Wasserman Schultz's primary opponent talks IT aide scandal

Tim Canova questions the Florida congresswoman's actions on 'The Story'

This is a rush transcript from "The Story," July 27, 2017. This copy may not be in its final form and may be updated.

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SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: We all come and have a chance to voice those ideas, voice those perspectives, and have a lot of healthy competition. And with that competition, you usually get the best results. The president likes that type of competition and encourages it.

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MARTHA MACCALLUM, "THE STORY" HOST: So, breaking tonight, the president "likes that kind of competition," in a moment, the press secretary will be here to explain that comment and also to respond to a profanity laced tirade that was given by her new boss. He has put out another tweet to try to explain that -- that's Anthony Scaramucci -- and that is our top score tonight.

It all started last night when Politico published an article on Scaramucci's financial disclosures. In a now deleted tweet he wrote this: "In light of the leaks of my financial disclosure info, which is a felony, I will be contacting FBI and Justice Department. #Swamp @Reince45," meaning Reince Priebus. So, it turns out that the information that was reported was public. It was not leaked. And that sent him, quickly backtracking on that, and then he tweeted this. "Wrong! The tweet was public notice to leakers that all senior administration officials are helping to end illegal leaks," again, "@Reince45."

So, then, we move forward to what happened this morning. The White House communications director called into CNN to try to clear all of that up. But the interview did little more than throwing some more gasoline on what turned out to be a pretty raging fire already. Listen to this.

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ANTHONY SCARAMUCCI, SENIOR ADVISOR TO PRESIDENT TRUMP (via telephone): We have had odds, with have had differences. When I said we were brothers from the podium, that's because we're rough on each other. Some brothers are like Cain and Abel. Other brothers can fight with each other and then get along. I don't know if this is repairable or not, that will be up to the president.

(END VIDEO CLIP)

MACCALLUM: All right. So, in the last couple of hours, it got a whole lot more interesting. Joining me now: White House Press Secretary, Sarah Huckabee Sanders. Sarah, good evening to you. Never a dull moment at the White House, and you know, I think everybody who has had a chance to read through these comments from a conversation that Anthony Scaramucci had with Ryan Lizza at the New Yorker, it's a jaw dropper. I mean, the language in there is just unbelievable.

SANDERS: I'm sorry, Martha, I lost you there just at the last second. Can you repeat that question?

MACCALLUM: Absolutely. The article that came out that Ryan Lizza printed in the New Yorker that detailed his conversation with Anthony Scaramucci, who's going to be the communications director at the White House, has language in it that I think is jaw dropping and really shocked a lot of people. He's put out a statement about that. You know, what's your response to it?

SANDERS: Look, I think Anthony put out a statement here just moments ago and stated that, you know, this is a guy who sometimes uses colorful, and in many circles probably not appropriate language. And he's very passionate about the president, the president's agenda, and I think he may have let that get the best of him in that conversation.

MACCALLUM: All right. I just want to put up one of these quotes, and some of them, I have to say we can't really put up on the screen at all. But he's going after the Communications Department because Ryan Lizza tells him that he understood that certain individuals were having a dinner at the White House, and he recorded that. So, according to Ryan Lizza's story, Mr. Scaramucci gave him a call and said, you know, why do you even know this? How do you know about this private dinner that's happening at the White House?

And he says, "They'll all be fired by me. I fired one guy the other day. I have three to four people I'll fire tomorrow. Reince Priebus, if you want to leak something, he'll be asked to resign very shortly. Reince is a blanking paranoid schizophrenic, a paranoiac." I mean, this is revelatory of what's going on inside the White House that I think, you know, American citizens look at that, and say, you know, "Gee, is the business the priority here or is it the animus that exists between these two individuals at this point?

SANDERS: Look, the business is absolutely the priority. Again, I think Anthony's put something out on this. The bottom line is: most of us here at the White House are focused on who has a job out in America, not who has a job here. That's what we're trying to put forward on the president's agenda. This is a big day today legislatively. We've got the health care vote coming up later tonight. Border wall just came out of the House Appropriations. We've got Russia sanctions bill that's just passed. We're focused on the agenda, moving forward. And sometimes, people on the staff get pretty passionate about that. Hopefully, they'll reel some of their language in. But again, I'm very focused. I know the president's very focused, and his team is on pushing his agenda forward.

MACCALLUM: But I mean, you know, we've had Anthony Scaramucci on this show many times you know. I mean, I think everybody -- he's an affable guy, and you know, we saw him come out in from of the podium the first time around. And has done, you know, I think a lot that the White House would feel very happy about. But the last 48 hours has been sucked into this fight that's going on between these two men. It does bring into question whether or not that's an effective communicator.

SANDERS: Look, again, I think that sometimes we have a lot of passion. Not just passion for the president and the agenda, but sometimes when you have the best people from around the country coming in with a variety of backgrounds, very different perspectives, you may not agree on everything. I think we have to push forward and that's exactly what we are doing. We are focused on health care; it's going to be a big thing over the next several hours. We're very committed to making sure we repeal and replace ObamaCare. That's going to be taking place later tonight. And that's what the majority of our staff --

MACCALLUM: And believe me, you know, I have a list of questions that I want to ask you about they're all policy oriented that got, you know, not to lower when this news happened. So, that's my point. That it steps on the message in terms of what's going on out there. And I would imagine, you know, that from now on, you know, when it starts a conversation, he's probably going to say this is off the record because we all know that, you know, that's how it works. But unfortunately, that wasn't said in that particular conversation.

SANDERS: Look, I don't think -- Martha, I don't think just because a comment is made, it takes about 30 seconds to make a statement like that.
There's a lot more hours in the day, and this isn't something that's all consuming for us or for our staff. The press and the media may make this the focal point of their day, but we're certainly not making it the focal point of ours. We're moving forward. We're focused tonight. Again, huge health care vote. And we've got a lot of people in the building that are working really hard to make sure that happens.

MACCALLUM: I'm sure you do. And you know, as I say, that is the interest that the American people have to be sure. I just want to put one more comment up on the screen, because you guys have to deal with your own internals there. And the staff, and the people that work at the White House to serve the American people, which we all know is a huge privilege. And I know you've said that Sarah, and I know that's what you feel. But this person is quoted, you know, works in the White House said, "This is getting out of hand. I'm honestly getting concerned for my safety in the office tomorrow. This type of behavior is unbelievable. Working in the White House, something like that is said, it's a disgrace." So, what are you guys saying to the other staffers who may now be -- have a lot of fears, based on these comments that they might not have their jobs tomorrow? Is that a reality for them?

SANDERS: Look, again, I think the people in this building, we should be focused on who has a job in the rest of the country, not who has a job in the building behind me. That's certainly the focus of the president, that's the focus that I have. And that's why we're working every day to build the economy, get regulations out of the way so that we have a better environment for job creation. In terms of people's safety, I certainly hate that somebody feels that way, but I've worked with an incredible team over the last six months. We have a great group of people. I love coming to work every day. I consider it a privilege, and I certainly feel very safe in the building and happy to be here.

MACCALLUM: All right. I do want to get to some of these other topics with you as well. You know, in terms of Jeff Sessions, who was interviewed by Tucker Carlson tonight, he said he found the language hurtful, that the president had said in speaking about him, but he said that he intends to stay in his job. Is Jeff Sessions -- does he have that assurance from the White House? Has he spoken to the president, and if not, when do you expect that they will speak?

SANDERS: I'm not aware if they've had a conversation today. But as I've said earlier and said many times this week, the president obviously is disappointed that he chose to recuse himself. But the president also wants him to go ahead and do his job. He wants him to get tough on intelligence leaks. He wants them to crack down on immigration which they've done, which we've spent a great deal of time talking about today, and the president will do so tomorrow on Long Island. These are big, important issues. And the attorney general needs to be focused on that and we hope he is.

MACCALLUM: I mean, you know, as we said, he's addressing the MS-13 threats right now, and you know the president's going to be talking about that tomorrow. His quote was, "If he wants to make a change, he has every right. I serve with the pleasure of the president, and I have understood that from day one." So, he's essentially saying that he plans to stay there unless the president of the United States personally asked him to leave. What do you think about that?

SANDERS: I think that's how every individual in this building is. We all serve at the pleasure of the president, and if at any point that changes, he should certainly make that decision. He hasn't, and so, therefore, we continue to go on and do our jobs. Look, I've said it three or four times tonight that I'm focused on who has a job outside of this building, not those of us that have them in here. And I think that's the attitude of every employee of this administration. We're focused on promoting the president's agenda, and that's what we're going to keep doing.

MACCALLUM: Yes. In terms of the chief of staff position, just one more employment issue at the White House. Because there's the big question about whether or not Reince Priebus will leave, and certainly now we're sort of privy to a lot of the heat that obviously exists for him right now. What kind of status update can you give us on that, because the senior official said this morning that he is gone?

SANDERS: Well, I saw him in the building a few minutes ago. He's in there working on the health care bill that's going forth tonight. And so, I don't have anything other than the fact that we're all putting our heads down, working on getting things done. And he's part of that team as of right now and that's what we're doing.

MACCALLUM: All right. In terms of health care, there are three Senators who said tonight that they will block this skinny bill if it goes through, and doesn't receive the kind of legislative process that they think it should receive. Does the president agree with that? What was his message to them tonight?

SANDERS: The same one that we've had since day one of coming into office. We need to repeal and replace ObamaCare with health care that works for America. That's what we're pushing forward. We hope that the Senate and the House can get together on that. Look, these guys have been talking about it for seven years. It's time for them to come together and get the job done. This is a part of this process; the steps that they're taking tonight. We hope they get this bill passed, and then we can move forward from here.

MACCALLUM: You know, there's a number of fronts where it looks like the president's getting a lot of pushback. One of them is on this health care bill; another has to do with Jeff Sessions. And you know, Lindsey Graham, who I know has had a good relationship with the president over the course of the last several months. He said, in very -- sort of very strong language, said if the president tries to nudge Sessions out or fire Sessions, we are not going to move forward with any effort to replace him. Grassley said the same thing. They're basically putting it on the marker and saying he is your attorney general, Mr. President, and if you try to sneak another way around that, we're going to block you at every turn. In fact, Lindsey Graham uses the language, it might the end of the Trump presidency.

SANDERS: Look, I think Senator Graham's got a pretty heavy lift, and he should probably stay focused on his job in getting some of the things done on health care and not worry so much about other people in this administration. He's got a big job to do tonight, and hopefully, he'll get that done.

MACCALLUM: So, I mean, would you say to those senators tonight, you know, that it appears that Jeff Sessions' job is safe? What messages the president saying with regard to Jeff Sessions right now, because there's been sort of a lot of back-and-forth about, you know, he serves at the pleasure of the president. You know, what is it? Is he going to stay or not?

SANDERS: Look, the reason that there's so much back and forth is because you guys keep asking the same question over and over. I've addressed this probably 100 times.

MACCALLUM: But it's easy to say he has the confidence of the president, and we expect him to remain attorney general.

SANDERS: And I've said, anybody that doesn't have the confidence of the president, moving forward, he has the ability to fire them. And if he decides to do that, he certainly will. This isn't a president that shies away from taking action and taking decisive action, and if he chooses to do that, he certainly would.

MACCALLUM: And do the president have any reaction to the back-and-forth with Anthony Scaramucci and Ryan Lizza, and the comments that were said in that article?

SANDERS: I haven't had a conversation with them since that story hit, so I certainly couldn't comment on his thoughts on that front.

MACCALLUM: All right. Sarah, thank you very much. Good to have you with us tonight.

SANDERS: You bet. Thanks, Martha.

MACCALLUM: All right. Good to see you. So, here with reaction is Dana Perino, White House Press Secretary under President George W. Bush. She knows a thing or two are rigors of Sarah Huckabee's job and she wrote a beautiful piece imparting some of your experiences. And you know, obviously, Sarah does a great job, and she's in a tough position tonight.

DANA PERINO, FOX NEWS CHANNEL HOST AND FORMER PRESS SECRETARY UNDER PRESIDENT GEORGE W. BUSH: I think what she proved tonight is she's a great asset to the administration. And while all of this chaos happening around here, and if you're a staffer at the White House and you're concerned? I would follow Sarah's lead because she is very grounded and she's level headed. And so, all those stuff that's happening around her and she's having to manage it. And I think what you see also is that there's a lot of pent-up resentment between the new Communications Director, Anthony Scaramucci, and the Chief Of Staff, Reince Priebus.

I think that the show that they put on last week, saying that, oh, no, everything's fine, we get along great. I don't necessarily think that that's true. And now we see them in these comments that there's a lot that has to be decided by the president. This is not something that Scaramucci can decide or Reince Priebus can decide. I actually think this decision comes down to the president. They've both made their case. And if they're both going to stay, then the president has to make that happen. If Reince is going to go, there's going to be other changes. I would suggest making them soon because the transition causes them not to be able to talk about the things that are going on.

MACCALLUM: Yes. And I want to get right back to that with you. We're going to take a quick break, and we'll be right back.

PERINO: OK.

MACCALLUM: Dana Perino, reacting to the explosive story that is breaking tonight, that and much. We're going to get reaction to all of that. And also, talk about the president's new Communication Director Anthony Scaramucci, who you've seen on this show many times. You've seen him in these halls many times. He's a bit on the hot seat tonight, but he has put out a tweet trying to put some of that to rest. So, "will it work," is the question that we are dealing with this evening. Also, Attorney General Jeff Sessions, speaking exclusively to Fox News as the president has been ratcheting up pressure on the nation's top cop. We will be right back with more of "The Story," and lots of breaking news right after this.

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UNIDENTIFIED MALE: You've seen the president's criticism of you? Do you think it's fair?

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MACCALLUM: We are back on a busy Thursday night here on "The Story." More reaction pouring in after the president's new White House communication director calls a reporter and unleashes, calling out fellow White House staffers and more. Tonight he has responded, sending this tweet out moments ago, which we did not get to pull up with Sarah Huckabee Sanders who joined us moments ago. But this was Anthony Scaramucci's response: he said, "I sometimes use colorful language. I will refrain in this arena, but not give up the passionate fight for the president's agenda. #MakeAmericaGreatAgain."

So, Marc Thiessen is a scholar at the American Enterprise Institute; Dana Perino is back with us, and Juan Williams is co-host of "The Five". Welcome, to all of you. Good to have you with us. Let me get Marc's thoughts first, and we'll go around the horn and come back to Dana. Marc, you know, before you do that, actually, let's put up one more of these quotes, so that you can -- you know, so the folks at home who may not have seen some of these can see them.

And as I've pointed out, we're not putting them all up for very good reasons, because they're not really PG-rated. He says, "I'm not Steve Bannon. I'm not trying to build my own brand off of the blank strength of the president. I am here to serve the country." I mean, he's really -- you know, has lashed out a number of people and threatened to fire the entire Communications Department in the course this, because he was upset that a leak happened that explained who he was having dinner with, with the president of the White House. Marc.

MARC THIESSEN, SCHOLAR AT THE AMERICAN ENTERPRISE INSTITUTE AND FORMER CHIEF SPEECHWRITER TO PRESIDENT GEORGE W. BUSH: Yes. I'm speaking as somebody who wants the president to succeed, and who wants his agenda to pass. This is an absolute train wreck. I mean, think about what's happening. Sarah Huckabee Sanders was just on and she said that he's just so passionate about the president's agenda. Well, if he's so passionate about the president's agenda, stop stepping on it.

Yesterday, they had a big announcement with Foxconn where they're investing billions of dollars in Wisconsin, going to create all these jobs, what are we talking about? We're talking about the president's -- his latest attack on Sessions and whether Sessions is still on the job. Now, we're talking -- you know, they have tax reform that they've unveiled today. Principles for tax reform. What are we talking about? We're talking about Scaramucci attacking the White House chief of staff as a schizoid paranoiac. I mean, they're stepping on their own story. And if they were getting stuff done, and this was all the sideshows, that will be fine. But they're not getting stuff done. And it's just an absolute train wreck.

MACCALLUM: And I think, you know, your passion is, you know, a lot of times people talk about -- trash the president, you want to support the president. You want to -- you know, you want to see the country to do well, we hope, no matter what party you represent in this country. So, I think that that, you know, feeling of being fired up when you see something like that comes out of a patriotic place. I think and hope -- whether you're a Democrat or you're a Republican. Because the fact of the matter is, and as Sarah Huckabee Sanders, who is -- you know, we're really glad she came on tonight, you know, made clear, she said, we want to talk about the jobs outside of the White House. But the problem is that there's so much -- you know when you make it all about you, which is what this appears to do in this particular instance, and the other individuals that you work with, you undercut that message in a huge way. So, let's go to the message master, Dana Perino, for another thought on that, Dana.

PERINO: Well, I do think that -- remember in the campaign when the president said, I alone can't fix it. This is an instance where, actually, he alone is the only one that can actually fix this. And so, he obviously has two people that he has relied upon in his White House, and I'm talking in particular now about Chief Of Staff Reince Priebus, and Anthony Scaramucci, the new communications director. They've both been loyal to the president, as far as I know. And the president is the one that needs to set the tone for these two guys.

Now, Sarah Huckabee Sanders in the press briefing today said that the president likes this kind of competition. Now, maybe this has gone too far. It's a little bit of a distraction. I would say, however, that one, let's not kid ourselves. Reporters love this kind of thing. They don't want Anthony Scaramucci to dial back his language. This is like, the best story that they can do. Because I will tell you this, reporters, human beings, they will always eat dessert first, OK? So, it's always much easier and much more fun to write about and talk about the telenovela that is the White House.

Imagine if you had cameras -- it's harder to make them eat their vegetables. Making them write a story only about Fox Con yesterday, or only about tax reform today, or only about health care tomorrow, you can do that, but only you at the top of the White House can make sure that happens.

MACCALLUM: Yes. You've got to put the vegetables on the table, and no dessert. No dessert. Juan, you think the place is on fire?

JUAN WILLIAMS, FOX NEWS CHANNEL HOST: I know the place is on fire. I mean, I just read about it. The thing about it, Martha, is it's not just that there's a fire at the White House tonight. It's that nobody inside the White House is interested in getting out. Everybody is locked in a death match. And so, what you have is Scaramucci versus Priebus, but also versus Steve Bannon. You can read that in the comments. He personally attacks both men, and really skirls a scandalous, offensive language. And you know, people are talking about, well, we have an agenda. This has been a very rough week for the White House.

Arguably, evidence of dysfunction, going from the president attacking his own attorney general, to now, you have the new communications director attacking the chief of staff and the chief political strategist for President Trump. President Trump, meanwhile, looks as if he's trying to stand back and say I like creative tension. But it's tension to no end, to no positive outcome. And open up this White House message to attacks from its critics. And what I'm noticing is, so many of the critics right now are fellow Republicans who are saying, as we've heard from people on this panel, you're not advancing the Republican agenda here, this is all about ego and competition. He said Cain and Abel, as what Scaramucci said, is his relationship with Priebus. That didn't end so well.

MACCALLUM: In which it didn't end very well. All right, thanks, you guys. We're going to take a quick break and we'll be right back with more. Thanks to all of you.

So, still ahead tonight. President Trump's plan to change the military's transgender policy is, apparently according to folks at the Department of Defense, not moving forward for now. One of this generation's great, General Jack Keane, joins us, and he will weigh in on that in just a moment. Plus, an update to a story that we first told you about last night, there are now new calls for Debbie Wasserman Schultz to be investigated into how she handled the scandal surrounding a former I.T. aide, who is now charged with bank fraud. Why did she not fire him, and why did she chew out the Capitol Police who wanted to look at her computer? All that after this.

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REP. DEBBIE WASSERMAN SCHULTZ, D-FLORIDA: Under my understanding, the Capitol Police are not able to confiscate members' equipment when the member is not under investigation. It is their equipment. And it's supposed to be returned.

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SCHULTZ: I think you're violating the rules when you conduct your business that way. There will be consequences.

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MACCALLUM: So, that video, which we uncovered here, last night on THE STORY, is getting quite a bit of attention. It's showing Debbie Wasserman Schultz scolding the Chief of the Capitol Police, who was there to protect her and everyone else who works on Capitol Hill. So, this is starting to get a lot more attention. RNC Chair, Ronna McDaniel, is calling for the former DNC head to testify about all of this before Congress, and about the man who you see on the right-hand side of the screen, Imran Awan, who recently was arrested as he was leaving the country. He's her former I.T. aide.

Tim Canova, Wasserman Schultz's 2018 Democratic primary opponent, has been taking another step further, saying that the video shows obstruction of justice. He joins us now along with Katie Pavlich, Townhall.com News Editor; and Mo Elleithee of the Georgetown Institute of Politics and Public Service, both are Fox News contributors. Good to have you all here. So Tim, obviously, you're running against her, so this story is helpful to you. But you believe that there is actual obstruction of justice here?

TIM CANOVA, CONGRESSIONAL CANDIDATE: Well, you've sort of film for yourself, the video. So, it's a question, is she obstructing justice when she makes a threat to the head of the capitol police? At the very least.

MACCALLUM: And the threat was what, exactly?

CANOVA: Well, she said there would be consequences, and this was a subcommittee hearing of the appropriations subcommittee on the legislative branch. So, was she threatening that somehow the budget would be impeded if he did not cooperate and handover the -- what is it, a laptop or computer that she said was hers? At the very least it shows a pattern of mismanagement. And we saw that throughout her tenure as the DNC chair.
The DNC lost an awful lot of seats, the Democratic Party in the last few years when she was chair of the DNC. In addition to losing seats, she didn't cooperate with turning over the servers of the DNC. There's lots of questions about that. And there's even a fraud lawsuit against the DNC, which really goes to her tenure as the chair of the DNC.

MACCALLUM: With regard to this particular story, I mean, the reason that she is getting so much attention here is because this man was forbidden from touching any congressional computers, because there was an investigation into whether or not he had access them improperly. And he worked for several members of congress on the hill, and he and other family members who also worked in the I.T. business with him made $4 million working on the hill. I mean, who knew that you could make that much money as an I.T. specialist. So you've got to ask yourself what's going on in here and what exactly are they being paid to do.

CANOVA: What's most troubling is that when the allegations surfaced several months ago, every other Democratic member of congress who Mr. Awan worked for fired him very promptly. Wasserman Schultz didn't fire him until the day after he was.

MACCALLUM: You know why?

CANOVA: I have no idea. I think those are the right questions to be asking. But, you know, the people in her district, of course, they want a choice. And the problem with Debbie Wasserman Schultz is that it seems to be nonstop drama, unfortunately, and that's divided the party an awful lot. The party needs to start unifying, and it needs to unify around some basic principal.

MACCALLUM: Two things, I want to get Katie to weigh in on this. Is there smoke in this fire?

KATIE PAVLICH, FOX NEWS CONTRIBUTOR: Absolutely. I mean, the question.

MACCALLUM: Is there fire in this smoke?

PAVLICH: Right, right, exactly. There's smoke, certainly it is. The big question for me is why wasn't Debbie Wasserman Schultz more concerned about this person working for her, the national security implications here. He was wiring money to Pakistan after having access to the house I.T. system, and her question should be not when the capitol police are going to give me my computer, which could have been compromised back, but please look into as much as you can to make sure that my office wasn't compromised, that my fellow Republicans and Democrats weren't compromised, and that there are people in Pakistan who now have our information.

MACCALLUM: As far as we know there's no connection between -- because we all remember that the Democrats didn't want to turn over their server during the hacking investigation last summer. As far as we know there's no connection between these two things, or might there be, Katie?

PAVLICH: Like I said, we don't have any evidence of that, but it begs the question why is Debbie Wasserman Schultz so averse to cooperating with investigations surrounded her I.T. systems, whether it's the FBI or the capitol police?

MACCALLUM: Mo, weigh in on this.

MO ELLEITHEE, FOX NEWS CONTRIBUTOR: Yeah. And in full disclosure, I worked at the DNC at the time that she was the chair.

MACCALLUM: Right.

ELLEITHEE: And I would disagree with the characterization that the DNC did not cooperate with the FBI in the server, it did turn over everything that was on that server. But you're right, it isn't related to this. Now, I don't understand this. I just don't understand why this got to the point it did, right? If I'm advising Debbie Wasserman Schultz, and every other Democrat has fired the guy, right?

MACCALLUM: Yeah.

ELLEITHEE: I don't understand why.

MACCALLUM: We don't know the nature of the work that she was doing for her. And she, obviously -- I mean, not obviously, but I think one could assume based on what we know that she felt protective of him in some way.

ELLEITHEE: And I don't know. One thing about Debbie, knowing her a bit, is, you know, there have been -- she's come under fire quite a bit for a lot of different things during her tenure, and her inclination tends to be to dig in. But when a guy who is barred from being able to access congressional technology remains as an I.T. director, it raises questions.

MACCALLUM: And still getting paid by the taxpayer to do that, by the way.

ELLEITHEE: I don't know if there's smoke, I don't know if there's fire, but I do think that there are some questions about that. But I do think we should be careful not to try to conflate that with the other.

MACCALLUM: We've got to go. But we're going to continue to ask them, because this is a story that we don't see to many places and we're wondering why about that, too, because it is obviously a story to dig into. Thanks, you guys. Good to see all of you tonight. So still ahead, a live look at the senate floor where after seven years, could we be seeing the end of ObamaCare as we know it? Tonight may tell that story. We are monitoring the latest here. They are going to vote tonight. And if anything breaks, we will certainly get that to you right away. We're watching it very closely. Plus an American general warning tonight that North Korea's missile capabilities is actually advancing much faster than we thought, General Jack Keane here on that very serious bit of news when we come back.

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MACCALLUM: We are back with more as we have two big stores that are breaking tonight. First, U.S. officials confirming that Iran launched a satellite carrying rocket into space, fueling fears of potential missile technology development in that region. And as the threat of North Korea -- nuclear of North Korea intensifies, a top army general offered this dire warning today. Listen.

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UNINDENTIFIED MALE: North Korea has advanced significantly and quicker than many had expected their intercontinental ballistic missile capability that could possibly strike the United States. We are fully in support of the secretary state -- the department of state in their efforts to bring this to a peaceful resolution. However, time is running out a bit.

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MACCALLUM: Joining now, General Jack Keane, chairman of the institute for the study of war, and a Fox News military analyst, General Keane, good to see you tonight.

JACK KEANE, FOX NEWS MILITARY ANALYST: Good to see you, Martha,

MACCALLUM: You look at what's going on in the world and everything that they're working on in congress, here at home, these are very serious threats that the United States potentially faces here. What's your assessment?

KEANE: Well, it's true. I mean, this nuclear proliferation that's taking place -- literally by rogue states, it's certainly a dangerous situation. And North Korea, Kim Jong-un's calculation is simply this, Martha. He believes when it comes down to the choice of war or acquiescent to his intercontinental ballistic missile capability with nuclear tips that we will acquiesce, he uses the backdrop of acquiring nuclear weapons themselves a number of years ago despite U.S. Protestations, we acquiesced. The Chinese, once they had acquired nuclear weapons, then they wanted to acquire ICBM's, we protested loudly. But once they acquired them, we acquiesced. That's what he's betting on. He's betting on the fact that at the end of the day, the United States will not go to war over his capability.

MACCALLUM: And what should we do?

KEANE: I think the Trump team, despite the fact that sanctions have always failed in the past, they are doubling down on this. There has to be a sense of urgency, because it takes sanctions a while to take hold, certainly. If they go all out, it's worth trying that. Obviously, the other option -- using a preemptive strike, that's not going to work in my judgment because Kim Jong-un will recognize that as an act of war and respond accordingly. And we certainly have all sorts of different military options from low-end to high-end that we can possibly execute. But I think he'll look at any one of those the same way, an act of war against his nation-state and he will respond militarily.

MACCALLUM: Because we have tens of thousands position on the South Korean side of that border, which is a big concern. I want to ask you about some changes that were made in NSC today, Derek Harvey, who was the top Middle East advisor to the president in the National Security Council, was pushed out. I know he's someone that you respect and admire, correct?

KEANE: Oh, yeah. I've known him for years. Derek Harvey assisted me in doing assessments for General Petraeus in Iraq over a two-year period, and then in Afghanistan over a period of a year, year and a half. He's the foremost -- best intelligence analyst I've ever met, and a foremost military expert. Invaluable, I thought, to the Trump administration. I'm actually befuddled by it. I know they're looking at giving him another position, certainly, and I hope that certainly takes place.

MACCALLUM: All right. One last thought on the transgender policy, because the defense department says that it's not a policy yet. It was tweeted by the president yesterday morning, which appears to have cut them a bit off guard.

KEANE: Yeah. I mean, policy by twitter just doesn't make any sense to me. The defense department can only respond to a presidential directive in writing, or a chief of staff signing for him. That's it. Or else they cannot take action. So I think this time that we have here, we've got to come to our senses here. We've got about 2500 soldiers after Secretary Carter lifted the transgender band, by which -- by the way the military did not ask for it, but he lifted it. And after that about 2500 soldiers came forward and changed their gender. They had served honorably and faithfully before that, and I have no reason to doubt that they served honorably and faithfully now. We cannot break faith with those soldiers in my judgment.

MACCALLUM: General Keane, as always, good to talk to you, sir. Thank you very much.

KEANE: Yeah. Good to talk to you, Martha.

MACCALLUM: So tonight, this is new communication director Anthony Scaramucci unloaded on White House chief of staff Reince Priebus, Karl Rove says the White House, in his mind, needs to wake up before teen drama overtakes the president's agenda. That is next.

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(BEGIN VIDEO CLIP)

SARAH HUCKABEE SANDERS, DEPUTY PRESS SECRETARY: The president, obviously, is disappointed that he chose to recuse himself, but the president also wants him to go ahead and do his job.

MACCALLUM: So he's essentially saying that he plans to stay there unless the president of the United States, personally ask him to leave.

SANDERS: That's how every individual in this building is. We all serve at the pleasure of the president.

(END VIDEO CLIP)

MACCALLUM: Well, that was Sarah Huckabee Sanders on The Story just moments ago. This comes as we hearing from Jeff Sessions himself for the very first time on all of this since this started. He spoke to Tucker Carlson just moments ago. You're going to see all of that at 8:00 tonight. So the last seven days at the White House have been really nothing short of chaotic. The newest headache is this bombshell interview from Anthony Scaramucci. It's a rant against White House chief of staff Reince Priebus, and it gets very vulgar at times. Ed Henry has the latest on this. He's on the north lawn where it's been pretty busy out there tonight, Ed.

ED HENRY, FOX NEWS: It has lot of drama, Martha. And let me tell you about your exclusive interview with Sarah Huckabee Sanders and the drama that was caused just off-camera that our viewers wouldn't had seen while you were talking at the top of this hour with Sarah Huckabee Sanders. All of a sudden, a line of reporters who had not been getting calls and emails returned from top White House aides for reaction to Anthony Scaramucci's strong comments in that New Yorker Magazine interview, started lining up just a few feet from where I am trying to grab Sarah Huckabee Sanders right after she finished with you.

Once the interview ended, she walked off-camera, looked at her phone, and said give me a couple of minutes. I think she clearly wanted to find out if anything else dropped in the last couple of moments. Was there any new White House strategy to react? Asked the reporters to walk down the driveway, they did that, they waited for her, and she said much the same that she told you that they're not going to be distracted by all this. But I will note, remember, on a similar occasion when Sean Spicer was practically hiding in the bushes on the driveway. In contrast, Sarah Huckabee Sanders faced the music and took the heat from reporters and tried here tonight to push back.

But you're right. There's a lot of drama. On top of what Scaramucci said in the New Yorker magazine, you have Jeff Sessions still under fire here. And I've been told by some of the president's advisors that for now they believe the president had been talked down from firing Jeff Sessions. He's still very angry at the attorney general, but they believe he is at least calm down because they tell me that what they're telling the president is that firing the attorney general, a popular conservative, would spark a revolt among the very Republicans on the hill the president needs on health care, taxes, and the rest of his agenda.

Republican Ben Sasse took to the senate floor to strongly discourage the president from going forward with one scenario being talked about, firing Sessions, and then using a recess appointment in August to install a replacement without having to get that replacement confirm. Sasse declaring the presidency is not a ball, and the nation is not a China shop. But the strongest defense of Sessions yet, came from Republican Lindsey Graham, who's also writing a bill that would block the president from firing special counsel, Robert Mueller, while the attorney general himself, as you noted, is speaking out for the first time to our own Tucker Carlson.

(BEGIN VIDEO CLIP)

UNINDENTIFIED MALE: If Jeff Sessions is fired, there will be holy hell to pay. Any effort to go after Mueller could be the beginning of the end of the Trump presidency, unless Mueller did something wrong.

UNINDENTIFIED MALE: You've seen the president's criticism of you. Do you think it's fair?

UNINDENTIFIED MALE: Well, it's kind of hurtful, but the president of the United States is a strong leader. He wants all of us to do our jobs, and that's what intends to do.

(END VIDEO CLIP)

HENRY: Now, on that very point, the interview there you can see was conducted in El Salvador where Sessions is working on ways to crack down on that violent gang MS-13. The attorney general also told the associated press in another interview he has no plans to step down, but the president has every right to fire him if he wants, but again, Session saying he has no plans to step down. You can see that full interview, top of the hour, right here on Fox News.

MACCALLUM: Yeah. We look forward to that. Ed, thank you very much. Ed Henry at a busy White House. Tonight, Karl Rove is former deputy chief of staff. He knows what it's like to work in the west wing. He did that, of course, under President George W. Bush, and he's also a Fox News political contributor. So Karl, I mean, you have a unique perspective on this. You have been in those halls and worked there. When you look at the back and forth that we have seen over the course of this week, which you wrote about today in the Wall Street Journal. And then, in particular, the story that broke tonight, what you make of it?

KARL ROVE, FOX NEWS POLITICAL CONTRIBUTOR: Well, I wrote my piece for this morning's journal, I went to bed yesterday afternoon, and so it was mainly focused on Sessions, and I thought Sessions was being -- first of all, mistreated by the president, and I thought the president was acting stupidly because if he removes Jeff Sessions there will be hell to pay for the next six months or longer. If you think the last six months of press have been bad for President Trump, tried pushing through a message about his agenda when the Democrats -- first of all, you have difficulty finding somebody, and then the nomination, the confirmation battle would be horrendous, and it will go on for months, and months, and months, and drown on this issue.

So I was writing about something that I thought was really problematic for the administration and hurtful to the president's attempts to get his message out. But I got to tell you, two hours, three hours after my piece went to bed, we'd began to have this drama with Anthony Scaramucci, who I know personally, I known for a number of years. First of all, accusing people of leaking what is actually a public document, his personal financial statement. Everybody who serves in the administration -- I had to do it seven years that I worked at the White House. I have to fill out a 278. It was available to anybody. He was working at the Export Import Bank, and somebody went over there and requested a copy of his document, which is available to the public, and then wrote about it.

And for him to rant -- rave about that was bad enough. But then, to go on, as he's done over the last 24 hours, this profanity laced tirade to Ryan Lizza of the New Yorker is appalling beyond belief. How can anybody overcome that and work as a colleague in the future. He goes after the chief of staff, Reince Priebus, in deeply personal terms. He says objectionable and almost homophobic things about Steve Bannon, the president's senior advisor and chief strategist. I mean, these things are appalling. And I can't imagine that that is constructive at all and working towards the fulfillment of President Trump's agenda.

MACCALLUM: What do you think the president does about it?

ROVE: Well, he's got something big to deal with, because he now has brought on a communications chief, he's got to decide. Is it going to be Reince Priebus or is it going to be Anthony Scaramucci. Is it going to be Steve Bannon or is it going to be Anthony Scaramucci, and that's a tough decision on his hands only.

MACCALLUM: Thanks as always, Karl Rove. Quick break. We'll be right back.

(COMMERCIAL BREAK)

MACCALLUM: And finally tonight, a moving ceremony at the White House today. President Trump honored the men and women who save lives during the horrific shooting at a Republican congressional baseball practice. He awarded medals of valor to five officers, as well as honoring the doctors and first responders. Listen to this.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES OF AMERICA: The assault on June 14th reminded us that evil exists in this world, but it also reminded us that heroes walk in our midst.

(END VIDEO CLIP)

MACCALLUM: Very true. In attendance today was Jennifer Scalise, the wife of Congressman Steve Scalise. He is currently in rehab and sends his best wishes in a statement saying in part, quote, I would not be here today without the bravery of Capital officers, Crystal and David. They save my life and are my heroes. And we agree. We will see you back here tomorrow night. Busy night, right, 7:00 tomorrow night, Tucker is live next from El Salvador, with Attorney General Jeff Sessions. Have a great night, everybody. Stay tuned.

END

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