Dems block McConnell effort to shield college from tax hike

This is a rush transcript from "The Story," December 21, 2017. This copy may not be in its final form and may be updated.

MARTHA MACCALLUM, HOST: Thank you very much, Bret. Never get in the way of Christmas and Congress. Thank you very much. There we go. Live look tonight as they are voting on averting a government shutdown. Lawmakers hope, obviously, that they're going to be able to do that this evening. Something tells me that they're not going to let this stand in the way of Christmas. Regardless of all of the Tiny Tim and the crutch talk, I think everybody's going to wrap this up. But first, sometimes in the making of the sausage on Capitol Hill, there are things worth watching.

Good evening, everybody. I'm Martha MacCallum and this is "The Story." As you know, no Democrats voted for the GOP tax cuts. Their opposition to the bill was clear.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI, D-CALIF., HOUSE MINORITY LEADER: It's the amount of Frankenstein. And anybody is familiar with Frankenstein -- knows that he was a creation. The monster that was created.

SEN. CHUCK SCHUMER, D-N.Y., SENATE DEMOCRATIC LEADER: The Republican credo can be summed up this way: help the rich, hurt the middle class.

(END VIDEO CLIP)

MACCALLUM: So, ironically, Senator Bernie Sanders fought back in an odd way, taking it out on a small school that helps poor families send kids to college in Mitch McConnell's home state. Here's what happened. In the bill, there was a tax hike on wealthy universities like Harvard, Sanford, and Yale. They would all now have to pay taxes on the gains from the enormous endowment. Harvard is 35 billion, for example. Stanford is 22 billion. But the law swept in Little Berea College in Kentucky as well -- endowment 1.2 billion. Berea is one of seven work schools in the state, tuition is free. But the students work on campus during their four years. The college president says they were a casualty of the bill. And that will be tough on students. Mitch McConnell tried in desperation to turn it around. He was not successful in doing that. Bernie Sanders said no way. Majority leader McConnell joins me now.

(BEGIN VIDEOTAPE)

MACCALLUM: Senator McConnell, good to see you today. Welcome. Thanks for being on the program tonight.

SEN. MITCH MCCONNELL, R-K.Y., SENATE MAJORITY LEADER: Glad to be with you, Martha.

MACCALLUM: So, we asked Sanders' office for a comment and he said this, "I'm glad that Senator McConnell has suddenly developed an interest in making college affordable for working-class families."

(LAUGHTER)

MCCONNELL: Well, this is the same Bernie Sanders who said every college student in America ought to have free tuition.

MACCALLUM: He'd like you to get on board with that, he says.

MCCONNELL: Apparently, not the one school that already has free tuition. Look, these are kids from low-income Appalachian families. Their families can't afford to send them this college. They work their way through as your set up piece pointed out. They are the cooks, the waiters, people who are cleaning the dorms. It's a great concept. They have built up a significant endowment over the years. It was started in the 1850's by the Appalachians and a lot of wealthy have contributed to their endowment over the years. And all of a sudden, earned the same category with Harvard and Yale. Look, we're going to fix this. I'm not going to let Bernie Sanders nail this wonderful private school in Kentucky, providing these kinds of opportunities for low-income kids.

MACCALLUM: Yes. Well, there's certainly some irony in the fact that person wanted to make tuition-free for everybody is going to make it tougher for these kids because they happen to be in your home state, or at least it looks like that was part of what was behind it. So, obviously, a big win this week for the GOP, something you worked very hard on. Is there -- you know, at some point, are you going to address spending? That becomes sort of the big next issue. And, we know on the House side, the Liberty Caucus is speaking out saying they would like to see spending addressed. Is that something that you see in terms of welfare reform, for example, in 2018?

MCCONNELL: Martha, can I just quickly take a look back since we're at the end of the year. This has been a year significant accomplishment. A new Supreme Court justice, cementing a right of center supreme court for a generation. 12 new U.S. circuit corps judges. The most for any first-year president since the circuit corps are created 1891. And now, comprehensive tax reform. So, before we look to the future, let's look back and this has been a year of substantial, substantial accomplishment.

MACCALLUM: I remember -- everyone remembers the moment when you said that the president had excessive expectations about what could be accomplished and what could be done in that period of time. Do you think that it helped that he did?

MCCONNELL: Well, I think that we had a lot of incentive to do tax reform. We wanted to do it for years. We were thrilled that we finally had a president who would sign the bill and he made it part of his campaign last year. So, I think it's better to measure -- I said several times during the year, better to measure the first session of the 100th Congress when it ends. And now, it has just about ended and I think it's been a year of substantial accomplishment.

MACCALLUM: All right. So, in terms of the second-leg of that tax cuts and entitlement reform are generally an idea for conservatives that go together. Are you going to get behind, because I spoke Speaker Ryan yesterday, he says he's very committed in 2018 to doing welfare reform, are you?

MCCONNELL: Well, if we can get any Democrats to support it. We've had a very difficult time getting any Democratic support for any kind of entitlement reform. In order to achieve that in the Senate, we would probably need to have Democratic support just as Senate Democrats indicate they're willing to sign up to do that kind of thing. I'd be excited about tackling it.

MACCALLUM: So, you're saying that it would be -- it would have to happen under the same standards, not under the same standards as tax cuts. You wouldn't be able to push through welfare reform because of budgetary rules with a simple majority?

MCCONNELL: Yes. We're going to have a 51-49 majority next year. That's about as tight as it gets. I'm not going to overpromise here that 51, 49 Republican Senate can tackle entitlements without any Democratic help at all.

MACCALLUM: All right. In terms of moving forward to next year, Senator Graham has said that he really wants to bring back repeal and replace. He said that as a result of what happened to the Obamacare mandate, during the tax cut bill, that, that pillar has been knocked out of that program, and that prices are going to go up markedly because of it. Is that something that you're going to be on board with?

MCCONNELL: Yes. I mean, just as soon as we can get enough votes to pass it, Senator Graham and Senator Cassidy have been working hard on that. We have, of course, taken one of the foundations out of Obamacare. We got rid of the individual mandate tax in this tax bill, and that was a significant step forward.

MACCALLUM: As you look at the possible challenges for next year, the Russia investigation continues to hang around. And, you know, in several committees on the Hill. How concerned are you about that being an obstacle for moving forward?

MCCONNELL: Well, I put that responsibility in the intelligence committee over here in the Senate. Senator Burr and Senator Warner are having their investigation. I assume we'll get a report at some point.

MACCALLUM: So, you brought the president on Louisville slugger to celebrate today. I think we have a picture of that. He also said earlier that one of the things that make it challenging to work with the president is that he likes to call you at all hours. When is the craziest time he ever called you, Senator McConnell?

MCCONNELL: Oh, about all hours of the day. I enjoy hearing from him. He likes to talk and we talk a lot.

MACCALLUM: Senator McConnell thank you very much. It sounds like everyone is going to make it home for the holidays with this continuing resolution, and it's punted I guess into 2018. And you'll make it through January 19th on that, correct?

MCCONNELL: We will, thank you. Thank you, Martha.

MACCALLUM: Senator, thank you very much. All the best.

(END VIDEOTAPE)

MACCALLUM: So, that what a short time ago. And now, you're looking live at the ongoing Senate vote where we are just told that they do have the votes to keep the government funded. So, you can breathe a big sigh of relief. Everybody is going to make it home. Chief National Correspondent Ed Henry, still out there though. He is here with the latest tonight on what's going on. Hi, ed.

ED HENRY, FOX NEWS CHANNEL CHIEF NATIONAL CORRESPONDENT: Well, Martha, good to see you. The last thing that President Trump and Republican leaders wanted to do after that big tax cut victory yesterday was to have a big government shut down here to divert attention from all of that. So, it's very clear that what they're doing here with this stop-gap measure is get to about January 19th, sort of kick the can down the road on some of the bigger spending decisions, go home for the holidays, deal with a lot of that next year.

This enables them to move forward on some of these key budget issues. The president signaled earlier today that he didn't want to see a big budget fight right now. Instead, he wanted to give the Republicans a chance to bask in this victory over tax cuts. In fact, earlier today, the president tweeted this quote: "House Democrats want a shutdown for holidays in order to distract from the very popular just passed tax cuts. House Republicans don't let this happen. Pass the C.R. today and keep our government open." And, indeed, Democrats seem to still be smarting a little bit from the president's big win on taxes.

After Obama Aide, Dan Pfeifer, tweeted this triumphant photo of the president with the Republican leaders in the oval office yesterday, and said that he'd like to see it on front pages when the president is, "indicted". Well, Obama official Ben Rhodes actually retweeted that with this snarky comment that the photo should also be used "alongside the obits", as in obituaries, "for Paul Ryan, Mitch McConnel, and Vice President Mike Pence." That drew a lot of scorn today.

Meanwhile, House Democratic Leader, Nancy Pelosi, went back to resisting the president's agenda. She told her colleagues they had to vote no on this stop-gap measure because it did not include a provision allowing the children of illegal immigrants to stay in American. Listen.

(BEGIN VIDEO CLIP)

PELOSI: I don't think in his heart that the president intended to hurt these people in the very cruel way that they are being hurt by the actions that are being taken.

UNIDENTIFIED MALE: There will be drama, there'll be chaos, there will be yelling and screaming, and then we will avert a shutdown. You know, but that's what happens. Unfortunately, it shouldn't be this way.

(END VIDEO CLIP)

HENRY: The bigger point is that after the tax cut victory, remember, Democrats had been predicting that cutting corporate taxes would not trickle down to employees. And yet, you've seen Wells Fargo, AT&T, other big companies say, actually, they're giving out bonuses, some of them are raising wages. And so, what's interesting is that Democrats have kind of maneuvered themselves into voting against lower taxes, and being against right now higher wages for workers since they said that this would not happen. That's not a place that Democrats want to be, Martha, heading into next year's midterms.

MACCALLUM: Yes. Ed, you can almost sense from them, when you look at those sound bites, and you read those tweets that they know that this has put them in a tight spot. And you also have to wonder if Republicans aren't really glad that this was a completely partisan vote right down party lines. They didn't work that hard to bring Democrats on board, and they probably like it that way.

HENRY: Yes, you're right. Because Democrats have been banking on the idea that the public would buy the argument that this would not trickle down to employees, that seems to be blown out of the water. And by the argument that it's not going to help the middle-class. As you know, there's been study after study suggesting this is going to help the middle-class big time. The proof is going to be in the pudding. Time has to play out here. And in the months ahead, we'll see whether or not the middle-class feels it, and whether some of those poll numbers that say -- that basically say the public doesn't like this tax cut whether or not those numbers turn into Republican's favor on that one.

MACCALLUM: And you're going to see it in housing numbers, you're going to see it in retail numbers. As you said, the proof will be in the pudding whether or not people have more money in their pocket, more disposable income, and put that they put that money to work in the economy. So, it's going to be very interesting to watch in 2018 as we head towards those midterms how all this reverberates. Ed, thank you very much. Always good to see you.

HENRY: Good to see you, Martha.

MACCALLUM: So, our marines training hard in below zero temperatures. Look at this. I mean, doesn't this make you feel kind of lazy? Oh my gosh. These guys are -- it's freezing out there. They're in South Korea getting ready and adjusting to those temperatures as we look ahead to the Winter Olympics.

General Jack Keane is here with the latest on the very serious side from North Korea. The possibility that anthrax tipped missiles are in the works. Also, a new report tonight says that a small group led by Devin Nunes has been meeting secretly for weeks to build a case against the DOJ and the FBI.

(BEGIN VIDEO CLIP)

REP. DEVIN NUNES, R-CALIF.: I hate to use the word corrupt, but they've become, at least, so dirty that -- who's watching the watchmen? Who's investigating these people?

(COMMERCIAL BREAK)

MACCALLUM: So, secret meetings on the Hill led by House Intel Chair Devin Nunes. They're digging into concerns about corruption in the Department of Justice and in the FBI with regard to the Trump investigation. So, today, FBI Director Andrew McCabe was back on the Hill before the House Judiciary Committee and demoted DOJ Official Bruce Ohr. He was in front of the Senate Intel Committee today, being questioned behind closed doors as well. So, they have a lot of questions for these individuals. And they've been grilling them all week, essentially. Ellison Barber joins us now live with this report from Washington. Hi, Ellison.

ELLISON BARBER, FOX NEWS CHANNEL CORRESPONDENT: Hi, Martha. That's right. Andrew McCabe was back on the Hill again today. He was just there earlier this week, but this time he was meeting with investigators working on a joint investigation involving two house committees -- judiciary and oversight. The chairman of the House Oversight and Judiciary Committees sent a letter to the Department of Justice Tuesday night, not long after McCabe finished his seven-hour testimony with the House Intelligence Committee on Tuesday. They said they wanted McCabe and others to be available for "transcribed interviews". One Republican member of the House Judiciary Committee says McCabe's interview on Tuesday was inadequate.

(BEGIN VIDEO CLIP)

SEN. RON DESANTIS, R-FLA.: We have some very fundamental questions here, which are very easy to answer. How did the Russia investigation start in July of 2016? Was it because of the Trump dossier that was funded by the Democrats and compiled by Christopher Steele? Did the FBI pay Christopher Steele for that dossier? If he's not capable of answering the questions, he's got no business being the deputy director of the FBI.

(END VIDEO CLIP)

BARBER: The DOJ agreed to make McCabe available to the House Committees today but only in a classified setting. In a letter, an assistant attorney general said, "Mr. McCabe will not be in a position to discuss matters that are within the scope of the investigation of Special Counsel Robert Mueller." The letter then went on to say, "We respectfully request that the interview transcripts not be made public." On the other side of the Hill today, also behind closed doors, the Senate Intelligence Committee heard from Bruce Ohr, a Former Associate Deputy Attorney General, who was demoted as Fox News exclusively reported after he had undisclosed meetings with two operatives tied to the firm that produced the Trump dossier. Democrats are warning that all of this is part of an effort to discredit the investigation into Russia's involvement in the 2016 election.

(BEGIN VIDEO CLIP)

REP. LUIS GUTIERREZ, D-ILL.: What's going on behind those closed doors? We all know what's going on. It's not a search for the truth. It's a search to undermine the legitimacy of Mueller's investigation.

(END VIDEO CLIP)

BARBER: Now, sources told Fox News that during Tuesday's interview McCabe said, he could not remember when he learned that the Clinton campaign and the DNC had paid for that now notorious anti-Trump dossier. We're told that he was pressed on that issue again by Republicans in the meetings today. Martha?

MACCALLUM: Ellison, thank you very much. Here now with more: Marc Thiessen, American Enterprise Institute Scholar and a Fox News Contributor; and Juan Williams, Co-Host of "The Five" and a Fox News Political Analyst.

Devin Nunes is at the center of a lot of this story today. It came out in Politico saying that he has been huddled, you know, sort of secretly for weeks was the phrase that they use. And they're getting together to try to figure out whether or not there is corruption at the highest levels of the DOJ and the FBI. And then, you know, on the other side of the fence, Marc, you have a huge criticism of Devin Nunes, you know, asking why he's back on the scene, he removed himself from the Russia investigation. We all remember the moment when he went quickly over to the White House to sort of share with them what he knew about this dossier. So, what do you make of his involvement and these supposed secret meetings?

MARC THIESSEN, FOX NEWS CONTRIBUTOR AMERICAN ENTERPRISE INSTITUTE SCHOLAR: Well, I don't know about his involvement, but I know that there's absolutely nothing wrong with Congress investigating this. Look, you've had senior members of the Justice Department fired from their jobs and disciplined for improper conduct. There's an ongoing internal inspector general investigation at the Justice Department into that improper conduct. And Congress is a (INAUDIBLE) branch of government would be advocating its responsibility if it didn't look into this.

None of that, by the way, undermines the credibility of the Mueller probe at all, because it was Bob Mueller -- it was Mueller, who when he found out about Peter Strzok and his virulent anti-Trump e-mails he fired him. So, he did the right thing. But he had something to fire someone for. And it's not just him, it's also Bruce Ohr, who was a senior official, who was meeting with Trump -- with the Fusion GPS, married to a Fusion GPS person. Met with Christopher Steele who is the guy behind the Clinton-funded Trump dossier, and didn't tell his superiors. He's also been disciplined. So, you've got people being disciplined. Internal investigation -- why would Congress not look into this? It would be an abnegation of responsibility.

MACCALLUM: That's a good question. You know, here -- you know, sort of, hyperventilating in some corners about the fact that these questions are even being asked. And Juan, there are people who are currently in the FBI and people not too long out of the FBI who are so unhappy with what they have seen going on from the Clinton investigation to now. So, this idea that it impugns the integrity to even ask these questions, to even say, wait a minute, you know, is there bias involved with Clinton? Was she given, you know -- was she sort of softballed handled? And was Trump sort of jumped on before he even had a chance to get into the White House? You know, these are -- why are these questions that are not even -- we're not even allowed to ask in terms of impugning their credibility?

JUAN WILLIAMS, FOX NEWS CHANNEL HOST AND POLITICAL ANALYST: Well, you can ask whatever you like, but I mean, what exactly is Devin Nunes investigating at this point? We've had Jeff Sessions, the Attorney General; we've had Rod Rosenstein, the Deputy Attorney General, who's in charge of the Mueller probe. We've had Christopher Wray, who's Head of the FBI, all say there is nothing right now of any significance that would undermine what Robert Mueller is doing. Instead, Devin Nunes who as you pointed out, Martha, was earlier involved and had to recuse himself and now back in charge is conducting an investigation solely among Republicans, no Democrats allowed in the room. No participation. So, it's not in keeping with a true congressional investigation. This is a partisan attack.

MACCALLUM: But the problem, Juan, is that -- I have a feeling that Marc will, you know, echo this thought. But the problem is that you know, the testimony that you talked about, with Rosenstein, and with Andrew McCabe and Christopher Wray, that was all in front of congressional committees who can't get any information that they want. They're going to have to subpoena to get the actual information about the dossier, Marc, correct?

THIESSEN: That's absolutely true. And look, again, they didn't say that there was nothing wrong or there was nothing done improper, what they said was repeatedly, I can't comment on that because there's an internal investigation being done by the inspector general. So, I mean, I worked on Capitol Hill for seven years. When there is an internal investigation by the inspector general, when people have been fired and demoted for political bias and doing things that were contrary to the conduct, Congress investigates that, and there were Democrats questioning McCabe today and there were Democrats questioning Ohr today. So, this whole focus on Nunes is a distraction. There is some serious misconduct going on, and we need to get to the bottom of it, just like we need to get to the bottom if there was any kind of collusion between Trump and Russia.

WILLIAMS: What misconduct? What misconduct, Marc? I mean, you should be specific. What misconduct? In fact, what we see here --

THIESSEN: Meeting with Fusion GPS without telling your superiors.

WILLIAMS: -- is the effort by Nunes to muddy the waters, to stir things up, to tell the people don't pay attention to the relationship between Russia and the Trump campaign. I think Ohr, I think all these people that came in today are to be credited, they're not running away from anybody. They're not taking the fifth. They're not claiming lawyer-client privilege. They are cooperating with whatever.

MACCALLUM: Yes, and that's a good point. You know, there was some concern that Andrew McCabe would not even come or that he would, you know, figure out or maybe get private counsel and leave the FBI. He's there, he's answering the questions. They have been back twice this week, and it's a point well taken. Marc and Juan, thank you very much. Good to see you, guys, tonight.

WILLIAMS: Merry Christmas.

MACCALLUM: Merry Christmas to you, too. So, General Jack Keane with a warning for everyone tonight. He says time is running out, and a showdown with North Korea is coming in 2018. And the United Nations gives the big thumbs down to the White House decision on Jerusalem today, but Ambassador Haley has a little something for all of them tonight. Former U.S. Ambassador to the U.N. John Bolton joins me next.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Let them vote against us. We'll save a lot. We don't care.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

NIKKI HALEY, U.S. AMBASSADOR TO THE UNITED NATIONS: America will put our embassy in Jerusalem, that is what the American people want us to do. And, it is the right thing to do. No vote in the United Nations will make any difference on that.

(END VIDEO CLIP)

MACCALLUM: That was the U.S. Ambassador to the United Nations, Nikki Haley, earlier today. But despite her, and the president's tough talk, including threats of withholding funding from the U.S. to countries who voted against, the general assembly overwhelmingly voted to condemn the United States decision to recognize Jerusalem as the capital of Israel and to move the U.S. embassy there. Ambassador Haley tweeted this, "The vote is in -- 65 countries refuse to condemn the United States and 128 voted against us." And now as promised, Ambassador Nikki Haley is taking note of the non-supporters, inviting those 65 U.N. members who didn't vote for the resolution to a special reception.

Here now, John Bolton who served as U.S. Ambassador to the U.N. and is a Fox News Contributor. Welcome, Ambassador Bolton, good to see you tonight.

JOHN BOLTON, FOX NEWS CONTRIBUTOR AND FORMER U.S. AMBASSADOR TO THE UNITED NATIONS: Glad to be with you.

MACCALLUM: I mean, obviously, most of these countries were never going to vote in favor of this. They recognize East Jerusalem as the capital for Palestinians and that was never going to happen, right?

BOLTON: Well, I think the Trump administration needs to use this as a fulcrum to look at funding of the U.N. system more broadly. You know, this little theater episode of theater wouldn't have happened, but for the stage that the U.N. general assembly provides. And it's such an insulting, meaningless exercise in international virtue signaling that I think it really -- the administration should get very serious about how we fund a whole range of U.N. activity.

MACCALLUM: Yeah. I mean, it is very interesting, as you say, that just the exercise of standing up there of going through this process and saying we're doing this because this is what the American people want, and because we believe it's the right thing to do. That we should be able to put our embassy where we believe it should be. And as you point out, fascinating that there are -- there were more countries than anyone expected who abstained. I mean, you know, that's not the most courageous position in the world, but they didn't vote no. So is there -- you know, is there a movement happening as a result of the bold stance that we've seen over the course of this year by Ambassador Haley and by the president.

BOLTON: Yeah. I don't think there's any question about it. I think if they have had longer to mobilize to conduct diplomacy not just in New York, but in capitals calling ambassadors in here in Washington, that they might have even gotten more to abstain. Look, what this was is an act of theology in New York. We had the French ambassador say today that international law dictates that Jerusalem, we can't recognize Jerusalem as the capital of Israel. That's just simply not true. The New York Times reporter who wrote on the subject said, look, consensus that international law says that east Jerusalem is the capital of the Palestinian state. That is flatly untrue as well. U.N. resolution Security Council resolution 242 says that the parameters of the Israeli state and whatever else is on the other side of it are to be determined by negotiation. That's the controling U.N. resolution and the rest of this is propaganda.

MACCALLUM: Fascinating. Ambassador John Bolton, thank you very much. Good to see you tonight, sir. Thanks for being here. And now we turn our attention to General Jack Keane, chairman of the institute for the study of war, and a Fox News senior strategic analyst. General Keane, good evening to you. What's your take on what happened at the U.N. today?

JACK KEANE, FOX NEWS SENIOR STRATEGIC ANALYST: Well, I, like Ambassador Bolton, surprised by the number of people that didn't participate in the vote or abstain and voted against it. So, I think that's a small victory. Listen, there's a huge anti-Israel bias in the U.N. We've known that for years. And there's also an undercurrent of anti-American bias. This is sort of reflective of it. I think on the table should be President Trump did it, funding for the U.N. based on their reform. I disagree with going after our allies on foreign aid. I think foreign aid should be province of our national interest. And I don't think we should let a symbolic vote like this that has no authority whatsoever to interfere with what is our true national interest with our allies.

MACCALLUM: All right. In terms of North Korea, the report today that they are going faster than anybody thought they could, and that they're now working to put anthrax on the top of an intercontinental ballistic missile.

KEANE: Yeah. Well, that's just another example of North Korea trying to intimidate us, you know, with some kind of capability of WMD. It's a lesser case to be sure than what their primary objective is, which is nuclearizing ICBM's. And you're right. I mean, they are getting closer, according to Director Pompeo, who certainly got my attention when he said they're not years away, they're months away, and he made that proclamation about a month and a half ago. So, that means sometime in 2018, at least in the mind of the director of CIA, they will have a nuclearized ICBM capability that's functional. That means it can reenter the earth's atmosphere and it's also miniaturized so that it could work effectively on top of an ICBM. So, yeah, we're getting closer to a showdown.

MACCALLUM: Reentry has been a problem on their missiles, right? But how long does it take for them to figure that out, do you think?

KEANE: Well, that technology is out there. And it's been out there since the 50's. So, it's not hard for them to acquire that, to buy that kind of technology from the Russians or others who have it. So, I think the CIA -- I'm just speculating. I don't talk to the CIA about something like this. Certainly has an understanding of that. And the other problem we have, we're running out of time because sanctions, Martha, takes much longer.

MACCALLUM: Do they ever really work?

KEANE: They never worked in the past with North Korea. We've had the promise of another countries trying to participate in this. But here's some disturbing evidence. That coal is still being shipped to China, and China is giving them revenue for it despite China's protestations that they're not going to do that anymore. And secondly, North Korea is still receiving oil. They're transferring it out on the open sea off the coast of North Korea to a third party, which is helping to sustain the regime. There is no evidence looking at North Korea's regime that it's in any state of near economic collapse. Not happening. So, this is going -- sanctions are going to take longer. Showdown may be coming. And it really raises the potential for some kind of military action.

MACCALLUM: Scary. General Jack Keane, thank you very much. Good to see you, sir. Merry Christmas to you.

KEANE: Merry Christmas to you, Martha, and your whole team there.

MACCALLUM: Thank you so much. So coming up next, this poster of Kate Steinle ripped down on the U.C. San Diego campus. And the student who put it up is being blasted. They wanted to bring him into a meeting to discuss this with him because they're concerned that it could be racist. David Wohl and Emily Tisch Sussman, next.

(COMMERCIAL BREAK)

MACCALLUM: So, the New York Times says today that without laws or walls, Trump presses the brake on legal immigration. In that article in the Times highlights the H-1B visa program saying the Trump administration has pursued its immigration agenda loudly and noticeably, but it also quietly and with much less resistance slowed many forms of legal immigration without the need for congress to rescind a single visa program enshrined in the law. Here now to talk about this, David Wohl, an attorney and conservative commentator, and Emily Tisch Sussman, Democratic strategist and campaign director at the center for American progress action fund. Welcome to both of you. Thanks for being here today.

EMILY TISCH SUSSMAN, DEMOCRATIC STRATEGIST: Thanks, Martha.

MACCALLUM: You know, Emily, it's interesting, you know, there have been a number of things that's happened on the immigration front without laws or without walls in terms of just speaking the policy loudly and clearly it has had quite a bit of impact.

SUSSMAN: It's had a huge impact. These things are all within the purview of the administration. And it's causing chaos. It's causing chaos for families. It's causing chaos for industry. Look, I've spoken to a number of tech attorneys who are telling me that their clients are no longer able to attract, since the beginning of this administration, are no longer able to attract the best and the brightest and the most talented they're trying to attract. Not only has their visa process been slowed down, but if their spouses may not be able to work. The chaos the administration has already caused, particularly for the dreamers, the 13,000 who've already lost status. So that's people who -- this is the only country they've ever known. They were working and in school here legally, but now because of administrative action by this administration, they no longer have that status. That's chaos.

MACCALLUM: David, do you want to respond to that?

DAVID WOHL, ATTORNEY: Well, look, this shouldn't come as a surprise to anybody. You know, illegal immigration and slowing that down, stopping, was part of the Trump doctrine, but also legal immigration. Martha, part of making America great again is putting America and Americans first. And there is tremendous -- there is a tremendous amount of tech talent in this country, and so Trump is going to slow down the H-1B program. He's going to slow down the immigration of people who come to America from places like India and other countries and drive down wages. Make jobs worse for Americans. This is putting American first. Companies will be forced to hire Americans. And this immigration will be slowed down. We have full employment and it will be picked back up again.

MACCALLUM: Robotics are going to take away a lot of jobs in this country. And I think it's a logical question to ask whether or not you want to increase or decrease legal immigration into the country. Tom Cotton is putting forth legislation on this question as well. I do want to get your thoughts on this before I let you guys go. A student at the University of California, San Diego, is being labeled a racist tonight. Gregory Lu hung 150 of these posters with the face of Kate Steinle, and on the bottom it said she had dreams, too. You'll recall that Steinle was killed in San Francisco. The accused gunman was recently acquitted. The posters were quickly ripped down. The UCSD College Democrats even going so far to post on their Facebook, we refuse to let racist statements pass to ignore slights to the immigrant community and to let our everyday conversations devolve into threatening hateful swill. The student that hung the poster was later contacted by the school office of prevention and harassment -- meeting about discrimination. We reached out to the school, and they said they conducted a review and sent this statement. In this particular case no formal investigation has been planned at this time. Nonetheless, the posters came down. A student was called racist for saying she had dreams, too. What could possibly be wrong with that, Emily?

SUSSMAN: Look, he obviously did this to be provocative. The family of the victim has asked -- said this has been too far too politicized already. And he took it over the top. He was trying to make a statement himself.

WOHL: Absolutely outrageous, Martha. You know, to hang a poster of Kate Steinle in memoriam in a college campus, and they have it torn down.

SUSSMAN: Do you really think that was in memoriam?

WOHL: They're showing their implicit support for the guy who killed her, by the way. This is a type of intolerance.

SUSSMAN: Don't agree with that.

WOHL: Poisonous, toxic, intolerance that has inflicted college campuses nationwide is why my brilliant son is not going to college. He does not want to be sort of infected by this intolerance, this indoctrination by professors and students to the far left that makes colleges a hostile learning environment for students, and it's just out of control completely, Martha.

MACCALLUM: How is tearing down these posters not infringing on their free speech, Emily?

SUSSMAN: He absolutely has free speech. And he was trying to be provocative in doing it in putting them up. This is not a memoriam. He was trying to be provocative. And that's exactly -- the reaction that he wanted.

(CROSSTALK)

MACCALLUM: He's making a point that she had dreams, too.

(CROSSTALK)

MACCALLUM: All right. We're going to wait for more information from the school on that, but pretty unbelievable. Emily and David, always good to have you with us. Thank you very much.

WOHL: Merry Christmas, Martha.

SUSSMAN: Thanks, Martha.

MACCALLUM: Thank you both. So, still ahead tonight, how the Trump administration is striking a different tone from years past. They are saying Merry Christmas. You know the president said that we'll be able to say that now. He's got it right on the front of his Christmas card. Family Research Council president, Tony Perkins, has been in touch with the White House about that, and some of their other decorations as well, and he will weigh in next.

(BEGIN VIDEO CLIP)

UNINDENTIFIED MALE: And give us the wisdom to be able to guide this great nation, and the future we ask in the name of the father, the son and the Holy Spirit. Amen.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

TRUMP: They don't use the word Christmas because it's not politically correct. You go to department stores and they'll say Happy New Year, or they'll say other things, and it will be red. They will have it painted, but they don't say, well, guess what? We're saying Merry Christmas again.

(APPLAUSE)

(END VIDEO CLIP)

MACCALLUM: That was President Trump vowing to put Christ back in Christmas. It was a promise that he made throughout the campaign. And he has been delivering, even putting the words Merry Christmas on the White House Christmas card. Can you imagine for the first time in almost 10 years. So, what does this movement towards keeping Christmas in the holiday season mean for the country? Here now, Tony Perkins, president of the Family Research Council. He met with the president just last week to offer counsel on religious issues. Tony, good to see you as always. Tell us about your meeting with the president on religious issues. What did you talk about?

TONY PERKINS, FAMILY RESEARCH COUNCIL PRESIDENT: Well, Martha, one of the things we were talking about was the move of the embassy from Tel Aviv to Jerusalem. And, but the president was really striking there in the oval office. He said, hey, Merry Christmas. You know, we can say Merry Christmas again. And as you said, the White House has made it very prominent in all of their displays. The -- not only the decorations, but as you pointed out the Christmas card that the White House sends out, which has been absent in the last 8 years. You know, we've moved away from the political correct happy holidays to Merry Christmas. And I think, Martha, very important to understand this is about a lot more than just, you know, some assault on Santa Claus once a year. This is about an ongoing attack on religious freedom in the public square, and when the president made this a center point of his campaign, as a candidate, the media kind of went what's this all about? But it was a very clear message that the president understood that the ability to express your faith in the public square was under assault. And he was going to be pushing back on that.

MACCALLUM: You know, I think people are relieved when you say Merry Christmas to them. I think they're happy to say it back to you.

PERKINS: Yes, absolutely.

MACCALLUM: I think it's the sort of gentrification of faith that really people don't like. They don't like season's greetings and happy holidays. We have the card from years past which said season's greetings from the White House. I don't think it means anything really to anyone. There was also a ceremony for Hanukkah, a menorah ceremony for Hanukkah that was at the White House as well. I think you want to recognize the richness of the different religions and the faiths that people practice in the country. Not diminish them by making them something generic.

PERKINS: Right. Nine out of ten Americans according to pew research celebrate Christmas. And two thirds of those recognize and believe the biblical story of Christmas that Christ was born as a child in a manger in Bethlehem. He came to be the savior of mankind. It was announced by angels. And so, most Americans believe that. But you are right in terms of people feel relieved when you say Merry Christmas. I've tried this, many stores. Every time I go someplace I say Merry Christmas.

MACCALLUM: Merry Christmas. People go, Merry Christmas. Merry Christmas to you, too.

PERKINS: Absolutely. Because they're afraid -- most Americans are not looking for conflict. And we have this cultural creation of conflict over Christmas because it seen as a religious expression, because most Americans see it as a religious holiday. So, the president coming to the forefront and saying, look, we're going to say Merry Christmas again. It is a signal to say, you know what? It's OK to express yourself on religious issues in our culture. And his policies have followed that. We're going to the executive order on religious liberty. We're hearing from federal employees, career employees that are saying you know what? We've never seen this before. They're calling us all in and saying, hey, this is Christmas time. Feel free to say Merry Christmas. Enjoy this time with your family and friends. And this is a breath of fresh air. And this is how the president is using, quote, unquote, the bully pulpit to restore freedom in the country again.

MACCALLUM: Yeah. I want to ask you about one other thing before you leave on the world scale because there's so much persecution of Christians in the Middle East. It's a hard time for them at Christmas. You know, your thoughts on what we need to focus on with regard to that in 2018.

PERKINS: Well, I was just over in the Middle East a month ago, meeting with Christians in Egypt and in Jordan. And, you know, they were asking, pray for us. This is a remarkable time for them. In fact, today, I was speaking with an Arab-Christian pastor in Bethlehem. He's a pastor of First Baptist church in Bethlehem. That's a pretty good deal being the pastor of First Baptist in Bethlehem. But they're under intense pressure, a majority Arab-Muslim culture. And they're saying pray for us. Pray that we can be light and truth in this culture because we're seeing a lot of Muslims come to Christ. And they're saying pray for us that we'll be bold and courageous.

MACCALLUM: Tony Perkins, thank you very much, and Merry Christmas to you, sir. We'll see you soon.

PERKINS: Merry Christmas to you as well. Thank you.

MACCALLUM: So, still ahead, Vice President Mike Pence makes a surprise visit tonight to our troops in Afghanistan, and delivers a Christmas message on behalf of the White House.

(BEGIN VIDEO CLIP)

MIKE PENCE, VICE PRESIDENT: I hope you find renewal and renewed strength in this season.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

MACCALLUM: Finally, tonight, the president at Walter Reed Medical Center today awarding a purple heart to 1st Lieutenant Victor Prado, and visiting with members of our military who were there, which is four days to go until Christmas. At the same time, Vice President Mike Pence in Afghanistan on a surprise visit spending time with troops who will be away from their families this Christmas in the name of keeping us safe here at home. Here's the vice president's Christmas message to our troops. It's the quote of the night.

(BEGIN VIDEO CLIP)

PENCE: In the coming days, we'll look to a manger. And we'll once again in your hearts claim the promise announced on a holy night of peace on earth and goodwill toward men. Let me say from the first family, my family, from families all across America, Merry Christmas.

(END VIDEO CLIP)

MACCALLUM: And Merry Christmas to all of you and your families. Thank you for sharing the story of 2017 with us. Here's to a great story being told in the New Year. Tucker Carlson is coming up.



Content and Programming Copyright 2017 Fox News Network, LLC. ALL RIGHTS RESERVED. Copyright 2017 CQ-Roll Call, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ-Roll Call. You may not alter or remove any trademark, copyright or other notice from copies of the content.