Report: Trump team considering partial privatization of VA; Chaffetz: 'Terribly arrogant' of Obama to take Utah's land

This is a rush transcript from "The Kelly File," December 29, 2016. This copy may not be in its final form and may be updated.

SANDRA SMITH, GUEST HOST: Breaking tonight, the Obama administration announces its retaliation against Russia for their cyber attacks and meant to interfere in our electoral process. As tensions between Washington and Moscow heat up. Just 22 days away from Donald Trump assuming the presidency.

Welcome to "The Kelly File." I'm Sandra Smith in for Megyn Kelly. The White House today announcing their punitive actions including the sanctioning of nine individuals and entities, the removal of 35 Russian intelligence operatives from the United States and the closure of two Russian owned compounds in New York and Maryland. When asked why the administration didn't leave this decision to President-elect Trump's administration, White House Principal Deputy Press Secretary Eric Schultz responded with this.  


ERIC SCHULTZ, WHITE HOUSE PRINCIPAL DEPUTY PRESS SECRETARY: The President is leaving office in a couple of weeks but he's the president from now until then. And the President-elect once he assumes office on January 20th will be in a position to make these sorts of decisions.  


SMITH: Schultz was also asked about concerns that the Obama White House is purposely pushing President-elect Trump into a diplomatic corner.  


SCHULTZ: If the next president wants to decide to let, re-allow in senior intelligence officials from Russia, they can go and do that. If the next administration wants to lift sanctions against senior Russian intelligence units to make it easier for them to interfere in our elections, they can go ahead and do that, we just don't think that makes much sense.  


SMITH: As for his part, just hours ago, Mr. Trump offered his take on today's actions saying, quote, "It's time for our country to move on to bigger and better things. Nevertheless, in the interest of our country and its great people I will meet with leaders of the intelligence community next week in order to be updated on the facts of this situation."

In just a moment, we will have reaction from Pete Hoekstra, Julie Roginsky and Charlie Hurt. But we begin with White House correspondent Kevin Cork who is in Honolulu with the President.

KEVIN CORKE, FOX NEWS WHITE HOUSE CORRESPONDENT: Good evening to you Sandra from Hawaii. Seventy two hours, that's how long nearly three dozen Russian operatives have to get out of the USA. They have been expelled by the Obama administration at least in part in retaliation for alleged Russian cyber hacking activity in the run-up to the 2016 presidential election.

President Obama making a statement about his decision today and it reads in part, "These actions follow repeated private and public warnings that we have issued to the Russian government and are a necessary and appropriate response to efforts to harm U.S. interest in violation of established international norms of behavior."

He went on to add this, these actions are not the sum total of our response to Russia's aggressive activities. We will continue to take a variety of actions at a time and place of our choosing, some of which will not be publicized.


SCHULTZ: Our bottom line is that what Russia has been engaged in over the last few months and years is unacceptable. It's outside the norms of diplomatic behavior. And the President is sending a message today to tell them to cut it out. And that's why he ordered aggressive actions.  

CORKE: As you know, Sandra, the White House is not been shy about accusing Russian President Vladimir Putin of orchestrating the hacks which were later revealed by the website WikiLeaks. Of course it all exposed allegations of Democratic Party infighting and a concerted effort by senior party officials to boost the candidacy of eventual party nominee, Hillary Clinton. Now for their part, the Russians snapped right back today ridiculing President Obama in a tweet from their UK Embassy, writing, and I'm quoting now, "President Obama expels 35 diplomats in cold war deja vu as everybody including the American people will be glad to see the last of this hapless administration, lame duck."

Pretty harsh words right there about the Russians and the UK. Now experts also tell us yes, you can see some of the sanctions, things that you can get your arms around. That's easy to spot. What you're probably not going to see, however, is a cyber-power that America has and will certainly utilize to retaliate against the Russians.  


MORGAN WRIGHT, CYBERSECURITY EXPERT: In cyberspace these things don't always have the media consequences like a bomb going off or bring in a fighter jet, you know, and bombing insurgents in a certain area. So, it is a different type of warfare with different types of ways that you measure it.  


CORKE: What Morgan Wright effectively saying is, there's going to be a lot more to this story, much of which we will not see, although it's also, to be fair, certain that we'll find out a lot more about the Russian response in the days to come -- Sandra.  

SMITH: Well, indeed. Kevin Corke, thank you.

Joining me now with more, Pete Hoekstra, former Michigan congressman and adviser to President-elect Trump's transition team. Julia Roginsky, Democratic strategist and Fox News contributor and Charlie Hurt, political columnist at The Washington Times.

Congressman, I'll start with you first. Why now. All signs are pointed to Russia behind this for quite some time. And the response from the White House is that, well, he's still the president with just a few weeks to go.  But he's been there for eight years. What about the timing?

FMR. REP. PETE HOEKSTRA, R-MINN., ADVISER TO TRUMP'S TRANSITION TEAM: You can't get into Barack Obama's head on this. There's really no reason why 22 days left in his administration he's muddying the waters and making things more difficult for the incoming president. You know, congratulations to Donald Trump. He's not letting this distract him. He's continuing to focus on the agenda that he wants to implement beginning on January 20, which is about getting this economy moving, defeating ISIS and reforming or repealing ObamaCare.  

SMITH: And when you look at a statement, Julie, I mean, he's saying exactly that, come on, let's move on. There's a lot of other things to get to like the economy but he says for the best interest of the country and the American people, he will sit down and find out what is going on here and found out the facts from intelligence.  

JULIE ROGINSKY, DEMOCRATIC STRATEGIST: Well apparently, he's been briefed on the facts or at least I would hope he's taken briefings on the fact at least since mid-August. So, for him to say he's going to sit-down and -- with his present, in the fact, that is a little speechless considering the fact that he's got access to briefings that the rest of us don't have. I will say this. You know, move on, move on from the fact that we had a foreign power infiltrate and hack some of our Democratic institutions, move on from the fact that this could easily happen.  

SMITH: All right. Let's move on to what is being done in these sanctions, Julie. Are you a fan, first of all, of us implementing these sanctions on Russia and do they go far enough?

ROGINSKY: I don't think they go far enough. I don't know what the President is doing behind the scenes. But I will say this, short of seizing whatever assets we have in the west and the ability to seize that belong to Vladimir Putin personally and to members of his inner circle, to the oligarchs that control the Kremlin, that would not go far -- short of that, nothing goes far enough. Because if you want to punish Vladimir Putin, you don't impose sanctions on intelligence agencies. You don't impose sanctions by kicking out a few diplomats/intelligence operatives, that is speckles and that is weak.

The only way to hit Vladimir Putin where it hurts is to go after his pocketbook and the pocketbook of his inner circle. I don't know if that is something that the administration is doing behind the scenes. But if they are not, these sanctions certainly do not go far enough.  

SMITH: And Charlie, it's important to get the facts right here. There's absolutely no evidence that Russia hacked the election itself. The CIA and the FBI both agree that Russia was behind the hacks on John Podesta, Hillary Clinton's campaign manager and the DNC. But that's it. The election itself, there's no proof that that was hacked.  

CHARLES HURT, COLUMNIST, WASHINGTON TIMES: Exactly, Sandra. And I think kind of the big news here is that finally President Obama is getting upset.  And you know, we've seen over the past eight years Vladimir Putin and his allies, they're gassed people, they've invaded countries, they've done all kinds, you know, they've sought nuclear weapons, they've done weapons tests. They've done all of this stuff and we haven't heard a peep, nothing more than finger wagging out of the administration.

So, I think it's great that President Obama is finally getting upset with Vladimir Putin. I agree with Julie that it's probably not enough. But I think it's also very instructive that, you know, none of these other things raised his eye. What upset him was that Vladimir Putin did something, according to the administration, that went after President Obama politically and that's the one line you can't cross with this guy. And because they went after him in a political way, they're going to react.  And I think that pretty much sums up the entire administration.  

ROGINSKY: Can I just raise one thing? The Magnitsky Act which Barack Obama did sign went very far in punishing a lot of the people in Putin's inner circle. I don't think it went far enough. I think it needs to be drastically -- but to say that we have not retaliated against the Russians for their behavior in the past under this administration is just not accurate. And I'll be the first to say, I think Obama's failure with respect to Russia has been woeful so I'm not defending his actions.

SMITH: So, we have to sit around now and wait to see what Russia's response is going to be from all of this. Because the Russian foreign ministry, a spokesman from there has put out a statement, in it she says, we can only add it if Washington takes new hostile steps, it will receive an answer. Congressman, what are they saying?

HOEKSTRA: Well, it's kind of uncertain. It will be very interesting to see. I mean, it could be a tit for tat and tomorrow Putin will expel 36 people from -- 36 Americans from the Moscow Embassy. But he may decide that he's going to restrain himself. He's looking towards January 20th, we will have a new president. He'll take a look at what this president does with the sanctions that President Obama has put in place and believing that maybe there is an opportunity for a little bit of a fresh start.

Remember, the other news today is, you know, for about the last four hours it was Russia and Turkey that negotiated a cease-fire in Syria, something that our secretary of state and this president have been unable to do.  They weren't even in the room when this happened. And so Putin is, right now, is working from a point of strength. I don't think he really needs to get into a tit for tat with President Obama although he may. He really doesn't have that.  

SMITH: I mean, Charlie, you do wonder though when he ultimately sits down and he sits down with intelligence, gets briefed on this, gets all of the facts on this, you wonder if President-elect Trump is going to take them at their word because he's already been skeptical of what has been coming out of our intelligence agencies and to be quite frank, Congressman, you said it's right to be so. So Charlie, will he take them at their word?

HURT: Well, I think that it's a good thing that he's going to sit down with them. And I also think it's a good thing that President Trump just like any president should be skeptical of everything that he hears.


HURT: But I think, you know, the real question here is whether Donald Trump decides, that you know what, I'm going to try to forge a relationship with Vladimir Putin to fight a global war on terror. And therefore put aside some of these other disagreements. And if he makes that decision, you know, he did campaign on that, that is what he said he would do and he got elected president promising that. So it might make a lot of people uncomfortable. It makes me uncomfortable to be in bed with somebody like Vladimir Putin. But you know, if the President sees this bigger picture as a way to go after the scourge of terrorism around the globe, then you know --

SMITH: And cyber-security is an enormous threat that we face every single day. And Donald Trump was asked about this when he stepped outside of Mar- A-Lago. Here's his most recent response to that if we can listen right now.  


PRESIDENT-ELECT DONALD TRUMP: I think we ought to get on with our lives. I think the computers have complicated lives greatly. The whole, you know, age of computer has made it where nobody knows exactly what's going on. We've have speed. We have a lot of other things but I'm not sure we have the kind of security that we need.  


SMITH: Congressman, what did you make of his response there? I mean, does that sound like he's taking this seriously and sees this as a very serious threat?

HOEKSTRA: Well, I think overall he sees cyber security as a very serious threat. I mean we know that over the last four to eight years, I mean, it's China, it's North Korea, it's Iran, it's Russia. They've all been hacking towards the United States and guess what, we've been doing it the other way as well. I think the other thing that you get when you go into cyberspace, the rules of war in cyberspace have not been clearly defined.  So if we retaliate, what do the Russians do to come back and those types of things? And you know, in all other areas of warfare, the parameters are kind of understood by both sides. In cyberspace it is not. So we've got to be very, very careful that this does not spin out of control and go into a direction that we're all going to be very uncomfortable with.  

SMITH: It does seem Julie like President Obama is trying to get a lot done in his last few days that he's in office.  

ROGINSKY: Well, let me say this. What he's trying to do is obviously set it up for Donald Trump to not be able to turn back some of the positions that he's done. But look, there are people like John McCain and Lindsey Graham who have -- as far as I'm concerned doing God's work on this and suggesting that they're going to put together a package of real sanctions with real teeth on it that they will put it on the President's desk.

And when they put them on the President's desk, the question for Donald Trump will be, is he going to side with the bipartisan coalition of members of Congress with the 17 intelligence agencies all of which agree that the Russians did hack into our democratic institutions, democratic with the small d, or is he going to side with Vladimir Putin and lift some of these sanctions and not go forward with them.

And to me, that's the situation that President Obama is setting up for President-elect Trump. I will also say, you know, I remember back in 2000 when George Bush looked into Vladimir Putin's eyes and saw his soul and thought he was a fantastic person. He was abusive of that notion when Russia went into Georgia. I remember when Hillary Clinton tried to do the reset button and she somehow thought that she could work with Vladimir Putin and of course, she couldn't. And Donald Trump will learn the same thing. You cannot work with this man. This man has set up a template where the West is the boogeyman by which he keeps his own people occupied from their own problems by focusing their attentions on the West and he will learn that very quickly and if he doesn't, it will be to his own detriment.  

SMITH: You know, I think a lot of people are falling in the trap of judging him before he's even in office. Julie Roginsky, Congressman, Charlie Hurt, good to see you all. Thank you for being here tonight.

HOEKSTRA: Thanks, Sandra.


HURT: Thank you.

SMITH: All right. Also tonight, President-elect Trump signaling that major changes could be coming to the VA. The fulfillment of the campaign promise to take care of our veterans looks to be his top priority right now.

Marc Thiessen, Nomiki Konst and Guy Benson are here on that.

Plus, new anger over two new national monuments named by President Obama out west. Utah Congressman Jason Chaffetz is here live with us to react.

And could the growing risk between the U.S. and Israel be having a similar effect on the Democratic Party? We'll ask Brooke Goldstein and Larry Korb about that, next.  


UNIDENTIFIED MALE: I heard the Secretary of State go after this coalition as being the most right wing coalition in Israel's history. And this is the reason why we don't have peace. There's another coalition. And it is a coalition of the Palestinian authority with Hamas which is a terror organization that is openly committed to Israel's destruction and who has chartered calls for the murder of Jews worldwide.   


SMITH: Breaking tonight, open revolt inside the Democratic Party as we're witnessing some of the most high profile names on the left bristle at Obama administration's recent handling of Israel. Secretary Kerry's address from the State Department called gratuitous and wrong by one leading Democrat.  Remarks that Mr. Kerry later defended as necessary.


JOHN KERRY, SECRETARY OF STATE: -- which is a very comprehensive effort that is moving Israeli settlers into the West Bank increasingly making the possibility of two states very difficult if not impossible. If you have more and more settlements being built in the area that is supposed to be the future Palestine, it makes it harder and harder to have that future Palestine.  


SMITH: Among the Democrats publicly voicing their displeasure, incoming Senate Minority Leader Chuck Schumer, House Democratic Whip Steny Hoyer and Eliot Engle, the top Democrat on House Foreign Affairs.

Correspondent Rich Edson has more on that part of this story from Washington.  

RICH EDSON, FOX NEWS CORRESPONDENT: Good evening, Sandra. Secretary of State John Kerry's speech criticizing Israel has drawn a robust response from Israeli Prime Minister Benjamin Netanyahu, Congressional Republicans and even some Democrats. For more than an hour, the Secretary of State outlined the Obama administration's plan to reach peace in the Middle East.  And while he did criticize the Palestinians for glorifying terrorists, he also spent much of his speech criticizing Israel on its settlement building. The top Democrat on the House Foreign Affairs Committee says that approach is misguided.  


UNIDENTIFIED MALE: It's easy for us to sit and point fingers and say, the Israelis should do this, the Israelis should do that. By the way, I didn't hear very much from John Kerry about what the Palestinians need to do.


UNIDENTIFIED MALE: But it's easy for us to do it.  


EDSON: The Senate's incoming Minority Leader Chuck Schumer writes in a statement, quote, "While Secretary Kerry mentioned Gaza in his speech, he seemed to have forgotten the history of the settlements in Gaza where the Israeli government forced settlers to withdraw from all settlements and the Palestinians responded by sending rockets into Israel."

He claimed that speech has emboldened extremists on both sides. Some Democrats are applauding Kerry. The second ranking Democrat in the House Steny Hoyer writes in a statement, quote, "Secretary Kerry's remarks outlined long standing American principles that only a two-state solution is a viable one. I continue to believe that the U.N. Security Council is the wrong forum for critiquing Israeli policies."  

And now a State Department official is responding to some of these responses in particular the one by Senator Chuck Schumer, saying, quote, "stating uncomfortable facts doesn't 'embolden extremists, dangerous steps on the ground by both sides do that" -- Sandra.  

SMITH: All right. Rich Edson, thank you.

Joining me now, Brooke Goldstein, a human rights attorney and Larry Korb, a senior fellow with the Center for American Progress and a former assistant Secretary of Defense. Good to booth of you to be here tonight.

Hey, Brooke, I want to start with you first. We had Alan Dershowitz on last night. He said, the peace process in Israel has been setback years.  Is the damage that has been done? Is it irreversible?

BROOKE GOLDSTEIN, HUMAN RIGHTS ATTORNEY: Look, I think the United Nations in general has been engaged in an incline, a very steady incline of anti- Semitic racist moves that are designed to damage any future of peace. And I think why we see a non-partisan disgust to what Kerry is pushing is because what he's pushing really is a Judenrein future Islamist state.  He's saying basically that Jewish homes in Judea and Samaria are an obstacle to the creation of a future Palestinian Islamist State, that this state should due free. That is racist, that is segregation, that is apartheid, that is undemocratic. It is anti-American.

Further he's saying this state should be ruled by the PLO, a terrorist group that recruits its own children as suicide bombers. So, while he's waxing poetic about whether Israel can remain a democracy, he's asking Israel to support the creation of an Islamist State in a sea of failed Islamist dictatorship when the Middle East is now in chaos because of all of the fake lines that are being drawn.

SMITH: And the timing of all of this of course is being questioned. And Larry, we looked to that speech, we look to the words coming from the secretary of state and then we looked to the words of key top Democrats in Washington and it seems like there is some in-fighting and some serious disagreement within their party.

LARRY KORB, SENIOR FELLOW, CENTER FOR AMERICAN PROGRESS: Well, there's no doubt about it. The Middle East has been contentious in Republican parties when I worked in the Reagan administration and on the George H.W. Bush and the Democrats. But what's interesting is Ehud Barak who was the prime minister before Netanyahu, also his minister of defense, he basically said today, two-thirds of the people in Israel supported Kerry's speech.

And one person you didn't mention in here was Dianne Feinstein, Senator Dianne Feinstein, a strong supporter of Israel, the ranking member on the Senate Intelligence Committee, she applauded Kerry for having a bold speech. And this idea that it was against Israel, no. If you look at it, the first two thirds of the speech were criticizing the Palestinians when he listed the five impediments to impeach. Now the other one got the most attention.

But the fact of the matter is, he did call out for the things that Brooke was talking about with the Palestinians and say, they can't continue do this kind of stuff, empower extremists if in fact that's what they want.  So, they're not going to get it if they keep on doing these things. And the other reason is that this year settlements are up 40 percent. Okay.  And so the fact of the matter is, if you don't say anything it's going to become more and more difficult to get that.  

SMITH: Let me get Brooke in here because she is shaking her head.

GOLDSTEIN: But this is a racist presupposition that Jews have no legal right to settle in their ancestral homeland --

KORB: No. It's the Geneva Convention.  

GOLDSTEIN: Absolutely not.  

SMITH: Go ahead.

KORB: Yes, it's the Geneva Convention.


SMITH: Hold on, Larry. Let Brooke finish her thought.

KORB: Don't say they don't have a legal right.  

GOLDSTEIN: If you dispute the borders of Palestine as a Jewish State which is created by the mandate system, you have to dispute the legitimacy of every single border carved up by the mandate, including Saudi Arabia, including Iraq, including Jordan which you know was created by the exact same mandate document that guaranteed Palestine from the river to the sea as a Jewish state. Palestine is the term used to identify Jordan and Samaria by the Romans and also by the league of nation.

It was meant as a derogatory term for the Jewish people. There was no such thing as an ethnicity, a Muslim ethnicity of Palestine. That was invented in the 1970s by Yasser Arafat. Anything else is a historical revisionism.  You have Muslim majority states that comprise of 99 percent of the Middle East. And to carve up another Islamist State, a dictatorship run by a terrorist organization in a sea of failed Islamic dictatorship is not a solution to anything. And if you promote that, you promote furthering of terrorism.  

SMITH: All right. So, Larry -- go ahead.

KORB: Wait a second. But then Yitzhak Rabin, Ehud Barak and Olmert are all going against what you said, they all accepted this. And in 1949, the Geneva Convention says, you cannot settle a territory which you conquer.  That's the basis on which --

GOLDSTEIN: Right. And whose territory was conquered? The ultimate empire existed --


SMITH: All right. This is surely a disagreement that is translating into so much disagreement in Washington. We have to leave it right there. But thanks to both of you for coming on and having the debate tonight. Thank you. Good to see both of you.

A troubling headline for law enforcement as we wrap up 2016. As we see a major uptick in the killing of police officers, are the recent protests by groups like Yelam (ph) at least partly responsible?

And as Democrats look back towards their November defeat, one former Obama staffer suggesting one of their issues might be their disconnect with people of faith.  

Plus, President-elect Trump suggesting there could be some major shakeups on the way for American veterans when it comes to their health care. We have a powerful panel lined up for you to debate. Thiessen, Konst and Benson, they're all next. They'll be here.


TRUMP: I've been saying we're going to take care of our vets. We're going to (INAUDIBLE) to make it great for the veterans because the veterans have been treated very, very unfairly.



SMITH: Breaking tonight, America's largest health care provider could be in for a major shakeup. President-elect Trump is now signaling that the status quo at the VA will not be allowed to continue under his watch and that improving care for our veterans could be all about limiting the government's current monopoly on services.

Peter Doocy has the latest from inside President-elect Trump's Mar-a-Lago estate where key meetings on the VA took place just yesterday. Hey, Peter.  

PETER DOOCY, FOX NEWS CORRESPONDENT: Sandra, a public-previous option is on the table for the veteran's administration under soon to be President Trump and a senior to give the veterans the choice between public treatment and private treatment options with this line, quote. Some vets love the V.A. some vets want to go the V.A. The idea is to come up with a solution that solves the problem. It's not the easiest thing in the world, because you've got all of these little kingdoms out there which is hard. You know in the federal government it's hard to break things up and start over. And now the President-Elect is also talking about why a private option is appealing to him.


TRUMP: I don't want to see veterans waiting in lines for weeks. And you know in many cases they have a minor illness and it takes so long to see a doctor it turns out to be a major illness and beyond that. I don't want to see that. So we will see what happens.


DOOCY: We don't have many other details yet and it is a shift that some major veteran groups have signaled they will not like. But it fits with the final promise of a 10-point plan listed on the website laying out the President-Elect's position. Number ten said quote ensure every veteran has the choice to seek care at the V.A. or a private service provider of their own choice. Under a Trump administration no veteran will die waiting for service. The news about the possibility of public and private option came after the President-elect met at Mar-a-Lago with executives from some of the best health care providers, including the mayo clinic, Johns Hopkins, Partners Healthcare and the Cleveland clinic, whose CEO Dr. Toby Cosgrove has been mentioned by transition sources as a leading contender to win the V.A. secretary nomination.

On a conference call with reporters this morning a transition official said the President-Elect is not feeling pressure to quickly nominate a V.A. secretary, instead saying this is taking so long because he wants to make sure he finds someone who shares his understanding of what the VA's most urgent needs are, Sandra.

SMITH: All right, thank you Peter Doocy, joining me now with more powerful panel for you tonight, Marc Thiessen, serves as Chief Speech Writer to President George W. Bush and a Fox News Contributor. Nomiki Konst is the host of the Filter on Sirius XM Progress and an investigator reporter, and Guy Benson, is a political editor at town and a Fox News contributor. Good to see you all of you tonight. Marc, is it a good idea to shake up the whole system?

MARC THIESSEN, AMERICAN ENTERPRISING SCHOLAR AND FOX NEWS CONTRIBUTOR: It absolutely is a good idea. Look, what Trump is proposing here and it seems to be very, very early in the process but it's not particularly new or controversial. In 2014, congress passed President Obama signed the veteran's choice act which allows veterans who live more than for miles away from a VA facility or have been waiting in line for more than 30 days to go to a private doctor. So what Trump seems to be talking about is dramatically expanding that to more veterans and I think it's a great idea.  It's very much like school choice. Under school choice if you like your public school you can stay in your public school but if you're stuck in a failing public school, you're not forced to stay there anymore. You can get a voucher and you can go to a private school and get your child the education they need. If you love your V.A. doctor, you get to keep it.  But if you're stuck in one of this V.A. hospital are where there are long wait times and you're not getting the care you need, you get to go to a private citizen it is a two minute decision and the first minute is for coffee, we got to do it.

SMITH: And Nomiki, it shouldn't be a huge shock that changes are coming.  Donald Trump promised this on the campaign trail and we know it's a problem. As Peter Doocy reported some vets love the health care they receive at the V.A., many hate it. Something needs to be done. He identified that. He won the election.

NOMIKI KONST, POLITICAL CONTRIBUTOR TO CBSN: Veterans deserve the best care possible and no doubt the V.A. needs reform. The problems root in the fact that the V.A. has not been funded properly. Over the past decades Republicans have been playing political football cutting funding for the V.A. Just in 2015 alone there was $1.4 billion cut led by Republicans that is $690 million to the V.A. that was cut. Of course the goal was they wanted to privatize the V.A. so they could make money off of the V.A. and veterans. The reality is this could all be solved. Veterans would receive the proper care if the V.A. was funded completely. The problem is it's been slashed and cut at the expense of our veterans, our heroes. They're suffering the consequences of the political games.

SMITH: Guy, I mean this partial privatization. They say this is just one of the options on the table. I want to tell you what we're deal with as far as what Americans want here. The vast majority of veterans, 87 percent believe the federal government should provide health care system but 50 percent, half of them say the health care system that is being provided is just not living up to the promise.

GUY BENSON, TOWNHALL.COM: Well it definitely is not living up to the promise, not just in substandard care that we've seen in a bunch of instances around the country, but also long waiting lines, many of which are covered up infamously by the bureaucrats trying to protect their bonuses in that horrible V.A. scandal. The status quo is unacceptable and our veterans deserve better. It is a (inaudible) unfortunately that V.A. has not been funded since 2000 the V.A.'s budget has roughly tripled since 2000. Ok, so this is not just hey, let's take out the money shovel and pile more cash on to this. This is a systemic problem that needs root and branch we form and giving the opportunity to veterans to escape the system that might be failing them and go seek private care, with some of that taxpayer money I think, like Marc that is a no-brainer.

SMITH: All right we all agree we want to absolute best for our veterans in this country. We want to move on also tonight, Democrats still picking up the pieces after the surprising November defeat for Hillary are now pointing to a new concern expose by Trump victory. They're complete disconnect with religious voters. A piece out today from the Atlantic describes this deficit as a near crisis with the former director Barack Obama 2012 Faith Outreach efforts Michael Wear describing the problem as follows, quote, it shows not just an aptitude but the ignorance of the Democrats in not even pretending to give the voters a reason to vote for them. Marc Thiessen.

THIESSEN: Why would you give someone a reason to vote for you if you want to force them to change their religious views, which is essentially what the Democrats want. In 2015 Hillary Clinton gave a speech to a women's panel in which she said, this is a direct quote, when it comes to abortion and gay marriage, quote deep seeded religious beliefs have to be changed.  Excuse me. It's the job of the president of United States under the constitution to protect the rights of people who hold views contrary to them and advocate for them. This calls on the Obama administration which tried to force the little sisters of the poor to provide contraceptives against their religious beliefs. When you find yourself in the fighting the little sisters of the poor in the Supreme Court you're doing something wrong. I'm sorry.

SMITH: Guy, you seem to be at grim.

BENSON: Yes, I mean that was one example catholic nuns in this protracted legal battle with the Obama administration to try to force them to facilitate the purchase of something that is against their religion. I think what we've seen, Sandra is for a lot of Americans Christians in particular, it's not just ignorance that they sense from the Democratic Party or the Obama administration, it's an open hostility where people feel like their views are being cast as bigotry that have to be stamped out by an aggressively secular government. And I think it is that fear, that concern, internalize by millions of people of faith that explains why Donald Trump did so well among Christian, including winning the majority of Catholics, by the way among even perhaps millions of voters who had some pause and weren't necessarily huge fans of his. It's been the drift and the direction of the Obama administration that got peoples off that their butts to vote against Hillary Clinton.

SMITH: Nomiki, are Democrats stopping, taking a look within looking at what the problem is and identifying it, because, obviously it was there.

KONST: The problem was not religion. The problem was the economy. Donald Trump is just as pro-choice as Hillary Clinton was. As far back as 1999 he advocated against banning late term abortion. SO it is not the pro-choice movement, over half of registered Catholics are Democrats, 80 percent of African-American Protestants are Democrats, half of main line Protestants are Democrats. This is not a crisis of the Democratic Party. This is really about the economy. People vote for the economy first. In fact it was a major story line by the Washington Times that Donald Trump was winning voters on the economy who were putting their pro-life believes second, third to the economy, because that is what the voters care about.  People have their personal beliefs, identity, and politics on both sides of the aisle.

SMITH: You won't get a disagreement with me there. It's always been about the economy. Democrats didn't even stay on that message there. All right we got to leave it there, thank you, all of you.

BENSON: Thank you.

KONST: Thanks guys.


SMITH: It was an historic year for U.S. Law enforcement and not in the way that one might hope as we learn that the ambush style attacks we saw in places like Dallas have resulted in the biggest surge of officer deaths on record. We'll debate what's really going on here and how America's finest and their families are dealing with this disturbing news.

Plus, new outrage after President Obama designated two new national monuments in Utah and Nevada. Utah Congressman Jason Chaffetz will be here to tell us why he thinks, these further cements, as he calls it, Obama's failed presidency.


SMITH: Developing tonight, new outrage after President Obama designated two controversial national monuments, The Bears Ears National Monument in Utah and Gold Butte National Monument in Nevada. Environmentalists are cheering the development, but critics call the move another government land grab. Doug McKelway has the very latest on this for us tonight, Doug.

DOUG MCKELWAY, FOX NEWS CORRESPONDENT:  Good evening, Sandra. With the designation of two huge western land masses as new national monuments, President Obama has given a nice parting gift to environmentalists and a bit of a parting shot at political rivals.


UNIDENTIFIED MALE: How do you else you look at Utah, other than the punishment to the people of Utah when we were so overwhelmingly opposed to it.


MCKELWAY: That 1.35 million acre parcel in Utah it is biggest the State of Delaware will now be called the Bears Ears National Monument. The second area in Nevada will become the Gold Butte National Monument. It spans 30,000 acres. The White House says the designation will protect quote, sacred sites, spectacular scenery and important natural and cultural resources and desert landscapes. Senate majority leader Harry Reid said Nevada designation quote, I was overjoyed to hear the news today. But in Utah it's a different story. It is not just the governor, but states entire congressional delegation and every local elected official is opposed to the designation. But the administration claims many Native Americans support the move.


UNIDENTIFIED MALE: There are instances where some of the sacred sites were desecrated and destroyed.

UNIDENTIFIED FEMALE: We are our own government and we have the right to speak over our ancestral lands.


MCKELWAY: But support from Native Americans is deeply disputed.


UNIDENTIFIED MALE: The Americans are reminded and most of those who are supporting of the national monument designation decide out of the state of Utah.


MCKELWAY: Adding insult to their injury, Utahans are now land basing the White House for its tweet touting the designation it used the wrong picture of arches national park. That prompted Utah Senator Orrin Hatch to tweet back, if you're going to take 1.3 million acres of Utah land, at least used the right photo. Opponents say this is a case of the president misusing the Antiquities Act to undertake a land grab. And as with hundreds of other unilateral moves by this White House they hope to undo it with the help of the new president, Sandra, back to you.

SMITH: All right Doug McKelway, thank you. Our next guest is a vocal opponent of the newly designated monument who happens to represent one of the states included in today's designation. Here with me now, is Utah representative Jason Chaffetz, who is the oversight committee chairman, congressman, it's good to see you. Thanks for being here.


SMITH: All right you're slamming President Obama why?

CHAFFETZ: It's terribly arrogant. The unilaterally he is taking 1.35 million acres that is more land than there is in the entire state of Delaware and re-designating it as a national monument an if you're living there, you are a rancher, you are a cattleman, if you have resources there, guess what, the president just changed the whole equation on you unilaterally with the stroke of the pen. There's not a single person in Utah in any elected capacity that supports this. From Democrats, Rebecca (inaudible) a locally elected Democrat from the Navajo nation, she is opposed to it on the San Juan County Council. So there is not a single person in any elected official that represents the area that is in favor of it but the president did it anyway.

SMITH: He is completely in his right to do so as you just heard from Doug, this falls under the 1906 Antiquities Act which gives the president the power to designate national monuments without approval from congress. But why now, do you think? What is there, just 20 days left in the term.

CHAFFETZ: Well, I think the arrogance of what he did is going to actually provide an opportunity for us to challenge that, because the Antiquities Act in the early 1900's was put in place to save small areas. It actually says small designations. You can take hundreds of acres and go protect bears ears and a couple other sites that are probably worthy of protection, but 1.35 million acres? Are you kidding me? This is a state of Utah where nearly 70 percent of our land is already controlled by the federal and state government.

SMITH: There's a lot of concern about not being able -- for energy development in some of the areas.


SMITH: All right so Congressman you sent a letter to President Obama.  What did you say in that letter?

CHAFFETZ: I'm the chairman of the oversight committee. I can investigate anything at any time. I can actually issue subpoenas. We are going to drag them up there.

SMITH: Are you going to?

CHAFFETZ: Absolutely. There is no choice. They just unilaterally did this. After two years congressman Rob Fisher and I worked try to come up with a bipartisan solution, never did the president ever grant us a meeting even though, as a delegation and ask for it, back in April and never did he ever discuss this with us. They gave us a 50-minute notice that they were going to do this and it's just terribly arrogant and it's destroying families.

SMITH: What do you mean he gave you a 50-minute notice? What capacity did they do that?

CHAFFETZ: They literally, I got a call from Secretary Jewell saying 50 minutes from now the president is going to designate the monument. That is the notice that we got that this was actually going to go down.

SMITH: Have you had any correspondence with the president since you since that letter?

CHAFFETZ: No. Since April we've been asking, all of us, from Orrin Hatch, Senator Mike Lee, myself, the governor, we got assurances via the governor from the Chief of Staff, form the White House that no decision had been made on December 12, but obviously they put this in motion a long time ago.  It's a radical environmental agenda. It's affected people in Utah and Nevada and the oceans across this country. Form coal miners and I just hope that President-Elect Donald Trump will do what he said he was going to do and reverse these executive orders, because this midnight monument, in the waiting hours it has to go away. It just has to.

SMITH: All right Congressman Jason Chaffetz thanks for coming on.

CHAFFETZ: Thank you.

SMITH: Good to see you. All right, up next, new numbers showing 2016 with a historically deadly year for U.S. Law enforcement, we'll debate what's really behind the spike when former New York City police commissioner Bernard Kerick and attorney Eric Guster join us after the break. There they are.


SMITH: Disturbing new numbers revealing that 2016 will go down as one of the deadliest on record for U.S. law enforcement. Thanks to so called ambush style attack that we saw in Dallas and Baton rouge 2016 the most dramatic surge in officers being fatally shot since record were created.  64 officers killed by firearms in 2016. More than 50 percent from 41 in 2015 and that is got some folks wondering what really going on behind these numbers. Bernard Kerick is the former commissioner of the New York City Police Department Eric Guster is an attorney and political commentator. I will start with you first what is behind this?

BERNARD KERICK, FORMER NYC POLICE COMMISSIONER: I think a lot of it is the cop rhetoric that is emboldening a lot of people to do this. You know the numbers you talk about. There has been a 56 percent increase over last year in cops being gun down. There's close to a 300 percent increase in cop assassination, executions where people walk up to a bunch of cops standing around and in front of a place, slaughter them, blow their brains out while they're sitting in a car having lunch. A 300 percent increase in those types of assaults on cops. That is beyond, you know, domestic violence.

SMITH: How can police do their job in this kind of environment?

KERICK: Look. They're going to do their job regardless. My son is a cop in Newark, New Jersey. He is on the Newark SWAT Team. This men and women go out every day, just like the cops in New York City. You're going to have 6,000 cops in Times Square on New Year's Eve in a very dangerous situation. They do it, they do it well.

SMITH: We thank each and every one of them. Eric, the numbers are concerning, gun-related deaths, 2016, 64 gun-related deaths. You look back in 2015 there was 41. There's clearly a trend here.

ERIC GUSTER, ATTORNEY AND LEGAL ANALYST: There are too many guns on the street, too many dirty guns on the street. And so many cops go to domestic violence scenes where a lot of the shootings occur. There is some anti-cop sentiment but I believe the media blows it out of proportion tremendously.  That causes those things to fester.

SMITH: I think I want to stop there, because I would like to get the former police commissioner to respond to that.

KERICK: Look. The anti-cop rhetoric stuff, I think this is stuff that started at the White House, started at the White House.

GUSTER: No way. No way.

KERICK: It's been down through.

GUSTER: Holding police accountable is not a problem.

KERICK: Holding police accountable is not a problem.

GUSTER: Police don't want to be held accountable for certain things. That is not anti-cop.

SMITH: Be specific, on how is this direct result of the Obama administration.

KERICK: Let's say Black Lives Matter. Black Lives Matter is a hate group.

GUSTER: 71 percent of cop shootings occur by white men. So what's your excuse for that?

KERICK: Black Lives Matter is a hate group. You have government officials in our government today that support groups like that. That calls for the assassination of cops.

GUSTER: This is fake this is a lie, what he is telling you. He is leading us down the road and saying Black Lives Matter. That is the first thing he just said.

SMITH: Ok, so let's go back to address the idea that there's too many guns on the street.

GUSTER: Let me address that, because I am tired of people saying Black Lives Matter in all of these cop shootings, but 71 percent of officer shootings are done by white men, but people come on television and say that Black Lives Matter is the cause and that is not true. They want to hold police accountable for things they do.

SMITH: Democrats like to address the idea that there are too many guns on the street. They want to implement more gun laws, let me just get this nearly half of all of the officers slain in the line of duty were killed with guns, the highest percentage of death in more than two decades.

KERICK: Let me talk about the gun issue for a second. Chicago has the harshest probably the strongest gun laws in the country, Chicago and Illinois, ok? Florida you can just about buy guns in any store you want over the counter. Chicago has more homicide close to more homicide than the entire state of Florida.

GUSTER: I thought we were talking about police shootings.

SMITH: We are.

KERICK: You are talking about guns. You want to talk about guns. Let's talk about it.

SMITH: The problem that we have with police in this country, final thoughts.

GUSTER: The problems that we have, there needs to be more community policing as far as reaching out to the community. That will ensure the citizens to tell police officer what is going on and it will ensure their safety.

SMITH: Clearly it's a problem. The numbers are daunting to look at as we wrap up 2016. All right, we'll be right back.


SMITH: All right have you pick up your copy of Megyn's new book "Settle for More" if not, now is the time. Many readers giving it five stars on

Here's one example, Linda writes in part, her story is truly inspiring and show us the secrets to become an extremely successful, I like the way she handles adversity emotionally and publicly. I would recommend this book to young people who could benefit from a boost to their futures.  I want daughters to read it.

Truly, truly inspiring besides being a great story of Megyn's Kelly event for life. You can pick up your own copy of "Settle for More" on Amazon or in book stores near you. It does make a great gift heading in to the New Year.

All right chime in on the conversation, go to Let us know what you think about tonight's show. You can also tweet me @SandraSmithFox. I appreciate you watching, I'm Sandra Smith in for Megyn Kelly tonight and this is "The Kelly File."

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