This is a rush transcript from "Fox News Sunday," January 13, 2019. This copy may not be in its final form and may be updated.

CHRIS WALLACE, HOST: I'm Chris Wallace.

Shutdown, day 23, the longest halt to government funding in American history, as each side digs in over the border wall.


REP. NANCY PELOSI, D-CALIF., SPEAKER OF THE HOUSE: What the president is proposing is not the best way to protect our borders.

PRESIDENT DONALD TRUMP: The Democrats don't care about the border and they don't care about crime.

WALLACE: Now the president weighs declaring a national emergency and funding the wall.

TRUMP: Congress should do this. If they can't do it, I will declare a national emergency.

WALLACE: We'll get the latest on where negotiations stand --

SEN. LINDSEY GRAHAM, R-S.C.: I have never been more depressed about moving forward than right now. I just don't see a pathway forward.

WALLACE: -- from Republican Senator Lindsey Graham and we'll ask Democratic Senator Chris Coons if his party is willing to make a deal. Senators Graham and Coons only on "FOX News Sunday".

Then, "The New York Times" reports the FBI investigated whether President Trump was working for the Russians. We'll ask our Sunday panel what the bombshell revelation means for the Mueller investigation.

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


WALLACE: And hello again from Fox News in Washington.

The government shutdown is now in week four, the longest in U.S. history, a record no one here in Washington can be proud of. Hundreds of thousands of federal workers face their first payday Friday without getting paid. Talks to reopen nine federal departments have broken down and lawmakers are out of town until tomorrow afternoon.

Meanwhile, the president has gone back and forth on whether to declare a national emergency at the border.

Let's get the latest now from Kevin Corke live at the White House -- Kevin.

KEVIN CORKE, CORRESPONDENT: Chris, from the White House to the southern border, a more measured tone from administration officials this week about the need for enhanced border security, a lot less talk about a wall and more about the exploding humanitarian crisis.


TRUMP: We are here today to address the humanitarian and security crisis on our southern border. This is a humanitarian crisis, a crisis of the heart and a crisis of the soul.

KIRSTJEN NIELSEN, DHS SECRETARY: This is a severe humanitarian and security crisis.

CORKE: On Twitter, Mr. Trump insisted that Democrats come back from their vacations and get back to work: I'm in the White House ready to sign. A sharp elbowed reference to the thousands of Democratic lawmakers who trotted to Puerto Rico for a retreat, where they hope to strategize ways to help the dead mired U.S. territory and even planned to see a special performance of the hit Broadway show "Hamilton".

This is as "The New York Times" reported that the FBI allegedly looked into whether or not the president was secretly working on behalf of Russia during and following the 2016 campaign, a suggestion that drew a scathing rebuke from the president's attorney John Dowd who wrote "The New York Times" story is an unwitting disclosure and verification of the utter corruption of their oaths by Comey and his colleagues to undermine the free election of the president of the United States.

JEANINE PIRRO, HOST: Are you know or have you ever worked for Russia, Mr. President ?

TRUMP: I think it's the most insulting thing I've ever been asked. I think it's the most insulting article I've ever had written.


CORKE: Quite a week here in Washington. By the way, Chris, the White House has asked the Army Corps of Engineers to look into additional possible ways to help fund border security, including an examination of the 2018 February emergency supplemental. They say that would actually draw funds from disaster relief. We'll see if that happens -- Chris.

WALLACE: Kevin Corke, reporting from a snowy White House -- Kevin, thank you.

Joining us now from South Carolina, Republican Senator Lindsey Graham, who after meeting with the president Friday urged him to use his executive powers to build a wall.

Senator, welcome back to "Fox News Sunday".

GRAHAM: Thank you.

WALLACE: This week, you first tried to arrange a compromise, a border wall funding in return for some protection for the Dreamers. The White House said no.


WALLACE: Now, you are telling the president, urging the president to use his executive powers to fund the wall and the president on Friday said not so fast.

Question, what is the president's strategy?

GRAHAM: I just talked to them about 30 minutes ago. He says let's make a deal. They did not turn down wall for the bridge, that's not that story line. I tried to see if we could open up the government for limited period of time to negotiate a deal and the president says, let's make a deal, then open up the government.

Nancy Pelosi says, even if you open up the government, I wouldn't fund a wall. So, that's why I'm depressed. You know, there's not much talk about what she said. She's telling the president, even if you open up the government, I'm not going to do a deal on the wall. And that's a nonstarter for the president.

WALLACE: Well, I don't mean in any way to cast aspersions on the president or Nancy Pelosi, but do you know one of the definitions of insanity is to keep doing the same thing over and over and expecting a different result.


WALLACE: What's going to go on? President says make a deal, the Democrats say not funding for the wall. Not saying it's right or wrong --

GRAHAM: Right.

WALLACE: -- but what happens?

GRAHAM: Well, I think it just plays out. What bothers me so much is that your next guests, Chris Coons, a great guy. We could sit down to make a deal with him wall, plus DACA, wall plus TPS. Every Democrat that I've worked with for about ten years now has agreed to funding for barriers/walls on Obama's watch, on Bush's watch, and all of a sudden, it's a bad thing on Trump's watch.

It really does perplex me how you expect this to end when you tell the president of the United States, you get $1 for a wall when in the past Democrats have appropriated billions for the wall. What are we supposed to do? Just give in? He's not going to give in.

WALLACE: He's not going to give in.

He said in a tweet, I believe it was yesterday, that he has a plan. What's the plan?

GRAHAM: The plan is to do a deal. He is willing, in my view, to do wall plus. Funding for the wall that we desperately need that's been done in the past. See if we can do a deal around the TPS recipients who are going to lose their legal status.

WALLACE: Those are temporary protected status.


WALLACE: Let me just state, temporary protected status.

GRAHAM: Right.

WALLACE: People who came in from disasters.

GRAHAM: Thank you.

Yes, there are about 400,000. They are going to lose their legal status soon. He's willing to extend that. The DACA recipients, they are all tied up in court but I think he would give them work permits for three years, one-time renewable if you could get wall funding.

I don't want to speak for the president. I don't want to lock him in, but I'm confident what I just described with a few other things would be a deal acceptable to the White House. And a lot of Democrats -- and I'm just so frustrated -- we can't get in a room and hammer it out.

WALLACE: Now, some White House officials it's been reported are now talking about well, maybe the president will be using his State of the Union speech to make this case.

GRAHAM: Right.

WALLACE: That's 16 days from now. Some White House officials are talking about this extending into February.

How much damage does that two of this government shutdown goes on for weeks, even into next month?

GRAHAM: Less damage than if we don't fix a broken immigration system. You've got to bad choices here. Continue to stalemate and see parts of the government shutdown, it will be inconvenient and it can create problems. Into the federal workforce, I'm sorry you caught up in this mess. But the real damage is people coming across the border, selling drugs, killing Americans, that needs to come to an end. So, the real damage is a broken border compared to a partial shutdown.

The president is not going to give in. No wall, no deal, but he's ready to deal. And your next guest I am sure would provide funding for a barrier where it made sense if he could get something for it.

WALLACE: You have been one of the loudest voices among Republicans urging the president to declare a national emergency. I have two questions.

GRAHAM: Right.

WALLACE: One, why doesn't he just go ahead and do that? He seems to think that's a way out of this.

Secondly, there are a lot of your GOP colleagues who say that would be a terrible precedent because someday, there's going to be a Democratic president and they're going to say, well, you know what, it's a national emergency, so let's fund climate change. It's going to be a national emergency, so let's fund income inequality.

GRAHAM: Let's start with the president. I ask him, Mr. President if you want to go down the emergency path, I stand with you. He said just 30 minutes ago, that's my last option. I think the legislative route is the best way to go, let's make a deal, but I will do it if I have to.

So, we have found, in the past, presidents declared emergencies for different things. I am going to support him. Before he pulls the plug on the legislative option, and I think we are almost there, I would urge them to open up the government for a short period of time, like three weeks before he pulls the plug, see if we can get a deal. If we can't at the end of three weeks, all bets are off, see if he can do it by himself through the emergency powers. That's my recommendation.

But I think the legislative path is just about shut off because Nancy Pelosi, the leader of the House, said, even if you open up the government, I will give you $1 for the wall. As long as that's the case, we are never going to get a legislative package no matter what the Senate does.

WALLACE: I want to just pursue this emergency option one more time because in 2014, President Obama used his executive powers to try and protect 5 million immigrants, and here's what you said at the time.

GRAHAM: Right.


GRAHAM: This is wrong, it's a responsible and will do damage to our efforts to fix a broken immigration system. This is a tremendous presidential overreach.


WALLACE: So, why was that an overreach for President Obama then but not for President Trump now?

GRAHAM: Well, what President Obama did, he didn't declare a national emergency about the DACA recipients. He took his power to pardon an individual or a smaller group and applied it to 1.8 million people. Ever president -- not every, a lot of presidents have declared emergencies. After 9/11, we did and they have taken money and powers to deal with a national emergency.

I think there is a crisis at the border. I think it fits the definition of a national emergency. It's the last option, not the first option, but we're pretty close to that being the only option.

How do you negotiate with the speaker of the House when she tells you even if you open up the government are not going to give you but $1 for the wall? So, until that changes, there's not much left except the national emergency approach.

And to my Republican colleagues: Stand behind the president as this is his last option. He ran on this as a centerpiece of his presidency, and it is a crisis. And if you don't see the crisis, you are not looking very hard.

WALLACE: OK, I want to switch subjects. "The New York Times" now reports that after President Trump fired FBI Director James Comey, that the bureau opened up a counterintelligence investigation into whether or not the president of the United States was working on behalf of the Russians. One, did you know about that? Two, what do you think -- I have to say, it's an astonishing idea.

The FBI, the bureau investigating whether the president was a Russian agent.

GRAHAM: Well, number one, that story came from somebody who leaked it with an agenda. So I'd like to know who leaked it because they have an agenda not very friendly to President Trump and I for one don't trust what I read in "The New York Times."

Having said all that, I'm going to ask the FBI director, was there a counterintelligence investigation opened up regarding the president as being a potential agent of the Russians? I find it astonishing and to me, it tells me a lot about the people running the FBI, McCabe and that crowd. I don't trust them as far as I throw them.

So, if this really did happen, Congress needs to know about it and what I want to do is make sure how could the FBI do that? What kind of checks and balances are there?

WALLACE: Let me -- you have a lot of clout in asking the FBI questions because you're the new chair of the Senate Judiciary Committee -- congratulations, Mr. Chairman.

GRAHAM: Thank you.

WALLACE: And your committee is going to begin holding confirmation hearings this week on the president's nomination of William Barr to be the new attorney general. What do you intend to ask him about the special counsel investigation, and whether or not the special counsel is going to be allowed to finish his investigation and issue a full, unedited report to Congress?

GRAHAM: I'm going to ask him, do you see any reason to fire Mr. Mueller based on what you know now for cause? Do you trust Mr. Mueller to be fair to the president of a country? Will you make sure he can finish his job? If you get the report, will you be as transparent as possible?

I've asked him those questions, and I'm very comfortable with those answers. So, I think you'd be a great attorney general, great job by the president to pick Mr. Barr. I see no evidence of collusion between the Trump campaign and the Russians, but that would be up to Mr. Mueller to make his report to attorney general and he soon will I hope.

WALLACE: Another question for the new chair of the Senate Judiciary Committee.

Justice Ruth Bader Ginsburg this week after cancer surgery, for the first time, astonishingly, in her quarter-century on the court, missed oral arguments. Now, we all wish her a speedy recovery, the doctors say that she is cancer-free. But there are reports for the White House has begun reviewing a possible short list of candidates to replace her.

As the chair of the committee that would vote on a replacement, have you given any thought how you'd prevent this from becoming a political circus?

GRAHAM: Well, number one, I wish her well and hope she recovers and continues to serve for many years. But here's what will happen if there's a vacancy, no matter from the liberal wing of the court, there'd be a lot of pushback from the left.

But my Democratic colleagues felt when they were in charge, we should confirm judges by majority vote. They changed the rules to accommodate President Obama. They tried to stack the court. They never thought Clinton would lose.

So, what you're going to have is Harry Reid and Chuck Schumer's desire to stack the court on their Democratic watch has come back to haunt them.

If there is an opening, whether it's Ginsburg or anybody else, I will urge the president to nominate a qualified conservative and hopefully those people will get through, that person will get through and I expect it to be along party lines.

And this is what happens when you change the rules. This has come back to bite them. I predicted it would, and we'll see.

I hope Justice Ginsburg serves for a long time, but there's an opening on this court, I'm going to be hell-bent to put a conservative to replace whoever steps down for whatever reason.

WALLACE: And just, finally, and I got about 30 seconds left, if you got Donald Trump -- and again, this is if -- you have Donald Trump replacing a liberal icon like Ruth Bader Ginsburg, isn't that a formula for -- I mean, doesn't that make the Kavanaugh hearings look like a tea party?

GRAHAM: They should have thought of that before they changed the rules. They try to destroy conservative judges. I voted for Sotomayor and Kagan understanding what I was getting. So this decision by Reid and Schumer may come back to haunt them, but I am dead set on making sure it is a conservative nominee.

And elections have consequences. The rules of the Senate were changed not by me, by them, and we had to do it on the Supreme Court because they would not give us any votes to nominate anybody and Kavanaugh was a fine man, they tried to destroy him. All this is going to come back to haunt them one day.

WALLACE: Yes, let me just really quickly explained that when the Democrats with the majority, Majority Leader Harry Reid changed it for judicial nominees short of the Supreme Court and for cabinet appointees.

GRAHAM: Right.

WALLACE: It went from the 60-vote margin to 51, and then the Republicans did it for the Supreme Court.

Senator Graham, thank you. Thanks for your time.

GRAHAM: Can I just say one last thing?

WALLACE: Yes, sir.

GRAHAM: One last thing. We don't need -- we don't need one Democrat to replace a liberal justice. And the reason that's the case is because of what Harry Reid did. What he set in motion. Thank you.

WALLACE: Always good to speak with you, sir.

OK. I guess you think it was OK to speak with us.

Up next, Democrats challenge the president to reopen the government and discuss border security measures both sides can agree on. Democratic Senator Chris Coons joins us next.


WALLACE: These days, Donald Trump is facing the toughest set of challenges of his presidency -- the government shutdown, the new Democratic majority in the House and the special counsel's Russia probe that appears to be close to wrapping up.

Joining us now from Delaware, Democratic Senator Chris Coons.

Senator, welcome back to "FOX News Sunday".

SEN. CHRIS COONS (D), DELAWARE: Thanks, Chris. Good morning.

WALLACE: House Speaker Pelosi says that the border wall is immoral and that she won't give -- I guess she will give $1 to pay for it. Do you agree with her?

COONS: Well, I agree with the advice that Lindsey Graham just gave to President Trump, which is that he should reopen the government and we should spend several weeks negotiating over what we can all agree on.

I personally don't think that a border wall is in and of itself immoral. What I think the speaker may have been referring to is some of the immoral immigration policies of the Trump administration, forcibly separating children from parents at the border and detaining children in cage-like facilities. The humanitarian crisis I think may have been what she was referring to.

The larger point here, Chris, is that we don't have a fundamental disagreement between Democrats who refuse to invest in border security and want open borders and a president who is determined to protect our country. Far from it. All of us have voted for more investment in border security, several times. And the compromise that we worked out before the end of last year, which passed the Senate unanimously, it will give the president another $1.3 billion for border security on top of the $1.3 billion from last year that hasn't been fully spent yet.

I do think if we reopen the government, if the president ends this shutdown crisis, we have folks who can negotiate a responsible, modern investment in technology that will actually make us safer.

WALLACE: So, let's -- you're exactly right. I -- you have voted for a border barrier in the past and I've been looking at your records, so let's put it up on the screen. In 2013, as part of comprehensive immigration reform, you supported $46 billion for border security, including 350 miles of new fencing. In 2018, last year, you and most Senate Democrats approved $25 billion for border security, including physical barriers.

So here's the question: I understand the idea that you don't want a 2,000- mile wall, but you have supported, and a lot of Democrats, including Pelosi, including Schumer, have supported a border that includes hundreds of miles of fencing. So why not make a deal, a deal that right now without opening the government, why not make a deal that Lindsey Graham was talking about, some money for border barriers, fencing, wall, whatever you want to call it, in return for some concessions on Dreamers and on TPS immigrants?

COONS: Chris, it would be great. If we could reach a resolution to our country's broken immigration system and find a path forward, we all agree to invest in border security, in new technologies and approaches that would actually make us safer.

One of the challenges of negotiating with President Trump, as Lindsey Graham knows better than anyone else, is I feel like I've signed up for the Trump of the day club. I don't know what position we're going to get on a negotiation from day one to day two. It was Senator Graham who famously talked about Tuesday Trump and Thursday Trump when he and Senator Durbin brought a comprehensive resolution, a bill, to President Trump last year, he embraced on Tuesday and then walked away and announced it on Thursday.

I will remind you why we are in this situation in the first place. Majority Leader Mitch McConnell put a bill on the floor that was adopted unanimously by the Senate at the end of last year that would have kept the government open and supported 1.3 billion in border security. The president reversed position the next day and rejected something he told Mitch McConnell he would sign.

Why is Mitch McConnell completely absent from these negotiations? It's because he doesn't really know what the president will accept.


COONS: I don't expect the president to capitulate. I do expect them to compromise.

We are clearly not going to build a border wall funded by Mexico but we should negotiate.

WALLACE: Forgive me -- but, Congressman (ph), the question is will Nancy Pelosi compromise? The Republican say, and you heard what Lindsey Graham just said, she's unwilling to give any money for the wall.

I understand the issue with President Trump and he certainly has reversed course a few times. What I'm asking you now, and this is -- we are in week four of the shutdown, so the situation has become dire.

COONS: Right.

WALLACE: Are you, are the Democrats willing to make a compromise that includes money for a border wall fencing -- a border barrier I will call it -- in return for some concessions from the president on people in this country illegally?

COONS: I think the president should test that by making it clear what concessions and what compromise he's willing to put forward. Look, Chris, you know me, I work with Republicans regularly. I've been on the phone with a half-dozen Democratic and Republican senators in recent weeks and several different efforts by Republican senators to negotiate a compromise, got cold water thrown in them the next day by the president publicly, even one effort that was being led by Vice President Mike Pence.


WALLACE: I mean, because I want to move on --

COONS: So, compromise and while the government is shut down, I will remind you we got 41,000 federal law enforcement officers out there today being forced to work without pay. We've got farmers all over the country not getting the relief payments for the impact on the soybean industry due to tariff war.

WALLACE: Sir, I understand all that, I'm just asking you if he agrees to a compromise that includes other things that the Democrats want, will the Democrats give way and include money for the border barrier? Yes or no?

COONS: Democrats will invest in border security. I'm not going to sit here on your show and negotiate on behalf of Speaker Pelosi, but I'll tell you that what Lindsey Graham himself just told the president is a great place to start here.


COONS: Reopen the government, stop harming our country and our economy and let's make our best efforts because we all agree we need to invest more in border security.

The only crisis here is one that's been created by the president's abrupt change in position at the end of last year in the last days of a Republican-controlled Congress.

WALLACE: OK, I want to move on just because I've got so many other questions to ask you.

COONS: Sure.

WALLACE: What you think about the report in "The New York Times" that in 2017, the FBI opened a counterintelligence investigation into whether or not the president of the United States was a Russian agent?

COONS: Well, that was a concerning, even alarming report and it suggests to me that the Mueller investigation needs to continue to its logical conclusion. I'm grateful for the partnership of Senator Graham, now the chairman of the Judiciary Committee, in reintroducing our bipartisan bill with Senators Tillis and Booker to protect the Mueller investigation, and I think that report by "The New York Times" may well suggest what it was that helped start this investigation in the first place.

I will also say this, Chris -- I was very concerned by President Trump's steadfast and public refusal to embrace the conclusion of our own intelligence community that Vladimir Putin's Russia had interfered in our 2016 election. There's been a confusing and at times even alarming tendency on the part of President Trump to complement President Putin and to do things like his abrupt announcement of a withdrawal from Syria that led his own secretary of defense to resign, that has led many of us to question his closeness to and his affinity for President Putin.

But I do think what we can all agree on is that the Mueller investigation should reach its conclusion --

WALLACE: All right.

COONS: -- should deliver a report publicly, and that will be the topic of the Barr nomination hearings this coming Tuesday.

WALLACE: Let me -- I got these two more questions and I got two minutes. So, let's try and squeeze them in.

You're also a member --

COONS: Sure.

WALLACE: -- of the judiciary committee which is going to hold the confirmation hearings --


WALLACE: -- on Bill Barr as the next attorney general. What does he need to say to persuade you, to assure you that he is going to let the Mueller investigation go to its conclusion and be reported to Congress? And is there anyway that that you can vote to confirm Bill Barr?

COONS: I'm keeping an open mind. We had a very constructive meeting this past week. I did ask him a number of questions right along those lines and will ask them again in the public confirmation hearing. I would need a firm commitment that he would not allow any interference in the Mueller investigation, he will allow it to reach its conclusion and he will release the report to the public.

I also asked him about seeking an ethics opinion from the Department of Justice about whether he should recuse himself given some of the opinions he's expressed both in a memo that he sent unsolicited, challenging the obstruction of justice basis for some of Robert Mueller's investigation. He didn't make that commitment. He said it would depend on the facts at the time.

I will re-ask that question this coming week. I have some other concerns about his views on criminal justice and civil rights. But the Mueller investigation, the rule of law, his willingness to defend the appropriate independence of the Department of Justice will be critical to my vote.

WALLACE: And briefly, sir, I want to pick up on the conversation I was having with Senator Graham, given Justice Ginsburg's recent illness, the fact that she is going to be turning 86 in March, it's only understandable that there would be some discussion about the possibility of replacing her at some point.

Have you given any thought given how -- and I know you were concerned about how ugly the Kavanaugh hearing is, how you avoid a repeat, particularly if it comes to the situation of Donald Trump replacing a woman who has become a liberal icon?

COONS: Well, frankly, I think the confirmation of Justice Gorsuch was conducted in a completely sort of measured and appropriate way in terms of its beginning, middle and end. What made the confirmation hearings of Justice Kavanaugh so difficult and ultimately so divisive was that there were credible allegations of sexual assault and we entered sort of a second phase of the hearing.


COONS: I have talked with Republican colleagues about finding a way that we have a clearer process for welcoming and vetting and making part of the confirmation process any such allegations so they don't arise at the last moment. I think there was a great deal of consternation over the timing of those allegations and then how seriously they were taken and investigated - - or not.

WALLACE: Senator Coons, thank you. Thanks for joining us today. Please come back, sir.

COONS: Thank you, Chris. Thank you.

WALLACE: Up next, we'll bring in our Sunday group to discuss how and when the government shutdown will finally end.

Plus, what would you like to ask the panel about President Trump's threat to declare a national emergency? Just go to FaceBook or Twitter, @foxnewssunday, and we may use your question on the air.


WALLACE: Coming up, the shutdown standoff drags on.


TRUMP: Dealing with these people is ridiculous. I don't know if they know how to make a deal.

SEN. CHUCK SCHUMER, D-N.Y., MINORITY LEADER: This is ridiculous and it's cruel and it needs to end now.


WALLACE: We'll ask our Sunday panel whether the president will declare a national emergency to fund his border wall, next.



TRUMP: I haven't done it yet. I may do it. If this doesn't work out, probably I will do it. I would almost say definitely.

I have the absolute right to do it, but I'm not going to do it so fast because this is something Congress should do.


WALLACE: President Trump changing course in a day on whether he is about to declare a national emergency and build a border wall on his own.

And it's time now for our Sunday group.

GOP strategist Karl Rove, columnist for "The Hill," Juan Williams, former Democratic Congresswoman Jane Harman, director of the Woodrow Wilson Center, and Josh Holmes, Senator Mitch McConnell's former chief of staff.

Well, Karl, let's start with the new wrinkle this week, can the president declare a national emergency to build the wall, should he declare a national emergency to build the wall?

KARL ROVE, CONTRIBUTOR: Yes. Well, look, I'm not a lawyer and I didn't stay at a Holiday Inn Express last night, so I'm not the expert on this. But I have been paying careful attention to people who are. David French (ph) in "The National Review" had, I thought, a particularly penetrating article on this. He pointed out that the sections of the law in which the president would have to rely, say the president can declare an emergency that, quote, requires the use of armed force, he can do military construction projects that are necessary to support that use of armed force. That seems to me to not apply in this situation.

The other statute that would be used says that the president can declare an emergency that terminates projects, quote, not essential to national defense and apply those monies to, quote, construct or assist in the construction, maintenance or repair of -- of (INAUDIBLE).

WALLACE: I just asked you what time it is, I don't want to know how the watch is made. What -- what's the answer?

ROVE: Bottom line is, I think the authority to do so is -- is --

WALLACE: Should he do it?

ROVE: Well, he may -- he -- maybe he should do it in order to get us out of the boxed canyon, because if he does do it, it will go to court and quickly, I think, the courts will say, you don't have the authority in this instance.

I mean the administration in 2017 and 2018 has said, on the record, no terrorist organization has sent people to the United States through Mexico. So hard to declare it a national security emergency.

WALLACE: All right.


WALLACE: We asked you for questions for the panel and on the president's thought about declaring a national emergency we got this tweet from Greg Engle. By declaring a national emergency, will this open the door for future -- future presidents to do the same over topics such as climate change, health care, or even gun control laws because of mass shootings? Is this really a national emergency or just fulfilling a campaign pledge?

Congresswoman Harman, how do you answer Greg?

HARMAN: It's not a national emergency. It is fulfilling a campaign pledge. The wall is a primal scream. In your conversation with -- your very good conversation just before with Lindsey Graham and Chris Coons, both of them made clear that there are ways that Congress can make a deal. That's the right answer. And I'm going to get in a fight with Josh because I think that Mitch McConnell, his old boss, who is a dealmaker and wrote an autobiography called "Playing the Long Ball," is bunting here and he could, if he chose to, rouse a veto proof majority in the Senate to pass what the Senate passed in the last Senate, which is the collection of CRs and then just leave one, that would be the Department of Homeland Security bill, with a shorter time frame to negotiate, have Lindsay and, as far as I'm concerned, Chris negotiate this and they will come up with the list of things they just suggested on TV, which maybe Trump will sign on whatever day they actually come up with it.

WALLACE: I love the fact that this is a fight between President Trump and Nancy Pelosi. And poor Senator McConnell, you're probably sitting out there with your lovely wife, Elaine Chao, watching this and suddenly he gets dragged into this fight.

HARMAN: Well, he is.

WALLACE: Well, wait, wait, let me -- let me -- as the shutdown drags into its fourth week, both sides are digging in harder than ever. Take a look.


TRUMP: This is a choice between right and wrong, justice and injustice.

PELOSI: It was a petulant president of the United States, a person who would say, I'll keep the government shutdown for week -- a month or years unless I get my way.


WALLACE: Josh, we have seen how government shutdowns play out. We've all been here for them. Usually they go on a week, maybe a week and a half, and at some point the public seems to turn against one side. That site generally blinks and they make a deal. One, why isn't it happening this time and, two, how long is this going to go on?

JOSH HOLMES, FOUNDER, CAVALRY: Well, first let me respond to my good friend Jane's criticism. His book is named to "The Long Game," which, unfortunately, is not the end of the untruths or misunderstands that we had about Mitch McConnell's role here.

HARMAN: It's long, though.

HOLMES: He basically played a role for eight years as minority leader in the Senate were Democrats control the Senate.

WALLACE: All right, let's go -- let's move on. I don't want to talk about Mitch McConnell. I want to talk about the shutdown.

HOLMES: Well, it's -- I think this is important to know because at that point he had an obligation to do a deal with an administration that didn't see eye to eye with his conference. That is precisely the role that Chuck Schumer and Nancy Pelosi find themselves in at this particular juncture. And instead of understanding how it is that they get from a to b and open up the government, Nancy Pelosi's telling the president she would only give him a dollar to open up -- open up the government and fund the wall. That's ridiculous.

This is not a particularly difficult thing to bridge here. We're talking about a $4 billion discrepancy in a $4 trillion budget. This is not difficult. If this is -- if this is as difficult as it gets from here in this Congress, we're all going to be in good shape.

WALLACE: So what are you saying, the deal should be some money for the wall, something between $1 billion and $5 billion in return for some concessions on people in this country illegally, like dreamers and the temporary protected status refugees?

HOLMES: Yes, I think it's obvious, right? I mean if you're talking about a $4 billion discrepancy, there's got to be a way to get -- come to the middle of it. Certainly if you were in the Democratic Party right now, there are concessions that you're interested in accomplishing, right? And if that is the case, you ought to wonder down to the speaker's office and Minority Leader Chuck Schumer's office and give them a piece of your mind.

WALLACE: So, Juan, why doesn't Speaker Pelosi, why don't the Democrats, make a deal?

JUAN WILLIAMS, POLITICAL ANALYST: Well, I think it's pretty clear right now, if you look at the polls this morning, that the president and Republicans are being blamed overwhelmingly for shutting down the government. And as Chris Coons pointed out to you this morning, Chris, Mitch McConnell and the Republicans had a unanimous support, Republicans and Democrats, for a bill that would have opened the government, kept the government open and then allowed for negotiations going forward. It's the president who has made it a point to say, I'm shutting down this government over the wall.

WALLACE: OK, but, wait a minute, but there are real people affected, right?


WALLACE: Eight hundred thousand people who aren't getting paid. People who are depending on services, on going to the airport today. I don't know what is going to happen with TSA or --


WALLACE: The flight controllers or whatever.

I understand all of that. And there's a lot of bad faith on both sides. Why not make a deal?

WILLIAMS: Well, I think you have a situation here, just in pure political terms, where, one, it's only a shrinking Republican base that backs the president and you don't want to reward bullying, and that's what this comes down to. Secondly --

WALLACE: So they're going to demand the president surrender?

WILLIAMS: No, not surrender. See, I don't think it's a matter of capitulation or surrender. I think it's a matter of saying to the president, let's be honest about this. You had two years of Republican majorities, didn't get done. You had the Senate majority leader say let's negotiate. You refused. So it's bad behavior.

And I might add here, remember that on the southern border eight congressional districts, including one Republican, none of them, including the Republican, voted for this wall, Chris. So the politics of this are very clear, its Trump, not the Republicans.

ROVE: That's simply not accurate. Look, last year --

WALLACE: But let me just -- no, let me ask -- I don't want to go do history.

How does this get resolved?

ROVE: It gets resolved by adults showing up at this discussion. We have people on both sides who could find a way to get this done.

Josh is right, we're talking about $4 billion. That is one-tenth of 1 percent of the federal budget. Out of every $100 spent by the federal government, we're talking about if you gave them $4 billion for the wall, it would be $0.10 out of every --

WILLIAMS: This is in the weeds, Karl.

ROVE: Let me -- let me finish.

WILLIAMS: Karl, let me just say this to you.

ROVE: Let me finish. Let me finish.

WILLIAMS: Didn't he say Mexico was going to pay for this?

ROVE: Let me finish.

WILLIAMS: Not the American taxpayer.

ROVE: OK, fine, we can stay stuck --

HARMAN: Totally. Fully.

ROVE: WE can stay stuck in this and we can argue about Nancy Pelosi saying it's an immoral wall, which she voted for the wall last year and did not declare when -- when Barack Obama wrote -- built 133 miles of wall that that was immoral.

HARMAN: Right.

WILLIAMS: No, that was fencing. It was fencing and barriers, not wall.

ROVE: Oh, no, no, it was wall. It was wall.

WILLIAMS: But it doesn't matter. This --

ROVE: Look, here's the bottom line --

WILLIAMS: He said Mexico will pay for this this.

ROVE: OK, you can -- you can say stuck yesterday.


ROVE: I think the American people are saying a pox on both your houses.

HARMAN: Yes, well, and 800,000 of them are out of work because of it.

ROVE: Take a look -- let me finish. Let me finish. Let me finish. Let me finish.

"The Economist" -- "The Economist" poll said --

WALLACE: Quickly.

ROVE: Asked the question in an interesting way, who do you blame a lot for this? Do you blame the Democrats in Congress a lot, 46 percent blame them a lot. Do you are blame the Republicans in Congress, 46 percent blame Republicans. And 59 percent --

WALLACE: Well, and there's a new poll, an ABC/"Washington Post" poll that says 53 percent for the president and Republicans try -- anyway.

ROVE: Well, but it's only --

WALLACE: May I just say one thing because we -- we -- we need to move onto the next segment. What I'm really happy about is that we were able to reach agreement at this table --

ROVE: Exactly.

WALLACE: Which indicates that the shutdown's going to go on a long time.

ROVE: At least three of us can. At least three of us can.

WALLACE: All right, panel, we have to take a break here.


WALLACE: When we come back, we'll discuss that shocking report. The FBI opened a counterintelligence investigation into whether President Trump was working for the Kremlin.

Plus, is the White House already preparing its Supreme Court short list in case Justice Ginsburg steps down from the court? All that, next.



TRUMP: Was going to fire Comey. I -- there's no good time to do it, by the way. I said to myself, I said, you know, this Russia thing with Trump and Russia is a made-up story. It's an excuse by the Democrats for having lost an election that they should have won.


WALLACE: President Trump in May of 2017 mentioning the Russia investigation as a reason he fired FBI Director James Comey. "The New York Times" now reports that was one of the reasons the FBI launched a counterintelligence probe into the president.

And we're back now with the panel.

Well, Karl, we have been in uncharted territory for much of the Trump presidency, but this has got to be the topper. The FBI -- the FBI launching a counterintelligence investigation into whether the president of the United States is a Russian agent.

Your thoughts?

ROVE: Yes, well, this happened in the aftermath of the firing of Comey. This was leaked to "The New York Times," which says something about the culture inside the FBI. The only good news out of this is in all likelihood, since Comey was fired in a very short period of time, less than two weeks later, Mueller is appointed. This was probably immediately subsumed by Mueller -- the Mueller investigation and has been, I suspect, handled in an entirely appropriate way.

But it says something that the FBI would react to the firing of Comey this way and that somebody -- somebody who was then near the top of the FBI, leaked this to "The New York Times." Shame on them.

WALLACE: President Trump, not surprisingly, went on a Twitter storm about this story yesterday.

Here's just one of his tweets. Wow, just learned in a failing "New York Times" that the corrupt leaders of the FBI, almost all fired or forced to leave the agency for some very bad reasons, opened up an investigation on me for no reason and with no proof after I fired lyin' James Comey, a total sleaze.

One sentence, incidentally. Pretty impressive.

Juan, you have to assume, if they had found evidence in the last year and a half that the president was a Russian agent, they would have intervened.

WILLIAMS: No, I think it was, as Karl said, all went to the Mueller pro. And --

WALLACE: But if they found that the president --

WILLIAMS: They're an investigative agency, right?

WALLACE: I understand, but if the White House -- if the FBI found evidence that the president was an ongoing Manchurian candidate, an agent for the Russians, you don't think that that -- they -- they'd just sit on that and --


WILLIAMS: I think it's up to Mueller. It's up to Mueller to say this is, one, provable and part of my ultimate report. You do not want to act in a way that would invite charges of politicizing an investigation. And this is unprecedented. The FBI, as you said, going into a counterintelligence investigation on the premise that the president may be a pawn, a Manchurian candidate, for the Russians. But what we can say, and I -- it's contrary to what the president said in his tweet there that when you have Mueller having so many guilty pleas, so much smoke coming. Michael Cohen is not going to testify before Congress. I think there's -- there's -- there's fire wherever there's so much smoke. And right now we have smoke billowing from 1600 Pennsylvania Avenue. There something going on.

But I don't think it's the case that, oh, therefore if they had found something right away it would have led to immediate charges against this president.


HOLMES: Well, I think if you cut away from the sort of conspiracy and all the invective that this "New York Times" article actually injects into our public discourse, what we've learned here is the mind-set of the FBI at the time. We learned nothing about the fact pattern that the president of the United States engaged in. In fact, we've known all of this for months.

What we now know is that the -- the FBI formalized what McCabe, Strzok, Lisa Page and all others have been doing for a matter of months before that point of view. They believed in their core of core that the president of the United States was a foreign agent and they were going to conduct investigations come hell or high water. This provided a perfect excuse for them to do so.

WALLACE: I want to go quickly to this and then move on.

HARMAN: OK. No. And I think that what you said, Chris, is right. This is a counterintelligence investigation, not a criminal investigation. And if they have had real evidence that the president was a Manchurian candidate, I think they would have intervene right then. I mean we can't have that go on -- an unprecedented whatever I -- collusion, cooperation, arrangement with one of our most important, strategic competitors, Russia.

So we'll learn soon from Mueller what's going on here.

I do want to agree with Karl -- agree with Karl and deplore the leak of information like this.

ROVE: And I -- and I agree with your finding about this.

This is sort of like this --

WALLACE: OK, no, no, this, no, we need shouting. OK, I want to move on.

There --

ROVE: This came out of a GI Joe movie. Yes.

WALLACE: There were new questions this week about Justice Ginsburg after it turned out that she has missed arguments, a lot of us didn't know this, for the first time in her quarter century on the court.

Here's what she said in 2017 about how long she will continue as a justice.


JUSTICE RUTH BADER GINSBURG, SUPREME COURT: As long as I can do the job full -- full steam, I will do it.


WALLACE: Josh, you know, a lot of us deplored, whatever side you were on, the Kavanaugh hearing and how ugly that was and how the Senate seemed to break down over it.

I got to say, if you have Donald Trump replacing the notorious RBG, that's a perfect political storm, isn't it?

HOLMES: Yes. I mean let me say at the outset, I think everybody hopes that Justice Ginsburg recovers fully.

WALLACE: Of course.

HOLMES: But -- but you're right --

WALLACE: And there's every sign that she is.

HOLMES: Yes. I think, given what we saw with the Kavanaugh hearings and everything else, you can -- you can say what you will, but this will be the first time that there is a seat that actually changes from a liberal held seat to a conservative held seat. And -- and if you think the Kavanaugh hearings was divisive, wait until you get a load of this. I mean this will be the -- the granddaddy of them all in terms of Supreme Court battles.

I think -- I was encouraged by what I heard from Chris Coons earlier in your interview, that he was working alongside Republicans to try to find a process -- which, of course, I believe is the biggest problem with the Kavanaugh hearings, the process that was held closed until the last minute and try to jump into a -- make the whole thing a political dynamic, which, of course, ruined --

WALLACE: What you're saying is the fact that suddenly Christine Blasey Ford and all of that stuff came out at the last -- at the 11th hour.

HOLMES: It was designed to create a political circus and sabotage two people's lives in the process. That is absolutely the wrong way to go and I'm encouraged that it -- what we're hearing from a Senate Judiciary Committee that we're going to try to reform some of that.

WALLACE: Congresswoman Harman, this is a delicate subject. I understand it as I ask the question. Was it foolish for Ruth Bader Ginsburg not to step down in the middle of President Obama's term?

HARMAN: No, it wasn't foolish. I -- she may look frail, but she's -- she's an iron maiden. She is a -- I knew her first when she was a litigator in the '70s and she's always been a petite woman whose voice sometimes wobbles, but her mind is strong and it's her call. And she wears that diva t-shirt in the gym at the -- at the Supreme Court and she's a trailblazer for women. I mean -- and she'll know when it's time. She's not going to hang on if she can't function fully in the job.

And the only thing she's missing right now are oral arguments. She's participating by phone in the decision about what cases to take. And hopefully she will fully recover soon. Her doctors say she's on course and she's cancer free.

WALLACE: All right.

All right, we have time -- I want to get into one last subject.

Secretary of State Pompeo is on a tour of the Middle East this week. In Cairo, he went after Barack Obama's Mideast policy. Take a look.


MIKE POMPEO, SECRETARY OF STATE: The age of self-inflicted American shame is over, and so are the policies that produced so much needless suffering.


WALLACE: Karl, he was talking there specifically about the president and -- and firing back at the policies of the president you worked for, Bush 43. But where are we on Syria right now? Because the president said we're going to get out right away. Then John Bolton, the national security advisor, said, well, it depends on what happens with the Kurds and ISIS. Now we hear the Pentagon is pulling equipment out. Do you know where we are?

ROVE: No. And we have a disconnect between I -- what I thought was an excellent speech by Pompeo. He opens up by saying, America is a force for good in the Middle East. Repudiates the Obama era doctrines. But there is a disconnect between that and pulling us out of Syria.

My hope is, is that our withdraw from Syria, I assume that the president's going to fulfill it, is done in an orderly fashion. But let's recognize our withdrawal empowers Russia, it empowers Iran, it empowers the Syrians. And the ultimate result of it may be Iranian-supported militias on the northern border of Israel, which is anathema to our interests and our allies.

WALLACE: Well, it -- we've got less than a minute left.

Congresswoman, I mean this was such a sore point when the president said we're going to pull out that James Mattis, the defense secretary, quit over it. Now they seem to be reshuffling it. Do you understand what the policy is?

HARMAN: No, and I don't think there's one person in the Trump administration who agrees with the policy. Understand that Bret McGurk, who was the special advisor dealing with the ISIS coalition --

WALLACE: The coalition.

HARMAN: Also retired early in protest. So that's two.

But I've been looking around, and -- and Karl is exactly right on who it exposes, but in addition to that, there could be a Turk massacre of the Kurds who fought side-by-side with us, not only in Syria but in Iraq and Israel is totally vulnerable because of this on its northern border.

WALLACE: All right. Well, one more subject to be continued.

Thank you, all, panel. See you next Sunday.

Up next, we'll be back with a final word.


WALLACE: Stay tuned to this station and Fox News Channel for the latest on the continuing government shutdown.

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

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