National counterintelligence exec on going after leakers

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National counterintelligence exec on going after leakers

William Evanina speaks out on 'Your World'

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

(BEGIN VIDEO CLIP)

RAHM EMANUEL, D-MAYOR OF CHICAGO: The city of Chicago may be the first to bring a lawsuit, but I'm also confident we will not be the last.

(END VIDEO CLIP)

TRISH REGAN, GUEST HOST: It's a showdown over sanctuary cities.

Welcome, everyone. I am Trish Regan, in for Neil Cavuto. And this is "Your World."

Chicago now suing the Justice Department, as the White House threatens to withhold some of its funding, along with other cities protecting illegal immigrant.

Chicago Mayor Rahm Emanuel calling it blackmail. The Justice Department says the mayor should be more concerned with the staggering number of murders in his city.

Mike Tobin is in Chicago with the very latest.

Hi, Mike.

MIKE TOBIN, FOX NEWS CORRESPONDENT: Hi, there, Trish.

Chicago Mayor Rahm Emanuel is essentially taking the position that the city will not enforce the policies that the Department of Justice seeks to enforce. However, they still want those crime-fighting dollars. They won't comply with those policies, but they still want those crime-fighting dollars.

This follows the Department of Justice making public the application for the Edward Byrne Memorial Justice Assistance Grant. Chicago is projected to be in line for $3.2 million from that grant.

However, the applications says, to get money, a police department must share with the federal government immigration status of certain subjects, must grant federal agents unlimited access to local police stations, and must give Homeland Security agents a 48-hour warning before releasing someone wanted for immigration violations.

The lawsuit claims the policy violates the Fourth Amendment. Mayor Emanuel says compliance would violate the principles that built places like Chicago.

(BEGIN VIDEO CLIP)

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

(END VIDEO CLIP)

TOBIN: Now, Jeff Sessions said last week that policies forcing law enforcement to arrest, release, then rearrest the same criminals endangers officers.

A spokeswoman for the Department of Justice said it is tragic that Mayor Emanuel is less concerned with that staggering crime statistics in Chicago than he is protecting criminal aliens and putting Chicago's law enforcement officers at greater risk.

The political element can be considered advantageous to Mayor Emanuel. Chicago, as you know, is the big Democratic machine. Standing up to Trump won't hurt him in the polls here. And there is a significant Latino population in the city of Chicago. And that population is politically active -- Trish.

REGAN: All right, thank you very much, Mike.

TOBIN: You bet.

REGAN: My next guest says the Chicago mayor's actions are violation and a willful violation of federal law.

Bristol County, Massachusetts, Sheriff Tom Hodgson joins me right now.

By the way, we did request an interview with Chicago's mayor and never heard back.

Sheriff, it's good to have you here. Thanks for joining the show.

TOM HODGSON, BRISTOL COUNTY, MASSACHUSETTS, SHERIFF: Great to be here, Trish.

REGAN: What do you think is motivating Rahm Emanuel right now?

HODGSON: Well, it has to be politics.

It's certainly not the safety of the people in Chicago. This is a mayor who is overseeing a city that is basically a war zone now with crime. And to think that he would pushing back against President Trump and Attorney General Sessions' efforts to try to keep the people in his own communities safe is -- it is unbelievable. It is outrageous.

REGAN: So you think it's political.

HODGSON: And you have to wonder. It's not question it's political.

REGAN: You do have to wonder.

I mean, what is amazing to me here is that we are a country, right, we are a country, and we have laws, and we have rules and regulations. And for whatever reason -- and I'm a big believer in local state rights -- but for whatever reason, federal law is not trumping these municipal rights in these particular cases, both in Chicago, San Francisco, and other cities.

How difficult do you think that makes it to do your job if you are a police officer there on the streets trying to keep everybody safe?

HODGSON: Well, it makes it very difficult when you have a mayor saying you can't cooperate with your federal partners.

And the attorney general is right, Attorney General Sessions, when he says it puts our officers at risk when we let people out that we otherwise had that we know the federal government once held, and then have them go out not only potentially victimize police officers when they finally go to get them, but in addition to which all the people in that community that faced the vulnerability of being severely injured or killed by crimes that may continue going on and us having taxpayers to then pay additional money to track these people down.

It is very, very difficult to understand how anybody would not want law enforcement agencies working in collaboration. And, by the way, let's remember that the FAA, the Federal Trade Commission, the FCC, these are all agencies that are regulated by law, as is immigration, by the federal government.

For Rahm Emanuel or any of these other elected officials who took an oath to uphold the law to decide how much of that law, how little they are going to abide by, it would be like saying that certain cities could then decide what flight patterns they want for the FAA.

That is not what was intended by the preemption concept of government.

REGAN: Yes, I hear you.

And this is that conflict between states, local and federal law, where you would think, in this particular case, in the interest of keeping everyone safe, federal law would trump things, no pun intended there.

HODGSON: Yes.

REGAN: But, Sheriff, let me ask you.

We have got a flawed immigration system, for sure. We need to be attracting talent here, talented people here that want to work hard, that want to be American. Why isn't the Chicago mayor talking about reforming immigration, so we get the good folks in, and we keep the bad folks out?

Is that just too politically divisive for him?

HODGSON: Well, and it requires some work. And it requires going down to Washington and telling Congress to finally do their job.

And what is really interesting is, this idea that the president has come up with to limit immigration, legal immigration, and target these people, these mayors should be jumping board with our president. He's absolutely right.

And he's not only trying to keep us safe, but he's trying to make sure that we're are targeting the right skill sets and that we are getting back to the kind of immigration law we used to have. And unfortunately for this president, for 20 years -- and I have been working on this for 20 years -- Congress has failed to act. The president has finally stepped in and said enough is enough.

And he's standing up for the people in this country. And God bless him and his attorney general for doing it, because that's what has to be done. Enough is enough.

REGAN: Well, that said, Rahm Emanuel is promising -- or threatening, I should say, that many other cities are going to follow suit. Do you see that happening? And is this going to turn into a much bigger battle that is heading for bigger courts?

HODGSON: Well, they probably -- there probably will be some.

But Rahm Emanuel, his attorney and he were saying that the reason he is fighting this in court is that Congress makes those rules, and that the president does not have the authority to do it.

Well, if that is true, Mr. Emanuel, then I suppose that would apply too to the immigration laws, wouldn't it? Congress established what those laws are. And you do not seem to want to follow them.

So, this is where -- and not only that. If you ever noticed, these objections around -- he uses the word immigrant. Half the businesses in Chicago and in Illinois, he says, are from immigrants. Well, OK, we are not arguing about immigrants. We are arguing about it and what we're against is illegal immigration, so that people will follow the laws, and that those who are waiting behind our borders, respecting the laws aren't made to feel like, boy, you are a bunch of fools for doing the right thing and respecting our laws and waiting your turn.

REGAN: There is a distinction. Exactly. There is a distinction.

Thank you so much, Sheriff. It's good to see you. Thanks for joining us.

HODGSON: Great. Great to see you. Thanks for having me, Trish.

REGAN: All right, stocks moving higher today, another big, big day here with the Dow and S&P closing at new all-time highs, actually the ninth straight record close for the Dow, and its 35th record close since the start of the year.

We have a whole lot more on the markets tomorrow on "Cavuto Coast to Coast" 12:00 p.m. Eastern on the FOX Business Network, followed by yours truly, 2:00 p.m. Eastern on the Fox Business Network. We will see you there.

Is the sheer threat putting leaks on lockdown? So far, no major leaks since Attorney General Jeff Sessions announced his crackdown. One of those guys with him is here.

And later, 200 days in, Congress out and no major legislation passed. Meet the Republican donor so enraged, he is now suing to get his money back.

(COMMERCIAL BREAK)

REGAN: Is the crackdown on leaks already working?

It has already been us a few days since Attorney General Jeff Sessions went on the attack against the White House and intelligence leakers. But, for now, things have been kind of tight.

Reaction right now from William Evanina, director of the Director of National Counterintelligence and Security Center. He was with A.G. Sessions just last Friday.

Good to have you here, sir.

What do you think? We haven't heard quite as much in the last couple of days. We're going on 72 hours, I guess you could say. Is there a change?

WILLIAM EVANINA, DIRECTOR, NATIONAL COUNTERINTELLIGENCE AND SECURITY CENTER: First of all, thanks for being here. It's a pleasure.

I think there is going to be a change. We hope there is. It's a government-wide effort to at least address the issue of unauthorized disclosures and that damage that they cause to our nation's security, and the efforts that we're putting forth to try and prevent them and stop them in the future.

REGAN: Why do you think are so many right now?

EVANINA: Well, I don't know if there's more now than ever, but I think you heard...

REGAN: People have said that.

EVANINA: Yes.

REGAN: But it is unprecedented how many leaks are happening right now. I just wonder why now. Why is that?

EVANINA: Well, I think, when you look back at history over the time, the last 10 years, the leaks or unauthorized disclosures have ebbed and flowed.

I think we look at it in a short period of time. It's hard to justify that there are that many more now. But I think the damage that we have seen in the last few years has been really traumatic. And I think, when we look at it, what does this really cause -- our national security, you have to take a harder look at what really is happening and bifurcate the leak, political leak issue, with the unauthorized disclosures, which is really causing damage to national security.

REGAN: Yes, you think even about James Comey, for example, who leaked himself, and then admitted that he leaked.

It makes me just wonder about the culture there, whether it has really been eroded in the last however many years, to the point where people think it is OK to leak, that this is something that you do.

How detrimental is it? How bad is it from a security standpoint, given your background in counterintelligence, if people are out there doing this?

EVANINA: Well, some of them have been really bad over the last couple years, to the point where we are losing intelligence collection capabilities, platforms, our global supremacy advantage with respect to military and intelligence operations.

So, when you look at that and putting our troops and intelligence officers in harm's way around the globe, it becomes very difficult to justify that someone with a security clearance would be willing to leak that type of damage.

REGAN: Do you think having a new chief of staff is helping?

EVANINA: I don't know.

But we look at it as a whole-of-government issue, that the disclosure of unclassified and classified information is really a government-wide effort, not necessarily just in one particular branch of the government.

REGAN: But if you come in and say you take over as CEO of a company, and you're running the place, you have got to at least impress upon people your sense of culture. And there may be may be a lot of people internally that they may not like you.

And that may be the situation in Washington, where Donald Trump has come in. He's got a lot of people who do not like him. And so he has got to fight back against this. You have got to have the right mechanisms to fight back against these actual leakers.

And so, in your view, is General Kelly going to be able to do that for him?

EVANINA: We certainly hope so.

And I think when you look at General Kelly's bona fides and what he brings as a general and this discipline, I think we look for that same competency and leadership across the entire U.S. government from every leader, because the issue of addressing the disclosures of classified information starts of the top with leadership.

REGAN: And do think that the A.G., in your view -- you were just with him on Friday -- how committed is he to going after these...

(CROSSTALK)

EVANINA: I think he is very committed. And I think he is very committed with the FBI to investigating these disclosures, as well as the entire intelligence community and all branches of government.

And I think this is a whole-of-government approach to stemming the problem of disclosing classified information to foreign entities.

REGAN: Well, how do you go after them? How do you find them?

EVANINA: Well, it's a multifaceted effort.

It starts with education, awareness, letting your employees know that there is bona fide ways to disclose waste, fraud and abuse, particularly through the Whistle-Blower Protection Act. There's different ways to do it.

You do not have to provide the information to a media outlet or to a foreign government.

REGAN: But how do you find the actual leakers? How do you know who is putting this information out to the reporters?

EVANINA: Well, there are investigative tools and techniques that law enforcement and FBI use to identify those.

But first and foremost, you have to identify if the information that has been transmitted is actually classified. We work with agencies to determine that and then send a referral to the Department of Justice, say, hey, there was classified information leaked in this report; hence, there should be an investigation.

REGAN: Mm-hmm.

What is your sort of gut reaction to all this as an American, as someone who cares about their country, and is working for the U.S. government, when you hear about other people in your ranks leaking?

EVANINA: It is disappointing. And it really is, because I don't think the individuals who leak this information understand not only the damage they cause to their colleagues, the folks sitting next to them, but they have betrayed the trust that they have been put in by the American government to bestow a security clearance on them.

And their colleagues and sometimes their friends could be harmed or damaged. And I think, when we look at it from a constitutional perspective, you are honored you should be a privileged to have a security clearance. And you are betraying that.

REGAN: Yes. No, they are. And that is, I guess, the message that needs to be delivered to all of them over and over again.

Hopefully, they stop.

Good to have you, Bill. Thank you very much.

EVANINA: It's been a pleasure. Thank you.

REGAN: All right, coming up everyone: Where is everyone?

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Hello? Is anyone there? Hello? Hello? Is anyone there?

(END VIDEO CLIP)

(LAUGHTER)

REGAN: Apparently not, Congress hightailing it out of D.C., leaving a major to-do list behind.

Meet the Republican donor so disappointed in his party, he is now suing to get his money back.

And a show of force, as every nation on the U.N. Security Council slaps North Korea with sanctions. Now North Korea is threatening thousands-fold revenge.

Former U.N. Ambassador to the U.N. John Bolton is here.

(COMMERCIAL BREAK)

REGAN: Two hundred days in, Democrats are letting it all out.

Today, the Democratic Congressional Committee mocking House Speaker Paul Ryan and Republican lawmakers for what it's calling a spectacular failure.

Let's go to Fox News Channel's Peter Doocy with more on this.

Hey, Peter.

PETER DOOCY, FOX NEWS CORRESPONDENT: Hi, Trish.

That's the group that is tasked with trying to wrestle control of the House away from the GOP, the Democratic Congressional Campaign Committee. And they say in a memo that Speaker Ryan has put his majority in peril by going 200 days without doing anything major.

Part of their new memo, the DCCC, says this -- quote -- "Let's be very clear. The American people are better off for Speaker Ryan's failed agenda, which is out to benefit the very rich and largest corporations, while devastating hardworking people's health care, cost of living, jobs, and wages."

A top House Republican I have heard from today, though, points out that Ryan's House has been passing bills, like a repeal and replace measure, and a border security bill, and a bill that gives money to fight the opioid epidemic. But those measures are just stacking up in the Senate, where things are really stalled.

Congress also needs to pass a budget before they can touch tax reform, so now President Trump's most prominent allies outside of government are starting to point fingers at GOP lawmakers, who openly admit things are taking a long time because they didn't think a Trump win in November was realistic.

(BEGIN VIDEO CLIP)

COREY LEWANDOWSKI, FORMER TRUMP CAMPAIGN MANAGER: The president has 225 nominations sitting before the U.S. Senate, and the Republicans have yet to act on them. At this rate, it will take 11 years to get those individuals confirmed. That is a shame.

(END VIDEO CLIP)

DOOCY: Senator Orrin Hatch, who has served in the Upper Chamber since 1977, says that even the nominations process, which is one of the only things the Senate has been filling its days with, it's slower than he can ever remember because what he sees as Democrats obstructing -- Trish.

REGAN: All right, thank you so much.

Get this, everyone. It is not just the Democrats fed up with Republicans in Congress. A GOP donor is suing his party for failing to repeal and replace ObamaCare.

Bob Heghmann says the GOP raised a whole lot of money on empty promises.

And he joins me now.

Welcome, Bob.

BOB HEGHMANN, GOP DONOR SUING HIS PARTY OVER HEALTH CARE FAILURE: Thank you very much.

REGAN: So, you are suing.

HEGHMANN: That is correct.

REGAN: That's kind of a dramatic move.

HEGHMANN: In the Eastern District of Virginia.

We have no choice. I mean, the Republicans are not serious about repealing ObamaCare. They're so split. Nothing they have put on the table touches ObamaCare. What they were looking for was to get enough money out of the Affordable Care Act to fund a tax cut.

That has nothing to do with health care. Meanwhile, the Centers for Medicare and Medicaid Services are designing a system where a computer is going to tell every American how much health care they can have.

That is where we have to attack. I want to just -- quick, two things that have come up in the public debate. One, it's not about me. I'm not looking for my money back. I want the promise kept.

Second of all, no one is going to lose their insurance. ObamaCare, the managed care portion of ObamaCare, is in the stimulus act. The exchanges, where many people currently have their insurance, is in the Affordable Care Act. We are not advocating repeal of the Affordable Care Act.

REGAN: Right.

HEGHMANN: We are not advocating taking anyone's insurance away.

What we want to do in the replace part is add a third option called a community health insurance option, which will allow the average family to buy affordable insurance with affordable premiums and affordable deductibles.

REGAN: So, that is an idea. You have got an idea.

But, for whatever reason, GOP leadership really hasn't shown any ideas. So, as you look at what has transpired -- and you know they're back on recess right now, instead of continuing to work on this -- clearly, you're frustrated. How frustrated do you think voters are? And is it actually going to cost Republicans come midterms?

HEGHMANN: Well, if you were watching the Internet, and not only the number of stories that have appeared about me, but literally the comments.

And the comments, there are thousands.

(LAUGHTER)

REGAN: About you?

HEGHMANN: And more than 90 percent of the comments are positive about my idea.

REGAN: OK.

HEGHMANN: Outside people make comments: Can I join your suit? Can we make it a class-action? Can I send you money?

The people are annoyed. And I'm going to tell you this. The Republicans will never repeal ObamaCare.

REGAN: Why do you say that?

HEGHMANN: And that's because, in ObamaCare, there is a -- because, in ObamaCare, there's a sweetener for the corporations.

What people don't know is that it's part of the stimulus act. Businesses, business partners of the HHS can sell the personal health information of every person in the United States.

REGAN: So, you think that this is sort of a lobbying effort, then, in your view?

HEGHMANN: That's it.

REGAN: That you have got members of Congress that are just not willing to go that final step, because they are fearful that somebody is going to pull away the funds for their next campaign?

HEGHMANN: Big pharma will pay whatever it has to pay to make sure ObamaCare is not repealed.

Big pharma -- big pharmaceuticals stand to make hundreds of millions of dollars once they gain access to the personal health information of every American, because then they no longer have to spray and pray, as advertisements call it, where they put out expensive advertising.

REGAN: Yes.

HEGHMANN: Instead, they can use the database...

REGAN: But, at the same time...

HEGHMANN: ... to find their potential clients.

REGAN: OK. So, you're talking about big pharma.

HEGHMANN: And then...

REGAN: But let's talk about the health care providers.

They can't be in business if they continue with the Affordable Care Act. They can't actually. You have seen them actually have to pull entirely out of states because it is not feasible. It doesn't work economically. It doesn't make sense.

So, from a business standpoint, don't you also run the risk of, as much as you may get pharma money on the lobbying inside, you have also got the other side with the health insurers that shouldn't want to see this continue?

HEGHMANN: You have got two things.

First of all, once we plug back into the community health care option, 90 percent of the families in America will drop out of the biggest expensive exchanges and buy affordable plans.

Second of all, the health care providers have no choice. HHS has said they will pull three-quarters of their Medicare reimbursement if they get out of their foxholes. So, they really have no choice.

REGAN: All right.

Well, what is your final message here for GOP leaders right now?

HEGHMANN: If I win, you are going to have a choice. You are going to have to do what you promised. You're going to have to repeal the ObamaCare as it's in the stimulus act. You're going to have provide the alternative.

Or you can give back the money, which is as much as $735 million.

REGAN: All right, $735 million you raised for them?

HEGHMANN: That is just what the RNC has collected since 2009 under the battle cry repeal and replace.

REGAN: All right, Bob Heghmann, thank you very much.

HEGHMANN: Thank you.

REGAN: Is Bob just the beginning? The warning from Brexit leader Nigel Farage later this hour.

And the U.N. slapping North Korea with the largest economic sanctions package ever, but North Korea says it will be the U.S. who pays dearly.

Our former Ambassador to the U.N. John Bolton is here.

(COMMERCIAL BREAK)

REGAN: Anthem Blue Cross Blue Shield announcing today that it will completely exist Nevada's ObamaCare exchanges next year. Anthem's stock up today on the news.

We're back in 60 seconds.

(COMMERCIAL BREAK)

REGAN: North Korea vowing retaliation after the United Nations Security Council unanimously passed economic sanctions against the rogue regime following its latest long-range missile test.

Now, moments ago, the president tweeting this: "The fake news media will not talk about the importance of the United Nations Security Council's 15-0 vote in favor of sanctions on North Korea."

Fox News Channel Lucas Tomlinson joins me now with more.

Hi, Lucas.

LUCAS TOMLINSON, FOX NEWS PENTAGON PRODUCER: Well, hi, Trish.

Well, that's right. North Korea wants revenge following that U.N. vote which drew the support of Russia and China. In Manila, Secretary of State Rex Tillerson says this proves the international community is united.

(BEGIN VIDEO CLIP)

REX TILLERSON, U.S. SECRETARY OF STATE: The best signal that North Korea could give us that they are prepared to talk would be to stop these missile launches.

We have not had an extended period of time where they have not taken some type of provocative action.

(END VIDEO CLIP)

TOMLINSON: But, despite Tillerson's insistence North Korea halt its missile test, days ago, U.S. spy agencies detected the rogue communist regime loading two anti-ship cruise ship missiles on a patrol boat on the East Coast.

It's first time these missiles have been deployed on this type of platform since 2014, U.S. officials tell me, more evidence North Korea isn't listening.

Today, hours after President Trump's phone call with his South Korean counterpart, the Pentagon says it would help put larger conventional warheads on South Korean missiles to deal with the threat from Pyongyang. Currently, there are limits to warhead size on South Korean missiles.

The Pentagon want those restrictions gone. And this topic is under active consideration here, according to a Pentagon spokesman a short time ago.

In 1991, the U.S. removed its tactical nukes from South Korea, and today is barred from deploying any land-based intermediate-range missile, thanks to a decades-long treaty with Russia.

And the State Department says that Secretary of State Rex Tillerson and Defense Secretary Jim Mattis will host their Japanese counterparts here in Washington on August 17, with North Korea at the top of the agenda -- Trish.

REGAN: Thank you very much, Lucas.

All right, let's get reaction right now from former U.S. Ambassador to the U.N. John Bolton.

Good to see you, Ambassador.

Do you take -- you take any of these retaliation threats from North Korea seriously in any way?

JOHN BOLTON, FORMER UNITED STATES AMBASSADOR TO THE UNITED NATIONS: Well, I think you have to take them seriously to some level.

But, honestly, their rhetoric is always over the top. Next, we will hear that they're unleash a sea of fire on the Korean Peninsula. That's one of their favorites. So, I think we have to consider the nature of the regime and continue to prepare against possible action that we would consider provocative or hostile.

REGAN: How big a deal is it that Russia and China joined in on these sanctions?

BOLTON: Well, it's a good political signal.

It shows that, at least at the rhetorical level, they are not going to defend North Korea's behavior. But let's be clear. In their public statements, they also said the United States has to start talking to North Korea, resume the six-party talks. The resolution itself says that.

That is a fool's errand. It's a waste of time. It gives the North Koreans more time to continue their development on nuclear and ballistic missile issues. So, while I certainly support the resolution, I am not holding my breath it is going to do anything.

REGAN: Let me ask you this.

If they don't do what we need them to do, are these sanctions really going to be enough? And I say this because the impact is roughly $1 billion to them. They have an economy that is worth an estimated $28 billion.

So, will this really affect things, or are we still talking about margins here?

BOLTON: Well, number one, you have to assume that to get to the billion- dollar figure that everybody enforces the sanctions. That would be a heroic assumption, untrue with respect to every other sanctions resolution that we have adopted.

Number two, I don't know where the $3 billion figure for exports came from. I hope we are not relying on North Korean figures. But even as an estimate, does it include the money that North Korea makes from being one of the world's most successful counterfeiters of U.S. currency? I wonder how much that accounts for.

And, finally, let's be clear. China is very worried about a catastrophic collapse of the North Korean regime. A billion dollars to China is chump change. They could give it to North Korea, say send us your coal for free. We will buy that bucket of pebbles over there for a billion dollars.

REGAN: All right, so that doesn't sound good, then.

Then what you are basically saying is that these are not really worth the paper they're written on. The sanctions sound like they are going to do very little to dissuade North Korea if China is there flipping them some money along the way.

BOLTON: Right.

Well, look, this has been the pattern for a quarter-of-a-century. The U.S. itself relaxed sanctions, I'm am sorry to say, during the Bush administration, and has had to reimpose them subsequently.

And North Korea has been very successful at evading sanctions. China, Russia, others have helped. Iran certainly is going to help. So, I have tried to put...

REGAN: So, what are our alternatives?

BOLTON: Well, they are very limited. I think they are very limited.

After 25 years of failed efforts, our diplomatic options are quite limited. And that is why there is, unfortunately, talk about a military option to protect the United States against the day when North Korea in fact can reach the entire continental United States with nuclear weapons.

REGAN: But, Ambassador, how are we ever going to let that day come? And why should we ever let that day come?

BOLTON: Well, I am with you. I wouldn't do it.

But I am telling you, I will predict it right now. We will hear people in this country, including in the government, saying right up to the date when the missile lifts off, why don't we just sit down and talk with the North Koreans?

We have talked to them for 25 years. It has not worked. It won't work now.

REGAN: So, alternatively, we go in, and we -- we're -- we're actually exercising our military might there?

BOLTON: Well, that is the last resort.

I think there is one diplomatic approach left. And that is to China, to convince China it is in their interests, their national interests, to see the Korean Peninsula reunited, essentially under South Korean control, to eliminate the nuclear program in the North, and thereby eliminate the risk that Japan will go nuclear in response to it.

This is a hard argument to make. But, as I say, we have been playing the diplomatic game for a long time.

(CROSSTALK)

BOLTON: And all that it's done is give North Korea time to advance its program.

REGAN: Unfortunately.

All right, Ambassador, thank you very much.

BOLTON: Thank you.

REGAN: Fresh off getting Russia and China to vote for economic sanctions against North Korea, U.S. Ambassador to the U.N. Nikki Haley will join "The Story" tonight at 7:00 p.m. with Martha MacCallum.

Massive reaction to Neil's takedown of this lazy boy cover. Remember this? Your tweets coming up.

And someone here says maybe New York City Mayor Bill de Blasio should be on that cover instead, because he is pitching the same old tax the rich fix to clean up the city's subways. Isn't that taking the easy way out?

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BILL DE BLASIO, D-MAYOR OF NEW YORK: Today, I am calling on Albany to pass a millionaire's tax to support the MTA.

(APPLAUSE)

DE BLASIO: It is a modest increase in state income taxes for those that make half-a-million or more.

(END VIDEO CLIP)

REGAN: New York City Mayor Bill de Blasio calling for a millionaire's tax that would hit people making $500,000 or more a year. So, I guess, technically, it's not really a millionaire's tax, right? But he is calling it that.

He says it is absolutely needed to pay for mass transit repairs and subsidize fare. But is that fair?

Here to debate it, we have Bustle.com's Julie Alvin, Fox News contributor Rachel Campos-Duffy, and Washington Examiner's Emily Jashinsky.

Rachel, start with you.

Just feels like sort of same old, same old. You go back to the well and say, oh, we will just tax the rich and problem solved?

RACHEL CAMPOS-DUFFY, FOX NEWS CONTRIBUTOR: That is right.

It's a typical liberal response. They do not say, hey, let's go back to the budget. Let's take out some of these wasteful expenditures and make the appropriate investments in public transportation that we need.

I mean, look, this is a city that spent, since 2009, $30 million on Shakespeare in the park plays -- or -- or -- yes, Shakespeare in the park plays, the one that Trump assassination, mock assassination came on.

REGAN: Right.

CAMPOS-DUFFY: They also spent $16 million, or have set it aside this year, for illegals to have legal fees paid for, in case they get, you know, a sanctuary city or -- or whatever is coming after them.

REGAN: All right.

CAMPOS-DUFFY: So, they're wasting money.

REGAN: So, I would agree. The subways are a mess.

And, Julie, you're -- you are here in New York with me, so you know that well too. They are a mess.

But, as Rachel rightly points out, we spend a lot of money in this city. Unfortunately, it sort of evaporates into nothing, because it's not going to the places it needs to go, i.e., education and the subways.

So, why is the answer just to tax, tax, tax, when you're already taxing every person that lives in this city just for the privilege of living in New York City a good 4 percent?

JULIE ALVIN, EXECUTIVE EDITOR, BUSTLE.COM: Well, we do spend a lot of money in this city.

And I think that some of the things that were just mentioned, for example, something like Shakespeare in the park, that's some -- that's a cultural institution. That's one of the things that make New York great.

REGAN: But if you can't get to work -- you know, you got to prioritize.

ALVIN: I agree.

And that's why I think that this tax is a good idea. It's a modest tax. Living in New York City creates enormous opportunities for wealth, and I think these people that are making at this sort of level of income should be willing to pay for these infrastructure changes.

And, honestly, this is a good economic decision for New York City. For every $1 spent on transit, you get $4 back as far as economic growth.

REGAN: The only problem this, though, Emily -- and we have seen it over and over again -- just take G.E., which had to move out of Connecticut, right, because the taxes went up too much -- at some point, you reach a point where people say, enough. I'm not going to live in New York City, because I do not want to pay more money to Bill de Blasio and company, so they can squander it.

EMILY JASHINSKY, THE WASHINGTON EXAMINER: Right. Exactly.

This is a great way to get wealthy people, who contribute a lot to your economy, to move out of the city. I should also -- I think we should also mention the city has increased fares year after year about every two years.

And they are now having this crisis. It has only gotten worse. So, they're not proving that they're using the money responsibly, by any stretch of the imagination.

So, why don't they put forward a plan to move the money around in the budget that is already are, show that they're going to use it well, and then ask for multi millions and millions more dollars? They have already shown they can't do it.

(CROSSTALK)

REGAN: But, Rachel, I will just jump in and back to Rachel's original point, that would actually require a whole lot of work.

(LAUGHTER)

JASHINSKY: Rather than ideology. Rather than -- and this is someone -- New York has elected someone whose default is to redistribute.

This is classic redistribution of wealth. And that's what they voted for. And we will see if they reelect de Blasio, after showing that that is actually what he's going to do.

(CROSSTALK)

REGAN: Rachel, fundamentally, does that really sell? Does that really play in Peoria?

It resonated among people in the Sanders crowd. But really, when you get down to it, isn't there a certain American ideal, American work ethic and a sense of you keep what you earn and you don't just give it all to government, so they can use it inappropriately?

CAMPOS-DUFFY: It is why the Democratic Party is such a coastal party. It works in California and San Francisco. It works in New York City.

But this is why the Democrat Party has been decimated at the local and state level. It's this kind of response to problems that is just tax, tax, tax.

REGAN: OK, Julie, I will give you the last word.

I know you like this.

ALVIN: Yes.

REGAN: I can't quite see my way through it, because I think your risk here is that you are going to wind up with less money. You can only push on a string so much, and, at some point, that breaks.

At some point, people say enough. I don't need to live in a city where I can't even send my kids to school, yet you have to pay that much in the way of municipal tax.

ALVIN: I would challenge those people to try to find a city that allows them the economic opportunities that New York does.

And as...

REGAN: There's like suburbs right over there, though. You can move to Greenwich.

ALVIN: Certainly, but then you have to deal with commuting costs.

And what is going to benefit those commuting costs is taxes that are improving the transit system.

REGAN: All right, good to see you all. Thank you so much. Interesting conversation.

CAMPOS-DUFFY: Thank you, Trish.

ALVIN: Thank you.

REGAN: All right, that GOP donor suing the Republican Party for failing to enact the president's agenda, why Nigel Farage says he is right. Nigel is next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

HEGHMANN: If I win, you are going to have a choice. You are going to have to do what you promised. You're going to have to repeal the ObamaCare as it's in the stimulus act. You're going to have provide the alternative.

Or you can give back the money, which is as much as $735 million.

(END VIDEO CLIP)

REGAN: That was GOP donor Bob Heghmann telling me moments ago why he has buyer's remorse.

He's suing Republicans for not passing health care reform like they promised to do.

And Brexit leader Nigel Farage says it's not only ObamaCare. The political class is blocking other changes President Trump was elected to do.

And he is here today. Good to see you.

NIGEL FARAGE, FORMER U.K. INDEPENDENCE PARTY LEADER: Thank you.

REGAN: So, if they are blocking him, you see that frustration that Bob had. I have certainly been frustrated. I think you're watching from overseas frustrated.

FARAGE: Oh, yes.

REGAN: What is going to happen to this political elite, this ruling class that is in the way of what the people want?

FARAGE: Well, in the end, they're going to get de-selected as candidates.

They are going to be removed, because if the Republican Party base can see that actually, in Donald Trump, they have got a man that won an election, that made a series of promises, and if you have got senators and congressmen that are holding that up, there comes a point where there has to be a rebellion that goes on within the party to get rid of these people.

This is about trust. It's fundamental, that people voted in 2016 for change. They deserve to get it.

REGAN: And is that what we are seeing right now, I mean, Bob there suing the GOP?

FARAGE: Yes.

REGAN: And he said he is getting thousands of comments. People are weighing in. And he's...

(CROSSTALK)

FARAGE: What his chances of winning legally are, I can't really comment, but...

(CROSSTALK)

REGAN: No, no, but in terms of what he is tapping in to.

FARAGE: But I think he represents the view of millions of people.

There was a deep, deep frustration. And it must be very tough for the president.

(CROSSTALK)

REGAN: Isn't that, in fact, why the president was elected, though? Because people wanted to disrupt it.

FARAGE: Do you know the whole 2016 phenomenon of Brexit and Trump was about people saying, we want a complete change of direction. We want things done differently.

And we are being frustrated back in the U.K. on Brexit. It is being delayed. And, yes, we will get it in the end, but it's being watered down. It's the same phenomenon all over.

And the really sickening thing is, there are career professional politicians, part of the swamp, I guess, if you want to put it that way, who get elected sounding conservative, and when they are in office, in between, don't behave like conservatives.

REGAN: Well, is it fear? Are they afraid to do something big, to do something bold? Is it because they are concerned about lobbyists?

What is the reason?

FARAGE: No, they're concerned about their careers.

They want to -- they want to play everything safe. They also like to be popular. They like newspapers to say nice things about them. They want to be non-controversial. They want to go with the flow.

It is the poison of career politics. And what politics needs is people with conviction and principles.

REGAN: Well, that is certainly what Donald Trump put forward when he was on the campaign stump. And that is what Americans responded to.

But when you look at that field and what it was, I mean, no one understood him, that he -- none of his rivals understood how he was campaigning or how he could continue to be successful.

So, why should we expect that any Republican currently in office right now that are part of that so-called D.C. establishment would understand him either?

FARAGE: Well, they probably don't.

And they have trouble with the fact that he puts things on Twitter starting early in the morning. And he is unconventional in every way.

REGAN: Right.

FARAGE: But what they need to understand is, there was a bond of trust between this president and millions of people who voted Republican who don't normally do so.

If you don't deliver for them, they are never going to vote for you again.

REGAN: It's so good to see you. Thank you so much.

FARAGE: Thank you.

REGAN: Nigel Farage.

All right, Neil taking on Newsweek over this lazy boy cover.

(LAUGHTER)

REGAN: We have your reaction coming up to his takedown. And what a takedown it was.

That's next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

NEIL CAVUTO, HOST: Reducing the president to a cartoon figure because you simply don't like the guy, that is wrong. That is insulting. This cover is a sin.

(END VIDEO CLIP)

REGAN: Lazy boy, oh, boy.

Neil's takedown of Newsweek's cover sparking massive reaction.

We have got some tweets I want to share with you right here.

Pat tweets: "When will this behavior stop? This is the president of the United States. You like him or you hate him, the position alone deserves respect."

Well put.

Mike says: "I agree with Neil. I use Newsweek when I run out of toilet paper."

(LAUGHTER)

REGAN: OK. I guess we didn't need that detail.

But...

(LAUGHTER)

REGAN: Hal tweets: "Newsweek is the lazy boy of journalism."

I kind of like this one. Here you go: "One million jobs added so far. Give the man a pizza."

(LAUGHTER)

REGAN: Susan's take on this cover is -- quote -- "This is beyond disgusting and demonstrates a total disregard for the welfare of USA by attacking our president. So ashamed of MSM," mainstream media.

Dick has a different take -- quote -- "As being close to retired, stay lazy as long as the stock market soars."

(LAUGHTER)

REGAN: And, lastly, one from Michael: "Who reads Newsweek? I watch Cavuto for my news."

Well, there you go. That's good.

Anyway, by the way, President Donald Trump just taking on a different publication here, tweeting in the last hour: "How much longer will the failing New York Times, with its big losses and massive unfunded liability and nonexistent sources, remain in business?"

(LAUGHTER)

REGAN: He is going after them pretty hard, as usual.

That will do it for me here. Catch me tomorrow on "The Intelligence Report," 2:00 p.m. Eastern on FOX Business.

"The Specialists" is next.

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