This is a rush transcript from "Sunday Morning Futures," December 16, 2018. This copy may not be in its final form and may be updated.

MARIA BARTIROMO, HOST: Good Sunday morning, everyone. Thanks so much for joining us. I am Maria Bartiromo.

Right now on "Sunday Morning Futures": House Intelligence Chairman Devin Nunes on Robert Mueller being forced to pull back the curtain on how the special counsel parlayed the controversial use of FBI tactics to take down Michael Flynn.

Also ahead, Congressman Tim Ryan, the first Democrat to challenge Nancy Pelosi for House speaker, on a federal judge ruling Obamacare unconstitutional.

Plus, Congressman Darrell Issa, who comes face to face with Jim Comey this upcoming week.

And former Attorney General Michael Mukasey on the man President Trump picked to be the next attorney general.

All that, plus the panel of Steve Moore and Art Laffer, as we look ahead right now on "Sunday Morning Futures."

Former National Security Adviser Michael Flynn set to be sentenced this Tuesday for lying to the FBI. It comes as the special counsel sharply rebukes Flynn's legal team for suggesting that federal agents manipulated him into not telling the truth, this amid growing questions over how the FBI handled that interview.

Joining me right now in an exclusive interview from the World Ag Expo in Tulare, California, is House Intelligence Committee Chairman Devin Nunes.

Mr. Chairman, it's good to see you this morning. Thanks very much for joining us.

REP. DEVIN NUNES, R-CALIF.: Thank you, Maria. It's great to be here with you.

BARTIROMO: A lot to talk about in this upcoming week, as we know that Jim Comey, Loretta Lynch is headed to the -- to the Hill to testify, potentially Rod Rosenstein. I want to get your thoughts on all of that.

But, first, we heard about the sentencing for Michael Flynn. He will be sentenced this week. But there's a lot of debate on whether or not the conduct that the FBI did in terms of getting him to say he lied was really not good conduct. Tell me about that.

There was a Wall Street Journal op-ed, and they said it was entrapment, that Michael Flynn was trapped into saying that he broke the law. Your reaction?

NUNES: Well, I think what was likely is, is that General Flynn was just out of money.

If you look at some of the documentation that's come out in the last week, I think most notable is the one line that says that General Flynn actually knew that the agents must have had the transcripts.

So, look, General Flynn is the former head of the DIA. He -- 30 years of military service. He has to know, when the agents start to talk about his conversations with the Russian ambassador, that they have the transcripts, not to mention that, remember, that -- some of that had already leaked out.

So just General Flynn knows that they had the transcripts, so why is General Flynn going to lie about something that he knows they have exactly what he said? And it never made any sense from the beginning.

I think what the more likely scenario is, is that General Flynn was out of money. How do we know that? Not because he's told me, but because he had to sell his house to pay his legal bills.

And then what you have seen is, even though it's been a year basically since he said, look, fine, I lied to you guys, you can bust me on this, knowing that he's not going to get any jail time, Mueller then comes out, does -- says, oh, we're not going to give this guy any jail time, well, knowing that, for all this time, likely, this was just a way for General Flynn to just end the investigation against him.

BARTIROMO: Because other people were speculating that maybe he was worried that they would throw the book at his son, that basically they put him in a corner and coerced him into saying things like, I lied and broke the law.

That's the way The Wall Street Journal writes it. The Journal editorial put out an article last week titled "The Flynn Entrapment."

And it reads in part this: "Not a rich man after decades in uniform, Mr. Flynn pleaded guilty to avoid bankruptcy and spare his son from becoming a legal target. Mr. Flynn's filing doesn't take issue with the description of his offense. But the additional facts the Flynn defense team flags for the court raises doubts about FBI conduct."

You have been investigating the FBI and the Department of Justice this entire year. What's your reaction to their conduct?

NUNES: Well, you know, one of the things is, is that we were actually never able to interview the second FBI agent that was there in the interview.

I would -- we have Chuck Grassley, Senator Grassley, and his team have been asking to get those -- the original FBI reports that came out of that Flynn interview. So there's so much that's -- that's out there that we need to know still, that I am really hopeful that the judge didn't just receive this interview with Peter Strzok that you saw that he got on Friday afternoon.

I really do hope that he actually got all the memorandums, all the memos, everything that was written after that, because it was clear from all of our investigation that we have done that the FBI agents who had interviewed Flynn didn't think that General Flynn was lying.

And then it doesn't pass a simple straight-face test that General Flynn would lie, when he knows that they have the transcripts of his conversation with the Russian ambassador.

BARTIROMO: Yes, I want to get back to that, because it appears that Robert Mueller scrubbed the phones, and we don't know what other texts are out there.

But Jim Comey suggested that he took advantage of what he perceived as a disorganized administration. And he basically said, the way we questioned Flynn was different than anything in the past.

Watch this most recent interview. This is back on December 9 at the 92nd Street Y with James Comey. Watch.


JAMES COMEY, FORMER FBI DIRECTOR: Something we probably wouldn't have done or maybe gotten away with in a more organized investigation -- a more organized administration, in the George W. Bush administration, for example, or the Obama administration -- I mean, in both of those administrations, there was process.

And so if the FBI wanted to send agents into the White House itself to interview a senior official, you would work through the White House counsel, and they will be discussions and approvals on who would be there.

And I thought, it's early enough. Let's just send a couple guys over.


BARTIROMO: So he basically admits that this whole thing was planned, premeditated, to just send agents in and hope that he doesn't have any lawyers around him.

NUNES: It's frightening, Maria, that the head of the FBI, who is on a 10 - year appointment, the reason that we have 10-year appointments is so that there is some continuity of government.

So the job of the bureaucracy is to support no matter who the people decide wins the election. So whether it's a Republican or a Democrat, the bureaucracy there in Washington and the swamp should be there to support the administration, not take advantage of the administration.

And that's why you -- that's why you hear this called the swamp there in Washington, D.C. It's for exactly cases like this, where you have the FBI director, who is on a 10-year term, who decides he's going to take advantage of a disorganized transition going into Washington, as he put it.

And that is, I think -- above all else, that's alarming that anybody in the federal bureaucracy would think that way. And I think that's why you're seeing so many Americans disillusioned with Washington. And, in fact, I don't think you're going to -- Donald Trump has done everything he can do to try to drain the swamp, as he calls it.

I don't think any of that's going to happen until you start to get some of these agencies out of Washington, D.C. When you have 90 percent of the populous in Washington, D.C., and 90 percent of the work force who vote extreme left and vote for Democrats, you have an unsustainable system.

And so I think it would be helpful to get the EPA, Department of Interior, some of these agencies out to maybe where the rest of America lives, and they might be a little closer to the people.

BARTIROMO: So, you just mentioned the so-called 302s, the reports that you have been asking for, for a year from the FBI and the DOJ.

More reports, so-called 302s, were released on Friday. And the president tweeted about it. I want to show you what the president said over the weekend and this morning about these -- these reports, and then get your reaction to what you have seen and what is still missing.

So the president tweeted this: "So, where are all of the missing text messages between fired FBI agents Peter Strzok and the lovely Lisa Page, his lover? Just reported that they have been erased and wiped clean. What an outrage, as the totally compromised and conflicted witch-hunt moves ever so slowly forward. Want them."

What happened here, Congressman?

NUNES: My guess is, is that the Mueller team, they had to get rid of Page and Strzok because the I.G. discovered that they were biased against the -- against the White House and the people that they were investigating.

And so I think it was a simple matter of what we have seen DOJ and FBI do in numerous cases here, is that they -- they quickly move to hide the ball and cover up their tracks, hoping that no one would actually catch them in this.

And the fact that you have two biased agents, and you would -- you would erase any of their phones, what should have immediately happened is, is those phones -- any dedicated public servant would have said, look, I'm not going to obstruct any investigation. These employees did wrong.

Those phones should have been -- been turned over immediately to the I.G., so the I.G. could conduct an investigation. Since they didn't do that, you have to wonder. I mean, these are sophisticated operators, some of the best operators that we have in all of government, that have worked at DOJ and FBI for a long time.

The fact that they wouldn't turn these over is just another alarming fact and a disturbing set of facts that continues in this whole fiasco.

BARTIROMO: It's just extraordinary, which is why then The Wall Street Journal came out with another op-ed titled: "Checking Robert Mueller: A Judge Brings to Light the FBI's Dodgy Conduct in the Michael Flynn Case," writes Kimberly Strassel.

Now, you want to break some news this morning in terms of what you're going to be calling for in the new Congress to try to get your arms around this stream of information that the American people have yet to see.

Tell us about what you're going to be calling for in 2019.

NUNES: Well, thank you, Maria.

And, as you know, we -- I have said this here in the last month and actually a couple months. Our investigation is essentially over. We have everything that we need.

What we're lacking now is, we're lacking the declassification by the president. And, for various reasons, the president or his staff doesn't want to do it. Therefore, I think it's important, if the president doesn't want his hands on it, we have to have somebody, some office that's going to look at all of these issues and all of these documents that need to be declassified.

I think, if the president was to create some type of office like this -- I'm going to be working with my colleagues to work on and send some example over to the president of a transparency type of office, so that -- so that the Congress, the American people, others can put in requests of documents or issues that they want declassified.

That way, the president doesn't have to take this full burden, full burden on, and the Congress has somewhere where we can go to, to try to avoid the swamp creatures, let's say, from getting involved and ensuring that the American public is kept in the dark.

We need to make sure that there's light. I always say that sunlight is the best disinfectant in Washington. The more that we can get declassified, I think the better. And I think an easy way to do it is to create an office that actually just works directly under the White House that specializes in evaluating this documentation to get -- and errs on the side of, the more sunlight, the better, to make sure that everything that we want declassified gets declassified.

BARTIROMO: Well, we have spoken with you all year, as you have been doing this investigation into the FBI's handling of this probe into the Trump campaign and potential collusion, alongside the investigation of Hillary Clinton's e-mails.

And we know that Robert Mueller was running the FBI during the time that the Clinton Global Initiative was operating. Now you have got whistle- blowers coming out on the Clinton Global Initiative and the Clinton Foundation.

Most people don't realize that these are all the same players who were actually running things at the government agencies that are now investigating that same thing, like Robert Mueller.

NUNES: Right.

BARTIROMO: What do you know about Robert Mueller's probe and when it is ending?

NUNES: Well, I have no idea when it's ending. It needs -- I have said this for months now. It needs to end soon, because it's destroying America.

You have -- you have over 40 percent of the American people believe that the Trump campaign colluded with the Russians, even though there is not one shred of evidence that that happened. And, in fact, the only evidence that we know for sure is that the Democrats and the Hillary campaign colluded directly with the Russians, OK, by hiring the foreign agent to go talk to Russians to get dirt on the other candidate.

The same is true for the -- this Clinton Foundation investigation. Let's not forget that one of the lawyers for the Clinton Foundation is serving on Mueller's team looking into the president.

Let's also not forget that you had the Clinton Foundation taking hundreds of thousands of dollars from not just Russians, but other countries, and at the same time while those countries had business before the State Department when Hillary Clinton was there.

So there's -- there's all -- there's all kinds of circumstantial evidence. We have been looking this -- looking at this, under the direction of Peter King, our -- my colleague on the Intelligence Committee. We have -- we have lots of things that look really bad.

But, at the end of the day, until you get either a special counsel or someone in the Department of Justice who is going to be able to operate -- operate with autonomy...


NUNES: ... to actually go in and bring this and prosecute it, I think justice is still going to continue to be denied.

So, I'm hopeful that someone within DOJ is looking at this, but I don't have a lot of confidence right now, after the last couple of years of what I have been seeing.

BARTIROMO: So we don't have a peep on any of that, where we actually have news and evidence of wrongdoing.

And yet every portion of the president's life is under the microscope, being investigated, from his personal transactions to his business transactions. Just extraordinary, actually.

We want to take a break, Mr. Chairman. I want to talk to you about China and a lot more when we come right back.

Stay with us. We have got more with Devin Nunes.

And the man who challenged Nancy Pelosi for the speaker of the House will be with me, Congressman Tim Ryan, reacting to her term limits deal with Democrats. Ohio Congressman Tim Ryan joins me to talk about that, plus his reaction to the latest ruling on Obamacare.

Plus, ahead, California Republican Congressman Darrell Issa joining me to discuss what he expects to hear from Jim Comey testifying tomorrow.

Back in a minute.


BARTIROMO: Welcome back.

I am back with House Intelligence Committee Chairman Devin Nunes.

And, Mr. Chairman, I want to get your thoughts on China. We have spoken on -- a number of times on this program with you about how China is using its economic power and putting it on its military complex.

Tell us what China is doing with regard to espionage in America.

NUNES: We actually just completed our investigation on China. So, we have had a couple-year-long investigation. We just approved it last week through our committee. It's a classified report, of course, Maria. So a lot of the work that we did, we will send on to other parts of our government.

But what we found is that is, is that they're moving in with -- first with leverage, like loaning money, building infrastructure. I think most concerning is when they get ahold of the electrical grid, they get ahold of the banking system, and then they go in with companies like Huawei or ZTE, and they offer basically free infrastructure, so free communications infrastructure.

And my warning to a lot of our allies in the countries that I meet with is, look, there's nothing for free. What the Chinese are doing with that is, is that they're ensuring that they control the communications infrastructure, so then they can monitor, for economic purposes, those businesses and others that they may want to get involved in, so that they have total control and manipulation capability over those countries and governments.

BARTIROMO: That's incredible.

And I know that the CFO of Huawei was arrested. She was held in Canada. She got out on bail. Is that more about espionage than it was about Iran sanctions?

NUNES: You know, I don't know about that. I would refer to the Department of Justice. And it's probably not something that I should -- that I should comment on.

But I do know that Huawei is actively going around the globe and offering products way below their own cost. So -- so that doesn't make any sense. Somebody is subsidizing that.

And in today's world, with the eve-growing and quickly-changing ways that we communicate, if -- if routers are put in -- and this is something that we have worked on for many years on the House Intelligence Committee, looking at -- routers can take that information and quickly route the information quickly back to China, where then they can comb through it.


NUNES: And I think that's the concern, is that there would be games being played within these communications -- within the communications infrastructure that would allow for the Chinese to spy very easily.

And I think that's the -- that's one of the big concerns that we have, is that the enemy American people have been -- have been having to listen to this Russia nonsense for so long. And it's not that Putin's not a bad guy. And, in fact, we had been the ones that had warned about Putin's ever- advancing capabilities.


NUNES: But, at the same time, we have totally ignored China.

So, the House Intelligence Committee, even though it didn't get a lot of coverage...


NUNES: ... we spent the last two years doing an in-depth look into China and what they're doing and how they're expanding across the globe.


NUNES: And I was glad to see John Bolton, our national security adviser at the White House, actually step up and have a plan for Africa.

And I think they're going to have to do that elsewhere around the globe...

BARTIROMO: That's right.

NUNES: ... to combat what is the real threat, which is -- which is China.

BARTIROMO: Because he declared -- he declared Russia, China national security threats in Africa.

OK, real quick, before you go, Mr. Chairman, you're facing a deadline this upcoming week. Will we see a partial government shutdown?

NUNES: Well, you have people dug in. And it doesn't make a lot of sense to me.

The president ran on infrastructure for border security, specifically building walls. There's at least 500 to 800 miles on our border where there is fencing now.


NUNES: Fencing that actually -- fencing that takes a lot of money to upkeep. It doesn't work, where, if you can replace it with new infrastructure, a wall-type feature, similar to what we have seen in countries like Israel...

BARTIROMO: Yes. The Republicans won't get behind the president. I mean, that's the issue, is, there are even some Republicans that won't get behind the president on his border wall funding.


BARTIROMO: Real quick, final word.


Just remember, I mean, we have the -- we have a few suspects in the Senate that are leaving the Senate. We only have 51 votes in the Senate. But, remember, even if we had every Republican, all 51...

BARTIROMO: All right.

NUNES: ... we still need 60 votes in the Senate to end the shutdown, Maria.

BARTIROMO: Devin Nunes...

NUNES: So, thank you. And thanks for having me on. And merry Christmas to you.

BARTIROMO: ... thank you so much for joining us this morning, Congressman. We will see you soon. Thank you.

We will be right back with Congressman Tim Ryan of Ohio.


BARTIROMO: Welcome back.

Democrats are vowing to appeal this morning after a federal judge in Texas ruled that Obamacare is unconstitutional.

President Trump celebrating the decision, which in -- came in response to a lawsuit from more than a dozen states.

Let me bring in Democratic Congressman from Ohio Tim Ryan. He serves on the House Appropriations Committee.

And, Congressman, it's good to see you this morning. Thanks so much for joining us.

REP. TIM RYAN, D-OH: Good morning. Good to be with you.

BARTIROMO: So, your reaction to this ruling? Obviously, it's going to go to the Supreme Court. Question is, does the Supreme Court rule the same way as this federal judge? And are you and your colleagues going to be able to come up with a new health care plan for America in the new Congress?

RYAN: Well, I'm very concerned about it.

I represent an area, Maria, that has a lot of people that work really hard, put in 40, 50 hours a week, and still can't afford health care. And for us to lose any kind of universality or help to give these families for health care, I think is a mistake for our country.

It allows us to be healthy, competitive. It's helped business in a lot of ways. So, I think this is a mistake by the court. And I don't quite understand it, because they're talking about the individual mandate, which in many, many states, there's an individual mandate for car insurance.

That's something that has been done all over the country to say, we know you're going to get in the car accident, so you need car insurance. You know you're going to get sick, so you should have to get health insurance. And if you can't afford -- afford it, we should help pay.

BARTIROMO: Well, do you think that there is any overlap in terms of commonality between the Republicans and the Democrats to come up with a new bill, new legislation in the new Congress to actually create the right health care plan for Americans?

RYAN: I don't think so.

I mean, it's just -- the Republicans have voted 60 or 70 times to repeal the Affordable Care Act. So, I think it would throw the health care system into a tailspin. I think a lot of people, with regard to preexisting condition -- and, again, these are people who are working.

They're working hard. They're doing everything right. And their kids need health care. I would hope we could come together. We used to be able to. Mitt Romney passed it in Massachusetts. The plan, ultimately, the Affordable Care Act plan, was really a Republican plan back in the day.

And I hope we can come together and say, every American in this wealthy country should be able to have health -- health insurance for their kids and their families.

BARTIROMO: Well, there's an impasse here.

And now here we are facing another impasse this upcoming week. You're on the Appropriations Committee. What are you expecting in terms of a partial government shutdown? It looks like we're going to see it. How are we impacted?

RYAN: Yes.

Well, I think, over the holidays, it will come down to national parks and federal workers, which I think we could fix once we get a new government in January. So, I think the impact won't be -- won't be huge, to be quite honest with you.

But, again, it's a sign of the dysfunction in Washington. We have got to figure out how to come together here around some basic budgets. I mean, we believe in border security. I believe in border security. We have technologies today that are -- far surpass a wall. I mean, this is not the 15th century.


RYAN: So let's invest into the technologies and the Border Patrol agents, the manpower we would need to secure our border.

And then let's find a deal on immigration reform, letting these kids, the DACA kids, into the country, making sure that businesses have E-Verify, so that they're not letting in illegal immigrants and then hiring them, so they could keep low-wage workers in the country.

And let's find a pathway for people to pay a fine, pay their back taxes, learn English, if they don't already know it, and come into the country in the next six, seven years, and start paying taxes and contributing to Social Security and Medicare and the economy and all of these things.

That's a good deal for everybody.


And this sounds very practical, Congressman. And you are always very practical and moderate.


BARTIROMO: Forty Democrats, many of your colleagues, sent a letter to the leadership saying, in the new Congress, we don't want all these investigations. We want legislation. We want to work for the American people.

I assume you're one of them.

RYAN: Well, we can walk and chew gum at the same time.

We have -- Article 1 of the Constitution gives us oversight responsibilities of the executive branch. We don't have a king in the United States. We're run by the people. We're run by the Congress. And we have those responsibilities that we have to execute.

My focus is on the economic well-being of the people of this country. And that means health care, wages, pensions, reinvesting back into the country.

And your last segment about China, we have got to become more competitive. China is coming at us economically.


RYAN: We have got to invest in the research, invest into these new growing areas of the economy. And we need to dominate them economically.

And that takes a plan. It can't be run by Twitter. It's got to be done with a long-term plan that we execute. And that needs to be the focus of the Congress moving forward. We got people still losing their pensions, still losing their health care, and still working hard, playing by the rules, and not getting ahead.


RYAN: And we have got to reestablish that social compact between corporations and workers and the government and the people.

BARTIROMO: Yes, which is -- which is including the layoffs that we just heard about in Ohio, your state, because GM is closing a plant.

Let's take a short break, Congressman. I want to ask you about that, as well as this new leadership agreement that you have signed on to, to give term limits to Nancy Pelosi.

I have got some questions about that, Congressman Tim Ryan. Stay with us.

We will be right back with more from Congressman Ryan.

RYAN: Thanks.


BARTIROMO: Welcome back.

We're back with Ohio Democratic Congressman Tim Ryan.

And, Congressman, you, like President Trump, have been upset with General Motors for announcing this closure of plants, layoffs. Meanwhile, you were among those who voted for a bailout of GM. Do you regret voting for the bailout?

RYAN: So, well, you think about that stuff when they start cutting jobs and laying off people.

But, at the end of the day, we had to save the American auto industry. We have tens of thousands of people getting pensions from General Motors.


RYAN: And I have seen what happens to workers when they end up in a bankruptcy court. They're the last ones in line.

So we have got to keep General Motors competitive and solvent. And, in Lordstown, Ohio, we have got to find another product to get into this facility. It's a state-of-the-art facility in a great location with a great work force. So I hope we can work through it.

But, at the end of the day, it's about those retirees that we have to protect.

BARTIROMO: Congressman, you and your colleagues have agreed with Nancy Pelosi to put in terms limits for her.

I don't understand this. She was going to become the speaker for two years. You have just given her four years.

RYAN: Well, the second term, you need a two-thirds vote, which is a much higher bar, supermajority, to be able to -- to be able to get there.

And then we will institute, with her support, hopefully, term limits for all leadership moving forward to a six-year term. And I think that's a -- that's a major reform, probably one of the biggest reforms we have seen in the Democratic Caucus in decades.

And that will prevent the concentration of power in our House leadership, which is a big, big reform for us. So it's one of those deals, you don't always get what you want, but you get something that really moves the ball down the field. And I'm proud of what we have done and the reforms that we have been making.

BARTIROMO: But look at the makeup of the new Congress.

I mean, I would like to get your opinion of some people like Alexandria Ocasio-Cortez or the new congresswoman coming in from Michigan. There's a lot of huge lefties in the party.

Can you get a shot in terms of being the nominee for president come 2020, with all the lefties that you're dealing with?


RYAN: Well, we have got a pretty broad coalition in the Democratic Party. We certainly have a strong Progressive Caucus.

We also have, I think, a 25-member Blue Dog Caucus. We have a New Democrat Caucus, which is a little bit more moderate. So we have got a -- we have got a big tent in the Democratic Party.

And I think the nominee for our party in 2020 is going to be somebody who's really focused on jobs and the economy and how do we, again, get ourselves ready to compete with Russia -- Russia and China, more China economically and Russia militarily, but how do we get ready to do that?

And who's got the reform ideas around education, around the economy, around moving private venture capital?


RYAN: Again, I hope that the Democrats can nominate somebody who is for a conscious capitalism, one that is focused on shared growth and shared prosperity, getting, as I said, that venture capital money out of California, New York and Massachusetts, into places like Youngstown, Ohio, and Flint, Michigan...


RYAN: ... which is a key to moving forward.

BARTIROMO: It's funny to see the leader on the Democratic side from California, the leader on the Republican side, Minority Leader Kevin McCarthy, from California.

So, we will be watching all the developments.

It's good to see you, this morning, Congressman. Please come back soon.

RYAN: Thanks. Merry Christmas.

BARTIROMO: Thank you so much.

And to you, Merry Christmas, Congressman Tim Ryan.

Former FBI Director Jim Comey due back on Capitol Hill tomorrow, expected to face another round of questioning behind closed doors.

Joining me right now in an exclusive interview is California Republican Congressman Darrell Issa. He sits on the House Judiciary and Oversight and Government Reform Committees.

And, Congressman, it's always a pleasure to see you. Thanks so much for being here.

REP. DARRELL ISSA, R-CALIF.: A real pleasure, Maria.

And, like you say, tomorrow is going to be a very different day for Comey, particularly in light of what we have learned, the misconduct during the Flynn investigation was all about, thanks to a judge that demanded to understand what had happened.

BARTIROMO: But, I mean, the last time he came before your committee, he said he didn't remember or didn't recall 245 times.

How are you going to get him to be honest this time?

ISSA: Well, he made a comment not long ago that -- that they never would have gotten Flynn in a more organized administration.

And now that Judge Sullivan has made it pretty clear that they, in layman's terms, violated his Miranda rights, tricked him into not having a lawyer, when, in fact, he was not only a suspect, but a target, and they had transcripts, this kind of conduct, we haven't seen in a long time.

It is the reason that there was a Supreme Court decision on Miranda about informing rights. And I would not be surprised a bit that the conviction of Flynn is overturned because of the Justice Department and the FBI's misconduct, and that, in fact, we go potentially all the way to Supreme Court with new protections when the FBI and the Department of Justice lies to somebody and tricks them into making statements, and then charges them with a lie that they entrapped them in.


We ran that sound bite earlier of Jim Comey saying that, we wouldn't have been able to get away with it if it were a more organized administration.

It certainly did look like what The Wall Street Journal called entrapment.

What else do you want to get from Jim Comey? When we followed your investigation all year, and we know that there were abuses to the FISA court, do you think you could move that ball forward?

ISSA: I think we will, particularly this postdating of 302, in other words, making documents sort of morph into what they want them to, rather than writing them and having them be a historic document.

But, certainly, the FISA abuse, we're going to learn more and more. Ultimately, for the first time ever, I believe, in the next Congress, the Senate might actually have to go to a federal judge and say, let's talk about the lies you were told, because we're getting stonewalled by this Department of Justice.

But tomorrow's a big day to at least ask some very specific questions on new revelations and things that we didn't get to, because Comey very carefully put a hard stop in that allowed him to get out and take a breather.

BARTIROMO: All right, so you have got Jim Comey, Loretta Lynch next week as well.

And what's the potential of Rod Rosenstein testifying?

ISSA: Well, I talked -- I talked to Chairman Goodlatte. He is still working on it.

I think, certainly, Rosenstein would like to avoid it, but I think we will get him.

BARTIROMO: Congressman, it's good to see you this morning.

ISSA: Thank you.

BARTIROMO: We will be watching the developments tomorrow and all week. Thank you so much, Congressman Darrell Issa.

ISSA: Thank you.

BARTIROMO: Up next: former Attorney General Michael Mukasey on President Trump's pick to be the next attorney general.

We will be right back.


BARTIROMO: Welcome back.

President Trump will nominate former Attorney General William Barr to once again lead the Justice Department. Barr previously held the title under President George H.W. Bush from 1991 through 1993.

Joining me right now is Michael Mukasey. He is former U.S. attorney general under President George W. Bush.

Your Honor, good to see you.


BARTIROMO: Thank you so much for joining us, Judge.

Your reaction to William Barr's nomination?

MUKASEY: Couldn't be better. Terrific choice.

Not only was he attorney general at one time, but he's -- the guy is a real lawyer. He was at one time the assistant attorney general in charge of what's called the Office of Legal Counsel. That is the office that is essentially the lawyer, the lawyer for the Justice Department and the rest of the government.

It attracts the best people in the department. That and the Solicitor General's Office get the best lawyers. And he headed that department. So he is -- he's a super pick. And he's also...

BARTIROMO: Do you also he will seek the truth in terms of these investigations that we have been covering all year?

MUKASEY: Absolutely.

BARTIROMO: I'm talking about the FBI putting its finger on the scale in the 2016 election, trying to stop Donald Trump, based on those texts from Peter Strzok and Lisa Page.

I'm talking about the handling of the Hillary Clinton investigation, where they wrote an exoneration letter before they even interviewed her.

Do you think William Barr will -- will pursue those things?

MUKASEY: I do. I do.

And he will pursue them to the extent that he has the authority to do it. And I think he's got enough authority to do both.

BARTIROMO: What about all of these investigations coming from the Democrats against the president? Virtually every corner of his life is now under investigation.

MUKASEY: Well, it's kind of -- it's kind of sad, because the trope from the beginning was resist.

And the notion that somehow politicians were sent to Washington simply to harass and conduct investigations of another administration is really disturbing.

BARTIROMO: Let me move on to Michael Flynn, because you don't think this was entrapment at all.


BARTIROMO: Tell me about that.

MUKASEY: Entrapment has a legal meaning. It means overbearing somebody's will.

In other words, if somebody resists committing a crime, you try to persuade him to -- please and so on. And giving somebody the opportunity to commit a crime that he's otherwise inclined to commit is not entrapment, even if it sounds unfair or looks unfair.

BARTIROMO: So what happened here? Why did he lie to the FBI?

MUKASEY: That's an excellent question, because I think that the truth would have been -- would have been fine.

He -- at the time that he spoke to Kislyak, he talked to him about Russian sanctions. He apparently also talked to him about the resolution condemning Israel for expanding its settlements in the West Bank and expanding settlements in East Jerusalem.

And he had every right to do that. He was the designee to be national security adviser. It would have been malpractice for him not to do it. He was -- they -- they interviewed him, supposedly, as -- because -- the pretext was that they were investigating a violation of the Logan Act.

The Logan Act forbids private citizens from talking to any foreign government with which we have a dispute...


MUKASEY: ... about the subject of that dispute. It's been on the books for -- since 1793. It's never been prosecuted successfully.

The last -- there were two prosecutions, both unsuccessful. And nobody has been prosecuted for it in modern times, including Hanoi Jane and Dennis Rodman and all the other people who were off talking to people that we had disputes with.

BARTIROMO: That's right. Yes.

So they knew he had spoke to Kislyak.

MUKASEY: They had a recording of it.

BARTIROMO: They had the recording.


BARTIROMO: And yet he was, what, afraid of the Logan Act?

MUKASEY: Well, he was -- he -- I doubt that he was afraid of the Logan Act. Nobody's afraid of the Logan Act. It's probably unconstitutional.

BARTIROMO: So, why lie?

MUKASEY: That's a very good question.

The question was -- is whether he was afraid of possible scandals about Trump's contacts with the Russians. I don't know. But he couldn't conceivably have lied out of fear of a Logan Act prosecution.

BARTIROMO: Before you go, what about the Mueller probe? What are your thoughts on where we are and what this looks like in the new -- in the new year and with the new Congress?

MUKASEY: We are where we before.

There is -- the -- Mueller was put in place only because it was necessary to have somebody, to have an independent counsel to investigate the question of whether there was a relationship -- a criminal relationship between the Trump campaign and the Russians.

There has been no showing of any such connection. Russians have been indicted for hacking. People have been indicted for crimes that have nothing to do with the Russians. Cohen has been. Manafort has been. But nobody makes that connection.


MUKASEY: And that's where we started.

BARTIROMO: Well, we will see what comes out of it. I mean, it is now two years going.


BARTIROMO: Judge, it's great to see you.

MUKASEY: Great to be with you.

BARTIROMO: Thank you so much for joining us. Always fantastic insights from you, Michael Mukasey.

A federal judge has ruled Obamacare unconstitutional, meanwhile -- how the tax reform law signed last year led to the judge's decision.

Our economic panel is next.


BARTIROMO: Welcome back.

Millions of Americans are now facing uncertainty with their health insurance coverage after a federal judge in Texas ruled that Obamacare is unconstitutional this Friday.

Let's bring in our panel.

Steve Moore is a distinguished visiting fellow at Project for Economic Growth at the Heritage Foundation. Art Laffer is the founder and chairman of Laffer Associates. He was also a member of President Ronald Reagan's Economic Policy Advisory Board.

Gentlemen, it's always a pleasure to see you both. Thanks so much for joining us.



BARTIROMO: Let's talk about this ruling from the Texas judge.

Unconstitutional. You can't have a law if you don't have some something that punishes those who don't have health insurance. So, that's why he deemed it unconstitutional.

Art Laffer, you first. Your reaction.

LAFFER: Well, I think it's awfully good for the economy, to be very frank.

If the Obamacare were knocked out, I think it would be a huge stimulus, because Obamacare basically is a huge form of government subsidies and spending. And government spending is taxation.

And I think this would be very helpful and, by the way, would also help keep down costs. And those costs are rising very rapidly in health care.

BARTIROMO: Well, they sure are.

And even though, on average, the cost was supposed to go down next year, in some states, it's still up 80 percent or 50 percent.

LAFFER: I know.

BARTIROMO: So, it depends on where you are.

Steve, what's your reaction to this? And I guess the next question is, does the Supreme Court rule the same way? Or will the Democrats and Republicans be able to come together on a new health care package next year?

MOORE: Hi, Maria.

Well, I'm not a -- I'm not a lawyer. So I can't tell you what the Supreme Court is going to do.

But the central contradiction of Obamacare for people who favor it has always been, look, if this is such a wonderful health care plan for people, why do you have to force them to buy it? And liberals have never had a response to that, right?

And so what -- it's really interesting what Trump is doing, regardless of what the Supreme Court decides. What doesn't Trump is doing has been phenomenal on health care. They're providing Americans alternatives to Obamacare that are much cheaper.

And, in fact, I think, in the next couple of years, because of what Trump is doing, you're going to see health care premiums declining.

And I have two sons that are late -- their late 20s just getting started with their career, Maria. They can't afford Obamacare. They can go out under Trump's plan and find a health insurance plan that costs them half as much as Obamacare.

BARTIROMO: So, the next catalyst on this will be the Supreme Court ruling then, gentlemen, you think?


Well, the Supreme Court, just remember, the five justices that upheld ACA before are still on the court.

BARTIROMO: Good point. OK. So you think that this could actually reverse.

LAFFER: By the way, Maria, I don't know that that's going to be determinative.


LAFFER: But that's -- that's the way it is.

MOORE: You know, the other irony of Obamacare, by the way, is, remember, the title of that law is the Affordable Care Act.



MOORE: And yet -- and yet the premiums for -- in most states have doubled since Obamacare was put in place.

It's the unaffordable care act.


BARTIROMO: Yes, very good point there, Steve.


BARTIROMO: Real quick, we're facing another deadline. We're at an impasse once again.


BARTIROMO: We might see a partial government shutdown on Friday, the 21st. What are the -- what's the impact?


LAFFER: It's political primarily, I believe. I don't think there will be much economic impact. It's just not large enough.

Most of the government is already funded. And it will be just a delay. For a lot of those others, those pays will be retroactively compensated for.

But it's a political issue. And the question is, that political issue will determine which side has the strength and the political power to make it through.


All right, real quick, the big debate for markets and for all of us are, are we going to see a slowdown in the economy in the next two years?


BARTIROMO: Steve, your prediction?

MOORE: No. No.

This economy is absolutely phenomenal. I mean, you look at -- I just gave a talk this week to the National Association of Manufacturers.


MOORE: Our manufacturing sector today is stronger than it's been probably in 30 years.


MOORE: Construction is great. Industrial production is great.

BARTIROMO: All right.

MOORE: Consumer confidence is high.

BARTIROMO: Tell that to markets.

MOORE: We saw the -- Arthur and I saw the president on Tuesday. The first thing we said to him is, Mr. President, this is working better than we even thought.

BARTIROMO: Gentlemen, good to see you both. Thank you so much.

MOORE: Thank you, Maria.

BARTIROMO: We appreciate it.

That will do it for "Sunday Morning Futures." Our conversation continues on FOX Nation. Join us.

Have a good Sunday.

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