This is a rush transcript from "Fox News Sunday," October 29, 2017. This copy may not be in its final form and may be updated.


A year after the 2016 election, was it Hillary Clinton and the Democrats who colluded with the Russians?


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: She denied it, her own people denied it. Everybody denied it. And now, they are sort of scooting around trying to figure out what to say.

WALLACE: Who in the Clinton campaign approved paying for the Russian dossier on Donald Trump? And did they break the law? And what does it mean for the investigation into Russian collusion with the Trump campaign?

We'll ask House Oversight Committee Chair Trey Gowdy, only on "Fox News Sunday."

Then, the GOP revolt.

SEN. BOB CORKER, R-TENNESSEE: It's obvious his political model and governing model is to divide.

SEN. JEFF FLAKE, R-ARIZONA: I have children and grandchildren to answer to. And so, Mr. President, I will not be complicit or silent.

WALLACE: What do Republican attacks on the president mean for the future of the party? We'll talk with Ohio Governor John Kasich, a Trump critic. It's a "Fox News Sunday" exclusive.

Plus, President Trump and the Republicans still looking for the first big legislative win.

REP. PAUL RYAN, R-WIS., SPEAKER OF THE HOUSE: This budget that we just passed in the House today brings us one step closer to historic tax reform.

WALLACE: We'll ask our Sunday panel if they can make good on the promise of big tax cuts by the end of the year.

And our power players of the week: showing the struggles our nation's heroes face when they come home.

All, right now, on "Fox News Sunday."


WALLACE: And hello again from Fox News in Washington.

We begin with the latest reports at least one person has been charged in connection with special counsel Robert Mueller's investigation into Russian meddling in the 2016 election. The reports say a federal grand jury approved the chargers Friday. Those charges have been sealed by a judge and anyone facing charges could be taken into custody as soon as tomorrow.

Meanwhile, House Republicans are launching new investigations into Hillary Clinton, including the revelation that her campaign and the Democratic National Committee paid for opposition research that led to the Russian dossier that accused the Trump campaign of collusion with the Russians.

Joining us now to discuss all this, Congressman Trey Gowdy, chairman of the House Oversight Committee.

Chairman, let's start with the report from several news outlets that the first Mueller charges will be announced tomorrow. As a former federal prosecutor yourself, what will you be looking for?

REP. TREY GOWDY, R-SC, CHAIR, OVERSIGHT COMMITTEE: Well, first of all, Chris, we don't know who's being charged. Let's assume arguably (ph) though the reporting is true -- we don't know who is being charged, we don't what they're being charged for, we don't know the time period. I will say this, the only conversation I've had with Robert Mueller, it was stressing to him, the importance of cutting out the leaks with respect to serious investigations.

So, it is kind of ironic that the people charged with investigating the law and executing the law would violate the law. And make no mistake, disclosing grand jury material is a violation of the law. So, as a former prosecutor, I'm disappointed that you and I are having the conversation, but that somebody violated their oath of secrecy.

WALLACE: Let's handicap this, though, if you will, sort of expert analysis. As a federal prosecutor, you're quite right. We do not know who is being charged and what they are being charged for. What, if anything, when we find that out, whether it's somebody close to the president, somebody further down, whether it's something related to Russia or whether it's in effect an extraneous charge, not to say it's not a legitimate charge. But something like fraud, or money laundering, what will that tell us about the Mueller investigation?

GOWDY: Well, a little phrase in the memo from Rod Rosenstein arose or may arise from investigation. And the reason you have that phraseology is, if special counsel finds evidence of a crime that's unrelated to his or her original jurisdiction, you don't ignore it. But it's going to be really important whether or not this indictment involves 15-year-old business transactions or 15-day-old conversations with Russia.

So, it's really important what the charge is. It's really important who the person being charged is. One thing I don't get that excited about, although I do see a lot of reporting, is somehow or another you're going to be able to flip a witness and that witness is going to turn state's evidence on everyone else. If you didn't believe a witness yesterday, chances are great you're not going to believe that witness tomorrow, particularly if they are under indictment and have a reason to curry favor with the government. These investigations come down to documents and evidence, much more so than they do witness testimony.

So, I would caution your viewers, don't get too excited that, all of a sudden, the government now has a star witness. That star witness, you probably didn't believe a week ago and you probably won't believe a week from now.

WALLACE: There have been growing calls from some Republicans to end the Mueller investigation. Some people say he's too close to Comey and the FBI and that he ought to resign. Some people say that when the Mueller budget for the special counsel investigation is presented to Congress to review next month that they should cut off funding.

Do you support any effort to either curtail or end the Mueller investigation?

GOWDY: I don't. And I readily concede, I'm in an increasingly small group of Republicans. I think Bob Mueller has a really distinguished career of service to our country. I don't think any of your viewers can think of a single thing he did as the FBI director that calls them to have a lack of confidence in him. I think most of our viewers have to be reminded that he actually was the FBI director or that he actually was a U.S. attorney, because he's a pretty apolitical guy.

I see the reporting. I see the same thing you're making reference to that he and Comey are friends. I'm not really sure what the definition of that is. I've got a lot of coworkers that it wouldn't stop me from investigating them or prosecuting them.

So, they're not family members. They weren't business partners.

I would encourage my Republican friends -- give the guy a chance to do his job. The result will be known by the facts, by what he uncovers. The personalities involved are much less important to me than the underlying facts. So, I would -- I would say give the guy a chance to do his job.

WALLACE: Let's turn to the revelation this week that it turns out that the Clinton campaign and the Democratic National Committee paid for the opposition research that led to the writing, the formulation, of this Russian dossier that has made all kinds of accusations against President Trump and his campaign.

What do you think is the significance of that revelation?

GOWDY: Well, one of the areas of significance is just how hard the Democrats in Congress fault Republicans for trying to gain access to this information. If it were up to Adam Schiff and other Democrats, who, of course, want all the facts to come out, they want all the facts of Russia to come out, except who finance the dossier. So, that's the most important thing to me is how unserious the Democrats in the House have been about uncovering all of the facts.

I am interested in who paid for the dossier because that helps you understand motive and intent and whether or not you can rely on the document. I am much more interested in whether or not the Department of Justice and the FBI relied upon that dossier and initiating a counterintelligence investigation or in court findings. That is really important to me.

I don't expect the DNC to be objective. Almost by definition, opposition research is not objective. I do expect an entity represented by a blindfolded woman to be objective. And if they relied on that dossier and they didn't corroborate it or vet it, then we have a serious issue and that's the next thing that House Intel is trying to find out, is whether or not the U.S. government relied on it.

WALLACE: Yes. Let me ask you about that, because your -- what -- the two points you are making, and I agree, these are two very important questions. Did the FBI based its original investigation, at least in part of the dossier? And when you talk about court representations, that's the possibility that they use the dossier to convince a FISA court to allow the FBI to wiretap people in Trump world, Trump associates.

Do you have any evidence of that? I understand the investigation is just beginning.

GOWDY: Well, actually, the investigation is not just beginning. We've been trying for a long time to get the Department of Justice to give us access to this information, and frankly it took the speaker of the House this week to tell the department that we're not going away. You know, Chris, people don't like it when I say this, but it's actually true -- it's sometimes hard to tell the difference between the Obama Department of Justice and the current Department of Justice in terms of transparency and their willingness to share information with Congress.

This is a really simple request. Did you rely on the dossier? And if so, did you vet it before you relied upon it? You can answer that in 30 seconds. But it's taken three months for the Department of Justice, and only recently have they agreed to give us the information.

So, the battle is not just with House Democrats. Unfortunately, it's also with the Department of Justice, the access (ph) of the information we need to wrap up this investigation.

WALLACE: What about the fact that the Clinton campaign and the DNC, which paid $12 million for the law firm, Perkins Coie, that paid for the opposition research that led to the dossier, that in the FEC filings, it simply says $12 million to Perkins Coie, the law firm, for legal work? No mention of the fact that it was also paying for oppo research that went to Christopher Steele, former British intelligence agency -- agent that went to the Kremlin. Not the money to the Kremlin, but his investigation.

As I understand it, that willful misrepresentation of campaign expenditures is a criminal offense.

GOWDY: Well, I'm not an election law expert, Chris, but the good news is you don't have to be to understand the absurdity of believing that you can launder all of your campaign money by just hiring a law firm. I mean, imagine if you and I were running for Congress and we just hired a law firm and said, hey, you go to all the oppo, you go buy all the television, you go buy all the bumper stickers, you go hire all the experts, and we're going to launder all of this through a law firm. I can't think of anything that defeats the purpose of transparency laws more than that.

So, I am interested in that, and I am also interested in sharing some memory tricks with folks at the DNC because no one can remember who paid $10 million to a law firm to do oppo research. I find that stunning. Ten million dollars and no one can remember who authorized it, who approved it, who said, this is a really good idea?

So, you've got two issues, a memory issue, and then the lack of transparency by laundering money through a law firm.

WALLACE: We're running out of time, but I want to ask you to more questions. One is that you are also -- have begun an investigation into the 2010 Uranium One deal. This was the deal under which 20 percent of America's uranium reserves ended up going to a Russian government agency. Hillary Clinton responded this week to all of this talk about her.

I'd like to play the clip of her.


HILLARY CLINTON, FORMER DEMOCRATIC PRESIDENTIAL CANDIDATE: The closer the investigation about real Russian ties between Trump associates and real Russians, the more they want to just throw mud on the wall and I'm their favorite target, me and, you know, President Obama. We are the ones they always like to put into the crosshairs.


WALLACE: So, Secretary Clinton and other Democrats are saying that you and the Republicans are just trying to shift the conversation.

GOWDY: Well, Chris, all the way back in 2010, Peter King and Ros -- Ileana Ros-Lehtinen, two of my colleagues on the House Intel Committee, sent a letter to CFIUS, trying to better understand this transaction. In 2015, the House Oversight Committee also wrote the Obama administration trying to understand what CFIUS did, whether or not they had all the information.

But, Chris, also keep in mind -- we've spent most of 2017 trying to better understand what Russia did to this country in 2016. Not to the Democrats, not to the Republicans, but to this country.

So, what we know was that Russia was not our friend in 2016. It's not that big of a leap to ask, I wonder if they were all friends in 2010. That's not that big of a leap.

It wasn't Republicans who gave the reset button to Russia. It wasn't Republicans who said we'll have more flexibility in the second term. It was a Republican named Mitt Romney who said Russia was our greatest threat, and the Democrats laughed at him.


GOWDY: Yes, I do want to know if the same group that tried to sabotage our democracy in 2016 is buying uranium in 2010. I want to know that.

WALLACE: OK, two quick questions to wrap this up. On the one hand, given the revelations about the fact that the DNC and the Clinton campaign paid for this -- the Russian dossier, in effect, do we at this moment have harder evidence of collusion between Clinton and the Russians than we do about Trump and the Russians?

GOWDY: You know, Chris, there are five words that start with C -- collusion, coordination, conspiracy, contacts, and coincidence. Where this falls out in those five Cs, I don't know. The word collusion has of criminal connotation to it.

I think the premise of your question is accurate. For a long time, we've heard about all the ties between the Trump campaign and Russia, for which there is no evidence, and lo and behold, despite serious Democrat opposition, we have uncovered that the DNC was working with Russian actors to try to disparage Donald Trump's reputation.

So, it's certainly interesting whether it's collusion, coincidence, coordination, I don't know yet.

WALLACE: Right. Very briefly, we do know, as you point out, that the key is the Russians did interfere, they did hack the DNC files. They did hack and put out information about John Podesta's files.

Don't we need to get to the bottom of that too?

GOWDY: I spent the better part of 2017 doing that, including interviewing three witnesses last week and I've got a bunch more this week.

Russia is not our friend. WikiLeaks is not our friend. Julian Assange is not our friend. They tried to attack the fundamentals of our democracy and that's what I spent 2017 focusing on. That to me is an American issue.

I wish the Democrats would help a little bit more instead of reading the Moscow phonebook during the witness interviews, trying to see whether Jared Kushner knows a guy named Igor. I wish they'd help.

But that's been my focus in 2017 -- is understanding that Russia tried to subvert our democracy. And it would be great if my Democrat friends helped a little bit.

WALLACE: Chairman Gowdy, thank you. Thanks for your time, and we will follow all the investigations in coming days, sir.

GOWDY: Yes, sir. Thank you.

WALLACE: Up next, we'll bring in our Sunday group to discuss the newest development in the Russia story.

Plus, what would you like to ask the panel about the Clinton and DNC connections to Moscow? Just go to Facebook or Twitter, @FoxNewsSunday, and we may use your question on the air.



TRUMP: They made up the whole Russia hoax. Now it's turning out that the hoax is turned around and you look at what's happened with Russia, and you look at the uranium deal and you look at the fake dossier. So, that's all turned around.


WALLACE: President Trump this week saying the real Russian scandal involves Hillary Clinton and the Democrats. But now, there are reports the federal grand jury has approved the first charges in Robert Mueller's investigation.

And it's time now for our Sunday group. The head of Heritage Action for America, Michael Needham. Mo Elleithee of Georgetown University's Institute of Politics and Public Service. Former Democratic Congresswoman Jane Harman, director of the Woodrow Wilson Center. And Ari Fleischer, former White House press secretary under George W. Bush.

I must say, you all have very distinguished and long titles.


WALLACE: All right. Michael, let me begin with you. What do you make of these reports that special counsel Mueller has gotten much first charges filed by a grand jury in his investigation and that whoever is being charged may be taken into custody tomorrow?

MICHAEL NEEDHAM: Yes, I think that what I tried to say all year, I think the responsible position all year long has been to allow these investigations to play out, to see what the special prosecutor comes up with and not to speculate in advance. And so, we don't know what will happen tomorrow, if anything will happen tomorrow, if these reports are correct, that the investigation should allow itself to play out. The country has the right to know what Russia, who's an enemy of the United States, has done to try to undermine our democracy.

And as we get to at the second part of this panel, we certainly have the right to know what other things have gone on with uranium or the Russians or the Democrats. And so, we should all allow the information to come out, evaluated once we know what we're evaluating and maybe we'll find our more tomorrow.

WALLACE: Congresswoman, just to pick up on Michael's point, we don't know who is being charged and we don't know what they're being charged for. But assuming that the reports are all correct that indictments are issued, announced tomorrow, won't that give Mueller more running them to continue his investigation?

JANE HARMAN, DIRECTOR, WOODROW WILSON CENTER: It probably will and I applaud what Trey Gowdy just said, that he supports Mueller and that there's no reason to believe that Mueller is a partisan actor. I think that's the place this investigation has to go. Sadly, it's kind of running out of steam on Capitol Hill, although I think they are entitled to get more information.

But Mueller is a lawyer with impeccable credentials and the country trusts him, and he's one of the few people the country seems to trust anymore now that Congress is at 80 percent mistrust and the Trump administration is 70 percent mistrust.

WALLACE: Let me turn to the other side of this, there's only so much we can talk about, something we have no idea what's going to happen. That's never really stopped us.


WALLACE: I want to return to the revelation this week that it turns out it was the Clinton campaign and it was the Democratic National Committee that paid for the opposition research that led to the Russia dossier. Democrats say that the Republicans focus on that and also on the Uranium One 2010 deal is an effort to divert attention from the collusion investigation. Here's an example.


REP. ADAM SCHIFF, D-CALI., RANKING MEMBER, HOUSE INTELLIGENCE COMMITTEE: Apparently, there's more interest in what happened seven years ago with Secretary Clinton than there is in the Russia investigation, and that's quite by design.


WALLACE: Ari, what do you think of that comment by Adam Schiff, who's a top Democrat on House Intelligence, the clip that I played for Trey Gowdy from Secretary Clinton, that this is really an attempt by Republicans, the focus on Clinton, to change the subject?

ARI FLEISCHER, FORMER WHITE HOUSE PRESS SECRETARY: I think it shows that if there is something wrong with Russia it's a one-way street. If it involved the Republicans, look at it, if it involved Democrats, don't. And that's problematic because this is about the United States.

Look, I think too many people have gone too far and now they are reaping what they sowed. We have created a modern-day red scare about all things Russia, to the point now where a uranium transaction that may or may not have been legitimate is now subject to this immense scrutiny because it involves Russia. And I find this all problematic.

Russia is a problem. Russia is an enemy of ours, but we can also work with Russia on certain things. But when you listen to the rhetoric that's' been created, everything that touches Russia is now a suspect, and Hillary and her people have now got caught in the web that they created.

WALLACE: But isn't there a legitimate concern about the Uranium One investigation? I -- we do not have hard evidence, and Fox News has been reporting on this for a couple of years now. But the fact is the people involved in the Uranium One deal gave millions of dollars to the Clinton Foundation. Bill Clinton gets a half million dollars speaking fee right at the time this is all coming down in 2010. Isn't that worth looking at?

FLEISCHER: Of course, it's worth looking at. I think it raises more questions about the Clinton Foundation than it does about the governmental process. I don't know if the Uranium One deal was legit or not legit. I do know that the issue about the dossier and the fact that it was paid for by the Clinton campaign is a serious issue. And as Vanity Fair reported in March of 2017, source A for that dossier was a senior Russian foreign ministry figure, and source B was a former top level intelligence officer still active in the Kremlin.

So, we do know that the Clinton administration paid a foreign operative to get information from the Kremlin on Donald Trump. That is using the Kremlin to get dirt on your opponent. That's what we suppose objective.

WALLACE: We ask you for questions for the panel. And on this issue on the Clintons and how involved they were with Russia, Dave Pearson sent this on Facebook. When is a second special counsel going to be appointed to completely investigate the corruption of the DNC and the Clintons with their Russian collusion?

Mo, how do you answer Dave?

MO ELLEITHEE, GEORGETOWN INSTITUTE OF POLITICS & PUBLIC SERVICE: Ari and I tend to agree with each more recently when it comes to the state of politics. This is one where I think we disagree, but I --

FLEISCHER: I knew that was coming.

ELLEITHEE: Look, I think the Uranium One story is one that has been litigated over and over, over the past few years. It has been debunked. We know facts that Secretary Clinton wasn't directly involved, and the fact there was nine different government agencies that had to approve this thing. We know for a fact that the major donor they are referring to in here is someone who had disassociated himself from both -- from the company three years before the deal and before she ever became secretary of state.

WALLACE: What about the FBI informant who the Clinton -- rather the Lynch Justice Department, the Obama Justice Department put a gag order on, who now finally is going to be allowed to testify for Congress, and apparently, according to his lawyer, has information about bribery and also about Clinton involvement in the Uranium One deal?

ELLEITHEE: The point I'm making is that over and over, this story has been looked at. And more information may come out, but over and over the story has been looked at.


WALLACE: -- about Trump?

ELLEITHEE: There isn't really any new information that came out this week. I do believe there is a coordinated effort to try to muddy the waters around what Mueller is doing and try to overly confuse the situation. That something Democrats have done in the past and that something Republicans are doing now.


WALLACE: -- Clinton, this is not Uranium One, but the dossier that the Clinton campaign and the DNC paid for the effort that led to the dossier? That's not new information?

ELLEITHEE: It had been widely reported that Democrats had paid for it after Republicans had paid for it.

FLEISCHER: After the dossier? Hold on --

ELLEITHEE: No, no, for the research that went into it.


WALLACE: Marc Elias, who was the person at Perkins Coie, had denied it. I don't know what you're talking about.

No, he had denied that he had any involvement in the dossier. This is the person at Perkins and Coie who gave all the money to Christopher Steele that led to the dossier. How can you say that we knew that?

ELLEITHEE: I know Marc. No, I'm saying that it had been widely reported that Republicans tied to one of Donald Trump's primary campaigns initially funded the contract with Fusion GPS and that after the primaries that Democrats did. Whether it was the DNC or the Clinton campaign or some other Democratic donor, that information wasn't there.


WALLACE: Wait, one at a time. Go.

NEEDHAM: In 2012, Mitt Romney was asked during one of the presidential debates what he thinks of the biggest threat to America is, he says Russia, and Barack Obama says, excuse me, the 1980s called and they would like your foreign policy back.

I was on the show a couple months ago and Zeke Emanuel, the brother of Rahm Emanuel, Barack Obama's chief of staff and a very prominent policy adviser of the Democrats, says that this investigation is so important, it goes to the bedrock of democracy. Now we find out that the DNC funded a dossier that relied as Ari just said on two senior Kremlin officials, to go (INAUDIBLE) and that dossier may have been used by the FBI or by the federal government to get a FISA warrant --


WALLACE: But we don't know that.

NEEDHAM: It may have been, as I said, CNN reported. CNN has not been, you know, overly kind all the time. CNN reports that that may have been used to get a FISA warrant to listen in on the phone calls of a senior member of the Trump campaign.

That is outrageous. That goes at the bedrock of our democracy.


WALLACE: Mo, you've got 20 seconds and then got have to break.

ELLEITHEE: Where I'm going to agree with you is that I think too many people in my party underestimated politically the threat of Russia back in the 2012 election. We should have played that -- we should have bought into that more. It was a mistake by Democrats, OK?

But today --


WALLACE: 2012?

ELLEITHEE: Look, what he did, what the president and his campaign -- or not the president, I don't want to overstep, but when Donald Trump Jr. and his associates met with someone who has clear ties to the Kremlin.

WALLACE: Why is that any different than what the Clinton campaign did?

HARMAN: It needs to come out.


WALLACE: All right. Go ahead.

HARMAN: Thank you.

WALLACE: I'll give you the final word. But it's got to be the final.

HARMAN: All right. The free media -- the Free Beacon website was the first to invest in this kind of oppo research on Republicans.

WALLACE: Yes, but they didn't go to the Russians.

HARMAN: They --

WALLACE: No, they didn't. They were doing research -- Christopher Steele had not been hired at that point.


HARMAN: But it is first to finance a file on Trump.


WALLACE: With all due respect, Congresswoman, they did not go to the Russians. They were simply involved in domestic research. That's a different thing than having Christopher Steele go to the Kremlin and talk to top Kremlin government officials and get dirt --

HARMAN: Well, oppo research is dirty, surprise, surprise. Should it be relied on? No. It should be a major part of our campaigns? No. We should have vision --

WALLACE: But the difference between oppo research in this country and oppo research for the Kremlin.

NEEDHAM: Congresswoman, do you ever think it's appropriate for a political party to use senior Kremlin officials for opposition research?

HARMAN: No, I don't, I don't.


FLEISCHER: The DNC paid for it.

HARMAN: Well, let's find out more, and -- but let's Mueller find out what the truth is.

WALLACE: And we may please end this --


WALLACE: Please? We've got to (INAUDIBLE).

Thank you, panel. We'll see you a little later if we have any time left.

But when we come back, the rise of Republican insurgents open warfare with President Trump and what it means for the GOP. Ohio Governor John Kasich is next.


WALLACE: Coming up, President Trump and the Republican resistance.


JEFF FLAKE, R-ARIZONA SENATOR: Mr. President, I rise today to say, enough.

BOB CORKER, R-TENNESSEE SENATOR: He has not risen to the occasion. It's very evident to me.


WALLACE: Ohio Governor John Kasich joins us to discuss what it means for the state of the GOP, next.


WALLACE: This week, open warfare broke out between two Republican senators and President Trump. Jeff Flake joined Bob Corker in questioning the president's fitness for office and announcing he too won't seek reelection next year. Their criticism highlights the growing debate inside the GOP about the future of the party.

Joining me now, Ohio's Republican governor and a frequent Trump critic,
John Kasich.

Governor, welcome back to "Fox News Sunday."

GOV. JOHN KASICH, R-OHIO: Thank you. Thanks for having me.

WALLACE: I want to start with some of Jeff Flake's speech on the floor of the Senate this week. Here it is.


JEFF FLAKE, R-ARIZONA SENATOR: We must stop pretending that the degradation of our politics and the conduct of some in our executive branch are normal. When such behavior emanates from the top of our government, it is something else. It is dangerous to a democracy.


WALLACE: Governor, do you agree with the senator that the conduct of the Trump presidency is dangerous to our democracy?

KASICH: No, I -- I -- I don't -- that's -- I -- I wouldn't go that far. What I would say is what people are frustrated with in the country is the fact that it isn't likely anybody can get along with anybody down there.

I focus on the policy, things that I agree with the Trump administration on and those that I disagree upon. And I've never gotten into the, you know, sort of questioning people's motives or their competence. I'm very concerned about -- about policy.

And, Chris, really what's happening inside the party is there's a debate about whether the country should look inward and kind of withdraw and take care of itself or whether the country ought to look outward. And -- and these involve issues of trade and immigration and our relationship with our allies.

And -- and the most interesting things that's coming, Chris, that you should focus on at some point, now that I'm the producer for your show, is that we are seeing the rise of millennials and gen-x-ers in the 2018 election. They are now going to equal the baby boomers. And what does that mean? They think profoundly differently than what the -- what this inward-looking group of Republicans care about, because they care about the environment, they don't want to focus on all these social issues. They understand America's place in the world. They're comfortable with -- with global outreach. It's -- immigration, another one.

So what's going to happen over time is that the gen-x-ers and the millennials are going to begin to overtake the baby boomers. And it will -- it will -- it will mean a profound shift in the way both the Republican Party and the Democratic Party function. And the question is, and to some sense, they're up for grabs because right now they're leaning independent. And the question is, who appeals to them?

WALLACE: I -- I --

KASICH: I happen to think the outward approach of our country is -- is the better one.

WALLACE: Well, I'm going to get to specific issues in a moment, but I -- I do want to pursue this question of the philosophy of the Republican Party because Steve Bannon and his supporters say, well, look, sure, Flake and Corker made tough speeches, but they basically -- the bottom line is that they announced that they are quitting, and that there was silence for most other Republicans. So can't one argue that what you call the inward-looking, the populist, nationalist wing of the Republican Party is taking over?

KASICH: No, I don't think so. I think the bulk of the Republican Party, and I've been in the Republican Party since I was a college student, is one that believes in the fact that America has a place in the world. You know, Reagan talked about it, advances in humanity. I agree. I think the bulk of the Republican Party does believe that immigration provides energy to our country. I think that the bulk of the Republican Party believes that America is special and has a place in the world at which to advance freedom and free enterprise and all those things.

I think that this move towards nationalism or looking inward, a lot of loud voices, but I don't happen to think it's -- it's the bulk. And we -- we will have to see over time. But for those -- that debate, that debate, to some degree, is going to be settled by the demographics in the near future. Maybe not today, not tomorrow, but soon it's going to be decided by that new wave of new thinking by these young people who can bring a lot of energy to the Republican Party and the conservative movement.

WALLACE: Well, let's talk about some specific issues because this is going to be played out at least until the next election in terms of broad philosophy. Republicans are going to unveil their tax plan this week and, according to reports, there are going to be big cuts in corporate taxes. There's going to be a dramatic hit to the debt. Perhaps as much as $2 trillion increased national debt we're going to be taking on. Is that the right way for the party and the country to go on tax policy?

KASICH: Well, look, Chris, here's the thing, you need to have faster economic growth. Our economic growth over the last couple decades has been anemic. And that means people can't get work. That means that we don't have a -- have growth and opportunity in all the things that people want.

I favor a tax bill. Our corporate taxes are too high. We can't compete as effectively in the world and some companies just hightail it out of America because of that. So I do think we need a tax bill.

When it comes to, how do you pay for it? You know, I think in that case, I happen to believe that entitlements have to be reviewed. And it may be separate from the tax bill, but it needs to happen because debt is going to swallow us up if we're not careful.

In our state, I've been able to cut taxes, but I've -- I've been able to stay, because we have a balanced budget requirement, to be able to pay for them in order -- instead of spending more in government, we gave money back to people. As a result, in Ohio now, we're up 490,000 private sector jobs since I've come in. That's up from a loss of 350.

So lower taxes does matter. But regulation matters. I think that's why the market's doing better right now is because the Trump administration has been -- has been moving away from stringent regulations and more common sense regulations and that's helped our economy to grow.

WALLACE: On immigration, the president says he's willing to make a deal to protect the so-called dreamers, people brought into this country as -- as children. But, in return, he wants funding for his wall and he wants tougher, more stringent limits on legal immigration. Your reaction?

KASICH: Yes. I -- I don't agree on really ratcheting down the number of legal immigrants that can come into this country. Immigration has always been sort of high-octane power for our country. It brings people in with a lot of energy and a lot of new ideas.

Of course we have to have a secure border. Everybody believes that. But to begin ratcheting down the number of people who can legally come here, I -- I don't support that. And in terms of DACA, these kids who came here -- one kid told me the other day he came when he was seven months old, I think. He's not 27. He's worried about what's going to happen to him. That's nonsense. Just let the pressure off those young people. They're contributing to our country and the DACA thing should -- it should not be -- they should -- it should not be part of a negotiation. Let them stay in America. You don't have to give them citizenship, but let them stay in this country if they've been law-abiding. They're conserving.

WALLACE: We began with Senator Flake's speech on the Senate and I'd like to end with it. Here's another clip.


JEFF FLAKE, R-ARIZONA SENATOR: When the next generation asks us, why didn't you do something? Why didn't you speak up? What are we going to say?


WALLACE: So, governor, when the next generation asks --

KASICH: I've spoken out -- I've spoken out more than anybody! I mean but mine is not personal. Mine is policy. And I look at what we've done in Ohio, Chris, and here's what we've done here. We're not a party that cuts anybody out in Ohio. My administration has included everybody. If the top does well, the people at the bottom ought to have hope. And as a result of that, I still have high job approval. My last reelection was overwhelming. And I'm a believer that everybody should be given an opportunity, not just those at the top, but also those who are struggling to get ahead.

WALLACE: But -- but, governor, if you feel --

KASICH: And I believe that's the best approach for America.

WALLACE: Governor, if you feel so strongly about the direction of the party and you don't like the way some people on -- in the Trump wing want to take the -- the country, I have to ask you, I've asked you before, why not consider, at least, running for president in 2020 for the Republican nomination against President Trump?

KASICH: Well, because, Chris, this is like 2017. I'm trying to be the best governor I can be. And I don't -- I'm not thinking about what's going to happen. What's going to happen with me politically, I have no idea. There's such upheaval in the country right now, no one knows what's going to happen next week.

So, look, all I want to do is contribute to bringing a calm voice that involves inclusion and everybody growing. Where that's going to take me, I really don't know. But I can tell you, at this point, I'm not plotting or planning anything like that, Chris. That's just not where my head is right now.

I am going to be a voice for the new generation, the next generation, and for what has traditionally been strong in the party. And I'm going to do my best to promote that. And, you know what? I think it's going pretty well.

WALLACE: Governor Kasich, thank you. Thanks for coming in today. Always good to talk with you, sir.

KASICH: Thank you, sir. God bless.

WALLACE: Up next, we'll bring back the panel to discuss the big reveal. We find out this week what's in the Republican tax plan.

Plus, President Trump's new war on drugs. We'll look at his plans to fight the growing opioid epidemic.



PAUL RYAN, R-WIS, SPEAKER OF THE HOUSE: We're trying to achieve giving people a break on their taxes, making it easier for people to plan and save for the future.

NANCY PELOSI, D-CALI., HOUSE MINORITY LEADER: You know, rip-off, a shakedown, a looting of the middle class.


WALLACE: House Speaker Paul Ryan and Democratic Leader Nancy Pelosi already fighting about who will benefit from the GOP tax plan before we even find out what's in it.

And we're back now with the panel.

Well, Michael, Republicans on the House Ways and Means Committee will unveil their plan on Wednesday. They've been very secretive about it. But we have heard some elements of it. And we've also heard this extraordinary timetable they're laying out. They want to pass it through the House and through the Senate, maybe different versions, by Thanksgiving. What do you make of all that?

MICHAEL NEEDHAM, CEO, HERITAGE ACTION FOR AMERICA: Well, I think as quick as possible is good. I mean, look, I don't think this has been a secret process. We had kind of an outline come out. We've had much more detail go on. We all know the basic broad strokes of it. I think Chairman Brady, the chairman of the Ways and Means Committee, has done an incredible job putting this together.

WALLACE: You like what you hear about the plan?

NEEDHAM: I do. I think it's a good plan that's put forward, that unleashes the types of growth. Here's what's going to now happen. Every single corrupt force of the status quo in Washington, D.C., the National Realtor Association, the Home Builders, the representatives of high-tax state are going to all come in and try to pick apart this plan and protect their little carve out. And so I think momentum and speed is something that unfortunately you need at this stage to get this plan, which has been talked about in the types of broad strokes that the vast majority of Americans need to know and what to know before all of the -- the National Realtors Association is just making totally kind of the arguments about themselves and what's good for themselves. This is a tax cut that will be good for people who don't itemize, for people who do itemize. This is a great plan for the country and we need to get it done before the forces of the status quo and the special interests tear it apart.

WALLACE: Mo, from what we know, is it a great plan? And the economy, we just found out, grew by 3 percent for the second quarter in a row. Won't -- if they get the tax plan and its continued growth, won't Republicans in 2018 be able to go to the -- to the country with a strong economy?

MO ELLEITHEE, GEORGETOWN INSTITUTE OF POLITICS AND PUBLIC SERVICE: They're banking on it. They're banking on being able to go with this because so far they don't have a very good track record of getting anything done. And so they know that if they don't get this done, they're in very serious trouble with voters.

Now, whether or not it's a good plan, we're going to have to see how it plays out. So far the things I hear, it doesn't sound very good. And, you know, Mike -- I'll -- just to toss back out the hypocrisy charge you through earlier, the fact that Republicans are now OK with a blueprint that is going to blow a $2.4 trillion hole in the deficit, when people who were absolutely --

NEEDHAM: I did not say -- that's not -- I mean if you're going to accuse me of hypocrisy, we have a spending problem in this country. The tax code should bring in the amount of revenue necessary to fund the constitutionally appropriate parts of government --

WALLACE: But -- but in fairness, the Republican -- Republicans haven't called for those $2 trillion in spending cuts.

NEEDHAM: Oh, sure, but I -- Republicans are completely gutless when it comes to spending cuts. Nobody would deny that. But that's not hypocrisy on the part of anybody on this panel. We should have a tax code that makes sense and that still makes sense (ph).

ELLEITHEE: I'm just saying the Republican Party, which has been fighting to -- to rein in the deficit, seems to be OK now, right? I'm not saying anyone on this panel --

NEEDHAM: The party should be fighting to rein in spending.


WALLACE: I hate to interrupt, but I do want to talk about one other subject, because it's too important not to, and that is another big development this week, and that was that the president declared a public health emergency on -- in terms of the opioid crisis, but he didn't declare a national emergency, which would have allowed access to more funds. And that resulted in two very different responses.


TRUMP: It is time to liberate our communities from the scourge of drug addiction. Never been this way. We can be the generation that ends the opioid epidemic.

PELOSI: What I would say to the president on that is, show me the money.


WALLACE: Ari, why didn't -- you don't know, but, I mean, your speculation, why didn't the president, as part of this announcement, say, and I'm going to ask Congress for x amount of money? And in failing to do so, did he step on his own announcement?

ARI FLEISCHER, FORMER WHITE HOUSE PRESS SECRETARY: Yes. I was surprised he didn't take that step. It seems to be a perfectly natural and appropriate step of the president when he says, this is a national -- this is a health emergency, so we need more money to fight it in addition to flexibility. I was surprised because Republicans on Capitol Hill and Democrats as well will support more funding to fight opioids. So it should have been included as a statement.

Now, it still is up to Congress. He couldn't have delivered it unilaterally. But I was surprised rhetorically, communications wise, he didn't call for it.

WALLACE: Congresswoman Harman, your thoughts about what the president did and didn't say in his announcement on the opioids.

JANE HARMAN, FORMER U.S. CONGRESSWOMAN (D-CA): He did the right thing. He should have funded it. But there have been a lot of missed opportunities here. And when we talk about tax reform, Penny-Kasich, which I was part of in 1993, would have been a great way to cut the deficit, which is crucial. And then Bowles-Simpson, which was originated in the Obama administration, should have been seized by President Obama and Speaker Ryan and would have put on the table the framework that would make the most sense, which is reforming entitlements, reforming taxes and cutting spending. And if we can't get there and we're just going to do this one-sided tax bill, I don't think that that's going to stimulate the economic growth our country needs.

FLEISCHER: Well, since we're back to taxes, the key thing on taxes is to make the economy boom again.

HARMAN: Right.

FLEISCHER: If that can happen, that's the best way to get wage pressure --

HARMAN: That's what I just said.

FLEISCHER: Pressure go up for low income people so they become middle income people. Middle income people become upper middle income people. That's why this tax bill is the heart and soul of Republicanism. If they cannot deliver it, if they cannot find unity as a caucus because of the individual provisions pull them apart, what's the purpose of having Republicans in Washington? And this is what it comes down to.

WALLACE: And, conversely, if they do pass it?

FLEISCHER: If they do, the sky is the limit. This is what Republicans need because if the economy grows and wages go up for the middle class, Republicans are in great shape. They delivered everything they promised and (INAUDIBLE) people that they need. And that's what Americans are looking for. Stop the arguments of the (INAUDIBLE) --

HARMAN: (INAUDIBLE) the country.

WALLACE: All right, you know -- you know what, we will talk about this in the commercial.

Thank you, panel. See you next Sunday.

Up next, our "Power Players of the Week." How a powerful new Hollywood film shows the real struggles of soldiers returning home from Iraq and Afghanistan.


WALLACE: It was a classic coming home movie after the Second World War called "The Best Years of Our Lives" that won the Oscar for best picture. We haven't had that kind of films that tells the story of soldiers coming home from Iraq and Afghanistan and the challenges they face. At least we haven't until now. Here are our "Power Players of the Week."


MILES TELLER, ACTOR: You get scrutinized if you mess up a military film and those guys tear you up.

WALLACE (voice-over): Miles Teller is the star of the new movie "Thank You for Your Service." The riveting story of a group of soldiers who come home from Iraq.

Jason Hall, who wrote "American Sniper," wrote and directed this film.

JASON HALL, "THANK YOU FOR YOUR SERVICE": They step off the battlefield, they step off the plane, they come home and the memories and the trauma of war continue to reverberate through them and into their lives here.

WALLACE: Their stories start small.

HALL: One day you're on the battlefield, and the next day, like in the movie, you're cooking pancakes for your daughter.

UNIDENTIFIED FEMALE: How long you been up?

TELLER: It's already 4:00 p.m. in Baghdad.

Got one chocolate chip smiley face pancake for you.

UNIDENTIFIED FEMALE: She doesn't like chocolate.

TELLER: OK. I guess I missed that.

HALL: They get flung right back into this life of being a father and then being provider.

UNIDENTIFIED MALE: And what about you?

TELLER: Don't worry about me.

HALL: And suddenly things are a little bit alien and a little bit off. And sometimes it can throw them -- throw them sideways

WALLACE: Estimates are one in five of the soldiers deployed to Iraq and Afghanistan suffers from some form of post-traumatic stress. The movie shows how many of them go to the VA looking for help.

UNIDENTIFIED MALE: And we're backed up. It could be six to nine months.

TELLER: Aare you kidding? You think these guys can wait that long?

HALL: I think there's a really good people operate in a very big, kind of broken bureaucracy. They're your podiatrists, they're your trauma experts and your brain surgeon. And so they're -- they're trying to do everything for all people. And -- and that's challenging.

WALLACE: The movie is based on the story of Sergeant Adam Schumann, who served in Iraq.

UNIDENTIFIED MALE: I rode shotgun in a lead Humvee and I looked for bombs.

Stop the truck.

You don't see the bomb unless they want you to.

WALLACE (on camera): This country is good at fighting wars. How are we at bringing the soldiers back home?

TELLER: They've always noticed the price of war and the sacrifices these guys make, and we know that biologically their brains, everything is different. They're a different person when they come back.

WALLACE: The name of your movie is "Thank You For Your Service," which we all say when we see a soldier and it makes us feel better.

HALL: Sure.

WALLACE: The sense I get is you think that's kind of empty.

HALL: I say thank you for your service and it makes me feel better. But what I'm not doing is I'm not -- I'm not offering to have that soldier, you know, tell me about his service and unload some of that on me.

WALLACE (voice-over): And that's the message of this movie, to connect the frontline to the home front and start a conversation.

UNIDENTIFIED FEMALE: You never told me you were a hero. Don't spare me the details, I can take anything (INAUDIBLE).

WALLACE (on camera): So how do these guys heal? How does this happen?

HALL: What I hope this movie does is I hope people see it and they understand a little bit more about what the veterans have been through so they can offer them an open door.

TELLER: There's nothing easy about it. But these guys are soldiers and they keep fighting to, you know, to get better, to, you know, be a good father, be a good husband.

HALL: I hope that it brings that -- that -- closes a space between the civilians and the military and -- and what our understanding of what they've done and -- and that service that they've given.


WALLACE: "Thank You For Your Service" opened in theaters nationwide this weekend. It is a tough, powerful movie.

Now this program note. Be sure to tune in to Fox News Channel this morning, that's tomorrow, for our new primetime lineup, starting with Martha MacCallum at 7:00 Eastern, followed by Tucker Carlson and Sean Hannity. Then the debuts of "The Ingraham Angle" with Laura Ingraham at 10:00 and "Fox News at Night" with Shannon Bream at 11:00. You won't want to miss it.

And that's it for today. Have a great week. And we'll see you next "Fox News Sunday."


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