Speaker Ryan reflects on the journey to passing tax reform

This is a rush transcript from "The Story" December 20, 2017. This copy may not be in its final form and may be updated.

MARTHA MACCALLUM, HOST: Great to have you all with us this evening. We've got breaking news tonight on "The Story." U.S. companies reacting to the tax cut, but not in the way that Chuck Schumer imagined.


SEN. CHUCK SCHUMER, D-N.Y., SENATE DEMOCRATIC LEADER: AT&T, big American company, fine American company, their tax rate over the last 10 years was a mere eight percent and they cut 80,000 jobs. That one statistic belies all this trickle-down bunk.


MACCALLUM: So, here's a few more statistics for you this evening. Just in breaking tonight, AT&T says they will pay more than 200,000 employees a thousand dollars this year and bump up capital spending by one billion. Wells Fargo simultaneously also saying that they're going to hype their hourly pay to 15 bucks. Fifth-Third Bank Corp also saying they will go to a minimum $15 per hour and one-time bonus this year of $1,000 following the passage of the tax bill says the company. Comcast also says, they'll give thousand-dollar bonuses to a number of nonexecutive employees and they pledge $50 billion over the next five years in infrastructure based on the passage of tax reform, says Comcast. Boeing will make up 300-million- dollar employee-related and charitable investment tax to thanks reform, says Boeing. These moves came late today after many had painted a very depressing picture of this bill.


UNIDENTIFIED MALE: The Republican Party went out of its way to remove 13 million people from the health roles.

DON LEMON, CNN HOST: President Trump and his administration have sold it with a lie.

LAWRENCE O'DONNELL, MSNBC HOST: On the Republican side of the aisle, with this tax legislation is the ugliest display of pigs at the trough.

SAVANNAH GUTHRIE, "TODAY" CO-HOST: I'll ask you plainly, are you living in a fantasy world?


MACCALLUM: And then, check out this tweet from Joy Reid, "They are literally stealing from you, America. Stuffing the money into their own pockets. And if you don't see that, I can't help you." So, in other words, if you like this bill, you're an idiot. The Wall Street Journal's Robert Rubin who has not been very optimistic about this bill overall, says there's a big disconnect out there. He says 80 percent of America is going to see a tax cut. But in their polling, only 17 percent thought they would. So, what's going on here? Let's bring in the man who has been working on this bill for 20 years, Speaker of the House Paul Ryan. Mr. Speaker, thank you very much for being here tonight. That's the first question --


MACCALLUM: -- what happened with the messaging here? Why is there such a disconnect in what people think they're going to get? And what the numbers are telling us they will get?

RYAN: Well, when people are bombarded with that kind of rhetoric, no wonder they're a little confused. When they're bombarded from the rhetoric from the left and a lot of people in the media, this is going to hurt them, this is going to raise their taxes, this is going to other things. People are going to be confused.

You know, this was the kind of debate I'm told they had in 1986 when Reagan passed his tax reform and the polling before they passed it, only 18 percent of Americans at the time thought they were going to get a tax cut. So, this is the kind of hyperbolic rhetoric you have when we're doing monumental reform which lets people keep more of their hard-earned dollars, which gets our businesses in sync with the rest of the world so we are not punishing them and losing jobs.

The left hates this. They're not for it. And what the news you're seeing today -- just in hours, you just mentioned in your lead-in: AT&T, $1,000 bonus for, what, 200,000 employees, a billion-dollar capital investment. Their CEO tells you that's 7000 jobs right there. Comcast, $1,000. You just said all of these things. That's just hours after this thing just passed here in the House today.

MACCALLUM: Yes, that news broke late today. Let me ask you a question though. You've been at this a long time as you've said yourself, 20 years. We've watched you talk about it for that long. You ran on it with Mitt Romney. What do you think was different now in this environment and why were you able to make this happen now?

RYAN: We made a promise to the American people that we would do this if they gave us this opportunity. We made a promise that if elected, this is what we would do. We're keeping our promise. I, as speaker of the house, all of the Senate Republicans, all the House Republicans, and President- elect Donald Trump, President Candidate Donald Trump, we told the American people this is what you do if you elect us. This is what we are going to do. And guess what, Martha, we just did it. And we've told people this year, we'll get it done by the end of the year. We just did it.

MACCALLUM: So, I've been listening to you for a long time on this topic. And you've always been two-fold. There's two parts to this story. There's the tax reform and tax cuts, and then there's the entitlement cuts.

RYAN: That's right. That's right.

MACCALLUM: The deficit is set to balloon over the next 24 months based on the numbers that we're seeing. You know, that's the real payoff because that's what we spend 70 to 80 percent of our tax dollars on -- funding all of these entitlements. Are you going to stick around, Mr. Speaker, to see that part of your promise through?

RYAN: Yes, I am, number one. Number two, just so you know, Martha, the House has passed all of these bills. The house passed the biggest entitlement reform bill ever passed by a Congress in May, our healthcare bill. Unfortunately, the Senate fell, basically, a vote short from doing that. So, what are we going to do in 2018? We're going to pick up where we left off and get back at reforming healthcare. We're going to get back at reforming these entitlements. And we're going to take on welfare reform, which is another big entitlement program, where we're basically paying people, able-bodied people, not to work and depriving them with all these disincentives from going to the workforce. This good economy we're going to get out of this, this faster growing economy, is going to produce higher wages and more demand for good-paying jobs. And that's what's good -- so, welfare reform is the perfect time to do welfare reform to ease the path for people who wanted to work.

MACCALLUM: Democrats can't wait for you to take that move, because they think that's going to help them a lot in 2018. When you look at the generic math right now, Democrats are up by 11 percent in House races. If you just pick, you know, a Democrat over a Republican. So, how are you going to tackle these things and still maintain your majority in 2018?

RYAN: I'll take results over rhetoric any day of the year of the month. The results that we produce with these reforms is what we care about. The hyperbole political rhetoric between now and then is what Democrats thrive on. We're going to go get the results that we promised the American people we would do. Remember this: Republicans, Donald Trump, Senate Republicans, House Republicans, we all said that we're going to take these issues on. We are taking them on. We said we'd get tax reform done by Christmas. We have done that. People want able-bodied people who are on welfare to go to work. They want us to get people out of poverty into the workforce. That's good for them, that's good for the economy. It's good for the federal budget. So, yes, we're taking these things out. And by the, Martha, those results, I'll take them over this hyperbolic rhetoric any day.

MACCALLUM: So, how much of what we saw today have to do with President Trump? Because, you know, we all remember, there were times during the course of the campaign when you said some very unkind things about him. You were not supportive of him becoming president. The words that your relationship has improved in recent months, is that true? And you know, what has changed about that relationship? Why did it change?

RYAN: We didn't know each other before; we know each other now. We get along very, very well. We talk all the time. And we have common goals, common principles, common agenda, common objectives -- and that is to help the American people improve their lives. And after the election, we met, we said here's the agenda that we all ran on. We all agreed. This is what we want to do. This is the agenda we want to do and we are in the midst of executing that agenda. So, the merger, the friendship that we've established, the cooperation that we have is on behalf of the people who elected us and given us this opportunity -- an opportunity we're not going to blow. We've just proven that today. We're getting tax cuts and tax reform done. Biggest one in 31 years. I think this is bigger than the '86 tax reform, frankly.

MACCALLUM: So, that's a lot of plans that you have. Are you going to stay beyond 2018? How many years do you see yourself staying on as speaker?

RYAN: I don't know how many years. If you asked me two years ago whether I'd be sitting here as speaker of the house, I would never have believed that. So, I can't tell you how many -- what I'm going to do years from now, I have no clue what that is. But I know this agenda matters. I'm excited about this agenda, I'm excited about this victory, and I'm excited about sticking around and getting more of these victories and helping lead our team to getting these things done for the American people.

MACCALLUM: It's probably going to take more than a year, is it past 2018?

RYAN: But I'll take those results. I'll take those results any day over those rhetoric.

MACCALLUM: Past 2018, Mr. Speaker?

RYAN: Who knows? I mean, who knows how long this is going to take, and how long we're going to be there. I'm going to stay here and get this done, because I believe in this. And we're -- it's working. By the way, I just really believe when people see the withholding go down, when they see more money in their paychecks, when they see all these announcements of all these investments, when they see these bonuses as a result of tax reform, that's the result that we expect. That's the result we're getting, and that's going to Trump this hyperbolic, crazy left rhetoric we're getting every day.

MACCALLUM: Speaker Paul Ryan, always good to speak with you, sir. Thank you very much.

RYAN: You too, Martha. Take care. Thanks.

MACCALLUM: And congratulations. I know you worked a long time to see this day. So, we'll see you next time.

RYAN: Thank you. See you.

MACCALLUM: So, here now with his reaction to all of this, Bill Bennett, host of "The Bill Bennett" podcast, he's a Fox News Contributor and Former Education Secretary under President Ronald Reagan. Bill, it's always good to see you. Thank you very much for being here tonight.

BILL BENNET, FOX NEWS CONTRIBUTOR AND FORMER EDUCATION SECRETARY UNDER PRESIDENT RONALD REAGAN: You bet. Former employer -- former employer of Paul Ryan, too. I raised that boy well, didn't I?

MACCALLUM: He worked in your office.

BENNETT: Yes. No, he really worked more for Jack Kempf than for me. But, we spent a lot of time together. Mrs. Ryan did a good job, and he used to be my staff assistant. Now I'm his acolyte. I'm his disciple. I walk around telling people I know Paul Ryan, I know Martha MacCallum.

MACCALLUM: Good to see when life works that way, right? It's nice to see people you work with when they're young and up and coming.

BENNETT: You bet.

MACCALLUM: You know, I want to put up with some pictures of four people who voted for the 1986 Ronald Reagan tax reform. And I'm sure everybody at home will recognize them. John Kerry was on board, Joe Biden was on board, Pat Leahy, who's still there, he was on board, the late Ted Kennedy was also on board. And let's look at a couple of the parameters of the Reagan tax cut. It took the individual rate from 50 percent to 28 percent. Big cut for the individual rate. The corporate tax rate went from 46 percent to 34 percent. So, a big cut in the corporate tax rate was a big part of that Reagan bill. And all four of those Democrats, not to mention, 33 Senate Democrats were on board and 170-something on the House side. So, why is it so different this time around, Bill?

BENNETT: I need to be fair think to be fair, the balkanization of the parties, I think, Republican Party is further to the right than it was. Look, I said all along that I thought Donald Trump was the more conservative candidate than Ronald Reagan and I served in Ronald Reagan's cabinet. And that cabinet of Donald Trump is more conservative.

But the real movement is the left. You know, read Ted Kennedy's speeches on foreign policy or economics or taxes, and you're absolutely right. It was what we call today centrist, moderate Democratic Party, and there's a question, isn't there, Martha, whether a centrist Democrat can get nominated and succeed? You know, will it pass muster of the test of Bernie Sanders and Elizabeth Warren?

So, I think that's part of the problem. But this opposition, I mean, this does put it squarely though, doesn't it, Martha? You know, they say no, we say yes. Let's see what the returns are. Now, in less eight hours your show started with these companies they did announce layoffs, did they? They did not announce reducing people's salaries. They announced increases, hiring increases, bonuses and the like.

And the bigger story, I think, and I think Ryan could explain it better than I know he could. It's not just the individual tax rates, but this reduction of the corporate, 15 percent, in the long run -- and I think that could be a few months. This will stimulate the economy. This will make these companies stronger. They'll be able to hire more.

And for every one percent of growth, what is it 250, $300 million back in the economy. That is going to make more difference, I think, in the end. But now we have the test, now we have the reality test. Apart from the positioning of both parties, now we have the real test.

MACCALLUM: Yes. I mean, people have to feel the difference. And we've seen a huge jump in consumer confidence -- housing, retail, all of those indicators that are, you know, how people feel about things. And there is such a disconnect, Bill. As I just talked about with Speaker Ryan in terms of how people claim they feel about this bill, and then the activity that you see on the part of companies and small business owners who are related at the fact that they can buy equipment and write it off immediately. That's the kind of stuff that really does move the gears, right?

BENNETT: It does move the gears, and it does move the country. And you are absolutely right. I think, you know where I think we are? I think we're back in early, very early November of last year. I've been listening to the Democrats all day on Fox saying, the polls, the polls, the polls. Remember the polls in early November? Remember what they were saying? So, look, given what a lot of the public has been fed by the Democrats and most of the media, you would understand why people feel that way. But, when they start seeing that return in their paycheck, and a bonus, and new job opportunities, that's a reality that's undeniable and irreducible.

MACCALLUM: Because Gallup says eight in 10 people experience stress every day. So, hopefully in 2018 our stress level will just go down a little bit.

BENNETT: That's right. That's right.

MACCALLUM: Bill Bennett, thank you, sir. Always a pleasure to talk to you.

BENNETT: You are very Christmassy. Look at you. You have the red background --

MACCALLUM: You like my lights behind me? That's my lights.

BENNETT: Fabulous! What do you do Christmas Eve if you're doing this today?

MACCALLUM: I have some family coming.

BENNETT: Thanks, Martha. Thank you.

MACCALLUM: Bill, thank you. I hope you have a great Christmas. Good to see you.

So, he spent seven hours, Andrew McCabe, behind closed doors yesterday. We kept thinking he was going to walk out. Remember last night, he didn't walk out until 10:00 at night, I think. He was questioned about what the FBI was doing before and during the Trump transition. Were they fair in their operations with the incoming Trump administration? That is a loaded question. Peter King, one of the lawmakers who was behind those closed doors with Andrew McCabe last night is here only on "The Story" tonight. And then, scientists unveil a revolutionary new type of lie detector with near perfect accuracy. So, what are the telltale science? We're going to tell what you they say you should look for.


BILL CLINTON, 42ND PRESIDENT: I did not have sexual relations with that woman, Ms. Lewinski.



MACCALLUM: So, after more than seven hours behind closed doors with the House Intel Committee, yesterday and late into the evening, it seems that Deputy FBI Director Andrew McCabe raised a lot more questions than he answered when it comes to how he handled the Clinton investigation during which she was exonerated and then the subsequent Trump investigation which he was involved in before it got handed over to the special counsel. Now, the Senate wants their turn, we understand. We just learned this today with Andrew McCabe behind closed doors as well. And subpoenas are said to be coming as a result of the discussion yesterday and it's also something that they have been working on for some time as well because they feel like the FBI is not forthcoming in the investigations that the Hill is pursuing. Chief Washington Correspondent, James Rosen, joins me now with his exclusive report on what he learned about what happened inside that classified briefing yesterday. Hi, James.

JAMES ROSEN, FOX NEWS CHANNEL CHIEF WASHINGTON CORRESPONDENT: Martha, good evening, house investigators tell Fox News they are readying fresh subpoenas for next week to be issued against a range of Justice Department and FBI personnel following yesterday's closed-door marathon interrogation of the FBI's number two official. Deputy Director Andrew McCabe faced intense questioning on his and the bureau's work last year with the infamous anti-Trump dossier, the companion of salacious and unverified accusations about then-candidate Donald Trump and his associates that GOP lawmakers believed was used to obtain surveillance on the Trump campaign advisor.

Sources close to the investigation tell Fox News McCabe said he couldn't recall when he learned that the dossier was funded by the Hillary Clinton campaign and the Democratic National Committee. Investigators said McCabe's answers presented conflicts with previous witnesses. Thus, warranting the fresh round of subpoenas. Among those, the panel expects to summon is Bruce Ohr, the high-ranking DOJ official who was demoted earlier this month when Fox News reported that Ohr met secretary in 2016 with the two men who created the dossier. Ohr is set to testify before Senate investigators likely this week. We also broke the story that Ohr's wife Nellie Ohr, an Academic Expert on Russia, was paid by the firm that created the dossier Fusion GPS through the summer and fall of 2016 and that she worked on the Trump project.


REP. RON DESANTIS, R-FLA.: What is the role of Bruce Ohr? He met with Christopher Steele before the election, was that authorized meeting?

ROD ROSENSTIEN, DEPUTY DIRECTOR FOR THE FBI: Congressman, I do not know all the details. This information is still developing. So, I don't know the full story but we've agreed to make Mr. Ohr available for congressional interviews and they'll be free to ask him those questions.


ROSEN: Contacted by Fox News today, both DOJ and FBI declined to comment on our reporting. Martha.

MACCALLUM: James, thank you very much. James Rosen in Washington. Here now with more, New York Congressman Peter King who serves on the House Intelligence Committee. Congressman, welcome. Good to have you here tonight. In terms of what you heard yesterday, and obviously we know it was a classified briefing. But just to characterize, was Mr. McCabe forthcoming when you asked him about bias that may or may not exist in the FBI with regard to the Trump investigation?

REP. PETER KING, R-N.Y.: I don't believe that adequate answers were given. I'll just leave it at that. I think there's a lot of so many unanswered questions, at least questions which have not been resolved. For instance, you know, the whole question of the dossier: what role did that play, if any as far as the investigation being commensurate? You know, we've sort of taken for granted that, you know, this was an investigation against the presidential campaign. This is almost unprecedented. And I remember last year when we were told why it was begun and we're talking about all of these contacts, unprecedented contacts between the Trump campaign and Russia. Well, it turns out there were virtually none, and none of any substance. Then, you have the dossier coming in as to what role that played, if any. And I have to be careful on this, when the FISA court allowed warrant --

MACCALLUM: Let me ask you a question about that. Because it's my understanding that the Democrats were looking for some evidence of collusion in their questioning yesterday. They wanted McCabe to confirm that they had a reason to do that unmasking. And that the only thing that he mentioned that came out of the dossier was that Carter Page took a trip to Moscow. Well, we all knew that Carter Page took a trip to Moscow. So, if that is all that they got out of that, that's not a whole heck of a lot.

KING: Well, first of all, let me tell you, Carter Page's trip to Moscow, there was absolutely nothing there. That's clear. We know that now. And to use that as any kind of excuse at all, even if that was only one of the bits of evidence they used to rely on that any way, to me was the irresponsible.

MACCALLUM: But was that the only thing that he mentioned in terms of substantive information that they got?

KING: No. It was not the only one, but to me, the other items he mentioned to me did not, did not add up to anything. The serious question -- certainly not enough to warrant going to a court, certainly not enough to warrant an investigation of a presidential candidate, and then have that investigation continue, no.

MACCALLUM: So, the text messages between Peter Strzok and Lisa Page are public record now. They're out there. Let's put one of them up on the screen that is of particular interest in terms of what was going on here and whether or not there was any sort of coordinated effort to do something against the Trump administration: "I want to believe, he said, the path that you threw out for consideration in Andy's office, that there's no way he gets elected," he being President Trump. "But I'm afraid we can't take that risk. It's like an insurance policy in the unlikely event that you die before you're 40." Did he confirm yesterday that Andy's office is his office?

KING: Again, I was not there when he confirmed it. I think he did but, again, I can't be certain on that, I just know that he did not adequately answer any of those type questions. And by the way, on this, Martha, let me say, for now four months now, at least, longer than that, our committee, the House Intelligence Committee has been asking for all these records. We didn't get any of them until we had to go to court to get them. And the FBI should be cooperating with us, the Justice Department should be cooperating with us. But these key e-mails, text messages, just the fact that these people are involved, none of that would be given to us. We had to fight for everything. And there's -- you know, what are they trying to cover up? You know, why are they obstructing a committee from doing its lawful work on a matter which is so vital to the country and to the world for that matter?

MACCALLUM: I mean, just to circle back for moment. You say you weren't there when this was confirmed, but it's your understanding that he did confirm that he's the Andy in the office?

KING: I really only say that officially because I'm not certain. But I mean, that was the impression I had. But again, I don't want to say that definitively.

MACCALLUM: OK. So, what's next in terms of these subpoenas? And I guess, you know, the American people watch this whole thing and they say well we, you know, we fund the FBI. We fund the Department of Justice. Why is -- and I know Congress is very frustrated that you're not getting the documents from the FBI and the Department of Justice about what their feelings or involvement may have been in any effort to be against the Trump administration. The American people feel the same way. Are we going to see any sort of open hearings from Ohr or from Strzok on these issues?

KING: I think you'll have open hearings if -- depending on what we learn in the closed meeting. Because it is important we do this closed because, again, this is part of an ongoing investigation. We don't necessarily want other witnesses to know everything that's being said in there so they can't tell their stories to it. But I'll just say this is, to me, based on what we were told back in January and February about all these extensive contacts, how petrified everyone was of the involvement with the Trump campaign and Russia. So far, we've seen nothing. If they're relying on Carter Page, if they're relying on a dossier by the way which has never ever been confirmed. There's virtually no way to back up what anything that's important that's in there, and the points we do look at, they turn out to be nothing.

MACCALLUM: Yes. I've got to go. But just before, you know, I let you go, was there anything in Andrew McCabe's open testimony before Congress that he contradicted in -- behind the close -- in the closed session yesterday?

KING: I really can't say, Martha. I'd rather not.

MACCALLUM: All right. Peter King. Understood. Thank you very much, congressman. Always good to have you with us.

KING: Thank you, Martha. Thank you very much. Thank you.

MACCALLUM: So, you remember Lynda Sarsour? She led the Women's March in women's rights and feminist groups after President Trump was elected. But now, she's being accused by someone who worked for her of enabling sexual misconduct in her office. One of her former employees breaks her silence in an exclusive interview.


LYNDA SARSOUR, ACTIVIST: I will respect the presidency, but I will not respect this president of the United States of America.



PRESIDENT DONALD TRUMP: Housing confidence is the highest it's been in many years. Just came out. Manufacturing the highest level of confidence they have had since they started doing it many years ago. And business has the highest level of confidence.


MACCALLUM: That was President Trump in the Cabinet Room earlier today. He also pointed out, which he likes to do but it's a fact. Look at the chart. Dow is up more than 5,000 points in one year. It's never done that before. Seventy new highs for the Dow Jones Industrials. Remember when everyone said the market was going to tank the day after the election and fall through the floor? It didn't happen. Historic tax reform on top of that. Three percent GDP growth, and a forecast to potentially do 4 percent in the third quarter. We'll see if that happens. So, what is next? Earlier, I spoke with White House economic advisor, Gary Cohn, and asked him, first of all, does he know exactly when the president is going to actually put his Donald Trump signature on this newly passed bill.

GARY COHN, WHITE HOUSE ECONOMIC ADVISOR: So, Martha, look, the House and Senate still have to come back and fund the government, and they're going to do that probably over the next day to two days. That will have an impact on when we sign the tax legislation. If they get the continuing resolution done in the next two days and they take care of some of the loose ends, we'll hopefully try to sign the tax legislation on Friday. If not, most likely will sign at the first week of the New Year.

MACCALLUM: All right. I mean, there's the question of the pay go.

COHN: Absolutely.

MACCALLUM: . if it's signed in this year it could mean a $25 billion cut to Medicaid. So, you know, is that why you might want to push it into the next calendar year?

COHN: Exactly, Martha. We're not going to do that. We would wait until the new legislative year and sign it next year. We would never put a cut in to Medicaid.

MACCALLUM: So, does that mean the president is going to sign it at Mar-a- Lago? And are there any concerns about the optics of that at all?

COHN: No, no. If we sign it next year we're going to sign it probably after January 1st when the president is back and probably sign it somewhere in the beginning of next year.

MACCALLUM: So, why do you think that the bill gets such a bad rap, I guess? You know, we've seen in the past that this kind of legislation has been supported by Democrats in the past. This time around they're railing against it, as Chuck Schumer is. Do Americans have a negative attitude about corporations in general, do you think?

COHN: You know, Martha I think people are going to change their mind very quickly on this bill. Chairman Brady said today there's three important date. I'm going to touch on one of the important date. The important date is February 1st. By February 1sts, the IRS will have the new tax withholding tables out. People will see a difference in their paycheck. They will see more take home pay on February 1st. Right now, for some reason, people don't think they're getting a tax cut. They don't understand that they're actually getting a tax cut. When people actually see more take home pay in their paycheck, I think their public opinion is going to change pretty quickly. So, you know, we are very excited. We know they're getting a tax pay cut.

MACCALLUM: They'll feel it. They'll feel or they won't, and then they'll be able to decide what they ultimately think about the bill when they see that. In terms of the carried interest loophole, this is basically something that gives hedge fund, people who run hedge funds the ability to pay a far lower tax rate than your average Joe. That was something the president said he absolutely get rid of, even though it would not make his hedge fund friends happy in New York. Why did that not happened?

COHN: Look, the president tried to get rid of carried interest. But let's talk about what the president actually did here. The president delivered on his four key initiatives. When we laid out what we were going to do in taxes, we talked about middle class tax relief. We talked about lowering business taxes. We talked about simplification and we talked about repatriation. Those were the president's four key principles. And he delivered on all four of his key principles. Yes, we talked about getting rid of many, many of the loopholes. And if you looked at what we achieved we did achieve getting rid of many, many loopholes. We didn't get rid of them all, but we're pretty excited about what we did get rid of.

MACCALLUM: All right. Quick personal question for you -- because there was discussion that you might be interested in a job of heading the Federal Reserve? That went another direction. Now we're hearing that you do want to stay at the White House. If you had decided that you wanted to leave at the beginning of the year at any point. What has changed your mind now?

COHN: Look, I'm very excited to be working on President Trump's economic agenda. We're achieving a lot of great things. And we've got many more things to work on. We're starting to work on infrastructure. We're starting to work on welfare reform. These are all great opportunities for us to really change the course of the American economy and the American worker and what's going on here, and it's something that it's a once in a lifetime opportunity to work on.

MACCALLUM: So, you want to stick around to see those things through. How would you say the mood is at the White House in terms of the work environment? Because there have some people that had left, we've seen a little bit of reshuffling, and are you going to stay all the way through 2018?

COHN: Look, I think the mood at the White House today is excited with our accomplishment, but everyone is very realistic that we still have a lot of work in front of us and we can do so much more.

MACCALLUM: Gary Cohn, thank you very much. We look forward to talking with you in this capacity in the New Year then. We'll see you there. Thank you so much.

COHN: Thank you, Martha.

MACCALLUM: Well, she led the women's march on D.C. saying that the Trump presidency would be a dark day for women. Now a woman who worked for her says Sarsour is not a defender of women when it comes to her experience. She breaks her silence coming up next.


SARSOUR: We are the conscious of these United States of America. We are this nation's moral compass. You can count on me.



MACCALLUM: We'll now -- to follow up on a story that we brought you earlier this week. Bombshell accusations against one of the lead people in the women's march, Linda Sarsour is now being accused of ignoring sexual harassment in her own work place. The story behind it is awful. But now Sarsour is hitting back at her accuser suggesting that it is nothing more than a smear campaign. In moments, we will hear the story directly from Asmi who is making these allegations. She'll join me live in the studio in just a moment. But first, let's go to Trace Gallagher who is in our west coast newsroom with the back story on all of this. Trace?

TRACE GALLAGHER, FOX NEWS: Martha, on background it's notable that Linda Sarsour is the most visible Muslim women activist in the country. She's a vocal critic of Donald Trump, and even organized the anti-Trump women's march back in January. She's a Palestinian-American who's been accused of being anti-Semitic and fully acknowledges supporting sharia law, which for the record opposes women who speak out against sexual misconduct. Now Sarsour is being accused of retaliating against a woman for speaking out against alleged sexual misconduct. Asmi Fathelbab told The Daily Caller website that back in 2009 when she worked for Linda Sarsour at the non- profit Arab-American association, a volunteer named Majed Seif sexually assaulted her by sneaking up behind her at work and rubbing his crotch against her. Fathelbab says when she reported the conduct to Sarsour she was body shamed. Dismissed as an attention seeker and told that Majed Seif was a good Muslim. Fathelbab even claims when she was -- that she was forced to speak with a New York police detective about the consequences of making a false claim.

The Daily Caller says three sources independently confirmed her account. And when Donald Trump Jr. retweeted the article, Linda Sarsour fought back calling the story a right wing attack. Sarsour then called the left leaning Buzz Feed to give her side of the story saying she found no substantial evidence to back up Fathelbab accusations. But say she still told Majed Seif to stay away from her. Sarsour then gave Buzz Feed documents she claims supports her version of events, including a statement by the accused denying the allegation, and statements from Fathelbab's co- workers saying they never witnessed any misconduct. But the documents don't offer any proof. Instead, they simply back up Asmi Fathelbab's claim that Linda Sarsour believes the accused over the accuser. As for the claims of body shaming, Sarsour said it never happened. And today, Asmi Fathelbab tweeted in part, quote, so to be clear, everyone has the right to state their me too story but me. Martha.

MACCALLUM: Trace, thank you very much. Joining me now the alleged victim of that sexual harassment, Asmi joins me now here on the set. Good to see you. Thank you for being here. I know this isn't easy, right?


MACCALLUM: She's coming after you.


MACCALLUM: How does that play out in your life?

FATHELBAB: I'd like to say it's the usual thing that she would do, just come at me for what I'm saying is happening.

MACCALLUM: She says that it was nothing, what happened to you. What do you say?

FATHELBAB: I say it was something. And I did tell her several times what was happening and she just brushed it off.

MACCALLUM: And were you as specific as Trace just explained in there?


MACCALLUM: So you specifically said that about the way that he was rubbing up against you.


MACCALLUM: And what did she say to you at the time?

FATHELBAB: One of her comments actually was something like that doesn't happen to someone that looks like you.

MACCALLUM: And what did she mean by that?

FATHELBAB: Well, I mean, I don't fit her, I guess, physical persona of someone being harassed.

MACCALLUM: So that's what you're referring to when you say that she was body shaming you.


MACCALLUM: And she said that's ridiculous. That never happened. I want to put up the tweet that Trace just mentioned, because I thought it was very moving. So to be clear, everyone has a right to state their me too story but me. Politics has more say than actual sexual harassment and abuse. If I stand up against Linda Sarsour, I'm a bad Muslim or against Islam. You all realize that you're just reenacting what I have been through. This is your response to what's happening to you on twitter. It's not just her, there's an army of people who support her that are coming after you, right?

FATHELBAB: I'm getting messages on twitter and Facebook even where there's more body shaming. I'm being told that I'm doing this for attention. It's politically charged somehow. I'm not really sure how that's possible because I'm not doing this for any reason other than wanting my story out there. She also has her people claiming that it's a -- other than having a right wing, excuse me, and left wing situation it's against Islam. And it's -- I'm just trying to defame her name somehow by saying what happened.

MACCALLUM: Why would that be against Islam? Are you not supposed to speak out as was suggested in that? Is that true?

FATHELBAB: It's not actually true. I mean, I'm Muslim. These people are Muslim as well. And I've studied Islam. Nowhere in there that it say that you can't say anything.

MACCALLUM: You're supposed to stay quiet?

FATHELBAB: No. And nowhere in there does it say that you have to -- you're against the religion if you actually stand up for yourself.

MACCALLUM: If you stand up for yourself. So, you know, we all watched the women's march. We heard all of these different women. Ashley Judd, other women standing on the stage talking about things that had happened to them. Linda Sarsour leading this whole movement talking about Donald Trump, you know, saying that he's unfit to be in the White House. And then you go to her and say, hey, this happened to me. Were you shocked with her reaction?

FATHELBAB: I, actually, was not shocked with her reaction, because that is actually how she treated me when I went to her the first time, when I went to her during the actual situation. That's why in the tweet if you noticed I did state this is exactly what happened to me. You guys are just replaying it. You're reenacting it. Telling me that I'm not a good Muslim. This never happened. I'm making up stories. Those are her words during that whole entire ordeal.


FATHELBAB: So now, everybody is just retweeting it. They're just doing the same thing that she did.

MACCALLUM: So, I asked you what you're doing now, and you said you're not working. And I said why? And you said everywhere I try to get a job, she finds me.

FATHELBAB: Yes. Because she did actually tell me at one point that I will never work in New York City ever again for as long as she lives.

MACCALLUM: I'm sorry for everything you've gone through. And I know there's a lot of back and forth with these affidavits and everything. But you have your story and you have laid it out. And you claim that you're 100 percent telling the truth, is that correct?


MACCALLUM: All right. Asmi, thank you very much. Good to have you here. I know it's not easy. Thanks for coming in tonight.

FATHELBAB: Thank you.

MACCALLUM: All right. So coming up next here on The Story this evening, scientists have just unveiled a revolutionary new kind of lie detector with near perfect accuracy they say, and they say it can catch a politician who, perhaps, dropped a whopper like this.


HILLARY CLINTON, FORMER SECRETARY OF STATE: I remember landing under sniper fire. We just ran with our heads down to get into the vehicles to get to our base.


MACCALLUM: Remember that one? Chris Stirewalt joins me next right after this.



TOM CRUISE AS "LT. DANIEL KAFFEE": Colonel Jessep, did you order the code red.

J.A. PETERSON AS "JUDGE RANDOLPH": You don't have to answer the question.

JACK NICHOLSON AS "COL. NATHAN JESSUP": I'll answer the question. You want answers?

"KAFFEE": I think I'm entitled.

"JESSUP": You want answers?

"KAFFEE": I want the truth.

"JESSUP": You can't handle the truth.


MACCALLUM: You need me on that wall. You might need someone like Tom Cruise to get the truth out of that witness. But you might not need it anymore, folks, because researchers from the University of Maryland and Dartmouth College, very smart places, say they have developed A.I., artificial intelligence, which is just going to be all over the place in our lives in 2018, no doubt, that can actually detect whether or not people are lying. Better than a lie detector test. Apparently, it's more accurate than human beings watching someone say something or figuring out from a video what's going on. These are some of the signs, frowning, she said, raising eyebrows, protruding lips, turning your head to one side. All of these are not good signs, people. So what does it mean if politicians can no longer lie? What kind of life would that be? What would it be like covering politics? Joining me now is Chris Stirewalt who is trying to do everything on the list at once, protruding lip. Liar, liar, pants on fire.


MACCALLUM: You know, so this is just fun, obviously. But, you know, I just want to explain a little bit about it because they used A.I., as I said. It's called dare. They watch 15 courtroom videos and the A.I. system was able to detect who was lying and who wasn't lying. They literally break it down frame by frame, and they see these little things moving on people's faces and they go liar, liar, pants on fire. And it was given to humans and they only got it 81 percent recognized the tell-tale signs of fibbing. So, I'm going to play three famous lies for you, and I want you to look and see what you can find, Chris. Here we go.



B. CLINTON, JAN. 26, 1998: I want to say one thing to the American people. I want you to listen to me. I'm going to say this again. I did not have sexual relations with that woman, Ms. Lewinsky. I never told anybody to lie, not a single time. Never. These allegations are false.

FORMER SEN. JOHN EDWARDS, OCT. 11, 2007: The story is false. It's completely untrue. I've been in love with the same woman for 30-plus years as anybody who's been around us knows she's an extraordinary human being. Warm, loving, beautiful, sexy, and is good a person as I have ever known. So the story is just false.

FORMER PRESIDENT RICHARD NIXON, NOV. 17, 1973: People have got to know whether or not their president's a crook. Well, I'm not a crook.


MACCALLUM: There's a trip down memory lane, right? What did you see in there, Chris?


STRIREWALT: One of the things that makes politicians so good at lying is that very often they are able to convince themselves that what they're saying is actually true. You see -- you know, it's not a coincidence that a lot of leaders are fairly high on the sociopathy scale. And part of that is -- I'm sure Richard Nixon believed that he was not a crook.


STRIREWALT: And when he said it convincingly, he was lying but not in his mind. We definitely see that now. We've seen that with Hillary Clinton. We've seen that with Donald Trump. When untruths are told, it's harder to detect them. When the person is fully convinced, completely convinced that what they're saying is really true. So that makes it harder. Those are the best liars.

MACCALLUM: It sure does. So, I checked off failing to answer, denial, repeating the question, being too specific, and for John Edwards, just too polite.


MACCALLUM: Chris, thank you. Thank you very much my friend.

STRIREWALT: Yes, ma'am.

MACCALLUM: Thanks for being here.


MACCALLUM: We'll be right back.


MACCALLUM: So, last week we asked to you send us email and you've love the idea. Kathleen from St. Louis wrote, I" almost fell out of my chair when I heard your show is letting us send email. It's maddening for those of us who do not do Facebook and Twitter to be blocked out." Dennis from Birmingham, Alabama, wrote this, "I have no idea if you'll read this email, but I'm glad I can sound off from time to time." We read them them all, Dennis. In fact, that is where we got tonight's quote of the night as well. Courtesy of John in Boston, quoting our Founding Father Thomas Payne, "Those who expect to reap the blessing of freedom must, like men, undergo the fatigues of supporting it. We fight not to enslave but to set a country free and to make room upon the earth for honest men to live in. In such a case, we are sure that we are right."

So are we. Thanks for being here, everybody. Good to have you on "The Story." Tucker Carlson in D.C. is coming up next. And we will see you back here tomorrow night in New York with more of "The Story."

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