>> thank you for the pools and the wet anchors. thank you very much. >> bill: good morning, everybody on a monday. critical week begins in the white house today with president trump confronting two major foreign policy challenges. this as he gets the brand-new chief of staff, new leadership inside the west wing. hope you had a great weekend. brand-new week begins now. i'm bill hemmer live in "america's newsroom." >> shannon: rallies our allies in response to new provocations from north korea. russia kicking out people in response to new sanctions passed by congress. vice president mike pence saying the u.s. will not back down from its commitment to peace. >> we hope for better days, for

better relations with russia. but recent diplomatic action taken by moscow will not deter the commitment of the united states of america to our security, the security of our allies, and the security of freedom-loving nations around the world. >> bill: that from a bit earlier. the new chapter begins in the west wing. general john kelly will be sworn in later this hour as the new chief of staff. chief white house correspondent john roberts to kick it all off now. welcome back there and good morning. >> good morning to you. another ho-hum nothing much to talk about week here at the white house. the vice president with some sharp words for russia today. tempering the tough talk with the possibility that things can get better but only if russia lives up to the demands of the world community to reverse its actions, aggressive actions in crimea and ukraine. in a speech today in estonia to

nato troops. he said the president will soon sign the new russia sanctions bill. he also said that the russian action taken last week to expel some 755 u.s. diplomats will not affect america's commitment to its allies in the region. listen to the vice president here. >> this very moment russia continues to seek to redraw international borders by force. undermine democracies of sovereign nations and divide the free nations of europe one against another. under president donald trump, the united states of america rejects any attempt to use force, threats, intimidation or malign influence in the baltic states or against any of our treaty allies. >> the president is increasing pressure on china to reign in north korea's nuclear program. he tweeted over the weekend. i'm very disappointed in china. our foolish past leaders have

allowed them to make hundreds of billions in trade yet they do nothing for us with north korea, just talk. we will no longer allow this to continue. china could easily solve this problem. no word from the president what he is going to do. u.n. ambassador nikki haley saying the u.s. will not seek any more sanctions against north korea at the united nations security council saying that resolutions that do nothing to increase international pressure on north korea are useless. the u.n. ambassador tweeting over the weekend. done talking about north korea, china is aware they must act. japan and south korea must increase pressure. it will require an international solution. you mention the president spoke with abe, the prime minister of japan late last night. they have a commitment to increase pressure between the united states and japan on north korea as well as try to twist the arms of north korea's

other neighbors and allies in the region like china to do more, bill. so far china has shown it's willing to go a certain distance it is only willing to go so far. >> bill: this hour the story of the hour the new chief of staff is sworn in. >> he will be sworn in at 9:30 this morning. 25 minutes from now. the big question is can general john kelly bring more order to what has been a somewhat chaotic white house in the last six months? one of the big questions is how much power will flow through him and access the president will flow through him and how much will flow around him? getting some indication that kushner and ivanka will follow his lead. the white house hasn't given up on healthcare they are looking for governors who like the idea of medicaid block grants to put

pressure on senators and members of congress to come to the table and do something about it. so far every effort has failed. september might be a pie in the sky hope but they say it's possible. >> bill: john roberts on the north lawn. thank you. >> shannon: republican senators gearing up to make a strong case for tax reform. president trump urged lawmakers to keep up the fight on healthcare. don't give up. republican senators, the world is wafption. repeal and replace and get cross state lines and more. peter doocy is live in washington what kind of pressure is the president putting on lawmakers today. >> he doesn't think lawmakers are motivated to fix the healthcare system that offers them different options and he doesn't think insurance companies don't want to change the system. he tweeted again this morning. if obamacare is hurting people

why should congress not being paying what public pays? the payments to insurance companies are cost sharing reductions and they have bipartisan support on the hill. >> i think there is in senator mcconnell's one of his bills that he had repeal and replace, he had a provision that we can all embrace. a provision to cover the cost sharing reductions, extends the reinsurance which is very important. >> one of the republicans who keeps voting no on every major healthcare plan her party puts forward is warning the white house not to touch those subsidies. >> i hear this described by some as an insurance company bail-out. that's not what it is. it is vital systems to people who make between 100 and 250% of the poverty level. >> she says changing the way

the government supports insurance companies could create instability, shannon. >> shannon: thank you. >> bill: plenty to analyze with byron york, how are you? here we go on a monday. last hour this tweet came out. highest stock market ever, best economic numbers in years. unemployment lowest in 17 years, wages rising, border secure, supreme court, no white house chaos. how does secretary kelly change things? or does he? >> well, first of all the general kelly has a lot of experience running large, complex organizations. the u.s. southern command certainly one of those and already been a big success running the department of homeland security. inside the white house the chief of staff's power comes from the president, and if the president sends a strong message to the staff that if you want to talk to me, you come through the chief of

staff, well, that will really empower the new chief of staff. if everybody still has walk-in privileges that they can come and talk to the president and not tell the chief of staff about it, meetings can go around him and cut out of the loop of some things you could have a repeat of what we've seen in the last white house. >> bill: kellyanne conway said look somewhere else when she told chris wallace this on sunday. >> the chaos this week was on capitol hill. why nobody gave us healthcare reform on a silver platter i don't know. >> bill: the reince priebus gone, without priebus trump is a man without a party. true or not he still has mike pence and as his vice president. priebus was a strong connection to republicans on the hill and with healthcare going down the way it did last week likely did not help him. >> first of all the president

has a point about all of these good economic indicators. essentially saying to voters, don't listen to all this gossip about the white house. look, your life is getting better. that's the kind of point a president makes out on the campaign trail. as far as the republican party is concerned, it is true that reince priebus and sean spicer were real links inside the white house to the republican party. as a matter of fact, they had brought a large number of people from the rnc into the white house especially into the communications shop and some of those people are now either going or are gone. and the interesting thing about trump is he did not have a lifetime in politics and did not bring with him a large group of people who were committed to serving him and who are loyalists of him.

there were hundreds of clinton loyalists ready to serve. trump didn't have that and he is having trouble staffing not only the entire administration, but his white house as well. >> bill: thank you for that. plenty to talk about that. a column in your near future about that. they can all agree on the russia matter with the sanctions being passed and the president willing to sign it. watch as this goes forward and see what putin does with the hundreds of folks working in russia now. >> shannon: he said more coming. we'll watch. that's not over. meanwhile violence and chaos in a socialist nation. u.s. condemning the latest action in venezuela. while the state department is calling the latest elections a sham. >> bill: authorities say they have foiled what they call a real and serious terror plot. how they say the suspects

planned on taking down a jet liner. >> shannon: republican say they're ready to tackle tax reform. house ways and means committee chairman kevin brady joins us next. >> within the president trump's team, senate republicans and speaker ryan and ourselves there is a seriousness of purpose within these efforts to come forward this year. wondering, what if? i let go of all those feelings. because i am cured with harvoni. harvoni is a revolutionary treatment for the most common type of chronic hepatitis c. it's been prescribed to more than a quarter million people. and is proven to cure up to 99% of patients who have had no prior treatment with 12 weeks. certain patients can be cured with just 8 weeks of harvoni. before starting harvoni,

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>> shannon: australia is on high alert after authorities foiled a terror plot aimed at taking down an airplane. chilling details saying islamic extremists planned to kill those on board with a makeshift bomb and poison gas. police have yet to confirm it but arrested at least four suspects. >> what i and other house leaders pushing -- i think it's the way to go and the right kind of tax reform plan. if it will stop us getting to con sen us a to get tax reform done we don't want that to happen meaning the border adjustment. we want consensus to get tax reform done. >> bill: republicans can come together to get meaningful tax reform. what will it look like? kevin brady is the chairman of the house ways and means

committee in studio. nice to see you in new york and thank you for being here. what did the failure of obamacare last week do to the tax issue? >> i think it created more urgency. we've been running two parallel tracks on two major initiatives and have worked now six years to be for this moment of history. what happened last week the house, the white house and senate come together unifying on principles on tax reform creating that urgency. we need to deliver this year and finally having the president solidly behind this approach much different than the healthcare. >> bill: let's talk about some of the intent and perhaps some of the themes that you are pushing for. border taxes out, right? you've agreed on that. >> yes. >> bill: i'm not many more specifics. >> the committees themselves ways and means and finances will write the ultimate bill. we wanted the lay out key principles for the american people. we're going on in for growth on jobs and paychecks.

the lowest rates we can and redesign so companies can compete and win anywhere in the world. for families fairness and simplicity. nine out of ten americans can file using a simple postcard style system and lower rates. >> bill: you're saying it's possible? >> it is. not only that we're on schedule to deliver this year. >> you said to maria on sunday you would get it done by end of this year. stand by that? >> yes. >> bill: why not stay in session during august? >> we need to be back home. this belongs to the american people. they have to have a say in for the first time in their lives a first say in how their tax. august is about making the direct case and listening to the american people not only in our town halls and round tables but going to the reagan ranch mid-month. it's when the house and senate came together to deliver so

we'll make that case back home and across the country. >> bill: you have a plan to roll this out and communicate it in a much different way than the healthcare issue was communicated. that's what i hear you saying. true or not? >> true. there is a big difference here. healthcare is so complicated it can divide families. households themselves. tax reform i don't care who you are this code is too complex and costly and special breaks. businesses aren't competing. we start from a different standpoint and secondly, the white house, house, senate are unified on this approach and the key principles. >> bill: americans are looking to see whether or not you can govern. you have all three in your hand to get this done. if healthcare went down and if the tax reform does not happen, what does that tell voters about your ability to do that job? >> i haven't given up on healthcare reform yet. and secondly i know that we can deliver on tax reform.

the best approach in a generation, lower rates, simpler, more companies, our workers can come complete. america is hungry for this type of reform. >> steve banion is talking about raising the highest rate. >> i talked to the president's negotiators. they want to see lower rates across the board because it's growth. what are you trying to accomplish here? growth of paychecks, jobs, u.s. economy so we want more people investing in homes, compete and win. that means lower rates. >> bill: and if you make it permanent, you have really made a difference in a generational change. i know you talk about that all the time. >> you hit the mark there. if we do a temporary tax cut it fades away. we want real long term investment decisions to bring

jobs and manufacturing, research back home. we want local businesses to unleash investment. that means making it permanent. >> bill: you want to make news? president sent out the tweet last hour. if a new healthcare bill is not acued quickly bail outs or insurance companies and congress with end soon. >> we delivered in the house. it wasn't because of that. back home are people are getting hammered on obamacare. prielss are going up. we lost nine insurers in texas. there are fewer choices. >> bill: he is talking about insurance for people like you. >> i'm less concerned about me but the people at home that get hammered under obamacare. >> bill: thank you for coming in today. kevin brady, good luck in august. see what happens. >> shannon: a massive manhunt is underway in alabama after 12 inmates escaped custody. how many are still on the run now? we'll bring you the latest details. >> bill: there are tens of

thousands evacuated after the lights went out. where the scene is unfolding today as we approach august 1.

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mmm, fine. okay, what do we got? okay, watch this. do the thing we talked about. what do we say? it's going to be great. watch. remember what we were just saying? go irish! see that? yes! i'm gonna just go back to doing what i was doing. find your awesome with the xfinity x1 voice remote. >> bill: we're watching what will be a very busy morning. the white house, former homeland security john kelly will be sworn in moments if now as the new chief of staff and there it will be right to work. president trump holds a cabinet meeting at 10:00 a.m. and we expect video from that and we'll play it for you when we get it here on "america's newsroom." >> shannon: well, 12 alabama inmates escape from jail sparking a massive manhunt.

11 have been caught. brady andrew kirkpatrick the only one still at large. jonathan serry is live in alabama. what do we know about the suspect still on the run? >> he is 24 years old. prior to his escape he was being held on multiple drug charges including possession of marijuana, possession of a controlled substance, position of drug paraphernalia. he escaped with 11 other inmates sunday. unclear how they got out of the walker county jail. authorities have been offering a $500 reward for information leading to their capture. if you spotted kirkpatrick investigators ask you to call the walker county sheriff's office in alabama at the number on your screen. >> shannon: so where did they capture the other 11? that's a huge group to round up. >> it is a huge group to round up. they didn't get far.

most were captured in walker county or surrounding communities within hours. some captured sunday night and some captured during the wey monday morning hours. two of these escapees were found in a truck stop. those accused of the more violent offenses fortunately have all been rounded up. >> shannon: jonathan is live for us. >> bill: another developing story. a violent scene at iraqi embassy in afghanistan. a suicide bomber attacked the building along with three other storming the compound. everyone inside is okay. isis claiming responsibility which took about a four-hour gun battle before it was concluded. so more on this as we learn it coming up here moments away.

>> shannon: the u.s. testing its anti-missile system in the wake of north korea's missile test. how president trump and vital u.s. ally are responding. plus this. >> i'm a master legislator. i know the budget, i know the motivation of people. >> shannon: nancy pelosi patting herself on the back and brushing about new questions about her leadership abilities. are democrats planning to push her aside? our political panel weighs in. ...made with carbsteady... ...to help minimize blood sugar spikes... ...you can really feel it. now with 30% less carbs and sugars. glucerna.

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what do we know about the u.s. response to the north korean test from this weekend? >> we're seeing strong action, very least strong muscle flexing from the united states following that north korea missile launch on friday. low over a joint u.s., south korean air base. bombers capable of carrying nuclear weapons escorted by south korea fighters jets. we see them being rolled out in response to north korean offensive activities. also significant that test that you mentioned of the thaad anti-ballistic missile system. the missile was launched from a base in alaska. this is the same system that is being set up in south korea to defend against anything coming from the north. that missile launch by pyongyang on friday according to our experts and others theoretically capable of hitting the west coast of the united states deep into

continental united states, another, the second missile fired by the north. dangerous stuff. >> bill: the response so far what have you heard diplomatically? >> let's go over more. a phone conversation between president trump and japanese prime minister abe. following that conversation white house putting out a statement saying that north korea presented a grave and growing direct threat to japan, to south korea, to the united states and other countries. we heard from beijing today, bill, coming from a spokesperson for their foreign ministry denying that they weren't doing enough to deal with north korea. there have been conversations and statements coming from the white house over the weekend that they were disappointed in china's inaction in dealing with north korea and we even heard from the u.n. ambassador over the weekend nikki haley

they weren't even going to ask for an emergency security council session because they were disappointed that china would be doing nothing. worse holding a do-nothing meeting than doing nothing at all. >> bill: something has to give. shannon. >> shannon: with respect to all this, president trump is looking for more help calling out china pressuring them to step up and help deal with north korea. the president tweeting this. i'm very disappointed in china. our foolish past leaders allowed them to make hundreds of billions a year in trade and they do nothing for us with north korea, just talk. we will no longer allow this to continue. china could easily solve this problem. i'm joined by andrew peek. what do you make of this? a lot of public pressure has been put on china. there were times when president trump seemed hopeful publicly they would have a good partner. you had doubts whether they

ever would be. >> historically the korean peninsula has been divided into separate political authorities. just the nature of its geography. a small country surrounded by larger ones all of which tend to provide to project their own influence in the region. china will never come to some sort of conclusion in north korea that is acceptable for us. they'll never produce a result that takes the north korean issue off the table and why the concern a little bit is that we're talking ourselves into a corner of having to do something. having to proper actively take action. >> shannon: you heard greg reporting on ambassador haley saying we aren't calling an emergency meeting of the u.n. they flout and ignore the sanctions and people aren't helping to enforce them. sends a worse message if we tried to set something up. the parties don't agree and nothing seems to make a

difference. she said done talking about north korea. china is a ware they must act. japan and south korea must increase pressure. not only a u.s. problem it requires an international solution. as for japan and south korea we saw our military drills with them this weekend. will that be effective in that region? >> two things here. i have think the president has done a good job of rebuilding our military deterrent in asia. with his actions in syria, with some of these drills and exercises you've seen in the pacific he has effectively rebuilt the belief in other countries that america will use military and that's an important thing you have to have on the table for effective diplomacy. i have to say i think nikki haley is wrong here. why not start putting resolutions on the table with respect to north korea and forcing the chinese to veto them? i think that would be a much stronger diplomatic solution and send a signal then just not trying to move a resolution forward at all. >> shannon: let's talk about

russia as well. we now have the sanctions package that looks like the president is going to sign and move forward with that. russia retaliating by saying they'll expel hundreds of u.s. employees or embassy employees. many are russian nationals so they won't be expelled to here but may be out of jobs. where are we? >> that's exactly right. only a quarter of those employees are americans. we don't have 1,000 diplomats in russia. it may affect some of the basic administrative functions of the embassy. things like clerical i shall -- issues. it isn't a shift in russian policy toward us. very much the russians still hope there is some room for a new approach towards europe from this administration. and they are willing to at least keep that possibility on the table. >> shannon: it seems larger than what we dealt with in the

past with expelling people. with president obama last fall over the situation with the election that we expelled 35 diplomats from our country. we're talking hundreds, not maybe a couple of dozen or dozens we've dealt with in the past. does it signal anything different this time around? >> these are spy games. these are issues that we do with the russians and historically we always have when we've been great power competitors. during the cold war there was a long stand-off when we wanted to build a new embassy in russia. they wouldn't let us do that for years and trying to prevent us from increasing it too much and eventually we traded that for them building a bigger embassy here. this is just kind of the tit-for-tat issue that great power competitors do. >> shannon: the president signs it. it is veto proof going back if not. does it change the conversation with respect to people thinking this president and his critics that he would be too close to

russia versus publicly taking the stands are aren't in russia's interests? >> first of all the sanctions bill. every president before this one would have vetoed this sanctions bill because every president before donald trump has said congress cannot restrict our ability to conduct foreign policy in the united states. in that respect it's not clear if it's constitutional. the constitution gives the president power to defend national security. but secondarily i think genuinely there is an issue with russia that the narrative and the democrats are pushing doesn't line up with president trump. he made his first trip to poland, a long-time competitor of russia and really at some point there has to be a recognition not just by the democrats but republican

foreign policy community that donald trump might be a hawk on russia, not a dove. >> shannon: thank you for that your service. bill. >> bill: thanks, 22 before the hour now, tens of thousands forced to evacuate two main islands in the outer banks of north carolina. check this out. a construction company severed a pain power cable and damaged two others. officials say power will be out for at least two weeks. crews are working overtime to fix it but this has already turned some vacation planning that probably took a year to a bit of misery in the outer banks. a beautiful part of america and the world. hang in there. that's a bummer. >> shannon: as a kid you got all your beach supplies together and ready to go. hopefully they can wrap it up quickly. coming up despite losses in iraq and syria new evidence

that isis may be regrouping in another hot zone, libya. details on that straight ahead. >> bill: president trump not ready to turn the page after republican senators failed to repeal and replace. asking for another crack at the healthcare overhaul. check it out. >> it is a consistent promise we made to the voters that we'll repeal and replace obamacare. we're one vote short. we won't give up on our effort to make sure this promise is delivered upon. ♪

if you have bad breath and your mouth lacks moisture, you may suffer from dry mouth. try biotène®, the #1 dentist recommended dry mouth brand. it's the only leading brand clinically proven to soothe, moisturize, and freshen breath. try biotène®. >> bill: breaking news from the white house in a moment here you're about to see what we call the tape play-out of president trump and secretary kelly moments after the swearing in to be the new chief of staff. this is a big deal today, folks. you're seven months into the administration. secretary kelly comes in with all the experience to try to reorganize the scheduling of the west wing on a daily basis. katie pavlich and marianne

marsh, good monday to you. this is a different topic we have planned. katie, what do you think he brings to this job that is necessary now? >> he brings essential discipline and leadership to the job. i think he is going to be able to tell the president who has respect for general kelly what publicly praised him for his experience. hopefully he can get in there and say if you want to be with the president you have to go through me and we'll have an organized, discipline chain of command which will in the end get more results for the president's agenda. >> bill: mary ann march, quickly. >> shannon: i agree with her but will he give him the power and authority necessary to bring order to a white house that has been the most dysfunctional than anyone can remember in the last six months? did he agree with him, he went to dhs and enacted them clinically. >> bill: we're seeing the video

now, let's drop in oval office. >> general kelly will do a spectacular job i have no doubt as chief of staff. what he has done in terms of homeland security is record shattering. you look at the border and the tremendous results we've had and you look at the spirit and with a very controversial situation there has been very little controversy which is amazing by itself. so i want to congratulate you on having done a fantastic job, general. we look forward to if it's possible an even better job as chief of staff. thank you. thank you very much. we'll see you in the board room. we're having a cabinet meeting. i think we've done very well. we've done very well. lots of records created, john. you look at stock markets, the highest it's ever been. unemployment lowest in 17 years. companies are doing

tremendously well. business spirit is the highest it's ever been according to polls. you look at the polls. the highest it's been in the history of these polls. we're doing very well and have a tremendous base. we have a tremendous group of support. the country is optimistic and i think the general will just add to it. the country is doing very well, strongest stock market ever on friday we hit the highest in the history of the stock market. business is very enthusiastic and we will proceed and we will keep going. but we have a fantastic leader, chief of staff. he will do a really great job. thank you very much. we'll see you in the boardroom. thank you. >> bill: significant moment in this administration. seven months in. the last comment he was referencing reflects a tweet from 90 minutes ago. he said the following. highest stock market ever.

unemployment lowest in 17 years, wage rises, he is angling for as we look at the stock market up 33 points. he wants to keep the economy strong because he knows that's why he won the white house simply. seeing that both of you reflect on the scheduling in the white house and that secretary kelly's chief job, right? i thought the point brit hume made sunday was interesting. if you read the art of the deal in that first chapter it shows you how president trump ran his business. gets in the office early. starts making phone calls. there wasn't a lot of structure to his scheduling then. he made contacts, made relationships throughout the course of the day. it seems to be what was happening or is happening in the west wing. katie, the point is he is the president and entirely comfortable with that style of management. >> we've seen that style of management over the past six months. reince priebus and steve bannon

were put into equal position, reince priebus was named chief of staff. they weren't given a structure in terms of who was in charge of making final decisions. i think that will certainly change now. and yes, there are certain management styles that work for businesses. he has been very successful. there is a structure that works in the white house and i think bringing general kelly in will show that is the way things have to be in order to plug the leaks and most importantly, to focus on exactly what the president just laid out, the economic prosperity we're seeing in the country that has been largely overlooked as result of the drama and chaos in the white house. >> bill: we'll talk about leaks in 45 minutes. jeff sessions will be in that board meeting as the president referred to it in about 15 minutes. go ahead, mary anne. >> you can't be successful in the white house if you react to everything. that's what he has done in his past life and the past even

months. everyone tells me kelly is by the book, get it done and get it done now. very methodical, step-by-step by step. that's what you need. whether he can be successful in this environment we shall see. the big disconnect after the swearing in is with congress. a different idea where they want to go. they're done with healthcare and let patty murray and lemarch alexander put together a repair bill when trump tweets he is wanting it to collapse. that's a huge difference. >> bill: just quickly. want our audience to hear what mick mulvaney said about pushing the republicans in congress to get healthcare done. he said this. >> in the white house's view they can't move on in the senate. tht people's view they need to stay and figure out a way to solve problem. you're talking about something they promised to do for seven years. you can't promise folks you are

going to do something for seven years and then not do it. >> bill: this is important because this is what the white house is going to stay on. so we'll see how that goes. we're out of time for now. katie, thanks for your time and mary anne thanks for coming as well. happy monday. >> shannon: you saw from the white house moments ago general john kelly sworn in as chief of staff. full cabinet meeting about to get underway. david bossie is here to talk about what happens next. plus this. violence erupting in the streets of venezuela. why a controversial vote is causing outrage among the people and getting strong reaction right here in the u.s.

>> bill: terrifying scene from germany. 100 people -- the fire and rescue crews had to use a crane to reach everyone. repelling those on board down to the ground. that's a job well done. thankfully everybody on board was okay. no one injured. >> shannon: violence on the streets of venezuela. check it out. people there outraged after an election that could give the country's president unlimited power. u.s. ambassador to the u.n. nikki haley tweeting this saying the sham election is another step toward dictatorship. we won't except an illegitimate government. the venezuela people and democracy will prevail. we're live in miami following the story. tell us about the outrage. >> horrible on the scenes in

caracas. it wounded a number of police officers. a lot of people felt in venezuela this wasn't an election at all. you couldn't choose to vote , no only choose from among candidates the government had picked for you. for that reason a lot of people were willing to go out on the streets. 10 killed. over the past four months we've seen more than 125 people killed in clashes with government security forces. this could only get worse if this new constitution basically eliminates the opposition in the national assembly we could see violence spike even further, shannon. >> shannon: what can the u.s. or should the u.s. be doing in this situation? >> the u.s. is talking tough right now saying this is a step toward a dictatorship and they have vowed to take strong economic moves against venezuela to try to turn this around. it is likely the u.s. will target the oil sector.

venezuela sells about half of its oil to the u.s. and that government needs the hard currency really to try to stay afloat in their terrible economy right now. keep in mind it is not just the u.s. here. a number of countries in the region, mexico, argentina, peru say the vote is a sham and they won't recognize the results. >> shannon: steve harrigan for us live in miami. thank you. >> bill: trump team has a lot on its plate. moments, problems with russia, north korea, here at home laying the ground work for tax reform. that's a big deal. keeping up the pressure on congress on healthcare. is john kelly the man to keep the west wing on track? president trump says yes. more on what changes we expect to see in the day-to-day operation of the white house. david bossie is here on that as we get ready for the cabinet meeting in the boardroom next. improve our workflow. attract new customers. that's when fastsigns recommended fleet graphics. yeah! now business is rolling in.

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people would ask me that we traveled,ntries what is your nationality and i would always answer hispanic. so when i got my ancestry dna results it was a shocker. i'm from all nations. it puts a hunger in your heart to want to know more. >> shannon: the first cabinet meeting about to get underway with the brand-new chief of

staff and john kelly takes the reins in the west wing. a new day and a brand-new hour of "america's newsroom" in new york. i'm shannon bream. >> bill: hello. monday we're waking up. i'm bill hemmer. good morning. on the hill the focus is on tax reform as republicans shift gears after their failure on obamacare. last hour here in "america's newsroom" the chairman of the house ways and means committee kevin brady, the man leading this charge on tax reform, says it has been a long time coming. >> august is about making the direct case and listening to the american people, not only in our town halls and round tables but we'll go to the reagan ranch mid-month. 31 years since president reagan delivered on tax reform. we'll make the case back home and across the country. >> bill: we have team fox coverage. david bossie standing by with reaction at the white house but we begin with mike emanuel back

on capitol hill. good morning there. so what do we know about the plans on tax reform as they stand right now? >> bill, republican leaders say despite their struggles on other major issues they're convinced they'll get tax reform done saying their focus will be growing jobs and paychecks nationwide. make the tax code more simple and fair for all americans and help middle class families not washington special interests. and while some have floated the idea of raising rates on upper income americans, house speaker paul ryan doesn't sound like he wants to go there. >> we're in the business of lowering tax rates not in the business of raising tax rates. the point is the president himself, with his economic advisors, put out a framework we think really works. >> the next step is for the relevant tax writing committees on capitol hill to craft legislation to lead to comprehensive tax reform, the first in a generation. >> bill: a big lift. what are you hearing from democrats heading into the next

major issue? >> democrats are suggesting that republicans should take a few lessons learned from the effort to repeal and replace obamacare when it comes to tax reform. >> if they do the same thing, campaign one way and then propose legislation another way in favor of the wealthy, powerful few, they will fail on tax reform, they'll fail on infrastructure. instead on those issues work with us in a bipartisan way and we could do good things on both those issues. >> as we've seen in recent weeks and months there isn't a lot of bipartisan spirit on capitol hill. we'll see if that changes. republicans will go home over august and sell tax reform to their constituents. >> bill: mike emmanuel on the hill. >> shannon: let's bring in david bossie. president of citizens united. campaign manager for the trump campaign and fox news contributor. we're talking tax reform.

a lot of folks on the hill are talking tax reform as well. but mick mulvaney says no, white house policy is we want to stay on healthcare. nothing else should get to the senate before that gets done. how does it work? >> i love that. i think mick mulvaney is expressing the president's belief that the senate, which failed just miserably last week to deliver. i hold senators collins, mccain accountable for their vote against what the president and what the republican party campaigned on for the last eight years. it's one of the reasons that president trump is in the white house is to repeal and replace obamacare and they couldn't get themselves to do it. they side with the democrats over and over again over their careers. this was an incredible slap to president trump. so with that said i think that the president is going to stay focused on healthcare and i think we'll get this done and i'm excited that mick mulvaney will make them focus on it.

now we need to pivot to tax reform once this is over immediately. >> shannon: will you imagine expectations on that? a lot of tax about tax reform versus a tax cut which would be easier and cleaner and easier to get passed. because healthcare has flamed out for now rather spectacularly how do you manage expectations about getting a tax reform package done? >> it won't be easy. none of these issues are simple. the president -- president trump's economy is now growing at 2.6%. we have the highest economic confidence level that the american people have had in over a decade. we have enormous job growth and job potential in this country. that's the thing that president trump campaigned on is unleashing the american spirit. unleashing the american worker to be able to make their own success in this country and that's what he has done in the first six months. we could take off if we have

tax simplification and rate cuts for corporations and individuals. i think it's vital that we get it done this year. >> shannon: will it be a bipartisan situation? do you think it's necessary? is that the way it will come down? they've been successful in blocking everything you wanted to do on healthcare. >> absolutely. what chuck schumer just said in that clip is quite frankly insanity. chuck schumer is the reason that nothing has happened in washington he himself, he is one person who has stood in the way of everything that the united states senate moving forward whether a piece of legislation, whether it's the president's ambassadors or his cabinet picks. this guy is a one-man wrecking machine for the american people. and i think that he needs to hear from the american people to stop this obstruction. here is what charles krauthammer terms trump derangement syndrome. that nothing president trump wants chuck schumer will be for.

it is truly a travesty for the american people. >> shannon: we have heard some bipartisan charter working on tax reform. so we'll see about that. folks think there is a new sheriff in town in the white house. john kelly stepping into the chief of staff role. collins said i think he will bring order and discipline and hillary's former campaign manager podesta said this about kelly. >> i have no doubt that the president has told him that he has full authority. the real question is will he allow him to exercise it? that means will he accept the discipline that general kelly will try to impose on the anthony scaramuccis and steve bannons and jared kushner's and the rest. >> shannon: he asked whether he thinks general kelly will stand up to the president and he said i think so.

>> i think it will be a great combination. they'll be terrific partners in this effort. i just want to go back to senator collins who said he will bring discipline. part of the discipline that senator collins doesn't want you to talk about is the discipline to have senators vote the way we need to have them vote. i hope general kelly will bring the discipline there as it is necessary. >> shannon: how do you think it will be structured now? there has been a lot of talk about who reports to whom and who will have the president's ear and a direct line? does it matter in setting up a framework that maybe will be from a communication's standpoint more unified and the legislative side trying to get things org united nationsed and done? >> general kelly will have to have a clean slate and build his own time within the white house and needs to have folks who will report to him and be part of a team, one cohesive

team. if he can do that and establish the ground rules. we have big personalities and people who have worked with and have known the president a long time including his family members. and those relationships aren't going to change with or without general kelly in that position. so i think he needs to do his job in managing the white house as best he can with the parameters that will be set for him. >> shannon: there is a little frustration and friction when he took over dhs that he couldn't get some of the people he wanted to be added to his efforts there. so we'll see how it works now in the white house where he will be face-to-face with the president every day. david bossie. thank you very much. >> bill: get back to north korea after another missile launch over the weekend. president trump and japan's prime minister agreeing to take further action. a big move by the north. its second intercontinental ballistic missile on friday. the u.s. responding to the launch by flying two supersonic

bombers over the korean peninsula sunday hours after the u.s. conducted a successful missile test of its defense system known as thaad. nikki haley saying solving the north korean problem will require the help of regional partners. done talking about north korea, china is aware they must act. japan and south korea must increase pressure, not only a u.s. problem. it will require an international solution, end tweet. north korea's closest ally, china, facing growing criticism for failing to rein in its neighbor. >> i'm very disappointed in china's response that it has not been firmer or more helpful. this is one of the reasons i hope general kelly will be able to be effective even beyond a chief of staff is to begin some very serious negotiation with the north and stop this program.

>> bill: the escalating crisis in north korea leading president trump to pressure china. that plan could come as early as this week. north korea's second intercontinental ballistic missile test on friday landed in the sea off the coast of japan. the u.s. mainland including los angeles was within range based on the height of that test. more than los angeles, there are some projections suggest that test could cover up to 2/3 of the united states. that's what they're talking about now. >> shannon: we've been told the president has been presented with a number of options that include military, cyber ops, all kinds of things. they may be done talking publicly about it as things may be happening privately. >> bill: a lot to consider. >> shannon: north korea not the only nation challenging the white house now. mike pence saying russia aggression won't be tolerated. >> the president made it clear that very soon he will sign the sanctions from the congress of

the united states to reinforce that. but at the same time as we make our intentions clear that we expect russian behavior to change. >> shannon: president putin ordering hundreds of u.s. diplomatic staff out. >> bill: isis claims responsibility deadly terror attack in afghanistan. what we're learning about that massacre in a moment. >> shannon: we're waiting the first white house cabinet meeting with secretary john kelly as the chief of staff. what approach he is expected to take in that brand-new position. >> he is doing it because he is loyal to the president and cares about the president's agenda and wants to support him. that's why he is stepping up and taking this role on. no, please, please, oh! ♪ (shrieks in terror) (heavy breathing and snorting) no, no.

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>> bill: another fox news alert. isis bouncing back. despite losses in syria and iraq where they're under intense pressure, security analysts now warning the terror group is regrouping in northern africa in libya as it takes advantage of the chaos in that country. a spokesman for the libyan army is ice is is gathering strength in the southern part of the country raising fears a new caliphate could be in the making. we'll watch that for you. 15 minutes now past the hour. >> to be clear, we hope for better days, for better relations with russia. but recent diplomatic action taken by moscow will not deter

the commitment of the united states of america to our security, the security of our allies, and the security of freedom-loving nations around the world. >> shannon: vice president mike pence over seas in estonia pledging support for america's allies in the baltic states after russia ordered 755 diplomatic staff cut and ordering the expulsions after congress backed new sanctions against the kremlin. john sununu and former white house chief of staff to george w. bush. we're by the way let our viewers know expecting a little video from cabinet meeting that we may get played out from the whitite house. if we have to interrupt apologies in advance. what do you make of the response from president putin is what a now a veto-proof measure in congress?

>> all of this underscores how important the relationship between the russia, the old soviet union, russia and the united states is and underscores how right mitt romney was that made the observation mocked by obama and the democrats. the second point is also critical. that is how irresponsible i believe it is for the democrats and frankly comey to have tried to use this russia thing to tweak this administration and the president and create political problems. it just creates a complicated back drop. it is in that complicated back drop that president trump and his secretary of state tillerson and foreign policy team have to respond. i think pence's comments in the region were extremely important to underscore what has to be the perspective of the united states in responding to this. >> shannon: i want to play a little bit of what president

putin said about the situation as it is playing out earlier today. >> we certainly have something to respond with and restrict those areas of joint cooperation that will be painful for the american side. i don't think we need to do it. it will be harmful for the development of u.s./russia relations and russia itself. >> shannon: he talks about restricting areas of joint cooperation. we know in the past they've talked about counter terrorism, that russia and the u.s. could work together. they've been at odds in syria they come together in cease-fire and de-escalation zones. are those now in danger given the cat and mouse game we're playing? >> that's what putin has said is in danger. the administration just has to go back and let him know that they are serious about dealing with these issues but they have to be dealt with in a very constructive way. what's happened in syria has a glimmer of hope of cooperation but it certainly wasn't very

significant in terms of the results that were achieved. russia's failure to deal with north korea is an important part of the equation. this is a tough world, an important issue. we have to get out of this climate of politicizing russia as a political issue with these investigations and get back to putting it on the table as the most important foreign policy issue the president and his administration have to deal with. >> shannon: i have to ask you as a former chief of staff at the white house yourself, what do you make of general kelly stepping into that position? what does it entail for people on the outside to coordinate everything the president wants to get done? >> it's important for general kelly to establish a relationship with the president in which the president will accept constructive criticism and behind the closed doors, of course, but will at least have those conversations with general kelly. general kelly has to understand that he serves the constituency

of one. >> shannon: we have to break in here. new video from a cabinet meeting now at the white house, the first overseen by chief of staff john kelly. >> and at homeland what he has done has been nothing short of miraculous, as you know the border was a tremendous problem and now close to 80% stoppage and even the president of mexico called me said their southern border, very few people are coming because they know they won't get through our border. the ultimate compliment. i want to congratulate him on the great job he has done with homeland security and i have no doubt he will be an absolutely superb chief of staff. we were discussing a little while ago before the meeting how well we're doing. however, we the highest stock market in history.

we have gdp on friday got very little mention although i guess in the business areas it did. got very little mention, 2.6 is a number that nobody thought they would see for a long period of time. i was saying we'll hit three at some point in the not too distant future. everybody smiled and laughed and told us we'd be at 1. 2.6 is an unbelievable number announced on friday. unemployment is the lowest it has been in 17 years. business enthusiasm is about as high as they've ever seen it. it is as high. the highest point in 28 years according to a certain chart. the manufacturers are -- the enthusiasm level is incredible. a lot of tremendous things going. we have some interesting situations that we'll handle. north korea, middle east, lots of problems that we inherited from previous administrations but we'll take care of them

very well. but overall i think we're doing incredibly well. the economy is doing incredibly well. and many other things. so we're starting from a really good base. i predict that general kelly will go down in terms of the position of chief of staff, one of the great ever. and we're going to have a good time but much more importantly we're going to work hard and we're going to make america great again. it's all about making america great again. that's what i said and how we won this big election and that's what we're in the process of doing and continuing and general, it is really great to have you on board and thank you very much. thank you. thank you very much, everybody. thank you. we'll handle north korea. we'll be able to handle it. it will be handled. we handle everything. thank you very much.

>> shannon: the president there, governor, both praising his new chief of staff and saying north korea will be handled. your reaction to those remarks. >> well, i think the president may be hinting. i don't know any more than you do. he may be hinting we're about to do something cyber or whatever. i don't know that we'll send a much more serious message to the north koreans. and secondly, i welcome general kelly to the limited club of chiefs of staff. i hope he enjoys it. he certainly has the background and capacity to make this thing work and frankly, general, if you need to chat a little bit about the job, give me a call. >> shannon: we'll make sure these two get connected. all right, governor, thank you very much. >> bill: he has worn the shoes. smart to pivot to the economy after the healthcare debacle of last week. with the economy you go into

tax reform and push it forward. much more on secretary kelly's new role in a moment. a change that many are praising. in fact, does the media prefer secretary kelly? we'll talk to howard kurtz speaking about that. anthony scaramucci already under fire in the first days on the job last week. how is that going? we'll find out next. >> scaramucci is learning something. any time a person is dealing with the press, period, especially the washington press and especially the press covering the president, be aware.

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face-to-face in some time. we'll see what happens there and we'll bring you headlines as we get them from the white house. the west wing where it's a brand-new day literally for secretary kelly. 28 minutes past the hour. >> shannon: this is fox news alert. isis claiming responsibility for an attack on the iraqi embassy in afghanistan. police say a suicide bomber targeted the embassy today in kabul followed by three gunmen who stormed into the building. we're live from the jerusalem bureau with more. why they may have chosen this embassy. >> it was just a few weeks ago that iraqi officials in afghanistan warned that maybe isis as a distraction of their losses in iraq would try to launch some type of attack against the iraqi embassy in afghanistan and that appears what they did. the iraqi embassy in kabul is some distance away from the

larger embassies it's in a busy market area but down a side street, not in the main diplomatic area. this attack appears to have been launched by isis in retaliation for their losses in iraq. they obviously just lost mosul not too long ago, a few weeks ago. the assault lasted for four hours started with a suicide bomber and three gunmen. iraqi ambassador and other employees got out safely. no other people were killed in the attack, just the four attackers. one afghan police officer was injured but it was an attack that sort of is significant of just how dangerous and deadly not only kabul but the entire country remains, shannon. >> shannon: connor, this is coming as the white house is contemplating a surge of troops to afghanistan, right? >> that's right. we've been expecting an announcement from the white house several weeks what their strategy going forward will be. a big division between different people in the white

house. there is a plan there the pentagon to add 3900 additional troops to the 10,000 or so the u.s. already has in afghanistan. that seems to be sort of the pentagon general's plan. others in the white house who want to scale back. don't add anything. there is a big division about what exactly would be successful in terms of a policy there. one of the big problems the u.s. over 17 years has pretty much tried just about every strategy there. none of them have fully worked. they've shown improvement at times in terms of troop levels adding a lot the violence will go down. but day in and day out afghanistan is a deadly place and the pentagon and white house and other policymakers in d.c. struggle to find something that they say this will work. for the time being there isn't a policy on the table right now that everybody can agree on, shannon. >> shannon: connor powell, thank you very much. >> bill: meanwhile, back at the white house west wing, first cabinet meeting getting

underway with general john kelly in his new post. meanwhile attorney general jeff sessions also in there. he has been taking aim at the leakers plaguing the white house. last week telling tucker carlson he is about to announce several criminal investigations. >> i have not been happy with the past prosecutions and investigations of criminal leaks. we've already taken a number of steps. we'll have multiple -- we'll have a press conference next week about it but we already have multiple numbers of prosecutions compared to last year at this time. we are stepping up those cases. it cannot continue. some people need to go to jail. if we can make cases they are going to jail. >> bill: andrew napolitano here on that. nice to see you, judge. he is going to show a jump in the number of leak cases pursued so far compared to last year. >> he used a term of art when he said criminal leaks.

if somebody in the west wing of the white house releases information that the president doesn't want out there but it is not classified, that's not good for the president but it is not a crime. but if someone unmasks from intel -- raw intelligence data the identity of a person participating in a communication whether it's telephone, email or text messaging and it's done for political purposes and not for national security purposes, that is a criminal leak. i suggest to you that's what has troubled the president and that's what the attorney general was referring to. >> bill: is that the first time he talked like that using those specific words? >> the first time i heard him say criminal leaks. the type of leaks that have bedeviled donald trump, that have commenced the entire mess that he is in now including with the special prosecutor began when susan rice and her colleagues. she admitted to some of this, engaged in unmasking, revealing the true names of people who

participated in conversations that were captured by american and british intelligence. some of this was of donald trump before he was president. >> bill: jeff sessions seems to be safe for now. >> i hope so. >> bill: would you agree? >> i don't know what's in the president's mind. i know that the tweets that were attacking jeff sessions have stopped. i also know the president has gotten some very prudent advice from people whose advice he respects that it would be better for everyone, including the 90,000 people that work for attorney general sessions and the justice department, if the attorney general were just allowed to do his job. >> bill: press conference this week. in the meantime there is a story surrounding this technology employee on capitol hill. who worked for debbie wasserman schultz trying to fly back to pakistan and he was arrested. earlier today this is what was said about what is happening on

the investigative front. >> there will be financial crimes that will be prosecuted criminally. i think that's just window dressing. what was he doing with this money? he has connections to a hezbollah-linked character in iraq. sending money to pakistan. i think there will be more than just the financial crimes on its face. in the house of representatives we have to investigate how our systems may have been compromised and it will require putting people in the chair. >> bill: he said a lot in that answer. let's back up and tell us where this story is now. >> where the story started and where it's gotten to now. congresswoman wasserman schultz. while she was a congresswoman employed at government expense an i.t. specialist in her office who was gathering information, as it turns out, and selling it to foreign nationals and foreign intelligence services. this is a felony.

as he was selling real estate in the united states and was attempting to flee to pakistan, he was arrested for failure to report these financial sales. what congressman desantis is saying financial stuff is bad but that's just the tip of the iceberg. what we really need to know is how did this person damage the national security of the united states by selling information from the wasman schultz he mails and what did he sell? this is very intriguing, what did the former chair of the democratic national committee and congresswoman from florida know about him and it. >> bill: the f.b.i. is charged with finding those answers, correct? >> i'm dying to hear her answer desantis's question. i don't think it will happen. she is a witness in the criminal prosecution of her former employee and the f.b.i.

probably doesn't want her testifying about it until after the trial. >> bill: desantis said how were our systems compromised? >> congress can ask this of mrs. wasserman schultz in an ethics investigation. she won't have to tell in public. i think desantis is right. he doesn't know how big the iceberg is or how deep it goes. >> bill: there could be others taking information either selling it or compromising the private work of members of congress. that's a big deal. >> we also don't know exactly what was sold and to whom it was sold and whether or not it contained classified materials. >> bill: meaning that any state actor or bad player could be involved. they would have a financial and political incentive to get that information. >> correct. look for an indictment soon to see if the government can flip this fellow. in return for a lesser sentence than the one he would normally

get can he tell who else knew about this? did any members of congress know about it? who were the foreign agents and what did they get? >> bill: imran amwa didn't get out of the country. how did the feds prevent him? >> i would imagine his name came up at a tsa lift and literally ran to an airport before the flight took off. once the flight takes off there isn't much they can do. this happens at the last minute. >> bill: trying to close loops still in the country and they've been tracking him. >> i would guess he knew they were on his case. >> bill: thank you, judge. nice to see you, sir. 22 minutes before the hour.

>> shannon: a growing number of states are suing drug companies for allegedly misleading doctors and the public about the dangers of opioid painkillers leading to the current epidemic of addictions and overdoses. we have an update on this story. hi, william. >> shannon, 8 in 10 heroin addicts started taking pain meds. today states say that drug makers are falsely claiming that opioids were not addictive. >> i crushed the bottom three vertebrae and then they prescribed me oxycontin. i was given this strong pain medicine for a case of bronchitis. >> he prescribed me more. >> doctor is the best drug dealer you can begin. >> they began with a doctor-prescribed painkiller.

>> the responsibility goes to the doctors, goes to the medical rep and the pharmaceutical companies. >> they down played the addictive nature of their project. >> grant woods sued the tobacco industry for marketing a deadly product. his target today the drug industry. >> heroin is back, why? it's back because of these painkillers. >> this lawsuit today is about accountability. >> 25 cities, states and counties are suing opioid manufacturers for deceptive marketing down playing the risk of addiction and overstating drug benefits for chronic pain. >> everyone wanted the make money and no one wanted to hear the damage it causes. >> pharma spend $30 million a year marketing oxycontin. doctors promoting the drug as safe. >> they don't wear out. they go on working. they don't have serious medical

side effects. >> physicians to a great extent took some of this stuff as gospel and did, in fact, over prescribe. >> the maker of oxycontin denied misleading anything saying opioids are a government-approved product. >> shannon: thank you very much. >> bill: the house minority leader nancy pelosi facing questions about her own future. how she argues that she is the best person for the job despite a lot of pressure from colleagues in the democratic party. >> i'm a master legislator. i know the budget. i know the motivation of people. i respect the people in congress. i think this is a great moment for those of us who understand what is at stake with the affordable care act.

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>> i'm a master legislator. >> shannon: nancy pelosi defending her leadership amid ongoing criticism from democrats. some are pushing for new leadership as the party unveiled a new agenda next week. let's bring in emily tisch sussman and lisa boothe. welcome to you both, ladies. emily, i want to start with you. are you comfortable with nancy pelosi basically as the defacto leader of the democratic party on the house side? >> i am comfortable with it and the numbers speak for themselves. republicans are in control of the house, senate and presidency. when democrats were in the control and the speaker of the house they passed 385 pieces of legislation signed into law.

right now this current congress has been able to pass 43. not on track to have productivity. people will question who are my elected representatives working for? for me or to try to save the face of the republican party? i think -- >> shannon: you have to deal with the reality that they lost the house when she was speak en and lost four special elections. >> we are oef in a different political climate now. everyone agrees we're in a total converse political climate. the failure to bring about changes and reforms to healthcare will reflect on the republican party. i think we're going to see significant changes both in the house and senate. you want to talk about the special elections. the last one we had there was 77 seats that are more competitive than the last one we have. democrats only need 40 seats to take back control of the house. >> okay. lisa, the last four is 0-4.

>> what do the policies get nancy pelosi on her party? they were rejected by historic margins throughout the past eight years. three elections since 2010 when she lost the house. majority and the house democrats netted a single seat. obamacare cost democrats 5.8 percentage points at the polls. i think what you heard from nancy pelosi is someone who is insecure about her position. she saw the most defectors she saw in november. 63 voted for tim ryan. there is a big diversity of opinion in the democratic party. there is anything but. you look at more than 1/3 of the individuals representing the democratic party in the house come from three states, new york, california, massachusetts. 2/3 come from the east coast and west coast. you see a party very much disconnected from average americans from mainstream americans out there in the

hartland and the democratic party is out of touch with them. >> shannon: what do you make the folks who say listen, we love it and hope nancy pelosi doesn't go anywhere we can tie her to every democratic candidate we can because they think it's a winning strategy for them. >> i believe the republicans think that's true. i've seen it myself in districts when republicans have nothing else to go for with their own candidates they'll tie the democrat running to pelosi. i do think it does work a lot for republicans but unfortunately they'll have to own up to their own record of being able to produce very little when they were in charge and full control of the presidency, house and senate. >> shannon: i want to read more of her interview when chris wallace impressed her on retaking the house in the mid-term. she said that's so unimportant and went on to talk about it was a conversation and the debate of ideas that was the important thing. >> i don't think her track

record is good here at all in terms of netting those seats and converting republican seats to democrat, which is exactly the democratic party needs to do to win back the house. look at the local, state and federal level where the democrat ideas have been rejected. the democratic party is trying to basically put a bow around garbage with their better deal. just because you put a bow on garbage it's still garbage. the democratic party has been selling americans and it has been rejected. you look at the polling. we're seeing a lot of optimism in what the republican party and president trump can bring americans in terms of economic growth. >> shannon: something he was touting from the white house today. for now i can tell lisa and emily we'll have to leave it with no source of agreement at all but a very friendly debate. happy monday.

>> bill: civil for the start of the week. president trump holding his first cabinet meeting with his new chief of staff. can secretary kelly iron out the chaos consuming the white house? howard kurtz has an interesting take on all that and he is next. for the strength and energy to get back to doing... ...what you love. ensure. always be you. your insurance on time. tap one little bumper, and up go your rates. what good is having insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch and you could save $782 on home and auto insurance. call for a free quote today. liberty stands with you™ liberty mutual insurance.

>> bill: big morning at the white house given all the news over the weekend. secretary kelly was sworn in as the new white house chief of staff and then the first full cabinet meeting got underway and still where they're meeting at this hour. president trump appointing the homeland security secretary replacing reince priebus friday afternoon and kellyanne conway senior counselor at the white house had this to say. >> being able to solve the problems of this nation and doing it in an orderly and

rapid fashion is really why we were sent to washington everybody is on the same team in terms of we're on the side of freedom and democracy. >> bill: howard kurtz host of media buzz here to talk about this. good morning to you. why is he winning praise at this early stage from reporters, secretary kelly? >> a lot of journalists believe he is a straight shooting general. a contrast to the general distain that reince priebus was covered. you have all the store aoefs about how general kelly will march into the west wing and impose military discipline and everybody will salute. it might raise expectations too high. he has to deal with the commander-in-chief showing in indications he will change his free wheeling style. >> bill: you change your communications director and secretary of state in a week's

time? >> it's a big shake-up. it gets thrown around a lot. we heard conway say we're on the same team. the problem is the white house hasn't acted like its members are on the same time. this is one of the things that general kelly will have to get ahold of. more people may be asked to leave and one thing -- one of the reasons anthony scaramucci was brought in as well. >> bill: scaramucci made a large splash with an interview without retraction word for word. mike huckabee says you can't trust anything. you have to state it's off the record. he shared this earlier. >> there is no such thing as off the record, not in politics. every morning you wake up you need to look in the mirror and say to yourself the press is not my friend. the press is not my friend. keep repeating it no matter how

nice they may be to you. >> bill: he made the mistake by not saying it was off the record. >> no question it was a mistake but i have gotten dozens of calls from republicans and democrats over the years, anchors who have unloaded in sometimes salty language, scaramucci-type language with the understanding that they are talking to me off the record and i'm not going to publish it and i'll say are we saying this for the record? how are we talking here? what has been overlooked in all this. it wasn't an interview it was venting. what has been overlooked is scaramucci is doing what the president wants. unlike spicer and priebus. he has donald trump's confidence. when he attacked reince priebus no one pushed back. for all the -- >> bill: why are you suggesting in the past as a report -- why was it different this time do you think?

>> they made a judgment because scaramucci didn't put the comments off the record he was free to publish the f bomb and graphic comments about others in the white house when rahm emanuel would call up reporters, i don't recall that happening. maybe what he said was off the record. i don't know. there is a degree to which you can sort of enforce the letter of the law on these things and scaramucci, i think, made clear that he feels he made a mistake but also feels betrayed here. >> bill: you don't know how many times scaramucci and this reporter have spoken in the past. >> it is not the first time they talked. >> bill: some sort of relationship. maybe a level of trust built into those graphic comments. howie, thank you so much, brother, in washington howard kurtz, thanks. >> shannon: president trump vowing he will handle north korea after the rogue nation's latest missile test. what moves the u.s. is taking trying to keep the north in check. whoooo.

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>> bill: the different melody. that's what we talk about. >> shannon: we are back on tv now. >> bill: a big welcome to shannon's parents. they are seeing everything. you are being a great host. >> shannon: they were blushing when they met you, my mom was so excited. >> bill: have a great monday, everybody. "happening now" starts right now. >> jon: a new era for the trump administration. a new studio for "happening now" as we look around. brand-new studio. he still has the new studio smell. >> no fingerprints everywhere yet. >> jon: lots of bells and whistles. we hope to bring you the news the old-fashioned way, and give you the stories "happening now." this as a general john f. kelly takes the reins as white house chief of staff, good morning to you on this monday. i am jon scott. >> i am molly line, sworn in and attending his first meeting as chief of staff. expressing confidence in him, but the direction that the cotr