>> always great to see you. liz: he is chairman, big guy on campus. folks. [closing bell ring] this certain loss is focusing at citigroup and the cfo estimating that the tax changes might not be so incredibly helpful to financials. that will do it for the claman countdown. here is "after the bell." david: the stocks are sinking for second straight day. the dow closing 36 points. s&p struggling to follow the nasdaq in positive territory. they're holding their breaths for congress to proceed with tax reform. hi, everybody, i'm david asman. melissa: i'm melissa francis. this is "after the bell." we have a very busy hour ahead for you. president trump doing what former presidents said they would but never did, announcing jerusalem as the capital of israel. plans to move the american embassy there. the move met with strong praise and a lot of criticism we'll discuss all of it. the president also warning of a government shutdown warning --

though sources are telling us a crucial vote may come as early as tomorrow. we're live at capitol hill with the latest. massive wildfires burning out of control in california. look at that! evacuation orders underway. nearly 200,000 people in the famous getty museum is now under threat. we're on the ground in los angeles. what a blaze. david: first back to the markets. struggling into the close, the dow ending the day into the red, driven lower by shares of merck, disney and nike. for more what is moving the markets let's go to nicole petallides. nicole, disney was down though that news roger iger would stay on as chairman. melissa: bob iger. >> i know what you meant, david. disney had a lot of fluctuations, particularly all the news pertaining to a deal at fox. that has been very busy stock indeed. as you noted to the downside. big picture, major market averages have gone back and forth. the dow itself had a high of 48,

a low of 44 and change. you know what i mean. so back and forth action. it remains to the downside. as far as the nasdaq, that's a win, right, after three consecutive days of losses. finally a little bit of a dead-cat bounce for the tech names. oil was down a buck 65. looking after hours, same number, 55.97. so that was a mover. it was not the oil numbers. it was gasoline build that weighed on oil that weighed on the group. h&r block revenue beat. not only did it beat, but beat five quarters in a row. winner, second best performer on the s&p 500. last but not least, bitcoin! this currency, digital currency, crip cocurrency you believe in it, don't believe it, went above 13,000. it started the year less than 1000. some people love it. it is goings-on the cboe. jamie dimon of jpmorgan calls

bitcoin a fraud. if you're a believer, not a believer. 13,000. david: another winner is roger goodell whose contract has just been extended by the nfl. we'll get pour on that to come. nicole, thank you very much. melissa. melissa: major middle east move. president announcing the u.s. embassy will relocate from tel aviv to jerusalem recognizing that city as the capital of the jewish state. here with more from the white house is blake burman of the response to this has run the gamut. tell us, blake. reporter: all over the map literally at the white house, melissa. the president said the decision which you just mentioned is recognition of reality. the president simply saying it was the right thing to do. president trump also insisted he wants to see this peace process through. try to get a deal beneficial to both israelis and to the palestinians including a two-state solution, so be it, if that is what both side want. >> we want an agreement that is

a great deal for the israelis and a great deal for the palestinians. the united states remains deeply committed helping facilitate a peace agreement acceptable to both sides. reporter: however even some of the united states's strongest allies disagree with the president's decision. for example, theresa may put out a statement moments ago which i reads quote we believe it is unhelpful to peace projects in the region. the british embassy is based in tel aviv and we have no plans to move it. also burning images of president trump to name one leaders the turkish foreign minister objected to the secretary of state rex tillerson. >> it will be a grave mistake, a grave mistake t will not bring and establish peace but

rather -- reporter: while the president made clear that past policy, u.s. policy and really policy in the region this, has been a failure, one thing that he says should remain as the status quo how the religious sites in jerusalem are treated. to that end, the prime minister benjamin netanyahu said none of the conditions involving the religious sites will be touched. he of course sided with the president on this overall policy shift, calling it quote, courageous and just. melissa. melissa: very interesting move. blake, thank you for this. stay tuned to "after the bell." coming up we'll discuss the president's historic decision with walid phares, fox news foreign affairs analyst. also john bolton, former u.s. ambassador to the u.n. they both have very interesting perspective on think, wow, what a pair. fbn's own cabinet. meanwhile the spending showdown, the government could partially shut down this friday if congress can't pass a short-term spending bill.

even the president is saying a partial shutdown could happen. adam shapiro will break it all down. adam, what is the holdup? reporter: the holdup is a did agreement among the republicans. the freedom caucus will meet at 6:00 p.m. this evening. they want a little bit of a longer window on the extension, the continuing resolution. they want to deal with raising spending caps on military spending but they don't want there to be a lot of, what you call christmas gifts. they're worried that the people on the other side of the aisle, the democrats would add a great deal of spending to any continuing resolution only two weeks long because it would run up against a christmas holiday deadline. where we're headed? we expect according to sources with republican leadership, a vote on continuing resolution tomorrow. what we're looking at is the potential two-week window. after that it would go to the senate which is expected to put it through immediately once they get it from the house. but if not, well the president's cool with a shutdown. here is what he said. >> the democrats are really

looking at something that is very dangerous for our country. they are looking at shutting down. they want to have illegal immigrants in many cases, people that we don't want in our country, they want to have illegal immigrants pouring into our country, bringing with them crime, tremendous amounts of crime. we don't want to have that. we want to have a great, beautiful, crime-free country. reporter: and, david, minority leader nancy pelosi actually tweeted early this morning after the president said that, that nobody is talking about a government shutdown, not what they want. but again, the timeline, we're looking at a vote in the house tomorrow on the continuing resolution. then expecting there to be some kind of a unanimous consent agreement in the senate which would allow a voice vote, essentially to get it through asap. david: even when there has been a shutdown, it is so partial, only 10 or 15% of the government is shut down.

it is a partial shut down. that is the worst that could happen. adam, thank you very much. melissa. melissa: here is a republican congressman from virginia, member of the house freedom caucus. sir, thank you so much for joining us. do you think extended beyond the two weeks would make a big difference? >> at first, that, it didn't have so much to do with extending it to make a difference and that is not really the key position. melissa: okay. >> the only thing we were going after, two things that are huge meeting at same time, the budget bill, the tax bill. melissa: all right. >> we usually load up the christmas tree at december 20, whatever, every year for last 10 years. everybody knows that. we have huge deficits to prove that. we didn't want complexity of having a budget thing with the tax bill. the tax bill is priority number one. we don't want anything to get in the way of that. we're all for tax cuts. the economy is already booming. we wanted to time them, leadership is coming in, giving

us good assurances it will be team ball. 218 votes on this cr and on the 22nd, with republican votes so we keep sanity, right? we need to fund our military but don't want to plus-up everything or the deficit foes even higher. melissa: what you're talking about underneath all of it is trying to somehow get ahold of out of control spending with the government growing bigger and bigger. those outside of washington lost faith with the idea that anyone will get their arms around the exploding size of government and just the waste of our money. >> yep. melissa: how can you get your arms around that, get control of it? >> that is funny. that is a great question. freedom caucus, that is our number one issue. melissa: that's a great answer. >> the answer we're bringing it up. democrats and media for first time in decade the democrats an mainstream media are interested in deficits so this is it's a

miracle. this is great news. melissa: the christmas miracle. let's capitalize on it, any group brings up what are assurances we get it right for the american people, we get thrown under the bus for taking care of fiscal issue that will bankrupt the kids. we're doing heavy lifting right now. we're trying to play team ball on the republican side, but we do have a reputation for fiscal responsibility. melissa: right. >> we can not lose that. "the economist" magazine -- melissa: being thrown under the bus, we see you stopping runaway bus of spending here. >> right, good. melissa: what can you do? this is the concern, as we look at tax reform, they talk about the ridiculous language of paying for it. >> right. melissa: just means taxing someone somewhere else. >> yeah. melissa: to pay for the tax cuts here, when really somebody need to tackle spending. >> right. melissa: is there going to be a new day where spending really, somebody attacks it in a serious way. seems like this president

wouldn't be afraid of taking that on. he is willing to be unpopular on a lot of stuff. >> yeah. melissa: is there chance this really will happen? >> the odds are low but you're right, the budget committee, we did good work. we saved $200 billion on entitlement mandatory spending. when we went over to the senate, the senate is the graveyard for spending cuts every single time. senate has leverage on tax bill, health bill, the budget bill. that is the problem. we sent our budget to them 77 days ago with 12 bills we passed for first time in a long time. we did our job. we're responsible. it is all in the senate. so, we started, we actually saved 200 billion. that went bye-bye when we got together with the senate. that is kind of the answer. but you're right, the problem is on the spending side. we have $100 trillion in unfunded liabilities as well with medicare and social security. they both go insolvent in 2034.

the graduating class of current kin der gardeners. they come to an end upside down for the current class of kindergartners. the bipartisan work needs to be done. we need to reach out for the -- paul ryan said next year spending is nullwer one issue. melissa: we'll stay on that. hold everyone to that. we're serious on this show cutting spending. >> thanks, melissa. anytime. david: we don't want to pay for tax cuts. melissa: that makes me so furious. david: they have to pay for our tax cuts by cutting spending right. david: inside the beltway leaders of america's largest companies reveal their plans to hike capital spending rest on tax reform. here is steve cortes, former advisor to the trump campaign, fox news contributor and veronica daguerre from the

"wall street journal" good to see you both. veronica, critics of corporate tax cuts say the corporation will use extra cash to buy back stocks and raise stock values. stock values at record highs. nobody in their right mind, they would be arrested for fiscal irresponsibility if they bought back stocks at this point. so aren't they going to put the extra cash back into capital investment? >> that is what a lot of people are hoping for. capital investment and giving people raises. we still haven't seen the wage growth in it country we've been wanting to see for so long. that would be definitely popular with average america, middle america, get them to buy into the tax bill even more. david: steve, that's a great point. tax cuts are coming if they come, we have at time for 4.1% unemployment, if they expand operations, hire more people, they will have to raise wages to get workers with such a low unemployment rate, right? >> amen, david. by the way i would say this is

reason number one that donald trump was elected, the angst and anxiety of the american worker who hasn't seen their wages increase in this century and it is 2017. in real terms haven't seen them increase in decade that has to change. that is the bad news. here is the good news, david. productivity is rising and rising dramatically up in last two quarters 3% versus onish percent productivity growth in the obama era. that tells me businesses invest in workers. when workers are more productive they command higher wages. it is a great, it is glorious. it will be a wonderful 2018. david: veronica, you see the polls, american people bought in, maybe not the folks watching us, but majority bought into the notion tax cuts will only favor the rich, even though as we explained workers will get a wage increase. >> very unfavorable with the public. they see it as tax cut for the

wealthy. david: but that's wrong, is it not? >> depends what the final bill is. to go back to corporate, to corporations if this corporate amt is kept in, that could change the entire equation here because some corporations could end up paying more. so forget about seeing those corporations hire or grow grow or give people wages. that will exchange the picture. david: you have to have tax cuts across the board. that is the way to do it. good to see you both. melissa. melissa: republicans seem to have a problem when it comes to selling a tax plan. results of a new board shows most americans are not on board. new york senator tom reed will have his chance to tell us why this will be crucial, the bill will be crucial for individuals and businesses. we'll ask him the status of state and local tax deduction as well. david: here's a question. is al franken on the way out? new allegation, brand new of sexual misconduct against the senator, the pressure is now on him to resign from his own

party. that is where the pressure is coming. melissa: bias at the fbi. house republicans calling for a probe into the fbi's treatment of hillary clinton during her email investigation. >> i think it's a sad day for america when the federal bureau of investigational louse itself to be this corrupt. --e. investigationallows itselfo be this corrupt. ♪go your own way once-daily anoro contains two medicines called bronchodilators, that work together to significantly improve lung function all day and all night. anoro is not for asthma . it contains a type of medicine that increases risk of death in people with asthma. the risk is unknown in copd. anoro won't replace rescue inhalers for sudden symptoms

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>> it is clear that hillary clinton has received break after break after break from the fbi. when it comes down to it he have one ought to be treated equally under the law regardless who they are. david: gop house members calling on attorney general jeff sessions to look into the special treatment of hillary clinton at the fbi as well as

people who actively dislike the president assigned to work against him in this investigation. joining me now to discuss is fred barnes. he is executive editor at "the weekly standard." fred, i can not recall an investigation that had this many conflicts of interests, can you? >> no. if want me to run down all of them i will have to go into the next segment because there are really so many. even things like stonewalling. in other words subpoenas from congressional committees looking into the same things, collusion with the russians which there seems to be no evidence of, or obstruction of justice by the president in firing fbi director comey in the first place, stonewall as if congressional oversight is not a part of the constitution. david: conflicts of interest lead people to believe it's a witch-hunt. rush limbaugh spoke to this

point earlier today. let's get your response. go ahead. >> mueller team is comprised of not faithful and non-partisan objective law-abiding investigators. it is populated by trump-hating, pro-hillary, pro-obama partisans who have been given unlimited money and unlimited purview to use the power of the federal government to implement their political ideas, not enforce the law. david: boy, it is hard to argue with that, isn't it, fred. >> i think he exaggerates a little but certainly not entirely. look at the original hires by special counsel here, robert mueller, however you pronounce his name, were people democratic donors. one was a lawyer for the clinton foundation. these were people who came with a partisan tilt.

why they were hired i don't know but it was clear who they were, what they had done, and then we see, then we see this fellow who was, this fbi guy who was removed a few months ago, i mean it was just reported. david: peter strzok. we're looking at a picture of him now. >> we would have known months ago if the subpoenas had been honored by the special prosecutor. david: if you're looking for obstruction of justice, i would say that is an example of it, as opposed to what the president has been doing. let me ask finally about the fbi. >> okay. david: we all grew up with confidence with the fbi. we were watching cop shows as kids. at least a lot of us waned to be fbi agents when we grew up. in fact there is a lot of questions about that. here is what one congressman, scott perry said about the questioning of the fbi itself. take a listen? >> should we fear the fbi if

we're not in the political mind set or say the right things? do we have the confidence in knowing that our justice department will prosecute crimes? is this now a justice department that prosecutes individuals? david: you have to raise the question, fred, about something that we never questioned is a problem, isn't it? >> it really is a problem. the fbi has been badly damaged. they need to be subject of an independent investigation itself, whether it is by congress? it would have to be by congress. we don't want another one of independent counsels, turns out they're not independent. david: right. fred barnes. great to see you, fred. thank you very much. >> appreciate it. you're welcome. melissa: big news out of washington. 33 out of 48 democratic senators and head of the dnc are calling for senator al franken to resign. this after a sixth woman accused franken of unwanted sexual advances. among those calling for him to step down, senator kamala harris of california tweeting, sexual harrassment and misconduct

should not be allowed by anyone. it should not occur anywhere. i believe the best thing for senator franken to do is step down. kirsten gillibrand of "new york posting" this on facebook, it would be better for our country that he sent a clear message any kind of mistreatment in our society is not acceptable by stepping aside to let someone else serve. senator franken responding to these calls, his office is saying expect announcement from him tomorrow. hmmm. david: it will be very interesting announcement, when you have the head of the dnc calling for you to resign -- melissa: feels like setting it up for roy moore. david: a lot easier to criticize roy moore is franken is out of office. tax cut that is good for your wallet but what about your local business? business owner brian hamilton says both plans are good for small business. that's coming up. plus the wildfires are worsening in california as thousands are forced to evacuate their homes. we have a live update from the

scene right after the break. ♪ >> up and blew over, caught the palm trees on fire. when the palm trees caught on fire it started -- >> it is something that i never wanted to see. it is a terrible feeling.

david: state of emergency in los angeles. intense winds fueling drug fires in southern california, forcing the evacuation of nearly 200,000 people. president trump tweeting out quote, our thoughts and prayers are with everyone in the path of california's wildfires. i encourage everyone to heed the advice and orders of local and state officials. thank you to all first-responders for your incredible work. fox business's hillary vaughn has been doing incredible work herself. she is on the scene with the very latest. hillary, how does it look? reporter: there are five total fires tearing through southern california. we're in bel-air where one house

still has a few flames inside. crews are working to get this fire under control for at least eight hours, and just until now, they finally stopped pumping water into it after the second story fell inside. if you look in, you can see flames still smoldering. the big problem here is the santa ana wind. right now they're working to make sure that no embers from flames inside of here catch fire elsewhere. embers can travel up to two miles. imagine the radius of coverage these crews need to make sure they're protecting. another house next to it right here, a lot of destruction and damage. the big problem here this, all happened at 4:00 a.m a lot of these people were asleep in their homes when the fires on the hillside began to threaten them. the big fire is still the thomas fire in ventura, 65,000-acres. but a lot of that has calmed down. again we're still early here on the west coast. it is just starting to heat up.

wind are just beginning to pick up and a lot of activity happens later in the afternoon into the evening, david. we'll keep you posted as fires progress. zero percent containment for this fire and the thomas fire. david: does seem when we spoke to you yesterday, you were in much windier area, that was ventura county but a little less wind where you are, right? reporter: that's right. david, a lot of these homes are blocking the wind. on the hillside over here there are several spot fires. we can't take you to it. the wind over the cliff is blowing a lot harder. these homes kind of protect a little bit. but there are still some gusts picking up. david: got you. hillary vaughn, thank you very much of the appreciate it. melissa: a tale of two tax plans. the house and senate are negotiating the final tax bill but republican leaders from high-taxed states still voicing concern. new york congressman tom reed sound off next. david: shockwaves all over the middle east.

president trump declaring that the u.s. recognized jerusalem as the capital of israel. it is getting mixed reactions from around the world. of walid phares, fox news foreign affairs analyst, john bolton former u.s. ambassador to the u.n., what a pair, they have got it all covered. they're coming up. >> this is nothing more or less than a recognition of reality. it is also the right thing to do. ♪ s? yes i do. true or false... type 2 diabetes more than doubles your chance of dying from a cardiovascular event, like a heart attack or a stroke. that can't be true, can it? actually, it is true. and with heart disease, your risk is even higher. in fact, cardiovascular disease is the #1 cause of death for adults with type 2 diabetes and heart disease. but there is good news. jardiance is the only type 2 diabetes pill with a lifesaving cardiovascular benefit. jardiance is proven to both significantly reduce the chance of dying from a cardiovascular event

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melissa: unempressed with the gop tax plan, only 29% of voters i a prove the republican tax overhaul plan according to a new "qunnipiac poll." is this a case of bad pr? do american voters have real concerns? we have republican congressman tom reed, from new york, member of the house tax writing and ways and means committee. i take the polls with such a grand of salt. hard to believe all the people they called had studied and understood the nuances of the plan. how seriously do you take these things? >> i don't think you can rely on every poll comes out. you have to govern for people back home. we're working on this seven years. i'm very confident you will see middle class tax relief primarily delivered across the country. $1600 to average family in my district. melissa: there is a lot of traction out there with the message originally coming from democrats but i hear it also coming from the never trump folks on the right saying this

is really tax plan about giving corporations a break on the back of individuals. >> i totally understand it. obviously it is a, an effective, i guess political attack that seems to have taken some traction but at the end of the day the reality and facts will carry this message and deliver results for american people that it is going to deliver. that will carry this policy forward. it will become a very positive impact on people's lives. melissa: another argument that gained a lot of traction, i would say the past 24 hours or so, i laughed the first time i heard it but people are taking it seriously, this idea the economy will overheat and we'll see massive inflation. if we low every taxes, all of sudden you unleash the economy, the fed will have to step in and crank rates higher and, you know, there are a lot of people out there who are saying they're frightened that this is going to happen? >> absolutely. why i think you see power of the

status quo. anything to stop changing reforming this tax code for the american people, because they're embracing and maintaining and fighting for the status quo, all special interests represented in 31 years of tax policy gone unaddressed. you're seeing arguments all over the place. but at the end of the day i trust people. i know people can look at legislation, do calculations themselves. we're making a simple code, we're making competitive code. we'll grow the economy f our biggest problem is growing the economy too much, i would love to have that problem. melissa: absolutely. that is laughable. what is not laughable though, state and local tax deduction when middle class folks do the calculation on that, and see that they're not going to be able to deduct humongous taxes that they're paying in these areas, what do you think is going to be the real impact of that? do you think you will see a lot of businesses and individuals leave california and new york, new jersey? >> well, first, i go through the

analysis with folks. 78% of people do not take itemized deduction. a lot think they do but don't. by expanding standard deduction you move that up 95% of people in our district will not take itemized deduction. that is why we fight for $10,000 worth of property tax people can continue to item eyes can take advantage of that benefit going forward. on state and local tax deduction there is more room to get into the income tax side of the equation on top of the property tax. that will further insulate and protect many people we represent. melissa: you must feel pretty confident of that math, you in particular, if you're wrong, you're toast. >> i totally appreciate that that is why we read the bill. we looked at this bill. we've been working on this for seven years on the committee. we are ready to go. i can go toe-to-toe with anyone. there is tremendous amount of misinformation out there. if you lay it out, where the text is, what the text says, amazing when the light bulbs go

off, that makes sense. i support that. we're seeing more and more support come out as we speak. melissa: if we see the economy grow, will you come back and maybe give more tax cuts and tackle some spending? >> we're going to obviously going to grow the economy. that is part of the solution on the national debt. melissa: right. >> we'll get spending under control. that will is dovetail effect. more revenue coming in because of growth, you can take spending. less people relying on government expanding programs because they're taking care of themselves which i do believe people want to do. they don't want to be dependent on government programs. melissa: i heard everything there except you might take another crack at cutting income tax, no? >> obviously -- melissa: for individuals. >> i'm a big believer making this stuff permanent on individual and corporate and business side. making sure we reduce the tax burden. that is good, sound policy. we're ready to be part of effort going forward. melissa: congressman reed, thank you. >> thanks for having me on. david: top rate has to come down. that is not what he said. melissa: not what he said.

david: senate voting to move forward hash out their version of gop tax bill for the house but can they make small business owners happy? a man who thinks the current version is huge win for small business, brian hamilton is coming next. the 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. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade

>> critics claim it doesn't do enough for small business. small businesses employ far more people than large companies. so more americans would benefit from really good tax break for the small firms, so would that happen? with more, brian hamilton, sage works, provides financial planning for unincorporated businesses. brian, those small businesses are worried. should they be? >> they should always be worried, david, where washington is concerned. david: true. >> yeah, definitely. so here's the deal, basically they are going to pay less taxes. my only fear, david to your question, there will be some

complication, there will be change. the small businesses have to scramble to see their accountants. they will pay a little bit more money for fees for that, outside of that i'm a fonzie, i'm a thumbs up on the tax plan for small companies that create jobs and do the innovation. david: let's talk about the two different versions. the senate version, in terms of these pass-through rates, the top rate in the senate version is little lower, 23%. the house is a little higher, 25%. i would think the small businesses would like the senate plan better, right? >> i think so, dave, small potatoes. what is happening under either plan, i don't want to say income is shelter, god forbid, but there is this threshold where you're going to be sort of sheltered on the bottom end of your income an pay less taxes about 25% up to x dollars. we don't know what x dollars is.

it's a boon for small businesses in that for the first amount of money you will pay fewers taxes. the difference between the plans, not a big deal. one other thing, too. as you knows hard to separate politics from policy, i hear all this stuff. david: right. >> remember under either plan, the rich guys, the super-rich guys are not going to get the breaks. once you start making big bucks over half a million, million dollars. this is for small businesses. that is why i'm smiling very happy for america -- david: totally against what you hear from the media. the media says just the opposite. just for the rich. quickly when you do bring down top rate as ronald reagan did in the 1980s, 28%, it will still be up to 40%, if you bring down the top rate you encourage a lot of entrepreneurs, who take it out of their pocket, pay taxes on individual rate, isn't that better for entrepreneurship, quickly if you lower the top rate?

>> real fast, david. here's another thing too i got to sneak it in, when these guys go out capital expenditures, biggest part of this tax plan is not talked about. when they make a big expenditure they can expense in first year. that is massive for capital expenditures. it is massive for investment. people, a great way to create jobs. david: brian, you're close to the small businesses. stay with us. stay close to us. we want to hear how it goes, particularly as they hash out senate and house version. brian hamilton, good to see you. melissa: other presidents made the promise. president trump is the one following through. the president's historic announcement that is parking calls for a day of rage. next up, walid phares, fox news foreign affairs analyst, john bolton, former u.s. ambassador to the u.n. are both here to respond.

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>> as soon as i take office i will begin the process of moving the united states ambassador to the city israel with jerusalem as its capital. >> jerusalem will remain the capital of israel and must remain undivided. melissa: well this time, a pledge kept. doing what other presidents did, the commander-in-chief announcing that the american embassy in israel will move from tel aviv to jerusalem. officially recognizing that city as its capital, but it did leave the door open for negotiations. >> we want an agreement, a great deal for israelis. and a great deal for the palestinians. we're not taking issues of status issues, including

specific boundaries of israeli sovereignty in jerusalem or resolution of contested borders. melissa: here now, walid phares, fox news national security and foreign affairs analyst. we have john bolton with us as well, former u.s. ambassador to the u.n. and fox news contributor. gentlemen, oh, boy, this is a huge issue, a historic day. walid, start with the statement that the president made there. saying by doing this it does not mean that the united states is taking a position who ends up where, which territory is what. is that accurate? >> first of all indeed a huge move that had to happen. majority of congress since 1995 voted for that move. many presidents and candidates supported that move. the issue is how to do that move. i think president trump decided to cross that river, that bridge if you want. he on one hand, he told israel, okay, there is u.s. consensus

both democrats and republicans jerusalem will become the capital. we'll move the embassy. it will take some time. but what is very interesting to me the statement where he said the boundaries of israeli sovereignty within jerusalem, that could be a window for negotiations with the palestinians. arab neighborhoods to be very clear, base for negotiation. maybe the capitol won't be in jerusalem but a piece of it could be part of a palestinian capital. melissa: ambassador bolton, your thoughts on that? >> the argument against moving to the american embassy to the capital city of israel has been that it would prejudice the final status negotiations over jerusalem. and that's always been a false claim because nobody ever suggested that the u.s. embassy would end up in any place other than jerusalem west the green line, west of the 49 armistice line, the '67 line. that is what trump was making clear today. so the next argument is that,

but my goodness if you move the embassy the peace process will collapse. melissa: that is what everybody is saying. >> that will not happen. melissa: countries are screaming that. >> not going to happen. melissa: no? why not? why is that not true, ambassador? >> who else will get the peace process moving along? trump made that point very clear he said he could live with a two-state solution if the parties agreed to it. they will have their days rage. burn the usual quantity of american flags. they will have their moment in the sun. and then they will find there is no place else to turn. so that isn't going to work either. i think, that is what i thought was the really the best part about the statement is that it walked that line. you can disagree with the president's decision. i certainly don't. i think this is long overdue. melissa: yeah. >> but there was nothing in that statement that calls the peace process into question or prejudices outcome of it. melissa: walid you even say that it is possible that it moveses it along faster. that it is a step in the right

direction because what has happened here, there is a timeline set, saying that you know, there won't be an embassy for five or six years but then it will be there. there is the opportunity to negotiate with that coming. >> yes. what the president has done, i think congress supports him as well on this issue, he broke the lock, meaning the whole issue was games of iran and brotherhood and jihadists, radicals meaning no solution now. a pest of solution has been found. as bam does mentioned united states recognized its embassy will be in the capital of israel, meaning even in the part that is pre-'67. they are not opposed to the moving the embassies palestinians, but they have a window themselves. there is window for palestinians and surrounded by arab coalition

partners of united states. israel, let's recognize that the palestinians need a capital. what can you offer? melissa: what do you think about that, ambassador? >> that is why it is really up to the palestinians and their supporters in the arab world to try and see if there is not a way forward here. i think this is, there's so much, has been made of this, for so many years, that what the president's done is pop a few soap bubbles of delusion about what was actually going to happen. i do think that could mean that the peace process would be on firmer ground. you're never going to have a lasting peace if it is based on ideas that don't conform to reality. that is very simple. melissa: walid, people say now they want to go out and kill americans. i'm pretty sure they're fairly focused on that already. >> of course. those who kill americans are those who kill americans. i don't think you have moderates in the area, elsewhere who are really concerned about half a million arabs sunnis and others

in syria killed by hezbollah or iran, lobbying missiles on saudi arabia. things have changed. so the real threat is not coming from the arab-israeli conflict. it is coming from iran. they need to reorganize negotiations with request u.s. and israel. melissa: thanks to both of you. appreciate it. david? david: getting ready to turn on the lights. christmas in the nation's capitol. sounds like a contradiction i know. but miracles still happen and we have proof coming up in a moment. you don't want to miss it. ♪

melissa: it is christmastime on capitol hill, any minute a new tree will join holiday festivities. david: christmas on capitol hill, the 79 foot tree will be lit by house speaker paul ryan, since christmas celebrates the birth of a particular child, we

have another birth. melissa: this is our statement manager -- stage manager, jason sedaka, we welcome his baby son max, look how adorable he is, there they are together. good luck, here is "risk & reward." >> you go to the stores, they have the red walls they have the snow, they have the sleigh they don't have merry christmas. they don't have merry christmas. i want them to say, merry christmas everybody. happy new year. happy holidays, but i want merry christmas. ♪ christmachristmas tree washingt. getting ready to say merry christmas we're waiting the capital christmas tree lighting. >> an historic day, president trump announcing that u.s. will recognize jerusalem as capital