MTP Daily, Transcript 12/20/2016

Guests: Nicholas Burns, Molly Ball, Ramesh Ponnuru, Jim Morrill

Show: MTP DAILY Date: December 20, 2016 Guest: Nicholas Burns, Molly Ball, Ramesh Ponnuru, Jim Morrill

KATY TUR, MSNBC HOST: Cynthia McFadden, another day, another fascinating story. Thank you so much. That`ll do it for this hour. I`m Katy Tur in for Steve Kornacki. "MTP DAILY" with Chuck Todd starts right now.

CHUCK TODD, MSNBC HOST: Yes, it`s Tuesday.

An unpredictable president-elect is set to take office in an unpredictable world. Tonight, the apparent terror attack in Berlin and the assassination of Russia`s ambassador in Turkey. Highlighting the unstable world that will face a president Trump.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Ultimately, we`re going to have to count on him when he is the president.

(END VIDEO CLIP)

TODD: Plus, seeing everything through the red and blue goggles. Party I.D. is not the single greatest force in American politics.

And, surprise, just when you thought politics couldn`t get any crazier in North Carolina, it does.

This is MTP DAILY and it starts right now.

Good evening, I`m Chuck Todd here in Washington and welcome to MTP DAILY. And welcome to the world stage President-elect Trump.

The Russian ambassador has been assassinated. Berlin has been attacked. A Swiss mosque targeted. A U.S. embassy threatened. And it`s only Tuesday.

Donald Trump is about to inherit a global security crisis that can ignites on any given day. And this time, it happened to ignite on the day the electoral college officially made him the president-elect.

We should warn you, some of this footage is graphic and disturbing. In Berlin, 12 people were killed and roughly 50 wounded, when a truck slammed into a popular Christmas market.

The manhunt for the attacker and any accomplices continues though. An ISIS media arm has claimed responsibility for the attack, although it provided no proof to back up that claim.

Meanwhile, in Turkey, a Turkish policeman shouting, god is great, in Arabic, and don`t forget Aleppo in Turkish, assassinated Russia`s ambassador while cameras were rolling.

Turkish investigators think he had help. Then, Turkish police arrested a man who fired a shotgun in front of the U.S. embassy across the street. And a gunman opened fire at a Zurich mosque, wounding three then, apparently, committing suicide.

President-elect Trump responded aggressively to the assassination of Russia`s ambassador, calling it the work of a radical Islamic terrorist that must be, quote, "universally condemned." He also tweeted in reaction to the events in Germany and Switzerland, calling them terror attacks that are only getting worse, adding the civilized world must change thinking.

Swiss officials say they do not believe the incident in Zurich was a terror attack though.

So, what the heck is going on around the world? When the midst of what some might call a wave of global instability, both from a security standpoint and a political one.

You can arguably trace a lot of it back to one moment, perhaps, or at least one issue and that`s Syria or even President Obama`s decision not to act when faced with the violation of his red line warning to Assad back in the summer of 2012.

The resulting Syrian civil war and migrant crisis has been massively destabilizing and particularly so for the west and Europe, in particular. It has fueled international terrorism concerns. It has sparked a rise of immigration hard liners. Think Brexit or Trump.

Don`t forget Aleppo was the assassin`s battle cry as Russia`s ambassador was killed yesterday. Aleppo is the center of the Syrian hornet`s nest where Assad, Iran and Russia are battling rebel groups, some of which are receiving U.S.-approved weapons. And it is a massive humanitarian crisis.

It all seems to have a common thread, Syria. Is Syria really unraveling the world? Of course, there is no to know what would have happened if President Obama and the west had decided to be more aggressive and had intervened more directly sooner in Syria and maybe had gotten rid of Assad. But we could have a different set of chaotic circumstances that we`re staring at.

But no matter how you slice it, Syria is a giant mess. President Obama has struggled to address it and so have western leaders all over Europe. Soon, though, that mess will be on Donald Trump`s desk.

Let`s get out into the field for the latest. I`m joined by NBC`s foreign correspondent, Richard Engel. He`s in Istanbul. And our foreign -- NBC foreign correspondent, Matt Bradley, is on the ground in Berlin.

Let me start with Matt in Berlin. Matt, I understand there is still a manhunt. They had somebody in custody and have since released. Are they any closer to finding either the cell or the individual that was behind this?

MATT BRADLEY, FOREIGN CORRESPONDENT, NBC NEWS: Well, Chuck, so much has changed in this investigation in just the last several hours. And I`m no expert in police work, but this seems to be that the police are back to square one.

[17:05:04] This initial suspect that they arrested, this 23-year-old Pakistani who arrived in Germany about a year ago, almost to the day, and tried to apply for asylum, he was released.

And so, now, there are no suspects. Whoever is the perpetrator of this crime last night, for which happened right behind me, as you mentioned, killed 12 people and injured dozens of others. That person is still at large.

And then, to this claim of responsibility from Islamic state. Islamic state could be actually have -- could have actually directed this attack. It`s not quite clear. Or they could be piggy backing off of an attack that was already just going to occur that may have nothing to do with jihadi terrorism.

What we do know is that this claim of responsibility will actually spread rather far politically and is going to vindicate some of the right-wing politicians in Europe, not just in Germany but throughout the region, who have blamed and have laid blame (ph) on Angela Merkel and her open-door policy.

If you remember, last -- earlier this year when the -- or excuse me, last year, when Angela Merkel opened the doors for migrants from the Middle East and from sub-Saharan Africa. It was -- it was widely praised throughout the world for showing German tolerance, but calls for a lot of popularity here in Germany.

And if it turns out that the perpetrator was, indeed, acting on direction from Islamic state, from their center in Syria and Iraq, and that will be a major, major problem for Angela Merkel as she heads into elections later next year.

TODD: No doubt. This is a potential -- this is a major crisis, security- wise, for Angela Merkel but also a political one.

Matt Bradley in Berlin, thank you very much.

Let me turn to Richard Engel. And, Richard, the story you`re covering, on Monday, I`m sorry, I`m sure a lot of people had historical flashbacks to what happened over a hundred years ago, and how a simple assassination triggered a world war.

Twenty-four hours later, Turkish and Russian officials are desperately trying to make sure this incident doesn`t escalate any further.

RICHARD ENGEL, FOREIGN CORRESPONDENT, NBC NEWS: Oh, just the opposite, in fact. I think Turkey and Russia are trying to use this as a point of departure to have even closer relations.

There has been animosity between Moscow and Ankara. Moscow, effectively, accusing Turkey, at one stage, of supporting terrorists, of supporting terrorists inside Syria.

Now, I think Vladimir Putin is hoping this tragedy will bring Turkey closer to its position. And we`re already seeing that. Turkey is reconciled with Russia. Turkish officials were with Iranian officials and Russian officials in Moscow today, talking about finding a joint strategy for Syria. That is something that seemed impossible just a few months ago.

So, no, I don`t think this was the Archduke Ferdinand moment (INAUDIBLE) for the world.

TODD: Let me ask you this. Where does the United States fit into this relationship these days?

ENGEL: Well, why do you think Ardgowan (ph) is going and cozying up with Russia, his traditional rival? The adamant empire and the Russian empire were always at odds.

He is making this rapprochement because I think he sees the U.S. isn`t the major player in Syria anymore. Turkey wants to have a vested interest in Syria. It has long-term interests there because of the Kurdish issue, because of Turkmen population, because of Sunni opposition groups.

And it sees that Russia is in Syria engaged and ingraged (ph) in this serious way. So, if Turkey wants to continue to have influence there, it needs to find a new partner.

TODD: Considering what we`re seeing right now and sort of the straw man that I set up at the top, do you trace all of this global instability right now right back to Syria?

ENGEL: I think that is the one thing that links all of these disparate kinds of attacks together. But I would say there`s a -- there was another option as well. So many people look at Syria, and the way you presented it as binary, should there be more force done in the beginning, to remove Assad and then maybe everything would have been better.

The regime change in Egypt didn`t turn out very well. The regime change in Libya didn`t turn out very well. But there may have been an early stage in the conflict when the rebels, backed by the United States, were marching their way to Damascus.

Perhaps there was a moment, at that point, to have had a diplomatic solution and to have a negotiated solution. Instead of the position that Assad must go that which we heard numerous times from President Obama and people around him.

And what I thought was really interesting was a few days ago, in his final press conference of the year, President Obama, a lot of attention was paid to the hacking issue and Russia. But he really laid out what happened in Syria and he said, effectively, we tried our best. But Russia and Iran wanted it more than we did and we didn`t, therefore, engage any more deeply into Syria.

[17:10:10] And I think that`s sort of what happened. He was into it and he wanted to effect a change but didn`t have the same vested interest that I think you could include Turkey or Russia or Iran and, therefore, backed away.

And I think that`s -- to go back to the point we were talking about earlier which is why we`re seeing this rapprochement between Turkey and Russia right now.

TODD: All right, Richard Engle in Istanbul for us. Richard, as always, thank you, sir.

Let me turn now to Nicholas Burns who, of course, is U.S. ambassador to NATO, a former secretary of state as well. He is now a professor at Harvard.

Ambassador Burns, let me pick up on that issue of Syria there for a minute and what Richard brought up with the president. Where do we go from here now on Syria? We know what -- I think there is a lot of back seat driving that plenty of folks are going to write books about going forward. But what do we do now?

NICHOLAS BURNS, U.S. AMBASSADOR TO NATO: Chuck, between now and January 20th, one president at a time. I think one of the complicated factors here is that we have this tradition, one president at a time. And President- elect Trump has been tweeting out in real time. And foreigners, Arabs, Turks, Russians are hearing two American presidential voices.

It`s not helpful to American policy. I think that Trump ought to form his government and dig into the intelligence briefings and try to figure out a strategy going forward.

As of January 20th, I think Syria is going to present a major challenge to the new Trump administration. They have a series of problems here. How do you defeat and degrade, degrade and defeat the Islamic state over time? And Donald Trump talked about that a lot in the campaign.

How do you win back Turkey and win the trust of Turkey so that Turkey is not realigning itself on this issue with Russia? And how do you blunt the impact of this very powerful move over Russia over the last 15 months to insert itself into the vacuum that we left?

TODD: Yes.

BURNS: And so, Russia`s now the most dynamic player. We`ve got a lot of moving parts here.

I do agree with Richard and your conversation. Syria is the cancer, the crisis, in the Middle East. It`s metastasizing throughout the Middle East but also into Europe. And our closest friends in Europe, the Dutch, the French and the Germans all face elections in 2017 and Syrian refugees and this crisis will be a big issue.

TODD: You know, it`s interesting. One of things Richard said was, and he`s not alone in saying this, is that when you talk about the issue of regime change and how it hasn`t -- didn`t go well in Egypt. He also brought up Libya.

But I want to ask you the Libya question this way. As unstable as Libya feels today, the reason we went in at the end of the day was a humanitarian crisis to save a slaughter in Benghazi. Arguably, that -- we saved hundreds of thousands of lives, I think, in Benghazi. It was ugly. It was messy. We lost a U.S. ambassador and other Americans. There`s no doubt.

But is Benghazi -- is Libya, today, an example of what Syria could look like today or not? And what Aleppo could look today versus Benghazi?

BURNS: I`m not sure Libya is the best example. I think that President Obama was right to go in in 2011. The mistake we made, in hind sight, was not staying to help them rebuild and deal with their own civil conflict.

But Syria is far worse off. And no one has wanted to put a big American land army into Syria. No one has proposed that.

But Leon Panetta, Hillary Clinton, David Petraeus proposed four years ago to put American weight behind moderate rebel groups. And the president didn`t do it. The president drew his own red line in front of Assad. And when Assad crossed it twice, we did not react. We could have bombed the Syrian air force and prevented them from using that air force against civilians.

I admire President Obama, truly. And I think -- we`re going to miss him when he`s -- when he`s -- after January 20th. But I think Syria is his greatest mistake in foreign policy. We can`t be that risk averse, take ourselves out of the equation for 40 years. We have been the dominant diplomat power.

Now, we`re not even at the table as the Russians, Iranians and Turks decide the future, not just to Syria but to Syria and some of the surrounding countries. And that`s to the disadvantage of the United States. So, Donald Trump, I hope, will be able to rebuild that American influence in the Middle East.

TODD: But it does seem as if his inclination is, you know, what -- look, I know how he thinks on Syria. What is in it for the United States at the end of the day? That`s the question he`s going to ask and he doesn`t see it right away.

What would you tell him if he asks you that question? What is it in it -- what`s in it for the United States to be -- get so involved in Syria?

[17:15:01] BURNS: I think the first thing you do is take out the map and just look at the countries that surround Syria. Look at Israel and Lebanon and Turkey and Iraq and Jordan. These are all countries that are important to the United States.

And one of the things we have to do, at times, is make sure that we`re a good coalition builder and alliance builder. These countries are all going to be at risk from further Syrian refugee flows, from terrorist groups going beyond the borders, from an Islamic state that`s right in the middle of Syria and Raqqa and northern Syria.

And I think that Donald Trump -- and he saw the interest during the campaign and fighting the Islamic state. He needs a broader approach.

But, Chuck, I`ll just repeat this. He needs to stay out of this political game publicly until he`s inaugurated on January 20th. He`s complicated things today.

TODD: Do you think he`s undermining the current -- the outgoing president here?

BURNS: I don`t know. I can`t say whether he`s intentionally doing that. I just don`t know. I just know that, as a veteran of many different transitions in the past, Republican and Democratic, --

TODD: Right.

BURNS: -- the tradition as the incoming president. The president-elect does not assert himself publicly in real time on tactical issues.

Again, as he did the other day in the South China Sea on the underwater drone crisis. You`ve got to let President Obama and Secretary Kerry and Secretary Carter handle these issues for the United States. And it`s going to be very complicating if he continues to do this.

TODD: All right. Ambassador Nicholas Burns, coming to us from Harvard today. Ambassador, always appreciate you sharing your views. Thanks for coming on.

BURNS: Thanks, Chuck.

TODD: Coming up, the great divide. This is a game changer in our country. Americans views on everything, and we mean everything, is now being shaped by a single prism. What political party do they view the world through?

Plus, the first lady`s candid conversation about her eight years in the White House. That`s next. Stay tuned.

(COMMERCIAL BREAK)

TODD: Welcome back.

Michelle Obama is arguably the most popular political figure in America. And she sat down with Oprah Winfrey for a wide-ranging interview that aired last night on CBS.

The first lady spoke candidly about life in the White House, the election and why she is not running for political office herself. And some of the hardest moments for her, personally, over the last eight years. Here`s an excerpt.

(BEGIN VICEOTAPE)

OPRAH WINFREY, HOST, CBS NEWS: When you were labeled that angry black woman, was that one of the things that knocked you back a bit?

MICHELLE OBAMA, FIRST LADY OF THE UNITED STATES: That was one of those things that you just sort of think, dang, you don`t even know me.

WINFREY: Yes.

MICHELLE OBAMA: You know? I mean, you just, sort of, feel like, wow. Where`d that come from?

WINFREY: yes.

MICHELLE OBAMA: You know, and that`s the first blow back because you think, wow, that is so not me. But then, you sort of think, well, this isn`t about me. This is about the person or the people who write it. You know? I mean, that`s just the truth.

WINFREY: That`s what I always used to say.

MICHELLE OBAMA: Yes, it`s just so -- it`s so much about that. And then, you start thinking, oh, wow, we are so afraid of each other.

[17:20:06]

(END VIDEOTAPE)

TODD: Welcome back to MTP DAILY.

We talk a lot about the big forces in American politics on this show. But our latest NBC News-"Wallstreet Journal" poll pretty much confirms that the greatest of all is partisanship.

Before you roll your eyes and say, duh, to hear your T -- to your T.V. to hear us out, you`ve got to just see this dramatic view. 68 percent of Republicans now say the economy will get better in the next year. Last year, that number was 14 percent.

For Democrats, only 19 percent think the economy will improve in the next year. Heading into President Obama`s last year in office, that number was 37 percent.

Folks, the truth was matter is this. The underlying dynamics of the U.S. economy haven`t really changed in the last year, frankly in the last two years. What has changed is the party that will be in the White House next year.

So, why does that matter? It means that so much public opinion is shaped to the Americans partisan lens. How you see the world around you depends now on whether you`re seeing the world through red glasses or blue glasses. And that could have dangerous implications for governance going forward. And it certainly means using a poll to figure out where the public is may not be so useful anymore.

Let me bring in tonight`s panel, Ramesh Ponnuru, Senior Editor for "The National Review;" Maria Teresa Kumar, President and CEO of Voto Latino; and MSNBC Contributor Molly Ball, staff writer for "The Atlantic."

Hi, Molly. I`m sure you`re an eye roller on that one. Well, duh, everybody sees everything through partisan eyes. But to see like what used to be -- you used political questions to see it politically.

But we just simply ask -- it`s sort of like turning to new topics. Let`s talk about where you think the -- how is your -- the economy going to look good for you in the next year? And people are answering with their partisan lens.

MOLLY BALL, MSNBC CONTRIBUTOR: Well, increasingly, what party you belong to determines just whether you`re happy or not with the way your life is and the country is. I would never roll my eyes at you, Chuck.

TODD: No, not in front of me.

BALL: But this is the trend that I`ve been thinking and talking a lot about with people. And you do see this long-term trend of people increasingly being loyal in the way that they vote. There is -- there are few, sort of, swing voters, although clearly this election a lot of people did change the party they supported.

On the other hand, the parties have less power than ever. Institutionally, the Democratic Party and the Republican Party, I think, are historically weak. So, I wonder if there`s not going to be a long-term collision of these trusts.

TODD: This is a great point. I actually don`t understand that, right? The parties are more useless than ever.

MARIA TERESA KUMAR, PRESIDENT AND CEO, VOTO LATINO: Right.

TODD: I`m sorry, they really are. And the loyalty is stronger than ever.

KUMAR: So, and it`s really the institutions that are influencing the parties. So, you can claim that the heritage foundation actually is much stronger than the Republican Party itself, because they are the ones that are, basically, pulling the strings.

And you can get the same analysis on the Democratic side, though I can`t imagine -- I can`t actually point to an institution within the Democratic Party.

TODD: No, but the interest groups you can always (INAUDIBLE.)

KUMAR: The interest groups.

TODD: The interest groups have more power than the party itself.

KUMAR: But at the same time, when you start -- when you start peeling back the layers of who voted Republican, who voted Democratic, for the most part, the working class voted Democratic. And the more diverse group of people voted Democratic.

So, the day after the Trump election, many people literally felt less safe. So, if you feel less safe, that means you feel less that your -- that the economy is going to work for you.

And so, it`s looking at it demographically as well.

TODD: There`s no doubt that, Ramesh, I remember this in literally the direction of the country. The day after Obama got elected, Democrats thought the direction of the country was terrific and Republicans thought it was the wrong direction. And it stayed that way and it was literally the other way around.

RAMESH PONNURU, SENIOR EDITOR, "NATIONAL REVIEW": Well, I think -

TODD: And we`ve already seen it in just that question now.

REMESH: There have been a couple of interrelated trends that have played out over several decades. And I think first and foremost was the ideological sorting out of the parties where there used to be liberal Republicans and conservative Democrats within our lifetimes. And over time, they went away.

And as the Republicans became more uniformly conservative, the Democrats more uniformly progressive, and people stopped being in counties that had - - that were mixed, they stopped being in neighborhoods that were mixed, that kind of polarization just increased.

BALL: But I think there`s a really good point here and that is that the people answering these polls are necessarily insane, right? If you`re a Democrat -

[17:25:04] TODD: No, you`re not at all.

BALL: -- or if you are an ideological liberal, then you don`t believe that a Republican president who implements conservative policies is going to be good for the economy.

TODD: Right.

BALL: So, there is a logic to this.

KUMAR: And this is where the parties, I think, get it wrong is that they absent those -- the two parties. There`s an increase of most Americans identifying as independent.

TODD: So, a year (ph).

KUMAR: Yes, but they are.

TODD: But it hasn`t -- we haven`t seen it -- we haven`t -- it`s funny -

PONNURU: But the behavior doesn`t always match it.

KUMAR: Yes.

TODD: Yes, that`s it. OK, there you go.

KUMAR: I think it`s -- part of it is because there hasn`t been an independent candidate that has actually wooed them enough.

BALL: But look what happened in the primaries.

KUMAR: Right.

BALL: You have candidates disrupting both the Democratic establishment and the Republican establishment in the primaries. And those were people who were registered as independents who were coming in and voting for Bernie Sanders and Donald Trump.

(CROSSTALK)

TODD: Usually, that`s just self-reinforcing though, right? Which is when the House member goes home and talks to people to find out what`s really going on and what`s really on their minds. They`re now getting partisan answers, too.

So, the House Republican finds out, over the last two years, that immigration is the biggest problem, right? A House Democrat goes home and finds out maybe infrastructure spending is the biggest problem. And they don`t even -- and, look, that`s the jerrymander thing. But it also goes to what it -- this just becomes reinforcing.

KUMAR: Well, and it depends on where they receive their information. I think that -- the balkanization of media, we can`t underestimate what that has.

TODD: I know, but if you put an egg (ph) on that one, who created what?

KUMAR: Right. But, as a result, that`s why you have an increased polarization and parties are speaking past each other because you are not speaking to the same constituency at the same time, even within your own district.

PONNURU: The polarization is not mostly of the form, I`m with this team because I love all the things they believe in. I`m with this team because I love the things.

TODD: And the other -

PONNURU: It`s negative.

TODD: Yes. I was just going to -- it is negative.

PONNURU: And each side is held together by its hostility to the other side. And it`s very, kind of, tribal politics.

TODD: And, I guess, the concern is, like, look at how it`s played itself out. Literally, you will have -- we have 37 percent of Republicans have a better view of Putin now than they ever have before, right? Because Putin was viewed as helping Trump and hurting Hillary Clinton. You don`t -- we don`t want that to play itself out going forward.

BALL: But I -- But I think Ramesh is right that this has become totally tribal. If there`s anything that I learned covering the 2016 election it was this was an election that was about people`s identities much more than it was about policy or anything else.

And people -- Trump was the master of this. People identify -- his supporters identify with Donald Trump like he was their sports team.

KUMAR: Right.

BALL: And they were going to root for him, win, lose or scandal.

TODD: Well, let me go to -- let`s go to a -- all right. (INAUDIBLE) let`s go to what we have -- we were trying to tell people what the country thinks that the president`s job approval or the direction of the country or do they think they feel good about the economy? If it`s all in the partisan lens, then are we getting a good snapshot and do we need to change the nature of questions? Do we only poll independents now? Should we only -- you know, do we actually go to olympic polling? You know, do you throw out the high and the low and then let`s go in the middle? I don`t -- I -- that`s my concern. I don`t feel like we get a real sense of where the people are.

PONNURU: You -- and you do have to look at historical comparisons with that in mind.

So, a modern president is not going to have the sustained high approval ratings that some past presidents have because the modern presidency under -- except under exceptional circumstances like those after September 11th.

TODD: Osama Bin Laden. That`s why the only time he gets -

PONNURU: You`re not going to have the approval of a large percentage of the other party.

KUMAR: Well, I think that (INAUDIBLE.) I think that it really depends on his two policies. It`s what does he do with tax reform? Is it going to hit the middle class? And what does he do -- does he really repeal Obamacare? Because are two pocketbook issues that are going to resonate with people almost overnight.

TODD: And don`t leave out the infrastructure spending.

KUMAR: And the infrastructure.

TODD: Because if that`s real, that has a chance to really --

BALL: But I think the public opinion polls are still correct because people form their opinions based on what their leaders tell them.

TODD: Yes.

BALL: And I think the Putin thing is a great example. Trump, you could say, is a master of the bully pulpit, a master of the leadership.

TODD: Yes.

BALL: He convinced a large portion of Republicans who thought that Putin was bad to believe otherwise. I don`t think that they -- that they aren`t - don`t believe what they`re telling the pollsters. It`s that they believe in Trump so much that they`re willing to change their opinions based on what he says.

PONNURU: Or look at the survey on Evangelicals and their belief that character matters for the presidency. 2011, some in the 60s and the 70s and then it drops 40 points when Donald Trump (INAUDIBLE.)

TODD: So, what you`re saying is that bumper sticker, if the people will lead, the leaders will follow, does not apply anymore, does it?

All right, guys. You guys are sticking around.

Still ahead, North Carolina. Are you as exhausted from North Carolina politics as I am? Yes, I am. But you know what? That`s right, it took another bizarre turn and we`re going to dig into what`s behind a possible deal to repeal the state`s controversial bathroom bill.

Stay tuned.

(COMMERCIAL BREAK)

TODD: We will have a lot more "MTP Daily" ahead. But first, here`s Hampton Pearson with what may be a record day with the "Market Wrap."

HAMPTON PEARSON, CNBC REPORTER: Close, but not there yet, Chuck. Another banner day for stocks. The Dow jumped 91 points to the 17th record close since the election, within striking distance of 20,000. The S&P up eight. The Nasdaq climbing by 26 points, another new high.

FedEx shares are sinking after hours. Earnings fell short of estimates while revenue was slightly better than expected. The stock is down more than 3 percent.

Volkswagen will buy back another 20,000 vehicles involved in the company`s emission cheating scandal and fix about 60,000 others. That`s it from CNBC, first in business worldwide.

(COMMERCIAL BREAK)

TODD: Welcome back. We have been closely watching political upheaval in North Carolina over the past few months let alone the past weeks as the state`s republican legislature used a special session to stripped powers from the incoming democratic governor before he takes office. It`s arguably been another PR nightmare for the state.

So in the wake of that nightmare, it seems like they`re trying to clean up another PR mess by fixing a different PR mess that restricted bathroom law known as HB2 could get repealed as soon as tomorrow believe it or not as part of a deal between the state and city of Charlotte. You may be wondering, what? Now, they cut this deal?

Let`s try to get a better understanding of this. Jim Morrill of course, The Charlotte Observer, has been following the story. We turn to him to sort of understand what`s going on. So, Jim, explain -- I`ll be honest, I have North Carolina political whiplash at this point.

(LAUGHTER)

TODD: Explain.

JIM MORRILL, POLITICAL REPORTER FOR THE CHARLOTTE OBSERVER: We all do.

TODD: How this happened and why we are suddenly -- this seems so easy now and it seems so difficult during the campaign.

MORRILL: You know, if this whole thing couldn`t get wackier down here, you know, after -- after the summer we had and after last week, this has been a roller coaster, you know. Last weekend, you talked about the special session where the republican legislators met and they took powers from incoming democratic governor, Roy Cooper.

They cut his appointment powers. Governor McCrory, the republican, signed those laws. And now, you have Cooper playing a role of broker in bringing the city council and the state legislators together in a deal apparently to repeal HB2.

TODD: And what is the likelihood there are enough votes in the legislature to do this? I mean, it was pretty the reason why I think Governor McCrory never says it publicly, but you guys have proven this request. I think one of the reasons why he felt like he had to sign it was because there was a veto-proof passage.

MORRILL: Well, the republicans do have a veto-proof majority in both houses of the legislature, but this is unusual. Because remember, there are a lot of democrats who didn`t vote for HB2 to start with. And so presumably, you`re going to have most if not all of the democrats voting to repeal the bill tomorrow, and they are going back tomorrow.

But the tale could be the story of the republicans and how they vote. They meet in caucus -- house republican caucus at 6:00 tonight in just a few minutes and that could tell the tale of whether they have the votes that they need to supplement the democratic votes to repeal it. The leaders of the house and the senate seem to think that they do or else they wouldn`t have called this in the first place or had this called.

TODD: You know, it seems -- politically, it seems as if this was bad politics for McCrocy, obviously he lost, where two republican statewide figures won, president-elect Trump and Richard Burr. But has this been bad politics for the republican legislature in district by district or not?

MORRILL: You know, I don`t think so. Not necessarily. I mean, the districts are so different here. You know, the legislators from urban areas have definitely felt this. I mean, they lost -- here in Charlotte, we lost the NBA all-star game, the ACC football championship game, Greensboro legislatures have lost the ACC tournament, SCAA tournament.

So, there has been a lot of effects from this, economic effects, that they have been, you know, isolated in different parts of the state. There are a lot of rural legislatures and republicans in Raleigh have their base among rural and suburban voters. And they haven`t really felt the impact of HB2 as much as others. So, you know, the effect of this has been not very evenly felt. TODD: Let me ask on the PR front, how much is this for republican legislature where they took in nationally from getting a lot of criticism even from republicans nationally for what they did? Do they see this as an opportunity to sort of at least leave the year with some having a better taste in their mouth about the legislature?

MORRILL: Yes, you know, I think a lot of them do. You know, they are still getting pressure and really been on pressure from the business community here. The hospitality and tourism industries just said the other day that they lost over $100 million and lost events and economic opportunities and things down here.

So, that affects their bottom line. And we have a deadline coming up for the NCAA to select the host of tournament sites for up to 20 or 2022. That deadline is coming up either in January or shortly after. So, there is a time clock on these things too. So I think.

TODD: There is a real sense of urgency, that if they do it by the end of the year, it can put North Carolina back and a place to host events again.

MORRILL: Yeah. I think that, you know, they are looking for some of these events that have left to start coming back if not right away at least pretty soon after they do this.

TODD: All right. Jim Morrill, I tell you, we think we are busy here in Washington with the new president. You really have been busy with all the post election drama that you have been dealing with so.

MORRILL: Yeah, feels like it.

TODD: Hopefully you get a week or so of rest as well. Jim Morrill, thanks very much. MORRILL: I will my editors. TODD: Yes, will you? All right. Fair enough. Up next, I`m obsessed about who makes the cut for the rock `n` roll hall of fame. And then in "The Lid," Mitch McConnell responds to these bipartisan calls for a probe of Russia`s election interference. Stay tuned.

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TODD: Welcome back. Tonight, I`m obsessed with the voting process. Oh, no, not the one I`m usually obsessed with. I`m talking about the election that gets music legends into the Rock and Roll Hall of Fame. We would like to see more transparency please. But anyway, overall, this year`s inductees were announced today and while some of the process makes perfect sense, sometimes it seems like the better man gets left behind.

So Pearl Jam, first year on the ballot, their first year of eligibility, first year hall of famer, of course they`re in and they should be. A win for the election process. Well done by these mysterious voters. Tupac, also his first year of eligibility, also in. I`ll tell you what I`m gonna be wondering, is he gonna show up for the ceremony? Come on, you know you`re thinking that.

Here`s where it gets a little round about though. Who decides which members of these bands get inducted? There are guys getting the nod as members of yes, but at least 10 others past and present members of the band who aren`t. You can call it a long distance run around. Also, we can`t leave it without noting that we have been covering yes as quest (ph) for the Hall of Fame since 2013.

I`ve seen all good people including a democrat and a republican and our pal, Steve Capus, a former president of NBC News, joined forces to get yes inducted. Congrats, guys. Then there`s Journey. There are seven guys getting inducted, not including their current front man, Arnel Pineda, who faithfully has tweeted his congratulations to the band today.

By the way, say what you want, but these guys are making money today because of Pineda. We hope the Rock and Roll Hall of Fame will welcome Pineda one day with open arms. So, congratulation to all inductees. And remember, just say yes to bipartisanship.

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(START VIDEO CLIP)

MITCH MCCONNELL, SENIOR U.S. SENATOR FROM KENTUCKY: It`s a serious issue but it doesn`t require a special committee. I mean, we have a Senate Intelligence Committee and a House Intelligence Committee run by knowledgeable responsible people.

There is no question that the Russians were messing around in our election. It is a matter of genuine concern and it needs to be investigated. In the senate, we`re gonna investigate that in what we call regular order.

(END VIDEO CLIP)

TODD: That was Senate Majority Leader Mitch McConnell and PBS station in Kentucky shooting down the idea of a select senate committee investigating Russian hacking in last month`s election which has been called for by senators from both sides of the aisle. Time for "The Lid." Panel is back. Ramesh, Maria, Molly. Ramesh, two things from that. Number one, he wanted to do regular order.

That sounds very much McConnell, but he made it clear, Russia mucked around in the democracy. You know, they may have. You know, there were some qualifiers there. He is trying to I think walk a line, it seems like between good relation with the Trump administration but also realizing he has got senators that want to do this.

PONNURU: That`s right and he doesn`t seem to want to defend the idea that Russia wasn`t interfering.

TODD: Yes.

PONNURU: He is not on the same page as president-elect Trump on this issue. I do think that when Senator McConnell said regular order, that is one of his favorite phrases in the English language, and I think he just is lost (ph) to depart from regular order.

And he also -- I think his people are making the argument at least that standing up at the select committee would take time, that this would actually be distraction from the work that the Senate Intelligence Committee is actually set up to do.

TODD: Isn`t the argument that maybe we are gonna end up with both, but you start with the standing committee, see what they find, and if suddenly you realize this is bigger, right? I mean, you know.

BALL: Look, I think.

TODD: That`s how I feel like how (inaudible) became senate select after became a senate house select type of thing.

BALL: I don`t think the appetite of people like John McCain to have an interjurisdictional investigation here. Because, you know, McCain argument is, this isn`t just about intelligence. This is about armed services, this is about foreign affairs. You have to have.

TODD: Too many jurisdictions. BALL: Jurisdictions across different committees with senators of different expertise. I think you`re exactly right about the middle ground that McConnell is trying to strike. I do not think there is any middle ground between Donald Trump saying this didn`t happen, and you know, John McCain and Lindsey Graham and a lot of other republican senators saying Russia is not our friend.

TODD: I keep envisioning, like, Bob Gates at a 9/11 commission type of scenario. And I feel like Bob Gates is, of course, the one person you could actually be bipartisan in one individual.

KUMAR: Even when he was doing the shows this weekend, he was very -- he was very diligent about saying Russia did mess, and we should be -- we should be concerned. And Donald Trump, he should actually -- if he were to pick a statement and say, we are concerned and we`ll look into it, I think it also gives him more legitimacy when people keep criticizing him on the Russians. But instead, he`s doubling down on the Russian side and that`s a little bizarre.

TODD: That`s the part of this -- and that`s always what`s the hardest thing about reading Trump. What seems politically expedient here would be to what Maria says. PONNURU: But I think that the criticism that Russia interfered and therefore his election was illegitimate is something that really gets to him, just speculation on my part, but that is what he is reacting to.

And it may be that post the electoral vote, when there was real sort of scattered and not terribly well organized attempt to deny him what he believes or what I think he really is legitimately owed, because of this Russia involvement, maybe he`ll come to a different view.

TODD: I want to bring up another topic here that`s kind of related, and that is the national security adviser, Mike Flynn. Yet again, Mike Flynn, semi-controversial story today involves with him having a meeting with a far-right party in Austria, who just signed a deal with Putin`s political party in Russia, sort of, you know, as a friendly, you know, that -- look, other political parties do that around the world.

That`s not an uncommon thing. But that there is this now far-right alliance going on with Putin and that Mike Flynn seems to be very comfortable operating in that space. How much more controversial press can Mike Flynn get and survive in Trump world?

BALL: Probably a lot. I mean, I think that Donald Trump is very comfortable with the global far-right. He`s comfortable with Putin. He`s comfortable with Nigel Farage. He`s comfortable with a lot of these figures of the far- right parties that have sprung up across Europe.

I don`t see -- I don`t see why -- I mean, I certainly understand why this guy in Austria is controversial and rightly so. But that Flynn is comfortable with him I think is probably not something that bother some people in the administration.

KUMAR: I mean, the fact that the president-elect was basically supported by David Duke, someone that is considered the extreme right within our own country and the fact that maybe as an auxiliary, this individual, now Mike Flynn, also has those alliances with individuals that are also -- it`s part of his larger narrative.

This is not surprising, and I don`t think that because he didn`t take the hit of it politically, I don`t think they`ll back away from it now.

TODD: I just like to go back to -- I just don`t know how much -- you hear, Flynn doesn`t -- Flynn has his allies in Trump world, Ramesh, but he also has detractors inside the tower as well. And that`s why you wonder how many of these -- I`ve had some people tell me, hey, you know, he had a lot of patience for Corey Lewandowski. He had a lot of patience for Paul Manafort, until he didn`t.

PONNURU: The patience is not.

TODD: Right. You know, all of a sudden, it`s like, I may agree with you, but you`re causing too much.

PONNURU: But this idea that there should be a kind of nationalist international, as odd as that.

TODD: Weirdly odd, yeah.

PONNURU: Is not one that is unique to Mike Flynn. Steve Bannon has talked about creating a populist alliance.

TODD: Spoken at conferences internationally in Europe, about this, right? This is as much Bannon as it is Flynn. But I just wonder how much Flynn can, when you`ve got the national security community and the foreign policy community, even on the republican side, quietly trying to undermine the guy.

BALL: Well, but the national security community and the foreign policy community on the republican side very much worked against Donald Trump`s election. I think you`re right about, you know, Trump always has these feuding power centers under him.

But when he thinks someone`s a kindred spirit, he is willing to go to bat for that person. Unless it is someone who`s been with him since the very beginning. I think there is a lot of -- a lot of not just loyalty, but like-mindedness there.

KUMAR: I do think that if someone is taking too much heat like Manafort did and Corey did, then he basically he does dissolve himself from them, right? I think that -- is that going to be enough right now? I actually think that they`re aligned.

PONNURU: This story, there`s just too much degrees of separation from Trump himself for it to be a real problem.

TODD: I don`t know. I will say this. I feel like Mike Flynn has -- he`s accumulated enough baggage where if they feel as if the heat`s coming on them, he becomes the first sacrificial lamb.

UNIDENTIFIED FEMALE: Yeah. TODD: Like, you know, you have to feed the Washington wolves sometimes and you just wonder, has he set himself up for that. BALL: The nice thing about a presidential administration is you have literally hundreds of potential sacrificial.

TODD: That`s true! By the way, that`s right. That`s a warning for anybody - - a warning to anybody that accepts any presidential appointment, left or right.

KUMAR: You have to know.

TODD: You too -- that`s right. You too will know that the wheels on the bus go round and round, right over your legs.

(LAUGHTER)

TODD: All right, Ramesh, Maria, and Molly, thank you very much. After the break, the electoral college vote reveals the depth of the Democratic Party`s division these days. Stay tuned.

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TODD: Finally tonight, in case you missed it, after all the talk this year of a divided Republican Party and all the speculation about republicans dumping Trump in the end, on the final chance for democrats to unite, they didn`t.

There were seven faithless electors who did not vote for their candidate during yesterday`s electoral college vote. It`s the most believe it or not since the 1808 election of James Madison, but you knew that already. Five democratic electors voted for someone other than Hillary Clinton.

Three picked Colin Powell, one for Bernie Sanders, and one for of course Faith Spotted Eagle, a native American travel leader and activist. There are only two electors on the republican side, one voted for John Kasich and the other one voted for Ron Paul. Yes, Ron, not Rand. Rand of course ran for president this year. Ron Paul has ran for president multiple times. First time he`s ever gotten an electorate. Congratulations, Congressman Paul.

But after spending most of 2016 talking about how divided the Republican Party is and how the divided party always loses, well it turns out we`re half right. The divided party always loses, but it`s the democrats who were divided. Those who were Sanders electors at (inaudible) who said, you know what? No Clinton. We want to make our Sanders point. So the question for.

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