FOX NEWS SUNDAY

Priebus details Trump's briefing with top US intel officials; Rep. Nunes reacts to intel report implicating Putin

This is a rush transcript from "Fox News Sunday," January 8, 2017. This copy may not be in its final form and may be updated.

CHRIS WALLACE, FOX NEWS ANCHOR:  I’m Chris Wallace.  

The U.S. intelligence community says Vladimir Putin ordered a cyber attack to interfere in our presidential election and help Donald Trump win -- as tension rises between the president-elect and the nation’s spy chiefs.  

(BEGIN VIDEOTAPE)

JAMES CLAPPER, DIRECTOR OF NATIONAL INTELLIGENCE:  I don't think that we've ever encountered a more aggressive or direct campaign to interfere in our election process.  

WALLACE:  Today, incoming White House chief of staff Reince Priebus on Mr. Trump's rocky relationship with the intelligence community.  

And the president-elect seems to find an ally and the founder of WikiLeaks.  

SEN. CLAIRE MCCASKILL, D-MISSOURI:  The notion that the elected -- the soon elected leader of this country would put Julian Assange on a pedestal.  

WALLACE:  We’ll ask House Intelligence Committee Chair Devin Nunes about some conservatives embracing Assange and Mr. Trump's plans to overhaul the nation’s spy agencies.  It's a "Fox News Sunday" exclusive.  

Plus, we’ll ask our Sunday panel about that horrific attack everyone is talking about -- four blacks torturing a mentally disabled white man live on Facebook.

UNIDENTIFIED MALE:  (EXPLETIVE DELETED) Donald Trump (EXPLETIVE DELETED) white people.

WALLACE:  All right now on "Fox News Sunday."

(END VIDEOTAPE)

WALLACE:  And hello again from Fox News in Washington.  

Russian President Vladimir Putin wanted to block Hillary Clinton. That's the blunt assessment of U.S. intelligence agencies on the Kremlin’s effort to influence the 2016 election in Donald Trump's favor.  An unclassified report now released after the nation’s spy chiefs briefed Congress, President Obama and President-elect Trump.  

In a moment, we’ll get the Trump team’s reaction from incoming White House chief of staff Reince Priebus.  

But first, let's bring in chief intelligence correspondent Catherine Herridge with the latest on what the intel community found -- Catherine.  

CATHERINE HERRIDGE, FOX NEWS CHIEF INTELLIGENCE CORRESPONDENT: Chris, the report has strong language, the tone is authoritative and most of the conclusions are at the high confidence level.  The central finding is that Russian President Vladimir Putin authorized a campaign to undermine and influence the U.S. democratic process, with the goal of damaging Clinton and her chances of winning.  Overtime, the Russians came to favor a Donald Trump victory.  

The FBI Director James Comey, CIA Director John Brennan are very confident Putin wanted to help Mr. Trump.  While the NSA Director Mike Rogers, whose agency analyzes signals intelligence, including intercepted phone calls, was only moderately confident.  

The report says Russian intelligence provided the stolen emails to Julian Assange and his website WikiLeaks.  Because of its self-proclaimed reputation for authenticity, Assange has consistently denied the Russian government connection.

Writing in a tweet after his classified briefing, the president-elect said there was absolutely no evidence that hacking affected the election results, voting machines not touched.

Though mentioning Russia, the vice president-elect said the briefing was useful.  

(BEGIN VIDEO CLIP)

MIKE PENCE, R-VICE PRESIDENT-ELECT:  It was a constructive and respectful dialogue.  And the president-elect has made it very clear that we’re going to take aggressive action in the early days of our new administration, to combat cyber attacks and protect the security of the American people.  

(END VIDEO CLIP)

HERRIDGE:  Senior congressional leadership known as the "Gang of Eight" was briefed but they did not see the underlying raw data -- Chris.  

WALLACE:  Catherine, I want to also ask you about the latest of that massacre Friday at Ft. Lauderdale Airport.  Police say an Iraq war vet, Esteban Santiago, opened fire after retrieving a gun for his checked bag.  Any evidence that this is terror-related?

HERRIDGE:  Well, Chris, investigators have not ruled out terrorism and confirmed to FOX News that the FBI's main field office in Alaska investigated Santiago in November after he told agents that U.S. intelligence had infiltrated his mind and forced him to watch ISIS propaganda videos.  No tie to terrorism was found.  Santiago’s mental state did not meet the legal standard for authorities to take his gun, and his erratic behavior was simply not enough for the no-fly list.  He now faces three federal charges that each carry the possibility of death, Chris.  

WALLACE:  Catherine, thank you.

HERRIDGE:  You’re welcome.

WALLACE:  One of the people in the room when President-elect Trump was briefed on the Russian campaign to disrupt our election is Reince Priebus, the incoming White House chief of staff.

And, Reince, welcome back to "Fox News Sunday."

REINCE PRIEBUS, INCOMING WHITE HOUSE CHIEF OF STAFF:  Good morning, Chris.  

The nation’s intel chiefs laid out the full classified report to President-elect Trump and others in his team, including you that Russian president Vladimir Putin ordered a cyber attack to interfere with the election and eventually came to try to help Donald Trump.  

Simple question: does the president-elect accept the findings and the evidence of the intelligence community?

PRIEBUS:  Well, I think he accepts the findings, Chris.  But here's the thing that I think everyone needs to understand -- when this whole thing started, it started from the Russians 50 years ago.  In other words, this is something that's been going on in our elections for many, many years, both the Russians, the Chinese, the Iranians.  It happens every election period.  

Now, in this particular case, it started way back in 2015 before either nominee of either party was chosen, and it started, and this is declassified, as a spear phishing exhibition over many different institutions.  It just so happened that the DNC had nearly no defenses on their system, and when they were warned multiple times by the FBI, they didn't respond.  

And so, suddenly, you have a major political party, one of the biggest political parties in the world, that by their own admission lacked defenses, lacked training, and allowed a foreign government into their entire email system without responding to the FBI.  

So, yes, we have bad actors around the world.  We have had bad actors, including the Russians.  But we also have a problem when we have a major political institution that allows foreign governments into their system with hardly any defenses or training.  That's a huge story, and that's what people aren’t talking about as well.  

WALLACE:  That's a fair point.  And it’s also, we should point out, there is no evidence that the Russians in any way were able to get into the electoral system and tamper with the vote count.  

But on Friday, hours before he had the briefing, Donald Trump said that this was, quote, "a political witch hunt".  

So, I just want to be very clear on two political points.  Does he now accepts -- but you say, well, this has been going on for years, never to this extent, never the hacking and dissemination of emails, and you could argue as to whether they were in some way were complicit in it because of their weaknesses, that we’ve never had this kind of dissemination before.  Does he accept that the Russians were behind this hacking campaign?  Yes or no?  

PRIEBUS:  Well, sure.  I mean, he's not denying that entities in Russia were behind this particular campaign.  But let me just -- can you -- let me respond to your point, though.  You say never have we had such a massive -- yes, but here's what we have.  We have the DNC as a sitting duck.  

So, if you have a person -- wait a second, because it matters to your point.  It matters because if the DNC allows any foreign entity into their system, says, here is 50,000 emails, you can have them.  Well, voila!  Now, you have the biggest dissemination of emails that we’ve ever seen in the history of America because we have a revolving door at the DNC.

WALLACE:  Who do you blame more for this?  Who do you blame more for this, Reince?  Do you blame Putin and the Kremlin?  Or do you blame the DNC?  Who is the primary actor here?  

PRIEBUS:  Well, listen, the primary actor is the foreign entity that’s perpetrating the crime to begin with, no doubt about it.

WALLACE:  Which was?  Which was?  

PRIEBUS:  I’m not denying that.  

WALLACE:  Which was?

PRIEBUS:  I’m not denying that.  I’m not denying that.

WALLACE:  And what was that foreign entity?

PRIEBUS:  The thing is -- Russia.  

But what I’m telling you is that we also have a situation where you have people at the DNC -- let me ask you this.  Anyone listening out there, if you had multiple calls from the FBI and you said, "By the way, Chris, this is the FBI, I think someone is in your system and stealing all of your emails", and you ignore multiple, multiple calls.  

They attempted to attack the RNC in the same way.  They didn’t get into our system because number one, we had our head straight and we had defenses at the RNC.  But number two, when the FBI called the RNC and said, we’ve got a hacking situation, we brought them in immediately.

And so, granted we have bad actors around the world, and cyber attacks have been happening for years, but we also have an entity that's allowed through a wide open door a foreign government into their system.  

WALLACE:  I get that.  

One other question.  

PRIEBUS:  Go ahead.

WALLACE:  Does President-elect Trump accept the evidence that he heard, does he find it persuasive, that Putin's interest towards the end of the campaign was to help Trump by discrediting Clinton?  

PRIEBUS:  I haven't asked him about that, Chris.  I mean, he accepts the fact that Russia and other entities engaged in cyber attacks on the United States all day long.  He accepts the fact that this particular case was entities in Russia.  So, that's not the issue.  

But -- and if you look at his statement, after he commends the intelligence community in the very first paragraph, he talks about the particular hack.  He talks about the fact that the DNC was a sitting duck while at the RNC had its act together.  He then says in the first 90 days of his administration, he is going to order a full report as to what we can do to be better.  

But one of the things we can do to be better is when the FBI calls you and says you have a problem, you return the phone call.  

WALLACE:  Well, I want to ask about that, because he said yesterday in which he said that we want to have better relations with Russia.  I mean, if he accepts the fact that they, in an unprecedented way, tried to interfere with our election, does that mean he is not going to respond, he's not going to take action against Russia?  

PRIEBUS:  He very well, he's going to order the intelligence community to make recommendations, and whatever those recommendations are will be discussed and actions may be taken, but I don't think there's anything wrong with trying to have a good relationship with Russia and other countries around the world.  And that's what the president is saying, that he is going to have good relationships around the world that will put America first, bring jobs back and make a safer across the globe.  That's what he wants to do and I think that's what he will do.  

WALLACE:  I want to consider the question of the president-elect's relations, not with Russia, but with the intelligence community.  Because here was a tweet that he put out on Tuesday.  "The, quote, ‘intelligence’ briefly on the so-called, quote, ‘Russian hacking’ was delayed until Friday.  Perhaps more time needed to build a case.  Very strange."

This was the reaction from the director of national intelligence.  

(BEGIN VIDEO CLIP)

JAMES CLAPPER, DIRECTOR OF NATIONAL INTELLIGENCE:  I think there's a difference between the skepticism and disparagement.  

(END VIDEO CLIP)

WALLACE:  Isn't that disparaging when the president-elect of the United States puts the word intelligence in quotes?  

PRIEBUS:  Well -- and Mr. Clapper also stated that there is no evidence in the report that any of this changed the outcome of the election.  

But to your question, here's what happened -- the president of the United States, a week earlier, a few days earlier, took on an enormous and unprecedented sanctions against Russia.  We then went into full gear to get an intelligence briefing on what the president knew that created that strong reaction, or what the briefing was that created that is sudden, strong reaction, and we were attempting to have that full-blown meeting on Tuesday.  

WALLACE:  I’m not asking about the schedule, Reince.  

(CROSSTALK)

WALLACE:  But wait a minute, I’m asking about why did he put the word intelligence quotes?  

PRIEBUS:  Because I’m getting to the point.  

The reason he put it in quotes is that the intelligence briefing in quotes that we were attempting to have was going to be on Tuesday.  It turns out, that the report, which apparently was supposed to be done that created the Obama reaction, wasn't going to be done until Wednesday, and therefore, the intelligence briefing in quotes that we were supposed to have on Tuesday was then, we were informed, was going to be done on Friday.  

So, here we are having to react to these Russian sanctions stories with the media and all of you, folks, you -- and you’re a good one, Chris.  We were supposed to be reacting to something that we had no ability to get a briefing on because the actual report wasn't done until Wednesday.  It's a frustrating situation and that's what the president-elect was referring.

WALLACE:  Yes, but the question is the way the relationship that he has with the intelligence community, what even the DNI, General Clapper, saw as disparagement.  

I want to ask you about something else, because the president-elect this week seemed to put more credibility to believe the founder of WikiLeaks over the intelligence community.  And I want to put up another tweet that the president-elect said on Wednesday.  

"Julian Assange said a 14-year-old could have hacked Podesta -- why was DNC so careless?  Also said the Russians did not give him the info."

Reince, several years back, I don't have to tell you, Julian Assange published, disclosed, hundreds of thousands of classified cables and other emails and documents that very much compromised the U.S. military in Iraq and that endanger the lives of hundreds of Afghan informants helping the U.S. military.  

Why would the president-elect give any credibility to Julian Assange?  

PRIEBUS:  Well, first of all, to your other point, he has tremendous respect to the people in the intelligence community.  In his statement on Friday, it was the very first thing he said, and he wanted to make it clear to everyone working hard in the interest of our foreign intelligence that he appreciates them very much.  

As to Assange, he doesn’t think this guy is a good guy.  He put in quotes things that he had said.  He didn't say I support this guy.  He didn’t say I think he's a good guy.  

WALLACE:  Why even quote him?  Why even give him any credibility?  He’s the president-elect.

PRIEBUS:  I think his point is that -- well, wait a second, I think his point is that the DNC was so lacking in any of their defenses, by their own admission.  

WALLACE:  OK, we got that.  I’m just asking why he was --  

PRIEBUS:  Perhaps a 14-year-old could have gotten into the -- but perhaps a 14-year-old could have gotten into the DNC.  When you have staffers opening up emails that say, you know, "I’m stranded in Mali and I need $20,000, click on this link", and the DNC is clicking on these links.  

You know, I’ve got to tell you something, no one thinks that Assange is a great guy, I can assure you of that.  But I think the issue here is yes, bad foreign actors, but it's also the DNC that has allowed itself to be hacked by about anyone in the world, and that is one of the reasons why this was such a big deal.  

WALLACE:  OK.

PRIEBUS:  I don't think anybody is talking about it.  

WALLACE:  I want to get into one must area, we are running out of time.  Has President-elect Trump given up on trying to work with Democrats?  

PRIEBUS:  Absolutely not.  Absolutely not.  In fact, another meeting --

(CROSSTALK)

WALLACE:  Can I explain to why I’m asking the question?  

PRIEBUS:  Sure.  

WALLACE:  Because I’m curious as to why he sent out to go tweets this week.  One referring to Schumer clowns, and another, the head clown, Chuck Schumer.  

Here's what Vice President Biden said this week.

(BEGIN VIDEO CLIP)

JOSEPH BIDEN, VICE PRESIDENT OF THE UNITED STATES:  Grow up, Donald.  Grow up.  Time to be an adult.  You’re president.  You've got to do something.  Show us what you have.

(END VIDEO CLIP)

WALLACE:  How do you respond to the vice president and why on earth call Chuck Schumer a clown?  How was that going to help you?  

PRIEBUS:  Well, first of all, Chuck Schumer and President-elect Trump have a long, long relationship together.  Donald Trump has helped Chuck Schumer in his runs for Senate.  Donald Trump has had massive fundraiser for Chuck Schumer at Mar-a-Lago many times before.  They have a personal relationship.  

And I’ve got to tell you -- I mean, when Senator Schumer says that he is going to allow the vacancy in the Supreme Court to take as long as he wants, and he's going to hold up cabinet secretaries and he's targeting eight of them when only just a few short years ago, it was the Democrats that were saying, we needed to move swiftly to approve these cabinet secretaries.  Eight cabinet secretaries were approved for President Obama on day one.  And now, they turn around and say they're going to drag their feet and put people through the ringer -- I mean, look, it's a frustrating situation.  They’re very --

(CROSSTALK)

WALLACE:  I just want to pick up on that --  

PRIEBUS:  And I think you're seeing some frustration.  That’s all.

WALLACE:  Reince, I just want to pick up on that -- we got less than a minute left -- because the Office of Government Ethics announced this week that it has been unable to complete background ethics checks on the number of Trump's nominees and said it's a great concern that these confirmation hearings are going to go forward before those background checks are complete.  If Senator Schumer says you're trying to jam them through.  

Given the statement by the Office of Government Ethics, any thought of delaying the confirmation hearings for any of these nominees until the background checks are complete?  

PRIEBUS:  No.  I mean, they have to get -- they have to get moving.  They have to move faster, and they have all the information.  These are -- these are people that have been highly successful in their lives.  

They need to move quicker.  And the fact is, there is no reason.  I mean, it’s the first week of January.  They have all the details that they need.  If they have all the information that they need.  

It's no different from any other new administration coming in and the American people demanded.  Change was voted for and change we will get.  

WALLACE:  Reince, thank you.  Thanks for your time today.  

PRIEBUS:  You bet.

WALLACE:  Just 12 days until the inauguration.  Look forward to talking to you again.

PRIEBUS:  You bet.  Thank you.  

WALLACE:  Up next, the chairman of the House Intelligence Committee, Devin Nunes, on U.S. intelligence officially blaming Vladimir Putin for ordering a cyber campaign to influence our presidential election.  

(COMMERCIAL BREAK)

WALLACE:  A look outside the beltway at the frozen tundra of Lambeau Field in Green Bay, Wisconsin, where the Packers host the New York Giants coincidentally today on Fox.  

Now back to our big story.  The U.S. intelligence report that Russian President Vladimir Putin ordered a campaign to swing the election in Donald Trump's favor.  

Joining me here in Washington, the chair of the House Intelligence Committee, Congressman Devin Nunes of California, who’s also a member of the Trump transition.  

Congressman, welcome back to "Fox News Sunday."  

REP. DEVIN NUNES, R-CALI., HOUSE INTELLIGENCE COMMITTEE CHAIRMAN:  It’s great to be here in person.  

WALLACE:  Before we get to that, let's talk first about the terrible attack in Fort Lauderdale, where five people were killed, six people were wounded.  Any evidence this is terror-related?  

NUNES:  Well, the investigation is ongoing.  Clearly, this person walked into the FBI, we know this now, and said that he was watching ISIS videos.  It's sometimes I think going to be hard in these situations to know where someone who has mental illness, and also is an ISIS follower, and where that sometimes they can be intertwined.  And I think we just have to let the FBI go through this and see if there is any actual data or evidence to show that this was an ISIS follower.  

WALLACE:  Of course, the big question people have is, how did this happen?  And could it happen again, particularly with the guy having walked into the FBI office?  Should he have been on a no-fly list?  Should he have been allowed to carry a gun, check it in his baggage and take on the flight with him?  

NUNES:  Well, right, this is -- this is the big challenge that the FBI faces with -- you know, there's investigations going on in all 50 states with ISIS followers and people who are -- who claim they’re ISIS followers.  And so, some of these cases get close and I think in this case, this one probably shouldn't have been closed.  

WALLACE:  As chair -- you say it shouldn’t have been closed.  

NUNES:  It shouldn’t have been closed.  

WALLACE:  So, do you think the FBI messed up?

NUNES:  Well, look, I think the FBI would tell you that this is -- this is not what the FBI wants.  I mean, they do a very good.  But they -- obviously, they missed this one.  

WALLACE:  As chair of House Intelligence, you received the same classified report on Friday.  Any doubt in your mind that Russian President Putin directed this attack and at some point -- not originally -- but at some point, it became an effort to stop Clinton and help Trump?  

NUNES:  So, six months ago, I publicly came out and said that this was the biggest intelligence failure since 9/11, was our failure to understand Putin’s plans and intentions.  

If you -- so, this has been going on for a long time.  We've known that Russia is a very sophisticated bad actor in the cyber realm.  Many members of Congress, not just members of the House Intelligence Committee, have been warning the Obama administration about Russia's continued cyber attacks on this country, and they did nothing.  

And so, now, as you look forward, you know, they lose an election, and then it appears like they want to change this narrative into somehow that Russia was responsible for Hillary Clinton losing the election.  And I just don't buy that.  

WALLACE:  No, and I want to make this very clear.  There’s no indication, despite Russia's efforts, and the intelligence community doesn't say this is why Trump won and she lost.  But the two things can be true, they try to do a campaign, and Trump won a fair and square election.  

I want to go follow up on this policy issue, though, because you say that Mr. Trump has to be tougher than President Obama was in responding to cyber aggression, especially by the Russians, but I want you to respond to this tweet, which I discussed with Reince Priebus.  Trump tweeted this on Saturday, "Having a good relationship with Russia is a good thing, not a bad thing.  Only stupid people or fools would think that it is bad."

This is his first reaction about getting his briefing about Russian interference in the election.  It doesn't sound like he’s ready to crack down on the Kremlin.  

NUNES:  And he wouldn't be the first president to want to be buddies with Putin.  So, you had President Clinton, President Bush, President Obama, including Secretary Clinton who hit the reset button.  Don't forget that you had President Obama, who got caught on a hot mic talking about being more flexible after the election with Vladimir.

So, clearly, three presidents have tried to be friends with Putin.  All three have failed, and I hope that Donald Trump, you know, he has a lot more information going into this, and I’ve cautioned his administration to be careful with Putin, because I think he is a bad actor.  

Although it remains true, the fact of the matter is, we would like to be friends with the Russians.  I just don't know if it's possible.  We’ve had a lot of experience with Putin.  He just doesn't seem to be a guy that we can work with.  

WALLACE:  I -- as a member, as we said, you’re not only head of House Intelligence, you are also a member of the transition team, particularly in these very areas of national security.  And I want to ask about the nomination of Senator Dan Coats, to be the director of national intelligence.  

Back when Russia invaded Crimea in 2014, Senator Coats said this, "Does this not remind us of what happened with Hitler in the early ‘20s and ‘30s?"  And in response, the Kremlin banned him from traveling to Russia.

So, what does the appointment of a clear hardliner, what does it say about this effort by President-elect Trump and some of his team to try -- or believe they can have better relations with Russia?  

NUNES:  Well, as I said before, I think all presidents have been making this mistake.  But I think you bring up a good point that Dan Coats is Russia hock.  Mike Pompeo, the future CIA director, is a Russia hock.  General Mattis, who will be secretary of defense, is a Russia hock.

So, Donald Trump is surrounding himself with very good people who understand the threat that Russia poses.  

WALLACE:  Let me just say, you’ve also got Rex Tillerson, who has done business with Russia, and received the friend of Russia medal, and you have Lieutenant General Mike Flynn, the national security advisor, who had dinner with Putin.  So, I mean -- there's a split inside the administration about Russia.  

NUNES:  Yes.  But like I said, Chris, this is not unusual for administrations to want to work with Putin.  I mean, they’ve tried -- all administrations have tried, going back to the first President Clinton when Putin was first put into office.  So, I just don’t see where this is anything different, and I think the news media is trying to blow this up -- or I say the Democrats are trying to blow this up, because they’re trying to change the narrative of what happened in this election.  

You know, I am not happy that this report, that we were briefed on, just the Gang of Eight, was briefed on Friday morning, yet many news media outlets already have the information that was briefed to the Gang of Eight.  So, this looks like a political rollout of a narrative just a couple weeks before Donald Trump's inauguration, and it bothers me, and I don’t think it’s good.  And the Intelligence Committee --

WALLACE:  Political rollout by the intelligence community or by the Democrats who were briefed?  

NUNES:  By the Obama administration.  

WALLACE:  Really?  

NUNES:  How else --  

WALLACE:  So, you think this is an effort by the Obama administration to undercut Donald Trump?  

NUNES:  How else do you define it?  How does the news media have this information before it's briefed to the Gang of Eight?  

WALLACE:  I want to ask you about another question.  President-elect Trump talks about tearing up the nuclear deal with Iran.  But the chairman of the Senate Foreign Relations Committee, Bob Corker, said this week, you know, leave that alone for a while.  There's not going to be a problem.  There are sanctions in place against Iran and they have to meet some standards, at least for the next few years. And the key is to focus on the more immediate threat of North Korea.  

Your reaction?  

NUNES:  Well, I think the Iranian regime continues to be one that is the largest funder of terrorism around the globe, and it has to be dealt with swiftly.  And I think the Obama administration has been way too nice to the Iranian regime, who essentially are terrorists.  

If you look at North Korea, this is one of the situations I think that people are going to look back as one of the major atrocities in world history.  And people are going to ask, why did somebody not act?  There are -- there are 20 million people living off of eating grass and the roots and trying to burn everything to stay warm in that country.  

You look at that country, it’s a -- it’s one of the worst places I've ever seen and I think it doesn’t get enough --

WALLACE: Let -- let me just interrupt because we’re beginning to run out of time. After North Korea announced this week that it's in the final stages of developing an ICBM missile that could -- could reach at least part of the United States, Donald Trump sent out this tweet in which he said at the bottom, "it won't happen." Now, you talk about other presidents. We’ve tried direct talks. We’ve tried pressure on China and it hasn't worked. What is Donald Trump going to do if -- do you have any sense of what he’s going to do to try to stop --

NUNES: Well --

WALLACE:  North Korea from pursuing its missile --

NUNES: This is another great example of a country, a nation state, that’s conducted cyberattacks against the United States, where President Obama did nothing. So, you know, why are we not responding when North Korea attacked this country, attacked Sony, leaked the information. Nothing was done. And so I think what -- I think what Trump is --

WALLACE:  Did we not do cyberattacks, because we believe -- that’s what we were kind of led to believe, that we took a cyber response.

NUNES: Well, you know, I don't know about that, but I can tell you that this is a regime that has to be taken seriously. We have to be tough with them. And I think Donald Trump will be tough with them.

WALLACE:  Quick question, are you talking about military action, take out their nuclear program, take out their missiles?

NUNES: Well, you never take that off the table, but we have a very large force in the region in South Korea protecting the South Koreans. I think Japan and South Korea have to be very concerned about these -- about these ICBMs and their nuclear capability.

WALLACE:  Would you urge them to start their own nuclear program?

NUNES: No, I would not. But we have to have a deterrent. And the United States needs to be that deterrent.

WALLACE:  Chairman Nunes, thank you. Thanks for coming in today. Always good to talk with you, sir.

NUNES: Great to be here.

WALLACE:  Coming up, we’ll bring in our Sunday group to discuss whether President Trump can and should still try to establish better relations with the Kremlin.

Plus, what do you want to ask that panel about that terrible attack this week streamed live on FaceBook of four blacks torturing a mentally disabled white man? Just go to FaceBook or Twitter @foxnewssunday, and we may use your question on the air.

(COMMERCIAL BREAK)

WALLACE:  Coming up, congressional Republicans much more receptive to those Russian intel findings than the Trump transition team.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN, R-ARIZONA: Every American should be alarmed by Russia’s attacks on our nation.

SEN. LINDSEY GRAHAM, R-SOUTH CAROLINA: We hope to make 2017 a year of offense.

(END VIDEO CLIP)

WALLACE:  We’ll ask our Sunday panel about the split inside the GOP, next on "Fox News Sunday."

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: What I will say is that -- and I said this right after the election -- we have to reminder ourselves we’re on the same team. Vladimir Putin is not on our team.

(END VIDEO CLIP)

WALLACE:  President Obama giving his successor, Donald Trump, gentle advice about how to deal with the Russian president after the report of Kremlin interference in the U.S. election.

And it’s time now for our Sunday group. Laura Ingraham, editor of LifeZette, Fox News political analyst and columnist for "The Hill," Juan Williams, Julie Pace who covers the White House and the transition for the Associated Press, and Michael Needham, head of the conservative think tank Heritage Action for America.

Well, Laura, as I was discussing with Reince Priebus and with Congressman Nunes, there are several things, all of which can be true, that the Russians did try to influence the campaign, that the Democrats are trying to use it to delegitimize Trump, and that Trump won the election fair and square. Where does this go from here and how do you think Donald Trump needs to handle Russia and that whole relationship?

LAURA INGRAHAM, HOST, "THE LAURA INGRAHAM SHOW": I think he has to handle it pragmatically as I think he’s going to handle the economy, which is, eyes wide open. We’ve made a lot of mistakes in the past. I think Priebus made the point of our -- our cyber security, both at the DNC and our own government, it's been pathetic. We are way behind the curve on the cybersecurity. I think you’re going to hear Donald Trump launched an entirely new initiative that will be very transparent and what the government’s going to do to beef it up.

But, look, I lived in the former Soviet Union. I know I -- I've been in Russia like seven times in the past five or six years. It does not surprise me in the least that Russia tried to influence the election. Not in the least. I mean this is what they do. This is what the FSB does, the former KGB. It's what the military intelligence does over there.

We've done the same thing in other countries. It doesn't make it right. It doesn't make it good. But I think what we have to understand at this point is, Donald Trump’s going to be the president. The country’s either going to improve, get more united behind certain issues or not. And the Democrats can kind of try to hang on to this. I don’t know what purpose it’s going to serve unless it results in better security for all of our systems across the board.

But this report was five pages long, the declassified report. Byron York (ph) wrote a great piece about this. Lots of questions remain. There are five pages, broadly spaced. We don't know if Russia was trying to undermine Hillary or help Trump. We don't know exactly when the hacking really began or when the influence campaign began. We don't know if it's just garden-variety propaganda.

There are a lot of questions that remain. It doesn’t mean it didn’t happen. I think it should be taken seriously. But to hyperventilate, that, oh, this means that Trump is going to be, you know, a -- you know, in this palsy-walsy (ph) relationship with Trump -- with Putin, I don't see that. I think that’s a fasil (ph) way of looking at this.

WALLACE:  Julie, I want to pick up on something that I discussed with Congressman Nunes. This isn't the first president who’s come in thinking that he's going to get along and tame the Russian bear. Clinton did it. George w. Bush did it, looking into Putin’s eyes. Obama with the reset. What do you think of the chances that they can turn a corner here, or what -- or in the end will it all come to ashes as it did with his predecessors?

JULIE PACE, THE ASSOCIATED PRESS: I think part of the reason you see new president’s come in and take this position, that we want to try to start new with Russia, is because I think everyone generally agrees it would be better if the United States and Russia had better relations. There isn’t a lot of dispute about that.

The question that I think Trump has to grapple with here is less about what he's going to do to try and reprove relations, and more about what he's going to need Putin to do. We hear a lot about the Obama administration not being tough enough, not acting quickly enough on -- on hacking and cybersecurity. But what are Trump's measures going to be for Putin? What does he have to do vis-à-vis Assad in Syria, what does he need to do in terms of Russians meddling in Ukraine? I think that is going to be the larger question that will shape this relationship.

WALLACE:  I want to turn dramatically to a story that everybody was horrified by and talking about this, this week, and that, of course, was the attack. And you see it there on camera four, blacks torturing a mentally disabled white man live on FaceBook, and forcing him to say hateful things. Here he -- here they are.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: (EXPLETIVE DELETED) Donald Trump. (EXPLETIVE DELETED) white people, boy.

(END VIDEO CLIP)

WALLACE:  Juan, I'm -- I was thinking about this yesterday. I’m not sure what to ask you except, how on earth can this happen?

JUAN WILLIAMS, FOX NEWS POLITICAL ANALYST: Right. It's just shocking. And it's primitive. It's savage. And, you know, on a very emotional level for me, scares me that people can behave in this manner to each other and then put it on tape for broadcast.

WALLACE:  (INAUDIBLE) live.

WILLIAMS: Yes. Well, I mean to --

WALLACE:  Yes.

WILLIAMS: What I mean was broadcast it out.

WALLACE:  (INAUDIBLE).

WILLIAMS: Right. So I think, to me, it -- it -- it stirs up racial tensions already hot from the campaign rhetoric of Donald Trump about the Mexicans and the women and all the rest. And we live in a society now where immediately the response, the strong response online was to tie this somehow into Black Lives Matter. And you see this from the white nationalists who seem excited by Trump’s election, to say, now, this is evidence of black racism, as if that were therefore legitimize acts of white racism.

It just -- it becomes perverse. You know, everything -- conversations about Dylann Roof, about a disabled black kid that was tortured, not on tape or live, as you describe it, so we didn't know about that. But clearly there’s something happening in the society that is deeply troubling on the level of race and difference. And the key here is, I think as -- you know, response -- for responsible people, including our president-elect, to act, to speak out and to say very clearly, this is unacceptable.

WALLACE:  We asked you for questions for the panel, and we got a lot of responses about this, including this on FaceBook from Roddie Spaniel Shelley. "Why is it more important to focus on politics in the crime than race? It was a racial hate crime. Say the words. It's finally time to call it what it is."

Michael, how do you answer Roddie?

MICHAEL NEEDHAM, CEO, HERITAGE ACTION FOR AMERICA: Well, I think this is the problem with hate crimes legislation in the first place. Look, what is problematic in the video that you saw is that it is despicable, and it is torturing of a mentally disabled person. And I think for us, and a lot of what Juan was just saying in terms of talking about the racial aspects of it, we shouldn't have hate crime legislation. We shouldn't be saying that if you torture somebody because of politics or you torture somebody because of race, that’s worse that if you torture somebody live on camera because of money or just because you’re a sick, depraved individual.

And the additional problem with hate crimes legislation is that you’re forcing -- in this case it’s very easy. They’re saying on tape why they’re doing it and what they’re believing. But in many of these hate crimes cases, you’re actually forcing a jury or a judge to get inside the mind of a depraved killer or torturer. And so I think we should be looking at the crime that was committed. We should be looking at the crime that’s committed in all of these hate crimes, so-called hate crimes there have been, and not putting people in jail because of their thoughts, but putting people in jail because of their actions. These were depraved, disgusting actions.

WALLACE:  You (INAUDIBLE) that, Juan?

WILLIAMS: You know, I think there's an added element that, you know, when you have people who are taking actions because of your race, religion, faith, ethnicity, immigrant status, whatever. And the whole idea behind hate crime legislation was that it would be additionally punitive. And I think these people should be punished to the absolute fullest extent of the law. But I do think --

NEEDHAM: If somebody had paid money to these guys once --

WILLIAMS: No.

NEEDHAM: So if somebody had just paid money to these guys and said, hey, I think it would be really amusing to have a video on -- on TV about this, that would have been less bad than in this case because that wouldn’t have been a hate crime? Look, what you’re saying --

WILLIAMS: No, because it’s the -- it’s the treatment of a -- of a guy who was a friend and who was mentally disabled.

NEEDHAM: Right.

WILLIAMS: And that’s the point. But, I mean, when you come to a Dylann Roof killing, was it nine or 10 black people in the church, again, I think your point is, it’s the action that counts. But I think when you add the racial element into it, I think it does factor in. It's a legitimate factor.

WALLACE:  We have a fact (ph) next segment --

INGRAHAM: Well --

WALLACE:  Thirty seconds.

INGRAHAM: Just -- just --

WALLACE:  Real quick.

INGRAHAM: I think there’s a -- there’s a great point to be made about the aggravating factor of -- of the hate crime. But, Juan, in -- in answering the question -- we’re all horrified by this. It’s evil, depraved (ph). But you mentioned white nationalists excited about Trump and you mentioned Trump's comments about Mexicans. This is just an evil act. I think to throw in Obama -- I -- I would agree with you even. The whole Black Lives Matter conversation, who knows what -- if that might have had an effect on it. But to -- to mention Trump in the -- in the -- in the conversation about what they did, to me just is -- is completely off base.

WILLIAMS: They mentioned -- they mentioned Trump, Laura.

INGRAHAM: Right, they mentioned Trump negatively. You’re also mentioning Trump negatively, which is --

WILLIAMS: I don't think there’s any question that there’s racial tension about the comments that Donald Trump has made in his campaign.

INGRAHAM: That’s -- and -- and none of it had -- had -- was affected at all by what Barack Obama has done for false comments.

WALLACE:  Look, you’re stealing time from yourself in the next segment and we need -- we need to get to it.

INGRAHAM: Hands up, don’t shoot.

WALLACE:  But you can all continue this conversation during our break. We need to take a break here.

When we come back, our Sunday group gives us their predictions on all sorts of subjects for 2017. You won't want to miss it, I promise you.

(COMMERCIAL BREAK)

WALLACE:  Well, we’re now going to look at predictions for 2017. And I want to talk with you, Laura, because you had a good 2016 predicting a year ago. Yes.

INGRAHAM: OK, say it, Chris, every single one of my predictions came out --

WALLACE:  No, I’m not going to.

INGRAHAM: OK.

WALLACE:  But on the economy, you said it was going to bump along. You said that the former Republican president was going to skip the convention. I’m not going to give you high marks for saying UCONN won the women’s --

INGRAHAM: OK, not that one, but Hamilton dominating the --

WALLACE:  (INAUDIBLE) -- no, that was kind of chalk too.

Anyway, politics, 2017.

INGRAHAM: I think Trump will nominate and the Senate will confirm a justice on the Supreme Court who will go down as a hero to judicial conservatives, constitutionalists. Perhaps Bill Pryor (ph). Perhaps Tom Lee (ph) of the Utah Supreme Court. It’s going to be a -- a great justice.

WALLACE:  And the Democrats won’t be able to block it?

INGRAHAM: No.

WALLACE:  All right. Julie?

PACE: Well, I actually made a New Year's resolution to be less predictive about politics. So I told my husband that because predictions did not go so well for a lot of journalists and pundits last year. So at least in keeping in the spirit of my resolution, I am going to predict that it’s going to be an incredibly unpredictable year in politics.

WALLACE:  That, I predict, will be the worst prediction I hear for 2017.

Michael, do -- help us out here.

NEEDHAM: Yes, most legislation in the last 100 years, the progressive era has been expanded within its first five to 10 years. The media said Republicans were quick -- quicksodic (ph). We were wasting time trying to repeal Obamacare. Obamacare will be repealed. They secretary of Health and Human Services, Tom Price, will do a great job managing the transition. Obamacare will be repealed and the American people will have access to -- to better health care focused on themselves and their doctors.

WALLACE:  Juan, your production for politics?

WILLIAMS: That President Obama’s phase (ph) in the game, that he becomes a powerbroker inside the Democratic Party in a way that we have not seen former presidents behave in recent history. He has high approval ratings. He’s going to live in your neighborhood, Chris, so he’s staying in D.C.

WALLACE:  Thank you.

WILLIAMS: And the whole issue became one now of legacy. And I think he’s going to be very engaged. He’s still a young man at 55. So he's going to be very much a player.

WALLACE:  Very young. It’s a child at 55.

Economy, Laura.

INGRAM: Contrary to all the talk of a trade war under President Trump, we will export more goods and services in 2017 than we did in 2016. We’re going to have a vigorous approach to trade, which will be more practical, pragmatic, and it will be better for American manufacturers.

WALLACE:  Julie.

PACE: I think we’re going to see businesses continue to be eager, in some cases, to let Donald Trump take credit for decisions they’re making to either bring jobs back to the U.S. or keep jobs in the U.S. It’s a mutually beneficiary relationship for Trump and businesses.

WALLACE:  Even if Trump had nothing to do with it?

PACE: Even if Trump had nothing to do with it.

WALLACE:  Michael.

NEEDHAM: Laura was right, the 2016 was going to be a sluggish year. 2017’s going to turn it around. Tax reform, regulatory relief. We will have the first real GDP growth of 3 percent or more in 2017. In a decade, we’ll have productivity gains for the first time since 2014.

WALLACE:  Juan.

WILLIAMS: I think Janet Yellen will be out as the chair of the Fed before the end of the year. President-elect Trump said during the campaign that he thinks she's overly political. And that was before she raised the interest rates a quarter point in December. And now we have the stock market pushing up towards 20,000. I think you’re going to see some real head-butting over the economy and its future under President-elect Trump.  

WALLACE:  And, briefly, how will the markets react to Yellen leaving?

WILLIAMS: Not well. That's -- that’s a point of anxiety for people who don’t like uncertainty.

WALLACE:  Sports. And I was going to say, I already know your prediction.

INGRAHAM: (INAUDIBLE) you get the camera, you get on the Alabama pin? UCONN, right, that was kind of obvious. I'm from Connecticut. UCONN last year. But Nick Saban will now go down, I think, in Alabama lure and history as right on par with Bear Bryant. They’re going to win tomorrow night against Clemson. They’ll have captured their fifth national championship in eight years. And I’m not going to be there. I’m going to be on Tucker Carlson’s show tomorrow night. So I’m bummed, though, because I can’t -- I’m not -- I’m going to miss part of the game.

WALLACE:  Oh, really, you’re going to -- you chose television over being at a game? Wow!

INGRAHAM: I have to help Tucker. It’s his first show at 9:00. Go Tucker.

WALLACE:  Your priorities. Well, that’s true, it is his first show and we wish him good luck.

INGRAHAM: Yes.

WALLACE:  Julie.

PACE: Well, this is probably more wishful thinking than actual prediction, but I'm going to go for it. My beloved Buffalo Bills will finally end their 17 year playoff drought in 2017.

INGRAHAM: Awe.

WALLACE:  Well, that -- that is --

PACE: Wishful thinking.

WALLACE:  Hope over experience.

PACE: Wishful thinking.

WALLACE:  I love these two, because they’re kind of in direct conflict. Michael.

NEEDHAM: As usual, Juan is going to be wrong on his prediction.

WILLIAMS: Wow.

NEEDHAM: Injuries derailed me in 2016. I’m going to stick with it. The best pitching staff that Major League Baseball has seen since the 1990s will propel the New York Mets to win the World Series.

WALLACE:  Juan.

WILLIAMS: The Nationals. The Washington Nationals will win the World Series this year. Dusty Baker, the manager who came in 2015, he said his job was to win a World Series. Hasn't done it yet. I think this is the moment they turn the corner because the Mets, Michael, I don’t think -- I think they -- they're due date has gone.

WALLACE:  Well, we should point out, it's not that one is going to win the World Series. They can’t even get to the World Series, one or the other, because they’re in the same division.

NEEDHAM: The Mets are going to knock the Nationals off far far before the World Series.

WILLIAMS: Oh, please.

WALLACE:  All right. Entertainment.

INGRAHAM: Oh, this is the best. OK.

WALLACE:  The envelope, please.

INGRAHAM: Now this is -- once again, a lot of the biggest movies of next year are going to feature characters that were really popular in the late 1970s for 12-year-old, 13-year-old nerdy boys. So we’re going to have Wonder Woman. Yes, the new Wonder Woman. How can you ever remake Linda Carter in Wonder Woman. They’re going to do "Planet of the Apes," "Star Wars: Episode VIII." It is going to be comic book central. And, once again, you know, I'm sorry, but remake-o-rama in Hollywood. Fresh out of ideas.

WALLACE:  Were you a -- were you a nerd in the 1970s?

INGRAHAM: I -- no, I didn’t like any of those. I’m the -- I was -- I was a drama-comedy.

WALLACE:  You didn’t like Wonder Woman? I find that surprising.

INGRAHAM: No. Well, not really. I wasn’t that. I was like "Brady Bunch," you know, all those kind of shows. But these are going to be huge movies. But the "Planet of the Apes," you can't get better than Roddy McDowell in like 19 -- whatever that was, 70. But they're going to try to do it again, planet -- "Return of Planet of the Apes."

WALLACE:  Wow. OK.

Julie.

PACE: Before the end of the year, I predict we are going to Donald Trump appearing on "Saturday Night Live" without Alec Baldwin.

INGRAHAM: Oooh.

WALLACE:  I have to tell you, since I took this show in 2003, because I have to get up early Sunday morning, I have not watched "Saturday Night Live." I would stay up to watch Alec Baldwin -- can you imagine the two of them together.

PACE: Really good.

WALLACE:  Michael.

NEEDHAM: Yes, more (INAUDIBLE) people on my team couldn't agree whether or not Mariah Carey will have a comeback. So I’ll predict Lena Dunham (ph), who promised us she would leave this nation, will not move to Canada, and America will be forced to endure her for another year.

INGRAHAM: Oh.

CAW: I take it we’re not a "Girls" fan?

INGRAHAM: Oh.

NEEDHAM: We’re not a "Girls" fan.

INGRAHAM: Gross.

WALLACE:  (INAUDIBLE).

INGRAHAM: It’s like a gross show. It’s disgusting.

WALLACE:  OK. All right. Anyway, nevertheless.

Juan.

WILLIAMS: So I see that critics are -- are picking "Moonlight" for best picture, but I think it’s actually going to be "Fences" Denzel Washington and Viola Davis. I think that’s a tremendous movie and it’s going to get a lot of attention. Also, you know, when it comes to best actress, Natalie Portman in her portrayal of Jackie Kennedy, it’s going to stir a lot of nostalgia about Camelot and the Kennedys in this era.

WALLACE:  Well, I hate to say this, but just as Michael said you’re wrong, it will be "La La Land," which wins best picture. And the Golden Globes are tonight. No, it was good. I'm sorry. Did you see it?

INGRAHAM: I saw it last night. Yes. I mean just save your time and watch "Singing in the Rain." People can actually sing and dance.

WALLACE:  And Debbie Reynolds is in it.

Panel, we have to take a final break. When we come back, we’ll get one more prediction from each of you for 2017.

(COMMERCIAL BREAK)

WALLACE:  As we begin the new year, we’re asking our panel what they see ahead for 2017. Now time for one final prediction, your pick for the person to watch this year. And as we told them, you cannot pick Donald Trump.

Laura.

INGRAHAM: Jeff Sessions. He’ll be confirmed as attorney general of the United States. And --

WALLACE:  And why him over the other cabinet picks?

INGRAHAM: Because I think we have so many really, really big issues in criminal justice issues, criminal civil division. He's going to root out, I think, ultimately, the politicization of the DOJ, which has been terrible in recent years. He is a man to watch and he’ll be a phenomenal attorney general.

WALLACE:  Julie, one to watch for 2017.

PACE: Picking up on one of Juan’s predictions, my person to watch as Barack Obama. He’s going to be living in Washington. He has talked a lot about appreciating the way that George W. Bush handled his post-presidency, staying quiet, not questioning his decisions. But I think that he’s going to face a lot of pressure from Democrats to speak out against Trump.

WALLACE:  Michael.

NEEDHAM: Stephen Miller is Donald Trump's senior advisor for policy. He was one of the first people in Washington, D.C. to identify, to understand the forces that really disrupted our politics in 2015/2016. He’s going to have a huge impact on policy inside the administration.

WALLACE:  Juan.

WILLIAMS: South Bend Mayor Pete Buttigieg. I always have trouble with his last name. But he is a Harvard grad, Rhodes Scholar, Navy officer, served in Afghanistan and I -- President Obama has identified him as one of the party's future stars at a time when the party lacks a strong bench. He's running for Democratic National Committee chair against Keith Ellison, Tom Perez. He offers a different look -- a gay guy from the --

WALLACE:  Real quick, yes or no, is he going to -- will he win DNC chair?

WILLIAMS: I don’t know the answer to that, Chris.

WALLACE:  OK. There we go. That’s a definite maybe.

Panel, thank you. We’ll lock all these predictions in a vault or maybe we’ll just stick them on a shelf somewhere and we’ll check back next year to see how you all did.

That's it for today. Have a great week, and we’ll see you next "Fox News Sunday."

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