Amb. Nikki Haley: Sanctions are a 'gut punch' to North Korea

This is a rush transcript from "The Story," August 7, 2017. This copy may not be in its final form and may be updated.

DANA PERINO, GUEST HOST: Breaking tonight the North Koreans vowing revenge on the United States just 48 hours after the United Nations slapped the rogue regime with new sanctions. That's "The Story." I'm Dana Perino, in for Martha MacCallum.

In response to recent International Ballistic Missile tests, the United Nations including sign on from China and Russia unanimously hit North Korea with the new round of sanctions meant to cripple its economy. In retaliation, North Korea's state T.V. promised to make America pay "a thousand times." The Secretary of State, Rex Tillerson, says the U.S. and the rest of the world will not back down.


REX TILLERSON, U.S. SECRETARY OF STATE: I think, perhaps, the more important element of that is just the message that this sends to North Korea of how unacceptable the entire national community finds what we they're doing.


PERINO: U.N. Ambassador, Nikki Haley, is here in just moments on what she called the "gut punch" to the North Korea. But we begin with Trace Gallagher on our West Coast Newsroom, Trace?

TRACE GALLAGHER, FOX NEWS CHANNEL CORRESPONDENT: Dana, not surprisingly, President Trump and South Korea President Moon Jae-in are both applauding the U.N. sanctions it is a bit more surprising that China is also on board even warning North Korea not to provoke the international community and violate the United Nations by firing off missiles and testing nukes. The comments are significant because China is the North's economic lifeline.

And in the face of these billion dollars sanctions, North Korea can ill afford to be economically squeezed by the Chinese. U.S. Secretary of State, Rex Tillerson, is leading Kim Jong-un some wiggle room, telling Kim the younger he needs to halt all missile test so U.S. and North Korea can start negotiations. Tillerson is also aware that talks with North Korea have gone nowhere for 25 years, and he's not about to set an artificial timeline. Watch.


TILLERSON: So, this is not "give me 30 days and we're ready to talk." It's not quite that simple. So, it is all about how we see their attitude towards approaching dialogue with us.


GALLAGHER: And despite Tillerson being willing to talk, it appears North Korea is unwilling to listen. Breaking tonight, U.S. officials are now telling Fox News that U.S. spy satellites have spotted North Korea loading anti-ship cruise missiles on to a patrol boat on the country's east coast. That's the first time these types of missiles have been deployed on this type of platform since 2014.

Remember, experts at the Pentagon say they believe North Korea now has an Intercontinental Ballistic Missile that can reach the shores of Alaska, and could soon have the capability to hit Hawaii and the U.S. West Coast. It's unclear if those missiles can carry a nuclear war head, but it's only a matter of time. And even though these U.N. sanctions signify a common view from the international community, it is very apparent that North Korea sees this as a U.S. crackdown. Dana?

PERINO: Here now exclusively: U.S. Ambassador to the United Nations, Ambassador Nikki Haley. And thank you so much for being here and congratulations because that 15 to zero vote was really hailed even by administration critics as quite amazing and impressive. Do you have any information on the new information that we have that North Korea, for the first time since 2014, is moving some military assets to maybe in response to these sanctions?

NIKKI HALEY, UNITED STATES AMBASSADOR TO THE UNITED NATIONS: I can't talk about classified information. What I can tell you is that we are on it. We are very aware of what's happening. We are going to continue to watch and see what happens. But it was a strong day for the United States. It was a strong day for the United Nations. And it was a gut punch to North Korea to let them know the international community is tired of it, and we're going to start fighting back.

PERINO: What was it like behind the scenes? Did you have to twist a lot of arms when it came to China and Russia?

HALEY: Yes. We did. But you know, at the end of the day, what we had to show them was, look, how many more ICBM tests do we need to see before we do something?

PERINO: Right.

HALEY: And the fact that every dollar of revenue that North Korean government gets, they're not feeding their people with it. They're using it towards the nuclear weapon system, and so we had to stop it. And so, going after the sanctions are going after their ability to build these missiles. And it's something that needs to happen.

PERINO: I'm sure you hear this too. And this really has gone from being a theoretical question like could they possibly get a nuclear weapon in the future to feeling a lot more real. And I wonder if you hear from your friends or family and people that you see on the streets, people even at the United Nations are they actually concerned because I hear people saying that they're really scared.

HALEY: I mean, all of us should be concerned about what's happening right now. But I think the signs that we're seeing from North Korea, their concerned back. Now, they see the international community as standing with one voice. China didn't pull off. Russia didn't pull off. And all of the Security Council and the international community said that's enough, you've got to stop. It's reckless. It's irresponsible. And the international community, really, laid down the groundwork of saying we're not going to watch you do this anymore. Now, North Korea has to respond. And, yes, they're going to say, they're going to threaten, they're going to do all of these things. But we're not going to run scared from them.

PERINO: Right, and not overreact, I guess, to every little provocation. Do we have a plan to keep China engaged to make sure? Because General Jack Keane will be here a little bit later in the show, and he has said that, you know, they have a terrible track record of keeping the sanctions going.

HALEY: 90 percent of the trade that North Korea has is with China. So, that's why they were so important to this resolution. And what we saw was the fact that China did step up. These are hard-hitting sanctions that we are doing, over a billion dollars out of their three billion-dollar export. But what was more important was China stepped up and said, we will follow through on these sanctions. We will make sure that we follow. And they encouraged the international community to follow it. So I think China feels this. I mean, when I talk to the Chinese Ambassador when that missile test took off, they felt it in China. It was so close to their border that the ground shook.


HALEY: So, the people of China now feel it, and they're disturbed enough to say that they now have to do their part. And now, we have to just stay on them to make sure they do that.

PERINO: Earlier today at the Pentagon, at a gaggle this morning, they said that the Department of Defense is working on moving to South Korea some larger missiles. Do you think you'll get push back from Russia or China on that?

HALEY: They won't like it, but they have to understand it. I mean, our job is to defend not just the United States but our allies. And what you're seeing is Japanese T.V. is showing that ballistic missile test on every television because they could see it when it came back into the atmosphere. And so, we have to protect our friends, and we're going to continue to do that. I think it's another sign of force that North Korea can't threaten and think we're not going to respond.

PERINO: There are lots of intrigues, of course, around Russia. And Secretary Tillerson, who is traveling in the region today had this to say. Let's listen to that.


TILLERSON: Tell the foreign minister that we have not made a decision regarding how we will respond to Russia's request to remove U.S. diplomatic personnel. We had -- I asked several clarifying questions just to make sure I understood some of their thinking behind that diplomatic note we received but felt they would respond by September First.


PERINO: I'm curious about the diplomatic part of your job in regards to Russia. Because, on the one hand, you had last week the Russian government Medvedev sending taunting tweets to President Trump after he signed those sanctions -- that were very tough sanctions. And then, on this side, you have them cooperating on North Korea and then we have other business with them including Syria and Ukraine. So, how are you walking that line?

HALEY: Well, I think Russia has to make these decisions, right? We're not having to walk align, because we are where we are, whether in opposing what they're doing with Ukraine, whether it's inviting Assad in Syria and the fact that that's their ally, whether it's these sanctions because they meddled in our elections. We're going to continue to do what we have to do. I think Russia's trying to figure out how to deal with us. And I think they're trying to decide when can we be with the United States and when can we not? The resolution was certainly an opportunity for them to be with us, and they stepped up and they did it. They didn't do it willingly. I think they wanted to drag it out a bit. But when they saw this train was moving they jumped on and they were with us on that.

PERINO: Just moving a little bit south, to South America. I was curious about Venezuela because that is disastrous and a chaotic situation. The human rights there are just abysmal. And I wondered, do you think that the U.N. will take any further action after the president put the sanctions on Maduro personally last week?

HALEY: What is happening in Venezuela is tragic. And we are watching a democracy go directly into a dictatorship. And I think that's why you're seeing everyone protesting. We actually had an emergency hearing on Venezuela two months ago because I said that this was a serious human rights situation. The Security Council's response was this should go the Human Rights Council. The reason it hasn't gone to the Human Rights Council because Venezuela sits on the Human Rights Council.

So, yes, I do think it's getting to the point where we're going to have to bring this back to the Security Council. But at this point, we're going to continue sanctions at least from the U.S. side, but we have to be loud about this. What's happening in Venezuela, and what's happening to the people there is just awful. And you've got 40 other countries and the Vatican saying that they condemn everything that Maduro is doing, and I think we have to keep up the pressure.

PERINO: I got one last question. I just -- you know, this is an issue that's really I follow a lot, which is the humanitarian crisis that is growing in Africa, especially in regards to famine. And I think it sort of flew under the radar screen that the Trump administration did not get enough credit. They stepped up -- I mean, the world community wasn't and President Trump said I will put $639 million more to this effort. And I wondered if that led any other countries to pony up their part.

HALEY: I think when the United States leads, everyone else does follow.

PERINO: Right.

HALEY: It's something that we've done. So, the fact that we put the 639 million was one thing. But the second thing is I'll be going to Africa in the fall. We're going to be going the Democratic Republic of Congo. We're going to South Sudan. We're going to go to Ethiopia. We're going to meet with the African Union. I mean, there are some things that we have to do there. There are political issues, there's famine, and there are a lot of human rights suffering.

PERINO: And it's a security issue for all of us as well.

HALEY: It's a big security issue. All eyes need to be on Africa and we have to have a strong Africa policy.

PERINO: Well, I could go around the world with you again and again but we have to let you go. Thank you so much for being here today.

HALEY: Thank you. It's great to be with you.

PERINO: And up next, General Jack Keane here with fresh reaction to our interview with Nikki Haley and today's latest provocation from North Korea. The question for him: is military action against the rogue regime still avoidable at this point? Also tonight, the Trump administration's message to sanctuary cities: obey the law or pay the price. That warning is not sitting well with Chicago's mayor. Judge Andrew Napolitano is here on the unprecedented step Rahm Emanuel is taking to protect illegal immigrants in his city. And NRA Spokesperson, Dana Loesch, under fire today after she took on the New York Times in a new ad; she's here to respond to her critics just ahead.


DANA LOESCH, THE BLAZE T.V. HOST AND AUTHOR: We're going to laser focus on your so-called honest pursuit of truth. In short, we're coming for you.




HALEY: All of us should be concerned about what's happening right now. But I think the signs we're seeing from North Korea, they are concerned back. Now, they see the international community is standing with one voice. China didn't pull off. Russia didn't pull off. And all of the Security Council and the international community said that's enough, you've got to stop it. It's reckless. It's irresponsible. And the international community really laid down the groundwork of saying we're not going to watch you do this anymore. Now, North Korea has to respond.


PERINO: U.N. Ambassador, Nikki Haley, just moments ago stating, in no uncertain terms that the ball is now in North Korea's court after the latest round of sanctions with fresh provocation from the rogue nation just today. Will the U.S. and our allies be able to stop short of military action and the effort to deter North Korea's nuclear ambition? So, to answer that question let's turn to no one else but the best: General Jack Keane, Fox News Military Analyst and Chairman of the Institute for the Study of War. Sir, earlier today, we found out that North Korea apparently, according to our sources, has moved anti-ship cruise missiles to the eastern part of the country. Apparently, they've not done that since 2014. Is this to be expected since North Korea said that they were going to punch back against the U.S. after the vote on Saturday?

GEN. JACK KEANE, FOX NEWS MILITARY ANALYST AND CHAIRMAN OF THE INSTITUTE FOR THE STUDY OF WAR: Yes, it is. I mean, certainly, the bell across rhetoric is part of that pattern. They may be moving this military capability, but they're not going to take military action against our allies or against the United States to be sure because that would clearly provoke a response that they would not be able to handle from the United States.

And let me just say listening to Ambassador Haley there, you know, the Trump team's got an absolute first rate national security team that they have brought together. And this is one of the stars of it. I mean, she is such a strong and articulate voice, and she pulls no punches whatsoever, no matter what the issue is that she's dealing with. And I think, you know, her skill as a successful Governor in South Carolina serves her well as a diplomat here in New York.

PERINO: I think so, too. I like the answer when I asked her if she had to twist a lot of arms, then she just simply said yes. Well, I guess, we have to leave it to our imagination as to what when we meant by that. One thing I didn't get to ask her, and I wish I had, and I wonder if you could comment on this because as you know the effort that diplomacy is trying to save off military action. Last week, President Trump put off a speech he was going to be giving about China. And there were some trade sanctions, some trade actions that they're going to take against China, but they pulled that back with no real explanation. And I wonder if, in talking with China, that one of the negotiating tactics with them was to say we will not do that in order to help you get us on the same page when it comes to this North Korea situation and the vote on Saturday. Do you think that's plausible?

KEANE: Oh, yes. That's definitely plausible. And also, China's very good at working with us -- sometimes I use the word gaming us to accomplish their national interests. But I think that this vote is a testimony to the fact that the international community to include China and Russia know two things here. One is that this is a rapidly dangerous situation that's being created by the North Koreans and nuclearized ICBMs. And the second thing and this is critical because this is what enhanced Ambassador Haley's hand when she played it. This is no longer the Obama administration of appeasement, of a combination of the North Koreans. They know full-well that this administration will not stand for a nuclearized ICBM pointing at the United States with the capability to hit it.

PERINO: Right.

KEANE: And as a result of that, she's playing a much stronger hand with the same international community that her predecessors were playing.

PERINO: What's interesting is that with Iran the Obama administration and the Bush administration before that were trying to get -- trying to prevent Iran from getting to the point that North Korea already seemed to be at. And so, I'm curious about how we figure out a way to, you know, it's not like we can't take them away from them now; they have the technology that they have. What is the best way for us to slow them down or to prevent them from using it?

KEANE: Well, I think our policy is simply this. I mean, we're going to economically sanction them using the international community to do that. And you talked about this. I mean, in the past, there are seven other times we sanctioned; never been successful. And the players, never truly vigorously executed to the fullest. This team, the Trump team, and Ambassador Haley will stay on top of it -- I'm sure, as will Secretary Tillerson. They have got to ensure that these people are executed rapidly and vigorously because the time clock is a factor here. And that's the reality of what we're dealing with.

PERINO: All right. General Jack Keane, thank you so much for being here.

KEANE: OK. Good talking to you, Dana.

PERINO: All right. Also breaking tonight, a sanctuary city showdown brewing between the Trump administration and Chicago's Mayor, Rahm Emanuel. The Democrat, now suing the Justice Department, after the DOJ vowed to cut funding to cities that harbor illegal immigrants and refuse to cooperate with immigration agents. Take a listen.


RAHM EMANUEL, MAYOR OF CHICAGO: Chicago will not let our police officers become political pawns in a debate. Chicago will not let our residents have their fundamental rights isolated and violated. And Chicago will never relinquish our status as a welcoming city.


PERINO: Mike Tobin has been following the latest dispute and joins us live in Chicago with the late-breaking details. Mike?

MIKE TOBIN, FOX NEWS CHANNEL CORRESPONDENT: You know, Dana, in a big Democratic town like Chicago, especially one with a powerful and active Latino voting bloc, Mayor Emanuel doesn't put himself in a bad spot politically when he squares off with President Donald Trump, especially over immigration. There are other so-called sanctuary cities, but Mayor Emanuel and Chicago are the first to file a lawsuit against the policy of Donald Trump's Department of Justice.
The suit is related to the Edward Byrne memorial justice assistance grant. Chicago would only get $3.2 million. But in order to get the money, city police would be required to share information with federal agents about illegals and give Homeland Security a 48-hour heads up if they're going to release an illegal. Saying those requirements violates the Constitution and the core values of Chicago. Mayor Emanuel took the opportunity to publicly defy the president.


EMANUEL: We're going to act immediately to make sure that there's a ruling by the court as there has been on other issues as relates to immigration and refugee policies where the court has basically stopped the Trump administration in its tracks.


TOBIN: Now, Attorney General Jeff Sessions fired back in a statement reading in part: "The political leadership in Chicago has chosen deliberately and intentionally to adopt a policy that obstructs this country's lawful immigration system. They have demonstrated an open hostility to enforcing laws designed to protect law enforcement, federal, state, and local, and reduce crime and, instead, have adopted an official policy of protecting criminal aliens who prey on their own residents." Sessions also said, "No amount of federal taxpayer dollars will help a city that refuses to help its own residents." Dana?

PERINO: All right, a strong statement there from the attorney general. Thank you, Mike. Here with more Fox News Senior Judicial Analyst, Judge Andrew Napolitano. So, last week when we were here -- and you were my personal lawsuit suitor -- I said, is there any way to get the courts to rule on this sooner than later so that we have some clarity? Does this action by the mayor get us a step closer?

ANDREW NAPOLITANO, FOX NEWS SENIOR JUDICIAL ANALYST: I'm sorry to tell you, but I don't think so. And I'll tell you why, because the attorney general has merely threatened to withhold funds; he hasn't actually withheld the funds. So, Chicago is not harmed. So, there isn't any case for the court to resolve until the money is actually held back. If Donald Trump had been president a year ago, and if the cash that's flowing to Chicago had been subject to the agreement, you take this cash, you agree to help the feds and for enforce immigration policy. Then, Rahm Emanuel has a very thin ice to stand on.

But since the money that is flowing to Chicago is coming from the last year of the Obama administration budget, which did not include the condition you will help immigration enforcement, he has very strong ground to stand on. So, once the case is litigated, I think he wins and the Trump administration loses. But, until the Trump administration actually stops sending the money, there's no basis for a lawsuit.

PERINO: So, why do you think they would be successful? Is it because of the way our system is set up that the state and local governments have some discretion --


PERINO: as to what they are going to do?

NAPOLITANO: Yes. And it's because of the number of Supreme Court cases which basically say the federal government can't (INAUDIBLE) the states. It can't come in there and say Chicago police you're now going to work for us. Even though work for us is minimal. It's just sharing of data. The city of Chicago has the right to spend its money and direct its police however it wants, and they're not required to help the Feds. Can the federal government enforce all federal laws on their own without local assistance? No. As big and powerful and rich as the federal government is, it requires some cooperation. But that must be voluntary on the part of the locals; it can't be compelled.

PERINO: It just seems like there should be a way to get this resolved. But let's move on to just another topic, which was the fact that the attorney general on Friday had a press conference to great fanfare talking about the leaks investigation and Deputy Attorney General Rod Rosenstein was on "FOX NEWS SUNDAY." Let's take a listen.


ROD ROSENSTEIN, DEPUTY ATTORNEY GENERAL: What we need to look at in every leak referral we get, we look at the facts and circumstances. What was the potential harm caused by the leak? What are the circumstances? That's more important to us than who it is, who is the leaker. So, if we identify somebody, no matter what their position is, if they violated the law and that case warrants prosecution, we'll prosecute it.

CHRIS WALLACE, HOST: Including White House officials and Members of Congress?

ROSENSTEIN: Including anybody who breaks the law.


PERINO: And so, you make a very important distinction about there are times that there are national security leaks that are criminal that's like classified information that would hurt somebody. And then, there's just stuff that you don't want out there that's sort of a (INAUDIBLE), but it's not against the law.

NAPOLITANO: It was embarrassing and humiliating, and to me, personally, irritating.

PERINO: And wrong.

NAPOLITANO: And wrong, that a transcript of the president's conversation with a prime minister of Australia or the president of Mexico was released. But because there was nothing classified in there, there was no crime. I believe what the Deputy Attorney General is talking about Rod Rosenstein in his interview with Chris Wallace was where classified material is released to affect the policy of the government to embarrass the president or for some other purpose, that's a felony. And that's what he's looking for.

Here's what I'm worried about: it is good for them to prosecute people who break the law. But where do these prosecutions begin? They go to the media person who received and published the information and say what are your sources? Ask Judith Miller and James Rosen about that. And that wreaks havoc on the ability of the media to do its job because the media doesn't have to reveal its sources. So, we'll see where it ends up.

PERINO: All right. Well, maybe even just talking about going after leaks will help stop them.


PERINO: Like the wall.

NAPOLITANO: It might have a marginal effect.

PERINO: You're talking about the wall.


PERINO: Curbs immigration.

NAPOLITANO: Was I a good professor tonight.

PERINO: You're an excellent professor. I appreciate it. And it was tuition free.

NAPOLITANO: Great student.

PERINO: What a deal.


PERINO: All right. Coming up, as the Dems look ahead to next year's midterms, political watchers note: they have one of the most historically unfavorable maps in U.S. history. So, will they stand a chance if they don't move beyond Russia? We'll break it down ahead. Plus, the National Rifle Association is under fire for an ad that some say is promoting violence. The person at the center of that ad: NRA Spokesperson, Dana Loesch, is here with a word for her critics. That's next.


LOESCH: We, the people, have had it. We've had it with your narrative, your propaganda, your fake news. Consider this the shot across your proverbial bow.


PERINO: The National Rifle Association, taking criticism on the heels of their latest ad; this one targeting the New York Times. Watch this.


LOESCH: We, the people, have had it. We've had it with your narratives, your propaganda, and your fake news. We've had with your constant protection of your Democrat overlords. Your refusal to acknowledge any truth that upsets the fragile construct that you believe is real life. And we've it with your pretentious tone deaf assertion that you are in any way truth or fact-based journalism. Consider this the shot across your proverbial bough. We're going to fist The New York Times and find out just what deep rich means to this old gray hag, this untrusty dishonest rag that has insisted on the welfare of mediocrity for 1, 2, 3 more decades. We're going to laser focus on your so-called honest pursuit of truth. In short, we're coming for you.


PERINO: The spot prompting swift backlash from some critics who accuse the organization of promoting violence. One CNN analyst even reporting the message at twitter for hate speech, tweeting, quote, this is the fifth add from the NRA TV, and they are increasingly shocking and hateful, threatening Americans and institutions. I've reported them. Here now to respond is the NRA spokesperson featured in that ad, Dana Loesch. So Dana, you don't shrink away from controversy.

DANA LOESCH, NRA SPOKESPERSON: No, I don't, Dana. It's so good to see you. Thank you for having me.

PERINO: Were you surprised last week with the backlash? I mean the ad is super strong. I mean, you're not pulling any punches there.

LOESCH: No, no, I'm not.

PERINO: So were you surprised at the response?

LOESCH: I was surprised that it came so late, because this ad has been out for some time, which kind of makes me wonder if it's not coordinated. I mean, this was all taped like a very long time ago. I think what got me -- what surprised me the most was that people would think that a promise to fact check a media organization is a physical threat, which it's not.

PERINO: Right. And so, what is your goal though to push back against the New York Times? I get it. I understand the media bias piece.

LOESCH: Right.

PERINO: You are sort of new to the NRA spokesperson role, and you've really changed things. It's like put them back on the map in terms of fighting back. What is the ultimate goal for the NRA with this ad campaign?

LOESCH: Well, with this particular ad campaign, Dana, the whole point of this is to show the media and announce to the media, look, we love a free press, but free people also have the right to criticize and fact check the press. That's why I use the word fist because apparently the New York Times was completely unaware of. But a free people have the right to fact check the press, particularly, when this is the press that has falsely maligned so many people for so long. I mean, think of this, Jim Rutenberg, just last year in a column had written that the New York Times doesn't have to objectively cover the president because they don't like the way that he talks.

And Arthur Sulzberger Jr., who is the publisher of the New York Times, actually came out and said, and I quote him, that they're going to rededicate themselves to balanced journalism. If you're practicing balanced journalism you don't need to rededicate yourself to balanced journalism. So they've kind of already admitted that they have been misleading and that they have been practicing bias. And that's what people are tired of. I think a lot of the bias has really gone to push people back into their little corners and has contributed to a lot of the political tribalism that we see here. It's not just conservatives that are affected. Liberals are affected too.

PERINO: I do want to just run one thing by you though, because there was a little bit of, like, I guess surprise from some on the right as well. This isn't as -- obviously this isn't the New York Times, but Amy Otto from The Federalist, she's a senior contributor there, she tweeted, I'm saddened that the NRA has so much time to make politicized content about the New York Times, but didn't speak up for Philando Castile. How do you respond to that, because I know this is not the first time you've been asked about that? I'm going to give you a chance to respond here.

LOESCH: Well, I'm unfamiliar with Amy Otto, but I would imagine that she's not unfamiliar with the NRA or myself. And I'm on twitter. I mean, you can always reach out to someone and ask for a statement. And I have remark on this. And the NRA had issued a statement on Philando Castile as well. Personally, I've spoken out about this on radio, and I've spoken out about it on twitter. So I think for anyone to say that the NRA hasn't been present on that issue. I think they're willfully not listening.

PERINO: All right. What's next? Has the NRA got something else up its sleeve?

LOESCH: The NRA, I'll always -- this depends on the media. It all depends if the media has something up their sleeve. Look, the NRA -- and this comes from membership as well, because I just talk for the millions of people who are NRA members. And people are tired of being maligned. They were tired in seeing Trump voters being maligned. I mean, look, I have an 80-something- year-old, the great aunt, who lives in the state of Illinois, who's always been a Democratic, and she didn't really appreciate the New York Times kind of fabricating that she was, I guess, some back woods hillbilly that shared one tooth, because isn't that what all Trump voters are? No, not all Trump voters are that, a lot of them are blue collar Democrats. A lot of push back against that.

PERINO: All right. Well, the New York Times and the NRA, that should be a good match to watch.


PERINO: All right. Thank you so much, Dana. Today marks day 200 of the Trump presidency. And still ahead our power panel of Jason Chaffetz, Mary Anne Marsh and Chris Stirewalt are here on the highs, lows, and what's next. We'll also get their reaction between -- battle with Vice President Pence and, guess what, the New York Times, they come up again. We'll explain. Plus, midterms are fast approaching and new polling suggests Democrats aren't growing their base. One report suggesting tonight they could be going too far on the Russia story. Last month, Mark Penn angered many of his fellow Democrats when he told them to move to the middle. Tonight, he's here with a new warning for his party.


PRESIDENT DONALD TRUMP: Most people know there were no Russians in our campaign. There never were. We didn't win because of Russia. We won because of you. That, I can tell you.




PERINO: Democrats are hard at work as they look to reclaim the House and even the Senate in next year's midterms. But so far, they can't seem to move beyond the battle cry, Russia.


UNINDENTIFIED MALE: This is an issue that's a serious issue and needs a thorough, thorough investigation.

UNINDENTIFIED FEMALE: We're going to learn a lot about the connections between this president, his allies, and the Kremlin. And it's going to be very revealing.

UNINDENTIFIED FEMALE: Speaker Ryan must allow a vote on an outside independent kit mission to get to the bottom of the Trump campaign's role in Russia's assault on our democracy, and prevent Putin from ever doing it again, immediately.


PERINO: Tonight, new polling suggests what you just saw isn't working. One Democratic strategist stressing to Politico that their party needs to move on, quote, we need to talk about what people think about what they wake up in the morning, and it's not Russia. Joining me now Mark Penn is the chairman of the Harris Poll, and served as White House pollster to President Bill Clinton. So I wonder what you think on this, Mark, because you've been there at the White House when there was a special counsel, and you understand the frustration that comes with it, and the Republicans overplayed their hand then. Are the Democrats doing the same now?

MARK PENN, HARRIS POLL CHAIRMAN: Well, I lived through this in '98, as you know. And we ran the midterms on a basic theme that the people want progress not partisanship. And so you have to be very careful.

PERINO: And you won seats, right? I mean, you picked up seats in 1998.

PENN: We did. It was almost unprecedented to win seats in that midterm because the Republicans went too far. So the question is, is this happening in reverse? Well, what I say is Democrats right now are winning on healthcare. Russia may be an issue that motivates the base. We'll see what the independent counsel says and where this develops. But really, we've got to get back to bread and butter issues, the economy, crime, immigration, education, if we don't get on the issues that people really care about, you can expect to see that the country reacts in a negative fashion, both the Democrats, Republicans, and to Trump, which is really where they are now.

PERINO: So have you a new poll that's out, and what are you finding there that people are feeling, you know, there're policy issues being left on the table and being decided by Republicans, not successfully I guess on healthcare if you look at that, but at least it looks like they're doing things. Are the Democrats feeding all of that ground to the Republicans at the moment?

PENN: Well, 56 percent are negative on Trump, 57 percent are negative on the Democrats, and 67 percent are negative on the Republican. So who's winning? Nobody, OK.

PERINO: The race to the bottom.

PENN: But, 89 percent say that the party that really wants to move forward, compromise, and not -- and be willing to compromise on its principles to get things done, 89 percent want that. You see the problem solvers caucus, for example, with their healthcare plan really took off when somebody actually took that step.

PERINO: Right. And I read some of their op-eds over the weekend about healthcare and how to deal with that. But it was just last month that you had an op-ed that you put out, it was July 6th. In fact, I had you on air that night because I had a chance to fill in for Martha. And you took a lot of heat from the left, because it seems that the Democrats are thinking that they really need to be more pure and to the left, and what you're saying to them is don't do that, there's danger ahead of you.

PENN: Look, back to the center. I lived through all of this in the 1990's. We moved to the center. This is not theory. This is really practice. It worked. It got Bill Clinton reelected. It got us to successful midterms. The same thing really has to happen. The issues are different. We have to be modernized for really what's going on in America today. But the working class vote is not an ultra-liberal vote. They're not going to be attracted by moving to the left or the right.

PERINO: Can I ask you about that, Mark, because when Chuck Schumer came out a couple of weeks ago and said they've got the new better deal slogan and he laid out the policy principles. It seemed to me that that sounded a lot like what President Trump ran on for a successful presidential campaign. Did you see that, too?

PENN: Well, I don't really think the better deal yet goes far enough in enunciating what the better deal is in the 21st century for working class beset by globalization and technology. I think we've got a long way to go in defining that as a real issue, because, right now, the economy issue is being won by Trump, believe it or not, and Democrats and Republicans are losing it aside from him.

PERINO: Isn't that amazing? Well, Mark, we'll be watching you and thank you for coming on tonight and telling us about what the Democrats need to do, and now we'll watch your twitter mentions blow up.


PENN: Thank you.

PERINO: All right, Mark Penn, thank you so much. So, 200 days ago the Trump administration began with much fanfare and questions about how the real estate mogul turned reality TV star would be as president. Just ahead, we dive into the president's effort to do it his way and ask what's next. Former congressman Jason Chaffetz joins us along with Chris Stirewalt and Mary Anne Marsh.



TRUMP: I didn't come to Washington for me. I came to Washington for all of you. That, I can tell you.



PERINO: President Trump just a few days ago at a campaign style rally in West Virginia. The president is currently on a working vacation in New Jersey, as renovations are made to the White House. Well today, marks his 200th day in office. So what are we to make of his time in office to date and his promises to the nation? Joining us now is former house oversight committee chairman, Jason Chaffetz, now a Fox News contributor, we're glad to have him, Chris Stirewalt, Fox News politics editor, and Mary Anne Marsh who served as a senior advisor to secretary of state John Kerry. Since you're here with me, you get to go first, congressman. I'm still going to have to call you congressman.

JASON CHAFFETZ, FOX NEWS CONTRIBUTOR: Whatever feels comfortable.

PERINO: We know the past 200 days have led us to this moment, and the Republicans have gone home for recess. You don't have to do recess this year. But what are they hearing about the first 200 days when they're back home, and what do they need to do in the fall?

CHAFFETZ: I think the president gets high marks. He put in Neil Gorsuch, a very conservative Supreme Court justice. The foreign policy side, I think is a real strength. They have had some hiccups, you know, out of the administer of the White House, but I think that's been resolved. I think the real heat, the real criticism are on the house and the senate. I mean, the senate, they actually said we're going to extend into mid-August because we have so much on our agenda. And what did Mitch McConnell do? They excused them early. They're not in even in session this week.

PERINO: Well, I think that was probably because they didn't get the healthcare vote.

CHAFFETZ: But they've got to do tax reform. They got a lot of heavy lifting.

PERINO: They certainly -- they have a lot on their plate. And Chris, there's also -- you know there's the constant political intrigue. We've just had a change -- a lot of change, actually, in senior staff positions. And then you saw over the weekend, that big story in the New York Times about Vice President Pence and looking ahead to 2020, which the vice president's office vigorously denied. But already you have political intrigue 200 days in. What do you make of that?

CHRIS STIREWALT, FOX NEWS POLITICS EDITOR: Well, first we have to say, once a congressman, always a congressman. I mean, the guy is tough on the upper chamber there, rough.

CHAFFETZ: They deserve it, easy target right there.

(LAUGHTER) PERINO: That's like shooting fish in a barrel.

STIREWALT: Well, also like shooting fish in a barrel has been throughout these 200 days, reporters finding eager leakers inside the White House, and people eager to run down and trash other people. You really have basically three factions inside this administration. You have traditional conservative Republicans, ala-Mike Pence, people of this mold. Then have you the Steve Bannon set. You have these -- whether you think of them as alt right or that they're populist nationalists, or whatever they are, but this is a different way to look at the Republican Party. And then have you these other people who aren't Republicans at all. This is like the president's daughter and son-in-law, this is like top economic advisor Gary Cohn, and now we have sort of a nonpartisan as White House chief of staff. So these groups, whatever they can do in the body of the chief of staff to clean things up, get it tightened down, make it run better, you still have these three factions who are still leaking on each other and are still trying to run each other down in the press and that's not helpful.

PERINO: Mary Anne, you really can look at this through both perspectives, right? The Republicans have pretty much stayed with the president. They can list off all sorts of things, not just Gorsuch but regulations, they can look at the stock market. They can list all of these things. And, yet, the Democrats can look at these first 200 days and say this is a disaster. What do you think? I'm assuming you're in the latter camp, but give me a broader perspective from the Democrats. Are they worried about those midterms as Mark Penn was just saying? It doesn't look like it's going to be easy for them.

MARY ANNE MARSH, DEMOCRATIC STRATEGIST: Well, I think a couple things. I mean, Congressman Chaffetz makes a great point. The reality here is anything that requires a vote hasn't gotten done. So any accomplishment and quotes that Trump talks about has not gone through congress. It's been either, an executive order, regulation changes, or the appointment of a Supreme Court justice. Yes, that required a vote, but that was going to happen anyways. To Chris' point, there was a lot of infighting, too. So as a Democrat, you're actually grateful nothing is getting done right now because you're afraid of the things that if Trump's agenda went through, that's exactly what you don't want. What you do want is what you're starting to see, which are effort to work together to get some things done. Repair the healthcare bill, don't repeal and replace it, things like that. That's what you're looking at. In terms of 2018, I have a more bullish viewpoint than Mark Penn does.


MARSH: I think that this isn't 20 years ago. And I remember Mark Well, and know him, and know everybody who worked on the Clinton campaigns.

PERINO: And we all look as good as we did back then, right?

MARSH: Yes, we do. But these are different times.


MARSH: And the country is more polarized. It's more left and it's more right. But whoever figures out what people really want, which is a good job with a good paycheck, those are the folks who are going to win in 2018.

PERINO: Jason, I wonder -- look I did it, I called you Jason. I have crossed the Rubicon. How difficult is it for the hill to come together to try to get these major things, and they're some must-pass thing, the debt ceiling is not that sexy of topic, you know, and then you've got the budget, what do you think they can really get done? And I think everyone points at tax reform. Is it possible? Can they do it before the end of the year?

CHAFFETZ: Well, I hope so. But the easier stuff was first. I mean, healthcare is difficult but it was doable. Everybody campaigned on it. Everybody said it in every ad and every promise that they made and, yet, they didn't get there. The gauntlet, the hardest part is actually September, because there is not a Republican out there that wants to vote for a debt ceiling increase. They got to do a budget. They have to fund the border wall. They have to do all of these things, and yet to go on recess. So they're not exactly coming together. We only have 12 days on the calendar in September. You've got to do all of that. And Republicans are more concerned, there's too many people that are more concerned about a primary than they are about their general election. So they do not want to go back saying we didn't get anything done and we didn't -- and we voted for a debt ceiling increase.

PERINO: In addition, Chris, in the time we have, there's always foreign policy problems. We started the show with an exclusive interview with Ambassador Nikki Haley, who is confronting the North Korea crisis, working with the national security team. And yet, you still have continuing from last week this fight, apparently between -- maybe it's a proxy fight between H.R. McMaster, the national security advisor, and Breitbart, I guess? I mean, how does General John Kelly help solve this situation?

STIREWALT: Well, look, he can't solve it. The president has to solve it. Now, Kelly can be a cop on the beat, right? He can say, no, you can't leak that. No, you can't say that. No, you're fired. No, you're in. You're out. But what he cannot do is tell the president what he believes about foreign policy. One of the challenges that this administration has had about foreign policy is speaking with many voices. And you heard -- Nikki Haley tonight, that was -- those were sentiments that came right out of the core heart of conservative Republican foreign policy, but not everybody in the administration.

PERINO: I've got about 20 seconds left. I'm going to give them to Mary Anne. What do you make of that? Is that a distraction that will hurt the president?

MARSH: It is. But James Rosen reported earlier tonight that Donald Trump gave him a vote of confidence. But I think the bigger thing going forward is that Donald Trump continues to play to his base and that's going to hurt anybody.

PERINO: All right, the three of you. You're amazing. Thank you so much for being here, day 200. We'll be right back.


PERINO: That's "The Story" for tonight. It was wonderful to have Ambassador Nikki Haley with us to talk about North Korea. No doubt, that story will continue. Tucker is up next, and I will see you here at 9:00 for "The Five." Good night.

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