'This Week' Transcript 8-6-17: Kellyanne Conway, Thom Tillis, Chris Coons

— -- ABC THIS WEEK

(BEGIN VIDEOTAPE)

ANNOUNCER: THIS WEEK with George Stephanopoulos starts right now.

GEORGE STEPHANOPOULOS, ABC HOST (voice-over): The president cleans house.

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: The president certainly felt that Anthony's comments were inappropriate.

STEPHANOPOULOS: The new chief of staff.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We just swore in General Kelly. He will do a spectacular job, I have no doubt.

STEPHANOPOULOS: But can General Kelly manage the president and his staff, refocus the White House and revive Trump's agenda? Those questions ahead for counselor to the president Kellyanne Conway.

And as the Russia investigation intensifies, a grand jury in place. The president lashes out.

TRUMP: The Russia story is a total fabrication.

STEPHANOPOULOS: Will he fire the special counsel? How will Congress respond? We talk to the Republican and Democratic senators joining forces to protect Robert Mueller.

And our powerhouse round table. We'll break down the politics, smoke out the spin: the facts that matter THIS WEEK.

ANNOUNCER: From ABC News, it's THIS WEEK. Here now, chief anchor George Stephanopoulos.

(END VIDEOTAPE)

STEPHANOPOULOS: Good morning. When August arrives, presidents escape. And President Trump kept up that tradition this week, decamping to his club in rural New Jersey for a welcome break from a bruising debut in Washington.

His big ticket promises: to repeal Obamacare, build a border wall paid for by Mexico, dead in the water. His approval rating the lowest of any president ever so early in his term.

This week we learn that special counsel Robert Mueller is zeroing in on the president's inner circle, with a grand jury meeting in Washington Documents demanded from the White House. And just this morning, President Trump wakes up to this headline in "The New York Times": Presidents aside, GOP stars move toward 2020 bids.

Mike Pence's schedule is so full of political events that Republicans joke he is acting more like a second term vice president hoping to clear the field than a number two sworn in a little more than six months ago.

Can you believe it's been just six months? One big bright spot (ph) for the president, the economy. Another strong jobs report on Friday and Trump's most loyal followers in West Virginia showed him lots of love the night before.

(BEGIN VIDEO CLIP)

TRUMP: Since our election -- not mine -- since our election, we've added more than 1 million new jobs. And the good news keeps pouring in.

(END VIDEO CLIP)

STEPHANOPOULOS: And with that, let's bring in the president's counselor Kellyanne Conway. Kellyanne, thanks for joining us this morning.

KELLYANNE CONWAY, COUNSELOR TO THE PRESIDENT: Hi, George. Hi.

STEPHANOPOULOS: So I just talked about the economy right there. You've seen another good jobs report on Friday. Solid growth through this year. The stock market, as the president has pointed out, at record highs. Yet the poll this week showed 61 percent disapproval for the president.

So why are people so unhappy with the president when the economy is doing so well?

CONWAY: But the numbers that you talked about are the most important indicators. You also see consumer confidence numbers, manufacturer, home builder, small business formation confidence. You see record close of the Dow -- over 22,000 points.

These are the measurements that matter to everyday Americans. And even this president when he came in, George, he made a promise that for every new regulation in, he would have two that went out. We're closer to 16 out for every new one in, and that regulatory framework has been so critically important to taxpayers, to property owners, to folks who are working hard and trying to get ahead.

I would note too in some of the polling, which of course I scour daily on behalf of the president, his approval rating among Republicans and conservatives and Trump voters is down slightly. It needs to go up. They are telling him just enact your program. Don't worry about a Congress that isn't supporting legislation to get big ticket items done. And don't worry about all the distractions and diversions and discouragement that others, who are trying to throw logs in your path, are throwing your way.

Focus on the agenda. And he's doing that. Look, nobody can deny these economic numbers. I mean, the idea that it's not getting huge coverage -- it's been a great weekend for this president. You see 2.6 percent growth. It doubled the first quarter growth. And you see the -- the job creation, 209,000, exceeded expectations, his one millionth job created.

And then you also just yesterday saw a unanimous rebuke of North Korea. The greatest economic sanctions package ever levered against them, it'll cost about $1 billion. Even allies in the region like China, Japan, South Korea, all agreeing with the United States that North Korea and its nuclear capabilities must be stopped.

STEPHANOPOULOS: We have seen that united front against North Korea right now. And the job growth and economic growth has been pretty steady. What we saw at the end of President Obama.

But one of the distractions, that "New York Times" story this morning talking about all these Republicans jockeying now to already run in 2020. "The Times" cites interviews with 75 Republicans at every level of the party. They say they expressed widespread uncertainty about President -- whether President Trump will run in 2020. Are you convinced he wants to run again and what do you make of the story?

CONWAY: The president says privately and publicly often, George, that he'll be there for 7-1/2 more years. So he plans on being a two-term president.

I read that article and I want to say a few things about it. First of all, I think that in the Republican Party for many decades, we have suffered from what I call staff infection -- people who are rewarded for losses. Most of the people quoted, most involved, I'm sure, have never won a national political campaign like the one I was involved in and you were involved in years ago.

Number two, they need a full employment act in Republican consultancy. Some of them are still not supporting their party and their party's main points of view on tax reform, on health reform, on putting ISIS in retreat if not full defeat.

And I want to make a remark about Vice President Pence. I've worked with him for ten years as his pollster, as a senior adviser, and certainly work with him daily in the White House. It is absolutely true that the vice president is getting ready for 2020, for reelection as vice president. And he's also getting ready for 2018 --

STEPHANOPOULOS: So no concern he's setting up a shadow campaign?

CONWAY: Zero concern. That is complete fiction. That is complete fabrication. And I know that his advisers who had comments attributed to them have pushed back strongly, as has the vice president. And as am I right now unequivocally.

Vice President Pence is a very loyal, very dutiful, but also incredibly effective vice president, and active vice president, with this president. He is a peer to the president in the West Wing. He just came off a trip in Eastern Europe and he'll go back I believe it was in the next week to South America, to represent the country on his fourth and foreign trip since taking office.

But let me make very clear, people meet -- Republican consultants, as always, people trying to play the parlor game, they're not on the -- they're in the I would say Trump inside -- inner circle because they did not believe in him. They totally missed what was happening in America. That the forgotten man and forgotten woman, many of whom had voted for Democrats in the past, many of whom had never voted, or never voted in decade, came forth and made this new Trump coalition in a way that -- in a way that frankly, respectfully, the last couple of Republican candidates did not. Mitt Romney and Paul Ryan won one state. They lost Wisconsin by 7 points. Donald Trump won Wisconsin, Michigan, Pennsylvania, Ohio, Iowa.

I would tell my Republican brethren: get onboard. Help us with tax reform and health reform and stop looking at 2020.

STEPHANOPOULOS: Let's see -- we will see what happens with that in September.

Meantime, General Kelly wrapping up his first week as chief of staff. We have that picture of him addressing the entire White House staff right there, some 200 people lined up there. I guess that's in the old executive office building.

What difference has he made so far?

CONWAY: It was quite a week with General Kelly.

A few things, George. I know there's much commentary about the order and the discipline. All of that is true. But let me just tell you that General Kelly is someone who wants to empower his staff to succeed. He commands respect and but he also shows respect. And in sitting in different meetings with him and in watching him in action this week, I've been incredibly impressed as to what a great listener, fully engaged General Kelly is.

I also believe the world is such a dangerous place, and so much of President Trump's day is filled with intelligence briefings, and new facts and figures about this increasingly dangerous world. It really helps to have a general in his fifth decade of public service going right back in and taking that oath of office again for a new position, so that he is hand in glove with the president. He has been with the president quite a bit this week, but he's been with the rest of us and his senior staff as well.

We're very happy to have General Kelly there as well because he, for the first six months of this year, George, has been a member of this president's cabinet. And he knows full well this hand-picked cabinet of talented and engaged and quite successful men and women are superstars in this administration.

And also General Kelly, I want to say, has been the chief military aide for two different secretaries of defense in a very bipartisan fashion. In addition, we should mention the biographical point, in addition to running the southern command. So he's very knowledgeable about the hot spots around the world. He of course is a master at unit cohesion. And we feel that coming together in the West Wing.

STEPHANOPOULOS: We still seeing -- we still are seeing tweets from the president. He insists he's going to keep up that tradition, including this one on Thursday where he said our relationship with Russia is at an all time and very dangerous low. You can thank Congress, the same people that can't even give us health care.

How is Congress responsible for relations with Russia being at an all-time low? And who is he talking about?

CONWAY: That tweet was likely in reference to the sanctions package that the president signed because it's a good step forward, but that he's also been critical.

And also, look, if you're Russia, you can't be happy with President Trump. We're now exporting coal to Eastern Europe--

STEPHANOPOULOS: But Kellyanne, wait a second.

CONWAY: He's beefing up the military.

STEPHANOPOULOS: Let me just stop you right there. Because the president signed that legislation. There's been widespread pushback from members of congress, including Republicans like Senator John McCain and others who say Russia is responsible, Russia with its actions in Ukraine, Russia its actions with interfering in our election, Russia is the one responsible for relations being at an all time low, but the president blames congress.

CONWAY: No, he doesn't blame congress.

STEPHANOPOULOS: That's what the tweet did.

CONWAY: I'm talking about the sanctions package.

But Russia overall this president has been very tough on Russia when it comes to, again, dipping into their energy capabilities in the region. We're now exporting coal to Eastern Europe. Beefing up the military, putting that money and that manpower and presidential imprimatur power behind an emboldened and a better finance military.

And also look at what the decisive, swift and I would say internationally acclaimed action President Trump took in April when Assad was gassing his own people, including those babies we all saw, gasping and taking their last breaths of air.

The president very swiftly, I think against what Russia wanted done frankly, took action in Syria.

So you know he met with President Putin for over two hours face to face. We know that if we can work on the big issues with Russia like defeating ISIS and not calling them our determined enemies, like Hillary Clinton did a year ago, and not putting them in full retreat or defeat calling them the JV team that was losing power, as President Obama did, then we'll work on the issues.

We're very happy that Russia was one of the 15 members unanimously voted for sanctions yesterday on North Korea, five permanent members and 10 rotating members.

STEPHANOPOULOS; Kellyanne, that's very different from the message the president is sending in that tweet. You also have bipartisan members of congress right now, including coming up on this program Thom Tillis and Chris Coons, who now are introducing legislation to protect the special counsel, Robert Mueller, saying that any decision by the president to fire Mueller if it indeed comes, should be reviewed by a judge.

What does the president think of that legislation?

CONWAY: Well, why are we engaging in hypotheticals. The entire Russia investigation is a hypothetical. The president has called it a fiction, a total fabrication to excuse the colossal and unexpected, unwanted defeat of Hillary Clinton in last year's election.

People just can't get over that election, George. It's corrosive to our body politic.

The president is going to continue to talk about America and I suppose others, sadly, will continue to talk about Russia.

But Ty Cobb, the special counsel to the president in the White House has made very clear as recently as this week that the president and others around him will continue to comply and cooperate and provide any information they have. But he also was not made aware of the grand jury proceedings until we all were. These are supposed to be done in secret and yet that leaked out as so many things do that are harmful to our security interest.

And let me just say something else about Russia, the president took on a new tact in West Virginia speaking about this the other night, he told the people there and around the country that those who are pushing this phony, fabricated Russia investigation are cheating you, the voters, out of what you clearly said you want. You want a new and different direction. You don't want the same failed policies. You want free markets, you want democracy, you want national security, American exceptionalism, prosperity at home. He's making good on those promises. Look at the stock market, look at the jobs numbers, look at the growth, look at the regulatory rollback on things that were hurting taxpayers and property owners and job creators and look at what he has promised those people.

They voted for him. And if Bob Mueller is going to continue the investigation, we'll cooperate however best we can, but the president is not a target of any investigation. Jim Comey told him that as FBI director three times and he had -- he assured that under oath.

STEPHANOPOULOS: That may have been overtaken by events now, and we'll see whether the special counsel is indeed looking at obstruction, including the president.

Part of the reason, as you know, that this story has persisted is because the White House and the president's surrogates have told conflicting stories. First, they said no contacts with Russia, and then it turned out there were at least 18 contacts. The story broke in "The New York Times" saying the president was involved in the drafting of his son Don Junior's misleading response to that meeting he had with Russian's during the campaign. And Jay Sekulow, the president's attorney came on "GMA" and told me this, saying, the president was not involved.

(BEGIN VIDEO CLIP)

JAY SEKULOW, TRUMP LEGAL TEAM: The president didn't sign off on anything. The president wasn't involved in that.

STEPHANOPOULOS: Well, The New York Times says that he was involved and that several people on the plane were involved in it as well, so you're disputing that account from "The New York Times"?

SEKULOW: Yes.

(END VIDEO CLIP)

STEPHANOPOULOS: But just this week when "The Washington Post" reported with more detail that the president was indeed involved in the drafting, Sara Sanders, the press secretary, conceded it. Let's listen.

(BEGIN VIDEO CLIP)

SANDERS: The president weighed in as any father would based on the limited information that he had. This is all discussion frankly of no consequence.

(END VIDEO CLIP)

STEPHANOPOULOS: Two very different answers in the space of two weeks there, Kellyanne.

CONWAY: The most important thing that Press Secretary Sarah Sanders said there, which is completely true, is that there's no consequence to any of these meetings.

The president weighed in as a father. He did not dictate the statement.

STEPHANOPOULOS: But first the White House and the president's lawyer said he wasn't involved at all. They didn't tell the truth.

CONWAY: George, you know, I know there's this whole thing about everybody wants to take...

STEPHANOPOULOS: About telling the truth.

CONWAY: You know, let's talk about -- let's -- no, OK. Well, let's talk about telling the truth. Let's talk about a president looking Americans in the eye, who are still suffering eight years later, who were lied to. If you like your plan, you can keep your plan. If you like your doctor, you can keep your doctor. Benghazi happened because of a video. Go tell the families of those four innocent Americans --

STEPHANOPOULOS: Kellyanne, you're simply changing the subject.

CONWAY: -- who were slaughtered in Benghazi that that lie mattered.

STEPHANOPOULOS: Hold on a second. You're changing the subject.

CONWAY: No. No. That is a subject. Let's talk about credibility that impacts people.

STEPHANOPOULOS: Going back to President Obama and Hillary Clinton.

Right there, I said directly different --

CONWAY: Those were big lies!

STEPHANOPOULOS: -- directly different responses within two weeks. How do you explain that?

CONWAY: George --

STEPHANOPOULOS: Can the president and his team get control of that and be open and truthful about the Russia investigation?

CONWAY: George, the president has said the entire investigation is fabricated. That this is a conclusion in search of evidence. They've come up with nothing. We've been doing this for almost -- about a year now, and what is there to show for it? What has actually metastasized in a way that we can say, wow, there's a smoking gun? There's a silver bullet?

I spent a lot of time with you during the campaign as a campaign manager, on your two programs, and others with ABC as well. What one thing did we ever say, do, or conspire that had anything to do with Russia? When I needed negative information about Hillary Clinton, I took a moment and I listened to Hillary Clinton. I mean, we went to Michigan, not Moscow.

STEPHANOPOULOS: Kellyanne, but wait a second. We know right now --

CONWAY: We went to Mecklenberg --

STEPHANOPOULOS: We know now what has come up in just the last few weeks is that Don Junior. responded to an e-mail saying that he was going to get Russian government information on Hillary Clinton. That was not out during the campaign. That was revealed just in the last several weeks.

CONWAY: Right. But what came of that meeting? Nothing. Jared Kushner shared with the House and Senate committees and then with all of us in a public statement at the White House about 10 days ago, George, that he had texted an aide and said please get me out of this meeting, it's a waste of time.

If you're getting dirt on your political opponent, if you're getting the silver bullet and the secret sauce on how to win the election, you don't ask your aide to pull you out of the meeting. You say please order lunch. Let's just stay.

There's nothing. There's nonsense. It was a ridiculous meeting. It was nothing. People want to -- people want to offer their services and have meetings all of the time, believe me. I know you know this. But let's look at the consequence -- no follow-up. No results.

STEPHANOPOULOS: Bottom line, Kellyanne --

CONWAY: No relatability (ph) -- I was never informed of that meeting. I found out about it when you found out about it, when the rest of the public did, when the president -- the president had no knowledge of that meeting.

STEPHANOPOULOS: Bottom line, Kellyanne --

CONWAY: Yes?

STEPHANOPOULOS: Does the president commit to not firing Robert Mueller?

CONWAY: The president has not even discussed that. The president is not discussing firing Bob Mueller.

STEPHANOPOULOS: But will he commit not to fire him?

CONWAY: We are complying and cooperating with -- he has not even discussed not firing -- he has not discussed firing Bob Mueller.

STEPHANOPOULOS: That's not what I'm asking.

CONWAY: And in fact, Ty Cobb -- well, hold on. I'm not the president's lawyer here. But I will tell you, as his counselor, he is not discussing that. He -- you have to listen to listen to his special counsel, Ty Cobb, who works in the White House now. He has said very clearly, George, this week, that we will continue to cooperate with Bob Mueller and his investigation. Even though he just hired his sixteenth person. Many of them are Democratic donors. But we'll continue to cooperate and comply.

And Ty Cobb said something that reflects the thinking of all of us, including the president. Anything that gets us steps further to this conclusion of what the president has called a complete false and fabricated lie, a conclusion in search of evidence, anything that brings us closer to that conclusion, we are all for.

But so far you've got conclusion and no collusion. And anybody who denies that is lying. We were promised Watergate, we were promised direct evidence of interfering and changing the electoral results. People talk about the 70,000 votes in Michigan and Pennsylvania and Wisconsin. There's none of that. Nobody even talks about that.

What about Adam Schiff and Mark Werner, the two Democrats who are in charge of the intelligence committee? They spend more time on TV than they do interviewing witnesses.

STEPHANOPOULOS: We will see what happens.

CONWAY: What is this investigation really about?

STEPHANOPOULOS: We'll see --

CONWAY: It's about an excuse for the Democrats who have no vision. Even Democrats don't want to be Democrats anymore. The Democratic governor of West Virginia became a Republican this week because his party is so out of touch with everyday Americans. He can't look at the coal miners in this state, the working people, that those who suffered with no health care who were lied to by the last president about keeping their doctor and keeping their plan, he became a Republican because he believes in free markets and democracy.

STEPHANOPOULOS: Kellyanne, no one can take away --

CONWAY: And he knows there's nothing in this Russia investigation.

STEPHANOPOULOS: -- the president's popularity -- no one can take the president's popularity in West Virginia. We'll see what happens with the Mueller investigation.

One final subject, this transgender ban that the president put out, the transgender tweet a couple weeks ago on July 26th. He said after consultation with my generals and military experts, please be advised that the United States government will not accept or allow transgender individuals to serve in any capacity in the U.S. military.

Yet after he sent out that tweet, the Chairman of the Joint Chiefs of staff said he's going to wait for any official order from the president before they implement. You've had the commandant of the Coast Guard this week saying he's not going to break faith with the transgender individuals inside his forces right now. General Mattis was apparently blindsided by the tweet from the president as well.

So what I want to know is specifically which generals and military experts signed off on that tweet from the president?

CONWAY: Well, first of all, the tweet didn't make policy, the tweet announced policy. This had been a conversation, discussions had with generals and other stakeholders for a very long time. The president announced it through the form that he does that cuts out the middle man.

STEPHANOPOULOS: Which ones signed off on it, though?

CONWAY: Well, hold on. He had talked to generals for quite a long time. I know that, and other stakeholders. And the fact is the Pentagon is a big place. If you find five or 10 people who say, we had no idea, 100 people say we had no idea, that doesn't mean that everybody there who needed to know.

I don't know when everybody at the Pentagon found out, but the president has made very clear what his policy is. The next steps, George, as you know, are to have policy guidance and to put the order out and to work with the stakeholders, obviously General Mattis -- Secretary Mattis and others, to implement this new policy.

STEPHANOPOULOS: Yes, but just, did the Chairman of the Joint Chiefs, did the Defense Secretary, did the commandant of the Coast Guard, did the other service chiefs sign off on that policy on that tweet before the president sent it out?

CONWAY: I can't answer that because I wasn't in the room when they discussed it with him. And I certainly aren't on the National Security Council. But I will tell you, having spoken with the president directly about this and having been involved a little bit in the discussions that the president had consulted for quite a while with different stakeholders, including his generals.

What he says in the tweet is absolutely true, he consults with generals and others about this issue. And, you know, President Obama took late in the game action. I mean, everybody runs around acting like he had a particular policy for all eight years.

He did not. And you know that. He took late in the game action. And the president is now acting early in his administration because he believes in military readiness and he believes in unit cohesion. This is what he has said. This is what others have said.

And but the policy guidance and the exact order and the final configuration of the law obviously are forthcoming.

STEPHANOPOULOS: Kellyanne Conway, thanks very much for your time this morning.

CONWAY: Thank you, George. Always a pleasure.

STEPHANOPOULOS: When we come back, two senators from both sides of the aisle joining forces to protect the special counsel from being fired. Thom Tillis and Chris Coons join us live. And later our powerhouse “Roundtable.”

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(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: Whether or not we are of the same party, we are not the president's subordinates. We are his equal.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: I like the president. I want to help him. But one of the things I want to do with my time in the Senate is to re-enforce institutions that arebigger than me and bigger than party.

SEN. JEFF FLAKE (R), ARIZONA: If you just have erratic behavior unmoored from principle, that's not a good combination.

SEN. LISA MURKOWSKI (R), ALASKA: If there is rhetoric out there not constructive to governing, I think it is important to speak up and I think you are starting to see a little bit of that.

(END VIDEO CLIP)

STEPHANOPOULOS: Republican Senators starting to stand up against the president and speak out. And when we come back, we're going to be joined by Thom Tillis, Republican senator from North Carolina, Chris Coons a Democrat from Delaware. They're teaming up for a new bill to protect the special counsel. We'll be right back.

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STEPHANOPOULOS: And we are joined by the two senators joining forces on that legislation to protect the special counsel Robert Mueller, Republican Thom Tillis of North Carolina, Democrat Chris Coons of Delaware. Gentlemen, thank you for joining me right now.

And Senator Tillis let me begin with you right now. You just heard Kellyanne Conway. No commitment from the president not to fire Robert Mueller. She says you're going to have to go to his lawyer for that, although she says it's not being discussed.

Your legislation would give a judge the ability to review any decision by the president to fire Robert Mueller. Why do you think it's so necessary?

SEN. THOM TILLIS (R), NORTH CAROLINA: Well, I think it's a necessary part of just continuing to improve the reputation of independence for the Department of Justice. This is something that lives beyond this special counsel. It provides the president with the opportunity to consult with the AG and the Department of Justice, potentially have one removed, but have that subject to a judicial review so that we make sure it's done for proper cause.

STEPHANOPOULOS: And the president is calling and you just heard Kellyanne Conway repeat it again, the entire Russia story, a fabrication, a witch hunt and a hoax. Do you agree?

TILLIS: I'm not sure that I agree with the witch hunt, and we'll let the facts lead us to whether or not it was a hoax or a distraction. But we are where we are and I want to see this investigation concluded so that we can get on to doing the good work the president has already started with regulatory reform, health care and tax reform.

This is a distraction I would like to get passed so that I can do as I have, go back to supporting the president's agenda.

STEPHANOPOULOS: Senator Coons, what are the prospects of passing this legislation?

SEN. CHRIS COONS (D), DELAWARE: Well, I think we've already heard strong interest from colleagues on both sides of the aisle in supporting this legislation. Senators Graham and Booker also introduced a similar piece of legislation before we went out.

And George, I'll point to you the fact that the president just signed a Russia sanctions bill, one that he initially opposed, but that passed the Senate 98-2. I think this is also an important bipartisan effort that may shore up the rule of law and the separation of powers and may ultimately get passed.

STEPHANOPOULOS: The president signed that sanctions legislation, Senator Coons, but we also saw that tweet saying that it's Congress's fault, and Kellyanne Conway said he was referring to the sanctions legislation there, for relations with Russia being at an all-time low?

COONS: Well, I disagree. I think the beginning of a better relationship with Russia is pushing back on Vladimir Putin's aggressive actions.

Look, Putin is a bully and he interfered not just in our elections but he's also interfering in elections of allies across Western Europe, he's invaded and occupied a portion of Ukraine, he stood behind Assad and his murderous regime. I think for us to have better relations with Russia, we first have to push back on this bully. And that's what the Russia sanctions bill is going to do now that it's been signed into law.

STEPHANOPOULOS: Senator Tillis, are you ready to take the blame for relations being at an all-time low with Russia?

TILLIS: The only reason we have bad relations with Russia is Russia is doing bad things. I agree with everything that Chris said. We are here because of their actions in Crimea, we're here because of their meddling in elections, because they're not necessarily being helpful in Syria. Our relationship with Russia is on Russia. If they want to come to the table and work cooperatively, I'm sure that this president would like that and this Congress would like that. But their behavior has to change.

STEPHANOPOULOS: Senator Coons, we've heard a variety of objections to the special counsel from the president and his team. They've pointed out -- they said that Robert Mueller has a conflict because he's a friend with the former FBI director. They say James Comey -- although both Comey and Mueller say it's just been a close professional relationship. They say that the fact that several members of the team, of the lawyers on the team have given contributions to Democrats in the past are signs of a conflict. They also say if Robert Mueller starts to look at the president's finances, that would be crossing a red line.

Any of those concern you?

COONS: They don't. Frankly, Bob Mueller is one of the most respected senior federal law enforcement officials in modern American history. I'll remind you, he's a Republican who was appointed by a Republican. And I agree with Senator Tillis, with Thom, that it is in everyone's best interest for Bob Mueller to be able to carry forward this investigation to its conclusion, so that we can get back to working in a responsible and bipartisan way to address the real issues facing this nation.

It's in President Trump's interest, it's in the interest of protecting rule of law, for Bob Mueller to be allowed to continue this investigation to its conclusion.

STEPHANOPOULOS: And Senator Tillis, have you seen anything in this investigation so far that would suggest that Robert Mueller has a conflict?

TILLIS: No, I haven't. I sit on Judiciary Committee along with Chris, or Senator Coons, and I have not seen any evidence to suggest that. And that's why I want this investigation to just follow through to an expedient conclusion, again so that we can get back to fulfilling the promises that we made the American people that the president is already working on. We need to be solely focused on that.

STEPHANOPOULOS: What would it mean, Senator Tillis, if the president fired Robert Mueller? What would the consequences be in your view?

TILLIS: Well, I think it just -- it's another example -- to me, the reputation of the Department of Justice has suffered some hits in the past. It would just be another piece of fodder, fodder for people who are trying to discredit what I consider to be one of the most important parts of the administration, and the FBI within the Department of Justice.

I'm working very hard, and I know that Senator Coons is too, to re-establish the integrity of this department, which is critically important to restore the confidence of the American people.

STEPHANOPOULOS: Senator Coons, Republican Senator Jeff Flake of Arizona suggested that if the president does indeed fire Robert Mueller, the Congress should think about hiring him. Would you be open to that?

COONS: I would. I think if the president should fire Robert Mueller abruptly, that would be crossing a big line. And I think you would see strong bipartisan action from the Senate, which might include our reinstating him or our rehiring him to continue to conduct that investigation on behalf of Congress.

STEPHANOPOULOS: Let me bring up --

TILLIS: George, George --

STEPHANOPOULOS: Go ahead, Senator.

TILLIS: One thing I would like to put there, though, I don't want this day to become a narrative to where we think that the president is headed in that direction. Kellyanne Conway said that she hasn't had discussions with the president on this matter.

Our effort here is just to take that off the table, any sort of precipitous removal, but we don't have any specific evidence to suggest that the president is going to do that. This is policy that lives beyond this administration incidentally, and it's important policy I think going forward.

STEPHANOPOULOS: Point well taken.

I want to bring up another subject while I have you both, and that's health care. Since the effort to repeal Obamacare has failed, lots of concern that the health insurance markets are going to implode over the next week if Congress doesn't pass bipartisan legislation to keep up those subsidy payments.

Your colleague, Senator Tillis, Lamar Alexander, is working on that in a bipartisan fashion. Is that legislation you support and you think the president should sign?

TILLIS: I met with the Senator Alexander and others to talk about what we can do to stabilize the market. I for one -- I think Chris probably had a different view -- but I was disappointed that we didn't get the votes to move forward with the health care reform bill a couple of weeks ago.

But we have got a destabilized market where insurance rates are going to go up 20, 30, 40 percent next year. Anything that we can do to prevent that and the damage that that will have on people who need health care I think is something I have to look at.

STEPHANOPOULOS: The president hasn't committed to keeping those subsidies going to the insurance companies, Senator Tillis. What's your message to him?

TILLIS: Well, the cost-sharing reductions over time need to be eliminated. But we can't just all of the sudden pull the rug out from underneath an industry that has had this in place for about seven years.

So in an ideal world I would like to see them go away overnight, but we don't live in an ideal world. If we don't provide some glide path downward, it will have the effect of raising insurance premiums.

And that's why we have got to come up with some sort of balance. And I think the administration understands that.

STEPHANOPOULOS: Senator Coons?

COONS: I agree with Thom. What I've heard in Delaware is that about half of the projected increase in annual rates is because of uncertainty in the marketplace. And so we need to come together quickly, in a bipartisan way, to strengthen and stabilize the individual marketplace.

We also need to begin working across the aisle to find ways to fix what is not working about the Affordable Care Act while still keeping in place the expansions that made better health care accessible for millions of Americans.

STEPHANOPOULOS: Remarkable amount of bipartisan agreement between the two of you today. Senator Tillis, that's not sitting well with everyone in your base. Laura Ingraham is out this morning with a tweet saying: “Another Republican senator who doesn't understand that there are three branches of government.” Any response?

TILLIS: Well, the response is the irony in the statement. I'm in the -- I work in Congress. I'm a member of the Senate. My job is to assert the authority of the Congress as a coequal branch. So for that particular person, they may want to go back and study up on civics 101.

STEPHANOPOULOS: Senators, thank you both very much.

COONS: Thank you, George.

STEPHANOPOULOS: Our Roundtable ready to weigh in on all the week's politics. And we'll be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: The Statue of Liberty says give me your tired, your poor, your huddled masses yearning to breathe free...

STEPHEN MILLER, WHITE HOUSE SENIOR POLICY ADVISOR: The poem that you're referring to was added later. It is not actually part of the original Statue of Liberty.

But more fundamentally...

ACOSTA: You're saying that that does not represent what the country has always thought of as immigration into this country?

MILLER: I'm saying...

ACOSTA: I'm sorry, that sounds like some National Park revisionism.

(END VIDEO CLIP)

STEPHANOPOULOS: A scene from the White House briefing room this week, Stephen Miller rumored does now that he might be the communications director in the White House, sparring with Jim Acosta of CNN. We'll see what happens with all that.

Let's talk about the week's politics now on our roundtable, Matt Schlapp, chair of the American Conservative Union, is here; Democratic strategist Stephanie Cutter, communications director of course for President Obama; the editor of "Bloomberg Businessweek", Megan Murphy; and Ramesh Ponnuru, senior editor at "National Review".

And let me begin with you, because I think as you look at the program today you see a bit of this divorce between the president and the Republican establishment. Kellyanne Conway being quite tough on those Republicans who were thinking, as you would expect that, of running in 2020. And you saw Senator Thom Tillis there not abashed at all about supporting this legislation, protecting the special counsel. What are we seeing going on here?

MATT SCHLAPP, AMERICAN CONSERVATIVE UNION: Well, you're seeing a lot of division amongst Republicans that started in the primary season and is going forward. There's so much political change. Definitely I can tell you on the Republican side I actually see a lot of change going on, on the division on the Democratic side as well.

But what you also see is a real constitutional disagreement between the legislative branch and the executive branch. Now, that's baked into the cake that they're supposed to have disagreements, but you see Republicans we run the whole show, yet there are real differences in these branches. And Donald Trump is kind of testing things that we haven't seen before.

STEPHANOPOULOS: And going straight to the base in West Virginia this week.

SCHLAPP: Sure.

STEPHANIE CUTTER, DEMOCRATIC STRATEGIST: Yes. You know, I think Matt is the expert on the Republican Party, but I think what's also happening is that there's -- people are losing confidence in him as the leader of the party. And you can see people pulling away. John McCain's quote in that story is classic, that people smell weakness basically with this president. And I think the president understands this and knows that he's losing right now, which is why he goes to West Virginia to rally his base.

SCHLAPP: By the way, we'll let you have John McCain if you want him. You can have him.

(LAUGHTER)

STEPHANOPOULOS: That a sign of the trouble right there.

Megan, let me pose to you the question I put to Kellyanne Conway right at the start. She recited those economic statistics. No question that the economy is, you know, chugging along pretty well in the same fashion it did under President Obama. Yet the president -- 61 percent disapproval.

MEGAN MURPHY, BLOOMBERG BUSINESSWEEK: Sixty-one percent disapproval and, perhaps most importantly, some declining numbers, some weakness in his base, which Kellyanne actually admitted on this show that they're seeing a little bit falling away.

Yes, he had a strong jobs number, 209,000 last week. We should remind viewers that the pace of job growth is actually slower than it was in 2015 and 2016, although still robust.

Here's one really important fact for the president: among people without a high school degree who are over the age of 25, their participation and movement into the labor market is actually the strongest it's been since 2011. That's a huge factor for him, as we see people who voted for him get jobs and we see wages tick up. We see among lower income, lower wage earners, that is really starting to be more robust than higher income workers. That will help him. And that is what matters.

So despite the chaos and the politics, among people's pocketbooks, it's possible -- it's actually possible --

STEPHANOPOULOS: That wage growth really is significant.

MURPHY: -- that we see the wage growth really helps him.

STEPHANOPOULOS: But that brings me to the next question. You know, the president at 61 percent when the economy is doing this well, when wage growth is starting to tick up, we're now what, eight or nine years into the recovery? At some point, there's going to be a downturn. Does he have a bottom?

RAMESH PONNURU, NATIONAL REVIEW: There has been no national crisis over the last six months. The president has achieved these sorts of approval numbers without anything external to the administration causing problems for him. And I think that has got to be a cause of serious concern for Republicans.

One of the reasons he is not having the sway among congressional Republicans, and even among his -- in his own administration that you might expect is that his popularity is so low.

STEPHANOPOULOS: And one of the things we saw so far this week, General Kelly come in, Stephanie Cutter, you served in the White House -- it does appear that he started to get his arms around the staff this week. You know, be careful when you say something. But so far this morning the president, his only tweet is kind of a Make America Great Again tweet. The tweets seem to be more strategic with that Russia tweet aside.

How much difference can he make?

CUTTER: He can make an enormous difference. And I think, you know, from what we can tell on the outside, it's already happened. Giving the White House some sense of organization. Controlling the information, or better controlling the information that gets to the president, to ensure its accuracy. Putting the White House on some sort of a structure. All of that is so important to the success of a presidency.

It's not about controlling the president; it's about controlling what goes on around him. Ensuring good policy gets to him.

Like the announcement on transgender. We were just talking about this. Rolling back transgender rights. He puts out this announcement and everybody in the Pentagon starts disagreeing with it.

STEPHANOPOULOS: And Megan, you heard, I mean, Kellyanne Conway couldn't really answer the question --

MURPHY: Exactly.

STEPHANOPOULOS: --of which military experts signed off on that tweet.

MURPHY: Well, it's clear that relatively none signed off since they've all come forward and said they didn't.

What's so surprising about this is also they put up such a weak support for it in saying first the expense of transgender in the military. That was knocked down very quickly. Then we had cost estimates where we spend more on Viagra than we do on educating people who have sexual identity issues.

I think everyone around this table would agree we support the men and women who support. They're 15,500 transgender members in the military who are questioning whether they have the support of their president and their commander-in-chief. That is destabilizing. And it's not just on transgender. It's when he makes a policy announcement that could be much, much, much deeper.

STEPHANOPOULOS: No question about that. But Ramesh, I have to say, as someone who lived through the Don't Ask, Don't Tell controversies of the early 1990s and saw the resistance of the generals to the idea of gays serving openly in the military, what a remarkable turnaround. We see, when the president comes out with something like that, I mean you have the military pretty much as united front saying hold on.

PONNUR: Yes, well, the culture has changed obviously dramatically on all of these issues. But the other thing is this administration, there's a certain amount of dysfunction. Where the Pentagon seems to be ignoring the president's tweet.

And that's not something that's just isolated to the Pentagon. The vice president seems to have his own Russia policy. If you listen to what he says and what the president says, they are not on the same page.

Attorney General Sessions not doing what the president wants him to do in terms of prosecuting or investigating Hillary Clinton.

There's a question on the part of subordinates in this administration about how seriously they should take the utterances of this president. Maybe Kelly can turn that around, but that would involve not just managing the staff but managing the president.

SCHLAPP: I think that's overplayed, but I do think it's fair, your comments on getting a hold of the bureaucracy. That plays right to this question about filling these jobs. #Resistance in the Senate, there's no question they're slowing down the president's picks but the president hasn't been rapid enough in make those selections.

He has got to get a hold of these agencies. They've got to understand that the West Wing has to work with the agencies to develop these policies. So I actually think the changes in the West Wing under General Kelly portend great things.

Because it was never set up -- you have worked there, several of us have worked there. It was never set up in a way that made sense where you could see it working. For the first time in this administration, I think the president is doing the right things on his agenda.

There has been too much turbulence around those decisions. I think General Kelly can really straighten this out.

STEPHANOPOULOS: Stephanie, General Kelly comes in and turns out -- it seems that in the wake of that the attorney general's job is safe again. He got a call from General Kelly. But I wonder if the president may have laid a bit of a trap for himself by bringing General Kelly in, particularly on the Mueller investigation.

Let's take Kellyanne Conway at her word for now, that the president is not discussing right now firing Robert Mueller, although we know he did it in the past. She would not commit to saying he wouldn't fire him.

I have to believe that if the president took a step like that, he would have trouble with his chief of staff.

CUTTER: Oh, absolutely. I also think that you would see mass resignations in certain parts of the government. And obviously what we just heard from the two senators, there would be, you know, a real constitutional crisis if something like that happened.

So whether that's a trap, I think a lot of that would happen anyway, but I don't think that General Kelly would stand for something like that. It's clear obstruction of justice. He's already being investigated for obstruction of justice. He's basically doing Mueller's job for him by...

(CROSSTALK)

SCHLAPP: It would depend on Mueller's actions. Mueller has a scope of which he can do this investigation. Everyone is acting as if Mueller wouldn't go outside that scope. It all depends on his actions. If he stays within the scope of the investigations...

(CROSSTALK)

CUTTER: … pretty broad strokes.

SCHLAPP: If he follows the law, he's going to be fine.

STEPHANOPOULOS: Well, as Bloomberg reported, Megan...

CUTTER: Well, if it's a broad scope, he should be fine.

STEPHANOPOULOS: … you were one of the first to report that they would -- that Mueller would be looking into...

MURPHY: Financials.

STEPHANOPOULOS: ... financials of President Trump. That does derive from this -- from the seed of this investigation.

MURPHY: Well, that's why this impaneling the grand jury is significant, not that it's any surprise. He has got 16 all-star prosecutors with him. We knew this was a serious, complex investigation. But what's going to be interesting is we're going to see from the kind of witnesses, the kind of leaks we're going to get out of this, and the kind of material they're looking at, are they focusing it squarely on possible obstruction, possible collusion with Russia, or are they expanding their scope to look at some of the financial dealings that were made, possibly not even within the Trump family, but with broader people that are around him.

That is what we are likely to see. Again, it is...

STEPHANOPOULOS: And from the hiring it appears that's exactly what they're doing.

MURPHY: Yes. These are prosecutors who are the most sophisticated at looking at mob ties, looking at complex financial fraud that we have seen. Make no mistake -- and it is within his scope of his investigation to look at that.

SCHLAPP: Yes. But then -- so the point of that would be that if he made any money on Russian transactions, that that would be illegal how?

MURPHY: Are you saying that if they find that people made a quid pro quo with certain Russians, that is...

SCHLAPP: I didn't say that.

(CROSSTALK)

SCHLAPP: That is the hardest thing to ever prove by a prosecutor.

(CROSSTALK)

STEPHANOPOULOS: … people were buying up a whole bunch of apartments as a way to launder money.

MURPHY: Yes. I think we ought to see what they find. And it's clear that they have discovered evidence of something. So there is a predicate of wrongdoing here. That's why we have...

SCHLAPP: No, no -- you mean, because of the grand jury?

MURPHY: We have two grand juries.

SCHLAPP: Well, the reason for that is because that we all know that General Flynn and Paul Manafort have a certain amount of legal trouble. I don't think that's a bold statement to make.

STEPHANOPOULOS: That's not the only one. Ramesh, you know, we also learned it was in Vox.com this week, and this is something we would have expected, that you have got at least six top officials in the Justice Department and the FBI who are likely to be called in as witnesses on the obstruction case. That is a remarkable lineup facing the president.

PONNURU: Right. And it's -- you know, special prosecutors have a way of expanding their purview. We do -- we also have to keep in mind it's not something that has to culminate in an indictment. It can just be a report to Congress and it could just lay out facts that are considered untoward or unbecoming of the president.

There are multiple ways this could play out and none of them -- you know, if you're in the White House, you have got to be very concerned about the way scandal has become further and further institutionalized as an issue that can harm this administration.

MURPHY: I think that is why the John Kelly issue can be also something that he's setting himself up for failure, when we look at replacing the communications director, for example. Stephen Miller, a man who has traditionally appealed to the most native impulses of the base, who is someone who may be cheered on television, but actually his policies are increasingly out of step with mainstream Republican voters, and actually increasingly the base.

Filling that position is crucial. Whether or not he'll be able to...

(CROSSTALK)

SCHLAPP: As the Republican expert, as Stephanie said, I might take a lot of exception at that.

STEPHANOPOULOS: No, but let's focus on that right now. There's no question that Stephen Miller, you know, that gets a lot of attention. He gets cheered inside of the White House. A lot of the president's supporters say you go, you showed CNN in that exchange right there.

And if you look at that, if you look at the trip to West Virginia, if you look at the transgender ban, what you see is the president really focusing on his hardest core supporters right now.

SCHLAPP: I actually think what you see the president doing is trying to implement the agenda that he said he would implement and what you have is a West Wing that wasn't set up to do it in a seamless way. And so I think the press is enjoying covering all these skirmishes, it's why the daily briefing, for some of us, there are days when it's painful and days when it's not. And that's why they have struggled with this idea should it be on camera, should it not be on camera.

Because you also have to admit, George, the press -- and you've had that job -- the press loves those moments, too, when all the cameras are on them and they're show-boating and that's not necessarily helping the country either.

So, what I would say is this, we're all trying to get in Donald Trump's head and we're all trying to look at why did he do it this way, or why did he do it that way, fair game. But what I'm looking at are the policies he's implementing and none of us should be shocked at what he's doing.

CUTTER: I'm looking at the policies he's implementing as well, and I don't see a lot that's been implemented. I'm looking at health care. I'm looking at tax reform. I' looking at success on regulatory...

SCHLAPP: Even regulations alone have been rolled back.

PONNURU: Let's get back to this immigration bill. We talk about the base. But of course the base is a variegated thing. And so far a lot of the administration's priorities have been pitched to a much more traditional Republican Party base. It's been health care. People have talked about tax reform, deregulation. Not a whole lot for the white working class voters who are part of a distinctive Trump base.

The immigration proposal is the first time I think this administration has really gone after and catered to this group of voters.

STEPHANOPOULOS: And one of the big questions we're going to find is it actually going anywhere in the congress this year?

That is all we have time for today. Thank you very much.

We'll be right back.

(COMMERCIAL BREAK)

STEPHANOPOULOS: And now we honor our fellow Americans who serve and sacrifice. In the month of July, one service member was killed in Afghanistan.

And we'll be right back after this from our ABC stations.

(COMMERCIAL BREAK)

STEPHANOPOULOS: And that is all for us today. Thanks for sharing part of your Sunday with us. Check out "WORLD NEWS TONIGHT". And I'll see you tomorrow on "GMA".