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ERIN BURNETT OUTFRONT

Reince Priebus Gives First Interview To Wolf Blitzer; Reince Priebus Out, Gen. John Kelly In As White House Chief Of Staff. Aired 7-8p ET.

Aired July 28, 2017 - 19:00   ET

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


[19:00:02] REINCE PRIEBUS, FORMER CHIEF OF STAFF: It's about moving his agenda forward. I think he made a smart decision with General Kelly, and I think he's going to do a great job and I'm looking forward to the future.

One other thing, I'm always going to be a Trump fan. I'm on team Trump, and I look forward to helping him achieve his goals and his agenda for the American people.

WOLF BLITZER, CNN HOST: But why did you resign? I'm still trying to understand. I understand that you told the President you wanted to resign. He accepted your resignation yesterday. But why? Were there a series of issues? Was there one thing that came up and you decided, you know what, I no longer can do this?

PRIEBUS: No. Look, I think the President wanted to go a different direction. I support him in that. And like I said a couple weeks ago, I said the President has a right to change directions. A president has a right to hit a reset button.

I think it's a good time to hit the reset button. I think he was right to hit the reset button. And I think it was something that I think the White House needs. I think it's healthy. And I support him in it.

BLITZER: Was he not happy with the direction you were setting?

PRIEBUS: No. But, look -- I mean, I think bringing in fresh face, I think bringing in fresh people is a good thing. So, look, he has the best political instincts. He's -- hang on a second.

BLITZER: Yes.

PRIEBUS: He knows, I think, intuitively when things need to change. I've seen it now for a year and a half on this wild ride with the President that I loved being a part of. But he intuitively determined that it was time to do something differently. And I think he's right.

BLITZER: But it's only been six months, not very long. When you say he wanted to do things differently, tell us precisely what he said to you, why he wants to do things differently and why you concluded that didn't include you. PRIEBUS: No. Look, I'm not going to get into that personal stuff. The President is a professional, and I'm a professional and professional people don't discuss private conversations in public. But what I will tell you is, this President has American -- the hearts of all Americans at the top of his mind at all times. He wants to do what's right for the American people.

And I think making changes in the White House is common. But I also think that they can be very important. And I think that this is a good appointment for the White House. And I think the general will do a great job.

BLITZER: When was the first inkling that you had that your time as the White House Chief of Staff was up.

PRIEBUS: I'm not going to get into that, Wolf. Look, I have a very close relationship with the President. I'm going to continue to have a close relationship with the President.

And out of respect for him, you know, I'm not going to get into our own private conversations. But I just put at this. I think change is good. He wanted to go a different direction. I support him in that. And I look forward to working with General Kelly over the next couple weeks.

BLITZER: I know you met with your staff, your senior staff earlier this morning before you went with the President up to Long Island. Did you tell your staff that you were leaving?

PRIEBUS: No. We were doing a business meeting in the morning. Everyone gave their reports, and then we were off to Long Island in New York to talk about MS-13.

BLITZER: What was the impact -- the new White House Communications Director, Anthony Scaramucci, you saw the interview, he granted Ryan Lizza in the New Yorker magazine. He called you some awful things, including a paranoid schizophrenic. He said your days were numbered. He said you were about to leave.

At one point he said Reince Priebus would resign soon and that he expected Priebus to launch a campaign against him. What was your reaction when you saw that interview?

PRIEBUS: No reaction, because I'm not going to respond to it. I'm not going to get into the mud on those sorts of things. Look, the President and I had an understanding. We've talked about this many times. And we ultimately decided that yesterday was a good day and that we would work together. And I think that General Kelly is a great pick.

So, I'm not going to get into the weeds on that. I support what the President did. And obviously I think it's a good thing for the White House.

BLITZER: But why were you opposed to Anthony Scaramucci even getting a job in the White House? You saw how bitter he was, how angry he was at you in that interview?

PRIEBUS: I'm not getting into that, Wolf. Look, it's over. I'm moving on. Support the President, and I support John Kelly and the President's agenda. So that's all you're going to get from me on that. I'm not going to get into the individual personal stuff.

BLITZER: He was also very angry at Steve Bannon, the White House Chief Strategist. I can't even read the words he uttered to Ryan Lizza about Steve Bannon. But do you think he could stay in the White House with Scaramucci now the Communications Director?

[19:05:03] PRIEBUS: That's going to be up to John Kelly. But I will say that Steve is doing a great job. He is a brilliant guy who only cares about the President's agenda. He thinks about it 24 hours a day. Never quits. He's a great asset to this President. And, so and a dear friend. So, my hat is off to Steve Bannon.

BLITZER: Can you just clear up the other charge? It was a very bitter charge that Scaramucci leveled against you, that you are a leaker and that you're really not that loyal to the President. You've got your own agenda. He made bitter accusations against you, specifically the leaking. Are you the leaker in the White House?

PRIEBUS: That's ridiculous, Wolf. Come on. Give me a break. I'm not going to get into his --

BLITZER: Why not respond?

PRIEBUS: Because I'm not going to because it didn't honor the President. I'm going to honor the President every day. I'm going to honor his agenda, and I'm going to honor our country and I'm not going to get into all of this personal stuff, so.

BLITZER: Is there a leaking problem in the White House based on what you've seen?

PRIEBUS: Yes, I think that General Kelly should see if he can get to the bottom of it and figure it out. But obviously unnamed sources are something that's been problematic and I wish him well and I'm going to try to help him. But, obviously, that's going to be on his plate and I hope he can get to the bottom of it.

BLITZER: Scaramucci suggesting the FBI should get involved in that investigation. Do you agree with him on that?

PRIEBUS: I'm not going to respond to that. Look, this is about the President, Wolf. I have answered your questions. I support his decision to hire John Kelly, and I'm looking forward to the future.

BLITZER: What is -- what is your future? I want to get to that, but I also want to get your specific advice for John Kelly, who is the incoming White House Chief of Staff.

BLITZER: Well, look -- I mean, God is good and everything works to good in the end. I believe that. I'm not worried about that. I care about my wife and my kids. That's what I care about most. And that's what I live for. So, I live for God, my family, my kids, and I know everything is going to be just fine.

And as far as John Kelly, he's going to be great. Keeping things organized, keeping everyone in their lane, controlling flow of information in and out of the Oval Office, those are all challenges to a chief of staff. And I think he's going to do a wonderful job.

BLITZER: I know you must be very disappointed. You really wanted to see repeal and replace of Obamacare.

PRIEBUS: Yes.

BLITZER: You're going out now without having succeed in that. We also it would happen overnight. How disappointing is that to you?

PRIEBUS: Well, it is disappointing, but I don't think it's over yet, Wolf. So I'm hopeful the Republicans can still come together before reconciliation is over. And I wish them well to do it and I'll be a part of trying to help make that happen if I can. And again I'll always be on the team.

BLITZER: What about the criticism that the President has leveled against the Attorney General of the United States, Jeff Sessions? How uncomfortable did that make you?

PRIEBUS: Look, you know, Jeff is a great guy. But the President is disappointed, and I'm not going to get into that one either. So I'm only here to tell you that it's been a great privilege to be Chief of Staff. I support the President in choosing John Kelly and I wish him well and I wish everyone in the West Wing all of God's blessings.

BLITZER: What's your proudest accomplishment over these past six months as the White House Chief of Staff?

PRIEBUS: I think getting everyone together. I think that moving this West Wing, I think in the right direction. I think, obviously, accomplishing all of the executive orders, the TPP, the V.A. accomplishments, the things that the President talks about all the time. The most bills in six months. The executive orders, the agenda of this President. It's something that I think everyone can be proud of.

BLITZER: What's your biggest disappointment?

PRIEBUS: Well, look -- I mean, I wish health care would have passed, but I don't think it's over yet, Wolf. I think we could still get there.

BLITZER: Well, talk to us about that. How do you get there? Because you don't have the votes. It's a 52-48 majority that Republicans have in the Senate, clearly not enough.

PRIEBUS: Well, they have to keep working, Wolf. I mean, they have to roll up their sleeves and keep working. They have to come up with another amendment.

I think that Lindsey Graham has got an amendment. I think they have to work on Lisa Murkowski and see if we can get her on the right side of the health care debate. I don't think this is over. I think they can get this done.

And, obviously, coming together as a party is something that I think we've had too much difficulty doing and having a governing majority is something that's been problematic. You can have a majority. But if you don't have a governing majority, you can't get things done.

BLITZER: Why not work with the Democrats and come up with a compromised work with some moderate Democrats, work to try to fix, improve the problems of the Affordable Care Act, Obamacare and not necessarily completely repeal it?

[19:10:07] PRIEBUS: Look. I don't think the Democrats want to work with us on anything.

BLITZER: They say they want to work with you.

PRIEBUS: Right. When you look at the delays of the cabinet appointments, you look at all of the delays of the nominations, they're debating our cabinet secretaries for 30 hours and then voting for them, you know, 90 to 10. This is not a party.

And, fortunately, Senator Schumer hasn't been the type of leader to want to compromise on the most basic things. And so, I think the idea that somehow Democrats are going to just come together and give us a few votes on something here or there, I think it's fantasy.

Now, that doesn't mean that I don't think it's important to try. So I'll give you that. But, obviously, the Republicans have to try harder.

BLITZER: I want to be very fair to you Reince since you and I have known each other for a long time. I just want to be clear for our viewers. Did the President formally ask you to resign?

PRIEBUS: No. I resigned and he accepted it.

BLITZER: And that conversation was just simply like that? He didn't try to talk you out of it?

PRIEBUS: We talked about it. You know, we -- you're confusing something. We talk all the time about this subject. Any time we want to go a different direction, either one of us, we talk about it.

So, look, he deserves credit for all of these accomplishments that he's had over the last six months. I don't think anyone realizes how much he's gotten done. I support him in making sure that the American people see and realize the work that he's done.

I think we could do better here in making sure that people realize that and see it. He deserves it. He's been a great President and I look forward to continuing to help him.

BLITZER: I just want to be precise to you. You spoke often with the President about possibly resigning? PRIEBUS: No. We just talk about the fact that both of us -- both of us have to be happy with where we're at and he obviously wanted to make a change and I offered my resignation and he agreed and we moved on. He accepted it.

BLITZER: And that was that. And did you recommend John Kelly or did he throw out that name to you?

PRIEBUS: No. We talked about a few different people together, and he thought John Kelly would be the number one pick. I thought it was a fantastic choice. I look forward to working with him.

BLITZER: So what about next for you? I remember there was some speculation you might become ambassador to Greece or something along those lines. Any consideration of that?

PRIEBUS: No. That's not going to happen. I think I'm going to take a little vacation, spend some time with my wife and kids and enjoy the future and continue to be supportive.

BLITZER: Last question to you as we go forward. And you've been very, very kind and you're very generous in spending some time with this first interview. Was there one favorite moment that you want to look back on, on these last six months that will always stay with you and be reflective of your time as the White House Chief of Staff?

PRIEBUS: Well, look, you know, quite frankly, the first day we walked in to the West Wing on business and we walked into the Oval Office and we signed the first executive order and just walking in that door and just feeling the majesty of the Oval Office and seeing the President sit at his desk and sign that document, it's a feeling that first feeling, that first raw feeling that you get that's so special. It was a privilege. It was an honor. And I look forward to continuing to help.

BLITZER: Reince Priebus, the now former White House -- soon to be former White House Chief of Staff. Thanks so much for joining us. You're always welcome to join us here in THE SITUATION ROOM.

PRIEBUS: Thank you.

BLITZER: Thanks very much. Reince Priebus, appreciate it very much.

Let's get some reaction. Mike Rogers, first to you, what do you think?

MIKE ROGERS (R), FORMER HOUSE INTELLIGENCE CHAIRMAN: Very classy. I think, he means it when he says he wants to continue to be supportive of the President. Clearly, there was dysfunction in the White House.

Knowing Reince, he probably came to the conclusion this was best for everybody to go into a different direction. And for months, me included, have been saying you either need to Reince as chief of staff or reconfigure the place, and I think that's exactly what he articulate (ph).

BLITZER: Ryan Lizza.

RYAN LIZZA, WASHINGTON CORRESPONDENT, THE NEW YORKER: You know, a lot of issues he didn't want to get into. He kept saying, you know, I don't want to talk about that. He very clearly did not want to return fire to Anthony Scaramucci, although the few things that he was willing to say about that suggested that, you know, he was not -- he continues to not be such a great Scaramucci fan.

I think his main message was to support Kelly, to tell everyone that he supports this choice. But it's clear that the President lost confidence in him at some point. He recognized that and decided they needed to part ways. But I think his -- I think there are a lot of details left to be learned about exactly what happened here.

But the one thing -- when you really pressed him on Scaramucci, the one thing where he was -- he didn't want to talk about it much or return fire, but you could tell he found the whole thing distasteful.

[19:15:12] BLITZER: Yes. He thought it was beneath the presidency, beneath the White House and he didn't want to get into that game. He was clearly very bitter at Scaramucci without saying it in those words, but you could see the bitterness seep through. Rebecca Berg, what came through to you?

REBECCA BERG, NATIONAL POLITICAL REPORTER, REAL CLEAR POLITICS: Well, I was interested in the discussion you had of Reince's legacy or lack thereof. I mean, you could tell how disappointed he seemed and sounded that health care did not get done under his watch.

And when he was discussing sort of the ins and outs of where Republicans went wrong and what they could have done differently, it didn't seem like he had an answer to that question. And as chief of staff, you need to be able to go to Capitol Hill, solve those tough problems, get the President's agenda through and Reince fell short there. And he seems to know this.

BLITZER: Kaitlan, you have covered President Trump from day one during the campaign as well. What stood out for you?

KAITLAN COLLINS, CNN WHITE HOUSE REPORTER: I think that's really what you would expect from an exit interview from Reince Priebus. He didn't want to say anything negative about the administration or fault them for anything that didn't go according to their plan.

And I thought it was very classy of him to not scoop to Scaramucci's level by saying they're returning fire on all of those things, his allegations that Scaramucci made against him, to Ryan Lizza, saying that he was a leaker and that he leaks details as small as a dinner that the President was having. I think that says a lot about Reince.

LIZZA: I think the astonishing thing -- I agree with you -- was classy not to return fire. I think the astonishing thing is what the President thinks of that. And clearly the President made a decision here that he likes the approach of someone like Scaramucci, not someone like Reince, who was the sort of midwesterner, above it all, classy in that interview. I don't think classy would describe Scaramucci's comments this week and he's the one that's surviving.

COLLINS: And Reince just say that exit interview, talked more about policy and the Trump agenda than Scaramucci did, and he's like very linked the interview with the other day which is a job of a comms director. So I think that says a lot about who is focussing on what.

BLITZER: You know, we're going to continue to follow the breaking news and there's a lot of breaking news. But that's it for me. I'm Wolf Blitzer. Thanks very much for watching.

Erin Burnett "OUTFRONT" with Jim Sciutto tonight starts right now.

JIM SCIUTTO, CNN HOST: And good evening. I'm Jim Sciutto in tonight for Erin Burnett.

You were just listening to Reince Priebus. He's the subject of our breaking news tonight. The White House Chief of Staff replaced. Priebus is out. The retired General John Kelly is taking over.

I want to get right to our panel. Jeff Zeleny, senior White House Correspondent, Mark Preston, he's executive editor for CNN Politics. Margaret Talev, senior White House correspondent for Bloomberg, Chris Cillizza, reporter and editor -at-large for CNN Politics, and General James Spider Marks. He knows General Kelly very well. They served together in Iraq.

Mark Preston, I want to begin with you. We heard Reince Priebus there playing you might say the good Boy Scout saying in a good conversation with the President tonight saying that Kelly is Chief of Staff and in his words a brilliant choice. That the President was great, Reince Priebus said. Playing the good Boy Scout there, do you think that reflects the reality of these last few days, these last few hours for the now former Chief of Staff?

MARK PRESTON; CNN SENIOR POLITICAL ANALYST: Well, Jim, I would even go back to these last few weeks, not last few months. No, I think inside, Reince Priebus is probably boiling with anger thinking that he put it all on the line for the President and in fact was not rewarded with the loyalty back.

But the fact of the matter was there did need to be a reboot in this White House. Perhaps right from the top, quite frankly, there needs to be a reboot. Meaning, President Trump really needs to handle things differently. But Reince Priebus, Jim, there is no way that he could go out in a gun battle with the President of the United States. To do so would close so many opportunities for him to hold jobs specifically in politics or in policy here in Washington, D.C. if he were to make an enemy with Donald Trump.

SCIUTTO: Jeff Zeleny, you've covered the White House. You've covered Trump throughout the campaign and now through six months of his administration. Does Reince Priebus's description of things, everything is in effect hunky-dory, this is friendly. It was expected. He was talking about it for a couple of weeks. Does that reflect the reality inside the White House and inside the administration as you've seen it? JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: It does not, Jim. And it's not surprising. Look -- I mean, this is something that frankly Reince Priebus hoped it wouldn't come to. He wanted to serve a year as Chief of Staff and, you know, this has been a very different administration, a fast paced administration.

If most administrations are driving 60 or 65 or so, this administration is probably driving about twice as that in terms of the, you know, different changes, the tweets the, you know, just how quick things have moved here. How many changes have been made, et cetera. So Reince Priebus simply, you know, could not hold on that long. And the President didn't want him to hold on that long.

[19:20:01] But I think, look, Reince Priebus is trying to put a very positive face on this, Jim. But I think one thing that was very telling when Wolf asked him what his favorite moment was, he said it was the first day when he walked into the Oval Office. I think from that moment, from January 20th, it got more difficult by the day.

And the President, we are told by our reporting over these last several weeks and months, began to view Reince Priebus as Chief of Staff as a irritant. He did not want him around. He began to view him as a, you know, essentially a junior staffer who he didn't really want to listen to. That is very different for anyone to be in.

And I think also Reince Priebus had a very difficult job, to be quite honest. If you talk to other chiefs of staffs for previous presidents as we often do who watched this throughout and had some sympathy for Reince Priebus, because there has never been a president like this who's tweeted his thoughts at all hours of the day, et cetera.

Someone very close to Reince Priebus told me something that I haven't forgotten. It was a couple months or so ago. They said the one thing that makes his job so difficult is that most chiefs of staff have the president's ear at the end of the day and they know that word is set. This President talks to so many people. There are so many avenues into him. So many people have his ear. It made it difficult for him to keep him focussed on track and to do his job.

But, look, it is time for a reset as mark said and Reince Priebus didn't want to leave. The President didn't want him to stay.

SCIUTTO: Right. If you're the chief of staff and you are viewed as a junior staffer, that's certainly a problem for your position.

Let's not forget if we can, Chris Cillizza, the events and it is easy because these events move so quickly of just the last 24 hours. You have the failure of a seven-year fight to repeal and replace Obamacare, which is a priority for the President, for the administration as well. And you have the new Communications Director. It's less than 24 hours ago tweeting in effect an accusation really at Reince Priebus that he was one of the leakers here.

What do you think -- was it the failure of Obamacare or the repeal of Obamacare that was the final straw? Was it this leaking allegation? What was the final straw for Reince Priebus as Chief of Staff? CHRIS CILLIZZA, CNN POLITICS REPORTER & EDITOR-AT-LARGE: Just quickly, too, Jim. Go back a few days, calling his own Attorney General beleaguered and very weak. You know, that the speech to the boy scouts, the tweets about transgender people not being able to serve in the military.

I mean, this week has been felt like six weeks. My guess is they will site as the catalyst that failure of the health care vote because Priebus was brought in many ways. He is a guy who knows Washington, right? He is supposed to be able to grease the skids, make the stuff work and it didn't.

But in truth, I think what Jeff said is the key, the thing to latch on to, which is Trump wants to be surrounded by people that he views as his peers and his equals. That's not a lot of people. It's usually very wealthy people or his family. That's always been how he's --

SCIUTTO: And generals really, right?

CILLIZZA: And generals. That's exactly --

SCIUTTO: McMaster's and now Kelly.

CILLIZZA: And, so, what you now have is an inter circle that once included some D.C. establishment types, remember, Reince is hiring, who was meant to be seen as an olive branch to the Washington establishment. I think what you see after six months as Donald Trump saying, you know what, all these guys are small potatoes. You know, all these -- they don't know anything. They say they're going to help us. They haven't done anything.

Now you've got Scaramucci, who, in a traditional Washington gambit, if you had what Scaramucci said to Ryan Lizza and you have Reince, Reince went overtime but not in Trump's role. But in Trump's role, Scaramucci, thank God, because he views him as a peer. He only -- these people as peers, tend to be to your point, military, rich people and people with whom he has related. So Ivanka, Jared, those types.

SCIUTTO: You mentioned Scaramucci and Wolf Blitzer asked Reince Priebus about Scaramucci's really profane comments about Reince Priebus in that interview with the New Yorker yesterday. Here's how Reince Priebus answered that question.

(BEGIN VIDEOTAPE)

BLITZER: Are you the leaker in the White House?

PRIEBUS: That's ridiculous. Wolf, come on. Give me a break. I'm not going to get into his accusations.

BLITZER: Why not respond?

PRIEBUS: Because I'm not going to because it doesn't honor the President. I'm going to honor the President every day. I'm going to honor his agenda.

(END VIDEOTAPE)

SCIUTTO: He went on to say that I'm not going to get into the mud, a reference again to those profane, really dirty comments that came from Scaramucci.

Margaret Talev, you've been watching this very closely for the last 24 hours. A bit of a deft referral you might say from Reince Priebus there on what were explosive comments from the current Communications Director.

MARGARET TALEV, SENIOR WHITE HOUSE CORRESPONDENT, BLOOMBERG NEWS: Well, that's right. It certainly doesn't serve him very well at all to say, yes, this guy just destroyed me in this public setting. But I venture a guess that General Kelly is not going to put up with that kind of talk about him. So, I'd be really surprised if we hear anything like that coming out in an interview about General Kelly.

[19:25:08] As we watch the next couple of days unfold, we know that there will be a cabinet meeting on Monday where he will be formally introduced. That will be his first day on the job and what we heard Reince Priebus described as kind of a transition.

But a couple of key questions really are going to be what is the situation with direct reports? Does the buck always stop with John Kelly, or are there a few top, senior or family people for whom they continue to answer really only to the President? How he carves that out and how he's able to impose order, structure, control on the White House is going to be really essential to how much of a reset button or a change agent he could be.

SCIUTTO: Let's look again at how Reince Priebus answered the question as to the President's, I believe as he say, the right to reset in terms of making a personnel choice like this. Have a listen.

(BEGIN VIDEO CLIP)

PRIEBUS: The President wanted to go a different direction. I support him in that. And like I said a couple weeks ago, I said the President has a right to change directions.

The President has a right to hit a reset button. I think it's a good time to hit the reset button. I think he was right to hit the reset button. And I think that it was something that I think the White House needs. I think it's healthy. And I support him in it.

I think bringing fresh people is a good thing. So, look, he has the best political instincts. He knows, I think, intuitively when things need to change. I've seen it now for a year and a half on this wild ride with the President that I loved being a part of. But he intuitively determined that it was time to do something differently. And I think he's right.

(END VIDEO CLIP)

SCIUTTO: General Spider Marks, you have the advantage of having served with John Kelly in combat, in Iraq during the war there. You're aware as our panelists are of just the turmoil inside this administration in the last 24 hours but in the six months since the President took office. Does General Kelly have the strength, the strength of will to come in there and clean House, but also crucially to tell the President, you might say, inconvenient things or to disagree with the President?

MAJ. GEN. JAMES "SPIDER" MARKS, U.S. ARMY (RET.): The short answer is yes he does. Look first of all, why wouldn't you want to have a number of generals and admirals around, primarily because during the lifetime that you spend in this environment called the military it's all about education, training, embracing the unknown, leaning in and trying to solve problems. Getting organizations aligned so that you can move forward to make that happen. I think the point that was made is a very, very clear.

First of all, John Kelly is a very measured leader. He's a very focussed man. He's a very humble guy. And he's an organizational guy. So he will get into the White House and he will say, look, here are the direct reports that need to come into me. And in all organizations, there will be exceptions.

So the family members are going to go straight to dad. They're going to go straight into the Oval Office. There are exceptional folks that will go straight to the Oval Office, much like Scaramucci.

The requirement is if you don't get in the middle of that, once you do is that once those individuals leave the Oval Office, the first person they see is the chief of staff so that you can have what's called a dump. What did the president say? What did you guys discuss, if in fact, John Kelly is not invited into the room. So those kinds of exceptions take place all the time in organizations.

SCIUTTO: But let me ask you.

MARKS: And John Kelly will get his arms around that in no time.

SCIUTTO: Let me as you Spider, are you comfortable with just the prominence and the number of uniformed or formerly uniformed officers in and around this administration? I mean, General Kelly himself last year in the midst of the campaign, while he was still in uniform, warned other -- his colleagues about the morass of Washington politics. And now he's -- I mean, he's as close to it as you get as Chief of Staff to a President.

MARKS: Correct. He's wedging right into it. He understands what needs to take place.

You know, when you look at his resume, his body of work over the course of his service to nation, it includes a significant number of positions here in D.C. So, I would tell you he has more than a scintilla of understanding about what takes place inside the built way. However, that isn't necessarily his first order of duty. His first order of duty is to embrace the White House and say, folks, this is how we need to be organized, so we can put a semblance of discipline into our processes. And we don't want to ask, I would say John would say this, we don't want to ask the President to change. The narrative is not the President should change. This 70-year-old man should change. What the staff needs to be able to do is enhance. And what the President does best, they must completely embrace and put a light on so that the President can be the president and the staff can get organized around that.

SCIUTTO: Jeff Zeleny, again, you have been -- go ahead. And then we'll go to Jeff.

CILLIZZA: Just very quickly. That's exactly right. The challenge, though, as we talk all about the shifting part. John Kelly in. Reince Priebus out. Anthony Scaramucci in, Sean Spicer out.

The only staffer that has really mattered in the first six months, Jim, is not a staffer. His name is Donald John Trump, right? I mean, he's doing all those things, making all these jobs very difficult.

I don't know if you can let Trump be Trump and effectively be anything close to what we have traditionally designed as an effective White House chief of staff. Sorry to interrupt you.

SCIUTTO: No, no, but that gets to the question I was going to ask Jeff Zeleny, because at the end of the day, it becomes is this a president that will listen to different advice, right? And General Kelly has an enormous amount of credibility. I mean, he carries it with him.

He's a Gold Star father. In addition to have led troops in combat, he lost a son in combat in Afghanistan. He has tremendous credibility in the country and it appears with the president. But this is not a president whose business life or political life who has shown himself to be one who listens as far -- to that kind of tough advice. Based on your knowledge of the president, experience of him and the staff, do you see that this could be different?

ZELENY: We'll see. I mean, I think the question is every president grows and learns in the job. It is a job that, yes, you can have a preparation for it. You bring your life experience to it, of course. But every president becomes better and learns the job as they go.

Now, we do not know -- we know President Trump isn't likely to change. That is the -- that's the truth of it. But can he learn and grow in the job?

And we have yet not seen. Even though we are a little over the six- month mark. We have not seen an external event happen to this White House that this president has to react to. And that's what most every president is judged by, be it 9/11, be it Hurricane Katrina, be it an oil spill, something to that measure.

And I think having someone like General Kelly, who is a good organizational leader, I think that could have an enormous benefit to this White House that in effect is rudderless. It does not have the leadership. Talk to Republicans on Capitol Hill who want President Trump to

succeed. Never mind the Democrats and the critics. Talk to Republicans who want them to succeed and they are just yearning for leadership.

So, we will see if the general is able to bring that in. But I think -- you know, we still do not know what this presidency will be about in the end. Will it be tested in ways that we don't yet know? North Korea again fired another missile today. So, I think the reality is bringing in an experience hand in the military in other organizational matters is a very good thing for this White House.

(CROSSTALK)

SCIUTTO: Jeff made a good point. You have North Korea launched a missile today with greater range, the potential of hitting the continental U.S. You have a bill on the president's desk right now imposing new sanctions on Russia, North Korea and Iran. He hasn't signed it yet. We don't know what he's going to do with that despite the overwhelming majority in Congress. You have those reminders.

And yet, Margaret Talev, in the last 24 hours we have been talking about a profane interview given by the president's new communications director of all things, and yet another shake up in the White House.

TALEV: Yes. And the cynical way to look at that is maybe the president didn't mind all of the, you know, Scaramucci brouhaha because it took everyone's minds off the other stuff. I don't really think that's what's going on at all. I think it's been a tremendous frustration for White House staff, all the way up to the top and across all layers to have these major brewing international issues and potential crisis, almost a willful test or an apparent willful test by a hostile regime, whether Iran or North Korea, to some extent Russia, just to try to see what's Trump going to do, what is the White House going to do.

That's not the situation you want to be in and be distracted by, you know, small potatoes political stuff. So, if General Kelly is able to restore order and sort of continuity in this White House and rally everyone from the national security staff to the political apparatus around him and kind of get down to business, that will certainly be potentially a very good thing for this administration.

SCIUTTO: Mark Preston, Reince Priebus said in his interview with Wolf Blitzer that making change in the White House is common. That's true. But the degree of change in this White House in the first six months is pretty remarkable.

We have a list of the various senior White House advisors that had been fired or resigned. It's a long one. And they're significant positions. Mike Flynn, national security advisor, James Comey, FBI director, of course, fired, Mike Dubke, the communications director prior to Scaramucci, Reince Priebus, of course, now, Katie Walsh, deputy chief of staff, KT McFarland, Sally Yates fired as well. She was the acting deputy attorney general.

[19:35:02] You've been covering politics a long time. Have you seen this level of turmoil so frequently so early in an administration?

MARK PRESTON, CNN SENIOR POLITICAL ANALYST: No. But there is absolutely turmoil. You're right about that. Whenever there is a new administration that goes in, there are extreme growing pains. But this is something that is really unprecedented.

The list that you just showed is basically a shadow cabinet. I mean, it is a shadow administration. He's basically turned over everybody of consequence.

I think what's really important, though, as we're looking to go forward and Jeff was talking about rebooting. Reince Priebus talked about rebooting. I talked a little bit about rebooting. The fact of the matter is, though, what is going to be key is can the general go to Capitol Hill, can the general convince congressional Republicans to trust him?

Because what we've seen from President Trump, he becomes very erratic, he becomes very vengeful. We have seen him go after Republicans at times because of his anger and not for strategic reasons and that is going to be key. And will the general be able to take telephone calls and be willing to take telephone calls from members of Congress at any hour of the day on every subject? Because that is the key to the Trump presidency.

Moving forward, they need to get health care done. Who knows what is going to happen? They are talking about tax reform. Who knows what is going to happen? Infrastructure, who knows what is going to happen?

And, Jim, coming up to September, the debt limit, the United States is about to reach its debt limit. That has to be raised as well.

There is a lot on the plate right now for this president and for this Congress.

SCIUTTO: Yes. And those debt level debates have never gone south before, have they?

Panel, listen, standby. We have a lot more to talk about.

I want to bring in now, Republican Congressman Lee Zeldin. He traveled with President Trump on board Air Force One to Long Island today. He's from the great state of New York, from Long Island.

Congressman, you were on that 48-minute flight from Washington, D.C. to Long Island. Perhaps an uncomfortable flight seeing it as it had the new Communications Director Anthony Scaramucci and the soon to be outgoing chief of staff, Reince Priebus. You spent time with the president as well.

Did you see this coming in those conversations today in what you saw?

REP. LEE ZELDIN (R), NEW YORK: No, I didn't see this coming for this evening. And to the credit of all those different people you just named, we were discussing the fight against MS-13. We were talking about health care, the legislative agenda going forward.

So, I mean, it was a short flight, but that time was spent talking to everyone doing the jobs that they were focused on at that moment for what was ahead for the trip, reflecting on what happened very early this morning in the United States Senate, and looking forward to legislative agenda.

SCIUTTO: Did you talk to Reince Priebus on board?

ZELDIN: I did. I sat next to him for the entirety of the flight and --

SCIUTTO: Did he seem like a man who was about to lose his job? Did he have any inkling of what was about -- he said that he resigned last night.

ZELDIN: No. He was actually doing his job as chief of staff. We were talking about different positions with the administration that they're working on filling. We were talking about the legislative agenda that -- making some small talk asking about how the family was going and how his is going.

So, you know, kudos to him with all this other stuff going on. He was handling today like a pro.

SCIUTTO: Did you see any interaction between the president and Reince Priebus on that flight or with the communications director? We've seen somewhat tense moments between the two of them on camera since that interview with "The New Yorker". What did you see?

ZELDIN: Yes. And the president came in, was interacting with all of us, again, no signs at all. You know, I knew I was going to be coming on your show this evening. Originally, we were going to be talking about MS-13 and obviously there is a development here that's taking precedent for the conversation.

And, you know, over the nature of that particular conversation, everyone was just talking like as if it was another day, going to do an appearance to talk about an important issue on MS-13 and what's next on health care and tax reform. So, it was a healthy interaction that I witnessed.

SCIUTTO: Let me ask you this because you and I have spoken before on the air and you've been among a small group of Republican lawmaker who is have been willing at times to speak publicly, critically about the president and some of the moves he's made. You now have a new chief of staff. In your view, is it the management in the White House that needs to change, or does the president have to change the way that he communicates things, the decisions he makes, et cetera?

ZELDIN: Well, I think the president is -- there is a lot that people comment on that he's not going to change. And it's putting the right people around him with the right chemistry, understanding each other's weaknesses and strengths.

[19:40:06] You know, I shared a story with one of the people on the plane earlier when I first came into the military, a lesson of General Petraeus that was passed along, three leadership principles: work hard, play hard, take care of your people, love the one you're with.

I would love to see in a highly functioning organization, you love the people you're with. That might mean your squad leader, platoon sergeant, might not get along with, but they're platoon sergeant or squad leader. Maybe there is a family member at your Thanksgiving table you wish they weren't in your family. They are.

And, you know, I think General Kelly can come in with just a tremendous amount of leadership experience in the military and understanding the military decision-making process and how to war game out a big plan to make sure the communications aren't getting into the different agencies and people aren't undercutting each other.

It's a move that the president I would say to his credit, you know, no disrespect to Reince Priebus, General Kelly comes in with a tremendous amount of leadership experience to be able to hit the ground running.

SCIUTTO: But do you see the president? You just described leadership qualities about supporting your team, your commanders in effect or whatever is in the foxhole next to you. After all, this is a president who this week was publicly shaming his attorney general, calling him beleaguered and other things worse. Do you see those qualities from the president?

ZELDIN: Yes. And I think that it's important to let the people who work for you know that you love them, especially if you want them to love what they do and love you back. This is, you know, the people that you appoint, they're not there. A lot of these positions, they're not there to serve the president. They take an oath to serve the United States of America and their loyalty is to the American people, and the goal would be to ensure that all of that -- that serving the president of the United States is serving the United States to the best of your ability.

But, you know, I just -- I don't know, you know, the full back story of what's going on between the president and the attorney general. All I know is what we're coming in contact with, watching the news and what I see in Congress.

SCIUTTO: The Twitter feed perhaps as well.

ZELDIN: And, you know, and today as we're on Long Island talking about MS-13 -- over the course of the last few weeks, the Justice Department has been indicting one MS-13 murderer after another, and kudos to the Justice Department, the Department of Homeland Security and the White House. That's the type of chemistry that helps keep communities safe and protects families.

SCIUTTO: Let me ask you -- let me ask you this. This is a week where we saw this morning as you mentioned earlier, the failure of the repeal and replace effort with three Republicans voting against the president. You also had this week the House, the Senate and prior to that the House by overwhelming majorities approved new sanctions on Russia, something the president said he did not want. From your perch, are you finding that Republican lawmakers are more

willing to defy this president than they were at the beginning of his term? We have certainly seen that in two important votes this week.

ZELDIN: Well, I mean, a lot of my colleagues we're not cheap and we have our own philosophical position. We look at nations like Iran, North Korea, China, Russia as our adversaries. The sanctions package impacted -- it was three of those countries. And these are issues we take highly seriously. It is not a move passing that sanctions bill where we're doing it as a needle to the president.

We're doing it because we believe that that's in the best interest of America's national security and, you know, I think it's a good thing that where you see -- we are a separate branch of government and while we have a president of our own party there and we saw our colleagues on the other side of the aisle previously with a president of their own party, there are times when you feel that loyalty to your president when considering an issue.

I spoke to people who were against the Iran nuclear deal, congressional Democrats, who came home from August recess in 2015 and said they were going to support the Iran nuclear deal. They said it wasn't worth it.

So, it happens on both sides where, you know, as you face these issues, I would encourage someone to vote for the increased sanctions on Russia, Iran, North Korea based off of your own assessment and your own vetting, doing your own homework and not based off what your political party is and if the president is the same political party. That shouldn't be the determining factor.

SCIUTTO: That's political courage. Congressman Zeldin, thanks very much for taking the time.

ZELDIN: Thank you.

SCIUTTO: OUTFRONT now with more, April Ryan. She's CNN political analyst and White House correspondent for American Urban Radio Networks; Bryan Lanza, he's former communications director for President Trump's transition team, also former deputy communications director for the Trump campaign; and Dan Pfeiffer, CNN political commentator, former senior adviser and communications director for President Obama.

I want to play for you, April, again how Reince Priebus answered Wolf Blitzer's question why did he resign and just see if you buy it. Have a listen.

(BEGIN VIDEO CLIP)

BLITZER: Did the president formally ask you to resign?

PRIEBUS: No. I resigned and he accepted it.

BLITZER: And that conversation was just simply like that? He didn't try to talk you out of it? PRIEBUS: No. We talked about it. You're confusing something. We

talk all the time about this subject.

(END VIDEO CLIP)

SCIUTTO: So, April, putting something of a brave face on it, but we know that there have been some -- the knives have been out for Reince Priebus for some time. You are at the White House. Tell us what really happened.

APRIL RYAN, CNN POLITICAL ANALYST: Well, Jim, first of all, you know, Reince is the former head of the RNC. He's got to put a brave face on it. But he also said that he and the president have been talking over time and that time is not more than seven months of, you know, they had outs, if either side wanted an out. So, Reince Priebus did the right thing for the sake of saving face.

Reince Priebus said that he resigned, but we know from very early on that Reince Priebus had been on the list of those who had a bulls-eye on his back. Reince Priebus is someone who was the establishment, who was going to help rein in this White House that's in chaos. You know, I remember hearing many stories from many sources about how he would tell people within the White House who had walk-in privileges all the time, you have to do it this way. You are under my purview.

There were people who would buck him. But Reince Priebus tried to keep order in a chaotic place where many people felt they could run in at any time. And Dan will tell you, Dan Pfeiffer would tell you that when you have a chief of staff, everyone, all the senior officials, come in under that chief of staff and have their back and forth, if you will, and then work it out before it goes to the president. And instead Reince Priebus was trying to keep order, but those people who had the issues kept going to the president, keeping the chaos going.

So, Reince Priebus did as much as he could do in this administration, but he's trying to save face. I mean, he was a big man in Washington who had a big job. And now, in the midst of chaos, he still stands behind this president and is trying to save face.

SCIUTTO: Bryan, I know you've been people -- speaking to people in the White House. You know them well. You have been working with them as this has been unfolding. What do you think is behind this?

We know they've been talking. You saw this even in Anthony Scaramucci's tweet yesterday that Reince Priebus might be the leaker. The president has been forward leaning about finding the leakers. Is that what was behind this? Did he lose trust in Reince Priebus?

BRYAN LANZA, FORMER COMMUNICATIONS DIRECTOR, TRUMP TRANSITION TEAM: You know, I would say that it appears that Reince Priebus lost -- his troops lost trust in him. I read this one in "Politico" story where he mentioned that he had chief of staff meetings and half the staff would show up.

But that's here nor there. That's not important. The thing is we have a fresh start with General Kelly. He's going to do a great job. I thank Reince Priebus for his service. I thank his family for his

sacrifice.

But at the end of the day, the presidency is bigger than one staffer. It's even bigger than the president. And, you know, everybody needs to be working in the same direction to push forward the mandate that was given to the president by the electoral majority in November.

And it wasn't happening and the president made a quick decision this time to turn the page. And he's chosen somebody who has served this country for decades and he's going to -- and we're honored to have his service yet again.

SCIUTTO: Dan, I'm just going to guess you might have a different view of how this went down and what it means for the administration.

DAN PFEIFFER, CNN POLITICAL COMMENTATOR: Well, look, I think by all standards, Reince Priebus had a terrible tenure as chief of staff. Now, that may not be entirely his fault, because the chief of staff is only as strong as the authority the president bestows on him. So, if the president undermined the chief of staff, ridicules him publicly and allows staffers to go around him, Reince Priebus had no chance to succeed.

And so, now, there is a chance with, you know, quote-unquote, fresh start here with General Kelly. But if I was General Kelly, I would be concerned that the same problems that affected Reince Priebus are going to affect General Kelly, in the sense that Anthony Scaramucci, who has had certainly a colorful, you know, disastrous first week as communications director, still reports directly to the president. Dan Scavino, who's, you now, had -- ended in trouble with the wall in six months still reports directly to the president.

The chief of staff has to be first among equals to make the White House run. And if Trump does not give General Kelly that authority, we're going to be right back where we were six or seven months from now in the same spot.

SCIUTTO: April, Wolf Blitzer pressed Priebus as to why the president wanted a change. Let's listen to how he answered that.

(BEGIN VIDEO CLIP)

PRIEBUS: I'm not going to get into that personal stuff. The president is a professional, and I'm a professional and professional people don't discuss private discussions in public. But I will tell you is, this president has American -- the heart of all Americans at the top of his mind at all times.

[19:50:07] He wants to do what's right for the American people. And I think making changes in the White House is common, but I also think that they can be very important. And I think that this is a good appointment for the White House, and I think the general will do a great job.

(END VIDEO CLIP) SCIUTTO: April, your reaction to that answer?

RYAN: I believe that Reince did take a swipe at Scaramucci when he talked about the comport of professional people. So he did take his swipe at Scaramucci.

But Scaramucci did come out -- I mean, I've heard from so many people, people in the community, people in Washington, Republicans, they felt that Scaramucci went too far. And for this to be the White House above the fray, this was, you know, the president talks about sewer. This was kind of sewer back and forth.

But it was good to see that Reince is at least trying to keep the dignity, the sanctity, the sacredness of the White House in his response, but he did take a swipe at Scaramucci, and that was obvious.

SCIUTTO: Bryan Lanza, you were shaking your head there for a moment.

LANZA: It's just silly. This town, the legend of Rahm Emanuel and his profanity, you know, is legendary. We've heard about it for decades and nobody seems to have an issue --

RYAN: But you didn't hear it from the street. You didn't hear it in the street.

LANZA: Now, you hear it from Scaramucci, and it's something different. I mean, the hypocrisy is just unreal. They're both colorful people that use colorful language --

(CROSSTALK)

RYAN: But you did not hear Rahm Emanuel in the street, on Twitter --

(CROSSTALK)

SCIUTTO: Brian, to be fair, it was on the record -- it was on the record interview with a journalist, and he's the director of communications. Is that not different?

LANZA: No. I mean, the chief of staff was cussed on the record. He's cussed before. You have the chairman of the Democratic National Committee that uses profanity at rallies. I mean, this is -- this sort of obsession that Republicans and the Trump administration is bringing profanity to Washington, D.C. is rather silly. I think if you look at the DNC chairman, if you look at Rahm Emanuel, their profanity are legendary at this point.

And it's just sort, you know, the folks did something knock good friend of mine, Anthony Scaramucci, it's silly.

(CROSSTALK)

SCIUTTO: Let's give Dan a chance to answer. Let's give Dan --

PFEIFFER: We're missing the point here. I don't actually care about Anthony Scaramucci's profanity. That's not the point. The point is the guy who was a White House communications director

called up a reporter from "The New Yorker", and in that, he called the White House chief of staff a paranoid schizophrenic, he attacked the president's chief strategist, and then claimed he's been in direct contact with the FBI and DOJ to investigate leaks, which would violate a thousand different rules about contacts between the agency and the DOJ.

So, I don't care if he swears privately. I don't care if he swears publicly, but what he did is so incompetent, that if an intern made that mistake and called up a reporter and didn't say you're on the record, I would fire the intern. I think they were capable of handling the copying in the office, and this guy is a White House communications director.

SCIUTTO: Bryan, how do you answer that? It's not about bad language. It was about -- talking about being in touch with the FBI and taking Steve Bannon to task. How do you answer that?

LANZA: Listen, the president brings in spirited people to his administration. We knew very early on in the campaign that we had diverse voices and they're very aggressive diverse voices. Nobody went up -- nobody shriveled up in fear of addressing their position and fighting out their positions for the president. That's the process. It should be that way.

RYAN: Those diverse voices are concerning many people --

SCIUTTO: You get the final word, April.

RYAN: Those diverse voices are causing a lot of people in Capitol Hill, particularly Republicans, to wonder if the democracy can stand. We've never seen this before. And, I mean, this is not myths, this is not conjecture. You've got Republicans publicly talking about this kind of stuff now, his own party. So there is a problem.

SCIUTTO: April Ryan, Bryan Lanza, Dan Pfeiffer, thanks very much.

We're getting reaction now tonight to this news from Capitol Hill. House Speaker Paul Ryan calling Priebus his dear friend, from Wisconsin, from the same state, saying in a statement, quote: He's served the president and the American people capably and passionately. He's achieved so much, and he's done it all with class.

OUTFRONT now is Ryan Nobles on Capitol Hill.

Ryan, you've been talking to folks on the Hill. Reaction there extending just beyond the Speaker Ryan from the same state of Wisconsin. What else are you hearing?

RYAN NOBLES, CNN WASHINGTON CORRESPONDENT: Well, Jim, I can tell you folks on Capitol Hill are just as surprised at this news as people are in the White House, and in that area, this was something that came as a big shock to many people in Washington and Capitol Hill, including Speaker Ryan himself. I'm told by a source he was not given a heads up that Reince Priebus would be removed from this post. And you mentioned that close relationship that Reince Priebus has with

Paul Ryan. They are obviously both from Wisconsin. They've worked together for a long time. But there are many other lawmakers on Capitol Hill who Reince Priebus has worked with for a long time, especially since he has been the chairman of the Republican National Committee for so long.

[19:55:05] We also heard from Ron Johnson, who chairs the Homeland Security Committee, and is also from Wisconsin. So, he was in an interesting position today, because he also works closely with John Kelly as secretary of homeland security. He had kind things to say about both men.

For the most part, Jim, we're hearing the company line. People saying that they appreciate Reince Priebus' work, but this is the president's decision, and they have confidence in John Kelly.

But there is no doubt that this is going to make things a little bit different up here. Reince Priebus was a conduit between the White House and Capitol Hill. In fact, he was up here numerous times over the past several weeks involved in some of these high level meetings as it relates to health care. And just after this big defeat by Senate Republicans unable to push through their health care bill reform last night, it certainly changes the scope of that relationship between these two sides.

You know, they had said for a long time they were working together. Could we see a new posture now where the White House looks at this body as being more of an adversary and maybe puts them on the spot in some certain areas? That's something we'll certainly be looking for.

SCIUTTO: Ryan Nobles, the news is moving fast. Thanks very much from Capitol Hill.

OUTFRONT now is CNN senior economics analyst Stephen Moore. He's former senior economic adviser to the Trump campaign, as well as distinguished visiting fellow at the Heritage Foundation.

So, Steve, literally just an hour before this staff shakeup was announced, the president took a shot at Congress, said he still wanted to get health care reform achieved. Have a listen.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: They should have approved health care last night, but you can't have everything. Boy, oh boy, they've been working on that one seven years. Can you believe that? The swamp. But we'll get it done.

(END VIDEO CLIP)

SCIUTTO: Notable, he used "they" there to talk about members of his own party, lawmakers on Capitol Hill. You heard Ryan Nobles there.

Is this the new strategy you'll see, the White House sort of retreating unto itself and taking on its own party as well? STEPHEN MOORE, CNN SENIOR ECONOMICS ANALYST: There's no question that

Donald Trump is extremely frustrated by the Republican leadership. At the beginning of the year, the Republican leaders of Congress came to Donald Trump and said, Donald, let us do this, we'll get this done for you, and they haven't done it. And Donald Trump I think has a right to be angry. I think a lot of conservatives --

(CROSSTALK)

SCIUTTO: Isn't it the president's responsibility to help push through major legislation?

MOORE: Yes.

SCIUTTO: I mean, do you think he credibly encouraged or was engaged with members on the Hill to get this through at a level of detail necessary to do so?

MOORE: Yes, it's a great point. I think Donald Trump has learned a big lesson that he had to be much more engaged. I mean, he wasn't as engaged as he needed to be. He needed to use all the executive branch, the bully pulpit at the White House and the executive branch powers to push this through, and he wasn't able to do it.

But I was explaining in part because he was told by the Republican leaders they could do it. He could stand back and they would deliver this for him. And, by the way, this has implications going forward, because of course, now we turn to tax cuts and tax reform.

Trump has to score a victory on that, given that -- by the way, I agree with President Trump. I don't think Obamacare repeal is dead yet. I really think there's still a chance later in the fall. They could revisit this. But for now, the shift is towards tax reform. I think you're going to see him engaged much more so.

SCIUTTO: But let me ask you, Stephen, because you and I talked about this before. And you yourself have said that you need to do health care before tax reform. I mean, there are budgetary reasons for that. How can you do one without the other?

MOORE: Well, now I think Republicans are looking at doing a tax cut. They are going to probably -- I mean, this is still being formulated as we speak. But there's a real possibility that they're going to use reconciliation to do a $2 trillion, $3 trillion tax cut that would basically be, you know, the same thing that they tried to do with health care. You know, Republicans only getting that through the House and Senate.

There's -- look, Republicans --

SCIUTTO: Not paid for, $2 trillion to $3 trillion tax cuts not paid for, so we're talking about adding to the deficit?

MOORE: You do some loophole closings. You could -- look, I think that if you do that, the business tax cut, you're going to get growth that over ten years, you're going to get a lot of revenue in return for that. But the point I was making is that Trump needs a W here. If he were to end this year without a victory on health care and tax reform, I think it would be devastating.

SCIUTTO: All right.

MOORE: So, I think there is going to be a victory on tax cut and I think there's going to be -- look, I was starting to say, Republicans are a lot better at tax cuts than they do health care.

SCIUTTO: All right. We'll have to leave it there. Stephen Moore, thanks very much.

Thanks to all of you for joining us. I'm Jim Sciutto.

Our breaking news coverage continues right now with "AC360."