Mueller report will be public in weeks. TRANSCRIPT: 3/26/19, The Last Word w/ Lawrence O'Donnell.

Guests: Ezra Levin, Raja Krishnamoorthi, William Yeomans, Ro Khanna

LAWRENCE O`DONNELL, MSNBC HOST:  Good evening, Rachel. 

And I`m sure every football coach wants to be compared to an attorney general.  Sure.  Why not?

RACHEL MADDOW, MSNBC HOST:  And if you`re an attorney general, I`m sure the football coach you want to be compared to is Bill Belichick. 

O`DONNELL:  Well, especially a winning coach, which a lot of people in this country is still resentful about with the New England Patriots.  Why don`t we just slide past away?

Thanks, Rachel. 

MADDOW:  Thanks, Lawrence. 

O`DONNELL:  Well, we have so much to catch up with tonight, including developments on the Affordable Care Act.  This is a very, very important development that we`re going to lead off with here tonight. 

And at the end of this hour, President Obama met with House freshman Democrats last night and gave them what I believe is the most important advice he could give them.  It was not the headline of the stories about President Obama`s advice to the freshman Democrats, it was how to conduct themselves as politicians and remain human at the same time, a very difficult balancing act.  The president gave them what I think is the most important advice he could give them. 

Later in this hour, we`re going to have a member of the House Armed Services Committee join us because they transferred today without consulting with the Congress a billion dollars, which is really, in the scheme of things, a very small amount of money and won`t get much done on the president`s wall project on the southern border, but that`s what he wants to use it for, money coming out of the Defense Department that has created problems for the Defense Department now with Congress. 

But, first, let`s get to what has happened today both in health care policy and an extraordinary policy change in the Justice Department and its big effect on the presidential campaign.  Democratic presidential campaign strategists believe that the Trump administration has just handed them their most effective campaign policy strategy against President Trump. 

One of the jobs of the attorney general and the Justice Department is to defend the federal government`s position in litigation, but not anymore.  That`s not what the Trump Justice Department does now.  The Justice Department has almost always defended the government`s position even when it is an inherited policy position from a previous administration. 

But last night, Attorney General William Barr authorized the Justice Department to switch sides, in effect, in a case involving the Affordable Care Act instead of defending the government`s position, the Donald Trump Justice Department is now supporting the other side of the litigation that would completely dismantle the Affordable Care Act, taking health insurance away from 21 million people. 

Here is Speaker Nancy Pelosi`s reaction today to the Trump administration`s attempt once again to completely repeal the Affordable Care Act this time through the courts. 

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE:  The GOP will never stop trying to destroy the affordable health care of America`s families.  This House, with a Democratic majority, we`re here to strengthen those protections and to lower health care costs further, because this House, this Democratic House, is for the people. 

(END VIDEO CLIP)

O`DONNELL:  The Democrats already held a big advantage on health care policy over President Trump and the Republicans.  That`s the number one issue that won back the House of Representatives for the Democrats.  In exit polling last year after a congressional election, 41 percent said it was their number one issue, 57 percent now say they believe Democrats will do a better job on preexisting conditions versus 35 percent to say Republicans would do a better job of handling that issue. 

Now that his administration is once again actively trying to take away health care protections for people with preexisting conditions and take away health insurance from 20 million people, President Trump, of course, said today, quote, the Republican Party will soon be known as the party of health care.  Polling shows that voters believe that the Democratic Party is the party of health care. 

Presidential candidate Bernie Sanders said this to Chris Hayes earlier tonight about the Justice Department`s actions. 

(BEGIN VIDEO CLIP)

SEN. BERNIE SANDERS (I-VT), PRESIDENTIAL CANDIDATE:  I`m going to do everything that I can to tell the American people, including the many people who voted for Trump, that he is an absolute fraud, as you just indicated.  He talked in his campaign about health care for everybody and then supported legislation that would throw 30 million people off the health care that they have.  So we have got to expose him for what he is, and we have got to talk about where we should be going as a country. 

(END VIDEO CLIP)

O`DONNELL:  According to polling, the Republicans have already succeeded in labeling themselves as the party who wants to take away health care.  Here is presidential candidate Pete Buttigieg reacting to President Trump`s latest attempt to eliminate the Affordable Care Act through the courts. 

(BEGIN VIDEO CLIP)

PETE BUTTIGIEG (D), PRESIDENTIAL CANDIDATE:  This seems to be the position they hold deep down -- just take this health care coverage away from millions of Americans.  As a matter of political strategy, I`m a little bit surprised because, you know, most Americans want this.  And so, at this moment when they were going to take a victory lap around what was happening in Washington, suddenly, they`re reminding us why so many of us are Democrats. 

(END VIDEO CLIP)

O`DONNELL:  Leading off our discussion now: Ezra Levin, you heard about him during Rachel`s last hour.  He`s the executive director of the Indivisible Project. 

Jason Johnson is with us.  He`s the politics editor at theroot.com, a professor for politics and media at Morgan State University.  He`s also an MSNBC political analyst. 

And Bret Stephens, columnist for "The New York Times" and an MSNBC contributor, joins our discussion tonight. 

And, Jason, I want to join the point that Pete Buttigieg just made, which is -- here are the Republicans in a glow of what they I think an overreaction to a letter from the attorney general about the Mueller report are kind of claiming as a victory moment in the evolution of the Mueller report, and they, in effect, politically step on it by making a move once again, this time through the courts, to remove the Affordable Care Act, as an option on American life. 

JASON JOHNSON, POLITICS EDITOR, THEROOT.COM:  I mean, Republicans take their car to a car wash and then park it under birds.  They cannot figure out how to be successful for more than 20 minutes before screwing it up again. 

Look, this is -- Mayor Pete is correct, Bernie Sanders is correct, every Democrat is correct.  The single greatest issue the Democrats have been able to run on over the last three or four years has been health care.  The Republicans, when they controlled the House and Senate, when they controlled the House and Senate and the presidency, not only could they not get rid of the ACA, but they couldn`t figure out how to replace it and solve some of the very problems they had been talking about for ten years. 

So, this is an absolute boon for the Democratic Party.  This helps in elections in 2018, helps in 2020 and demonstrates again that the Republican Party led by Donald Trump has no messaging or policy discipline. 

O`DONNELL:  Ezra Levin, as Rachel was discussing, your organization has now stepped forward, Indivisible, with an effort, a public effort to force the release of the Mueller report.  But you were also the organization that basically drove the Democratic strategies in many of the campaigns, helping with various issues that elected this new Democratic House of Representatives, health care being number one. 

Two things, talk about the real effect of this policy.  If the Trump administration is successful and if this does mean the end of the Affordable Care Act, what does that mean to 21 million people?  And then, secondly, what would be the result of it in the presidential campaign? 

EZRA LEVIN, INDIVISIBLE PROJECT, EXECUTIVE DIRECTOR:  Yes, you know, it`s funny, we watched this movie before and we know exactly how it`s going to turn out for the Republicans.  You know, what they`re trying to do is roll back Medicaid expansion in 37 states.  They`re trying to gut protections for folks with preexisting conditions.  They`re trying to throw young people off their family`s insurance. 

This isn`t popular.  They tried to do it, and, actually, you know, this week is the two-year anniversary of when the House of Representatives under then-Speaker Paul Ryan tried and failed on a vote to repeal the Affordable Care Act.  They failed in the House of Representatives that time because it was so unpopular.  They eventually did get it through the House, but they ultimately weren`t able to get through the Republican Senate because this is so deeply unpopular. 

And what I will say is we saw these Indivisible groups all over the country holding die ins, holding protests, doing letters in 2017.  This helped put pressure on the political system that made it impossible to get through the legislature, and then those exact same groups were the groups that were registering voters, that were endorsing candidates and that were getting out the vote in 2018. 

So, I think -- I think this policy from the Trump administration is a moral abomination, but I also just think it`s politically stupid.  They`re setting themselves up for a repeat of the 2018 blue wave.  And we took out the House of Representatives in 2018, we`ll take out the White House and Senate in 2020. 

O`DONNELL:  Bret, some of the Democrats were struggling with how to handle the question Medicare for all, for or against.  For example, a candidate like Joe Biden, we don`t know where he is or what his response is on that now. 

And with this, the Republicans and the Trump administration move the ball back to where it was in the two years of the Trump administration.  They move it back to the Affordable Care Act.  So, for example, Kamala Harris campaigned tonight.  Her tweet, Trump and his administration are trying to take health care away from tens of millions of Americans again.  We must fight back again with everything we`ve got, and in 2020, we need to elect a president who will make health care right. 

So, it seems they`ve moved the line of scrimmage back to a spot where they already lost. 

BRET STEPHENS, OP-ED COLUMNIST, THE NEW YORK TIMES:  Well, I`m not sure how the politics of this play out.  I hope Ezra is right, but a couple points I think the audience should bear in mind.  What Trump is doing here is a pure base play.  Obamacare, the Affordable Care Act, remains profoundly unpopular with the Republican base, and even talking about wanting to see its repeal is appealing to the sweet spot. 

The second thing I think the Trump administration is trying to do, it`s trying to say what`s the Democratic alternative?  The Democratic alternative is Medicare for all.  That, they will argue, is unaffordable.  It shows Democrats can`t be trusted with the (INAUDIBLE). 

I think that`s the strategy.  In some ways the way I really see this helping Democrats is it`s going to require them to defend the Affordable Care Act, which is now broadly popular as the existing system with all of its imperfections, rather than go for advocacy of Medicare-for-All system which I don`t think is going to help Democrats in 2020.  I could be wrong, but that`s my guess. 

O`DONNELL:  That`s, in effect, a rephrasing of what I said.  I think we actually agree on this. 

And, Jason, before we dwell completely on the politics of this, we are talking about 21 million people whose only access to health care is through this legislation.  I know many of these people, and it is -- it is something that they are living on, quite literally living on. 

We`re going to hear those stories.  Those stories are going to be brought forward.  We`re going to see those people.  We will surely probably have them on programs like this, because this is something that has become the thing that is actually sustaining their lives, and President Trump now is once again actively trying to take it away. 

JOHNSON:  Well, President Trump isn`t just actively trying to take it away because he has some policy alternative.  It`s because he`s hostile.  It`s because he`s angry.  It`s because he hates Obama`s legacy. 

Lawrence, remember, you give a perfect example of this.  When we had the government shutdown, that was a mini version of what can happen when people`s access to government-funded or government-supported health care can magically be taken away.  Remember, I talked about one of my students who had to deal with cancer treatments, people not able to get to the NIH.  All sorts of things just happened during the government shutdown. 

If they were to eliminate the Affordable Care Act through the court, not through a gradual process, but through the courts, it would basically be like the government shutdown for all health care in America immediately.  There would be deaths.  That`s not hyperbole.  That`s not something Democrats would have to make up. 

And all those deaths, all that suffering, and all those harmed families would be on the hands of the Republican Party.  Trump doesn`t care, but I think there`s many Republicans in the House and Senate who realize that is a death sentence, if not practically for many millions of Americans. 

O`DONNELL:  Ezra, with your organization now working in a new territory, which is the release of the Mueller report?  Is there any crossover here in what`s happening in terms of the political energy that you bring to the Mueller report and then this Justice Department action on the Affordable Care Act? 

LEVIN:  Oh, yes.  I was talking with Grapevine Indivisible which is in the Dallas area, a very red area.  They`ve been holding weekly meetings every week stretching back to 2017, and they held their meeting yesterday after the release of the Barr memo, and I heard from Heather, the leader of that group, that she quoted Glenda of Oz.  You had the power all along, my dear, you just had to learn it yourself. 

That the group`s view their job as building up activists and activism in their communities and fighting back wherever they can.  And they don`t count on anybody else to ride in on a white horse and save them.  They`re building this up themselves.  And so, that means fighting to make sure the report comes out.  They`re going to do that. 

That means fighting to protect the Affordable Care Act.  They`re going to do that.  That means fighting against whatever else comes out from this administration.  They`re going to do that, and they`re doing it in 2019 because that`s the right fight to fight. 

But in doing that, they`re also building up their strength.  They`re building up their membership.  They`re building up their force that`s going to build the wave in 2020. 

O`DONNELL:  So, Bret, Bill Barr is the most experienced attorney general, perhaps the most experienced attorney general we`ve ever had since he`s been attorney general before.  He`s been in this position as attorney general where he`s been defending government policies of previous administrations.  He`s watched his administration policies be defended by subsequent attorney generals by the other parties, which makes this so fascinating.  It brings us to breaking news reporting from "Politico" right now saying William Barr was opposed to this switch. 

It says, "Politico" is saying the heads of the Justice Department and Health and Human Services Department opposed the unexpected switch in legal tactics.  The Trump administration`s surprising move to invalidate Obamacare on Monday came despite the opposition of two key cabinet secretaries, Health and Human Services Secretary Alex Azar and Attorney Bill Barr. 

STEPHEN:  Well, it`s a familiar story with the Trump administration and anyone who serves in it, but at some point, and in Attorney General Barr`s case, that point has come very quickly.  You have to choose between your position in government and your integrity as a person.  Jim Mattis discovered that, Rex Tillerson discovered that, to some extent even Jeff Sessions discovered that, and that`s happening very soon here. 

O`DONNELL:  And, Ezra, I just want to go back to you on the policy issues here, as they interact with the campaign -- and I could just read a stack of tweets from every one of the presidential campaigners tonight on this specifically.  This, in reviving the fight over the affordable care act now, do you think that will actually overshadow the debate within the Democratic field about Medicare-for-All? 

LEVIN:  Yes, well, I think we can walk and chew gum.  I think we need to fight back against the worst this administration is doing, but I don`t think we can be scared to talk about what our vision for the future is going to be.  Look, we`re going to have the House, the Senate and the presidency in 2021 and we`ve got to have some plans about how we`re going to use it. 

O`DONNELL:  All right.  We`re going to have to leave it there.  Ezra Levin, Jason Johnson and Bret Stephens, thank you all for starting us off tonight.  Really appreciate it. 

And when we come back, new polling overwhelmingly now favors the release of the Mueller report, and now, the Justice Department has announced it will be released in weeks.  That`s the phrase they used, in weeks.  And while congressional investigations of the president continue tonight with news that Deutsche Bank will be turning over Trump banking records to the House Financial Services Committee, we`re going to have more on that coming up. 

And we will be joined by a member of the House Armed Services committee after the Trump administration today announced the transfer of more than a billion dollars to try to pay for some of the Trump wall. 

And at the end of this hour, former President Obama gave some important advice to the freshman Democrats in the House of Representatives last night, not just political advice, but life advice.  It is the most important thing that House freshman members or any politicians should know.  We will bring you that at the end of this hour.

(COMMERCIAL BREAK)

O`DONNELL:  Congress wants the Mueller report and we have a member of Congress joining us in this discussion who is on one of the committees that will receive the Mueller report as soon as Congress does get it, which is now supposed to be within weeks.  Today, Quinnipiac released a poll saying 84 percent of Americans think the Mueller report should be made public, while 9 percent -- 9 percent -- don`t think it should be made public. 

Even Republicans favor the report being made public to 75 percent and 17 percent of Republicans who say it should not be made public.  After that poll was released today, Justice Department officials told reporters that a public version of the Mueller report will be ready in weeks, not months, quote, weeks, not months. 

Today, House Speaker Nancy Pelosi dismissed Attorney General Bill Barr`s summary letter of the report and told her members to wait for the full report. 

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE:  Let`s see the full report.  We don`t need an interpretation by the attorney general who is appointed for a particular job to make sure the president is above the law.  We need to see the report.  So that`s my message to our members. 

(END VIDEO CLIP)

O`DONNELL:  House Democrats continue their investigations of the president as they wait for the Mueller report.  House Financial Services Committee Chair Maxine Waters told reporters today that Deutsche Bank has begun providing President Trump`s financial records to her committee. 

Joining our discussion now, Congressman Raja Krishnamoorthi, a Democrat from Illinois who sits on the House Intelligence Committee and the House Oversight Committee.  Also with us, William Yeomans, who spent 25 years at the Department of Justice, knows their procedures inside and out, was a former chief counsel to the Senate Judiciary Committee, and now serves as a senior fellow at the Alliance for Justice. 

And, Congressman, I want to go to what we are now hearing from the Justice Department today apparently saying you will have this report in weeks. 

REP. RAJA KRISHNAMOORTHI (D), ILLINOIS:  Well, I think that we need full transparency, especially after what we saw in the Barr summary.  The American people want the Mueller report, they don`t want the Barr report, and the fact that they have been holding this back just begs the question why?  What`s in there that they don`t want us to see readily? 

O`DONNELL:  And I want to -- Bill Yeomans, with your experience in the Justice Department, the reason I wanted to talk with you about this tonight is there has been so much questioning procedurally of how this has worked and how it has worked with the attorney general.  And we have George Conway today writing an op-ed piece about this, married, of course, to a staffer in the White House, and George Conway says that because the Barr letter about the Mueller report says that it contains evidence that has never been made public in any way about obstruction of justice, that`s an example of exactly what the public needs to know to evaluate the full impact of this report. 

WILLIAM YEOMANS, FORMER CHIEF COUNSEL, SENATE JUDICIARY COMMITTEE:  Well, absolutely.  I think the public needs to see the report in full.  Obviously there are some hurdles.  They say it`s going to take weeks.  We`ll see.  They need to deal with grand jury material, they need to deal with any classified information.  It`s not clear there is classified information. 

But they also apparently are going to send it to the White House for review for executive privilege.  And that`s a step that I think is going to be incredibly important and could slow the process down.  I hope it doesn`t. 

O`DONNELL:  And let me just go over what do you consider the appropriate kind of review that the attorney general should conduct of this report before making it public? 

YEOMANS:  Well, I think what the attorney general should do is go to court and get an order to allow the grand jury material to be disclosed to Congress.  That`s been done in the past, and it can be done here.  I think that the executive privilege part of this should be taken care of very quickly. 

The president should waive the executive privilege.  He has said that he wants to get the report out.  He sees it as complete vindication.  If that`s true, then he shouldn`t want to assert executive privilege.  So, the scrubbing of the report should go fairly quickly.  And if they get a court order, which they can do in very short order, and this can all be done soon. 

O`DONNELL:  Well, of course, Congressman, President Trump has said just about everything on the release of the report.  He has said, as Bill Yeomans just said, he has in the past said yes, they should release it.  Now, today, he`s saying it`s completely up to the attorney general. 

KRISHNAMOORTHI:  Right, he`s trying to have his cake and eat it, too.  On the one hand, he knows that the American people demand transparency.  They will respect the conclusions of Bob Mueller but they want to see the report, they want to see the underlying findings and materials. 

On the other hand, there`s stuff in there that for some reason is making him uncomfortable with releasing it, and, you know, I think that`s precisely why the American people should see this report.  Especially when with regard to obstruction of justice issues he was not exonerated regardless of, you know, how many tweets he puts in all caps.  He was not exonerated by this particular Mueller report. 

O`DONNELL:  Congressman, do you want to hear from Robert Mueller in testimony in at least one of the House committees? 

KRISHNAMOORTHI:  I personally would like to hear him.  I think that Chairman Schiff has indicated that Mr. Mueller may come before the Intelligence Committee at some point, if for no other reason than to talk about counter-intelligence issues which may not have to do with a criminal probe per se, but which have to do with whether basically people were compromised and to what extent they were compromised and maybe subject to leverage by our adversaries. 

At the end of the day, we have to all join hands to protect our national security for sure. 

O`DONNELL:  Has Congressman Schiff indicated whether that kind of hearing could be public, or could it be one of those hearings where you have the public version and at the end of it, you do a couple hours in closed session? 

KRISHNAMOORTHI:  He did not indicate that, although there would be intense public interest in what Mr. Mueller has to say.  And so, I`m sure that Chairman Schiff would probably be weighing the different considerations here for sure. 

O`DONNELL:  Bill Yeomans, one of the issues Ari Melber raised Sunday night when the letter came out, very simply, how many pages was the report?  In the attorney general`s letter, he could have very easily said in the first sentence, I received a 500-page report from Robert Mueller.  He doesn`t say how long it is. 

But if it takes weeks, three weeks, let`s say, to review this report to decide what of it can be made public, does that give you a sense of how big this report is, how much they`re wrestling with there? 

YEOMANS:  Well, I think it must be substantial.  It wouldn`t take that long otherwise.  But my concern is that we`re in a situation now where we have the Barr spin on the Mueller report, and that`s out there being used by the president and his supporters as a political triumph.  And I suspect that the report is going to be much more damaging for the president than they are letting on at this point. 

And so, I`m not sure how much of a hurry the White House is to get the report out.  I think they want to enjoy what they are considering their triumph for a while longer.  So I was heartened by the polling numbers that you were citing, that there should be public pressure on the White House and on the Department of Justice to produce this thing. 

But to answer your first question, I think it probably is substantial, but we just don`t know.  And we don`t know -- when we finally get it, I hope it`s finally clear what`s been left in and what`s been taken out.  I hope nothing has been taken out, but if it is, I hope we can see what that is. 

O`DONNELL:  Congressman, let me ask you about the breaking news for the hour, and that is the attorney general, apparently, according to "Politico" in another report tonight, opposed the orders basically from the White House to switch sides in the litigation on the Affordable Care Act, and now the attorney general and the Justice Department are in court, basically trying to destroy and eliminate the Affordable Care Act in court. 

Your reaction to that? 

KRISHNAMOORTHI:  I -- you know, I think that this was a horrible decision by the Trump administration.  You know, as you might recall, the original lawsuit actually was something that the Trump administration supported to the extent that it would remove protections for people with preexisting conditions.  Now they`ve taken the position that the entire Affordable Care Act should be struck down, not only the protections for people with preexisting conditions, but Medicaid, expanded Medicaid for millions of people, subsidies for another group of millions of people who receive it under Obamacare.

And then, of course, all the other protections, whether it`s protections for dependent children to be able to stay on their parents` plan up to the age of 26, lifetime limits on health care expenses and so forth.  This is something that will be totally opposed by the American people.

And, indeed, that`s what helped elect us to the majority last fall, the concern that the Affordable Care Act would be struck down and there would be no replacement for it.  And that`s exactly what the Trump administration is reiterating its position in supporting right now.

O`DONNELL:  Congressman Raja Krishnamoorthi and William Yeomans, thank you both.  Actually, look, can we just hold for one second?  William Yeomans, I want to get your reaction as a Justice Department veteran of this kind of switch, in effect, by the Justice Department, by the attorney general and the attorney general opposing it.

YEOMANS:  Yes.  And let me just say, I think this is a sign of dangerous politicization of the Department of Justice.  If it`s true that the attorney general was overridden to force this litigation decision, that is extremely dangerous.

So we are violating all the norms of independence of the Department of Justice from the White House when it comes to litigation and prosecution decisions.  And I think that`s extremely, extremely dangerous.  It is also a huge step for the federal government to decide not to support the constitutionality of the federal statute.

Traditionally, it only does that when there is no reasonable argument that can be made in support of the statute.  And that certainly is not the case here.  So I think what we`re seeing is a very political decision by what is becoming a very political Department of Justice.

O`DONNELL:  That`s an important note and we needed it before ending this segment.  William Yeomans, Congressman Raja Krishnamoorthi, thank you both very much for joining us tonight.  Really appreciate it.

And when we come back, we`ll be joined by a member of the House Armed Services Committee after the Trump administration today announced the movement of about a billion dollars, a little bit more than a billion dollars to go toward the Trump wall.  It`s a small amount of money but it`s a very big principle involving government funding and the control of government funding and Congress` control of government funding.

And at the end of the hour tonight, the words of Barack Obama for the freshman Democratic members of the House of Representatives.  He had a private meeting with them last night off the record.

But some of what he had to say has slipped out to "The Washington Post."  And in my reading, it`s the most important advice that any politician could get.  Those freshmen got it from Barack Obama last night.  We`ll have that at the end of the hour.

(COMMERCIAL BREAK)

O`DONNELL:  Last night, acting Defense Secretary Patrick Shanahan sent a letter to the Department of Homeland security informing them that he had made $1 billion available for the new border wall construction by moving that money into a Pentagon account for drug enforcement.

The Defense Department transferred those funds without Congressional approval.  In a letter to Secretary Shanahan today, House Armed Services Chairman Adam Smith rejected that move, writing the committee denies this request.  The committee does not approve the proposed use of Department of Defense funds to construct additional physical barriers and roads or install lighting in the vicinity of the United States border.

But there may be little House of Representatives can do about that.  "Fox" is reporting tonight the request was unilateral.  It was not sent to Smith and Congress for approval and it`s not something they have the ability to stop.

The only thing that Congressional Democrats can do now is reduce the Pentagon`s ability to shift money around going forward and that`s just what they`re threatening to do.  "Politico" reports top lawmakers of both parties have warned they may cut off the Pentagon`s ability to move money within its budget if defense leaders violate the longstanding custom by shifting funding without asking Congress` position -- permission.

In a House Armed Services Committee hearing on the Pentagon`s fiscal budget for next year which just happened to be happening today, Chairman Smith pressed Secretary Shanahan on the consequences of shifting $1 billion without going through Congress.

(BEGIN VIDEO CLIP)

REP. ADAM SMITH (D-WA), CHAIRMAN, ARMED SERVICES COMMITTEE:  You are not asking for our permission.  Now, you understand the result of that likely is that the Appropriations Committee, in particular, would no longer give the Pentagon preprogramming authority.  I think that`s unfortunate because they need it.

PATRICK SHANAHAN, ACTING UNITED STATES SECRETARY OF DEFENSE:  It`s a very difficult discussion, and we understand the significant downsides of losing what amounts to a privilege.  Given a legal order from the commander in chief, we are executing on that order.

(END VIDEO CLIP)

O`DONNELL:  One of the members of the House Armed Services Committee, who was in that hearing today, joins us, Democratic Congressman Ro Khanna of California.  He`s also a member of the House Budget and Oversight Committees.

And Congressman, I`ve seen a lot of testimony.  I`ve seen a lot of cabinet officials testify about actions taken.  Was I -- do you share my sense that what I was watching there was a reluctant member of the cabinet taking an action that he stressed was on an order from the commander in chief?  Was that the sense you got from him?

REP. RO KHANNA (D-CA), ARMED SERVICES COMMITTEE:  Lawrence, I couldn`t agree more.  You almost felt sorry for him.  I mean he understood that this was going to hurt the Department of Defense going forward, that we would take away their authority to reprogram going forward.  But he said, basically, to Adam Smith and to Republicans that he was just following the commander in chief`s order.

And here`s the situation for our nation.  We need talented people to serve.  They get there, they serve, they realize they can`t exercise their judgment of what they think is in the best interests of the country, and that`s why you see resignation after resignation.  There is only so long people like Secretary Shanahan can put up with it.

O`DONNELL:  Congressman, let`s talk about the practicalities of this.  I noticed that what the Defense Department is saying is they`re alerting the other department that Homeland Security, we have a pot over here in our budget.  It`s a billion dollars.  It`s available to you.

They didn`t send a billion dollars to Homeland Security.  Homeland Security didn`t take it.  They`ve just been told it`s here, it`s available.

There is no plan to build a wall on the southern border, there isn`t -- that billion -- what is the practicality?  Let me ask you, what`s the practicality of that billion dollars being rushed into a construction project?

KHANNA:  Well, it`s just optics.  I mean they want to say that the president is getting closer to his goal of building a wall.  But you`re absolutely right, it`s not like this money is there and that construction is starting.

It`s moving money around so that the president can go to his base and say, look, I`m making progress, I`m getting what I wanted for the wall.  But the money is just shuffling from one account to another, which by the way, no one has done before.

Not President Reagan.  Not President Bush.  I mean it`s really unprecedented what they`re doing without Congress` consent.

O`DONNELL:  Congressman, I want to extend our discussion, but would you allow me to squeeze in a commercial break to do that?  Because there are a couple more things I want to talk to you about, unrelated matters on the other side of this commercial if we can.

KHANNA:  Sure, Lawrence.

O`DONNELL:  Thank you.  We`re going to be right back with Congressman Ro Khanna.

(COMMERCIAL BREAK)

O`DONNELL:  We`re back with Congressman Ro Khanna.  And Congressman, you wrote an important op-ed piece in "The Washington Post" today pointing out the fact that the Mueller report, when it comes out, will contain all sorts of detail about how the Russians interfered with our election that would enable us to defend better against that kind of interference.

But your op-ed piece says we can`t wait for the Mueller report.  We have to get to work on that defense now.

KHANNA:  Lawrence, we do.  The most striking finding in the Mueller report is that the Russians hacked our e-mails and they manipulated social media.  And there are some very basic things we need to do to make sure the Russians never do that again and other countries don`t do that again.

First, we need tech companies to better coordinate to make sure that they`re removing bots and removing suspicious actors.  Second, we need law enforcement agencies to help coordinate with the tech companies to be able to do that.  And third, we need to better provide tech equipment and intelligence to campaigns so they`re not as vulnerable.

O`DONNELL:  And Congressman Khanna, I want to get your reaction to what we led the show with tonight, which is the administration`s switch of positions on this court case involving the Affordable Care Act.  So now, President Trump and the Trump administration through the courts are actively trying to dismantle in effect repeal the entirety, the entirety of the Affordable Care Act.

KHANNA:  I mean they`re hurting the very people that voted for the president.  The Affordable Care Act helps most people in many of the red states.  That`s just a fact.

And what they`re doing is taking away insurance from hard-working Americans, and this was very unpopular.  Every time they`ve tried it, they are stuck on doing something that no one in this country wants, not Republicans or Democrats.

O`DONNELL:  Bret Stephens, in the beginning of our discussion, made the point that this has always been considered very popular, the right thing to say to the so-called Trump base.  But the Trump base is a very small number now, especially on that particular issue, because it`s not 100 percent of Trump voters want the Affordable Care Act repealed.

KHANNA:  And there is a difference between the rhetoric and the reality.  I think the Trump base may like something going after President Obama.  But what they don`t want is their actual health care taken away.  So it`s one thing rhetorically to do something.  It`s another thing when you`re in charge and governing to actually have people`s health care threaten.

And I think the president has never understood that distinction between being a candidate where he can say anything and then actually governing where people see the results.

O`DONNELL:  Yes, I just want to make it clear.  I agree with Bret`s point that the so-called Trump base has always cheered about this.  But your point is they might cheer about it at the rally, but if you actually try to do it, that support turns a different way.

KHANNA:  Absolutely.  I mean the people who are hurting the most are working families, many of them blue-collar families, many of them in Ohio, Pennsylvania.  They don`t want to go back to a system where they don`t have health care or they have to pay outrageous amounts for health care.

What the president should be talking about is what he actually promised in the campaign.  He promised better benefits, less pay.  In 2000, he came out for a single parent system in his own book because he knows that`s what`s going to help working families, but he`s hostage to some very far-right folks.

And basically, he doesn`t like this because it`s called Obamacare.  And his campaign is to reject everything that President Obama did.  And there are multiplicity of reasons, I think, that that appeals.

One of them having to do with President Obama was the first African- American president.  And I think any time he attacks Obama, people respond.  But that doesn`t mean that people didn`t benefit from President Obama`s policies.

O`DONNELL:  Congressman Ro Khanna of California, thank you very much for joining us on all these important subjects tonight.  We really appreciate your input.

KHANNA:  Thank you, Lawrence, for having me on.

O`DONNELL:  Thank you.  And when we come back, last night, it was meet the freshman for Barack Obama.  President Obama met with the Democratic freshmen in the House of Representatives.

And what he had to say was more important than anything that they heard in their orientation week.  We`ll bring you, President Obama, meeting the freshmen after a break.

(COMMERCIAL BREAK)

O`DONNELL:  It was meet the freshmen night last night for President Obama and the freshmen Democrats in the House of Representatives.  The president knew many of them already because he campaigned for them.  And some of them worked for President Obama in his administration.

It was a closed door private meeting but we know a little about what was said in that room.  One unnamed person who was in the room told "The Washington Post", "He said, we as Democrats, shouldn`t be afraid of big bold ideas but we also need to think in the nitty-gritty about how those big bold ideas will work and how you pay for them.

Freshman Representative Haley Stevens of Michigan, a graduate of the Obama administration told "The Washington Post", he was speaking to staying in touch with your constituents, making sure you`re doing the regular communications as well as recognizing there`s often time nuances to policy making and that it takes time.

President Obama also told the freshmen why he loves Nancy Pelosi, and he gave them the most important advice they can possibly get as politicians.  And that advice is the key to holding on to your soul while constantly compromising your way through the world of politics.

How do you do that?  How do you hold on to your humanity while trying to hold on to a political career?  Barack Obama gave the House freshmen Democrats the key to exactly how you do that last night.  And that`s going to be next in tonight`s LAST WORD.

(COMMERCIAL BREAK)

O`DONNELL:  Last night in a private meeting with the freshmen Democrats in the House of Representatives, President Obama told them why he loves Nancy Pelosi.  He said, "The reason I love Nancy is because she combines a passion for doing what`s right for our country and our kids along with a toughness that can`t be matched on the Hill."

We know precious little about what the president actually said in that room.  "The Washington Post" was able to get a few Obama quotes out of the freshmen Democrats who attended the meeting.  And I`m not sure if the president framed it this way but he did give the freshmen the key advice about how to remain human beings while being politicians, how to retain their humanity, their sense of themselves in what is a swirling and sometimes raging sea of compromise called politics.

The compromises are large and small.  The compromises involve everything from governing policy to how much time you will spend with your children, to how much time you will spend fundraising versus how much time you will spend governing and on and on.

And most politicians lose themselves in that endless swirl of all of that compromise.  They get caught up in it.  They get lost in the fog of it all.  And eventually, sometimes very quickly.

You don`t recognize them if you knew them before they became politicians.  Politics is a place where you can lose your soul and in my experience, most politicians do.  But there`s a way to hold on to who you really are, even when you`re a politician.

I realized how you do this after a couple of years of working in the United States Senate and thinking about it, a lot.  I put it in the form of a question then.  What would you not do or say to get re-elected?

Most politicians, that`s a trick question for them.  They don`t even understand it because most politicians would do or say anything to get re- elected.  According to "The Washington Post", this is the political life advice that President Obama gave the new members of Congress last night.  Obama also gave the freshmen some advice.

Find the policy you`re willing to lose your seat over and fight for it.  That`s it.  That`s the key to retaining your humanity, retaining who you are as a person while being a politician.

Find the policy you are willing to lose your seat over.  Have an answer to the question, what would you not do to win re-election? And no matter how many compromises you make as a politician if you hold on to that one defining point about yourself, if you always know the lines you will not cross to win re-election, then your family, your friends, will always recognize the person they knew before you became a politician. That`s tonight`s LAST WORD. "THE 11TH HOUR" with Brian Williams starts now.

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