Sen. Graham to President Trump: 'Don't let us quit' on health care

NEWYou can now listen to Fox News articles!

This is a rush transcript from "The Story," July 31, 2017. This copy may not be in its final form and may be updated.

DANA PERINO, GUEST HOST: Breaking tonight, a third major White House shake-up in just ten days, as the Trump administration looks for a reset with the four-star general empowered to shake things up. That's our top story tonight. I'm Dana Perino, in for Martha MacCallum.

Today marks the day one of John Kelly's tenure as President Trump's Chief of Staff, and he was quick to make his presence felt. Within hours of being sworn in, we would learn that one of the administration's most colorful, controversial, and short-lived day without; removed from his position at Kelly's direction.

Anthony Scaramucci only joined the administration ten days ago. His selection prompted Press Secretary, Sean Spicer, to quit, forced the ouster of then-chief of staff Reince Priebus, and led to General Kelly's (INAUDIBLE), which in turn led to Scaramucci's demise. It's enough to make your head spin. This afternoon, Press Secretary, Sarah Huckabee Sanders, addressed the news.


SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: General Kelly, I think, will bring a new structure to the White House, and just appoint in strength, and we're all really excited to work with him. General Kelly has the full authority to carry out business he sees fit.

UNIDENTIFIED FEMALE: He said earlier, all staff will report to the new chief of staff. Does that include Jared Kushner? Does that include Steve Bannon; everyone reports to Kelly?

SANDERS: That includes everybody at the White House.


PERINO: And that means everybody. In moments, we'll be joined by a former White House Chief Of Staff, Governor John Sununu. We'll also speak to South Carolina Senator, Lindsey Graham is here with me. But we begin with our Chief National Correspondent, Ed Henry, reporting live from the White House. Never a dull moment, Ed!

ED HENRY, FOX NEWS CHANNEL CHIEF NATIONAL CORRESPONDENT: Never, Dana. In fact, the day started very early -- 8:28 a.m. -- with the president tweeting that the stock market at its highest level ever, and the southern border being secured, "no White House chaos!" He declared. Except a couple of hours later, yes, a bit more chaos. Look at how quickly all this went down after General Kelly was sworn in as the new chief of staff, you can see Anthony Scaramucci was in the oval office, they're with President Trump and the new chief of staff in the back of the room. But by 7:00 a.m. when the president moved onto a cabinet meeting, Scaramucci was gone. In one fell swoop, this enables Kelly to establish order inside the White House, in a way that former Chief of Staff, Reince Priebus, never did.

Kelly, establishing a chain of command so that everyone, as you heard there, including Ivanka Trump and Jared Kushner, allegedly, will no longer be able to report just directly to the president. They'll have to go through the chief of staff. The White House, initially, putting out a statement saying that it was basically Scaramucci's choice that he wanted to have a clean slate for the new chief of staff. But Sarah Huckabee Sanders made clear that the president was not happy about Scaramucci's profanity-laced interview with the New Yorker Magazine last week. And she also made it clear that there was an expectation of -- with some that maybe Scaramucci would go back to his job at the export/import bank. But even that is murky now if you look at exactly how she phrased all this. Watch.


SANDERS: He does not have a role at this time in the Trump administration. The president certainly felt that Anthony's comments were inappropriate for a person in that position.


HENRY: Now, Democrat, Adam Schiff of California tweeted, "Thank you, Anthony Scaramucci, for your service. I speak for a grateful nation when I say 'has it really only been 11 days?'" Even a Republican jumped in. Congressman Lee Zeldin from Long Island tweeting, "864,000 is an impressively large number. That's the number of seconds Mooch spent as communications director. It's almost as if a Four-star Marine general just took over as chief of staff."

I went back to the transcript of Anthony Scaramucci's one and only briefing at the White House podium, July 21st. He said he was an incrementalist that he did not want to say or do anything too bold. He wanted to take it a step at a time -- that is not how it played out at all, Dana.

PERINO: Well, there's one thing he did as he turned those cameras back on in the briefing room, so he made a mark while in those 10 days.

HENRY: And he puts up the chief of staff.

PERINO: Ed, thank you so much.

HENRY: Thank you.

PERINO: OK. Joining us now: former New Hampshire Governor, John Sununu, who's served as the White House Chief 0f Staff under the first President Bush. And Governor, I had the opportunity to work with two chiefs of staff that I revered, Andy Card and John Bolten, in the 43 administration. And I was wondering, from your perspective, what did you think of General Kelly's first day? And what do you think that meant today when he said I'm going to make my first decision to be -- to remove Anthony Scaramucci from his position?

JOHN SUNUNU, FORMER WHITE HOUSE CHIEF OF STAFF UNDER PRESIDENT BUSH: Well, I think -- first of all, I think the president deserves credit for knowing that he needs somebody like General Kelly there. And I think General Kelly has enough confidence from the president that he's going to be able to do that. You know, I'm a great believer in a strong chief of staff serves the president well. If they mesh together and have a common, and the chief of staff understands what the president's agenda is. So, I think you're going to see a very different White House under the general.

PERINO: I always thought that it would be great to have a chief of staff because, then, you can say, well, don't bother me with this -- about the chief of staff. I don't want to have to worry about it. But what does it mean, then, from a staff perspective, because having been a staffer, and sort of leadership from a follower's perspective, when you have somebody that you can think will be an honest broker for your views, I assume that people thought that they should go around Reince Priebus as a chief of staff. Because they thought if they got to the president that they would be able to win whatever their position was. And I just wonder, from your perspective, about being that honest broker for everybody, not just the stuff, but also the cabinet.

SUNUNU: Well, I think with 45 years of public service experience, you're looking at someone that understands that. I just hope the general understands he's got to make himself a little bit more accessible to his staff within the White House that might've been the norm, if you will, within the military. I think that's the more he is accessible to the staff, the more he hears their concerns, the more that he can pass those concerns onto the president, and get a decision and solve problems as quickly as possible.

PERINO: They have a couple of big issues coming up; one that I'm going to talk to Senator Graham in a moment about the health care bill and what the president wants him to be able to do. So, there's some big domestic item on the plate, including tax reform, a big undertaking that hasn't been done in many years. So, somebody like General Kelly who is the Four-star Marine, an amazing public servant, what would you advise him when he's looking at these big domestic policy issues and how to sort of shepherd that through the process to success for the president?

SUNUNU: Well, I think he's got to sit down with the legislative liaisons that are in the White House, and sit down and put a strategy together. Identify which one of the senators need to be worked on, which one of the house members need to be worked on, making sure that they're getting the president's preferences and the president's dislikes in terms of what should be in the legislation. He's got to start making sure that the communication between the White House, and not only the leadership over the legislative side, but the committee and subcommittee, and frankly, the Rank and File Republicans. The more you talk to the individuals over there that you're hoping will vote for you, the more likely you are to get their support.

PERINO: What was it like when, you know, Members of Congress would call you up, and maybe make a demand or a request, and that you were juggling all of those things for the president? What would you advise him, because you know those calls are going to start coming in?

SUNUNU: Well, I think you've got find out from the president what goodies he's willing to give away, and what goodies he's not willing to give away, and what perks he's willing to provide, and what kind of meetings he's willing to take with the members of congress? And I think you establish with the president a process, a schedule, and a program. And a chief of staff and a president have to work hand in glove. The chief of staff, certainly, has to understand he's got a constituency of one, but the president has to understand that he's to give quick feedback to the chief of staff on those kinds of issues so that he can be well-served.

PERINO: I know that, certainly, the chief of staff and the president often spend up to 16 hours a day together. So, hopefully, they will get along well. Thank you so much. Your input was invaluable, Governor.

SUNUNU: Thanks, Dana. Take care.

PERINO: All right. Also breaking tonight, President Trump, issuing an ultimatum to Congress: repeal Obamacare or no more personal health care perks for them. Earlier today, the president tweeting: "If Obamacare is hurting people, and it is, why shouldn't it hurt the insurance companies, and why should Congress not to be paying what the public pays?" The president was referring to an insurance carve out that has American taxpayers pay a portion of the premiums for Members of Congress like the business we do for their employees.

South Carolina Senator, Lindsey Graham, met with the president days ago to find a way forward on health care, and he joins me now. So we're lucky to have you in the studio tonight. What did you make of that big change today with General Kelly? You've known the general well.

SEN. LINDSEY GRAHAM, R-S.C.He couldn't have picked the finer man to be chief of staff. I've served with him in Afghanistan. The Marines have landed in the White House, and they've got beat you and hope they can hold it.

PERINO: And did you think that that was a good decision today to remove Anthony Scaramucci?

GRAHAM: It's an excellent move. Well, I'll leave that up to the president, but I think we've got a chance for a fresh start. None of these matters if we're successful. We fail on health care, I don't care who he hires.

PERINO: So, last week was kind of a bummer on health care for the Republicans. And the president is saying, do it now. Can you do it?

GRAHAM: I am like 1,000 percent with Donald Trump on this. We should be politically horse-whipped if we don't try again. The best idea, we have even brought up, take all the money under Obamacare and bring it back to the states. That and single-payer health care, the government closest to the people is the best government. The health care closest to the people is the best health care. We had Republican Governors up and the White House today, we look to Washington to fix Obamacare, we should've looked to the governors. I'm excited about Gram (INAUDIBLE), which empowers governors or states under Obamacare to get 40 percent of the money -- New Yorker, California, Massachusetts, and Maryland.

My goal is to make sure that if you live in South Carolina, you get the same amount of money from the federal government as you would if you lived in California, with more flexibility that'll put Democrats in a box. It will make health care more accessible to you. If you don't like what's going on, you complain to your governor or your state house guy, rather than the bureaucrat in Washington. I'm so excited about this. Mr. President, don't let us quit. Make us keep trying. I think we can pass this bill to block grant the money back to the states.

PERINO: So, for the senators who voted against the bill last week, do you think that they could vote something like you're describing?

GRAHAM: John McCain said the process was broken; we voted on amendments we didn't know anything about. The skinny bill didn't sound too good, to begin with. I really do believe, if you have (INAUDIBLE), Mike Lee, and Ted Cruz have good ideas. We took a really principled position on health care that we should send the money back home closest to the patients and had hearings and votes in the normal course of business that we could get this done.

West Virginia, under my approach, gets 43 percent more money than under Obamacare, with more flexibility. Montana, where a Democrat exists; there's 200 percent more. So, the bottom line is: by 2026, we want to make sure that every state gets the same block-granting works. And Mr. President, you make sure that we tried this before we say that we failed. We haven't even begun to fight yet.

PERINO: I grew up in a small state, low population state of Wyoming, so I know that that might be persuasive. Can we just (INAUDIBLE) this criticism out, because you saw one of your good friends, Senator Jeff Sessions, and now the Attorney General Jeff Sessions, but a little bit embattled. I sort of floated this idea on Friday --

GRAHAM: Yes. Don't do that again.


PERINO: The Sunday show, we talked about it. I mean, roll it out.


UNIDENTIFIED FEMALE: One of the things you reported this week, John, is that Attorney General Jeff Sessions might be moved to replace General Kelly at DHS.

UNIDENTIFIED MALE: There's been some speculation that the president may ask Attorney General Jeff Sessions to replace John Kelly as Secretary of Homeland Security. Is he considering him moving over to replace General Kelly as the Secretary of Homeland Security?


PERINO: So, I was just spitballing there. And you don't think that's a very good idea, although, I thought, politically, it made sense.

GRAHAM: Well, here's what I would say, Jeff Sessions is one of the best people to be chosen to be attorney general. He's a great rule of law guy. He's a rock solid conservative. He's happy at the Department of Justice. If you had an opening now, or the attorney general, it would be a political nightmare for us. The president, choose wisely with Jeff Sessions. He serves at the pleasure of the president. If the president wants to fire, he can, but I would urge the president to let Jeff Sessions keep serving him and the country well.

Let's put it this way, Jeff Sessions is as good a pick as I could think of. I think he's happy at being attorney general. I know the law is in good hands with Jeff Sessions. Let's fix health care. I don't want to talk about tweeting. I don't want to talk about anything else. I want Donald Trump to lead the Republican Party to take the money and power out of Washington when it comes to Obamacare.

PERINO: Well, today, apparently Sarah Huckabee Sanders said that the president has 100 percent confidence in the entire cabinet. So, I assume that attorney general --

GRAHAM: So do I. So do I.

PERINO: All right, thank you so much.

GRAHAM: Thank you.

PERINO: Tonight, the U.S. is facing a new reality: North Korea, one step closer to having a weapon that could strike major cities across our country. So, how long would it take for the missiles to get here if they start launching? We'll talk to an extra next. Plus, U.S.-Russia relations, hitting an all-time low with the president said on new sanctions, and Putin punishing U.S. diplomats. So, now, can critics really say that the president is going easy on the Kremlin? And word police are back, they're upset with the way that Justice Department is classifying those who violate our immigration laws. That debate, just ahead.


JEFF SESSIONS, ATTORNEY GENERAL: Too many jurisdictions still refused to cooperate with the federal immigration authorities, regarding illegal aliens who commit crimes.



PERINO: Breaking tonight, a frightening new reality settling over the country. More than 72 hours after nuclear-armed North Korea test fires yet another Intercontinental Ballistic Missile triggering an aggressive show of force by the U.S. scrambling two supersonic B-1 Bombers over the Korean Peninsula. U.S. security experts say the missile may reach as far as the East Coast of the U.S.; giving folks in San Francisco, Chicago, and New York City a little more than 30 minutes to brace for impact. Michael Malice is an expert on North Korea and Author of "Dear Reader: The Unauthorized Autobiography of Kim Jong-il." Michael, this has gone from being a theoretical exercise or thought to be in something where I have people actually asking me what are we doing? Is this going to happen, and what can possibly do to prevent it?

MICHAEL MALICE, AUTHOR, COLUMNIST, AND MEDIA PERSONALITY: That's a very complicated question, obviously. So, for a long time, North Korea's been threatening the U.S.: think they're going to wipe us off the map the same as the 60's and 50's. Now, however, they have weapons that only can reach us, but those weapons can do monumental harm and do it very, very quickly. Now, the question of what you'd do? Well, if you have someone pointing a huge gun at your head -- just like in a hold-up -- you have very few options. And especially when this person knows -- in the case of Kim Jong- un -- if he loses his reins of power, he himself will probably personally be killed, just like Kadakia and just like Saddam Hussein did. So, there's a huge intent for him to do whatever it takes to maintain his stranglehold in this country.

PERINO: Do you think -- is it a surprise that they are this far along, and the technology, or did we miss something, or they did they just advanced more quickly than we thought?

MALICE: I mean, we tried to reason with them and tried to bribe them, and they lied. They have no problem lying all the time. They disseminate constantly when they are attacked by the U.N. for having concentration camps. Their actual response is, we don't use that expression, so therefore, we don't have any. I mean, they have no respect for the diplomacy of anything like that. They boast about it in their literature, which I read when writing my book about how they're conniving and that would everybody else. They're villains through and through.

PERINO: So, the president wants China to do more.

MALICE: Right.

PERINO: Will China do more, and what could they do?

MALICE: We saw the president's frustration over Twitter. He's like, China's not doing anything. And also have complained about --

PERINO: In all caps.

MALICE: Yes. And also, that complain about Kim Jong-un: the wisest guy doing what he can (INAUDIBLE). There are certain things China can do. However, China does not want U.S. ally in their border, and China does not want 25 million North Korean refugees storming into Manchuria, and China kind of likes the fact that there's an American soil over there, and North Korea's also a source of cheap labor for China. So, these are a huge step for China to become a status quo. On the other hand, China does want to be defending collegiate students being killed for no reason.

PERINO: And so, do you think that China will step up? Like what are the leverage point that we have?

MALICE: We have -- so the one leverage point that we have that's kind of creeped out in the last week is, if South Korea and Japan are saying we want nukes as well, China does not want nuclear proliferation on that peninsula, in that area, because those nukes could hit Beijing just as it hit Pyongyang. However, this is trying to push one country to push another, and that's a very tricky hat trick pull off.

PERINO: What do you think of the new chief of staff at the White House? He is a military man, a Four-star general Marine.

MALICE: Right.

PERINO: Do you think that his leadership at the White House is good and necessary at this time when we're facing this kind of threat?

MALICE: Well, I think it's a -- crossed to mind is military people tend to like military solutions. At the other hand, every single military person I've heard speaking from this White House has pointed out how catastrophic, disastrous a military option will be because you would have all those missiles. Forget San Francisco and Washington; hitting Seoul, a city of what? 10 million people, full of skyscrapers, or we're just cataclysm like the movie "Independence Day," but in real life. So, I think a military guide knows how to do strategy, and this is a strategic approach and not a diplomatic one necessarily.

PERINO: And then, so, what are the push points on diplomacy that we're trying right now?

MALICE: We're not even speaking to North Korea. So, it has to go to --

PERINO: Do you think that we should? You advocate for direct talks?

MALICE: Sure. I mean, I'd be up for trying anything as long as we're (INAUDIBLE) and let these people leave the country and have access to the outside world.

PERINO: All right. Michael Malice, author of "Dear Reader," something fascinating to read.

MALICE: Thank you, Dana.

PERINO: Getting more important every day. Thank you so much. Also, tonight, Russia is now lashing out at the Trump White House after the U.S. blast a new round of sanctions on Moscow. Vladimir Putin is announcing his plans to force nearly 800 staff members at the American embassy in Russia out of a job. Back in for us like this, prompting the New York Times to write the headline: "Putin's bet on a Trump presidency backfires spectacularly."

Joining me now is Marc Thiessen is a Resident Fellow at American Enterprise Institute and a Fox News Contributor, and Zac Petkanas is a Democratic Strategist and former Senior DNC Advisor. Marc, do you think that Russia actually did something that nobody had actually been able to do in Washington for quite a long time, what's that?

MARC THIESSEN, FOX NEWS CONTRIBUTOR AND RESIDENT FELLOW AT AMERICAN ENTERPRISE INSTITUTE: Well, they've achieved something that even the Soviet Union couldn't achieve in 70 years, which is the turn of Democratic Party into a bunch of cold warriors. I mean, a few years ago, in 2012, the Democrats, Barack Obama stood on the debate stage when Mitt Romney said Russia was our big geostrategic foe. And they said, hey, the 1980's called, they want their foreign policy back. Well, now they're channeling their inner Ronald Reagan; they didn't care much about it when the Soviet Union was putting people in the Gulag, and threatening us of nuclear annihilation, but they screw with Hillary Clinton's campaign, and all of a sudden, they want a cold war. So, that's a quite a transition.

PERINO: So, Zac, now that the Republicans and Democrats have come together on the Congressional sanctions, and President Trump is going to sign. I mean, do you think that that cooperation then will continue to try to push back on what is geopolitical foe -- the United States.

ZAC PETKANAS, DEMOCRATIC STRATEGIST AND FORMER SENIOR ADVISOR OF THE DNC: Well, let's be clear, it's not the Republicans who have to come together, it's the Republicans in Congress who have rebuked to this White House, who lobbied furiously against this bill up until the moments that it passed. And the only reason they're signing it now is because Congress has boxed them into a corner with passing this legislation by veto-proof majorities. If you want any evidence of this -- I mean, I look forward to the White House signing ceremony, you think he's going to have a big one? They're going to do one of those big rose garden ceremonies?

PERINO: Probably, not.


PETKANAS: No. I mean, the White House is not happy with this. They have made that very clear from the very beginning. And so, Democrats and Republicans in Congress are aligned in recognizing that Russia is a geopolitical foe, but this White House continues to carry the water for the Russian government.

PERINO: But however, I -- actually, Marc, just based on, you know, you and I worked at the same White House in Bush, 43, days. I actually think, even if Hillary Clinton had won the election, and all of this had happened, I actually think that she would have pushed back on Congress as well because presidents always want more flexibility in negotiations in diplomacy. Do you think I have that about right?

THIESSEN: I think you do have that right. And presidents of both parties don't like having sanctions mandated by Congress and having their flexibility taken away. But again, look at the, you know, if you wanted -- Donald Trump's -- he has no problem signing this bill, even though he probably doesn't like having the flexibility taken away for one simple reason, it's that his best defense against Zac's charges of Russia collusion are, look at my policies, I'm the toughest presidents on Moscow since Ronald Reagan. And he bombed his ally -- Assad.

They've accused him of violating the INF treaty. They've accused them of arming the Taliban. They've given the kind of clean energy bill -- an energy bill that LNG bill packaged with Poland to make them less dependent on Russian energy. Their every single policy the Trump administration is taking has been tough on Russia.

PERINO: And Zac, let me out to that list, which is that you have Vice Presidents Mike Pence on a trip abroad right now. He's in Eastern Europe. He's actually in Georgia. And he is talking to the people who want to protect their freedom and are worried about Russian aggression. I mean, do actions speak louder than words at this point, and will the Democrat sort of understands that even if they continue to push on the investigation front?

PETKANAS: I think actions speak much louder than words. And let's remember that the first action that this White House took his removing sanctions against the Russian spy agency, the Russian spy agency - - the FSP -- that actually attacked this country through a cyber-attack. And the second thing that they did, they spent -- I mean, the last six months undermining NATO and the European Union. That is the number one strategic, geopolitical goal of Russia. How many times did we come out here and call on him to show support for Article Five?

THIESSEN: Excuse me, he got the --

PETKANAS: And it's only after it became a massive political issue, that he came out and said that he would pose support for Article Five.

PERINO: OK. Zac, let me give Marc the last word on that.

THIESSEN: Yes. And Donald Trump, by doing that, got NATO to cough up $12 billion in additional money to support the NATO alliance. So, it's true. It's a fact, Zac, and that doesn't make Moscow happy. I mean, look, I know you want to attack Donald Trump, but you can't be more in favor of the Kremlin position than Moscow, OK? They're upset with him. They don't like his policy. So, you can't be more KGB than Putin.


PETKANAS: He was stoking division within the NATO alliance, which was parroting Russian propaganda.


THIESSEN: When Dana and I worked in the White House, I wrote speeches all the time for George W. Bush saying NATO has to pay its fair share, now they aren't because Donald Trump threatened them. So, he's strained with the NATO alliance, and he's taking the most anti-Russia policies across the board. And I'm sorry, you're wrong.

PERINO: He took a different route to get there, but he ended up -- he got there, actually, the solution that he wants. All right, gentlemen.


PERINO: Zac, I love it that we can crack you up tonight.


PETKANAS: Well, it's pretty absurd.

PERINO: OK. Still ahead, as the bad news for Democrats keeps on piling up, brand-new polling shows just how unpopular they are with blue-collar voters, will this force the party to turn on its current leadership? That's ahead. Plus, Sergio Martinez was deported from the U.S. 20 times. But because Portland, Oregon, refused to comply with the federal detainer order, he was able to viciously assault a 65-year-old woman. Judge Andrew Napolitano is here next on whether stories like this increase pressure on the courts.


STEVE CORTES, FOX NEWS CONTRIBUTOR: This is an outrage. And political correctness sometimes isn't just dumb; it can be downright dangerous or even deadly as we've seen in some cases.


PERINO: A brutal attack in Portland, Oregon, is once again pushing the Sanctuary City debate in the to the national spotlight, 31-year-old Sergio Martinez had been deported from the U.S. at least 20 times, and now he is accused of sexually assaulting a 65-year-old woman after breaking into her home, Martinez who has a long rap sheet, he was released by local of a federal immigration hold, here now, Judge Andrew Napolitano Fox News Senior Judicial Analyst.

I imagine that people in America hear stories like this, and think how is this possible? How does this keeps on happening? Not only that he was here 20 times illegally, but that local authorities in the federal government cannot get together and fix this.

ANDREW NAPOLITANO, FOX NEWS SENIOR JUDICIAL ANALYST: Well, someone who has been deported 20 times and keeps coming back, there is obviously something wrong with the system that lets them keep coming back, and why the Oregon people, why the Oregon government, the government in this town, would not be concerned enough to the safety of the people who live in this town, why they would not want him running through the streets, look, he is innocent until proven guilty, and overstaying a visa is not a crime, but coming back here after you have been deported is a crime, coming back here 19 times after you have been deported is 19 crimes, why haven't he been arrested? Why isn't he prosecuted? Why was he free to attack this woman?

PERINO: And so why do we keep sending him back? Why wouldn't we just keep in here and jail in America?

NAPOLITANO: That is a very good question, the Justice Department has decided it is less expensive to deported then to prosecute and incarcerate, but right now, will they have more than enough evidence to prosecute and incarcerate him, he had been in jail, we would be paying for him in jail, but he wouldn't be in the streets, able to rob and rape as he apparently did in this case that you just describe.

PERINO: Let me ask you his, the Sanctuary City, I have question, , you are my legal professor here for the (inaudible), why would the administration not ask the Supreme Court for an expedited review so that we can solve this issue and so we can get beyond this, because this could last for several years before we get a solution.

NAPOLITANO: All right, so the cities that receive federal funds have received it under the last year of the Obama administration, and to those funds have come with strings attached to them, they did not have the string attached, you will cooperate, with ICE and help us find illegal's, therefore, by receiving that money, the local government is not obligated to cooperate with ICE. But in the first budget of the Trump administration, when that money comes in, it will have that string attached to it now, so if the Supreme Court were to grant the government expedited review, the government will lose, that is why, that is why it is not asking for the expedite reviews, the best thing that the government can do is to adopt the Trumpet budget, which will have the string attached to it, the cities are so starved for cash, they will take the federal cash, and it just comply with the strings attached, and when they do take the money within agreement and I am calling a string, that they will cooperate with ICE, then the courts will force them to cooperate with the ICE, or discords the money that already received.

PERINO: I'm trying to be fair on this one because of course nobody -- everyone is upset about this crime, including people in Oregon and the government of Oregon, this is a horrible thing, so trying to understand what happen, they say that there is a discrepancy, that ICE did not do the proper paperwork, so therefore they did not have the authority to continue to detain him.

NAPOLITANO: They would have had the authority under federal law to detain him another 48 hours to find out if the detainer as proper, and they ought to know that he had been deported 19 or 20 times before they decided to let him loose in the streets. So there is a tremendous disconnect here, some of the Sanctuary City folks are a principled people that want to help decent immigrants that have overstayed their visa, but failing to communicate to the government when you have a potentially violent person on your hands is to show no respect for public safety and whatsoever.

PERINO: And their duty?

NAPOLITANO: Of course.

PERINO: All right thank you.

NAPOLITANO: I enjoyed being your professor.

PERINO: Thank you, I love that. I will be back tonight, followed over this phrase, illegal aliens, immigration have a good say that this is a dangerous and slippery slope, the Department of Justice as they are just interpreting the U.S. code, we will have both sides of that debate ahead, plus Democrats just wrapped up a major internal research project and the results show a party without the historical base, the question tonight despite the turmoil in D.C., could Republicans may be looking at another midterm victory. Chris Stirewalt, Josh Kraushaar, and John Lieber are here next with their thoughts.


UNIDENTIFIED FEMALE: We are very proud of the fact that our Party has diversity thinking in it, we can accommodate that.



PERINO: Internal Democratic Party research, revealing big challenges for them, especially if they want to wrestle but control in Washington, a group called ally for Democrats, working-class white voters in districts that they need if they want to win back the house, the survey found that an overwhelming 61 percent of these folks disapprove of the Democratic Party. Chris Stirewalt is Fox News politics editor, Josh Kraushaar, Politics Editor in National Journal and Jon Lieber is the head of Eurasia Group Practice, tracking U.S. politics and policy, Josh let me start with you, because you wrote about this internal document, they can't say that this is a fake full, this is their own research, basically telling them that they are in some deep do-do.

JOSH KRAUSHAAR, NATIONAL JOURNAL POLITICS EDITOR: This is a Democrats Super Pac connected to Nancy Pelosi, that is a big warning flag, a big red for the Democratic Party, if they want to try to win back the house just by running against Donald Trump, it turns out that in these Blue collared swing districts, Donald Trump is actually pretty popular, and to the Donald Trump brand is in the toilet, under 35 percent, and the brand is just really in the dumps, and the biggest statistic that was an eye-opener for both Democrats and Republicans alike when blue-collar voters in these districts were asked which party would do a better job on the economy, Republican party had a 35-point edge, that is a seismic advantage and it was one that is the Democrats were stunned by when they saw the data.

PERINO: Jon when you look the -- one of the things that you talk about is that the Democrats are seen as a more urban Party and the Republicans as a more rural Party, but when you look at something like that, with an advantage on the economy at plus 35, what do you think the Democrats are thinking they need to do to sort of revamp if they are going to ever hope to win again?

JON LIEBER, EURASIA GROUP PRACTICE: I think the Democrats recognize that they need to take the conversation and owners about economic issues, I think if you look at the 2016 election, you have a split between these parts of the country, with Donald Trump outmaneuvering the Democrats on issues of immigration and trade, and I think they really didn't see that coming, and the Party wants to keep the conversation away from that, they ran a pro-immigrant, pro-trade candidates last cycle and they want to do is talk about jobs, talk about the economy, to talk about how better they are, but with an employment rate of 4 percent, I mean there is a lot of tale when President Trump right now, and until a new Party leader emerges who can really push the message, I think they are going to be in the wilderness for quite some time here.

PERINO: And in fact Chris Stirewalt, you wrote about that today, in half time report, which everyone should sign up for, Nancy Pelosi said on Sunday, it was unimportant that Democrats win back the house majority, is that really what you want to be saying is you rally the troops? It is not that important if we win?

CHRIS STIREWALT, FOX NEWS DECISION DESK CORRESPONDENT: Apparently it wasn't important when she failed to do it as a Democratic leader in 2016 and 2014, 2012, decency and reform in Washington generally holds that after you lose the body, you have a chance to get it back it, as would be appropriate if she had a chance in 2012 to try to win back the house, and then especially the person who had such seniority say all right guys, I'm going to move on and let you try something else, if the Democrats are serious, and they really have a shot, these poll numbers are daunting for them, especially in this precincts where you have a lot working-class voters, but there is a path for Democrats to win the house, absolutely, and not a bad one, but if they want to do it, it is going to be so much harder, is there bragging Nancy Pelosi forward, because it is just tailor made messaging for Republican, because in every race, they did mentioned the special election, you want Nancy Pelosi to be speaker of e the house, you can go, no, bro.

PERINO: And yet Republicans Jon, are doing any victory laps when they are back on recess this month, because they just had the big health care failure of last week, Lindsey graham said they are going to try to get this going again, and now they want to start to tackle tax reform, and you have President Trump saying that he will be out there, trying to give a big speech, he is going to be out there selling it, do you think that tax reform would help take Republicans across the finish line next November?

LIEBER: It could help if they get it done, the key here is pushing a pretty sizable middle-class tax deduction, I think there'd thinking more about corporate tax reform, thinking about the revenue neutral tax reform, what they really need to do is push a large middle-class tax cuts, that is something that the Party can run on, ultimately, I think that is why they are going to get it done, because the Party will be much more unified around issues like taxes than they ever were around health care.

PERINO: Do you think Josh, that the change in Chief of staff from Reince Priebus to General John Kelly, that the White House now have a chance to sort of reboot and try to take a different tack on a big major efforts like tax reform, that maybe they should have used on health care?

KRAUSHAAR: Well, for the first time they have someone who had a clear hierarchy, he is clearly in charge, and clear lines of authority, and that is an advantage that John Kelly had that Reince Priebus, when he was basically chief of staff, he never really had the traditional responsibilities as chief of staff, so it is definitely an opening, but it is pretty sobering, because it has been six months, six wasted months where there really was a momentum, there was an opportunity for Trump to build alliances with conservative Democrats, for him to win over his Party, to really shifted in his direction and get some big legislative victories, and who they are not as many on the board, so with the new opportunity, it is running low.

PERINO: So Chris, also, I was curious about the serious case of news that comes out of this White House, all having to do is the personnel matters, it is only 11 days and Anthony Scaramucci was going to be the Director of communications, not General Kelly, his first decision was to make that go away. So tomorrow, I guess they could have a clean slate's that they say that they want.

STIREWALT: They say that they want that, this all comes down to a very simple proposition, if you believe that Donald Trump is capable of changing, then this administration could be quite successful for all of the reasons that we just described, for all of these reasons that have to do with the electorate, the economy, and all these things, the Republicans could be in a very good position right now, but for them and for their party and midterms and the future everything else, it depends on the question can Donald Trump change, and is he ready to do that? He can make General Kelly double chief of staff, triple super-duper chief of staff, but if he doesn't abide by the rules that he set for himself, none of it will matter.

PERINO: I would love to have a staff, but I would love to have a chief of staff, because it makes your life so much easier, so I would say rely on your chief of staff, it makes things easier. So congratulations to John Lieber who had his inaugural hit on Fox News.

LIEBER: Thank you.

PERINO: Up next, the term illegal alien setting off a firestorm tonight, the Department of Justice once again using the language to talk about undocumented immigrants, advocates are average, fans of the president say this is a another positive step towards moving away from political correctness, we have both sides of this debate tonight, when David Wohl and Pablo Manriquez joins us next.


PRESIDENT DONALD TRUMP: The previous administration enacted an open-door policy to illegal immigrants from Central America, will come in, come in please, please.


PERINO: A debate over a phrase, the Department of Justice is taking some heat from immigration advocates for using the term illegal alien to describe undocumented immigrants, some calling the phrase and on unfair label, use to call the undocumented communities, the Department of Justice meanwhile says they are just using language that is consistent with the U.S. Code, here now to debate, Attorney David Wohl and Pablo Manriquez a Democratic strategist, David, you point out that it is the actual code, it is what it says you are to call someone who is undocumented, is that right?

DAVID WOHL, ATTORNEY: Yes, alien is someone who is from a foreign country and is a citizen of that country, not a citizen of the United States, and illegal alien is someone who enters the United States and is subject to deportation, should they be caught, now if people are wanting Mr. Trump or Jeff Sessions to engage in political correctness or sugarcoated the description of violence and felons who happen to be illegal aliens, it is just not going to happen, Mr. Trump ran on a platform as everyone knows of not being politically correct, of telling it like it is, and that is how it is, and by the way, these are terms that are generally pushed by Democrats and by the mainstream media, and that is all the more reason they are going to keep saying illegal alien.

PERINO: Pablo, what is the other side of that because I understand that for people who may be if you are a dreamer, or if you are here, you came here under difficult circumstances, and you have abided by the law, you aren't a criminal that this phrase is actually quite hurtful to people in the community.

PABLO MANRIQUEZ, FORMER DNC BROADCAST MEDIA DIRECTOR: I have absolutely no doubts that it is super hurtful, but you know it is more hurtful? Deportation, and that is where we need to focus, I don't see Jeff Sessions of the Justice Department totally has our number as an immigrant advocate community, as a Senator, he was always tormenting us in any way that he could from Alabama, but if you are a member of the immigrant advocacy community tonight, why not consider a different word? Let's talk about the p-word for a minute, why are ICE agents allowed to walk the streets with police across their uniform? They are not police, they are immigration customs unit, so I think that for the dreamers, the immigrant advocates, everyone who is pushing and failing to succeed in terms of relief or get some relief for undocumented immigrants, we need to realign our focus towards the actual issue here, and that is ICE, it is not semantics, it is nothing academic, it is not what Silicon Valley wants to be in San Francisco like a discussion around the campfire, this is real.

PERINO: So are you ok then with the phrase illegal alien? That doesn't bother you?

MANRIQUEZ: I said at the other day on Facebook, and a lot of people who were previously undocumented told me that that was really inappropriate, I didn't think of it that way at the time, but I respect their opinion on it. I don't use it anymore.

PERINO: And David, --

MANRIQUEZ: I think it is a waste of time, when families are getting ripped apart to talk about the names - guys focus.

PERINO: So David, to that point, it's a debate over this phrase of illegal alien, is it really just a euphemism for the bigger picture, which is the concern of a families being ripped apart, even if someone had come here illegally, that is a crime, you cannot do that, you think that we should really be talking about the bigger issue?

WOHL: Well, the reality is if you are here illegally, you should expect to be deported, Mr. Trump and Jeff Sessions and ICE are not storming homes, generally right now, they are focusing on people who are being released from jail, they are focusing on people who are convicted of felonies, violent felonies, and they are getting rid of them, and guess what? The Latinos, the Hispanic community, appreciate that, I work with so many from that community in southern California, the idea that somehow they don't like ICE, they don't like law enforcement, it is their families that are being preyed upon, and they don't mind being called illegal aliens, a lot of them that I know are actually good people, it is a term that is being used for political expediency, to go after Trump, but it is a term that doesn't mean anything for the bigger picture.

PERINO: In the last 30 seconds, I'll give you the last word, Pablo.

MANRIQUEZ: I just don't understand why we are deporting good people, as he said, a lot of them are good people, I agree wholeheartedly, I have a very different experience with ICE, and on the other hand, 45 percent of ICE agents are Hispanic.

PERINO: We have to wrap it up, thank you so much, Pablo and David we appreciated that, the debate will continue, will be right back after this.


PERINO: Thanks for being part of the story tonight, Tucker is up next, he is kicking off his week long investigation in to the MS13 gang and stay tuned for me and the rest of the gang on "The Five" at 9:00, have a great night.

Content and Programming Copyright 2017 Fox News Network, LLC. ALL RIGHTS RESERVED. Copyright 2017 CQ-Roll Call, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ-Roll Call. You may not alter or remove any trademark, copyright or other notice from copies of the content.