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Trump Rejects Intel Report on Russian Hacking; Tillerson's Ties to Russia Under Scrutiny; President Counsels Democrats on the Way to Regroup; Trump's Personal Transition. Aired 8-9a ET

Aired December 18, 2016 - 08:00   ET



JOHN KING, CNN ANCHOR (voice-over): Donald Trump offers supporters his holiday take on naughty and nice.

DONALD TRUMP (R), PRESIDENT-ELECT: I mean you were nasty and mean and vicious and you wanted to win, right? But now, you're mellow and you're cool because we won.

KING: Current president's year end message is far more sober.

[08:00:01] BARACK OBAMA, PRESIDENT OF THE UNITED STATES: There are places around the world where horrible things are happening and because I'm president of the United States, I feel responsible.

KING: One month before the Trump inauguration, Russia's election year hacking remains a bitter flash point.

OBAMA: Over a third of Republican voters approve of Vladimir Putin, the former head of the KGB. Ronald Reagan would roll over his grave.

KING: But the president-elect says he doubts it happens and Republicans worry he's too cozy with the Kremlin.

SEN. JOHN MCCAIN (R), ARIZONA: Vladimir Putin is a murderer, thug, a KGB agent.

KING: INSIDE POLITICS, the biggest stories sourced by the best reporters, now.


KING: Welcome to INSIDE POLITICS. I'm John King. Thanks for sharing your Sunday morning.

The president-elect is at his Palm Beach estate enjoying a holiday break, after a busy week of personnel decisions and some more rallies to thank his supporters.


TRUMP: This is a truly exciting time to be alive. The script is not yet written. We do not know what the page will read tomorrow. But for the first time in a long time what we do know is that the pages will be authored by each and every one of you. It's a movement.


KING: The current president is on his annual holiday trip to Hawaii. And his year end press conference was a vivid reminder of the dramatic change in both substance and style now just 33 days away.


OBAMA: Almost every country on earth sees America as stronger and more respected today than they did eight years ago. In other words, by so many measures, our country is stronger and more prosperous than it was when we started. It's a situation that I'm proud to leave for my successor.


KING: The president's news conference was dominated by questions about Russia's cyber meddling in our election. President Obama says there's evidence voting machines were tampered with. So, no reason he says to question the count or Trump's Electoral College victory. But he said there was clear evidence, is clear evidence that Russian hacked the Democratic National Committee and Hillary Clinton's campaign chairman with the goal of hurting Clinton and he said he hoped the president-elect would have a change of heart and would stop attacking American intelligence agencies and defending Russian President Vladimir Putin.


OBAMA: The transition from election season to governance season is not always smooth. You know, it's bumpy. There's still feelings that are raw out there. There are people who are still thinking about how things unfolded and I get all that.

But when Donald Trump takes the oath of office and is sworn in as the 45th president of the United States, then he's got a different set of responsibilities and considerations. And I've said this before. I think there's a sobering process when you walk into the Oval Office.


KING: Again, that inauguration now just 33 days away.

With us to share their reporting and insights this morning, Julie Pace of "The Associated Press", Jonathan Martin of "The New York Times", Dan Balz of "The Washington Post", and CNN's Sara Murray.

Let's start with the contrast, both the stylistic contrast. When you see President Obama standing there saying, you know, essentially all is well, we rebuilt the economy, we rebuilt our stature around the world, and you watch Donald Trump finishing his campaign tour, he is still campaigning on, forgive my shorthand, but that all is hell, that Washington is a mess, that the economy is a mess, that we need this dramatic change.

But particularly, Dan, on this question of Russia. Of the people who received the intelligence briefings I believe that Donald Trump is alone in still refusing to say something happened. There's a debate about how high it was in the Kremlin. There was a debate about, you know, what to do about it.

But now, you have Republicans saying we need to have hearings. You have president of the United States saying the evidence is overwhelming and Donald Trump still says, I don't think it happened.

DAN BALZ, THE WASHINGTON POST: He is till an outlier on this. I mean, we don't know what the people closest to him who will populate the new administration are saying to him about this. But certainly, in any public comments, he's alone in being unwilling to accept the view that this was done by the Russians and the latest conclusion that it was done to help him and to hurt Hillary Clinton.

And it's a very odd situation that he can't sort of wrap his head around the idea that this is what actually happened because the evidence does seem overwhelming and the conclusions are wildly shared, and the question is, will there be any kind of a change of heart or any kind of change of view once he becomes president of the United States because this is going to fall into his lap?

KING: And that was the point the president seems to be making there, where he was -- he just repeatedly said, I've seen the evidence. The evidence is there. I've seen the evidence.

But he seems to be trying to give the president-elect some grace, saying election is over, transition period, he's, you know, sort of learning up. I don't mean that as a criticism. You're learning up the job. It's a hard job to take on.

He seemed to be trying to give him a nudge but also some grace.

JULIE PACE, THE ASSOCIATED PRESS: Right. And I think that's why you're going to see the president, he has ordered the intel community to put forward a public report that will be out before he leaves office which he can hand over to Trump.

[08:05:07] I think what's interesting about the way that Trump is handling this is that he's viewing this hack of the Democratic groups as through the prism of his own election. Maybe his tone will change after we get to Monday when the electors will cast their votes and then there will be no debate over whether he's going to be president.

But when you actually take office, you can't view these issues in terms of how they relate to you. You have to view them in terms of how they relate to the country, our own national security, events around the world and whether he's able to make that shift I think will really tell the story of his presidency.

KING: In your piece today, Dan, you talked about how he campaigned on America first. And you could make the argument there, again short- handing, but he's almost putting Kremlin first in criticizing the CIA. Why? Why -- you know, some people around him when you talk to them

say he'll get there. But why? Is this ego? He doesn't want to say, oh, I got some help in the election? Is this an affinity for Putin? Or just willing to ignore some things, even if he believes them to true, not say so publicly because he thinks there's some new page turn coming?

SARA MURRAY, CNN POLITICS REPORTER: Well, look, the one thing intelligence agencies do differ on is the conclusion of whether Russian meddled to specifically help Donald Trump and hurt Hillary Clinton. That's one area where the CIA has been more forward-leaning than other agencies have been, and that seems to be the issue that Donald Trump and his advisers are sort of laying their hat on.

They are offended by this conclusion. They feel like it is an opportunity and a way for people to delegitimize his presidency, which is ironic coming from a guy who spent years insisting President Obama was no born in the United States, and many saw that as a way to delegitimize President Obama.

But that is what they are hanging on and I think they will continue to do that until we actually see the electors vote. Whether Donald Trump changes his tone beyond that is an open question but honestly, we have not seen this, we've not seen it publicly from Sean Spicer who did interviews over the weekend and declined to talk about sort of the risk of Russia. We even saw Chris Collins, a congressman, out there saying, you know, if Russia hacked the DNC, then the worst thing that happened the truth came out.

This is a very different tone I think than we would see from Republicans if it was flipped. If Republicans were saying this, or if this happened to Republicans, I think they would be saying that Democrats were treasonous for latching on to conclusions.

JONATHAN MARTIN, THE NEW YORK TIMES: That's a pretty safe bet, I think. Everything is tribal now and partisan. So, they are trying to accommodate their principal, their president. And so, it's causing them to get into all these contortions to try to rationalize what he's saying.

Part of me wants to think that, to Julie's point that he is reluctant to admit it was the Russians because that would cast some shadow on his victory. But here's the problem with that: he's been un -- he's unwilling to challenge Putin well before this.

One of the biggest mysteries of this campaign was for a year and a half, whenever he was asked about Putin or Russia, his tone changed, his demeanor changed, his language changed. I mean, like no other country in the world would he somehow try to rationalize or, you know, sort of couch his comments. But whenever it was Russia and Putin, he was always different. And that's why there are these laboring questions.

KING: Let's listen to that. Let's listen to some of that, because as a candidate, a lot of candidates say things as a candidate. Then they have very different views, they learn the transition, and they become president and have to actually deal with the problems. So, we'll see what President Trump does. But candidate Trump, you're right, was pretty friendly toward Putin.


TRUMP: There's nothing I can think of than I rather do than have Russia friendly as opposed to the way they are right now so we can go and knock out ISIS together with other people, and with other countries.

I'm not a friend of Putin. I don't know Putin. I never met Putin. I respect Putin. He's a strong leader, I can tell you that, unlike what we have.

Russia, if you're listening, I hope you're able to find the 30,000 emails that are missing.


KING: That is noteworthy for a number of reasons. Number one, he urged a foreign government to hack into American institutions. Number two, that was the last time he had a press conference back in the campaign.

But, look, we were questioning -- you know, we have these questions about the hack and what we're going to learn in these investigations both the internal administration, in a few moments we'll get to the Republicans on Capitol Hill, and how they want to come at this.

But to me, it's a bigger question of what a change we're going to get in 33 days and in the sense that if you listen to President Obama in his news conference, he was essentially -- used John McCain's words but he says, you know, Putin can't be trusted. Putin has blood on his hands in what's happening with Aleppo right now. Putin annexed Crimea. Putin stole land from Georgia. That why can you -- do not have a romanticized view of this guy, but he thinks Trump does.

PACE: And Obama is speaking as someone who tried to have a better relationship with Russia when he first come into office. Putin was not president at that time.

KING: As did George W. Bush.

PACE: As George W. Bush, but Putin was still very influential.

No one argues with what Trump is saying about wanting to have a better relationship with Russia, being able to address some of these issues more easily if there was a more productive relationship.

[08:10:03] But saying that shouldn't wipe away all that we know about what Putin has done. Ukraine, Crimea is the most obvious example but if you look at Syria if Russia were taking more action and we're not propping up Assad, we would be talking about a very different situation there.

So, it's as though he is choosing to ignore all of this evidence about what Russia is doing to destabilize places around the world in favor of a positive relationship. But I think he could be talking about both.

BALZ: But the other aspect of this is he's given no indication of what a different relationship with Russia would be like or how you get to that point and the degree to which you stand up to Russia when you have to stand up to Russia and perhaps cooperate in some other areas. I mean, he's just simply said wouldn't it being a great if we had a better relationship? That's -- you know, everybody's wish about a lot of things. But how do you get to that point and what's really behind that in his thinking. Does he think Russia is a constructive force or can be a constructive force? Or does he think they are not.

All the evidence at this point is that they are not in a variety of places around the world and that's what he's got to confirm.

MURRAY: And I also think when you think about Donald Trump's view of the world, he looks at ISIS as something that has a direct impact and a direct threat on America. He doesn't necessarily look at Aleppo in that way. He doesn't look at it as the kind of situation that is a direct problem or a direct risk for our country.

And so, just thinking of Donald Trump's world view he's less likely to be concerned about what Putin is doing as it relates to Aleppo, as it relates to destabilizing nation abroad than he is about thinking, oh, if we could team up with Russia to fight ISIS, wouldn't that being a great? And they would take care of the risk to our homeland.

KING: And yet during the campaign, he sounded, a lot of Republicans were nervous about Donald Trump because he was talking about not intervening, not being an interventionist, not projecting U.S. military force overseas. In these recent "thank you" rallies he's got around the country, he has talked about safe zones.

And again in the contrast we're going to get between our new president and our outgoing president, President Obama talked about how it's a great idea. They come to with you the idea, you want to save lives. You want to save those children.

And then you look at how do you do it? How many troops would it take? How long would they have to be there? How much money would it cost?

What about the Russians? You know, if they won't cooperate, can you get it done?

I'm fascinated by Donald Trump now says create safe zones. How does he that? How does he do that? And maybe that's back in the card play with Russia?

PACE: Maybe. I mean, safe zones, again, are one of these things that's like the no-fly zone. That everyone likes the way it sounds because you don't envision massive U.S. troop presence on the ground.

But who is going to enforce it? You have to enforce it on the ground and on the air, that's going to fall on the United States. It's a situation where you will likely end up with American casualties. Is the American public ready for that? Is Donald Trump ready for that?

So, he hasn't laid out these plans in detail. He has now more advisers around him that will give him these plans. But if he's talking about safe zones, actually, he's talking about a fairly lengthy U.S. military commitment to Syria.

KING: We'll see how that one plays out.

Everybody, sit tight.

Up next, the president-elect Russia problem with fellow Republicans and what it means for his early days in office.

First, though, politicians say the darndest things. My memory of election night is different than what you hear from the president- elect. But, lucky for me, you can check the tape. See that right there? That was, wow. Flash back.

Thanks for watching Mr. President-elect and letting your supporters know which network you most trust.


TRUMP: They are getting a little nervous. John King, nice guy, he's got the map. He's good with the map. But his hand is starting to shake. Oh, my God. Oh, oh, my God, he won.

Because remember they said, before the election, there is no path to 270 for Donald Trump. Oh. But there's a path to 306.




[08:17:01] KING: Welcome back.

ExxonMobil CEO Rex Tillerson is Donald Trump's choice to be secretary of state. He's a friend of Vladimir Putin. And that worries many leading Republicans because they already think as we just discussed the president-elect is too quick to praise the Russian president.


SEN. JOHN MCCAIN (R), ARIZONA: Anybody who is a friend of Vladimir Putin must disregard the fact that Vladimir Putin is a murderer, a thug, a KGB agent whose airplanes as we speak have been a targeting with precision weapons hospitals in Aleppo, who have committed atrocities throughout the region, and has destabilized Ukraine, has invaded Ukraine, destabilizing, trying destabilize Baltic countries. And the list goes on and on.


KING: As you can see there, no friend of Vladimir Putin in John McCain.

So, hawks like Senator John McCain and his friend Lindsey Graham say they have a confirmation test for Mr. Tillerson.


SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: I want to hear from him if he believes the Russians tried interfere in our election. They're trying to destabilize democracies, and if somebody wants to be secretary of state, and they hear the briefings that I've heard and they don't believe the Russians were involved in our election, interfering with our elections, then I really question their judgment. And if they don't believe sanctions are appropriate given what Putin has been doing all over the world, including our backyard, then I don't think they have the judgment to be secretary of state because if you don't go after Russia, you're inviting the other bad actors on the planet to come after you.


KING: So, Mr. Tillerson is going to have some rough sledding. Is it possible, number one, that Donald Trump's choice to be secretary of state will be rejected by a Republican Senate? Is it possible? And even more so, I suspect the answer is no in the end, because Mr. Tillerson is a very impressive person by all those who know him.

But this is a proxy to get answers we were just trying to get answers in the last segment, right? Does Donald Trump, is he ready to concede Russia hacked us? Is he ready to concede Putin is not a cuddly Teddy Bear?

MURRAY: Well, it would certainly be helpful to Rex Tillerson's odds if Donald Trump said something even remotely critical or skeptical of Russia between now and Tillerson's confirmation hearings. Like you said, I think it's unlikely that he actually gets rejected by the Senate in part because Senator McConnell phoned his support behind Tillerson.

But also, as you said, people who know him say that he's very smart, he's very direct, he's very captivating, that when he gets one on one with these senators in meetings and even when he gets in hearings, he'll be able to win them over. But I do think as part of that, obviously, he's going to be forced to answer a lot of uncomfortable questions about whether he thinks Russia meddled things. It's helpful not to get further in front of the principle, on that. That's why it'd be helpful for Donald Trump to say something.

But I think he's also going to need to come in to these meetings and say I had a good relationship with Putin when I represented the interests of my shareholders, but now that I'm representing the interest of Americans, that relationship needs to change. But he's going to have to be convincing for people like Senator McCain, for people like Senator Graham.

MARTIN: Yes. And those two Senators are looking for some ground to fight on here when it comes to Russia. They -- it's important to note -- are going, the week after Christmas, the two of them are going on what I call a "screw you, Vladimir" tour.

[08:20:09] It's not officially called that.


MARTIN: But seriously, they are going to the Baltic States. They are going to Georgia. They are going to the Ukraine.

And the message there is pretty straightforward, it is to -- you know, make clear to Putin that not everybody back in Washington has a rosy view of him. But also, to offer some reassurances to our allies, you know, in those countries that America is still on their side, or at least elements of the American government are still on their side. And so, those two senators are looking for ground here.

Now, I don't know if they can ultimately try to stop Tillerson's nomination, but they are going to make this confirmation process entirely about Russia if they have anything to say about it.

KING: It's interesting the choice because it's another -- we'll get to some of the others in just a moment, but it's one of these choices that Trump has made that a degree unnerves the Washington establishment. And as you heard Senator McCain and Senator Graham and Marco Rubio is in the same camp with them, saying, wait a minute, a friend of Vladimir Putin is not the right attorney secretary of state. That's what Washington says.

Donald Trump says, as he did during the campaign, you're wrong.


TRUMP: Rex is friendly with many of the leaders in the world that we don't get along with and some people don't like that. They don't want him to be friendly. That's why I'm doing the deal with Rex because I like what this is all about.


KING: You can make, think of it as Trump thinks, as a negotiation.

MARTIN: Oh, sure.

KING: If you read the art of the deal, that if you want to send a guy in -- if the idea is to deliver a tough message to Putin better to have it delivered by somebody he knows and respects and likes, right, than somebody who he thinks is a clown.

BALZ: You know, the interesting thing if you put this in the context of political campaigns, so far, Rex Tillerson has been defined by everybody but Rex Tillerson. And I think everybody has to keep an open mind.

I think Jonathan is right that Senators McCain and Graham will use these hearings, and we've seen Senator McCain over the years use hearings effectively to drive a series of questions and a series of answers that he's looking for and to create a moment and to create discomfort for somebody who is on the opposite side of the table.

But I don't think we know at all at this point how Mr. Tillerson is going to approach this. Sara is right it would be helpful if Donald Trump said something acknowledging in some even gentle way that he believes that the Russians were involved.

KING: And one of --

BALZ: We got a lot more to hear from Mr. Tillerson.

KING: And one of the early tests how good the Republican president who remember was not the choice of many establishment Republicans, how much is -- how good or bad in the middle his relationship will be?

Another choice that has unnerved a lot of the Washington establishment and unnerved a lot of people in the Middle East as well is David Friedman, the president's choice to be ambassador to Israel. He's a bankruptcy lawyer. He's known Trump for years. He also has -- he's a critic of the two-state solution, saying he doesn't see it as viable, at least right now, to have a separate Palestinian state. He wants to move the embassy ASAP from Tel Aviv to Jerusalem, which is against years of U.S. policy, which says the fate of Jerusalem will be decided in negotiations between the parties. He has expanded, supported -- excuse me, expanded settlements in the West Bank.

What is Donald Trump trying to say here?

PACE: Well, he's sending someone over to Israel as his ambassador if he's confirmed who marks a shift in U.S. policy on a lot of these hot button issues. There's been some reporting out of Israel how he's even to the right of Bibi Netanyahu which creates a fascinating dynamic in Israeli politics.

You know, Trump has talked about Middle East peace as the greatest deal. If he could do one deal as president, that's the one he wants to do. Should we look at this as part of his negotiation, sending a hard-liner over as ambassador so that he can sends an envoy who's able to work both sides? Possibly. Or do we look at this and look at Friedman's position on settlements, on the two-state solution, and think that that is going to be Donald Trump's policy? If that's his policy, it makes an eventual peace deal much less likely.

MARTIN: But this appointment really captures why it's folly to try to make heads or tails of the Trump strategy going into this presidency. This is someone who has tried to make the ultimate deal, Mideast peace for months, somebody who actually angered some pro-Israel groups because he was so determined it seemed to deal over there.

And then, you know, he actually becomes president and folks around him are much more hawkish when it comes to the Middle East. And he's obviously very heavily influenced by his son-in-law Jared Kushner, on Middle Eastern issues, and the next thing you know, he's nominated to be ambassador to Israel, an over-hawk on Mideast peace.

So, you know, it's a long ways away from Trump being at the RGC conference and being asked about moving the capital or the embassy from Tel Aviv to Jerusalem and saying, I'm not sure yet about that", and being booed by the way.

[08:25:08] PACE: Yes.

MARTIN: Being booed.

So, the bottom line is you just don't know what he's going to do because a lot depends upon who is in his ear, what his motivation is at that moment.

KING: And so, one other quick point before we go here is that we have one president at a time, that's just the operating policy. There was an incident over in the last several days, over the weekend, in which the Chinese seized an American drone, underwater drone in the South China Sea and they negotiated to get it back.

But Donald Trump, first he tweeted -- there was a misspelling in one of them. "Rips it out of the water and takes an unprecedented act." It was done you can find the spelling here on online if you want.

But then last night he tweeted, "We should have told China we don't want the drone they stole back. Let them keep it."

Again, shaking things up in one of the most complicated delicate relationships in the world, which he has shown no hesitancy to sort of, you know, get the Chinese thinking, what's next?

PACE: The Chinese will show no hesitancy in pushing back. I mean, they are a country that has pretty easy ways to be provocative, and they have been sending messages if you read of the state publications in China. They are sending messages that they are not going to go easy.

KING: Even President Obama did seem to say, you know what? Maybe we do need to rethink this a little bit. But his advice was to do it more delicately. If you want to shake it up, shake it up, maybe it needs to done. But be a little bit more gentle.

MURRAY: Trump's really not great on gentle and delicate, in sort of like sending subtle messages. He doesn't really do that.

But the thing you should realize his view and his top advisers view is China is the main event. If they are going shake up a relationship and break some glass, it's going to be with China and that is, you know, you saw Mitt Romney running, he said, Russia is our number one geopolitical foe. Donald Trump really sees that as China through the lens of what he wants to get done, through the lens of creating jobs, through the lens of creating the American worker. So, to him no relationship is more strategic than the one with China and I don't think that he's particularly worried about alienating them.

KING: Thirty-three days. A lot of this -- we'll see what happens. Transitions are different from presidencies. We'll see what happens when he's actually the president.

Up next, President Obama offers some advice to the Democratic Party at what the first lady describes, listen here, as a painful moment. (BEGIN VIDEO CLIPS)

OPRAH WINFREY, TV HOST: Your husband's administration, everything, the election was all about hope. Do you think this administration achieved that?

MICHELLE OBAMA, FIRST LADY: Yes. I do, because we feel the difference now.


OBAMA: See, now, we're feeling whatnot having hope feels like.

TRUMP: Michele Obama said yesterday that there's no hope.

I honestly believe she meant that statement in a different way than it came out because I believe -- I believe there is tremendous hope. And beyond hope, we have such potential.



[08:31:32] KING: Welcome back. The election was 40 days ago. 40 days ago. But Donald Trump's victory is not yet official. Tomorrow is the next big step in that process, the electoral college, the electors meet out across the country.

This is how it turned out on election night. 306 for Donald Trump, 232 for Hillary Clinton. Now the electors need to meet state by state to make it official.

A little bit of a history lesson here. Some people like it, some people don't, but the electoral college goes back to the constitutional convention of 1787. The idea, protect the little guys, essentially. It established to give less populace states influence in presidential elections. Now we call them flyover states. But the founders set it up this way. Each state selects its own elector. They cannot have any involvement with the federal government.

So if no one gets 270 votes, what happens then? We probably don't expect that to happen but it will go to the House of Representatives. One vote for each state, 26 votes to win in the House of Representatives. Now again nobody expects that to happen. But occasionally there are so-called rogue or faithless electors. The biggest example, after the 1872 election. Ulysses S. Grant won and won big. Horace Greeley died after the election before the electors met. So 63 electors were so-called faithless. But understandable in that case.

Will there be a big defection tomorrow? There's a lot of lobbying of the Trump electors. But we don't think so. More likely maybe a little more than normal.

Here's what it normally plays out. Back in 1988 one elector from West Virginia cast his vote for Lloyd Bentsen, not Michael Dukakis. There was Al Gore elector in 2000 who abstains, and one John Kerry elector in 2004 who instead cast the vote for John Edwards.

This is the more likely scenario. President Obama said sure the electoral college is controversial but he says Democrats should not focus on the process. They should focus on the party's message.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: How do we make sure that we are showing up in places where I think Democratic policies are needed, where they are helping, where they are making a difference. But where people feel as if they are not being heard. And where Democrats are characterized as coastal liberal, latte sipping, you know, politically correct, out of touch folks.

We have to be in those communities. And I've seen that when we are in those communities it makes a difference. That's how I became president.


MARTIN: That's the second time since the election that he's gone on an extended tangent that is so clearly an indictment of Hillary's campaign. I mean, he doesn't say it directly but that's of course what he's getting at. And by the way I saw Tim Kaine, I think, last week, I went to talk to him and he said something very similar to me which was in Virginia, he said, in my state, you know, what we do in our campaigns there, in the past campaign is even the counties we know we're going to lose we go there. Why? To cut into the margins. Because losing a county 60-40 is a lot different than losing there 80- 20.

KING: Or show respects for people you're going to have to govern even if they vote against you.

MARTIN: You know, Obama did that on '08.

KING: The question is, does the party take its advice? Because let's be honest. And the president was actually quite candid about it. He won two electoral college landslides running for president. He was unable to transfer his popularity in any of the elections whether it's the midterm elections of 2010 or 2014 where the Democrats got spanked. And that Republicans made huge gains not only in Congress but at the state level. And then obviously he campaigned aggressively for Secretary Clinton and there's no evidence -- I mean, it's not his fault but he wasn't able to automatically say hey, you know, African- Americans, turn out.

[08:35:05] Hey, Latinos, turn out in the same numbers you did in 2012. Young people, turn out in the same numbers you did in 2012. So will they listen to him now?

PACE: They're caught in this tug-of-war because on the one hand you do have demographics that are moving in almost permanent favor toward Democrats if Republicans can't make gains with Hispanics in particular. So they are looking at these numbers that are pointing in one direction and yet at the same time it is true that Hillary Clinton did not show up in places where she should have showed up. So that is the -- you see it play out in the DNC fight right now.

I think that Obama would probably in his heart of hearts argue for the demographics because he is a numbers guy, a data driven guy, but he also in 2008 was in Indiana and he won that state. And he did it because he showed up. So again, it's a push and pull right now for Democrats.

BALZ: But the truth is the policies he's pursued have not been aimed at the people he's talking about there.

PACE: Absolutely.

BALZ: They have been aimed at those sort of his coastal liberals, the rising electorate. I was out in Wisconsin a couple of weekends ago and there was a conference at the University of Wisconsin and there was a Q and A involved with one of the professors there whose name is Catherine Cramer who's done a book called "The Politics of Resentment." She spent years literally going around Wisconsin talking to people.

Somebody in the audience got up and said what is it that Democrats can say to people in these rural areas? And she said, you know, I think the first thing is Democrats have to listen to people. It's not just showing up and giving a message, it's understanding what it is that drive those people who voted overwhelmingly for Donald Trump.

KING: And then speak in a way, as you explain your policies, that they relate to. That's part of Hillary Clinton as she was -- the people didn't feel like they related to her.

Speaking of Hillary Clinton, she spoke to donors this past week and we're circling back a little bit to the whole Russia hack, but in a different, more political context. She spoke to donors the past week, and she said, yes, Putin did this and he did it because he doesn't like me.


HILLARY CLINTON, FORMER PRESIDENTIAL CANDIDATE: We are also learning more every day about the unprecedented Russian plot to swing this election, and this is something every American should be worried about.

Vladimir Putin himself directed the covert cyber attacks against our electoral system, against our democracy, apparently because he has a personal beef against me.


KING: Now the more they learn about this some Democrats say Mr. President, you had this intelligence. Mr. President, you knew this at least in September. Why weren't you more open about this? Why didn't you try to help Hillary Clinton if this was happening? The president in his press conference saying, not my job.

(BEGIN VIDEO CLIP) OBAMA: I wanted to make sure that everybody understood we were playing this thing straight. That we weren't trying to advantage one side or another but what we're trying to do is let people know that this had taken place. Imagine if we've done the opposite. It would have become immediately just one more political scrum.


KING: It was interesting there because the president saying they did issue a statement in September. The intelligence agency saying this had happened. It was pretty straightforward. It's happening. We believe the Russians are responsible. We believe it goes high up in the Russian government. It didn't say we think they're trying to tip the thumb for Hillary Clinton and the president didn't talk about it, you know, didn't add to it his campaign speeches. Hey, Russia is messing with our elections, or something like that.

He also, the president also defended the FBI. And James Comey, the FBI director, this just a day or two after John Podesta, the Clinton campaign chairman, wrote a vicious, harshly worded op-ed in Dan's newspaper, "The Washington Post," saying there's something wrong at the FBI that needs to be cleaned up.

If you're a partisan Clinton Democrat you probably didn't like what you heard from the president there.

PACE: And you're seeing some of those frustrations from the Clinton supporters starting to be aired in public right. It's fascinating to think of a split between Obama and Clinton factions. Again there was no good answer for Obama in this situation. He's right. If he had weighed in more aggressively against Comey and had pushed the intelligence agencies to make a determination about why the Russians were doing this, he would have just been torn apart. And it could have had the effect of energizing the Trump supporters even more. So I think he probably made the right decision as president but, again, if you're a Clinton supporter, as a Democrat, huge frustrations right now.

MURRAY: And I also think to the point of, you know, mentioning the Podesta op-ed, look, there were federal investigators who tried to warn the DNC, senior officials at the DNC repeatedly that there were hacking attempts and they did not heed those warnings or take any steps to do anything about it and improve their security until months later. So there is culpability on multiple fronts from this point. But I think, you know, the overall -- we're past the election, Donald Trump is going to be president and I think that, you know, nobody is trying to push back on that at this point.

But Russia is still attempting to hack U.S. political institutions. This is not a problem that is going away and we now have some -- a president-elect who's is not acknowledging that, and two, who made a habit of questioning whether the election was rigged and is now has evidence that, you know, whether they were doing it because it was a personal beef against Hillary Clinton, U.S. intelligence seems to think it's more likely they want to send our elections into chaos or at least make people think that they are chaotic as an attempt to undermine our democracy, that's a serious problem.

[08:40:08] Like it's surprising to not see a president-elect talking about this. It's surprising to not see an even louder chorus of Republicans talking about this.

KING: Well, they will, I think once -- I think once we get into January, once we're through the transition and we're in the new administration, especially a certain group of Republicans is going to be vocal. We'll see if the new president comes along with them.

A footnote before we go to break. I just want to show you a picture. We have had three successive two-term presidents. Relative a young man when they were first elected. There's President Obama at his pre- Christmas press conference in 2009. There he was as he headed off to Hawaii this year. The job takes a toll. The job takes a toll.

Up next the president-elect's daughter is getting a White House office and his sons are in transition meetings and helping pick the Cabinet. So can he keep business in family without creating a mess of conflicts?

And please take our INSIDE POLITICS quiz this Sunday. We know the secretary of State is first Cabinet position in line of presidential succession. Behind the president, the president, the speaker of the House, the Senate president pro tem. Which is the lowest Cabinet level? Is it the secretary of Veterans Affairs, the secretary of Agriculture, Homeland Security secretary, or the secretary of Education? Vote now. Don't Google.


KING: Welcome back. The president-elect's transition to-do list still includes deciding just how he plans to hand off his complicated business and wallop his presidency from its decision-making. He had promised to do so this past week but says he needs a bit more time. We do know Ivanka Trump is coming to the White House with an office now East Wing, West Wing.

Sara Murray will help me out on that in a minute. In a tweet on Monday the president-elect said this about his businesses.

"Two of my children, Don and Eric, plus executives, will manage them. No new deals will to be done during my term or terms," there you see that, "in office."

Later in the week his children were involved in an official transition meeting with technology executives. One of the many examples critics use to question whether Trump's children can manage his business if they're also involved in official government business?

[08:45:04] This is a tricky one. And they get a little sensitive about it but you do have his daughter Ivanka who many people thought after the campaign that she would run the Trump Organization. Now she's coming into the White House. Her husband, Jared Kushner, they're trying to figure out the nepotism rules. But apparently he comes into the White House. Don and Eric run the Trump Organization but they're helping to pick Cabinet members and they're showing up at these meetings. Kosher?


MURRAY: You know, I'm going to go ahead and say not exactly. Look, there is going to have to be a point and Hope Hicks acknowledged in a statement that there would be a point where the sons would be taking over the businesses and Trump would no longer be getting briefed on it. He's even open to no longer having conversations with his sons about the business. That one is a little bit harder to believe.

But Jared Kushner and Ivanka Trump are both coming to Washington. Whether they are given formal titles or remain in some sort a more fit advising him to be determined. She was supposed to have an office in the East Wing. That may be changing. She may get an office in the West Wing. It may be less formal than that. Depending on how they deal with it. And on the one hand, you sort of get it.

Donald Trump has spent his life building this business. You understand why he doesn't just want to sell it all off and leave with himself nothing after the presidency but he also campaigned on -- for a year and a half on the notion that the presidency was so much more important than anything he was doing in the corporate world. And so I think what you're seeing is them really struggling on any way to draw a clear bright line. And when you talk to some people who are close to Trump and close to the family members, they admit privately there will never be a clear bright line.

KING: And he also campaigned about -- he's accused the Clintons of pay-to-play. He said he was going to drain the swamp. This past week "New York Times" reporting that they were auctioning off coffee with Ivanka as part of a charity fundraising effort. I think on the one hand you could say it's a charity fundraising effort. Good. That people used their influence. On the other hand she's going to have an office in the White House. It strikes you as pay-to-play and it apparently that's been cancelled.

MARTIN: Yes. What strikes me about it is that I don't think they really appreciate why it's problematic. Are even care for that matter. Take the example of the Interior secretary nomination. Not the most high profile Cabinet post but one where you all saw this on vivid display. We have a story in the paper yesterday about Don Trump Jr. was sitting in on the interviews and in fact played a key role in torpedoing the nomination of a member of Congress on the House side, Miss Rogers, who was widely thought to get that post until Don Trump Jr. Intervened and they -- then elevated a different congressman instead.

He literally is in these meetings talking to these possible candidates and then he's sort of urging his dad for or against. It's striking and really I'm actually surprised that nobody in Congress has stood up to say hey, I'm not so sure that this is kosher.

PACE: And yet one counter argument that you hear from a lot of people around Trump is that they are very happy with the idea that Ivanka and Jared in particular will be Washington and in the White House because they are a calming presence and they can be a moderating presence. So you get these questions about the businesses but also a lot of people who are quite happy to have those two folks in the White House.

BALZ: I think Sara's point is the operative one, which is that they will not draw bright lines and they will continue to push the edge of the envelope on this as long as they can and in some ways the legal aspects of this are still a little murky and yet to be worked out.

KING: And again, 33 days and if you're a Trump critic you get mad when I say this. Give him grace, he's our president. Yes, give him grace for 33 days and then he'd still be held accountable. See what happens.

Our reporters share from their notebooks next including some insight on the contest for chairman of the Democratic Party.

And our quiz results we asked which Cabinet secretary is lowest in the line of succession behind the president? Veterans Affairs, Agriculture, Homeland Security, or Education. The votes were split. The answer is Homeland Security secretary, a cabinet position that was only established in 2003, it's already the third largest Cabinet department in the United States government but low on the list. Thanks for voting.


[08:53:02] KING: Welcome back. We fill our INSIDE POLITICS table each week with reporters, not pundits, and we close by asking them to share a bit of their reporting. Help get you out ahead of big political news just around the corner. Julie Pace?

PACE: Well, Rex Tillerson's confirmation hurdles are getting a lot of attention publicly. Some Democrats are actually more focused on the upcoming hearings for Steve Mnuchin, whose Trump's pick to lead the Treasury Department. Mnuchin is a former Goldman Sachs banker who made quite a bit of money off of the foreclosure crisis. And Democrats really see his hearings as a way to start dinging Trump on his own economic message while refocusing the Democratic Party's message.

And one interesting element to these hearings is that several people who lost their homes to foreclosure through One West, which is a bank that Mnuchin was involved in, are planning to come to these hearings, some are even hoping to testify at them which could really lead to quite an emotional punch at these hearings.

KING: And that should take place even before the inauguration.

PACE: Exactly.

KING: We'll watch that. Jonathan?

MARTIN: John, first of all, Obama could not have been more complimentary of Tom Perez, his Labor secretary, at the Friday press conference that the president had. He was effusive talking about the man who had served in his Cabinet. He stopped just short of endorsement for Secretary Perez's candidacy for the DNC. The question lots of folks are asking in the DNC is, will President Obama in January or perhaps out of office in February formally endorse Secretary Perez? Why does this matter?

Yesterday speaking to a top Democrat, I was told only about a quarter of the DNC voting committee which is about 440 people are now committed to a candidate. So this thing is wide-open and the endorsement of a current or former president could matter a great deal.

And also, by the way, a former presidential nominee, Hillary Clinton, also been very quiet on this front. Her words could have some impact, too.

KING: We'll watch that as January plays out. Dan?

BALZ: Continuing on with the fate of the Democrats as we go forward, talking to a number of Democrats recently, obviously everybody is concerned about the 2018 Senate map but I was talking to a former governor this week who thinks that the party cannot underestimate the significance of trying to win back governorships.

[08:55:08] He made a couple of points. One is that the Trump coalition or the Trump pattern of support in the states is very unusual and probably not to be replicated by other Republicans. Because of his outperforming in rural areas, underperforming in the suburban areas. But there are a number of Midwest governorships that are at stake obviously in 2018 and that's where a lot of Democrats think the party really needs to concentrate.

KING: It's a great point. The Obama years have not been good for the Democrats at the state level.

BALZ: Not at all.

KING: Legislature. Sara?

MURRAY: Well, we are more than a month into Trump transition now and we're beginning to get a better sense of sort of what he is like as a manager particularly when it comes to managing the prickly problem of having these early loyalists that he does not necessarily want to put in top roles in the White House. So what he does is he offers them lots of jobs. Lots of jobs he knows that they are not going to accept. That gives him the opportunity to appear magnanimous, to give them the opportunity to save face.

We saw it with Chris Christie. We saw it with Rudy Giuliani. And we're likely to see another round of it any day now. That's when Trump is expected to roll out a list of White House staffers. And you can bet that missing from that list are going to be some of Trump's earliest and most strident supporters.

KING: Some of them are already grumbling. We'll watch that one play out.

Next Sunday is Christmas and we're taking a break. So let me close with a yearend thank you. First to all the reporters like this group who juggle their schedules in a hectic campaign year to join us each Sunday. Also thank to you the tiny but remarkable INSIDE POLITICS team I can never thank enough. And thanks to you for sharing your Sunday mornings.

Merry Christmas. Happy Hanukkah. We'll see you soon.

Up next "STATE OF THE UNION" with Jake Tapper.