New questions over Comey's handling of the Clinton probe

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New questions over Comey's handling of the Clinton probe

Report: FBI confirms the former director drafted a letter exonerating Hillary before the investigation was complete; Ron Hosko explains on 'The Story.'

This is a rush transcript from "The Story," October 17, 2017. This copy may not be in its final form and may be updated.

MARTHA MACCALLUM, "THE STORY" HOST: Breaking tonight, President Trump about to take the stage to talk about, we are told, the greatness of America. He's also rally support for his tax cut plan, vital to the success of year one for his presidency; he will do that at the Heritage Foundation in D.C. where you see everybody gathering. Good evening, everybody! I'm Martha MacCallum. We are going to take you there live in moments. But first tonight, our story begins in Raqqa, where it was a huge day as the ISIS stronghold all but fell to U.S.-backed Syrian forces. The radical Islamic group once referred to by President Obama as the J.V. team dominated a caliphate that stretch from Syria to Iraq, killing thousands, some by drowning, some by being set on fire, mass beheadings. Their story is far from over; we will talk about that, but Raqqa is no doubt a huge development today. Here is President Trump on the news today, and then back on the campaign trail at the end. Watch this.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I totally change rules of engagement. I totally changed our military. I totally changed the attitudes of the military and they have done a fantastic job. ISIS is now giving up. They're getting up, they're raising their hands, they're walking off. Nobody has ever seen that before. You fight ISIS first. Right now, you have Russia, you have Iran, you have them with Assad, and you have them with Syria. You have to knock out ISIS, they're chopping off heads. These are animals.

(END VIDEO CLIP)

MACCALLUM: Chief National Correspondent, Ed Henry, live tonight at the White House with the backstory. Hi, Ed.

ED HENRY, FOX NEWS CHIEF NATIONAL CORRESPONDENT: Martha, good to see you. As a candidate, President Trump was repeatedly mocked by Democrats for saying he had a plan to defeat ISIS but was not going to share it with the public because he did not want to tip off the enemy. Well, here we are less than a year into his administration, that plan is being implemented, and now the enemy is on the run. Let's remember that enemy, ISIS, carrying out a series of atrocities during the Obama administration including that particularly horrific one in which they took a Jordanian pilot hostage, put him in a cage and then burned him a life for all the world to see. The same enemy that then-President Barack Obama had dismissed as the J.V. team even though the terror group then begin wreaking havoc around the globe, including disgusting videos of the beheadings of American Journalist like, James Foley, and Steven Sotloff.

Tonight, American officials are being cautious not to declare mission accomplished, though we're getting reports from fighters from the American- backed militia in Syria, firing celebratory shots in the air as they get the boot off this terror group off of their throats tonight. U.S. Central Command telling us "More than 90 percent of Raqqa is in SDF control." That's referring to the Syrian Democratic Forces, as Candidate Trump, if you remember, promised on the campaign trail almost exactly one year ago tonight that he would defeat them.

(BEGIN VIDEO CLIP)

TRUMP: We are getting rid of ISIS. ISIS is -- we have no choice. By the way, not since medieval times has anyone seen a chopping off heads, drowning in steel cages, burying in sand. Not since -- not since medieval times. It all grew during the tenure of Obama and Hillary Clinton.

(END VIDEO CLIP)

HENRY: So, while this is a win tonight, the hunt for ISIS Leader, Abu Bakr al-Baghdadi, continues despite all kinds of air strikes targeting him. He has not yet been killed or captured to our knowledge, so there are still many challenges ahead for men and women in uniform. In fact, Pentagon officials, telling us tonight that ISIS had put improvised explosive devices on the ground hidden all around the city of Raqqa. It could take years to clear that out without more injuries, more deaths. There's a lot of work to be done, Martha, but this is a big victory tonight.

MACCALLUM: Absolutely. Indeed, Ed, thank you very much. So, here with more tonight, Karl Rove, former Chief of Staff to President George W. Bush; and Marie Harf, former President Obama's State Department Spokesperson, both are Fox News Contributors. Great to have both of you here tonight as we wait for the president's speech to get started a few minutes down the road. Marie, I want to start with you. I heard General Jack Keane talk about this this morning and he said it took the Obama administration far too long to deal with ISIS. He claims that the administration was too concerned with possible adverse consequences of their actions and he sees President Trump's action as decisive and effective, what do you say?

MARIE HARF, FOX NEWS CONTRIBUTOR AND FORMER STATE DEPARTMENT SPOKESPERSON UNDER THE OBAMA ADMINISTRATION: Well, I think it took the whole world by surprise how quickly ISIS was able to take territory in Iraq and in Syria back when they first really rose to prominence. But after our administration, sort of, got a better sense of what was going on, we did put in place a plan that we see being carried out now. I mean, the plan to retake Raqqa was put in place during the Obama administration. Now, President Trump has done something like we've some of the rules of engagement, he has made some tweaks around the edges, but this is the plan that the military has had in place for a long time. And Ed is absolutely right, this is a big victory.

MACCALLUM: But some of the military would say that they weren't allowed to do what they believe that they could do. And Karl, I want to get you in here, even President Bush said that he always listens to his generals, he had daily conversations with them. We did not see that in the Obama administration.

KARL ROVE, FOX NEWS CONTRIBUTOR AND CHIEF OF STAFF TO PRESIDENT GEORGE W. BUSH: And let's be honest. The reason that ISIS spread so rapidly in that map that we saw recently across the Syria and Iraq was because 2012, for political reasons, the Obama administration withdrew our military forces from Iraq. Does anybody think that if we had kept intelligence gathering, and air assets, and military trainers, and military coordinators, that as an organized column of ISIS approached Mosul, that American fire power and American leadership could not have helped the Iraqis keep them restrained and not allow them to take Mosul and all that territory.

Right after -- literally, the city boundaries of Baghdad. So, yes, President Trump did two things. First of all, he made clear that we're going to take action, and we saw that when -- unlike what President Obama said that's a red line if they dropped gas on their own people. When the Syrians dropped gas on their own people under this president, he immediately took action, and then he listened to the military and unleashed them on the mission they could do -- which is setting up a force of Syrians to work with American trainers and American assistance to do exactly what we saw today. But let's not kid ourselves, the battle against ISIS is going to continue. They've been kicked out of Raqqa but just like al- Qaeda, we will face these people for years to come.

MACCALLUM: And they've moved down into the Euphrates River Valley. That's where they have migrated while this area has been bombed and hit so ferociously. You also have the Russia element. They recently retook the city of Mayadin, which is also a stronghold of ISIS. So, now, you've got really the battle between Russia and Iran, and the Syrian forces backed by the United States for control of Syria.

HARF: Well, right. So, the Syrian Civil War is going to continue regardless of the fact that we've retaken Raqqa. But I think the real threat from ISIS -- and look, to respond Karl here, ISIS would never have existed if its precursor hadn't been able to flourish after we invaded Iraq back in the Bush administration. So, this has a longer history passed the Obama administration. But to be clear here, what I think is the biggest threat is ISIS ideology having spread to Europe, to Africa, to Asia and these lone wolves who've maybe never even gone to Syria.

MACCALLUM: I want to put something up on the screen because you have a great point. This came from the MI-5 General Director Andrew Parker in the U.K. today. He says, "The U.K. has seen a dramatic upshift in threats from Islamic terrorism this year reflecting attacks that have taken place in Westminster, Manchester, and London Bridge. He goes on to say, he said, "That threat is multidimensional, evolving rapidly, and operating at a scale and pace that we have not seen before." That's a terrifying word.

HARF: It is. And unlike al-Qaeda, which really wanted people who are going to carry out terrorist attacks in the names, to commit them, to pledge allegiance, to train with them; ISIS doesn't care. They're fine if you go online and you get radicalized and then you commit a terrorist attack in their name. We don't even -- these people don't even have to go to Syria or Iraq, and it's much harder to find folks like that. So, this is going to be a very serious challenge in the west, across Africa and Asia.

MACCALLUM: I want to play something from the rose garden today. This is the Greek prime minister with President Trump. He was asked a question by John Roberts. Watch this.

(BEGIN VIDEO CLIP)

JOHN ROBERTS, FOX NEWS CHANNEL CHIEF WHITE HOUSE CORRESPONDENT: You said that the potential for a Donald Trump presidency: "I hope we will not face this evil." And I'm wondering if after spending time with the president, you have changed your mind or if you're of the same mind?

TRUMP: I wish I knew that before my speech.

ALEXIS TSIPRAS, PRIME MINISTER OF GREECE: The meeting that we had was very productive and not a moment that I feel that I threatened at any time.

TRUMP: A number of countries were a little bit nervous at the beginning, and I have very good relationships with the leaders of virtually every country I've dealt with.

(END VIDEO CLIP)

MACCALLUM: Interesting moment.

ROVE: One quick moment, may I say that I really was taken aback by your audacious life suggesting that President Bush was responsible for al-Qaeda and ISIS. Islamic terrorism has been around for 20 years before he took office. You may have forgotten that the attack was made in 1993 on the first --

HARF: Well, I was responding to what you said about President Obama pulling out of Iraq and that being responsible for the ISIS.

ROVE: No, for the spread of ISIS.

HARF: OK. Well, ISIS actually started as a Q.I. during the Bush administration.

MACCALLUM: I get it. And we could go on with that for a long time.

HARF: We have to defend our own administration.

MACCALLUM: But in terms of the Greek prime minister saying that he was concerned that President Trump was going to be evil, he handled the moment well when he said, you know what, a lot of people were nervous about me coming in.

ROVE: Well, look, if you go to Europe during a -- particularly in what we call the new Europe, Eastern and Central Europe, there is a growing recognition that America is there, and they want America to be more there, but America is there in a way that they were afraid it wouldn't be.

MACCALLUM: Karl and Marie, thank you very much. Great to see you guys. And Karl will be back a little bit as we watch the president speak tonight at the Heritage Foundation. So, there is a live look; the crowd is gathering this evening and getting ready a moment now. We do expect that the president will step to the podium and really focus -- he's going to focus on America, the heritage of the country and then he is expected to move on to comments about tax reform and the history of cutting taxes in this country in terms of economic stimulation.

So, we're going to go there as soon as that get started. But first, the FBI releasing documents showing former Director James Comey may have decided the outcome of the Hillary Clinton investigation, two months before he ever interviewed her. Former FBI Assistant Director under James Comey, Ron Hosko, is here. And former House Oversight Committee Chairman, Jason Chaffetz, to react. Also, a big day today in a huge NFL controversy. The players and the owners draft up over three hours of talks today to try to decide how to move forward on the national anthem protest. What Commissioner Roger Goodell just told the media? Next.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Will players continue to take a knee?

UNIDENTIFIED MALE: I mean, that's going to come down to the individual. It's going to be an individual's choice, but I think the ownership, the team, and the league, and players, I think we're going in the right direction.

(COMMERCIAL BREAK)

MACCALLUM: So, any moment we expect to hear from President Trump, he is speaking tonight at the annual gathering of a major conservative think tank in Washington, D.C. So, we'll take you there live as soon as that gets underway. But first here tonight on The Story, the FBI is confirming former Director James Comey drafted a letter exonerating Hillary Clinton in the private e-mail scandal several months before the investigation was even completed. Trace Gallagher with all the details here in the back story from our West Coast Newsroom. Hi, Trace.

TRACE GALLAGHER, FOX NEWS CHANNEL CORRESPONDENT: Hi, Martha. It's unclear exactly when former FBI Director James Comey drafted a letter regarding Hillary Clinton's e-mail investigation. But we now know Comey sent the draft to his Deputy Director Andrew McCabe, General Counsel James Baker, and Chief of Staff James Rybicki on May 2nd 2016, which is more than two months before then-Director Comey issued this now infamous statement. Watch.

(BEGIN VIDEO CLIP)

JAMES COMEY, FORMER DIRECTOR OF THE FBI: They were extremely careless in their handling of very sensitive, highly classified information. We cannot find a case that would support bringing criminal charges on these facts.

(END VIDEO CLIP)

GALLAGHER: The May 2nd date of Comey's draft letter is also well before FBI agents had conducted all the interviews of key witnesses, including Hillary Clinton. The existence of the Comey draft is just now being made public by top ranking members of the Senate Judiciary Committee, which is investigating President Trump's firing of James Comey. But Iowa Senator Chuck Grassley, the Committee Chair; and South Carolina Senator Lindsey Graham who sits on the committee, uncovered the document back in August, and quickly wrote a scathing letter to the newly appointed FBI Director Christopher Wray, saying: "The outcome of an investigation should not be prejudged while FBI agents are still hard at work trying to gather the facts."

The Comey letter, which was unclassified, yet heavily redacted, also calls into question the former FBI director's Senate testimony in June of this year when Comey said the reason he publicly announced the results of the Clinton probe in the summer of 2016 was to "protect the credibility of the investigation after then-Attorney General Loretta Lynch and former President Bill Clinton had an unscheduled meeting on a tarmac in Arizona." But that meeting happened 56 days after the draft letter, reportedly exonerating Clinton, had already been sent. Calls for Comey to return to Capitol Hill for more questioning are now mounting. Martha.

MACCALLUM: Trace, thank you very much. Joining me now, Ron Hosko, who served as Assistant FBI Director under former FBI Director James Comey until 2014. Ron, good to have you back in the program, nice to see you tonight. I want to start by playing this exchange between James Comey and Congressman Ratcliffe back in September of 2016. Let's watch.

(BEGIN VIDEO CLIP)

REP. JOHN RATCLIFFE, R-TEXAS: Did you make the decision not to recommend criminal charges relating to classified information before or after Hillary Clinton was interviewed by the FBI on July 2nd?

COMEY: After.

RATCLIFFE: OK, then, I'm going to need your help in trying to understand how that's possible. To me, the only way that an interview takes place with two central witnesses, and the subject of the investigation is if the decision has already been made that all three people in that room are not going to be charged.

(END VIDEO CLIP)

MACCALLUM: It's a good question. Ron, what do you make of that and the emergence of this memo that was written, exonerating Hillary Clinton two months before the decision was made?

RON HOSKO, FORMER ASSISTANT DIRECTOR FOR THE FBI UNDER FORMER DIRECTOR JAMES COMEY: So, Martha, you know, one of the things the FBI does extremely well is produce paper. The director, you know, the senior leadership of the FBI is in briefings for much of their day, reading papers about significant cases and very often producing those papers to push further up into the food chain. I was a participant in that, a recipient and a briefer at times. And so, these papers very often are the repository is maybe a portal, it's some sort of internal site that you have a number of living documents that detail the progress on significant cases.

MACCALLUM: You know, but this -- the way this was read by Graham -- a document that exonerates her and it was put together before two dozen witnesses had even been spoken to. So, I understand how you're sort of, you know, working on parallel courses, and you are kind of moving the evidence through. But if -- you know, if their interpretation of what this document is, is accurate, it sounds like more than that.

HOSKO: Well, certainly, you know, I think it would benefit us all to see the document, see the contents of the document.

MACCALLUM: Absolutely.

HOSKO: But certainly for Congress to ask Comey questions about it. But I think as you know, there has been a lot of discussion about intent, the intent element of the espionage statute that was at issue here whether Mrs. Clinton had violated that intent element, whether there should be an intent element. And I think that it could well be that James Comey, former Prosecutor. A person used to creating lengthy prosecution memos and detailing the weaknesses and strength of the case, could have been taking his own proactive steps here to document that very same thing, believing that the e-mails at the time or perhaps not showing that intent strongly enough for the FBI to recommend prosecution.

MACCALLUM: Understood. But that there were a number of key witnesses that hadn't been spoken to. So, we will see, and as you say, we really need to see that document, which is not classified as far as I understand. So, hopefully we'll get our hands on it. Ron, thank you so much. Good to have you tonight.

HOSKO: Thanks.

MACCALLUM: So, here with more, former Congressman Jason Chaffetz, former Chairman of the House Oversight Committee, and while he was in Congress, called on the Justice Department to investigate the actions in the run up to the 2016 election. He's also a Fox News Contributor. Good to see you tonight. Let me begin with a quick comment from your former colleague, Trey Gowdy, on this and get your thoughts on the whole picture. Let's play.

(BEGIN VIDEO CLIP)

REP. TREY GOWDY, R-SOUTH CAROLINA: Congress should look at this decision not to charge and whether or not it was made before you interviewed two dozen witnesses, including the target of the investigation. We need to talk to them again.

(END VIDEO CLIP)

MACCALLUM: And you agree, he needs to explain, right?

JASON CHAFFETZ, FOX NEWS CONTRIBUTOR AND FORMER CONGRESSMAN: Yes, absolutely. You should come before the House Judiciary Committee of the Senate Committee with Senator Grassley and Graham. But John Ratcliffe asked a very direct question and if you watch Director Comey, he get very testy about this, but the fact pattern is that this memo was released for distribution within the FBI more than two months, two months, before they actually interviewed the key witness -- Hillary Clinton. And two other people's sitting in on that meeting had been giving immunity. They were fact witnesses, they were given immunity, and they got to act as her attorney -- something that Director Comey also said in the history of his career he had never, ever seen before.

MACCALLUM: Yes. I mean, it really is so important in this conversation that we actually are able to see this document, because then you would get the tone of it, the finality of it. You could sort of ascertain whether or not it looked like a decision had already been made, because, of course, that's been a suspicion of a lot of people throughout the whole course of this, that it was just sort of going through the motions, and, yes, we know we have to do this investigation, but we know we're never going to prosecute.

CHAFFETZ: Well, any time you have an unclassified document that's redacted, that should raise a flashing red light to say there is something fundamentally wrong here. You couple that with the fact that judicial watch put in a foyer request asking for documents relating to the tarmac meeting. Initially, the FBI comes back and says we don't have any documents. Only then, to probably be caught and come back say, well, actually, we have 30 of them -- 30 pages. And those too have been redacted. And I'm really counting on Michael Horowitz, the Department of Justice Inspector General; he has 450 employees, you haven't heard a leak from him. But come next year, I think he's going to come out with a definitive report. But in the meantime, Director Comey needs to come back and explain this and Congress should be able to see those documents.

MACCALLUM: We've got to leave it there. Jason Chaffetz, thank you very much; always good to see you.

CHAFFETZ: Always good to see you.

MACCALLUM: And we're going to go to the Heritage Foundation tonight and there is President Trump. He has just walked in. We expect this will be, you know, a moment here before he actually gets started. Some early indications are that he's going to talk tax reform and American heritage.
So, he's beginning, let's listen in.

(CHEERS AND APPLAUSE)

TRUMP: And because of that, I hear they had to make this room a lot larger quickly. That's great. Thank you very much. Thank you, folks. And really, the dedication and leadership and devotion to our country has really been spectacular. We appreciate it very much. I'd like to begin by providing a quick update on our economy. I don't think too many people in this room will be upset, but the stock market hit today 23,000. That's an all-time record high, so congratulations to everybody in our country.

It's an incredible honor to be here tonight to celebrate this really wonderful foundation. Just a few months from now you will mark the 45th anniversary of this esteemed institution. For nearly a half a century, you have been titans in the fight to defend, promote, and preserve our great American heritage. Few people have worked harder to protect this heritage then Ed Meese a fearless defender of our constitution. Where is Ed? Where is Ed?

(APPLAUSE)

TRUMP: Thank you, Ed. Thank you very much. And Mrs. Meese, thank you very much. Thank you. Thank you.

(CHEERS AND APPLAUSE)

TRUMP: Wow! That's a very popular couple, I must say. I also want to express my deep appreciation to the great Steve Moore, who is with us tonight. Steve, where is Steve? Steve has been fantastic. We've been working long and hard together. We're thrilled to be joined by many distinguished guest, including Senator Joni Ernst and Congressman Ron DeSantis. Please stand up, where is Ron? Ron DeSantos. Thank you, Ron, for everything, and thank you, Joni. Thank you, Joni. Thanks, Ron.

Finally, I want to express our gratitude to Kate James, Bill Walton, and the dedicated scholars and staff at the Heritage Foundation, thank you very much. Thank you. Great job. Everyone here tonight understands a core truth, that for America to have confidence in our future, we must have pride in our history. As Americans, we have inherited a special legacy of freedom, culture, laws, traditions, and values.

Your organization is named the Heritage Foundation, because you understand that our glorious heritage is the foundation of everything we hope to achieve. You understand that human progress must be built upon a firm foundation of timeless truths. These truths are immortalized in our founding documents, and the most important truth our founders understood was this: freedom is not a gift from government. Freedom is a gift from God.

(CHEERS AND APPLAUSE)

TRUMP: that is why we are here tonight, to rededicate ourselves to the defense of our God-given rights.

TRUMP: And that is why we're here tonight to rededicate ourselves to the defense of our God-given grace. We are here to ensure that we defend this legacy from any threat -- foreign or domestic -- that would seek to weaken our values, diminish our freedoms or dissolve the bonds that hold us so strongly and firmly together. As our nation has responded in recent weeks to a series of heartbreaking tragedies, from the catastrophic storms, to the devastating wildfires, to the horrific mass shooting in Las Vegas. We are reminded that no destructive force on Earth is stronger than the courage, character, and love of the American people.

(APPLAUSE)

TRUMP: This is a time of great challenge for the world, but also a time of great opportunity. We can unleash the creative power of our citizens, unlock new frontiers in science and medicine, and usher in prosperity for communities all across our land. But to achieve these great things, we must hold fast to the values that define who we are as a people and as a nation. Everyone here tonight is united by the same enduring beliefs. We believe that the Constitution is the greatest political document in human history, and that judges should interpret the Constitution as written.

(CHEERS AND APPLAUSE)

TRUMP: We believe we should preserve our history, not tear it down. Now they are even trying to destroy statues of Christopher Columbus. What's next? Has to be stopped, its heritage. We believe that America is a nation of opportunity because we are a nation of laws and we support the incredible men and women of law enforcement. We believe that our great American flag should be treated with reverence and respect, and that young Americans should be taught to love our country, honor our anthem and proudly recite the pledge of allegiance.

(APPLAUSE)

TRUMP: We believe that strong nations must have strong borders, and that are most important job is to serve the needs of America and the American people. That includes common sense reforms like cracking down on sanctuary cities, ending catch and release, and very importantly, ending chain migration.

(APPLAUSE)

TRUMP: the loyal, hardworking citizens of our country deserve a government that shows them the same loyalty in return. Finally, we believe that the basis for international security and peace is mutual cooperation among independent and sovereign nations. This is the message I delivered in my address to the United Nations. I told the leaders in that hall that just like I expect, and we all understand this, and they finally understand it, because there was a great misunderstanding, that just like I expect them to put the needs of their country's first, I will always put the needs of our country first.

(APPLAUSE)

TRUMP: That is why we are withdrawing from one-sided international deals like the Trans-Pacific Partnership and the Paris Climate Accord. Devastating to our country if we would have gone into those deals. My administration is working to strengthen old alliances and form new friendships based on shared interests, shared goals, and shared values. As a demonstration of America's will, we have passed historic increases in defense spending, you saw that just last week.

(APPLAUSE)

TRUMP: Because as Ronald Reagan said, we believe in peace through strength. We've made historic strides in the fight against ISIS, dealing them one brutal defeat after another. We're confronting dangerous regimes from North Korea to Iran. Last week I announced our strategy to ensure that the Iranian dictatorship never acquires a nuclear weapon.

(APPLAUSE)

TRUMP: And we've imposed tough terrorism sanctions on Iran's Islamic revolutionary guard corps. I also canceled the last administrations one- sided deal with the communist Cuban regime and we will not lift sanctions until political and religious freedoms are restored for the Cuban people.

(APPLAUSE)

TRUMP: At the same time, we are confronting the socialist oppression of the Maduro regime, the problem in Venezuela is not that socialism has been poorly implemented, but that socialism has been faithfully implemented.

(APPLAUSE)

TRUMP: We stand in solidarity with the people of Venezuela in their struggle for freedom. Here in America we are strengthening our own freedom by appointing judges to the bench who will support and defend the constitution of the United States.

(APPLAUSE)

TRUMP: With your help, we have not only nominated, but confirmed the new Supreme Court justice, who is doing a spectacular job, Neil Gorsuch.

(APPLAUSE)

TRUMP: We have taken action to repeal the EPA's so-called clean power plan and we have ended, finally, the war on clean, beautiful coal. People going back to work, they're going back to work. Over the last nine months, we have removed job-killing regulations at a record pace. In fact, in nine months we have done more, they say, then any president in history, and we're nine months and there's more to come. We have statutory guidelines, we have to go by a period of time, but there's much more to come. And I believe in regulation, but it has to be limited to what we need. We want clean water, we want clean air, it has to be fair. We also want, by the way, jobs.

(APPLAUSE)

TRUMP: And our regulatory reductions are going to put more Americans back to work and more lobbyists out of work. I don't know. There could be some lobbyist in this room, sorry. Which is why regulatory reform is a crucial part of our drive to drain the swamp. On the economic front, we are upholding the legacy of America's greatest presidents, from Washington to Jackson, to Lincoln, by defending American industry and defending our American workers. We want more products stamped with those beautiful words and letters, made in the USA.

(APPLAUSE)

TRUMP: To restore opportunity and freedom, we must continue our campaign to repeal and replace the disaster known as ObamaCare.

(APPLAUSE)

TRUMP: And I've been hearing that phrase for seven years. Seven years I've been hearing it. So have you. And I got here and I thought, maybe when I sit down at that desk the first day, January 20th, I'll have something to sign. Not as easy as we thought, but we are going to get it done, you watch.

(APPLAUSE)

TRUMP: I'm pleased the Democrats have finally responded to my call for them to take responsibility for their ObamaCare disaster, and work with Republicans to provide much-needed relief to the American people. While I commend the bipartisan work done by senators Alexander and Murray, and I do commend it, I continue to believe congress must find a solution to the ObamaCare mess instead of providing bailouts to insurance companies.

(APPLAUSE)

TRUMP: After many, many years of government obstructing job creation, you have now an administration that promotes job creation and celebrates the dignity of work.

(APPLAUSE)

TRUMP: unemployment -- and this is something so important -- unemployment is almost at a 17 year low. GDP growth reached more than 3.2 percent last quarter, and people said it would take years to get there. Manufacturing confidence is at record levels, but our country and our economy cannot take off like they should and like it should unless we transform America's outdated, complex, and extremely burdensome tax code.

(APPLAUSE)

TRUMP: The great Heritage Foundation has been at the center of several incredible tax cuts in American history. Working closely with the Heritage Foundation, Ronald Reagan cut taxes to unleash the economic miracle of the 1980's. You understand that lower taxes mean bigger paychecks, more jobs, and stronger growth. At the heart of our plan is a tax cut for everyday working Americans. The first $12,000 for a single individual, and the first $24,000 for a married couple, will be tax-free.

(APPLAUSE)

TRUMP: We are nearly doubling the zero bracket, and we substantially increase the child tax credit for working families, which so many people want, including my daughter Ivanka. To save Americans precious time and money, we are also simplifying the tax code. Under our framework, the vast majority of families will be able to file their taxes on a single sheet of paper.

(APPLAUSE)

TRUMP: In addition to simplification, the other pillar of our tax plan is reducing our crushing business tax so that we can restore America's competitive edge. Today, our business tax rate is 60 percent higher than our average economic competitor. This is a giant, self-inflicted economic wound. That is why we will cut the corporate tax rate from 35 percent all the way down to not more than 20 percent, way below our average competition out there in this very competitive world.

(APPLAUSE)

TRUMP: And for small businesses that file taxes as sole proprietors, as corporations or partnerships, we will cap the top tax rate and a maximum of 25 percent.

(APPLAUSE)

TRUMP: That's a tremendous reduction from what it is, and I will tell you, it's the biggest reduction in taxes in the history of this country.

(APPLAUSE)

TRUMP: For the more than 30 million Americans small businesses in America, our plan cut their top marginal rate by about 40 percent. This will be the lowest top marginal rate in income tax rate for small and medium-sized businesses in more than 80 years.

(APPLAUSE)

TRUMP: To maximize job creation for at least the next five years, we will allow our companies and our manufacturers to expense the full cost of new equipment in the year they buy it. One year, it's written off.

(APPLAUSE)

TRUMP: It makes me want to go immediately back into business. And yes, we are ending the horrible and very unfair estate tax also known as the death tax.

(APPLAUSE)

TRUMP: Finally, we are going to bring back trillions of dollars currently parked overseas. You look at the money that can't come back into our country. I've been saying for years it's $2.5 trillion. Democrats want it back, Republicans wanted back, and they have for a long time. They've never been able to make a deal, lack of leadership. They've never been able to make a deal. We're putting that in our tax plan. I think it's going to be over $3 trillion, it could be substantially more than that, because if I'm saying $2.5 trillion, and I've been saying it for many years, we know one thing, it's a lot more now. Nobody really knows the answer, I will tell you. I think it's very substantially over $3 trillion that will be brought back in our plan and put to work in our country, not some other country.

(APPLAUSE)

TRUMP: Our framework provides a one-time low tax on profits currently sitting offshore so that this money can come back right where it started, come back home to America, where it belongs. And believe me we can use it in this country. We need it so badly for so many things, including infrastructure, which we will also be doing. We will eliminate the penalty on bringing home -- and we have to do that, future earnings. My council of economic advisors estimates that this change, along with a lower business tax rate, would likely give the typical American household around a $4,000 pay raise, and that's money that will be spent in our economy.

(APPLAUSE)

TRUMP: Our tax plan will ensure that companies stay in America, grow in America, and higher in America.

(APPLAUSE)

TRUMP: We will lift our people from welfare to work, from dependence to independence, and from poverty to total, beautiful prosperity.

(APPLAUSE)

TRUMP: Which is why we need the help of the Heritage Foundation, and everyone here tonight, to get our tax cuts through the House, through the Senate, and to my desk for signature.

(APPLAUSE)

TRUMP: So you've got to call up your local senator and say, senator, don't give him a hard time. Don't give him a hard time. It's going to be hard getting the Democrats because they're obstructionists and they vote in blocks, but if we get the Republicans we need, which is virtually every single one of them, because that's what we need, we will get that largest tax cut in the history of our country, and you will see things happen like have never happened before. We will have employment, we will have jobs, we will have companies moving back into our country, and we certainly won't have companies leaving anymore, that I can tell you. So get your senator, call your congressman. You don't have to call Ron. I think Ron is OK. Right, Ron, you're OK? Good. Ron's good. Most of them are good. I think we're going to get there, Ron. Ron is incredible. So let's give our country the best Christmas present of all, massive tax relief. And speaking of Christmas, yes, you want to hear it? Speaking -- I'm talking about Christmas presents -- I will give you a bigger Christmas present. You're going to be saying Merry Christmas again, OK? You can say Merry Christmas.

(APPLAUSE)

TRUMP: You know, you go to the stores and they have the red walls and they have the snow and they even have the sleigh and the whole thing. They don't have Merry Christmas. They don't have Merry Christmas. I want them to say Merry Christmas, everybody. Happy New Year, Happy Holidays, but I want Merry Christmas.

(APPLAUSE)

TRUMP: We're going to say it again. It's happening already, you know it. You know it's happening again. This is our chance to truly make a difference. This is our opportunity to unleash a new middle-class miracle. This is our once in a generation opportunity to revitalize our economy, revive our industry, and renew the American dream. The Heritage Foundation can once again help make history by helping to take this incredible idea, this proven idea, this tax cut, making it a reality for millions and millions of patriotic Americans. We know that when the hardworking people of this country huddle in the break room at the rest stop, or at the end of a long shift, they take pride in knowing that the projects they work, and the products they make, aren't just building business, their building families and communities, and most of all, they are building this nation that we all love so much.

(APPLAUSE)

TRUMP: The fact is the soul of the country is found in its people, and we owe it to our citizens to provide them with a future of opportunity where they can earn a living with dignity and purpose. We want every parent to be able to care for their children, and we want every child to know a future opportunity, and we want them to have security, and we want them to have hope. We have it in our power to build this future together, and we will build upon the firm foundation of our great American heritage. As long as we remember who we are and what we are fighting for, then we will never, ever fail. And as long as we have pride in our country, confidence in our future, and faith in our God, then our best days are yet to come. Our values will endure, our communities will flourish, our people will prosper, and America, the land we love, will thrive as never, ever before. Thank you to the Heritage Foundation.

(APPLAUSE)

TRUMP: Thank you very much. Thank you very much.

(APPLAUSE)

TRUMP: Thank you to the Heritage Foundation and thank you to everyone here tonight. Thank you to every American whose hard work and patriotism makes our country run. And again, God bless you all, and God bless the United States of America. Thank you all. Thank you.

(APPLAUSE)

MACCALLUM: So there it is the typical Trump soundtrack kicking in. You can't always get what you want by the Rolling Stones. He's hoping that he gets what he wants in terms of tax reform. He laid it out there tonight to the Heritage Foundation, part of a very concerted effort to go out and sell this plan. He has done it to small communities in Pennsylvania. Tonight, speaking to the Heritage Foundation, trying to rally their support, and their outreach as much as they can to support this bill as well. He was criticized for not doing this with health care, and he is definitely out there trying to make this happen for tax reform. So joining me now Marc Thiessen, former speechwriter for President George W. Bush, and Karl Rove back with us, former chief of staff to President Bush, both are Fox News contributors. So gentlemen, Karl, let me start with you, what did you think?

KARL ROVE, FOX NEWS CONTRIBUTOR: Well, it took him a while to get there. We had the pay onto conservative principles and then a big dose of America first nationalism, but I thought it was pretty good. He hit the main points, cut the corporate tax rate to 20 percent. One point he didn't make that needs to make, he made it sort of gently, the people who pay the corporate tax rate are primarily the workers in the form of lower wages and smaller benefits, and secondarily, the consumers who were buying the goods or services of the company. So when we cut the corporate tax rate, the first people who are going to feel this are going to be the employees of the company. Larry Lindsey, a colleague of Marc and mine said taxes are paid by those who can't escape them.

Actually, it's called the immobile factor of production and economics. Workers can't escape the fact that their companies are getting taxed. Then you talk about repatriation, the idea -- think about it, we're the only major industrialized country in the world that taxes the foreign profits of companies headquartered in it twice. If you're a German company that sells something to the United States, you pay a tax on the profit here, take it home and don't pay a tax there. But when you're an American companies sell something at a profit in Germany, you get taxed in Germany, and then you get taxed again in the United States.

So having one of the largest, the highest corporate tax rates of any major industrialized country. The president misspoke a little bit, we're bringing it down into just below the middle of the industrialized countries. There are lots of countries that are below us, Korea, Denmark, others, they're below us, and then making it into a territorial tax system so we don't go back to this process of stranding these foreign profits. President said free trade. I've talked to a bunch of economists, they think it's an access of $4 trillion of American profits that are stranded abroad.

MACCALLUM: All right. Marc, he said that combining those two things, if you have that tax cuts, and you lower the corporate rate, and you bring the money back from abroad, $4,000 would fall, he believes, to the bottom line for every family in America. What do you think?

MARC THIESSEN, FOX NEWS CONTRIBUTOR: First of all, I want to put Karl in charge of writing it because he's got the details of the thing down to a science. You could write the bill, Karl. Look, the problem we have right now -- first of all, this is a great speech. It's exactly what he had to do because he didn't do this on health care reform. He's using the bully pulpit to sell this to the American people, rally conservatives, rally ordinary Americans around it, and get it done. He's got to have more details like that. That $4,000 figure is a little bit shaky for most of the economist I talked to, and part of the problem is that we don't have a tax bill yet. We don't know what the rates are going to be for each individual group, and so he can't really go out there yet and say in a credible way, if you're making this and this amount of money, this is how much your tax bill is going to go down.

If you're making this and this amount of money this is how much your tax bill. He's got to learn if he's going to pass this he's got to make it real for ordinary Americans. And the other problem he has to overcome in writing this bill is that -- during the Bush tax cut debate, as Karl remembers very well, President Bush was able to say every single American will get a tax cut, and that's not true yet of this bill. You had -- Cohen, I'm sorry, rather, going out there saying, well, if you're in the middle class some people might have a little bit of a tax increase. That's not going to work. You have to get a tax bill that cuts taxes for every single American and no one can argue with that and that's a winning sell.

MACCALLUM: I mean, part of the issue here is that some loopholes would go away, and when you look at the doubling of the child tax credit and the standard deduction and all of that, some people it may come out to not benefit. Karl, when you put a number on that and say every family is going to get $4,000, if your family doesn't get $4,000, that's politically difficult, right?

ROVE: Yeah. Well, they said on average. And Kevin -- the author of the study, he's trying to make a point. He is engaged in this argument, who benefits from this. And look, economists agree largely that the taxes are mainly paid by the workers. The question is it 40 percent of the tax burden, is it 70 percent of the tax burden, is it more? But the argument is to who is paying the corporate tax as large have been settled, the president probably would have been better just focusing on that and not getting into the numbers games just yet.

MACCALLUM: One -- last quick, Marc.

THIESSEN: This is exactly what he needs to do. The one thing he didn't do in this speech, he sort of dismissed Democrats. One of the things we learned in ObamaCare is that 50 votes is not enough to get -- 52 Republicans is not enough to get a good agenda through, so he has to get some of those Democrats through.

MACCALLUM: Thanks, you guys. Great to see you both. Quick break, we'll be right back.

(COMMERCIAL BREAK)

MACCALLUM: That is our story for tonight. Thanks for being with us. We'd love to hear your stories, tweet me at Martha MacCallum using the #TheStory. Back here at 7:00 PM tomorrow night. Tucker Carlson, up next.

END

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