This is a rush transcript from "Hannity," July 31, 2017. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: This is a "Fox News Alert." Welcome to "Hannity."

We are following several major, huge breaking news stories tonight. Now, the White House shakeup -- Anthony Scaramucci is out as the White House communications director.

Also, President Trump and members of his administration are now turning up the heat, finally, on congressional Republicans after the Senate failed to repeal and replace ObamaCare -- of course, a seven-year promise.

And then after another North Korean ICBM test, the commander-in-chief -- he is promising you, the American people, to handle this growing threat from this rogue regime in Pyongyang.

And Republicans on the House Judiciary Committee -- they are now finally -- we've been calling for this for months. They are now calling for a special counsel to investigate the massive scandals surrounding Hillary Clinton, James Comey, Loretta Lynch.

Also, an explosive new report on the Obama administration loosening rules to make it easier to unmask members of Congress. Wow.

Now, all of that and also much more. We have breaking news in tonight's important "Opening Monologue."

All right, Anthony Scaramucci has resigned as the White House communications director. General John Kelly is sworn in as the new White House chief of staff. Eric Trump will be joining us tonight with reaction.

Also tonight, after last week's epic failure to repeal and replace ObamaCare, President Trump is, yes, rightly pressuring Republicans to keep to their seven-year promise to you, the American people. They are desperate for the promise to be fulfilled.

Now, over the weekend, the commander-in-chief -- he tweeted out, quote, "If a new health care bill is not approved quickly, bail-outs for insurance companies and bail-outs for members of Congress will end very soon." Now, the president also added, quote, "Unless the Republican senators are total quitters, repeal and replace is not dead. Demand another vote before voting on any other bill."

Republicans appear now to be throwing in the towel on repealing ObamaCare. The president -- he is 100 percent committed to hold their feet to the fire, and so are we here on this show. And now, after losing a very close vote -- because why? Senator John McCain, he joined the obstructionist Democrats -- Republicans are apparently what, ready to give up? I'm sorry. There's no excuse. It's pathetic, inexcusable. And it proves that we now have a Republican Party that is not only spineless and gutless and lacking leadership and unity -- what do they stand for? What is their identify? They don't have one!

Republicans in Congress, you have a choice to make. You can keep your word and start doing your job and passing bills and keeping promises, repeal and replace ObamaCare, or literally, keep making excuses why you can't implement the president's agenda and your agenda. Guess what will happen? You will risk losing the House and Senate in 2018.

So in case you care, my message to you lazy people in D.C. is stop the vacations, get to work, because when you fail, it's the American people, the forgotten men and women in this country, who end up suffering. You're supposed to serve them, in case you forgot you're public servants.

Also tonight, America faces a growing threat from North Korea. The Trump administration is now vowing to take action. On Friday, the rogue regime conducted yet another ICBM test, which Fox News has, in fact, learned is the longest missile test in the history of North Korea.

And then over the weekend, the U.S. military, they conducted a successful THAAD antiballistic missile test that was over the Pacific Ocean to send a message back. And earlier today during a Cabinet meeting, President Trump says his administration will handle North Korea.

And this comes after the president called on China to step up and do more to stop Pyongyang's aggressive behavior. The Japan prime minister is now saying that he and President Trump -- they have agreed to take action against North Korea, which is desperately needed. And the president is now facing an increasingly difficult situation here. There's no good answer to this situation.

And the reason why -- and you will never hear this from the media -- it goes back decades to the Clinton administration. Now, you won't learn this from the media, but back in 1994, then-President Bill Clinton and his administration, they struck a deal with Kim Jong Un's father, Kim Jong Il, where according to The New York Times the U.S. at the time agreed to give North Korea over $4 billion taxpayer in energy aid over the course of a decade. In exchange, North Korea was going to a freeze and eventually end their nuclear weapons program. And as a part of the deal, North Korea would allow inspectors into its nuclear sites.

But this is the important part. Remember, think Iran, because it's like Iran redux here. They would also be allowed to keep their nuclear fuel rods, which could be used to make weapons for an unspecified number of years. Bill Clinton, well, he put those fears aside, gave them the money, your money, and praised this really dumb agreement which they never kept. Watch this.


THEN-PRESIDENT BILL CLINTON: This is a good deal for the United States. North Korea will freeze and then dismantle its nuclear program. South Korea and our other allies will be better protected. The entire world will be safer as we slow the spread of nuclear weapons.


HANNITY: Well, it wasn't a good deal for the American people, and Clinton ended up eating words, because in 1998, North Korea test-fired a long-range missile. By 2006, North Korea had conducted its first nuclear test, and under the Obama administration, the North Korean threat grew rapidly. He did nothing about it, either. It turned into the growing crisis that now the president is facing. No great solution.

As for the fourth major story tonight on our agenda, Republicans on the House Judiciary Committee, they have sent a letter to the Department of Justice -- finally. They're calling for a special counsel to be appointed -- finally -- this time to investigate major scandals with real evidence surrounding Hillary Clinton, James Comey, former Attorney General Loretta Lynch. It's about time they did this, used their authority of subpoena power to restore law in the country.

Guess what? We need equal justice under the law. Now, we've been telling you this for months on the program. There is a massive double standard when it comes to investigating scandals, in this case, that involve Democrats. And the Republicans are in charge.

Now, these are scandals that, of course, the destroy Trump establishment media -- they just routinely ignore despite mountains and mountains of evidence. There's Hillary Clinton, her mishandling of top secret, classified, special access program information on a private email server in a mom and pop shop bathroom. We also know that Clinton deleted -- imagine if Donald Trump deleted 33,000 emails -- and acid washed her computers with BleachBit and then smashed mobile devices with a hammer the way she did. And then, of course, her lawyers did turn over BlackBerrys to the FBI, but guess what? They didn't have SIM cards.

Then there's the real Russia collusion story, the Uranium One deal, which I predict will be the biggest news to come out in the next year or two, where the secretary of state -- remember? -- she approved handing over up to 20 percent of America's uranium, the foundational material of nuclear weapons, to Vladimir Putin and the Russians, all while people involved in the deal in Canada, they kicked back over $145 million to the Clinton Foundation. Bill Clinton doubled his speaking fees in Moscow.

Then you got James Comey testifying under oath. He had a friend leaking comments to the New York Times, some of which were classified, we're told, government information. He's not allowed to do it. Well, that could be a crime also. Comey may have violated the law. Those were -- that was government property, and that could be a violation of the Espionage Act.

Also, Comey admitted before Congress, yes, the former Attorney General Loretta, Lynch pressured him not to tell the truth, that the Clinton email investigation was an investigation. Well, she wanted to call it a matter, and he ended up listening!

And as for Lynch, just days before Comey's announcement that let Hillary off the hook, she met Bill Clinton for 40 minutes at an airport tarmac. Conflict of interest?

And of course, there's the group behind the fake news anti-Trump dossier. It's about the hookers in Russia that turned out not to be true, Fusion GPS. Well, who was paying for that hit piece? Who were they tied to because they had ties to Russia! And as we've been saying for months, the evidence is overwhelming, staggering and incontrovertible, and the Justice Department needs to do the right thing, appoint a special counsel, get to the bottom of all of these scandals.

Also, finally tonight, a stunning report from our friend John Solomon at The Hill about how former Obama Director of National Intelligence James Clapper, made it much easier to unmask members of Congress. Really? And their staffers? Well, that opens the floodgates for Fourth Amendment privacy violations.

With reaction, from The Hill, John Solomon himself, conservative commentator Monica Crowley. OK, so really? We have the former director of national intelligence, then we have the issue of Susan Rice, then we learn from your friend Sara Carter that the general counsel of the FBI is being investigated for also leaking intelligence information. Why is this unmasking story by Clapper so important?

JOHN SOLOMON, THE HILL: Well, it goes to a very important issue, which is the founding fathers created the separation of powers, right? They said the Congress and the executive branch and the judiciary were supposed to be independent coequals. And if the executive branch could on its own begin unmasking information about members of Congress, it opens the door for them to spy on things that are being said about them, or things that they themselves were talking about when they were intercepted overseas.

And I think the standard in (ph) change (ph) -- back in 1992, CIA director for George H.W. Bush Bob Gates -- he put out a standard that made unmasking a last resort. You'd only unmask a member of Congress if there was no other way to get foreign intelligence. James Clapper, and maybe leading up to the point where James Clapper issued this memo, there may have been some changes, change it to a standard of convenience, which is if it helps you to understand a report, you can unmask a member of Congress. Privacy issue and a separation of powers issue, I think.

HANNITY: But then we got General Flynn was leaked on. That's a felony. That's a crime. I am hearing, and my sources are telling me, that huge names in the Obama administration -- we have Susan Rice, now we're looking into Clapper, but names that everyone will know, are going to also be revealed in this scandal, that this was widespread at the top. Are you hearing that?

SOLOMON: Yes. And in fact, if you look at the rules, one of the things that Clapper did is he widened the circle of people that could unmask a name without any written permission. It used to be just the defense secretary, the secretary of state, the president and the vice present, and the national security adviser, the only five people to have special access to unmask information.


SOLOMON: When Clapper put out the rules in 2013, it expanded to all of their deputies and all of their advisers. And I think that's going to be an interesting area for us to look at in the weeks ahead.

HANNITY: All right, Monica, let me ask you this. So the Republican Party -- they're not accomplishing their promises. They're not keeping even a simple one like repeal and replace. I was very happy the president really went in (ph) and said, Do your job. Don't quit.

But more importantly, they have subpoena powers. They have the power that we have given them. They're now in charge of these committees, and only now are they finally beginning to realize that the Democrats and the media want the president destroyed and that there's far more evidence of real wrongdoing and felonies committed, and only now they're getting in the game.

MONICA CROWLEY, CONSERVATIVE COMMENTATOR: Six months -- six months into the fact. Look, Sean, I really believe that there are some Republicans -- not all, but there are some on Capitol Hill who are as interested as Democrats and the media are in destroying Donald Trump. And I'm referring to establishment Republican types who are interested in torpedoing the agenda of the president, which also happens to be the Republican agenda. So it's a self-destructive act.

But because Donald Trump represents such an existential threat to the establishment on both sides, as well as to the media and the deep state and the permanent federal bureaucracy, that there are elements on all sides that are actively trying to undermine him, even if that means...

HANNITY: I have heard behind closed doors...

CROWLEY: ... losing their grip on their own agenda, even if that means that perhaps even losing the House because Trump represents such an overwhelming threat that they are willing to destroy him and take him down! And by the way, the country, by failing to repeal and replace "Obama care," by having tax reform in a chaotic mess already...

HANNITY: Why aren't they doing their job, Monica? Why aren't they keeping -- it's now eight months, and they haven't kept a simple promise!

CROWLEY: Well, and again, it gets to a point -- and I realize my point is quite controversial here, but it's not just the Democrats, the far left and the media that are...


HANNITY: ... part of my five.

CROWLEY: ... out to destroy Donald Trump. Remember, he is -- he's -- he is a very interesting kind of figure that threatens...

HANNITY: So they care more about -- wait a minute!

CROWLEY: ... everybody on both sides!

HANNITY: Think of what you're saying. So they don't care if they lose, as long as they hurt the president.

CROWLEY: Think about it this way...

HANNITY: Republicans, you're saying that?

CROWLEY: Yes. Not all, obviously. But I think there are elements...

HANNITY: You think some.

CROWLEY: ... in the Republican Party that are as interested as the Democrats and the left and the media in taking this president down, making sure he doesn't succeed. Remember, you and I have talked about this repeatedly, that Donald Trump needs to deliver one thing, that's a booming economy. He needs congressional help to do that. The two elements of that are tax reform and repealing and replacing "Obama care."

HANNITY: Do you expect this is going to happen on his economic plan?

CROWLEY: If he can't get those two elements in, it's going to flatten the U.S. economy!

HANNITY: You think they'll do this to his economic agenda.

CROWLEY: I am not sure. I mean, already now, the talk on tax reform is, Well, it's also in chaos on Capitol Hill. If they are really interested in serving the American people, they would make sure that that agenda goes forward...

HANNITY: All right, let me ask John one last question...

CROWLEY: ... and that the economy is one set on a growth path.

HANNITY: That's a chilling -- I -- they're part of my five against the president, so I agree with you, but -- I'm going to ask Eric Trump about it later tonight.

Do you believe that based on the information that you haven't shared with us yet -- and I know you're investigating every day, Sara Carter is, as well -- that this whole narrative flips? Because I believe it will boomerang.

SOLOMON: I do think that there's a growing number of lawmakers beginning to ask questions that they weren't asking at the beginning of this controversy back in January. And one of the interesting things about Congress -- when something hits their back yard, they always seem to take it a little more seriously than when it's just in the media. Today's stories about members of Congress own privacy, their own separation of powers potentially be putting at risk, and I think people are going to ask some questions about this and how did we get to this point.

To Monica's point, I think there's another dynamic that goes on. Lawmakers always worry about getting reelected themselves, right? And they're always afraid that someone's going to accuse them of being soft on terrorism if you don't give the intelligence community all it wants. I think people will go back and look at 2013...

HANNITY: You know...

SOLOMON: ... and ask some important questions.


HANNITY: I will say this. I love our intelligence community. And they risk their lives to keep us safe, and the 99.9 percent do such a good job. But if the tools we give them, the weapons of intelligence are turned on the American people the way we're discussing here, that is the foundation of a police state. So that half a percent or half of 1 percent that might be misusing it, that's the deep state that needs to go. Thank you both.

CROWLEY: And that would be -- that would constitute the most dangerous scandal in U.S. history.

HANNITY: Absolutely agree. Absolutely.

When we come back, the deputy assistant to the president, Dr. Gorka -- he'll join us to talk about how can you deal with North Korea. I don't think there's a good answer. Also, Eric Trump coming up.


TRUMP: We have some interesting situations that we'll handle, North Korea, Middle East, lots of problems that we inherited from previous administrations, but we'll take care of them. We'll take care of them very well. We'll handle North Korea. We're going to be able to handle them. It will be -- it will be handled. We handle everything. Thank you very much.


HANNITY: All right, that was the president earlier today reassuring the American people his administration will, in fact, deal with North Korean aggression.

Joining us now with reaction, deputy assistant to the president Dr. Sebastian Gorka. Dr. Gorka, I'm really becoming alarmed and concerned. North Korea may be the defining moment, much to our chagrin, because we've got so much to do for the country, of the Trump administration.

And from my perspective, there's no good answer because the Clintons gave North Korea nuclear weapons. All their bribes did not work. All their assurances and -- that they would not get nuclear weapons when we would give them money not to build them. Didn't work out the way they promised, just like Iran will not work out the way the Obama deal was structured.

SEBASTIAN GORKA, DEPUTY ASSISTANT TO THE PRESIDENT: Sean, you're absolutely right. The Clinton administration facilitated the strengthening of North Korea when it comes to these issues. And the Obama administration with its so-called leading from behind and strategic patience simply allowed that vacuum to be filled, and was basically were taken for a ride.

So that's true, but that's history, and that's all changed. You look at what we've done in just the scant six months that the president has been in office, whether it's revitalizing NATO, whether it's the liberation of Mosul with our Iraqi partners or whether it's simply the -- the domestic national security successes with regard to illegal immigration.

This is a results-oriented presidency, and we're going to do the same with North Korea. And please understand there's a whole palette of options. It's not a question of peace or war. There's lots of things that we can do, some of them less than overt. But the fact is, this president will not allow American lives or our partners' interests to be endangered.

HANNITY: Well, we know -- we see and read this is really scary. If they can reach with their ICBMs New York -- and I know we have the ability to take these out of the sky, but I'd rather they never be launched.

Here is the other danger, though. I worry about South Korea. I worry about Japan. If this guy is crazy enough, is he going to launch a nuclear war against China? I mean, not exact happy in the -- nor is the president how China is reacting to Pyongyang. And I think they need a stronger response. They have more influence in the region. This is more their regional problem than it should be ours.

But I don't see a good answer. You take out the nuclear sites, what is he going to do next? Is he going to launch a missile on Seoul or Japan?

GORKA: Look, this -- let's look at what this man is really doing. This is calculated saber-rattling. Every single launch is an escalation. But what's really their end game? Because let's step back. Let's take fear off the table. Let's look at reality. Remember "Gulliver's Travels," that great, great, story. America is a Goliath. We're a giant, 12 nuclear aircraft carriers. We've just commissioned the latest one, the USS Gerald Ford.

North Korea -- they can't even feed their own people, Sean. This is a Lilliputian little flea. The fact is, they know that we are not just a superpower, we are a hyperpower. Sean, this is nothing more than blackmail. But we will not allow ourselves or Western civilization to be blackmailed.

HANNITY: Well, I think it's also a tale to be told, that we can't expect that bribing Iran is going to result in anything different...

GORKA: Right.

HANNITY: ... than the attempts to bribe North Korea. Do you think he's mentally unhinged, mentally unbalanced, or is that an act?

GORKA: Look, I don't know. I'm not a medical psychologist, psychiatrist. But what you said is very important to understand. When it comes to countries like North Korea, when it comes to ISIS, when it comes to Iran, this presidency will say, will stand up and call out evil when it sees it.

When you see Stalinist regimes that maintain labor camps -- think about that for a second -- when you see non-state actors like ISIS maintain slave markets, we will not say, Oh, well, you know, this is just a function of ideological differences or unemployment. We will call out evil when we see it! And you know what? America has stood up to evil before. And what happens, Sean, every time, we won.

HANNITY: Thank you so much, Dr. Gorka. Serious issues, real evil in our time.

When we come back, Eric Trump -- he'll join us in studio straight ahead.




TRUMP: We just swore in General Kelly. He will do a spectacular job, I have no doubt, as chief of staff. What he's done in terms of Homeland Security is record-shattering if you look at the border, you look at the tremendous results we've had, and you look at the spirit.


HANNITY: That was the president earlier today praising his new chief of staff, General John Kelly. Plus, also today, the White House announced Anthony Scaramucci is out as the White House communications director.

In studio, with reaction to the White House shakeup, is from the Trump Organization Eric Trump. Eric, good to see you. How are you?

ERIC TRUMP, THE TRUMP ORGANIZATION: Good to be with you, Sean, as always.

HANNITY: Appreciate you being here. I read about, I have to read it so my audience doesn't have to go near it, "The Washington Post." And they had an incredible story. Four days after he lost his son in Afghanistan, General Kelly was giving a speech, he said the one thing I don't want you to mention is my son. He talked about the horrible treatment of our military. We ask him to fight, bleed, and die, and then we say, oh, never mind, because it becomes politicized. And then he said something, we are one of only 5,500 American families that have suffered the loss of a child in this war. The death of my boy simply cannot made to seem more tragic than others. And I'm thinking, wow, what an amazing human being.

ERIC TRUMP: He is an amazing human being. He's an incredible guy. I've got to know him. He is tough. He's disciplined. He's incredibly smart. He will operate that place so incredibly well. And listen, my father has so many great people by his side. The whole cabinet, he really has one of the most impressive cabinets there, but in terms of organization, I think you can give it to a military guy, I think he is going to do an incredible, incredible job for the Trump administration.

HANNITY: I was watching your father tweeting all weekend, and I agree with your dad. Either they are quitters, total quitters in the Senate, or repeal and replace is not dead. And I'm like, this is August, your father has been in office since the 20th of January. And I'm a registered conservative, but I mostly vote Republican. I'm like, what is wrong these people?

ERIC TRUMP: Look at the weight that he has to carry. Look at the weigh, and look at the good things that are happening. The media doesn't want to talk about it, you talk about it, but the media doesn't want to talk about it. You think they would get on the bandwagon of we have a stock market that is 100 points off of 22,000, already a record. We broke another record today. He has broken 30 records in the last three, four months. It is just skyrocketing.

You look at oil prices, how good that is. You look at infrastructure, all of the pipelines and things that are going in. You look at the military, what he's doing. You look at the V.A. and what he's doing. Tax reform, which he obviously wants to get done which would be incredible for the country. You look at consumer confidence. You look at building in America, so many incredible things that are being done. And all they want to focus on is Russia and the scandal.

And I guarantee you if you want the mainstream media, the only thing they're going to talk about is Anthony for the next two weeks, whatever it is. But they won't talk about the stock market, they won't talk about people's 401(k)'s, they won't talk about --

HANNITY: Regulation gone. The promises kept.

ERIC TRUMP: This country is $4 trillion richer, $4 trillion richer under my father in the first six months. Where is that? Where is that?

HANNITY: But the Republicans, not only, they all ran on repeal and replace, Eric. Your father, as he said, you guys have made this promise now for seven years. I have a pen in hand, I'm ready to sign it. And the things that your father made promises on the campaign trail that he's kept, but not only that, they have allowed this phony Russian narrative to go out for so long, but yet we we've got the Ukraine collusion, we've got Uranium One, we got the email server scandal which we know laws were broken, you've got Comey leaking, the general counsel we learned of the FBI last week is leaking, Loretta Lynch. They're not even using the power of subpoena to investigate what I truly see as real evidence, real crimes.

ERIC TRUMP: Sean, my father said it. He said it a couple of weeks ago in a tweet. Am I going to have to carry this whole weight on my shoulder? When are some of the people in my own party going to start protecting me? I feel that as well. I am an outsider. I am looking in on the White House. I'm running our company, but I want someone to start fighting for him. He is the best fighter in the world. He will do a better job finding for himself than all of them will do fighting for him, but how much weight does he have to carry by himself? How can a party that is doing so much better than the Democrats, if you look at how much more money the Republicans are raising, you look at the complete shambles that the DNC is in. The DNC is in debt. The Republicans are raising seven times on a monthly basis what the DNC are. Why wouldn't they embrace that? Why wouldn't they carry -- my father has the voice of this country. The people of this country love him. Why wouldn't they get in line. It doesn't make sense, especially --

HANNITY: Keeping promises is good politics, Eric.

ERIC TRUMP: That's right.

HANNITY: You want to raise money, you want to do well, you want to get reelected, how about you build the wall, repeal and replace.

ERIC TRUMP: But Sean, especially for a fundamentally broken system. Obamacare has gone down the tubes. It is a bankrupt system. It is going to be subsidized. The insurance companies want nothing to do with it. The best doctors aren't honoring it. Premiums have gone up 100, 200, 300 percent.

HANNITY: In Arizona 116 percent this year.

ERIC TRUMP: It's breaking. So you mean to tell me, and by the way, this goes for Democrats as well, you mean to tell me that there is not a single Democrat on the opposite side of the aisle that doesn't see a single problem with Obamacare that they wouldn't join forces --

HANNITY: They don't want your father to succeed.

ERIC TRUMP: Of course not. Of course they don't. And I say it all the time on FOX, I say it all the time just in general, they would rather see this country fail than see my father succeed.

HANNITY: That's sad. I have identified on this program five forces that are against your father. I call it the deep state. There are more intel leaks, seven times the past two administrations against your father. Then you've got obviously have Democrats, they hate him, they don't want him to have one success. And I think your comment is relevant and appropriate.

Then you have got the media, which focuses in on process, palace intrigue, and Russia. Then you have weak Republicans. John McCain had promised us how many years and was so disappointing last week. And the last one is never-Trumpers. But that's a lot of forces ganging up against one guy. Is that the whole swamp?

ERIC TRUMP: It is the whole swamp, but he is tougher than all of them. He is tougher than all five of those groups. You look at the media, the media has gone to shambles. They would rather focus on Russia and they would rather focus on these nonsense stories than real news that people care about. And that is the sad thing for this country, it's a sad thing for democracy. It's a sad thing for the morality of this country. It is really a race to the bottom with the media these days. It's no longer who has the best journalistic integrity, who puts out the best story, what's the most meaningful story, how it affects people. It is who can publish the most sensational story that gets the most clicks on Twitter or Facebook or one of these, and it is really become a race to the bottom and there's no question it's hurting.

HANNITY: Eric, good to see you. Thanks for stopping by, thank you.

And coming up on this busy breaking news night, the Trump administration are not backing down from the battle to repeal and replace Obamacare. Republicans, grow up and keep your promise. Former governor Mike Huckabee is next straight ahead.


HANNITY: Welcome back to "Hannity." So Republican lawmakers in the Senate, they failed to repeal and replace ObamaCare after seven long years of promises. But the president, he is not giving up. Instead he is continuing to put pressure on Congress to make good on the promise of repeal and replace and replace it with something that actually works.

Joining us now with reaction as well as the shakeup in the White House, former Arkansas Governor Mike Huckabee. Governor, one thing that was missing in my mind, I've read Patient Power, Cato Institute, Musgrave, Goodman, what, 15, 20 years ago, and ever since I believed in IRA account, health savings accounts for people. I've been interviewing this guy from Wichita, Dr. Josh Umbehr, Atlas M.D., about health care cooperatives, $50 a month, unlimited care, total access to your doctor 24/7. Not one time last week when the Republicans were wetting toilet paper and throwing it against the wall with their ridiculous ideas did I hear any of these creative, free market solutions. Why?

MIKE HUCKABEE, FORMER ARKANSAS GOVERNOR: Because Washington thinks that they have to come up with a plan that is one-size-fits-all. The truth is one size will mess up all. And that is the problem whether it's Obamacare or even what the Republicans in the Senate tried to do.

The smart play, read the constitution. Discover the fact that nobody in Washington has responsibility to provide health care for everybody. Send this back to the states where it belongs. I guarantee you, Sean, that there is a big difference between health care delivery in Massachusetts, where Charlie Baker is governor, and Mississippi where Phil Bryant is governor. But there is one thing in common -- both of those guys would design a plan that would work for their demographics, their constituencies, and it would be 100 times better than Washington.

HANNITY: I agree.

HUCKABEE: So here's the point, Sean. The problem with Washington is not that they are trying things that are too big. They are trying things that are too small. Do something big. Go constitutional. Send it back to the states. I guarantee you it could work better and it would come to innovations like you've mentioned.

HANNITY: I'm not the biggest fan on Lindsey Graham and John McCain. But Lindsey Graham is involved in the very idea of block granting money to states, and if California wants to go single-payer, let them pay for. So do you support this as may be the final solution where you can get Murkowski and people like McCain back on board?

HUCKABEE: I would like to believe that they would be on board for the simple reason that they are going to be hard pressed to say, no, we are not for that. We don't believe the people in our home states have good sense to do it.

Sean, as long as Washington is really run by the donor class and by the lobbyists, and everybody and every piece of legislation gets a carve out for their particular special interest, we are never going to see anything happen that turns out well. And what you mention, the kind of innovations, can only happen when there is a kind of freedom and liberty that's left when we do this in a constitutional manner.

HANNITY: Governor, I see the president, he goes out and speaks to these huge crowds, has these amazing rallies, and you see the reaction of people. Right now I look at the Republican Party without an identity. They are not saying build the wall. They can't even get a seven-year promise fulfilled and get their act together or not. We see very specific ideas from the president on energy, on the radical Islam, on building borders, the president's economic plan, middle-class tax cuts, corporate cuts, repatriation for multinational corporations. Where is the identity of the Republican Party, free-markets, capitalism, more freedom, less government intrusion, bureaucracy, where are these discussions within that party? What do they stand for at this point?

HUCKABEE: It is hard to say because we have seen in this last total disaster after all these years of voting to repeal Obamacare, some of the very same senators that voted to repeal it then voted to keep it, and they're Republicans. And I've heard people say, we are worried that Republicans may lose the House and the Senate. I am less worried that the Republicans will lose the House or Senate. What I would really like to see is some different Republicans keep the House and Senate, but at least go there with some Republican attitude and really have a goal to shake things up.

HANNITY: Does McConnell need to go?

HUCKABEE: I'm frustrated.

HANNITY: Don't you love the easy questions? Go right ahead. I think if he can't get this done he needs to go.

HUCKABEE: I think a lot of those guys need to go, and I like a lot of them personally. But, look, it's one of the reasons I am for term limits. The longer they stay, the more attached they to the institutions of the elitist insider's game of Washington, and the less they are attached to the passions of the people they need to be serving.

HANNITY: We will stay on them. We will hold them accountable. Governor, great to see you, thank you.

When we come back, GOP lawmakers on the House Judiciary Committee, finally, we have been calling for this for two months, they are talking about calling for a second special counsel to be named. Why? Investigate Lynch and Comey, and, yes, Hillary Clinton. Larry Elder, Gregg Jarrett, next.


HANNITY: Welcome back to "Hannity." So as we mentioned in tonight's opening monologue, Republicans on the House Judiciary Committee, they sent a letter to the DOJ requesting that they appoint yet a second special counsel, this time to investigate Loretta Lynch, James Comey, and Hillary Clinton. We have been saying this forever.

Joining us with reaction, Fox News anchor, attorney Gregg Jarrett, Salem radio nationally syndicated host Larry Elder. You know I've been on this for weeks. There's nothing with Russia, nothing, but yet Ukraine, Uranium One, Hillary's emails, James Comey, we have so many other issues, Loretta Lynch. It's about time, finally.

GREGG JARRETT, FOX NEWS ANCHOR AND ATTORNEY: Yes. And the Judiciary Committee wants a special counsel to look into two dozen different questions that are all very serious and could be crimes. For example, as you point out, was Hillary Clinton enriching herself by conferring benefits to a foreign government, in particular Russia? And what about Fusion GPS. Why was the FBI relying so heavily on this anti-Trump dossier that was done at the behest of a Clinton supporter? Why were they willing to pay $50,000?

HANNITY: Comey was going to pay that. And we have on top of that, look at where that money comes from. And Larry, you are an attorney, too. I want to know where that money came from. I want to know if that money, could it have been laundered, $145 plus million is a lot of money.

LARRY ELDER, SALEM RADIO NATIONAL SYNDICATED HOST: These are, of course, very legitimate questions. This is why Donald Trump is upset. There was no special counsel in the mid-90s when hundreds of thousands of dollars were illegally donated to the DNC. The DNC, oops, gave back the money. The FBI investigated, the head of the FBI, Louis Freeh, very well respected, at least as respected as Robert Mueller is, said if there is any reason for special counsel, it is here. Janet Reno refused to do it.

And then go down the list. You talked about fast and furious. The scandal with IRS and Lois Lerner, we haven't gotten to the bottom of that. And regarding Fast and Furious, as far as I know Eric Holder is the only sitting A.G. to be found in criminal contempt of Congress for failing to turn over documents that Congress wanted. And the list goes on and on and on.

HANNITY: Could we add Debbie Wasserman Shultz's I.T. guy, and we know he was double billing and we know she kept him on for a year afterwards, and we know that there were hard drives, government hard drives smashed. What is it with Democrats and BleachBit acid washing, taking hammers to iPhones and BlackBerries, and destroying hard drives and getting away with that, because I would be in jail and calling both of you to bail me out.

ELDER: And in a rational world, this sounds like an episode of Jason Bourne. You catch the I.T. guy when he is trying to leave the country at Dulles and his wife had left earlier with money and a bunch of family members on at exorbitant prices. The Democrats dumped him, and Debbie Wasserman Shultz kept him. Is he blackmailing her? Was he one of the sources for WikiLeaks? We don't know. It seemed to me that the people on the other channel would be interested in this if this were a Republican in trouble and as opposed to Debbie Wasserman Shultz.

HANNITY: Take any of these scandals, Gregg, and you take out DNC, and put in RNC destroying hard drives, Gregg, you destroy BlackBerries and iPhones with hammers, you acid wash and BleachBit 33,000 emails, you send the FBI phones without SIM cards. And I'm thinking I'm paying you a lot of money for the next three years of my life to try and get me out of what is the impossible.

JARRETT: Well, a special counsel should have been appointed about a year ago after James Comey decided not to prosecute Hillary Clinton. And the committee wants to know, and a special prosecutor to investigate, how in the world could you determine that she didn't violate the Espionage Act? How is that you determine that she wasn't enriching herself by using her office and paying her husband and her foundation benefits from Russia and banks?

HANNITY: Why isn't the Republican Party using their power of subpoena? I know they are not using their power to legislate and keep promises. But you would think that maybe they would use their investigative authority, the fact that they run these committees, and they've allowed the narrative to be Russia, Russia.

JARRETT: Now the judiciary is ready to do that now. And not just with a special investigator. They voted to launch their own investigation. And yes, that would mean subpoenas. Let's haul Hillary Clinton, James Comey, and Loretta Lynch before the committee. Samantha Power and Susan Rice, they also want to look into unmasking.

HANNITY: There are going to be top Obama names involved in unmasking coming out in the days to come. I got a roll. Larry, good to see you., and Gregg, always good to see you, too.

When we come back, I'm so sorry to my friends Diamond and Silk with all the breaking news last week. We didn't give them all the final words that they deserve. Our friends are back for the final word tonight.


HANNITY: And welcome back to "Hannity." So our friends, the Republican duo Diamond and Silk, they are back. They get the final word tonight, and I apologize for last week. Take a look.


LYNETTE "DIAMOND" HARDAWAY: Hey, Sean, here's our final word for tonight. Well, it looks like that D.C. swamp is starting to smell. We, the American people, can smell it from a mile away.


HARDAWAY: See, sometimes it's hard to drain the swamp when you have rats clogging the pipe, when you have snakes bringing in the rats to infiltrate. And then, Sean, you even got Hillary Clinton running around here clueless. She even wrote a book about it called "What Happened."

RICHARDSON: What happened?

HARDAWAY: Hillary, what happened? You happened. And you didn't know how to make it happen. And the American people just so happened to wake up and saw that nothing was happening with you. And every time you tried to convince everyone that it was going to happen, the American people made sure it didn't happen.

RICHARDSON: That's right.

HARDAWAY: So we don't need you running around asking what happened or writing a book about what happened, because it's time for you to get with the program. We already have a president that's making it happen. And his name is Donald J. Trump.


HANNITY: They are the funniest. I love them. And they will be back again this week, later this week.

Unfortunately that's all the time we have left this evening. Remember, this show will always be fair and balanced. We are not the leftwing, destroy-Trump, establishment media. Thanks for being with us. See you back here tomorrow night.

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