Will 'the resistance' continue in the New Year?

This is a rush transcript from "The Ingraham Angle," December 26, 2017. This copy may not be in its final form and may be updated.

KATIE PAVLICH, GUEST HOST: I'm Katie Pavlich in for Laura Ingraham and this is "The Ingraham Angle" from New York.

Washington may be taking a holiday break, but the news is not. We've got so much good stuff for you tonight. Governor Jerry Brown is acting like the king of California, practically making up his own immigration law and pardoning felons said to be deported.

President Trump is putting his money where his mouth is and slashing U.N. funding after that disgraceful vote against the U.S. over recognizing Jerusalem as the capital of Israel.

And a blockbuster new report shows why it is so hard to drain the D.C. swamp, with some bureaucrats set to make more money than senators.

We begin with the president launching a scathing new attack on Twitter this morning. He called that infamous Russian dossier bogus and a pile of garbage used by a tainted FBI to target the Trump campaign. Is he right?

Let's asked our guests, in Houston tonight is Horace Cooper, a co-chair of Project 21, and in Washington is Democratic strategist, Richard Goodstein. Thank you so much, Gentlemen, for being here tonight.

So, there are serious questions about how the FBI used this dossier. We have Andrew McCabe now, the former deputy director, going to retire, saying that he is not going to verify what was in the dossier, but also said a lot of it is unverified. Horace, what is your response to that?

HORACE COOPER, CO-CHAIR, PROJECT 21: This is the problem. It appears that every single claim that was put forward in this matter is falling apart, and for the federal government to bring these claims forward and go forward with an investigation, even preliminarily.

This is the kind of thin read that if they went into a federal court, and ask a judge for permission, the judge would tell them, this is not sufficient to go forward with an investigation.

This is ridiculous and if it weren't for people like Sara Carter, I don't know how we would have found out the truth since the mainstream media isn't doing its job.

PAVLICH: Sara is an incredible reporter. Richard, what about that? I mean, there are serious questions about how this dossier was used. I think we need to take a step back and go back through history a little bit.

When these allegations were being shopped around to the mainstream many reporters in the fall of 2016, many of them rejected the dossier out right because it was unsubstantiated, The New York Times, CNN, a number of them.

And then when BuzzFeed published it, they were serious questions in the journalism community about whether that was the ethical thing to do. Are you concerned about this dossier being used by the FBI to target American citizens working on a transition team?

RICHARD GOODSTEIN, DEMOCRATIC STRATEGIST: You know, Katie, Donald Trump should thank his lucky stars for the FBI. He would not be president of the United States but for James Comey insinuating himself in the campaign twice adverse to Hillary Clinton and never breathing a word of what the intelligence community knew, which was that the Russians were trying to help Donald Trump. So, the suggestion that somehow the FBI was looking to kind of in favor of Hillary, that is delusional, I'm sorry.

PAVLICH: But what about the text messages that we've seen going back and forth between a lead FBI attorney and a lead intelligence officer saying we need an insurance policy just in case President Trump gets elected? What about that?

GOODSTEIN: Ted Cruz call Donald Trump a pathological liar and utterly a moral. Marco Rubio called him a con artist. The notion that people were calling Donald Trump names was not unique to people in the FBI.

PAVLICH: Those questions about whether the FBI actually took action and whether the insurance policy was the Russian investigation. Horace, I want to go back to you. There are questions about accountability here.

The American people are wondering after eight years of the Obama administration using federal government agencies to go after political opponents, whether we will ever see anything happen?

We have Representative Republican Francis Rooney calling for a purging of the FBI, we will listen to that and then we'll get your response.


REP. FRANCIS ROONEY, R-FLA.: I'm very concerned that the DOJ and the FBI, what do you want to call it deep state or what are kind of off the rails when you look at what that Strzok guy was texting, you look at the (inaudible) guy talking to the dossier, Clinton op research people.

Then this McCabe guy's wife takes $600,000 from Clinton related sources while she is running for state senator. I would like to see the directors of those agencies purged it and say, look, we've got a lot of great agents, a lot of great lawyers here.

Those are the people that I want the American people to see and know that good work is being done, not these people who are kind of a deep state.


PAVLICH: Horace, your response?

COOPER: Here's a fact. Sessions, the attorney general, needs to bring in the new FBI director, and he needs to say, I'm going to prepare a memorandum and it is a memorandum instructing the FBI that we are going to depoliticize investigations.

In the wake of Ted Stevens' phony prosecution, Eric Holder had to call and his prosecutors and the FBI, and redirect them on how to carry out their investigations. Something very similar needs to be done here. It is it pretty clear that this investigative team has gone off the rails pursuing political agendas rather than actually trying to uncover criminality.

PAVLICH: Richard, what about that question? If you look at Andrew McCabe's testimony, according to lawmakers who were in the room last week during his closed-door testimony, they talk about how they moved away from collusion when it comes to looking at the Trump campaign. If that is the initial issue, and if Democrats are concerned about democracy as they claim, why are they not concerned that this has gone so off the rails?

GOODSTEIN: For the following four reasons. The Russians offered to help the Trump campaign. Donald Trump Jr. said, "We love it, yes." The Russians proceed to help through WikiLeaks and Donald Trump, a hundred times mentioned during the campaign WikiLeaks.

And we know that people very close to now President Trump said in advance of the Podesta emails coming out, they were coming out. When did they come out? An hour after the "Access Hollywood." All of that is smoke, Katie. I mean, do we know yet for sure whose fingerprints are on that? No. But as regards --

PAVLICH: It's been a year? How much time do you want?

GOODSTEIN: The dossier did not force Michael Flynn to plead guilty. The dossier did not force Papadopoulos to plead guilty. The dossier is not what got Manafort in the hot seat --

PAVLICH: Once again, Horace, did any of those guilty pleas or indictments have anything to do with collusion?

COOPER: They have nothing to do with collusion. In fact, everyone should know that the details of Michael Flynn's conversations being put forward in the media was in fact a crime and there has been no investigation of that.

If anything, that Mike Flynn has pled guilty to had anything to do with collusion, we would have known it during the plea agreement. Nothing was like that that was said and there is nothing about the Paul Manafort indictment that is in any way related to collusion.

Nearly a year has gone by, we have seen nothing but an investigation that seems to be investigation for investigation's sake.

PAVLICH: Richard, quick last word to you at then we got to go.

GOODSTEIN: Collusion is in your face. If a crook that got stolen goods, says, would you like them, and you said, would you -- I will take a look at and the higher-ups said, let's see more, that is what Donald Trump and the presidential campaign said, Russian, if you have more leaks, let's have them.

PAVLICH: Well, you know, last time I checked, it was a Hillary Clinton campaign that paid for the dossier, which is actually connected to Russians. So, on that note, this is not going away as we know it. Happy New Year to you guys, thank you so much for coming. Appreciate it.

Here is something Laura has been telling you about for weeks. Democrats will be turning to sexual misconduct allegations to try and dump Trump. Now that allegations of collusion with Russia are going nowhere, but now the chatter and debate is almost intensifying by the day.

Let's discuss that prospect with Erin McPike, the White House correspondent for "The Independent Journal Review." Erin, thanks so much for being here. We appreciate it. So, we have heard a lot of the last few weeks about President Trump potentially firing Special Counsel Robert Mueller. The White House is vehemently denying that claim. Why do we keep hearing about it?

ERIN MCPIKE, WHITE HOUSE CORRESPONDENT, INDEPENDENT JOURNAL REVIEW: Why do we keep hearing about the White House going on this rampage? Look, you know, I think a number of Democrats -- sorry, Katie, I have an echo in my ear -- Democrats clearly --

PAVLICH: I want to see if that is fixed for you, Katie. Little technical difficulties. Are you all right?

MCPIKE: I'm good.

PAVLICH: OK. Do need to question again? Let's change topics. Let's go to 2018 and how Democrats will play this. We've heard from the White House that the president has no goals of firing Special Counsel Robert Mueller. Despite those claims, we keep hearing from Democrats on the Hill that he might. How is the White House reacting to that and what are you seeing on the ground going into 2018 in terms of the strategy?

MCPIKE: Katie, a lot of the Democratic strategists that I talked to do not want to be pushing impeachment and that is because when you look at the seats the Democrats need to win in order to flip the Senate, there are a lot of seats they need to hold that are very red states.

That's West Virginia, Missouri, Indiana, North Dakota, and then they also need to win a couple of seats, and that's in states like Arizona and Tennessee, and impeachment is not going to play there. The specter of impeachment isn't good.

And independent voters won't go for that. They want to see Democrats really trying to go for things like infrastructure and working with Republicans on something, infrastructure chief among those. We know that impeachment is not going to play.

PAVLICH: You know, we are based in Washington. I'm based in Washington. The momentum is on the Republican side. Is there pressure on the Democrats to come to the table with something in January especially when it comes to big project like infrastructure?

MCPIKE: I do think infrastructure is the big thing, but look, the tax reform bill that just passed is still not very popular. Republicans obviously are going to be going on a tour of the country to try to sell tax reform and Democrats have had the upper hand there.

It did pass. There is going to be some momentum from Republicans. But Democrats want to keep that bill as unpopular and their messaging has been better for the past couple of months than Republicans, but they want to keep pushing that message with the American people.

PAVLICH: What about the counties, Erin, the hundred plus counties that switch from Barack Obama blue to Donald Trump red in the last election? How are Democrats targeting those voters and are they seizing on issues like the economy, where the momentum is on the Republican side or are they going with more of these issues of sexual misconduct and the Mueller investigation and the Russia collusion allegations?

MCPIKE: I think the biggest message that you will see from Democrats is that they will say that Republicans haven't kept their promise, simply that this tax reform bill will add to the deficit, at a trillion dollars to the deficit, and that means that the Republicans just haven't been truthful with what they have been trying to push on Capitol Hill.

I think that is going to be a bigger message. Sexual misconduct will play in primaries, sure, it will be an animating cause for Democrats with their progressive activists and with women, but I don't think that is going to be the biggest message of next year.

PAVLICH: What about the numbers? The Republicans have very little wiggle room when it comes to passing their agenda and the Senate. Democrats have their eye sight of the Tennessee Senate race, they are going after Arizona. How are voters feeling about 2018 and one of the big topics there?

MCPIKE: You know, Katie, Arizona I think is the biggest one. Tennessee, I don't think at the end of the day will be in play as much. What you are seeing from (inaudible), that Democratic congresswoman who is formally progressive, she's sort of moving into the middle.

She is trying to cast yourself as a moderate, and she keeps saying that she will be talking about Donald Trump in her Senate race. That she wants to talk about tax reform and infrastructure, some of those kitchen table economic issues, that's obviously the big message of the year.

PAVLICH: It's going to be an interesting 2018, for sure. I'm sure we will see you on the White House and on the road. Thank you so much, Erin. Really appreciate it.

MCPIKE: Thanks, Katie.

PAVLICH: Well, another Trump hater is California's governor who apparently learned nothing from the killing of Kate Steinle. We will tell you about how Jerry Brown turned a Christmas tradition into an opportunity to keep immigrants convicted of felonies on the streets of his state.


PAVLICH: The California governor, Jerry Brown, just took another swipe of the president's crackdown on criminal immigrants. Brown, a Democrat, over the weekend, pardoned a pair of immigrants convicted of felonies to try to save them from deportation. One of them guilty of a gang-related weapons charge. Can President Trump stop the golden state from becoming a sanctuary state for such felons?

Joining us now for a debate from San Diego is John Cox, a Republican candidate for governor, and in Fort Worth, Texas, Francisco Hernandez, an immigration attorney. So, Francisco, I want to start with you to lay the legal ground here. I think people have a lot of questions about how a pardon from a state governor for state crimes shields an immigrant with a felony from deportation, which is a federal responsibility.

FRANCISCO HERNANDEZ, IMMIGRATION ATTORNEY: Well, because he pardoned the underlying offenses, which is about as effective as President Trump pardoning Yosemite Sam in Arizona. You can't pardon somebody who didn't admit they have done something wrong, but bottom line, it doesn't matter. We've got the resolve this issue if we are talking the difference of deporting somebody who is admitted to a criminal offense --

PAVLICH: Specifically to the felony here, I mean, people really have questions about why is it that the state governor can pardon these crimes. That is something governors do all the time, but how does that shield somebody from a deportation?

HERNANDEZ: It may or may not. It doesn't matter.

PAVLICH: It does matter.

HERNANDEZ: Arizona, Georgia passing these state laws --

PAVLICH: We are going to go for John Cox. You are running for governor in California. Does it not matter?

JOHN COX, R-CANDIDATE FOR CALIFORNIA GOVERNOR: It matters. It matters, Katie, as you said because the first job of any governor is to protect the people, and what Jerry Brown continues to do, mismanaging the state, and expose the people of California to more danger.

You know, the rule of law is sacrosanct, Katie. It's a thing that protect us. It's the thing that makes us that we don't live in chaos and we don't live in terror of criminals roaming the streets.

Now I am not saying that they are roaming the streets, but my platform is to protect the people of the state, absolutely. And you don't do that by running gambits around federal law, by pardoning people without a reasonable justification.

PAVLICH: Francisco, question for you -- Francisco. Should the governor of California be making decisions for the people of his state when it comes to allowing felonies -- felons back out on the street, to get back at Donald Trump? Is that really the way he should be running the state?

HERNANDEZ: You are giving him the victory. He cannot pardon a federal -- it doesn't matter what he does on state law. He can pardon -- it doesn't matter.

PAVLICH: Can the federal government still deport this guy?

HERNANDEZ: Just because he pled guilty, this guy, Cox, is running for governor against them, that's the best thing he can do?

PAVLICH: Francisco, I want your legal immigration attorney. I want you to answer your question. Can the federal government, through immigrations and customs enforcement, still deport this guide based on his felony weapons charges?

HERNANDEZ: Yes, absolutely.

PAVLICH: John, now you can respond?

COX: Listen, Katie, I'm a businessman -- excuse me, may I respond?

PAVLICH: John, go ahead.


PAVLICH: Francisco, let John respond. John, go ahead.

COX: Excuse me, thank you, Katie. I'm a businessman, Katie. I've got to solve problems and I've also got to make sure the rules are enforced. What Governor Brown is doing this kind of action is sending a message to people, frankly, people who are already in prison and are wondering why they aren't being pardon, as well.

You know, he is sending a message that the rule of law doesn't matter and the thing that separates us from a lot of countries around the world, Katie, that are in chaos, that are not successful, is that in this country, we enforce the rule of law.

This is why making California a sanctuary state is so unproductive. I am a businessman, I have to solve problems. We have to actually address the problem of illegal immigration and protection of our citizens.

We are not going to do that as long as we have politicians, crash politicians like Jerry Brown and frankly, (inaudible) --

PAVLICH: Back to you, Francisco. How is it that states like California and cities, sanctuary cities, are still getting away with --

HERNANDEZ: There is no such thing as sanctuary cities --

PAVLICH: Yes, there is. San Francisco, California just is trying to be a sanctuary state.

HERNANDEZ: The federal government can take these folks right back right now. We are so intent --

COX: You should tell -- Francisco, you should tell that to the family of a young woman who was murdered in Northern California because the authorities there did not inform the federal authorities when they released a guy from prison, from custody --


PAVLICH: OK. I'm going to interject and ask Francisco another question. We all know about that case, we are going to move onto another topic. Francisco, is this a good use of resources from the state government to be using pardons to pardon immigrants who have felony records?

HERNANDEZ: The pardon does not matter. Let's get on --

PAVLICH: But detail wise, why does it not matter?

HERNANDEZ: I am here for the 11 million people who committed zero offenses, paying taxes --

PAVLICH: We are not talking about that. We're talking about two immigrants yesterday who were pardoned by Jerry Brown -- maybe not. They are being protected by a state that won't turn them over to ICE.

HERNANDEZ: We are letting the tail wag the dog.

PAVLICH: OK. Over to you, John. It looks like you need to respond.

COX: We are letting dangerous people out to hurt people in the community. We have got to make sure that the rule of law is enforced. We have got to send a message to everybody that the rule of law is going to be enforced.

If I am elected governor of California, it will be, Katie, and that's what the first rule -- and that's the first role of a governor, to protect the people and Jerry Brown is leading the people --

PAVLICH: Francisco, quick last word to you.

HERNANDEZ: Public safety.

PAVLICH: Quick last word to you, Francisco.

HERNANDEZ: My goodness. You are running for governor, yes, stand for the rule of law. Don't take on immigration issues, federal issues, that you've got nothing to do with.

COX: I'm not. And Jerry Brown is inserting himself by using the pardon power. That is the problem. He is inserting himself in the situation a situation.

PAVLICH: So, we know that the governor pardoned these two immigrants. They had criminal records, they did their time, and now Francisco says they can still be deported under federal law. So, we'll see where it goes from there. Thank you both for coming on the show. I appreciate it.

Another Trump promise kept. He said the U.N. would pay for its vote condemning the U.S. and boy, he wasn't kidding. We'll tell you how the president struck back next.


PAVLICH: President Trump is proving himself a man of his word on the world stage. He quickly delivered on a promise today, slashing funding for the United Nations. We'll analyze that in a moment, but first, Fox News reporter, Ellison Barber, joins us in Washington with the details on President Trump's move.

ELLISON BARBER, FOX NEWS REPORTER: Good evening, Katie. On Sunday, Ambassador Nikki Haley announced a drastic cut to the United Nations budget for the next two years. The U.S. says they negotiated a reduction of over $285 million for the U.N.'s 2018-2019 budget.

Haley called it an historic reduction in spending and a step in the right direction. Haley went on to say, quote, "The inefficiency and overspending of the United Nations are well-known. We'll no longer let the generosity of the American people be taken advantage of or remain unchecked."

On Thursday, the general assembly overwhelmingly approved to condemn the U.N.'s decision to recognize Jerusalem as the capital of Israel. Only nine countries voted against the resolution, 128 in favor of it. President Trump threatened to cut aid, Haley said she would take names.


NIKKI HALEY, U.S. AMBASSADOR TO THE UNITED NATIONS: The United States will remember this day in which it was singled out for attack in the General Assembly for the very act of exercising our right as a sovereign nation.

We will remember it when we are called upon to once again make the world's largest contribution to the United Nations and we will remember it when so many countries come calling on us, when they so often do, to pay even more and to use our influence for their benefit.


BARBER: Two weeks ago, the AFP reported that the U.S. was seeking a $250 million cut to the U.N.'s budget. But many say the announcement from Haley, the timing in particular, is an obvious message in response to the General Assembly's Jerusalem vote.

The U.N. secretary general proposed a $200 million cut to the budget back in October. Early this month, the AFP reported that the U.S. and the European Union wanted additional cuts. The U.S. is the U.N.'s biggest financial contributor. The money from the U.S. makes up 22 percent of the U.N.'s regular budget -- Katie.

PAVLICH: Thanks, Ellison. Joining us now for analysis from Los Angeles is Lisa Daftari, the editor-in-chief of the "Foreign Desk News," and in Washington, Hamza Khan, a Democratic strategist.

So, Lisa, let's go to you first. You have covered the U.N. You have spoken at the U.N. Is the timing here really about the Jerusalem vote or is it about President Trump's promise to make sure American taxpayer dollars are spent efficiently at the United Nations?

LISA DAFTARI, EDITOR-IN-CHIEF, "FOREIGN DESK NEWS": It might be a bit of both. So, the Jerusalem vote might be the proverbial last straw. But this is something that President Trump and then-Candidate Trump has been campaigning on and promised to make these cuts, to cut the fat, to not to stand by and allow the status quo bureaucracy to continue, particularly at large bodies like the U.N. or NATO.

He has emphasized that he has wanted other nations to be reciprocal, or to pay their share, or to at least echo and stand up for the right. The United States, not undermining the foreign policy, and at least be on board with what the U.S.' interests are.

PAVLICH: Hamza, you say that pulling funding is a bad idea and that it sends a message to the U.N. that the U.S. doesn't really care about it. Is that true or is that we just want our money spent more efficiently? Let me first start by saying thank you for being here tonight. And, frankly -- Thank you for coming.

KHAN: Thanks again. This is really an interesting message to be sending from the White House and from Nikki Haley. It's as if the Grinch who stole Christmas is happening right in front of us, right in front of our eyes. In terms of the money that is being taken out of the budget, look, $285 million being pulled from the U.N. funding is a drop in the bucket for the U.S. overall foreign aid spending. We spent 1.3 percent of our entire budget on foreign aid, including military aid to other countries. So for us to be pulling just a little bit of money like $285 million doesn't really make that much of a difference in the long run.

What it does send a message, though, to our allies and to the rest of the world is that if a country decides to go out and use First Amendment freedoms of their own and speak out against what they feel to be American aggression or American interests that don't line up with American values, that the Trump administration will go out of their way to punish them for that.

PAVLICH: What about that, Lisa. Isn't that the point? U.S. are not a charity, right? They are given for a reason.

LISA DAFTARI, EDITOR-IN-CHIEF, THE FOREIGN DESK: No. It's funny when he said it's the Grinch who stole Christmas. It's actually a Christmas gift to all taxpayers not to be giving out this money whether it's a drop in the bucket or not. This is a symbolic cut, meaning that the U.S. will no longer tolerate other countries taking advantage of our generosity, whether it's at the U.N. or anywhere else.

PAVLICH: Lisa, follow up on that. There has been all this talk about how this is the United States putting their leadership aside in the world, taking a step down from the world stage. Is that how you see it or do you see it as the United States actually standing up for what it believes in?

DAFTARI: This, I would say, is another step in the direction of leadership for the United States. To say that we are not here to have our policies undermined with a bogus vote at the U.N., yes, we pay the lion's share, the majority of the budget they are. And we allow -- look, for years, we've allowed the clowns and dictators from around the world, whether it is Gaddafi or Ahmadinejad or Castro to come and parade there and to have these anti-U.S. propaganda at the podium, why is it not the right move for the U.S. to stand up for what we believe in and to have our money and our aid, whether it is at the U.N. or foreign aid or anything else, why not use that leverage to echo what we stand for?

PAVLICH: Hamza, speaking of what we stand for, Nikki Haley made it very clear that we are going to be moving our embassy to Jerusalem no matter what the U.N. thinks. We now see Guatemala is doing the same and a number of other countries are set to announce their moves, as well. How is that the leadership of the United States not paying up on the world stage?

KHAN: In terms of the leadership of the United States not paying off on the world stage when it comes to moving the capital of Jerusalem, or recognizing, rather that Jerusalem is the capital of Israel, there is no argument that Jerusalem is the eternal capital of the Jewish people. That's not really up for debate here. What the question of the matter is really is what are we doing in terms of negotiating between both parties in good faith to help establish a decision and a framework for diplomacy going forward that allows for Palestinians and Israelis to coexist in their homeland?

PAVLICH: Speaking of operating and negotiating in good faith, Lisa, are the Palestinians really a partner that the Israelis and the international community can depend on to be a good faith partner in peace?

DAFTARI: I think, Hamza, you have some great ideas, but the reality tells a different story. At the U.N., almost half if not more in some committees of the resolutions the recommendations are about Israel. When they talk about violence on the Gaza Strip, Hamas, a terror organization recognized by the United States terror organization, is not once mentioned in those resolutions. Instead it's about the violence of the Israeli soldiers.

The news here is that Israel is our biggest ally. It's geographically in the region, it's politically in terms of intelligence, in terms of technology, they provide so much for the United States. So this is not just something that we can just say, this vote was something that -- it's about the future of the Palestinian people with the Israeli people. What have we lost here? What have we ever had in terms of peace talks? Rabin and Arafat, they shook hands on the White House lawn under Bill Clinton's watch, and what does he get from that? I don't know what is really being disrupted here. I think if anything this is a great starting point. As you said, Hamza, Jerusalem is the capital of Israel and this is a great starting point. Let's see where we go from here, from a factual starting point.

PAVLICH: Hamza, in terms of the priorities of the U.N., obviously funding from the United States and other countries drives the priorities. When it comes to the biggest issues in the Middle East, why is it that the U.S. is so focused on the Israeli-Palestinian conflict when right next door in Syria you have 100,000 plus people who are murdered, civilians in a civil war with Russia being involved? Why is it that they are so much focused all the time on the Israelis rather than other issues going on in the Middle East?

KHAN: That's a great question. And I can't answer it for sure as to why these other countries have decided to make Israel the focus of their foreign policy at the United Nations. But what I can tell you for a fact is it's incredibly important for us to recognize that all these countries do apparently care so much about this small conflict in the Middle East, and small only in terms of when we think about how many people have been killed in it since 1948. When we look at the greater impact on what it's had on global politics across the world, it's obviously been -- it's obviously had a great impact across the planet.

PAVLICH: Lisa, a quick last word to you on the U.N. and the overall issue of moving the embassy.

DAFTARI: Yes, I don't think that these other nations care about peace between the two countries. I think they care about using their influence. The Arab countries influence at the U.N. to incriminate Israel further. And I think at least in this country we can come to a consensus that what President Trump did is a wonderful starting point for our biggest ally in the Middle East to declare the truth that Jerusalem is the capital of Israel, what many presidents, both Democrat and Republican, have wanted to do. It's great starting point. And I think that is where we will have the most beneficial outcome.

PAVLICH: Tonight we had an agreement on the panel that the capital of Israel is Jerusalem, so I think that we can end on that high note. Thank you both for coming. Lisa, Hamza, really appreciate it.

KHAN: Thanks for having us.

PAVLICH: The U.N. isn't the only giant bureaucracy the president is trying to change. A new report shows why D.C. swamp creatures may have even more power than your elected representatives. A look at Washington salaries that may shock you coming in.


PAVLICH: The economy is much improved for blue-collar workers under President Trump's leadership, but another group that continues to do astonishingly well are employees of the federal government. According to a new report by the watchdog group Open the Books, the federal government pays its workers $1 million per minute, $66 million per hour, and $524 million per day. Great paycheck. And at 78 federal government agencies, the average employee compensation exceeded $100,000 in 2016. All of that is being paid for with your tax dollars.

So for more, let's bring in from Chicago the CEO and founder of Open the Books, Adam Andrzejewski. Right, Adam Andrzejewski, is that your name?


PAVLICH: All right, so let's go through these numbers one more time. Astonishing, by the minute how much are we paying federal employees for their time?

ANDRZEJEWSKI: Well, federal employees, the bureaucracy, is paid $1 million a minute. And you're exactly right, it's a half billion dollars a day. But we also found, when we not only opened those books, but we audit them, our team of auditors found that there are 30,000 federal bureaucrats that out earn every governor of the 50 states at $190,000 a year. That is their salary. We also found that if you are a highly compensated federal bureaucrat, and we define that as over $200,000 a year of salary and bonus, the number of federal employees have increased over the course of six years by 165 percent.

PAVLICH: So what about that? The president has been criticized for not filling all the positions in the federal government. Can the federal government function without filling all these positions, and would it actually make it more beneficial for taxpayers?

ANDRZEJEWSKI: So the president has led on this with his own payroll at the White House. He is running a leaner payroll than at the same point as during the Obama administration. He is down 100 positions and we forecast that would save taxpayers $20 million over the course of his four years.

The first lady is also leading on this. She has a payroll of five employees versus 24 employees as former first lady Michelle Obama had. But here's the point, Katie. Everybody watching the program here tonight needs to come to OpenTheBooks.com. We have mapped the 2 million federal bureaucrats by zip code so everyone can see in their own zip code a small piece of the swamp, a small piece of the federal bureaucracy. All of us need to give it oversight, and when we get that oversight we need to have the transparency impact. We have to ask our member of Congress what they are doing to squeeze out the bloat in the federal bureaucracy.

PAVLICH: So it's not just inside the beltway, it bleeds itself out into the rest of the country as well. You talk about oversight and transparency. The numbers on bonuses are absolutely incredible -- 330,000 bonuses for $351 million, total federal bonuses $1.5 billion. And none of that is disclosed, essentially, or a very small portion.

ANDRZEJEWSKI: Right, only one-third of the total bonuses are actually disclosed. And that is a real problem. It's a transparency problem. Because the unions, the federal unions, negotiated into their contract that the performance bonuses, that's $1.1 billion worth of performance bonuses, aren't disclosed. They aren't disclosed to we, the people, in who gets what in terms of performance bonus.

And we show that small federal agencies, there is an agency out in San Francisco, California, they only employ 300 people, but three out of the four largest bonuses last year, they had three of them. These are not rocket scientists. They are not curing cancer. They are a land management organization, and the top bonus in the entire federal system went to their human resource manager. It was $141,000.

PAVLICH: How is that? How is it that this is negotiated at such a high rate? As we said at the beginning of this segment, many of these bureaucrats are being paid as much or more than elected senators. I mean, how does that process work and how did they get to those numbers?

ANDRZEJEWSKI: Well, it's not only the compensation on salary and bonuses but it's also other perquisites, like paid time off. So if you are federal bureaucrat and if you hit your three year anniversary, you stand in line to get eight and a half weeks of paid time off. It's 10 holidays, 13 sick days, 20 vacation days, 43 days a year of paid time off. That is a perk that costs taxpayers every single year $22 billion.

PAVLICH: It sounds like European-style living and working to me inside the beltway and outside, as you have pointed out. The 2018 elections are coming up. Republicans have been running for years on cutting spending. Spending cuts are always very difficult, but if you could advise politicians and congressmen on Capitol Hill who are worried about this issue, what would you say to them in terms of how to make sure that taxpayer dollars aren't being abused in this way?

ANDRZEJEWSKI: Two cuts for $2 billion, really quickly. End the bonus program. It's $1.5 billion. Then, Katie, and this is bipartisan, federal P.R. officers. There is 3,500 of them. The line item in the budget every single year as a half a billion dollars on salary and total cost, and that should be cut, as well.

PAVLICH: OK, well, Adam, thank you so much for your expertise. We have a lot of work to do. Have a good one page

ANDRZEJEWSKI: Thank you for our interest in our work.

PAVLICH: Thank you.

Swamp or no swamp, the president seems to be learning how to navigate Washington after the big tax cut victory. But there are some tricky issues ahead in the GOP agenda for 2018. We'll look at that with strategy guru Ed Rollins next.


PAVLICH: Republicans head into 2018 unified and on a roll after the big tax cut victory. But the president is pumped tweeting tonight, "All signs are that business is looking really good for the next year only to be helped further by our tax code bill. Will be great year for companies and jobs. Stock market is posed for another success."

But next year's agenda and Congress could divide GOP leaders and conservatives over such thorny issues as DACA amnesty and entitlement reform. Let's look into our crystal ball with political strategist Ed Rollins who has served in the administrations of four Republican presidents. Thank you so much for being here tonight.


PAVLICH: So we have on the McConnell Senate side talk about DACA, talk about Dodd-Frank. On the House side with Paul Ryan, he sees this as an opportunity with the momentum from tax reform to work on entitlement reform.

ROLLINS: There is momentum in the tax bill. Paul Ryan has always had an agenda to basically repeal some of the entitlements. Unfortunately there aren't enough senators to do that with the two vote margin that we have lost the Alabama seat, and two senators who are not well, McCain and Cochran. The likelihood is you are not going to get entitlement reform in the Senate.

So I would argue that things like infrastructure that the president wants to do, he may get some bipartisan support. DACA will basically be the immigration reform part of it, is a lot to fill up a year. And we still have big budget battles ahead.

PAVLICH: But going into the 2018 elections, as you know, elections change agendas on Capitol Hill. Is DACA really something that President Trump is going to want them to go for considering his base is against it?

ROLLINS: The truth of the matter is he has to get something on the other side. He can't give them DACA, which is what Democrats want, without some basically immigration reform, a wall, a step towards a wall, or something to equal that.

One thing Trump has done is he's kept his promises. This was a big promise. The promise was not to keep DACA. The promise was to build a wall. So the Democrats have to get something.

One of the things that happens -- I ran the congressional committee in addition to the White House political director -- in the next month, members of Congress are going to go back home and they going to start doing polling. And they are going to discover that their numbers aren't good.

PAVLICH: Congress is unpopular? I did not know that.

ROLLINS: They don't believe that's their own fault. The president may be unpopular, they may believe the other side may be unpopular, but all of a sudden it changes the whole mindset. And then they get into a reelection mode. If they do, the reality is Republicans can do OK. They could hold where they are today and maybe even add a little bit. The likelihood is that they don't, they get caught off guard and they could lose some seats. And if they lose some seats --

PAVLICH: But what about Democrats in vulnerable red districts? What about infrastructure spending? Is not something that we are really going to see Democrats come to the table on, or can they really go into a 2018 election only resisting the president?

ROLLINS: I think they would like to go in resisting, but there such a need for infrastructure across the country. It depends on what the plan is and what's it going to cost. I think the key thing here is that is one thing they probably could get done. It could have gotten done a year ago, and the reality is they may be able to get it done. The other stuff is all tussling.

PAVLICH: One of the issues with tax reform was the spending aspect of this. And there had been concerns voiced by people in the House, Republicans in the House and in the Senate over the issue of spending that was not addressed this time around. Is infrastructure going to be halted by the spending issue?

ROLLINS: The critical thing here is to get a budget through. Because of the way it is set up if you want to increase the defense appropriations, you've got to offset that. Democrats want more entitlement spending. So I think the key thing is, what is the factor that is going to be there and how do you fund this infrastructure? Is it a lot a private money, is it state money, is it federal money? If it's all federal money, that's not going to go anywhere. If there's some negotiation going on there, I think that's --

PAVLICH: We have seen the administration try to pave the way by making the licensing and the permitting process much easier. But in terms of reconciling the priorities of the House, the Senate, and the White House, how does the president maintain his agenda in an election year when each individual district is going to have its demands?

ROLLINS: He has the big megaphone and he can basically go out and create a lot of chaos or a lot of basically positive reinforcement. His messaging is going to be very, very important. His political operation has to increase and be more geared to going out and helping the senators and the incumbents that are in trouble.

PAVLICH: Do you think he should get involved in the races coming up?

ROLLINS: You can't blame Virginia and you can't blame Alabama on him. In both cases there were different circumstances. He can set a national tone, though. I think the national tone is keep talking about the economy. He has to keep selling the tax bill. The tax bill, obviously, is something that is going to be more popular as people understand what's in it. I think to a certain extent that is what Democrats are going to try put around his neck, and he basically can sell that and sell that effectively.

PAVLICH: OK, well, it's going to be a wild ride. Another election, here we come.

ROLLINS: Absolutely.

PAVLICH: Ed Rollins, thank you so much for your time.

ROLLINS: Happy holidays.

PAVLICH: You too.

Up next, the California community devastated by recent wildfires found the true meaning of Christmas spirit this holiday weekend. Stay tuned.


PAVLICH: Before we go, the Christmas spirit proves yet again that it endures no matter the difficulty or hardship. One Northern California community recently destroyed by wildfires still found reason to celebrate in a way many, probably think -- didn't think was possible over this Christmas weekend.


UNIDENTIFIED MALE: In Santa Rosa, out of the darkness, there is light, fueled by neighborly love, --



UNIDENTIFIED MALE: The spirit is really nice to have all of this happening. It makes you feel happy.

UNIDENTIFIED MALE: Hundreds of people have come home for the holidays to a place where no homes stand. But for four hours Saturday, coffee park had the old feel of Christmas, with a lights illuminating the darkened lots of homes now burned from existence.

UNIDENTIFIED MALE: It is all about cleaning up the devastation that they went through and giving them a chance to start over.

UNIDENTIFIED MALE: October 8th, the North Bay erupted in flames, fanned by gusty winds and fueled by brush. And 250 homes burned with losses estimated at nearly $10 billion. More than two months later, rebuilding has begun but many souls are still scarred from the loss.

UNIDENTIFIED MALE: When this community burned down, there was a lot of distraught people. They were emotionally torn, their spirit was lost.

UNIDENTIFIED MALE: Construction contractor Glenn Golati (ph) along with a half-dozen other cosponsors spent $50,000 to transform desolation into a Saturday night destination.

UNIDENTIFIED MALE: I work with a bunch of good contractors side-by-side, and we decided to bring a little Christmas cheer and a little happiness to the local community.

UNIDENTIFIED MALE: For one night, there was life and light, snow slides and Santa rides.

UNIDENTIFIED FEMALE: A sense of community, and we are all getting together and you can feel the love in this community in Sonoma County. It's really nice.

UNIDENTIFIED MALE: Even those who didn't lose last October are giving in any way they can to those who did.

UNIDENTIFIED FEMALE: It is the right thing to do. We were all affected by the fires. We just want to give back.

UNIDENTIFIED MALE: Is still painful.


UNIDENTIFIED MALE: Through pain, there is healing, and hope that coffee strong isn't just a saying, it's a state of being, as real as Christmas magic.

UNIDENTIFIED FEMALE: It's a redefined neighborhoods and what a neighbor is.


PAVLICH: An amazing testament to the season. Those people have been through so much. And we wish and pray that they can fully recover.

And finally tonight, Christmas is behind us, but New Year's Eve is just around the corner. So be sure to tune into Fox's "All-American New Years" show live from Times Square. It's going to be cold. Jesse Watters and Kennedy will be counting you down to 2018, and no doubt it will be a whole lot of fun. So check it out beginning at 10:00 p.m. eastern.

And that's all we have tonight. I'm Katie Pavlich in for Laura Ingraham. Pete Hegseth will be in this chair tomorrow for Laura, so be sure not to miss it. And now let's turn it over to Ed Henry who is in for Shannon Bream. Down to you, Ed.

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