Corey Lewandowski on Perez as DNC chair, Trump's agenda; Govs. McAuliffe and Walker on local impact of Trump's agenda

This is a rush transcript from "Fox News Sunday," February 26, 2017. This copy may not be in its final form and may be updated.

CHRIS WALLACE, FOX NEWS ANCHOR:  I’m Chris Wallace.

President Trump prepares Tuesday night’s primetime address to Congress where he’ll lay out his legislative agenda for year one.

(BEGIN VIDEOTAPE)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES:  The era of empty talk is over.  Now is the time for action.

WALLACE:  We’ll discuss the president’s plans for ObamaCare and tax reform with former Trump campaign manager Corey Lewandowski.  And look ahead to other big decisions, including a revised travel ban.

Then, the nation's governors are in town and we’ll ask two leading figures how the Trump agenda will affect people in their states.

GOV. SCOTT WALKER, R-WISCONSIN:  Do what you said you were going to do, to go big, to go bold.

GOV. TERRY MCAULIFFE, D-VIRGINIA:  Actions at the federal level end up on the desk of governors.

WALLACE:  Terry McAuliffe of Virginia, and Republican Scott Walker of Wisconsin, it’s a "Fox News Sunday" exclusive.

Plus, Democrats look to harness the Trump resistance.

At Republican town hall across the country --

(CROWD CHANTING)

And with an election of a new Democratic Party chair.

TOM PEREZ, CHAIRMAN, DEMOCRATIC NATIONAL COMMITTEE:  We need a chair who can take the fight to Donald Trump.  We also need a chair who can lead turnaround and change the culture of the Democratic Party and the DNC.

WALLACE:  We’ll ask our Sunday panel about the strength of the Trump opposition.

And our power player of the week, the man behind the president’s tweets.

As he is dictating a tweet, have you ever said to him, maybe not?

WALLACE:  All, right now, on "Fox News Sunday."

(END VIDEOTAPE)

WALLACE:  And hello again from Fox News in Washington.

As Donald Trump pushes his agenda in a speech to Congress this week, Democrats have picked a new chair to rebuild their party and mobilize opposition to the president.  They elected former Obama Labor Secretary Tom Perez head of the Democratic National Committee.

FOX News correspondent Jonathan Serrie has the latest now from Atlanta.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE:  Mr. Perez, congratulations.

JONATHAN SERRIE, FOX NEWS CORRESPONDENT:  With new chairman the Democratic National Committee hopes to rebuild the party with a 50-state strategy.

PEREZ:  Because if we want to take back the House of Representatives, we got to take back state houses, we got to take back governor’s mansions.  And we also have to make sure that we’re working together on the issue of internal culture change.

So help me God.

SERRIE:  Tom Perez, a former Obama labor secretary, nominated his closest competitor, Minnesota congressman and early Bernie Sanders supporter Keith Ellison as deputy chair, in an apparent effort to unify the party’s establishment and progressive wings.

REP. KEITH ELLISON, D-MINN., DNC DEPUTY CHAIR:  If they trust me, they need to -- they need to come on and trust Tom Perez as well.

SERRIE:  Democrats say they also want to listen to another voting bloc that left the party in large numbers to support Donald Trump.

THARON JOHNSON, DEMOCRATIC STRATEGIST:  We need to focus on working class Americans, particularly working white Americans.  We’ve got to take an economic message to them to let them know that Democrats can create good paying jobs in America again.

PEREZ:  We can’t be bullied alone.  We’ve got to be in partnership.  The union movement is under attack.  Planned Parenthood is under attack.  And the Democratic Party will always be there to defend our friends.

(END VIDEOTAPE)

SERRIE:  Democratic strategists say that they can take lessons from Republicans when it comes to recruiting candidates and messaging.  They say it’s not enough to complain about President Trump, they have to talk about their own values and vision for America's future -- Chris.

WALLACE:  Jonathan Serrie reporting from Atlanta -- Jonathan, thanks for that.

The president weighed in early this morning with this tweet, "The race for DNC chairman was of course totally rigged.  Bernie's guy like Bernie himself never had a chance. Clinton demanded Perez."

Joining me now from New Hampshire, Corey Lewandowski, former campaign manager for Mr. Trump, still sometimes an advisor and now a political consultant.

And, Corey, welcome back to "Fox News Sunday."

COREY LEWANDOWSKI, FORMER TRUMP CAMPAIGN MANAGER:  Thank you for having me.

WALLACE:  First, I want to get your thoughts about the election of Tom Perez, a relative centrist, as chair of the DNC.  What does it say to you about how Democrats are going to deal with President Trump?

LEWANDOWSKI:  You know, Chris, what this says to me that they have now put someone in the chair of Democratic Party who doesn’t understand what’s going on in America.  You know, you have an opportunity, they would have had an opportunity to pick a candidate that understood what Middle America is about and not someone who’s just concerned about the East Coast or the West Coast.  And instead, what we’ve seen is, you know, more of the same from the Democratic Party, which is what caused them to lose this election at the presidential level.

Tom Perez was a close confidant of Hillary Clinton.  And if you look at the three major Democratic presidential candidates, whether it’s Michael Dukakis, Mondale, Wallace, the three of them combined could not have secured enough electoral votes to become elected president of the United States.  That's what this party represents, is completely out of touch with mainstream America, understanding that their base is on the rights and the far left of the political spectrum in the United States, all the way in California and in Massachusetts.  And this is just a terrible decision for these guys because they’re continuing to move to the left and forgetting what the real people care about.

WALLACE:  I want to and the reason we invited you on in the first place is I want to talk about the Trump agenda with you, given the fact that he will have the primetime speech to Congress.  But before we get to that, these last couple of weeks of Mr. Trump's first days in office, have been dominated by attacks on the media and intelligence community.  And here is chief strategist Steve Bannon at the CPAC conference this week.

(BEGIN VIDEO CLIP)

STEVE BANNON, WHITE HOUSE CHIEF STRATEGIST:  They’re corporatist, globalist media that are adamantly opposed, adamantly opposed to an economic nationalist agenda like Donald Trump has.

(END VIDEO CLIP)

WALLACE:  There certainly were all lots of "ists" there, corporatist, and globalist, and nationalist.  But you have said that you think that this president needs to have a laser focus on the economic agenda.  Does all of the -- do all of these attacks on the media and intelligence and opponents, does that get in the way of that message?

LEWANDOWSKI:  Chris, what the problem is, is that the media continues to, you know, run a false narrative about the president.  And if we just cover him fairly, and what the president said in his press conference where he spent 77 minutes fielding questions from the media is, look, I’ll take that bad stories, but just report fairly and accurately on what we’re doing.  And they refused to do that.

Time and time again, we’ve seen front page stories in The Washington Post, in The Wall Street Journal, New York Times, which are just 100 percent factually inaccurate.  And the response is, oops, if we made a mistake, we will update it and the White House has denied these things.

WALLACE:  Why not just pursue his agenda?

Here's what President Trump tweeted late Friday night, "Fake news media knowingly doesn’t tell the truth.  A great danger to our country."

He may be right in that or he may be wrong on it, Corey, but how many jobs does that create?

LEWANDOWSKI:  Well, Chris, the president is out creating jobs.  We’ve seen what he’s done with Boeing Corporation.  We’ve seen what he’s done in the Carrier Corporation.  We see time and time again he is bringing companies in, saying, what can you do to create a better environment for the American business community?  He’s reducing regulations.  He’s passed the executive order that says for every new executive order, we’re going to reduce two executive orders, two regulations so that businesses can grow.

That’s what the president is doing.  He is bringing companies in to say, what can we do to grow?  The media doesn’t want to report that.

The media wants to report false stories of the removal of Martin Luther King Jr.'s bust from the Oval Office, which we know to be factually inaccurate.  They want to write a story about a story of national security which is absolutely, factually false, particularly when you have the director of national intelligence or you have the director of the CIA saying that the story that you have written has a false narrative in it, and the media doesn’t want to report that.  They have their own agenda.

And this is the first president in a lifetime that has the ability to fight back through his almost 100 million people who follow him through the various mediums of social media.  He has to do this to get the real story out to the American people.

WALLACE:  All right.  But I want to press my point on this.  There’s no question that the president has signed a number of executive orders and we’ve reported on all of them.

But in terms of his legislative agenda, he is falling behind where other new presidents have been at the same point in their terms.  And one of the questions I’ve got, particularly given the fact that he is going to give his speech to Congress this week, how important is it for him -- given the fact that there are some splits inside the Republican Party -- to give marching orders, give direction on where he wants to see Republicans in Congress, in the House and Senate, go in passing his agenda?

LEWANDOWSKI:  It’s very important.  I think what this administration has said, and you heard from the secretary of the treasury, where they’re looking at the first full tax change since 1986, the first fundamental tax change.  They are hoping to get that done in the coming months.  We know that the president has said during his press conference that he is going to submit a plan for the full repeal and replace one of ObamaCare.

What we know about ObamaCare, Chris, is that premiums are up over at 100 percent in many of these states.  Private companies are pulling out.  The plans are a failure.  The promises that were to the American people of, if you want your doctor, if you like your plan, you can keep it, are not factually correct.

His agenda is moving forward through Congress.  What he has done in the first 35, or 36 days, is the executive orders that didn’t require the confirmation process or the approval of Congress, very important.

And if you look, he’s put coal miners back to work.  They were in the White House last week saying, "Thank you, Mr. President, for giving us the opportunity to get back to work every day."  He’s meeting with car executives.  He’s meeting with airline executives.  What can the government do to stimulate the economy so that we’re not growing at 1 percent, but we’re growing at 4 percent or 5 percent?

We finally have an OMB director, the Office of Management and Budget, who can finally look at the budget and as the president puts together his budget, it is his moral belief that the government needs to be leaner and more efficient and more business friendly.  I think that's what you’ll see coming out of his budget in the near future.

WALLACE:  But, Corey, let me -- let’s take a specific example.  You mentioned a bunch there.  ObamaCare, repeal and replace.  Eleven million people gained health care coverage through the expansion of Medicaid.

There are now, as I say, there’s a split inside the Republican Party, because a lot of Republicans looked back home at their states where people gained coverage for the expansion of Medicaid.  They don’t want to give that up.  There are others who say, we want to stop the expansion of Medicaid.

Does the president need in his speech on Tuesday to help settle that issue, because there is a real split inside the GOP?

LEWANDOWSKI:  I think what the president is going to use during his speech on Tuesday, he’s going to talk about a number of things.  He is going to talk about the accomplishments of his first month in office, the executive orders that he’s outlined.  The second thing he’s going to talk about, though, is the economic security our country needs, and that’s about education.  It’s about jobs.  That’s very important.

The third thing that I think the president is probably going to talk about is border security, taking care of our veterans, national security.  He has talked about this in general, the need to increase spending on the military.

But when it comes specifically to ObamaCare, Chris, you have to remember -- there are multiple states with the premiums for these people are up over 100 percent.  Small businesses can’t afford this.  Individuals who are on the plan --

(CROSSTALK)

WALLACE:  Corey, I understand the campaign against ObamaCare.  The question is, what are you going to do to replace it?  And that's what a lot of people are concerned about.

Let me ask you about another --

LEWANDOWSKI:  But that’s --

WALLACE:  Go ahead.

LEWANDOWSKI:  That’s what the White House is working on that right now with the members of Congress.  And what the president said during his press conference is, by the second or third week of March, he will have a plan up on the Hill.  The Hill is going to be working on this already to make sure that there is a unified component so that people can actually have health care coverage.

The president has been very clear about this.  He has a giant heart.  What he said was, we’re not going to throw people out in the street.  We’re going to take care of people.

But you have to do it in a manner that does not have increases of 100-plus percent so people can’t afford to cover themselves anymore.

WALLACE:  Let me move on to another subject.  The president also plans to roll out a revised travel ban this week that will cut people, visitors and refugees coming from certain countries.  But a report that was leaked this week by the Department of Homeland Security said this, and let’s put it up on the screen, "Country of citizenship is unlikely, excuse me, is unlikely to be a reliable indicator of potential terrorist activity."

Two questions, what does the president do about these continued leaks from within his administration?  And secondly, you know, when you get something like this from DHS, there is a possibility that it might be blocked again, his new travel order.  Maybe he should forget about the travel orders and just go to extreme vetting.

LEWANDOWSKI:  Well, let me say, the first part, you’re absolutely right.  And I think -- you know, I don’t speak for the administration.  I speak for Corey Lewandowski, citizen.

Any information that’s being leaked out of this administration needs to have a lid put on it and it’s very hard to do when you’ve got career bureaucrats sitting in these government agencies who have access to information that have a completely different agenda.  And if the Senate would confirm the president’s selections for secretary, and the under position, we can stop those things.  It's very important to do.  So, hopefully, the Senate will take those up and confirm those.

The second component of this is, if you listen to what John McCain said, someone who has been quick to criticize the president, he’s talked about General Mattis, and General Kelly, General McMaster, the entire national security team, he says it’s potentially the best national security team that has ever been assembled.  And when you look at that holistically and the advice that they are giving the president as it relates to a travel ban or having better vetting process, the president is very open in my opinion to listen to what those experts say, and writing a plan which will make sure first and foremost that the American people are safe and secure in their homeland.

If that means an extreme vetting process, if it means rethinking the way the State Department issues visas, then you have to do that.  It’s crystal clear, the Constitution is crystal clear.

WALLACE:  Corey --

LEWANDWOSKI:  The president has the presidential prerogative to stop anybody he wants from coming into the country by suspending visas with no question about it.

WALLACE:  Corey, I’ve got less than a minute to left, I want to ask you one last thing.  A top Republican, House Republican, Darrell Issa of California, came out over the weekend and said that he thinks that there should be a special prosecutor to investigate this question of leaks, of links rather between the Trump campaign and Russian intelligence.  He says he doesn’t think that the Justice Department and Attorney General Sessions should do it because they are too close to President Trump.

What do you think of Issa’s idea, special prosecutor?

LEWANDOWSKI:  I think with all due respect, Senator Jeff Sessions, now Attorney General Jeff Sessions, has the utmost character and qualifications.  If he wants to investigate this under the Department of Justice, that’s his prerogative to do.

Let me tell you, Chris --

WALLACE:  What do you think Issa is up to?

LEWANDOWSKI:  -- because I was on the campaign -- well, I don't know.  But let me tell you, because I was on the campaign for 18 months, I ran the campaign -- never, ever, ever did or anyone that I know of have communication or contact with anyone from Russia, or the Russian government, whatsoever.

So, look, I can tell you this: I have the utmost confidence in Attorney General Sessions, if he believes that there is something there, then he will investigate that.  I think he is completely capable and confident to do so.  He is a man of the utmost integrity and I believe it in his capable hands.

WALLACE:  Corey, thank you.  Thanks for your time today.  Always good to talk with you.

LEWANDOWSKI:  My pleasure.  Thank you.

WALLACE:  Up next, to the nation's governors come to Washington to lobby the Trump White House on everything from ObamaCare to immigration.  Governors Terry McAuliffe of Virginia and Scott Walker of Wisconsin will join us.

(COMMERCIAL BREAK)

WALLACE:  The nation's governors have come to Washington brining their wish list for items like infrastructure, and their questions about how the president's policies will affect people back in their states.

Joining me now, Wisconsin Governor Scott Walker, chair of the Republican Governors Association.  And Virginia Governor Terry McAuliffe, a Democrat, and chair of the National Governors Association.

Gentlemen, welcome back to "Fox News Sunday."

GOV. SCOTT WALKER, R-WISCONSIN:  Thanks, Chris.

GOV. TERRY MCAULIFFE, D-VIRGINIA:  Thanks for having us.

WALLACE:  Let's start big.

President Trump's first month in office, Governor McAuliffe, how's he doing?

MCAULIFFE:  Not great for Virginia.  I can tell you as a governor of the commonwealth, not happy about the federal hiring fees, very concerned about health care.  It could cost literally hundreds of thousands of Virginians their health care, very concerned.

Very concerned about the travel ban.  I’ve been very vocal on that.  And concerned about what ICE officers are now doing randomly stopping people in the commonwealth.

WALLACE:  All right.  We’re going to dig down into a few of those in a minute.

Governor, big picture, you have a lunch with the president yesterday at the White House.  What did you talk about?

WALKER:  Health care.  You know, it’s a concern we all have.  I mean, we -- as governors, we want personalize patient-centered health care that treats people not like a number, but like a human being.  And I think that’s a common sense that we want and, certainly, some (ph) of the president talked and was very interested on.  As I came back, Terry and I and others were listening to his secretary of health and human service.  I’m all for a plan that goes beyond repeal and gets to replace and reform plan that helps all the people of Wisconsin, Virginia, everywhere else.

WALLACE:  The reason I want you is to drill down on part of the Trump agenda and how it’s going to affect people in your states.  Let's start with ObamaCare repeal and replace, and we should point out, Governor McAuliffe, that in your state, even though you’re a Democratic governor, you couldn’t expand Medicaid as part of it, because Republican legislature blocked you.

What are you concerned about in terms of replacement?

MCAULIFFE:  Well, first of all, in Virginia, we did not.  We have forfeited $7.9 billion, Chris.  I could've had 400,000 individuals get health care, could have created 30,000 new jobs.

But my concern going forward is if we just eliminate the ACA, it costs the Virginia budget $200 million per year and lose $157 million pharmaceutical reimbursement right off the bat.

So, I’m very concerned about how we do this going forward.  We don’t like bloc grants. If you’re going to bloc grant us, we’re going to have a set number and what happens if we have a recession?  What happens if the stock goes down?

We at the state level have to incur those costs.  I’m very worried about the per capita rates.

So, these are big issues.  But Scott is right, we’ll hear from the governors.  You know, I serve as chair of the governors.  We have 46, our biggest crowd ever.

We want to work together.  We want to get everybody quality health care.  We want personalized medicine.

I agree with Scott.  People need to be treated like individuals, and dignity, and not a number, but the devil is in the details.

WALLACE:  All right.  Well, let’s talk a little bit about the details, Governor Walker, and I want to put some numbers because more than 200,000 people in Wisconsin have gained coverage under ObamaCare.  The uninsured rate in your state has fallen by 39 percent.

What happens if some of those people lose health care coverage under repeal and replace?

WALKER:  Actually, ours is a model of exactly what will happen under replace and reform.  I didn’t take the expansion.

WALLACE:  Right.

WALKER:  I didn’t --

WALLACE:  But you have your own system.

WALKER:  Not a state exchange.  No, ours is exactly what you want to model going forward.  For the first time ever, even without an ObamaCare expansion, I cover everybody living in poverty, 100 percent coverage for people living in poverty.  It never happened with Democrat, Republican governor ever before.

For those above, we help transition them into the marketplace.  To me, that’s the goal.  As governors, for years, we’ve said not just in health care --

WALLACE:  But can you guarantee that all of those 200,000 people are going to keep coverage?

WALKER:  Well, we have -- under our plan, we have one of the lowest rates of uninsured, in fact, one of the highest rates of overall insured in the nation, because we use reforms to help get people into the marketplace and to make things work there.  I think that’s exactly what we want has a nation.

Governors are more effective.  They’re more efficient.  They’re more accountable.  For years, governor have said, give us the tools not just on health care, but on education, transportation, and other issues.

Now is our chance to do it.  We just need to make sure that each of our state, we’re very unique, not only the Commonwealth of Virginia and Wisconsin, but all 50 states in their territories are unique.  We can make it work if governors work together with a president and the House that I hope will be receptive.

WALLACE:  OK.  Let's turn to another subject and that’s tax reform.  Governor McAuliffe, what do you think of the idea that Republicans, particularly in the House, are pushing of a border adjustment tax?  And, generally, what do you think of President Trump's talk of renegotiating trade deals?

MCAULIFFE:  The border text is a disaster for the economy.  I mean, you look at Virginia, we’re a big ag state --

WALLACE:  Let me just quickly point out, border tax -- border adjustment tax, you would tax imports coming in.  You wouldn’t tax exports going out.

MCAULIFFE:  Let's be very clear: countries around the globe are not going to sit there and wait for this.  They will reciprocate immediately against the United States of America.  I’m a big trade state.  I’ve been in 22 trade missions to dozens of countries.  Our economy is very strong today, Chris.

When I became governor, unemployment was 5.4.  We got it all the way to 3.7, 185,000 new jobs.  Why?  We’re trading around all over the globe.

If we treat countries like this, they are going to reciprocate against that.  I disagree with some of my party.  You give me a fair trade deal, protect worker rights, protect environmental rights, we in America can crush anybody around the globe.  We will win this argument.

But if we start putting walls up around our states and our country, you -- it’s a global economy.  Ninety-five percent of the world’s customers, Chris, live outside the United States of America.  We can’t just do trade with ourselves to grow our economy.

WALLACE:  Let me bring Governor Walker in this.

Your state exported $22 billion in goods to foreign markets in 2015.  Are you worried about if you set up border taxes, you set up border trade deals -- you get out of some of these trade deals, that it’s going to hurt that?

WALKER:  We want good trade.  We want it to be fair and we want to be free.  We want to have trade with all of those different countries you talked about.  We want to make sure that if a Harley-Davidson is sold in Japan or China, it’s treated the same way that a Kawasaki or Toyota might be sold as it’s coming into the state of Wisconsin or any other state of the United States out there.  So, fair and free trade go hand in hand.

But I think the other issue that the House and the Senate really need to focus in on, certainly, what the president is talking about, is let's just bring the employer tax rate down so that it’s comparable with the rest of the industrialized world.  The states that have succeed, our state employed more people last year than ever before.  Why?  Because we got government out of the way, we lowered the tax burden, that by the time my budget is done, in eight years, we have cut taxes more than $8 billion --

(CROSSTALK)

WALLACE:  Let's talk about.  I mean, wouldn’t lowering corporate tax rates and making them more competitive with the rest of the world be a good idea?

MCAULIFFE:  Oh, do I think we need tax reform?  Absolutely.  The more we can reform taxes and put more money into people’s pockets so they can spend more is by far the single biggest stimulus we can do for our economy today.

We definitely -- let's bring back this overseas money, repatriate this money that’s overseas, and let's bring it back to America.  We got to make it attractive to the individuals, and the CEOs, and the shareholders to bring the money back.  But, of course, we ought to do that.

And this is my point.  These are the big issues that I wish President Trump would focus on.  He ran on jobs.  Right now in Virginia, he is hurting me on jobs.

Let's go back to focusing on what we do in Virginia every day, rolling and diversifying our economy and to cyber security, solar, all the renewable energies, biotech -- that's how you grow economies.  We have 4.25 million workers in Virginia today, the most ever.

WALLACE:  I want to move on to another subject.  Governor Walker, you oppose candidate Trump’s Muslim ban during the campaign.  Is the new order that we understand the president is going to sign this week, is that in affect a cleaned up version of the same Muslim travel ban?

WALKER:  No.

WALLACE:  And how do you feel also about DHS step up enforcement of immigration?

WALKER:  No, it’s not, because if it was, it wouldn’t be limited to those countries.  It’s very much aligned with where there’s a safety concern.  You know, under President Obama, all of us governors, and he (ph) actually set it up --

WALLACE:  You’ve got the DHS saying the country of citizenship doesn’t -- the citizenship country doesn’t -- it’s not a reliable indicator of terrorism.

WALKER:  But all of the governors who were when President Obama was in place when they started bringing in refugees en masse from Syria, got on a call with the head of then Department of Homeland Security, and we’re very concerned, even including many Democrats, saying what kind of certainty do we have to know, particularly after in light of what’s happened in Europe, that there’s been a good system of vetting and understanding who’s coming into our respective states?  That’s what we’re asking for.

Now, do they need to modify it, adjust it (ph)?  Possibly.  But going forward, if the objective is to make sure that safety is paramount, and that’s really what we’re all about.  At the local, state and federal level, more than anything else, we are responsible to our citizenship for the safety of our fellow citizens.  That's what it should be about.

It shouldn’t be about religion, it shouldn’t be about anything else.  It should ultimately be about safety.

WALLACE:  Governor McAuliffe, firs of all, is this travel order -- is it about religion?  And secondly, your thoughts about stepped up deportations?

MCAULIFFE:  Well, it’s very disconcerting.  People think it’s about religion and they think it’s about geography.  And that’s very damaging to our economy.

I go back -- this is not helping us create jobs.  I was out of Dulles Airport within 12 hours --

WALLACE:  I mean, wait a minute, if you’re protecting the country, I mean, doesn’t that come before jobs?

MCAULIFFE:  Chris, let's be clear.  Everybody is about protecting the country.  We have a very rigorous program, the United States of America, to check two year process on refugees, and other related visits.

Let's be clear.  We’re all in agreement.  We want to keep our country safe.  But there is a very fine line.

I went to Dulles Airport, I was probably the first selected official out-of-the-box, because I was tipped off.  There was a family there, detained for hours.  Two children, U.S. passports, no access to legal counsel.

So, I went and I said, "I’m the governor.  This airport is in my state, I want to know why they are being detained."

I’m very concerned and I’m meeting with General Kelly in the next hour to talk about how this ICE enforcement is going on, because let's go back to the economy.  If we are randomly going to stop people on the streets, Chris, let me tell you, it’s going to drive people underground.  They are not going to seek health care.  They’re not going to work with law enforcement, 32.5 percent of the economy in northern Virginia, small business is by foreign owned businesses.

We are scaring people.  Discrimination breeds hatred, and we got to stop it.  Let’s work together.  Of course, we want to be safe.

WALKER:  I think part of that is, and you see it not only amongst elected officials, but in the media, it’s one thing to say it, it’s another see what the facts are.  I’m glad we’re going to have that discussion later because I think it’s important for all of us as governors and officials --

(CROSSTALK)

WALLACE:  OK, I got --

WALKER:  -- what exactly is it.

(CROSSTALK)

WALLACE:  I’ve got 30 seconds left and given what you were just saying, Governor McAuliffe, you're only allowed to serve one term in Virginia.  That term ends at the end of this year.  You say that the only thing you’d be interested in -- I love the look you are giving me -- is an executive job.  What do you think against running against Donald Trump in 2020?

MCAULIFFE:  I have 11 months lefts as a governor of the great commonwealth of Virginia.  We have had tremendous success diversifying and growing our economy.  I am going to finish up.  I have no intentions of running against Donald Trump.  I want to finish strong.

I’m telling you, Chris, Virginia’s first governor, Patrick Henry, second governor is Governor Thomas Jefferson, and now, Terry McAuliffe.  What a great job I have.

WALLACE:  That’s right --

(CROSSTALK)

(LAUGHTER)

WALLACE:  One of them ended up as president.

MCAULIFFE:  Yes.

WALLACE:  Governor Walker, Governor McAuliffe, thank you both for coming in today.  Always good to talk with you.

Up next, we’ll bring our Sunday group to discuss the Trump agenda and how the president will try to get through Congress.

Plus, what would you like to ask the panel about what the president needs to say in his speech Tuesday night?  Just go to Facebook or Twitter @FoxNewsSunday and we may use your question on the air.

(COMMERCIAL BREAK)

WALLACE: Coming up, President Trump doubles down on his attacks on the media.

(BEGIN VIDEO CLIP)

TRUMP: I want you all to know that we are fighting the fake news. It’s fake, phony, fake.

(END VIDEO CLIP)

WALLACE:  Our Sunday panel discusses the president’s remarks and previews his upcoming prime time speech to Congress, next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

TRUMP: The forgotten men and women of America will be forgotten no longer. That is the heart of this new movement, and the future of the Republican Party.

(END VIDEO CLIP)

WALLACE:  President Trump laying out a new path for the GOP, addressing conservatives at the CPAC conference this week.

And it’s time now for our Sunday group. Advisor to former British Prime Minister David Cameron, Steve Hilton, Fox News political analyst and columnist for The Hill, Juan Williams, Julie Pace, who covers the White House for the Associated Press, and Washington Examiner contributor Lisa Boothe.

And, Steve, first time FOX NEWS SUNDAY panelist, welcome.

STEVE HILTON, FOX NEWS CONTRIBUTOR: Well, it’s great to be here, Chris. I just wish there was more to talk about. It’s very -- very boring time.

WALLACE:  You’ve become an American commentator and we give you this fire hose to drink out of.

Julie, as we’ve been discussing, there are some divides among congressional Republicans, forget about the Democrats, on issues like ObamaCare and tax reform. Do you expect the president, in his prime time speech, if not to settle those issues, to give some direction to Congressional Republicans?

JULIE PACE, THE ASSOCIATED PRESS: Well, Republican -- Republicans are certainly hoping to get some direction on a couple of key things. One, tax reform, how to pay for it. This border adjustability program that Paul Ryan's office is really pushing but Senate Republicans are opposed to, Paul Ryan's office is looking for a really clear signal from the president that he supports this. He’s been talking more warmly about it, but hasn’t given a full-throated endorsement.

I think ObamaCare, though, is what Republicans and Democrats are going to be looking for some real direction on because this is one that is going to come up first ahead of tax reform on Capitol Hill. And while Republicans are fully on board with the idea of repealing ObamaCare, there are huge divisions over what a replace package would look like. And first President Trump said he wanted to see them move quickly on this. Now he says this could go into next year. And beyond outlining the couple of popular provisions of ObamaCare that he wants to keep, he really hasn’t talked in detail about what the rest of the replace package would look like, how he would look to pay for it, and what this would do to people who might lose coverage under the current program.

WALLACE:  You can’t get -- I mean, obviously, not really into the details, but some kind of direction in this speech?

PACE: Everything we’ve heard from the White House so far is that we should expect sort of a broader address. That this is going to be more his vision for the country, less a laundry list. But I think that you’re seeing Republicans behind the scenes trying to push the White House to get a little bit more specific than maybe they’re hoping to right now.

WALLACE:  We heard from the president's chief strategist, Steve Bannon, this week. For a lot of people, ,it was the first time they have literally ever heard his voice. And here's what he had to say about Trump priorities at the CPAC conference.

(BEGIN VIDEO CLIP)

BANNON: The First is kind of national security and sovereignty. The second line of work is what I refer to as economic nationalism. The third, broadly, line of work is what is deconstruction of the administrative state.

(END VIDEO CLIP)

WALLACE:  Steve, we don’t think of Donald Trump as especially ideological, but Steve Bannon clearly is. Does this kind of intellectual overlie -- as I say, there are a lot of ists (ph) in it -- does that serve this president?

HILTON: I think that there are elements of it that do. But I think that actually, you’re right, that he’s more pragmatic, and that's what really, I think --

WALLACE:  He, Trump.

HILTON: He, Trump, is more pragmatic. And I think that that’s what he really needs to convey in this speech. I think -- I think Julie’s exactly right that he will cover a lot of ground and it will be broad. However, I think it really needs to have a focus. And the focus has to be on the issue that really got him elected. And I think that is his promise to deal with the economic crisis. The real economic crisis that is affecting around half of Americans without a job, with incomes that have fallen for the last couple of decades, people who have lost that sense of economic security and hope. That’s what he’s got to focus on.

And the elements of that are pretty straightforward. Much more straightforward actually than anything on ObamaCare. It’s the tax cut, the business tax cut, and the repatriation so that money is invested here in America. And it’s the infrastructure, which we almost seem too have forgotten about. That was a big part of his campaign promise. So I think he’s got to put the focus on getting the economy moving.

WALLACE:  We asked you for questions for the panel. And on this issue of what the president should tell Congress, we got a number like this. A tweet from VG, "stay on topic: job creation. Taxes. Health care. Stay positive. Bring the country together. Don’t talk about critics." And this on Facebook from Kathy Roberts, "it would be nice if he would start to unite this divided country and start a healing process. He’s still campaigning for a job he won."

Lisa, what do you think of the advice and how likely that President Trump will follow it?

LISA BOOTHE, WASHINGTON EXAMINER CONTRIBUTOR: I would agree with the advice. I mean I -- I do think that President Trump realizes that he’s going to be addressing a Congress and I think he does realize about the challenges that he faces, because if you look at that dynamic, particularly in the Senate, which is really what matters for President Trump in trying to move his agenda forward, there’s a lot of complexity there, both with Republicans who have already voiced objection, whether it’s over the border adjustment tax, or with even, you know, the differing opinions on how to move ObamaCare forward.

And then you also have those ten vulnerable Democrats, who might also be facing primary challenges to their left. So there’s a lot of complexities that he’s going to be dealing with. So I think he recognizes that this is an opportunity for him to set the agenda, to lay it out, hopefully offering some more specifics. But I do think that we’ll see a little bit more of a positive tone than may be we -- we saw at CPAC or some of the more recent speeches that he’s given.

WALLACE:  Well, and that brings up the question, Juan, are all of these tax -- because certainly if not for the first two weeks, certainly for the last two weeks, so many attacks on the media, so many attacks on political opponents, are they serving this president well politically or do you think it’s getting in the way of his agenda?

JUAN WILLIAMS, FOX NEWS POLITICAL ANALYST: Well, I think, obviously, with the base, demonizing the press, it seems to me to be a continuation of the campaign in which he goes after Hillary Clinton, Barack Obama, even the intelligence agencies that are looking into his ties to Russia. But even as it feeds the base and their distaste for mainstream media and persuades them, listen to me, don't listen to the press and my critics, it serves as a distraction. A distraction from the fact that he has accomplished so little of the pledges that he made to his backers during the campaign. ObamaCare, tax reform, build the wall, these things haven’t happen. There’s a fact-check out today, "The Washington Post," that says he’s only done about 10 percent of all the things that he said he would get done in the first 100 days.

WALLACE:  Well, it’s only been one month.

BOOTHE: Yes.

WILLIAMS: Right, but I think that it’s critical -- I think it’s critical to understand, he was talking about things that he would get done out of the box that would transform this government, drain the swamp. That there’s so little progress on that front. And when we come back to the press, you see a very interesting thing here. The Quinnipiac poll this week showing that despite his constant attacks, saying the press is the enemy of the American people, Steve Bannon telling the press, shut up, you were wrong about the election, so just shut up and listen, guess what, the American people still trust the press and First Amendment rights more than they trust this president.

WALLACE:  Lisa.

BOOTH: If you -- I actually disagree with Juan here, surprising. But, no, I think that President Trump actually has a lot of room to run because if you look at polling, Democrats are really the only group of voters that trust the media. You look at the, you know, most recent Gallup poll regarding the media, only 14 percent of Republicans trust the media, only 30 percent of independents. But I don’t --

WALLACE:  But -- but I -- to a certain degree that’s beside the point. I -- I mean he’s not going to -- as I -- as I said in my conversation with Corey Lewandowski, he can bash the press all he wants, it doesn't create jobs.

BOOTHE: It doesn’t create jobs, but what is does do -- but, OK, so -- but also, what is he supposed to do. You look at the general election. Ninety-one percent of the coverage was negative towards him. You look at the facts that his --

WALLACE: He’s president.

BOOTHE: I understand that.

WALLACE:  Forget it.

BOOTHE: But -- but -- I know, but this coverage has carried in to his administration as well. You -- there’s been a lot of completely blatantly false stories out there regarding made up meetings between Steve Bannon and General Kelly. I mean there’s been information surfacing the dossier with the -- which every publication said is unsubstantiated, unverified. There’s been numerous reports that have not been true. And I think John Dickerson was correct when he said that the media has ruined their reputation on their own. So I think there’s a general lack of distrust with the information that is asserted (ph).

WILLIAMS: But, Lisa, let me --

WALLACE: Quick. Real quick. We’ve got 30 seconds.

WILLIAMS: Sweden, illegal votes, crowd size, where’s this come from? It comes from Donald Trump putting out what he calls alternative facts.

WALLACE: OK. All right. You know what, we’re never going to settle this.

WILLIAMS: No.

WALLACE:  But we will continue to talk about it.

Let's take a break here.

When we come back, the Democratic National Committee elects a new party chair. What does it say about how they plan to take on President Trump?

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

PEREZ: We need to make house calls! We need to listen to people! We need to get back to basics and we need to move forward!

(END VIDEO CLIP)

WALLACE: New DNC Chair Tom Perez laying out the Democratic Party's plans to rebuild after November’s election defeat.

And we’re back with the panel.

I’ve got to tell you, we spend the entire commercial arguing about Donald Trump’s agenda. I wish we had that. It was actually very, very interesting.

Juan, what do you think that Perez’s victory says about the Democratic Party and their path forward in terms of dealing with Donald Trump?

WILLIAMS: Well, I think the election between Keith Ellison, the congressman from Minnesota, and Tom Perez, the former labor secretary, was portrayed as kind of a Bernie Sanders left backing Ellison, progressive elements, far left wing of the party, versus the Obama wing, a member -- you know, you think about Perez as the former labor secretary, but you had people, Joe Biden, President Obama and the like, lobbying to get Perez in this position.

I think the key issue here that both sides agree on is you’ve got to go away from centralized Democratic Party politics and get back to building state organizations. And they agree on that. But the key elements for that is, can you raise the money, Chris? We saw in the recently released money totals, donation totals for the Republican Party, they doubled what they raised four years ago after the election in the month of December. Democrats have not released their totals yet. ACLU, Planned Parenthood, they have record numbers as we see resistance building to Trump, but not the Democratic Party. So that’s the key test that right now Perez has made Ellison his vice chair, largely symbolic as a show of unity because they’ve got to go to the donors, they’ve got to go to the base and somehow channel the opposition to Trump into something that becomes essential, which is winning elections.

WALLACE:  Hillary Clinton sent a video message to the DNC meeting and here’s a clip.

(BEGIN VIDEO CLIP)

HILLARY CLINTON, FORMER PRESIDENTIAL CANDIDATE: Lets resistance plus persistence equal progress for our party and our country. So keep fighting. And keep the faith. And I’ll be right there with you every step of the way.

(END VIDEO CLIP)

WALLACE: Steve, do you get the sense that the Democrats have a clue as to why they lost and any notion of an idea of how to build the party back up?

HILTON: I think the answer to that is partly yes, actually. And I think we’ve got to separate organizing per message. In think in terms of organizing, to be fair to them, I think the autopsy that is often brought up when they say, well, the Republicans, after they lost in 2012, they did an autopsy, why won’t the Democrats not an autopsy?

I think when it comes to organizing, it’s kind of happened. I think Juan’s right. I think they’ve all accepted there’s been a real consensus that they need to get back to grassroots, to local and state races, select candidates differently and harness that energy that’s clearly there in terms of the resistance to the new administration and bring that into the party. They’ve all accepted that. I don't think there’s any argument about that. And I think that is something that the Republicans need to take seriously. But on --

WALLACE: But -- but do the -- but in addition to that, you also need an agenda. You need a message.

HILTON: That’s what I was going to say. The second part, the message, I think there the news is not so good for the Democrats. I don’t think that they really understood the fact that what’s really happened in the last year or so is that working people in America have lost the sense that the Democratic Party’s there for them. That that is their voice. And Trump and Bannon have plowed into that territory saying, we are there for the American worker.

And I think that the election of Perez is actually bad news on that front because it seems to me that he is more likely to pursue the more coastal agenda, if you like, in terms of focusing on identity politics and so on, rather than I think the economic message, which really ought to be the heart of their strategy in the future.

WALLACE: Congress was on recess this week, and we saw at these town halls, particularly the Republican members of Congress held, some emotional protest about the Trump agenda. Here was Tom Cotton of Arkansas in a town hall.

(BEGIN VIDEO CLIP)

SEN. TOM COTTON, R-ARKANSAS: Everyone in this room has been hurt or helped --

UNIDENTIFIED FEMALE: I have been helped (ph). I have only been helped (ph). ObamaCare saved my life, senator.

COTTON: Nobody here -- nobody -- nobody here has not been affected by ObamaCare. So you’re talking --

UNIDENTIFIED FEMALE: Yes, because it saved my life, senator.

(END VIDEO CLIP)

WALLACE: Lisa, some folks are comparing this to the Tea Party protests back in 2009, 2010 against Democrats when president -- or rather against Republicans when President Obama was trying to pass ObamaCare. And the question I have is, do you see the same kind of grassroots activism here? I mean do you think this is at all equivalent to what the Tea Party was doing back then?

BOOTHE: I mean there’s -- I think there’s certainly, you know, a lot of anger and the base is activated, and so that’s something that Republican should watch, absolutely. I mean I think the Tea Party stood for something. There were principles. I'm not sure, this seems to be more of a movement that’s standing against Trump instead of standing for something specifically.

But to Steve's point, and also sort of this broader -- you know, this proxy war and sort of fight for the -- the heart and soul of the Democratic Party, the big challenge they face is to an order -- in order to enact policy changes, in order to actually move agenda forward, you have to have the numbers. And the big challenge that they face right now is the fact that there are so many Democratic seats that are up for re-election in 2018, particularly in the Senate. They have 23 seats, ten of those President Trump won, five of those President Trump won by double digits. And I think right now with the resistance that we’re seeing from the left and this activation of the Democratic base, the problems for them, are Democrats going to start seeing primary challenges to the degree that Republicans have for so long? And then what challenges do those present, particularly for those 10 Democrats who are not only looking to their rights for someone potentially more moderate or Republicans to win those red states, but also to their left and having to engage and win a primary. So I think that’s the challenge for the Democratic Party or sorting -- wading through this battle that they’re facing right now.

WALLACE: Julie, what do the officials you talk to in the Trump White House, what do they think of these emotional and well-attended protests and do they worry at all that they could be a repeat of 2010 when grassroots fervor drove Republicans in this time that in 2018 -- and, yes, there are some numbers that help them -- but that they could end up help -- helping Democrats this time?

PACE: It’s interesting because when you talk to Republicans in the White House versus Republicans on The Hill, I think you actually hear two slightly different stories about these protest. What I hear from officials in the White House is quite similar to what the president says publicly about these. He -- they believe that these are, to some extent, paid activist, people who are coming in from outside of these district to get on television, to try to make a scene and disrupt these town halls.

But on The Hill, Republicans are more concerned, and they believe that they should not underestimate what they’re seeing there. And they give a lot of credit to people like Tom Cotton, some of these other lawmakers who are going out there, spending a lot of time answering questions from supporters and from opponents. They think that that is the model. That one of the mistakes that Democrats made during the health care town halls in 2010 was shying away from it, was not really getting in the weeds and trying to defend the policy. And they think that the way that Republicans can get ahead of this is to actually engage with these people as opposed to doing what some of the folks in the White House are doing, which is to just dismiss this as a paid protest.

WILLIAMS: I think also that part of this is, it’s not just the town halls. If you look now at the president's approval numbers, they’re in the low to mid 40s and at a very low point for a new president, first month in. So you have the town hall and you get people like Senator Mitch McConnell, the majority leader, the Republican majority in the Senate, saying, you know, it was a change election for the White House, but it wasn’t for the Senate, and making some distance now between his fate and fortune and the Trump White House. And I think that’s troubling for the Trump White House.

BOOTHE: But -- but it’s -- but it’s also important to point out that the Associated Press just ran a story about the fact that those 10 venerable Democrats, senators, are also not holding town halls as well. And I think the big problem for Republicans right now, particularly with ObamaCare, is there is a vacuum of information in the sense that Republicans haven’t presented a clear plan. So it’s very difficult to combat some of the narratives because, you know, there’s nothing to really point to.

WALLACE: And that -- and let me just quickly say, that’s going to be the key because if they do repeal and replace, the success of repeal and replace is going to be really important in 2018.

Thank you, panel. See you next Sunday.

Up next, our "Power Play of the Week," the man behind Donald Trump's tweets.

(COMMERCIAL BREAK)

WALLACE: When Mitt Romney tweeted during the 2012 campaign, a team of 20 reviewed every message. But with Donald Trump, it’s just him and one trusted aide. Here’s our "Power Player of the Week."

(BEGIN VIDEOTAPE)

DAN SCAVINO, WHITE HOUSE DIRECTOR OF SOCIAL MEDIA: Just directly reaching out to what we call the Trump train out there, the movement, and delivering our message directly to the American people.

WALLACE (voice-over): Dan Scavino is describing his job as White House director of social media. Getting Donald Trump’s message out unfiltered by the press or anyone else. When the president took office, there was some question whether he would keep tweeting.

TRUMP: Let me ask you, should I keep the Twitter going or not? Keep it going? I think so.

WALLACE: And why not? Mr. Trump now has 95 million followers on eight different White House and personal platforms.

WALLACE (on camera): How important is that, that it’s his authentic voice reaching directly to his supporters?

SCAVINO: It’s very important. It is him speaking. His mind as president of the United States of America.

WALLACE (voice-over): Scavino spends his day near the president.

SCAVINO: He’ll start speaking a tweet, which I know is a tweet, and then we will simply send it out. He’s been called the Hemingway of Twitter many times with 140 characters. There’s so many times that he’ll give me a message when we’re traveling or in the office, and it stops at 139 characters.

WALLACE: Of course that’s during working hours. Then there are the tweets the president types himself early in the morning or late at night.

SCAVINO: I get --  I get a little bing as we like to say, and I get the tweet. And then I’ll take the tweet and amplify it on to Instagram, as well as his Facebook account.

WALLACE: This is the Trump Facebook page, filled with official announcements, presidential musings, and behind the scenes video that Scavino takes.

WALLACE (on camera): As he’s dictating a tweet, either in the campaign or now as president, have you ever said to him, maybe not?

SCAVINO: There’s been times, but not too often. But I -- I’ve always believe in -- and being with the man from day one is, let Trump the Trump.

TRUMP: Did anybody ever hear of Dan? He’s become quite famous in social media.

WALLACE (voice-over): Scavino was a mini celebrity on the campaign trail as one of candidate Trump's inner circle, but he goes back a lot longer than that. They met when Scavino was 16, working at a country club in suburban New York.

SCAVINO: Often when he would come up, I would either for caddy or clean his clubs upon departure of the golf course. And he said to mean, he said, you're going to work for me one day.

WALLACE: He ended up running a Trump golf course, but was about to start his own social media business when he heard the boss might run for president.

WALLACE (on camera): Do you ever think to yourself, Dan Scavino, 16-year-old caddy, assistant for the president?

SCAVINO: It’s overwhelming. It’s surreal. But we’re here and we’re here to serve the American people.

WALLACE:  (voice-over): Now Scavino spends more time around Donald Trump than almost any member of his staff, in a relationship that’s close to family.

SCAVINO: He knows I’m there for him. he knows I have his back. Everything we’ve been through, nobody’s taken more incoming than Donald J. Trump. And to be with him in the fox hole and it’s just -- just being here in the White House, when everybody said, and I can’t say it enough, you have zero chance, Scavino, what are you doing?

(END VIDEOTAPE)

WALLACE: And Dan Scavino promises a big rollout on Trump’s social media this week for the president's address to that joint session of Congress.

Now this program note. Be sure to tune to your local Fox station Tuesday nights for President Trump's primetime speech, anchored by Shepard Smith. And I’ll see you on Fox News Channel for special coverage with Bret Baier and Martha McCullum.

And that’s it for today. Have a great week. And we’ll see you next "Fox News Sunday."

(COMMERCIAL BREAK)

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