The Last Word w/ Lawrence O'Donnell, Transcript 8/7/17 NYT: Republicans consider Presidential Run

Guests: Jonathan Capehart, David Jolly

Show: THE LAST WORD WITH LAWRENCE O`DONNELL Date: August 7, 2017 Guest: Jonathan Capehart, David Jolly

JOY REID, MSNBC: It`s going to be a long --

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UNIDENTIFIED MALE: Million people lose coverage in North Carolina.

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REID: Wow, Congress might want to start wishing that they had booked their summer vacations in Europe instead of heading back to their home districts.

There`s still 24 days left in August, it`s going to be a long recess. Watch this space. All right, that does it for us tonight, Rachel will be back in this very chair tomorrow.

And right now, it is time for THE LAST WORD with the great Lawrence O`Donnell. Good evening, sir, Lawrence.

LAWRENCE O`DONNELL, HOST, THE LAST WORD: Good evening, Joy, you know, I`m going to use some of that Mark Meadows video later in the show.

And as I was writing a little something about it, I was trying to think of how to describe him, and I found myself --

REID: Yes --

O`DONNELL: Saying, extreme conservative Republican, but I`m not sure what conservative means anymore.

REID: Yes --

O`DONNELL: He`s extreme something. He`s freedom caucus. He`s like the guys on the right, but I`m not sure that conservative -- I mean, there are plenty of principled conservatives who say no, this stuff is not conservative.

REID: Yes, I think they`re boo bait. They`re just getting booed every time they walk on stage, it`s boo bait --

O`DONNELL: Yes, those videos are irresistible, and we will be showing some of them in the next hour, thank you, Joy.

REID: We`ll be watching, have a great show --

O`DONNELL: Thank you.

REID: Well, the person President Trump has to fear most could be one of the people he spends almost every day with.

We identified him as the most dangerous man in the Trump White House a few months ago, and that man is, of course, Mike Pence.

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UNIDENTIFIED FEMALE: A Republican shadow campaign is taking shape with Mike Pence maybe ready to step in, should the president decide not to run in 2020.

UNIDENTIFIED FEMALE: Mr. Pence, outside PAC has actually raised more in donations than the president`s PAC has.

UNIDENTIFIED MALE: The donors are worried that Donald Trump with his approval rating are so low that it will be very difficult for him to get reelected.

UNIDENTIFIED MALE: There are a number of Republicans now who feel totally free to block him, to speak out against him, they don`t fear him at all.

UNIDENTIFIED MALE: Referring to our colleagues across the aisle as losers or clowns is just not the direction to go.

They`ll stand up every time to the president when he`s doing things that I don`t think he should be doing.

UNIDENTIFIED FEMALE: The Republicans are trying to stave off the civil war that`s public and going to come in their party, you know, whenever the supposed Trump era is.

UNIDENTIFIED FEMALE: He is the most selfish president who has ever occupied the Oval Office.

UNIDENTIFIED FEMALE: Hell, yes. A lot of Republicans would much rather be doing business with Mike Pence.

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O`DONNELL: The president of the United States attacked the "New York Times" today, A, because it`s Monday and, B, because the "New York Times" said that Mike Pence, Vice President Mike Pence is making plans to run for president in 2020 if Donald Trump doesn`t run for re-election.

That story in the "Sunday Times" got this reaction from President Trump today. How much longer will the failing "New York Times" with its big losses and massive unfunded liability and nonexistent sources remain in business?

The story that Donald Trump claims has nonexistent sources does have some unnamed sources and some named sources.

One of the named sources explained why potential Republican candidates are looking at 2020 when Donald Trump is supposed to be running for re- election.

That source said, quote, "they see weakness in this president, and that source is, of course, Senator John McCain."

There is probably no potential Republican candidate for president who sees more weakness in this president than Mike Pence does on a daily basis.

Mike Pence sees it up close. Mike Pence sees how weak this president is when the door is closed and there are no cameras present.

Mike Pence truly knew long before we did just how weak this president was on the phone with the president of Mexico in January, begging the president of Mexico to stop saying that Mexico would not pay for the Trump wall.

Mike Pence knows that Donald Trump was too weak to ask or demand that the president of Mexico pay for the wall, and so he was just begging, begging the president of Mexico to stop talking about it publicly.

And he is so weak that he failed in that begging. The president of Mexico issued a statement about that phone call that emphasized that Mexico would not pay for the wall.

Mike Pence sees the president`s weakness up close, and he sees the president`s incompetence up close, and he sees his ignorance up close.

Mike Pence knows that the nickname for the president in the West Wing is now the two-minute man, referring to the president`s attention span.

Mike Pence has seen the president`s -- Mike Pence and no one in America -- no one in American has ever seen a president who cares less about doing the work of the presidency.

Mike Pence has seen all that. Every vice president is a heartbeat away from the presidency as they say, but Mike Pence knows that he may be a plea bargain away from the presidency.

Mike Pence knows that he may be our next Gerald Ford and assume the office of the presidency because the president in effect plea bargains with the impeachment process and resigns.

And so of course, Mike Pence is running for president. Of course he is. And of course, Mike Pence is planning to run for president in the next presidential campaign because he knows how erratic and impulsive Donald Trump is.

And that Donald Trump just might just be the next incumbent president to quit in the middle of his re-election campaign the way Lyndon Johnson did in 1968.

Lyndon Johnson began his re-election year appearing to be invulnerable, on his way to a landslide re-election. Then came a surprise challenge from inside his party, first from Senator Eugene McCarthy and then Senator Robert Kennedy, and then Lyndon Johnson lost the will to fight for the presidential nomination within his own party.

And on March 31st, March 31st, 1968, Lyndon Johnson shocked the country and the world when he said this.

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LYNDON JOHNSON, LATE FORMER PRESIDENT OF THE UNITED STATES: I shall not seek, and I will not accept the nomination of my party for another term as your president.

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O`DONNELL: That moment was absolutely unthinkable until it happened. Donald Trump not running for re-election would not be surprising, and thanks to Lyndon Johnson, it would not be unprecedented.

Ohio Governor John Kasich is one Republican who is thinking of running for president even if Donald Trump runs for re-election.

And by 2020, there could be a very big opening for John Kasich in Trump country. Donald Trump came in a close second in the Ohio caucuses in 2016.

In 2020, he might come in a distant second in the Iowa caucuses if John Kasich runs against Trump on jobs in Iowa. Wright County, Iowa, voted for Donald Trump 2 to 1 over Hillary Clinton.

But some Trump voters there are now very disappointed in the president because he actually fulfilled one of his campaign promises.

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DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I`m going to withdraw the United States from the Trans-Pacific Partnership which is not yet been running.

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O`DONNELL: Donald Trump actually delivered on that promise on his first week in office. One farmer in Wright County, Iowa, who voted for Donald Trump told "Politico", "I was disappointed Trump kind of broadly wiped out TPP before there was even a discussion."

Iowa was one of the many agricultural states that was poised to win huge economic gains and jobs if the United States ratified the Trans-Pacific Partnership.

But that`s not the story Trump and other politicians told about the TPP.

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TRUMP: The Trans-Pacific Partnership is another disaster, done and pushed by special interests, who want to rape our country, just a continuing rape of our country. That`s what it is, too.

It`s a harsh word. It`s a rape of our country. This is done by wealthy people that want to take advantage of us.

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O`DONNELL: Nothing has hurt American farmers more than canceling the Trans-Pacific Partnership. But American farmers do not have the Trumpian indecency to call that rape.

That is the only time Donald Trump spoke out against rape on the campaign trail. And of course, he didn`t actually mean rape.

Bernie Sanders, whose position on TPP was identical to Trump`s never called it rape. That is a uniquely Trumpian gift to the TPP debate.

A hairstylist in Iowa told "Politico", "if the farmers have a bad year, we all have a bad year. If the farmers have a good year, we all have a good year.

Bad years are coming to American agriculture because of the cancellation of TPP. American agriculture long ago began producing more food than America can consume, profit for American farmers is almost entirely dependent on exports to foreign countries.

So when President Trump made noises early in his administration about using executive actions to try to pull out of NAFTA, Iowa corn farmers panicked since their profit margins is dependent on exports to Mexico.

Donald Trump won the electoral college by winning the votes of some people who did not want him to do some of the things that he promised to do.

And that is one of the reasons he is the weakest president in the history of polling at this point in his presidency. It`s because so many of his voters did not vote for all of the Trump agenda.

They were registering a protest vote, many of them, and their next protest vote might be against Donald Trump not just for policy positions, but for the chaos he has created in government and the possible criminality.

The special prosecutor Robert Mueller is investigating yesterday in a rare media appearance. Deputy Attorney General Rod Rosenstein, who appointed the special prosecutor said this about the investigation.

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CHRIS WALLACE, FOX NEWS: In the course of his investigation of the issues that he is looking at, if he finds evidence of a crime, can he look at that?

ROD ROSENSTEIN, DEPUTY ATTORNEY GENERAL, UNITED STATES: Well, Chris, if he finds evidence of a crime that`s within the scope of what Director Mueller and I have agreed is the appropriate scope of this investigation, then he can.

If it`s something outside that scope, he needs to come to the acting attorney general, at this time me, for permission to expand his investigation.

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O`DONNELL: Joining us now, Jeremy Bash; Msnbc national security analyst and a former chief of staff at the CIA and Defense Department.

Also with us, Jill Wine-Banks; former assistant Watergate special prosecutor and an Msnbc contributor. And Jill, people who have been studying the Rosenstein response for 24 hours now, what did you make of that?

JILL WINE-BANKS, LAWYER: I think it really reaffirms the breadth of the power that Mr. Mueller has and his jurisdiction includes not just collusion between the Trump administration or the Trump campaign and the Russian government, but anything that stems from that.

And that can also be looking at his intent or the motive for cooperation. And that means looking at finances, his financial records, his tax returns to see what the connection is financially between Russia and Mr. Trump.

O`DONNELL: But Jeremy Bash, it`s that last part where Rosenstein says, if it`s something that`s outside the scope, he, meaning Mueller, needs to come to the acting attorney general, at this time me, for a permission to expand his investigation.

Does that sound like a limiting element here to you?

JEREMY BASH, FORMER CHIEF OF STAFF AT THE CIA & DEFENSE DEPARTMENT: Not so much because I think there is so much that is within the scope as Jill referenced.

If you read the original Rosenstein memo, it says that Mueller would have jurisdiction to prosecute any matters that arise.

And that is a very broad term. And I think that also includes basically anything -- any instance in which the Russian federation would have leverage over the presidency, over the United States.

So that could include the whole gamut of financial transactions that have tied the Trump organization to Russia for many years.

O`DONNELL: Jill, but that phrasing "any matters that arise from the investigation", that`s right there in Rosenstein`s authorization of the special prosecutor.

And I have been taking that to mean that if in this investigation the special prosecutor trips over something that has nothing to do with Russia, that took place that has to do with some deal made for a golf course in the United States.

That if there`s a crime involved, he can investigate and prosecute that crime, and he doesn`t have to go back to Rosenstein to get a broadened authority.

What is your interpretation of that?

WINE-BANKS: It`s a tricky question, and I think it`s possible that you`re correct. But it`s also possible that he would have to go back and ask permission.

But I think it would be very hard for Mr. Rosenstein to say no to any expansion, particularly because of the cover letter he wrote with the order.

He makes it very clear that the reason he`s appointing a special prosecutor is to have independence from the normal chain of command in the Department of Justice.

And that would apply to any potential crime involving the Trump family or the president or anyone in his campaign. So it would be very hard having had that as the background for Mr. Rosenstein to say no if, for example, as happened in the Clinton administration, where you had a real estate deal.

And then it suddenly turned into somebody let them know that there might be a blue dress. And he expanded the investigation.

I think you can`t say no if someone comes forward to the trusted special prosecutor and admits some kind of criminal act. I don`t think the attorney general or the acting attorney general or anyone at the Department of Justice can say no to that.

O`DONNELL: Let`s listen to something else that Rosenstein was asked about, and that is what is and is not a presidential order when it comes to the Justice Department? Let`s listen to this.

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WALLACE: And the president, because he can order the Justice Department to do things, when he says here`s what prosecutors should be doing, they should be looking at Hillary Clinton, do you view that as an order?

ROSENSTEIN: No, Chris, I view what the president says publicly as something he said publicly. If the president wants to give orders to us in the department, he does that privately, and then if we have any feedback, we provide it to him.

I can tell you the president has not directed us to investigate particular people, that wouldn`t be right, that`s not the way we operate.

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O`DONNELL: Jeremy, that last part of Rosenstein going out of his way to say this isn`t happening, this thing that the president wants us to do about Hillary Clinton, that I found pretty extraordinary.

BASH: I did as well, Lawrence, but I also found extraordinary that the president has directed the Justice Department to engage in a war on leaks.

And in some ways if you think about it, Lawrence, this is sort of a back door to allow Sessions to reverse his recusal. What do I mean by that? Sessions is, of course, recused from the Russia investigation. But if he is in charge of investigating leaks about the Russia investigation, it provides an opportunity for him to crack down on anybody trying to interfere with the investigation.

O`DONNELL: And, Jill, I want to -- this is a political question, but I want to go back to your memory of the Watergate era.

The idea that this president is going to serve out his term now because we have the Watergate model and because we have the Nixon resignation model, it is alive not just in our imaginations but in the rhythms of the story, the possibility that Donald Trump would not serve out his term.

And so it seems completely unsurprising on the basis of the state of the investigation and the special prosecutor that Republicans wouldn`t be thinking, what am I going to do in the next presidential election if Donald Trump either isn`t running or is forced to drop out because of the investigation, which is the most likely impediment at this point to a re- election campaign.

WINE-BANKS: I think you`re absolutely right, and it didn`t take very long when you think about it. We were appointed in May of 1973, and in August of `74, just a little over a year later, the president resigned based on the evidence that we had uncovered.

And so if we can look forward and say a year from now, the Mueller investigation may produce the same results, it`s going to be well before the next election.

And this rumor about Mike Pence could be true, that he would become the vice -- the president without ever having to run.

And so everybody may be looking to who is going to run in the next election in 2020?

O`DONNELL: Jill Wine-Banks, thank you very much for joining us. Jeremy, please stick around for another segment, really appreciate it.

Coming up, the president`s new chief of staff could not stop the president from a flood of Twitter activity this morning when he was watching TV as usual.

And Republicans are promising tax cuts, but at town halls, they are still getting questions about health care.

And tonight, a question about the Trump wall that was not answered the way Donald Trump wants it answered by his Republican members of Congress.

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O`DONNELL: And now the two-minute man. In a report from "The Washington Post", even President Trump`s national security adviser H.R. McMaster can`t get the president to focus.

After attending multiple meetings to craft foreign policy over the Spring and Summer, "The Washington Post" reports "Trump had little time for in- depth briefings on Afghanistan`s history, its complicated politics or its seemingly endless civil war, even a single page of bullet points on the country seem to tax the president`s attention span on the subject, said senior White House officials.

I call the president the two-minute man, said one Trump confidant. The president has patience for a half-page."

President Trump had been warned against the legal complexities of a transgender -- a military ban against transgender enlistees.

White House lawyers and Defense Department lawyers tried to slow him down, tried to explain the details of this, tried -- needed time, they said, to work out the legal complexities of it, to see if it was possible.

But then, according to "Politico", the Trump administration had no plan in place, but Trump told others they would have to get in gear if he announced the ban first, one White House adviser, who spoke to Trump said.

He also said the announcement would stop the lawyers from arguing with him anymore. And so the president simply announced it on Twitter.

Joining us now is Lucian Truscott; a West Point graduate and the author of "Dress Grey" along with many other books on the military.

He`s now a columnist for "Salon". And back with us, Jeremy Bash. Lucian Truscott, with your experience with the military and the way generals operate, this president has now surrounded himself with generals.

Is that going to improve the workings of the Trump presidency?

LUCIAN TRUSCOTT, AUTHOR & JOURNALIST: I don`t think so. I think we saw the evidence today. I think in the pecking order of Trump`s generals of it, General Kelly has now moved down to number three.

The evidence being that he couldn`t control Trump tweeting. And I think number two is McMaster, but McMaster can`t control Trump`s attention span, and that leaves Mattis over there at the Pentagon, who is the last man standing sort of.

He is the one I guess that we should look to, to moderate Trump on Korea or anything else that`s going on in the world.

O`DONNELL: And Jeremy, we saw a bunch of angry tweets this morning against Senator Blumenthal. Donald Trump saw him on television talking about the special prosecutor`s investigation and immediately started firing off these things.

And we now have reports indicating that General Kelly was with the president this morning in New Jersey, so was either near him when this was going on and either could not control it or saw the tweets and said, OK, we`re going to let him fire off this group of tweets.

BASH: Well, the staff has to get very creative when they`re thinking about influencing this president.

I`ve heard a lot of discussion about showing pictures to the president of things like nuclear weapons during intelligence briefings.

They need to show him pictures so he`ll understand what we`re talking about. I heard some analysts advising the White House that they should create a video of the consequences of a military strike in North Korea so we can see it like if it were on cable news, spilling forth what all the consequences would be.

Only the president would understand the video. And I`ve also thought ironically that the only way we`re ever going to wedge this president away from Vladimir Putin would be to use our influence with people at "Time Magazine" and somehow try to name Putin "Time" man of the year.

Only that might do it.

O`DONNELL: Lucian Truscott, the idea that the military approach is the right approach for everything, which seems to be Donald Trump`s notion that, I know, the military can solve it.

So you put General Kelly in charge of the White House after having put General Kelly in charge of homeland security.

Maybe there will be another general in charge of that soon. What is our experience with that as a country?

TRUSCOTT: Well, the experience is not very good, and the experience this time I don`t think is going to be very good either.

I think if everybody thinks that Trump`s generals are the adults in the room, we`re doomed because you have to look at these guys with this in mind.

All of their -- their entire careers were made out of two wars that we`ve lost. We didn`t win the war in Iraq and we didn`t win the war in Afghanistan.

So I don`t know why he thinks that you can bring generals around him, surround himself with generals who really haven`t got a very good record over the last 10 or 15 years.

O`DONNELL: And Jeremy, this is -- this is the only presidential candidate in recent memory who ran and when talking about generals and when talking about military matters claimed to be smarter than the generals or to know who the good generals were and who the bad generals were without ever mentioning names, of course.

And here he is getting reports now in meetings with generals over what to do in Afghanistan, and President Trump gets so angry at them that he just starts yelling in frustration about it all.

BASH: Yes, I`m not sure I agree with the last statement that the generals haven`t done a very good job. I think that`s too much of an overstatement.

But I do think it is important to have national security professionals around this president. There was an article today also in "The Washington Post" about how the president likes his CIA director who took political lines.

That`s dangerous for the Central Intelligence Agency, for the professional military to take a political stance with the commander-in-chief.

O`DONNELL: And Lucian Truscott, the -- what do you see unfolding here over time, given what we`ve been able to observe about Donald Trump`s personality.

There is a -- you could say, a military frame of mind, a military style. At least, those of us on the outside feel that there is.

And Donald Trump seems has -- seems to share none of that in any way, none of the discipline, none of some of the admirable qualities that the military does instill.

The generals involved in dealing -- now working with President Trump at the cabinet level and now General Kelly as chief of staff, they don`t have any real experience in their military lives trying to control a person like this, right?

I mean this kind of person would have been drummed out of the military very quickly.

TRUSCOTT: Well, there`s that. I think you`re exactly right about that, Lawrence. But the real disconnect here is that what generals know about and what they`re trained to do at places like West Point; the Naval Academy, the Air Force Academy is understand the exercise of power in the absence of money.

You can`t give a guy a raise in the military for charging a machine gun nest. You can`t tell somebody, I`ll play you extra if you fly this night mission.

Trump only understands money. And the very idea that he would think that the answer to all of his problems lies with these guys that are so completely different from him, have a completely different background in what they do and how they`ve lived their lives, it`s just -- it`s just foolish.

It`s fool hardy. It`s really unbelievable, I think, because he stacked the cabinet with as many billionaires as he could to get in there.

But then look at these important positions that he turned over to generals, and these people are people that he just doesn`t understand at all.

O`DONNELL: Lucian Truscott and Jeremy Bash, thank you both for joining us tonight, appreciate it.

BASH: Thank you.

TRUSCOTT: Thank you.

O`DONNELL: Coming up, Senator Jeff Flake slammed his party yesterday on "Meet the Press" for not doing enough, not standing up to Donald Trump when he lied about President Obama`s birth certificate.

But what did Jeff Flake do?

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LAWRENCE O`DONNELL: And now for tonight`s episode of Better Late Than Never starring republican Senator Jeff Flake. Six years late.

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JEFF FLAKE, REPUBLICAN SENATOR: I wish that we as a party would have stood up, for example, when the birtherism thing was going on. A lot of people did stand up, but not enough.

CHUCK TODD, JOURNALIST: did you do enough?

FLAKE: That was particularly ugly

TODD: Do you think -- I`m just curious

FLAKE: On that, I think I did.

(END VIDEO CLIP)

O`DONNELL: Oh, no, no, no, no, you did not. You definitely did not do enough. The first time we can find Jeff Flake saying something negative about Donald Trump`s lies about Barack Obama`s birth was in June of last year after Donald Trump had already locked up the Republican Presidential nomination.

And what Jeff flake said then was not exactly a condemnation. He said "he has said he`s an unapologetic birther. I don`t know how anybody seriously any right-thinking person who can still believe that canard. But I think he knows a lot of Republicans believe it, and he`s willing to pander to them." If Republicans as a party had stood up against Donald Trump`s lies about President Obama`s birth six years ago, they could have stopped Trumpism in its tracks, but they didn`t, and Jeff Flake didn`t. Here`s Donald Trump six years ago, April 7th, 2011.

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DONALD TRUMP, PRESIDENT OF THE UNITED STATES: He may not have been born in this country, and I`ll tell you what three weeks ago I thought he was born in this country. Right now I have some real doubts. I have people actually been studying with it, and they cannot believe what they`re finding

REPORTER: You have people now down there searching, you mean in Hawaii?

TRUMP: Absolutely, and they cannot believe what they`re finding.

O`DONNELL: I said Donald Trump was lying about that that day, six years ago. Jeff Flake said nothing. But yesterday Jeff Flake said he thought he did enough in taking a stance against that lie. The first time Donald Trump opened his mouth about President Obama`s birth, I said he was lying. Jeff Flake said nothing.

The news media as a whole never figured out how to handle Donald Trump`s lying about President Obama`s birth in interviews, and Donald Trump knew they would never figure out how to handle his lying because none of them were accustomed to dealing with an outright pathological liar talking about the President of the United States on television in interviews. And so every Trump interviewer failed whenever the subject of President Obama`s birth came up. F or six years, they failed every one of them.

And then last year, Donald Trump said President Obama was apparently born in the United States, and he didn`t want to talk about it anymore. And the news media for the most part followed his orders and did not ask him about it anymore. And the final great attempt -- and I do mean great attempt -- to corner Donald Trump on this was admirably launched by Lester Holt in the first Trump versus Clinton Presidential Debate.

Lester Holt went at it repeatedly. He went at it several times before eventually being forced to move on because of the debate format to other subjects. Lester Holt`s final attempt to get Donald Trump to admit his lie about President Obama and admit that it was a lie with a racist appeal. In that final attempt, Donald Trump closed the book on the subject this way.

(BEGIN VIDEO CLIP)

LESTER HOLT, NBC NEWS ANCHOR: We`re talking about racial healing in this segment. What do you say to Americans --

TRUMP: Wwell, it was very -- I say nothing. I say nothing because I was able to get him to produce it. He should have produced it a long time before. I say nothing.

(END VIDEO CLIP)

O`DONNELL: I say nothing. Well, Jeff Flake said nothing. He said nothing too. He said nothing that night about Donald Trump`s racist lie. It would have been much more important for Jeff Flake to say something that night, on debate night, than it was yesterday now that Donald Trump is the most unpopular first-year President in the history of polling.

It takes far less political courage to say that now, but this is not the where were you when we needed you segment, it is the better late than never segment. So this is one of those moments where graciousness should overrule other feelings. So it`s time to say thank you, Jeff Flake, because better late than never. But we are never going to count Jeff Flake as part of America`s early warning system that will try to save us from the worst poisons in our political system.

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(BEGIN VIDEO CLIP)

FLAKE: During rallies when the chants lock her up," you know, we shouldn`t be the party for jailing your political opponents, and anybody at that rally, anybody at those rallies ought to stand up and say that`s inappropriate. We shouldn`t be doing that.

(END VIDEO CLIP)

O`DONNELL: Joining our better late than never discussion, Jonathan Capehart, an MSNBC contributor also with us, David Jolly, former Republican Congressman from Florida. Jonathan, Jeff Flake, it`s better late than never, I guess. He`s opposed to the locker up chants. Good to know and he thinks the attacks on President Obama`s birth was something that maybe Republicans should have stood in the way of.

JONATHAN CAPEHART, MSNBC CONTRIBUTOR: Yes, better late than never. I think you raised a very good point in your excellent summation before we came back. You know, in his new book, devil`s bargain, Josh Green writes that the lesson that Trump learned from that whole racist birther lie that he perpetuated for years --

O`DONNELL: For five years before the campaign.

CAPEHART: Right. The thing that he learned, the number one lesson that he learned from that was that there was no price to pay for saying something so outrageous, so racist about the sitting President of the United States. And as a result, we saw him go out and actually run for President and slander his fellow opponents, Lyin` Ted, low energy Jeb, crooked Hillary, little Marco. So, you know, I`m actually very happy that Senator Flake has found it within himself to be very bold and very vocal about what the party needs to do now that Trump is President and he is violating every convention, every norm, everything that we used to hold dear about American political discussion, now that he`s trashed all of that.

But what it`s going to require for Jeff Flake`s word to have any meaning is he`s going to have to do all of this when there is no book tour, and he`s going to have to convince senior members of the Republican Party to follow him in saying the exact same thing.

O`DONNELL: well, his senior senator from Arizona, John McCain, in our opening segment, he said, they see weakness in this president. David Jolly, he was talking about the potential republican candidates for president who might run in the next election.

DAVID JOLLY, FMR. REPUBLICAN CONGRESSMAN: Sure.

O`DONNELL: Whether Donald Trump runs or not.

JOLLY: Sure, sure, look, we know this President is historically weak, but Jonathan`s exactly right. What Trump proved with birtherism is there was no price to pay for spouting that type of rhetoric. That is why it was one of the very dark chapters in Republican history, not just modern history, but all of Republican history. we`re living it today, though, when you see Gingrich take on Mueller, a law and order man, when you see the likes of Laura Ingraham take on McMaster, a three-star, purple heart, silver star, active duty soldier. But there`s something else going on with Donald Trump, and it`s this. if Bill Clinton felt your pain, Donald Trump felt your anger.

But Bill Clinton took that economic populism to bring people together, to bring the country together, to build empowerment policies for people. Donald Trump turned it into a cultural populism that divided the country, and it was reflected in the very beginnings of birtherism that he was the architect of.

O`DONNELL: Jonathan, one of the things we`re seeing in this Pence for President campaign -- and he is running. I mean it might not be in the next one, but it will be in the one after that. He`s a more disciplined person, and running for president does require a certain discipline. At least it had until the last campaign.

CAPEHART: Right.

O`DONNELL: So he`s working in a very disciplined way on fund-raising, actually raising more money than donald trump is raising. and it would make sense that he do that even if it was in support of the trump/pence ticket.

CAPEHART: Right. Discipline is the exact right word about Mike Pence. He comes from the world of politics unlike the boss, unlike president trump. Mike Pence came from the House. He was governor of Indiana.

He actually believes in the conservatism that he talked about. And so he is very steadied, very measured, and I think in a lot of ways, a lot more dangerous for people, particularly people at home. I think for people who are concerned about the United States` standing in the world and whether, you know, we`re a tweet away from bombing North Korea, you don`t have that worry with Mike Pence.

You have that worry with Mike Pence at home. and so if you know that the guy who is at the top of the ticket is a little unstable and that you might be called in to jump in, what do you do if you are a conservative from Indiana who comes from the world of politics and has always been about being ready? You get ready.

O`DONNELL: David, what`s your reaction to that, the possibility of Mike Pence moving out and going for the top position?

JOLLY: Look, you nailed it at the very top of the hour. He`s running. There`s no question. He`s the Vice President.

He`s still young. He`s either running in `20 or `24. But let`s not overlook the fact that Mike Pence is tainted by all things Donald Trump. Every time he stands up and says it`s his high honor to introduce the President of the United states, that means he is supporting the President of the United States.

And I would say this. There`s going to be a lot more people than Mike Pence running for President. You`re going to see a lot of republican politicians at university of Iowa football games this fall and next fall. No question about it.

O`DONNELL: All right. Quick break, please stay with us and when we come back, a republican town hall tonight showed that the president`s next big problem with congress is going to be the wall that Donald Trump wants congress to pay for instead of Mexico.

(COMMERCIAL BREAK)

O`DONNELL: The Trump wall is coming back to haunt Donald Trump. Tonight Republican Congressman Mark Meadows held a town hall in North Carolina where he was asked whether congress is going to pay for Donald Trump`s wall on the southern border.

(BEGIN VIDEO CLIP)

MARK MEADOWS, UNITED STATES REPRESENTATIVE: So ?I believe that we have to build a wall in portion -- hold on, hold on. And then -- so hold on, all right. So hold on, we believe that there will be a wall in some areas. There will be a virtual fence in some areas. It will really be about securing our southern border.

I believe that honestly that if there`s any amount of monies that`s allocated to it this year, it would probably be a little over $2 billion, which honestly doesn`t build a wall. It doesn`t build a wall. I mean it`s a 12 to $20 billion fee but as we look at that -- so as -- as we look at that -- so as -- well, Mexico I don`t think is paying for it.

(END VIDEO CLIP)

O`DONNELL: A virtual fence. How much does a virtual fence cost? Last week we learned Donald Trump never believed what he was saying about Mexico paying for the wall on the southern border after transcript of his conversation with the president of Mexico was published by the Washington Post. The government leaders on Capitol Hill are worried that a funding fight over the Trump wall could shut down the government next month when congress has to pass a spending bill.

(INAUDIBLE) no one sees Trump`s wall getting much more than a symbolic nod which is sure to anger Trump and the Bannon faction and could lead to a shutdown. Sources close to Trump say he will go crazy when he realizes congress has no plans to pay for it. What do you mean will? Will go crazy? We are back with John (INAUDIBLE) and David Jolly in a moment.

(COMMERCIAL BREAK) (BEGIN VIDEO CLIP)

WILL HURD, UNITED STATES REPRESENTATIVE: Building a wall from sea to shining sea is the most expensive the least effective way to do border security.

(END VIDEO CLIP)

O`DONNELL: Back with us Jonathan Capehart and David Jolly and Jonathan we just heard from a Texas republican -- Texas congressman who like many republicans in Texas don`t think the border wall is a great idea. And we may be headed for a government shutdown over the Trump wall which would theoretic -- which would in one level be a shut down over congress`s failure to pay for the wall. But isn`t it really a shutdown over Mexico`s failure to pay for the wall?

That`s the Mexican government shutting down the American Government?

CAPEHART: Yes. If you follow the logic of President Trump who said that Mexico you better believe is going to pay for the wall. Which we know Mexico is not going to pay for the Wall. And now we know congress is not going to pay for the wall and even worse, Lawrence, it`s not just probably going to lead to a government shutdown, it`s probably going to lead to -- and I hope this doesn`t happen, the first ever crashing through the debt ceiling of the United States.

That is infinitely more problematic, more dangerous than just shutting down the government. The government you can -- you can turn it back on by (INAUDIBLE) a budget. But crashing through the debt ceiling where the United States dollar is the global currency, you not only destroy our financial system you destroy the global financial system.

JOLLY: David Jolly are Mitch McConnell and Paul Ryan going to allow in effect Mexico to shut down the American government over the Trump Wall?

JOLLY: Well, I -- I think it would be Trump`s shortsightedness and dishonest to (INAUDIBLE) to the American people that he could do that. Listen, you know remarkably there were several of us in congress when I was there that proposed a bill to require operational control of our border, south, north, east and west. It seemed simple, operational control.

It was not good enough for the hard liners who wanted a physical wall. But Lawrence, we are going to see something interesting that we have not seen in the eight years of Barack Obama. You know any budget process we`ve seen recently requires democrats and republicans to pass it. In fact there is usually more democrats than republicans that pass it out of the house and senate. The likes of (INAUDIBLE) always voted no but now they have to accept it.

Obama always accepted those bipartisan budgets. What will Trump do when congress actually gives him a bill that has been supported by more democrats than republicans because that is the only bill that will pass the congress.

O`DONNELL: But Jonathan what about that? What do democrats do when they are presented with saving Paul Ryan and Mitch McConnell on this by -- by joining something that can pass?

CAPEHART: Well, look. It depends on what that bill is. If it is something where it is about keeping the government open, protecting the American people and safeguarding the full faith and credit of the United States in a completely separate bill I think democrats will put country over idealology and over party. I think when it comes to the president we have seen -- he couldn`t care less about any legislation.

All he cares about is a win. So all you have to do is say is package it up and say Mr. President you signed this and you win. You -- you got your budget, you have pulled this from the brink of a debt ceiling crisis and he`ll sign it. Because he just wants to be able to have the ceremony, have the signing ceremony, have everyone around and applaud. If that`s what it takes, fine.

O`DONNELL: David go ahead.

JOLLY: Yes, Lawrence, earlier this year the president in the spring the president actually swallowed exactly that budget bill that Jonathan is referring to as a clean up bill from last year that didn`t get done. And it was remarkable that he Mulvaney and Trump signed it and declared a win out o fit when it actually was a failure of every promise he had made to the American people. And I think Jonathan`s right. Democrats and responsible republicans will come together.

Trump will have to sign it. Because otherwise it will shut down the government and it will blow through the debt.

O`DONNELL: We have from Senator Orrin Hatch tonight who is the chairman of the finance committee which has most of the jurisdiction over all healthcare legislation of the senate. Issued a statement -- he didn`t issue a statement. It was kind of (INAUDIBLE) he said that he is sick of health care. He doesn`t want to deal with anymore, his exact words were, we are not going back to health care.

We are in tax now. As far as I`m concerned they shot their wad on health care and that`s the way it is. I`m sick of it. And David Jolly I`m going to have to go to you because Jonathan Capehart can`t keep a straight face.

CAPEHART: Wow.

O`DONNELL: Go ahead David. Your reaction, Jonathan`s going to compose himself and we`ll get his reaction.

JOLLY: Well look Hatch is right that he doesn`t want to deal with healthcare but the fact is he has to because it is still the same issues we face in the previous months and years on Obamacare. So they are going to have to. What Hatch is speaking to is there is no responsible agenda on the hill and no way to get tax reform to get done until healthcare gets done. He`s just denying reality on that one.

O`DONNELL: Jonathan Capehart I`m just going to -- I will pull rank here and say that I know Orrin Hatch, and I know that he does not know the meaning of all of the words in his statement, okay?

CAPEHART: OK, fine.

O`DONNELL: And so he was saying it from the most innocent place in Orrin Hatch`s heart.

CAPEHART: Sure. And -- and in reaction to the senator, I will say this. If what he means is we are not going to go for full scale Obamacare repeal, we`re moving on to Tax Reform, that I get. Tiny fixes to Obamacare to make sure that it works for all Americans. I think he could get with that.

O`DONNELL: It sounds like he was sick of even that. Jonathan Capehart --

END