with lindsey graham says, yes, there are 50 votes, and now senator mitch mcconnell, leader of the republicans in the senate, he too has said, yes, we've got those 50 votes. the market likes it. we're down 143. neil, it's yours. busy day. neil: yeah, i think you're right. i think that graham, you know, prediction did change things. for how long, is anyone's guess. thank you, stuart. in the meantime, stocks had been dropping actually all over the place as you've been seeing on this abc news report. only abc news, we should stress, right now. no one is double or triple confirming this, that michael flynn is not only prepared to testify against the president, but that the president directed him to contact the russians. in and of itself, that would not be a huge deal. of course, it depends at what point he wanted that contact assured, as president-elect or soon into to oval office itself. that would be natural for the president to follow up in establishing relations with the russians if you didn't have a cynical view of this. if you do and you're saying that there's some sort of a

coordination between the two, then all bets are off, and that's what gives you a better than 300-point falloff. the markets are confused because they want to see tax cuts, we're getting closer to that, but they don't necessarily want to see us heading towards impeachment hearings. >> hi there, neil. michael flynn walked into a federal courtroom here in washington, d.c. earlier this morning, pled guilty to one count, essentially, of lying to federal investigators on two different occasions, both times about his contact cans with the then-russian ambassadorrer is bay kislyak. that happened during the transition, once on december 22nd and another conversation he had a week later on december 29th. flynn has pled guilty, and shortly afterwards just a little while ago he released this statement which says in part, and i quote: i recognize the actions i acknowledged in court today were wrong, and through my faith in god, i am working to

set things right. my guilty plea and agreement to cooperate with the special counsel's office reflect a decision i made in the best interests of my family and our country. i accept full responsibility for my actionings, end quote. it is this december 29th phone call that really got flynn in trouble in the first place, neil, as you know. he was only on the job for 25 days for, essentially, lying to the vice president, mike pence, about his contacts with kislyak. and now we know he will likely be headed to jail for lying about that very phone call to federal investigators. however, the documents show and flynn backed up in court today that on that phone call as it was happening beforehand he called a senior official on the transition team during all of this to communicate to discuss what to communicate, rather, exactly with kislyak. and afterwards flynn spoke with senior members of the transition team about that phone call which sort of elevates this into a much different realm. the white house's defense on

this day comes from one of the president's attorneys from inside the white house, ty cobb. and cobb is essentially saying, hey, look, flynn is pleading guilt to what we -- guilty to what we fired him for. he says in a statement, and i quote here: the false statements involved mirror the false statements to white house officials which resulted in his resignation or february this year, nothing about the guilty plea or the charge implicates anyone other than mr. flynn. however, you have president's

team. that sent stocks in a downward move but abc news is reporting that angle. >> i can understand if you are talking to the russians as a candidate you are violating the debit is only one president at a time. if you are offering your opinion or conveying your opinion on president obama's crackdown on resin emissaries, flinging a lot of them out, to convey to the russians that he would not follow up on that, is that too an act that would be deemed unconstitutional, while the pricing things? >> i would guess the details, what was expressed, what we know is on that very date or the date before was within hours, president obama, the

obama administration made the decision to expel many russian diplomats, come out of the compounds, 48 to 72 hours, that is when the flynn conversation occurred. at the least it is running a parallel government trying to have conversations during the transition, whether it is legal or illegal at this point, keep in mind flynn is cooperating with special counsel. in the 20 i want to pull banei put this in perspective no one is sure whether this pertains to the president-elect or president of the united states. that would be very crucial. as a constitutional scholar,

someone who is so impressive he was on a short list as long as i can remember for supreme court justices, not that he was interested but senate judiciary committee member mike lee with us. thanks for taking the time. if such a conversation took place, could you educate me, if a representative of donald trump's, then a candidate for presidency of the united states, a key policy advisor to reach out to the russians and no indication that he did, that is one of the charges in this report, is that an impeachable offense? >> i have no idea what is behind mister flynn's decision to plead guilty, i learned about it moment ago and can't comment on it because i don't know enough about it. neil: jeff flake was a holdout on the tax bill, we are getting word, will new -- he will be a

gay vote. that would seem to indicate there are enough votes to get this passed, presumably tonight. is that your understanding? >> i think we will get this bill passed and passed out of the senate probably today, if not sometime over the weekend but it is going to pass. there are questions about what it will look like and will be undertaking an amendment process over the next few hours trying to improve it. neil: senator flake was concerned about the deficit, let us not worsen the deficit by all measures, whether joining the this joint economic committee or joint committee on taxation, this was going to do that. do you know what assurances have been made to get that vote? >> don't know what assurances have been made to senator flake or what prompted his willingness to vote for it but we have been told, based on modest economic growth

projections this will not blow up the deficit. with fairly modest growth, the type of growth we can reasonably expect based on historical data and what we are doing in this bill this is going to pay for itself. neil: with senator flake's vote, senator bob corker and susan collins, leaning more today than they, senator corker i would imagine, senator flake is edified, more likely a yea vote that would indicate all 52 republicans are going to the yes vote on that. >> there is a high likelihood we have at least 50 votes which is all we need given mike pence can break any tie and would do so in favor of tax reform. it is possible we will get all 52. the question is what it looks like at the end of the day, pushing to provide tax relief, tax-cut on the payroll tax for middle-class working parents.

i'm working with marco rubio to put that into the bill to make sure we bring about this reform and soften the blow of the tax penalty built into the current tax code. neil: you didn't want to discuss at the outset all these fast-moving elements on general flynn but the markets are confused. maybe buoyed by the tax-cut, progress you folks have made, but concerned this is heading into a constitutional crisis regarding the president and who knew what and talked to whom. are you worried about that? >> not at this point. we have lots of other things to worry about. our job is to make sure the tax bill gets done. there are all kinds of things one could assume when looking at the flynn decision but i don't think there is anything in there is a unavoidably implicates anyone in the administration. we shouldn't make any rash decisions or assumptions where

this leads. neil: do you find it improper for a representative of a campaign to be talking to the russians when the campaign is not decided? >> most people would regard it as unusual. whether it is improper or illegal are different questions and i don't know enough about it to comment meaningfully on that point. neil: thank you very much. i take it from you that a vote could be coming later tonight, is that your understanding? >> be coming tonight or sometime this weekend but the important message is we will get this past. it will provide meaningful relief for the american economy and lead to economic growth and job creation. it is what the american people want, what they expected when they elected a republican congress and republican president. neil: the $2000 child tax credit you and marco rubio wanted, is that holding firm or has been revised? >> that is holding firm.

what senator rubio and i are trying to do is try to provide refund ability to the amount of taxes paid including payroll taxes. 15.3% of earnings, this is an important part of alleviating the burden on working middle-class parents who suffer under the current tax penalty. neil: the wall street journal criticized the two of you for figuring out a way to get tax -- it is a burden but that is a slippery slope to give tax breaks to people who pay no income tax. >> but they are paying taxes, try telling a schoolteacher or police officer that they paid no taxes to the federal government. neil: why not lower the payroll tax? >> that is one of many approaches we could take that is neatly into the package in this bill of the child tax credit, the cleanest way of

delivering that relief. neil: thank you very much. to update you on a couple develop and split on the tax thing, we will get into in a second, looks like republicans have the votes especially with jeff flake signing on to this to go ahead and pass major tax reform, would not be the largest text bill in american history or the greatest from high level to dramatically lower level but corporate rates will go down dramatically, we don't know the timetable or, the level at which it gets 20% or whether it goes higher to provide more revenue, apparently the senator was telling us, marco rubio, there was a lot of wheeling and dealing going on. the package on which they plan to vote tonight, we do know it has changed since leaving committee, they have to reconcile that assuming it does pass the senate when it passes the senate with their counterparts in the house.

the second drama, with that going on why are we selling off? the big news was general michael flynn, pleading guilty to lying to the fbi, an abc report that he plans to testify against the president of the united states and report from abc, not confirmed anywhere else, this is not confirmed anywhere else, then candidate donald trump urged foreign policy advisor general flynn to talk to the russians, that would be a no-no, whether it is an impeachable offense in regard to the president of the united states. good to have you. if i could ask a couple basic questions, with the candidate talking to one of his advisers to reach out to the russians, would that violate? >> it wouldn't, the logan act

was passed in 1799, no one has been prosecuted. federal court, especially in new york federal court in 1964 it is unconstitutional. the act is. it is overly broad, vague, ambiguous and violates the first amendment freedom of speech. we begin with that. to answer your question directly i don't think it violates the logan act. of candidate trump had somebody reach out to the russians or any foreign government during the campaign, where is the crime? there is no statute that makes that against the law. neil: president obama was cracking down on the russians throwing a lot of emissaries out of the country, on charges they involved themselves in the election, fast and loose with buying -- buying. would it be unusual for

candidate to be making overtures -- >> president obama did it. other presidential candidates have done it especially those with little foreign-policy experience. warner: to given the backdrop, will this -- you know lawyers, most of them in the senate and congress, they will keep pushing this. will they have a point to want to push it and get to the bottom of this because the original things they were throwing a general flynn he could be facing 60 years in jail and it is whittled down to one charge of lying which could be a matter of months. >> we don't know enough about what flynn intends to tell

special counsel. honestly i have no idea, my initial reaction was this is a plea deal to save his son who had legal exposure to his chief of staff, that was first and foremost on the general's mind when he pled guilty. you should never lie to the fbi. it is obviously wrong. papadopoulos did it, he's young and i attribute it to being naïve and stupid. general flynn should have known better. what he intends to tell i do not know, but if i were a special counsel, the last thing i would try to prosecute under would be the logan act. i read portions of the plea deal which talks about flynn making contact with the russians about a un vote during the transition. there's nothing wrong with that. i had a column with a law professor who wrote a book on transition teams.

this is what transition teams do. they reach out to foreign governments to tell them of their plans and to get a read on the foreign government. neil: some of the indications are that flynn in asking to meet with the russian ambassador was not to get assurance they would necessarily retaliate, measures president obama was taking. whether that is a violation of the logan act as greg pointed out was decided in the 1700s, anyone's guess but it is fodder for both sides today, democrats going full throttle with it and markets confused over it. tax cuts are going to happen but so far confused for the president whether he will be able to enjoy it. after this.

neil: why would the president of the united states flushing on his abc news story why michael flynn would likely testify against the president of the united states and implicate them in the russian overture thing get the president's urging, that flynn was told to talk to the russians, several reports from abc news, they are the ones

breaking all of this, we have not heard it from anyone else, i hasten to add that, that the general felt he had been abandoned by the president in recent weeks, told friends about this decision to make this plea deal in the last 24 hours. we were told separately by john roberts that many were surprised the white house, nevertheless by this move of today, particularly implicating potentially the president of the united states. on the good news front for republicans and their tax-cut progress indications they have enough votes, all republicans voting for this, all 52 in the united states senate, indications that jeff flake is a yes, looking like bob corker could be since they tend to vote in tandem and susan collins could be a yes as ron johnson, republicans who were concerned about fair business treatments were going to be yes

votes. and marco rubio did get their way and get increase in the child tax credit so there was a lot of wheeling and dealing to get those votes, secure those votes. the only question is at what time today, it is supposed to be today they are going to go ahead and try to conclude those votes. the senate will vote on this, it is not a done deal even after they vote yes, substantial differences between the house package and the senate package, we don't know the senate package because it doesn't look a lot like the committee from which it left the house budget republican committee, diane black is with us, thank you very much. i am told it will look different not only for what you folks cooked up but what the senate committee cooked up and

could be moving targets, with a higher corporate rate than 20%, we don't know for sure. is that a nonstarter to you? >> it certainly is not. what we intended through the process, our overall goal to get the economy moving. you don't do that 20% for the corporations, you are not going to get the economy moving. it doesn't do what we intended to do and that will be a good thing about the conference committee, throwing that around and have an opportunity to come out with the best of the best. neil: we are hearing the senate is keeping all those rates, six or seven of them, a lot of rates, lower rate for upper income, you keep it the same in the house, this is not going to be easy to reconcile.

neil: >> once we set out targets and the principles, make something simpler if you keep those brackets, you have to decide what it is that helps those that we were targeting. and not as big a difference to come out of committee, and there aren't that many big differences and what differences are there are ones, it may not be one or the other but a combination, to meet the goals for simpler -- middle income to have the most. neil: democrat john conyers is going to be at 2:00 p.m. do you

think he should lead? >> i think he should lead. there is enough evidence that if there was sexual harassment, no place in congress or the public or private sector for sexual harassment and he needs to do the honorable thing and leave. neil: with that apply to roy moore if he wins the senate seat in alabama, a number of decades to be sure and would not be welcome. >> it takes conviction, something to show these allegations are true. i haven't looked into his case but whether that is so or not, if these are true allegations he should do the same thing. this kind of thing going on in congress whether it is in the house, the senate or employees or the elected official, this is a place we should have

safety for all of the employees and all those doing their work here. i believe if someone is in that situation where they have sexual harassment they need to leave and be held accountable by the way. and put some accountability out there. neil: millions were issued to those who were harassed and worse. no one seems to know how and why and how many but it happened, what has been largely a man's club. >> i know that the house administration committee is doing the work, to have the appropriate information but moving forward, the bill i am a cosponsor of, we have transparency and this is important for the victim, the

things they have done, horrible activities, there will be transparency and we will say no public funds could be used for any settlement cases on sexual harassment. neil: did you know public funds have been used? >> i did not. i was totally unaware of this and when i found out i was so disturbed this might be happening and this is why i felt strongly i needed to sign on this bill to say this cannot happen any longer and we are going to publicly expose people, actions on whether it is a woman or a man, i don't care, it is sexual harassment either way. we need to be held to a higher standard, we are public servants who need to be held to a higher standard and if this is the case and someone has performed sexual harassment on someone they need to be held accountable and need to be transparent. neil: thank you, house budget

committee chairman, very good seeing you. donald trump will be having lunch with his secretary of state rex to listen who we are told is out of a job. a very busy travel schedule approved by the white house. i am a little confused what is going on, and update after this.

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deduction, the you take the yes so we will get from corker, the turnaround by senator dean and johnson, lankford from oklahoma persuaded on deficit and other fair tax, this looks like it is a done deal. >> a dozen roses to susan collins, saving my salt deduction. >> charlie gasparino -- neil: not necessarily in issue. >> a wonderful woman, paragon -- neil: you know, on any other day we would be racing ahead on this news, not today.

>> what i reported earlier today, they were told directly, and it is 100% accurate, he was going to cut some sort of deal, they are telling people i am fine. neil: the president knows he will cut a deal. >> as that was happening, he was telling people, the last couple days, i am fine, and -- neil: you are a long way from that. >> the president himself, developing alternative realities to this, fake news -- neil: you didn't -- >> i said it was this way.

that wasn't his voice. it gives you an insight into his mind. i am not saying the deal flynn cut, the market came back for two reasons after it was down, that flynn was able to testify against trump, there is progress on tax cuts, we might not get corporate tax cuts. neil: we don't know the details or what got these votes to be yes, we don't know about raising taxes. >> that would be problematic. the other thing that came back is it is clear that abc report, may be ahead of itself. flynn if you look at the charging doctrine, they said he will cooperate against transition officials was theoretically trump was a transition official but, had a

deal specifically with the president in their. neil: i was listening to judge andrew napolitano on one of the shows, i am not a lawyer, saying he could have been facing charges that could land him in jail but found guilty for six years. it is at best a few months in prison. what gets you to that point? serving up the president. ashley: or someone close to the president and that is how these things work, mob cases, i covered a few of them and insider-trading cases. i wasn't covered myself but insider-trading cases, i have done a lot of those. you start wide, manafort and start moving in, flynn. the word you hear from people,

like speculation blues not saying it is true, the next one on the hit list is jared kushner, some of his dealings, work within the transition committee. if i made a bunch of calls, these are people pretty tight with steve bannon and trump does this mean the president is toast? with the speculation among those people that mueller is aiming for jared before the president -- neil: volatility, in the markets, the fear -- >> markets are coming back. neil: not done yet. there are a lot of ways to interpret this going to the president. he could claim ignorance of the process as a candidate or president elect, not knowing it is not illegal to be talking to

your aides about talking to the russians. >> it is not illegal to lie to the media or trump would be in jail by now. neil: that is what republicans are saying, defending him on these conversations he apparently had to see where he stood on his early on so he didn't know, you don't do that. lou: president obama said if you want your insurance you can keep it, politicians lie all the time. neil: i think he thought that would be the case. >> i just know from what i understand the existential threat to the president is not in this indictment yet. it may come as a result of this indictment but they are moving in and it is jared he has his bull's-eye on. neil: have you drank a peppermint latte yet? >> you have a fetish for this.

any sex or pumpkin spice lattes. neil: it is peppermint season. and umbrella and the way you go. >> that is sexier, peppermint. neil: i wanted to throw it out. a lot more from that, peppermint lattes to mitch mcconnell, he says he has the votes to cash and lindsey graham says we have the votes to pass. ♪

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knowing that the most important goals are yours. it's how edward jones makes sense of investing. neil: all 52 republicans going to yes votes, what do you think? >> there is a very high likelihood we have at least 50 votes which is all we need given mike pence can break any time and would do so in favor of tax reform. it is possible to get all 52. neil: that is how it is looking right now. anything could change. how did they get those extra republican votes, potentially

all of them? sean duffy, wall street journal associate editor, how do they get them? >> we don't fully know. there is a piece of this online, richard ruben, it looks like around the edges, some accommodation of specific issues some of the senators had but at core here, there is going to be walking into this a disagreement, and agreement to disagree with the joint committee on taxation that says you are adding $1 trillion to the nation's debt over the next we 10 years of this tax reform. and the senate where there are a lot of deficit hawks are saying, you know something? we think the growth rate of the economy is going to be bigger than you are saying, joint committee, we are counting on that happening and we believe those deficits aren't there or they are willing to shoulder them. of the 20 the regular debt will

be growing so much faster, another $9 million to $10 million on that but let me ask you what susan collins is on, the idea the senate like the house might just keep part of the state and local tax deduction or put a $10,000 limit on that, it would cushion the blow somewhat for those from high tax states, wouldn't solve it but cushion it. >> there are a bunch of differences between the house and senate bill, how salt is being treated and deductions are being treated that would presumably be reconciled at the end of the day. how much of that happens in the senate bill, how much is promised will happen in reconciliation down the road we don't know. neil: not going to be smooth, differences between them not going to be a rubberstamp.

>> senate bill repeals the individual mandate requirements of the affordable care act, differences, the house is not, differences in things like tax brackets, the speed of implementation of tax reform. at the end of the day, there is a fundamental law of bureaucratic physics, momentum is your friend and the senate has that now. no question, for all the disagreement this is moving forward and senators are getting on board either be grudgingly or with the hope that their particular concerns will be resolved down the road. when john mccain said i am satisfied, i am going to vote for it, that was a signal to a lot of other senators that you have cover and he felt the procedure had been sufficient enough that this had not been done behind closed doors and too rapidly that there had been enough hearings that it had credibility. neil: that was the watershed

event. a number of powwows with wall street corporate powers many of whom have said they expect this to happen but does not necessarily signal they will be doing a lot of hiring once they do happen. that is something we will get into later in this broadcast. also getting into the rally that could have been. still early but a lot higher with these-being plus going in the opposite direction if there was no mike flynn news today, after this. ♪ ♪ insurance. liberty did what? yeah, they saved us a ton, which gave us a little wiggle room in our budget. wish our insurance did that.

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neil: we are down 89 points was we have had some volatile swings, i don't remember a day like this, normally it goes in one or the other direction, not multiple directions, sometimes within seconds of each other. market watcher joining us right now. fighting against the tax cuts, they are optimistic, but

concerned about the flynn developments. what is out here? >> a perfect storm with the flynn developments, first day of the month from an incredible end of november so we start the new month and get a bombshell dropped on us out of nowhere so the market disappeared, the sell side was in complete control and we came to the conclusion this was old news, the market is not focused on anything political, it is focused on tax reform which in essence is political. the market is focused on. neil: we don't know what final concessions were made from the original senate package to get the yes votes that have been coming in. one idea was they are going to get fairer treatment to small and medium-sized businesses which could cost big businesses which could make a be affect prominent dow, s&p stocks, are

you worried about that? >> the small caps of underperformed, they are down the most. is it really going to benefit them the most. that has not been the case as well as the market is related to. will affect big business? maybe. in the end of it they will get a break as well and it will benefit them, maybe they will use it for more hiring, more infrastructure spending on their part, that is to be determined, so many concessions to be resolved, we are a long way from a tax plan. neil: another argument that has been raised, as much as the markets are advanced it will be a lot cheaper once these taxes go into effect. things change because the lower tax rate all of a sudden, not as pricey as they appear to be or as heavy, do you agree with that? >> i think the s&p earnings

will increase 6%. lea:%. given the run-up we had in the last week of that, we already baked that into the cake. >> we have pie in the sky hopes for this tax bill, you won't be that way. concessions will affect both sides. would be nice to see both parties come together and not have such a divide, one size says all good, the herbicides is all bad, has to be good for all of us and that is the hope of this bill, we can get to that point and the markets, let's take a breather, reevaluate, hitting historic highs every day like we are seeing is concerning from a market standpoint. it is not all that good, but most of it is good. at least until the end of the year we will see the market go higher. neil: we talk about how the leadership rotates, something

healthy markets do aztec crumbles as it did a couple days ago, financial issues come to the floor, insurance issues, when that starts happening what do you do? >> that is a good question. as long as sector rotation is in play you will play that trend and be ahead of the sector. this market went from a growth market to a value market almost overnight, early last week so you have 2 play the trend, you can't have all your positions sitting in tech and saying i made so much money this year i'm not going to lock in profits, bit coin is a great example how quickly tides turn, you have to be nimble and affect the financial sector underperformed and the transport, those are the biggest leaders in the market. neil: thank you, more after this. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable.

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neil:ing all right, there are two issues that are sort of gnawing at traders today. it is general flynn and his pleading guilty to lying to the fbi and possibly implicating the president of the united states that's weighing on traders and offsetting the gain we'd nonetheless be seeing on the prospect of major tax cuts coming and a senate vote expected later on tonight that will confirm that. so it's this push and pull here that's been dictating the mood at the corner of wall and broad. dan henninger joins me now, and i'm telling you, crackerjack writer as well. ron christie, special assistant

out of washington for bush 43. which wins out in this argument? no one likes a constitutional crisis, if that's where this could be heading. way too soon to say that. offsetting whatever gains we were getting from tax cuts. what do you think? >> well, i think, you know, markets are supposed to anticipate events, and i think yesterday we saw them anticipating most likely success for the tax bill. it ran way up on that. and the market's already at an historic high, so perhaps it got a little bit frothy. neil: used the flynn stuff as an excuse be. >> yeah, to sell off some today. it hasn't been a big selloff. the flynn excuse be, or the flynn event was significant, there's no question. this is the former head of the director of national intelligence pleading guilty to lying to the fbi. we have a special prosecutor who is looking into whatever happened between the trump campaign and the russians in the election of 2016.

so it was more than nothing. and i think what the markets have to do and all the rest of us have to do is absorb just what exactly is the significance of mike flynn's plea. as catherine herridge was reporting earlier on fox, mike flynn is broke. this guy has no money. he cannot go forward trying to defend himself against robert mueller, so he has basically copped a plea, and the question is what, if anything, can he tell them about the rest of the members of the trump campaign. neil: yeah, you do wonder, though, because he copped a plea on one issue of lying when there were so many other potential charges, we're told, that could will -- that could have landed him in jail for decades. this one could amount to, if at all, a few months in jail. so something was arranged. >> we should try to focus on what a special prosecutor does. neil: right. >> his brief was to look into events of the 2016 election and possible relationship between the trump campaign and the russian campaign.

but ultimately, his mandate is to bring charges for crimes committed. his mandate is not simply to find evidence of collusion. he's not going to give a report to the american people -- neil: sometimes as we learned from ken starr, it's a direction having nothing to do with the intent of the original investigation. >> that's right. ultimately, he has to have evidence of indictable crimes, and so far there's no evidence of that. neil: switching gears, ron christie, we're also getting reports on what has gotten these potential yes votes on the part of some senators who were sitting on the fence. we are learning now that a lot of the key points they agreed on was, for example, keeping the amt, also restoring the property tax deduction but with a $10,000 cap that would be just like what they cooked up in the house, restoring deductions for medical-related expenses for two years. i don't know if there's a limit on that. and increasing the so-called

pass-through deduction from 17.4% to 23%, very analogous to what the big companies get. your quick thoughts on that, if that was the means by which -- or these are the means by which they got these yes votes. >> good afternoon, neil. i think it is. there was a lot of concern from senators and certainly members of the house of representatives who are watching these proceedings cautiously and carefully that a lot of their constituents in higher earner states and cities would be hurt by some of these provisions that were not originally in the senate bill. so the provisions that you've just outlined, i believe, have given a lot more assurances to some of the senators who are wavering on the p fence, even getting someone like a susan collins, getting people who have been wavering, who've been hesitant who are now saying, you know what? this doesn't look so bad after all, and let's go to the house and iron out some of these issues so we can get something done for the american people. i am cautiously optimistic.

of course, mitch mcconnell, the senate leader, said earlier today they have the votes. i'm cautiously optimistic they do. let's have that vote, go to conference and see if we can get a significant tax bill for the american people. neil: i don't think that conference is going to be, you know, easily sledding, do you? >> no, i don't. i don't think it's going to be easy sledding, but at least it proves that republicans are at least attempting to govern here. neil: that's true. >> my frustration has been seven years we can't get an obamacare fix, and now we have largest majority since 1929, and we can't pass a tax bill? let's just move forward, see if we can actually put one and one together and get two and see if we can build on there and make some progress. neil: you know, when you look at the ten-year plan here, dan, many were making a big deal about the tax cuts not paid for, they're going to add a trillion to the deficit and all that, and they totally ignore the fact that just overspending in this thing for the next ten years is going to be another $9 trillion. as if that didn't matter. >> yeah, i mean, people forget that barack obama virtually

doubled the deficit over the eight years of his presidency. and i think on this question of whether they're going to increase the deficit over ten years, i mean, the argument is that the tax bill will not produce enough revenue to fund the government. now, the question here is who's, whose goals are being served here, the government or the people who are going to benefit from the tax cut? i mean, the idea that we should be worried about a tax cut that is not going to give the government enough money to spend, to me, seems to be a completely wrong goal for a republican tax bill. neil: but we're obsessing over something that is actually one-tenth of overall debt, ignoring the nine-tenths that's out there. and you mentioned, by the way, debt accumulating under barack obama, under george bush. republicans and democrats have failed at this, and i see very little to indicate that will ever change. >> and the assumption is the economy would only grow 1.9% a

year over the period of this tax reduction. it's currently growing at 3% a year without the tax reduction or anticipation of it. and also i would add with the deregulatory things that trump's been doing. neil: so you're saying that would go a hong way. >> if you get it up to 2 or 2.5%, it would go a long way toward satisfying these concerns. neil: you know, ron christie, another thing we've gotten into here is this idea the president needed a win, the republicans needed a win, but the impact won't be felt for a while. for individuals, even for corporations depends on how they commit that savings in taxes they're getting, they might just plow it back into their stock or their dividends. they're free to do that, but even seeing and registering that impact, let alone the delay, hiring folks, expanding plants, equipment, all that stuff, what if that isn't resonating a year from now and we're at the midterm elections? then what? >> it depends, of course, what

they ultimately pass. if they don't get anything accomplished, it will demonstrate that we've said for years trust us with the honor -- neil: no, no, they get it done. >> oh, they get it done, oh, no. if, in fact, they do get it done, neil, i think that would be a nice shot in the arm. i think it would be promises made, promises kept. yes, it might take several months past the election in 2018 for people to start actualizing some of those returns and benefits, but at least it will demonstrate they got significant legislation to the president, the president signed it, and it made a good, honest down payment of what republicans said they were going to do and how they were going to govern. and i think that is what would give people the ability to say, well, you know what? we'll give these guys two more years or six more years in the house or senate respectively to try to do more things good for the economy. neil: what do you think? >> i agree with that, and i would add what is the alternative to this tax bill? the problem for the last eight years has been a lack of wage growth and a lack of capital

investment. the country needs both. they are passing this tax bill to reduce the corporate rate to 20%, to increase capital investment, put more pressure on the job market, raise wages. if your argument is that we shouldn't be doing this, which is the argument of the democrats, what should we be doing to raise wages? they had a shot for eight years, neil, and nothing happened. so now this is what's on the table. let's give it a chance. let's see if it can work over the next two or three years. neil: you would argue that it would be better than 1.9%. >> i would say so. neil: all right. dan, thank you, ron, i want to thank you. we were talking at the outset here michael flynn pleading guilty to the fbi, to heritage foundation senior legal fellow john malcolm. one of the things i was trying to get a handle on here, if the general is saying that he at the behest of the president was talking to the russians, help me, because i'm not a lawyer, i don't know about the logan act and all. i do know that it's, apparently,

a bad idea if not illegal, if not unconstitutional, to have two presidents at the same time trying to do foreign policy here. but if the president-elect or the guy running for president is interested in communicating or having emissaries communicate with the russians on a host of other subjects, is that a bad idea? >> well, see, there is only one president at a time, and in december of 2016 it was barack obama. you had a president-elect at the time, donald trump, so certainly if you believe that these back channel communications were going on, assuming they were between general flynn and then-ambassador sergey kislyak, it would be embarrassing because it certainly suggests that the president-elect was in some way trying to undermine the efforts of the then-sitting president to sanction the russians. neil: and what's crucial here is the time -- >> not necessarily illegal. neil: what's crucial is the time

at which this happened. if he was just elected president, it's a little different if it was ahead of his even getting elected president, right? >> yeah, no, look, i suppose that's so. back channel communications do happen. the logan act has only been used once, i believe, in its entire history, and that was well over a hundred years ago. it is most likely unconstitutional if it was ever pushed. however, it is certainly embarrassing at the very least, something that one might not want to talk about and certainly admit to the fbi. but lying to the fbi is a very, very serious matter and, of course, if there were these back channel communications, one of the things they'll want to figure out is who ordered them and why? was this payback for something or to just because they thought it was bad policy and wanted to send a message that this was something that would be taken care of after inauguration day? there are a lot of unanswered questions, but the one thing for sure, whatever story michael flynn has to tell, he's now telling it. neil: well, he obviously made system sort of a deal here that

would take down or knock down charges that could have put him behind bars for decades to one simple charge. i'm not minimizing it, that at best could keep him behind bars for a few months. >> yeah. neil: some sort of a deal was made there. >> oh, yeah. look, there's no question he's entered into a deal, and he's hoping to get the benefits of that cooperation with the special counsel when it comes around to sentencing. whatever other activity he might have engaged in in the terms of other false statements or being an unregistered foreign agent, certainly something the judge can take into consideration at the time of sentencing. but he has limited his liability and capped his exposure by entering into this agreement. neil: john, last dumb question for you. much of the argument had been made about the trump folks and the president himself on these issues. he was new to the job, didn't know it was bad form or not wise, not prudent to do a lot of the things he did; talking to the russians, advising fellow republicans to eat up on this

investigation -- ease up on the investigation, how far and how long can you go with that? [laughter] >> well, the one thing where you can go a long way is if you are literally talking about charging somebody with crimes. these are specific intent crimes. you have to know the law, you have to know that you are violating the law. so i suppose that that can provide you some solace. but, look, you're playing with bug boys, you need to -- big boys, you need to surround yourself with people that know what they are doing. and i like to think that the president did and he didn't commit a crime, and so far nobody has implicated him, but we'll see how it plays out. neil: a lot of the things that were charged in the beginning about making overtures to republicans, ease up on this, that sort of thing -- >> right. neil: -- that doesn't smell right. >> well, there i think you're talking about the conversations that he had with jim comey -- neil: right. >> -- in his office saying, look, flynn's a good guy -- neil: and beyond.

urging republicans where's this going -- the excuse has always been he's new, and i understand that, but it only goes so far, doesn't it? >> look, i agree with you. you are the president of the united states, and you need to learn these proper protocols, and there are rules to follow. i still question whether or not he committed a crime. i certainly don't think that that conversation with jim comey rises to the level of obstruction, but we'll see where this goes. neil: indeed, we will. john malcolm, thank you very, very much. >> good to be with you. neil: we are now finding out why so many republicans who were sitting on the fence less than 24 hours ago are now off the fence and yes votes. it could be all 52 republicans voting for this tax measure. they got what they wanted. all of them. how is that possible? ♪ ♪

neil: now we know why, what, about haa dozen united states senators who a little more than 24, 48 hours ago were kind of on the fence are off the fence on voting for this. a number of amendments were made to win them over. we don't know their total cost, where all of this will go, but we do know it is likely all 52 republicans, all of them, will vote for this measure whenever it comes up for a vote,

presumably tonight. adam shapiro with more. >> reporter: one of the things fox business has learned is that a promise to repeal the alternative minimum tax, that is going to die. the senate tax bill, as we've been told, is going to include an amendment that would keep the amt but raise the threshold as to when it would kick in for people. and that will actually save, when they're adding up the debt and deficit stuff, about $133 billion over the ten-year period. so this is going to be big because they had promised to repeal the amt. it is not going to be repealed. we've also learned that they're going to, the senate had originally proposed repatriation on assets companies had in banks overseas, 5 president on illiquid assets, 10% on cardiac. they're going to raise those, and it's going to go to 7% on illiquid assets and 10% on cash. these are just parts of the ways

they intend to shrink that trillion dollars in debt that would have been added to the national debt that the jct was talking about yesterday. susan collins got her restoration of the property tax deduction with a cap of $10,000, and they're also going to restore the ability to deduct medical expenses with a phaseout period of roughly two years. neil? neil: you know, that brings it closer to reconciling what had been some sharp differences with the house. those allowances might have improved the odds of reconciling with the house, right? >> reporter: very much is because, remember, the property tax deduction was a house issue. neil: right, right. >> >> reporter: and, in fact, you have got the peter kings and the tom reeds who wanted that in there. will the house go along with the amt being kept alive, i would -- most likely. but until you're in conference committee, you don't know. neil: you don't know. adam, thank you very much. close, not quite a cigar yet, but it's that way. to dagen, connell, and deirdre.

what do you think? >> i think they end up keeping the alternative minimum tax in there, that that's not going to placate the republican lawmakers in very high-tax states. you get rid of the state and local tax deduction and also keep amt? you are really sticking it to higher income and families in those blue states, in new york, connecticut, new jersey, massachusetts and california to name them. that was the only -- neil: at what point it kicks in -- >> right. but that was the only thing that republican lawmakers in those states could argue to their constituents, hey, you might get rid of the state and local tax deduction, but -- neil: yeah. and we are doubling your standard deduction. that's not going to cut it. >> dagen is right, but it may not matter math wise. there are no republican senators from -- in the house -- neil: but the representatives when it comes to the house. >> probably not enough to defeat the bill. what can they lose, 22 in the

house, right, and still get this thing passed even after it comes through conference? i'm saying the point is math wise they may still have enough to -- >> but -- go ahead, deirdre. >> i was just going to say unknown as of this moment, and we are seeing markets off their lows, so i think investors long term at the moment don't know what to make of all this. toole neil well, i think the markets are more fixated on flynn stuff. if this didn't happen, we'd be up a lot. >> indeed. >> probably. >> but if the senate does something that's going to complicate the passage of this even in the house, you're right. listen, the republican senators, they -- this bill is designed to basically make an obscene gesture to those democratic lawmakers in high-tax states, period. they don't care what they think, and it's a political maneuver, if you will. but on the house side, what they really need to do is come up with something that doesn't have to go to conference, that you don't have to -- the house -- neil: or avoids the fight.

>> right. could just give a thumbs up to whatever the senate passes. if they keep amt in there, that is a big hurdle for republicans. neil: do you know what we forget, these arcane senate rules and budget reconciliation. >> yeah. neil: they're a creature of that process. and a lot of people are saying in the end what i found fascinating in this, well, you're not paying more these tax cuts, but no one said boo about you're also not paying for the $9 trillion plus in extra spending that's going to result. that, you were so focused on the tax cut part of that revenue that it's only a tenth of the $10 trillion we're adding to our debt -- >> and there's a couple twitter comments that went around earlier saying for all gen-xeres, they should be screaming about the burden that their preteen and teenage kids are going to have to carry as they get older, which i think is a fair point. neil: depends if you like those kids. [laughter] >> you could like one -- >> these nincompoops, though, in the senate, they're getting

little favorites -- neil: every time you say something like that, it does hurt our bookings -- >> but you know what? it's coast to coast with neil cavuto, and how you only have me on once a month. you can promise me -- neil: early in the morning -- [inaudible conversations] >> jeff flake for his vote secures commitment on daca, lisa murkowski gets a commitment on drilling in the arctic -- neil: that's how it works. [inaudible conversations] >> that's why people hate -- neil: [inaudible] >> yeah, that stuff. >> that's why people hate them. that's why their approval rating is lower than -- >> what? [laughter] >> at the end, this is a corporate tax cut. we said it from day one, this is a corporate tax cut that they have to find political ways to pass -- neil: wouldn't it be a kicker if the corporations don't hire people -- >> we're not sure where the -- >> where are we on that, by the way? i thought we were staying at 20?

neil: what if they don't -- they're free to do what they want to do, if they just buy back stock and they don't hire people -- >> well, and but the pact that they tried -- the fact that they tried to do corporate tax reform with some changes on the individual side, you get marco rubio going but what about the children? we need to do more for the children. [laughter] >> that's a really good marco rubio impression. [inaudible conversations] neil: i don't know. >> boxed in by the $1.5 trillion over the ten years -- >> he wants to make the child tax credit -- >> no, i'm not arguing. >> i'm saying he wants to make it refundable against the payroll tax which, by the way, okay, so that pays for somebody's social security and medicare, now he wants somebody else to pay for it? talk about putting a burden on our children. neil: yeah. and they don't pay any income tax. giving tax breaks to people who don't pay, if you were really serious about payroll tax which is an onerous -- >> it paid for a benefit, neil.

neil: i understand that. >> angry at everybody. neil: why are you getting angry at me? why didn't they do something about the payroll tax itself then? >> because they're gutless. >> that's your answer. we'll be back after this. neil: switching gears a little bit, the fear was when we got the flynn news, and it compounded when he was going to serve up the president and compounded itself yet again on reports that he might try to draw a line between the president meeting with the russians and all of that, all sorts of sinister stuff -- >> yeah, i mean, gold was spiking, right? treasuries, yields at their lowest level in -- neil: it washed out. but a lot -- >> it was a reaction. >> i'm old enough to remember the starr report and the impeachment of president clinton. neil: absolutely. >> two months before the starr report came out in september, september 11th, 1998, the s&p, the overall market was down about 20% in the two months before that. starting in the summer. but once it came out even during the impeachment proceedings

because the economy was great, because of the technology boom the market from the starr report to the end end of the year was up 25%, and it just kept running. >> and we're up around 17% now. >> definitely a few parallels to that. obviously, we're very far away from that. number one, today that big spike down a lot of algorithms are going to drive that on a minute to minute basis, and people take a second, try to figure out what's going on, but they do start to have deeper thoughts about worst case scenarios. is the worst case scenario in this whole russia investigation and the flynn plea deal the removal of the president of the united states from office? okay, if it is, then what's the replacement for that president? another republican president. is that person pro-business. so i think they start to have thoughts about is the world the end of the world -- neil: you really are selfish. >> that's true, but what does it have to do with this conversation? neil: me and my money --

>> no, we're thinking about the children. >> we are thinking about the economy. and making it d. neil: you didn't address -- >> anything. neil: -- ralph telling me we try often -- >> i've had a lot of dental work this week. i have a giant bruise on my face, too, that -- neil: okay. well, i'm just saying, i mean, it's kind of hurtful. >> no algorithm for that. >> but see after today you're, like, please don't book her for a up couple months. neil: deirdre's always pleasant. connell, mostly pleasant. [laughter] >> i love them both. >> who is that, ralph? neil: love, love, love watching all you guys. especially you, young lady, early in the morning with maria, you just have to be in the easy chair with popcorn -- [laughter] i'm thinking to myself, there goes that guest, there goes that guest. [laughter] more after this.

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neil: you know, there is other news today, folks, like john conyers, holding a news conference at 2:00 p.m. eastern time. calls to resign over the harassment charges. also politico reporting that congressman blake farenthold, a texas republican, charged of using taxpayer money to settle a sexual harassment claim. so that's coming from politico. he has not responded to. that when he does, we'll pass that along. and nbc news chief andy lack calling matt lauer's behavior appalling and top-to-bottom review there, there are separate reports that lauer is seeking a $30 on million payout or what he's owed on the remainder of his contract. if he has a good moral clause in the contract, he'll not be able to get a penny but the expectation is that he'll do a little bit better than a penny. see what happens. abc news now reporting that mike flynn is going to be

testifying and implicating the president of the united states, donald trump. what he is saying, what about conversations involving the then president-elect, the candidate donald trump, corresponds what he's going to say and what was said to the russians, get the skinny all of this with judge andrew napolitano who joins us on the phone. judge, what does this mean? and the implication of this settlement, only one charge, i heard you this morning talking about the significance of settling on this one charge that he lied, because he could have been facing a lot more charges, right? >> i'll give you the numbers, neil, in terms of jail exposure which is the way lawyers and judges look at this. if he had been charged for everything the government claims there is enough evidence and if he had been convicted of all the charges, he was facing 60, 6-0, years in jail. as a result of pleading guilty

on one charge of lying to the fbi, facing between six and 12 months in jail. so what would he have given the government to induce them to that radical reduction from 60 years to a half a year to a year? it probably is something involving the president of the united states. now, if it involves the president as the president of the united states, the conversations, he's the chief adviser, crafter, creator of foreign policy, that's not an issue. if it involves the president as president-elect, then the issue is what the president-elect and general flynn interfering with the foreign policy of the united states technically a crime but never prosecuted. but if it involves donald trump the candidate, instructing general flynn or acquiescing in general flynn, engaging in deals with the russians, we have this very profound problem

on our hands of an american citizen, general flynn and the future president, helping the russians to interfere in an american election. we don't know exactly what it is. i saw the -- as most of us have by now -- the plea agreement. it pertains to communications with russians during the transition president. it does not really address what might have happened or what instruction the president or the candidate might have given to general flynn during the campaign j we also don't know to your point there, to put a fine point to it, whether this was before he was elected president or after when he was president-elect. is there a difference and distinction there legally? >> absolutely critical distinction. because after he's elected president, he has no interest in affecting the outcome of the campaign. but i did see, neil, reading between the lines, in the plea

agreement, what i think general flynn is going to go to and where i think bob mueller's people lead him to, that is an effort to cover up or conceal what had been done by others in the campaign with the knowledge of the president. that is what i think their strong case is against him as a result of the documents they revealed this morning. neil: all right, so a legal question i'd have, if president-elect trump, let's say he's already elected president, is urging flynn to contact russia. we'd have to know what it's about, right? that wouldn't be unusual for an incoming president to send out feelers or through emissaries contact other foreign governments. i'm sure that was their posture, correct? >> correct. look, we didn't have a secretary of state. normally the secretary of state is sworn in the day after a president. for some reason rex tillerson was not. so not only are the conversations you're describing

normal, they would have been expected in this situation where general flynn would have been more or less taking the lead on communicating with foreign governments until a secretary of state is in place. that's where it's very key, what they're talking about. were they talking about what the u.s. policy towards russia is going to be in the incoming trump administration, or were they talking about what they don't want anybody to know about and might have been discussing during the campaign? either way -- neil: go ahead, i'm sorry. >> this is not good news for the president. general flynn was his constant confidant from june of 15 when he first began his campaign to february of 17 when he fired general flynn, and during that time period, we now know he dispatched general flynn to talk to many foreign leaders.

question, did he talk to any russians about digging up dirt on hillary or using social media to manipulate the american public. that's what bob mueller wants to know. neil: bob mueller has to distinguish between conversations involving what role the russians might be playing in the election and the president or his emissaries trying to find out let's say about isis, right? >> correct. correct. by general flynn asked ambassador kislyak about isis, that is reasonable and to be expected. but if he asks him about the hackers and the dnc that are not ordinary and reasonable and could be incriminating. neil: if you are donald trump, would you be nervous? >> yes, and i would have a different team representing me. this came up so suddenly and with such ferocity, unless trump knew about it and the

rest of us didn't, i'm sorry to say, that i wish him well and i want him to succeed, but this is now a major, major distraction on the cusp of a legislative victory. neil: yeah, yeah, timing is everything. to your point. judge andrew napolitano thank you very much. >> you're welcome. neil: not that wall street is the best arbiter of things like, this but right now off its extreme lose of the day. down better than 350 points, now down about 63. these are fast market conditions and violently swinging ones as well. right now more enthused about tax cuts than potential administration cuts. stay with us. copd makes it hard to breathe. so to breathe better, i go with anoro. ♪go your own way copd tries to say, "go this way." i say, "i'll go my own way" with anoro. ♪go your own way once-daily anoro contains two medicines called bronchodilators,

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. neil: all right, if you're an investor, you like this kind of news, if you're waiting for guys to hire you and you need a job, you don't like this kind of news, as we have been reporting here, growing indications, companies are more inclined to pass along their

profits to their shareholders. latest three there, guys, what's coca-cola, pfizer and cisco, correct? the latest to indicate that lot of tax savings are plowed right back into the stock, benefitting the shareholders but that is not necessarily in the plant and equipment. that is down the road, nothing illegal about it but for a lot of republicans promising a bigger job wave as a result of this maybe not so fast, to ism committee chair, what do you make of this? >> closed the month of novwith a pmi of 58.2, strong performance, anything over 50 is expanding environment. so we have 18 industry sectors that we report on and we had 14 of the 18 reporting expansion. now you within respect to your question, neil, i think money goes back to shareholders. money doesn't go under a mattress, so it ends up getting

reinvested. see what happens in the longer run. our community is positive on what's happening in the manufacturing environment. we had a really high quality month this month because the number was primarily driven by due order activity as well as production, and the pmi is made up of five subindexes. neil: and the pmi stands for what? >> the purchasing managers index, right now pmi, goes back to 1931. it was jointly developed with institute of supply and management. neil: what will the manufacturers do, tim, as a result of the tax savings they're getting. the easiest thing to do is to just put it right back into their stock or their dividend or to -- right? that's the immediate indication, and these companies indicate that for the time being? >> we run a lee time analysis where capital equipment is averaging 160 days lead time. our community is saying it's going to be a good investment

year going forward into 2018, and they have said that 2017 has been pretty strong, so i mean, from the manufacturing perspective, things are looking pretty good. neil: so i guess what i'm trying to get a handle otim, it changes a lot, you cannot make the argument that the more you plow back into company's stock, the better if, does it allows you to go, for expanding plants and doing the stuff you focus on, but it isn't immediate, right? so people expect the immediate bang for the buck, it will see that, will it happen but be delayed. what's your sense? >> well, you know, actually the gdp economy consists of manufacturing and services. the services piece has more of an immediate effect. the manufacturing piece is a little bit more longer. so things don't actually show up the next day, for instance, new order activity which is strong this month generally new orders have a 60 day lead time. the new orders today, some

instances we're not performing against those until sometime in january. taxes is a good thing for the economy, i don't think you're going to see the big bang on day one, but positive sentiment, good growth, we've had really good performances this year, our pmi number is the fourth highest in the last 12 months. it's above the average for the year, above the average for the last 12 months, so i think we're pretty confident that you're going to see a reinvestment, and where that shows up in terms of wage improvements and stuff remains to be seen. neil: thank you very much, good seeing you again. >> thank you. neil: i want to switch very, very quickly if we can, mark warner, the virginia democrat, big on investigating a lot of the russian ties with the senate intelligence committee. let's listen into this. >> still under die. how many more figures have to be brought to justice because of their ties with russia, before we end up connecting all

the dots. >> do you think president trump will be implicateed? >> i believe that we need to give everybody the benefit of the doubt, but until we get all the facts, but i'm going to be very anxious to see since it was obvious that general flynn was in a great deal of legal jeopardy, and it's curious he seemed to have pled guilty only to one charge, so my hope is that general flynn will tell everything he knows and why he was having the contacts with russians? who directed these contacts? i think it goes well beyond the fact that he just lied to the fbi. >> do you have knowledge who the presidential transition officials were who did direct him to have the conversations with the russians? >> again, i'm anxious to wait for general flynn to come clean, and i hope that special prosecutor mueller will get that information out because the american public deserves to

know. reporter: do you have confidence in richard burr and why is the president pressuring to end it? >> listen, i think the chairman made very clear that we needed to keep the distance from the white house, and we're continuing to work in a way. we're getting all the witnesses that we need to see, there are a number like mr. kushner and others that we're going to want to invite back. this investigation is going to continue in the bipartisan fashion, and we're going to get the job done. reporter: what's the next shoe to drop? >> you know, truth is, this is a story that you can't make it up. it is -- it's still remarkable to me, that as we see senior intelligence officials appointed by this president acknowledging the massive russian intervention. we've seen the social media companies that first resisted but now acknowledge massive

russian intervention. frankly virtually every one of my republican colleagues acknowledges russian intervention. the one individual that seems to deny that this is not a major issue is donald trump. i kind of wonder why. so again, we'll see where this story leads. reporter: have you talked to vice president pence given he was the head of the transition? >> as many times you ask, we don't share who we'd like to talk, to when we'd like to talk with folks. i have a great deal of confidence in special prosecutor mueller. i'm anxious to hear general flynn's full explanation of his contacts with the russians. clearly he was willing to lie about those contacts, and lied to the fbi, and i'm anxious to hear from him who directed him to have the contacts. reporter: what have you seen of the documents?

do you have concern of the potential of the vice president? >> not going to share -- i'm not going to share, our investigation is ongoing, and you know, i think what we owe the american people is all the facts, and we've still got more folks to talk to, and you know, we want to get this job done but want to be complete, and again, one more that we've seen some, and obviously including the president who said, hey, nothing here, let's try to shut this down. i don't think there's anybody that's following this story now in light of another admission of guilt coming from a senior trump official. this time the national security adviser, that we don't owe the american public the follow through of the investigation until we have all the facts out. reporter: did senator burr previously tell you about the conversation? >> the focus is are we going to be able to do this investigation in a way where we get access to all the

witnesses? we are going to do that, and i think again, i was proud of what the chairman said in the "new york times" story that he acknowledged that he needed to stay away from the white house. but what's the real issue here is you've got this repeated pattern of the president of the united states, who's trying desperately to stop this investigation. cost jim comey his job, because he wouldn't stop the investigation. he intervened with senators. he intervened with other senior intelligence officials. i think the american people, and a lot of us asked why is he so desperate to have this investigation stopped? particularly as we see more and more people either plead guilty or come forward under indictments. reporter: we've got to go. senator, thank you very much. neil: you've been listening to mark warner, the ranking minority member on the senate intelligence committee indicating it doesn't stop with

flynn, that he wants to maybe get a chance to speak to jared kushner again, that he obviously thinks it's a significant development when a former national security official has been found to have lied to the fbi, and the reasons behind that, and implicating the president of the united states all fodder for this committee, and that something that keeps this dragging on. the dow down about 91 points here. the fact this has been a competing element with something that is normally good news like tax cuts and the prospect of a yea vote sometime tonight is the time which we led. back with charlie gasparino, where do you think the flynn thing is going? >> when the senator was speaking, people digesting the news. neil: a weird day for swing states. >> it really is, shows that markets sort this stuff out long-term, not short-term, very volatile. basically what i said before earlier. when i talk to people in the trump orbit today following the

flynn news, they discounted the severity of the abc news report that flynn was specifically going to testify against trump himself. what i was told is that the target that mueller is laying out as the next shoe to drop. i'm not saying he's guilty. he's not. he's been public with this, is jared kushner. that the trump son-in-law. is that good or bad for the president? it's good it's not him directly, right? but ultimately bad. and you see that in the market action. listen, if you got indictments, and this is unprecedented. so early in an administration. have you former campaign manager inyou dite -- indicted. you have michael flynn, national security chief, he was indicted and possibly senior adviser/son-in-law indicted. neil: we're not at the last one yet. we lived through the watergate

period, investigations can go on and on and on and someone copping a plea leads to others doing the same. >> right, and leads to others being indicted. this is where i think the market overreacted to the initial report. prosecutors generally don't get a guy, they work inwards slowly building the case until they corner their target. the target is obviously president trump, not saying he's guilty. neil: why does the president -- you mentioned it earlier, why does the president think none of this is touching? >> that's the alternative reality of donald trump. maybe it won't touch him. by the way, they went after everybody surrounding the great hedge fund trader steve cohen. clearly the target, they never have evidence to go after steve cohen. steve cohen is going to restart a hedge fund soon, open it to the public. neil: by the way, collusion is the toughest of all things to

prove, and a debate among judge napolitano here. that alone, they expect it. >> how many people indicted on the logan act, i hear it's none. neil: oftentimes it's a he said-he said kind of a thing here. the president asked to talk to the russians and you have to prove if that was true, he asked you to talk about the election when it could have been isis. >> and asked to you talk about, you know, hacking -- neil: and two people have to agree. >> hack into the e-mails, there's a lot of variables here. i think there's a couple take away, you have the alternative reality that donald trump lives in. this is not great development, yet he's telling people, i'm fine. and he is telling people this. there's the other development, so early in the administration, correct me if i'm wrong, and if i'm wrong, call me out, this much sort of scandal around among the senior aides -- >> the closest i think of one

person going is burt lance, jimmy carter's budget director, but the other stuff alluded to and trying to raise it with the judges and other legal scholars here is that the president can claim he was new and is new to the problem, so doesn't know that talking to authorities about this russian thing or going light on an investigation, that that's at the very least improper. but that has been the argument republicans defending him have said he's new to the system, doesn't know that sounds, asked for progress on the investigation, i don't know what the skinny is here, but he falls back on that a lot. i had no idea. now he knows, obviously, but a lot is going to be raised about who he talked to and at what time. >> knowledge and intent matters in this. neil: but it's amazing all of this happening on a day we likely get tax cuts passed. >> by the way market is not off that much. neil: and you varney obsess over this by the way, tick-by-tick movement in the

market. >> i love watching the markets. i like interpreting what the markets are saying. long-term for an investor, you should not be worrying about that. just because the market goes down. neil: on the tax cut, if you don't mind my veering here, the market is rising in anticipation of it happening, looks like it's going to happen. what now? >> i think that's marginally, particularly if you get the corporate tax, we have to see corporate taxes, it's a great thing for the markets. neil: the amc is back. >> donald trump, worst-case scenario, i know investors are thinking this, he gets indicted. have you pence in, if he has to get impeached and have you -- neil: way ahead of yourself here. >> i'm telling you, people think of those long-term -- neil: you talk to greedy people who are absorbed with money, money, money. >> i know. neil: it's sad. >> i love it. i'm going dye my hair orange tomorrow. if he gets the 20% corporate tax cut, i might wear a trump wig on the air, really.

neil: that's his hair, that is his hair. >> no. neil: charlie gasparino, thank you very much, you never know with charlie. that's the way it goes. i know this, trish regan, love it be her today, she is at the reagan presidential library getting ready for a very, very big show. so much more, to you, trish. >> breaking right now. huge swings in the market, on reports that former national security adviser michael flynn will testify that president trump directed him to make contact with russian officials. you can see in the market how we tanked on that news but rebounding a little. welcome everyone to a special edition of the "the intelligence report." we are live from the ronald reagan presidential library in simi valley, california where the world's most influential and powerful leaders are gathering. leaders in national security and defense, they are all here for the fifth annual reagan national defense forum. from a nuclear