SPECIAL REPORT

Do President Trump's 2005 tax returns matter?

This is a rush transcript from "Special Report with Bret Baier," March 15, 2017. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIPS)

PRESIDENT DONALD TRUMP: I have no idea where they got it, but it's illegal, and you're not supposed to have it, and it's not supposed to be leaked. And it's certainly not an embarrassing tax return at all, but it's an illegal thing. They've been doing it. They've done it before, and I think it's a disgrace.

BRET BAIER, ANCHOR: After the release last night of President Trump's 2005 tax returns, does that in your mind rebut some of the claims, including Secretary Clinton, that he paid no taxes?

SENATE MINORITY LEADER CHARLES SCHUMER, D-N.Y.: The Trump campaign said these numbers are accurate. It's two pages of one year. The real nub of this is what happened over 10 years. There might have been a year it was good. But much more importantly, where is he getting all this money from? The key question is, are there Russian sources? He is president. To me, it is selfish not to make public all your tax returns. Every other president, Democrat and Republican, has done it.

(END VIDEO CLIPS)

BRET BAIER, ANCHOR: President Trump and the minority leader in the Senate talking about the release of these 2005 tax returns. A tweet this morning from the president, "Does anybody really believe that a reporter who nobody ever heard of went to his mailbox and found my tax returns? NBC News -- fake news."

The tax rate comparisons, we put this up earlier in the day, but the average income average there, 22.5 percent. There you see Donald Trump at 2005, President Obama, Mitt Romney, and Bernie Sanders in those various years.

Let's bring in our panel: Steve Hayes, editor in chief of The Weekly Standard; Mara Liasson, national political correspondent of National Public Radio\; Michael Needham is chief executive officer at Heritage Action for America, and syndicated columnist Charles Krauthammer. Mara, what about this?

MARA LIASSON, NATIONAL PUBLIC RADIO: Well, this was a leak that was pretty good for Donald Trump. There was nothing in these tax returns that suggested he was a tax cheat or avoided taxes. He might've taken a big write-off. So I don't think this was a bad thing for him, and as you showed, he paid a pretty healthy percentage of taxes compared to other people.

Where David Cay Johnston, who happened to have won a Pulitzer Prize for covering this kind of stuff got it, we don't know. But I don't think Donald Trump was that upset about this leak compared to other ones.

HAYES: Steve?

STEVE HAYES, THE WEEKLY STANDARD: I agree. The question you asked Chuck Schumer, does this contradict the claims from Hillary Clinton, the answer to that is sure. No, of course it does, but he has to make up all sorts of additional charges.

BAIER: There is only so much time for an interview.

HAYES: He -- you asked the question. He could've given the answer. Of course it contradicts.

BAIER: Why didn't you --

HAYES: No, it was a right question. He just didn't answer it honestly. And then he went on to speculate. This is so ironic. This guy who spends a lot of time criticizing Donald Trump for making things up or speculating irresponsibly, and a lot of that criticism I think is valid. Here you have Chuck Schumer saying, well, the tax returns could indicate he had money from the Russians, maybe from Saudi Arabia. Maybe he didn't include them on the list. This is just rank speculation of the kind we've gotten used to from Harry Reid. It's irresponsible. He shouldn't be engaging in it.

If you want to make an argument that Donald Trump should release his tax returns, I would agree with that argument. I think he ought to. But don't go and do the kind of thing you spend much of your day criticizing Donald Trump for doing.

BAIER: To that point, I thought the exchange about Saudi Arabia was very strange. Michael, the travel ban, he brings up Saudi Arabia and maybe he chose not to put Saudi Arabia on the list because he has hotels there.

MICHAEL NEEDHAM, HERITAGE ACTION FOR AMERICA: Yes, it's just baseless speculation. It was based on legislation that passed that Barack Obama signed how those countries where chosen. But this whole story is also part of the reason the American people are so sick of Washington, D.C., in the way it's covered. We had an election. Hillary Clinton tried to make a big deal out of this, and the American people decided that they didn't care.

And now this morning "ABC News" spends 10 minutes on their morning show going through the big story of what was in Donald Trump's tax returns when there's really no news. There some good news for Donald Trump, it's not huge good news. It's not big bad news. Let's talk about the real issues.

BAIER: Charles?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: It's good news because it's the first time the issue has come up. We've gotten a look a real return. And it was not only a clean one but a favorable one. In fact it would feed speculation that perhaps it originated with Trump. I have no idea. But if it did it would be a good idea on their part to have to have done it.

I think the Schumer response was an example of the sort of innuendo festival that we are now experiencing. The Saudi stuff was simply outrageous. He kept it off list because he has hotels there? Come on, everybody knows who is on the list and why, and it's just the way to throw the kitchen sink at Trump. There's a lot of stuff on Trump, but this is not part of it. And the more you try to desperately throw everything at him, the more you discredit stuff that can actually be a valid criticism.

BAIER: OK, let's turn to the wiretapping claims. This is the House Intelligence Committee chairman and ranking member and also Senator Graham and the president.

(BEGIN VIDEO CLIPS)

REP. DEVIN NUNES, R-CALIF.: President Obama doesn't do wiretapping, just like President Trump can't do wiretapping. The whole premise of the statement was wrong.

REP. ADAM SCHIFF, D-CALIF.: You can't level an accusation of that type without either retracting it or explaining just why it was done.

SEN. LINDSEY GRAHAM, R-S.C.: Now I want to know, was there any surveillance at all with a warrant or without a warrant? The longer it takes to answer the question, the more suspicious I get.

TRUMP: Wiretap covers a lot of different things. I think you're going to find interesting items coming to the forefront over the next two weeks.

(END VIDEO CLIPS)

BAIER: That is President Trump in the interview with Tucker Carlson that airs tonight. What the House Intel chair and ranking member said is that we haven't found anything that backs that up as of today.

LIASSON: Yes, as of today, and we will be getting more information as FBI Director Comey briefs various members of Congress. Donald Trump said President Obama wiretapped him. He didn't say that President Obama came with overalls and came with a little bag of tools. What he clearly was saying President Obama ordered him to be wiretapped either with or without a FISA warrant. And that's what we're going to find out about.

BAIER: Steve?

HAYES: Very clearly what President Trump accused President Obama of was incorrect. It was false. And I think we knew that at the time. It was certainly clear I think to White House officials pretty early that President Trump was engaging in the kind of rank speculation that Chuck Schumer was engaging in in your interview.

Having said that, I think there is a lot more to learn about what the Obama administration was up to with respect to its targeting, if there was targeting, of the Trump administration, the Trump transition or the Trump campaign. Did the Obama administration ease rules that would've made it easier to disseminate incidental collection that could have led to the unmasking of somebody like Mike Flynn? There's "New York Times" reporting in a March 1st that suggest that they might have done just that. There's more here, but it's important if you are the president and the leader of the free world to say things that are accurate.

BAIER: Yes. And when I asked questions the question to the speaker of the House about reports and he gives an answer that's kind of strange and we follow up on it, it's interesting to be mentioned as one of the places that he saw reports, asking about reports.

So Michael, the bottom line is, where does this go? What doesn't get talked about is the possible investigations into Paul Manafort and the former campaign manager. We knew they were looking at him and connections to Russia and possibly a money situation.

NEEDHAM: I think those questions will be asked and we need to wait and we need to get the answers and not rush to a judgment. At the same time, I think this was something else that Chairman Nunes and Adam Schiff brought up today, if in fact there are people in our intelligence community who leaked information about the national security advisor and his conversations with the Russian ambassador, and they were doing that just because they didn't like the new boss or just because they wanted that information out there, that is also concerning. So I think we need to take a pause on this. We need to wait until the 20th, the 28th when there's open hearings. We need these investigations to end. And realize, there's a whole lot of baseless speculation, there's a whole lot of actual very concerning accusations being put out, and let's see where they go.

BAIER: OK, this is a FOX News alert. We have five, six hours, five hours before the travel ban, the next one is to goes into effect. And a federal judge in Hawaii has now ruled a temporary restraining order preventing this travel ban, the second one, the adjusted one, from going into effect, citing the merits of the establishment clause, claim. The plaintiffs had met their burden of establishing a strong likelihood of success, saying that they are going to put this on pause. Remember, these are the six countries we talked about in that interview with the minority leader. He wanted seven it seems, Saudi Arabia, but there are six. And a second bite at the apple here to try to redo it by the administration after challenges in courts the first time. Charles, what does this mean and what do you think happens?

KRAUTHAMMER: This has become a sideshow. This is not going to affect anything. Had we have the first ban, it wouldn't have had any effect anyway. It's a temporary one. It suspends the immigration from these countries. The reason was supposed to be because they are hordes of them waiting to come in, and while we are tightening up the vetting, we have to block them. Everybody understands that was a farce because the order was blocked. So we've had a month of this. The hordes have not come in. Throats have not been slit all over America. This is unnecessary. You never had to have the ban in the first place.

The issue is the vetting. Why not tighten the vetting with or without a ban and do it? That's supposed to be the heart of the issue. So I was sure there was going to be some kind of intervention. There is. This is going to put it on hold. I think this issue is going to fade away because it has no impact. It was a response to a campaign promise and will have no impact in the long run.

BAIER: Mara?

LIASSON: What's interesting about that order is they talked about the establishment clause. That's about whether this is a Muslim ban or not. What I understand is the administration is pretty confident that it has a fixed due process problems with the first Muslim ban. And the outstanding issue --

BAIER: They didn't call it a Muslim ban back then either.

LIASSON: I'm sorry. They didn't call it a Muslim. There were problems with it, and but they think they fixed the due process problems. But it's the question is whether it's a religious test. That's what the courts are going to --

BAIER: It was interesting a member of the Saudi royal family yesterday saying, listen, we are confident that it is not a Muslim ban, number one. Number two, Saudi Arabia is very aggressive in its vetting who comes in its country. And we understand it. Steve?

HAYES: That's pretty good spin. That's exactly the kind of spin you would expect from a senior Saudi official whose country is not on the list. Look, I think we will likely see this go back and forth. None of this is likely to end up playing out in the courts and with the populace. I think this fight is far from over.

BAIER: Michael, you agree?

NEEDHAM: Yes, no, I think it keeps going. And it's important for it to go on. The president of the United States through the constitution has the right to conduct foreign affairs. Statutorily the Congress has given him the right to set these policies. To have these judges coming in and make these rules is absolutely not the role of the judiciary. The person who has the investigation, the person who has the power both by the constitution and statue to make this is the president of the United States. The judges need to stay out of it.

BAIER: You know what's so striking, just back to that Chuck Schumer back and forth on Saudi Arabia, was the stark difference between the Chuck Schumer we saw after their first travel ban who was very emotional about not letting people in the country and the Chuck Schumer we saw tonight who said, you know what, Saudi should be on that ban list.

KRAUTHAMMER: Well, I mean, this is a festival of hypocrisy all around on all of these issues. You play the hand that embarrasses the other side. I agree that the judicial issue is an important one. This is a way overstep on the part of the judiciary. But as to national security, completely unimportant and a sideshow.

LIASSON: Really quickly, the moral of the story is that Democrats shouldn't do the kinds of things that they complained about for the last eight years.

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