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State of the Union

Democratic Wave Coming in 2018?; Trump's First Year; Interview With Bob Woodward and Carl Bernstein; Interview With Former White House Communications Director Anthony Scaramucci. Aired 9-9:30p ET

Aired December 31, 2017 - 09:00   ET

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

[09:00:27]

(BEGIN VIDEOTAPE)

DANA BASH, CNN ANCHOR (voice-over): Trump's first year. We look back at key moments from the president's historic year in office...

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We have more legislative victories than any other president.

BASH: ... and what year two might bring for his presidency.

ANTHONY SCARAMUCCI, FORMER WHITE HOUSE COMMUNICATIONS DIRECTOR: He's going to surprise people.

BASH: President Trump's former Communications Director Anthony Scaramucci will be here.

Plus, the investigation continues. As President Trump continues to attack the FBI and dismiss the Russia probe as a hoax...

TRUMP: There is absolutely no collusion.

BASH: ... special counsel Robert Mueller and his team press forward with their probe. We discuss the latest details with legendary investigative journalists Bob Woodward and Carl Bernstein.

And majority in trouble? Republicans end the year with a major legislative victory on taxes.

REP. PAUL RYAN (R-WI), SPEAKER OF THE HOUSE: This is going to give the American economy the jolt of energy it needs.

BASH: But is the GOP at risk of losing its hold on Congress next year?

UNIDENTIFIED MALE: We're in a very challenging midterm environment.

BASH: We will break down the political map for 2018.

(END VIDEOTAPE)

BASH: Hello. I'm Dana Bash, in for Jake Tapper in Washington, where the state of our union is making resolutions. After enjoying ample time on the golf course during his holiday break

in Florida, President Trump is heading into a critical election year with a schedule that is already filling up.

Shortly after returning to Washington, the president plans to huddle at Camp David with the House speaker, Paul Ryan, and Senate Majority Leader Mitch McConnell to strategize for the new year.

And the president is already expressing optimism that he can be a deal-maker in 2018. He told "The New York Times": "We can do bipartisan health care, we can do bipartisan infrastructure, and we can do bipartisan DACA."

Also already on the books for January, the president's first formal physical examination and his first State of the Union address.

Joining me now to discuss the president's first year in office and what lies ahead in 2018 is his former White House communications director and someone, I guess it is fair to say, in his inner circle, Anthony Scaramucci.

Anthony, thank you so much for joining me. Happy new year to you.

SCARAMUCCI: Dana, great to be here. Happy new year.

BASH: Thank you.

You still speak to the president. How is he feeling about his first year in office?

SCARAMUCCI: Listen, I think the president feels great.

I talked to him last Monday. And he's very happy with what happened as it related to the tax reform bill that was put in place recently. And so, listen, I think you got -- 2018 is going to be a big year, a big year for the Republicans.

And because we both know, Dana, that the -- the midterm elections for a first-term president always go to the other side, I think the president will surprise here by delivering very strong results alongside of the Republicans in the congressional midterms.

BASH: But let's talk about tax reform. One of the most controversial aspects of this new tax bill is the cap it puts on state and local deductions. It's known as SALT.

This week President Trump told "The New York Times" that it might have turned out differently if Democrats had been willing to work with him.

Here's what he said. He said: "I could have done something with SALT or made it less severe, but they were very ineffective," "they" meaning the Democrats.

The president seems to be admitting that he could have made this tax penalty less severe. Was it about punishing blue states?

SCARAMUCCI: No, I don't -- I don't think it was about punishing.

I think all the president's saying there is that there are always chips on the table for bargaining purposes. And so, because they weren't willing to deal with him, a lot of the chips that they could have used were left on the table.

And so that is actually a signal from the president. He's trying to signal the Democrats that he's ready to work with them, and that whatever chips are on the table for health care or for DACA, he's there to negotiate with them.

I mean, I think that's been the hallmark of his entrepreneurial success as a business leader, is being a great negotiator, and I think he's just trying to signal to these guys, listen, there's stuff that we can do together.

As it relates to the SALT situation, I know people on the Democratic side will say that was a punishment for the blue states. I don't think anybody sees it that way. I think we're past that as it relates to tax strategy, the good relationship with Secretary Mnuchin.

The goal there was just basically to find ways to lower the overall rate, but then also make everybody a little bit more competitive and accountable on their budgets at the state and local level.

[09:05:00]

So -- so, to me, I think, long-term, that is probably short-term states for -- short-term pain for the states like the one I live in, New York. But, long term, I think it will make those states more adaptive, aggressive, and leaner and more entrepreneurial. So I think it's a good thing, by and large.

BASH: The president has recently stepped up his attacks on his own FBI, calling it tainted, saying its reputation is in tatters.

This week, a Republican congressman took that to a new level. Listen to what he said.

(BEGIN VIDEO CLIP)

REP. FRANCIS ROONEY (R), FLORIDA: I would like to see the directors of those agencies purge it.

(END VIDEO CLIP)

BASH: Do you agree? Should there be a purge at the FBI?

SCARAMUCCI: Not close enough to -- to really make a judgment there for me personally.

But I think what the president is expressing is some level of frustration at what we know from our lives and what we read in our social textbooks about due process. I think what the president is probably asking for is a de-politicization of these agencies, and let's just go through the rule of law, as opposed to what we see from political agendas.

And so, for me, I hope that that's the case, because I think it is just better for our society. Cicero once said that we are slaves to the law in order to be free. And nobody is above the law. And I think the president understands that. And he just wants to hold people accountable to due process.

And so I think that's where that -- that rhetoric is coming from.

BASH: And you don't think that the rhetoric is coming from the fact that, despite his saying that he doesn't think that he's going to be in any trouble, he is actually worried about where the investigation is going?

SCARAMUCCI: I really don't think he's worried about it.

I have had the opportunity to be in the campaign. I was in the transition. I guess they are calling my period in the White House a Mooch. It was 11 days.

(CROSSTALK)

BASH: You are a verb now. Congratulations.

SCARAMUCCI: Yes, I became a verb. Imagine that in 2017.

(LAUGHTER)

SCARAMUCCI: We will have to see what happens to me in 2018.

But as it relates to my time with the president and my interaction with him and his staff, I'm certainly not worried about it. I know that he's not worried about it. And he said, I think, to "The New York Times" a couple days ago that he expects the investigation of Mueller to treat him very fairly.

And my guess is, that will be the case. But when you really uncover the data and the information, you will find that the president was nowhere near the Russians as it related to the campaign, the election or anything thereof.

So, I'm not worried about it. I don't think he's worried about it. I think he's frustrated about it. I think he doesn't like the scandals incorporated that go on in Washington, where we find the scandal du jour to try to distract our political opponents from their agendas by picking on them personally.

And so I think that has got to stop on both sides, frankly. I have said that if Senator Clinton became president, they would be attacking her on her e-mails, they would be attacking her on Uranium One.

Washington has this magnificent way of finding scandals to hit people with to distract them from their agendas. The great news about the president is, he's undistracted, he's undeterred, and I think he is going to have a phenomenal 2018.

BASH: Speaking of 2018, I think it is fair to say you have had a strained relationship with Steve Bannon. I'm trying to be nice now.

He recently backed Roy Moore for Senate in Alabama and is talking about looking ahead to more races where he's going to try to usurp the incumbents.

When Moore was defeated, you said it was a good day for America, in the sense that Bannon lost.

Do you believe that, because of that, the president is going to stay away from the candidates that Bannon supports in 2018?

SCARAMUCCI: You know, I can't speak for the president on that. I know he has a good relationship with Steve.

BASH: Are you urging him to ignore Bannon's advice now?

SCARAMUCCI: Not -- not -- not at all.

I think -- I think what we have all found with the president that he's got his -- a very strong constitution and personality. You can offer him advice, but he's going in the direction that he wants to go in, irrespective of the advice.

But specifically as it relates to Steve, I always got on with Steve. I guess there was a situation where he decided that it was important for him to diverge from me. That's fine. It is nothing personal for me.

Steve and I actually, on a lot of these ideological areas, are quite similar. I think he's a great writer. He's been a -- by and large a force for good. But there are some certain things that he does that I actually don't like. And I have no problem speaking out against those.

And he's feel -- he's felt to speak out against me. And that is fine. I think, at the end of the day, it's a new page, it's a new year. And so I'm looking forward to finding ways to getting along with Steve and finding common interests, like we did during the campaign.

BASH: Anthony Scaramucci, stay right there. We have a lot more to talk about, including getting some inside scoop from you about what it is really like to work inside the Trump White House and whether the president will continue to say "You're fired" in the new year.

(COMMERCIAL BREAK)

[09:13:28]

BASH: Welcome back to STATE OF THE UNION. I'm Dana Bash.

We are back with one of President Trump's most loyal supporters, former White House Communications Director Anthony Scaramucci.

Anthony, I want to ask you about something that the president tweeted this past week. It was about global warming. Let's take a look. He said: "In the East, it could be the coldest New Year's Eve on record. Perhaps we could use a little bit of that good old global warming that our country, but not other countries, was going to pay trillions of dollars to protect against. Bundle up."

Is it appropriate for the president to joke about something that scientists believe is harming the country and the world, no matter if it is manmade or natural?

SCARAMUCCI: All right, well, first off, you can tell that was the president tweeting himself. Am I right, Dana? Isn't that like -- that's the...

BASH: You -- you know far better than I.

SCARAMUCCI: Well, I...

(CROSSTALK)

BASH: But it -- I -- it certainly seems that way, but I'm glad you are confirming that.

SCARAMUCCI: I'm giving a shout-out to my friend Dan Scavino.

(LAUGHTER)

SCARAMUCCI: I know the difference when Dan is tweeting and when President Trump is tweeting. And so that was clearly the president.

So, listen, I -- I -- I love the president's sense of humor, but I also think he's saying something else. And I think you guys should ask him directly if he's a climate change denier or not. I think you will find you will be surprised by that answer.

But as it specifically...

(CROSSTALK)

BASH: Meaning -- meaning -- meaning you think that he believes -- he believes that climate change is real and manmade?

SCARAMUCCI: Well, I'm going to let him -- you -- hopefully, you guys will call a question out to him. I will let him answer that directly. I'm not going to answer that for him.

But, more specifically, I think what he's really saying in that tweet is that that deal, the Paris accord, there was something wrong in that deal as it related to the United States. And so he didn't just want to sign it and go along with the crowd.

[09:15:07]

I think what you will find with the president, he's an entrepreneur. Entrepreneurs have a tendency to diverge from crowd thinking. A lot of the times, in the early stages of that, they get ridiculed and picked on. But, longer-term, like a Jeff Bezos or a Steven Jobs, you see that

their vision comes to fruition. And so my prediction is, is that some time at the end of 2018, people will look back at him and say, wow, he had a lot of common sense by getting out of that climate accord.

But he's pretty much a practical, commonsense-oriented guy. But, in the meantime, it is freezing here on this beautiful Sunday morning. So...

BASH: Yes, during the first year in the president's term, more than a dozen top White House officials have either resigned or been pushed out, fired.

You were one of them. Should we expect this trend to continue in year two, perhaps starting with the secretary of state, Rex Tillerson?

SCARAMUCCI: Hard -- hard -- hard to really know.

But -- but my -- my point on this, and I have said this repeatedly, is that I admire that aspect of the president, even though I was a victim of that. I didn't resign. I was, frankly, fired.

At the end of the day, I respect the businesslike decisions that are being made by the White House. And it's very different from the government.

And so, for me, I think the president is instilling a culture inside of the government that is refreshing. It's perform, or we're going to ask you to leave.

In my specific case, because I was actually hired, in my opinion, to help fire and uncover leakers and to remove people that were bad actors from the White House. Unfortunately, we learn in Washington, the minute you are hired as a hatchet person, the knives get very, very long, and you get taken out as well.

So, it is what it is, but I do respect the president and Chief of Staff Kelly. I think somebody wrote an article recently that the White House is performing better since those 13- or 11-day period in July. And so I hope people will judge that the way I'm judging it.

BASH: And, Anthony, you talked about the culture.

You actually recently described what it's like inside the Trump White House, and you did so in fairly brutal terms. During a speech at a Hanukkah party this month, you reportedly said: "The first pill you take is the anti-friendship pill. You can be my friend for 30 years, but I'm going to stab your eyeball out with an ice pick if it gets me power. And the second pill that you take" -- this is what you reportedly said -- "is power is aphrodisiac. And, so, look, students of history know that the power is -- power corrupts, and it corrupts absolutely."

SCARAMUCCI: Yes, Lord Acton said that. Well, I would -- I would recommend people...

BASH: So, well, is there -- is -- obviously, this is metaphoric, but is it really that bad?

SCARAMUCCI: Well, here's what I would say.

I would recommend people, if they have the interest, to go to that Facebook Live. You can just Google my name and punch it up. And you can see the entire interview.

BASH: Yes.

SCARAMUCCI: Obviously, someone took those two excerpts. I have a tendency...

BASH: Well, what I really want to do is give you to -- get you to talk about the culture.

SCARAMUCCI: Listen, I have a tendency -- I have a tendency to talk with colorful language.

(LAUGHTER)

SCARAMUCCI: I'm telling you right now I'm not changing that. I probably won't talk to reporters that way anymore on a recorded phone line.

(LAUGHTER)

SCARAMUCCI: But I have a tendency to talk with colorful language. I said those things.

And the point being -- and it wasn't just about the Trump White House. It's about Washington in general. I think we have got to be very careful that people get intoxicated by power.

Harry Truman once said that, if you want a friend in Washington, buy a dog. And my point about people taking an anti-friendship pill, I thought I had very strong alliances with people that, in fact, I did not have, as a result of the fact that, once they were in power, they were building borders to secure and protect their power.

I think that is very, very dangerous. I can tell you, candidly, that the president does not like that. The president likes a team- oriented, collegial culture. That sort of internecine infighting which was taking place, I would say, through the period ending July 31 was something that he really didn't like and he wanted to have end.

BASH: But...

SCARAMUCCI: And, frankly, I think I helped him put an end to that.

So, the last point about power corrupting, one of the reasons why I was a big proponent of turning the lights back on in the press room and the cross-camera and opening up a broader relationship with the press is that the fourth estate's job, if it's done properly, Dana, is to check people that are in power, particularly in our republican democracy. So, for me, I meant those things. I think we have to be very, very

cautious with people that we give power to, because they can run amok and they can get overzealous with it.

And I think that is why the founding fathers set it up this way, so that there's such a check and balance in the system, so that no one person can rule a roost over everybody else.

BASH: Anthony Scaramucci, I could not agree with you any more. That's a beautiful way to end this interview and start the new year, talking about the importance of a free press.

SCARAMUCCI: Well, I hope you take -- I hope -- I hope you take a Mooch, a vacation, at some point, Dana.

(LAUGHTER)

[09:20:01]

BASH: I want a longer vacation than that.

No, I'm just kidding.

SCARAMUCCI: Oh, yes, good for you, yes, exactly, two Mooches, two Mooches.

BASH: Exactly, a double Mooch.

Thank you so much.

SCARAMUCCI: Thank you.

BASH: President Trump says it has already been proven that there was no collusion with Russia, but special counsel Robert Mueller is pressing forward.

Is the investigation casting a shadow on the Trump presidency?

Legendary journalist Bob Woodward and Carl Bernstein will be here next.

(COMMERCIAL BREAK)

BASH: Welcome back to STATE OF THE UNION.

One thing we know is on the president's 2018 wish list, a swift end to special counsel Robert Mueller's investigation into potential collusion between anyone on team Trump and Russia.

In an interview at his Mar-a-Lago resort, the president told "The New York Times" that the Russia investigation is making the country look very bad, but said he does think Mueller is going to be fair.

What impact does the continuing investigation have on the Trump presidency? Hear for my "pinch me" moment of 2017, the veteran duo who led the

reporting on the Watergate investigation, Bob Woodward and Carl Bernstein.

Thank you so much, both of you, for joining me. I appreciate it.

BOB WOODWARD, "THE WASHINGTON POST": Thank you.

CARL BERNSTEIN, CNN CONTRIBUTOR: Good to be here.

BASH: Bob, let me start with you on the president's increasing attacks on the FBI.

He's called the FBI tainted. He said, its reputation is in tatters. He said that he has the absolute right to do whatever he wants to at the Justice Department.

[09:25:08]

I know you have been working on a book on President Trump. What do you -- what strikes you when you hear all of that?

WOODWARD: I think that is a mistake.

Clearly, now Trump is, at least for the moment, saying he expects to be treated fairly by Mueller. And, of course, the FBI on this case works for Mueller. If you go back to the Nixon case, it was a giant mistake for Nixon to have such animus toward the first Watergate special counsel and then fire him, Archibald Cox. And that got the whole impeachment case going.

So, you know, Mueller's going to do this job. I think some of the Trump lawyers are fantasizing when they think it's going to be over quickly. There's no reason that the Mueller operation is going to close up. They are going to want to be thorough.

Of course, as we all know, these investigations can be dangerous. They clearly want to get it closed down as fast as possible. But I don't think that's going to happen.

BASH: Carl, Bob mentioned the famous, infamous, Saturday Night Massacre, when Archibald Cox, the special counsel, was fired in 1973.

Do you trust that the administration is not going to do this?

BERNSTEIN: No.

(LAUGHTER)

BASH: They assure that the president won't go that far, that he won't fire Bob Mueller. Do you believe it?

BERNSTEIN: There's no reason to believe almost anything Donald Trump says, because what we know is that the president of the United States and his presidency is characterized, above all else, by the lying of the president of the United States. That doesn't mean that lying by the president is a crime. It does

mean that we see him covering up events, but not necessarily criminally covering up events.

And where this is going definitively, we don't know. But there are -- many times, he has expressed, I'm told by people in the White House, the desire to fire Mueller, the desire to pardon people under investigation, including his family.

And one of the things that is going on now is that his lawyers are telling him what he wants to hear.

BASH: Yes.

BERNSTEIN: And that is what I'm told by lawyers in the White House.

They are telling him what he wants to hear to keep him...

BASH: To keep him calm.

BERNSTEIN: ... from acting precipitously and to go off and fire Mueller in a rage or fire Rod Rosenstein, the deputy attorney general in a rage.

They have an out-of-control client. The president of the United States, in their view, is out of control a good deal of the time, especially when it comes to this investigation.

BASH: And, Bob, Carl mentioned covering up.

I want you to listen to what Dianne Feinstein, who is the top Democrat on the Judiciary Committee in the Senate, said about this investigation earlier this month.

(BEGIN VIDEO CLIP)

SEN. DIANNE FEINSTEIN (D-CA), RANKING MEMBER, SENATE JUDICIARY COMMITTEE: I think what we're beginning to see is the putting together of a case of obstruction of justice.

I think we see this in the indictments, the four indictments and pleas that have just taken place, in some of the comments that are being made.

(END VIDEO CLIP)

BASH: Bob, one of the main lessons from Watergate, I don't need to tell you is, it's the cover-up more than the crime, generally.

Is that what the president should be worried about?

WOODWARD: You have to look at the crimes.

I'm not sure Senator Feinstein is quite right. I think that it's possible this will lead to an obstruction of justice case, but I -- we have not seen the evidence. And you talk to very experienced criminal lawyers and prosecutors in Washington, they will say, what is public now is questionable, needs to be investigated, but it's not a slam- dunk case or even the sort of case that you would bring against a sitting president to maybe initiate some sort of impeachment investigation.

BASH: Well, on that point, Carl, the investigation has been going on for over a year, at least in the Justice Department, the FBI.

We still don't know about any evidence that the president knowingly colluded with Russia. Does that give the president's claim that this is a witch-hunt some credence?

BERNSTEIN: He believes it's a witch-hunt. There's no question he believes it's a witch-hunt.

And, also, I think Dianne Feinstein, the senator, is ahead of her skis on this and is not quite well-placed in her assessment of where this investigation is.

Lying by the president of the United States, though this president does it almost reflectively, is not necessarily a crime. Lying to the press, which he does day in, day out, is bad for the country. It's indicative of the way he governs. We have never seen anything quite like a president who lies so routinely as this one.

[09:30:04]

But it's not necessarily a crime.

BASH: Carl, briefly, I just -- I want to also get your perspective on the fact that like -- that one of the hallmarks of the Trump presidency has been to go after the press, calling us fake news and even worse.

How does this compare to what you dealt with, with Richard Nixon? He was no fan or friend of the press.

BERNSTEIN: Nixon in Watergate tried to make the conduct of the press the issue, instead of the conduct of the president and the men around him.

Donald Trump has gone even farther. He's tried to undermine the credibility of the press as a national institution, to the detriment of the country, by these broad attacks on the press, which, really, the press is, in the United States, as our leaders have recognized going back to the days of the early republic, the last bastion of truth that makes democracy function.

Yes, we make mistakes, and we need to admit our mistakes. We oughten to be too provocative, which we sometimes are, with a president who is putting a lot of bait out there. And, sometimes, we take the bait and get a little petty.

I would like to see a lot less of criticizing on our air the president for playing golf. Let him play all the golf that he wants. I don't think that is our job. We have got a deadly serious inquiry in front of us. And the

reporting, by and large, by the mainstream press, by "The New York Times," "The Washington Post," CNN, "The Wall Street Journal," has been some of the greatest reporting of the presidency that we have seen in the last 50, 60 years.

BASH: Amen, Amen, Carl.

BERNSTEIN: So, I...

WOODWARD: That's right.

But -- but, just real quickly, the tone is a big issue here.

BERNSTEIN: Yes, I agree.

WOODWARD: In lots of reporting, particularly on television commentary, there's kind of a self-righteousness and smugness in people kind of ridiculing the president.

When we reported on Nixon, it was obviously a very different era, but there was -- we did not adopt a tone of ridicule. The tone was, what are the facts?

BASH: I have to -- before we go, I have to ask...

WOODWARD: Yes.

BASH: ... about something that you informed me about, a Woodward and Bernstein bond that continues.

Tell me about the Internet Sabbath.

WOODWARD: Yes.

(LAUGHTER)

WOODWARD: What Carl and I...

(CROSSTALK)

BERNSTEIN: We're taking a break right now from it for a few minutes here.

(LAUGHTER)

WOODWARD: But what we have done -- Carl and I are really friends and meet and talk and have dinner and get together with our wives. And we talked about the tyranny of the Internet.

I'm writing a book on Trump. Carl is writing a book on his time at "The Washington Star" before he came to "The Post."

And we talked about this tyranny. So, Carl will call me, say, 10:00 or 11:00 in the morning, and say, we're going dark on the Internet for four hours, total Sabbath. (LAUGHTER)

WOODWARD: We have to work on our books.

And we do this.

BERNSTEIN: Right.

WOODWARD: And the extraction from the madness of the Internet and e- mails makes you, I think in both of our cases, much more productive.

BASH: Right. Well, we're going to have to leave it there.

I appreciate, more than you know, having both of you on to share your insights.

Happy new year, Mr. Woodward.

WOODWARD: Thank you.

BERNSTEIN: And to you.

BASH: Happy new year, Mr. Bernstein.

Appreciate it.

BERNSTEIN: Good to be with you.

BASH: And President Trump has made an art of touting his accomplishments, boasting this week about the soaring stock market and growing economy. But is all these winnings enough for Republicans to actually keep the majority in Congress in 2018? We'll breakdown the map next.

(COMMERCIAL BREAK)

[09:37:29]

BASH: Welcome back to STATE OF THE UNION.

Republicans are wrapping up year one with a major legislative win on taxes. But will it be enough for the GOP to hold on to its majorities in the House and Senate in 2018?

John King is at the magic wall to break down the midterm map.

JOHN KING, CNN ANCHOR, INSIDE POLITICS: Well, Dana, let's start with the Senate.

One reason the Democrats are suddenly hopeful they cannot only hold their own but maybe take back the Senate majority, they're going to begin the New Year with a Democratic senator from Alabama. Doug Jones will join the Senate early January putting it at 51-49, the Republican majority.

Now, can Democrats take it back? Challenge number one, protect these 10 states all represented by Democratic senators, all carried by President Trump in 2016, in some cases by 10, 20, 30 points or more.

Can the Democrats hold them all? Noteworthy, none of these 10 voted for the Republican tax cut plan. The Democrats think pretty clear they think can hold the five states where President Trump won only by single digits. Then you have the bigger challenge, but again, looking at the Jones win, looking at the dynamics in 2017, the Democrats are now confident they can hold all or most of their seats in 2018.

What would that do then? That would have you at 51-49. Still, that's where we would be.

Then this comes into play. If the Democrats can hold all 10 of those or nine of those 10, then they do have a shot to take back the Senate.

Challenge number one? Amy Klobuchar expected to win in Minnesota. But Al Franken's sit will also be up because he is resigning.

Can the Democrats hold this seat? They think so. Given the president's numbers they believe Minnesota will stay in Democratic hands.

So it is conceivable, conceivable, the control of the Senate could actually come down to a handful of Republican-held seats. And these are the three big targets, Tennessee, an open seat. Bob Corker's retirement.

Arizona, an open seat. Jeff Flake is retiring. Nevada, Dean Heller, the Republican incumbent perhaps the most vulnerable Republican senator.

If the Democrats can hold their own there is a chance, you see 49, 48 there in this area (ph), they can take the Senate back by contesting these Republican seats, a chance Democrats think they have because of the president's bad poll numbers, especially in the suburbs.

(BEGIN VIDEO CLIP)

SEN. CHUCK SCHUMER (D-NY), MINORITY LEADER: One place we're really going to focus on is the suburbs. This is a horrible bill for so many suburban people.

REP. NANCY PELOSI (D-CA), HOUSE MINORITY LEADER: And they know it.

SCHUMER: And they know it.

(END VIDEO CLIP)

KING: The dynamic in the House, more seats but similar. Let's just look at the balance of power right now.

Republicans have the majority. There are three vacancies at the moment. Let's assume just for the sake of argument those special elections stay in the same party's hands.

So then you go into the election looking something like this, CNN currently lists 20 toss-up seats. That number will grow into 2018. But of the 20 toss-ups this shows you it's a Republican challenge, 16 of them are Republican-held seats.

[09:40:08]

The Republicans head into 2018 at a disadvantage and they know it. So you look at the map, where are the races going to play out. Here's the most important number to think about, the Democrats need two dozen, to pick up 24 seats to retake the House majority.

So how will this play out? If you're the Republicans, you're looking for cushions. You're looking to knock off Democrats.

Where do you look? These are all Democratic members of the House who have districts carried by President Trump in 2016. So the Republicans looking for a cushion are going to target these races.

But here's the flip side, for the Democrats, they need 24, well, here nearly two dozen Republicans who represent districts carried by Hillary Clinton. These will be targets, number one, as the Democrats try to get to that number of 24. It will be a lot of back-and-forth about the races in 2018.

Individual members, how strong of a campaign they can run, but the biggest factor in the midterm election, the president's approval rating. That's where President Trump is now, high 30s. Look where President Obama was, President Bush into his second midterm election, President Clinton in his first midterm election.

Here's why Republicans are worried. If the president's numbers are anywhere, anywhere like that next year, look at what happened. This would be enough, for example, for Republicans to lose both the House and the Senate.

If it's like 2010, if it's like 2006, if it's like 1994, if the dynamic stays unpopular president, his party gets wiped out. That, Dana, is why Republicans enter 2018 very worried.

BASH: And now let's bring in our roundtable.

Bill Kristol, is the midterm going to be a referendum on President Trump?

BILL KRISTOL, EDITOR, THE WEEKLY STANDARD: When you have a president and Congress of the same party, you know, that they have governed for two years and people will say, do we like what is happening or do we want to check the president? If you want to check the president, the best way to do it is to put one or both Houses in control of the opposition party.

That's what happened in '94. That's what happened in 2010, only one House with President Obama. And I think it is very likely to happen this year.

BASH: Except that President Trump is at the lowest that we have seen in modern history when it comes to his approval ratings. So how do you combat that? MICHAEL CAPUTO, FORMER SENIOR ADVISER, DONALD J. TRUMP FOR PRESIDENT: Well, it depends on what approval rating you look at. Rasmussen had a poll that came out just this week talking about him at the same level, 46 percent, that President Obama was at this point in his presidency.

So I also think they're having difficulty polling Trump support. They always have. And I think they may always have this problem in the polling industry.

But, you know, the president's approval rating is very important in 2018. But it's mostly important if, in fact, they have a bad economy, for example. If the economy comes back and gets to four percent growth like some people predict, that will blunt the impact of the president's poor approval rating.

BASH: Bakari, you were down in Alabama --

BAKARI SELLERS, CNN POLITICAL COMMENTATOR: Yes.

BASH: -- campaigning for Doug Jones, do you think that that was honestly a one-off? Or do you feel that that momentum there can be and will be translated in other places?

SELLERS: No, I think it can be picked up and moved to other states and I think the Democrats will focus on that.

I know, Tom Perez, the base of our party came out, African-Americans, African-American females. What we also saw in particular were young people swinging in mass numbers to the Democratic Party.

I mean, the Republican Party has a problem with their future. And that two out of every three young people in this country, they want to be Democrats because they do not agree with the isms, the racisms, the xenophobias, the bigotries and all those other things that sometimes are associated with the president of the United States.

So yes, it can be picked up. And one of the states that John King didn't mention, which is the state that I was talking to Bill about earlier, is Mississippi. And Mississippi is a state where you will see that there is an election in 2018, and I believe that the same playbook that we use in Alabama will be one that will duplicate in Mississippi.

KRISTOL: The key (ph) is bringing Bakari in the campaign. There's a 100 percent -- from the last year there's a 100 percent correlation that we're campaigning for a different kind (ph) of (ph) Democrat.

(LAUGHTER)

SELLERS: There we go.

(LAUGHTER)

BASH: What do you think?

NINA TURNER, CNN POLITICAL COMMENTATOR: Well, Democrats certainly have a shot. There are about 391 people, I think, who have filed to run for the Congress on the Democratic side. So we got over 300 chances to make some magic happen.

(LAUGHTER)

People who have raised over $5,000. So now Democrats, if they can't win with those kind of odds then we really need to question our viability.

But I will say with Alabama, just the Democrats should be proud of that but not overly because it was a very close race. And one of the things Democrats are really going to have to focus in on, it wasn't a mandate, (INAUDIBLE) stretch your imagination when you take the African-American vote and you take the Republicans that wrote in, most likely those -- that's where the sweet spot is, but to really get in there and cultivate relationship with voters well before you need to knock and drag them out.

BASH: Bill Kristol, someone who knows something about taking a majority, by (ph) a (ph) way (ph) of election is former House speaker Newt Gingrich.

And he recently wrote, "Every Republican beginning with the president and vice president needs to understand what a disaster a House Speaker Nancy Pelosi and a Senate Majority Leader Chuck Schumer would be.

[09:45:03]

By June, it may be too late to course correct. Avoiding a Democratic wave election requires action now."

But what action?

KRISTOL: I don't know. I guess passing some legislation, hoping for a good economy. The economy was coming back in 2010 and the Democrats lost, 52 House seats, 94 after Clinton the economy was not so terrible.

I just think voters -- if they -- (INAUDIBLE) looked at this there's a very high correlation between the approval of the president, if his party controls Congress, and what happens in the off-year election. So Trump somehow needs to be likable.

CAPUTO (ph): Like, yes.

KRISTOL: And he needs to change who he is. Which I'm going to just guess won't happen.

BASH: You're really going out on a limb now.

(LAUGHTER)

KRISTOL: That's what these shows are all about, sticking your neck out.

BASH: Exactly. What concerns you the most politically going into 2018?

CAPUTO: Newt Gingrich is actually quite optimistic about what is going to happen in 2018. I'm not. I'm not quite sure the Republican campaign geniuses here in Washington really get what needs to be done in order to win in 2018.

I'm not real confident that they ever will. If you look at, they're trying to run out the Breitbart, FOX, grassroots people out of the party.

If they do that, we're going to end up at a 30 percent minority in perpetuity, but, at the same time, we look at Montana, Georgia, even Kansas, the special elections that happened in Kansas, it was a plus- 20 state, right? And we won by eight. So we have a real significant problem.

We have to do some very big things to win in 2018.

SELLERS: One of the things that we're not talking about which Democrats are focusing on, is the gubernatorial races that are coming up. Because you have Ohio, you have Wisconsin, you have Florida, you have these races which are very important.

And the gubernatorial races in 2018, I would argue, are even more important than the House and Senate races because who is in the governor's mansion controls redistributing. And that -- that is the -- Democrats are focused on that.

BASH: Redistributing which controls the House district.

TURNER: The state legislature, very important. I mean, as someone who served in Ohio Senate --

BASH: Yes.

TURNER: -- we draw the lines. And so it is important not to ignore state legislature.

BASH: The president is talking as we end this year a lot about bipartisanship, about the fact that he does wants to reach the across the aisle, does want to work with Democrats.

Politically, should Democrats work with him? Or should they stick to the, we're not going to work with you on anything because -- because it works for them.

TURNER: I mean, I think the American people want folks, if the president can put forth something that Democrats can agree with, we have got to stop using people for pawns, for political gain just to gain extra seats.

SELLERS (ph): Correct.

The people are hurting and if there are policy positions like health care, because the president has totally went the opposite, tax -- his tax bill, people are up in arms even right now. Dana, as you know they are trying to pay their property tax bill only to find out that they are limited because the state and local deductions are limited to $10,000.

So if the president really is going to do the right thing, then the Democrats should work to do the right thing.

SELLERS: Infrastructure.

TURNER: On -- right. On behalf of the people.

SELLERS: Infrastructure, I would implore every Democrat in this country -- every Democrat in this country needs to come to the table with ideas about how to reform infrastructure.

TURNER: Yes.

BASH: OK. I love -- I love ending on optimistic notes. And I think that is a good one to end on.

SELLERS: Happy new year.

(CROSSTALK)

(LAUGHTER)

BASH: Easy, guys. Easy, guys.

Up next, her husband might be the most powerful man in America. But his wife Melania is more popular. A look back at the first lady's eventful and unexpected first year in the White House, next.

(COMMERCIAL BREAK)

[09:52:14]

BASH: Welcome back.

Since becoming first lady Melania Trump's profile has increased considerably here at home and on the world stage.

(BEGIN VIDEOTAPE)

TRUMP: Melania, by the way, she has become very popular. Hasn't she?

BASH (voice-over): First lady Melania Trump is closing out her first year in office with approval ratings up 17 points.

MELANIA TRUMP, FIRST LADY OF THE UNITED STATES: We love to live in Washington. We have a very busy life.

BASH: The unexpected first lady initially delayed moving into the White House, which also meant a delay in taking on traditional first lady responsibilities.

MELANIA TRUMP: It's great to be here. BASH: But after arriving in Washington with her son Barron in June she began to embrace the role hosting dignitaries and managing White House staff.

But it is on the international stage that Melania Trump came into her own, wowing Europeans with her language skills. And highlighting her work on behalf of children during a high-profile speech before the U.N. general assembly.

MELANIA TRUMP: Our own example, we must teach children to be good Stewarts of the world they will inherit. We must remember that they are watching and listening.

BASH: A message that doesn't always seem to resonate with her husband.

TRUMP: Lying Ted, crooked Hillary.

They call her Pocahontas.

MELANIA TRUMP: I give him my opinion and he could do whatever he likes with it.

BASH: Perhaps not surprising, the former model has brought her signature and very Fifth Avenue fashion sense to the White House.

MELANIA TRUMP: It can be a daunting task to choose an outfit that will be mesmerized and become part of our nation's story.

BASH: Shirking the every man brand favored by her predecessor and opting instead for top-shelf names like Valentino and Dior.

Her expensive taste drew criticism when she wore a $51,500 coat during a trip to Italy and boarded a flight to tour hurricane damage in designer heels.

TRUMP: She took tremendous abuse.

BASH: Despite her highly scrutinized position Melania Trump has remained the woman behind the dark sunglasses diligently appearing by her husband's side but never giving away too much.

MELANIA TRUMP: It's a very exciting life. And it's part of being a first lady.

(END VIDEOTAPE)

BASH: And an uplifting person to end the year, a young barber in Philadelphia decided to use his talent to help the homeless.

(BEGIN VIDEOTAPE)

BRENNON JONES, HAIRCUTS 4 HOMELESS: My name is Brennon Jones and I created Haircuts 4 Homeless.

SEAN JOHNSON, OWNER, TAPER'S BARBERSHOP: Hi, I'm Sean Johnson, the owner of Taper's Barbershop.

[09:55:00]

JONES: I was out in downtown Philly, and Sean approached me. He thought I was a random barber just out there just cutting hair.

He asked me before he left, so what are you going to do during the winter months? I really didn't have an answer.

JOHNSON: So I went back downtown. I told him about another place that me and my fiance owned. And it was fully furnished.

We had intended on turning it into a barber shop or a salon. And I invited him up there because it was just sitting and what he was doing is a wonderful thing.

JONES: And he said, how much do you like it? I said, I love it. So this allowed me to be able to do what I needed to do.

Mondays -- makeover Mondays for the homeless.

JOHNSON: Seeing a homeless person get a haircut, it makes me smile. Anything can change from there.

JONES: I don't get paid. I don't get nothing for it. But the thank you, the smiles, the happy faces, that's, you know, that's something that money can't buy.

Good luck tomorrow.

(END VIDEOTAPE)

BASH: After almost a year of the Trump presidency, how has the administration's "America First" agenda impacted the United States role on the global stage?

Fareed Zakaria has that next.