Trump considers revoking ex-Obama intel officials' clearance

This is a rush transcript from "Your World," July 23, 2018. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: Well, it was the day the president meant to tout products in America, but attention quickly shifted to his looking at revoking security clearances for those who know the deepest secrets of America, not clearances for top officials of this administration, but the last administration, including John Brennan, James Comey, and, well, you can see Michael Hayden and James Clapper and Susan Rice and Andrew McCabe.

And that could be just for starters.

But it's already started a firestorm in Washington today.

Welcome, everybody. I'm Neil Cavuto. Glad to have you. This is "Your World."

And security clearance revoked? Not yet, but for those six former Obama administration officials, tops in national security, may be closer than they think or you think, and all because the administration insists that they potentially politicized and in some cases used their public service and security clearances inappropriately.

All six are frequent administration critics, which prompted allegations the president could be launching his own witch-hunt.

Now, lost in the argument is whether the president can do this, which he can. How is it, though, that so many former top officials now out of power have access to this intelligence, which they do?

To Kevin Corke at the White House on the furious fallout from all of this.

Hey, Kevin.


You could almost hear an audible GASPARINO: . I mean, I could hear it when I was sitting there in the front row. As soon as she said it, I could hear people to my right, Neil, just reacting almost immediately to this idea that the president and this administration might revoke the security clearances of a number of former Obama administration intelligence officials.

To hear them tell it, Neil, they have not only politicized their position and their access to the sensitive material, some of them have even attempted to or in fact have monetized that material. That's to hear the White House tell it.

So here's some of the big names that you mentioned, Comey, Clapper, Brennan, Hayden, Rice, McCabe. Comey, of course, has hit the president before on Twitter, but it's Clapper in Brennan in particular who have been overly partisan. That's -- that's fairly unusual.

It does beg the question why and certainly why now. Hayden less so. Rice involved in the unmasking. And, of course, McCabe with the dossier, and, of course, he was relieved of duty as well.

So, today, Sarah Sanders, the White House press secretary, said the president is investigating what can be done.


SARAH SANDERS, WHITE HOUSE PRESS SECRETARY: Not only is the president looking to take away Brennan's security clearance. He's also looking into the clearances of Comey, Clapper, Hayden, Rice, and McCabe.

The president is exploring the mechanisms to remove security clearance because they have politicized and in some cases monetized their public service and security clearances. Making baseless accusations of improper contact with Russia or being influenced by Russia against the president is extremely inappropriate.

And the fact that people with security clearances are making these baseless charges provides inappropriately legitimacy to accusations with zero evidence.


CORKE: Brennan in particular has been -- I'm going to be careful in how I characterize this -- he's been unhinged, to hear some White House officials tell it.

That's not me saying that. That's them saying that because they feel so strongly, Neil, that he's been so unfair in his criticism.

I can also tell you this very quickly. We have actually heard from the spokesperson for Andre McCabe, Neil. And she says, listen, my client's security clearance was already deactivated. So even though he was among the names mentioned today, he may not need to have his security clearance revoked.

But it does beg the question why so many people have access to such high security information, Neil?

CAVUTO: Yes. And where does it end and how far back does it go?

Kevin, thank you very, very much, Kevin Corke.

Let's get the read on this from FOX News contributor, legal eagle Ted Williams.

Ted, do you know how far back these type of clearances can go?

TED WILLIAMS, FOX NEWS CONTRIBUTOR: Well, they can go back at least about a three-year period, Neil.

Normally, when these high-ranking officials leave the government, they continue to have their clearances, and primarily so they can contact and make communication with members of the current administration, so they can embark their wisdom on them.

So, those things are normally kept into place.

CAVUTO: All right.

So when you heard about this and now, of course, the administration seems to be saying they could have been leveraging, monetizing this for themselves, and not just because they have been frequent to a man and woman, in the case of Susan Rice, frequent critics of this administration.

What do you make of that?

WILLIAMS: Neil, the first thing that came to mind was Richard Nixon and the Nixonian people, where Nixon had a list of people he disliked and certain things happened with those people.

Here, we have Trump, who is being criticized by many of the individuals on this list. Those individuals certainly have a First Amendment right to criticize. They also certainly don't have a right to these security clearances. So they very well could be revoked.

But the question is, are you revoking them because they're critical of your administration? If that is the case, that's very petty on the part of Trump.

CAVUTO: Then let me ask you this, Ted. If you're under the suspicion that someone criticizing you, let's say, on another news network -- and a lot of these are frequent contributors, permanent contributors to other news networks, are saying things about you based on information to which they might be privy or have access to, does the administration have a point?

WILLIAMS: Well, they certainly would have a point if they are using that information, as they say, to make money. But...

CAVUTO: But you would never know, right, though? You would never know what information they -- whether they're making money right away or sharing something indirectly in an inferred insight. You know what I mean?

WILLIAMS: And that's the burden, I believe, that Donald Trump is going to have to meet, because there's not only those individuals on the named list, but there are other officials in the administration -- or in previous administration that have these clearances.

So the question that Americans should be asking, why are you revoking these -- this specific group of individuals that you named? I think this is very troubling. I would hope that Donald Trump and his administration would think twice about going forward with this, because it looks very Nixonian to me.

CAVUTO: All right, does the president have the power to do this, though?

WILLIAMS: That is a debatable question right now.

I would think that he probably do, if, if he can show that someone is using a clearance, not only to make money, because all of these guys make money, but if they're using it in some kind of way to hurt the United States of America, and not to hurt Donald Trump as an individual.

CAVUTO: All right, thank you, my friend, very, very much, Ted Williams, attorney, FOX News contributor.

Let's get the read on this with Claudia Rosett. She's with the Independent Women's Forum, single-handedly took on the United Nations. Don't even get me started on that one.

But, Claudia, always good to have you.

I didn't want to steer away from what we originally intended. But I did want your thoughts on this and how many people have access to top security information. I thought, once out of power, out of that security access, but I guess not.

CLAUDIA ROSETT, FOREIGN POLICY FELLOW, INDEPENDENT WOMEN'S FORUM: Well, Neil, that would make a lot sense to me.

And I don't know the intricacies of this. But I think Trump is raising a very good question. Why do these people still have these clearances? What for?

And I think Ted Williams just made a very important point. You don't want to take them away based on personal animus. On the other hand, as a policy, what are we doing? I already think there's an obscene payola that goes with a lot of former government positions. People serve and then cash and to a degree that I think for the average American would be pretty appalling to see in detail.

So, it's worth -- I think this is a question worth raising. And then add to it the kind of leaking that we have seen and the incredible politicization of the matter of what's classified.

Speaking as somebody who has no access to classified material, it becomes very frustrating as an American watching the sort of enigmatic, elliptical things from Washington, where it sure looks like this kind of access is being used for partisan purposes.

CAVUTO: Yes, whether they're profiting off it or not, which I think was the thrust of what Sarah Sanders was saying earlier on.

But let me ask you a little bit about whether, as some of the president's critics have commented, this is all meant to distract from the Putin summit and the criticism he's getting over that, and that this just gets people talking about something else. What do you make of that?


Well, much as I would have preferred that, for the next two-and-a-half years, we discuss nothing but the Helsinki summit...


ROSETT: Look, there's plenty of discussion about that. I'm sure there will be more.

I thought President Trump put on a very clumsy performance there. But I don't think the sky is falling. And I think if you look at what happened on the ground, he has actually made the strongest moves against Russia that we have seen in a very long time.

And I think he also is trying to solve immensely complicated problems. President Obama bequeathed us a very dangerous planet on which there was -- talk about collusion -- collusion between Russia, China, Iran, North Korea.

And in trying to defuse these threats, Trump has the enormous problem, real problem. This is genuine. It's not manufactured. Where do you start? How do you do it? Who do you try to hive off?

And he's hired superb advisers in John Bolton, in his secretary of state, Mike Pompeo. Nikki Haley is saying marvelous things at the U.N.

And I think it's worth at least giving the benefit of the doubt that this not the apocalypse. So is it a distraction? Actually, I think it's moving on to the next thing. Iran just threatened us with the mother of all wars.

CAVUTO: That's right.

And he responded, you will suffer the consequences the likes of which few throughout history have ever suffered before. So this tit for tat just ratcheted up.

Just all a lot of bellicose words, or is there something more here?

ROSETT: Well, there's more here in the sense that Trump actually has done more than, say, Obama did. He has carried out airstrikes on Syria. He has in fact stripped ISIS of its caliphate. It's since he became president that that's happened.

Things are moving. Something's changing. Is he prone to hyperbole? Absolutely. If he were another president, I might be worried about that statement, because that wouldn't be at all normal. With Trump, that's sort of a normal response when he's trying to be threatening.

I think the Iranians understand that. I also think that there's just that bit of unpredictability to what he says and does, certainly to what he says, but to what he does.


CAVUTO: All right, though, when John Bolton -- you mentioned him before, Claudia -- says that he spoke with the president over the last several days, "And the president told me that if Iran does anything at all to the negative, they will pay a price like few countries have ever paid before."

So apparently he's communicating through his top lieutenants, this is how I feel, this is what I'm going to do.

But then what does that mean if the -- what is considered agitating behavior or something that would warrant a response like that on the part of Iran?

ROSETT: Well, what the Trump administration hasn't done is spell out what this price would be. And it's highly unlikely that it would be beyond anything anyone has ever experienced before.

I discount that. On the other hand, the fact that John Bolton has said it, as well as Trump put it out on Twitter, says to me that Iran would be well advised to think that there is something serious here, that they do have something in mind, probably not the end of creation, but something in mind, something that would hurt Tehran.

And, look, part of what America is trying to do right now, what the Trump administration is trying to do, is claw back the credibility squandered in every side by President Obama.

And I think this is part of how they're doing it. And I actually think it's a good move. You know what? Threatening the Iranian regime, the world's leading state sponsor or terrorism, tremendous maker of trouble, partner in proliferation with North Korea, and Russian's pal in the Middle East, for all their disputes in Syria, good move.

It's much better than if Trump had extended a hand.

CAVUTO: Claudia, thank you very, very much. It's always good chatting.

ROSETT: Thank you, Neil.

CAVUTO: All right, two quick tech items to pass along right now.

Google, Alphabet out with earnings that beat the Street estimates by far. It was expected to earn about $9.59 a share. It came in at around $11.75 a share. Remember, this is the same company the Europeans are threatening. In fact, not threatening, they already have sued better than $5 billion, saying that the company unfairly leverages its success in the search area to a variety of other areas.

Google is saying not so. The president has defended them. And, separately, there's Apple, which is in the middle of a trade war and now being focused on by no less than China. There's a pivot going on here that is remarkable.

We're on it after this.


CAVUTO: All right, this is an interesting way to apply a little pressure on an American company that might be fearful that an ongoing trade war with China could hurt its business there and the repercussions here, subtle pressure, not so subtle right now, that China is trying to use its own technology factory arm, BOE, already behind making a lot of these Apple screens for its iPads and laptops, down the road for iPhones as well, and that if Apple agrees to that, everything could be hunky-dory.

It's a little bit more subtle than that, but that's it. That's a little pressure situation here. It's a way for Apple to sort of resist the same kind of harm that could be coming from any other companies, technology companies included in this ongoing tiff with China.

But it is not exactly subtle.

Financial analyst Heather Zumarraga, Democratic strategist Antjuan Seawright, and our own Deirdre Bolton.

Deirdre, this is Soprano pressure to me.


DEIRDRE BOLTON, FOX BUSINESS CORRESPONDENT: Yes, this is pretty strong. We will go with that Soprano pressure. I like the , Neil.

So, if BOE, which is not a household name in the U.S., but it is essentially state-run, China state run manufacturing company, gets a contract with Apple to produce the screens that go into our phones, first of all, China would have big manufacturing bragging rights over South Korea and Samsung, which I would have to say it would eventually be displacing, in theory.

And it would also have big bragging rights over Japan. So this would just be China flexing its muscles. And what I find interesting about the timing here, Neil -- and you alluded to exactly this point -- is, as the U.S. and China, the headlines are more and more combative as far as trade tiffs becoming trade wars, here we have a potential for one of our most famous companies to be getting yet one more manufacturing tie-in from a Chinese company, Neil.

CAVUTO: Heather, what does this mean?

I mean, obviously, Apple is doing everything it can to avoid an outright trade war that could imperil not only its workers over there, all the stuff it makes over there, all the customers it has over there, and a lot of stuff that makes its way back here.

HEATHER ZUMARRAGA, FINANCIAL ANALYST: I think a Trump tweet is coming pretty soon, telling Apple that they shouldn't be partnering with the Chinese in this way, if, at the end of the day, their theft of -- continuous theft of technology or intellectual property from American technology companies such as Apple.

We know that Apple already had to hand over to the Chinese to comply with local authorities all of their customer data, like your e-mails and texts, not in the U.S., but in China. If you have used the Apple iPhone and you're Chinese, then you have -- they have all your data, your pictures, your e-mails, your texts.

So if this becomes a national security threat, again, at some point, then I think President Trump will try and get involved, and so will Congress at some point in time.

CAVUTO: Antjuan, where do you think all this is going?

ANTJUAN SEAWRIGHT, DEMOCRATIC STRATEGIST: Only God may know at this point, Neil.


SEAWRIGHT: But what I can tell you, that it will not be beneficial for those of us who know what this would mean long term.

At the end of the day, we all know the danger in trade wars. We all know that China wants to advance its mission to be a world power. And for some -- for a lot of countries outside of United States, they essentially smell blood in the water.

They see the divide between the president and even some of the long-term economic vibes in this country of what trade war could mean. And I think...

CAVUTO: Well, you wouldn't fold like a cheap suit to them, right?


SEAWRIGHT: I definitely wouldn't.

And I think we have to remain...

CAVUTO: You would fold like a cheap suit or you wouldn't? I didn't understand.



BOLTON: Never. Never.




SEAWRIGHT: We should not.

But, Neil, Neil, Neil, on a serious note, I think this is a very dangerous game.

CAVUTO: All right.

SEAWRIGHT: And I think this is a tremendous opportunity for the president not to get on Twitter and go on a tweetstorm, but for him to step up and lead on an American front and talk and tell -- be honest with the American people about what this should mean.

BOLTON: Neil, one thing I want to just say quickly is that...

CAVUTO: Go ahead.

BOLTON: ... Apple has not confirmed or denied these talk, first of all.

CAVUTO: That's right.

BOLTON: Second of all, Apple has a super high bar of manufacturing exactitude, and especially for this kind of screen on the product that makes them more than half of their revenue.

CAVUTO: And if BOE doesn't measure up, it doesn't get the business. So, that I could understand.

BOLTON: There you go. Absolutely nothing -- yes.


CAVUTO: But let me ask you then, Heather, when you listen to this, and I thought -- I look at it in the context of all of these so-called thing -- stocks, the Facebooks and Apples and the Netflixes, the Google, even out after the bell with some strong numbers, that this is really what's driving our markets.


CAVUTO: And if they hiccup, if even one of their members hiccup, they all start hiccupping. And that's what China is doing here, that this is a very layered plot. What do you make of that?

ZUMARRAGA: I think it could be.

If you look at the Nasdaq market, it's leading all the indices higher, comprised of all these major big cap tech companies, as well as smaller cap technology companies, up 51 percent since President Trump was elected.

So some investors see high valuations in technology sector as, you know, a potential issue. And this could just be the push to -- that it rolls over and the markets follow.

Wouldn't be good.

CAVUTO: We shall see.

All right, the Dow down about 14 points today, technology, though, not an alarmingly weak spot in this.

We will have more after this, including the latest battle still over ICE. It doesn't end.


CAVUTO: Well, say this about these occupy ICE protests. They continue to occupy the headlines here.

This one continuing in Portland, Oregon. It's starting to hit a lot of the local businesses there.

Trace Gallagher has more on the latest -- hey, Trace.


When these projects began a month ago at the Portland Immigration and Customs Enforcement Building, some businesses near the site were supportive of the cars, but now those business owners say they're actually being targeted. And here's why.

When the protesters occupy this area, as they have every day, the Department of Homeland Security is reportedly not getting very much help from the Portland Police Department. So, DHS does its own crowd control, and that means blocking off a main road.

But that also cuts off traffic to businesses like the Happy Camper Food Cart. It gets worse because now every time a DHS or ICE employee tries to buy food from the Happy Camper, the protesters harass and threaten both the business and the customers.



SCOTT HAKES, OWNER, HAPPY CAMPER FOOD CART: The individuals that are making the most noise, unfortunately, are the ones that have made the personal threats to burn our cart down at least three times.


GALLAGHER: Yes, and here's the irony.

The Happy Camper Food Cart funds a nonprofit to help Portland's homeless problem, but the owner -- you just saw him there -- says that between the profits being down and threats being up, they have decided to shut down the cart and put it up for sale.

And, by the way, Judicial Watch is now looking into claims that Portland police are not helping ICE with threats, disorderly conduct and impeding traffic. The locals and feds are supposed to have a mutual agreement.

Finally, two quick mentions, Neil. On Friday in Arizona, former Vice President Joe Biden spoke to the League of United Latin American Citizens, where he called the president's immigration policy -- quote -- "one of the darkest moments in our history."

And Arizona Democratic congressional candidate Ann Kirkpatrick was roundly booed and shouted down twice, once when she came out in favor of ICE, and once when she came out against comments recently made by Congresswoman Maxine Waters telling her supporters to harass Trump administration officials -- Neil.

CAVUTO: Thank you, Trace, very, very much.


CAVUTO: Well, on my weekend show "Cavuto Live" this past Saturday, I did raise that issue with former ICE Director Thomas Homan and how -- he how he felt that this move was going.


CAVUTO: The passion is on the far left that espouses views like this, but presumably not the votes. And they're worried. Should they be?


And I use to use the terms that those on the far left are misinforming America. In the last two months, what I can say is, they're lying to America. It's reckless for anybody, especially a congressman or senator, to say, let's occupy ICE, let's occupy the airports.

These are men and women that shouldn't be distracted from their job. They're trying to keep American airways safe. They're trying to do their jobs. And they shouldn't be distracted.


CAVUTO: And he says right now they are distracted.

Political commentator Ashley Pratte with us right now.

Ashley, where's this going? Because as far as the left is concerned, it's not going away. And the push to get ICE defunded and out and ultimately shut down, despite moderates in the Democratic Party saying that could be a mistake when close to seven out of 10 Americans support it being around, where's it going?

ASHLEY PRATTE, POLITICAL COMMENTATOR: I think this going nowhere fast, Neil. And I will tell you why.

It's because Democrats that have very contentious races coming up in do not want to touch this issue. Actually, there are some Democrats out there now saying, please do not make this our number one priority issue, especially when only 25 percent of Americans care about this.

And that will be a problem if they're trying to hold on to seats or if they're trying to gain a majority. This isn't a winning issue for Democrats, and Democrats know that. And the more far to the left that the party goes, this will only pose more of an issue if they are actually trying to win seats back in 2018.

So when Senator Gillibrand, Neil, comes out today and says that she's really doing her party a disservice, because, again, this doesn't actually go anywhere. And I don't think this is a platform that the Democrats are actually looking for. I don't think you would ask any Democrat, hey, do you think that we need, more immigration control, or do you think that we need to fix the problem at the border?

They would say yes. Now, would they disagree with the policies and the administration's policies around this? Probably, but I don't think that they would say that abolishing ICE is the answer.

CAVUTO: I think, though, that a lot of them read the political tea leaves probably within their party that the passion is on the extreme left.

And I only illustrate Joe Biden having clearly sympathetic words to say to this movement. So, again, where does this all go?

PRATTE: Yes, I definitely think of the passion is in the far left and the very progressive base of the party.

But that's not how they're going to win elections. And I do think that as we see Organizing for America and Obama getting involved in some of these races in '18 and in '20, I do think what we're going to see here is more of a streamline to the moderate base of the party.

And that's going to frustrate a lot of that progressive base that is very upset still by what happened to Bernie Sanders in 2016. So I do think that the party does need to come together and try to heal some of these wounds before creating further friction here.

And I do think that this will cause friction moving forward, because, again, this will not be a winning issue in some of these very, very key races. And if Democrats do want to win 2018, I don't think that this is the leg that they want to stand on in order to do that.

CAVUTO: It was only a year ago that most Democrat, at least in the House, signed to this measure to beef up support and financing essentially for ICE, the way it exists now.

The only thing that's changed, of course, is this controversial issue of separating kids from their parents. But barring that, which has since been corrected, not enough, many critics say, to satisfy critics, but it is certainly a whole different mind-set from when everyone was on the same page.

PRATTE: For sure.

And ICE, I think, for the most part is doing a great job, and they serve a very necessary function and purpose. Now, again, this is all on policy that people disagree with. Abolishing ICE is not the answer. What they do, again, serves a very distinct purpose in our nation.

And I don't think taking it out on an agency is the right way to go about it. And we have also seen problems when it comes down to the border issue. Was the way this handled appropriate? No. You saw Republicans and Democrats come out and say, no, these families seem to be reunited. We shouldn't be ripping children from their parents.

And we came together to find a solution there. But I think, moving forward, again, we need to think about what actual change looks like, rather than calling for the abolition of a complete group, which doesn't make any sense at all, especially when we know that they do -- they do serve a distinct function in purpose for our -- for our country and for our government.

CAVUTO: Yes. Ashley, always good having you. Thank you very, very much.

PRATTE: Thank you.

CAVUTO: All right, speaking of the left, they're exasperated trying to understand how it is, with all the criticism of the president, all the controversy over immigration and the Putin summit and all of that, his approval rating went up -- after this.


CAVUTO: Alphabet shares are up around 5 percent, a little bit more than 50 bucks, after hours. You might have heard that it beat earnings expectations. And a lot of people are saying that big $5 billion fine, eh.

After this.


CAVUTO: All right, it had been a tough week for the president, with the controversy over how he handled himself with Vladimir Putin and everything else, the ongoing protests over immigration and specifically whether shut down ICE, and they were nationwide.

So a lot of people thought, when the weekly poll numbers would come out, at least in one case, we would see that the approval rating tumbling. In fact, it ticked up a little bit.

So what to make of that?

Larry Sabato, UVA Center for Politics.

Obviously, there was more Republican support, as if he needed it, picked up. And that made a big difference here, but he is defying, I think, as one Democratic critic put it, simple gravity. How's he doing it?

LARRY SABATO, DIRECTOR, UNIVERSITY OF VIRGINIA CENTER FOR POLITICS: Well, essentially, nothing's changed since Election Day.

And I have said this over and over. He got 46 percent on Election Day. That poll has him at 45. I have seen other polls have him between 42 and 46.

I think if the election were held again, with the same two major party candidates, it would turn out about the same way. The reason for that -- and this is very unusual in American politics. The reason for that is that people made up their minds, not just about Donald Trump, but especially about Donald Trump, a long time ago. They're either for him.

And most of the people for him are really for him. And -- or the people who are against him are really against him. And they're in their foxholes. They're in their foxholes. And nobody is crawling across no man's land.

We have had very few converts on either side. So, will that change? I don't know what future events will -- will bring us to. But for the time being, in the first year-and-a-half of the Trump administration, essentially, he's been in about the same place. He had a period of being in the 30s, but that was artificial.

And, again, if the contest were held again, even at that time, I think probably the results would have been about the same.

CAVUTO: So let me get your sense of people who still don't come out and say the reason why they support him, the personal foibles notwithstanding, they like the economy. They like the markets. They like the pickup in activity.

I saw there was one survey about parents of graduating college students who just were overwhelmed and happily so with the prospects for their kids and jobs, et cetera.

And that has been one of the things that has them saying, all right, I like this guy. All the controversy and hearing from the press and everything else, I can deal with all that because I like what's -- what's happening in this country. And that will win out, or at least mean fewer angrier voters going to the polls in the midterms, denying Democrats of taking the House.

What do you think of that?

SABATO: You have to motivate people to vote.

And right now, the greatest advantage Democrats have is that their enthusiasm level is that at about 65 percent. Republican enthusiasm level is around 50 percent. Now, can that change by November? Of course.

This will come as a shock to the audience, but polls are not that precise a measurement. I know no one but you and I, Neil, learned that in 2016. So things can change dramatically by November.

But right now, Democrats are more enthusiastic. That's what Republicans have to worry about. But the economy is absolutely the best card Republicans have to play. If they talked about that more, if the president spent more tweets about the economy than other things combined, I think he would be better off.

CAVUTO: I'm a very modest guy, but I did predict the president's victory, but that's neither here nor there, because I look beneath the surface.


CAVUTO: But let me ask you this, Professor. Do you find it weird that he wouldn't benefit more with what's been happening in that economy, with what could be a very strong second-quarter GDP report? There are even hints of being 4.5, 5 percent.

Now, that could be a one-time event, I grant you. But it would be a historic one-time event, at least by recent memory. And yet he would -- with that alone, you would think he would be up to 55, 60 percent approval.

SABATO: Neil, incredibly, I agree with you completely.

I don't recall any other instance of this. But...


CAVUTO: Now, that hurts my feelings, Professor. That does hurt my feelings.

SABATO: Well, no, I'm just telling -- but you should be thrilled.

CAVUTO: Yes, OK, fine, fine.

SABATO: You should be very happy about today.

But, look, here's the -- here's the key to the whole thing. It's that if this were another president and the economy where this golden, assuming the other president wouldn't try to get into controversies all the time, I will bet that other president would be at 60 percent.

And this is what a lot of Republicans say privately, Neil. If he would just suppress the urge to get into battles with lots of other people unnecessarily and tweet out some of the things he does, he would probably be higher.

CAVUTO: You should see what he says about you.


CAVUTO: Larry, it is a...

SABATO: Oh, God.

CAVUTO: It is always a pleasure, my friend.


CAVUTO: Thank you very, very much.

SABATO: Thank you. Thank you, Neil. OK.

CAVUTO: Larry Sabato, presidential historian extraordinaire.

We said at the beginning of this broadcast the president is now looking at the security clearance given to former top Obama officials who have also been frequent critics of his.

What does a Republican congressman think about that?

After this.



QUESTION: Will the President consider Senator Paul's suggestion and call for the removal of former Director Brennan's security clearance?

QUESTION: Is it his position then that any former Obama administration official who holds clearance and does make political statements about him should have their clearance revoked?

QUESTION: Are you considering any additional actions against Brennan and the other names you read off?

QUESTION: the President is threatening to punish Brennan and Comey and Clapper for saying things about him that he doesn't like.

SANDERS: The president doesn't like the fact that people are politicizing agencies and departments that are specifically meant to not be political and not meant to be monetized off of security clearances.


CAVUTO: All right, now, political is one thing. Whether you're monetizing or cashing that in or taking advantage of that momentarily is another thing.

But what the administration seems to be saying are, those six former Obama administration intelligence officials maybe should have their security clearance revoked.

To Florida Republican Congressman Matt Gaetz. He's a member of the House Judiciary Committee.

So much to talk about, Congressman.

So if you will indulge me on this, I didn't even know you would still get such clearance after you leave office. I guess it's for up to three years. But that's surprised me.

REP. MATT GAETZ, R-FLA.: It surprises me as well, Neil. And it might be appropriate to look at that policy more broadly.

But the real challenge here is that we all have a stake in the action to ensure that intelligence doesn't become politicized at any stage in the game.

And we learned recently, with the release of the Carter Page FISA application, that there was a political opposition research document that went from the Democratic Party to the Perkins Coie law firm to Fusion GPS, and then because Fusion hired Nellie Ohr, a spouse of a senior Justice Department official, that political document worked its way into the intelligence process.

And so, again, I support the president's efforts to ensure that our intelligence doesn't get politicized. I'm not entirely sure if all of the individuals' names maintain a full security clearance.

But the president certainly has reason to be concerned.

CAVUTO: And the Carter Page stuff, I'm still not sure, because so much was redacted from that and just wiped out, you had no idea what was going on.

But, having said that, apparently, the impetus to originally look into him were these reports that he was talking to Russian operatives or Russians in general, apart from all of this other -- pardon the term -- trumped-up stuff.

What did you make of that?

GAETZ: I made that it wasn't sufficient alone to obtain the warrant, Neil.

If you look at the Nunes memo, it made the hard charge that so much of the Steele dossier was essential, was the critical piece of evidence. And I think that the release of the FISA application bears that out.

It also bears out that the Michael Isikoff Yahoo News article was used to corroborate the Steele dossier. It was mentioned four times in the first 30 pages of the FISA application.

And that was a news article that was planted by Christopher Steele. And so it would have been very easy for the people seeking this desire to spy on Carter Page to simply say that the Democratic Party, Hillary Clinton's campaign were involved in curating this information.

And then the court could have made the decision. But they didn't do that.

CAVUTO: But how can you -- how can you get anything from these documents? We're rifling through them, but they're all blacked out here.

I don't know what they -- they would infer or imply here, but they seem to -- I hear Republicans saying they discredit the whole Mueller probe, Democrats saying, here was a guy who is separate from this other charge, that they were only pursuing this investigation based on nefarious political information. In his case, they had stuff on him meeting with Russians.

Now, do you find his just meeting with Russians, let's say during the campaign, to be a problem?

GAETZ: Oh, of course. I think that any time there is an attempt at Russia malign influence, it's bad.

But, in the words of Andrew McCabe, there would never have been this application granted for spying in the absence of the dossier. So you -- look, you're right. This application will be an ink blot test. Republicans will look at it and see one thing. Democrats will look at it and see another.

My hope is that all Americans would accept the premise that, if a political party paid for information, and then essentially paid to hire the spouse of a senior Justice Department official to cloak that with the legitimacy of the intelligence community, that, as Americans, we would all think that that should be disclosed in a non-adversarial setting, like the FISA court.

Remember, there's no defense attorney. There's no way to challenge the information. And the Woods procedures at the FBI would have required all information, even information that wasn't very helpful to the government's case, to be disclosed. And, here, it wasn't.

So, again, you're right. Both sides will look at this very differently. But we should find common purpose in the theory that political documents shouldn't be the basis of spying.

CAVUTO: All right. Well, of course, they argue otherwise. And back and forth we go.

But, real quickly, then, on the president then fingering these former Obama administration intelligence officials, that I guess you would have to prove -- or maybe you don't have to prove -- that they monetarily took advantage of that information they had, or is this his own political witch-hunt to something he deems to be a political witch-hunt?

GAETZ: I can tell you, Neil, we get a lot of briefings here in the Capitol Building that we can't talk about on television.

And my fear is that Mr. Brennan is a lot more involved than the American people know. And I think that the president is right to be suspicious of Mr. Brennan having access to information.

And we have seen that he's used it to try to make a political case, not to contribute to the collection of intelligence.

CAVUTO: All right.

GAETZ: So, if there was some legitimate lag time for three years before, I don't think that would apply to Brennan in these circumstances.

CAVUTO: All right, Congressman, thank you very, very much.

GAETZ: Thank you Neil,

CAVUTO: All right.

Meanwhile, I told you in the beginning the administration had that very, very tough words for Iran, of course, that all-caps tweet that the president sent out.

I understand, with tweeting, if it's all caps, that's a big deal, so that you would immediately think would send oil prices soaring. Just the opposite. Why is that?

After this.


CAVUTO: All right, I'm very technologically savvy, as some of you know, so I immediately seized upon the president's threat, all but threatening war with Iran.

And what first gave it away was the fact that was in all caps. And I'm not even going to read the whole thing. I know there are a lot of you listening on radio. It just says that we have had it with you, and enough with you, and you keep screwing around with us, well, the hell with you.

All right, oil analyst Phil Flynn here.

Normally, say something about that, about Iran, you are cruising for a bruising. Oil prices are going to rocket.

They didn't. Why didn't it happen?

PHIL FLYNN, PRICE FUTURES GROUP: I think, initially, they did.

When we saw this tit for tat going back and forth with Iran, prices were a lot higher. But I think they took President Trump's threat seriously. I think the Iranians are saying, wait a second, what did we get into?

President Hassan Rouhani, the president of Iran, was saying, any war with Iran will be the war of all wars. And President Trump says, never, never, never say that. Again. You will be sorry of what you get yourself into.

I think that actually calmed the markets a little bit. Later in the day, there was a also report, Neil, that already Saudi Arabia and the United States are working together to actually replace all Iranian oil once those sanctions go into effect in November.

So I think the combination of the president's strong stance against Iran, as well as talk of cooperation with the Saudis, really calmed the market down, when it was initially rattled by the comments.

CAVUTO: I have another crackpot theory which are very, very, very nice to, in the past, just dismiss and shoo away.

And that has to do with the latest housing data, which we saw for the third month in a row some signs of data abroad, particularly out of China, that is showing things softening. So maybe it's a global slowdown issue, or not as fast as we were going issue.

FLYNN: I think there is some of those fears in the marketplace.

But, to be honest with you, this time of year, data normally gets a little bit soft. So I don't want to read too much into that, because the last time we underestimated oil demand from China in a slowing economy, we got blindsided with very strong demand.

So, I think it's too early to make any broad assumptions about a major drop in demand, especially because global supplies are the tightest they have really been in like 10 years.

CAVUTO: Yes, that's why I thought their question about that data was so stupid, when they told me to ask you that.



FLYNN: That was never...

CAVUTO: Let me get your final sense on a trade war and how that would impact all of this.

I mean, every -- we know the higher prices are coming. Some people feeling it now. What do you feel?

FLYNN: I think that the trade war fears are really being overblown at this point.

I think we're making major steps towards the regular -- the -- even to trade war to make it fair trade, actually. So I think we're making some good steps.

There are going to be some winners, Neil. There's going to be some losers. But I don't think it's going to derail the global economy anytime soon.

CAVUTO: All right.

FLYNN: And I think the U.S. is going to come out winning this thing.

CAVUTO: All right. We shall see.

Phil Flynn, oil analyst extraordinaire in Chicago, he's called every little twist and turn in this oil market.

All right, we have a lot more coming up, including what could be happening tomorrow.


CAVUTO: All right, count Adam Schiff among those not too pleased with the president's targeting of six former Obama intelligence officials, saying right now: "Politicizing security clearances to retaliate against former national security officials who criticize the president would set a terrible new precedent. An enemies list is ugly. Wake up, GOP."

This is big.

More on that tomorrow.

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