>> announcer: "this week" with this week with george stephanopoulos starts right now. the president cleans house. >> the president certainly felt that anthony's comments were inappropriate. >> a new chief of staff. >> we just swore in general kelly. he will do a spectacular job. i have no doubt. >> but can general kelly manage the president and his staff? refocus the white house and revive trump's agenda? those questions ahead for counsel to the president, kellyanne conway. and as the russia investigation intensifies, a grand jury in place, the president lashes out. >> the russia story is a total fabrication. >> will he fire the special counsel? how will congress respond? we talk to the republican and democratic senators joining

forces to protect robert mueller. and our powerhouse round table. we'll break down the politics, smoke out the spin. the facts that matter, this week. from abc news, it's "this week." here now, chief anchor, george stephanopoulos. >> good morning. when august arrives, presidents escape. and president trump kept up that tradition this week, decamping to his club in rural new jersey for a welcome break from a bruising debut in washington. his big-ticket promises, to repeal obamacare, build a border wall paid for by mexico, dead in the water. his approval rating, the lowest of any president ever so early in his term. this week, we learn that special counsel, be robert mueller, is zeroing in on the president's inner circle with a grand jury meeting in washington, documents demanded from the white house. and just this morning, president trump wakes up to this headline in the "new york times." "president aside, gop stars move toward 2020 bids." mike pence's schedule is so full

of political events, that republicans joke he is acting more like a second-term vice president hoping to clear the field than a number-two sworn in a little more than six months ago. can you believe it's been just six months? a big bright spot for the president, the economy. trump's most loyal followers in west virginia showed him lots of love the night before. >> since our election, not my -- since our election, we have added more than 1 million new jobs. and the good news keeps pouring in. >> and with that, let's write in the president's counselor, kellyanne conway. kellyanne, thanks for joining us this morning. >> hi, george. hi. >> so i just talked about the economy right there. you have seen another good jobs report on friday. solid growth through this year. the stock market, as the president pointed out, at record highs. yet the polls this week showed 61% disapproval for the president.

so why are people so unhappy with the president when the economy is doing so well? >> but the numbers that you talked about are the most important indicators. you also see consumer confidence numbers, manufacturer, home builders, small business formation confidence. you see record close of the dow over 22,000 points. these are the measurements that matter to everyday americans. and even this president, when he came in, george, he made a promise that for every new regulation in, he would have two that went out. we're closer to 16 out for every new one in. and that regulatory framework has been so critically important to taxpayers, to property owners, to folks who are working hard and trying to get ahead. i would note, too, in some of the polling, which, of course, i scour daily on behalf of the president, his approval rating among republicans and conservative and trump voters is down slightly. it needs to go up. they are telling him just enact your program. don't worry about a congress that isn't supporting legislation to get big-ticket items done. and don't worry about all the

distractions and diversions and discouragement that others who are still trying to throw logs in your path are throwing your way. focus on the agenda. and he's doing that. look, nobody can deny these economic numbers. the idea that it's not getting huge cover -- it's been a great weekend for this president. you see 2.6% growth, it doubled the first quarter growth, and you see the job creation, 109,000, exceeded expectations. and you also, just yesterday, saw a unanimous rebuke of north korea. the greatest economic sanctions package ever levered against them, will cost about $1 billion, even allies in the region like china, japan, south korea, all agreeing with the united states. >> they do. >> that north korea and its nuclear capabilities must be stopped. >> we have seen that united front against north korea right now. and the job growth and economic growth has been pretty steady with what we saw at the end of president obama. but one of the distractions that "new york times" story this morning talking about all these republicans jockeying now to already run in 2020.

the "times" cites interviews with 75 republicans at every level of the party. they say they express widespread uncertainty about whether president trump will run in 2020. are you convinced he wants to run again, and what do you make of the story? >> the president says privately and publicly often, george, he'll be there for seven and a half more years. so he plans on being a two-term president. i read that article, and i want to say a few things about it. first of all, i think that in the republican party for many decades, we have suffered from what i call staff infection, people rewarded for losses. most people involved, i'm sure, have never won a national political campaign like the one i was involved in, you were involved in years ago. number two, they need a full employment act in republican consultancy. some of them are still not supporting their party, and their party's main points of view on tax reform and health reform on putting isis in retreat, if not full defeat. and i want to make a remark

about vice president pence. i've worked with him for ten years as his pollster, senior adviser and certainly work with him daily in the white house. it is absolutely true that the vice president is getting ready for 2020 for re-election as vice president. >> so no concern he is setting up a shadow campaign? >> zero concern. that is complete fiction. that is complete fabrication. and i know that his advisers who had comments attributed to them have pushed back very strongly. and as am i right now unequivocally. vice president pence is a very loyal, very dutiful, but also incredibly effective vice president, active vice president, with this president. he is a peer to the president in the west wing. he just came off a trip in eastern europe, and he'll go back, i believe, within the next week to south america to represent the country on his fourth or fifth foreign trip since taking office. let me just make very clear. people -- republican consultants, there's always people trying to play the parlor

game. they're not in the -- i'd say trump inside inner circle, because they did not believe in him. they totally missed what was happening in america. that the forgotten man and forgotten woman, many of whom have voted for democrats in the past, many who have never voted in decades came forth and made this new trump coalition in a way that -- in a way that respectfully, the last couple republican candidates did not. mitt romney and paul ryan one won state. they lost wisconsin by seven points. donald trump won wisconsin, michigan, ohio, iowa. i would tell my american brethren, get on board and stop looking at 2020. >> we will see what happens with that in september. meantime, general kelly wrapping up his first week as chief of staff. we have that picture of him addressing the entire white house staff right there, some 200 people lined up there. i guess that's in the old executive office building. what difference has he made so far? >> it was quite a week with general kelly. a few things, george. i know there's much commentary about the order and the

discipline. all of that is true. but let me just tell you that general kelly is someone who wants to empower his staff to succeed. he commands respect, but he also shows respect. and in sitting in different meetings with him, and watching him in action this week, i've been incredibly impressed as to what a great listener, fully engaged general kelly is, and i believe the world is such a dangerous place and so much of president trump's day is filled with intelligence briefings and new facts and figures about this increasingly dangerous world. it really helps to have a general in his fifth decade of public service going right back in and taking that oath of office again for a new position so that he is -- hand in glove with the president, he has been with the president quite a bit this week, but he's been with the rest of us and the senior staff, as well. we're very happy to have general kelly there, as well, because he for the first six months of this year, george, has been a member of the president's cabinet and knows full well this hand-picked talented, engaged, quite successful men and women are

superstars in this administration. and also general kelly, i want to say, has been the chief military aide for two different secretaries of defense and in a very bipartisan fashion. in addition, we should mention the biographical point. in addition to running the southern command. so he's very knowledgeable about the hot spots around the world. he, of course, is a master at unit cohesion. and we feel that coming together in the west wing. >> we still have seeing tweets from the president. he insists he'll keep up that tradition, including this one on thursday, where he said, our relationship with russia is at an all-time and very dangerous low. you can thank congress, the same people that can't even give us health care. how is congress responsible for relation relations with russia being at an all-time low, and who is he talking about? >> that tweet was likely in reference to the sanctions package that the president signed, because it's a good step forward. but that he's also been critical. and also, look, if you're russia, you can't be happy with president trump. we're now exporting coal to

eastern europe. >> but wait a second. let me just stop you right there. the president signed that legislation. there's been widespread pushback from members of congress, including republicans like senator john mccain and others who say russia is responsible. russia. its actions in ukraine. russia, its actions with interfering in our election. russia is the one responsible for relations being at an all-time low. but the president blames congress. >> well, he doesn't blame congress completely. i talked about the sanctions package. but russia overall, this president has been very tough on russia when it comes to, again, dipping into their energy capabilities in the region. we're now exporting coal to eastern europe. beefing up the military, putting that money and that manpower ana presidential behind an emboldened and better financed military. and also, look at what the decisive, swift, and i would say internationally acclaimed action president trump took in april when assad was gassing his own people, including those babies

we all saw, taking their last breaths of air. the president very swiftly, i think against what russia wanted done, frankly, took action in syria. so we -- you know, he met with president putin for over two hours, face-to-face. we know if we can work on the big issues with russia like defeating isis and not calling them our determined enemies like hillary clinton did a year ago, and not putting them in defeat, calling them the jv team that was losing power as president obama did. we're happy they're one of the 15 members that unanimously voted for sanctions yesterday on north korea. five permanent members and five rotating members. >> that's different than the message is sending. you have bipartisan members of congress, including thom tillis and chris coons, now introducing legislation to protect the special counsel, robert mueller, saying that any decision by the president to fire mueller, if, indeed, comes, should be reviewed by a judge. what does the president think of that legislation? >> well, why are we engaging in

hypotheticals? the entire russia investigation is a hypothetical. the president has called it a fiction. total fabrication to excuse the colossal and unexpected, unwanted defeat of hillary clinton in last year's election. people just can't get over that election, george. it's corrosive to our body politic. the president is going to continue to talk about america, and i suppose others, sadly, will continue to talk about russia. but ty cobb, special counsel to the president in the white house, has made very clear, as recently as this week, that the president and others around him will continue to comply and cooperate and provide any information they have. but he also was not made aware of the grand jury proceedings until we all were. these are supposed to be done in secret. and yet that leaked out, as so many things do that are harmful to our security interest. and let me just say something else about russia. the president took on a new tack in west virginia, speaking about this the other night. he told the people there and around the country that those who are pushing this phony,

fabricated russia investigation are cheating you, the voters, out of what you clearly said you want. you want a new and different direction. you don't want the same failed policies. you want free markets. you want democracy. you want national security, american exceptionalism, prosperity at home. he's making good on those promises. look at the stock market. look at the jobs numbers. look at the growth. look at the regulatory rollback on things that were hurting taxpayers and property owners and job creators. and look at what he has promised those people. they voted for him, and if bob mueller is going to continue the investigation, we'll cooperate however best we can. but the president is not a target of any investigation. jim comey told him that as fbi director three times, and he assured that under oath. >> that may have been undertaken by events. part of the reason, as you know, this story persists is because the white house and the president surrogates have told conflicting stories. first they said no contacts with russia and then it turned out there were at least 18 contacts.

the story broke in the "new york times" saying the president was involved in the drafting of his son, don junior's, misleading response to the meeting he had with russians during the campaign. and jay sekulow came on "gma" and said the president was not involved. >> the president didn't sign off on anything. the president wasn't involved in that. >> well, the "new york times" says he was involved in it, and that several people on the plane were involved, as well. so you're disputing -- >> that's incorrect. >> that account from the "new york times." >> but just this week when the "washington post" reported with more detail that the president was indeed involved in the drafting, sarah sanders, press secretary, conceded it. let's listen. >> the president weighed in, as any father would, based on the limited information that he had. this is all discussion, frankly, of no consequence. >> two very different answers in the space of two weeks there, kellyanne. >> the most important thing that press secretary sarah sanders said there, which is completely true, there is no consequence to any of these meetings. the president weighed in as a father. he did not dictate the statement. >> but first the white house and the president's lawyers said he

wasn't involved at all. they didn't tell the truth. >> george, you know, i know there's this whole thing about everybody wants to take this taco owe. >> telling the truth. >> let's talk about -- no. okay. let's talk about telling the truth. let's talk about a president looking americans in the eye who are still suffering eight years later who were lied to. if you liked your plan, you could keep your plan. if you like your doctor, you could keep your doctor. benghazi happened because of a video. go tell those families -- >> kellyanne, you're simply changing the subject right here. hold on a second. >> no, no. let's talk about credibility that impacts people. >> right there, i said direct -- >> those were big lies. >> directly different responses within two weeks. how do you explain that? can the president and his team get control of that and be open and truthful about the russia investigation? >> george, the president has said the entire investigation is fabricated. that this is a conclusion in search of evidence. they have come up with nothing.

we have been doing this for about a year now. and what is there to show for it? what has actually metastasized in a way that we can say, wow, there's a smoking gun. there's a silver bullet. i spent a lot of time with you during the campaign as a campaign manager on your two programs and others with abc, as well. what one thing did we ever say, do or conspire that had anything to do with russia? when i needed negative information about hillary clinton, i took a moment and i listened to hillary clinton. i mean, we went to michigan. >> kellyanne, wait a second. we know right now -- we know now what has come up in just the last few weeks is that don junior responded to an e-mail, saying he was going to get russian government information on hillary clinton. that was not out during the campaign. that was revealed just in the last several weeks. >> right. but what came of that meeting? nothing. jared kushner shared with the house and senate committees and then with all of us in a public statement at the white house about ten days ago, george, that

he had texted an aide and said, please get me out of this meeting, it's a waste of time. if you're getting dirt on your political opponent, if you're getting the silver bullet and the secret sauce on how to win the election, you don't ask your aide to pull you out of the meeting. you say, please order lunch. let's just stay a while. it was nonsense. it was a ridiculous meeting. it was nothing. people want to offer their services and have meetings all of the time. believe me. i know you know this. but let's look at the consequence. no followup. no results. >> bottom line, kellyanne -- >> i was never informed of that meeting. i found out about it when you found out about it. the president had no knowledge of that meeting. >> bottom line, kellyanne -- >> yes. >> does the president commit to not firing robert mueller? >> the president has not even discussed that. the president is not discussing firing bob mueller. >> but will he commit not to fire him? >> cooperating with -- he is not even discussing not -- he has not discussed not firing bob mueller. >> that's not what i'm asking. >> ty cobb -- hold on, i'm not

the president's lawyer here. i will tell you, as his counselor, he is not discussing that. you have to listen to his special counsel, ty cobb, who works in the white house now, and has said very clearly, george, this week, tell continue to cooperate with bob mueller and his investigation, even though he just hired the 16th person, many democratic donors. but we'll continue to cooperate and comply. and ty cobb said something that reflects the thinking of all of us, including the president. anything that gets us steps further to this conclusion of what the president has called a complete, false and fabricated lie, a conclusion in search of evidence, anything that brings us closer to that conclusion, we are all for. but so far, you've got conclusion, and no collusion. and anybody who denies that is lying. we were promised watergate, we were promised direct evidence of interfering and changing the electoral results. people talk about the 70,000 votes in michigan and pennsylvania. and wisconsin. there's none of that. nobody even talks about that. what about adam schiff and mark warner? the two democrats who are in

charge of the intelligence committee? they spend more time on tv than they do interviewing witnesses. >> we will see what happens. >> it's about an excuse for the democrats who have no vision. even democrats don't want to be democrats any more. the democratic governor of west virginia became a republican this week, because his party is so out of touch with everyday americans. he can't look at the coal miners in his state, the working people, those who suffer with no health care who were lied to by the last president about keeping their doctor and keeping their plan. he became a republican. >> kellyanne, no one can take away the president's popularity in west virginia. we'll see what happens with the mueller investigation. one final subject. this transgender ban that the president put out. the transgender tweet a couple weeks ago on july 26th. he said after consultation with my generals and military experts, please be advised that the united states government will not accept or allow transgender individuals to serve in any capacity in the u.s. military. after he sent out that tweet, the chairman of the joint chiefs

of staff said he's going to wait for any official order from the president. you have had the commandant of the coast guard saying he's not going to break faith with the transgender individuals inside his forces right now. general mattis was apparently blindsided by the tweet from the president, as well. so what i want to know is, specifically, which generals and military experts signed off on that tweet from the president? >> well, a number of them. first of all, the tweet didn't make policy. the tweet announced policy. this had been a conversation discussions had with generals and other stakeholders for a very long time. the president announced it through the form that he does -- >> which signed off on it, though? >> well, hold on. he had talked to generals for quite a long time. i know that. and other stakeholders. and the fact is, the pentagon is a big place. if you find five or ten people who say we had no idea, 100 people who say we had no idea, that doesn't mean that everybody there who needed to know -- i don't know when everybody at the pentagon found out. but the president has made very clear what his policy is. the next steps, george, as you

know, are to have policy guidance and to put the order out and to work with the stakeholders. obviously, secretary mattis and others, to implement this new policy. >> but just -- did the chairman of the joint chiefs -- did the defense secretary, did the commandant of the coast guard, did the other service chiefs sign off on that policy on that tweet before the president sent it out? >> i can't answer that. because i wasn't in the room when they discussed it with him. and i -- and i certainly -- on the national security counsel. i will tell you, having spoken with the president directly about this, and having been involved a little bit in the discussions, that the president had consulted for quite a while with different stakeholders, including his generals. what he says in the tweet is absolutely true. he consults with generals and others about this issue. and, you know, president obama took a late in the game action. everybody runs around acting like he had a particular policy for all eight years. he did not. and you know that. he took late in the game action.

and the president is now acting early in his administration, because he believes in military readiness, and he believes in unit cohesion. this is what he has said. this is what others have said. and but the policy guidance and the exact order and the final configuration of the law, obviously, are forthcoming. >> kellyanne conway, thank you very much for your time this morning. >> thank you, george. always a pleasure. when we come back, two senators from both sides of the aisle joining forces to protect the special counsel from being fired. thom tillis and chris coons join us live. and later, our powerhouse round table. >> announcer: "this week with george stephanopoulos" brought to you by trivago.

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and we are joined by the two senators and we are joined now by two senators joining forces on the legislation to protect the special counsel, robert mueller. republican thom tillis, chris coons of delaware. senator coons, you heard kellyanne conway there, no commitment from the president not to fire robert mueller. she says it's not being discussed. your legislation would give a judge the ability to review any decision by the president to fire robert mueller. why do you think it's so necessary? >> well, i think it's a necessary part of just continuing to improve the reputation of independents for department of justice. this is something that lives beyond this special counsel. it provides the president with the opportunity to consult with

the ag and department of justice, potentially have one removed, but that have that subject to a judicial review so we make sure it's done for proper cause. >> and the president is calling, and you just heard kellyanne conway repeat it again, the entire russia story a fabrication, a witch hunt, and a hoax. do you agree? >> i'm not sure i agree with the witch hunt. we'll let the facts lead us to whether or not it was a hoax or a distraction. we are where we are, and i want to see this investigation concluded so we can get on to doing the good work the president has already started with regulatory reform, health care and tax reform. this is a distraction. i would like to get past so that i can do as i have, go back to supporting the president's agenda. >> senator coons, what are the prospects of passing this legislation? >> well, i think we have already heard strong interest from colleagues on both sides of the aisle in supporting this legislation. senators graham and booker also introduced a similar piece of legislation before we went out. and george, i'll point to you the fact that the president just

signed a russia sanctions bill, one that he initially opposed, but that passed the senate by 98-2. i think this is also an important bipartisan effort that may shore up the rule of law and the separation of powers, and may ultimately get passed. >> the president signed that sanctions legislation, senator coons, but we also saw that tweet saying that it's congress' fault and kellyanne conway said he was referring to the sanctions legislation there for russia being at an all-time low. >> i disagree. i think the beginning of a better relationship with russia is going to be pushing back on vladimir putin's aggressive actions. look, putin is a bully. and he interfered not just in our elections but allies across western europe. he has invaded and occupied a portion of ukraine, stood behind assad and his murderous regime. i think for us to have better relations with russia, we first have to push back on this bully, and that's what the russian sanctions bill is going to do now that it's been signed into law. >> senator tillis, are you ready to take the blame for relations being at an all-time low with

russia? >> the only reason we have bad relations with russia is russia is doing bad things. i agree with everything that chris said. we are here, because of their actions in crimea, because of their meddling in elections, because they're not necessarily being helpful in syria. our relationship with russia is on russia. if they want to come to the table and work cooperatively, i'm sure this president would like that and this congress would like that. but their behavior has to change. >> senator coons, we have heard a variety of objections to the special counsel from the president and his team. they have pointed out -- they said that robert mueller has a conflict, because he's a friend with the former fbi director. they say, james comey -- it's been a close professional relationship. they say that the fact that several members of the team of the lawyers on the team have given contributions to democrats in the past is signs of a conflict. they also say that if robert mueller starts to look at the president's finances, that will be crossing a red line.

any of those concern you? >> they don't. frankly, bob mueller is one of the most respected senior federal law enforcement officials in modern american history. i'll remind you, he's a republican who was appointed by a republican, and i agree with senator tillis, with thom that it is in everyone's best interest for bob mueller to be able to go forward with this investigation so we can get back to a responsible and bipartisan way to address the real issues facing this nation. it's in president trump's interest, it's in the interest of protecting rule of law, for bob mueller to be allowed to continue this investigation to its conclusion. >> and senator tillis, have you seen anything in this investigation so far that would suggest that robert mueller has a conflict? >> no, i haven't. i sit on the judiciary committee, along with chris or senator coons, and i have not seen any evidence to suggest that. and that's why i want this investigation to just follow through to a -- an expedient conclusion, again, so we can get back to fulfilling the promises

we made the american people. that the president is already working on. we need to be solely focused on that. >> what would it mean, senator tillis, if the president fired robert mueller? what would the consequences be, in your view? >> well, i think it's just another example. to me, the reputation of the department of justice has suffered some hits in the past. it would just be another piece of fodder or fodder for people who are trying to discredit what i consider to be one of the most important parts of the administration. and the fbi within department of justice. i'm working very hard, and i know that senator coons is, too, to re-establish the integrity of this department, which is critically important to restore the confidence of the american people. >> senator coons, republican senator jeff flake of arizona suggested that if the president does indeed fire robert mueller, the congress should think about hiring him. would you be open to that? >> i would. i think if the president should fire robert mueller abruptly,

that would be crossing a big line. and i think you would see strong bipartisan action from the senate, which might include our reinstating him or our hiring him to continue to conduct that investigation on behalf of congress. >> let me bring -- >> george, one thing i would like to put there, though. i don't want this day to become a narrative to where we think that the president is headed in that direction. kellyanne conway said that she hasn't had discussions with the president on this matter. our effort here is just to take that off the table, any sort of precipitous removal. we don't have any evidence to suggest the president is going to do that. this is policy that lives beyond this administration, incidentally, and it's important policy, i think, going forward. >> point well taken. i want to bring up another subject while i have you both. and that's health care. since the effort to repeal obamacare has failed, lots of concern that the health insurance markets are going to implode over the next week if congress doesn't pass bipartisan legislation to keep up those subsidy payments. your colleague, senator tillis, lamar alexander, is working on that in a bipartisan fashion.

is that legislation you support? do you think the president should sign? >> i met with the senator alexander and others to talk about what we can do to stabilize the market. i for one think chris probably had a different view, but i was disappointed we didn't get the votes to move forward with the health care reform bill a couple of weeks ago. but we've got a destabilized market where insurance rates are going to go up 20, 30, 40% next year. anything that we can do to prevent that and the damage that that will have on people who need health care i think is something i have to look at. >> the president hasn't committed to keeping those subsidies going to the insurance company, senator tillis. what's your message to him? >> well, the cost-sharing reductions over time need to be eliminated. but we can't just all of a sudden pull the rug out from underneath an industry that's had this in place for about seven years. so in an ideal world, i would like to see them go away overnight. but we don't live in an ideal world. if we don't provide some glide path downward, it will have the effect of raising insurance premiums. and that's why we've got to come

up with some sort of balance. and i think the administration understands that. >> senator coons? >> i agree with thom. what i've heard in delaware is about half of the projected increase in annual rates is because of uncertainty in the marketplace. and so we need to come together quickly in a bipartisan way to strengthen and stabilize the individual marketplace. we also need to begin working across the aisle to find ways to fix what is not working about the affordable care act, while still keeping in place the expansions that made better health care accessible for millions of americans. >> remarkable amount of bipartisan agreement between the two of you today. senator tillis, that's not sitting well with everyone in your base. laura ingram is out this morning with a tweet saying another republican senator who doesn't understand that there are three branches of government. any response? >> well, the response is the irony in the statement. i work in congress. i'm a member of the senate. my job is to assert the authority of the congress as a coequal branch. so for that particular person,

they may want to go back and study up on civics 101. >> senators, thank you both very much. >> thank you, george. our round table ready to weigh in on all the week's politics. we'll be back. >> announcer: "this week with george stephanopoulos" brought toy by at & t business. you by at&t business. stay with me, mr. parker. when a critical patient is far from the hospital, the hospital must come to the patient. stay with me, mr. parker. the at&t network is helping first responders connect with medical teams in near real time... stay with me, mr. parker. ...saving time when it matters most. stay with me, mrs. parker. that's the power of and. we cut the price of trades to give investors even more value. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be.

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stephen miller, some rumor he'll be the new communications director. sparring with jim acosta of cnn. matt th matt shlap and the communicatio communications director for president obama and the senior editor at national review. let me begin with you. as you look at the program today, you see a bit of this divorce between the president and the republican establishment. kellyanne conway being quite tough on those republicans who are thinking -- >> sure. >> -- as you would expect, of running in 2020. and you saw senator thom tillis there, not abashed at all about supporting this legislation, protecting the special counsel. what are we seeing going on here? >> you're seeing a lot of division amongst republicans that started in the primary season, and it's going forward -- there is so much political change. definitely, i can tell you on the republican side, i actually see a lot of change going on in the division on the democratic side, as well. but what you also see is a real

constitutional disagreement between the legislative branch and the executive branch. that's baked into the cake. they're supposed to have disagreements. but you see republicans -- we run the whole show, yet there are really differences in these branches. and donald trump is kind of testing things that we haven't seen before. >> and going straight to the base in west virginia this week. >> sure. >> yes. you know, i think matt is the expert on the republican party. but i think what's also happening is that there's -- people are losing confidence in him as the leader of the party. and you can see people pulling away. john mccain's quote in that story is classic, that people smell weakness, basically, with this president. and i think the president understands this, and knows he's losing right now, which is why he goes to west virginia -- >> by the way, we'll let you have john mccain, if you want him. you can have him. >> another sign of trouble there. let me pose to you the question i put to kellyanne conway right at the start. she recited the economic statistics. the economy is chugging along

well in the same fashion as president obama yesterday 61% disapproval. >> 61% disapproval and declining numbers and weakness in his base which kellyanne admitted on the show, they're seeing falling away. yes, he had a really strong jobs number, 209,000 last week. we should remind viewers, the pace of job growth is actually slower than it was in 2015 or 2016, although still robust. here is one important fact for the president. among people without a high school degree who are over the age of 25, their participation and movement into the labor market is actually at the strongest it's been since 2011. that's a huge factor for him as we see people who voted for him get jobs and we see wages tick up. we see among lower income lower wage earners starting to be more robust. that will help. and that is what matters. so despite the chaos and the politics, among people's pocket books, it's possible -- it's actually possible we see the wage growth really helps him. >> that brings me to the next question. the president at 61% when the economy is doing this well, when

wage growth is starting to tick up, we're now, what, eight or nine years into the recovery. at some point, there's going to be a down turn. does he have a bottom? >> there has been no national crisis over the last six months. the president has achieved these sorts of approval numbers without anything external to the administration causing problems for him. and i think that that has got to be a -- a cause of serious concern for republicans. one of the reasons he is not having the sway among congressional republicans, and even among -- in his own administration, that you might expect, is that the popularity is so low. >> one thing we saw so far this week, general kelly, stephanie cutter, he started to get his arms around the staff this week. you know, be careful what -- when you say something. but so far this morning, the president, his only tweet is make america great. the tweets seem to be more strategic with the russia tweet aside. how much difference can he make? >> he can make an enormous

difference. and i think, you know -- from what we can tell on the outside, it's already happened. giving the white house some sense of organization. controlling the information, or better controlling the information that gets to the president to ensure its accuracy. putting the white house on some sort of a structure. all of that is so important to the success of a presidency. it's not about controlling the president. it's about controlling what goes on around him and ensuring good policy gets to him. it's like the announcement on transgender. we were just talking about this. rolling back transgender rights. he puts out this announcement, and everybody in the pentagon starts disagreeing with it. >> well, and megan, you heard, kellyanne conway couldn't really answer the question, which military experts signed off on that tweet. >> well, it's clear that relatively none signed off since they have all come forward and said they didn't. what's so surprising about this is also they put up such a weak support saying first the expense of transgender in the military. that was knocked down very quickly. then we had cost estimates where we spend more on viagra than

educating people who have sexual identity issues. everyone around this table would agree, we support the men and women who serve. there's 15,500 transgender members in the military who are questioning whether they have the support of their president and their commander-in-chief. that is destabilizing, and it's not just on transgender. it's one he makes a policy announcement that could be much, much, much deeper. >> no question about that. but i have to say, as someone who lived through the don't ask, don't tell controversies of the early 1990s and saw the resistance of the generals to the idea of gays serving openly in the military, what a remarkable turn-around. we see when the president comes out with something like that, and you have the military pretty much as a united front saying, hold on! >> well, the culture has changed, obviously, dramatically, on all of these issues. but the other thing is, this administration, there's a certain amount of dysfunction where the pentagon seems to be basically ignoring the president's tweet. and that's not something that's just isolated to the pentagon. the vice president seems to have his own russia policy. if you listen to what he says and what the president says, they are not on the same page. attorney general sessions, not

doing what the president wants him to do in this terms of prosecuting or investigating hillary clinton. there's a question on the part of subordinates in this administration about how seriously they should take the utterances of this president. that would involve not just managing the staff, but the president. >> i do think it's fair, your comments on getting ahold of the bureaucracy. that plays right to this question about filling these jobs. hash tag resistance in the senate, there's no question, they're slowing down the president's picks. but the president hasn't been rapid enough in making those selections. he's got to get ahold of these agencies. they've got to understand that the west wing has to work with the agencies to develop these policies. so i actually think the changes in the west wing under general kelly pore tend great things. because it was never set up. you worked there, several of us have worked there. it was never set up in a way that you could see it working. for the first time in this administration, i think the president is doing the right thing on this agenda. there's been too much turbulence around the decisions. i think general kelly can really

straighten this out. >> stephanie, general kelly, it seems in the wake of that, the attorney general's job is safe again. he got a call -- >> yes. >> from general kelly. but i wonder if the president may have laid a bit of a trap for himself by bringing general kelly in. particularly on the mueller investigation. let's take kellyanne conway at her word for now, that the president is not discussing right now firing robert mueller, although we know he did it in the past. she would not commit to saying he wouldn't fire him. i have to believe that if the president took a step like that, he would have a trouble with his chief of staff. >> oh, absolutely. i also think that you would see mass resignations in certain parts of the government. and obviously, we just heard from the two senators, there could be, you know, a real constitutional crisis if something like that happened. so whether that's a trap -- i think a lot of that would happen anyway. but i don't think that general kelly would stand for something like that. it's a clear obstruction of justice. he's already being investigated for obstruction of justice.

he's basically doing mueller's job for him. >> but mueller's actions -- mueller has a scope of which he can do this investigation. everyone is acting as if it mueller wouldn't go outside that scope. it all depends on his actions. if he stays within the scope of the investigation, if he follows the law, he's going to be fine. >> well, as bloomberg reported -- >> if it's a broad scope, should be fine. >> you were one of the first that reported that mueller would be looking into financials of president trump. that does derive from the seat of this investigation. >> that's why this panel of the grand jury is significant. not that there is any surprise. we knew this was a serious and complex investigation. what's interesting, we're going to see from the kind of witnesses, the kind of leaks we're going to get out of this, and the kind of material they're looking at. are they focusing squarely on possible obstruction, possible collusion with russia, or are they expanding their scope to look at some of the financial dealings that were made, possibly not even with the trump family, but broader people around him.

that is what we are likely to see. >> from the hiring, it appears that's exactly what they're doin doing. >> these are prosecutors most sophisticated looking at mob ties, complex, financial fraud we have seen. make no mistake. and it is within his scope of his investigation to look at that. >> so the point of that would be, if he made any money on russian transactions, that that would be illegal how? >> are you saying that if they find that people made quid pro quo with russia -- >> i didn't say that. >> that's the hardest thing ever -- >> if people were buying up a whole bunch of apartments to launder money. >> we have to see what they find. but it's clear they have discovered evidence of something. so there is a predicate of wrongdoing here. >> no -- that's why we have a grand jury? >> two grand juries. >> we know that general flynn and paul manafort have a certain amount of legal trouble. i don't think that's a bold statement to make. >> that's not the only one. we also learned -- it was in fox.com, you've got at least six top officials in the justice

department and the fbi who are likely to be called in as witnesses on the obstruction case. that is a remarkable lineup facing the president. >> right. and it's -- you know, special prosecutors have a way of expanding their purview. we do -- we also have to keep in mind, it's not something that has to culminate in an indictment. it can just be a report to congress, and it could just lay out facts that are considered untoward or unbecoming of the president. there are multiple ways this can play out. and none of them, you know -- if you're in the white house, you've got to be very concerned about the way scandal has become further and further institutionalized as an issue that can harm this administration. >> i think that is why the john kelly issue can be also something that he is setting himself up for failure, when we look at replacing the communications director, for example. stephen miller, a hand who has traditionally appealed to the most native impulses of the base, may be cheered on

television, but he's out of step with mainstream republican voters and the base. filling that position is crucial. whether or not he'll be able to -- >> as a republican expert as instead of is, i might take a lot of exception at that. >> let's focus on that right now. there is no question that stephen miller, you know -- that gets a lot of attention. he gets cheered inside the white house. a lot of the president's supporters, say you go. you showed cnn. in that exchange right there. and if you look at that -- if you look at the trip to west virginia, if you look at the transgender ban, what you see is the president really focusinging on his hardest-core supporters right now. >> i actually think what you see the president doing is trying to implement the agenda that he said he would implement. and what you have as a west wing that wasn't set up to do it in a seamless way. and so i think the press is enjoying covering all these skirmishes. it's why the daily briefing for some of us there are days when it's painful and days when it's not. and that's why they have struggled with this idea should it be on camera, should it not be on camera. you have to admit, george -- the

press loves those moments, too, when all of the cameras are on them and they're showboating and that's not helping the country, either. so what i would say, we're all trying to get in donald trump's head. and we're all trying to look at why did he do it this way, why did he do it that way. fair game. i'm looking at the policies he's implementing and none of us should be shocked at what he's doing. >> i'm looking at the policies implementing, as well. and i'm looking at health care, i'm looking at tax reform, success on regulation -- >> even regulations alone. >> back to this immigration bill. we talk about the base. but, of course, the base is a very agated thing. and so far, a lot of the administration's priorities have been pitched to a much more traditional republican party base. it's been health care, people talk about tax reform. deregulation. not a whole lot for the white, working-class voters who are part of a distinctive trump base. the immigration proposal is the first time, i think, this administration has really gone after and catered to this group of voters. >> and one of the big questions we're going to find out, is it actually going anywhere in the congress this year. that is all we have time for

today. thank you all very much. we'll be right back. we'll be right back. now we honor our fellow and now we honor our fellow americans who serve and sacrifice. in the month of july, one service member was killed in afghanistan. and we'll be right back after this from our abc stations. this from our abc stations. this from our abc stations. when you're clocking out. i'm the one clocking in & sensing your every move and automatically adjusting

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