fans have donated $170,000 for the andy dalton foundation. it's awesome. thanks for joining us. i'm i'm dana perino. here's trace. >> trace: the white house briefing set to start in minutes. you better believe reporters will have lots of questions. this morning seemed like it would be all about. trump talking up the size of his nuclear button in a twitter taunt to north korea. now everything has changed. after the president's former chief of staff blasted the president after calling a trump tower meeting. the president fired back saying bannon has lost his mind. that's ahead this hour in "shepard smith reporting." well, the white house briefing set to start minutes from now. i'm trace gallagher in for shepard smith. we're waiting to hear what sarah sanders says about steve bannon

after the president said his former chief strategist lost his mind. president trump distancing himself from the man that served as a top adviser in the final months of the campaign and the first seven months of the trump administration. that's after bannon accused members of the trump campaign of treason. a source close to bannon confirms to fox news he made the comments in a new book, the british newspaper "the guardian" first reported on this. bannon was referring to the trump tower meeting with a russian lawyer and called the threat a category five hurricane for the trump administration. that meeting happened in june 2016. in attendance, donald trump jr., paul manafort and the president's son-in-law jared kushner. trump jr. admitted a middleman promised dirt or hillary clinton from a russian lawyer. president trump has denied any

collusion with russia. the white house said the president didn't know about the trump tower meeting. steve bannon says there's zero chance that is true according to the book. this afternoon, the president released a statement responding to bannon's comment and here it is in full. "steve bannon has nothing to do with me or my presidency. he lost his job and he lost his mind. steve was a staffer that worked for me after i already won the nomination by defeating 17 candidates, often described as the most talented field ever assembled in the republican party. now that he's on his own, steve is learning that winning isn't as easy as i make it look. steve had very little to do with our historic delivery which was delivered by the forgotten men and women of our country. he had everything to do with the loss of the senate seat in alabama. steve is only in it for himself.

he pretends to be at war with the media, which he calls the opposition party yet he spent his time at the white house leaking false information to the media to make himself seem more important than he was. it's the only thing he does well. steve was rarely in a one-on-one meeting with me and only pretends to have had influence to fool a few people with no access and no clue whom he helped write phony books. we have many great republican members of congress and candidates of the make america great again agenda. like me, they love the united states of make and helping to take back our country rather than seeking to burn it down." kevin corke is live in the briefing room with more. kevin? >> listen, what a great job by you to break that down for the folks at home. what is happening here, trace, it's fair to say the president

is trying to take a decidedly different view of a man that obviously helped to shape and certainly helped to frame the trump political insurgency. but the president is doing everything he can to distance himself from mr. bannon. there's another white house statement i want to share with the folks at home. this is coming from sarah sanders who will obviously be out here for the briefing in about 12 minutes or so. she writes this book is filled with false and misleading accounts from individuals that have no access or influence with the white house. she says participating in a book that can only be described as trashy tabloid fiction exposes their sad attempts at relevancy. you may recall after his firing, bannon told the weekly standard that the trump presidency we fought for is over. bannon suggesting the trump white house wasn't going far enough to reach its potential to reshape conservative american politics. the president tried to distance himself from mr. bannon before

his departure. he said listen, the guy came on to the campaign after i already knocked out 17 competitors in the primaries and when he left on the 19th, the president tried to strike a balanced tone. he said i want to thank steve bannon for his service. he came to me during my run against crooked hillary clinton. it was great. thanks. so i guess you can look at it this way. bannon helped. he was a friend until he wasn't and apparently now he's crazy. trace? >> kevin, we're going to get back to steve bannon in a moment. the president issued a new threat to north korea. >> yeah, he did. this is an interesting one. sometimes it's the blessing in a curse to have a media platform like twitter, for example. it's a blessing because it's a direct line of communication to the american people and it can also be a decided curse if you're the communications staff trying to make heads or tails of sometimes a tweet will come out and it will be to the point. other times it can be confusing or confounding. let me take you to the tweet.

this is an interesting one. he said basically here that he talked about the fact that kim jong-un was saying how he has a button and his button was at the ready. the president in his tweet clearly making it plain and clear that he's got a button and his button is bigger. so let's get down to the brass tacks. a lot of people feel like the message was clear and that's what the president was after. here's kellyanne conway. >> the president's position, our position on north korea has never changed. he continues to apply maximum pressure. north korea must denuclearize the peninsula region. we're happy that there seems to be a more unified international effort in this regard in that pursuit. >> others, however, as you can well imagine have criticized the effectiveness, if you will, of the president's bombastic style. >> where we have serious issues

to address abroad, president trump seems happy with macho boasts and belligerent threats that get us nowhere. president trump's foreign policy by tweet will not advance our standing in the world. >> clearly trace, as you can probably predict, north korea will be a major topic today. a lot of us felt like it would be the primary topic of discussion. but given the book excerpts, it may have to take second billing. trace? >> trace: thanks, kevin. we'll get to the briefing as soon as it begins. we've been changing with the politics. let's bring in our political panel. jessica tarlov is the senior director of research at bustle.com and the author of america in the age of trump. kristin tate is a conservative columnist and the author of "government gone wild, how d.c.

politicians are taking you for a record and what you can do about it." she knows steve bannon personally because she worked two years at breitbart. give us your thoughts on this back and forth between steve bannon and the president. >> i think that trump's comments, his lengthy comments, personally attacking steve bannon is one of the biggest mistakes he's made as president of the united states. because it only risks him alienating his own base. trump supporters love the fact that he's a fighter. that's one of the reasons he won in 2016. but now that the campaign is over and he's president, he's got to focus the fighting spirit and energy on pushing forward with his campaign promises and on fighting against big government democrats. not only personally attacking his former chief strategist and someone that happens to be a trumpism populist conservative. it only makes trump insecure and weak. and i think it could alienate

some of his base. >> whatever the opinions are, jessica, it's not unexpected. you know that if donald trump gets hit, he's going to hit back. >> and he's going to hit harder. that's what they always say. it's not unexpected. i don't believe he wrote this statement himself. i think we'll see what plays out on twitter later as things progress. i've been seeing reports that steve bannon is unshaken by all of this and kristin knows him personally. i'm not a topic for breitbart to hire, so i don't know. i would imagine he's sitting in his office and it's a normal day. i think the president does look weak here. some of the biggest mistakes of his presidency? i don't know. i put charlottesville comments ahead of that or the gop tax reform bill. it's a distraction and a mistake to tweet about kim jong-un in that way. but i'd rather talk about this than this intramural business here. >> trace: hold on one second. she makes a good point when she

says she doesn't know what steve bannon is thinking. you go back to his days at the white house, there was a lot of fighting between him and staff members in the white house. numerous reports that he is still in some capacity advising the president. and at the same time, his criticizing the administration policy. so what do you think having known steve bannon, do you think when he does respond, what do you think his response to the president's tweet will be or message? >> i can't predict that. what i can say is i think steve bannon's allegiance is to trumpism, not necessarily to trump himself, the man. so when bannon thinks that trump is making mistakes or not sticking to his promises, he will properly call trump out on that. steve is an honest guy. he's brilliant. i thought that trump made a mistake in his statement saying that bannon had nothing to do with his win. that's nonsense. when bannon came into the campaign, it was a disaster.

manafort had no idea how to control a candidate who was so unconventional like trump. bannon came in there. he knew to let trump be trump. he knew how to connect trump to his base. when he was in the white house, bannon served as probably trump's stronger tie to his own base. >> and building off of that -- >> trump looks really bad right now. >> i agree with that. building off your point, this is par for the course for donald trump in disowning key members of his team. he says paul manafort didn't manner. george papadopoulos was the coffee boy. now steve bannon didn't play a role. i doubt this will come to kellyanne conway as the day is young. it goes back to the heat and the pressure coming off of the mueller probe. we saw attacks about the grand jury over the weekend, the past couple days, that the composition of it was unfair to the trump team because it's too high percentage of african americans. and we know the comments from steve bannon about it being treasonist. that don jr. and jared kushner

and paul manafort took that meeting with the russians, has gotten to have gotten under trump's skin. >> trace: you can separate yourself from the george papadopoulos's than the steve bannons of the world. he's a major player in the media. it's different for him to get some separation between himself and bannon, is it not? >> i think trump's mistake today was in his statement personally attacking bannon instead of focusing on issues or even the content of what he said. all trump has right now is his base. if he alienates them, he's done. the democrats think he's mentally unstable. when he turns to the attacks of a fellow populist conservative, he risks having his own base think he's unfit. he has to be careful. i'd like to see him use his fantastic unorthodox spirit

pushing for what he ran on, what he campaigned on. that's what his base wants. i come from a family of trump supporters. they have no interest in squabbles with steve bannon. they want the wall built and taxes lowers and progress and obamacare repealed and replaced. that's what they're interested in. >> trace: i have about 10 seconds left. >> i have no trump supporters in my family but i agree. i yield my team to the floor. >> trace: kristin tate, jessica, thanks. >> thanks, trace. >> trace: there's more breaking news. paul manafort suing the special counsel, robert mueller and accusing him of going too far. we're working on the breaking details right now. plus, more on steve bannon's allegations and the president's explosive response as we wait for the white house press briefing on a very busy day of news.

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>> trace: and breaking news. a live look in the white house where we expect sarah sanders to start speaking any moment now. you have heard how president trump today slammed his former chief strategist steve bannon saying bannon lost his mind when he was fired from the white house. that was a response to bannon's tough talk in a brand new book. among bannon's reported comments that robert mueller's russia

investigation is going to focus on the money laundering trail left behind by some members of the president's inner circle. let's get live to peter doocy in washington. trace? >> bannon's death is that the mueller probe will turn up some financial crimes convictions before anything about collusion with russian. he's quoted as telling the author michael wolf this. "you realize where this is going. it's about money laundering. their path to expletive trump goes through paul manafort and jared kushner. it's as plain as a hair on your face. bannon continues with this. it goes through deutsche bank and all the kushner blank. the expletive is greasy. they're going through that and going to roll those two guys up, referring to kushner and manafort and say pay me or trade me. now the former white house

communications director anthony scaramucci that got fired after 1 1/2 weeks on the job for some colorful language used to describe steve bannon and others at the white house is saying, told you so. he said take out the expletives and pay closer attention. atrealdonald trump is doing a great job. because the white house is challenging the accuracy anthony scaramucci could win an award from the president. the president said he will recognize what he considers the reporters to be the most dishonest in all the media. that's coming next monday, trace. >> trace: and some people quoted in this book are denying the quote as tributed to them, right? >> yes, the billionaire friend and former chair of the trump inaugural committee, tom barrick is denying that a quote attributed to him is accurate.

the book, the excerpts from it, said that barrick referred to the president as crazy and stupid. barrick said that never helped. he said the quote attributed to me by michael wolf is completely and utterly false. i never have been interviewed by michael wolf, nor did i give him any quotes, nor did he attempt to verify this totally false comment with me. wolf says that he did over 20 interviews from this book. we've only seen a handful and the excerpts that have been released. but barrick is the first to say the quote next to his name was made up. trace? >> peter doocy live in washington. the son of steve doocy. breaking news. attorneys for president trump's former campaign chairman paul manafort suing the special counsel saying the russia investigation has gone too far. that according to court documents obtained by fox news.

the chief intelligence correspondent catherine herridge has the breaking details in washington. catherine? >> thanks, trace. according to this 18-page civil complaint filed with the court, former campaign chairman paul manafort and his legal team are suing robert mueller and rod rosenstein alleging the russia probe has gone beyond the scope of the regulations. saying the investigation of mr. manafort is off of the original jurisdiction to investigate any links or coordinate between the russian government and individuals associated with the campaign of president trump. in addition as you remember in october, manafort and his business partner pled not guilty to a 12-count indictment that included money laundering allegations and making false statements in connection with their work in the ukraine based on the civil complaint filed today. manafort's legal team is asking the court to set aside those

charges, trace. >> >> trace: catherine herridge live in d.c. thank you, a quick break as we wait for the white house briefing. sarah sanders was supposed to take the podium at 3. it was pushed to 3:15. we anticipate she will take the podium in any minute and we'll bring it to you live. stay with us. patrick woke up with a sore back. but he's got work to do. so he took aleve this morning. if he'd taken tylenol, he'd be stopping for more pills right now.

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>> trace: here it is. the first question on steve bannon from president secretary sarah sanders. >> it's clear what his position on mr. bannon is. it's pretty lengthy and pretty detailed and there's not much to clarify or add. >> is there regret? they did have a long and close working relationship. >> once again, the president's statement fully addresses his

position and his relationship with with mr. bannon is. april? >> when is the last time the president talked to steve bannon and this is a serious question. is the question blocking steve bannon from calling his cell phone? >> i'm not aware he was calling his cell phone. the last conversation took place the first part of december. >> what is the news to the base? what does this do to the president's base? >> i don't think it does anything to the president's base. the base and the people that supported this president supported the president and supported his agenda. those things haven't changed. the president still is exactly who he was yesterday as he was two years ago when he started out on the campaign trail. his agenda hasn't changed and his continue to fight and push for that agenda. the base is extremely excited and happy with the job that this president has done in his first year in office. look at all he's accomplished. they're happy with where he is.

peter? >> steve bannon has a distinct following, the alt right. some people may not necessarily be for the other, people are xenophobic. what happens there? >> that's a question that you have to ask steve bannon. it's not changed because the president hasn't changed and his agenda has not changed. we're continuing to accomplish a lot of things on the president's agenda as we did last year and we're going to do more this year as we move into the beginning of 2018. peter? >> a couple questions. i'll try to make them simple. >> you don't think i can handle the hard ones? >> did donald trump jr. commit treason? >> it's a ridiculous accusation. if it's in reference to comments made by president bannon, i refer you to what he made on "60 minutes" where he called the collusion of russia with this president is a total farce.

if anybody is inconsistent, it's him. not the president or this administration. >> does the president need my of donald trump jr.'s guests at the trump tower that day? >> no and he wasn't aware of that. >> and we'll talk about the nuclear button tweet. should americans be concerned about the president's mental fitness, that he appears to be speaking so lightly about threats regarding the nuclear button? >> the president and the people of this country should be concerned about the mental fitness of the leader of north korea. he's made repeated threats, tested missiles time and time again for years and this is a president that is not going to cower down. he's going to do what he promised. stand up and protect the american people. i'm going to keep moving. john? >> is it possible he could misinterpret that? couldn't he miss interpret a

tweet like that? >> i didn't say that. it's clear what the president's position is. our position on north korea hasn't changed since the beginning. this is a president who is committed to protecting americans and protecting the people of this country. he's not going to back down from that. john? >> thanks. it's a very hard statement that the president put out and it's not the first time that steve bannon has been topic a here at the white house briefing. the last time you made reference is after his interview on "60 minutes." during that white house press briefing on september 11th, a series of questions were asked to you at the time, you were hands off in terms of going after steve bannon. the president responded in a particular way. what has changed? what has changed between then and now after the interview that he apparently did with michael wolf in his book? >> once again, the president and

his feelings towards mr. bannon are very clear in his statement. there's really not much else to add beyond that. i don't think there's much gray area in what his feelings are. >> this is a pretty dramatic falling out between the president and someone that worked on his campaign and worked in this white house close to him every day. and so i think everyone is wondering, what led to this quite dramatic falling out and was it the loss of roy moore in that senate race? is this a direct response to steve bannon calling the president's son unpatriotic saying he completed treason? >> there are a number of factors playing in. i think that going after the president's son in an absolutely outrageous and unprecedented way is probably not the best way to curry favor with anybody. ashley? >> you mentioned statements the president said was harsh and said the entire book is fiction.

that said, a note explaining how the book came to be, the author conducted interviews, many with the president, spoke to over 200 people, many of the president's top aides -- >> he never sat down with the president, just to be clear. >> did they -- >> there was one brief conversation that had nothing to do originally with the book. it was i think around five to seven minutes in total since the president has taken off. that's the only interaction that he's had. >> were there any phone calls -- >> that's the only interaction that the president has had with michael wolf since he took office. >> can you reconcile the president's statement with the authors statement about how the book came to be? >> i'm not sure what the authors statement on how the bock came to be. i know the book has a lot of things so far of what we've seen that are untrue. you have many people that have quotes that are sourced to them that are now coming out publicly and saying that those things are

not true. so i can't speak to what the author's comments were. i can only speak to the white house. >> does the white house have a copy of the book now? >> i believe there may be some individuals that do. jim? >> sarah, the president's statements that steve bannon had very little influence in the white house. the president elevated him to the same level as the chief of staff and put him on the national security counsel. how do you reconcile that? >> i wouldn't say he elevated him to the same level as chief of staff. in the actions that steve took, the president was clear he didn't have a lot of influence on him or the decision making process throughout his time here at the white house. margaret? >> i need to clarify. many of us have seen michael wolf at the white house on multiple occasions. we know he was here. who gave him access to the white house? what was he here for? can you explain any of that? >> yeah, so far from what i can tell of the roughly just over a

dozen interactions that he had with officials at the white house, i think close to 95% were all done so at the request of mr. bannon. >> so you would just say the compliance came from steve bannon. other white house officials were not working with him and helping -- >> any that did so far as far as we can tell did so at the request of mr. bannon. deborah? >> the president tweeted that he will be announcing the most dishonest and corrupt media awards monday at 5:00 p.m. can we have details on that? where will he say it? will it be televised? how many awards -- >> will there be an audience. >> i don't want to spoil anything. but my guess is that there are quite a few individuals that could be up for those awards. beyond that, i think we'll have to see what happens monday. >> will the press corps be in

the room for that? >> it midget hard to prevent trophies if you're not there. we'll wait and see monday. judson? >> two policy ones. the first is there were reports from a letter from the department of transportation related to the amtrak gateway tunnel in tunnel. >> is it infrastructure? >> in principal supports the 50/50 split on that and what changed with wanting that with the bipartisan new york delegation earlier? >> we don't have any new policy announcements on that front. as we get further into the year and further into the conversations on infrastructure, we'll be rolling out more details on what we want to do, what we hope to accomplish and what the plan is to do that. >> i have some questions about a shorter list. demands on immigration.

is that something that mick mulvaney had on capitol hill today -- >> it's possible that it comes up. we're certainly open to conversations on that. today the focus is on the budget. we would like a clean budget bill. so that's not what our focus is going into today's meeting. our priorities on what we would hope to have in any immigration bill and any daca deal have not changed. they would include securing the boarder with a wall, eliminating the visa lottery program and ending chain migration. all of those things are the same. >> and you said that the last time the president spoke with steve bannon was in the early part of december. was that before or after the special election in alabama? >> i'd have to look back at the exact date and circle that. >> the drafting of the statement the president issued today is lengthy. did he write it in his own hand? >> these are the president's

words. they're very clear. there's not much to add. >> its been reported that he was furious that bannon was quoted as saying. is that accurate? >> i think furious, disgusted would fit when you make such outrageous claims and completely false claims against the president and his administration and his family. >> i want to ask you personally. i know you speak on behalf of the president and on behalf hoff the american people. how surprised were you at what you read, these excerpts attributed to mr. bannon? did that surprise you in any way be and if so how? >> certainly surprising. i for one was somebody that very much believed that the president could and would win. otherwise i wouldn't have dedicated so much time to that. not only that, i worked in the white house since the very first day. a lot of the characterization

that i saw that he was pushing out was the opposite of what i saw take place every day they've been here. >> very quickly on north korea. there's been some folks in town that have said listen, it doesn't help. despite the idea being we're going to be forceful, going to push back. some have said it doesn't help when the tweets come out the way they do. yet we know that the president has made it clear, i am who i am, i'm going to tweet the way i want to tweet. is there any consideration that tweets like the one on north korea actually don't advance the agenda, meaning working with other partners in the region? >> i think what didn't help was the complacency and the silence of the previous administration. this is a president who leads through strength and he's going to do that. he's going to focus on everything that he can do in order to keep americans safe and he's not going to be pushed around by the leader of north korea. our policy with north korea has not changed. we're fully committed to

continuing to apply maximum pressure and working with all of our partners in the region, including south korea who we have a better relationship now than ever before. we're going to work with them and hopefully north korea will make better decisions. kristin? >> you have said that people should question the mental fitness of kim jong-un. isn't it dangerous for the president to be taunting him on twitter? >> i don't think it's taunting for him to stand up for the people of this country. what is dangerous is to ignore the continued threats. if the previous administration had done anything and dealt with north korea, dealt with iran instead of sitting by and doing nothing, we wouldn't have to clean up their mess now. >> sarah, it's a taunting tweet to say that he has a larger nuclear button. >> it's a fact. >> what does it say about the president's priorities, that he

unleashed a four paragraph statement about steve bannon and one tweet on north korea? >> ambassador haley, jim mattis, have all talked about it. saying one tweet is disingenuous. >> the president is well aware of how the process works and the capacity of the united states. it's greater than that of north korea. >> two foreign policy questions. one, yesterday you said there would be more details on pakistan. seems that the separation planned to cut off security assistance to pakistan. is that accurate? >> we'll keep you posted as the decisions are finalized. >> regarding jerusalem and israel, the president tweeted last night that we have taken

jerusalem. the toughest part of the negotiation is off the table. israel for that would have to pay more. first, taking it off the table, when the president announced that jerusalem was the capitol of israel, if the administration policy was stated as that the borders were not being decided, this doesn't affect negotiations, the tweets seem to contradict that. >> i don't think so. it doesn't affect the negotiations. we want to continue to have conversations and continue the peace process. we're still very much committed to that and hope we can continue to push forward in that point. >> what is the "pay more" thing? >> i'm sorry? >> he said israel would have had to pay more. >> i'd have to check on the details. i'm not sure. jordan? >> thanks. in light of this book and the back and forth and the access of michael wolf to the white house. will the white house release the

visitor logs to the public? >> i don't anticipate any changes at this point. john? >> thank you, sarah. two questions. first, during the campaign, the president said repeatedly entitlements were off the table and he would preserve social security, medicare, medicaid part d as they were. now with the passage of the tax reform legislation and the recent statements of house speaker paul ryan that entitlements should be considered, has the president changed his position from the campaign? >> the president has not changed his position at this point. again, as conversations go on, if that does change, we'll let you know. trey? >> is it safe to say steve bannon is off the list of social invitations for the white house? >> probably so. trey? >> a couple questions -- >> since those are controlled by

if first lady, her statement is pretty clear on her position as well. >> thank you. questions on steve bannon and one on north korea. how would you describe steve bannon's role in the white house when he was serving in this administration? >> the president addressed what he feels it was. to me, that's the most important voice in this process. he has spoken very clearly on that front. >> is the president looking for an apology from steve bannon? what is he looking for in the future? >> i don't think anything. >> if i can follow up on north korea. discussing earlier, the idea that kim jong-un would be the one who is mentally ill, is the president concerned that tweeting about nuclear war could cause someone like kim jong-un to act with military force? >> again, i've addressed this. the president is concerned about the continued threats that this individual has made towards the united states and others. he's not going to allow him to continue to do that without saying something and standing up for the people of the country.

>> three secretaries have said that the deadline for daca is this month, that there's not enough time to put a new program in place by march if it's not done this month. do you agree with that? does that make you feel like you have to get this done sooner? there's been some talk here about not worrying about it till march. >> we would like to get something done. again, we want to make sure that we have complete and responsible immigration reform. we're not just dealing with one piece of it. we've laid out our priorities and what it would take for us to make a deal on that. we look forward to getting that done. >> does it have to be done this month? >> i'm sorry? >> does have it to be done this month as they're saying? >> i don't know that it necessarily has to be done this month. we'd like to make a deal on securing the border and ending the visa lottery program and the

wall. if the democrats are willing to make the deal, i think we would be happy to get that done by the end of the month. sorry. >> a very quick question. i don't understand the timing of somebody. steve bannon left in the summer, late summer. if the president says he's lost his mind when he left, why does he continue to talk to him for so many months? >> the president continued to have conversations with him often, asked for by mr. bannon. the president spoke with him. that doesn't mean that he can't hold that position. andrew? >> what do you -- your comments and kim jong-un. is that based on a u.s. psychological assessment or is that your opinion? >> i'm not going to get into further details on that front. one last question. andrew. go ahead. >> the president enjoyed a slight bump be popularity when

he was in florida golfing. i'm sure you saw that is it possible that americans like him more when he's not tweet something. >> americans like the fact that he got the largest tax cut in history done. i think they like the fact that they'll see more of their paycheck. i think they like the fact that american companies are investing back in this country and not other ones. i think they like the fact that american companies are now giving out massive bonuses across the board. we're seeing every single day more and more companies announce decisions like that. that's what most americans are happy about, particularly the holiday season and they had more money to consider spending as they celebrated christmas with their families. one last question. hunter? >> the past day or so we've seen president trump attack the press, the justice department and now his former ally, steve bannon. by attacking critics and key institutions in our democracy, isn't the president engaging in authoritarian behavior? >> not at all. the president is responding to news of the day.

if the president can't respond aggressively to an individual like the leader of north korea that continues to threaten americans, then that's a dangerous place we don't want to go down. >> what do you think when the president calls for people -- >> i'm sorry. >> we've seen you and the president call for critic to be fired from their jobs. >> i don't think it's necessarily critics. we're certainly happy for people that have different opinions. but there's a difference between different opinions and different facts. people are entitled to an opinion but they're not entitled to their own facts. we have a big problem with people putting out misleading information. those are very different things. thanks so much, guys. >> trace: there you have it. about a 25-minute briefing. sarah sanders answered mostly questions about steve bannon. if your just joining us, steve bannon and author michael wolf said a meeting that donald trump jr. had with a russian lawyer in june of 2016 was treasonous.

in response, president trump released a four paragraph statement saying in essence that steve bannon lost his mind. let's bring in jessica tarlov and kristin tate, a conservative columnist. kristin knows steve bannon personally because she spent two years working at bright bart. it's interesting, kristin. one of the last questions dealt with the fact that steve bannon did in fact communicate with the president after he left the white house. the question was asked, if he lost his mind, why was the president still communicating. sarah sanders answered, well, look, you can still talk to the guy. doesn't mean he didn't lose his mind if you want to take to the guy every once in a while. >> you know, trace, watching this press conference, i just had to laugh. it kind of encapsulated exactly why the american people are completely fed up with the media. we're dealing right now in our country a potential government shut down, we're coming up to a critical mid-term election and

trying to figure out what to do with hundreds of thousands of illegals and reporter after reporter talk about -- >> trace: it is the topic of the day, kristin. we were going to talk about north korea. but let's face it, everybody in the world is talking about the steve bannon quote to the book. jessica, in fairness, the white house is trying to distance itself from steve bannon and down play his role in the white house. i get kristin's point. the media could be talking about more important things. but right now, this is at the top of what we want to hear about agenda. >> and there were questions about kim jong-un and whether it made sense for the president to be treating about his large nuclear button. so the questions were there. this is the news of the day. frankly, that's the president's fault. that's not the press's fault. he's in control here. he can tweet about the spending bill. he can tweet about the dreamers.

he can tweet about a government shut down. he can tweet again about his amazing victory with the tax reform. he only took a couple days off to revel in that accomplishment. hits a huge bill and he squandered that opportunity with this kind of behavior. i don't feel bad for him. i feel bad for sarah huckabee sanders. i'm in awe of how much better she is than shiean spicer. she gets it. she knows where to cut out. i don't agree with her. she does a good job for him. >> and on that point, kristin, you know, sarah sanders brought up a good point where she said, look, they asked about steve bannon's comments about donald trump jr. and sarah sanders said, you have to remember that steve bannon is the one that told "60 minutes" this whole russian collusion things is a farce. so the white house is now adopting a strategy saying look, we're going to use steve bannons

words against steve bannon's words. >> yes. that's true. however, i think it was a mistake for them to put out this statement right before the press briefing. because of course, all of this now dominated the white house press briefing. the liberal reporters, their goal is to make trump look unfit to be in office. when you release a lengthy statement personally attacking your former chief strategist, it kind of only gives more weight to that argument. it certainly did not help with the focus of today's presser. so i think they didn't do themselves any favors. the country, conservative republicans would be better off if trump would put this behind him and focus on the issues at hand and moving the country forward. >> trace: we have to go, jessica. the question was asked whether or not the cell phone, if steve bannon can still call the president. sarah sanders said i don't know. i didn't know he had the president's cell phone number. >> i'm sure he can call him. text him, talk to him any time

the president doesn't sleep that much. i'm sure he will be awaiting a chat this evening if steve bannon feels like it. going back to what i said initially to kristin's point here. the president of the united states of america starts all of this. i understand he's a counter puncher. he's in complete control here. if he behaves presidential, he will be treated with a little more respect by the press and maybe he can talk about some things on his agenda like the big beautiful wall and whatever other goodies we're going to be getting in the next three years. >> trace: the big beautiful wall that he wants to go along with the daca funding. jessica, kristin, we'll be talking more about this. thanks for joining us. we have more breaking news. minutes ago, fox news confirmed reports of a fire on bill and hillary clinton's property outside new york city. we'll tell you what we know about the fire and where it burned next. megan's a lawyer.

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>> trace: a fox urgent now. first responders have put out a fire at bill and hillary clinton's property in new york. it's about 30 miles north of manhattan. police tell fox news the fire is not at the clinton's main residence, but it is at a building on their property. we do not know who was home at the time. we have no reports of any injuries. just talk about the white house press briefing. north korea was a major topic at the briefing. let's get live to jennifer griffin at the pentagon. jennifer? >> trace, no official reaction from the defense secretary to president trump's resent tweets about north korea. certainly there's concerns the president's tweet ratchets up the man on man brinkmanship and could hurt talks. so far north korea has not accepted the invitation of south

korea's president despite kim jong-un having proposed talks in his new year's address. south korea has wanted the talks next tuesday. china's foreign ministry responded to the president's tweet this morning. >> currently the situation on the peninsula is sensitive and complex. we hope all parties concerned can remain restrained. what is said should be conducive to alleviating the situation. >> i'm told there was more movement seen at known ballistic missile bases as recently as today. last week, the intelligence community started to see movement near pyongyang suggesting that north korea was getting ready for another ballistic missile launch. i'm told if north korea does not begin dismantling its program, the u.s. will take preemptive military action in the coming months.

back to you. >> thank you, jennifer. the senate is the back in session. and congressional leaders from both parties meeting this hour with the white house budget director, mick mulvaney and mark short. let's get to mike emanuel live on capitol hill. >> good afternoon, trace. the first order of business is trying to hammer out a two-year budget agreement. republicans are saying it's time to rebuild the military and democrats want to emphasize domestic spending. democrats have talk about wanting to do a deal on daca, the children brought to this country illegally by their parents. the white house is saying, you heard from sarah huckabee sanders, that they want a clean budgetary agreement. they don't want to get into immigration matters now. the president set a march deadline for dealing with the immigration issue and they want to address mother than the young peop people. there was a january 19th deadline when the government runs out of money. >> mike emanuel live on capitol

hill. good to see you. thank you. i'm trace gallagher in for shepard smith. the dow not bad today. "your world" with neil cavuto is coming up next. a lot going on in the world. we'll see you tomorrow at 3:00.

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>> it's been reported that he was furious when these reports first came out. is that accurate? >> i think furious, disgusted would probably certainly fit when you make such outrageous claims and completely false claims against the president, his administration and his family. >> neil: welcome, everybody. i'm neil cavuto. on "your world" today, a startling development. the bloom is off the rose between the president of the united states and his one top campaign adviser that played a critical role in the president's inauguration a year ago. that was then. a different relationship now. no relationship at all now. kevin corke at the white house with what went wrong and