Trump confronts North Korea, health care reform tensions

The 'Special Report' All-Star panel weighs in

This is a rush transcript from "Special Report with Bret Baier," June 30, 2017. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

PRESIDENT DONAL TRUMP: The era of strategic patience with the North Korean regime has failed. The United States calls on other regional powers and all responsible nations to join us in implementing sanctions and demanding that the North Korean regime choose a better path, and do it quickly.

(END VIDEO CLIP)

BILL HEMMER, FOX NEWS: It was a major event at the White House with the president hosting the president from South Korea. I want to bring in our panel right now and talk about that very phrase: Tim Farley, host and managing editor of "Morning Briefing POTUS" on Sirius XM Radio; Olivier Knox, Yahoo! News chief Washington correspondent, and syndicated columnist Dr. Charles Krauthammer. Four nights this week. Are you tired of me yet?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: No, but I'm getting there.

(LAUGHTER)

HEMMER: Just give me 25 minutes, all right?

Olivier, strategic patience is over. We heard this repeatedly. What does it mean?

OLIVIER KNOX, WASHINGTON CORRESPONDENT, YAHOO!: The line there, the important line was the other regional powers that he referenced. He did not call out China by name, but that's clearly who he meant. The administration has been piling the pressure on Beijing to do more to rein in North Korea's missile programs and its nuclear programs. It imposed sanctions on a Chinese bank accused of laundering North Korean money. They just approved an arms package for Taiwan. That's another point of pressure on China. And all this is happening as the president is heading to Europe next week on the sidelines of a major international summit in Hamburg, Germany. He's going to meet with the most important people in this process including China's Xi Jinping.

HEMMER: What comes of that?

KNOX: That's a really good question because there has been sort of a dance between President Trump and President Xi Jinping on exactly what China's role is going to be. He recently tweeted out that he was disappointed that China had failed to yield more progress in this very important and escalating diplomatic spat. His aides are saying we're not really pressuring China, we're just trying to get them to see things our way, which sounds kind of like one of the same thing. But what the administration hopes for is that China will put a lot of pressure on its banks and its other businesses to curtail trade and finance in North Korea.

HEMMER: Do we have any indication, Tim, whether or not China is willing to do that?

TIM FARLEY, "MORNING BRIEFING POTUS": I don't know what China is going to do. I was surprised by President Moon because he seemed a little bit more conciliatory toward the North when he was running for president, and today he was very effusive in his praise for President Trump. President Trump has taken a little bit more hardline, as Olivier mentioned, with these sanctions and some of the deals he's made. President Trump has actually, I think, played a pretty sharp game with North Korea thus far. And with China, the question is what China will do. They are as an enigmatic as ever about that.

HEMMER: Strategic patience, when you hear that phrase, Charles, what do you think of?

KRAUTHAMMER: It's clearly a repudiation of the idea behind the Obama administration which was basically that's a euphemism for not doing anything, for thinking that somehow, which is the Obama policy, which is that the North Korean regime is so inhuman, so inefficient, so much starvation that it can't survive in the long run. We just wait and eventually it will collapse. It's not going to happen. And the main reason it's not going to happen is because it's sustained by China economically and politically and diplomatically.

Look, I think the administration made the right choice to try to go through China, to threaten, to cajole, to see whether China will do it. I think in the end China is not going to do it. I think it thinks what the Americans are doing is a bluff. The bluff being China, if you don't act we're going to take this in our own hands, strategic patience is over. It was announced earlier in the week that the president is looking at military options. Well, those are pretty serious. That's all-out war on the Korean peninsula which we tried 60 years ago, or the North Koreans tried it, initiated it, and we suffered a lot. So we don't have a lot of options here. I think we have to play the China card, which is what the administration is doing, but we have to understand that it is a longshot choice.

HEMMER: I want to turn back to domestic politics, because it was a big week here for health care. You could argue that it was empty in the end, but we'll see where it goes. I want to take you back to January because the president sent out a tweet for what he prefers in terms of the strategy going forward. He said this about six months ago.

(BEGIN VIDEO CLIP)

TRUMP: It will be repealed and replaced. It would be essentially simultaneously. It will be various segments, you understand, but it will most likely be on the same day or the same week, but probably the same day. It could be the same hour.

(END VIDEO CLIP)

HEMMER: So that was from six months ago to this morning, we have this tweet, "If Republican senators are unable to pass what they are working on now, they should immediately repeal and then replace at a later date." Where does that go, Olivier?

KNOX: It depends on Congressional leaders, the Republicans in Congress right now, it depends on whether they can lock up the support. This makes it a little harder for them to lock up the support for the existing Republican legislation. The president has had a couple of different scenarios over the past six months, including the one you showed but also another one in which he said we can just watch Obamacare collapse, maybe nudge it along as well, and then that will force Democrats to come to the table. That's still an option as well. But I think we have to watch and see what Mitch McConnell, the Senate majority leader decides to do.

HEMMER: This idea has been floated by others.

FARLEY: I don't think Senator McConnell is going to wait for the president. He's going to do what he wants to do. And I think from talking to Republicans and Democrats I've talked to, I think that what's working here is they are going to try to get anything past that they can get if they can get something done. Then they're worried about fixing it later. It's not so much about repeal and replace. Down the road they are going to have to fix it along the margins with some Democrats even eventually. But I think at some point I think they're going to try to figure out a way to claim victory because if they don't pass anything, that's a loser. This bill was a loser from the beginning, but they're going to try to work on something so that they can get it passed in the Senate so it passes the Byrd rule. It gets to the House. They manage to figure out a way to reconcile the Senate and the House versions, and after that they will fix it somewhere down the road.

HEMMER: That's a lot of hoops.

FARLEY: That's what Mitch McConnell is looking for, I think. I don't think he really is worried too much about what the president --

HEMMER: Quickly, Ben Sasse, the Republican senator from Nebraska had this to say about what comes next and what he would do or not do in the schedule coming up, which is important.

(BEGIN VIDEO CLIP)

SEN. BEN SASSE, R-NEB.: If we don't get this resolved by the Monday of next week, July 10th, if there isn't a combined repeal and replace plan, I'm writing a letter to the president this morning urging him to call on us to separate them. If we can't do them together, let's do it as much repeal as we can and then let's have the president asked us to cancel our August recess period and stay here and then work on replace separate.

(END VIDEO CLIP)

HEMMER: That may be the case, and it's really a guessing game right now, Charles. But that point he makes at the end about the August recess, there is talk in this town about blowing that off completely.

KRAUTHAMMER: That's the best element in that idea is to cancel the senators' recess. They haven't quite earned it yet. Look, in theory the repeal first idea is good. But there is a reason why it was abandoned. It's not going to pass. You can't have a clean, bald, and naked repeal because it means that there are millions of Americans who are going to be out of health care insurance, out of coverage almost overnight, and that will be utterly intolerable. It will not get a majority.

The reason why Sasse wants to advocate it is because he knows it's so intolerable it would then force the Senate into doing a repair, a replacement quickly. But that may not work. I think that's going to be seen as a bluff. The only way to go I think right now is the McConnell way where you try to piece together a replacement. And if you can do it, you do it. If you can't, you can't do repeal alone.

HEMMER: It could make it for a very long, hot August here.

KNOX: It could. It definitely could. Although, as you note, there have been some calls to do away with what I think they call their district work period, their home work periods.

One of the options that was talked about earlier on, it's passing repeal immediately, but the repeal wouldn't take affect for a couple years. One of the original ideas was to have the repeal takes effect after the 2018 midterms, for example. So that would give them a longer window. One of the problems is that would problem hemorrhage conservative support because a lot of conservatives want a pure up and down repeal. And so how do you get them back on the table on the replace front?

KRAUTHAMMER: If they did that, that repeal would be repealed in the future. It doesn't have a hope. It's like the doc fix. You say we're going to repeal in two years. The Congress will be around in two years, and it's still going to be an unacceptable idea, and it will in and of itself be repealed. It can't be done alone. They have to recognize that.

HEMMER: Charles, I want you to reflect on something real quick. We did a fox poll and we put the numbers out about 30 minutes ago. Are you proud of your country? Today 51 percent say yes, it kinds of aligns with the numbers from a year ago. Then we asked question, the founding fathers, would they be proud of our country today? Charles, 79 of those that we surveyed say no. Why is that?

KRAUTHAMMER: If I had to give a -- this is a reflection of reality, which I'm not sure it is, I would say that the deepest problem is civic education. We are raising generations of kids who have no idea what their history is. They have no reason to be proud of our history. They are being taught patho-history, pathology, all the things that we did wrong, all the sins, all the injuries, all the crimes, and none of the glory of it. You raise a generation like that, you end up not exceptionally proud of your country. That's probably the most important reason.

HEMMER: Do you want to ask, do you know who the founding fathers are? That's next week. All those polls, by the way, are on our website at FOXnews.com.

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