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Developing now, Wednesday, Dec. 19, 2018

The sentencing of former Trump National Security Adviser Michael Flynn was delayed in a dramatic hearing where the judge scolded Flynn and said he could not guarantee he wouldn’t receive prison time. Legal scholar Alan Dershowitz tells FOX News Flynn has three possible options to avoid a prison sentence

In a victory for President Trump, the Senate on Tuesday night passed a bipartisan criminal justice reform bill. The measure will go to the House, where it is expected to be approved quickly

Fired FBI Director James Comey was grilled by House GOP lawmakers about former President Obama's knowledge of Hillary Clinton's use of a private email server, transcripts of Monday's hearing show

The White House indicated it is looking for alternative ways to fund President Trump's border wall as both the administration and congressional leaders try to avoid a government shutdown before Friday's deadline

Federal Reserve on Wednesday is expected to raise interest rates for the fourth time this year

Hollywood luminaries and fans are paying tribute to 'Laverne & Shirley' star and 'A League of Their Own' director Penny Marshall, who died Monday night at 75

THE LEAD STORY – FLYNN'S OPTIONS: A federal judge on Tuesday delayed sentencing once again for former national security adviser Michael Flynn -- a surprise decision at a dramatic hearing where the judge tore into the defendant and even questioned whether Flynn committed treason before walking back his comments ... The defense asked for a sentencing delay after U.S. District Judge Emmet G. Sullivan questioned Flynn's cooperation in a separate case and tore into the defendant and warned he couldn’t guarantee that Flynn wouldn’t get prison time. Sullivan asked both sides to file a status report due March 13. Later Tuesday, he ordered Flynn to stay within 50 miles of the D.C. area and give up his passport by January.

In an op-ed for FoxNews.com, legal scholar Alan Dershowitz says Flynn has a few limited options for avoiding a prison sentence. He writes: "Now that the judge has signaled his willingness to consider a prison sentence, Flynn has three options – none of them good. Flynn’s first option is to ask the judge to throw out his questionable guilty plea – but it will be difficult to do so in light of his statement at the sentencing hearing that he accepts his guilty plea and knew he was doing wrong when he lied to the FBI.

Flynn’s second option is to cooperate even more, but there may not be much more he can say or do. If he admits he withheld some cooperation that would hurt him. The former national security adviser’s third option – a nuclear one – would be to seek to recuse Judge Sullivan because of the judge’s prejudicial misstatements about treason and about Flynn being a foreign agent while working in the White House.

CRIMINAL REFORM VICTORY FOR TRUMP: The Senate on Tuesday night overwhelmingly approved a bipartisan criminal justice bill backed by President Trump after defeating three amendments pushed by conservative Republicans ... Lawmakers approved final passage 87-12. The measure now goes to the House, where it is expected to be approved quickly. Its passage would mark a significant victory for Trump and his son-in-law and senior adviser Jared Kushner, who worked the halls of Congress for months in an effort to forge a compromise.

President Trump congratulated the Senate soon after the measure's passage, tweeting: "America is the greatest Country in the world and my job is to fight for ALL citizens, even those who have made mistakes ... This will keep our communities safer, and provide hope and a second chance, to those who earn it." - Reported by Samuel Chamberlain

Newt Gingrich, Pat Nolan: Our criminal justice system is badly broken. That’s why the First Step Act matters

WHAT DID OBAMA KNOW? - Transcripts of former FBI Director James Comey's closed-door testimony before House Republicans has raised questions over how former President Barack Obama could have determined that Hillary Clinton’s use of a private email server while secretary of state didn't imperil national security if the FBI never briefed him on the investigation ... In a second meeting this month with lawmakers, Comey was asked about remarks Obama made during a “60 Minutes” interview in October 2015.

Obama said of the email matter that it wasn't "a situation in which America’s national security was endangered,” and that Clinton never appeared to hide anything. Rep. Trey Gowdy, R-S.C., asked Comey if he had ever spoken with Obama about the Clinton email investigation, to which the ex-FBI chief replied, “No.” He said he never directed anyone at the bureau to do so either. - Reported by Paulina Dedaj

Comey: DOJ official reacted to Trump exoneration requests saying 'God, I was hoping that would go away'

BACKING DOWN FROM THE BORDER WALL? - As congressional leaders continue negotiations to avert a partial government shutdown at the end of the week, the White House has indicated it is looking for alternative ways to fund President Trump’s signature campaign promise of a border wall without a government funding lapse ... Trump has demanded $5 billion in funding for the wall, estimated to cost between $20 billion and $25 billion; Democrats countered with $1.3 billion -- on the condition it was for fencing and not a wall.

A Senate Democratic aide told FOX News that Senate Majority Leader Mitch McConnell, R-Ky., proposed $1.6 billion for border security (which would include fencing, not a concrete wall as Trump promised his supporters) and a $1 billion “slush fund” for Trump to use for his immigration agenda. Democrats rejected that offer. Trump on Tuesday took to Twitter in defense of his desired wall along the U.S.-Mexico border, describing it as an aesthetically-pleasing, not concrete, structure that will also offer the necessary protection for the country.

At the White House, there were signs that the administration was backing down on its previous tough demands for the $5 billion funding. White House press secretary Sarah Sanders told reporters they were “disappointed” that the Senate hadn’t voted on anything, and said the White House was looking at “every avenue” to find additional funding -- including having funds redirected or "reprogrammed" from other departments.

FOX News' Chad Pergram reports the following: "In the coming days, the House and Senate will likely approve some form of a short-term spending measure to avert a partial government shutdown in the wee hours of Saturday morning. If there's no action, then nine federal departments would close just days before Christmas. Instead, a tentative, stopgap package simply re-ups the remaining seven spending bills at current levels through Feb. 8." - Additional reporting by Adam Shaw

ALL EYES ON THE FED: Federal Reserve policymakers at the central bank will conclude a two-day meeting Wednesday, during which they’re widely expected to raise the benchmark federal funds rate for the fourth time this year, despite opposition from President Trump ... About 80 percent of Wall Street traders expect to see a raise – and it likely won’t be the last, heading into next year, according to Steve Rick, chief economist at CUNA Mutual Group. “The Fed continues to see the economy is overheating, as we’re operating above normal levels right now – so we’ll continue to see rate hikes in 2019 because the economy is overheating at this point,” Rick said. - Reported by Megan Henney

REMEMBERING PENNY MARSHALL: Penny Marshall — best known for TV's "Laverne & Shirley" and director of hits such as "Big" and "A League of Their Own" — is being remembered for her charming and hilarious personality ... Marshall died Monday night at her home at age 75 due to complications from diabetes. A who's who of Hollywood paid tribute to the actor-director after news of her death broke on Tuesday. Video clips and images from various shows Marshall worked on flooded social media.

Marshall, who was born in the Bronx, New York, grew up in an artistic home. Her mother was a tap dance teacher and father a film director. She appeared in several hit 1970s shows such as "The Odd Couple" and "Happy Days." But "Laverne & Shirley" launched her to worldwide fame. Starring opposite Cindy Williams, the TV duo became iconic during the show's eight-year run and opened the path for Marshall's career as a director.

Penny Marshall was in league of her own as sports fan and memorabilia collector

THE SOUNDBITE

RUSSIA HYSTERIA MADNESS - "How did everybody in America with an Ivy League education simultaneously go insane in the space of a single year? The people in charge have lost it. They really have." – Tucker Carlson, in his monologue on "Tucker Carlson Tonight," lamenting on the cost of the mainstream media's fixation on the Russia collusion probe. WATCH

TODAY'S MUST-READS

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Stormy Daniels announces Playboy photo shoot: ‘This is such a dream come true for me.’

MINDING YOUR BUSINESS

Oil prices plunge more than 7 percent as U.S. output rises.

Euro Pacific Capital CEO Peter Schiff: Next U.S. recession will be 'much worse' than the last.

Taxpayers can no longer claim these four deductions.

Glaxo and Pfizer to combine consumer health businesses.

Allergan stops sales in Europe of breast implants linked to cancer.

Want to work from home? These are the top 10 jobs.

STAY TUNED

On FOX News:



FOX & Friends, 6 a.m. ET: Kellyanne Conway, counselor to President Trump; Michelle Malkin; Newt Gingrich; FOX Nation host Tomi Lahren; Robert Wolf, former chairman and CEO of UBS Americas; Cardinal Timothy Dolan shares his message for Christmas.

Special Report with Bret Baier, 6 p.m. ET: Special guests include: U.S. Sen. Marco Rubio, R-Fla.

On FOX Business:

Mornings with Maria, 6 a.m. ET: Special guests include: Kellyanne Conway, counselor to President Trump; Jim Kee, president and chief economist of South Texas Money Management; David Gale, EY Global advanced manufacturing transaction leader; Jerome Griffith, Land's End CEO.

Varney & Co., 9 a.m. ET: Special guests include: Nigel Farage, European Parliament member and former UK Independence Party leader; Herman Cain, chairman of America Fighting Back; U.S. Rep. Andy Biggs, R-Ariz.; Christian Whiton, senior fellow for strategy and public diplomacy at the Center for the National Interest.

Countdown to the Closing Bell with Liz Claman, 3 p.m. ET: Ward McCarthy, Jeffries chief financial economist; John Silvia, CEO and founder of Dynamic Economic Strategy; Andy Brenner, global fixed income head at NatAlliance Securities.

On FOX News Radio:

The FOX News Rundown podcast: A Green Beret has been charged with premeditated murder after confessing to killing an Afghan bomb-maker. His father, Jerry Golsteyn, discusses why his family is in shock that Maj. Mathew Golsteyn’s case has been reopened. A federal judge Tuesday unexpectedly postponed the sentencing of President Trump's former National Security Adviser Michael Flynn for lying to the FBI about his communication with a Russian official. Judge Andrew Napolitano, FOX News senior judicial analyst, explains the legal strategy behind the delay. Plus, commentary by Howard Kurtz, host of “Media Buzz.”

Want the FOX News Rundown sent straight to your mobile device? Subscribe through Apple Podcasts, Google Play, and Stitcher.

The Brian Kilmeade Show, 9 a.m. ET: Alan Dershowitz and Bloomberg View columnist Eli Lake on the sentencing delay in Michael Flynn's case. U.S. Rep. Jim Jordan, R-Ohio, on the revelations from James Comey's closed-door testimony on Monday. Brandon Steiner discusses his new book, "Living on Purpose."

#TheFlashback

1998: President Bill Clinton is impeached by the Republican-controlled House for perjury and obstruction of justice. (He was subsequently acquitted by the Senate).

1975: John Paul Stevens is sworn in as an associate justice of the U.S. Supreme Court. (He would retire in 2010.)

1957: Meredith Willson's musical play "The Music Man" opens on Broadway

FOX News First is compiled by FOX News' Bryan Robinson. Thank you for joining us! Enjoy your day! We'll see you in your inbox first thing Thursday morning.