New questions surround FBI 'dossier' investigation; Sen. Grassley on Gorsuch's qualifications, nuclear option

Senate Judiciary chair raises concerns about the FBI's deputy director; insight on 'The First 100 Days'


This is a rush transcript from "The First 100 Days," April 3, 2017. This copy may not be in its final form and may be updated.

MARTHA MACCALLUM, HOST: Breaking tonight, Susan Rice, President Obama's former National Security Adviser, according to multiple sources, is the top-ranking person then-White House official who called for Trump team to unmask in raw intelligence reports. If so, if that's the truth, she may be called to testify about that before Congress.

Welcome, everybody. I'm Martha MacCallum. This is day 74 of "The First 100," as we follow both sides of the Russia investigation tonight. This is the side with the fastest-moving developments. This is what Susan Rice said when she was asked about what she knew about all this.


SUSAN RICE, FMR. OBAMA NATIONAL SECURITY ADVISER: I know nothing about this. I really don't know to what Chairman Nunes was referring, but he said that it was potentially incidental collection on American citizens. I was not aware of any orders given to disseminate that kind of information.


MACCALLUM: So, it is worth pointing out that Ms. Rice's credibility has been called into question on various stories in the past, like, when she defended accused deserter U.S. Army Sergeant Bowe Bergdahl or claimed that Benghazi terror attacks were the result of a video.


RICE: It was a spontaneous reaction, the consequence of the video. He served the United States with honor and distinction.


MACCALLUM: So this time, was Susan Rice being forthright when she said that she didn't know anything about Trump team members being swept up in surveillance of any foreign officials. Joining us now with his very latest reporting on what took place in those final days of the Obama administration and whether they were trying to smear the incoming president, perhaps. As our own Adam Housley who broke news on this story over the weekend. Adam?

ADAM HOUSLEY, FOX NEWS CHANNEL SENIOR CORRESPONDENT: Yes, Martha. In fact, you touched on something here at the top about how did Rice know to ask for that intelligence to be unmasked. That's something we're still looking into. But it's a question that we're hearing from multiple sources who also tell Fox News that former National Security Adviser was the one who requested to unmask the names to transition officials. The unmasked names, people associated with Donald Trump were then sent to all the NSC, some at DOD, James Clapper, John Brennan, basically, the people at the top including former Deputy National Security Adviser Ben Rhodes.

Now, these names are part of incidental electronic surveillance, we're told, of candidate and president-elect Donald Trump and people close to him, including family members for up to a year before he took office. Now, when the names of Americans are incidentally collected, in general, they're supposed to be masked, meaning those names are redacted from reports, whether it's international or domestic collection, unless it's an issue of national security, an issue of crime, or if the person's security is threatened in any way. But there are loopholes and ways to unmask those names through backchannels, but Americans are going to -- supposed to be protected from this incidental collection, our sources, in this case, they were not.

And these all comes in the wake of Evelyn Farkas' television interview last month, the former deputy secretary of defense under President Obama said this in part.


EVELYN FARKAS, FORMER DEPUTY ASSISTANT SECRETARY OF DEFENSE: I was urging my former colleagues and frankly speaking, the people on the Hill. It was more actually aimed at telling the Hill people, get as much as information as you can, get as much intelligence as you can before President Obama leaves the administration.


HOUSLEY: Meantime, we're also told that House Intelligence Chairman Devin Nunes knew about the unmasking and leaking back in January, well before President Trump's infamous tweet alleging wiretapping. Our sources say, "The intelligence agencies slow-rolled Nunes. He could have seen the logs in other places besides the White House skiff which is a secure room that's been used in the past to see these things, but it had been already a few weeks and hasn't been able to access it. So, he went to the White House because there, in the skiff, he could protect his source and he could get the log so it's basically a two-fold reason why he went there. Also, keep in mind, as the Obama administration left office, it approved new rules which gave the NSA much broader powers by relaxing rules about sharing intercepted personal communications and the ability to share those, Martha, with 16 other U.S. intelligence agencies. As you can tell, a lot has come out since we first got into the on Friday and we expect more to come, Martha.

MACCALLUM: We know after Devin Nunes went to the White House, he did express some reservations about sort of the way that he approached some of that. But what you point out is significant and that if he was slow- rolled, he was, perhaps, frustrated at his ability to see what was being offered to him through those channels, right?

HOUSLEY: Right. And keep in mind also, if you were to go to the agency where your source is, most likely if you're a congressman and head of that committee, you're going to be known. So, I think that comes into play as well here.

MACCALLUM: Yet one other interesting thing, the person at the NSC who first uncovered this, he took it to the White House Attorney, correct? And then he was told to stop researching it? Can you shed any light on that?

HOUSLEY: Well, that's Eli Lake report. He was the - Eli was one of the first to came out with Susan Rice. We had known Susan Rice was the leaker but they were the first ones, really, to came out with it and break it, really. That was from his report. What I can tell you, the people we talked to saw some of this stuff separately. So, they are people also involved in this community, and we're learning of names being unmasked that didn't normally happen, and it did set off some other maybe some other light bulbs in people's minds as they were seeing some of this stuff are coming across at the time.

MACCALLUM: Yes. All right. Adam, thank you, great reporting. Good to see you tonight, Adam Housley.

So, here now, Pete Hoekstra, former Chairman of the House Intelligence Committee and chairman and former Trump campaign national security adviser; and Marie Harf, former Obama State Department Spokesperson, and Fox News Contributor.

Marie, let me start with you, why would Susan Rice say that she didn't know anything about it if multiple sources are now saying that she was the person who requested the unmasking?

MARIE HARF, FOX NEWS CONTRIBUTOR: Well, good evening, Martha. I'm not sure why Susan Rice said which she said in any given interview. I actually just saw the interview for the first time a few minutes ago, but here's what I do know, that it's not at all unusual for the National Security Adviser to request additional information, and by that, I mean here unmasking of an intelligence report. So, that does not mean she leaked it and no one has reported that so we should not equate unmasking with leaking. But, it's not unusual for a National Security Adviser to request this kind of information. It happens all the time. I've been in the Intelligence Community and I've been in the administration, and I know that this is a fairly common practice.

MACCALLUM: Right. It's supposed to be for Foreign Service value. So, she would have had to prove that somehow there was some value in not only knowing the people on one side of the intercept but also unmasking so that others in the administration could see the names of these Trump individuals - Trump team individuals or that they were the ones that were being discussed. It's interesting to me that when looking at the other people in the circle, you have Brennan, you have Clapper, and you have Ben Rhodes who we remember famously bragged about the echo chamber, and how easy it was to put out a message when he wanted to the press and then sort of have it take on a life of its own. You know, I mean, I doubt you're going to confirm right now whether you think Ben Rhodes is behind this, but do you have thoughts on that?

HARF: Well, what I know is that the Intelligence Community is the one who makes the decision when they are asked to unmask someone's name if there's enough information if they should do so. So, take the White House, take Susan Rice, take Ben Rhodes, take them out of this conversation. If the Intelligence Community professionals decide that there's some value in national security, foreign policy, or otherwise in unmasking someone, they will grant those requests, and we have seen no evidence in Eli Lakes' report or others that there were partisan political motives behind this. And we can't assume that unless there's actually evidence to back that up.

MACCALLUM: Well, what we - what we do know - and let me go to Pete Hoekstra in this, what we do know is that there was a concerted effort from DOJ and other areas to lower the bar so that more people would have access to this information, correct, Pete?

PETE HOEKSTRA, FORMER HOUSE INTELLIGENCE COMMITTEE CHAIRMAN: It really is, and the whole scenario really is kind of amazing to me now. It was only two weeks ago that we had Mike Rodgers from the NSA telling the House Intelligence Committee how important and the strict guidelines that they had in place to make sure that Americans were not unmasked, those who were caught in incidental collections.

And, you know, run through the scenario here. Number one, it's -- you know, it's perfectly logical to have, you know, Americans collected, inadvertently collect as we're collecting intelligence. The second question is though, how does the stuff on the Trump administration actually even make it to the White House? What is the national security purpose as to why our National Security Adviser and others need to see this information? What were the national security implications of this? Then the unmasking, then spreading it across 17, 16 -- 17 intelligence agencies to make sure that the information was preserved. I think what you're going to find out and what was of concern here is that the unmasking reached unprecedented proportions, as we started getting closer to the campaign, and as we started getting closer to the inauguration of President Trump. That's what you're going to find.

MACCALLUM: Marie, if you go to the extent of unmasking, would that intelligence be naturally shared with the president? Would he be in the loop on that?

HARF: It really depends, Martha. It's a case by case situation. And, you know, if they were seen in -


MACCALLUM: But let me - hold on. Let me -- let me just jump in there. If the unmasking has to do with the incoming President of the United States and the various entities involved have lowered the bar so that everybody can see it, don't you imagine that the president would be in that circle or not?

HARF: Well, I can tell you that the president definitely was kept up to speed on the investigation that happened over the fall about Russian interference in this election. And we have to remember, this isn't really a conversation about unmasking, this is a conversation in the broader sense about Russian interference and whether Americans got picked up on collection about Russia. And so, yes, the president obviously would be kept up to speed on that larger investigation.

MACCALLUM: Although we have been told the - that whatever Devin Nunes saw had nothing to do with Russia.


MACCALLUM: Let me just ask Pete. Final thought, Pete, and then we got to go.

HOEKSTRA: Yes, what you'll find is, you know, this is exactly what people on the left and people on the right were most worried about from 2001 and 2009. Big data, big government creating an opportunity for massive abuse. And it appears that that may be what we're starting the road that we're starting to go down and that has huge implications for our Intelligence Community moving down the road.

MACCALLUM: All right. Thank you, both, for being here. We're going to see you a little later.

HOEKSTRA: Thank you.

MACCALLUM: Pete Hoekstra and Marie Harf coming back later tonight.

Also breaking this evening, FBI Director Comey, top deputy, finds that he is now under the microscope. Ari Fleischer and Zac Petkanas join us on the new questions about Andrew McCabe's potential involvement with the British spy who put together that dossier on now-President Trump.

Plus, democrats laying down the gauntlet on Judge Gorsuch in a historically unprecedented Senate move that is likely to send up a roadblock on any hopes for bipartisan dreams that may still be lingering out there tonight. We'll be right back with more.


MACCALLUM: There are new developments tonight after the Senate Judiciary Committee Chairman has raised questions and some demands for answers from FBI Director James Comey. What is Senator Grassley focus? He would like to know does the deputy FBI director have a -- who had a conflict of interest while he was investigating the Clinton e-mails scandal, are there more questions now about what this deputy director to James Comey knows about the British spy Christopher Steele, and why the FBI considered paying him, they went pretty far down the road to that to get intelligence on Donald Trump, then-candidate Trump. Who needs spy novels these days, right? Jonathan Hunt has the latest for us, live from our west coast newsroom. Good evening, Jonathan.

JONATHAN HUNT, FOX NEWS CHANNEL CORRESPONDENT: Hey, Martha. Yes, truth really maybe stranger than fiction in this day and age. Andrew McCabe, may be an unfamiliar name but it's one taking on more importance in the investigation into the Trump-Russia ties and more aptly in the case of Mr. McCabe. The investigation -- all of that investigation. Now, the background first. McCabe is the FBI's Deputy Director, and the concerns about him are laid out in a letter from Senator Charles Grassley to FBI Director James Comey. In that letter, the senator points out, as previously reported by Fox News, that McCabe is already under investigation by the FBI inspector general over his role in the Hillary Clinton e-mail investigation.

The implied concern being McCabe's impartiality, given that his wife, who was running for the Virginia State Senate in 2015, received around $700,000 in political donations arranged by close Clinton confidant, Virginia Governor Terry McAuliffe. Grassley writes, quote, "While Mr. McCabe recused himself from public corruption cases in Virginia, he failed to recuse himself from the Clinton e-mail investigation despite the appearance of a conflict created by his wife's campaign, accepting $700,000 from a close Clinton associate during the investigation."

Grassley's letter then turns to the Trump-Russia investigation and in particular, a discussion within the FBI about whether to pay former British spy, Christopher Steele, we all remember, drew up that dossier that alleges Russian officials had gathered information on Mr. Trump that could embarrass him. Mr. Grassley writes that there are even more conflict of interest questions, quote, "If Mr. McCabe was involved in approving or establishing the FBI's reported arrangement with Mr. Steele, or if Mr. McCabe vouched for or otherwise relied on the politically-funded dossier. Simply put, the American people should know if the FBI's second-in-command relied on Democrat-funded opposition research to justify an investigation of the Republican presidential campaign." Now, Martha, the letter then lays out a dozen questions, specifically, regarding Andrew McCabe's role in the investigation of President Trump, his associates, and Russian officials. The letter, by the way, was sent to Director Comey last Tuesday, and Senator Grassley's office said -- office tells us tonight that they have not yet received a reply from Director Comey. Martha?

MACCALLUM: All right. We'll hear from him in a bit. Jonathan, thank you very much. Joining us with more now, Ari Fleischer, served as White House Press Secretary under President Bush, and Zac Petkanas, he's the director of the DNC's war room against President Trump, which must be a very busy place, Zac. There's certainly there's a lot going on in that area. So, Zac, let me start with you on this. What do you make of this inquiry, this questions that Senator Grassley has about Andrew McCabe?

ZAC PETKANAS, DEMOCRATIC NATIONAL COMMITTEE SENIOR ADVISOR: Well, I think, it is an attempt to buy the republicans once again to muddy the waters. They want to talk about anything but the actual substance of the allegations about the potential connection and collusion between Russians and the Trump associates.

MACCALLUM: I mean, it seems at this moment and, you know, there's a lot more to be told in this story. There's two sides to this story, the one we're talking about right now, and the one that you bring up, which is whether or not there was any collusion. We know that there was Russian intervention and certainly attempts to intervene in what people thought about the process, as it was going on through the e-mails that were leaked. But in terms of Andrew McCabe, Ari, would it be unusual if the deputy director was reaching out in some way to this former intelligence official from Britain that put together this dossier and that there may have been offers to pay him for information that would be against Donald Trump?

ARI FLEISCHER, FORMER WHITE HOUSE PRESS SECRETARY: It struck me really as odd having that -- read that so-called "dossier and BuzzFeed," of course, they're the only ones who have the temerity to publish it because it was so outlandish for the United States government through the FBI to pay for anything like that. That's what would bother me the most here because judgment or FBI -- that they should be spending taxpayers' dollars in something so worthless. But I do think on the broad point here, people should not reach any conclusions or leap to any conclusions about Donald Trump and collusion with Russia. Nobody knows that. Nobody has those facts. Let it be investigated, and nobody knows anything here yet about McCabe. Let Grassley ask his questions. It is incumbent on the FBI to answer them. But what I have always tried to do in Washington, Martha, was to step back instead of leaping forward when it comes to these types of allegations. Let people do their work, get the answers and wait.

MACCALLUM: When you look back, you know because you do have to, sort of, go down every avenue and figure it out on all sides. So, when you look back at Andrew McCabe, the deputy FBI director, who's the person in question in this particular part of it, with the Clinton investigation of e-mails, his wife had received $700,000 for her campaign from Terry McAuliffe. Now, that campaign was over before the investigation that McCabe was undertaking with regard to the e-mails for Clinton before it began, but still, you know, as a politician said about this, Zac, you never really forget when somebody gives you a half a million dollars. It's a nice piece of change. So, should he recuse himself from that, and does that question -- throw his credibility into question?

PETKANAS: I guess, I'm not understanding the insinuation here, is the insinuation that the FBI was not hard enough on Hillary Clinton, is the insinuation that the FBI is in the tank for democrats because there's someone who is a member of the Clinton campaign, I can assure you that that is simply not the case. I mean, the letter that, for example, that Director Comey sent right before the election may have tanked the entire campaign in and of itself. And so, I don't totally understand the insinuations regarding McCabe. But look, we'll make you a deal. Republicans are not crazy about the number two in the -- from the FBI, McCabe. Democrats are not big fans of the number two at the Department of Justice, Rod Rosenstein, who is the Trump appointee. Why don't we get both of them out of the picture and let's have a special prosecutor? That will take care of both sides.


FLEISCHER: Thank goodness, gracious, the last thing anybody needs are special prosecutors now. You know, I have faith in the system, Martha. And I really mean that. I have faith at the Intelligence Committees on the Hill, and the FBI can do their job. And the last thing you want in Washington, D.C., with all the noise, with all the finger-pointing controversy now, is to make it worse by appointing a special prosecutor, which as we've seen from history, just leads to more unhinged charges and back and forth charges, and even deeper allegations of scandal when maybe there is none at all. Let people do their jobs.

MACCALLUM: All right. Well, let see when Senator Grassley gets -- yes.

FLEISCHER: That's right.

MACCALLUM: When he gets a response to his letter. He's got a lot of questions about Andrew McCabe, and we'll take it from there. Thank you, gentlemen. Good to see you as always tonight.

So coming up, the president has a huge week ahead. Today, he met with the Egyptian President and vowed to work with him against ISIS -- an idea that he talked a lot about on the campaign trail. When most Americans are winding down this Friday, President Trump goes to Mar-a-Lago for a tit for tat with the leader of China. Not much on that to-do-list there, right? Quite a bit. All right. So, let's talk about that.

Plus, senate democrats hit the magic number to filibuster Judge Neil Gorsuch, but is this the hill they want to die on? Senate Judiciary Committee Chair, Chuck Grassley, and our own Chris Stirewalt, coming up next. Straight ahead.


MACCALLUM: Breaking tonight, Judge Neil Gorsuch is now one step closer to becoming the next Supreme Court Justice. One way or the other, you could say. Today, the Senate Judiciary Committee voted along party lines to move the nomination to the senate floor, and that is where this fight really lies. As at least 41 democrats are now prepping to take the unprecedented action of filibustering a nominee for the associate justice position on the United States Supreme Court.

Earlier today, a number of democrats on the judiciary committee did not budge from those positions. Watch this.


SEN. DIANNE FEINSTEIN, D-CALIFORNIA: I cannot support this nomination.

SEN. PATRICK LEAHY, D-VT.: I will not, I cannot support advancing this nomination.

Chris Coons, United States Senator from Delaware: I have decided that I will not support Judge Gorsuch's nomination.

SEN. DICK DURBIN, D-ILL.: I hope, I just hope at the end of the day, we can resurrect what this institution was all about and should still be all about. This nomination does not give us that chance, unfortunately.


MACCALLUM: Iowa Senator Chuck Grassley, who chairs the Senate Judiciary Committee, joins me now. Senator, good evening. Good to have you with us.


MACCALLUM: Your reaction as you listen to those fellows -- to the Democrats on your committee?

GRASSLEY: I listened to every excuse, and it probably falls into two or three or four different reasons because this guy is so qualified and so independent that they can't lay a glove on him in regard to his qualifications and a good reason why he should not be on the Supreme Court besides the fact that several democrat legal people outside of the Congress are backing him, and one example would be the solicitor general under Obama, Mr. (INAUDIBLE), who has said that this guy should be on the Supreme Court.

MACCALLUM: You sound angry.

GRASSLEY: I sound -- I should sound angry. I just -- I think you get very intense when you works -- when you find a guy so qualified that in turn -- then they can't find the excuse against his qualification or why he shouldn't be on the court, they dig up all these other things.

MACCALLUM: All right. So, I heard Senator Durbin, expressing his concern for what this means for the future of the senate. And I would imagine that you share those concerns?

GRASSLEY: I do share those concerns, but don't forget, for 211 years, there weren't filibusters of judges. And soon after George W. Bush got in, Senator Schumer gave that famous speech that poisoned the well, and it's -- judges have become very political since then. I hope we get over that and this is an opportunity to do that with a very qualified person. If this person wasn't qualified they could talk politics, but politics won't work for this one.

MACCALLUM: And there a lot of politics in play here, here is Chuck Schumer over the weekend. Let's play that.


CHUCK TODD, MEET THE PRESS SHOW HOST: Why would Senator McConnell work with you guys on this, when you changed the rules first and you decided to do this and again you change you yourself this week and two months ago that you regret and it was a mistake?

SEN. CHUCK SCHUMER, D-N.Y., MINORITY LEADER: We never, but we don't regret not changing it for the Supreme Court. That is been the tradition of the senate for a long time. This is nothing new.


MACCALLUM: So we are looking at a nuclear option here deployed by senate Republicans or you still hold that hope that when push, it may not go that far?

GRASSLEY: When he said that it is always been this from Supreme Court judges where the assumption you have 60 votes that is absolutely wrong. There hasn't been a partisan filibuster against the Supreme Court justice ever. This is the first one.

MACCALLUM: Indeed it is. What's the impact on the Trump agenda? If you can't get Neil Gorsuch concerned with people getting together and agreeing on his qualifications, do you think there's any hope for getting together on anything else on the agenda?

GRASSLEY: Let me assure you that Judge Gorsuch is going to be on the Supreme Court by midnight Friday night. I can assure you that. One way or another he'll get the necessary votes to get there. And changing the rules -- remember that in November 2013, Reid change the rules for every cabinet person, for every Judge but not to Supreme Court. So this change was made -- this precedent was set four years ago.

MACCALLUM: Indeed. I want to ask about a letter you wrote to the FBI director James Comey with a number of concerns about Andrew McCabe the deputy director of the FBI and his potential involvement in approaching Christopher Steele a former British intelligence agency to do some work for them perhaps on now President Trump. Tell us what your concern is about Andrew McCabe.

GRASSLEY: Well, is there a conflict of interest, because we raised the same question a year ago, I mean a few months ago in regard to the Clinton e-mails, because McCabe's wife was very close to governor McAuliffe and there's no doubt about that connection with the Clinton administration. So raising that conflict of interest right there I want to know whether or not he is involved with the Dossier and Steele and all that stuff and we don't know for sure but we need to get the information, if he is involved in the investigation and the possible conflict of interest.

MACCALLUM: You go after him very specifically in your letter and outline a dozen questions that are aimed at him and what he knows about the situation. Do you have specific reason to believe that he was involved?

GRASSLEY: We want to know if he is involved, because there is the obvious conflict in regard to the Clinton e-mails. The inspector general's investigating that.

MACCALLUM: Senator Grassley, thank you very much, good to have you with us tonight.

GRASSLEY: Thank you, glad to be with you Martha, anytime.

MACCALLUM: All right here with more, Fox News politics editor, Chris Stirewalt to boil down what this means really for the Trump agenda. Chris good evening, to you, it looks like they're going forward with the filibuster yes or no?

CHRIS STIREWALT, FOX NEWS DECISION DESK CORRESPONDENT: Some Democrat would have to change their minds. We got down today to the final four and Chris from Delaware, Democrats said now that he is going to block. What I cannot figure out is how Democrats are this strategically stupid. This is not the Chuck Schumer I've seen and covered for these years. This is the level of tactical, strategically stupidity that boggles the mind and it tell me essentially, this goes to your point when you interviewing senator is, Democrats are so beholden to their base that demands maximum opposition to Donald Trump that they're even forcing them to do foolish things, because it will be no problem for Mitch McConnell to invoke the nuclear option on Neil Gorsuch, who is widely like respected and has bipartisan acclamation. People say this is exactly the kind of judge you want, this is the guy. Instead he is going to make it easy for him to do this and next time do you think they'll send another Neil Gorsuch down from the White House? Do you think they will send somebody with this impeccable bipartisan vote in a few days?

MACCALLUM: But don't they say if we're going to have a nuclear option anyway at some point, we are just going to continue digging our hills and resist threshold right now. What do they have to lose if that is what they are thinking?

STIREWALT: What they have to lose is that next time they might beat the nuclear options that if White House sends down a worst nominee next time they might be has Republicans peel away. I think they're making a serious strategic error. I think it's going to have enormous consequences for how nominations is happening in the future, but also on the Supreme Court we're going to see a more bipartisan Supreme Court and justices put on without bipartisan vote and go back and forth. They're making it worse.

MACCALLUM: What do you think people in places like Pennsylvania and Missouri and places where they went for Trump and have senators and congressmen bucking the trend and going against Neil Gorsuch. How's that going to play for them the next time around when they come back to their constituents and say I voted that guy down and people say I thought he was ok?

STIREWALT: Voters in Missouri are focused right now on how nicely the cardinals beat the cubs.

MACCALLUM: As they should be.

STIREWALT: Well they should. As they face re-election for these folks there'll be a consequence for this but it all comes down to if Democrats can help make sure that Donald Trump's presidency is a failure and if it's a disaster and wages aren't up and he still has a 35 percent job approval rating. So that is what they are betting on. All-in on full opposition, support him in every turn, hope is a disaster and then tries to cash in at midterms.

MACCALLUM: They're in deep.

STIREWALT: Way deep.

MACCALLUM: Thank you very much, good to see you.


MACCALLUM: Coming up tonight, while Russia is on everybody's mind it's Egypt and China that are on the president's front burner as North Korea is reportedly not afraid to make the first move. Pete Hoekstra and Marie Harf, back with us to discuss and DNC chair Tom Perez dropping four-letter words as the leader of the party. So much for they go low, we go high. Remember that? Is this a good way for them to get the voters they lost back?


UNIDENTIFIED MALE: Well I'll tell you my idea because do you know what embodies their program? I don't care, because they don't give a (BEEP) about people.



MACCALLUM: Developing tonight foreign policy is really what going to take center stage this week as the Trump administration looks to make big moves on several important funds. Today the president welcomed the Egyptian counterpart to the White House and delivered this message.


PRESIDENT DONALD TRUMP: We're having a great discussion with representatives of Egypt and we have many things in common. There are a few things we don't agree on and I think that this is going to be a very productive day.


MACCALLUM: There you have it, so this as the president's son-in-law and senior adviser, Jared Kushner made an unannounced trip to Iraq with the chairman of the Joint Chiefs of Staff. These developments come ahead of a very important meeting, probably his biggest one yet. The end of the week he'll meet with the Chinese president Xi Jinping at Mar-a-Lago over the weekend and that could take on a confrontational tone over trade practices and North Korea and all of that, as the tensions are rising in the Korean Peninsula as Kim Jong-un nuclear provocations led President Trump to suggest an interview with the Financial Times that he could go alone to act against North Korea if China is not willing to do their part which president has complain about for many years. President Trump said he has a new approach. That is a busy week. Welcome to both of you. Marie, you say the Trump team's take on North Korea is -- how did you say it, the thing they're handling least badly. What do you mean?

MARIE HARF, FORMER CIA SPOKESPERSON: Yes. I think it's the thing they may have listened to President Obama's advice when he said this is the most important challenge he'll face. Most of the public rhetoric has been strong but pretty sober for this administration. Sending Secretary Tillerson to China was an important signal and the meetings this week are very important. My advice to them are to use the meetings to focus on North Korea not on the trade issues which I think he talks about during the campaign in an unserious way. While the U.S. can do things alone actions are much more effective particularly on North Korea to get the Chinese on board and its looking forward to the write-ups from the meetings.

MACCALLUM: What do you think?

PETE HOEKSTRA, FORMER CONGRESSMAN: I think that is exactly right that Donald Trump has been anticipating the meeting and laying the framework and groundwork for the meeting, reaching out to the South Koreans and the Japanese immediately after the election, continuing that dialog with the South Koreans and the Japanese after he was sworn into office, Tillerson going to China. He has laid the framework. He understands that he needs to deal with North Korea and America needs a new strategy. The meeting with Sisi today is just as important. He is handling that very well. We almost lost Egypt to the Muslim brotherhood under the last administration. We lost Libya and Syria. A large part of Iraq became part of the caliphate. He is rebuilding our relationship with Egypt because we need Egypt if we are going to be successful in fighting ISIS and radical jihadist.

MACCALLUM: I mean he is reaching out to people that the Obama administration was criticized in not reaching out and trying to team up to combat ISIS and to combat Islamic extremism. This is a very different tact.

HARF: The reason we didn't embrace president Sisi like Donald Trump has is because he is shown himself to be a horrible violator of human rights in his own country and that was important to the Obama administration. If you imprison hundreds of people, thousands of people including some American citizens we're probably not going to embrace you but what we tried to do at the same time is work with the Egyptians.

MACCALLUM: How's Iran fit into the picture?

HARF: We worked with the military and others to fight ISIS. I didn't hear anything about human rights. Sean Spicer doesn't even say it privately.

MACCALLUM: There are things they disagree on and Pete, go ahead.

HOEKSTRA: I think the most important thing -- the disaster in Egypt and throughout much of the Middle East was the Obama administration deciding to cut a deal with the Muslim brotherhood believing they can work with Radical Jihadists and the Radical Jihadist would change their behavior. Instead Radical Jihadist saw a huge opportunity which led them to almost take over Egypt and take a look at the suffering and the tens of thousands of people who have died in Libya and Syria and Iraq, because of that fateful discussion.

MACCALLUM: Marie and Pete. Thank you. Good to have you with us tonight. Also as Democrats look to rebound from their November defeat they're looking at this man, Tom Perez to help them get the party back. Some of the blue collar voters they vote in places like Wisconsin and Michigan and Pennsylvania. So the newly installed DNC chair is doing some insulting on the road to do that. Charlie Hurt and Krystal Ball will debate that, straight ahead.


UNIDENTIFIED MALE: Donald Trump, you don't stand for our values. That is what they said. Donald Trump You didn't win this election.




MICHELLE OBAMA, FORMER FIRST LADY: When someone is cool act like bully, you don't steep to their level. Our motto is, when they get low, we go high.




MACCALLUM: Former first lady Michelle Obama voicing what would be a Democratic rallying cry for 2016. Just months later however the Democrats are as far from that they can be and Tom Perez testing out a new strategy with how low can you go. Watch.


TOM PEREZ, DNC CHAIRMAN: Donald Trump you don't stand for values and you didn't win this election. When it came to health care we call it something else and so what do we call it? I don't care.


MACCALLUM: Joining me now Charles Hurt, a Washington times political columnist and Fox News contributor and Krystal Ball, Senior Fellow at The new Leaders Counsel. Krystal, let me start with you. What's your reaction to it?

KRYSTAL BALL, SENIOR FELLOW AT NEW LEADERS COUNCIL: When I heard the comments I absolutely loved it. I said to myself, finally, we actually have a Democrat with let's just say some fortitude and it's not about Republican voters but average folks in west Kentucky and Michigan and places we need to win again, this are about a health care program that was the most unpopular piece of legislation proposed that was cruel. It would kick millions of people off health insurance. I love to hear he is out fighting and fired up and good for the party.

MACCALLUM: Let's hear from Hillary Clinton on the campaign trail talking to coal miners. Remember this?


UNIDENTIFIED MALE: That is my future. I want to know how you can say you're going to put coal miners out of jobs and then come in here and tell us how you're going to be our friend, because those people out there don't see you as a friend.

HILLARY CLINTON, FORMER PRESIDENTIAL CANDIDATE: I don't know how to explain it other than what I said was totally out of context from what I meant, because I have been talking about helping coal country for a very long time.


MACCALLUM: Charlie, I think that may have been one of the most significant moments in the campaign. These are the people that Hillary Clinton lost. Now, it's no surprise Donald Trump spends a fair amount of time with coal miners lined up behind him. That is not unintentional. Is Tom Perez the right guy to bring back those voters to the Democrat Party?

CHARLIE HURT, WASHINGTON TIMES: I have a hard time seeing that because Tom Perez is very much the face of the Democratic establishment in Washington. He is been part of the problem as voters see it for a very long time. And so the notion that they would put him as the face of the Democratic Party is almost as absurd as keeping around people like Nancy Pelosi and Chuck Schumer as the heads of their respective chambers in congress, when they have been clearly part of the problem for a very long time. It's so easy to forget, just the past eight years President Obama was viewed as a success largely because he won re-election and because the press loved him and he got great press coverage. What was forgotten but revealed by Donald Trump's massive stunning victory for these people was the fact Democrats lost over 1,000 seats nationwide running on his policies. Barack Obama was the only Democrat who thrived under the reign of Barack Obama.

MACCALLUM: Tim Ryan wanted to replace Nancy Pelosi and the south bend mayor but they keep catering to the furthest reach of their party, Krystal and I mean just look at strategy. Do you think its good strategy?

BALL: I don't think it's about the furthest reach of the party. What I think we have to do and by the way I'm a huge fan of Congressman Ryan and backed him in provide a new direction in leadership because we have to re- center on what is the bottom line for Americans. We need to have an economic vision that speaks to everyone. That is what the party has to focus on.

MACCALLUM: Thank you. We'll be right back.


MACCALLUM: Now the baseball season is underway. President Trump decide the -- decided not to the ceremonial first pitch. He is the first president to opt-out since Taft in 1911. JFK did the honors in 63, President George W. Bush was there in 2006, and President Obama also played ball in 2010. So tonight's quote is from Babe Ruth and it is one probably every president can relate to see specially when the going gets tough the bambino said you just can't beat the person who never gives up, truth, right? We'll see you here tomorrow night.

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