Mitch McConnell on his united front with President Trump

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Mitch McConnell on his united front with President Trump

Senate majority leader weighs in on tax reform and the GOP agenda on 'Fox News Sunday.'

This is a rush transcript from "Fox News Sunday," October 22, 2017. This copy may not be in its final form and may be updated.

DANA PERINO, FOX NEWS HOST: I'm Dana Perino, in for Chris Wallace.

The Republican-led Senate passes its budget, clearing a path for President Trump's tax cut plan.

(BEGIN VIDEOTAPE)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I want to get it by the end of the year, but I'd be very disappointed if it took that long.

PERINO: We'll discuss what obstacles lie ahead for the first tax overhaul in decades, with White House Budget Director Mick Mulvaney.

Then, as senators work on a bipartisan deal to fix ObamaCare --

SEN. LAMAR ALEXANDER, R-TENNESSEE: I think as people read the bill, they'll see it doesn't bail out insurance companies, that it avoids chaos.

PERINO: Nineteen states sue to keep the health subsidies Trump cut. We'll talk exclusively with California Attorney General Xavier Becerra, who is leading the charge.

Then, the president stands side by side with Mitch McConnell in a show of unity after Steve Bannon declares McConnell enemy number one.

TRUMP: We're probably now I think, as far as I'm concerned, closer than ever before.

PERINO: We'll discuss the impact on the agenda with the Senate majority leader live on "Fox News Sunday."

And --

JOHN KELLY, WHITE HOUSE CHIEF OF STAFF: So, he called four people the other day and expressed his condolences in the best way that he could.

PERINO: The White House chief of staff weighs in on the president's response to the death of four U.S. soldiers. We'll ask our Sunday panel how the issue has become political this week. Plus --

So, I was the first Republican woman press secretary. You are the second, but you are the first working mother.

Sarah Sanders on balancing life at home and at the White House.

All, right now, on "Fox News Sunday."

(END VIDEOTAPE)

PERINO: And hello again from Fox News in Washington. President Trump's drive to overhaul the nation's tax code cleared a major hurdle this week when the Senate approved his budget blueprint. The House is poised to adopt it next week.

In an op-ed in this morning's USA Today, President Trump writes: Revising our tax code is not just a policy discussion, it is a moral one, because we are not talking about the government's money. We are talking about your money, your hard work.

We begin here in Washington with the White House Budget Director Mick Mulvaney.

Sir, welcome back to "Fox News Sunday."

MICK MULVANEY, WHITE HOUSE BUDGET DIRECTOR: Good morning. Thank you for having me.

PERINO: In my first time here and my first guest on the first every "Fox News Sunday."

MULVANEY: I'll try hard not to screw up too bad.

PERINO: OK, me too.

So, you must feel a lot better today than you did a week ago about the chances for tax reform.

MULVANEY: Very much so. We felt good last week but not only did the Senate then pass the bill, we're hearing now that the House may go ahead and either take the Senate amendments or move very quickly to accept the Senate amendments and we may save as many as 10 or 12 legislative days, which is a big deal. It sounds like it's not much, when you only here in the end of October, but in the congressional calendars, that's a long time and it really does buy us some more time and some opportunity to get this done before the end of the year.

PERINO: Well, especially because Treasury Secretary Mnuchin promised that the president would have a bill by December. Do you think that's realistic?

MULVANEY: Absolutely do. In fact, they got a lot more, if the House really does take the Senate budget, when they come back I think it's Tuesday this week, it absolutely moves the ball a lot, further a lot quicker towards an actual law (ph).

PERINO: Another thing Secretary Mnuchin said is that the only thing non-negotiable is the corporate tax rate, which you all in your proposal would be 20 percent, coming down from 35 percent. But if you had to negotiate on that number, would you?

MULVANEY: The two priorities from the very beginning from the president have been that middle taxpayers will pay less and it will be simple for them. That's number one.

Number two, that the corporate tax rate is going to come down. We wanted 15 percent. The House kept pushing and pushing and pushing. We talked about 20, we love to get back down to 15 percent as we continue that negotiation.

But those two things are sort of the foundation of a tax plan for the president and I don't think the House really wants to negotiate those very much.

PERINO: I would agree. But there is some possible concern. Let's listen to House Freedom Caucus Chairman Mark Meadows, because he's got a little bit concern about the possibility of a fourth bracket for high tax earners. Let's listen.

(BEGIN VIDEO CLIP)

REP. MARK MEADOWS, R-NC, FREEDOM CAUCUS CHAIRMAN: I'm against having a top rate. If we're going to do that, then we need to just admit that at times that having a top rate for those that earned a million dollars or more is maybe a political reality. But it doesn't necessarily boost the economy.

(END VIDEO CLIP)

PERINO: So, in the plan -- right now, there's seven brackets. The plan will take it to three. But in order to do the pay-fors, there's this possibility of a fourth tax bracket.

MULVANEY: Actually, that's a fifth rate. People forget that we actually have four rates now. It's zero, 12, 25 and 35. And there has been some discussion mostly on the Hill about adding that top bracket.

What we've just said at the White House is, look, we're agnostic about that. It's not a big piece for us. If the House needs to add it to pass a great tax reform, that's great. If they don't, that's great, too. It's not what's driving this for the effort of the White House.

PERINO: The conservatives have long believed, as I understand it, that taxes and high taxes depress economic growth and investment. So, I think if it keeps creeping up, will it depress what you want to do?

MULVANEY: And our opinion of that has not changed. I guess what we're saying is, look, we want the very best tax package that can actually pass, and if there's things the House has to do or the Senate has to do to get that last vote or two to get across the finish line, that's up to them.

That fifth bracket is not a party (ph) for the White House. We're not pushing for it. We don't necessarily even want it. But it's something that in the greater scheme of things, if the House and Senate tell us we have to take, then we'll open to it.

PERINO: So, if that happened, do you think that Senator Schumer and Warren will complain that the tax plan doesn't do enough to tax the rich? Do you think that they could come on board?

MULVANEY: No chance. In fact, I've asked a couple of Democrats if they'd ever vote to lower the corporate tax rate, they told me no, which is just bizarre, Dana, since they've supported themselves bills in the past, in fact some Democrats supported bills that Schumer has talked about and Ron Wyden talked about that actually lowered that corporate tax rate. President Obama talked about lowering the corporate tax rate. It's almost as if since it's President Trump's administration and it's a Republican plan, now they're against it.

PERINO: They're in just say no mode.

MULVANEY: Yes.

PERINO: I do have a question. So, I grew up in Wyoming and Colorado. That's not -- those are not high tax states.

MULVANEY: Right

PERINO: And I've been trying to understand this issue about state and local tax deductions. This seems like this could be a big sticking point where it's the big revenue raiser. That in order to pay for the tax cuts, which I know you care about, but there's about 40 House Republicans who represent taxpayers in those high tax states, like New York and California, and lot of them in New England, and they're saying that this is a deal breaker for them.

MULVANEY: I hope it's not because at foundation here, one of the things we're driving is fairness. And if you live in Wyoming and I live in New York and we make the same amount of money, our house is worth the same amount of money, our cars are worth the same amount of money, all other things being equal, shouldn't we pay the same amount of federal tax?

I think it's yes. The president thinks it's yes. Secretary Mnuchin thinks it's yes. Most people think that we should pay the same amount.

That's not the way our tax system works right now. Right now, if you live in Wyoming, all other things being equal, you pay more tax than someone who lives in New York. That's just not fair and it's something we really are hoping to change and we hope the House and the Senate can accept that.

PERINO: But -- so, some are saying, though, that those taxpayers in those states would end up actually disproportionately paying for the tax cut bill if this stays in there?

MULVANEY: Yes, and that's -- you have to be careful there, because one of the reasons it's so hard to do tax reform, and we haven't done tax reform in this scale since the 1980s, if ever, is that you can always sort of go in and look at one provision and say, oh, this is so bad for this person. I can't vote for it. You have to look at it holistically. You have to look at the entire impact of the tax plan.

I heard Governor Cuomo in New York said this tax plan would raise taxes of every person in New York. That's just patently false, when you look at it writ large for example, doubling the standard deduction, most people aren't going to be interested in their state and local taxes deduction (INAUDIBLE). They're not going to take.

PERINO: They won't have to do.

MULVANEY: That's exactly right.

PERINO: OK.

So, thirty-six years ago, the U.S. national debt crossed a trillion dollars for the first time. Today, it's $20 trillion. And I know you came to Washington, D.C. because you wanted to combat overspending and you even talked about it actually in January at your confirmation hearing. Can we just listen to that?

MULVANEY: Sure.

PERINO: Trip down memory lane.

(BEGIN VIDEO CLIP)

MULVANEY: I believe as a matter of principle that the debt is a problem that must be addressed sooner rather than later. I also know that fundamental changes are necessary in the way Washington spends and taxes if we truly want to help the economy. This must include change in our government's long-term fiscal path, which is unsustainable. Part of that also means taking a hard look at government waste and ending it.

(END VIDEO CLIP)

PERINO: I know that your principles haven't changed.

MULVANEY: Yes.

PERINO: I fully understand that politics has. But have the economics changed?

MULVANEY: No, all that's changed is sort of the politics. Well, what's changed is that we sent $54 billion worth of discretionary spending reduction ideas to the House, Dana. I think the House took maybe four or five billion of it. I don't think the Senate took any of it. It's very, very hard in this environment to lower spending.

So, what we've done is sit back and go, OK, how do we balance the budget in the 1990s? We did not cut our way to balance in the 1990s, we sort of restrained the growth of government, so that government revenues, tax receipts, grew faster than expenditures.

And that's what we're trying to do. We're not abandoning fiscal restraint by any measure. I would never do that. But we're sitting there and going, OK, if we can slow the expenditures but increase the revenues by growing the economy. As America gets wealthier, the families get wealthier, the government actually gets wealthier, too. That's how we balance the budget in the 1990s. That's how we're going to do it again today, but we need to tax reform to do it.

PERINO: If you get the economic, if you get the tax reform passed and the resulting economic growth that you project, would you try to revisit with President Trump your concerns about the growth of entitlement spending?

MULVANEY: In fact, I had a meeting with the president just the other day. We walked over some of the numbers, as the deficit came out to -- the deficit came out last week, about what's driving the deficit. And I actually said, look, here's where it is, here's where it isn't, and, Mr. President, I'm going to come back to you again and want to talk to you about entitlement spending.

And he said, look, I'm still not going to do it, but happy to have a conversation. Same thing we -- discussion we had in the spring, I promised people I wouldn't change Social Security. I'm not going to do it.

I said, that's fine, but my job is to show what that means. And I think that's the right way to do it, and I think that if we do get this growth, Dana, both 3 percent, you can start to see that deficit trimmed down, which is what's driving everything we do.

PERINO: Are you concerned about the uncertainty in the health care market with the confusion about whether the president could support the bipartisan short term fix of Alexander-Murray, that that would hurt your ability to actually hit that 3 percent growth target?

MULVANEY: No, not at all. In fact, I'm surprised now that the Democrats are all of a sudden concerned about uncertainty in the health care markets when it's been uncertain since the day ObamaCare passed. They're concerned now about rates going up when they've been going up since the day it was passed. So, again, that's the politics of the day.

I think on the CSRs, which is thing that the president is, look, I would be OK with making these payments, if I get something for people in exchange, if I get something that actually helps people, give us more ability on associated health plans, give us more ability to sell state lines, give us more ability to expand health saving account, give us tools that actually help people and we'll talk about looking at Alexander-Murray.

PERINO: When the president goes to the Hill on Tuesday for lunch with the senators, what's the main message you want them to walk away with?

MULVANEY: Well, tax reform for certain. But the one thing that doesn't get a lot of discussion mostly in the media is the lack of progress on our nominees. And we're very excited to hear Mr. McConnell commit this week to having the Senate starting to work on Monday and Friday and even the occasional weekend. And as a House member, I sort of laugh when I hear that, former House member.

I think President Obama had twice as many of his confirmees in place at this point of his administration, as we did. This is a Republican Senate with a Republican president, we need our people in place.

PERINO: It seems like the Senate has done well confirming judges, but the rest of the government does need to be filled.

MULVANEY: We got tremendous job on judges, but we do need them to start working more, again, why? Because the Democrats are obstructing it every turn. They're obstructing people, Dana, who go on to get 80 or 90 votes, people who are never contentious in the first place. Everybody knows they're qualified. It's obstruction for the sake of obstruction and we just need the Republicans to push back.

PERINO: And they probably get good headlines for it back in their own districts.

MULVANEY: Yes.

PERINO: All right. OMB Director Mick Mulvaney, thanks for being here.

MULVANEY: Thanks.

PERINO: All right. Joining us now from Sacramento is Xavier Becerra, the attorney general of California. He is leading a coalition of 18 states and the District of Columbia against the Trump administration's effort to end ObamaCare payments to insurers. It's just one of California's many lawsuits against the Trump administration, on everything from health care to immigration, to clean energy.

Sir, thank you for being with us today.

XAVIER BECERRA, D-CALIFORNIA ATTORNEY GENERAL: Thanks, Dana.

PERINO: So, a federal court had ruled that the payments that actually I was talking about with Mick Mulvaney, the CSRs, these subsidies for health care payment, that they themselves were unlawful because they were never appropriated by the Congress. So, tell me about your lawsuit and how you expect to win it given that information?

BECERRA: So, that decision had been put on hold. The Obama administration first, now, the Trump administration are in court against that decision. And we have now states joined in that effort as well to try to keep not only that decision on hold but permanently on hold and to move forward with the Affordable Care Act because millions of people depend on it, some 7 million will probably be affected if the Trump administration's efforts to kill the cost-sharing subsidy that people depend on to afford their deductibles and their copayments and their insurance are taken away.

PERINO: What is the timeline for your lawsuits? You knowing -- you'll expect to hear anything back from the courts?

BECERRA: Well, we went and asking for the court to give us an emergency ruling to stop what the Trump administration did last week, or a little bit more than a week ago, but it was supposed, under the Trump administration, take effect immediately, or under their order and we can't afford to have that kind of uncertainty. There are people who are day to day depending on their health insurance.

There are someone, like Rebecca in California, Modesto, California, mid-30s, she is a quadriplegic. She has constant visits to the doctor. She right now pays about $15 in copayments for those visits. Without those copayments being made, part of the ACA, well, guess what? Her payments go up to about $105 every visit.

Someone like that cannot afford to have this kind of uncertainty hanging over her. She requires that health care. She depends on it.

PERINO: Given all the uncertainty and what we were just talking about, going forward, would you personally support something like what Senator Bernie Sanders has suggested, which would be a Medicare for all plan?

BECERRA: Oh, absolutely. I've been a supporter of Medicare for all for the 24 years that I was in Congress. This year, as attorney general, I would fight for that if we had an opportunity to put that forward in the state of California, because I think what we do is we give people that certainty that they're going to able to access a doctor or a hospital.

The worst thing we used to have was situations were young families wouldn't know if they should take their children to the hospital because it can lead to personal bankruptcy. That ended with the Affordable Care Act. We can't go back to those days. And so, absolutely, when you give people access to Medicare and talk to seniors who have their Medicare who say keep your hands off my Medicare, I think it would have the same effect for most Americans if they knew they could depend on something like Medicare for themselves as well.

PERINO: And we'll have to call Mick Mulvaney back to ask him how we're going to pay for it.

Let me move on to -- the fact that you're also --

BECERRA: Actually, it saves us money, Dana. It saves us a great deal of money and that's why we continue to have Medicare for seniors.

PERINO: Maybe we can have you back and we'll have a big debate when it ever actually ripens into an issue.

Let me ask you about the lawsuit that you filed about DREAMers and DACA. I'm curious that, you know, the president has asked the Congress to come back to him with an actual law instead of relying on the Obama executive orders for DREAMers. So, why not wait to see how that turns out before pushing forward on this lawsuit?

BECERRA: Well, again, if the Trump administration weren't putting people's lives at risk, their ability to continue to go to school, to work, to provide for their family, then perhaps we could wait. But Donald Trump didn't wait. He decided to repeal the DACA program all together and now, we have to act because we can't afford to put people in this kind of limbo. So, we're out there to protect at least in California, more than 200,000 young people. We're fighting really hard to continue to show that they belong in America.

PERINO: But he's also said that he wouldn't deport them. So, you know, are they being -- are they fearful for no reason at this point?

BECERRA: Dana, if we had that kind of certainty, things would be different. But we don't. We know of DREAMers who have been deported for no reason, no criminal history, nothing that they particularly did.

And at the same time, you don't want to put people in limbo this way. Just the way Rebecca doesn't want to lose her Affordable Care insurance because someone says, well, don't worry, we'll find another way for you do it. She can't afford that because she as a quadriplegic has to know that she can make her doctor visits. The same thing with all these DREAMers in America who know America as the only home they've ever had. We can't afford to put them in limbo either.

And that's why we're out there going to fight, fight as hard as we can. I say that not just as the A.G. but as a son of immigrants.

PERINO: Can I ask you one last question? And it's -- kind of make it quick. So, there's all of these lawsuits that you're filing, since 2014, the number of Californians saying that they support seceding from the Union has grown from 20 percent to more than a third. And this group, Cal Exit, now gathering signatures for a ballot initiative next year. In fact, Steve Bannon this week said that California is to President Trump what South Carolina was to Andrew Jackson.

Are you comfortable with that sort ballot laying, which even if it is not -- if it's unconstitutional, would you allow it to be on the ballot?

BECERRA: Well, we all get to express ourselves. And certain people in California who are frustrated with this administration constantly taking digs and hurting California. But I will tell you this -- California is the economic engine of the United States of America. We on our own as a state could be the sixth economic power in the world.

The U.S. needs California as much as I believe California needs to be part of the United States. We'll do everything we can to be the leading force for this country rather than be out of it. I think we can continue to be the leader in it.

PERINO: All right. Thank you, Mr. Becerra. Appreciate you joining us.

BECERRA: Thanks, Dana.

PERINO: All right. Have a good day.

Up next, Senate Majority Leader Mitch McConnell on his united front with President Trump despite the gridlock blocking much of the president's campaign promises.

(COMMERCIAL BREAK)

PERINO: As pressure from the president and Republican voters builds for a legislative win after the failure of repeal and replace, Senate Republicans scored a win this week by passing a budget deal, paving the way to pass tax reform, a major Republican priority.

Joining us now from Louisville is Senate Majority Mitch McConnell.

Sir, thank you for being here today.

SEN. MITCH MCCONNELL, R-KY, MAJORITY LEADER: Good morning.

PERINO: So, the first nine months of the year did not produce the legislative wins the president expected. With the passage of the budget bill and now on to tax reform, did you get a sense that Republicans can sort of taste victory?

MCCONNELL: Well, tax reform is important. Thirty-one years ago today, Ronald Reagan signed comprehensive tax reform. We intend to accomplish that between now and the end of the year.

But, you know, the suggestion that the president hasn't been able to change a lot of things is simply not true. We have the Supreme Court with Neil Gorsuch, other court nominations coming through. New people in the agencies who are dealing with the regulatory rampage of the last eight years.

The president is making a lot of changes and the Senate, since it's in the personnel business, is helping the president accomplish these changes. But we intend to achieve tax reform as well.

PERINO: So, health care was hard. Tax reform apparently sounds like it's supposed to be easier. I don't exactly know how that is. But I could see that the path, especially at 51 votes make sense. But I don't know if you heard, Mick Mulvaney was talking about this possibility that there might be a compromise where an additional tax bracket would be added, maybe a so-called millionaire's tax. Is that something that you could support?

MCCONNELL: You know, Dana, I hate to get into the details of this. It's going to be hashed out in the open, in the Ways and Means Committee in the House and the Finance Committee in the Senate.

I can tell you what the overall goal is, middle class tax relief, the stopping of job exportation because of our horrible business tax structure in this country, to get the country growing again. That coupled with the regulatory changes the president's already implementing, we think, give us a chance to achieve at least 3 percent growth. There wasn't a single year of 3 percent growth during the Obama years. That's what we need to get the country growing and going.

Again, the details of it, such as the one you mentioned, are all going to be hashed out in the committees, in open process, and then we'll take the bills up on the floor and see what they look like at that point.

PERINO: OK. Moving on, there's Alabama Senate hopeful Roy Moore. The super PACs that you allied with spent millions to boost incumbent Luther Strange. But if Moore is elected on December 12th, he could be a really key vote on tax reform.

So, your friend, Steve Bannon, he was a major backer of Moore, has made no secret that you are his enemy number one, and that you are the roadblock to the president getting his agenda accomplished.

Listen.

(BEGIN VIDEO CLIP)

STEVE BANNON, FORMER WHITE HOUSE CHIEF STRATEGIST: This revolt is going from Alabama to Arizona. The last couple of days, Mitch has been saying this big thing, hey, you got to win. Winners make policy. Losers go home.

Hey, Mitch, note to self, Mitch, big Luther Strange and Little Bobby Corker are both going home.

These people, Mitch, it's 2-0.

(END VIDEO CLIP)

PERINO: And even the president didn't really dispute Bannon's frustration with the Senate Republicans.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Myself, I'll be honest, they are not getting the job done. And I can understand where Steve Bannon is coming from, because I'm not happy about it and a lot of people aren't happy about it.

(END VIDEO CLIP)

PERINO: So, Senator McConnell, is tax reform a must pass? And if you get that legislative success, is it the antidote to Steve Bannon's agitation against you?

MCCONNELL: Well, let me just say with regard to the element that you're referring to here, they've been out there for a number of years. They caused us five Senate seats in 2010 and 2012. We would have gotten the majority of senators, but for the fact that they were able to nominate people who could not win in November.

In '14, they were defeated everywhere. In '16, they were defeated everywhere. And the difference is, we've been in majority, in 2014 and 2016, two congresses in a row.

Look, this is not about personalities. This is about achievement. And in order to make policy, you have to actually win the election. The kind of people that are supported by the element that you'd just been referring are specialists in defeating Republican candidates in November. And that's what these inner-party skirmishes about.

Our goal is to nominate people in the primaries next year who can actually win and the people who win will be the ones who enact the president's agenda.

PERINO: So, you mentioned that in the Rose Garden. You talked to the president about those four individuals that you could rattle off the top of your head. But I was curious about two conservatives that are not actually very good allies of yours who you didn't initially support in the primaries. That would be, for example, Marco Rubio and Pat Toomey.

So, could it be that there are some good GOP senators that could emerge from primaries that you maybe wouldn't anticipate?

MCCONNELL: Actually, I supported both of those senators. Many times we're on the same side. But the point is, to make policy, you got to win election. And some of these folks that you've been quoting, as I said are specialists on nominating people who lose.

That isn't going to help President Trump achieve his agenda. He needs a Republican Senate and a Republican House to confirm judges, and to pass legislation that are important to him and to the country.

And that's what this is really all about. Trying to change America from the Obama years and take it in a different direction.

PERINO: When you talk about the judges and I know you must have spoken about that with the president because he talked about it in your press conference with him in the Rose Garden.

On Tuesday, the president's coming to have lunch with you and your members and apparently, they're frustrated not necessarily with judges with the pace of confirmations of other nominees that the administration has put forward and Mick Mulvaney just said that the president is going to press the Senate on that.

What do you think he'll say?

MCCONNELL: Yes, the Democrats have made it hard, but they can't stop them. I mean, ultimately, we're going to get all of these nominees. They've slowed the process down, which has been pretty exasperating. But they will not be able to win on any of this confirmation. We will confirm them all both administration positions and to the judiciary.

PERINO: Do you worry, sir, that your personal unpopularity with the Republicans out in the country is weighing down your possibility to make sure that you can keep the Senate next year?

MCCONNELL: Look, I'm not going to be on the ballot on any of the states, and I don't think the candidates who are running need to take a position on me. People on those states are interested in what the candidates can do for them, and for the country. Trying to cook up an issue like this is irrelevant. It's only going to create divisions and make it more difficult for us to win in November. But I don't expect any candidate in America to sort of sign up on how they may vote for the majority leader of the Senate a year and a half from now.

PERINO: So, last question for you is on a different topic. There's a looming issue of possible regulation of the Silicon Valley giants which have largely grown because of a lack of federal regulation and interference. Do you think that that could be about to change under President Trump and a Republican Congress?

MCCONNELL: I don't know. I mean, I think all of these areas, we need to take a look. And I think it's in the early stages of trying to figure out what the way forward is.

PERINO: All right. Senator McConnell, thank you so much for being here with us this morning. Always good to speak with you.

MCCONNELL: OK. Thank you.

PERINO: All right. Up next, we will bring in our Sunday group to weigh on the path ahead for tax cuts, what it could mean for the middle class, economy and job.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

TRUMP: He was so offended, because he was in the room when I made the call, and so were other people. And the call was a very nice call. he was so offended that a woman would be -- that somebody would be listening to that call. He -- he was -- he actually couldn't believe it.

Actually, he said to me, sir, this is not acceptable.

(END VIDEO CLIP)

PERINO: President Trump defending his chief of staff in an interview with Fox's Maria Bartiromo, saying thee congresswoman's attacks on John Kelly were, quote, sickening.

And it's time now for our Sunday group. Former Republican Congressman Jason Chaffetz, who's now a Fox News contributor, columnist for The Hill, Juan Williams, Julie Pace, Washington bureau chief for The Associated Press, and editor and chief of The Washington Free Beacon, Matthew Continetti.

You know, I've never -- I've had a chance to be on the panel, but to never run the panel, so I'll try to do my best.

So this is not a controversy that the White House anticipated before the Rose Garden press conference with Mitch McConnell, but as soon as President Trump referenced how his predecessors handled outreach to families of the fallen, I knew they would have a firestorm on their hands. And so the back and forth went on all week and included an appearance by General Kelly in the briefing room, a gold star father himself.

And then this from Congresswoman Fredericka Wilson. "I feel very story for him because he feels such a need to lie on me and I'm not even his enemy."

And it didn't end there. President Trump also took a stab at Wilson Saturday on Twitter. "I hope the fake news media keeps talking about whacky Congresswoman Wilson in that she as a representative is killing the Democrat Party."

Julie, what is the White House thinking this morning?

JULIE PACE, THE ASSOCIATED PRESS: Well, this, as you said, this was not a fight that the White House anticipated, but it was one that they were led into day after day by the president himself, that this is a president who does not like to admit when he is wrong. He doesn't like to back away from a fight. His strategy tends to be to push forward. So he's really been the one driving this forward every single day.

You've seen John Kelly at the podium backing him up. White House officials certainly would like to put their attention on things like tax reform, which is really probably what the president is going to be judged on this year in terms of whether this year has been a success or not.

But you saw the president out there again this morning. It's a fight he feels like he needs to win, which is a bit odd because this is -- this is a fight where I don't think anybody really comes across looking -- looking very good right now.

PERINO: Jason, as a former member of Congress, do you think it was inappropriate for the congresswoman to reveal the conversation in the first place?

JASON CHAFFETZ, FOX NEWS CONTRIBUTOR: It really is almost a sacred moment. You're dealing with a family who's still coming to grips with the fact that their son or daughter has lost their life. And so there's got to be some way to raise the bar and just say, enough is enough, we're talking about military. We're talking about people who have lost their lives. They really do need (INAUDIBLE).

PERINO: Now --

JUAN WILLIAMS, FOX NEWS POLITICAL ANALYSIS: Well, let me just say though, I mean, the argument had been that she said something that wasn't true. That she said that the president said, your son knew what he signed up for, and the idea was, oh, well, Fredricka Wilson, oh this congresswoman from Florida, just doesn't like President Trump and said this. And then President Trump seemed to indicate that she had fabricated something. Then it turns out, in fact, Kelly comes out and says that, oh, no, he did say that. Maybe the context was a little off, but he did say that. And then Kelly attacks her by saying she took credit for the funding for an FBI office in Miramar, Florida, and that wasn't true.

So I -- you know, they're attacking Fredricka Wilson in a very aggressive manner, but I just think it's been unfair. And, again, it strikes me that -- especially that Kelly's used to the military and patriotism, to cover for Trump, I think it's offensive.

PERINO: But isn't that also then -- I mean the -- the same accusation could be made, Matt, about Fredricka Wilson. That's why I'm asking, like -- like, it's unfortunate to me that any of this happened because grief is very personal. Commanders in chief have to make very tough phone calls because of the decisions that they made on their watch. What do you make of all this?

MATTHEW CONTINETTI, THE WASHINGTON FREE BEACON: Who's politicizing who, right?

PERINO: Right.

CONTINETTI: Everyone seems to be politicizing different aspects of this incident. Larger questions involving, what were the soldiers doing in Niger in the first place?

WILLIAMS: Yes.

CONTINETTI: I'd like to hear an explanation about what exactly the mission was. In fact, we still don't know the full details about the ambush and the assault. If President Bush -- President Trump, rather, has a two-track presidency. On the one hand, you have the judges, the policies, the deregulations, tax and budget. On the other hand, you have a showman and the constant fights. Last week it was Bob Corker. This week it's Fredricka Wilson. We don't know who it will be next week.

PERINO: Don't forget the NFL.

CONTINETTI: Always the NFL. That an -- that's a long-running plot line.

PERINO: Running (ph).

CONTINETTI: Somehow he's able to balance the two of them together. But we see just this week that they can over -- one can over -- easily overshadow the other. President Trump might want that to happen, actually.

PERINO: Well, we certainly offer our condolences to the families of the fallen of the U.S. soldiers. And Secretary Mattis had been on Capitol Hill giving Senator McCain more information.

Jason, can I ask you about this possibility that the Republicans could get tax reform done.

So health care was supposed to be so easy.

CHAFFETZ: Right.

PERINO: And now it seems like we all are talking like, tax reform's going to happen. Is -- is there a catch?

CHAFFETZ: Well, Speaker Ryan said that they were going to stay through Christmas if need be to get tax reform done, only to go on an 11 day recess.

Now, the House is poised this week to do something I didn't think they would do, which is pass over a ten year period a $47 trillion budget that doesn't balance and only has one -- count them, one -- billion dollars that they're supposedly going to cut. So Republicans are swallowing hard on a pillar that's supposed to be very important to the, fiscal discipline, with no cuts. And once they get that done, they're doing it on the promise that they're going to get tax reform, but they haven't introduced the bill yet.

And so here we are, at the end of October, coming up on it, and they haven't yet introduced the bill. I don't think this is going to be easy. If it was easy, it was going to be done a long time ago. The budget was due in -- by law on April 15th and now here we are turning the corner heading up towards Halloween and they still haven't got that part done.

PERINO: Matt, do you find it strange that conservatives are now talking like deficits don't matter?

CONTINETTI: Well, we've talked like that before in the 1980's, right, with President Reagan who said, you know, I don't worry about the deficit, it's big enough to take care of itself.

PERINO: Yes. And so are we back to that?

CONTINETTI: The debt, of course, has increased exponentially under both Republican and Democratic presidents.

PERINO: Right.

CONTINETTI: No one seems to be able to control it for some of those automatic spending reasons that I think that Director Mulvaney mentioned.

PERINO: Yes, they (INAUDIBLE).

CONTINETTI: I will say this, though, a lot is riding on this tax reform. This is -- because of the failure of ObamaCare repeal and replace, the centerpiece of President Trump's first year in office, if they don't get it done, politics in Washington is going to be up-ended.

PERINO: Julie, what did you think of this idea that they would add a millionaire's tax in order to help pay for these taxes?

PACE: It's fascinating to hear someone like Mick Mulvaney saying, we're for agnostic (ph) about a fourth tax bracket, a millionaire's tax bracket. Look, it's a -- it's a play to try to get some more moderate, potentially conservative Democrats on board. I think that you're going to see this internal fight that's happening behind the scenes among Republicans on the details of this really explode into the open, though, if you do see a fourth tax bracket pushed through here.

PERINO: So, but, Juan, if they've -- if the Republicans add a millionaire's tax, what would Schumer and Warren complain about?

WILLIAMS: Oh, well, still -- and I -- I think Congressman Chaffetz is on to something here -- it's still, we don't have a revenue source or stream that would really offset the cost of the tax cut. Let me just say, overall, this was supposedly about tax reform. Apparently that's not the issue now. We're just onto tax cuts. So the argument coming from the Democrats is, this really is disproportionately beneficial to the very rich. You add the fourth bracket, but it still does nothing in terms of offsetting things like doing away with state and local deductions.

PERINO: That's a big issue.

WILLIAMS: That's a huge issue. How about home mortgage? Imagine, no home mortgage deduction. I mean I'm sure k-street --

PERINO: Well, that's not -- they're not saying that.

WILLIAMS: Well, they are making the case -- and then also less in terms of your retirement contribution. So these are things that would squeeze the middle class. The middle class is not going to benefit because of the added tax on the rich.

PERINO: This -- this state and local deduction -- tax deduction issue is a big deal. If you're from a state like me in Wyoming you think, well, that's ridiculous. Why do they get to do that? But for people who live around here, it's a big deal, Matt.

CONTINETTI: That's right. And what's fascinating to me about this fourth bracket issue that you've introduced is, when you were serving President Bush, Republicans would never do that. With President Trump, though, it shows you how the Republican Party has changed.

PERINO: Uh-huh.

CONTINETTI: And, in fact, most of President Trump's supporters would have no problem at all --

PERINO: Yes.

CONTINETTI: With a fourth tax bracket affecting millionaires.

CHAFFETZ: But --

PERINO: But what --

CHAFFETZ: It's (INAUDIBLE) politics and it doesn't bring along Democrats. Republicans are poised to pass a $47 trillion 10-year budget and didn't get a single Democrat to come along. At least do something Republican in that budget. But they're not going to do that. And so if you're going to give up with fourth bracket, what do you get for it? It doesn't sound like the Democrats are going to come along.

PERINO: Could they use that fourth bracket to pay for dropping the state and local tax deductions?

CHAFFETZ: It doesn't --

PACE: They -- they potentially could. But I think this issue with the state and local taxes is fascinating because you hear states like California and New York, you automatically think Democrats. A lot of Republican representatives.

WILLIAMS: Correct.

PERINO: A lot. There's 40 in the Northeast alone.

All right, panel, it's time to take a break. We will see you a little later this hour. We'll discuss the president's decision to greenlight the release of thousands of secret documents related to JFK's assassination. It's a move that has conspiracy theorists buzzing.

But first, I return to the White House to check in with the second Republican woman and first mom to serve as White House press secretary.

(COMMERCIAL BREAK)

PERINO: A live look at 1600 Pennsylvania Avenue here in Washington, where I had the privilege to serve as press secretary for President George W. Bush. Earlier this week, I returned to my old stomping ground to sit down with the current press secretary, Sarah Sanders.

(BEGIN VIDEOTAPE)

PERINO: What is your first news memory and did affect any of your education or career choices?

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: The first one that comes to mind would probably be when my dad ran for the U.S. Senate in 1992. I was nine. And he lost. It was a devastating night for our family. And I remember just the impact. It certainly gave me a greater appreciation for when you win and versus when you lose.

PERINO: When he decided to run again, did you -- as a kid, did you not want him to?

SANDERS: You know, at that age, it seemed fun and fascinating. When most kids were going to summer camp, I was doing like the Arkansas Festival Circuit. And so I thought it was all great. And I loved the campaign aspect from a really early age. And I was excited for him to be part of that race.

PERINO: Your dad told me that you had a desk -- like an office when you were four years old.

SANDERS: I did. It was actually in his office. So he had the big like credenza, and underneath that bottom part I would keep all of my own supplies, my, you know, tape and glue and scissors and make wonderful masterpieces I'm sure.

PERINO: I was the first Republican woman press secretary. You are the second. We -- you are the third woman overall. But you are the first working mother to ever have this job. In this job we -- everybody sees you all the time. We know that you're working 24/7. So how do you balance it all?

SANDERS: I think one of the biggest things is the moments that I do have with my kids, I have to be really present. I try to put my phone away and fully focus on the time that I have with them and I try to block out specific time, whether it's early in the morning - I think it's probably a blessing I have early rises. People always ask, what's the hardest thing about your job. For me it's being away from my family.

PERINO: Right.

SANDERS: The other part is having an incredible partner. My husband is supportive. And he puts up with all of this and helps keep, you know, all of us afloat. And I couldn't do it without having him as that support system to get through each day.

PERINO: In my book I wrote that my favorite piece of advice is that choosing to be loved is not a career limiting decision. And was he your boss at some point?

SANDERS: No, I was actually his boss.

PERINO: You were his boss, OK.

SANDERS: I was his boss.

PERINO: I think that some people imagine that if they ever want to have this job that it's this magical moment and a real Cinderella story. And the stars come out and there's a band and it's like everyone is so excited. And that certainly was not my experience.

SANDERS: There was no band. I can assure you, there was no band.

PERINO: And for you, you didn't really have any time for a honeymoon. It was just, hit the ground running.

SANDERS: Yes, so it all happened within about a four hour period.

PERINO: I loved the deputy job.

SANDERS: It was great.

PERINO: I found in the deputy position, that's when you get to know the Commander in Chief very well in a little bit more of a relaxed setting possibly.

SANDERS: I think any job in the White House is incredible. And I've always said, if I ever walk into the building and I'm not in awe of being here and being part of it, then I've been here too long and it's time to go. Thankfully, I still feel a sense of reverence every time I step into the building, certainly every time I step into the briefing room, and I hope I never lose that.

PERINO: Yes. I used to say a little prayer of thanks and gratitude every morning as the Marine opened the door.

SANDERS: I say -- and I also say a little prayer of `God help me" every day right before walking into that room.

PERINO: So recently in "The Atlantic" magazine, Glenn Thrush said he thought the administration's apparent tension with the press was overstated. Would you agree?

SANDERS: No. I know Glenn well, but, you know, I think that there's always going to be tension between whatever administration is in place at that time with the White House press corps. But I do think that there is a heightened tension certainly between this administration and the press.

You have -- hold on, I allowed you to finish.

I think you can see that in the coverage. I mean I've been around press and worked in politics my entire life and I've never experienced the level of kind of hostility that I think we see day to day.

PERINO: Yes.

On the day of the Las Vegas massacre, that was the first day of my new show, "The Daily Briefing." And so we were covering your briefing. And Ari Fleischer, a former press secretary as well, was on as my guest. And we watched you.

SANDERS: The memory of those who displayed the ultimate expression of love in the midst of an unimaginable act of hate will never fade.

PERINO: Showing that emotion was important. And it's not always easy to do at the podium.

SANDERS: Yes, you want to, I think, project strength certainly from an administration standpoint. But I think, at that moment, the country was broken. And I felt like it was an appropriate time, if ever, to show the emotion of that situation.

But the biggest thing I wanted to do was talk about the spirit of our country. And I wanted to make sure to communicate that.

PERINO: Like me, you were student body president and you -- but unlike me, you come from a political family. Do you think you ever see yourself running for office?

SANDERS: I don't think so. I never like to say --

PERINO: There's an opening.

SANDERS: I never like to say never because it'll come back to bite you. Every time I think I have a perfect plan for my life, God tells me otherwise. And so I never really envisioned sitting here having this conversation with you.

PERINO: Right.

SANDERS: Not even as far back as, you know, maybe two years ago. And so never say never. But I don't think that's part of the master plan for me. But, again, right now it's one day at a time and trying to do the best I can.

(END VIDEOTAPE)

PERINO: Our thanks to Sarah.

Up next, two former presidents from two different parties weigh in on the state of politics today.

But first, Sarah and I went outside the West Wing for a lightening round, including her most embarrassing moments on the job so far.

(BEGIN VIDEOTAPE)

PERINO: What time do you wake up?

SANDERS: Usually about 5:15.

PERINO: On your own or with an alarm?

SANDERS: With an alarm and usually a child.

PERINO: What is the last thing you read before bed?

SANDERS: Usually the last e-mail -- work e-mails off of the day.

PERINO: Marine One or Air Force One?

SANDERS: I think Marine One. It's a little bit more special. It's a small group, so it's pretty exciting.

PERINO: Coffee?

SANDERS: Lots.

PERINO: You're most embarrassing moment as White House press secretary so far?

SANDERS: Oh, when they had a bring your child to work day. I just brought my middle son, Huck, who's four now. And I had gone into the Oval to explain to the president -- he was going to go out and take a picture with all the kids. So I'm in there walking him through, you're going to go out, you're going to take the picture, you'll come back in, and I look up and I see the bushes in the Rose Garden like violently shaking, and then I see a little blonde head pop up and then I see my son's face peeking into the window of the Oval. And the president's like, there's a little boy in the bushes. And I'm like, yes, that's --

PERINO: That would be mine.

SANDERS: That's my son.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

TRUMP: In the aftermath of these terrible storms, the American people have done what we do best, we came together, we helped one another and through it all we remain resilient.

(END VIDEO CLIP)

PERINO: President Trump joining via video message as all five former living U.S. president stand on one stage, raising funds for hurricane relief. United for a night, at least.

Yet just on Thursday, in two separate speeches, both former presidents, Bush and Obama, made remarks largely perceived as against the current White House.

GEORGE W. BUSH, FORMER U.S. PRESIDENT: Discontent deepened and sharpened partisan conflicts. Bigotry seems emboldened. Our politics seems more venerable to conspiracy theories and outright fabrication.

BARACK OBAMA, FORMER U.S. PRESIDENT: Do you want a politics of division and distraction, or do you believe in a better kind of politics, one where we work together and listen to each other and move this country forward.

(END VIDEO CLIP)

PERINO: And we are back now with the panel.

Julie, the White House didn't take the bait. Watch this.

(BEGIN VIDEO CLIP)

QUESTION: Does the White House feel it's appropriate for past presidents to be critical of the sitting president? And -- and when was the last time President Trump spoke to President Bush?

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: I'm not sure of the last time they spoke, but our understanding is that those comments were not directed towards the president.

(END VIDEO CLIP)

PERINO: So, Julie, they -- I thought that was skillful and -- and -- and smart. What did you think?

PACE: I thought it was very smart. Generally you try to avoid tangling -- even -- even someone like Trump, who, as I was talking about before, likes to tangle on pretty much any issue. You try to avoid tangling with the former occupants of the Oval Office. There is such a small group of people who know what that job is like.

I do think it was remarkable that both Bush and Obama, in these separate set of remarks, came out, said fairly similar things, expressed concerns about divisions in the country. President Bush has been so careful about weighing in, in politics for almost a decade now and Obama has chosen his spots pretty carefully.

PERINO: Yes, but, Matt, I have a theory, that if President Bush had given that same speech about values he has long held, if he had given it in October of 2014, that the media would have said that it was against President Obama for leaving Iraq too soon, not having America be the front and leader in the world, for dividing America. But this time the media tried to drive this wedge between both President Trump and -- and -- and the other -- the former presidents.

CONTINETTI: I do think President Bush's remarks were more general than say President Obama's, which were in the midst of a campaign for Virginia governor. What's striking me to the degree that they overlapped the messages, I think that feeds into President Trump's critique of the two party duopoly.

PERINO: Right. It did -- it looked like a -- like a two frontal attack, even though they were -- President Bush's remarks were scheduled a year in advance and President Obama was in Virginia.

Jason, Steve Bannon has said that President Bush was the most destructive president in the history of the country, but that was in the same speech where he was calling for Republican unity. So how is that going?

CHAFFETZ: Well, it's pretty hard to rectify those two. But we've got to be very careful. I mean, let's attack people on policy, but let's not play into the Democratic hands with this division of -- based on identity. And this identity politics, it really does scare me. And when you turn that fire internally, hey, that's the fastest way to becoming the minority party.

PERINO: Yes, well and I think that the -- all the presidents being together last night and inviting President Trump or I think maybe even his suggestion to do a video since he couldn't be there like just to make all that in one showed a lot about America.

Juan, I want to talk to you about President Trump. He's got a big decision, whether to release long, secret government documents relating to the assassination of President Kennedy. This is what he tweeted. "Subject to the receipt of further information, I will be allowing, as president, the long blocked and classified JFK files to be opened."

Are you excited about that?

WILLIAMS: Yes, I think it's interesting to everybody in the country, anybody who's lived through that period and curious about American history. Given what President Bush said about our politics these days being so open to conspiracy theory fabrication, wouldn't it be something if Ted Cruz's dad really was involved? I mean this -- apparently President Trump --

PERINO: We could find out. We could find out.

WILLIAMS: But here's the thing, Dana. So according to a 1992 law regarding the Kennedy assassination, everything is supposed to be released by Thursday. The final papers. You've got about 3,000 files still there. And then there are other papers that -- that have things that have been redacted. Maybe they would be fully released now.

And there's some resistance on the part of Mike Pompeo, the CIA director, because apparently these papers involve the activities of CIA people, CIA agents, who were looking at Lee Harvey Oswald in Mexico City, his ties to the Cubans, to Russia and the like. And it could be that you have some sources, methods of operations revealed. Maybe even some negligence by CIA officials.

But in terms of real revelation about why Lee Harvey Oswald acted and what happen, it doesn't seem to be there according to historians.

PERINO: Matt, do you want to see them released?

CONTINETTI: I do. It's interesting, as an historian. But, look, President Bush -- President Trump in 2000 said his base were readers of The National Enquirer. This is a perfect move for his base because The National Enquirer is going to love what comes out of these files.

WILLIAMS: Yes, conspiracy theories. A little better -- a little better than the -- than the birther conspiracy.

PERINO: Well, we will bring it to you.

PACE: Transparency is never a bad thing.

PERINO: OK. Chaffetz is -- Jason, in the house, says open it.

CHAFFETZ: Open this. Transparency. It's what we're supposed to be about.

PERINO: All right.

And that is it for today. I'll see you tomorrow for "The Daily Briefing" at 2:00 Eastern on Fox News Channel. Chris is back next week. Have a great week and we will see you next "Fox News Sunday."

END

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