All in with Chris Hayes, Transcript 3/20/2017

Guests: Matthew Rosenberg, Jane Mayer, Michael Isikoff

Show: All in with Chris Hayes  Date: March 20, 2017 Guest: Matthew Rosenberg, Jane Mayer, Michael Isikoff

CHRIS MATTHEW, MSNBC HARDBALL HOST: He`s on the way to introducing me to a top New York editor vouching for me big time. Jimmy Breslin, like all the big ones. Bob Woodward, George Well, Maureen Dowd, Peggy Noonan, William Safire, Mary McGrory, Mike Barnicle was fearless. Least of all, competition, least of all that. Jimmy, to you, to Ronnie, to all of the grave diggers out there, we`re going to miss him. We`re going to miss him.

CHRIS HAYES, MSNBC ALL IN HOST: Tonight on ALL IN.

JAMES COMEY, FBI DIRECTOR: The FBI, as part of our Counter Intelligence Mission, is investigating the Russian government`s efforts to interfere in the 2016 Presidential election.

HAYES: Confirmation from the FBI.

COMEY: And that includes investigating the nature of any links between individuals associated with the Trump campaign and the Russian government.

HAYES: Tonight, inside this historic hearing.

JIM HIMES, UNITED STATES CONGRESSMAN FROM CONNECTICUT: The people around the President, Michael Flynn, Jeff Sessions, Carter Page, Paul Manafort, have an odd connection to Russia.

HAYES: What we know about the investigation through the questions being raised.

ADAM SCHIFF, UNITED STATES CONGRESSMAN FROM CALIFORNIA: According to Steele, it was Manafort who chose Page to serve as a go-between for the Trump campaign and Russian interests.

HAYES: And a new level of spin from Team trump.

SEAN SPICER, WHITE HOUSE PRESS SECRETARY: Paul Manafort, who played a very limited role for a very limited amount of time.

HAYES: Plus, the FBI debunks the President`s three-week-old wiretap claims.

COMEY: I have no information that supports those tweets.

HAYES: Then debunks his live tweeting of the hearing.

COMEY: I have no information that supports those tweets.

HAYES: And with an FBI investigation looming, his Healthcare Bill in doubt, and approval ratings going south, where does this President go from here?

DONALD TRUMP, PRESIDENT OF THE UNITED STATES OF AMERICA: We`re going to win so much, you`re going to get so sick and tired of winning.

HAYES: When ALL IN starts right now.

Good evening from New York. I`m Chris Hayes. An unprecedented and historic moment on Capitol Hill today. The Director of the FBI James Comey confirming a story that the President and his allies have desperately tried to dismiss. Comey telling the House Intelligence Committee and, by extension, the American people, that the FBI is currently investigating whether President Trump`s campaign work for the foreign adversary, the Russian government, as the Russians were engaged in a criminal campaign to influence the U.S. Presidential election on Trump`s behalf.

(BEGIN VIDEO CLIP)

COMEY: I have been authorized by the Department of Justice to confirm that the FBI, as part of our Counter Intelligence Mission, is investigating the Russian government`s efforts to interfere in the 2016 Presidential Election. And that includes investigating the nature of any links between individuals associated with the Trump campaign and the Russian government and whether there was any coordination between the campaign and Russia`s efforts. As with any counterintelligence investigation, this will also include an assessment of whether any crimes were committed. I can promise you, we will follow the facts wherever they lead.

(END VIDEO CLIP)

HAYES: Comey said the investigation had been under way since last July, though he made no mention of it during the Presidential campaign. Comey staying silent on the Russia-Trump investigation then despite repeatedly discussing the FBI investigation into the Hillary Clinton`s e-mails, a decision that many believe cost Clinton the election. Comey today didn`t just confirmed the investigation into possible coordination between the Trump campaign and Russians. He also dismissed President Trump`s utterly unsupported claim made in a series of early-morning tweets that Mr. Trump was wiretapped by President Obama.

(BEGIN VIDEO CLIP)

COMEY: With respect to the President`s tweets about alleged wiretapping directed at him by the prior administration, I have no information that supports those tweets and we have looked carefully inside the FBI. The Department of Justice has asked me to share with you that the answer is the same for the Department of Justice and all its components.

(END VIDEO CLIP)

HAYES: Much more on that part of the story shortly. But first, to the investigation. At today`s Intelligence Committee Hearing, the ranking democrat, Adam Schiff invoked the infamous and unconfirmed dossier from former British Intelligence Agent Christopher Steele six times in his opening statement alleging, among other things, ties between the Trump campaign and the Russians. Schiff referencing specific Trump campaign officials, including Former Foreign Policy Adviser Carter Page and Former Campaign Manager Paul Manafort.

(BEGIN VIDEO CLIP)

SCHIFF: According to Steele, it was Manafort who chose page to serve as a go-between for the Trump campaign and Russian interests.

(END VIDEO CLIP)

HAYES: Manafort, who served as the Campaign Chairman and who like the other campaign officials categorically denies wrongdoing was at one point Trump`s Campaign Manager. But at the White House briefing today, Press Secretary Sean Spicer sought to play down Manafort`s role along with the roles of others mentioned in connection with the Russian probe, dismissing Carter Page as, quote, hanger-on and disgrace Former National Security Adviser Michael Flynn as a mere campaign volunteer.

(BEGIN VIDEO CLIP)

SPICER: Even General Flynn was a volunteer of the campaign and then obviously there`s been a discussion of Paul Manafort who played a very limited role for a very limited amount of time. To start to look at some individual that was there for a short period of time or separately, individuals who really didn`t play any role in the campaign and to suggest that those are the basis for anything is a bit ridiculous.

(END VIDEO CLIP)

HAYES: Trump was trying to undercut Comey`s comments before the hearing even began tweeting the stories as fake news, before adding quote "the real story that congress, the FBI and all others should be looking into is the leaking of classified information. Must find leaker now." Republicans on the House Intelligence Committee tried to help seeking to steer the hearing repeatedly towards the issue of leaks with Representative Trey Gowdy, a Benghazi Committee Fame, suggesting that former Obama administration officials are to blame and comments that were promptly tweeted out on the official POTUS account. POTUS also tweeted an early clip from the hearing with the caption, "The NSA and FBI tell Congress, Russia - and I`m quoting here "did not influence electoral process." But that`s not what Comey and NSA Director Michael Rogers had in fact said. And the tweet led to a remarkable live facts check by the FBI Director of the sitting President during today`s hearing.

(BEGIN VIDEO CLIP)

HIMES: This tweet has gone out to millions of Americans, 16.1 million, to be exact. Is the tweet, as I read it to you, "The NSA and FBI tell Congress that Russia did not influence the electoral process," is that accurate?

COMEY: We`ve no opinion, have no view, have no information on potential impact because it`s never something that we looked at.

(END VIDEO CLIP)

HAYES: Joining me now, Matthew Rosenberg, National Security Reporter at the New York Times, Jane Mayer, staff writer at the New Yorker and Author of Dark Money by the Billionaire`s Funding the Radical Right and Michael Isikoff, Chief Investigative Correspondent for Yahoo News. Well, that was quite a day today. Michael, let me - let me start with you because you`ve been writing about what news we learned today. To me, it was just remarkable to have this thing reported, anonymous leaks be confirmed in person on the record by the Director of the FBI, both that it`s happening and that it started in July.

MICHAEL ISIKOFF, YAHOO NEWS CHIEF INVESTIGATIVE CORRESPONDENT: Exactly. Look, it is extraordinary to have the FBI Director confirm that there is an active investigation of the campaign of the sitting President over questions of collusion with a foreign power. That in itself is stunning. We knew the FBI was up to something. They were investigating aspects of this. But to have Comey directly say it`s about possible coordination was something I don`t think anybody was expecting. Also, the fact that this began late July -

HAYES: Oh, my goodness, yes.

ISIKOFF: - more than three months before the election was something I don`t think any of us realized in its full dimensions. Now, a couple things worth pointing out, as we reporting tonight on Yahoo News, this was just a few weeks after Christopher Steele, the ex-British spy, who was the author of that dossier, first briefed FBI agents about the contents of his reports. So it appears very more and more that he set the ball in motion, set the chain of events in motion that led to this investigation. There were other aspects, the republican convention that month, Carter Page`s trip to Moscow. But it appears to have begun with this much maligned dossier.

HAYES: Matthew, I want to ask you about the dossier and about Adam Schiff reading it into - essentially reading parts of it into the record in a second. But Jane, I want to - I mean, the thing that I kept thinking about today was, James Comey broke protocol to give these updates about the Hillary Clinton e-mail investigation. And I think in some sense, is it possibly defensible judgment or not defensible judgment, it`s a bizarre situation to find one self in. But I just kept thinking today that A, the door has been cracked open, and B, to find out that there was an ongoing investigation of possible collusion with the foreign adversary for three months during the campaign sort of puts all that in a kind of strikingly different context.

JANE MAYER, NEW YORKER STAFF WRITER: I mean, I think you really have to wonder what voters would have made of it and what impact it would have had on this campaign if they had known that the FBI was investigating the Trump campaign for a possible collusion with Russians during this period. And I think it raises a lot of - you know, sticky questions for Comey. Why did he feel it necessary to update the public right before the election on the status with Hillary Clinton`s investigation, his investigation into her and not even mention that there was simultaneously an investigation into Trump`s people and possibly Trump himself. It just seems like there was kind of an imbalance in the need to let the public know.

HAYES: And not only that, I mean, you have the October 31st story in the New York Times in which the FBI very clearly sort of tried to wave off the Russia story and then today you have - when you think about how serious to take this which is always been the question, right, from the very beginning. Adam, you had Adam Schiff citing the Steele dossier, this document whose status remains this kind of bizarre mystery to all of us. Under confirmed how much of it is true? Is it just allegations? I want you to listen to what Schiff did with the dossier and then get your reaction to what it means that he would essentially enter that into the record in public. Take a listen.

(BEGIN VIDEO CLIP)

SCHIFF: According to Steele, Russian sources, the campaign is offered documents damaging to Hillary Clinton which the Russians would publish through an outlet that gives them deniability like WikiLeaks. The hacked documents would be an exchange for a Trump administration policy that de- emphasizes Russia`s invasion of Ukraine and instead, focuses criticizing NATO countries for not paying their fair share. Policies which even as recently as the President`s meeting last week with Angela Merkel have now presently come to past.

(END VIDEO CLIP)

HAYES: Matthew, that - I mean, it strikes me as notable that the ranking member of that committee would cite that document.

MATTHEW ROSENBERG, NEW YORK TIMES NATIONAL SECURITY REPORTER: It does. And I think that`s the other kind of amazing. A day of many amazing things. As you have this dossier that until now has been rumor and innuendo and like you said a mystery to all of us being read out, parts of it and being cited by the ranking Democrat on the House Intelligence Committee. Now, one thing that Mr. Schiff did not say is that a lot of it does remain unproven. That both journalists and others who had copies of it for a long time have not been able to report much of it out. We`ve heard that you know, the FBI believes the Intelligence Community about 30 percent of it may be accurate, but most of that 30 percent or if not all is been non- Trump stuff. The material about machinations inside the Russian government. And it`s the Trump material that I think most - people find most interesting and that Schiff was referring to.

HAYES: Well, and to Michael, I mean, the big thing here to me is you know, is that again, the behavior of Sean Spicer today trying to minimize Manafort and Flynn -

ISIKOFF: Yes.

HAYES: - we all saw the campaign. We were there. I was there in Cleveland when General Flynn was there chanting "lock her up." I saw Paul Manafort run the campaign. It just struck me as a bizarre attempt to, you know, make us forget what had happened and bizarrely sort of guilty acting if there`s actually nothing there.

ISIKOFF: Yes. I mean, look, I mean, first of all, Manafort was the Campaign Manager for some period of time, hardly a marginal period. And Flynn was the principle National Security Adviser to candidate Trump who was sitting in on his intelligence briefings being provided by the Intelligence Committee. That is a bit more than a volunteer. But a couple of other striking things worth mentioning, you know, Comey said right at the get-go that he was authorized by the Department of Justice to make this statement. Well, Jeff Sessions had no role in that. He is recused from this investigation. So it was Dana Boente, an Obama administration holdover who`s now the acting Deputy A.G. who gave the green light for Comey to give this extraordinary statement. That is something that you can imagine is going to enrage folks at the White House tomorrow. Once again, it confirm their paranoia about a deep state imbedded in the U.S. government that`s working against them.

HAYES: That is a great point. And Jane, Devin Nunes at the end of it, said something like, you`ve cast a cloud over this administration which, again, I don`t know the truth of what they will or will not find. And obviously the facts, that we know them in some ways or unnerving enough in the absence of collusion. But I was just reminded of this Kellyanne Conway tweet during the campaign. "Most honest people I know are not under FBI investigation, let alone two." It is now the case, two months in this administration that every day we wake up, the President of the United States and his campaign are apparently currently being investigated by the FBI about possible collusion to a foreign adversary.

MAYER: Well, this is part of the corner that painted themselves into. I mean, by calling for a criminal investigation and screaming "lock her up" all through a campaign when they were dealing with Hillary, they can`t really say, well, now that such things don`t matter. You know, there - really, it was - I have to say in an extraordinary day, I can hardly remember a day for a President where so many things went wrong. Just to even have the Director of the FBI saying outright, in essence, that the President lied in his tweets about whether he was wiretapped. I mean, it`s just - it`s hard to convey how really strange this is.

HAYES: Yes. Jane, by the way, I want to commend to everyone watching your piece on the Mercers, a fascinating billionaire family.

MAYER: Thank you.

HAYES: It`s in the New Yorker right now. They are the Reclusive Hedge Fund Tycoon behind the Trump Presidency. It is a shocking and eye-opening read. Really, really well-reported. Folks should check that out. Matthew Rosenberg, Jane Mayer and Michael Isikoff, thank you all for being with me on this night.

MAYER: Thank you.

HAYES: Still ahead, much more on today`s hearing including James Comey`s statement, "they have no information to support President Trump`s reckless, baseless wiretapping claims." And yet, that did not stop Sean Spicer from continuing to wild goose chase in the White House briefing room. More on that after this two-minute break.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SCHIFF: I hope the President will have the strength of character to apologize not only to President Obama who he defamed but to the American people for leading us on this unfortunate wild goose chase.

(END VIDEO CLIP)

HAYES: The utterly unfounded assertion by the President of the United States that his predecessor had him under surveillance. A claim that began on the fringes of right wing media and caused a major diplomatic incident with Britain and an embarrassing episode with Germany has now engulfed the NSA and the FBI. The heads of both agents having to publicly set the record straight.

(BEGIN VIDEO CLIP)

COMEY: With respect to the President`s tweets about alleged wiretapping directed at him by the prior administration, I have no information that supports those tweets and we have looked carefully inside the FBI.

MIKE ROGERS, NSA DIRECTOR: I`ve seen nothing on the NSA side that we engaged in any such activity nor that anyone ever asked us to engage in such activity.

COMEY: So no individual in the United States can direct electronic surveillance of anyone. It has to go through an application process, ask a judge, the judge can then make the order.

SCHIFF: So President Obama could not unilaterally order a wiretap of anyone?

COMEY: No president could.

(END VIDEO CLIP)

HAYES: As of the administration`s insinuation that somehow British intelligence GCHQ did the wiretapping at President Obama`s behest that was also summarily shot down.

(BEGIN VIDEO CLIP)

SCHIFF: Did you ever request that your counterparts in GCHQ should wiretap Mr. Trump on behalf of President Obama?

ROGERS: No, Sir. Nor would I. That would be expressly against the construct of the Five Eyes Agreement that`s been in place for decades.

SCHIFF: And the Five Eyes are some of our closest intelligence partners and Britain is one of them?

ROGERS: Yes Sir.

SCHIFF: And if you were to ask the British to spy on an American, that would be a violation of U.S. law, wouldn`t it not?

ROGERS: Yes, Sir.

SCHIFF: The British allies are British allies that call the President`s suggestion that they wiretapped him for Obama nonsense and utterly ridiculous? Would you agree?

ROGERS: Yes, Sir.

(END VIDEO CLIP)

HAYES: Despite the testimony from both the heads of the NSA and the FBI, the White House is still, still refusing to back down.

(BEGIN VIDEO CLIP)

SPICER: They -

UNIDENTIFIED FEMALE: The wiretapping of the President -

SPICER: No, no, no. Listen, I understand that. What I`m getting at is that, there`s a lot of information that we have come to learn about what happened in terms of surveillance throughout the 2016 election and transition.

UNIDENTIFIED FEMALE: Are you saying the President has evidence that we have -

SPICER: No, no. I`m saying that there`s a lot more questions that need to get asked about the involve - what was being done in terms of surveillance. The president understands that you don`t literally wiretap people the same way that you did in the 70s and 80s with wires and things in the top of the phone.

UNIDENTIFIED MALE: Director Comey didn`t focus on wiretapping. He focused on the question of surveillance.

SPICER: No, but again, I think that we are - we are still at the beginning phase of a look as to what kind of surveillance occurred and why,

(END VIDEO CLIP)

HAYES: Joining me now, Philip Rucker, White House Bureau Chief for the Washington post. He`s been reporting about the White House response to this. I mean, it strikes me that the situation that it`s actually somewhat similar to the President`s pursuit of Barack Obama`s birth certificate, which was, there was no amount of countervailing evidence including the document itself that would stop him from pursing it. He`s now President of the United States and this seems like a kind of sequel.

PHILIP RUCKER, WASHINGTON POST WHITE HOUSE BUREAU CHIEF: It sort of does. I mean, this is something where there`s just no evidence. And the administration keeps wanting to look for evidence hoping it might pop up someday. Trump has even suggested it would appear in a few weeks and we just don`t have any yet. And the most damaging thing today is that the FBI Director came out to the public. This is somebody who Trump was running around the campaign trail praising and celebrating as a truth teller for what he said about Hillary Clinton. He came out and said that the President was not true and the reason you see Sean Spicer trying to kind of work his way around it and defend it is because there`s no greater sin in Trump`s mind than somebody who admits defeat or is willing to concede that they were wrong. And so we`re not just seeing the White House take that step.

HAYES: I want to just stress how remarkable that moment was today in the hearing.

RUCKER: Yes.

HAYES: Because here are two individuals, James Comey and Mike Rogers. They both serve for the pledge of President. The FBI Director has fixed terms as a means of kind of insulating independently but he can be fired as can the Director of the NSA, having to say in an open hearing that President has no evidence to support this claim and, in fact, it`s sort of insulting or a profound misunderstanding to even make the claim.

RUCKER: I think that`s right. I mean, it`s just remarkable. We haven`t seen something like this. I interviewed today Doug Brinkley, who`s a presidential historian, written biographies of a number of presidents, and I just asked him for a historical parallel. He couldn`t come up with one. He said, he was mystified by what happened today. And he said, "Imagine if J. Edgar Hoover had testified before Congress that any of the presidents he served under had been telling something - saying something that wasn`t true." It`s just a truly remarkable day and it speaks to the credibility problems that President Trump has right now 60 days into his Presidency.

HAYES: As you read that first part of that quote, becomes sort of ringing in my ears, the smell of treason in the air. Presidential story in what has Brinkley said. There`s also the kind of chain of custody of this information which we sort of track down now and it was given new life by a commentator on Fox News, a fine legal mind in the words I think paraphrasing the President, Andrew Napolitano. We`ve just received word I think that he`s been taken off the air. And it appears that -

RUCKER: Oh god.

HAYES: - it`s possible that Napolitano claim came from a man named Larry C. Johnson, a Former Intelligence Officer best known for spreading hoax about Michelle Obama who said he was one of the sources for Mr. Napolitano`s claims. So here you have the President essentially reading Breitbart, watching Fox News and the U.S. intelligence apparatus, essentially at (INAUDIBLE) in front of a whole country and Sean Spicer unable to bend to the obvious reality.

RUCKER: I think that`s right. And you brought up judge Napolitano. He`s really the only person that made that claim about the U.K. intelligence surveillance which, of course, was not true. He`s not a news source. I mean, he`s not a journalist. He doesn`t have sources. As brilliant as he may be, he`s a commentator on Fox News with an opinion and a point of view to press forward and the fact that the President would hear that on FOX and then repeat it or Sean Spicer, rather, would hear that on Fox and then repeat it as evidence in the briefing room is really striking and one of the reasons that you saw our allies, the British, respond so forcefully to this.

HAYES: Yes. And I should note that the President has just concluded his rally in Kentucky in which he made no mention of any of this. Which interpret however you want.

RUCKER: Yes.

HAYES: Philip Rucker, thanks so you. Appreciate it.

RUCKER: Thank you.

HAYES: Later, former Nixon White House Counsel on today`s historic hearing. A little bit of bonus tape of him testifying. And why it says that maybe time for a grand jury to investigate the Trump campaign`s ties to Russia.

And with three days until the vote, Republicans come up with a $75 billion Hail Mary to try to get fellow republicans to vote for a bill that no one seems to like. Jess McIntosh and Michael Steele ahead.

(COMMERCIAL BREAK)

HAYES: There is much more to come on today`s incredible hearing in the House. Former Nixon lawyer John Dean will give us his take on the FBI`s announcement of an investigation into the Trump campaign ahead. But there was another big congressional hearing today, and one that is, in a way, unprecedented. The Senate Confirmation Hearing of Judge Neil Gorsuch. Judge Gorsuch is President Trump`s nominee to replace Justice Antonin Scalia who, of course, died 13 full months ago. The Gorsuch nomination arises after the unprecedented refusal of Senate Republicans to even hold hearings on President Obama`s nominee Judge Merrick Garland. Today, democrats on the Senate Judiciary Committee noted that as well as the particular perils the judiciary faces during a Trump Presidency.

(BEGIN VIDEO CLIP)

DIANE FEINSTEIN, UNITED STATE SENATOR FROM CALIFORNIA: Judge Garland was denied a hearing and this vacancy has been in place for well over a year. I just want to say I am deeply disappointed that it`s under these circumstances that we begin our hearings.

PATRICK LEAHY, UNITED STATES SENATOR FROM VERMONT: This was an extraordinary blockade. It was totally unprecedented in our country`s whole history.

DICK DURBIN, UNITED STATES SENATOR FROM ILLINOIS: Your nomination is part of a republican strategy to capture our judicial branch of government.

RICHARD BLUMENTHAL, UNITED STATES SENATOR FROM CONNECTICUT: A large part of the threat comes from the man who nominated you, who has launched campaign of dishes and relentless attacks on the credibility and capacity of our judiciary to serve as a check on lawless executive action.

(END VIDEO CLIP)

HAYES: Senators began actually questioning Judge Gorsuch tomorrow. Next, the President`s approval ranking is tanking as his unpopular Healthcare plan gets revamped in a sort of remarkable last-ditch effort to save it in time for a Thursday vote. That`s just after this break.

(COMMERCIAL BREAK)

HAYES: There`s a new plan to pass or perhaps more accurately ram through the GOP health care plan. Changes are being made to establish a reserve fund of at least $75 billion for tax credits to help one of the core constituencies that propelled Trump to the White House, Americans between 50 and 64 as well as repeal Obamacare taxes a year earlier than originally planned. All of it is designed to sweeten the deal to get the deal passed, though some changes reportedly would not happen until the bill reaches the Senate, meaning they would just vote for the $75 billion with no details of about what to do with it.

This, after a weekend in which the plan continued to draw fire from Republican senators who are attacking it from the right and the left.

(BEGIN VIDEO CLIP)

SEN. RAND PAUL, (R) KENTUCKY: I believe that the real negotiation begins when we stop them, you have to stop them, conservatives will only have a seat at the table if we have 21 votes in the House or three or four in the Senate. Let`s make sure that we increase our leverage by holding the line.

I think there`s enough conservatives that don`t want Obamacare-lite.

SEN. TED CRUZ, (R) TEXAS: It`s their so-called three-bucket solution, which is all the goods is in bucket three. Bucket three takes eight Democrats. Anything in bucket three - I`ve called bucket three the sucker`s bucket.

UNIDENITIFIED FEMALE: We have to do something about the fact that the House bill disproportionately affects older, rural Americans.

(END VIDEO CLIP)

HAYES: That epitomizes, I think, the problem which is that there is no core constituency for this bill. The unpopularity of the plan, only 34 percent approve, seems to affecting President Trump`s job approval rating. It now hovers at all-time historic lows for a president this early in his first term, getting even worse after the March 6 rollout of the GOP health care plan.

In The Huffington Post polling aggregate, the same trend is notable. After March 6, you can see a change for the worst. The inflection point right there is Trumpcare.

Joining me now, MSNBC political analyst Michael Steele, former RNC chairman; and Jess McIntosh, executive editor at Share Blue, former communications director for the 2016 Clinton campaign.

And Michael, I`ll start with you. I thought that the appearances by Ted Cruz - by the way, sucker`s bucket is a great coinage.

MICHAEL STEELE, FRM. RNC CHAIRMAN: It`s a great (inaudible). I love it.

HAYES: It`s very good and also true. Believe me, buddy, bucket three is when your ship comes in. Like, okay.

STEELE: That`s right. That`s right.

HAYES; But I just thought it illustrated the core -- who is this bill for? There`s no core constituency for the bill. It`s not -- it`s like it`s reverse engineered around a set of compromises or whatever it is, but I don`t know among voters or among politicians that there is anyone there at the center demanding this.

STEELE: Well, the interesting thing is there were absolutely no lessons were learned from the 2009 effort by the Obama administration to do Obamacare. It`s the same argument that could have been made there, that the core constituency at best was loose and it was largely made up and played to by, you know, members of congress and that`s the focus here. It`s not on the street. This isn`t a bill that`s on the street as evidenced by polling you showed, 34 percent of Americans go like, OK, yeah, that`ll do. Everyone else is like hell no we don`t want this.

And yet the whole play is to get it through the House and then sweeten it enough for the Senate to pass it.

But here`s the question, when all of that happens, what are you left with?

HAYES: Right.

STEELE: If you cannot go to the American people and say, you will be better off because of these things that we have done here, specifically A, B, C and D, then it`s not something that the American people are going to buy.

HAYES: Right. Because in some ways, Jess, the victory of passing a bad bill that`s bad for people is not an actual victory if it`s bad for people.

JESS MCINTOSH, EXECUTIVE EDITOR, SHARE BLUE: They are not trying to do a thing here, which is why the strategy to do a thing is so complicated and failing. They`re trying to repeal Obamacare. That`s the only mandate that they had..

HAYES: Right, that`s the actual thing they wanted. Right. That`s right.

MCINTOSH: That`s what they want to do. So, now that it`s about - they don`t -- Obamacare was a really hard thing to pass but the point was, to cover more Americans. We all knew what that was.

HAYES: There was a project in play.

MCINTOSH: There`s a product, and that made it worth the political headache to get it done because we believed in this principle that we were all fighting for.

HAYES: right.

MCINTOSH: Their only principle is repeal Obama`s signature legislation.

HAYES: And Michael, go ahead.

STEELE: No, I was going to say, to Jess` point, and that is the fact that what happened was that the president said, oh, no, we`re going to repeal and replace because, remember, they say we`ll repeal now and replace in a couple of years.

HAYES: Right.

Talk about the sucker`s bucket, that`s the ultimate sucker`s bucket, that some day there`s going to be a new health care system we`re going to get to.

But, Michael, Jess, to your point, nothing to me illustrates this better than, OK, the bill is in trouble. The Gadsden flag waving members of the House Freedom Caucus, many of whom I genuinely believe are genuine - have an ideological commitment, are principled in that respect, they`re peeling away. They are going to get brought back on board with a $75 billion slush fund that`s just thrown at the bill to basically say, we will just throw money at whoever may need it without any details of how it will be dispersed to get the conservatives to vote for it.

MCINTOSH: When principled conservatives are part of your loudest opposition throwing a pile of money with unspecified targets, the problem is not going to solve it.

HAYES: $75 billion.

STEELE: Thank you.

MCINTOSH: Exposes the utter lack of princple underpinning this entire effort and that`s why it`s not going to...

STEELE: And that`s why Rand Paul and other conservatives are going, no, we`re not buying this. In that third bucket, even with $75 billion in it, is a sucker`s bucket because the reality is with those conservatives who came in on the wave in 2010, all about the fiscal responsibility that they promised their constituencies cannot go back and justify spending that kind of money and not having any clue of what is going to happen to it or where it`s coming from.

HAYES: Not to mention, one of my favorite details of the bill has been overlooked is that there`s $100 billion essentially kind of insurance fund, it`s $10 billion a year, so that`s over the budget window, $10 billion a year, which is basically frankly there that if the insurance companies start hemorrhaging during the transition, they can be made. They can be restitude and made whole, which, by the way, if that was just there right now, the premium problem would go away.

So, snuck inside of this thing is basically an insurance company bailout, which no one has gotten -- Rand Paul talked about a little bit this weekend on the Sunday shows. But they haven`t even gotten to that part to it yet.

MCINTOSH: No, they haven`t. The part that they got to first was that it was going to disproportionately hurt the older rural Americans in red Trump voting states, like the optics around this things were so poorly crafted that that was the first takeaway.

HAYES: That was the first one.

MCINTOSH: The next one was the insurance company slush fund. There is no constituency that voted to...

HAYES: to make this happen.

So, here now becomes the question, Michael, is that Ryan basically -- he`s committed at this point. He`s got to pass this thing.

STEELE: Oh, yeah.

HAYES: They are now at the point where they`ve sort of opened up and negotiating and you see the desperation saying, well, $75 billion the Senate will figure out. Like, does he get it passed? I mean, do people roll on Thursday? Do they actually push this thing through?

STEELE: I think they do. I was listening to a number of folks capitulate, is the only way I could put it this past week and weekend on that very point.

So I do think they get it in the House and that`s why you see guys like Rand Paul holding that conservative line fiscally and going, no, there is no economics that supports what the House will send us. There is no health care strategy that supports what the House will send us relevant to Obamacare.

So, I think it passes the House and I think it gets eaten alive in the Senate.

HAYES: For what it`s worth, having interviewed a lot of members of the House on this program, they`re sort of noes until you start really getting in on them. They`re very - they`re are not really hard-nosed. So, I tend to think you`re right. We will find out this week.

Micheal Steele, Jess McIntosh, thank you both.

Still ahead, former Nixon White House counsel joins me. Why he says it`s past time to have a grand jury investigation into possible collusion between the Trump campaign and Russia. Stick around for that.

Plus, Sesame Street versus President Trump in tonight`s Thing One, Thing Two starting right after this break.

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HAYES: Thing One tonight, since President Trump released his budget axing funding for the Corporation for Public Broadcasting. There has been no shortage of headlines about Big Bird`s future. And while Sesame Street moved to HBO two years ago, PBS still airs the show free for households who don`t subscribe to the premium station. If they air reruns, this episode could pop into rotation.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Now, will Sesame Street just become a footnote in america`s history?

ELMO: If we don`t do something about Mr. Trump, Elmo thinks we will be history.

(END VIDEO CLIP)

HAYES: See, long before President Trump called to eliminate the funding for PBS, he was featured on PBS and that`s Thing Two in 60 seconds.

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(BEGIN VIDEO CLIP)

TRUMP: No puppet. No puppet.

You`re the puppet.

CLINTON: It`s pretty clear you won`t admit that the Russians...

(END VIDEO CLIP)

HAYES: There are several times in which Donald Trump has been portrayed as a puppet. as The Washington Post highlights today, Ronald Grump first showed up on Sesame Street nearly three decades ago.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Nice to meet you. Grump is the name, Ronald Grump. And I`m a grouch builder. I make places for grouches to live.

(END VIDEO CLIP)

HAYES: Grump make another appearance in 2005, searching for an apprentice, donning an orange tupee. But, perhaps the most prescient episode was back in 1994 when Joe Pesci played Ronald Grump, a real estate mogul trying to destroy Sesame Street.

(BEGIN VIDEO CLIP)

BARBARA WALTERS, NEWS ANCHOR: Real Estate tycoon, Ronald Grump, has announced plans to demolish Sesame Street and create a lavish new Grump tower.

JOE PESCI, ACTOR: Trust me, you won`t miss all this.

UNIDENITIFIED FEMALE: Miss it? We live here. It`s our home.

PESCI: OK, OK, that`s it. I tried to be nice to you people, but you don`t want to listen? That`s it, you`ve got two weeks, pack up and get out.

Give me this, you. Get out of my way.

(END VIDEO CLIP)

HAYES: Ultimately, Ronald Grump is forced to scrap his plans to demolish Sesame Street as public pressure mounts in the streets. Imagine that.

(BEGIN VIDEO CLIP)

CROWD: One, two, three, four, Sesame Street forever more. One, two, three, four, Sesame Street forever more. One, two, three, four, Sesame Street forever more.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

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SETH MEYERS, LATE NIGHT TELEVISION SHOW HOST: Donald Trump talks about himself as a law and order candidate. This feels a lot more -- you sort of draw the distinction between what law is and what order is and how he is far more order than law.

HAYES: This is to me the key point that when we hear that phrase law and order they run together in our head, right. But the law is a complicated thing, and when people say, well, this unauthorized immigrant broke the law, my response to them always is, have you broken the law? Have you broken the law? And the answer to that is yes to everyone sitting in this room and everyone watching at home, the answer is yes. You`ve driven over the speed limit. You`ve gotten behind the wheel with one too many drinks. You`ve maybe stolen a candy bar as a kid. There are so many ways in which the way we enforce the law is dependent on how we think about the social order and who threatens it.

And what law and order functionally does is it maintain a social order and we`re seeing that, we saw that in the 40, 50 years, we`ve built the largest prison system in the world and we`re seeing that now under the Trump administration.

(END VIDEO CLIP)

HAYES: That was me talking to Seth Meyers. I will be on late night with Seth Meyers tonight talking about my new book that comes out tomorrow, "A Colony in a Nation" about law and order, policing, and democracy. I`m also kicking off my book tour tomorrow. I`ll be at Politics and Prose in D.C. with the great Jameel Bouie (ph). We`re doing an event. And then in Boston on Wednesday and Philadelphia on Thursday. All the info for those events is on our Facebook page, Facebook.com/AllInwithChris. And bonus, stay tuned to MSNBC tonight, in just a little while, I`ll be a guest on the Rachel Maddow somehow. I`m going to talk to her about the book, and I will explain the most overlooked line in the declaration of independence in which Thomas Jefferson blames basically British cops for the revolution. You don`t want to miss it.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

JOHN DEAN, WHITE HOUSE COUNSEL: To one who was in the White House and became somewhat familiar with its inner workings, the Watergate matter was an outgrowth of a climate ofexcessive concern over the political impact of demonstrators, excessive concern over leaks, an insatiable appetite for political intelligence all coupled with a do-it-yourself White House staff regardless of the law.

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HAYES: In june of 1973, John Dean, Richard Nixon`s White House counsel, sat before the Senate Watergate committee and talked about the president`s subversion of the constitution. 44 years later, the man who testified against Nixon watched another high-profile hearing focuse on an official investigation that could potentially have similar consequences to Watergate.

(BEGIN VIDEO CLIP)

REP. ADAM SCHIFF, (D) CALIFORNIA: Now here I think you`ve said there`s been no evidence of an illegal wiretap by President Obama. Is that right?

JAMES COMEY, FBI DIRECTOR: I`ve said the FBI and the Department of Justice have no information to support those tweets.

SCHIFF: But there is evidence, is there not, of a break-in of the Democratic headquarters by a foreign power using cybermeans?

COMEY: Yes, there was.

SCHIFF: And there was an effort by the Russians to cover up the break-in of the Democratic Party headquarters by using cutouts like WikiLeaks to publish the stolen material. Isn`t that right?

COMEY: Certainly, to cover-up that they were the ones releasing it.

(END VIDEO CLIP)

HAYES: And joining me now is John Dean, former White House counsel to Richard Nixon.

You know, I was thinking about what you made of today`s hearing today because I was incapable of finding any kind of precedent or any point of comparison even historically for what we saw. What was your reaction to it?

DEAN: Well, my reaction to the hearing itself was that it`s very early, they`re just starting to unravel what has happened. We`re just learning the basic. We`re just getting affirmations about things that have rumbled in the press. So, it is not a pinnacle moment at all. It`s just a really preliminary moment, if you will, is what I saw. And I was more stunned by the reaction of the White House and their handling of it, which seemed to me to be over the top.

HAYES: Well, that`s what I wanted to talk to you, because there are two issues here. And I think we`re headed towards a crash course, sort of headed into each other. One is what may or may not have happened between the campaign and any Russian elements, right. Let`s put aside that for a moment.

There`s also the question of whether this White House will obstruct essentially an investigation. You now have the head of the FBI with a target painted on his back, the front line investigators with targets painted, you have a U.S. attorney who the president had said he was going to retain who has been summarily fired in Preet Bharara. And it strikes me that in some ways there`s a kind of obstruction landmine that the entirety of the White House now has to tiptoe through. And if they do not have a culture of compliance in that White House, they are going to blow themselves up.

DEAN: That`s absolutely correct. In fact, they are in a cover-up mode. There`s just never been any question in my mind about that. I`ve been inside a cover-up. I know how they look and feel. And every signal they are sending is we`re covering this up. Experienced investigators know this. They know how people react when they`re being pursued.

This White House is not showing their innocence, they are showing how damn guilty they are is what we`re seeing. So, this is par for the course. And they seem to have learned nothing from history because there have been too many cover-ups. And they are just typical is they`re trying to distance themselves from people that are involved.

Their characterization of what`s going on.

HAYES: I want to stop you there, because that to me was sort of a striking moment. I mean, the Paul Manafort/General Flynn moment today in the press briefing in which Sean Spicer basically tries to essentially say they barely had anything to do with the campaign when we all watched it unfold and Manafort was the campaign manager.

Did that strike you as odd as well?

DEAN: It absolutely did. Let me tell you how predictable this is and how coverupish it is, because this is exactly what happened during Watergate.

For example, when it came clear -- when I had broken rank and became a public person out there, suddenly Nixon had never had any meetings with me at all. Then he had one or two meetings with me. Well, we had 37 meetings about Watergate. And so -- and he knew damn well that we had been deep in the thick of it.

But suddenly, they distance themselves. That`s exactly what we`re seeing here.

When the break-in occurred, for example, for Watergate and Hunt and Liddy were uncovered and the fact they worked at the White House, suddenly they had done nothing at the White House. They had had no real assignments.

So, this is classic coverup, Chris, is what we`re seeing.

HAYES: Let me ask you, the idea that the president of the United States -- one thing that stuck with me is the day after the inauguration, he tracks down the acting director of the park services to find pictures to essentially instruct him to find pictures of the inauguration that show bigger crowds. And if he does that for that, the question is does he call someone from the FBI, does he call Comey, does he call someone at a front line at a desk in the FBI? I mean, all of those are the kinds of things you can imagine a president wanting to do and only being restrained from doing with proper advice and counsel.

DEAN: Well, he certainly has no problem calling out judges on his Twitter account and that`s getting closer to the area of obstruction.

The obstruction statute is actually somewhat narrow. There is no grand jury at this point, so it`s very hard to obstruct justice unless you actually have a court proceeding.

HAYES: Interesting.

DEAN: Because that`s where justice is dispensed.

There can be obstruction of congress and other things like that by lying to them and so on. But the obstruction of justice statute hasn`t come into play because it`s too early into the investigation.

But they`re going into this with a very bad mentality that`s going to get them in a lot of trouble.

HAYES: It was the impaneling of a grand jury that ultimately was so crucial in Watergate. What kind of development did that represent then?

DEAN: It - well, because of the break-in and the arrests of the break-in, there was a natural and probable cause to create a grand jury to unravel what had happened at the arrest at the Watergate. But that grand jury then after the successful trial of those involved who had been arrested went on and started looking at the coverup and that`s where a lot of people got into a lot of trouble. They lied. They disassembled on things they didn`t have to. Some people got before the grand jury who weren`t even involved in Watergate and just lied about their activities at the White House and ended up with perjury charges. So, these things can spread.

HAYES: I don`t dispense legal advice on the show, but if you`re watching and you ever have an interview with anyone from the FBI, retain counsel and do not lie.

John Dean, thanks for joining us.

That is All In for this evening. The Rachel Maddow Show starts right now. Good evening, Rachel.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. END