All In with Chris Hayes, Transcript 5/23/2017

Guests: Ellen Nakashima, Chris Murphy, Jill Wine-Banks, Christopher Hill, Nayyera Haq, Jeff Merkley

Show: ALL IN with CHRIS HAYES Date: May 23, 2017 Guest: Ellen Nakashima, Chris Murphy, Jill Wine-Banks, Christopher Hill, Nayyera Haq, Jeff Merkley

CHRIS MATTHEWS, MSNBC HOST: That`s HARDBALL for now. Thanks for being with us. "ALL IN" with Chris Hayes starts right now

(BEGIN VIDEO CLIP)

CHRIS HAYES, MSNBC HOST: Tonight on ALL IN.

REP. TREY GOWDY (R), SOUTH CAROLINA: What is the nature of what you saw?

JOHN BRENNAN, FORMER CIA DIRECTOR: I saw interaction and -- aware of interaction that, again, raised questions.

HAYES: The Russia plot thickens.

BRENNAN: It raised questions in my mind again, whether or not the Russians were able to gain the cooperation of those individuals.

HAYES: A former CIA Director goes further than ever in describing what he saw, as the current Director of National Intelligence won`t deny the President asked him for help.

DAN COATS, NATIONAL INTELLIGENCE DIRECTOR: It`s not appropriate for me to comment publicly on any of that.

HAYES: Plus,

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: If you`re innocent, why are you taking the Fifth amendment?

HAYES: Today`s bipartisan response to Michael Flynn taking the Fifth.

Then, the Trump budget versus the Trump campaign.

TRUMP: Save Medicare, Medicaid, and Social Security without cuts.

HAYES: And the latest updates from Manchester including an evolution and the American response.

TRUMP: I will call them from now on losers. Because that`s what they are.

HAYES: When ALL IN starts right now.

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HAYES: Good evening from New York, I`m Chris Hayes. Tonight, President Trump is lawyering up amid big developments on Capitol Hill. A Former Director of the CIA, John Brennan, testifying for the first time that last year when he was serving as CIA Director, he saw intelligence revealing contacts between Russian officials and members of the Trump campaign and grew worried that the Russian government may have gained the cooperation of Trump campaign officials.

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BRENNAN: I encountered and am aware of information and intelligence that revealed contacts and interactions between Russian officials and U.S. persons involved in the Trump campaign that I was concerned about because of known Russian efforts to suborn such individuals and it raised questions in my mind, again, whether or not the Russians were able to gain the cooperation of those individuals.

GOWDY: Did you see evidence of collusion, coordination, conspiracy between Donald Trump and Russian state actors?

BRENNAN: I saw information and intelligence that was worthy of investigation by the bureau to determine whether or not such cooperation or collusion was taking place.

(END VIDEO CLIP)

HAYES: Brennan`s testimony follows a report yesterday in The Washington Post that after then FBI Director James Comey publicly disclosed the FBI investigation into possible ties between the Trump campaign and Russian meddling in the 2016 election, President Trump made separate appeals to the Director of National Intelligence Daniel Coats and to Admiral Michael Rogers, the Director of the National Security Agency, urging them to publicly deny the existence of any evidence of collusion. Both reportedly turned him down. According to the post, senior White House officials also asked top intelligence officials if they would try to convince Comey to drop the FBI`s investigation into former Trump National Security Adviser Michael Flynn. "Can we ask him to shut down the investigation? Are you able to assist in this matter?" One official said of the line of questioning from the White House.

The story since confirmed by NBC News adds yet another layer to the growing scandal surrounding the President`s attempts to interfere with an investigation of his own campaign. Separate from the question of whether there was any collusion with Russian operatives. Did the President of the United States and his associates obstruct justice by trying to impede the investigation? We now have reporting that the President or his allies and aides asked a wide range of officials to either knock down reports of collusion or halt an investigation outright. Among them, the chairs of the Senate and House Intelligence Committees, Richard Burr and Devin Nunes, the FBI Director, and then Assistant Director James Comey and Andrew McCabe, and now Director of National Intelligence Dan Coats and NSA Director Mike Rogers. Testifying on Capitol Hill today, Coats was asked to confirm or deny The Washington Post reporting, and chose neither.

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COATS: It`s not appropriate for me to comment publicly on any of that, and so on this topic, as well as other topics, I don`t feel it`s appropriate to characterize discussions and conversations with the President.

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HAYES: Late today, NBC News confirmed that President Trump is now expected to retain a private attorney Marc Kasowitz to represent him on matters related to the Russian investigation. Joining me now, Ellen Nakashima, she`s National Security Reporter for the Washington Post, one of the authors of yesterday`s blockbuster report that President Trump asked Coats and Rogers to publicly deny Russia collusion. Ellen, first, let me start with your reaction to interpretation of the testimony by Dan Coats today, him neither confirming nor denying the reporting in your article.

ELLEN NAKASHIMA, WASHINGTON POST: It seemed to be a -- basically by not denying the story, there was a tacit to acceptance of the story was accurate.

HAYES: Yes. And there had not been -- my -- I should note there have not been official denials by the White House as well, is that correct?

NAKASHIMA: That`s correct -- that`s absolutely correct. In fact, the White House was remarkably silent on the story all day today. President Trump did not say anything about it, did not tweet about it. Usually, he`s the first out of the box.

HAYES: So let me ask you this. It`s sort of remarkable, the color in this article. I mean, the sense you get is the President just sort of calling through a list of intelligence officials asking them to not knock this down without any seeming awareness of the possible impropriety of the entire endeavor.

NAKASHIMA: Yes. That`s right. That`s what`s been so remarkable about this story all along, with President Trump trying to get FBI Director Jim Comey to intervene, to drop the investigation into Mike Flynn, to then refine that he`s trying to get the NSA Director to come out publicly and say there was no evidence of collusion. he doesn`t -- he doesn`t understand the lines, the traditional lines between the law enforcement agencies and the political branch -- the executive branch, the political White House.

HAYES: It`s also noteworthy to me that both Coats and Rogers just refused, I mean; basically it sounds like Rogers somewhat awkwardly attempting to explain to the President of the United States why it would just be an impossible and incomprehensible thing for them to do it.

NAKASHIMA: Right. I mean, both men were not going to do something that they considered to be very inappropriate, and at the same time, at least I think you know, Rogers did not want to be seen as insulting or slapping -- you know, putting a slap in the face of the Commander in Chief. So --

HAYES: So do we know of any other -- I guess the question is this -- the most charitable interpretation of the President`s actions is that he didn`t like the public relations aspect of it and was looking for P.R. help. There`s two components of your story. There`s him asking them to knock down the story and then there`s also officials asking about the Flynn investigation itself. That seems to me quite important given the Comey reporting.

NAKASHIMA: Yes, that`s right. And that piece is something that bears further reporting. Notably today, Dan Coats was also asked about that and he said he was not aware of it, I believe. And so we will have to continue to report out. Now, that is a little more significant in that it`s -- now you`re starting to talk about --you`re moving into more of what could be considered obstruction of justice.

HAYES: Right.

All right, Ellen Nakashima thanks for your time tonight.

Joining me now Democratic Senator Chris Murphy of Connecticut, member of the Senate Foreign Relations Committee. First, let`s start with your reaction to the reporting we`re just talking about, the President contacting Coats, Rogers, among others it appears in an attempt to knock down this story.

SEN. CHRIS MURPHY (D), CONNECTICUT: Well, first, it is certainly sounded like Dan Coats` refusal to answer the question was, in essence, a confirmation of it that is part of this pattern of a president who is trying to shut down this investigation any way he can. And this is a pattern of behavior that really does start to look like obstruction of justice. So I think we`re going to continue to follow this story. You pair it together with the confirmation that there were contacts with the Russian government during the campaign, and you know, it feels today as if the walls are real closing in on this President.

HAYES: You know, Brennan -- former Director Brennan said something very interesting today about briefing your colleagues in the Senate, the gang of eight particularly. And I want to play that for you because it struck me as notable in terms of who else sort of knew or should have known about what exactly they`re investigating at that time. Take a listen.

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BRENNAN: We kept Congress apprised of these issues as we identified them. Again, in consultation with the White House, I personally briefed the full details of our understanding of Russian attempts to interfere in the election to Congressional leadership, specifically Senators Harry Reid, Mitch McConnell, Dianne Feinstein and Richard Burr, and to Representatives Paul Ryan, Nancy Pelosi, Devin Nunes and Adam Schiff between 11th August and 6th September.

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HAYES: So that`s last summer, the height of the campaign that he`s briefing republican and democratic members of Congress. Are you -- what is your reaction to the reaction of folks like McConnell and Ryan and their -- the way they`ve handled this issue throughout?

MURPHY: Well, I think there`s some question there as to whether they had informed Congress about the Russian manipulation of the election or the context with the Trump campaign. But the fact of the matter is, this should have been a much bigger deal at the time. And I know that both Senator McConnell and Speaker Ryan know the potential gravity of this, and unfortunately, they simply aren`t taking it seriously enough. There`s real political peril for republicans if they continue to stand with this President and back up some of his attempts to try to stop the truth from coming out. Ultimately, this will land at their feet as well as the President`s.

HAYES: Do you end up asking yourself what else is the White House up to that I don`t know about when you read a report like in The Washington Post?

MURPHY: Yes and no. In part, because it doesn`t seem like much happens in this White House without it ultimately being reported --

HAYES: Fair point.

MURPHY: You know, not even the President`s private selection of a lawyer is a secret for more than a few hours. Listen, I think this administration is so ham-handed in the way that it tries to stop the truth from coming out that may eventually get caught and eventually gets reported on. And I`m just thankful that there are so many good reporters around Washington that are believing this truth out. and I`m now thankful that we have an independent counsel that is going to be frankly, able to take some of this reporting and give us a set of recommendations on how to proceed here in the Congress.

HAYES: There`s been a very active debate among democrats both on and off the record about the use of obstruction of justice, which actually has you know, a precise legal meaning, and impeachment. What is your feeling about that?

MURPHY: Well, you know, as you know, Chris, the decision as to whether to move forward impeachment is really a political decision. And so, if there`s a belief that a crime has been committed by a president, you would think that that would rise to the level of an impeachable offense. But ultimately, it`s a decision by Congress as to what it believes is high crimes and misdemeanors. So yes, we`re going to watch as to whether this rises to the level of obstruction of justice. But frankly, whether or not it does, if there is an ongoing pattern by this President of trying to stop investigative agencies from getting the truth or if you continue to have evidence that the campaign, perhaps with the President`s knowledge, was coordinating with the Russians, that alone without the obstruction of justice charge would be enough to start that discussion of consequences in the Senate and in the House.

HAYES: All right, Senator Chris Murphy, thank you for being with me.

MURPHY: Thanks.

HAYES: As a few folks pointed out yesterday, it was 44 years ago yesterday on May 22nd, 1973, that this was the front page of The New York Times, Richard Nixon conceding a wide White House effort to conceal some aspects of Watergate. The Nixon Presidency was ultimately brought down in large part by the so-called smoking gun tape onto June 23rd, 1972 recording on which Nixon tells Chief of Staff, H.R. Haldeman, to direct the CIA to stop the FBI from investigating the Watergate burglary.

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H.R. HALDEMAN, PRESIDENT NIXON`S CHIEF OF STAFF: Now, on the investigation, you know, the Democratic break-in thing, we`re back to the - - in the problem area because the FBI is not under control and they have, their investigation is now leading into some productive areas,

RICHARD NIXON, FORMER PRESIDENT OF THE UNITED STATES: Without going into the details -- don`t, don`t lie to them to the extent to say there is no involvement, but just say this is sort of a comedy of errors and that they should call the FBI and say don`t go any further into this case", period!

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HAYES: And joining me now, Attorney Jill Wine-Banks, who`s one of the prosecutors in the Watergate scandal. So let me start with this question. From your perspective, having been a prosecutor during Watergate, how proper and or legal is it for the President of the United States to reach out to members of the intelligence community to try to get them to go on the record in his defense or even to intervene in an investigation?

JILL WINE-BANKS, WATERGATE SCANDAL PROSECUTOR: Completely illegal. It is obstruction of justice.

HAYES: Really? You think facially, flat out?

BANKS: Flat out. Anyone who is saying differently, people are saying well, you have to show corrupt intent. Yes, you do. But I think asking Sessions to leave the room when you are having a conversation with Comey about the investigation is clear enough evidence of intent. And it`s exactly what got Richard Nixon into trouble. He was plotting with his aide, Haldeman, to get the CIA to tell the FBI to stop investigating on the false grounds that it would hurt national security.

HAYES: This is what was so remarkable to me because really the breaking point in Watergate was precisely that, what you just said, right? That Nixon sort of cooked up this idea that he was going to tell the FBI, that they were going to uncover some you know, black ops the CIA was running. And it was -- that was the point where it kind of all flipped over, right?

BANKS: It was the discovery of that tape, which was just before trial we asked for additional tapes, went to the supreme court, they said we have a right to them. That one tape, June 23rd, just six days after the break-in, was exactly the smoking gun that led to the republicans going to the President and saying if you don`t resign, you will be impeached.

HAYES: And why was that so important? I mean, there was a lot of facts that are even put on the table at that point. What was it about that do you think from a legal perspective or political perspective?

BANKS: Two things. One, it was just an accumulation of things that by that point you couldn`t ignore anymore. And it was -- he had lied. He said he didn`t even know about the cover-up until March when John Dean told him there was a cancer growing on the Presidency. This was in June. So he was publicly committed to "I didn`t know until March." But he actually knew in June, and he was plotting in June. He was part of the cover-up. And I think it was just all too much.

HAYES: There`s -- you said this is an obstruction, and talking about this President`s behavior.

BANKS: Yes.

HAYES: And if all this bears out -- so here`s a question to you. I mean, with Watergate, right, the underlying infraction, which is the break-in and a variety of transactions that happened with that group was sort of off book bagman, that there was a cover-up of an actual first order crime. If it`s the case that there is nothing they`re covering up from a collusion standpoint, does that change the legal, moral, political consequence of this obstruct -- what you call obstruction?

BANKS: My opinions are based on legal. I`ll leave the political to your political advisers.

HAYES: Right.

BANKS: I don`t know what will happen whether there will be impeachment, whether there`s the will for impeachment. So that`s a different -- that`s a political question. But the interesting thing here is, the underlying crime could actually be as bad or worse. You had them talking to the Russians, and we don`t know about what. That`s going to be testimony interestingly this week, although today the former CIA Director Brennan said there was a pattern of conduct between the campaign and the Russians that was concerning. That`s disturbing.

HAYES: But let me ask you this. I guess my question is, is it possible to commit obstruction of justice, to impede an investigation into something that you didn`t do?

BANKS: That`s a very interesting, philosophical, legal question, and I`m not sure --

HAYES: It may -- it may arrive at that moment.

BANK: I think we may. Although I have a feeling that you don`t engage in the kind of behavior here if there isn`t an underlying crime. So the question is exactly what are they concealing and why are they concealing it? What is the connection to Flynn that makes the President protect him so much? There`s just too many questions.

HAYES: Jill Wine-Banks, thanks for being with me. That was great.

BANKS: Thank you,

HAYES: Coming up, new subpoenas and now threats of contempt charges for Donald Trump`s ex-National Security Adviser, Michael Flynn and what former CIA Chief John Brennan today described as the treasonous path after this two-minute break.

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SEN.MARK WARNER (D-VA) VICE CHAIRMAN, SELECT COMMITTEE ON INTELLIGENCE: We issued two subpoenas to the two Michael Flynn businesses that we`re aware of. While we disagree with General Flynn`s lawyers` interpretation of taking the Fifth clear -- it is even more clear that a business does not have a right to take a Fifth if it`s a corporation. So those subpoenas -- one has been served, one is in the process of being served, and we keep all options on the table. We think the Committee has moved forward to (INAUDIBLE)

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HAYES: The leaders of the Senate Intelligence Committee announced their response today to fired National Security Adviser Michael Flynn`s rejection of their original subpoena to him. General Flynn had invoked his Fifth Amendment against self-incrimination and refused to turn over business documents related to his interactions with Russian officials. So the Committee has issued two new subpoenas, this time directly to Flynn`s businesses since corporations can`t invoke the Fifth. In a letter to the Committee explaining his refusal to comply with the subpoena, Flynn`s lawyer asserted that his client had been quote, "the target on a nearly daily basis of outrageous allegations." Flynn also previously requested immunity in exchange for testimony which he was not granted. Meanwhile, in the House investigation into ties between the Trump campaign and Russia, democrats are citing new evidence against Flynn and pushing for another subpoena. Congressman Elijah Cummings wrote to House Oversight Chair Jason Chaffetz saying to the Committee quote, "has in our possession documents that appear to indicate that General Flynn lied to the investigators who interviewed him in 2016 as part of his security clearance renewal.

Joining me now, Naveed Jamali, MSNBC Contributor, former FBI Double Agent, authority of How To Catch A Russian Spy. Naveed, let`s start with the allegation by Elijah Cummings they have evidence that he lied to the people interviewing him when he was getting a security clearance review. How big a deal is that?

NAVEED JAMALI, MSNBC CONTRIBUTOR: Well, it`s a big deal, it`s a big deal for two reasons. The first one is the sort of pragmatic one which is you know, it`s potentially a crime. If he did those -- did this knowingly and there was an intent to you know, to sort of cover something up here. The second one is on the counterintelligence side, you know. When someone purposefully misleads something in the resolve -- in regards to an SF-86, which is this form that is a security background questionnaire. When someone purposely leave something off, if you are a counterintelligence officer, if you`re a security officer, it raises a red flag, besides for the obvious reason of the illegality. It shows potentially an attempt to deceive. And that is you know, that is a very troubling thing.

HAYES: I want to just run down because I give a sense of this and get your reaction. I mean, here are some of the problems Flynn currently has in terms of when you talk about that sort of deception right, as a red flag. He did not clear his RT payments as required by Army regulations. It appears. He allegedly didn`t disclose those foreign payments in a security clearance interview, which we just talk about. Did not register as a foreign agent while working for Trump campaign and then lied about the nature of his contacts with Russian Ambassador. So that --whether he did anything wrong, there is a pattern here that, as you say, it would seem to me would raise red flags.

JAMALI: That`s absolutely right. Again, taking this to the question of illegality or criminality aside for one moment, if you`re looking at this and you`re a security officer and you`re going to make the determination if this person warrants or meets the criteria to be given a security clearance, you`re going to have very you know, serious concerns about issuing that clearance. So it shows a pattern potentially of deception. And you know, that is the thing that really does trouble me. I mean, we know what happened from 2014. We know what happened most recently in 2017. But there`s a large gap of several years where we don`t know exactly what Mr. Flynn was doing.

HAYES: You know, I was watching the testimony of Brennan today and there was sort of a light bulb moment for me, particularly with this back and forth about collusion and cooperation. And you`ve been very clear about your skepticism of open collusion or conspiring simply because the tradecraft of Russian intelligence. They`re not going to sit down and be like hey, I`m a Russian spy, let`s figure out how we can work together. And Brennan said this thing that I thought of conversations you and I have had -- have had in that regard. Take a listen.

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BRENNAN: I`ve studied Russian intelligence activities over the years and I`ve seen it, again, manifested in many different of our counterintelligence case and how they`ve been able to get people, including inside of CIA, to become treasonous and frequently individuals who go along that treasonous path do not even realize they`re along that path until it gets to be a bit too late.

(END VIDEO CLIP)

HAYES: How does that relate to your awareness of how Russian intelligence or any intelligence agency operates in terms of cultivating people without them even realizing they`re being cultivated?

JAMALI: That`s exactly right. The Russians are so sophisticated when it comes to this, and you know, I would call it the romance phase. There`s this part when you know -- and I was dealing with the GRU, a legit military intelligence officer. And you know, Chris, he never actually said to me we want you to commit treason and spy on your country. There`s a very nuance and careful slow progression where they`re just -- you know, they`re saucing you out. They`re determining if you`re real. And this concept that someone`s going to sit down with you, did exactly as you said and say, you know, I want you to spy, it`s unlikely. So that`s exactly right, it`s very slow dance and it can take years. They`re also incredibly paranoid and they`re constantly looking for any signs that you perhaps may have been co-opted. So what Brennan said rang absolutely true. It`s a slow dance.

HAYES: And so -- and so, what I`m hearing from you then is that there`s a possibility that this idea of collusion which is two collaborators exchanging information, it could be the case that -- could be the case that Russians are pulling off these operations of act of measures in terms of the hacking while also attempting to essentially compromise or infiltrate in a sort of unilateral sense agents around the Trump campaign.

JAMALI: That`s exactly right. So if you think -- going back to that timeline with Flynn, we talk about 2014 when he was -- you know, essentially fired by President Obama. This -- someone sort of a bitter general would be a perfect target for the Russians.

HAYES: Right.

JAMALI: And again, the way that they -- they would make an approach. I mean, this is how I would do it if I were them. They would make an approach, and that approach may not be illegal, that approach may not be even raise the concerns of Mr. Flynn who is a 30 plus year veteran of the intelligence community.

HAYES: Right.

JAMALI: So that is -- it is exactly right. They might build a network of people, this is what they do. And then what`s very curious, Chris, that all these people potentially ended up in the Trump campaign. That`s the big question.

HAYES: Yes.

JAMALI: But you`re right.

HAYES: Yes. It just seems like this space that has to be reckoned with in terms of -- there`s a sort of cartoonish image that we`ll find, some plot in which people were sitting down in the back of a restaurant.

JAMALI: Right.

HAYES: And this to me seems to me like a more fruitful line of sort of thinking through this problem. Naveed Jamali, thank you for joining me.

JAMALI: Thank you.

HAYES: White House unveiled the Trump budget today with massive cuts to many of the things candidate Trump said he would protect. We`ll show you who would be hurt the most after this quick break.

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TRUMP: Save Medicare, Medicaid, and Social Security without cuts. Have to do it. Get rid of the fraud, get rid of the waste and abuse but save it. People have been paying in for years, and now many of these candidates want to cut it.

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HAYES: From day one of his campaign, the President promised he would not cut Medicare, Medicaid and Social Security. Unlike his opponents, he`d be a different kind of republican. And voters rewarded him for it in the primary particularly and in the general election. But today, the White House released its budget for 2018, and among the $4 trillion in cuts it proposes are billions upon billions of dollars slashed from both Medicaid and Social Security. The Republican Health Care Plan passed out of the House already, already included $880 billion in cuts to Medicaid. On top of that, the Trump budget would cut an additional $660 billion over ten years, all but gutting the program. The President`s Budget would also slash funding for Social Security Disability Insurance, SSDI, which provides benefits to people with disabilities. Many of those people were once factory workers and manual workers in places like the rust belt, which of course helped deliver the President`s electoral college victory. In fact, you could see from this map, it would be highest participation in Social Security Disability Insurance is concentrated in the south, states like Louisiana, Mississippi, Kentucky, West Virginia, all in the Trump column in 2016. House Budget Chair Mick Mulvaney was asked about the impact of those SSDI cuts earlier today.

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UNIDENTIFIED MALE: Will any of those individuals who presently receive SSDI less as a result of this budget?

MICK MULVANEY, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET: I hope so. If there are people getting SSDI who should not be getting it --

UNIDENTIFIED MALE: Those people who should be getting it, they receive less --

MULVANEY: Oh no. Oh no. If people -- if people are really disabled, we are not kicking anybody off of any program who really needs it.

(END VIDEO CLIP)

HAYES: That remains to be seen, of course. The president`s budget is so extreme, it`s quite hard to find anyone on Capitol Hill of either party who supports it, including Republicans.

What republicans are saying about the president`s budget, coming up next.

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HAYES: Dead on arrival, that`s how the number two Republican in the Senate, John Cornyn, described the president`s budget, which was unveiled today. Other Republican lawmakers have criticized the proposal for its steep cuts to Medicaid, its reduction in State Department funding and for its overoptimistic growth projections, among other issues.

The reaction has been so negative that according to the Associated Press reporter Eric Werner, House Speaker Paul Ryan had to tell House Republicans not to fall into the trap of criticizing the Trump budget, arguing there`s plenty to like.

And that`s true, if you happen to be among the wealthiest Americans. The president`s budget trades massive tax cuts for the wealthy for absolutely unprecedented cuts to programs that help people with low incomes including welfare, Medicaid, food stamps.

But here`s the thing, it goes much further than that. The Trump budget would slash funding for most government agencies, affecting everything from cancer research to the Special Olympics to diplomatic security. It would limit agricultural programs, another farm bill would shrink the federal student lone program for low income students. In other words, something for just about everyone to dislike.

I`m joined now by Senator Jeff Merkley, Democrat from Oregon, and a member of the Senate Budget Committee.

Do you agree with Senator Cornyn that this is DOA?

SEN. JEFF MERKLEY, (D) OREGON: Yes, I do. A budget is a statement of values. And the first value we learned is that President Trump doesn`t honor -- doesn`t have the integrity to honor his campaign promises on Medicaid and on Social Security. We also learned that it`s not an America first vision for America, it`s billionaires first, and it`s rural and working Americans last.

And this budget just proceeds to eviscerate rural America.

HAYES: How so?

MERKLEY: Well, it does so through rural development, cuts slashing rural development, rural business services, rural transportation, rural water supply programs, rural airport services, rural clinics, rural hospices, rural post offices and even rural rental housing.

I`ll try to say all of that quickly.

HAYES: So here`s my question to you. Look, any attempt from anyone who want to cut spending is going to meet resistance, right. The folks that say -- Mick Mulvaney and others say this is the kind of thin we need to put quote taxpayers first, that it`s politically difficult to cut spending in any case, that they`re being brave essentially in proposing this when there`s very little political upside. What do you say to that?

MERKLEY: Well, it`s certainly putting taxpayers first if you`re a billionaire taxpayer, but it`s putting Americans, working Americans, struggling Americans, Middle Class Americans in a terrible bind, undercutting the core programs that support both in rural America and in urban America.

I think about the -- this woman, Carol, who contacted me from a small town in Oregon, and she said look, my husband, we`ve been married 33 years. He has dementia. He`s in a nursing home. The Medicaid being cut will destroy the support for him to be in a nursing home. She can`t care for him, because she has congestive heart failure. And she`s concluded her letter by saying, if we lose the ACA, if we lose the Medicaid, surely I will die.

And I think she`s speaking for millions of Americans who are struggling, trying to get by, who have worked their lifetimes, their bodies are worn out. These programs have given them peace of mind that if they have a medical problem, they`ll get the care they need and the peace of mind that they won`t go bankrupt, and these programs have supported the economy. And they`re just being torn apart.

This is a president who has no vision of how America really works.

HAYES: So, you`ve articulated in that both I think a substantive defense on the merits of something like Medicaid and the Medicaid expansion particularly and opposition to cuts, but also a political case. I mean, what`s remarkable to me about the budget is that it goes after so many different things -- cancer research, National Institutes of Health, things that are quite popular. I mean, these are not programs that are perceived only to benefit a few.

There was a time when the president himself recognized the danger of this kind of thing, this is back in 2012. Here is the president then tweeting about the Ryan budget, "Paul Ryan`s budget is very dangerous for the Republicans just before the election. Be careful."

What has changed?

MERKLEY: Well, I don`t know that the president has a grip over his own budget. His team is careening from one place to another. Certainly I can tell you I`ve been out in rural counties in Oregon. I have a town hall in every county. I`ve been in at least a dozen Republican counties since January, and people are infuriated with the Republican leadership.

HAYES: But you`re a Democratic senator. Of course you`re going the say that.

MERKLEY: Well, I tell you, it`s very strange. In 2009, when I was first elected, I go into these counties, I had committed to be there in every county, and people came out and they were ready to tear my heart out because they thought Obamacare was some type of socialist foreign contrived takeover.

HAYES: So, these are places where you met with a lot of political activism oppositionally.

MERKLEY: Oh, absolutely. I have been on the receiving end of that, for sure. And in half of those countries I have walked into the room and had people stand up and start applauding. They are looking for champions to stop this craziness, this destructive set of strategies that Trump is putting forward. And his budget embodies that.

HAYES: I kept thinking about cuts to SSDI and I thought about the places that I`ve traveled and voters I`ve to across this country and what it would mean to them and the politics of that. It`s explosive. Senator Jeff Merkley, thanks for joining me.

MERKLEY: You`re welcome.

HAYES: Still to come, a new tone and some old vocabulary and reaction to last night`s attack in Manchester. What to make of President Trump`s somewhat muted response to terror ahead.

Plus, tonight`s Thing One, Thing Two starts after the break.

(COMMERCIAL BREAK)

HAYES: Thing One tonight, the magical power of gerrymandering, where politicians redraw legislative districts to benefit themselves and their party. The Washington Post published this handy diagram explaining the problem. Let`s take a state that votes 60 percent blue, 40 percent red. And depending on where you place those voters, i.e. the district lines, how you carve it up, you could end up with blue winning three districts and red winning two, which would be pretty fair, or blue winning all five districts. But with some deviance with some deviously creative drawing, you can get red winning a majority of the districts even with an overall minority of the voters.

Now, it turns out this is not a thought experiment, both parties have used this tactic to their benefit. But since 2010, Republicans have been pushing the limits of it to an incredible affect, and in some cases doing so illegally.

Perhaps the most extreme example of Republican gerrymandering, that resulted in this insane district map just went up to the Supreme Court and how the high court ruled and why it could influence states across the country is Thing Two in 60 seconds.

(COMMERCIAL BREAK)

HAYES: One of the most extreme examples of gerrymandering is the congressional map drawn by North Carolina Republicans after 2010. It`s a map that delivered the GOP an overwhelming 10-3 advantage in House seats by 2014, turning a roughly 50 percent statewide support into a 77 percent advantage.

A challenge to this map just went before the Supreme Court, specifically two bizarrely shaped congressional districts where republicans were accused of clustering African-American voters.

On Monday, the court rejected those districts, citing racial bias. Justice Elena Kagan wrote in the majority opinion, "by sliming the district and adding a couple of knobs to its snakelike body, North Carolina added 35,000 African-Americans and subtracted 50,000 whites, turning district 12 into a majority-minority district.

The district map was even too extreme for the reliably conservative voting Justice Clarence Thomas who served as the deciding vote in the 5-3 decision. Election law expert Rick Hasan (ph) reacted to the ruling writing, "holy cow this is a big deal. This will lead to many more successful racial gerrymandering cases in the American south and elsewhere." A Texas gerrymandering case could be one of those. Just hours after the ruling, a federal judge urged Texas lawmakers to consider voluntarily redrawing their district lines in light of the Supreme Court ruling.

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HAYES: British Prime Minister Theresa May has raised the country`s terror threat to its highest level, warning that another attack may be imminent in the aftermath of last night`s concert bombing in Manchester, Britain`s worst terror attack since 2005. The death toll now stands at 22, with another 59 injured. The victims included young children. The concertgoers leaving a performance by pop singer Ariana Grande.

The bomb detonated right outside that concert hall. British authorities believe the homemade explosive was set off by a suicide bomber who has now been identified as Salman Abedi, a 22-year-old British man whose parents were born in Libya.

He lived less than four miles from the Manchester arena, the site of the attack. And police have also arrested his 23-year-old brother, but provided no further details.

ISIS has claimed responsibility for the attack, but offered no proof of the connection.

Makeshift memorials in Manchester and words of condolence from the British royal family have been joined by worldwide expressions of support. President Trump traveling in the Middle East where he delivered a major speech on Islam and terrorism just two days ago reacted to the attack this morning. And while his response was in character, it was quite different than much of what we saw from him on the campaign trail. That`s next.

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HAYES: Today President Trump responded to the Manchester Arena attack during a joint press conference with Palestinian Authority President Mahmoud Abbas in the West Bank city of Bethlehem.

(BEGIN VIDEO CLIP)

TRUMP: So many young, beautiful, innocent people living and enjoying their lives murdered by evil losers in life. I won`t call them monsters, because they would like that term. They would think that`s a great name. I will call them, from now on, losers because that`s what they are. They are losers.

(END VIDEO CLIP)

HAYES: For the president, it was a measured reaction, particularly compared to previous situations he addressed as a candidate. For example, in the immediate aftermath of the Orlando nightclub shooting last June, candidate Trump reiterated his call for a Muslim ban.

(BEGIN VIDEO CLIP)

TRUMP: We must find out what is going on. We have to do it. It will be lifted, this ban, when and as a nation we`re in a position to properly and perfectly screen these people coming into our country. They are pouring in and we don`t know what we`re doing. We cannot continue to allow thousands upon thousands of people to pour into our country, many of whom have the same thought process as this savage killer.

(END VIDEO CLIP)

HAYES: Joining me now Nayyera Haq, who is a former State Department spokesperson, former White House senior director under President Obama and Ambassador Christopher Hill, NBC News and MSNBC diplomacy expert who is a former ambassador and former assistant secretary of state.

And Ambassador Hill, let me start with you. Your reaction to the tone of the president and its marked contrast to how he sounded as a candidate.

CHRISTOPHER HILL, FRM. ASSISTANT SECRETARY OF STATES: Well, it is in marked contrast, of course. But I think he also expressed the indignity and sense of outrage that these murders require. So I think he did fine. I think it was a good reaction, it was from the heart. And I think that`s what people would like to hear from our president.

HAYES: It struck me, Nayyera, that when you look at that little dateline there where he is, he`s in Bethlehem. He`s meeting with the Palestinian Authority. He just was in Saudi Arabia at a summit of, you know, Sunni Muslim officials and leaders. It changes both I think probably the world view and the language that any president will use, the fact that you actually have to go to the Middle East and interface with people and you can`t just be talking about them like they are not in the room.

NAYYERA HAQ, FRM. STATE DEPARTMENT SPOKESPERSON: Well, certainly. And I think we saw that the president was influenced by the surroundings, so he was influenced by the fact he was around many Muslim leaders of the Sunni persuasion. He`s influenced by being in Bethlehem, one of the holiest cities in the world. And what he`s not influenced by was a constant stream of cable television, or staring at his Twitter account all day. So that is, again, part and parcel of who our president is, is that he`s influenced by the dynamic in the room and the media and attention that he gets around him.

HAYES: Well, and Ambassador Hill, a lot of people said in response to the Muslim ban, there was a lot of critiques about it, substantively, morally. But one of the diplomatic critiques is precisely that this is offensive to people that we have to work with diplomatically for a variety of reasons, particularly when the first ban, for instance, banned Iraqis who were fighting and dying to defeat ISIS.

You wonder if these sorts of real world pragmatic concerns are going to start to operate on this White House at all.

HILL: Well, one hopes. I mean, he`s gone to a region of the world that is very much in turmoil. It`s interesting, though, how he`s kind of cast his lot with the Sunni Arabs out of whose community comes some of this most hideous extremism.

But he also seems to be trying to tee up some sort of approach on Israel, pointing out, really going after the Iranians, going after the Iranians in Saudi Arabia, which was kind of a funny place to do it, given that they don`t have elections in parliaments and things like that.

And then he does the same thing in Israel as if to say -- in fact, he did say that Saudi Arabia and Israel have a lot in common.

So, he seems to be trying to tee up some sort of effort, I think, on Middle East peace.

HAYES: Yeah, Nayyera, please.

HAQ: Well, what he really has teed up is he`s stepped right in the middle of the Sunni/Shia conflict, which in previous years, we have as the United States, tried to stay out of fully taking sides.

I mean, granted, we don`t have the diplomatic relationship with Iran, but Iran has had elections recently and we have been making an effort to bring international power to bear to have it denuclearized as a state. Again, that was done at the expense of our relationship with Netanyahu and Israel.

So, there have been tradeoffs from our previous U.S. foreign policy in the region. But on the upside of what we saw under the Obama administration, and even in the Bush administration, is we did not pick sides between Sunni and Shia, which has been a divisive part of the Middle East.

HAYES: I would respectfully say the fact that we have been arming and supporting the Saudis as they pursue a proxy war in Yemen against Shia rebels, the Houthis, is pretty much taking sides in that, isn`t it?

HAQ: Let`s just say that we`re going much further down the line, particularly with so pointedly being in Saudi Arabia speaking out against Iran. You`re starting to hear drumbeats that we -- I think it pedaled back a little bit in the last couple of years of potential U.S. involvement militarily in Iran.

I mean, these foreign trips are really about signals and absorbing information overseas. It`ll be interesting to see what he actually does when he gets back here to the U.S. and has to deal with the domestic arguments as well.

HAYES: Well, that`s -- Ambassador Hill, my question about counterterrorism here, which is that, what do you see as continuity or as breaks. Obviously, the Muslim bans issued one and two both block by the court, the first one essentially rescinded. Are massive breaks -- there has been an escalation in drone strikes and in other raids we`ve seen. But what, to you, do you see as the hallmark so far of how this president has taken this approach in a different direction?

HILL: Well, I clearly -- this is someone who is kind of behaviorally pliable with whomever he`s last spoken with.

HAYES: Right.

HILL: So, I think he found a lot to think about in Saudi Arabia, probably issues that he, frankly, had never thought about.

So, I think he was kind of impressed and they showed him what they are doing about terrorism. He said, wow, you`re doing the same sorts of things we`re doing. And so I think this was kind of a revelation for him. He kind of liked the whole family thing. He brought his family there so the Saudis liked that. And he kind of looked around that rather glorious looking room and said, hey, this is the way I like to decorate.

I think he felt very much at home.

HAYES: House of Trump, House of Saud to paraphrase a book title from the Bush years.

Nayyera Haq and Ambassador Christopher Hill, thank you both.

That is ALL IN for this evening. "THE RACHEL MADDOW SHOW" starts right now.

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