All In with Chris Hayes, Transcript 8/18/17 What a Week

Guests: Gabriel Sherman, Philip Rucker, Mickey Edwards, John Harwood, Kal Penn, Betsy Woodruff, Ben Howe

Show: ALL IN with CHRIS HAYES Date: August 18, 2017 Guest: Gabriel Sherman, Philip Rucker, Mickey Edwards, John Harwood, Kal Penn, Betsy Woodruff, Ben Howe

JOY REID, MSNBC NATIONAL CORRESPONDENT: Tonight on ALL IN.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I like Mr. Bannon, he`s a friend of mine.

REID: Bannon gets bounced.

STEVE BANNON, FORMER WHITE HOUSE CHIEF STRATEGIST: It`s not only not going to get better, it`s going to get worse every day.

REID: Tonight, inside the departure of one of the most controversial figures in the White House.

TRUMP: Mr. Bannon came on very late, you know that.

REID: A new threat of war from the world of Breitbart.

UNIDENTIFIED MALE: Is there going to be a war with this White House?

REID: Plus, why Bannon`s departure doesn`t fix Trump`s problem with race.

TRUMP: We really do have to ask you something, where does it stop?

REID: Then, another mass resignation from yet another White House council.

TRUMP: Excuse me, excuse me.

REID: My exclusive interview with the man who let the Exodus, actor Kal Penn. And a look back at Trump`s worst week yet.

ROBIN ROBERTS ABC GOOD MORNING AMERICA ANCHOR: Have you talked to him directly yet?

SUSAN BRO, MOTHER OF HEATHER HEYER: I have not and now I will not.

REID: ALL IN starts now.

Good evening from New York, I`m Joy Reid in for Chris Hayes. Steve Bannon is out but he`s not going easy. Exactly a year and a day after taking over the Trump campaign, the former Breitbart chairman and right wing lightning rod was dismiss zed, effective today from his job as Chief White House Strategist, telling The Weekly Standard tonight "The Trump presidency that we fought for and won is over. We still have a huge movement and we will make something of this Trump presidency but that presidency is over.

Bannon had positioned himself as a voice inside the White House for the president`s political base. A famous leak keeping a list of all Trump`s major campaign promises on a white board in his office. And this week, he was the only White House official to publicly embrace and encourage the president`s widely condemned response to the violence in Charlottesville in which he defended participants in a white nationalist rally. As business leaders and Republican lawmakers denounced Trump`s conduct according to the Washington Post.

Many on the White House staff let a drum beat for the president to dismiss Bannon and any other aides who have connections of any kind to the white nationalist movement. But long before Charlottesville, Bannon was known to clash with some of his White House colleagues, including National Security Adviser H.R. McMaster and economic adviser Gary Cohn. And rumors of his imminent dismissal accelerated with the appointment of John Kelly as the new chief of staff who reportedly has been determined to bring order to the West Wing.

But according to report, it may have been a book that decided Bannon`s fate. The devil`s bargain by Bloomberg Joshua Green on Bannon`s role in shaping and paving the way for the Trump campaign. Listen to Trump`s response when asked about Bannon earlier this week.

(BEGIN VIDEO CLIP)

TRUMP: I like Mr. Bannon. He`s a friend of mine. But Mr. Bannon came on very late, you know that. I went through 17 senators, governors and I won all the primaries. Mr. Bannon came on very much later than that and I like him. He`s a good man, but, we`ll see what happens with Mr. Bannon.

(END VIDEO CLIP)

REID: BuzzFeed reports that the president recently told the confidant that effing Steve Bannon taking credit for my election. Tonight, Bannon is already back at Breitbart cheering this evening`s editorial meeting as he told The Weekly Standard and this is a real quote, "I feel jacked up. Now I`m free. I`ve got my hands back on my weapons."

Joining me now to talk about what just happened are two men deeply sourced inside the Trump administration. Gabriel Sherman, special correspondent for Vanity Fair and Philip Rucker, White House Bureau Chief for The Washington Post. Gentlemen, thank you for being here. Gabe, I`ll start with you at the table because -- well, that`s quite a quote. I`ll give you another one from The Weekly Standard`s interview from Bannon. I`m definitely going to crush the opposition. There`s no doubt. I built a bleeping machine at Breitbart and now I`m about to go back knowing what I know and we are about to rev that machine up and rev it up, we will do. Who is Bannon talking about going to war against? Is it Donald Trump?

GABRIEL SHERMAN, SPECIAL CORRESPONDENT, VANITY FAIR: Yes. Well, that`s classic Bannon you know, he is a bombastic character. And I think really first he`s going to go to war against his globalist as he likes to call them moderate enemies inside the White House, that includes Jared Kushner, it includes H.R. McMaster, Gary Cohn. These were the people principally he was battling to and execute his populist nationalist agenda. I think when it comes to Trump, really it`s going to come down to policy. I don`t think he is going to be driven by vengeance personally This is a matter of Bannon`s ideas. He has ideas, whether you agree or disagree. He was going to fight from the White House to pressure the White House not to abandon his populist message.

REID: And Philip, let`s go backwards now to talk about just how this came out because of course you have the White House and the Bannon folks now first leaking and then confirming, saying what he really resigned on the 7th. That`s when he really resigned, it was just effective today. Is that true or was he flat out fired?

PHILIP RUCKER, SPECIAL CORRESPONDENT, VANITY FAIR: Well, that`s what Bannon is telling his friends. But other White House officials are saying that he was fired and that this was a decision that General Kelly largely made himself of course with the blessing of President Trump. And it`s important to remember what Kelly is trying to accomplish here. He is trying to bring some order to a White House that for seven months now have been ridden by inciting, by backstabbing.

A legislative agenda is basically in shambles, nothing is really happening when it comes to the priorities that the president wants to get done. And so, Kelly is trying to bring some order and feels like getting rid of Bannon is a way to do that.

REID: Phil. we`ll stay with you for just a second. Is it -- where were Javonka, they called Jared and Ivanka, were they a part of this push to get rid of Bannon?

RUCKER: Well, we know from reporting a few months ago that Jared and Ivanka Trump made a direct appeal to try to get their father and father-in- law to fire Steve Bannon. This is back in sort of April or May. There`s long been tension between Bannon and the Kushner group, Cadre if you will. But Trump didn`t act on it then. Certainly, they`re encouraging of removing Bannon but I -- I`m told that this is really a Kelly-driven decision to fire him.

REID: And let`s talk, Gabriel, about the Mercers because of course the mercers are the money behind Breitbart. Did the money actually behind Kellyanne Conway and a little money behind Bannon, he`s now back talking to them. Did they try to fight to keep Bannon in place and what might they do now that he`s gone?

SHERMAN: Mercers have been the money behind Breitbart. They were Bannon`s advocate, they brought him into the campaign last summer. They wanted to keep him, the Mercers really see if Bannon as the avatar of this populist movement. Now that he is out, they are billionaires, they are going to contribute millions of dollars presumably to whatever venture he does next. Right now, it is going to be Breitbart. But I would not be surprised to see Steve Bannon leverage the Mercer`s billions of dollars and maybe try to turn Breitbart into a global media platform, a television network, maybe buy a company. I mean, I think s Steve Bannon sees himself in world historical terms. And that he`s outside of the White House, he is not going to want to do something small. So, whatever he does next, you can pretty sure it`s going to be a big thing.

REID: (INAUDIBLE) just stay with you for a second because they have always had Fox News, so the Republican Party has Fox News in their corner, that`s sort of the state-run media if you will but there are these other media entity sort of swirling around. At one point, people thought Trump might make one. So, now, what you`re saying then is Bannon might go out there and try to create his own media empire?

SHERMAN: Without question I think that has to be on the table. And we know from my own reporting that there`s a of tension between Steve Bannon and Rupert Murdoch. He -- we used to know from reports the other day that Rupert Murdoch told Donald Trump at a dinner at the White House to fire Steve Bannon. Steve Bannon sees Rupert Murdoch and Fox News by extension really as part of the globalist establishment (INAUDIBLE) as hard as that might be to imagine. But I think Steve Bannon sees them as part of the D.C. swamp and he wants his media empire to be the voice to be the new right which is the Breitbart populist in some cases white nationalist right.

REID: And the demographic is about 40 years younger which is something that value -- makes that Breitbart valuable. Philip, Donald Trump is not yet, I haven`t checked his Twitter feed in the last, what, seven minutes, but he hasn`t yet attacked Bannon despite the fact that Bannon is out there talking which Trump hates in getting headline instead of Trump. Is Donald Trump afraid to attack Steve Bannon? We have heard some rumors that there are Right Wing bloggers who said if Bannon goes, we`re unleashing all of our upper research on this White House?

RUCKER: Yes. You know, he is not engaged with Bannon and it`s interesting, he didn`t -- the president didn`t issue any kind of statement today praising Bannon for his service which seems unusual for an official that senior. But I know that he is worried about the kind of impact, the kind of damage that Bannon could have on the outside, certainly if he is going to try to go to war with people inside the administration, try to hold the president to his campaign promises that could potentially get ugly at some point.

REID: Yes. The plot thickens. Gabriel Sherman, Gabe Sherman, and Philip Rucker. Thank you guys, have a great weekend.

SHERMAN: Thank you.

RUCKER: Thank you so much.

REID: All right. Thank you. Now, I want to turn to somebody who`s been incredibly vocal about the president`s behavior this week. Senator Brian Schatz, Democrat of Hawaii joins me from Honolulu. Senator, welcome.

SEN. BRIAN SCHATZ (D), HAWAII: Thanks, Joy. Thanks for having me.

REID: So after Charlottesville, you essentially said this is not your president, that Donald Trump is unfit for office. It`s not something we haven`t heard before. With Bannon gone, does that change your view?

SCHATZ: No, it really doesn`t. And I -- there was a fascinating panel about what happens next with Steve Bannon and he obviously an outside character, grandiose character and a dangerous person to have proximity to that much authority. But in the end, the failures of this presidency are the president`s failures. And what happened in the wake of Charlottesville was a perfect example of that. What we saw was that by all accounts, the president had a script that he was supposed to read where he met the basic moral test of being the leader of the free world which is to say that he knows the difference between Nazis and people who protest against Nazi and he`s the one that went off script. So, as dangerous as Steve Bannon is and as thankful as many of -- as many of us are, that he`s leaving the White House, I think the real problem is the president of the United States and that`s not going to change anytime soon.

REID: And I want to put up the tweet that you put up on Tuesday. This is the day after Donald Trump`s unprecedented press conference where he supported the white nationalist marchers are you wrote, as a Jew, as an American, as a human words cannot express my disgust and disappointment. This is not my president. Bannon has signaled he`s going after "The globalist" that usually the -- a very loaded meaning when people especially at Breitbart use that term. Do you believe that Jewish members of this cabinet should resign in protest, particularly given that Breitbart is signaling they`re coming for them?

SCHATZ: Yes. I think they have to. I think people of conscience can`t pretend that this president is something that they hoped he would be. That they were hoping that he would be competent, that he would be a deal maker in the middle, that he would be a pragmatist. I remember reading an article online at the very beginning of the presidency that he was going to function as sort of an executive chairman and allow each one of his cabinet officials to run the government as they see fit. None of that happened.

And his ability to make deals, his ability to be a pragmatists, his a ability to be a competent leader for the United States, none of it came through and so I -- what I thought was really hopeful over the last few days is that there are Republicans who are patriots, who are finally standing up and saying enough is enough. Mitt Romney, both Presidents, Bush, many of the leaders of the service branches of the Department of Defense and finally, some of my senate colleagues on the republican side whom I`ve been relatively critical of for not doing enough.

They said it`s a pretty harsh things and I think that this is the beginning of the end of Republicans being able to hide behind some imaginary Donald Trump that clearly doesn`t exist anymore. This person is not capable morally, politically or in terms of his competencies to lead the free world.

REID: But it -- notably not on that list of people who stood up to Donald Trump in the wake of this -- the Monday press conference are Mitch McConnell who issued a statement much later and some private concerns and over on the house side, Paul Ryan. Without their leadership, do you expect your colleagues on the other side of the aisle to have the courage to stand up to him with more than words?

SCHATZ: I think there`s a ground swell. And I imagine that Majority Leader McConnell and Speaker Ryan will be among the last to turn but I think, you know, one of the things that was exciting for the country in the last week or the work period was John McCain`s no-vote where we rejected what they were going to do the ACA but also a 98-2 vote for tough Russia sanctions which obviously the president was trying to stop all the way through.

REID: Yes.

SCHATZ: So even in that week and add to that Jeff Flake`s very sharp comments that week, you have the beginning of the mouse that is the legislative branch starting to roar. I don`t want to overstate this because I think we have a long way to go but I was encouraged by Republican patriots, people with whom I disagree on almost everything when it comes to policy but who are moral and decent human beings who want to do the right thing by the country, who say look, I have very few bright lines but understanding the difference between Nazi`s and the people who oppose Nazis is one of those bright lines and I think we`re going to see more of that rather than less through the fall.

REID: Yes. You would think. Senator Brian Schatz. Thank you very much for your time tonight.

SCHATZ: Thanks, Joy.

REID: Thank you. Let`s turn now for some republican reaction to the Bannon ouster. Mickey Edwards represented Oklahoma in the House of Representative for 16 years. He is now vice president of the Aspen Institute. Congressman, thanks for being here.

MICKEY EDWARDS, VICE PRESIDENT, ASPEN INSTITUTE: Sure. Glad to be here.

REID: So (INAUDIBLE) photo, this was a staff photo of the Oval Office back in the beginning, this must be in January earlier on on the campaign, you have Steve Bannon there, you have Reince Priebus, you have Sean Spicer, you have General Flynn. You can see it there. Now, everyone at that table, with the exception of Mike Pence is gone. And most of the people around that table represented the Republican establishment, except for Bannon. What do you make of the fact that now Bannon, the anti-establishment guy is gone too?

EDWARDS: I don`t make much very of it, Joy. The problem was not Steve Bannon. I mean he`s -- he`s a terrible human being, he`s got crazy ideas, but the problem is Donald Trump. I agree with what Brian was just saying. You know, it is Donald Trump who doesn`t know the difference between people who are neo-Nazi or whatever term they want to use that the white nationalists and the people are standing up against them. It is Donald Trump who doesn`t understand that you have to have a certain level of competence in order to make things work. You know, this is -- he has a good habit here for himself of throwing something out there that switches our direction, gets us to look in the other direction. It`s not Steve Bannon, you know, it`s Donald Trump and he is still there.

REID: And let`s talk just a little bit about the Republican base. I mean, you`d run, you know, in the Republican Party. Obviously, Donald Trump knew something about the GOP base that the rest of the party did not. He defeated 16 other people who are more establishment types. Is the base of the party more Bannonite than average Republicans want to admit?

EDWARDS: Well, they might be. I think there are a lot of people in the Republican Party, especially those who are from areas that have been hard hit economically, who are just desperate. They are looking for something different. But I will tell you, I mean, I`m concerned by the number of people who have remained silent, not only as we just talked about, both Mitch McConnell and Paul Ryan. So let me add to the -- there are people within the Republican Party in the leadership and in the base who are speaking out and saying, we don`t support bigotry, we -- you know, big deal. You know, it is not about that. That`s easy to say.

What you need to do is call out the president and these people voted for him. They put him in office. He didn`t just parachute in. And so they have a great responsibility now. And I personally think those members of congress, Republican or Democrat, those who don`t call out Donald Trump by name at this point are going to have a legacy that they`re never going to be able to repair.

REID: Should congress censure the president?

EDWARDS: I think Congress they should censure the president, you know, not just for what he said in Charlottesville but for a lot of things. I mean, here is a man who is the enabler of what the white nationalists are doing. He is the validator of the kinds of things they are putting for. So, he is not just somebody who sits there and failed to say the right things. You know, he just kind of messed up, he didn`t say the right things when this happened. Now, he is the person who gives them the credibility to say, look, the president does this, why can`t we?

REID: Yes. And what do you say to members of Congress who are in, you know, still actively in politics who say, if we turn against this president, we will lose our seats?

EDWARDS: Then they lose their seats. You know what, the United States is more important than rather anyone member gets to remain in congress forever. You know, there`s life after congress. So, what`s happening is you see among members of congress, you know, this is part of the partisanship that I talk about all the time. These are members of congress who took an oath of office and the oath of office was not to defend their party. It was not to help their party or to pass a particular tax bill or a particular budget.

You know, the oath of office was to defend the United States to defend the constitution of the United States. And if you lose your seat because you stood up to do what was right, you know, people are going to cheer you and they`re going to look back and say that was somebody who had courage, who had principles and these people now who aren`t doing it. I don`t know how they are going to live with themselves.

REID: Yes. History definitely will judge. Mickey Edwards, thank you so much for joining me.

EDWARDS: Yes. Thank you, Joy.

REID: Thank you. And next, more on what Steve Bannon means for the Trump White House with John Harwood and Jason Johnson after two-minute break.

(COMMERCIAL BREAK)

REID: Long before Steve Bannon joined up, Donald Trump launched his campaign with this.

(BEGIN VIDEO CLIP)

TRUMP: When Mexico sends their people, they are not sending their best. They are bringing drugs, they`re bringing crime, they are rapists, and some, I assume are good people.

(END VIDEO CLIP)

REID: Without any help from Steve Bannon, Trump repeatedly claimed this.

(BEGIN VIDEO CLIP)

TRUMP: People that were cheering in the other side of New Jersey where you have large area of population, they were cheering as the World Trade Center came down.

(END VIDEO CLIP)

REID: And long before that, Trump skyrocketed to a place of political relevance by trafficking in the racist birther conspiracy theory.

(BEGIN VIDEO CLIP)

TRUMP: A birth certificate is not even close. A certificate of live birth is not eve signed by anybody. I saw his. I read it very carefully. Doesn`t have a serial number, it doesn`t have a signature.

(END VIDEO CLIP)

REID: And decades before that, in 1989, Trump stoked racial tensions with full-page ads calling for the execution of the teenagers dubbed the central park five when they were falsely accused of rape. He was incensed years later when the wrongly convicted men, four African-American and one Hispanic, received a settlement from the city. And so, as the president`s chief strategist leaves the Trump administration, does anything really change inside the White House? MSNBC Contributor Jason Johnson, he`s politics editor at The Root, and John Harwood, he`s CNBC editor-at-large, they join me now. Jason, you know, Donald Trump have a reputation that far proceeds Steve Bannon.

JASON JOHNSON, MSNBC CONTRIBUTOR: Right.

REID: So, it -- was Steve Bannon the reason that Donald Trump seemed to truck with racism and xenophobia?

JOHNSON: Not really, Joy. Because like who you hire is a reflection of your values? So you had Steve Bannon, you had Steven Miller, you had Gorka, Trump was racist enough before he brought Steve Bannon in. He didn`t need Bannon`s help. But what Bannon did provide him with was a cover in media so that Trump could pretend that what he was doing was policy oriented and political as just a being a racist on a regular basis.

REID: Yes. And John, I want to play, you know, what actually Bannon said at CPAC, this was sort of a thing that Donald Trump didn`t have when Bannon joined up. And this is him talking about globalists.

(BEGIN VIDEO CLIP)

BANNON: It`s not only not going to get better, it`s going to get worse every day. And here is why. By the way, the internal logic makes sense. They`re corporatists, globalists media that are adamantly opposed -- adamantly opposed to an economic nationalist agenda like Donald Trump has.

(END VIDEO CLIP)

REID: And John, is there a case to be made that the racism piece in the sort of, you know, allowing white nationalists to march and saying they`re good people that that part might have been inherit and Donald Trump didn`t need Bannon for it. But what you just heard is what Bannon brought to the table, the sort of populism that agenda that Trump may not have had going in.

JOHN HARWOOD, EDITOR-AT-LARGE, CNBC: I don`t think so, Joy. I think Donald Trump was talking about bad trade deals for a very long time, all the way back to NAFTA and before NAFTA. So, I think Donald Trump, as Jason was indicated was reaching out for somebody with some of the same sentiments as he had at a time when his campaign was doing badly. You know hat, Donald Trump does when times are tough is to go ever more fiercely toward his comfort zone because that`s where he`s going to get some applause.

And I think Internally, Bannon reflected that. Externally, these rallies he has reflect that. He wants -- he wants to be bathed in applause. And the other thing I just wanted to point out, it`s not irrelevant in this week, when we`re talking about white supremacists and neo-Nazis that 90 years ago, Donald Trump`s father was arrested at a Klan event in New York and then some years after that, in the 1970s, a Republican Justice Department sued the Trump company that involved both the father and the son for discriminating against African-Americans. So, there are some things that are deep within Donald Trump that Steve Bannon had nothing to do with.

REID: Yes. And, you know, Jason, to that very point of needing to get applause and the things that he wants applause for. I want to play you Donald Trump, this is March 10 of 2016, this is before Steve Bannon came on to the campaign.

(BEGIN VIDEO CLIP)

TRUMP: I think Islam hates us. There`s something -- there`s something there that -- there`s a tremendous hatred there. There`s a tremendous hatred, we have to get to the bottom of it.

(END VIDEO CLIP)

REID: That -- and that sentiment didn`t come from Steve Bannon.

JOHNSON: Right, right. Bannon is like the emperor and Trump is like Vader, right? Like --

(CROSSTALK)

JOHNSON: -- and Vader, like -- he`s like teach me how to be more racist and more effectively racist I can be and that`s pretty much what their relationship was. And I think what`s dangerous is look, now that Bannon is on the outside, he can -- he can pretend he`s got this sort of a globalist agenda, he`s going to start a media empire, he`s going to expose just how dangerous and how close this Trump administration is to white nationalists, to people who wanted (INAUDIBLE) no nationalist white state and how dangerous that`s going to be for all of us. And the thing is, Trump has no ground to stand on. He can`t say I don`t have these beliefs. So he`s going to be in a tremendous amount of trouble especially now that he`s surrounded by people who don`t necessarily agree with that belief.

REID: Well, and then that is the question, John Harwood, for the Republican Party. Because to admit that this is the core base, right? That Donald Trump still has the base would be to say that that white nationalist base is the base. If Donald Trump loses Steve Bannon, does the bottom drop out of his base?

HARWOOD: Not necessarily. And I think the kind of people that we`re talking about, you could call them white nationalists, you could call them people who are motivated by racial resentment, that`s` part of the Republican base. It`s not most of the Republican Party but it`s the part that got Donald Trump the nomination and put him over the top in those rust belt states. I think the Republican Party, if they are rational and looking to the future, a country that`s getting better educated and more diverse with every passing year, it`s going to be a majority, minority country within 30 years, they are going to have to separate themselves from the rawest elements of this base, which Bannon speaks to and figure out a way to develop a different identity. And some of them are talking about doing that, talking about pretending as if the president doesn`t even exist and trying to define the Republican Party their own way.

REID: You know, Sean -- pollster Sean Trende, you know, had this theory which Donald Trump proved out, that Republicans just maxed out the white vote and resentment helps you do that and they could win without minority voters. Does Donald Trump prove they should triple down on that and be afraid to walk away from his base or can they still win the election without the Bannonites?

JOHNSON: I remember literally sitting in a meeting with Reince Priebus where he was talking about essentially that Trump couldn`t do this, that he didn`t believe that they could win the white base only. But you can, you can win with white voters only with voter suppression and making sure that those people are turning out to vote on a regular basis. And I think the other thing is this, you know, Bannon, even though he is gone, you still have Republicans in the party who want to push forward those policies, they want to limit immigration, they want to make voting more difficult. I think this is a winning strategy for the Republican Party. Now again, whether those will be inning strategy in 2020, we I don`t know but for now, they have no reason to change.

REID: Right. And it works because they had a charismatic guy at the top of the ticket Trump would be pulling off. Jason Johnson, John Harwood, thank you guys. Have a great weekend. And still to come, my interview with the great Kal Penn on his message to the president as he led todays` mass defection from the Trump White House. That story is next.

(COMMERCIAL BREAK)

REID: Trump has lost an average of one advisory group a day since his impromptu Tuesday press conference on white supremacist violence in Charlottesville. By Wednesday, at least a half dozen CEOs had ditched his manufacturing council. Then word broke that his strategic and policy forum was disbanding itself. In response Trump Tweeted, "Rather than putting pressure on the business people of the Manufacturing Council and Strategy Policy Forum, I am ending both. You can`t quit me. I quit you."

Then on Thursday, continued backlash forced him to abandon an infrastructure council while it was still being formed. And today the President`s Committee on the Arts and Humanities quit on that. Politico pointing out that the PEAH is an official agency. That makes that the first White House department to resign. But the President insisted that no, no, he was the one doing the dumping. A White House spokesperson saying, "Earlier this month it was decided that President Trump will not renew the Executive Order for the President`s Committee on the Arts and the Humanities which expires later this year."

That`s not the way the Arts Committee remembers it. Actor Cal Penn was on that committee and he spearheaded the mass resignation and he joins me live to respond to the White House next.

(COMMERCIAL BREAK)

REID: The entire president`s committee on the arts and humanities resigned today in protest of his equivocation around white supremacists and neo-Nazis. Their blistering resignation letter concluded, quote, "supremacy, discrimination and vitriol are not American values. Your values are not American values. We must be better than this. We are better than this. If this is not clear to you, then we call on you to resign your office, too."

The note included one additional message. The first letter of each paragraph spelled out one word: resist.

The man behind that message, actor and now former member of the president`s committee on the arts and humanities, Kal Penn joins me now.

Kal, thanks so much for being here.

KAL PENN, ACTOR: Yeah, thanks for having me. How are you?

REID: So, you -- I`m good. I`m good.

So, you tweeted out earlier the letter, you said earlier this month, it was decided -- I`m sorry, you tweeted out yours that said, "Dear Donald Trump, attached is our letter of resignation from the president`s committee on the arts and humanities." That got retweeted a lot.

Then the White House came out and made this statement that, no, no, no. They decided to disband it. It wasn`t you guys. So, who broke up with whom?

PENN: Yeah, no, I mean, unfortunately, we broke up with him first, so he is not allowed to break up with us after that, but I learned that in fourth grade.

REID: And so how did it come together? Explain the process by which the members all came together and decided to quit together.

PENN: Sure. So, probably about half of the original members left after the administration change but the -- we were a committee that doesn`t turn out. And I think you mentioned, you know, as Politico did, that we are technically an official White House agency. So, half of us figured, look, we don`t agree with the president on almost anything, but if our mandate is to execute arts education and cultural diplomacy, and that is sort of what we are there for, why not stick around and see how much we can actually get done.

But I think this week was particularly pronounced and a lot of us said we don`t want to be complicit in any of this. So, you know, we`re also friendly with each other. There were text chains and email chains, and I think, you know, a few of us said, look, I`m thinking of resigning, is anybody else feeling the same way? And it turned out we all did.

REID: And, you know, we`ve had over the course of a last few weeks, you`ve had the several honnorees of the Kennedy Center honors say, no, not going to show up to the White House event. You then had a lot of business leaders walk away from the business of manufacturing councils. You`ve started to see it -- Mar-a-Lago losing at least five I think or more charitable events that were going to be at Mar-a-Lago. Were you guys influenced by the sort of trickle that is turning into a flood of people walking away?

PENN: No. I don`t think so. And I think, look, we didn`t set out to influence anybody else or to do what anybody else had done, we just sort of looked at ourselves and said this has gone far beyond -- you have got a sitting president who is essentially equating, or is equating a terrorist with the quote, unquote, other side.

And we sort of said, look, we have got this incredible arts program called Turnaround Arts that was launched through the president`s committee, now it`s housed at the Kennedy Center. It is very vibrant, it`s still doing very well. What do we tell our kids when they ask us, is this normal?

And we just sort of said, we just can`t stand around and have our names attached to something like this. And so for us, that certainly was the right decision.

You mentioned the Kennedy Center. And I think about it, you know, I have only gone one time, got to go last year, and you famously people know you as having gotten really involved in the sort of quasi-governmental programs during the Obama administration. How difficult has it been for people in the arts to reckon with this new administration given the blatant statements of bigotry whether it`s against Muslims, or against Mexicans or against, you know, pick a group.

PENN: Yeah, sure, it`s a great question, because I think artists sort of view themselves and folks who work in the humanities do, too. It`s both, you try and spark a conversation and the arts should, in an ideal world, spark that conversation.

And they also sort of capture what`s greatest about America and our great diversity is I think the president`s FY 2018 budget, while not shocking, was definitely disturbing. Zero dollars for both the NEA and NEH. So, you can have somebody like Ivanka Trump or Melania Trump talk all they want publicly about how great the arts are and how we should be educating our children in the arts, but when, particularly Ivanka when she was senior adviser and the budget that she puts out has zero dollars for the National Endowment for the Arts, zero dollars for the National Endowment for the Humanities, it is very clear how they feel.

And I think most artists know how to do a lot with very little. And so you have got very small arts organizations with incredible staffs, incredible outreach, folks like Americans for the Arts, that are really doing everything they can to make sure that not just the NEA and NEH budgets are put back in when congress and the White House negotiate, but the folks are aware of all this.

REID: And lastly, if you were invited to the White House, would you go?

PENN: I mean, I don`t think I`m getting that invite.

REID: If Donald Trump wanted to heal and he wanted to invite you to come, would you go?

PENN: I would politely decline right now, but I do have to say I certainly hope they don`t abandon the arts, particularly if folks don`t know there`s a huge economic imperative there. If we`re talking about pumping out engineers and job creators and innovators, I mean, that`s a difference between just an engineering education and an engineering education, STEM, with the arts.

So, if they are serious about any of this, I hope that they continue down that path.

REID: Kal Penn, who is currently part of the great cast on Designated Survivor on ABC. And when he is not helping kids learn about the arts and the Turnaround Arts program, he`s doing all sorts of amazing things as an artist. Thank you very much. Really appreciate your time.

PENN: Thank you. Good to talk to you.

REID: Thank you.

And still to come, the completely catastrophic week in the Trump presidency, which started with white nationalist rallies and didn`t get any better from there.

And, another of Trump`s billionaire buddies backs out in tonight`s Thing One, Thing Two, next.

(COMMERCIAL BREAK)

REID: Thing One tonight, if there`s one guy Donald Trump really likes to talk about on the campaign trail, it was his billionaire investor buddy Carl Icahn.

(BEGIN VIDEO CLIP)

TRUMP: I want Carl Icahn negotiating for me. I want the greatest business people negotiating my deals, not hacks.

Carl Icahn just endorsed me. You know, Carl.

Carl Icahn endorsed me.

I have some of the greatest business leaders.

Carl Icahn.

I have Carl Icahn.

I will call the executives, or I`ll have Carl Icahn do it.

I`d either get myself, Carl Icahn, or somebody else that`s very good at this stuff, OK.

(END VIDEO CLIP)

REID: Trump was so excited to have Carl Icahn that during the transition in December, Trump named him to be his special adviser on regulatory matters. But we have an update on Trump and Carl Icahn. Can you guess what it is? That`s Thing Two in 60 seconds.

(COMMERCIAL BREAK)

REID: As organizations and business leaders cut ties with the Trump administration in droves this week following Donald Trump`s defense of white supremacists, there was this interesting announcement from billionaire investor Carl Icahn. Today, with President Trump`s blessing, I cease to act as special advisor to the president on issues relating to regulatory reform.

Icahn posted the letter he sent Trump, claiming he was resigning to avoid any appearance of overlap with the appointment of Neomi Rao as regulatory czar, which happened over a month ago.

Icahn writes, "I chose to end this arrangement with your blessing because I do not want partisan bickering about my role to to cloud your administration or Ms. Rao`s important work.

But the timing is notable given the events of this week as well as the other point that Icahn seemed determined to make, "I had no duties whatsoever. I never had a formal position with your administration nor a policymaking role and sincerely hope that the limited insights I shared have been helpful to you."

So, to anyone asking Carl Icahn wants you to know he barely had a connection to the Trump administration before, but even that has been severed today.

(COMMERCIAL BREAK)

REID: Just around this time last week, images of a veritable who`s who of white supremacist hate groups holding Tiki torches and chanting Nazi slogans begin showing up online. They were in Charlottesville, Virginia for a Unite the Right rally, which turned deadly on Saturday when one of the attendees drove a car into a group of counter protesters, killing 32- year-old Heather Heyer and injuring 19 others.

After botching his initial response on Saturday, the president appeared to try a script to do-over on Monday, denouncing the hatred. That lasted until the very next day when he was once again off script in the lobby of Trump Tower and defended the people who rallied in Charlottesville.

(BEGIN VIDEO CLIP)

TRUMP: I have condemned neo-Nazi`s. I have condemned many different groups, but not all of those people were neo-Nazi`s, believe me, not all of those people were white supremacists by any stretch.

You also had people that were very fine people, on both sides. You had people in that group -- excuse me, excuse me, I saw the same pictures as you did.

(END VIDEO CLIP)

REID: And today, near the end of a week in which the president failed to show any moral leadership whatsoever, when chief White House strategist Steve Bannon left the White House and marched straight back to the so- called platform of the alt-right and some of the world`s most prominent magazines explicitly linked him to white supremacists, we learned that Donald Trump never spoke to the mother of the young woman killed in Charlottesville.

On Saturday, apparently, his staffers tried to call Heather Heyer`s mother during her daughter`s funeral.

(BEGIN VIDEO CLIP)

SUSAN BRO, HEATHER HEYER`S MOTHER: At first, I just missed his calls. The first call it looked like actually came during the funeral. I didn`t even see that message. There were three more frantic messages from press secretaries throughout the day.

I`m not talking to the president now, I`m sorry. After what he said about my child. And it`s not that I saw somebody else`s tweets about him, I saw an actual clip of him at a press conference equating the protesters like Ms. Heyer with the KKK and the white supremacists.

(END VIDEO CLIP)

REID: Can this president sink any lower? We`ll take stock of the events of this truly unbelievable week next.

(COMMERCIAL BREAK)

TRUMP: Does anyone know I own a house in Charlottesville?

Oh, boy, it`s going to be -- it`s in Charlottesville. You`ll see.

UNIDENTIFIED MALE: Where is it?

UNIDENTIFIED FEMALE: Is it the winery?

TRUMP: It is the winery.

(CROSSTALK)

TRUMP: I mean, I know a lot about Charlottesville. Charlottesville is a great place that`s been very badly hurt over the last couple of days. I own actually one of the largest wineries in the United States, it`s in Charlottesville.

(END VIDEO CLIP)

REID: Believe it or not, the president had just been asked a question about whether he had any plans to visit Charlottesville in the wake of the attack there. And he responded by talking about his winery.

Betsy Woodruff has been covering the administration for The Daily Beast, and Ben Howe has been doing the same for the conservative blog Red State.

Ben, I have to start with you, on this day when Bannon has left and essentially kind of declared war on the White House. If it comes down to a war between Bannon and Breitbart and Trump, who would the base of the Republican Party choose?

BEN HOWE, RED STATE: Well, that`s been the question all day, honestly. I mean, if you look at the way Drudge came out very early to try to almost be a peacemaker, it seemed like, saying Bannon had one heck of a ride, or whatever it was he said, I think that there`s going to be some divisions about Trump`s style going forward and there`s going to be a lot of criticisms coming from Breitbart that we hadn`t seen before. But I think they`re mostly still on the same side.

That said, I think -- I think Bannon specifically, when he gets the idea in his head that he needs vengeance on some one, that`s -- I know this man -- and when he gets the idea that he needs to get revenge on somebody who has wronged him, then all of the things that should be important have stopped mattering and what matters most is winning.

And he`s sort of a Game of Thrones style guy, it`s win or die.

REID: That sounds exactly like Donald Trump, Betsy, that sounds exactly like Donald Trump, which -- you know, and when you see that clip of him talking about his winery instead of talking about the tragedy -- you know, when he turned it right back to himself, I wonder what kind of Trump he becomes without Bannon.

I mean, what tea leaves can you read for us?

BETSY WOODRUFF, THE DAILY BEAST: All we have to do is look at the first few months of his candidacy for president to understand what he`s going to be like before Bannon, as you guys have highlighted on the show, President Trump was someone who pushed conspiracy theories and demonized people of color, demonized women, criticized his enemies often based on alternate facts, if you will, and in the era after Bannon, Trump is going to be the same.

I think something that`s important for viewers to understand is that a lot of the narrative of Bannon as a puppet master or a Darth Vader figure or the man behind the curtain is something that was pushed really enthusiastically by Bannon himself. He spent a whole lot of time on the phone texting with reporters trying to persuade them that he was the power behind Trump, that he was this driving force when in fact he wasn`t actually doing a huge amount for the last few weeks.

Symbolically, he was very important, but practically he wasn`t a huge player. He didn`t even really have much of a portfolio. When he was pushed out, reports indicate that General Kelly didn`t even know what Bannon`s real job was.

For the most part, he was kind of a nonplayer. He was basically a figurehead. Now that he`s moving to Breitbart, he`ll be able to weaponize that symbolism. But the idea that all of a sudden Trump is going to be different just doesn`t pass the smell test.

REID: Yeah, he`s got his weapons, like that 13-year-old sort of rant that he went on at Weekly Standard was something special.

WOODRUFF: This dude bro machismo that is so goofy and over the top and you see it at Breitbart and you see with Trump and it`s this exaggerated cartoonist chest thumpin that many of us are acutely familiar with and that usually is a sound and fury signifying nothing.

REID: But I wonder what happens if functionally, even if Donald Trump continues to be, you know, flipping out on Twitter and being himself in his persona, but that if functionally and policy wise the Gary Cohn`s of the world prevail and he becomes a garden variety Republican, policy wise just pushing tax cuts, taking office, trillion dollar infrastructure off the table, no more trade wars with Mexico. If he becomes sort of a garden variety Republican, what happens to his base then?

BOWE: I think that a lot of his base will abandon him if he turns on conservative policies any more than he already has.

But really I think a bigger issue is going to be no matter if he embraces a more moderate platform, no matter if he starts coming around on various things that the Republican Party have wanted him to come around, or things he might have come around with Democrats on, he will always find a way to insert himself in such a chaotic, ridiculous way that he will make it difficult to pass things that might have bipartisan support.

So, I have a hard time seeing even if he finds some middle ground in talks in the White House, I have a hard time seeing anyone ever wanting to be near him publicly because he`s such a train wreck.

REID: And you know Betsy, I guess that`s kind of what I kind of picture, too, right. I`ve had this song Mr. Lonely in my head all day. Because you have got Republicans who can`t exactly do a photo op with this guy. He`s defended neo-Nazis. And so even if he went toward them on policy, it doesn`t seem that they would come back to him either, right?

WOODRUFF: No. And not just Republicans, but also the CEOs and business leaders that he and his White House were relying on to pass tax reform.

Remember, after the failure of the ACA repeal, the one thing Republicans really have left as a possible win was doing some tax reform package. And the White House`s communication strategy was to spend the month of August getting CEOs and business leaders and corporate icons to try to push their constituencies, to push their employees, their group members to try to get tax reform to happen. And perplexingly, the president seemed to think that the best way to push tax reform was by kicking off a national conversation about Robert E. Lee. It`s extremely baffling. And that`s why he`s going to have so much trouble getting anything accomplished.

REID: Very quickly, ben, is Donald Trump a lame duck?

HOWE: I think that he may as well be considered to be a resigned president as of today. I cannot picture how he can get anything done.

REID: Wow. Betsy Woodruff, Ben Howe, quite definitive. Thank you guys for making the time. Appreciate it.

And that is All In for this evening. You can catch me Saturday and Sunday for some AM Joy starting at 10:00 a.m. Eastern.

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

END

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