Rep. Gaetz on the political fallout of the migrant caravan

This is a rush transcript from "The Story," October 19, 2018. This copy may not be in its final form and may be updated.

MARTHA MACCALLUM, HOST: Fox News alert, an explosive report from Saudi Arabia, just coming out. Essentially admitting the involvement in the death of journalist Jamal Khashoggi. 18 Saudi nationals arrested and the deputy of Saudi intelligence, fired.

Now all eyes are on President Trump, and what his next move will be. The president also dealing with a powder keg situation here at home, as that caravan of Honduras immigrants, thousands strong breaks through the border fence in Guatemala, and rushes into Mexico vowing that they will not stop until they reach the United States.

Good evening, everybody. I'm Martha MacCallum. Mexican police in riot gear now pushing some of those immigrants back across the border amid reports of tear gas and rocks being thrown, and celebratory air horns blaring.

The president, says he will put a stop to all of this before it reaches the southern border. Suggesting that this is nothing more than a political ploy, 17 days before the midterms.

(BEGIN VIDEO CLIP)

PRESIDENT DONALD TRUMP: Now, we're starting to find out and I won't say it 100 percent. I'll put a little tiny question mark at the end. But a lot of money has been passing through people to come up and try and get to the border by Election Day because they think that's a negative for us.

Number one, they are being stopped. And number two, regardless, that's our issue.

(END VIDEO CLIP)

MACCALLUM: "That's our issue," he said. Florida Congressman Matt Gaetz, went viral suggesting that very idea and he's facing some heat for it tonight, and he joins me now. Congressman, thank you for being here tonight.

REP. MATT GAETZ, R-FLA., HOUSE JUDICIARY COMMITTEE: Thank you, Martha.

MACCALLUM: All right. So, let's take a look. This is the tweet and the video that you posted yesterday. It says, "Breaking, footage in Honduras giving cash to women and children to join the caravan and storm the U.S. border at election time. Soros?" And then it goes on to say, "U.S. backed NGOs, time to investigate the source."

That was not accurate, correct?

GAETZ: I was inaccurate about the location of the distribution of the cash. The video that the president retweeted was provided to me by a senior official in the Honduran government, the bilateral ambassador to the United States that had been collected by Central American intelligence and was actually in Guatemala, not Honduras.

MACCALLUM: But, they're handing out according to the reports, they're handing out a dollar of the -- equivalent of like a $1.29. And it's suspected that these groups are either local merchants or organized crime, who like to sort of ingratiate themselves with the local population.

Is there any reason -- do you have any evidence or any reason to believe that this is connected to NGOs or to George Soros?

GAETZ: Yes, I do have reason to believe that, Martha. The first is that, that has been a suspicion relay to me by U.S. government officials.  Second, it's the suspicion that's been relay to me by Honduran officials.  And third, it is a model that we have seen play out across the world.  Judicial Watch, actually just issued a report about how U.S. backed NGOs can commingle with C4s and other nonprofits established by leftist people like George Soros.

And in the Balkans actually, this resulted in political activity that was commingled with U.S. funds and the political agenda of George Soros. So, those three things let me to believe that you made mention of the value of what was being handed out.

I think that reporting needs to be double-checked. Again, the Honduran ambassador who was in my office a couple of hours ago found it suspicious that he believed Honduran currency was being handed out inside of Guatemala. That would seem to push back against the theory that these are Guatemalan merchants that are willingly giving up of this money.

It is true that there are some cartels that in a compulsory way, force local businesses to give up cash and other resources to facilitate the caravan.

MACCALLUM: Well, we know there's a lot of nefarious players at work in a lot of this. And in some cases, taking advantage of these people. Is there indication that there are more people pushing to the border now than a few weeks ago, and that there's any connection whatsoever to our impending midterm election?

GAETZ: I believe that the Left is trying to create a crisis on the border.  Because if you look at the first two years of President Trump's time in office, I think the low point from a polling standpoint was when there was this family separation issue. And I think that there are those on the Left who would like nothing more, than to see Republicans struggle with women and children at the border, and the heart-wrenching images that, that creates.

It's odd to me, Martha that they had women and children separated from men when it came to giving out this cash and while there is sort of a Robin Hood element of a lot of these cartels that dates back to the Medellin Cartel.

These two particular individuals wearing the white shirts in the video that you played earlier from my tweet, they -- according to intelligence officials in Central America are associated with the Bally, Bally Cartel, and that they act in concert with the Sinaloa Cartel.

MACCALLUM: All right, we will -- we'll stay on it, and we'll see -- you know, what we can learn about the situation. Essentially, you stand by the basic under pending of your -- of your tweet, correct?

GAETZ: I do. Except that I got the location wrong as a consequence of how it came to me.

MACCALLUM: Understood. Another story that broke late today is the arrest of Elena Khusyaynova, who managed millions of dollars. She's a Russian for a company that was owned by Yevgeny Prigozhin, a Russian oligarch who is sometimes called Putin's chef. He was indicted back in February on interfering in the 2016 election. And now, she has been essentially managing millions of dollars in an effort to influence and basically create havoc in our midterm elections. What's your reaction to this?

GAETZ: This is more of the same from Russia. Russia engages in a malign influence campaign all over the world. I would expect that they would try to undermine democracy here just that they -- as they have in other places.  And it's why -- and so important the work that's going on with the homeland security and a lot of our state election officials to ensure not only that we protect the integrity of the ballot, but that Russians don't find new ways to sow discord and distrust in democracy.

MACCALLUM: Yes. I mean, it does appear to back-up the notion that what they like to do is sow discord on both sides. And that is what happened in the 2016 election. It appears that the effort, at least, has been made in the midterm elections as well. Congressman Matt Gaetz, thank you very much. Good to see you tonight.

GAETZ: Good to see you, Martha.

MACCALLUM: You too. So, just 17 days away now, we will know if Republicans maybe hang on as some are suggesting is a possibility at this point to their majority in the House. But where do the numbers stand?  Chris Stirewalt, Fox News politics editor here to break it all down for us.  Chris, good to see you tonight. Thanks for being in here.

CHRIS STIREWALT, FOX NEWS POLITICS EDITOR: Howdy, ma'am. Happy Friday.

MACCALLUM: Happy Friday to you. So, some pieces of journalism out there today, looking at some of these numbers, looking at where the money flow is moving in some of these races, suggest that some races that were thought to be unwinnable by Republicans now appear that they may be within reach.

The Cook Political Report has predicted that Democrats could pick up originally 30 to 40 seats. They've now moved that number to 25 to 35 seats, and we know that they need 23. What do you make of that?

STIREWALT: Well, look if you to ask me at the beginning of September, whether any team but the St. Louis Cardinals could win the World Series, I would have said that you were crazy. Of course, it had to be the Cardinals. Look at how hot, look at how good, what a great team, how they came together? Well, that's not true. So, so, so, part of this thing --

MACCALLUM: Sports and politics, though both very difficult to predict.

STIREWALT: Well, but also this thing's change, right? The game changes, it -- the issue sets change, the candidate in a lot of these cases. When we were talking about the possibility, maybe think about it this way. It's maybe a one in five chance that the Republicans can hold the House.

Let's say 20 percent that they can buy the skin of their teeth, dig their heels in and win in very difficult places like New Jersey 11, is a great example. They have to find a way in difficult blue states and districts that voted for Hillary, to dig in hard and win. They need to do that. So, holding on the House that's maybe one in five.

But the other thing that's one in five, which is Democrats storming with the 60-seat victory of the kind that Republicans had in 2010. That means that they'd have to win and seats like Pete Sessions down in Texas, which is still Texas.

Regardless of what else is going on and however many Beto O'Rourke yard signs there are, Texas remains Texas, we checked. It will be very hard for them to get to that point. And that's why people are sort of cooling down or calming down and they're looking at the races in specific. And what you see is what we've known for a while.

Democrats have a strong structural advantage. The most likely outcome, yes, is in that 30 to 40 seat space in between, which is enough to give the Democrats a majority. But now, people are finally realizing that doesn't mean that there's zeroed. It's not a zero percent chance that Republicans' win. It's actually pretty considerable, it's a one in five.

MACCALLUM: It's fascinating. It really is fascinating. Here is the president sort of closing argument that he's using to touch on certain issues that he believes these elections and the people running in them on his side of the fence need to pay attention to. Watch this.

(BEGIN VIDEO CLIP)

TRUMP: This will be an election of Kavanaugh, the caravan, law, and order.  And come Election Day, Americans will remember a Kavanaugh. I'm willing to send the military to defend our southern border. All-cause because of the illegal immigration onslaught brought by the Democrats --

(END VIDEO CLIP)

MACCALLUM: I mean, it almost feels like the president has gone back to 2016. He's like, you know what, the wall and the border works for me, they can work for these candidates as well in places like the suburbs in Minnesota, and in the suburbs in Pennsylvania, some suburbs in California.  Do you think that, that closing argument could be effective for his team?

STIREWALT: If I didn't know better, I'd almost think he wanted the Caravan to get here. But any -- what did he say? "That's our issue," as he said.

Look, those issues work well in some places and will help Republicans who are running in red districts. Intensify the base, get them out and in places like that Pete Sessions district in suburban Dallas, these things will help him.

But in other districts, note John Culberson, the congressman also from Texas who has a more difficult district than Sessions. He's not going to appear with the president, and he's got a Houston area seat. He's not going to appear with the president when the president comes to Houston next week because it's not a good fit for him.

So, when you're talking about winning the House, it is not one size fits all. It's one size, its 435 sizes fit all.

MACCALLUM: Yes. I'm just want to just scroll through these real quick in the -- in just in the last minute, we have -- you got Iowa's first district. Texas, 23. Florida's second district. Where the money is moving as it moves out of other places, quick thought on those Chris.

STIREWALT: Part of it is strategic and down in Florida, that's certainly, the races cook up late and somebody can be helped by more money. And then in sometimes, it's just that you got to pay, you got to dance with the one who bring you.

So if you're Paul Ryan's leadership fund, and you're a longtime incumbent who's been loyal to Paul Ryan. Even if it doesn't look so hot, you're still going to get some dough at the end because gosh darn it, why not -- why not stick with us until the end? We had so much fun together.

MACCALLUM: Thank you, Chris. Good to see you tonight.

STIREWALT: You bet.

MACCALLUM: So, coming up, we're going to get back to this story which is still we're getting brand new details on this by the minute.

Saudi Arabia has now confirmed the death of journalist Jamal Khashoggi.  They say that 18 Saudi nationals have been arrested and that the deputy of their Intelligence Agency has been fired. So, are they trying to pin the blame on these people and suggest that they didn't know what they were doing? They say there was a skirmish that went awry, next.

(COMMERCIAL BREAK)

MACCALLUM: Fox News Alert, Saudi Arabia, confirming for the first time, moments ago, that yes, journalist Jamal Khashoggi is dead. And he was killed in the Istanbul Consulate. Saudi prosecutors say that 18 arrests have been made in connection with his death.

We now have word that Secretary of State Mike Pompeo is aware of the statement by the Saudis, and we are awaiting comment from the Secretary of State, tonight.

Benjamin Hall is live in Istanbul, where he has been covering the story since it broke, and these new details have come in. Ben, explain to us what we know, what we are learning at this hour, tonight.

BENJAMIN HALL, FOX NEWS CORRESPONDENT: Martha, this is the statement we've been waiting for, for 17 long days, the Saudi's version of events. And today, they are laying it out in fair amount of detail. Remember, it's 1:00 a.m. in the morning in Saudi Arabia, strange time to be releasing this.

But it has just broken on Saudi State T.V., and they're quoting the Saudi State prosecutor. As you pointed out, they are saying that 18 people have now been arrested, 15 of those people were the same suspects pictured by the Turkish CCTV, flying in Istanbul, arriving at the consulate, shortly before Khashoggi, leaving, shortly afterwards.

And now what they are saying about what happened inside the consulate. I will read you their statement. They say that a discussion between Khashoggi and the people who met him while at the consulate, led to a fight and a clash with hands, resulting in his death.

And remember, we've had so many reports of a bone saw, fingers being torn off, and torture. That this, clearly, one way of Saudi Arabia trying to pull back from that. They are very much claiming this was an accident.  But the big question again, one of many big questions, why were 15 of them, even there, in the first place to question him?

Of the 18, two are high-ranking officials. And these are the two had they pinned the blame on. One of them is a name we've heard for some time, a few days at least, his name is General Asiri, he was a Vice President of Saudi Intelligence. He was Former Spokesman for the Saudi-led Coalition in Yemen. He was educated in the U.S. and the U.K.

While he has now been arrested, and his post has been taken away. And the other man is Mohammad bin Salih Ramai, a minister and a consultant to the royal court. But that's as far as the connection with the royal court comes -- goes. And they are very clear that the royal court and the royal family had nothing to do with this.

That they are learning about this just as much and as soon as everyone else. In fact, we are hearing that King Salman himself, reached out to President Erdogan, just a couple of hours ago, to let him know the results of this investigation.

That he said we hope the relationships between the two countries can remain strong, because that relationship has been severely fractured, over the last couple of weeks.

So, that's what we are hearing from now. We are also hearing that Saudi intelligence is going to go through a complete restructuring. But again, we had heard for some time, that the line from Saudi Arabia would be (INAUDIBLE) it was an interrogation gone wrong. That it was sanctioned at a relatively high level, but not to the royal family. That's exactly what we are now hearing.

And now, the bug question, what has happened to Khashoggi's body? What happened in there? What have they done afterwards? How will the White House respond? But 17 days after Khashoggi went missing; we have finally got the Saudi version of events. Martha?

MACCALLUM: Yes. That is an essential question and it appears that they're working hard on plausible deniability. Benjamin, thank you very much.  Just to mention, Lindsey Graham -- Senator Lindsey Graham, tweeting tonight, he has been very outspoken on this and he has said that MBS, Mohammad bin Salman, the Crown Prince of Saudi Arabia, must go.

He says to say that I'm skeptical of the new Saudi narrative about Mr. Khashoggi, is an understatement.

Joining us now on the phone, Judith Miller, Pulitzer Prize Winning Reporter, a FOX News Contributor and a friend of Jamal Khashoggi, Judith, good to have you with us, tonight, what's your reaction to this, tonight?

JUDITH MILLER, FOX NEWS CONTRIBUTOR (via phone): Well, I'm afraid that I'm, kind of, in the lane of Lindsey Graham camp, tonight, Martha. I mean, this explanation or partial explanation, does not really pass the smell test. I mean, what were those 15 members of the hit team doing in the consulate?

What was the goal of their meeting with Jamal Khashoggi? What happened to the body? All of the major questions remain. This announcement made in the dead of night, in Riyadh, the middle of the morning there, suggests panic. And that's what I think is going on. And I don't think it's going to wash. It's a start of an explanation. It is not a convincing one.

MACCALLUM: Yes. You know, one of the things that strikes me, when you hear this explanation, if this were the case, if it were an interrogation that went wrong, the likely outcome would be that you would discuss it almost immediately, and you would have a body.

And the body, you know, you would say, this went horribly wrong. There was a fight. And, you know, something happened, and there was a struggle, and he was -- he was killed as a result of it. That is one of the big questions, of course.

And, you know, I mean, all of these just smacks of the removal of responsibility by the royal family. And, I guess, you know, will they get away with it is the question here, tonight, Judith?

MILLER: Well, I think, the White House wants them to get away with it.  Jared Kushner who has been a huge promoter of the Crown Prince, clearly, wants the world and the country to believe this explanation. But I don't think it's going to fly on Capitol Hill.

I mean, look, last year, even before all of this dreadful news -- but I'm not talking about all of the foreign policy mistakes he has made. Even before that, Congress nearly severed the weapon sales to the Kingdom.

And now, you have people calling for a complete re-examination of the relationship with the Saudis. You know, I think, this will be, once again, a test of Donald Trump's ability to get what he wants done, with the Congress.

There is one other thing that's been a real weapon in Donald Trump's quiver, and that is the long-standing relationship with Saudi Arabia.

MACCALLUM: Yes.

MILLER: Massive amount of the arm sales and sales business with the country, and the businesses at stake. Clearly, the establishment -- the foreign policy establishment will want to accept the Saudi explanation and move on.

MACCALLUM: Right. To that end, let me just jump in for just one moment.  We just received a statement from the White House, and here it is. I'll read it to you and you can give us your response.

The United States acknowledges the announcement from the Kingdom of Saudi Arabia that its investigation in the fate of Jamal Khashoggi is progressing and it has taken action against the suspects it has identified thus far.

We will continue to closely follow the international investigations into this tragic incident and advocate for justice that is timely, transparent, and in accordance with all due process. We are saddened to hear the confirmation of Mr. Khashoggi's death and we offer our deepest condolences to his family, fiancee and friends.

And that is from the Press Secretary Sarah Sanders. Judith?

MILLER: That sounds like more or less than acceptance, if not an endorsement from what we've heard so far from Riyadh. And I'm just wondering whether or not Lindsey Graham, kind of, felt the same way, I don't think so. I, you know -- the hope is that, if this blows over, then we move to the midterms and the country has lots of other challenges.

That Jamal Khashoggi saves the outrage phase, but ultimately, we have to ask ourselves, what kind of country are we doing business with? What kind of future king would Crown Prince Mohammad bin Salman be? What does this episode show us about the way they do business? And can we trust them?

There's so much at stake that we can overlook, incidents like this, or tragic incidents, as the White House calls them. I think that's what the country has to decide. And it's not just the White House making this decision.

MACCALLUM: Judith Miller, thank you very much, good to have you calling in tonight with this breaking news. And we will continue to stay on top of it.

So, there is a growing chorus of Democrats, demanding that Hillary Clinton stepped aside. But there is one former adviser, a close adviser, who is speaking out against the tide. Philippe Reines, says Hillary still has a chance and could run in 2020. He makes his argument, here exclusively, coming up next.

(BEGIN VIDEO CLIP)

HILLARY CLINTON, FORMER DEMOCRATIC PRESIDENTIAL CANDIDATE: I think, in this time we are in, particularly in this campaign, you know, maybe I missed a few chances.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

MACCALLUM: So, tonight, the intrigue intensifies over whether or not Hillary Clinton is considering a bid for the White House again, in 2020.  Despite a series of recent comments that have left some ardent Democrats with a bit of a bad taste. Watch.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: There are people who look at the incidents of the 90s, and they say a president of the United States cannot have a consensual relationship with an intern. The power imbalance is too great.

CLINTON: Who was an adult. You cannot be civil with a political party that wants to destroy what you stand for, what you care about.

(END VIDEO CLIP)

MACCALLUM: Those are two comments that are getting a lot of attention.  The New York Times wrote an editorial blasting Clinton saying, this is the sort of moral arrogance and self-justification that has long troubled even many Democrats about Mrs. Clinton.

Joining me now is the Philippe Reines, her long-time adviser, who made a lot of news today, arguing just the opposite that Hillary Clinton, he believes, is a viable candidate in 2020, Philippe, good to have you on, nice to have you back, thanks for being here tonight.

PHILIPPE REINES, FORMER HILLARY CLINTON ADVISER: Thank you, Martha.

MACCALLUM: So, what do you make of the New York Times argument that her comments show moral arrogance and that those are troubling answers?

REINES: Well, for once, I think the Fox audience might like what I have to say. The New York Times doesn't get to tell anyone what they can or can't do. This is a refrain that people have heard over the years, and it's silly. People didn't want her to run for senate. She did. She won.  People didn't want her to be Secretary of State. She did. She did a great job.

People didn't want her to run and be president, she was the nominee. It's just silly. It's very inside baseball. For someone who got 65 million votes, more than anyone, except Barack Obama, I'm going to guess that more than a few still like her. And this notion of go away, there's some sexism to it, too. I mean, you don't hear anyone saying McCain should go away after 2008 or Mitt Romney or John Kerry. It's just a woman that is supposed to be quiet and go away.

MACCALLUM: But the difference is that she was the nominee twice. I mean, you can look at people like Joe Biden who have run a couple of times unsuccessfully. But do you feel just from a purely political perspective that when you have been put all the way up there, you are the nominee twice, that perhaps it's time to try somebody else?

REINES: Well, look, I mean, I'm not saying she is going to run. I was not being cute. I think the odds are probably in the power ball range. I think the issue of--

MACCALLUM: Really?

REINES: Yes. I think the issue of--

(CROSSTALK)

MACCALLUM: But what is she doing I guess? Why is she out there so much?

REINES: But someone has got to win Power Ball. Well, she is answering questions. She is out there campaigning for 2018 candidates, obviously flipping the Congress.

MACCALLUM: But they are saying that she is making it all about her. And she is saying, you know, we can't be -- you know, civility is something that, you know, sort of a luxury. She says--

(CROSSTALK)

REINES: You know, she describes herself -- she describes herself as a Rorschach test, that people see what they want to see. And I think it's a  point where people have political stigmatism where they see only one thing which is that she annoys them for not going away. And I think that's because, you know, she threatens certain people including Donald Trump, who only a matter of hours ago yet again attacked her. Steve Bannon, you know, today said that he sees her as a real rival--

(CROSSTALK)

MACCALLUM: But let me ask you this. You know, the comment about Monica Lewinsky, she said, you know, she was an adult so therefore that's that, you know, that's a done situation. That's a difficult argument in this Me Too moment. And that is something that would continue to come up. His background, how she dealt with it. That's not going to go away likely in this environment.

REINES: No. I mean, obviously, again we are in Power Ball territory. But if she ran she would have to answer. I think that what you saw the other day and what you are seeing is someone who is talking as a wife, as a mother, and third as first lady and the political figure.

I mean, it was a very trying time for her. And for both Clintons. He was impeached. There is a belief, which I share, that he had a reckoning. And I think you are seeing someone being asked 20 years later it's just a raw topic.

MACCALLUM: All right. Before I let you go, if she were to run do you think she would win?

REINES: I do.

MACCALLUM: OK.

REINES: Everyone loves a comeback.

MACCALLUM: Welcome back. Good to see you. Thank you.

REINES: Thank you, Martha.

MACCALLUM: Coming up, Adam Schiff's attack on a Republican colleague backfires accusing him of being racist against Koreans. That congressman joins us next. He's demanding an apology on behalf of his children who guess what? Were adopted from South Korea.

(COMMERCIAL BREAK)

MACCALLUM: Democratic Congressman Adam Schiff under fire tonight for a tweet suggesting that some of his Republican colleagues are motivated by what he sees as deep seeded racism. Schiff calling out my next guest, Republican Tom MacArthur of New Jersey saying that in art, quote, "Representative MacArthur says his Korean-American opponent is in quote, "not one of us." The dog whistles, he writes, of bigotry have been put away. Now they are using Trumpets."

But it appears that Schiff sort of step in here. Now MacArthur who has two adopted children from South Korea says that Mr. Schiff owes him an apology and owes his children an apology.

Congressman Tom MacArthur of New Jersey joins us now. Good to have you with us today. Let's put, I want to put the tweet that you responded to that with. Up on the screen. And you say, "Hey, Adam Schiff. First, I didn't say that. Second, you should have done some research before you made such a disgustingly false claim. I have two adopted children from South Korea. I don't want your apology but you can sure apologize to my children." And there's a picture of your beautiful family.

REP. TOM MACARTHUR, R-N.J.: Thank you.

MACCALLUM: What did he -- how did he respond?

MACARTHUR: Well he hasn't responded. I tried to get him on the phone last night. Crickets. Look, this is just another one of those the angry resistance going after me and going after others with whatever they can grab to try to get power. They're just trying to divide America and make people angry and make people afraid. It's pretty disgusting. And it's not going to work.

MACCALLUM: So when you said, "not one of us" he jumped on that and assumed that you meant your opponent's ethnic background. What did you mean?

MACARTHUR: Well, I didn't say it. It was an outside ad. What it said was he was a Nancy Pelosi liberal so it was clearly referring to his political stance, nothing to do with this race. But this is -- this is what the angry resistance is doing. They want to get power. Adam Schiff is desperate to get a gavel in his hand and try to stop this president's agenda. And he'll do anything to do it. He couldn't care less whether he said something offensive or wrong. He is just--

(CROSSTALK)

MACCALLUM: Do you think your children will get an apology?

MACARTHUR: I doubt it. You know what, I don't care about an apology. He should apologize to the American people.

MACCALLUM: Well, let me ask you. You are running, you have a very tight race with Mr. Kim. It's 40 to 41 right now but a point apart from the polls that we've seen. You voted for the tax package which was very unpopular in New Jersey because of the implications for the state taxes. Do you think that's going to be a problem for you?

MACARTHUR: No. They have the right to vote. The vast majority of people in my district are getting lower taxes. We doubled rates. We did so many things in that tax package. It's not just about one thing. Not just about the state and the local taxes. And people's taxes are going down.

I asked my opponent today. We had a televised debate. And I said what do you want to replace it with? Are you going to repeal it? Because if you repeal it the people in part of south Jersey are going to lose $3,500 a family. And it was, again, it was silence. No specifics, no answers.

I think -- I think the resistance is trying to distract, just trying to make people angry. They're trying to make people afraid. Because once April comes the game is up. People are going to see that their taxes went down and they're trying to make people afraid today and they are going to fail because the American people do not want to be divided. They don't want to be angry. They want leaders that are work together and get things done.

MACCALLUM: Let me ask you. Do you think that if someone said the kind of thing about your family that he said and the parties were reversed that there would be more outrage?

MACARTHUR: I'm absolutely certain of it. I'm absolutely. The media is definitely complicit in this. At times, they'll look away from this with Adam Schiff. But the American people won't look away. They see this for what it is. It's a pattern from an angry left resistance movement that my opponent is part of. And guys like Adam Schiff will do anything to get power. And the American people I don't think are going to fall for it because they are too smart for that.

MACCALLUM: All right. Wo we'll be calling the races in just a few weeks. And I look forward to seeing how it all works out after this. Thank you for being here tonight, Representative Tom MacArthur.

So, one of the first cases that could go before the Supreme Court justice Brett Kavanaugh is whether to tear down this cross in a veteran's memorial park. Shannon Bream on how this could play out with the new composition of the court.

(COMMERCIAL BREAK)

MACCALLUM: There is a religious freedom fight that's brewing in Maryland where the battle to protect a World War I cross memorial could become one of the first cases that's heard by Justice Kavanaugh on the Supreme Court. And the outcome could have very big implications for other religious monuments with crosses in them across the country. Including those at Arlington National Cemetery.

Joining me now is Shannon Bream, host of "Fox News @ Night" and our resident Supreme Court expert. Shannon, good to see you tonight. This is an interesting case. For 36 years this cross was on private land. And then in 1961, it became, it was on the state land. So, what's at stake here and how is it going to work?

SHANNON BREAM, FOX NEWS HOST: Yes. This is really interesting. We've been tracking this case for years. Because it's been spending a lot of time in the lower court. It's a large cross that sits in Maryland in an area that yes, is now controlled by state authorities, by the park land. And so, the government is involved a little bit here.

Now the fourth circuit, the next level down from the Supreme Court said essentially, they thought this did amount to the government sort of endorsing a religion. They said this cross that was put up to recognize a number of young men who were lost in World War I by the gold star mothers and also the American legion.

They said by using the cross it looks like an endorsement of Christianity. So there has been this fight back and forth that is now finally on the calendar for the Supreme Court to vote on it. And now Justice Kavanaugh on the bench, people think this could be one of the cases he might be a yes vote to hear.

MACCALLUM: So what do you think is the main constitutional question that they will consider when they look at this?

BREAM: They are looking at whether the government is endorsing this idea of any specific religion over another. And so, people have argued for years with a number of these memorials that listen, these were to the war dead. And many of them are this large Latin cross that was understood decades ago to be a memorial. Not necessarily saying everyone who perished here was Christian but this is for our war dead.

You mention other places. Let's talk about Arlington National Cemetery here in Washington just outside D.C. There are two large Latin crosses much like this one in Maryland so people are very worried about this. Potentially if you take down the one in Maryland does every cross inside a place like Arlington have to go?

So, there are much bigger questions. It takes four votes for the court to hear the case. So, we'll watch. This is on the conference list for October 26 they vote behind closed doors. If four of the justices say we are ready to answer this question, they'll vote yet to put this on the calendar.

MACCALLUM: Yes, it's fascinating. Any indication based on prior decisions how Brett Kavanaugh, Justice Kavanaugh might approach this?

BREAM: He is very much been viewed as somebody who is very supportive of religious liberty issues. And some of these cases involving the HHS contraceptive mandate where religious employers and others were going to be forced to pay for certain kinds of contraceptives they said they had a religious objection to, because they viewed some of them as triggering what they believed were abortions.

He was supportive of the idea of religious freedom in those cases so a lot of people think he would be someone to be an advocate in this case. We'll have to see. He has a bit of a record on religious liberty but not specifically with one of these big memorials because they're all over the country.

MACCALLUM: It's going to be fascinating to watch. Thank you so much, Shannon. Great stuff. Good to see you tonight.

BREAM: You, too.

MACCALLUM: So U.N. Ambassador Nikki Haley came out swinging at the annual Al Smith charity dinner here in New York.

(BEGIN VIDEO CLIP)

NIKKI HALEY, UNITED STATES AMBASSADOR TO THE UNITED NATIONS: I get it. You wanted an Indian woman. But Elizabeth Warren failed her DNA test.

(END VIDEO CLIP)

MACCALLUM: So, my ladies' night panel here to weigh in on that. Plus, what do you think about iPad tipping? Does it annoy you? The big debate coming up next.

(COMMERCIAL BREAK)

MACCALLUM: U.N. Ambassador Nikki Haley stole the show last night at the Al Smith dinner in New York poking fun at politicians on both sides of the political aisle. And even her own boss in a keynote speech that demanded attention before she even got to the mic.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It is my pleasure to introduce the next president of the United States, Nikki Haley.

HALEY: I so can't believe you just did that. The president called me this morning and gave me some really good advice. He said if I get stuck for laughs just brag about his accomplishments. It really killed at the U.N. I got to tell you.

I get it. You wanted an Indian woman. But Elizabeth Warren failed her DNA test. Actually, when the president found out that I was Indian-American he asked me if I was from the same tribe as Elizabeth Warren.

(END VIDEO CLIP)

MACCALLUM: Ladies night, folks. Lisa Boothe, Danielle McLaughlin, and Caroline Polisi. Welcome to all of you. She looked amazing first of all. And she is a superstar. There's no doubt about it, Lisa.

LISA BOOTHE, FOX NEWS CONTRIBUTOR: Well, I'm a huge Nikki Haley fan girl. Nikki Haley for president 2024. But no, I think she is awesome. I mean, look, she was a former governor. U.N. ambassador currently. I mean, she's got such credibility. I think she would be an amazing potential presidential candidate.

Also, I found a joke about Elizabeth Warren hilarious because it's true. Obviously, Elizabeth Warren exposed herself as a fraud recently. And so, I thought the joke was perfectly timed and hilarious.

MACCALLUM: Well, the whole thing at this dinner I've been to several times is to, you know, sort of walk that line of sort of jabbing a little bit. You can maybe jab at the president a little bit and make, have some fun with everybody. What did you think, Danielle?

DANIELLE MCLAUGHLIN, DEMOCRAT STRATEGIST: No. I think the dinner was a little bit like her time at the U.N. She's walked that line and she's been able to distance herself from Trump on Russia, for example, but then she's really been in a lockstep for the American first policies. So, I agree with you, Lisa. I mean, I'm might not say 2020 clearly. She doesn't want to say anything about that now. But would she primary the president?

CAROLINE POLISI, DEFENSE ATTORNEY: Let's settle when--

(CROSSTALK)

MACCALLUM: It's far enough away. So, we will see. Caroline, what do you think?

POLISI: Yes. Look, everybody loves Nikki Haley. And this is why. I mean, everybody loves somebody that can poke fun at themselves and others. This is kind of like what the White House correspondent's dinner should have been.

MACCALLUM: Yes.

POLISI: A little bit, you know, tongue and cheek--

MACCALLUM: Exactly.

POLISI: -- and not over the line.

MACCALLUM: Exactly.

POLISI: Everybody can laugh. It's important for us as a country to laugh at ourselves.

MACCALLUM: yes.

POLISI: So, I loved it. I thought she did great.

MACCALLUM: I would say there is such an art to doing this kind of dinner. And when you do it well it's hilarious. I've seen President Obama do it very well. President Bush do it very well. And today President Trump at this dinner during the campaign, it didn't work out that well. So there is a real art to it.

So, speaking of art, and movies, a lot of attention this week to these Disney princess characters because a couple of celebrities have said that they don't think that they set the best example for their children.

Here's Kristen Bell talking to it, talking about this. She says "Don't you think that it's weird" - in Snow White she is talking about - "that the prince kisses Snow White without her permission? Because you cannot kiss someone if they are sleeping." This is what she says to her girls. Lisa?

BOOTHE: Well, look, I would say the prince -- or Snow White would still be asleep if she were never kissed so there's that.

MACCALLUM: True.

BOOTHE: Factual.

MACCALLUM: She would have slept forever.

BOOTHE: Also, my dad told me princess stories every single night before I went to sleep when I was younger. It was strangely all different version of Disney movies that he kind of came up with on his own.

MACCALLUM: You thought he was just a fantastic person (Ph).

BOOTHE: Yes. But I turned out to be a strong and an independent woman as a result despite being told Disney stories. Because my parents told me I could do whatever I wanted when I grew up. So, look, she has the right to, you know, parent however she would like as a mom, but I do think it's kind of silly.

MACCALLUM: And your favorite Disney character is?

BOOTHE: Belle.

MACCALLUM: Because?

BOOTHE: Because she is just strong and an independent woman.

MACCALLUM: Yes.

BOOTHE: She wanted to leave her village. She had higher ambitions and hopes. She went to save her dad. So, she is a strong and an independent. She loves her dad. Also, she didn't -- what is his name? I forgot.

POLISI: Gaston.

BOOTHE: Gaston.

MACCALLUM: No. She didn't like him, she didn't like Gaston because she is a big, he's a blow hard.

(CROSSTALK)

BOOTHE: And he was hot. She knew he was a bad guy. But able to see through the B.C. veneer of the beast.

MACCALLUM: I totally agree.

BOOTHE: And see what is on the inside.

MACCALLUM: And she also, Belle also, you know, she and the beast they gain a relationship of friendship.

POLISI: Yes.

MACCALLUM: And then they fall in love.

POLISI: There is substance.

(CROSSTALK)

MACCALLUM: Danielle, what's your favorite?

MCLAUGHLIN: I totally agree.

MACCALLUM: You like Cinderella.

MCLAUGHLIN: I like because I'm going to date myself here. But like there were no Disney princesses. We were harkening back to the '50s. I wish that I had grown up in the time of Moana who was from the South Pacific which is where I'm from. This adventurous girl who goes out to save her island. Steep in the folklore that I grow up with. So, I love her.

The point I would make about this is it's important to have these cultural references. "Snow White" written in 1812. Like women were basically property at that.

MACCALLUM: Right.

MCLAUGHLIN: Certainly not one woman around the world had to vote. So parental guidance is really important. And we should have these critical discussions about what these pieces of culture mean for girls and boys.

MACCALLUM: Yes. There are too many princesses now. Like every six weeks it feels like there's another, you know, "Frozen," they've got like a million of them coming out. You know, I think that they were kind of special. I also think that we sort of overdone the princess thing with little girls.

POLISI: Right.

MACCALLUM: Everyone is a princess! Everyone is a Tiara. It's like, you know, Halloween is one day a year. But the rest of the year, you know, you are a kid. What do you think about all of this?

POLISI: Yes. I will say that I have a 7-year-old daughter, she's in second grade. So, having to relive these stories through her it is definitely, it definitely gets the wheels turning.

MACCALLUM: Right.

POLISI: I loved Kristen Bell. You know she obviously was Elsa in, you know that's taken everybody by storm. And I love in that movie, you know, the overarching message of love between two women. It was a sisterly bond.

(CROSSTALK)

MACCALLUM: A sisterly love. Right

POLISI: There was sort of, you know, there were narratives of a love story throughout with men, of course. But I think Disney saw the writing on the wall that, you know, this whole, you know, do anything you can to catch a man wasn't going to cut it. And so, they are evolving with the times.

MACCALLUM: Right. So, before I let you go, when you, look at this headline from I think this is the Wall Street Journal. You want to percent for handing me a muffin? The awkward etiquette of handing of iPad tipping. And I just have notice this recently as well. You just, like you get a cup of coffee and then they turn it around and go, ha-ha, are you going to give me 15 or 20 percent?

BOOTHE: Well, I'm a Target audience because I'm such a sucker. Because I don't people are working hard and they provide good customer service and they deserve a tip and so I am probably their target audience because I am guilted easily into giving a tip. Because you know, I think--

(CROSSTALK)

MACCALLUM: So, you give 10, 15, 20?

BOOTHE: I'm a typically a 20 percent person.

(CROSSTALK)

MACCALLUM: You do too?

MCLAUGHLIN: No, I do too.

MACCALLUM: You feel guilted into it?

MCLAUGHLIN: A little bit. And I think about this should really be about reward. So, I was a waitress in high school and college and grad school.

BOOTHE: Yes, me too.

MCLAUGHLIN: I slogged my guts out running between tables.

MACCALLUM: For 20 percent.

MCLAUGHLIN: Right. I'm not sure that taking a glass case and hand it to them.

MACCALLUM: yes.

MCLAUGHLIN: But I still pay it. So, like almost the cafe owners are the ones that are doing bad because they're not paying it.

POLISI: I'm going with Emily and post on this one. You do not need to tip on something like this. I mean, she is the final word. And if they are not providing real service you don't need to tip.

MACCALLUM: I consider myself a very good tipper. She was a waitress for eight years so I understand what's it's like. But come on, handing it over the counter?

BOOTHE: I'm a sucker I guess.

MACCALLUM: I'm going to make sure you are going to my checkout counter.

All right. That is "The Story" on this Friday night. Have a great weekend, everybody. We'll see you back here on Monday night at seven. Tucker Carlson is up next.

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