MTP Daily, Transcript 5/24/2017

Guests: Amy Walter, Steve McMahon, Michael Steele, Julian Barnes

Show: MTP DAILY Date: May 24, 2017 Guest: Amy Walter, Steve McMahon, Michael Steele, Julian Barnes

CHUCK TODD, MSNBC HOST: I don`t need more on an hourly basis, some days.

NICOLE WALLACE, MSNBC HOST: Well, I`ll take it. I`ll take what you don`t want. Kick it back to 4:00.

TODD: Oh, fair enough. Well, we`ve got a lot going here at 5:00. Thank you, Nicole.

Well, if it`s Wednesday, the new CBO score is out on the Republican health care repeal and replace plan and we`ve got the numbers.

It`s breaking lonking (ph) news here in Washington but it`s wonkish news that will matter at the ballot box.

Good evening, I`m Chuck Todd here in Washington and welcome to MTP DAILY.

Russia is dominating beltway politics, that we know. But health care has been dominating battleground politics outside of Washington.

Together, these two issues may be holding up everything right now for the White House and for Republicans in Congress. And there`s very little relief in sight on either issue.

On the issue of health care, moments ago, the Non-partisan Congressional Budget Office, the umpire of sorts for legislation here in Washington, published its updated analysis of the House health care bill that Republicans passed earlier this month.

According to their estimates, 23 million would lose coverage over a span of 10 years. That`s not much different from prior estimates. It was about 24 million in the previous bill that ended up not being voted on.

This bill that did pass the House would cut the deficit, according to the CBO, by $119 billion. That means the House does not have to revote on this legislation, due to reconciliation rules by the way.

And the CBO says that some folks with pre-existing conditions in many states could find themselves priced out of the market. The rapid response from the RNC blasted the CBO`s credibility on health care. They slammed the agency as way off with its Obamacare predictions, essentially trying to say, hey, don`t take their numbers to the bank.

And just hours before that CBO score became public, interestingly enough, Senator Majority Leader Mitch McConnell had a strikingly dour assessment of the Senate`s ability to get health care done. He told Reuters, quote, "I don`t know how we get to 50, at the moment, but that`s the goal." That`s basically the law if you`re going to do anything.

Folks, McConnell`s not a guy who plays games with this stuff. If he says he doesn`t know how he`s going to pass health care in the Senate, it`s because he doesn`t know how he`s going to pass health care in the Senate. He doesn`t have some sort of trick under his sleeve. He`s not about raising or lowering the expectation bar. He`s not very good at that.

So, bottom line is that they`re not in a good place right now, the Senate GOP. So, it comes as health care anxieties are dominating battleground politics. The airwaves are being flooded with health care ads, from the big skies of Montana which hold as special election tomorrow, to the suburbs of Atlanta which hold that special House election next month.

Here`s a sampling.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Greg Gianforte says he`s thankful for the new health care bill. The one that eliminates protections for pre-existing conditions.

UNIDENTIFIED MALE: We know Quist didn`t pay his own taxes, yet he wants to raise our taxes to pay for a government takeover of health care.

UNIDENTIFIED FEMALE: As a doctor and a breast cancer survivor myself, what Karen Handel did is unforgivable.

UNIDENTIFIED FEMALE: I`m currently fighting cancer. When I see ads attacking Karen Handel, they make me sick.

(END VIDEO CLIP)

TODD: I don`t know about you, I just had flashbacks to 2014, 2010, 1994. Anyway, you get the point. Health care ads are back in a big way.

But we`re going on dive into the latest on the Russia investigation a little bit later in this hour. But we begin tonight with that breaking news on the Congressional Budget Office scoring, which, of course, a Washington term, the House health care bill.

Joining me now is someone who I like to talk to for all things budget and understanding the wonkiness of Washington is Stan Collender.

Stan, help us speak the budget ease for this. OK. So, what do we learn from this? We know the basics here. The previous score was 23 million -- 24 million would lose insurance down to 23 million. The deficit number essentially went up or down, however you want to (INAUDIBLE.)

The deficit is going to lower now with this new bill by $31 billion.

STAN COLLENDER, CONTRIBUTOR, "FORBES": It will be higher.

TODD: Right, that`s good, higher. So, essentially, what the CBO is saying is this McArthur Amendment on the essential health benefits got the Republicans a million more people covered. They went from -- down from 24 million to 23 million uncovered, for a price of $31 billion. Is it (ph)?

COLLENDER: Probably not. And don`t get me --

TODD: Am I reading this correctly?

COLLENDER: No, no, you are reading it correctly. But it`s not just that the coverage would be -- that fewer people would be covered, it`s that some of the coverage would be less valuable. So, it`s not a complete apples-to- apples type of thing. It`s 32 million -- 31 million people less and others would have less coverage even though they`d be paying more.

TODD: Now, Republicans would say, hey, the premium numbers are going to go down. And the CBO says that premium numbers absolutely will go down. But then, they also say if you have a pre-existing condition, you are likely to get priced out of the market.

COLLENDER: Well, look, if someone who`s a cancer survivor, this is the kind of thing that concerns me greatly. And it should concern everybody because almost everybody`s got a pre-existing condition in one way or another.

[17:05:01] TODD: If you were born, you were born with a pre-existing condition. I mean, I`m meaning, like, everybody. I mean, everybody`s --

COLLENDER: Yes.

TODD: -- at some point, a scientist can claim anything`s a pre-existing condition via genes.

COLLENDER: Yes. No, no, absolutely. And it`s not just a question of lying around doing nothing and being lazy and eating fried foods. You know, my dad gave me, I inherited his genes and I`ve got his diabetes even though I work out like a fiend and I eat well.

TODD: So, you have a pre-existing condition.

COLLENDER: I have a pre-existing condition.

TODD: At birth.

COLLENDER: But let`s keep in mind here that the Senate has already said they`re not taking up the House bill.

TODD: Right.

COLLENDER: All right, so, well, I think this is probably going to be very difficult for Republicans to explain. I think they`re extremely grateful right now and taking a deep breath that they don`t have to take another vote.

TODD: Now, explain why they would have to revote. And I apologize here to viewers that get frustrated when we speak too much Washington. You know, we`re CBO. We`re saying scoring. You know, these are not the way Americans speak about their checkbooks. But why would they have had to revote? What would have come back from the CBO that would have said revote?

COLLENDER: In simple terms, without going into budget wonkishness. The House and Senate are considering health care under special rules that would essentially prevent a filibuster from being used. So, you need fewer votes, under those circumstances. You only need 51 votes in the Senate to get anything done. Fifty if Michael -- Mike Pence is going to vote for something.

TODD: Right.

COLLENDER: So, the revote would have occurred because the bill that passed the House didn`t qualify under those rules. So, they were waiting for CBO to say, yes, it`s OK. We bless it.

TODD: So, now, the ball truly is in the Senate Republicans` court.

COLLENDER: Right, right. And, in fact, they were probably helping. The Senate was -- the Senate Republicans were probably helping. Maybe the House will take a revote. They won`t be able to pass it so we won`t have to do anything on this.

TODD: Now, there has been a, sort of, one -- there`s a reason why health care went first, as far as Congress was concerned. Because -- and we`ve had -- they wanted to get savings out of here in order to do tax reform. They wanted to do health care under the 2017 budget and do tax reform under the 2018 budget.

Their deficit number in savings here is 131 billion over 10 years. They wanted more than that to apply to tax reform. What does this mean for tax reform?

COLLENDER: Well, the very simple answer is -- I`ve been telling clients this since January. This doesn`t make it any easier. Tax reform, which is always going to be difficult, now it becomes a little bit more expensive. And becomes more difficult for them to find savings they need.

Unless they decide the hell with the deficit. Right? We`ll blow it up. We`ll spike it. We don`t to have pay for things. That`s a possibility under tax reform. Remember, in 1986, they started with an agreement between House Democrats and Republicans. It`s going to be revenue neutral. That is tax reform would not increase the deficit.

TODD: Right.

COLLENDER: Here, they don`t have that agreement. They were hoping this would make their lives easier.

TODD: Now, among the criticisms that`s going to come on the CBO in -- when they score the budget, eventually, and because there`s a -- we`ve already seen the skirmishes and already there`s a back and forth between the White House on their assumptions on economic growth. Their assumption on three percent growth, did they use good math or did you -- did they use funny math?

COLLENDER: Well, funny math is probably giving it the benefit of the doubt. The Congressional Budget Office and the Federal Reserve, along with a bunch of Wall Street firms, say that three percent growth is extremely unlikely. They`re estimating less than two percent growth.

So, where they can -- where Mulvaney, where the White House came up with three percent growth, it looks like it`s more wishful thinking and a little bit of praying, rather than solid economics.

TODD: What is the best way -- you`re -- let`s say someone is watching out here, going, I want -- what is the -- what is the most neutral economic growth assessment you can find? Where do -- where is the most reliable indicators for projections like that?

COLLENDER: Well, first of all, the Congressional -- in spite of what the White House and the RNC were saying, the Congressional Budget Office has actually done a pretty good job projecting the economy.

Now, remember, anything that`s 10 years from now is pure speculation by anybody. But CBO has done a relatively good job. Remember, its only purpose in life is to try to get the numbers right.

But if you -- if you do a combination of the blue-chip indicators on Wall Street, the Federal Reserve and the Congressional Budget Office, you start to regress toward the mean here. And I would -- I would take the Federal Reserve over all -- it would be almost in any day of the week no matter whose administration it is.

TODD: So, we`re looking at -- we`re looking at economic growth somewhere between -- lower than three but above two?

COLLENDER: I -- it`s not clear it`s going to be above two. But keep in mind what this does, Mulvaney -- Mick Mulvaney, the OMB Director, yesterday himself said, if we don`t get three percent growth, we don`t balance the budget. In fact, we have a large, large deficit.

TODD: Is there -- is there a realistic balance budget program that could happen from anybody, if you don`t touch Social Security and Medicare?

COLLENDER: No.

TODD: Because it seemed to be lethal (ph) to me that they were claiming a balanced budget and not touching Social Security and Medicare.

COLLENDER: Well, they were touching Social Security disability.

TODD: Right.

COLLENDER: Right, but they were hoping for rapid growth. I mean, it would be great -- it`s almost like what David Stockman was doing during the Reagan administration where he was projecting rosy scenarios. And this is rosy scenario on steroids.

TODD: All right. Stan Collender, the man who helps me try to figure out how to, I guess, interpret budget speak. And I recommend everybody be sure to find you. You`re the budget guy online. I believe that`s your Twitter.

[17:10:00] COLLENDER: At the budget guy. Thank you.

TODD: At the budget guy. Follow this guy on Twitter. It will make you smarter. Stan, thank you very much.

And speaking of rosy scenarios and economic growth, joining me now is South Carolina Republican Mark Sanford. He`s a member of the House Budget Committee. And he inspired me on that last question.

But, Congressman, let me first start with what you heard from the Congressional Budget Office on health care. The re-marked up bill by CBO essentially says, for $31 billion more, you covered 1 million more people. The uncovered estimate went from 24 million to 23 million but the deficit savings went down $31 billion. Satisfactory to you?

REP. MARK SANFORD (R), SOUTH CAROLINA, HOUSE BUDGET COMMITTEE: Well, that isn`t what I`ve heard.

Again, I haven`t had the time to look at what actually the CBO came out with. What little I know of, based on just taking votes on the floor and walking off, is that one of the other things that was done is that it says it`s going to lower premiums. Giving states flexibility with regard to different mandates would, in fact, lower premiums.

And I think that`s important to both sides of the equation. We had the (INAUDIBLE) protect people with pre-existing conditions and needing to address that. But you`ve also got the issue of how do you help people that are in a small business, that are out there struggling, that have seen --

TODD: Right.

SANFORD: -- premiums wildly escalate?

TODD: All right, but let me read directly from the report, Congressman. They address this issue. Although premiums would decline on average in states that chose to narrow the scope of their essential health benefits, some people enrolled in nongroup insurance.

The special pool would experience substantial increase in what they would spend on health care. People living in states modifying the essential benefits who use services or benefits no longer included would experience substantial increases in out-of-pocket spending on health care.

Now, look, this goes to the whole larger argument, I think, between the ideologies in this country, right, which is, is this -- should government be a part of this or not? But how do you explain that constituent saying, hey, I`m lowering your premiums but it`s going to cost you more to get health care?

SANFORD: Well, I mean, that`s the tension and that`s the tug-of-war that`s been taking place in this entire debate. And it`s really just been enjoined. What it means is now, this bill will make its way, based on the CBO score, from House the Senate. They`re going to begin a whole other debate there.

If they actually complete that debate, it`s going to come back to the House and conference forum will vote for it -- for it or against it. But I think there the bigger question of allowing states flexibility in what they may or may not do, simply means the debate will be replicating yet again at the state level, and states will decide whether or not they want to, again, afford folks those choices or whether they don`t.

Many states would say, no. We`re not even going to give people the chance to have that chance of higher premium. But we`ll see what happens to a state like South Carolina, California or Texas.

TODD: Are you comfortable with that, though, that basically your pre- existing condition, it depends on -- it ends up being geographically based? You know, so, maybe you get pretty good protection and pretty decent premium options in state X but state Y does -- is going to put you in a risk pool.

And because you`ve -- you`re -- maybe because of your job, you`re stuck working in state Y. You`d like to move to a state that gives you better coverage but you`re not going to get it. Should that way -- should that be the way we run our health care system?

SANFORD: Well, that is the notion of federalism which I happen to believe in. I believe in a quilt work of different approaches. That not the federal government should decide all. That we ought to have different decisions made by different states. And we actually have a competition of different ideas.

I would also say it`s also important to look at this notion of health care from the standpoint of what built in on the way of protection. So, Upton Amendment added $8 billion. The Palmer Amendment added $15 billion. The base bill added $115 billion. All of which were designed to protect people. I think that these high-risk pools, while insurance premiums would go up, the high-risk pools are there to cover people with those higher premiums.

So, I think the debate, again, has a long way to go.

TODD: That`s fair.

Let`s talk about the budget. You were pretty critical of your former South Carolina colleague, Mick Mulvaney and the scenarios that he came up with or they put out in the budget that claimed a balanced budget in 10 years and the three percent economic growth.

Now, you heard Stan Collender, probably at the tail end there, his explanation of it. How unrealistic do you think this number is?

SANFORD: Completely unrealistic. So, I didn`t exactly hear what Stan Collender had to say but I thought he was boo-hooing the idea that we could get to three percent. And, if so, I completely concur.

What you can`t do is go out and pick rosy assumptions to make the numbers fit when, in fact, they don`t. And, fundamentally, if you look at this budget, that`s what it does which is a real disservice to every one of us.

[17:15:06] And Republicans and Democrats, we may have different priorities, but at least let`s have a debate based on real numbers and then have the food fight as to what our different priorities might be. If you base a budget on assumptions that aren`t real, we then, in essence, end up with a false -- you know, baked-up debate that`s not real. That doesn`t serve anybody real well.

TODD: Let me ask you this. Philosophically, you`re a deficit hawk and you want lower taxes. What`s the point where if you thought a tax cut would explode the deficit, what`s that line for you?

SANFORD: I don`t know. I mean, I`ll look at it. There is a line. I mean, there is a thing called the laugher curve. I mean, there is a point at which you begin to get to a point of diminishing returns, in terms of tax cut versus revenue to the government. And we have a government that has to be fed.

Again, I want it as small as possible. I want it as streamlined as possible. I want it as efficient as possible. But once it is there, you can`t say we`ll get our kids or our grand kids to pay for it. A deficit is simply deferred tax.

And if we stack up deficits, what we`re really saying is we`ll get somebody else to pay the tax. And I don`t think that that`s fair, based on the fact that our founding fathers promised us life and liberty and pursuit of happiness. And that`s awfully tough if we`re loaded up with debt.

TODD: Does it -- does tax reform have to be deficit neutral for you to vote for it?

SANFORD: I wouldn`t say deficit neutral. But I`d say close in that direction. What you can`t do is come up with fake pay-fors and you can`t come up with a budget -- a list of budget assumptions that presume, you know, the lifting of financial gravity.

TODD: All right. Congressman Mark Sanford, always a pleasure, sir. Thanks for rushing to the camera. I know we asked you early up. I appreciate it during this breaking news.

SANFORD: A pleasure.

TODD: All right. We are now joined by Republican Senator James Lankford of Oklahoma who`s a member of the Intelligence Committee and Appropriations Committee.

A little quick change of topics here, Senator. I know we were going to talk a little more on international stuff and the Russia investigation. But the CBO score, what you`ve seen, 23 million people would be left without insurance over a 10-year period. The deficit reduction, a little over $100 billion. Where are you on this?

SEN. JAMES LANKFORD (R), OKLAHOMA, INTELLIGENCE COMMITTEE: Yes, I`m going through it like everybody else is, trying to get a chance to read it, literally in between meetings trying to read through it.

The number of people that wouldn`t get coverage doesn`t bother me as much, only in that it`s a guess from CBO. They base their guess on it if people aren`t mandated to buy coverage by the federal government, they won`t buy coverage.

I don`t agree with that premise. I do think if you get the prices down, most people want to have insurance. They want to have access to it. There are different policies they can`t buy right now and different options that are not there.

So, I think there are other options that they just can`t assume yet because they don`t know on the economics model of it. We do look close at the spending numbers. Those are the bigger issue for us.

TODD: Well, I was going to ask you, overall, this deficit reduction number, it`s $119 billion. I think there was a time when many of your colleagues thought the number -- that if did you a repeal and replace of health care, that you would get a deficit reduction number closer to $500 billion perhaps or that would give you more wiggle room on tax reform. Is this a disappointing number to you?

LANKFORD: I`m still going to go through that, Chuck. So, I don`t know completely on where that`s going to fit. There`s still quite a bit that has to be done, as you`ve seen from the report itself. That CBO estimates the cost of premiums will go up the first two years.

We`re still looking, as the Senate, to say what can be done to actually bring the cost down. In estimates in the third year, for many states, including states like mine, the costs would drop pretty dramatically after that. And so, we`re going to try to figure out what`s the best way to do it.

Obviously, this is not a finished product. This is another look by CBO. We`ve got another look from CBO when we rewrite ours. And then we`ll have actuaries that will step in. So, this is part of the process. This is not a finished product. This is part of the journey. You do it. You have it scored. You do it. You have it scored. And you keep going.

TODD: All right. You noted that, yes, premiums would go down. But CBO says, yes but. And they`re but on the premiums going down is if you are in a state that cuts back on essential health benefits, then your out-of- pocket costs are going to go up. And if you have a pre-existing condition, your premiums may skyrocket even if you`re in a risk pool.

What is your philosophy, at least, on how to deal with that issue?

LANKFORD: I would say that`s a big part of our conversation in the Senate is trying to take care of those folks that have pre-existing conditions because we don`t want to do that. Obviously, CBO is guessing on their premiums would skyrocket because there is no model that`s given from the House proposal.

So, as they try to guess through the process, they`re going to do a guestimate without information on it. We`ve got to actually look at real information and try to help resolve that for people with pre-existing conditions.

I would also say that as we walk through this, remember that we`ve got 9 million people that are currently -- by the end of the year, there are 9 million people that are on these individual markets from the Obamacare, what are exchanges. And my state`s not an exchange. It`s a monopoly.

[17:20:07] So -- but there`s 9 million people. There are 6.5 million people that are paying the fee. That literally don`t have insurance, that are paying the extra tax, but they don`t have health care. Those folks want to get health care but they can`t afford it. So, you`re also dealing with that reality.

We`ve got to be able to fix that for both. For folks that want insurance but can`t buy it because it`s too expensive. And for those folks that can`t get it because they don`t have enough income to be able to get it.

TODD: And, finally, quickly, on tax reform. It`s, sort of, a similar question I asked Mark Sanford. Does tax reform have to be deficit neutral for you to support it? Are you comfortable with the deficit going up for a higher tax cut?

LANKFORD: Yes. Well, I`ve got to be able to see the way they score. As you know, you track all these models all the time. I`ve got to see the way that it`s scored, dynamic, if it`s static. What that means in the dynamic model.

Is it a realistic model or not? It doesn`t have to be exactly deficit neutral if it`s a realistic model that we can actually work through with to be able to figure out how to get tax activity and economic activity. There`s both the movement of money in the country that`s very important and the amount of money that people make and keep.

TODD: Senator James Lankford, I`m going to leave it there. I appreciate you working with us on this breaking news and thanks for having me on.

I`m now going to move to Senate Democrats are choosing to respond to the CBO score in a group press conference. Here you go.

SEN. CHUCK SCHUMER (D), NEW YORK (live): -- Republicans in Washington and the president should read this report cover to cover. Throw their bill in the trash can and begin working with America -- with Democrats on a real plan to lower costs for the American people.

There`s a lot to unpack in the report. I`ll just focus on a few provisions. First, costs. CBO report makes clear, your premiums are heading up for the next several years if the Trumpcare passes. 20 percent increases in 2018. 5 percent following year.

Now, Republicans are crowing about premiums going down in the outer years. That`s because the coverage is so bad, of course the premiums go down. But you get almost no coverage. Cheaper insurance isn`t going to help anyone if it doesn`t actually cover you when you`re ill.

If you`re an older American, Trumpcare is going to force you to pinch your pennies just to be able to afford health care at all. The CBO report says that seniors could see their premiums go up by as much as 800 percent under this bill.

Pre-existing conditions. The CBO report states, a direct quote, this is from the -- Tom Price selected CBO director. People who are less healthy would ultimately be unable to purchase comprehensive non-group health insurance at premiums comparable to those under current law if they could purchase it at all.

So, the so-called fix, which some of the moderates in the House bought into, doesn`t make pre-existing conditions any easier or any better.

Think about that for a minute. Under Trumpcare, if you have a pre-existing condition or your sick, your insurance costs could go up so high you can`t afford it at all.

The non-partisan scorekeepers have spoken loudly and clearly. Trumpcare means higher costs and less care for the American people. For the good of the country, Republicans in the Senate should reject this path and work with Democrats to fix our health care system instead of pulling the plug on it.

Senator Murray.

SEN. MURRAY: Well, thank you, Senator Schumer. You know, I`ve had to say this far too often recently, but people are really --

TODD: You`ve just heard there from the Senate Democratic leader, Senator Minority Leader Chuck Schumer. Obviously, they want to brand this Trumpcare. Sounds familiar.

Let me bring in tonight`s panel. Amy Walter, the National Editor for the "Cook Political Report." Steve McMahon, Democratic Strategist and co- founder of Purple Strategies. And Michael Steele is an MSNBC Political Analyst and former a RNC chair.

OK. Amy, everything old is new again.

AMY WALTER, NATIONAL EDITOR, "COOK POLITICAL REPORT": Right.

TODD: Health care is back --

WALTER: Yes.

TODD: -- and back and back and back. What did we learn today?

WALTER: Well, I think what we`re learning today, as we just saw with the Democrats there on the Senate floor, as well as even the Republican Senator Lankford, is that there is a whole new debate that`s going to go on in the Senate, all right? The bill that`s going to go in the Senate is going to have its own set of criteria. It`s going to get its own CBO score.

But the challenge right now for Republicans is that the bill that`s sitting there right now, the ACHA, is getting defined as one where people are going to have to pay more for pre-existing conditions. Older people are going to have to pay more. And those ads are going on right now and the ads that you showed in the individual districts. But they`re going on, too, in pro- Democratic groups are running lots and lots of these ads to brand the bill, in general, bad for consumers.

And this is what is going to be tough for Republicans as this goes through. It`s in this legislative purgatory right now. That doesn`t mean that just because you`re going to have a new bill, it gets redefined.

TODD: Right.

WALTER: It is getting defined right now. And the challenge for Republicans is how do you undefine it when (INAUDIBLE)?

[17:25:04] TODD: And Senate Republicans throw out this bill and say, no, no, we`re starting from scratch. Lankford basically was trying to say that. But you`re right.

Steve, first.

STEVE MCMAHON, DEMOCRATIC STRATEGIST: Remember, Colin Powell and the Pottery Barn Rule, right? You break it, you own it. The Republicans are now being defined as the party who have broken health care. And I didn`t think I would see it happen this year. But you see Democrats in Republican districts and districts that are plus 20 Republican running pro-Obamacare ads. And so, it`s a new day in politics. It`s a new day in Washington.

WALTER: Well, Steve, they`re not running pro-Obamacare.

MCMAHON: Well, they`re --

WALTER: They`re running a Republican -- they`re still not embracing Obamacare.

MCMAHON: It`s the same thing. I mean, they`re saying, let`s not go where the Republicans want to go. Let`s keep what we have.

TODD: Go ahead.

MICHAEL STEELE, MSNBC POLITICAL ANALYST: I was going to say, that may be true to a certain extent. But, you know, this whole idea that we own it completely, at this point, is not set in stone. So, let`s not lock that door yet, sir.

The reality for Republicans, to Amy`s point though, I think does present itself with an opportunity in the Senate. And I think you`re going to hear, and you`ve already heard from Lankford and you`ll hear from McConnell and others, that we`re going to take a different approach in the House.

And this will give them the room they need to undo the very thing that you`re talking about, with respect to the House bill and the onerous aspects of it, to, sort of, soften the blow on those with pre-existing conditions. To soften the blow on a -- in a number of areas by, sort of, expanding the marketplace a little bit, if you will. That embraces a little more Obamacare than the House does.

MCMAHON: Yes. But then, Michael, it goes back to the House. Will the House Republicans who voted for this bill vote for anything that comes out of Senate? I agree with you. That`s what the Senate would like to do. They would actually like to --

STEELE: At that point --

MCMAHON: -- probably sit down with some Democrats and do this together. But it`s got to go back to the House, at some point, and they won`t vote for it. And there won`t be --

STEELE: -- at that point, they likely will. You know why? Because they have to go back in their districts and run.

TODD: That I agree with.

STEELE: You come in with your ads, they want to be prepared.

MCMAHON: That`s true though (ph).

TODD: But it`s interesting to me. Essentially, the voters are essentially going to say, Amy, oh, we don`t like Obamacare because it costs too much. It costs me too much. And now, they`re going to say, we don`t like Trumpcare because that didn`t cover enough.

Like, that`s the fundamental problem here is that, you know, the fickle voters here, they want great coverage for a low price. And both parties try to somehow overpromise on this.

WALTER: Of course they overpromise. Of course they overpromise. Of course.

TODD: And this is what`s been biting -- it bit the Democrats. I mean, I know it`s obvious but this is what is biting them both. They`ve been dishonest about the idea that somehow you can lower prices and you can increase coverage.

WALTER: Well, there are two issues here. One is there are very few people as just an overall percent of the population that are going to go through exchanges or be getting health care through this, right?

TODD: That`s a political argument over, like, five percent of the population.

WALTER: Most people who were -- are have -- forming opinions about this health care are not getting covered by this health care. They are getting covered by employer or Medicare. It`s not going to impact their day-to-day lives.

The second piece to your overpromises part goes to, this is challenge when the two parties decide they`re only going to pass major, major legislation with one party, right? They`re going to shove it through on a partisan vote. You`re never going to make everybody happy regardless. But when you shove it through in a partisan way, then you have to overpromise and then it becomes tribal and then we get to the place we are now.

MCMAHON: John Kasich was on one of the programs on MSNBC earlier and he was saying, you can never do major legislation if you want it to stick with a straight party line vote because it`s never going to be accepted by the other side.

Republicans ran against Obamacare for seven years very successfully. They now are going to repeal it, maybe. Replace it with something that people aren`t going to like very much.

And when -- and when essential health benefits go away and the Trump voters who put him in the presidency begin to figure out what this means for them, I don`t think it`s going to be a very good day for Donald Trump, his White House, the Republicans in the Senate or even the Republicans in the House in gerrymander districts because, you know, people are going to figure this out.

STEELE: I think you`re banking too much on health care. I think, by the time we get into the fall and to the next year, one of two things will happen. You`re either going to have a bill that the House or Senate are going to sign off on and the president`s going to sign and the chips will fall where they may. Or the Senate will punt on this thing and it will be nothing. It`ll be status quo and --

(CROSSTALK)

TODD: But, Michael -- but, Michael --

STEELE: You`re stuck -- you`re stuck either way. You`re either going to get, you know, gored by your own ox, by your own hand or you`re going to get gored by somebody else.

TODD: You know, it`s interesting, you`re, like, oh -- wait. The 2009 version of you, OK, watching the Democrat --

STEELE: Right.

TODD: And do you know how many Democrats said essentially the same thing. Oh, it`s too early to assume health care is going to be, like, the be all end all. It`s too -- just wait until the bill passes. Just wait until people start seeing it.

STEELE: No, I`m saying it`s going to be --

TODD: That may have worked for the Democrats four years ago.

STEELE: -- it`s going to be one of two things. We`re either going to be in the space where the -- what you`re saying is right, we own it. OK? We`ve got the whole lock, stock and barrel, because the House and Senate signed off on it and the president signed off. Or the Senate punts completely. That`s all I`m saying.

TODD: Amy, if a guy named Rob Quist is a --

[17:30:00] WALTER: Right.

TODD: -- gets sworn in as a member of Congress --

WALTER: Yes.

TODD: -- in 48 hours.

WALTER: Health care had a big role.

TODD: Will health care die the next day in the senate? WALTER: I don`t know if it will be as consequential as the Dave Brat win.

TODD: Yeah.

WALTER: . in Virginia where immigration died. But that should really scare a lot of Republicans. The difference though is that they`ve already voted for it. And they`ve been promising for eight years that they were going to pass it.

So they are in a terrible gnawing situation. It is either really unpopular even in places where Republican should win or they don`t pass anything and then they look completely inept even though they have all three branches.

TODD: Unpopular, incompetent, you`ll take unpopular every time, won`t you?

STEVE MCMAHON, DEMOCRATIC STRATEGIST: Yes.

MICHAEL STEELE, FORMER RNC CHAIR, MSNBC POLITICAL ANALYST: Yeah.

(CROSSTALK)

STEELE: That`s my point.

MCMAHON: Mitch McConnell was saying as earliest as recently as today that he doesn`t see a path to 50 votes for health care reform in the United States senate. I don`t think that path got any smoother or any easier today. And here`s what`s also going to start to happen.

People who go to their doctors just for the regular routine care and didn`t have a co-pay, are going to start having co-pays when this thing starts to unravel more. And that`s going to affect people in ways that Republicans don`t understand. You know, it`s interesting, nobody has ever taken an entitlement or benefit like this away from someone in American after they`ve gotten it. This is not going to be.

STEELE: And they still won`t.

TODD: Well, I`m with Michael. I have a feeling. Status quo is where this headed.

STEELE: Exactly.

TODD: You guys just stick around. Quite a first 31 minutes in this one. Still ahead, President Trump is set to meet with NATO leaders as another terror attack leads the headlines and obviously impacts what they talk about. How is the Manchester bombing changing those discussions in Brussels? We`ll update next.

(COMMERCIAL BREAK)

TODD: Welcome back. First round of national polls out today post all of the Russia mess special counsel, et cetera. While this is admittedly a very volatile time to poll and the numbers always could change, don`t be surprised if you see a lot of dead canaries near the White House right about now. Could it be found that by a margin of 54-43, Americans believe that President Trump is abusing the powers of his office?

President`s job approval rating in that same poll is just 37 percent. For Quinnipiac, improvement was 36 percent the last time they polled two weeks ago, 55 percent disapproving. This poll found Mr. Trump under water with every single demographic group you could slice except the white men, white voters without a college degree and most of all Republicans who still approve of the president by a wide margin.

So why did President Trump fire FBI Director James Comey? Well, 55 percent in this poll said it was to disrupt the FBI`s investigation and possible Trump campaign ties to Russia. Just 36 percent said they thought it was because the president had lost confidence in the FBI director. Meanwhile, there is a Monmouth University poll out today.

They found that only 32 percent of Americans approve of the health care plan that the house Republicans passed, while 55 percent disapprove of it. Do you think those numbers could get better? Perhaps, but they could also get worse. We may know a lot more about that wave Democrats are hoping for after tomorrow`s special election results in Montana and next month`s congressional vote in suburban Atlanta.

Up next, how the Manchester terror attack is shooting the conversation at the president`s first meeting of NATO.

(START VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: What took place is horrible. Unthinkable. We will win 100 percent.

(COMMERCIAL BREAK)

TODD: Welcome back to "MTP Daily." Right now, President Trump is in Brussels for a summit with NATO allies. The White House plans to prioritize defense of anti-terror spending while meeting with fellow NATO leaders. The attack Monday night in Manchester, England will also be a major topic of discussion as NATO figures out its post cold war role.

There were more arrests related to that attack by the way in Manchester today including the father and younger brother of the suspected suicide bomber who were arrested in Libya. ISIS initially claimed responsibility for the attack. But officials say they have proven links between the suspects and Al Qaeda.

Salman Abedi, a 22-year-old British national of Libyan descent was known to British and U.S. intelligence officials. Officials are concerned now of a follow-up attack saying it is very possible. Speaking earlier today, President Trump was defiant, calling on allies to continue the fight against terrorist groups.

(START VIDEO CLIP)

TRUMP: We are fighting very hard, doing very well under our generals and making tremendous progress. But when you see something like happened two days ago, you realized how important it is to win this fight. And we will win this fight.

(END VIDEO CLIP)

TODD: So what kind of reception is the president going to get with NATO allies? Joining me now from Brussels is Julian Barnes. He covers NATO and terrorism for the "Wall Street Journal" and is the Brussels bureau chief for the journal. Mr. Barnes, welcome. Let me get right to a question because we have a bit of a satellite delay. How has Manchester in that attack changed the conversation already with this NATO meeting?

JULIAN BARNES, WALL STREET JOURNAL BRUSSELS BUREAU CHIEF: Well, it is definitely putting the focus on terrorism. That was one of the two focuses they had. They were going to talk about counter- terrorism but the attack in Manchester makes it much more immediate.

Like there is something to talk about. It also points out problems. This for a lot of European countries is a police matter, not a military matter. Mr. Trump may hear a little bit about that as he talks to leaders and hears their thoughts tomorrow. TODD: There is a bit of a split among NATO nations. On that point, I would like you to get into that. Which countries do see it as a national, sort of a global issue or nationals security or European issue, NATO issue? And which of the major allies do see it as a police issue?

BARNES: Well, look, there`s a broad agreement on what NATO is doing on counter-terrorism. That`s training local forces, working with partner nations that are fighting terrorism directly. What NATO is doing in Afghanistan essentially, a training mission. Now, whether there`s room for the alliance to do more, that`s where the debate is.

Right now the United States hasn`t asked for a combat role. Countries like Germany are dead set against NATO taking on air strikes against Islamic state or reengaging in combat operations in Afghanistan. Other countries like France see terrorism in Europe as a police matter.

But there are countries like Turkey and the United States who say, look, we`ve got to have better intelligence sharing, better cooperation, because the threats that are hitting Europe, hitting Turkey, hitting the United States are emanating from the Middle East. And there`s more that can be done even if NATO is not doing strikes against Al Qaeda or Islamic state.

TODD: I want to talk about the atmospherics at this meeting. Just getting this on the president`s first overseas schedule was a big deal to NATO members and a bit of a back and forth with this White House. Who is trying to reassure whom more? NATO allies with the president or the president with NATO allies? On any given day, I`m confused.

BARNES: It`s actually a good question and that`s exactly right. Who is saying we`re with you more? You know, NATO allies want to hear Donald Trump say he believes in NATO, he stands behind Article 5 which says an attack on one is an attack on all. And Donald Trump wants to have NATO say, hey, we heard your call, we`re increasing defense spending.

You know, both sides are going to get that tomorrow most likely. President Trump is going to say what allies want to hear. And allies are going to endorse Trump`s call for more spending. Maybe not just in the way the White House would hope, but they`re approving measures that should overtime boost European spending.

TODD: I got to ask a final question on Russia. There is a role that NATO has been playing to try to push back against Russia incursions into eastern Europe. How much of that is that going to come up tomorrow and where is the president on this?

BARNES: Well, look, that`s going to be very important to a lot of allies; Estonia, Poland, Lithuania, Latvia. They`re all going to mention it in their remarks. They`re all going to focus on what NATO is doing. And, you know, those countries really support what the U.S. is doing in terms of contributing to the NATO force there to deter Russia.

But, look, the administration has something to say there, too. Just today, they announced, or last night, 4.8 billion in European defense spending to boost those forces which are trying to deter Russia. So if Trump wants to, he can highlight that. Of course, we don`t know exactly what he will say when he is sitting around the dinner table.

TODD: Well, and that is the joy that is of covering this president sometimes. You just never know what he might say. Julian Barnes, the Brussels bureau chief of the Wall Street Journal, thanks for being on, sir, appreciate it. So, is it better right now if you`re a Republican to talk about Russia or health care? We`ll have that debate after the break.

(COMMERCIAL BREAK)

TODD: Tonight, I`m obsessed with potica. No, I did not say pizza.

(START VIDEO CLIP)

UNIDENTIFIED MALE: What do you give him to eat? Is it potico?

(END VIDEO CLIP)

TODD: Well, never mind what the pope was joking about, but it was the pope joking with first lady, Melania Trump, today about a sweet treat that might be served these days on the White House China at home. Four reporters initially thought the pope said pizza. But it turns out he said potica, which is something we didn`t know about.

We can always count on the pope to teach us something new. So what exactly is potica? We of course get the answer. It is a pastry from the first lady`s homeland of Slovenia. It sometimes called a nut roll in this hemisphere.

The traditional recipe calls for about a pound of ground walnuts, look at that, we even have the roll of that, in sugar, butter, mixed with filling. Whip in a few cream, that all goes on top of the blanket of dough before it is rolled up and baked.

Are you hungry yet? We are a little bit. I just got one question these days. I`m guessing it is not so gluten-free. We`ll be right back.

(COMMERCIAL BREAK)

TODD: Time for "The Lid." Panel is back; Amy Walter, Steve McMahon, Michael Steele. So my question to each of you guys was, okay, I had Senator James Lankford on. We talked about a little bit of NATO, little bit of terrorism, little bit of Russia. We ended up talking about health care. My question to you, Michael Steele, as a Republican, right now in this environment, would you rather be talking about health care or the investigation into Russia?

STEELE: Russia all day long.

TODD: Politically, why is that?

STEELE: Politically because it speaks to a sweet spot with your base and the aspect of health care is still too unsettled within the party as a whole. You have factions within the GOP itself. It cannot pull out a solid front. So while they work that out, let`s talk about the thing that we should be concerned about, what Russia is doing, how they`re doing it, all of that, absolutely. And also, you got this thing.

TODD: You`re not going to undermine the president here? Did you feel like.

STEELE: I feel like -- I feel like.

MCMAHON: Throwing him under the bus?

STEELE: No, you`re not throwing him under the bus, but I really think you get past that with this investigation.

TODD: Easier to get past Russia than health care?

STEELE: Yeah.

MCMAHON: But you have something to say. I mean, ultimately what Republicans are doing in both instances is defending the indefensible. They say we want to get to the bottom of Russia but not if it hurts this president. They`re protecting this president and this administration at all cost and at their own political peril. I don`t think it is a very good. TODD: Amy, let`s talk about tax cuts. Amy, you know where I`m going here which is the Beltway is consumed with Russia.

WALTER: Yeah.

TODD: Is America consumed with health care?

WALTER: If I were -- I`ll put it on the other hand. If I were a Democrat, where would I be spending my ad dollars right now, on Russia or on health care? I would be spending it on health care, which they are.

TODD: Which they are.

WALTER: Right? You noticed that -- granted that all these special elections are in Republican-held districts, but even in a swing district or even in, you know, a less difficult environment for Democrats, I still would be running about health care. Policy we`re going to talk a lot, I`m sure about the budget. Just the overall running and functioning of the government.

The Russia stuff, I think, it plays for the base. Michael is right. It can gin up on both sides. If you`re running to get those, disaffected sort of the middle of the road, not paying attention every day voters, I would go with health care. MCMAHON: I think what Republicans are discovering, if they haven`t, they will soon, the word Obamacare is unpopular with a lot of voters. But every single feature that`s in Obamacare that you try to unravel is very popular with the voters. And it`s the individual elements of this that people are objecting to. The Republicans taking away. And if they can`t figure that out.

STEELE: Which is why you don`t talk about it.

TODD: Mitch McConnell would sit there and say, tax reform. He would say -- he would say don`t give me that choice. We`re going to talk about what we do. We`re going to talk about tax reform. Can they successfully, A, pivot to that and pass something meaningful enough that Americans would forgive them?

STEELE: On tax reform?

TODD: Yeah.

STEELE: I think they can. The difference for me between tax reform and health care is that you can compartment allies tax reform. I can do tax cuts, I can do repatriation of funds. I can do a whole lot of individual pieces. I don`t have to do one big bill like you have to do with health care.

So it`s easy to do it in bite size chunks that appeal to certain aspects of our economy, whether it`s the business community, middle class, whatever. And redirect the conversation into a space that is really up the president`s alley, which is where the president wants to be anyway. So let`s help him get there and have that conversation.

WALTER: That`s what the most remarkable to me. I thought when this administration began, that we are going to see every day or at least every week something like we saw with the carrier decision. The president going.

TODD: That`s what I thought.

WALTER: . talking every minute about, I don`t care if it`s 25 jobs, that he would be out every day talking about that.

TODD: He was going to be the mayor, hey, look at this job.

(CROSSTALK)

STEELE: Exactly right.

WALTER: Because that really is ultimately -- look, this is where Republicans want to make the case, and they are making the case that this is going to be about choice and cost, right? That`s where they want to go to on health care. If they succeed, it will be that a year from now, people`s costs are lower. We don`t know how they`re going to get there, but that`s how they win on that fight.

But overall where voters are going to be paying the most attention is to their pocketbook and how they are feeling about the economy. And that the president getting caught up in the all this legislative morass about the CBO score and all that doesn`t get to what he was doing at the beginning.

TODD: All right. I think the debate has been settled. They want talk about potica.

(LAUGHTER)

TODD: Amy, Steve, Michael, thank you all. After the break, a historic day in the Hawkeye State.

(COMMERCIAL BREAK)

TODD: Finally tonight, in case you missed it, and I`m guessing many of you did, it`s the end of an era in Iowa. The end of a very long era. The Hawkeye State is trading one history making governor for another. Terry Branstad, the longest serving governor in American history has officially resigned. And former lieutenant governor, Kim Reynolds, is now the governor.

She`s the first woman to hold the office in Hawkeye State history which she called humbling and exciting. The governor`s staff tracked his days of service and today was day number 8,169. If you want to do that by our calculations, that means he has been governor of Iowa off and on for 22 years, four months, two weeks, and three days. Now, Branstad`s title is ambassador.

He got sworn in today as the U.S. ambassador to China. Governor Reynolds will hold the office through 2018 when she is expected to attempt to run for a full term. But nothing is guaranteed. She is expected to face both a primary fight and probably a tough challenge in a general. She may get primary challenge from the mayor of Cedar Rapids.

One thing it seems the new governor can count on, Branstad`s backing at a press conference yesterday. Her predecessor pledged 100 percent of his support for her. And friends are good to have even in politics. Even if they`re on the other side of the world. But as for that Branstad, mark, who is going to pass 22 years as a sitting governor in this country ever again?

That`s all for tonight. We`ll be back tomorrow with more "MTP Daily." "For the Record" with Greta though starts right now.

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