This is a rush transcript from "Sunday Morning Futures," February 4, 2018. This copy may not be in its final form and may be updated.

MARIA BARTIROMO, HOST: Good Sunday Morning. This week lawmakers are digging deeper into the Nunes memo on surveillance abuse at the FBI and the Justice Department. The deadline for another spending deal looms on Thursday and the Dow Industrials is looking to rebound after a tough Friday.

Hi, everybody! Thanks so much for joining me. I'm Maria Bartiromo. Welcome to "Sunday Morning Futures."

We have got an up-close look at the Nunes memo on alleged surveillance abuses at the FBI and the Department of Justice. President Trump said it vindicates him. What does it reveal about ex-FBI Director Jim Comey and his probe of Hillary Clinton? Congressman John Ratcliffe is one of the few lawmakers to have seen the intel behind the memo, the actual underlying content. He will join me coming up along with Jim Kallstrom and Alan Dershowitz on that. A massive sell-off on Wall Street, the worst week for stocks in two years. What's behind the plunge what does things look like going forward? House Financial Services Chairman Jeb Hensarling will join me live. And then the deadline looming for a short-term spending bill, are there any obstacles in the way? A closer look at that and a lot more right now as we look ahead on "Sunday Morning Futures."

Now, the latest on that memo, President Trump says that the GOP memo released Friday completely clears him in the Special Counsel Mueller probe. The President tweeting yesterday on the topic saying that this, that memo alleges the FBI relied excessively on an anti-Trump dossier funded by Democrats to spy on a Trump campaign advisor. Joining me right now is Congressman John Ratcliffe of Texas. He's a member of the House Judiciary Committee and he is one of the only three lawmakers to have actually seen the intel behind the memo the underlying content. Also with me here in the studio is James Kallstrom, a former Assistant Director of the FBI. Gentlemen, it's good to have you both on the program. Thank you so much for joining us.

JAMES KALLSTROM, FORMER ASSISTANT DIRECTOR, FBI: Nice to be with you.

REP. JOHN RATCLIFFE, R-TEXAS: Good morning Maria.

BARTIROMO: Let me -- let me set out right off the bat that both of you having worked at the FBI with the FBI, the experience of having experience with the FISA Court, you were both so disappointed to actually learn what you have learned. Let me kick it off with you Congressman because you saw the underlying data. What's most important that we need to understand from this memo?

RATCLIFFE: The most important thing not just from the memo but from the underlying documents that I have seen is that full disclosures weren't made to the FISA Court. And why that's so important, Maria, the FISA Court unlike any other court in America including the Supreme Court doesn't hear both sides. This is a court where the government comes forward and in this case they ask for surveillance on American citizen, it's up to the government to make full disclosure and in this case, in asking for a warrant against someone associated with the Trump campaign disclosure was not made that that dossier that was the basis of it was paid for by Hillary Clinton's campaign, and prepared by someone who has an expressed desire to keep Donald Trump from becoming president or that the FBI Director himself called it unverified. Those are disclosures that had to be made that weren't made.

BARTIROMO: So there were a handful of FBI leaders here that go to the -- and Department of Justice leadership, they go to the FISA Court to get a warrant to spy on somebody and they don't tell the judge that in fact what they have as evidence which is this dossier which was largely based on getting that warrant, they don't tell the judge that that dossier was paid for by the opponent, by Hillary Clinton?

RATCLIFFE: That's right. And not just once, not just twice, not just three times but there were four different occasions for there to be full disclosure. And again Maria, there isn't someone in there to fill in the blanks to give the other side of the argument to a FISA judge. So when we give law enforcement these really powerful tools for law enforcement and counterintelligence purposes, we trust that the government will use them fairly and fully disclose before they take this type of action and that's one of the things that I was most disappointed in as I reviewed the underlying source documents to all four FISA applications.

BARTIROMO: Jim Kallstrom, we know that the leadership of the FBI did not like Donald Trump during the election leading up to the election. Peter Strzok and his girlfriend Lisa Page back and forth with text messages saying he's this, he's that we need an insurance policy should he win, let's get to the secret society. I mean crazy texts like they actually wanted to abuse their power and dictate an ending that they didn't because they saw a different ending happening.

KALLSTROM: Crazy on that but before I get to that point, John is 100 percent correct, but in addition to that, the information was bogus. Sure they didn't tell the judge but they also didn't tell the judge that the information was made up. It was phony. You know this is a serious, serious matter. Criminal contempt, false statements, conspiracy to lie to the court, denying civil rights under the color of law, perjury. I mean these are serious, serious things. During my career, I was involved in one way or another with literally hundreds of these types of orders, and the way it was looked at was meticulous, the chain of command, the number of people that you'd have to sit down and do a mortar board to convince that you actually had a legitimate case to go to the judge and I think these people, these (INAUDIBLE) that were around Comey and the Department of Justice and elsewhere was so cocked sure that Hillary Clinton had a 99.9 percent chance of winning, they just threw caution to the wind and they did all this crazy stuff and I don't think we've seen about one or two percent of what we're about to see. We haven't talked about the unmaskings, the activity of Obama's national security council and Uranium One and all this host of other things. And this is bad stuff.

BARTIROMO: Well, yes, you bring up Uranium One and it's an important thing to bring up because the Hillary Clinton investigation seems to have been in even before they interviewed her, the fix was in Congressman and I know you've spoken about this before because you actually interviewed Jim Comey at that testimony last September, September 2016 when you were looking at all of the behavior at the FBI and coming up with this conclusion that there should be no charges. Let me show this quick clip of you talking to Jim Comey last September.

(BEGIN VIDEO CLIP)

RATCLIFFE: Did you make the decision not to recommend criminal charges relating to classified information before or after Hillary Clinton was interviewed by the FBI on July 2nd?

JAMES COMEY, FORMER DIRECTOR, FBI: After.

BARTIROMO: Congressman, he said after. He lied to you.

RATCLIFFE: Well, I want to give him the opportunity to come back and clarify his testimony, what he said, he said very clearly. What I know now is that he had written an exoneration memo before he gave that testimony saying that he wasn't going to charge her. I've seen text messages, I've seen e-mails and I have received testimony from other witnesses that are all inconsistent with that testimony that he gave to me under oath. So he needs to have the opportunity to comeback and either clarify that testimony or assert his own Fifth Amendment rights.

BARTIROMO: Congressman, people want to know, will there be charges here? I mean, whose accountable for all of this?

RATCLIFFE: Well, I'm not in the business anymore of charging people but I'm in an oversight role and I think we're very clearly demonstrating to the American people that we're trying to restore faith and trust in the Department of Justice and the FBI. You know, James Comey is tweeting that Republicans are attacking the FBI, the Democrats are saying the same thing. Maria, before this memo was ever released, more than half the country believed that Hillary Clinton was not charged with mishandling classified information because her name was Hillary Clinton. More than half of the people in this country believed that they would be in the slammer right now if they had done the things that she had done. So we're trying to restore faith and trust in the Department of Justice and it's these types of investigations that can do that.

BARTIROMO: How tough is it to restore this, to turn the ship around Jim Kallstrom?

KALLSTROM: Well, I mean, it has to be a strategy now by the President to - - and the new FBI Director to really cleanse the FBI of these people that don't respect the rule of law, that have thrown the FBI under the bus, the 99 percent of agents that are out there every day risking their lives, doing incredible things to look at all of the 300 different federal statutes from the migratory bird act to espionage.

BARTIROMO: Those guys and gals have been besmirched by --

KALLSTROM: Yes, they have been besmirched and they've been let down and this traitorous bunch of people that basically just, you know look the other way from what their sworn duty was and it's just pathetic and I think, you know, I think they're in deep trouble. I think there's the possible obstruction of justice along with the perjury, the Federal Records Act has been violated numerous times. On the Hillary Clinton case, I mean that was just a sham investigation. Comey brought all investigations on Clinton, the Clinton Foundation, anything to do with the Obama administration into headquarters. So the whole investigate ever FBI out there in the field offices were basically cutoff from these investigations, so they knew nothing of it and it was a small group of people that conducted this sham investigation and they didn't need a whole lot of people because they didn't do anything, yet there was so much evidence of Hillary Clinton's violation about 12 federal statutes that you could fill up a pickup truck with what were just laying around.

BARTIROMO: So what's the clarity then Congressman, in terms of charges? Give us some more clarity in terms of whether we are going to see people being held accountable. First up, are there more memos coming out? Are there more text messages that the American people need to see?

RATCLIFFE: There are more text messages that I'd like to see that we haven't been provided yet. We've requested documents and we've just received a fraction of them, so we'll continue to look at that. There's more testimony to be received and these Congressional investigations will continue. The Inspector General is continuing his investigation into the DOJ and FBI, decisions that have been made and I do think there's a possibility for, I know Americans have a fatigue with respect to Special Counsel but there may need to be the need for the appointment of another Special Counsel to look into some of these issues. Chairman Nunes on the House Intelligence Committee has indicated that there will be more memos coming out relating to actions of the State Department. So I know people want justice to move quickly but we have to make sure that we follow due process, and -- but at the end of the day, I'm confident that we are going to be able to restore people's faith and trust in these institutions that are vital. I am -- Maria, I'm more proud of my association with the Department of Justice as an institution than I am Congress as an institution. I don't want the DOJ and the FBI to suffer the kind of public approval ratings that Congress has.

BARTIROMO: Yes, but you know, I mean, talk about the Department of Justice. The number three guy there, Bruce Ohr, his wife worked for Fusion GPS. Did they all know his wife worked for Fusion GPS, the firm that actually wrote what you called nonsense, the salacious dossier that was used for a warrant to spy on an American citizen?

RATCLIFFE: Well, that's what our investigations going to reveal. I can tell you that I have looked at the underlying source documents which include more revelations regarding Bruce Ohr and his wife Nellie and the connection with GPS. There was a direct pipeline into the DOJ essentially from the Democratic National Committee and Fusion GPS that is troubling. More bad details are going to come out about that, unfortunately, who at the FBI was aware of that, we're still determining that.

BARTIROMO: And it feels like, Jim Kallstrom, we are pursuing an investigation of potential collusion between Trump and Russia, something that doesn't exist and we're not investigating something that we know exists, and that is this bias and this corruption at the top of the FBI which is why the Congressman's comments are so important this morning.

KALLSTROM: Yes, when Comey was fired, he applied soon after that to be the FBI director. Went to the White House with Robert Rosenstein, I understand, was turned down for that job and then a day or two later, Rosenstein appoints him as the Special Counsel when there was no predicate crime. There was a conflict of interest as long as the Jersey Turnpike and speaking of Rosenstein, he signs one of these orders. The Deputy Attorney General signs one of these continuing FISA orders. Now, did he -- is he claiming he did not know that this was bogus information? That he did not know the court was not giving the information about the whole, you know, the DNC and is he playing dumb to all this stuff?

BARTIROMO: Meanwhile he's tweeting Congressman. James Comey sent out this tweet before the memo. All should appreciate the FBI speaking up. "I wish more of our leaders would but take heart, American history shows that in the long run, weasels and liars never hold afield, so long as good people stand up, not a lot of schools or streets named after Joe McCarthy." Is he kidding me, all of this stuff happened on his watch?

KALLSTROM: He's the king weasel.

BARTIROMO: And they stonewalled you for a year. You've been asking for documents they keep stonewalling you. What is he talking about with this tweet?

RATCLIFFE: I really don't know. I'm at a loss to describe his actions, Maria. You're right. He was in charge. It was the Obama administration as I said that has shaken people's faith and trust in this and if I were a guy that were under investigation by the Inspector General for hatch act violations, I wouldn't be tweeting about this. I don't know. Maybe it's gallows' humor.

BARTIROMO: Wow, all right -- real quick.

KALLSTROM: But you know Comey, McCabe, Sally Yates, Rosenstein -- these people all have exposure. These people have all in one way or another told a federal judge a bunch of (INAUDIBLE)

BARTIROMO: We will leave it there. Jim Kallstrom, Congressman Ratcliffe, it's good to see you both. We'll be right back.

RATCLIFFE: Thanks, Maria.

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BARTIROMO: Weeks and months of record-setting gains coming to an end this past week. The stock market taking its worst hit in two years on Friday, Dow Industrials plummeting better than 600 points S&P 500 and the NASDAQ also down on the day on Friday, contributing to one of the worst weeks for this market in about a year. Investors are fearing a stronger than expected jobs report will lead to higher wages and interest rates higher and bring on inflation. Let's bring in Texas Congressman Jeb Hensarling this morning. He is Chairman of the House Financial Services Committee. Congressman, it's good to see you this morning.

REP. JEB HENSARLING, R-TEXAS, CHAIRMAN, HOUSE FINANCIAL SERVICES COMMITTEE: Good morning. Thanks for having me again, Maria.

BARTIROMO: So do us a favor and just put together the backdrop for us. We know that this market is up $8 trillion since the election. Markets don't go straight up. But we also know that the Atlanta Federal Reserve came out with a prediction last week on Friday looking for go GDP growth in the first quarter of 5.4 percent. Wow, you haven't heard of 5.5 percent number in GDP in a long time. We had a good jobs number on Friday, 200,000 jobs and yet the market sells off 600 points. What's going on Congressman?

HENSARLING: Well, it certainly is counterintuitive for most of the American people to have such a strong underlying economy and all of a sudden see that the stock market reverses. I think part of what's going on here, Maria is we know that the Federal Reserve has built up a huge bloated balance sheet and we know that at some point that has to unwind and that we cannot have artificially low-interest rates in perpetuity. So the good news is if there was any time to unwind this balance sheet, it's now in the underlying economy and the fundamentals are so strong. And I do remind people obviously there's a lot of volatility last week but I think the stock market is still up 27 percent for the trailing 12 months. It's still up in calendar year 2018 but in most importantly, we now averaging over three percent economic growth and as you well point out the Atlanta Federal Reserve saying -- says we're looking for a whole lot better. The tax cut and jobs act is working, regulatory reform is working, and I think the economy will be very strong, but the Fed's got a tough job. They're going to have to balance it and ensure that they can keep inflation in check and not put a wet blanket off a growing economy.

BARTIROMO: Yes, it's a good point. Well, I've been making the case this tax plan and the rollback in regulations have a long runway. You've done a great job in terms of rolling back regulations. Of course, this President, that was one of his major priorities. What's the impact and how long- lasting will this economy sort of feel that in terms of the rollback? Because I'm trying to get a sense of a lot of parts of the economy haven't even felt that rollback yet.

HENSARLING: Well no they haven't. I mean, the truth is a year into the Trump administration, Maria, there's still so many offices that he's not been able to get confirmed through the United States Senate because Democrats are dragging their feet, so really in some respects, you're only seeing leading edge of the tax reform plan. You're only seeing leading edge of the regulatory reform. But what I do know is when you measure regulatory burdens, by number of pages in the federal regulation six of the worst seven regulatory years in our history took place under the Obama administration.

BARTIROMO: Hold that thought right there. Congressman hold that thought. We want to take a short break and then continue this conversation.

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BARTIROMO: And we're back with Congressman Jeb Hensarling this morning. The Chairman of the House Financial Services Committee and you were saying, you were making an important point there Congressman, and that is that under the Obama administration, it was one of the highest in terms of regulation. Explain that burden and why it was so important to rollback those regulations because almost instantaneously as soon as the markets and the business community figured out that regulations were coming down, they started spending again. They opened the purse strings and started investing looking for growth once again rather than sitting on cash as has been the case.

HENSARLING: Well, again, and I -- as I said on your show before, it was once you stop the beatings, morale improved. So all the Trump administration had to do was quit putting out the luminous regulations and strangling red tape on our American business enterprises and they see that. And then the Obama administration, you know, I had one businessman tell me that my whole business depends upon what side of the bed a bureaucrat wakes up on. It's an erosion of the rule of law. People were having to actually calculate political risk in the United States of America and it was the cost, it was the complexity, it was the uncertainty of it all. That's going away under the Trump administration and the President has exceeded his own goal. It's not just, you know, getting rid of two regulations for every one new one on the book.

BARTIROMO: Right, it's 22.

HENSARLING: It's 20 for one. It's 22 -- 22 for one.

BARTIROMO: Real quick though Congressman, are you worried about wage growth, 2.9 percent wage growth in the last year from that jobs number on Friday and rates are going higher. These are the worries from the market. Not to mention there is worry about what's going on with NAFTA but that's a whole other conversation. Do you worry about higher rates and higher wages?

HENSARLING: Well the only thing I worry about right now is my teenage daughter getting her driver's license, so no I'm not particularly worried about it.

BARTIROMO: Big trouble.

HENSARLING: Yes, it is. So wages do need to go up. We know that any time we finally have a strong economy, we're going to have to deal with higher interest rates and the Fed was going to have to manage a tough problem. But again with the fundamentals of the economy so strong, no it's not something that I worry about and I believe and hope this fed will be up to the challenge again, to unwind something that, you know, previous fed really put together

BARTIROMO: All right. We will leave it there. Congressman, it's good to see you, sir. Thank you so much. Jeb Hensarling joining us there to talk about the economy and that market selloff. Going into the midterm elections as the Republicans have two big stories, a better economy and abuse of power on the other side. Republicans release that memo accusing the FBI and the Justice Department of abusing their power, their surveillance power in investigating a former Trump campaign advisor. Democrats are saying that the memo is misleading and leaves out pertinent information. My next guest says Congress should create a non-partisan commission to get to the bottom of all of this. Joining me right now is Alan Dershowitz. He's Harvard Law Professor Emeritus and a Fox News Contributor. Alan, always a pleasure. Your thoughts on what we know so far, based on this memo?

ALAN DERSHOWITZ, FOX NEWS CHANNEL CONTRIBUTOR: Well we know a lot of things. We know that the FBI exaggerates the national security threats when they refuse to declassify memos that might embarrass them and that has to stop. The public has the right to see material unless the national security is in danger and we heard the phoniest argument recently to try to stop this memo there coming out. Now we see the memo and there's absolutely nothing in it that in any way affects national security, that's number one. Number two, we have to worry generally about the FBI when they're getting FISA requests and warrants that they don't make full disclosure. That because they have the right to get ex-party warrants without the other side being involved, they have a special obligation to make sure that they disclose everything, even the negative aspects of it. And we no one thing for sure, they did not disclose that this dossier came from a bias source. They should have disclosed that. This is a systemic problem, not just a problem in this particular case. What I worry is that this may reflect a general approach that the FBI takes when they get FISA warrants, disclosing only what they want to disclose and not telling the court about information that might lead them to reach a different conclusion.

BARTIROMO: Well, we just had Congressman Ratcliffe and he's only one of three members who's actually seeing the underlying content and the intelligence here. He says there's more coming particularly we're going to -- we may hear more about Bruce Ohr, the number three Department of Justice official who his wife was working for Fusion GPS the whole time, and Fusion GPS wrote the dossier.

DERSHOWITZ: What we need is an objective assessment of what the public is entitled to see. The FBI should not be making that assessment because they're biased in favor of protecting themselves.

BARTIROMO: Are we going to see charges -- explain the process here. How is the American people going to feel like there's accountability here? I mean obviously, there was a massive abuse of power at the top of the FBI. We know that now to be true.

DERSHOWITZ: We have to see the entire dossier. We have to see the entire application, so we can make a judgment about whether there was an abuse. You see, I don't believe distinguished from I think what a lot of your guests do that this was necessarily partisan, that the FBI, sure guys like Strzok care deeply about Trump losing and Clinton winning. I think, for the most part, it's overzealous prosecution that transcends partisanship and that's why every American, liberal, conservative, Democrat, Republican has a stake in making sure that the FBI remains accountable and follows the law and follows the Constitution. That's why I've suggested from the very beginning a non-partisan commission that could stand for and represent all of the American people, not the partisan bickering that grows out of committees when the Republicans release part of and won't release the Democratic part of the report. We have to make sure non-partisanship protects all of the American people.

BARTIROMO: Well it's not just the FBI by the way. We would like to see that at the IRS as well. But I seem to remember targeting of conservatives at the IRS as well a couple years ago. How far up the chain do you think this goes, Alan? I mean obviously when you consider the unmasking, when you consider this FISA warrant that they were able to get even though the evidence that they were presenting was completely bogus, does this go up to President Obama?

DERSHOWITZ: Well, we have probable cause now. That's all we have is probable cause because we haven't seen all of the documents for believing that there may have been some partisanship or overzealousness. Probable cause means there should be further investigation and it should not be by Congressional Committees because we get two truths. The congressional committees produce a Republican truth and Democrat truth.

BARTIROMO: And by the way, the Special Counsel --Alan, the Special Counsel, are we ever going to hear from Mueller in terms of this evidence of collusion? Is he going to look at all of this stuff as well? How long can this investigation go on with no evidence of supposed collusion?

DERSHOWITZ: He's going to come out with no indictments of anybody important, certainly not of the President but then he's going to try to issue a report to Congress in which he doesn't come to conclusion, he just lays out all the evidence and lets Congress decide, that's not good enough. Again, we need a non-partisan commission to make sure what the Russians did in this past election is never repeated. This is not about whether the Russians wanted a particular person to be elected president, it's about the Russians trying to destabilize the American electoral system.

BARTIROMO: This is the stuff of banana republic. Alan Dershowitz, thank you for weighing in. We appreciate your time this morning. We'll be right back with Congressman Peter King

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BARTIROMO: Welcome back. The declassified FISA memo firing up heated debate in Washington. The memo shows the top law enforcement officials misused surveillance tools to spy on a Trump aide. If the report does prove abuse at the FBI and the DOJ, what is the next step? My guest, New York Congressman Peter King says open hearings. He's the Chairman of the Subcommittee on Counterterrorism and Intelligence and he sits on the Homeland Security Committee. Congressman, it's always a pleasure to see you. Thanks for joining us.

REP. PETER KING, R-N.Y., CHAIRMAN, SUBCOMMITTEE ON COUNTERTERRORISM AND INTELLIGENCE: Thank you, Maria.

BARTIROMO: What do you want to see take place here? People want to see accountability. We are well aware of what took place at the top of the FBI around the election.

KING: Well the Intelligence Committee, we have to finish our investigation of the whole collusion issue and I can tell you right now as far as I'm concerned there's been no evidence of any collusion whatsoever. We still have several witnesses to go through. We will have to issue a report on that. We also will be doing a report at least analysis of the CIA and the Intelligence Committee's assessment last year about Russia and the Trump campaign and I think the American people are going to see that really this has been 15 months of a sustained attack on President Trump by certain people in the intelligence community, certain people in the FBI. Again, what their motives are, I'm not going to jump to that conclusion yet but certainly it's been very improper conduct, very bias conduct, whether they're aware of the bias or they're just living in an echo chamber, I don't know. But what's happened here to the President of the United States a duly-elected president should never happen again. So we need to go forward with that. I've said the other day I think right now since most of our work in the intelligence committee is done behind closed doors, I think the House Judiciary Committee should certainly look into all of the allegations and all I believe the solid fact foundation that we have in the memo that we released the other day.

BARTIROMO: Yes, and we just heard from Congressman Ratcliffe who's on the Judiciary Committee who basically said the investigation of Hillary Clinton's e-mails, it was -- the fix was in, and you know, Jim Comey actually admitted later that he began to write the exoneration memo before he actually interviewed him. And yet, we continue to hear from Jim Comey. Here's his latest tweet, Congressman. Look at this. He says -- this is after the memo was released. That's it? Dishonest and misleading memo wrecked the House Intel Committee, destroyed trust with intelligence committee, damaged relationship with FISA court and inexcusably exposed classified investigation of an American citizen? For what? DOJ and FBI must keep doing their jobs. Can we just pick apart this tweet for a second? Destroys trust within the intelligence community? He's been stonewalling Congress for a year, unwilling to give up the documents that actually prove that there was -- that there was abuse at the top of the FBI, and then he says inexcusable exposed classified investigation of an American citizen? Didn't this from the guy who actually leaked classified information to his friend who is a profess o with the whole intent of getting a special prosecutor. Is he serious with these tweets?

KING: Yes, Maria, since December of 2016, we've had constant leaks coming from the intelligence community, coming from the Justice Department, coming from the FBI. They usually go to the Washington Post and the New York Times revealing classified information and these criminal activities being carried out by people in the government. Nobody is investigating it, nobody looks into anything. After Jim Comey -- I have always defended him over the years, but what he's doing here is totally wrong. For him to be saying somehow that by us putting out a memo which did not reveal any classified information, did not reveal any sources or methods to say that somehow we're compromising national security or we're putting credibility to the Justice Department and the FBI at risk, when he was there as head of the FBI and stuff was appearing all over the place, whether it was from him, his office, whether it was the Justice Department, this was coming from secret investigations being carried out and the testimony and facts are going out often they were misleading, they were out of context or they were totally wrong. All this was being done to hurt President Trump. And now, when we come back with an honest assessment, somehow he's saying that we're the ones creating the issue? Now, I'm very disappointed in Jim Comey and I thought that that tweet coming from a guy who was a smart lawyer, who knows what he's doing, sounded like a handout from the Democratic National Committee.

BARTIROMO: It's incredible actually. Where will the accountability be, Congressman? Tell us how you see this playing out in terms of actual charges.

KING: Again, I think we have to have a Congressional investigation. I like what Alan Dershowitz says that we can have a commission come and also as listening coming from John Ratcliffe, and also to Jim Kallstrom. This, again, you know, this is full-scale investigation of president Trump for collusion. So far nothings come up and we want to start connecting dots about collusion against the Trump campaign, they're out there. Now, whether or not this is criminal, whether or not what was done should have been done. I think it certainly violates procedures and definitely unethical and it could well if a prosecutor wants to find crime, I think it can be there but I don't want to jump to conclusions like they have against President Trump but I think we have to have Congress fully investigate and I think the Justice Department should look at did people in the FBI, did people in the Justice Department intentionally withhold necessary evidence to the FISA court and continue, continue that nonsense through one plus three, four total FISA applications here.

BARTIROMO: Because basically the people who brought the warrant and asked for the warrant from the FISA court, they knew that the Democrats paid for the research right?

KING: They knew it and also, you know, actually, it's not just --

BARTIROMO: And they didn't tell the judge?

KING: I agree that's -- they tell a judge that it was paid for by the Clintons. They may have said it was some political motive but they did not say it was paid for by the Democratic National Committee or the Hillary Clinton campaign was involved. And also the only real fact that I've been able to track down in that dossier is that Donald Trump's lawyer Michael Cohen was supposed to have met with a Russian agent in the Prague, Czech Republic. That totally untrue. Michael Cohen has never been in the Czech Republic, so what they're relying on is we know it's false and everything else in there is slandering gossip.

BARTIROMO: Right. Before you go, Congressman, look, it's pretty clear that the Democrats just do not like this President. They hate this President frankly, and they want to regain power so that they can move to impeach him and they're not doing anything in terms of messaging or in terms of doing or you know, having a plan for the American people. It feels like this President has just put the left in a box with this immigration plan because he's actually offering more than what they've asked for the DREAMers. If they say no to this, it's obviously going to just be well, we just want to resist because he just offering what they wanted.

KING: He offered three times more than what they wanted.

BARTIROMO: Right.

KING: And that's again --

BARTIROMO: So will we see a deal on immigration, tell us about DACA and immigration and what is to come in the coming weeks.

KING: I certainly hope there should be a deal, get this off the table, take care of these young people that are here. And again, if the Democrats are turning down, this should be an issue against them in the campaign. We're trying to make of this. We're trying to get it resolved. The President wants to resolve it. And again, Chuck Schumer has said that he would put money to the wall if the President gave a form of status to the DREAMers. He was talking about 800,000 DREAMers, now President Trump says he will give it to 1.8 million DREAMers and Chuck Schumer says no because he can't pay for the wall. So no, they box themselves in. I believe and it's important for Republicans to stay on this and address it in an intelligent way

BARTIROMO: All right, we'll see. This is --

KING: And the President leading the way. The President is leading the way.

BARTIROMO: Yes, this is going to be an important test to see how Chuck Schumer and Nancy Pelosi respond since it's much more than what they wanted actually. Peter King thank you, sir. It's always a pleasure to see you. U.S. stocks taking a serious stumble after a strong jobs report. Our panel is up next with all of the above. We're looking ahead right here on "Sunday Morning Futures." Stay with us.

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BARTIROMO: Welcome back. Well, North Korea, other threats have not spooked investors so far but on Friday, we got a pretty good spook. We learned that some things do scare investors, higher interest rates, inflation, higher wages, a report showed that the economy added 200,000 new jobs in the month of January and that wages are up 2.9 percent year-over- year. That sparked inflation fears, the Dow fell on one of its worst days in two years, down 666 points on the Dow. Let's bring in our panel right now. Mary Kissel of the Wall Street Journal Editorial Board and a Fox News Contributor, Lee Carter, is President and Partner at Maslansky and Partners. Great to see you both.

MARY KISSEL, FOX NEWS CHANNEL CONTRIBUTOR: Thanks for having us.

BARTIROMO: Thank you so much for joining us. So what's your take? All good news and yet we have one of the worst days for the stock market.

KISSEL: Well, Milton Friedman often said that the stock market is different from the economy. Think about the Obama era, Maria. We had trillion dollar annual deficits, red tape, higher taxes, higher healthcare costs, and the stock markets went up because the fed was pumping up the stock market. Look, this is a different kind of market wages rising as you just said, job creation, more business investment. So, you know, I think what they're worried about is that the fed is going to raise rates too fast and kill this off. But you know what? If Donald Trump had won in an independent-minded federal reserve chairman, he would have picked a guy like John Taylor or Kevin Warsh. He picked Jerome Powell. This is an easy money guy. This is somebody that the White House can control. I suspect that those easy money policies will continue but also on the other hand that we'll see real growth generated from tax cuts and regulatory reform. I'm not too worried about this fall.

BARTIROMO: I'm not either because you're actually seeing relatively low rates even with the little bit of a move that we saw, Lee. And this is all happening for the reasons you wanted it to be happening, that wages are finally going up.

LEE CARTER, PRESIDENT AND PARTNER, MASLANSKY AND PARTNERS: That's right. And one of the things that I think, everybody is talking about the number of the fall but we're not talking about the percentage of the fall as much of that and it's 2.6 percent. We've had 2.6 percent fall the day after a State of the Union Address by both Bill Clinton and Obama. This isn't that big of a correction, so I think we have to keep that in mind percentage wise. I also think that there's a number of factors that people aren't talking about. It could be the fact the pension funds rebalanced and started and are shifting elsewhere, but I don't think that and I think people are panicking. So let's look how the Asian markets open tonight and see if it's really a continuing trend.

BARTIROMO: Yes, and by the way, you're seeing a market still up in the trillions since the election. $8 trillion in market value gains since the election so markets don't go straight up, Mary.

KISSEL: Yes, but look markets -- look, markets go up and markets go down so you know, let's be careful here too. Donald Trump has also imposed some policies, trade policies that could bring that market down. We've also got a Treasury Secretary who's talking down the U.S. dollar so there is also stuff that can go wrong here and I just want to be sure that we say that.

BARTIROMO: Yes, there are risks for sure, higher rates is one of them but if we have some kind of a trade war and on Friday there was a headline that said just Trudeau is not afraid to walk away from NAFTA talks. I think that actually accelerated things. I've got to get your take on the memo and what's going on at the FBI. The panel deals with that when we come right back and we look ahead on SUNDAY MORNING FUTURES. Stay with us.

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BARTIROMO: Welcome back. Let's end on our top story. President Trump says a newly declassified memo vindicates him when it comes to the Russia investigation. We're back with our panel Mary Kissel and Lee Carter. And one of the really damning things from this memo was the fact that we have learned that when they went -- the FBI went to try to get the warrant to spy on an American citizen, they did not tell the judge that one of the major pieces of evidence, the dossier, was paid for by the Hillary Clinton campaign in the DNC.

KISSEL: Yes, and look, Maria, that is a material omission. That in and of itself is the story here. Everything else is just smoke. But look, I don't think the media in America has even read the Steele Dossier that we're talking about. Just the fact that the FBI used that and submitted it to a court, it's garbage, Maria, that they used that to establish probable cause is cause for concern. Then you add in the fact that you had everything else going on with the FBI, Comey, the way that he treated the Clinton aides. We've had six top officials now.

BARTIROMO: The fix was in.

KISSEL: The fix -- the fix was in. There will be a lot of distraction here and the media wants you to think about other things but just focus on the fact that the court was misled, that is a great problem that signals a big problem with our FBI.

BARTIROMO: Well we have six either DOJ or FBI people that have either been fired or reassigned.

CARTER: That's right.

BARTIROMO: This is real stuff. They've obviously been reassigned as a result of the Inspector General's work.

CARTER: That's right and I think one of the biggest surprises to me in this memo is when I looked at it I'm outraged. But when you talk to the American people, they're not sure what to believe. When you talk to Republicans, they're saying this is the worst thing ever. If you talk to Democrats they're saying it's the Republicans putting -- trying to undermine the FBI. And then everybody in the middle is saying where do I get the facts because all I'm hearing is one side or the other and I think what people need to focus on is here are the facts. And just as you were saying , this is paid for by the Democrats, before that it was paid for by opposition research against Donald Trump and you cannot ignore that.

BARTIROMO: Yes, but I mean going into the 2018 midterm elections, the Republicans have two story lines. Number one, they have a good economy because obviously, we see these bonuses. We're talking about 5.5 percent economic growth if you listen to the Atlanta Federal Reserve, and then you have abuse of power on the other side. These are the two things, that's why the numbers have changed going into minders haven't they?

CARTER: They absolutely have changed and significantly. We're looking at where it was sure that the Democrats had much higher favorability than the Republicans. There was no question about it. In the last two months, we've seen that gap close to just two percent. So the Democrats, they think are really confident that they're going to sweep these midterm elections, I would not be so sure because they have no method and --

BARTIROMO: And all they have is to resist. That's right.

KISSEL: That's true, Maria. You can get the news from the Wall Street Journal Editorial Page or this show. The FBI mislead a federal court. That is the story here. Again, everything else is just smoking mirrors.

BARTIROMO: And you want to be able to -- and you and I have spoken about this before. You have to have trust in the federal agencies, whether it's the FBI or the IRS, that they're going to have an independent look. Otherwise, why do we say we live in a free country?

KISSEL: And the other thing too. We learned from the memo that this Steele fellow, he leaked to Yahoo News and then the FBI used that story in its submission to the court. So there are a lot of questions here.

BARTIROMO: So they -- and they kept submitting, right? They have to do --

KISSEL: And they also -- and they also fired him and did not notify the court.

BARTIROMO: And you're supposed to have new information when you go for a renewal of the -- of the FISA warrant. Incredible. Ladies thank you.

CARTER: Thank you so much.

BARTIROMO: Thank you both. Have a great Sunday everybody. I'll see you tomorrow morning on the Fox Business Network. "Mornings With Maria" at 6:00-9:00 a.m. Eastern. Join us tomorrow morning bright and early. First though, here is Fox News and "MediaBuzz" right here.

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