have a plan.

MUKASEY: None.

BARTIROMO: No wonder they all went back to the fight.

MUKASEY: Nobody had thought it through, nobody had thought it through beyond signing the order, and the voice off camera belonging to the White House counsel, Greg Craig, said we're going to have procedures and he looked earnestly into the camera and said, yes, we're going to have procedures.

BARTIROMO: Even as we sit here today, Judge, President Obama is trying to get as many people out of Guantanamo as possible. He wants to do everything he can to make it hard for Donald Trump to reverse it.

MUKASEY: Correct. And to increase the per capita costs and claim that it's wildly expensive. Of course, the easy way to drive down the per capita cost is to have more capitas there, that is more people.

BARTIROMO: Right, to send more people there.

MUKASEY: Right.

BARTIROMO: So, you think Guantanamo Bay is one of the first ones that Donald Trump --

MUKASEY: Probably, probably, I think it should be. I mean, I don't know that, but I think it should be an early candidate.

BARTIROMO: Really interesting stuff.

Judge, good to see you

MUKASEY: Good to see you.

BARTIROMO: Thank you so much, Judge Michael Mukasey there.

Jobs, taxes, regulations -- up next, my interview with Treasury Secretary Nomine Steven Mnuchin and Commerce Secretary Nominee Wilbur Ross. What they plan to do in the first 90 days and beyond.

We're looking ahead today on "Sunday Morning Futures".

(COMMERCIAL BREAK)

BARTIROMO: Welcome back.

Creating jobs, rolling back regulations, cutting taxes -- these are some of the priorities of President-elect Trump's economic team. On "Mornings with Maria" on the Fox Business Network, I sat down with Treasury Secretary Nominee Steven Mnuchin and Commerce Secretary Nominee Wilbur Ross who told me tax reform will be priority number one with the first 90 days in office.

(BEGIN VIDEOTAPE)

STEVE MNUCHIN, TREASURY SECRETARY NOMINEE: We're going to have an integrated plan and work closely between Commerce and Treasury to make sure we drive growth in this country. Our number one priority is to sustain 3 percent to 4 percent GDP.

BARTIROMO: Three percent to 4 percent GDP is almost double what we're seeing right now, and, of course, how do you get there is the question, in terms of growth? When would you expect 3 percent to 4 percent economic growth?

MNUCHIN: You know, I think this is something over the next couple of years we're going to get to and I think it's very achievable. I mean, this has been an administration for the last eight years where we haven't had enough growth, our number one priority is going to be tax reform. We think that, by lowering the corporate tax rate, we're going to make U.S. corporations incredibly competitive, and create an enormous amounts of money that comes back onshore and creates jobs.

BARTIROMO: Wilbur, let me ask you about steel tariffs that you've dealt with in your private life and running your business, and the idea that people are worried about potential tariffs actually being a disruptor for economic growth. How do you see tariffs and trade changing?

WILBUR ROSS, COMMERCE TREASURY NOMINEE: Well, trade is the important thing to change, and tariffs are one potential ultimate tool. But really, they're for the most part a negotiating tool to get the countries to relieve the tariff and non-tariff barriers to our trade. The real objective is to build our exports, not so much to kill the imports. It's a total mischaracterization of what's being done. If need be, there will be tariffs and there will be especially tariffs for punitive purposes for people who dump.

BARTIROMO: Steven, if it's one thing that you hear from managers of businesses and CEOs, it's over and over again, it's the fact that our tax plan is the most unfavorable in the industrialized world, the highest taxes in the industrialized world.

Talk to us, you said in the first 90 days you're going to have tax reform.  Walk us through it.

MNUCHIN: Sure, so this is going to be a major priority and there's two aspects of it. One as I mentioned is corporate taxes and the other is personal income taxes, and we're going to simplify the personal income tax, lower from seven brackets down to three, simplify it, deliver a very significant middle income tax cut that's going to be combined with the child care program.

And the other aspect of it is on the upper end, not -- we'll cut the tax rate, but it will be offset with a significant reduction of deductions.  So, for the upper class, it won't be a tax cut but it will be a simplification, it will lower the marginal rate, which will spur investment.

BARTIROMO: You say it will spur investment, because you have to assume that, with a better situation on earnings, because companies are paying less in tax, they will reinvest that money in their business and higher?

MNUCHIN: Absolutely. We fundamentally believe in dynamic scoring of taxes, and this is something we're going to be working with Congress and passing legislation.

BARTIROMO: What regulations out there do you think are most onerous, that you really do need to take a second and third look at?

MNUCHIN: Well, the first thing we're going to do is look at Dodd-Frank.  It is way, way, way too complicated, and there's many aspects of it that we got to kill. There's many aspects of it that prevent banks from lending, and we need to make sure that banks lend. We want to see huge growth in this economy. It's small and medium-sized business and we need to make sure the banks are lending to them.

BARTIROMO: So, the rules had become so stringent that the banks pulled back, and they were lending less. Is that right?

MNUCHIN: Absolutely. And the rules are so complicated, that many times banks don't even know how to interpret many of the rules. So, let me just say, you know, I believe we need to have proper regulation of banks that have FDIC deposits to make sure that we keep the safety of FDIC deposits.  But having said that, there's many aspects of Dodd-Frank that cross over so many things that make no sense, that we're going to look at.

BARTIROMO: Well, you probably experienced this as well, Wilbur.

ROSS: I did, in the banks that we have.

BARTIROMO: Yes.

ROSS: The average small bank now has more compliance people than lending officers. That's a very flawed business model.

BARTIROMO: Even at the large banks, the regulators have offices there, right?

ROSS: Absolutely. That's not the way to run a bank. Government is not the right way to allocate capital. Private sector is the right way. Look at Fannie and Freddie, the two things the government had the most influence on. They're not exactly role models.

BARTIROMO: Would you move to change Fannie and Freddie at this point, move to have these privatized?

MNUCHIN: Absolutely. We got to get Fannie and Freddie out of government ownership. It makes no sense that these are owned by the government and have been controlled by the government for as long as they have. In many cases, this displaces private lending in the mortgage markets, and we need these entities that will be safe.

So, let me just be clear. We'll make sure when they're restructured they're absolutely safe and they don't get taken over again but we got to get them out of government control.

BARTIROMO: So, tell me about NAFTA. What do you want to change about NAFTA?

ROSS: Well, I think the right way to negotiate NAFTA is in conference rooms with Mexico and Canada, not, frankly, in the press room.

BARTIROMO: OK, that's a fair point, but you know, a lot of people worry, businesses in particular, that if we're going to see pulling out of TPP, looking at NAFTA, changing NAFTA, looking at anything else that may not make sense, is it too much at once? Will it create disruption as opposed to growth?

ROSS: First of all, it isn't a question of pulling out of TPP. TPP does not exist.

BARTIROMO: Right.

ROSS: It's a fiction of people's imagination at this point.

BARTIROMO: Obama wanted to push it until the last days in office. Come on.

ROSS: It's especially a figment of his imagination.

BARTIROMO: Right. So, that's the question, though, in terms of disruption. Too much at once. What do you say to that?

ROSS: My point is it's hard to say there's disruption when you don't do something you weren't doing anyway.

BARTIROMO: What about NAFTA?

ROSS: NAFTA needs to be fixed, but it's not going to be fixed with blowing up the whole world. Mexico is not going to go to zero. Canada is certainly not going to go to zero, but there are changes needed and I think the markets are recognizing it.

Look how the peso has acted. If that doesn't tell you that everybody knows there will be change, I don't know what does.

(END VIDEOTAPE)

BARTIROMO: My thanks to Wilbur Ross and Steven Mnuchin.

Up next, House Majority Leader Kevin McCarthy on immigration and repealing Obamacare. We're looking ahead to 2017, this morning on "Sunday Morning Futures".

(COMMERCIAL BREAK)

BARTIROMO: More now on some key economic issues ahead in the new Trump administration. I'm with House Majority Leader Kevin McCarthy.

Congressman, you said you'd be all about jobs. Tax reform is a priority, repealing and replacement Obamacare is a priority and border security is a priority. How do these things lead to jobs? Walk us through what your priorities are for '17 and when do you think you could actually get these things done?

REP. KEVIN MCCARTHY, R-CALIF., HOUSE MAJORITY LEADER: Well, I think all of these are going to have to start right away. That's why I set the calendar for Congress. We made sure within those first 100 days we're working in session more.

BARTIROMO: That's excellent.

MCCARTHY: We add weeks that we're working in there, we look at not just 100 days, but the first year, and we want to be working closely with this administration, the Senate as well. So, we've been meeting on a weekly basis. There's certain things we can do right away and certain things we have to start and make sure we get it right.

One, when it comes to border security. You've got to make sure your country is safe. So, President-elect Donald Trump has run on making sure this border is secure, you'll see an early bill with that. Regulations that we can deal with early on, looking at rolling them back in others.

We'll start moving those, article one, when I talked about the REINS As act and the midnight, and the midnight rules, Sue and Settle.

And then you look at ObamaCare, it has failed and everybody knows it. So, what are we looking at in a different place? We have to repeal it first, and then we're going to do, replace it with new legislation where you get greater choice, more doctor/patient relationship, a health care system that actually works, that the premiums go down, greater choice. Not an easy thing to do.

BARTIROMO: All those insurance companies, united, universal, they said they were going to lose $1 billion, they pulled out. Do you think you're going to be able to work in terms of the insurance companies offering health care?

MCCARTHY: Oh, yes. You want to have individuals that have greater choice, more options out there to pick from, and I've already sent a letter to every governor and every insurance commissioner, give us your ideas as well. So, it's not just the House or Senate involved. We want everybody's input in this, because we want to get this right.

BARTIROMO: Explain sanctuary cities to me because I don't understand why or how it's possible that for all of these years, we've been blowing off the law. I mean, what are you going to do with mayors like Rahm Emanuel who say, "Look, if you're illegal, you're safe in Chicago"?

MCCARTHY: No, America's strong because of the rule of law, and if you break the rule of law, you break down society. Two years ago, we passed a bill, if you want to ignore and only pick and choose which law you want to enforce, then you should not be recipients of federal money.

I think the sanctuary city issue is going to go away. These mayors are going to realize, they can't pick and choose what federal law they want to enforce or not. So, we need to protect the citizens there. Why would they want these individuals to come there illegally, not knowing who they are and protect? Their first role is to protect Americans.

BARTIROMO: So, how far are you willing to go in terms of voting, in terms of holding back federal funding for these cities?

MCCARTHY: Well, we've shown two years ago if you want to pick and choose the law, and it's not just in sanctuary cities. We have to be a country that has rule of law, a fairness. You can't pick and choose which ones they are.

So, you've got to uphold the laws that are passed. You've got a balance within to go through it. If you don't want that, then you shouldn't want the federal money to come with it.

BARTIROMO: Wow.

MCCARTHY: It's that simple.

BARTIROMO: There will be a lot of debates in the New Year, I could see that.

Let's talk tax reform and go back to that for a moment. We had Steve Mnuchin on the show recently, incoming Treasury secretary. Here's what he said about priorities in '17.

(BEGIN VIDEO CLIP)

MNUCHIN: Our number one priority is going to be tax reform. We think by lowering the corporate tax rate, we're going to make U.S. corporations incredibly competitive and create enormous amounts of money that comes back on shore and creates jobs.

(END VIDEO CLIP)

BARTIROMO: Trump's plan is a 15 percent corporate tax rate, the GOP House plan was 20 percent, where do you see this going?

MCCARTHY: Well, we'll sit together and work -- the only way I see it going, it's going to get lowered. If we want to create more jobs in America we have to create a structure that makes us competitive.

Right now, we're not. Right now our corporate tax rate is so high, it gives you incentive to be in another country. We also, if we're in a world economy, you create money in another country, we punish you if you want to bring that back to invest in America, we're going to change all that. Keep America competitive where we can compete around the country, create a tax system that's fair, create a tax system that's simple. We have a tax plan that fits on a postcard so every family can fill it out themselves

BARTIROMO: But should we be pushing and warning companies if you go overseas and try to get your products back in, you'll get a 35 percent tariff?

MCCARTHY: No, I think the way we solve competitiveness we create a struck too you are that makes you want to be in America. And I think lowering the tax rate, dealing with repatriation so the money can come back to America, invest in America for American jobs, solves the problem that we're trying to go out after.

BARTIROMO: So, you're not expecting to be warning the way President-elect Trump has done?

MCCARTHY: I think what President-elect Trump is doing, he's warning others that America is not competitive today, and that we're going to change all that. We're going to work closely together to make sure we get a tax code that's fair and that works.

BARTIROMO: And real quick on infrastructure, Congressman, are you going to spend $1 trillion on infrastructure? As a conservative?

MCCARTHY: A trillion dollar is very expensive. You know, I came into Congress, watched the President Obama do this stimulus and at the end of the day, more people believed Elvis was still alive than the stimulus created jobs.

But what you can do, currently today, the regulations to build a road, you wait a decade for that. You could see the reforms there, and what I like about President-elect Trump doing, he brings that business idea in, what about a private partnership? What about taking investments from the outside, changing the structure, so you can build it faster and looking at infrastructure in a different manner to make sure we build America stronger where we can be competitive.

BARTIROMO: That's what I was trying to say. As a conservative, you can't like $1 trillion in spending. You're saying you could probably get there without spending that much money?

MCCARTHY: Oh no, you can make reforms and build something easier, faster and cheaper, and you can take a reform where you allow private sector money in to make it happen as well.

BARTIROMO: Congressman, you've got your work set out for you. We're wishing you the best.

MCCARTHY: Well, I'm telling you, we will not miss this window of opportunity. America puts trust in us, they want to see change and we want to make sure it happens.

BARTIROMO: Congressman Kevin McCarthy, joining us, thank you so much.

MCCARTHY: Thanks for having me.

BARTIROMO: Great to talk with you.

We'll be right back.

(COMMERCIAL BREAK)

BARTIROMO: Well, one week until year end and it was a year that saw major stories gather the nation and the world's attention. The biggest has changed the political landscape in Washington. President-elect Donald Trump surprise victory on November 8th over Hillary Clinton was voted the top story of the year, in an associated press pool of editors and news directors.

We bring in our panel right now. Ed Rollins is a former campaign manager for the Reagan/Bush ticket in 1984. Joe Trippi is a former campaign manager for Howard Dean and a Fox News contributor.

Gentlemen, good to see you.

And, wow, what a year. It really has been an honor to sort of navigate things with you all year, Ed.

ED ROLLINS, CNN POLITICAL ANALYST: Well, the truth of the matter is we sat here a year ago and said that Donald Trump is going to be president and Hillary Clinton and Democratic Party are going to be in kind of disarray.  Just the opposite story could have been told. I think most people thought Mrs. Clinton was going to be the president and, obviously, the Democrats would do well in the House and Senate.

It just goes to show that campaigns matter and politics matter and candidates matter. And I think to a certain extent, Trump became this extraordinary candidate by the end who captured these last couple of weeks, this great unrest that's out there today and now he's to produce.

BARTIROMO: You know, we were just talking with Karen Finney and she felt like it was the coverage from the media. Why do you think all of that is?

ROLLINS: Well, you live with the media. I mean, the truth of the matter is they're very much a part of the campaign. But you have to capture that concern of the voters out there. And Trump talked to that voter that was very unhappy.

BARTIROMO: He sure did, Joe, because he made his campaign all about jobs.

JOE TRIPPI, FOX NEWS CONTRIBUTOR: Yes. And he also made it about Twitter.  I mean, look, what we saw was not just -- first of all, Ed, and I talked a year ago. We all would have agreed that if Trump had won, it would have been the biggest -- should be the biggest news of 2016. And it is.

The second of all, it's clear that the change in media environment, and his understanding of social media, and how to keep his, you know, what he wanted in front and center and have mainstream media pick it up, was a bold stroke that worked for him. And I think we're going to see it looking forward, in his presidency for sure.

BARTIROMO: Well, how much of it was, though, that she was a flawed candidate? I mean do you think things would have been different had President Obama pushed somebody else forward? Or had the Democratic Party not been afraid to challenge Hillary?

TRIPPI: Look, I -- look I think when you lose by 78,000 votes the three states that she lost, every single reason that everybody is putting out there, from hacking, to Comey, to their inability, Democratic inability to turn their vote out, every single one of them is going to be right. Every single reason is why she lost. But the fact of the matter is she did win the popular vote. I'm not -- he's president. Not taking that away from him.

BARTIROMO: Right.

TRIPPI: But I'm saying that in the end I think the party needs to take a seat, look at what really did go wrong. Not -- I mean, the Comey and the other things are, and whether her server, those are all things that weren't in control. But did we get out the vote the right places? Did we have a message that appealed to blue collar workers in the Midwest? You know.

BARTIROMO: Right.

TRIPPI: And clearly, we need to improve. So, I mean, I think it's distraction to talk about the other stuff, even though I think as a country we should look into what happened, with the Russians, to make sure we understand it. I don't think that as a party it does us any good to focus on that when we should focus on what did go wrong.

BARTIROMO: Especially when you look at Wisconsin, Michigan, Ed.

ROLLINS: She didn't create any excitement.

TRIPPI: Yes.

ROLLINS: She's obviously a woman who served her country very ably and well and served both as first lady and senator of her state. She was the inevitable nominee and she probably shouldn't have been. She wasn't a very good general campaign, and for a variety of reasons she got knocked off.

But the integrity issue was her issue. She built up over a 30-year period, people didn't believe she was honest and I think to a certain extent that's what did her in in the end.

BARTIROMO: What about the Republican Party, Ed? Let's face it, Donald Trump was not an establishment candidate by any means. A lot of the GOP was against him.

ROLLINS: He's still not an establishment candidate.

BARTIROMO: Right.

ROLLINS: It's now his party. He has the Congress, both the House and the Senate. They're not going to roll over and play dead for him, particularly the Senate, but he has to lead them and he has to basically put some wins on the board, he has to do some things that make Americans feel better about themselves and he really has to drive this economy.

If he drives this economy, in two years the economy's better in those states we talked about there, then, obviously, Republicans will do well in the future. If not, we'll have failed and failed miserably.

BARTIROMO: It's also an experiment in terms of creating an environment for business that they will hire, because the Dems will say that's actually not the way to grow an economy.

ROLLINS: Well, I think we're going to have to rethink how we grow an economy. And I think the combination of growth, robotics, and where we go there -- we're not going to need the big manufacturing jobs back in this country. They're not going to come back from China, Mexico, anywhere else.  So, you have to duplicate some other kind of job. That's going to be the test.

BARTIROMO: Yes, it's about skill sets.

All right. We'll take a short break. And then, when we come back, we're looking ahead. The one thing to watch in 2017 from our panel, on "Sunday Morning Futures", next.

(COMMERCIAL BREAK)

BARTIROMO: And we're back looking at the big thing to watch for the New Year.

Ed Rollins, what do you think?

ROLLINS: Well, first of all, I'm going to watch President Trump. I mean, he's a big personality. Can he deal on the world stage? Can he get his agenda through? He has a brand-new team, most of whom have never been near Washington and certainly the positions they're in. And we'll see if he can move the Congress. If the Congress basically and he has a collaboration and can push some stuff through, then, obviously, we'll have a good year.

BARTIROMO: And also, Joe Trippi, the experiment of putting all these business people in government roles.

TRIPPI: No, that's absolutely correct. And I think, look, we -- you celebrate, you know, getting 20,000 on the Dow, that's going to inevitably happen, a lot of working people were left behind. They weren't part of that rally from 10,000 to 20,000. And Obama's Democrats paid a price for that anxiety, and watching the -- you know, Wall Street move but nothing else did, in those states we talk about, Wisconsin, Michigan, Pennsylvania.

BARTIROMO: Yes.

TRIPPI: The question is, is that what you're looking for? Does this administration, with its business leaders, does it change that? Or does it work like everything keeps moving in Wall Street like they're still getting left behind? That's going to be what to look for in 2017.

BARTIROMO: Can they do it? Real quickly.

ROLLINS: I think they can. I think they got a year to do it. They're going to move a lot of stuff fast.

BARTIROMO: All right. Ed Rollins, Joe Trippi, good to see you both.

That will do it for "Sunday Morning Futures". I'm Maria Bartiromo. From all of us, have a very Merry Christmas and wonderful New Year.

"Media Buzz" begins now.

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