Larry Kudlow on road to economic recovery amid coronavirus pandemic

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This is a rush transcript from "Sunday Morning Futures," May 3, 2020. This copy may not be in its final form and may be updated.

MARIA BARTIROMO, FOX NEWS ANCHOR: Good Sunday morning, everyone. Thanks so much for joining us. I'm Maria Bartiromo.

Straight ahead right here on "Sunday Morning Futures": a new bombshell report that the Chinese Communist Party destroyed evidence, lied to the world about coronavirus.

This, what Senator Tom Cotton told us just last week:


SEN. TOM COTTON (R-AR): Once they knew that it was spreading all around China, they were not going to take the responsible action of bringing in international scientists and shutting down international air travel.

Rather, they were going to let the virus escape their borders, so the rest of the world would suffer along with China.


BARTIROMO: Coming up right here, we will talk with two other senators who want to hold China accountable, Lindsey Graham and Ted Cruz joining me live coming up.

Plus: The reopening begins, businesses like these rolling out the welcome mats, as more states begin to reopen this week.

Florida Governor Rick (sic) DeSantis joining me, as he prepares to fire up much of Florida with phase one tomorrow.

Also ahead, the director of the National Economic Council, Larry Kudlow, on what it will take for the rest of the country to get back to work.

And in the middle of all of this, a dump of documents revealing exculpatory evidence in the Michael Flynn case. Congressmen Jim Jordan and Trey Gowdy are turning their attention now to FBI Director Christopher Wray and what he's done about it in the last two years.

All that and a lot more right here, right now on "Sunday Morning Futures."

And, tomorrow morning, much of Florida will enter phase one of a three- phase opening, with the exception of three counties with the most COVID-19 cases. That's Miami-Dade, Broward and Palm Beach.

The executive order allowing some businesses, retail stores and state parks to reopen tomorrow morning, but only at 25 percent capacity.

Joining me right now to tell us how he's gearing up is Florida governor Ron DeSantis.

Governor, it's good to have you this morning. Thanks so much for being here.

GOV. RON DESANTIS (R-FL): Good morning. Thanks for having me.

BARTIROMO: What will tomorrow look like, sir?

DESANTIS: Well, I think tomorrow is going to be a small step. I think it's going to be a measured step. I think it's going to be an important step for people of Florida to know that there is a light at the end of the tunnel.

We're going to follow a safe, smart, step-by-step approach to Florida's recovery. We're going to follow data and facts. But we are intent on moving forward to be able to get the society on its feet again.

Florida, we were doing so well before this pandemic hit. Our unemployment rate was 2.8 percent. We were having businesses come left and right. Our coffers were overflowing, even though we have very low taxes.

And I think we can get back there. It's not going to be like turning an on- and-off switch, but I think tomorrow will be an important first step.

I think it's also important to point out to folks the way Florida approached this. Even though our hospitalization and infection and fatality rates are much lower than many of these other big states, particularly in the Northeast and Midwest, we did not necessarily -- quote -- "shut everything down."

I had construction going. We had a lot of retail that was open. I actually accelerated road projects, because the traffic was down, so places like Orlando, Tampa, Miami, we accelerated and surged workers, and were able to knock out a whole bunch of stuff in a very short period of time that's going to be, I think, very good going forward.


DESANTIS: So, we're starting, I think, a little ahead of where some other states are. So, I think that'll help us as well.

BARTIROMO: Yes, I love the fact that you actually allowed construction to take place while much of the state was closed. You actually said, OK, let's close down these traffic lanes, and finish the job that you were doing and accelerate construction.

That was really important. And you were accelerating road projects in Tampa, right, even while traffic was down, which was -- put you ahead of the game.


Well, Tampa, a big bridge connecting Pinellas to Hillsborough, then Orlando and I-4, which is one of the big problem spots. We have had a long-term project there. This has really allowed us to make some great strides. So, within a couple weeks, we will be able to open entirely new interchanges there that I think people will be really excited about.

BARTIROMO: And at the same time, you were hit with massive amounts of unemployment benefits. Things changed in a couple of weeks from that very strong economy.

Disney, one of the most important businesses in your state, closing down, furloughing 75,000 employees, Universal the same. Do you think those workers will actually come back at some point? You think Disney will rehire those people?

DESANTIS: No, I think that's the plan.

Yes, look, this is a temporary closure. I think they have already been making great plans to come back safe. It's interesting. These parks were open all the way through the middle of March. And they were doing -- it was under the radar. A lot of people don't know, but they were doing ridiculous safety precautions.

It was so well-thought-out. And to this day, we really haven't been able to tie any outbreaks back to those theme parks. So I think they were really concerned about safety. I think they have even better ideas.

So I think that they will come online. It's not going to be phase one, but I think it will be something that happens. And I think you're going to see a lot of new innovations just to give people the confidence that it's a safe thing to do.

BARTIROMO: Many people's parents, grandparents are in Florida at nursing homes, Governor.

I want to ask you what you're doing there, because we have seen a real disaster in terms of the nursing homes in New York. How are you going to avoid what has taken place there? What have you already done in terms of nursing homes in Florida?

DESANTIS: Well ,those were the first actions we took in March, because we knew that this was a virus that affected elderly much more severely than people who were younger, particularly people under 50 who -- with no conditions.

So, we immediately worked to limit -- not have visitation, all the staff members had to be screened thoroughly before being able to go to work. We required the wearing of PPE. We sent rapid-response teams to go look at infection controls, assess needs and report back.

I have sent National Guard. I have got 50 National Guard strike teams going to nursing homes, conducting surveillance testing, so that we can identify clusters, if they're there, and limit them.

And then my secretary of health administration, she said from the very beginning to hospitals, you cannot send a COVID-positive patient back into a nursing home that doesn't have the capacity to isolate with negative pressure, because, when you do that, then it spreads like wildfire.

So she did a really good job with that. And so what we're doing going forward is, I'm going to be unveiling a mobile R.V. lab that we can drive across Florida. The results are going to back in 45 minutes. So we're going to go to nursing homes, is going to be our number one thing, test the staff, test the residents.

And, eventually, Maria, once we get enough rapid tests, I'd like to be able to test the family members and let them go visit their loved ones. These people haven't had visitors for close to two months. That's not an easy thing.

Obviously we have got to err on the side of safety. But if a son or daughter can get a test, and they're negative, then they should be able to go in and see -- see their parents.

BARTIROMO: Yes, I love the fact that this mobile lab that you're debuting debuts tomorrow, right?

So you have to come back and tell us how that went with the mobile lab. Sounds very interesting.

I want to ask you about international travel, Governor, because, to me, that seems like the last thing that's going to come back here. But Miami -- Florida is in an important place in terms of entering -- having foreigners enter the country.

You have got a big population from Brazil coming to Miami. When are you expecting international travel to resume as part of this reopening?

DESANTIS: Well, a lot of that has been going on the whole time, actually.

The European travel was stopped, Asian. But you have had people go. I spoke with the president about this last week. He asked me to come up with some suggestions about how you do it. And my view would be, if you're in a country that has an outbreak, and you want to fly into the United States, then I think that there should be a rapid test done in that country at the airport, in conjunction with the airlines, so that if you're negative, you board the plane and come.

I don't think people should just show up here COVID-positive and then have Floridians have to scramble to contain it. So I think we may be able to get there. I have people working on this in Florida for the proposal. I'm going to give it to the president.

But I know he's very concerned about it, because we have done all this mitigation. It's caused a lot of problems. But we needed to do it to stop the spread and to keep our hospitals from being overwhelmed. The last thing we want to do is to be doing a good job here and then have it seeded through people coming in from foreign countries.

BARTIROMO: That's right.

DESANTIS: So I think we will -- I think we're going to get there. I think it's -- yes. And I think it will be meaningful.

BARTIROMO: All right, so you're working on a plan. We'd love to hear that in, more details, when that's ready.

Real quick on what you need now, Governor, because we had the mayor of New York City on last weekend, Bill de Blasio. He said, we need $7.5 billion right now of federal money. We need to be made whole.

A lot of conversation about a next stimulus plan, a relief package, if you will, that will be targeted at the states.

How much money does Florida need?

DESANTIS: Well, Florida, we were flush before this. We were going well. Obviously, this is going to hit our revenues, because you have had key sectors of our economy, like tourism, that have taken a huge hit.

I think we can get those back off the mat, but, going forward, that obviously is going to be a problem.

What I would say is, it's one thing to help a state with lost revenue from the pandemic, but this pandemic should not be used to bail out obligations that were run up over 20 or 30 years. I think that would be very unfair to the states that have done it well.

And so I think, if you're going to make a state whole from pre-pandemic, that's one thing. But to go beyond that and to bail out pensions or do things like that, a lot of these states weren't being managed properly.


DESANTIS: And I wouldn't want to see Florida and Texas lose our competitive advantage because they're getting bailout money and we're not.

BARTIROMO: I understand that, yes, a very good point.

So, very -- very quickly, specifically, does Florida need any federal money right now or not?

DESANTIS: Oh, look, we lost revenue.

I mean, I think, if they're going to do a package, we would absolutely love to be included in it, because the economy has taken a hit. We have got people unemployed .We have parts of our economy that have stopped. And we're going to get it back. But, I mean, it has -- it has caused problems.

BARTIROMO: All right.

Governor, good to have you this morning. Thanks very much.

DESANTIS: Thank you.

BARTIROMO: We look forward to the update. And good luck tomorrow with the reopening of much of Florida, Governor Ron DeSantis.

And, as more states start allowing businesses to reopen, how will adjusting to social distancing impact the bottom line? Are we in a recession right now?

National Economic Council's Larry Kudlow weighs in on that when we come back, as we look ahead on "Sunday Morning Futures."


Coronavirus closures and stay-at-home orders hitting some sectors of the economy particularly hard, closed businesses, grounded flights slashing the demand for oil, sending prices to unprecedented lows.

Larry Kudlow is the National Economic Council director, and he joins me right now.

Larry, nice to see a weekend where many businesses are beginning to open.

What kind of an impact will this have, the reopening, on overall economic growth for the year, Larry?


You know, May will probably be a big transition, very positive, probably transition into June, as we get the economy opening. We have the federal guidelines, as you know, data-dependent. It's got to be, within 14 days, the numbers have to be coming down.

The states themselves will have their own guidelines. Everyone is emphasizing best-practices behavior, distancing. Testing is picking up very, very rapidly. So I think things look a little better.

It's going to take a while, but I think America wants to go back to work, Maria, and we would love to see it.

BARTIROMO: How bad has the economic damage been so far, Larry? Is it fair to say we are in a recession right now? We have all seen the numbers. In terms of the second quarter, we're looking at a contraction of up to 30 percent just for the second quarter.

Are you saying you're expecting growth in the third quarter, Larry?

KUDLOW: Yes, I am.

Look, it's funny. These terms recession, I understand that, but this is different than past recessions. This is different than past history. We basically shut down the economy as a means of fighting this highly infectious virus.

So, you know, nothing like this ever happened before in American history. So, yes, we are in a deep contraction. There's a lot of hardship out there. We have done the best we can with liquidity and cash to keep people afloat. It's very, very difficult.

Unemployment, as you know, is going to continue to rise. But, having said all of that, as we move into the second half of year -- and I want to quote the Congressional Budget Office, as well as a bunch of private forecasters and The Wall Street Journal forecasting survey.

Maria, they're looking for a substantial rebound of, say, 17 to 20 percent in the second half of the year, beginning in the third quarter. The growth rate in the third quarter could be well over 20 percent.

And I want to add to that, as we formulate our own policies, there will be additional policy discussions with Congress. We want to move towards long- run growth incentives. President Trump cut taxes and regulations for middle-income folks, better trade deals, boosting the energy system.

That worked. We had terrific growth in earlier years. Even the beginning of this year, we were growing at better than 3 percent.


KUDLOW: Those incentives will remain, and we will build on those incentives, so that, coming off of this pandemic, we could have one of the greatest economic growth rates in American history in 2021, next year. That is a possibility.

BARTIROMO: All right, great. That's what I want to talk to you about.

You just heard we spoke with Ron DeSantis about money that the states may need. Are you planning another stimulus or a relief package for states and for local areas?

We had Mayor de Blasio on last week. He said New York City needs $7.5 billion right now, government -- the federal government has to make New York City whole. What about that?

And then can you walk us through some of the incentives that you're working on to make 2021 one of the best economic years on record?


Well, look, we will see -- in a few weeks, probably, we will see the discussion with our friends on Capitol Hill. The president is not necessarily opposed to medical-related supplies, to COVID-19-related assistance to the states. We have already given them, as you know, hundreds and hundreds of billions of dollars for medical equipment and testing and a variety of ways.

And the governors have been terrific working with President Trump and Vice President Pence. I was in some of those meetings in the Oval Office this week with the governors. So that's all to the good.

Regarding overall state and local assistance, we will see. The president has mentioned, of course, that that could be tied to the listing of sanctuary cities, which I think is a long-run issue that could be attended to now.

I don't want to get ahead of the curve. He hasn't made up his mind yet. So we will see about the state aid.

On the other side, the president, as you know, wants to put a payroll tax holiday for the employee side. We have it for the business side. We would like it for the employee side. That creates a 7.6 percent increase in after-tax wages. That would be a positive thing.

We want to make sure that, for small businesses and actually all businesses, full 100 percent expensing. You know, that's especially important. As these restaurants and shops and whatnot, as they open up, they're going to have to pay for a lot of new equipment to be safe and sound.


KUDLOW: That's what the public requires. We want all that to be expensed.

We want to help out with entertainment deductions for restaurants, stores, business -- baseball stadiums.


KUDLOW: We'd also like to see, by the way, some kind of safeguard, some kind of shield for liabilities, because, otherwise, restaurants will be sued.

They will fold. They won't go back in. We have to make sure that they are protected. So those are some of the things. There are others that we are talking about to provide growth, not only for the second half of this year, but for a spectacular 2021.

BARTIROMO: All right, we will be watching it. We hope it is spectacular.

Larry, it's good to see you this morning. Thanks so much.

KUDLOW: Thank you, Maria.

BARTIROMO: We will be watching. And thanks for your leadership, Larry. You're doing a great job.

Larry Kudlow joining us this morning in -- on the recovery.

His state, meanwhile, up next, the second largest economy in the country, and now it is getting back to business -- that's Texas -- just as the Senate is. Senator Ted Cruz will be here live to weigh in from Texas.

Stay with us.


BARTIROMO: Welcome back.

Texas of the first states in the country to restart its economy, reopening some businesses last Friday, as the Senate prepares to get back in session tomorrow morning.

Joining me right now for more on all of this is Texas Senator Ted Cruz, who serves on the Judiciary and Foreign Relations committees.

Senator, it's great to see you this morning. Thanks so much for being here.

SEN. TED CRUZ (R), TEXAS: Maria, good morning. Good to be with you.

BARTIROMO: You have done so much work, and I want to thank you for that.

You have introduced a number of bills with regard to China. And I want to talk about those, because China has created a number of lobbying groups in the United States. They have done it in Hollywood. They have done it in university.

And, this morning, we have more breaking bombshell news in an investigation that we have certainly been doing a deep dive in into China, whereas the Chinese communist government lied about the coronavirus.

Tell us what's most important in keeping China held accountable, Senator.  CRUZ: Well, I think the most important long-term national security and foreign policy consequence of this coronavirus pandemic is going to be a fundamental reassessment of the United States' relationship with China.

I believe China is the most significant geopolitical threat to the United States for the next century. And I have been saying that for years. Many in Washington have not been interested in hearing it or have refused to listen.

I think this coronavirus pandemic has opened the eyes of many in Congress, many in Washington, and even some in the media.

If you look at the pandemic itself, the communist government in China bears enormous responsibility, enormous direct culpability for this pandemic. We know they covered it up. We know that when heroic whistle-blower doctors tried to draw attention to it in December of last year, the Chinese government shut them up, it punished them, it silenced them.

Had they behaved responsibly and sent in health professionals and quarantined those infected, there's a real possibility this could have been a regional outbreak, and not a global pandemic. And the hundreds of thousands of deaths worldwide are in a very real sense the direct responsibility of the communist Chinese government's lies.


And now we get a 15-page research document which lays the foundation for this case of negligence. And it lays the foundation among the Five Eyes, the five countries who are together, unified, which basically were the ones who were most affected by China's negligence, including the United States.

So does the U.S. have allies across the world on this?

CRUZ: Well, yes.

And the Five Eyes are our closest allies, with whom we share the most sensitive intelligence information. And the Five Eyes network itself, the integrity of that network, has potentially been seriously compromised, because the United Kingdom had made a decision prior to this pandemic to allow Huawei, the giant telecom company that's owned and controlled by the Chinese government, to build some of the telecom infrastructure and equipment in the United Kingdom.

I had spoke out loudly against it. A number of us had, because Huawei is a multibillion-dollar espionage agency for China. And if they build the infrastructure, it gives them the ability to surveil and to intercept.

And from the perspective of the Five Eyes network, we can't be sharing information with a system that is compromised. As I said a couple of months ago, four eyes are better than six eyes...


CRUZ: ... which means, as much as we love the Brits, if they're going to set up a system that lets the Chinese hack into the communications, we're not going to be able to share the same information.


CRUZ: Here is the good news, Maria. Post-coronavirus, the reports out of the United Kingdom are that the prime minister and the government are seriously reconsidering that Huawei contract because of these security risks.


CRUZ: An example of all sorts of people who were potentially attracted by the billions that China offers in enticement, and now realize the lying and the danger from China.

BARTIROMO: That's right.

That's -- you make such important points, Senator.

You know, Secretary Pompeo joined me literally a year-and-a-half ago, almost two years ago, and said on my program, on this show and on "Mornings With Maria" on FOX Business, we will not share as much with European friends if they have Huawei telecom...

CRUZ: Yes.

BARTIROMO: ... because there are our backdoors in all the technology.

CRUZ: Yes. Yes.

BARTIROMO: And all the data that is going through Huawei goes directly back to the communist country.

I want to get into specifics here, because you and I spoke over the weekend, as we prepared for this interview. And we talked about the theft that is so prevalent coming out of China, the theft of intellectual property.

CRUZ: Yes.

BARTIROMO: You said right now, as we speak, the Chinese Communist Party has directed students, if you will, researchers, if you will, at M.D. Anderson, one of the leading cancer institutions in America...

CRUZ: Yes.

BARTIROMO: ... in the world. And they're stealing from us right now in regard to cancer research.

Tell me about that.

CRUZ: No, that's exactly right.

What we're seeing from China -- look, there's always been theft or there's been piracy and industrial espionage. What we have never seen in the history of the world is a nation state with trillions of dollars of resources like China who uses the theft of intellectual property as a strategy, who invests billions of dollars into it.

So they go into universities. M.D. Anderson had a number of instances of Chinese nationals on the payroll of the Chinese communist government making more from China than they were making from M.D. Anderson who were stealing their intellectual property.

And this, by the way, isn't missile technology. This is treatments and cures for cancer. They're doing this at universities throughout the United States. They're doing this at businesses throughout the United States.

You know, this week, I have got four pieces of legislation I'm introducing. One of them is legislation that prohibits the U.S. government from conducting any business over any telecom or Internet infrastructure that China owns or controls.

Why? Because they use it to steal. That is part of their strategy.


CRUZ: Last fall, I traveled to Asia, did an Asia tour of Pearl Harbor, Japan, Taiwan, India, Hong Kong, really friends and allies all surrounding China.


CRUZ: The entire purpose of the tour was to talk about China's threat.


CRUZ: You know, when I was meeting with the leaders of our Pacific Command out there, they were saying the military threat from China is enormous.

And one of the reasons is, is that they steal our military technology. So they don't have the R&D costs. They just steal what we invent.


CRUZ: And they are flooding hundreds of billions into building up their military.

BARTIROMO: Unbelievable.

CRUZ: It is dangerous. And we have got to treat them like the threat that they are.

BARTIROMO: So, this is how China does it. They create all these lobbies, right?

CRUZ: Yes.

BARTIROMO: They have created a lobbying group with universities, so they can send their researchers in there to steal.

They have created a lobbying group with Hollywood. They fund all the movies, so that Hollywood listens to them. They have created lobbying groups throughout America.

One of your bills is called the SCRIPT Act. I want you to talk about that, because they have really bullied Hollywood. And Hollywood producers roll over about it. You have mentioned a couple of films before, "Top Gun," "Bohemian Rhapsody."

Tell me what your SCRIPT Act does, real quick.

CRUZ: Yes.

No, it really is tragic that Hollywood has been willing over and over again to kowtow to the Chinese communists and let the Chinese government censor American movies.

And so I introduced legislation called the SCRIPT Act.

BARTIROMO: We're showing the "Top Gun" jacket, Maverick's jacket, right now on air.

We're showing Maverick's jacket right on air right now, because Hollywood - - because China -- the Chinese communist government told Hollywood, take off the flag of Taiwan and Japan off of Maverick's jacket, right?

CRUZ: Yes. Yes.

And Hollywood happily complied. And think about it for a second. We're saying Maverick is afraid of the damn Chinese communists. This is ridiculous. And China is willing to happily go along.

BARTIROMO: And how about "Bohemian Rhapsody?"

In "Bohemian Rhapsody," the Chinese communist wanted them to edit out a part when Freddie was gay? How do you tell the story of "Bohemian Rhapsody" and not say that Freddie was gay?

CRUZ: You don't, but Hollywood was more than happy to edit the scene out.

They did it, because the Chinese government didn't want to acknowledge that Freddie Mercury was homosexual. Look, that's a huge part of the story.


CRUZ: And the problem is, Hollywood is more interested in making millions of dollars from the Chinese market than they are in free speech, than they are in artistic integrity.


CRUZ: And so what the SCRIPT Act says is, all right, fine, if you want access to the Pentagon, if you want access to jet airplanes and ships...


CRUZ: And, by the way, there are 1,000 movies that used access to the military to make the movies.

If you want access to the Pentagon, you can't let...

BARTIROMO: No censorship.

CRUZ: ... the Chinese censor your movie.

BARTIROMO: Perfect. I love it.

CRUZ: And it blocks...


CRUZ: Because it's trying to use the assets we have to discourage them kowtowing to the Chinese communist censors.

BARTIROMO: Senator, thank you for your work on this. You're doing a great job. Please come back soon.

Senator Ted Cruz, we will talk with you soon. Thank you, sir.

We will look at that legislation this upcoming week.

And stay with us. We will be right back.


SIDNEY POWELL, ATTORNEY FOR MICHAEL FLYNN: Nothing about this case was done right.

They violated every rule, every protocol, and then have long hid, since the beginning of the investigation, the evidence that they knew he was innocent. The entire prosecution was false.

It must be dismissed for the government's egregious misconduct and his guilty plea withdrawn.


BARTIROMO: That's Sidney Powell, the lead attorney for President Trump's former National Security Adviser General Michael Flynn, reacting to newly unsealed FBI documents during the Mueller investigation.

I spoke with her on "Mornings With Maria" on FOX Business this week. Those documents include handwritten notes from the date of Flynn's interview in January in which FBI officials debated whether to warn him that lying to the federal agents was a felony or -- quote -- "get him to lie," so we can prosecute him or get him fired.

Joining me right now is Judiciary Committee Chairman Senator Lindsey Graham.

Senator, it's great to have you this morning. Thanks so much for joining us.

SEN. LINDSEY GRAHAM (R-SC): Good morning.

BARTIROMO: We have been down this road many times in terms of that cabal and how they set everybody up to try to take down Donald Trump.

GRAHAM: Yes. Right.

BARTIROMO: We now know Peter Strzok was critical there.

Will you call Peter Strzok to your committee to interview him as a witness, Senator?

GRAHAM: Yes, when the case is over.

I'm not going to do anything to interfere in an ongoing criminal case. That would be unethical. That would be wrong. But when this case is over, I'm going to ask questions, like, why did the field office recommend dropping the case, and Peter Strzok and the seventh floor insisted that it go forward?

Seems to me there's a tale of two FBIs here, the FBI agents that we all admire in the field office and this hit squad that McCabe and Comey put together operating out of the seventh floor.

I want to know why Flynn was being surveilled by the Obama administration to begin with. The Obama administration is surveilling the national security adviser of the president-elect. What the hell was that all about?

I want to know why they were looking at manufacturing a crime, rather than investigating the one -- investigating a crime.

The field agents wanted to drop the case. It was the seventh floor at the FBI said, no, we got to go forward.

It is now time to understand how the seventh floor operated. I will be all over that.

Mr. President, don't give Flynn a pardon yet. Let the system work out. He deserves a new trial. And that case should be dismissed because of prosecutorial misconduct. That's the right answer here.

BARTIROMO: So, you -- do you think he will be exonerated then?

GRAHAM: I think the judge should, in light of this new evidence, dismiss the guilty plea and eventually dismiss the case.

We now know, in January the 4th, the FBI agents in Washington said, there's no there there.


GRAHAM: It was only after Strzok got involved, at the direction of the seventh floor, the case continued. And this is a process crime.

They set him up. I hope the guilty plea is set aside. And I hope government will join in, in a motion to dismiss the case.


GRAHAM: Attorney General Barr is a real hero here for the rule of law.

So, Attorney General Barr, if he joined in with the defense to dismiss the case, that would be the right outcome.


GRAHAM: Then I come in.

BARTIROMO: I have got to tell you, though, I mean, we have been talking about this now for three years.

And when I first came on the scene and said, look, this is a coup to take down Donald Trump, I got slammed.


BARTIROMO: Everybody out there was just going on this, you know, Russia collusion witch-hunt, which was ridiculous.

GRAHAM: Right.

BARTIROMO: And you told me repeatedly over the last couple years, as I continued to bring this evidence forth -- in February of 2019, you said, I'm going to subpoena Rosenstein, Yates, Strzok, Comey.

In July of '19, you said, I'm vowing to a deep dive.

GRAHAM: Right. Right.

BARTIROMO: In August '19, you said, Well, we will make sure this never happens again.

GRAHAM: Right.

BARTIROMO: September 22, 2019, you came on this show, you said, we're ready to start calling people. October 29, I'm going to call Horowitz and subpoena.


BARTIROMO: November '19, I'm going to call Horowitz after the findings.

You are the only one with subpoena power right now in the Republican Party.


BARTIROMO: We need you to call these individuals down to testify as witnesses.

People want you to move on this, Senator. Are you going to do it?

GRAHAM: Yes, but I have told you, and I will tell you again, I'm not going to interfere in an ongoing criminal matter.

This is a rule of law nation. I'm a politician. My goal is to write a report of how it got off the rails.


GRAHAM: But I can promise you, we're going to do it right.

I'm not going to jump in the middle of this case. But when it's over, we're going to find out why the Mueller investigation lasted two years. We're going to find out what kind of FBI shop was run out of the seventh floor. We're going to find out how you could issue warrants against Carter Page, when the Russian sub-source told the FBI in January of 2017 it's all a bunch of garbage.

That's my lane.


GRAHAM: Durham is a prosecutor. I'm an oversight guy.

But I'm not going to interfere -- interfere in an ongoing criminal matter, period.

BARTIROMO: Another lane of yours is the China lane.

GRAHAM: Right.

BARTIROMO: You also have bills coming out to keep China's feet to the fire. They lied and they hid this coronavirus.

Now the whole world is suffering. Tell me what you're going to do. And where are your colleagues on the left in terms of partnering with you against China?

GRAHAM: Well, I have got a bill that says we're going to put sanctions on China's economy until they cooperate with the investigation about how the virus came out of the lab, if it came out of the lab at all, closing the wet markets that create these pandemics, and dealing with the abuse against the Hong Kong democracy advocates.

But it doesn't matter what I do or what Ted Cruz does or Tom Cotton or Marsha Blackburn or Martha McSally. Where is Pelosi and Schumer? We have all got good ideas on the Republican side. The president wants to be tough.

Where is the Democratic Party? Don't give China a pass.

So, to Senator Schumer and Nancy Pelosi, why don't you work with me and others to hold accountable -- China accountable for killing over 60,000 Americans, and having 30 million people lose their job? They're absolutely AWOL when it comes to China accountability.

So, none of this matters unless you can get Democrats involved.

BARTIROMO: Yes, I know.

But, so far, the media is even siding with the Democrats, trying to investigate President Trump.



BARTIROMO: I mean, I believe this election will be about China.

Most people understand what has taken place here.

GRAHAM: A hundred percent.

BARTIROMO: And President Trump has changed the conversation on China.

GRAHAM: So, look at this.

The Democrats have impaneled a group to look at Trump, not China. President Trump has made very good decisions, very hard calls consistently.

Not one Democrat has come forward with any idea to hold accountable China for killing over 60,000 Americans by withholding information about the virus and putting 30 million Americans out of work, because that's what we had to do to save probably a million lives.

Not one Democrat has come forward with an idea to hold China accountable. China is the problem, not Trump. Democratic Party, step up. Don't give China a pass.

BARTIROMO: All right, we're going to keep following you on this, Senator.

Thanks very much for joining me this morning. We have got to get more into it with you the next time.

Senator Lindsey Graham, always a pleasure to see you, sir. Thank you.

Coming up: the Michael Flynn case, as former House Oversight Chair Trey Gowdy and Ranking Member of the Intel Committee Congressman Jim Jordan join me next with what they are going to do next, questioning Robert Mueller's entire investigation and pointing the finger squarely at Christopher Wray.

That's next.


BARTIROMO: Welcome back.

We are talking about newly revealed FBI notes this morning.

And joining me right now to talk about that is Congressman Jim Jordan and former Congressman Trey Gowdy, Congressman Jim Jordan, ranking member of the Judiciary Committee, Trey Gowdy, former prosecutor, House Oversight Committee -- formerly House Oversight Committee chairman and a FOX News contributor.

Gentlemen, thank you so much for joining us.

REP. JIM JORDAN (R-OH): It's good to be with you.

BARTIROMO: We are looking at these notes written about that interview with General Flynn.

First off, let me get both of your takes on what was most stunning.

Trey Gowdy, you looked at this. And, of course, we had an additional dump of documents this past week. What struck you?

TREY GOWDY, FOX NEWS CONTRIBUTOR: That there was absolutely no evidence that Michael Flynn was an agent of a foreign power the entire time they spent looking at him.

In December of 2016, they had nothing. So they're about to close the investigation without even interviewing him. Keep in mind, they had no interest in interviewing Michael Flynn. They're about to close the case. Then you get the call with Kislyak.

And Peter Strzok seems more interested in setting up an American general than he is figuring out what the Russian generals were doing to this country. They send two agents over there without informing the White House, without informing the Department of Justice, and they wanted to set him up. That is not the FBI that this country needs.


Jim Jordan, your reaction to these notes from Mr. Priestap, which basically tells us that it was a total setup.


BARTIROMO: They were saying, look, do we want to get him to lie? What do we want to get him to say?


JORDAN: Think about -- yes, Maria, think about what happened in three weeks in January of 2017.

On January 3, Chuck Schumer on "The Rachel Maddow Show" says this, in response to a statement that president-elect Trump had said where he said, we were being spied on.

Schumer says: "If you mess with the intel community, they have six ways at getting back at you."

The very next day, January 4 -- Trey just talked about it -- Peter Strzok overrules the agents who say, Mike Flynn did nothing wrong, overrules them because Comey and McCabe told him to. January 6, the FBI and other people in the intel community in the Obama administration go to Trump Tower and try to set up the president.

Remember, this is where Jim Comey says after the meeting is done, I want to talk to the president. He tells the president about the dossier, the dossier they already knew was false, they knew was Russian disinformation, and they knew was paid for by the Clinton campaign.

And then, just two weeks after that, we have the FBI going to the White House to set up Michael Flynn. All that happens in three weeks' time. This shows you they were out to get the president, and they were willing to do whatever it took to get him, including going after a three-star general who had served our country for three decades.

BARTIROMO: What I want to know is, is this going to be the beginning of the dominoes falling?

I mean, Trey, you did an excellent job, Jim Jordan, you did an excellent job really digging in and getting to the bottom of this.

We know the bad actors, Jim Comey, Peter Strzok, Lisa Page. Will we see accountability, Trey?

GOWDY: Well, accountability, I mean, you can have it in the executive branch with prosecutions.

But accountability, Maria, takes consensus. I bet Jimmy can't name a single Democrat that is interested in the House at looking into the treatment of the FBI.

When I was there, the Democrats finally found a cop that they liked. Unfortunately, his name was Peter Strzok, whose only interest in this investigation was if it would lead to the impeachment of Donald Trump.


GOWDY: So, accountability requires consensus. Where is it?

JORDAN: They won't even -- Maria, they won't even...

BARTIROMO: Let's take a short break.

Yes, go ahead, Jim.

JORDAN: They won't even have a hearing where they bring in Michael Horowitz.

After the investigation he did into the Carter Page FISA, they wouldn't even bring him in for a hearing. Jerry Nadler or Carolyn Maloney wouldn't even bring him in.

BARTIROMO: And we still haven't heard from them. You're right.

All right, let's take a short break. I want to ask you about Christopher Wray and the Mueller report.

Stay with us.


BARTIROMO: I'm back with Congressmen Jim Jordan and Trey Gowdy.

Congressman Jordan, let me ask you.

You just said a minute ago on your way out, Jerry Nadler will not even bring Michael Horowitz in to question.

We already know that they made 17 errors, according to the I.G. report. You're saying that your committee chairman will not bring him into find out what the heck happened here.

JORDAN: No. He had this scathing report about the Carter Page FISA, wouldn't bring him in. Neither would the Oversight Committee.

And now Mr. Horowitz is working on a broader look at FISA. And just four weeks ago, he sent out a memo which said he's looked at 29 cases, 29 cases, random sample, 29 cases, and there were major problems in every single one.

In four of those cases, they couldn't even find the Woods file, which is a file they keep which has the sort of basic evidence, underlying evidence, that they then use to take to the court. Couldn't even find the Woods file.

And what I find interesting is, two months ago, when Chris Wray did testify, FBI Director Wray testified in front of the Judiciary Committee, he told us we could all sleep well at night, the FISA process is fine.

Well, somebody is wrong here. Either Christopher Wray is wrong when he said, we can all sleep well at night, or Michael Horowitz.

And I'll tell you what. Mr. Horowitz has done good work.

So, I'm wondering what Christopher Wray is really up to when it comes to reforming this FISA process, which we know was at the heart of this whole Trump-Russia investigation.

BARTIROMO: I'm sorry. How arrogant is that, go sleep well at night with all of this, when we know what the cabal did?

Trey Gowdy, Peter Strzok is a kingpin here. He's the one who interviewed General Flynn. He was simultaneously working on an investigation into Hillary Clinton's e-mails.

So, did he lie then? And did he lie on the Hillary Clinton e-mail investigation? Is that going to come up again?

GOWDY: Well, Maria, the FBI, those letters stand for fidelity, bravery and -- bravery and integrity.

So, I'm going to ask you and your viewers, which of those words come to mind when you think of Peter Strzok promising to stop candidate Trump, interested in the impeachment, but not the interference?

Which of those three words comes to mind when you hear Jim Comey say, we're going to see what we can get away with, or when you read notes about a pretextual defensive briefing?

Which of those three words that are supposed to personify the FBI, which of those three words do you think about over the last four years, when the world's premier law enforcement agency has been riddled with bias and incompetence?

BARTIROMO: Yes, good point.

GOWDY: So, Chris Wray, look, he didn't start the problems, but he's been there for two years.

We need an FBI that we can trust. And what I read in these notes is not the FBI I used to work with.

BARTIROMO: Yes, it's great to get your take on both -- you're both zeroing in on Christopher Wray, as well as the Mueller investigation.

Thank you, gentlemen.

I'll see you tomorrow on FOX Business, "Mornings with Maria."

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