still at 22,100. we understand that neil cavuto is not in today, he may have got an invite to the stuart varney compound which, i will point out, liz, myself or connell shane -- because we're filling in for them. connell: you talk about ratings gold, we'll check it out tomorrow. [laughter] thank you, ashley. good to see you, sir. we will have a busy couple hours. all quiet at the white house, i guess, but president trump has been making some noise there in new jersey, and on the next two hours of "coast to coast" we'll be talking about that and more. i am connell mcshane, and first up is the media prematurely predicting an end to the trump administration with all this talk in "the new york times" saying vice president mike pence is somehow running a shadow campaign. the vp calling that article disgraceful and and offensive. it alleged there are so many doubts over the current president that republicans like

tom cotton, ben sasse, john kasich and even, yes, mike pence, are quietly planning a run in 2020. now, if you're watching this show on friday, neil ran through a number of accomplishments that the white house has been pointing to in its first six months whether it be job gains, stock market gains, all that kind of thing. so our question to follow up on that given that this article has been written, was or is the president being counted out way too early? to start us off, charlie gasparino, fox business correspondent, here in the studio from. the independent women's voice, heather higgins, also here many our new york studios, and are from "the hill," editor-in-chief bob cusack from d.c. heather, there's been so many articles written even during the campaign that it's all over for donald trump, and although there have been moments where i think most of us would agree things have been messy during this -- [laughter] first six months -- you stay out of this gasparino -- [laughter] >> sorry, i just laughed. connell: president's been

written off so many times, maybe the premise of this article's doing it again. >> this is actually intentional, and i am in the weird position of somebody on twitter actually toted this all up, i'm apparently one of only 27 people who actually predicted that trump would win in advance of this. and on that list of people who were actually working for his campaign. the number's even smaller -- >> i was on the other side of that bet. >> people who are writing these articles and counting him out and saying all this is going on are the same people who have gotten it wrong every single time about whether or not what he says is going to sink his campaign or be a problem for him. connell: right. >> this is a tempest in the ea teapot. they can't -- teapot. they can't say that the economy's doing badly, that he's not fulfilling his campaign promises because he's actually done a lot of them. not legislatively -- connell: right. they can say no big things in terms of health care and all of that is legitimate --

>> but it's only six months, and he has to let congress work through its dysfunctionalty. connell: point taken, but the idea of people running against him, including the sitting vice president. >> i took a lot of heat on social media -- connell: you always do. >> i guess this was mild comparatively. basically saying the markets are up because investors say net-net no matter which way you put it -- and i made this case to neil too, but he disagreed with me -- net-net trump is better than hillary clinton. connell: he creates a better business environment. >> you know, either way. even if he does nothing, he's going to be better than the taxes, the regulations and all the other bad stuff that would occur under hillary clinton. that said, let's be real clear here. when you say these people, the people -- the reporter in "the new york times" who did that story, i don't remember him being a prognosticator. he's a reporter. connell: right. >> if you look at what he said in the story, he's pointing out, he's getting specific examples on why it looks like pence is covering his rear end and

thinking possibly of a run. and he laid it all out. it was a pretty compelling read. he started a fundraising -- connell: i want to ask bob about it just to get him into the conversation, and then we'll come back to heather. bob, you're the d.c. guy in the middle of all of this, and you know how things work down there. if that's true, i know the vice president's pushed back so hard, but is that sod that someone -- so odd that someone behind the scenes, even a vice president, would be preparing for the possibility that the sitting president maybe chooses not to run for re-election. what if that happens and he's not ready? is that so odd? >> no, politicians always thinking years down the road. pence would not be running against the president under this premise of the times story. others, i think there's very little doubt that trump -- first of all, i think he's going to run for re-election. michael bloomberg has said there's a 55% chance that trump would win re-election. but i do think trump will be primaried. it won't be, certainly, pence --

connell: kasich or somebody like that. he never denied it. heather was going to make a point. what was it? >> to clarify, these people was, indeed, a genrety about the editors -- generality about the editors at "the new york times" are wanting to run stories showing republican discord, etc. and they're doing that in part because they don't have stories about markets doing poorly to run instead. but larger point is everybody down in that swamp is a political animal outside of trump, right? and they are thinking about their long-term careers, and pence -- as his obligation is -- is thinking what happens if something happens and trump doesn't run. he needs to be prepared. the others are -- >> but that's the point of the story. and when you said messy, right? you said the trump administration -- that's a euphemism for the general dysfunction that we have here. connell: fair. >> and this is not good. by the way, there's no arguing with that. general kelly will tell you that. connell: that's why he's in the job. that's fine.

>> i disagree. >> well, then i guess if there wasn't dysfunction, ryan priebus -- reince priebus would still be the chief of staff. connell: what's the point though? >> the point is this, mike -- in i guess obama's first six months, you did not hear of joe biden setting up exploratory committees and taking the overt steps that mike pence is taking. you just didn't hear it. connell: well, it was a different environment. is that your point? >> yeah. >> there's no need to do that. >> this is a dysfunctional presidency. and before we attack this story, listen, i don't -- i beat up on "the new york times" all the time. i agree they're not giving him credit for the markets and and r the economy being better -- connell: i want to play something neil said on friday in a second, but, bob, is that a function -- as charlie suggests, there's that "newsweek" cover, by the way, where they called trump the lazy boy. >> that's bologna.

connell: here's a little bit of a taste of what neil had to say about this cover of "newsweek" saying, hey, trump's lazy, essentially. neil was to not happy with that take and gave his own take. here it is. neil: it's in a news magazine, and impressionable people who don't know anything about mainstream media bias might be led to the conclusion that the president is a total waste just like they might have been led to that impression in the first six months to one year of ronald reagan's administration when the media was similarly harsh and saying he was a guaranteed one-termer. just like they were similarly dismissive in the first year of abraham lincoln's administration saying he was losing the war and didn't have a clue. i believe lincoln did okay, i believe ronald reagan did okay. it is way too soon to say whether donald trump will do okay and be okay. but for me, this kind of treatment not okay. connell: so all of you had a lot to say about all that. i'll just read a a few of these

tweets that came into us, then we'll continue. k.m. tweeting the real lazy boy is "newsweek." the magazine can't spend its time covering all that the president of the united states has accomplished, so it makes a trash cover to sell. then lori: a lot of us that weren't trumpsters are thrill with what he's getting done. now, we did hear some like lois on facebook who said: neil, come off it already. i saw you to two times friday, then again saturday that's all you could talk about. he's not lazy, but he's crazy. and tammy: that is one of the most outrageous lies i've seen in the media. that's the one thing no one can say about trump, that trump is lazy. bob, just use that as a way to come back to the exact point that charlie was making, making the biden kind of obama comparison versus pence and trump now. how do you see that? is that a function of the media treating the obama presidency differently? in other words, the media being

unfair to trump as it wasn't to obama or just the circumstances being far different then than they are now? >> i honestly think it's both. i think the media -- the media had a rough 2016. we got it wrong, basically. we didn't try to answer the question who's going to win, and trump pulled off the shocker. but i also think too many in the media haven't done a reflection of why they got it wrong. and number two, you know, we're referees. unless you're a columnist, you can't be antagonist you can. connell: so they're missing, we haven't done enough self-analysis in terms of -- what are we missing? we don't know what we're wrong about? is that the point? people haven't look ared internally? >> yeah. one of the things, and personally when i got outside of the beltway, when i went to ohio two weeks before the election, i was like hillary clinton has no shot to win ohio. we have to get out of the beltway thinking. there was a group think that he had no chance, and that was wrong. >> yeah. but let's also dial this in a different way. "newsweek" has to sell magazines

or get clicks, right? so what it did was one of the most outrageous things to get a click. it basically lied, because we all know he's not lazy -- connell: a lot of things, but not lazy. >> so they lie, they exaggerate, they use hyperbole to get clicks because let's be real clear here, donald trump lost the popular vote. there's a business reason why left-wing tv and left-wing media is doing this. and one of the reasons is because 50% of the population or a little -- 47% of the population voted against him. he only got, what, 43% of the vote? i can't remember -- connell: it's kind of a different discussion, because -- >> remember, there's a business reason why that cover's out there, why msnbc is doing better, because there are a lot of people who don't like president trump. connell: no, i mean, i guess. your point, that's why the ratings are up in the far-left media. go ahead, heather. >> obviously, there's a business reason. and, actually, if one is a republican, one should hope that

the meme continues that trump is ineffective and all the antagonism to him, because if you're a republican, it's going to mean that the hard left continues to primary their own people k and it gives the republicans the better shot in 2018. it is, however, i think, missing what is going on through executive orders -- >> yes, i agree. >> -- through regulatory changes -- >> particularly regulation. >> there are a lot of changes and keeping campaign promises. remember, trump is going to run on i kept my campaign promises. that's what you can predict about 2020 -- >> how about the wall? >> i do want to say -- [laughter] >> except for the wall. >> no, whatever he does, he'll say he kept his campaign promise. >> he quoted something, he said something else to the mexican president. >> one of the things that is not analogous is biden was never the sort of person who was going to set up a fundraising committee and run for president. he was somebody who wanted to be anointed, pulled into it. >> maybe.

>> he certainly was not the sort of person who was going to go out and seek it, and there was to -- no assumption -- connell: well, he wants to run. >> if trump decides for some health reason or whatever that he doesn't want to do it again, pence will be the logical next nominee. connell: well, you know who else needs a logical next nominee? the democrats. we've never said who's the up and coming democrat who's going to -- that's the problem for the democratic party, you know? >> that's the unfairness of the media coverage, i think. it's not that trump is, you know, it's not unfair to do this story about pence thinking of running in four years. i mean, there's enough evidence there that you can clearly, you know, make that, those connections. clearly, kasich is running and some of the others are probably running too. what's unfair is what they leave out. they left out the fact that the markets and most sophisticated businessmen think this guy is better hands down -- connell: so that brings up kind of a final -- >> and the democratic party.

this is a party in dysfunction. it's so far left, it's almost -- the guys -- look who's running the democratic party. this guy, perez -- connell: running the dnc, but we don't know who's going to run for -- >> he's a quasi-socialist -- connell: tom perez is. >> he's running the democratic party. connell: finish this off for us, so who do the democrats have? we've been talking about the sitting president being primaried, so who do the democrats have, and do you think that there's a serious primary challenge at hand as a possibility? i know it's a long way off for this president because even though his base support has gone down, it's still fairly strong, right? >> yeah. and i think trump will be primaried if he runs again, and that'll be the first time since buchanan took on bush and weakened him, honestly. on the democratic side, i think it's going to be extremely nasty. sanders runs again, warren runses, biden runs, kamala harris. the democrats have to worry about getting younger. i think they might need a fresh face because the party, whether it's in congress or these people

who are considering running, it's old. and that usually doesn't work. >> but getting back to -- [inaudible conversations] >> their base is going to be one place, which is hard left, anti-trump -- >> right. >> and the swing that they're going to need is going to be going a lot of this is working. >> okay. >> right? and they're going to have a big challenge on the left. i think they're going to wind up getting their tail handed to them in '18, and that's going -- connell: the democrats are, in the midterms? >> the democrats are, and that's going to -- connell: real quick, charlie. >> "the new york times," does "the new york times" play to that base as a business decision and we get such skewed coverage over the next two years? i mean, that is really where the business story is. they see an opportunity in left-wing media. and "the new york times" is sort of starting to parrot that. listen, there's a lot of great reporters there. connell: no, i understand your point -- >> in a way that's very overt, you know? i know republicans have hated them from time -- >> no, no, no.

it is going to get worse before it gets better. connell: we've got to run. heather, charlie, bob, appreciate it. now, this leak crackdown we've been talking about so much, the media hunkering down on that because the question on, at the end of last week was would journalists be a target, maybe fear jail time themselves? we have a little bit of a clarification, i believe, on that. then, big u.n. win over north korea. kim jong un now is promising retaliation of the worst kind, so we'll talk about that warning after a quick break. we'll be right back. ♪ ♪ ♪

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on home and auto insurance. call for a free quote today. liberty stands with you™. liberty mutual insurance. >> one of the things we are doing is reviewing policies affecting media subpoenas. we respect the important role that the press plays and will give them respect, but it is not unlimited. they cannot place lives at risk with impunity. >> are we don't prosecute journalists for doing their jobs. we look at the facts and circumstances of each case, and we determine whether somebody's committedded a crime. >> you don't consider the publishing of classified information as a crime. >> well, chris, i don't think you can draw any general line like that. it depends upon the facts and circumstances. you know, generally speaking, reporters who publish information are not committing a

crime, but there might be a circumstance where they do. connell: so that is the deputy attorney general, the second man speaking, rod rosenstein. seemed to downplay the concern that the administration would look to lock up some journalists if they publish leaks. but to hear critics of the white house tell it, journalists should be fearing for their freedom after those comments on friday from the attorney general, jeff sessions. we bring in from the washington examiner, white house correspondent, sarah westwood. and from the media research center, dan gainor. so which side of this are you on, dan? i mean, where do you think the administration is heading, to sort of go after -- as we've seen in the past on both sides of the aisle -- journalists or just concentrate on the leakers? >> i think they clarified and said they're going to concentrate on the leakers. it is possible that a journalist could reveal classified information that would put american lives in jeopardy or really harm national security.

they might go after that journalist. but, by and large, what they're talking about is fixing the leaks. and the leaks exist right now because of the press wants to sink this administration. connell: but sessions did say, i mean, he a talked about media subpoenas on friday. you think that is fair game though, the idea, dan, that journalists should at least be looked into for what they publish? as chris wallace was getting at with rod rosenstein, what's the crime here, the publishing or the leak? media subpoenas gets a lot of reporters saying, uh-oh, wait a second here. >> well, you say it gets a lot of reporters saying that, but when the obama administration did it, nobody seemed to get upset. connell: they should though. no, i hear you, absolutely. i think people inside this news organization did get upset. your point's well taken. the idea that it should be fair on both sides and you should be focusing on the information rather than that messenger, sarah, of that information? what's your take? >> obviously, this is a really complicated situation for the trump administration because they already have such a tense

relationship with the press, and so many reporters are predisposed to believe that the trump administration wants to crack down on the free press. and so any move of that the department of justice makes that can be characterizedded as an effort to suppress the media, it will be presented that way to the public so that the trump administration, obviously, has to be careful how they go about this which is why what rod rosenstein did was so important on sunday. he clarified that's not the focus of the efforts. the focus of the efforts are to stop the leaks, are to enforce the laws about disclosing classified information and to simply review the 2015 guidelines the doj put out on media subpoenas. dan is right, those guidelines came about as a result of the obama administration scandals, wiretapping associated press and fox news reporters -- connell: right. >> there was so much of a backlash that the doj then had to go back and issue these guidelines that limited its

ability to subpoena reporters in order to track their sources. now, the justice department is just saying they're going to go back and look at whether those, that was a correct decision at time, whether the guidelines need to be updated. everyone at justice department says they might not touch those guidelines, they might amend them. they don't know. they're just initiating that review. connell: it's not even a hypothetical in this most recent story about the transcripts being leaked of the president's conversations very early in his administration with the leaders of mexico and australia. now, whatever you think of what came out of those conversations, it's almost irrelevant to a conversation like this, the idea that they did, dan, come out. that the conversation, you know, world leaders were having with each other that they thought was private is not public. so when you're investigating that, should you be at all looking at washington post reporters and trying to get the information from them or focus on other ways of getting the information in terms of who had access to it and who was leaking it? i would think maybe there's some sort of an electronic trail that does not require a media subpoena. isn't that fair?

>> yeah. i think that's a perfect example because it's, while it's injurious to the nation to have that kind of material leaked, it doesn't put us in major jeopardy. it doesn't put lives on the line or anything like that. so, of course, i think that's a circumstance where you would try to find the leakers. a lot of that conversation gets shared throughout the administration, and it's also through the intel agencies. connell: right. >> so it's difficult to narrow that down quickly. but i think that's where the administration should be focused. again, because the obama administration so aggressively pursued the press and the press had this idea that the obama administration was favorable, yet eight of the thirteen espionage prosecutions came from obama. i don't think trump wants to replicate that. he's already got enough of a war with the press. connell: all right. final word on this, sarah. i hear what dan's saying about the transcripts being leaked, but to me, that was kind of a big deal. it's tough to have an honest conversation, right, with a

leader if you think, certainly, you know, that conversation's going to be leaked to a newspaper or some kind of news outlet either. that, to me, is an important investigation, but what's your take? >> exactly. there are far-reaching diplomatic implications for a leak of that sort. we already know though that the government has the capability to track down leakers internally not relying on journallests. look at the case of the young woman in georgia who was found looking backwards tracing her steps who printed out that information examining the copy of that document that was provided back to the government by the reporters. it was not done -- connell: right. >> -- surveilling those reporters. so we know the government has that ability, they can exercise it more aggressively. that's what attorney general sessions is saying heir going to do. connell: thanks, guys, sarah, dan. we're going to move on to north korea, it's a big story with these new sanctions. we'll talk about them next. ♪ ♪

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connell: big story what happened in the u.n. and the security council with unanimous vote to impose sanctions against north korea. so that is sparking some new nuclear threats. adam shapiro is covering that. adam joins us from bridgewater, new jersey since he is traveling with the president on his working vacation this week. what is the latest there, adam? reporter: it's a work vacation. the president has been briefed on this and other matters. there will be a whole slew of cabinet officials who will come back and forth next two weeks to new jersey and new york, briefing president on all kinds of issues. let's get down to north korea. you mentioned sanctions which the u.n. security council is imposing on north korea. this includes a ban on north korea and exports of coal. it also will prohibit north korean laborers entering into joint ventures and working outside of north korea. it will cost the north korean economy something like a billion dollars in lost foreign revenue. here is what u.n. ambassador

nikki haley said why it was time to do this. >> what we basically did was kicked them in the stomach, told them to stop, said we'll not put up with it anymore. the ball is in north korea's court. they have a big decision to make. they can respond pulling back, they will not be a part of this reckless activity anymore. or they can see where it goes we'll continue to keep up the strength and activity to make sure we stop them. reporter: of course the north korean regime responded first saying unno circumstances would it negotiate in regards to nuclear arms and missile program. they also promised 1000 fold revenge saying that quote, we're ready to retaliate with far bigger actions to make the u.s. pay a price for its crime against our country and people. the rhetoric ramped up but the sanctions are ramping up too. connell. connell: thanks, adam shapiro, there with the president in new jersey. let's go to the american defense international chairman, former south carolina republican

chairman van hipp who joins us now to talk a little bit about this. van, it is interesting, as adam said, north koreans through kim jong-un say our he revenge will be thousands fold. how seriously do you and how seriously should we take their response, their threat? for years it was all rhetoric. you kind of told yourself, nothing will ever come of this. now i think people are changing their tune a little bit on that. what is the real deal i think? >> connell, we're at 59th minute of 11th dealing with north korea and clock is ticking. i hats off to my fellow south carolinian nikki haley accomplished at the u.n. the toughest sanctions we've seen by the u.n. security council. i would caution our viewers go back to a few years 2012. we've seen that movie before with china. back in 2012 they supported u.n. security council sanctions against north korea while at the

same time helping, having a chinese bank helping iranians launder money through a chinese bank for north korean and nuclear missile test. it comes to this. we know they have the ballistic missile capability. they have had this capability for some time. they have been in cahoots and in bed with the iranians sharing this technology back and forth. i think it all comes down to our intelligence on that miniaturized nuclear warhead. we know they have the design package, iranians have the designed package of infamous dr. a.q. khan from pakistan. how close are they to miniature rising that nuclear warhead so that icbm can accommodate it? connell: we're told they are close. closer than ever hitting parts of united states. if all that is true, what would it take? would it be sanctions as tough as you say they are, back kim jong-un in a corner? would he react? >> i think it is different this time, i think chinese and

russians came to the table and supported these sanctions this time i think they realize, connell, this president is a little different. this president means business. he has said, rex tillerson, secretary of state has said, we will not allow a nuclear-armed north korea capable of striking the united states to exist. i think they realize this president means business. connell: does it already, just for a second, does it either already exist or inevitably exist no matter what the sanctions do? maybe they could be already there or very close to being there hard to be stopped even if we hammer the economy? i don't know that the guy cares his people are starving in his country. there is no evidence to suggest that he he does, right? >> our intelligence can't be 99% accurate. it has to be 100% accurate. i'm very concerned open source intelligence tells us a few weeks ago, a couple iranian nuclear scientists were headed guess what? pongyang. in the past when iranians and

some in particular gone to pongyang we see nuclear tests follow a short time thereafter. so look, prior administrations both democrats and republicans kicked the can down the road on north korea. we are today at end of that road. i think -- connell: politically right for nikki haley at the u.n., we don't know if we can trust the chinese. maybe the story we talked about a lot last week, the trump administration reportedly getting tougher on chinese when it comes to trade. maybe that prompted them to get moving as well? >> it's a very big win. i think ambassador haley like me, a big fan of the great late president ronald reagan, he had a great phrase, trust by vary few. that is what we need to do with the chinese right now. connell: if they vote for this, you really need them over there, we really do as the president pointed out. >> that's right. connell: we appreciate it, van. van hipp, scary stuff at same time. growing talk among democrats maybe they get themselves to the table when it comes to another one of our favorite or least favorite topics, tax reform.

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♪ connell: you know apple, there is a report out, planning to introduce a smartwatch to that's capable of connecting with cellular networks. it should be a big deal because you no longer have to carry the iphone around with you, if you have this type of apple watch if it happens. 2.8 million, number of apple watches solid worldwide in the second quarter as they stand now. netflix story today, making first-ever acquisition. netflix doing buying of come big book publisher, millar world which published the "kingsmen, secret service." they plan to turn the millarworld to turn into tv series and kids shows.

interesting for netflix. republicans focusing on tax reform, they're now on recess. amid growing talk that democrats could be invited to the table. the house republican conference chair, kathy mcmorris rogers. she joins us right now. congresswoman, the idea of bringing democrats to the table is something that sound good, everybody wants it, let's be bipartisan but we talked so much about tax reform, if you start bringing democrats into the discussion, does that mean it will be watered down? >> not watered down. our goal on tax reform has always been to bring down tax rates, close loopholes, get our economy growing and allow people to keep more of their hard-earned tax dollars. that will continue to be our goal. we've been talking about this for month, for years, actually. now it is time for action. connell: yeah. >> as we're home in our districts, as i get around eastern washington i hear a lot of people asking about tax reform.

people are anxious tore congress, the president to take action, a once in a generation opportunity to enact meaningful tax reform. connell: what do they want, do they want something to get done? do they want you to swing for fences? what do people want? that would matter getting democrats involved versus going it alone. what do people tell you you? >> people are telling me they want both individual and corporate tax reform. for individuals it is, what we've been proposing is a collapsing of the tax rates down to three main brackets for. for corporate tax reform bringing down those tax rates, closing loopholes. connell: right. >> we have the highest corporate tax rate now in the world. as you think about businesses that are relocating their headquarters or being bought out by others around the world we want those businesses here in america. we want people to believe that they can start a business, grow a business, and do it right here in america, produce, manufacture, in a competitive way. that is why tax reform is so important.

connell: we were showing some numbers that the president has proposed or administration has proposed. we expect more details after congress gets back i would think but just say for example, corporate rates down 35 down to 15, maybe you don't get down that far, three brackets, make it simple, three instead of seven, 10, 25, and 35, i could be reading this completely wrong i find it hard to believe you could get this done by end of this year and at all, we're tired of watching how everything operated with regard to health care and you just look, boy, i don't know how they will do this. in terms of making anything bipartisan name a democrat that would work with this administration to be fair the president has enough trouble with his own party, nevertheless getting anybody else on board? >> i think you're ignoring that there has been a lot of work that's already been done and this is once a generation opportunity for tax reform. this is seen as something that is a must-do, and doing the big

things is never easy but we have in the house, we have been having hearings. we've been working on this for years, and there has been a lot of work done in bipartisan way for many years. we've been the ways and means committee has been holding hearings but also having working groups. 12 different working groups by different members of the ways and means committee, each one led by a republican and a democrat. so there has been a lot of bipartisan work. connell: corporate would have most support when you talk about bipartisan support? >> i think that is true. that there is, been more bipartisan support on the corporate tax reform side but we, this is time to do both. that we need both individual and -- connell: what if you can't, congresswoman, with all due respect, what if you can't? would you settle for dog something as opposed to striking out appears to be case for now with health care? would you get something done?

>> i'm not ready to give up on that. i think this is our time. there's a, there is a, there is intensity that this has to to be done both in the house and senate and administration. the house and senate has been working for weeks on this. chairman ryan, chairman brady, gary coyne, steve mnuchin, treasury secretary, they have been meeting every week to hammer out an outline. you saw the speaker pulled away from the border adjustment tax in an effort to reach consensus how we move forward in the fall. connell: yes. >> there is a desire, there is a belief it is a must-do, this is our time, this is our moment. we're getting started on this. connell: a lot of people are getting anxious to get you guys back to see if it actually does happen. thank you, congresswoman, enjoy

the break. congresswoman kathy mcmorris rogers. chicago is in the news today because of sanctuary cities. there is escalating legal battle involving the mayor, you're looking at him, rahm emanuel. what does it mean, crackdown on the cities, response from this mayor and showdown with jeff sessions and company after a quick break. on time. tap one little bumper and up go your rates. what good is having insurance if you get punished for using it? for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. liberty mutual insurance.

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connell: so new york city mayor bill de blasio, would tax rich people in a way to have subway system fixed. summer of hell left transit crippled with train delays and closures. we'll talk more about that in the next hour of "cavuto: coast to coast." this whole idea from mayor de blasio. another mayor in the news. mayor of chicago, rahm emanuel, sued the federal government today over the sanctuary city crackdown. >> chicago may be the first to bring a lawsuit, but i'm confident we'll not be the last because other cities knows these are false choices the trump justice department is asking us to make. connell: the justice department fired back at mayor mayor emanuel in the statement, in

2016 more chicago wants were murdered than in new york city and los angeles combined. starerring that he is concerned with that figure instead of. gop consultant, giana callwell is with us. former obama 08 campaign, with is us. i believe you're out in l.a. today. you're a chick -- you're a chicago guy, right. >> yes, i am. connell: tell me about your city and what you think of mayor of your hometown with this lawsuit? >> well, let me say something that i think all three of us can agree on. rahm emanuel is a failed mayor. i'm sure there is going to be know fight. >> will not agree on that. not going to agree on that. we all know that is case. connell: won't give you a inch on anything. this lawsuit specifically with the sanctuary cities. >> yeah.

but so he is failed mayor but with this lawsuit, this disingenuous because chicago's mayor is using sanctuary cities and people of chicago as a pawn, political fight. one he continues to lose. he has no record of accomplishments in chicago in terms of better the city, pushing it forward. look at every benchmark determine what is good mayor he gets an f. in addition to the violence in chicago completely out of hand. memorial day weekend my younger brother in a car with two of his friends on south side of chicago, two individuals walked up to the car, riddled with 25 bullets. thankfully my little brother lived. his best friend died in his arms. it is horrible situation. rahm emanuel is not focusing on residents safety versus protecting people potentially criminals. not everyone obviously but there is obviously some criminals in chicago that he is protecting. connell: let me ask andrew about this in the following way. if you try to simplify, look at some numbers in chicago, they

are quite staggering, some murder numbers, violence numbers overall, andrew, look at arguments, whether rahm emanuel or anybody else makes, this is tough for them. they have to generally comes in and say here is the reason i'm not going to cooperate with the federal law. they have to make that case, right. people say, why, why aren't you cooperating with what law states? >> it is terrible what is going on with crime in chicago. i'm sorry to hear what giana's brother went through past memorial day, that does not make this sanctuary city effort by trump and laws that he is forth to be right. this is courageous act by rahm emanuel? why? connell: whoa. >> make my point, giano. >> okay, go ahead. >> this courageous act. why, when you look at constitutional law is the law is on rahm emanuel's side.

he is not allowed, federal government is not allowed to coerce him into following these policies. that is what happened with the aca and medicaid, and medicare. they had to make that choice for -- connell: all getting worked out. hold on one second, guys, right? it will all get worked out in the courts. but you didn't answer the question, how do you defend that argument? >> i will not defend the question. connell: go ahead, real quick. >> connell, instead of focusing on how to reduce crime, instead of focusing on that, we are saying okay, we're going, the federal government will give us less money. that is not fair. we should be focusing on, we should be focusing on how to reduce that number. that is not by taking away federal money. connell: go ahead. >> andrew, it is so interesting, i thought you were going to come on with your coffee talking points, not happy hour talking points. you chosen to go by the way of happy hour talking points.

respond to quote, unquote courageous act by rahm emanuel i think it is blatantly false. to talk about the federal government pushing rahm emanuel, push being him in this direction it is called stick and carrot approach, where the federal government may have grant funding for particular localitity but is available, if you don't do x, y, z, you can not apply for that money. that is not coercion as you put it. rahm emanuel in this way a gracious individual. he is failing the people of chicago on multiple fronts, especially black community in chicago. between 18 and 24 -- connell: guys. can't talk at same time. let him finish. finish real quick. one sick, we have 30 seconds to. >> african-american man between ages 18 and 24 in chicago, 47% are unemployed and out of school. rahm emanuel should focus on those issues instead of trying to protect folks shouldn't be

here anyway. connell: got a second, andrew. >> the trump administration is failing blacks and minorities in chicago. they're taking away resources could be used for local police to protect the streets. connell: we'll see. >> you know what? we're also, you know focused on taking away the american values. we, american values, americans came here for the opportunity and rahm emanuel, and rahm emanuel is trying to protect. connell: i think this is tough one for democrat to argue on particular issue how it comes across for no other reason. thanks to both of you. vice president in the news for this "new york times" story. whole speculation that maybe he is thinking about a run in 2020. we'll talk more about that when we come back here on cavuto coast to coast.

♪

>> it's hour number two of cavuto coast to coast, i'm connell mcshane in for neil, and we're on a number of stories this hour. but let's start with this one. the new york times story. the paper saying president trump could face a republican challenge in 2020, possibly even from his own vice president mike pence. the vp spokesperson responding to all of that earlier. >> it's absurd and really what you've got here is speculation, conjecture, half-truth, masquerading as news on the front page of the never trump new york times. the vice president has been nothing but supportive. he is supportive of the

president, and his singular focus is on making sure the president's agenda is active and that the president is reelected in 2020. connell: and the president himself seemed to respond. you read through this tweet. the failing new york times, which made wrong predictions about me, including my big election win is totally inept, and he continues to say the base is far bigger than ever before. so the prediction of president trump's collapse overstated as he talks about some of his big rallies there from campus reform.org media director phillips is with us in this hour, democratic strategist margie is also here and from the daily caller, chris bedford. let me start with you, chris. you know, it's interesting. we were talking about this a little bit last hour, and there's all kinds of ways you can go on whether mike pence is really thinking about iran or kasich is or somebody is. but i tell you, it does seem like the white house was very, very upset to see that this story was even written, this

speculation was even being had in the new york times or anywhere else. >> well, it's not good speculation for the white house because if you're a sitting president whose primaried by his own party, typically, you lose. it does huge amounts of damage. ronald reagan when he was running against jimmy carter, he would make run campaign ads, just repeating quotes from ted kennedy. mike pence, though, is definitely not the villain here. people are kind of constructing that through rumors, and it's probably coming from the fact that a lot of traditional republicans and conservatives in dc secretly wish that mike pence was president because he's someone who they feel like they could deal with more effectively than donald trump. but he's a loyal, loyal, soldier. he rose to the entire campaign, some conservators or critics of trump attacked him over and over again to say how could you be so loyal to trump. and he has never shown at any point in his career that he would stab his boss in the back. >> what's interesting about that is going back to 1980 to jimmy carter while the republicans had ronald reagan waiting to run in that race,

and he's obviously a strong candidate and became president. served two terms. i don't know that the democrats have somebody waiting in the wings this time because that's the other part of the story that doesn't get talked about. i know this is all hypotheticallies. we're all waiting on this. >> yeah. i don't think there is a clear frontrunner right now. obviously, we have quite some time to go. but on the mike pence point, i think it's a smart strategy because there are has been a lot of uneasiness and unsteadiness in this presidency. there's been talk of impeachment. there's divide in the republican party. absolutely he's out fundraising. and he has to also notice since things have gotten tense with trump, you haven't seen mike pence standing near him, around him, talking about him in the press. he's been keeping a very safe distance, and i think, you know, look, if he did end up in the white house, him having strong relationships with other party members, the republican party and democrats would be absolutely paramount.

and having a campaign behind him. so i don't think these are unreasonable. connell: might not be that crazy if it's true a politician, even sitting vice president, but certainly these other people mentioned john kasich or any of these guys thinking about positioning themselves to run. or not everything collapsed for the president but to say he decided not to run for some reason. >> exactly. he said that -- he's been saying i don't really enjoy this that much. like, he's been talking about. connell: well, i don't know. the other thing to be fair to the sitting president as it stands, and we talked about this cabinet a little bit earlier. as crazy as some things seem on certain days and, you know, we went through the anthony scaramucci stuff, whatever it may be. and there have been days where things just seem, like, boy, what's going on here? there are other times if you take a step back and stock market's at a record high, some of these regulations that have been rolled back, many people that we speak to have created a better business environment. that this is only six months in and not everything is a

disaster; right? we're putting up some, quote, unquote, accomplishments under the president. many are business related. a better business environment, yet they're talking about primarying him. what do you make of that? >> i think it's important to remember who's pushing these claims and if they are, in fact, fantasy, what's the narrative behind them? so many of the critics pushing this idea in the white house on the republican party, they would make it seem that america is teetering on the edge of catastrophe, and they're ignoring the good things that president trump is doing. the million jobs that have been created since he has taken office. so i think a lot of this american people have trouble ascertaining what's true and what's not because they know that the liberal media and the left have already pretty much made up their mind about how they're going to cover president trump's administration. so it's tough for them to see what's a big deal and whatnot. connell: that may be true, but also chris made a point is that that might not be all that's to it; right? the republican establishment may be as big, if not a larger issue for this president than the liberal media and the left. we knew the liberal media and the left would be against a republican president.

granted maybe it's more so this time than in the past. even if all of that is true, there's a lot of people in his own party that are even not comfortable or worse than that with this president. >> the entire time. if you go back to when he was nominated at the rnc out in ohio, there were people who were plotting these kind of fantastic plots to have him remove and have him not get the nomination, give it to ted cruz, give it to john kasich. not a day in washington goes by. connell: this never trump movement is behind more than everything else. is that what you're saying? >> that's the people who i'm hearing these mike pence things from a lot. mike pence is extremely popular from both conservatives and with establishment republicans. but i hear his name come up almost daily. names i don't hear come up almost daily as a primary challenge people like ben sasse or john kasich. i haven't heard any words from that. but if you see mike pence, that's coming from the never trump crowd. connell: interesting. marjorie, let me go back to the democrats. there are signs that they're

starting to get worried within the democratic party if you read some of the articles, including this one from politico about overplaying their political hand when it comes to russia. and not focusing enough on the agenda. and that's kind of what politico says. democrats fear the russia probe blow backs. what do you think of those kind of political wins that for all of this talk every day of the week, there's a lead story in some publication or another about the russia investigation and th the president's approval generating has gone down whatever it has gone down to. and maybe there is kind of a fatigue setting in that the democrats should be finding something else to talk about, other than russia. at least and especially if nothing ever comes of it of substance. >> right. well, and money always talks. i mean, in every election when it what it comes down to is how are people feeling about the economy? about the security of their jobs and how that relates to their pocketbooks? so absolutely the economic messages are going to be fundamental for democrats, and they do need to figure out what their identity is around that. what they stand for related to

that. and it's an interesting time because we talk about a lot of the policies that trump is, you know, pulling back on or helping businesses, but they're also in some cases hurting the very people who were his supporters like the tpp work around that happened in the un today. that will be a problem because it's going to affect the manufacturing and labor stuff. connell: be more specific on that. because you're going to think the best strategy is an economic one. because it would seem. tell me what it is and these guys can react. >> well, it's always economic. rapport democrat and who's doing a better job of communicating what that means, who's impacted by, you know, basically policies, what it means to money in their pocket and what it monies, you know, in terms of, you know, culture. and the democratic party traditionally has been a very big tent. and, unfortunately, that means trying to play to everybody's different belief systems. what we know is that the numbers look different when it comes to who turns out to vote. while minerals are big supporters of democrats, they don't show up at the polls. and the people that do are a lot of that older generation

who typically learn -- lean more conservative. connell: because i was making the other side of it from president trump's point of view, i don't think i would tweet about anything or talk about anything other than the current economic conditions. the jobs report we had on friday, the record high for the stock market. i mean, you've got to be a little careful. that could turn around in a heartbeat. >> if the democrats want to use the economy as a measuring stick for how people should vote, republicans are going to gain an even bigger majority in the midterms in 2010. i think people are looking around, seeing the confidence in business, they're seeing the stock market break records every week. and go ahead. i think every time the democrat spends a week talking about russia, they're getting closer and closer to handing the election in the midterms in 2020 back to republicans. what percent of americans view russia as the view? the other 94% say talking about more is more important. >> economics does go beyond jobs, though. you have to think of it in the context of health care. what health care means to a family. what it means to different

types of jobs. what it means on immigration because immigration is fundamental for a lot of the tech jobs, for example, or migrant farm workers. how that impacts the farming community. so economics isn't just as simple as jobs numbers. it goes beyond that. connell: so as a final point to bring it all together. if you're the democrats putting together a strategy just in this kind of hypothetical scenario, what's the best place to go after it? because in theory, a president with a approval generating in the 30s that's what we're dealing with should be fairly to beat, but maybe not. >> well, you would think so. and a lot of the polls that we've seen aren't that great because we don't know who's actually a voter, who has changed. i got a chance to look at some polls just recently that have been done over the last six months and there are has been a seven-point drop among people who are strongly, strongly favorable of donald trump. i think that's a constant barrage and republican's failure to pass obamacare repeal. but they're in trouble and if the democrats aren't talking about jobs, which they got slammed in in this last election. if they don't learn any of these lessons from past

election and go for more populous things, the guys many michigan, they're not going to vote for them. the guys in pennsylvania are not going to come out and vote for democrats because they think jeff sessions is a russian agent. it's not going to work. connell: it may not and however much trouble the president appears to be in. we're going to move on to north korea with these threats from the north koreans again that they may actually use nuclear weapons against the united states if provoked. the question then i guess is whether or not these sanctions over the weekend, you know, that were passed in the un and the security council, does that be provoked? and did president trump keep china in check with some sort of threat that worked? we'll explain after a quick break. don't go away

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the weekend after word president trump is actually planning a crackdown on chinese trade. so did that help in terms of getting china onboard? swiss america chairman craig smith is with us. smart trade pro founder. dr barton is also with us. what do you think of that? all of a sudden we're going to see a new president trump who's back to the future, back to the campaign talk. i'm going to get tough with you, china, when it comes to trade. do you think it helped? >> well, i'm not sure, connell. but i've got to tell you, it's interesting how he called for this investigation and the next thing you know the chinese and the russians are both at the table signing these agreements for the sanctions. i think china was saying that they were going to crack down, but they really have let north korea do whatever they want. and i think the big issue here -- we have to keep in mind that kim jong-un and his father are willing to allow millions of people starve in north korea, if that's what they have to do to get to

their end goal. and the 800-mile border with china could present a real problem. because that part of china is not a rich part of china. it's a very poor part. so there are a lot of moving pieces here. i suspect he's going to get china to cooperate with him. it's just a question will they really knuckle down this time? . >> to craig's point you do have a leader in north korea who doesn't operate at the same level that all of us do and is willing to just let his people suffer and, yeah, you're saying you're doing all of this damage to the economy and the guy doesn't care and, in fact, maybe even more provoked by that. maybe we're having a -- are we even close to a point where we're having a serious talk about the real threat? not the rhetoric, the real threat of nuclear weapons being used? >> well, economic sanctions historically takes some time and sometimes lots of time to work through the system. so if we're trying to stop the immediate threat of their

missile development program, that won't -- just won't work in and of itself. what the hope is -- and the secretary of state just said that we hope this will bring them to the table in a manner matter of months before things really start to work through the north korean economy. they want to see fewer or no more tests. they want to see some of these things, and they're trying to force that hand before the people of north korea really do get hurt by this. connell: right so if they are in a position, craig, where they kind of look at this, and they know that kind of backed into a corner, they -- you know, kim jong-un, they being north korea. and now they're more capable than they ever have been before, at least that's what we've been led to believe that somehow a missile could get with a nuclear warhead either now or in the future to the mainland. do you think no matter what china says, it's a risk that this guy actually acts upon at this time if he's capable?

>> you know, it's so hard to predict the actions of the madman. dr is it right, you know? these sanctions are going to take some time to work, and i'm not sure that we have time. that's why i like the talk out of rex tillerson. he's saying, hey, we're not talking about you coming to the table 30 days now after. he's saying, no, we want you to stop now, and then we'll start talking. and i -- quite frankly, nobody's going to like to hear this. but -- and, look, i don't want to go to war any more than anybody else does. but i think the only thing that's really going to stop north korea is quite frankly an attack on their facilities to disable them or maybe we can come up with a virus like happened in iran where we can slow the whole process down. connell: think about that for a second. you say attack on facilities. not that it's an authority. but the economist magazine, dr last week went through that as kind of a hypothetical, and i think that's how it started with we get to the point where

we don't know what else to do, and we do initiate an attack on their facilities. one thing leads to another. next thing you know, the guy does actually fire off a missile that he has hidden in some mountain somewhere, slips through the cracks and hits an american base somewhere or hits one of our allies somewhere and then, you know, you can't even talk about how damaging that would be. we don't want to to talk about how crazy that would be. it would be nuclear war. >> no. and that's the real problem. craig's right. when you're dealing with someone that just has clearly shown over and over again that they don't use normal louis norm logic. even if it's lots of strike from the international community, they in korea and the we hope that china can exert some of that economic

and political influence. that's the best solution, really. connell: that he doesn't feel cornered, like, forget it, i'm dead anyway. there's nothing i can do about this, and i may as well fire off whatever i have left, which is the scary of all scenarios. >> also, keep in mind, connell, we do have the fad system that's working rather well. we do have defenses in that part of the region. so just to think he can launch a nuclear strike on us, there's no indication that he could put a nuclear-tipped warhead. connell: he couldn't get it through. that's obviously the hope and a fair point. thank you, and we'll wrap it up on that note, craig and dr. scary times. now, the state department saying that the gains we've made against isis still have started to dramatically accelerate, which would be obviously, good news. and they've done so under president trump 30% of the territory reclaimed from isis has been won, according to the state department, over the past six months. so would those metrics, the

war against isis is actually -- to use their terms, accelerating. at the moment, will at&t spin off cnn as part of a time warner deal? you've maybe heard that before. well, if you did, you probably heard it from charlie gasparino. he was the first to break that, and he has a new development on it. coming up next when you have something you love,

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connell: a pretty good stat, 73% of the s& s&p 500 companies so far this he didn't season have beat analyst estimates. 73%. in the meantime the dow today is up again. not a ton. up 20. so its on pace now for its ninth straight record close, well above 22,000. nasdaq, though, hasn't hit a record since the 20th of july. you can look at that. still less than 1% away. those are the markets. we have reports now in the meantime that at&t is considering a sale of cnn.

post a time warner merger. however, as you might suspect, our own charlie gasparino way ahead of this back in january. watch. >> you may see what bankers are saying is a potential spin-off of cnn to make this deal go by. that there is a lot of talk about that and there will be buyers. we shall point out that cbs in the past has expressed some interest in buying cnn, if that became an issue with other potential deals. connell: here to talk more about that. charlie gasparino. do you ever get weird talking about yourself on tv? >> when i see myself sweat, yes. [laughter] connell: i was going to say. you're not the only one. is it going to happen? what's the latest on this? >> i don't know. and here's why. there are clearly people in the trump administration, people like steve bannon, child support to either kill this deal or put on -- you

know, steve bannon is his adviser and who has been very critical of cnn's coverage internally, as has the president who wants as a condition of this merger. you don't want to kill the merger. they claim too much concentration of power with at&t's distribution plus the programming might of time warner, which includes cnn. i think it's too much power and too much power located in one company. so they either want to kill it or make one of the conditions pretty onerous like spinning off cnn. you have to weigh it there. and bannon does have the ear of the president. that's one end. counterbalance it, in particular if you look into arbitrage this, which means play this stock. connell: no, i know. scaramucci used it in his conference. >> although he meant delta, not arbitrage. he misused the term. connell: my mistake.

>> but the other side of the story is this: you have pretty much three market types in the various regulatory agencies. the fcc, the justice department antitrust division that has to approve this who believe that this merger is pretty sound on antitrust basis, and they're more conservative free market types, so they have -- it's a much higher bar or threshold to get them to kill the deal, which is to force the change. and those people are very powerful in the administration. and as we know, the trump administration is now under a lot of pressure for not having the executive branch medal with the justice department. and the ultimate decision here is made with the justice department's antitrust decision. so you have to balance those two out. it looks like the antitrust division will probably approve this. but you have the political guys on this side saying don't do it and force a major condition for the approval of the merger. connell: so what if it happens? say the merger goes through; right? and is there interest in cnn? >> i think at&t's interested in keeping them.

cnn makes a few bucks, they give them a lot of -- ther there ithere is a up to owning a cable news network. connell: will someone make a bid? >> if they want to sell it? i don't think there's a shortage of buyers right now. cbs has expressed cnn in the past. connell: there's been talks for years about both of them. >> and my producer interviewed them at the sun valley, and just so you know, he has no potential -- he doesn't see any big deals coming from cbs. but he also thought that this deal, he mentioned this to brian as well, would go through intact. so, you know, the real -- the reality is if this doesn't go through intact, if they have to spin off cnn, i think there will be buyers. i think cbs is a logical buyer of it. you know, don't put it -- don't put past a tech company's buying it. the late, great jimmy lee. one of the greatest investment bankers ever.

said how tech like google was interested in time warner back then. they have tons of cash, they're looking to expand into content. don't put it -- it is a possibility that google could guy cnn. you could see something like that. connell: wow. >> and could you just imagine? connell: all kinds of other issues. but that is interesting. >> jimmy told me that. and we should point out jimmy died about two years ago. he was the best media banker in the country. and he actually predicted that time warner would be bought. he didn't think news corps would buy it. he thought there was too much institutional opposition to that inside time warner, melting -- he actually thought a tech company or something or obviously a distribution company like at&t would make a move. at&t made the move. connell: at&t did make the move. we'll follow it. >> a broken clock. i'm once once a day. connell: they are calling it here in new york, actually,

the governor came up with this. they're calling it the summer of hell in new york city for commuters. now, as i said, the governor coined the term but the mayor has a fix that could cause a little bit of hell for rich people. we'll explain that after a quick break

connell: breaking news on health care now, coming in from anthem, the health care company set to withdraw from nevada's individual health market next year in 2018. so it's already left california, indiana, wisconsin, and ohio. now, i add nevada to that list. we're talking about the summer of hell here in new york city a few minutes ago about how now the mayor bill de blasio wants to tax rich people. top 1% in order to pay for fixing the subways. the summer of hell is a reference to the problems that commuters have been experiencing. so what does this do? new york city counsel joe is here.

good to see you, joe. >> good to see you. thank you. connell: that's the whole idea. you want to take money, i'm sure this is politically popular because you just say, hey, let's take the money from them. >> this is bill de blasio's one trick in his bag of tricks that he seems to resort for everything. whether it's weather in new york city or pre-k, he said let's tax the rich. he tried this earlier this year with a mansion tax, he tried this in '14 with the nearly identical new york city tax. he's going with the same tactics and expecting a different result. so this is probably not going to happen. connell: the problem just theoretically on it, there are a lot of rich people in new york, obviously. some of the richest people in the world live in new york city. you've got for the most part them to stay here; right? if you're the leader of the city. you want them to do business here and hire people here. >> sure. and where bill de blasio gets credit is this is a very vibrant city of a lot of people want to come here but a lot of these people that are here are wealthy that

would be subject to this tax, and they are economically mobile. we have the best restaurants. people are always going to want to come here and live here. but when you give people a ridiculously high tax reason to leave, they're going to go down south for better weather and for better financial climates. connell: you can't always -- i'm from here, and i'm sure you are too and instinctively you say this is the best city in the world, and that may be true in our minds, but you can't rest on that forever because a lot of people have and all of a sudden something pops up, i'm going to move to north carolina, texas, whatever. i don't want to pay this anymore. i'm sick of it. >> and one million new yorkers have left this city since 2010. just last year alone, almost 200,000 people have left new york state. these are people, again, migrating for economic purposes. not simply because they prefer the weather in another state. what this mayor is doing is just trying to kick the political football back to governor cuomo. the truth of the matter is that the mayor of the city doesn't have the ability to do this tax. he doesn't. connell: and, by the way, they don't like each other.

outside of new york may not realize both democrats can't stand each other. >> this is not the situation where the mayor and the governor are cooperating on something they really should be cooperating on. connell: right? >> the governor has been so eager to cut the ribbon on shiny things that take credit after saving the system after new york sandy. now that things have gotten bad, he still has to own it 100%. connell: the mta, the state agency. it does bring up the point it would be nice to fix that subway system a little bit. any better ideas topping the top 1%? how do you pay for something like that? >> let's start with this. the mta has a bigger budget than lithuania. it's a question of how do you spend that. you've seen the capital projects that have been exposed. the railroad line into grand central station. this is a product that has been delayed and cost overrun of $800 million. it's absurd. even relatively mundane projects have been overbudget by $400 million.

so the nta has to figure out how they're spending the money before we get into real solutions. real solutions could be taxing the east river bridges. there's no rhyme or reason as to why someone crosses the brooklyn tunnel has to pay 8.50 and someone who crosses the bridge right next to it has to pay nothing. why there's no 2017 solution for this is beyond me. connell: everybody watching in ohio is, like, enough of this. we feel partiality about it. we need better subway. we don't want to put up with it for a few minutes. good to see you, joe. a thing that everybody cares about is tax reform debate we keep having every day; right? and the focus for republicans after the recess, i think will be squarely on taxes. the house republican conference chair kathy mcmorris rodgers is with us. as a matter of fact, in the last hour, shears what she said. >> what if you can't? would you settle for just doing something as opposed to just striking out? >> i'm not ready to give up on that. i think that this is our

time. there's an intensity that this has to be done both in the house and the senate and the administration. >> okay. from usa today. you know, that's the right answer in fairness to the congresswoman because when you're starting a negotiation, the last thing you want to say is would you settle for doing something small? you probably should say we should -- we want to get as much done as we possibly can. i'm not going to give in now. so i get that. that's the right answer. but is it a realistic one? >> you know, we just have to see. i mean, i think she has to say that for negotiations and also for the voters who expect that the fact that there's republicans in the house, senate, and white house, they expect things to be moving, and they're not. you know, health care was kind of this massive failure, so they need to promise that they'll get tax reform done and go full speed ahead on it. connell: i told her this too when she was on. i would be really surprised if

they got it done. as i was saying to the congresswoman, we would be so skewed watching the last few months, which is nothing in terms of health care that you just say i can't say it. anybody working with this president from the other side of the aisle or some on his own party working with him and republicans coming together. they have the votes, technically, but it's just hard to believe that they're going to get it done. >> well, we're seeing the party so fractured; right? it's easy to be united as the party of known. we've seen democrats like that. bernie sanders and joe manchin very different. but they can be both be "no." but it's la harder to be yes on something and agree. there's conservatives in the republican party, there are moderates, and they all have different things they want. and it's going to be hard, and they're already, you know, in the senate basically assuming democrats aren't going to get onboard, so they're using reconciliation, which is where you can pass something with 51 votes. so it will make it easier to pass but already they're kind of alienating democrats who are frustrated that, again, same as health care, they're not being brought to the table.

connell: yeah, that whole reconciliation thing didn't work out well. we know that should give politically but you and i can have a different discussion. are you picking to anybody you're speaking to there in washington about conversations that are happening about going smaller as opposed to trying to do a huge tax reform package? and if so, what are they talking about? individual rates, corporate rates, what's being discussed? >> you know, right now, they really are saying that they're going big. i mean, they're saying they would like democrats to get onboard. but that might not happen. so we're doing reconciliation. so they are not really open to going small, and i think that's the same thing that she's saying because the voter wants them to go big. there could be very well conversations behind the scenes. but right now, they're saying we have to do this. but reality too is the timeline. so they're gone the rest of this month. connell: getting it by the end of the year is tough. and the same old getting it in the midterm election year is tougher. that's what i'm saying.

you can't see it. it's just so hard to imagine it happening. >> yeah. and it might be health care going small. they couldn't get the repeal, so now we're seeing patty murray who are senators republican and democrat saying okay. well, let's fix this in the meantime and buy us some time. you might see something like that with tax reform. but they need a win. i mean, they went into august recess with really nothing. the only thing that has passed the house, senate, and then signed by the president. the only big piece of legislation is a bill that limits trump's power to russian sanctions. so the president was not happy about that. that is not his agenda. so they need some agenda items. connell: absolutely. and the white house is right to point out that certain things are getting done, the rolling back of religions and a more positive business environment. supreme court, but you're right. they need a big legislative win, so we'll see. thanks. good to talk to you. another thing that hanging over all of this is the robert

mueller investigation reportedly used not one but two or more grand juries in this whole russia probe. the latest on that coming up net ♪ [vo] progress is seizing the moment. your summer moment awaits you now that the summer of audi sales event is here. audi will cover your first month's lease payment on select models during the summer of audi sales event.

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now that robert mueller is using multiple grand juries in the russia investigation. so it brings up the larger question here on this monday. where is it all going? former whitewater i want counsel with us. good to see you. >> thank you. >> so if you have two or three grand juries, some people say this is obviously it has been picked up a level. and others saying this is routine until you gather evidence. what do you think? >> it's hard to tell whether it's just routine but even basic things, like, for example, if you were investigating michael flynn, and you had a preexisting investigation with a grand jury in virginia and during the course of that investigation and as an example, you've uncovered false statements to the fbi and statements were taken in washington, d.c. you would have to submit that evidence to a -- connell: it has to be in dc. >> it would have to be venue you'd there as opposed to eastern virginia and alexandria. so the fact that there's another grand jury limited in that hypothetical doesn't

suggest much more than you're going through the ordinary course of doing an investigation and where things naturally should go, that's where they go. >> what about them going in a place where they wouldn't ordinarily naturally go, in other words, outside of the scope of just russia. will see been so much talk that this following the money, various articles written about that to the trump finances and what have you. what -- what's the kind of latitude? >> hard to know what to make of that. i know that the special counsel inherited what was the beginnings of an investigation in new york. so there's that sort of piece of it. you don't know where exactly ultimately that will go. connell: but looking into russia and finds something else that's completely unrelated, but it's kind of a business dealing that needs to be looked into, he can look into it. >> he can. although prudence would dictate, and it seemed to be seconded this weekend by rod rosenstein, who appeared to the fox news channel to suggest, look, you know, if it's within his mandate, which is to say things directly related to the russia investigation, he'll go on and

do that, which is within his mandate. along the way if he uncovers other things that at least arguably are not within his mandate, then he goes back before the deputy attorney general. and he has to go back to rod rosenstein to examine for jurisdiction, which is he's certainly capable of doing and rod is likely to grant him that expansive authority. >> right. that's just normal. that's almost like a rubber stamp; right? >> well, i don't know if it's a rubber stamp. ultimately, rod rosenstein does control the scope of the vegetation of. but -- you know, what it does represent clearly is that if he were to decide not to allow bob mueller, it would naturally give rise to the question, well, who's going to investigate this? it would otherwise be the justice department and that presents a political issue, obviously one that would be disclosed. and there would be a debate about where appropriately that investigation should be pursued. connell: i know it's tough because we're on the outside, both of us are on the outside looking in. but you obviously have expertise in this area. so from what you've seen, is there anything that jumps out

at you as the most series of allegations or the parts of the investigation, it the don jr. meeting or the michael flynn investigation in virginia. >> i really think it's too early to be able to gauge that and tell. i mean, i think the more significant thing that you can read into all of this is that he's assembled a staff, including a staff of lawyers. 16 by the latest count sufficient to have clusters of prosecutors and agents do various parts of the investigation simultaneously. and the second thing is that it indicates because he's not only brought over people from within the department to be detailed to that investigation but also people outside. presumably they wouldn't have made a commitment to the investigation unless they expected and have been told to expect that the investigation would last well into 2018. and i think that's what we know. in other words, this is not going to be over in 30, 60, or 90 days. >> and that's a political calculation that the administration has to make because they have to know you're trying to push the taxes, you're trying to do infrastructure, whatever it is. this is there; right? it's

not going anywhere. i think the earliest you could see this wrapping up. >> well, my hope is having learned lessons from the whitewater era and even before that this investigation could be responsibly and swiftly concluded with the major prosecutorial decisions that need to be made. connell: the lesson was. >> well, before the midterm elections. connell: the lesson was what? should have done it sooner? >> well, should have done it sooner because it doesn't get better with age. you get sort of 18 months to two years to kind of either show something for what you've done or not. otherwise, the push patience has been exhausted. connell: this is kind of weird. why does something -- why does it take that long? what's the most pain-staking part of this process? because they're saying jeez, let's look into it, talk to the people we need and draw some sort of conclusion. but every lawyer says this kind of thing takes forever. why? >> well, part of it is it's one thing to talk about records and documents and issuing subpoenas for those kinds of things. another thing putting people before the grand jury. issues arise along the way

about whether or not someone will go voluntarily or one who asserts their fifth amendment privilege or whether to compel testimony and the consequences of that also prosecuting at lower levels in the hopes of turning somebody as a cooperating witness in favor of, you know, gathering further evidence. that process is time-consuming. now, i don't know whether any of those things will be appropriate in this investigation. you have to sort of decide if there's some there initially to warranty taking the big prosecutorial steps. but if you're talking about prosecuting lower level people in order to get to higher level people, that's a time-consuming process, and that's frankly what belabored the star investigation and other investigations during the clinton era is that, you know, it went on for some time and all of a sudden you're not talking months any longer. you're talking years. connell: it's just going to go on for some time too. but hopefully not that long. thank you for being on. >> thank you for having me. connell: neil's take friday on that newsweek cover, your thoughts on that coming up next.

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♪ connell: so on the show friday many of you may have seen this, look at neil, talks with his hands. neil ranted, he certainly did. you all reacted. here is part of his take on that "newsweek" cover from friday, watch. >> it is way too soon to say whether donald trump will do okay and be okay but for me, this kind of treatment not okay. and it will confound everything

and everyone if it is accepted as fact. and why do i fear it could be accepted as fact? because it was in a magazine called "newsweek"! you know what it should be called? news that is very weak. you get it. how i, all right. i'm done. and i haven't even had lunch which could explain. but i wanted you to be aware, folks this ain't fair, this ain't right, not remotely fair or remotely balanced. connell: neil on the way to vacation for the "newsweek," lazy boy cover. he has better work ethic than most. what is our media trying to do. this is adam on twitter writing in, trump may be a lot of things, lazy not one of them. who in the hell is "newsweek" trying to kid. calm down, adam. tina tweets, i need the cover with two exclamation points. it will make history when he is

impeached to pass on to my grandkids, tell this part of american history. milo, i wish i could subscribe to "newsweek" so i could unsubscribe. tell them to shove their letter where the sun doesn't shine. near the armpit area. not funny. that is it for the "coast to coast." pass it on to the great trish regan. trish: thanks so much, connell. north korea threatening revenge, a thousand-fold retaliation against the united states after the u.n. voted to impose new sanctions against the rogue state after the latest missile lawn. i'm trish regan. welcome to the he "intelligence report". u.n. ambassador nikki haley says it is time for north korea to realize we are not playing anymore. congress back at home for august recess. constituents are not rolling up the welcome wagon.