'This Week' Transcript 6-17-18: Former White House Chief Strategist Steve Bannon This is a rush transcript for 'This Week' on June 17, 2018.

A rush transcript of “This Week with George Stephanopoulos” airing on Sunday, June 10, 2018 on ABC News is below. This copy may not be in its final form and may be updated. For previous show transcripts, visit the “This Week” transcript archive.

ANNOUNCER: THIS WEEK WITH GEORGE STEPHANOPOULOS starts right now.

JONATHAN KARL, GUEST HOST: Trump's hard line.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: When we have the laws change, it will be like perfecto.

(END VIDEO CLIP)

KARL: Still separating children from their parents at the border.

(BEGIN VIDEO CLIP)

TRUMP: We need a wall. We need border security.

(END VIDEO CLIP)

KARL: Imposing massive new tariffs.

(BEGIN VIDEO CLIP)

TRUMP: We have been taken advantage of as a country for decades by friends' and enemies' wealth.

(END VIDEO CLIP)

KARL: Slamming the FBI after the inspector general's report.

(BEGIN VIDEO CLIP)

TRUMP: The IG report was a horror show.

(END VIDEO CLIP)

KARL: All this on the heels of the historic summit with Kim Jong-un.

(BEGIN VIDEO CLIP)

TRUMP: A very worthy, very smart negotiator.

(END VIDEO CLIP)

KARL: The president seems to be flying high, but the policy of separating children from their parents at the border is sparking widespread condemnation. And the new tariffs could set off a jobs-killing trade war. And on North Korea, critics say the president is lavishing too much praise on a brutal dictator.

We'll take all that to Trump's controversial former chief strategist, Steve Bannon. Live, a THIS WEEK exclusive, diving into his blunt and unfiltered takes on trade, 2018, and the raging immigration debate, in his first live Sunday show interview ever.

Plus, analysis from our powerhouse "Roundtable." What's fact? What's fiction? And what matters, THIS WEEK.

ANNOUNCER: From ABC News, it's THIS WEEK. Here now, chief White House correspondent, Jonathan Karl.

KARL: Good morning. Happy Father's Day. And thank you for joining us as we close out a momentous, historic, and most unusual week in American politics.

The week began with the once unthinkable summit between Donald Trump and Kim Jong-un, followed by a marathon press conference in Singapore, and the president's first network interview in over a year with our own George Stephanopoulos.

While the substance of the agreement with North Korea can be debated, President Trump sure seemed in command, going face to face with perhaps America's most dangerous enemy. By the end of the week, the issue that threatened to consume Washington was closer to home on the southern border where the administration has undertaken a zero tolerance immigration policy resulting in the separation of children from their parents.

It's a policy that has received widespread criticism from Republicans in Congress, including Paul Ryan, and religious leaders on the left and right, including Trump supporter Franklin Graham, who called separating families disgraceful.

On Friday, on seven different occasions, the president said that a law passed by Democrats is to blame for separating families. But that's just not true, as Republican Senator Lindsey Graham said: "The president could end this family separation with a simple phone call."

So let's dig deeper into all of this with the president's former chief strategist Steve Bannon who, of course, played a critical role in crafting the policies we now see taking shape.

So you've heard the criticism, left, right, a lot of Republicans, Speaker of the House Paul Ryan. How do you justify this policy?

STEVE BANNON, FORMER TRUMP CHIEF STRATEGIST: It's zero tolerance. I don't think you have to justify it. We have a crisis on the southern border. But the elites in this city, and this ties into Korea, ties into everything that took place this week, the elites, the permanent political class in this city want to manage situations to un -- you know, to bad outcomes.

And Donald Trump is not going to do that. He's just not going to kick the can down the road, whether that is China, whether it's tariffs, whether it's Korea, whether it's the southern border.

We ran on a policy, very simply, stop mass illegal immigration and limit legal immigration, get our sovereignty back, and to help our workers, OK? And so he went to a zero tolerance policy. Zero tolerance, it's a crime to come across illegally, and children get separated.

I mean, I hate to say it, that's the law and he's enforcing the law.

KARL: But, Steve, take a look at this image. We have this image of a young child, two years old, facing the possibility of being separated from her parents. There were nearly 2,000...

BANNON: But, Jonathan -- Jonathan, Jonathan, you had the human traffickers, this is a huge business now, coming up from Central America. You're just going to exacerbate the problem. The president has said, give me...

KARL: But how is that American?

BANNON: Give me a border wall for security, OK? Give me border wall security. We won't have this problem. He has a zero tolerance situation. He has drawn a line in the sand. I don't think he's going to back off from it.

And by the way, I don't see the mainstream media, and I don't see the liberal left embracing the Angel Moms, those people that were permanently separated from their children because of illegal aliens that came over here and committed crimes and killed people.

You're very selective about how you...

KARL: No, no. Steve, this is a...

BANNON: Jonathan...

KARL: -- U.S. policy. We are taking and separating these young children from their parents at the border.

BANNON: We separate (ph) --

(CROSSTALK)

KARL: What about the morality of it?

BANNON: The morality is the law. They’re -- they’re criminals when they come across. OK? Illegally. And that’s why they’re getting separated. By they way, if they’re calling asylum, they’re still going to the -- to the detention centers although the (ph) -- detention centers are now full. That’s the Obama policy, right, from 2014.

KARL: The children are criminals? The children that --

BANNON: They are not but they’re -- the law -- because the -- because consent decree means that children cannot stay with parents that are being charged with a crime. This is the law. Donald Trump is put in a terrible situation. Why is he put in a terrible situation? He’s put in a terrible situation because the (inaudible) class in this city has not wanted to address this. Donald Trump has gone against his base more than any president to show a profile of courage and say hey, look, I’ve -- we’ve got to try to work this out.

The base does not support these policies that really Donald Trump’s trying to push through with -- with Paul Ryan. Donald Trump is leading his base to that. He’s shown more leadership than Bush, he’s shown more leadership than Obama. And now that he’s had (ph) a zero tolerance policy, he’s being ganged up on by the mainstream media.

KARL: So what about the religious leaders? What about -- you have the evangelicals, people like Franklin Graham calling it disgraceful, Cardinal Dolan called it unjust, unbiblical, un-American. And then you had the pope. The pope --

BANNON: You know, by the way (ph) --

KARL: Listen to what -- the pope tweeted this. Children must be able to play, study and grow in a peaceful environment. Woe to anyone who stifles their joyful impulse to hope. The pope --

(CROSSTALK)

BANNON: By the way, the pope more than anybody else has driven the migrant crisis in Europe, that’s why you have a new government in Italy.

KARL: The pope?

BANNON: The pope. Yes. By the way, the Catholic church, they’re going after (ph) Cardinal Dolan. Cardinal Dolan’s attacked me. The Catholic church is one of the worst instigators of this open borders policy. Right? They’re Catholic -- and I’m a catholic. I’m --

(CROSSTALK)

BANNON: -- I’m missing mass today -- I’m missing mass today or going later with my dad to be on your show. I’m a Catholic. No, the Catholic church is one of the big instigators in the open borders and the pope has been driving the migrant issue in -- in Europe. Yes, so no. It’s -- by the way, the pope is not -- is not infallible when it comes to public policy and that’s a public policy issue.

KARL: So I want to show you another image. This came from General Michael Hayden, who is the former CIA director. He tweeted this, obviously a photo of Auschwitz and Birkenau, saying our -- other governments have separated mothers and children. What -- what’s your response to the former director of the CIA?

BANNON: Well I don’t believe in the deep state but we’ll get into this later. I think Hayden and all that crowd -- Brennan (ph), all of them, this shows you the over the top anti-Trump, anybody but Trump -- to demonize the president of the United States as a former military officer, completely unsatisfactory. And it’s over the top comparison. This is a law, OK? The president is enforcing a zero tolerance policy. We’ve got to get security on the Southern border, he has not been given his wall and I believe he’s going to enforce this policy.

KARL: So why -- why does the president pretend that this is a Democratic law?

BANNON: He’s not pretending.

(CROSSTALK)

BANNON: -- no, no, no. Because -- because for decades, this law’s been on the books. He’s enforcing it. Who has gone out -- and by the way, this --

(CROSSTALK)

BANNON: -- no, no, no. Jonathan, this what I don’t get -- this is what I don’t get about you. Who has gone against his base to reach out -- to reach out with amnesty for DACA, to reach out on everything he’s reached out to for Democrats over the last six to nine months with people -- the hardliners in his base saying we can’t do this, trying to lead us to some sort of compromise. All he’s had is his hand smacked away the entire time. And now they’re trying to demonize him (ph).

The whole purpose here is to demonize Donald Trump. And here is a guy that’s shown more profile and courage than anybody on this issue. Because you have the hardliners over here, right? The deplorables. And then you have the open borders crowd. Donald Trump is trying to reach a compromise. And all the Democrats have done the entire time --

(CROSSTALK)

KARL: -- the deplorables?

BANNON: Yes, the -- proud to be a deplorable.

KARL: So --

BANNON: I’ve got t-shirts and ball caps. We’re proud to be deplorables.

KARL: So the president -- the House is going to be debating immigration this week. Paul Ryan’s -- has got a bill. There are a couple bills under consideration. One of them would provide citizenship for the DACA recipients, a path to citizenship. Should that be supported by the president?

BANNON: The president is trying to show leadership. The president is trying to show he’s president for the entire country.

KARL: So you’re not in favor of (ph) --

BANNON: No, no. Absolutely -- I -- I -- I believe that this bill -- and the concepts to these bills came up from people that (inaudible) have the tables run on us (ph) in November. This was the best deal that they could get. I’m adamantly opposed to these bills. I think that any pathway to citizenship for DACA is unacceptable. And I believe when you look at the four pillars that President Trump I think has very magnanimously laid out, I don’t think the four pillars are included here.

And --

KARL: So you oppose even having this path to citizenship that would take years --

BANNON: Absolutely.

KARL: -- for the DACA recipients?

BANNON: Absolutely. Absolutely.

KARL: Why is the president supporting it?

BANNON: Well, the president’s -- he’s trying to show leadership. He’s trying to show that I can bring my base --

KARL: Mistake -- is it a political mistake?

BANNON: I think that what we should, and Lou Dobbs said it the other night, Lou Dobbs, you know, told the president on national TV if you go down this path, he believes we’ll lose 50 seats in the House in November, because you will not generate the base.

I believe that this -- this --

(CROSS TALK)

KARL: So you -- you think they lose 50 seats in the House, they lose control of the House if they support this bill?

BANNON: Lou Dobbs said, and I believe. If you -- if you support this bill, I think this is the way the deplorables don’t come out, I think this is a way potentially lose 50 seats. Otherwise, I think we run the tables.

This is what I’m saying, at the time the people in the White House thought about this, they thought there was going to be a blue wave, right. And this is the best they could do at the time.

I strongly recommend that we just wait until 2019, right, to address this, because I think we’re going to have a big November, and we’ll -- and we’ll play this from a (inaudible) and another thing, any bill that doesn’t have e-verify, we have to understand one thing, that this illegal immigration, the people that hurt the most are the Hispanic and black working class.

It suppresses their wages, it destroys their healthcare, it destroys their school systems.

(CROSS TALK)

KARL: -- unemployment rate in this country of 3.8 percent right now, is this really about (inaudible) jobs?

BANNON: Yes, it is, because wages are not increasing at -- at -- at -- we have to have the wages increase, and we don’t want to continue to have the jobs that --

KARL: What about the wall?

BANNON: -- we don’t want to continue to have the pressure of unskilled labor in this country that destroys the black and Hispanic working class. Once we get those wages up in -- in agriculture and construction and oil field services, OK, then we can think maybe of a guest worker (ph) program.

The thing to do now is to build a southern wall to -- to basically --

KARL: OK so -- so the wall, Will -- Will Hurd, republican of Texas said this is a fourth century solution. How hard do you think the president --

BANNON: The fourth century solution, what worked in Israel and it worked in Hungary. When it says fourth century solutions, let’s try a -- I’ll tell you from Will Hurd, let’s try a fourth century solution first, let’s try it first, and if that doesn’t work --

(CROSS TALK)

KARL: -- how hard should the president push for this? Should he say no -- no funding, government shutdown unless there’s funding for the wall?

BANNON: I believe when the appropriations bill comes up in --

KARL: October.

BANNON: in -- in -- really in September now, before (inaudible) I think it’s the (ph) 30 of September, and I’ve said this for a long time, that’s why I think people shouldn’t go home for -- for the August recess.

KARL: You want a shutdown over the wall.

BANNON: I would definitely shut down the government over the wall, absolutely. (Inaudible) listen, let’s get it all on the table. Here’s the thing, President Trump’s got a great saying internally when he’s talking to you, no games, no games.

We’ve got to stop the games of (ph) the city, OK, this is all games, this is a game to demonize him. This is the security and sovereignty of the nation, OK. And we’re not helping those people who are bringing the kids up in that treacherous journey, you’re helping the traffickers that are making the money.

OK, this is not right for them --

(CROSS TLAK)

KARL: -- you’re separating from their children --

(CROSS TALK)

BANNON: -- and it’s not right for the working class in this country that it’s forced (ph) upon. OK, and we’ve got to stop the games in this city. So yes, I would say on -- in September, if they have not allocated money for the wall, let’s shut down the government, and by the way on November 6, let the voters decide.

KARL: OK let’s -- let’s -- let’s turn to the -- the other big, big story here. The -- the North Korean summit. So the president meets with Kim Jong-un and he, in the process, has lavish praise for the person that’s considered the most brutal dictator on earth. Let’s take a listen.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT, UNITED STATES: It’s an honor to be with you, very great honor.

UNKNOWN: You trust him?

TRUMP: I do trust him, yes. So he’s a very smart guy, he’s a great negotiator. We get along very well, we had a good chemistry.

(END VIDEO CLIP)

Do you have any issue with the optics here? And you also had the -- the American flag there right next to the North Korean flag.

BANNON: Once again, let’s talk about political courage, OK. The elites and the permanent political class and the elites, look at the cards Donald Trump was dealt. OK, they have managed a process for unsuccessful outcomes for 20 or 30 years.

This is all a subset of the geopolitical situation we have in China. OK, when Donald -- Donald Trump came onboard, OK, (inaudible) what Korea and publicly (ph) sort of thing has what, 20, 30, 40 nuclear weapons, has ballistic missile technology that hit Tokyo (ph) now the continental United States?

China has built what nine or 10 islands on Obama’s watch --

(CROSS TALK)

KARL: Clinton, Bush, Obama --

(CROSS TALK)

BANNON: Donald Trump is handed cards, OK, with the (inaudible) rise of China and -- and Korea, it’s (inauidible) state as a -- as a nuclear threat to our allies in the northwest pacific in the United States.

That’s what he’s dealt with. And -- and what does everybody say about Trump? Oh he’s an isolationist, he’s going to go it alone, (inaudible). He’s done more for engagement in this process --

KARL: So -- so are you OK with that, though, saying he’s honored --

(CROSS TALK)

BANNON: -- here’s what I’m OK with, I’m OK with starting a process that is going to bring peace to the Korean peninsula. I served as a naval officer in the seventh fleet with the Korean Navy.

I’ve spent a lot of time in Korea --

(CROSS TALK)

OK, the people there ultimately want to see an end to the (inaudible) haven’t ended the Korean War. President Trump is trying to be a peacemaker. OK, in that process, by the way, in that process, he hasn’t given up anything.

He hasn’t -- all he was this week was vilified, vilified. And so if Donald Trump -- by the way this is what upsets me, he has to have the vision, he has to negotiate the deal, he has to execute the deal, he has to come home --

(CROSS TALK)

-- on Sunday morning TV this morning, where is the republican establishment on Capital Hill? Where are (ph) Corker and all those guys flooding these Sunday morning shows? Why am I here?

Well, no, no, seriously.

Why are they not flooding these Sunday morning shows, talking about how the President of the United States is finally engaged with our allies in the Pacific to stop Chinese hegemony?

OK, and to deal with it --

(CROSSTALK)

BANNON: -- he didn't give up any sanctions. He got so many concessions from the North Koreans. And yes, there are some optics because he's trying to start a process. The process that will end with a verifiable denuclearization of the peninsula. It will take many, many years.

And I don't know why, he comes home and people do nothing but vilify him. And the Republican establishment doesn't have enough guts to come to these microphones this weekend and back him up as a guy that's trying to do something.

JONATHAN KARL, ABC NEWS CHIEF WHITE HOUSE CORRESPONDENT: OK, let's get to the IG report on the FBI's actions during the 2016 elections. This was -- had that very damning exchange, the text exchange between Peter Strzok, FBI agent and former FBI lawyer, Lisa Page.

She says, "Trump's not ever going to become president, right, right?"

And he responds, "No, he's not. We'll stop it."

Absolutely damning. But we also heard from FBI director Chris Wray, who said this about the report.

(BEGIN VIDEO CLIP)

CHRISTOPHER WRAY, FBI DIRECTOR: This report did not find any evidence of political bias or improper considerations actually impacting the investigation under review.

(END VIDEO CLIP)

KARL: He also said that the bias was limited in scope.

Was he right?

BANNON: Jonathan, let's talk about that -- let's talk about the "we'll stop it." OK. We have an issue. This is all tied to Korea and the southern wall. We have an elite in this country. That's not the most damning thing.

Remember, Strzok and these guys are not FBI agents. They're the equivalent -- he and McCabe, they're equivalent of three- and four-star generals. This is the leadership of the Federal Bureau of Investigation.

(CROSSTALK)

BANNON: If you look at what they said about the American people, this is not animus. The hatred of the American people and the Trump supporter and President Trump himself is shocking. And that has not been played up enough.

They called the Trump voters, lazy, poor, these middle class, lazy, uneducated people can't get jobs and pieces of excrement. You can't even say what they really said on Sunday morning television. They called Trump a piece of excrement.

Their hatred of Trump, they weaponized the FBI against Donald Trump. This report is shocking on so many levels. And remember, and IG report. He says bias. Unless an inspector general actually a guy tells them, yes, I did it biasly (sic), he's going to actually say that, the inspector general's report is just the beginning. It's a small sliver.

Remember he didn't go to the intelligence agencies. He didn't go to State. He didn't go to the White House. And let's talk about this comment. "We'll stop it."

OK. Devin Nunes comes out, the Intelligence Committee, all that was supposed to be presented to the Intelligence Committee. He did not see that quote until noon on Thursday when it was in the report.

More importantly, more importantly, on page 404 of this report, there is a footnote. That was deleted. That and the footnote, they only found that in May. That exchange -- hang on. That exchange was found in may When they went back and took the thing and then went back.

He -- Strzok, who is a three-star general equivalent, and Page, deleted the this. You know why?

They knew it was a smoking gun. Very simple. Very simple. Very simple.

The attorney general of the United States, Jeff Sessions, good friend of mine, on Monday, he's got to put a special prosecutor on this. OK?

KARL: And if he doesn't?

BANNON: He ought to put a -- he has to put a special prosecutor. And that special prosecutor ought to call for a grand jury. And panel a grand jury and go with it. By the way, if he does not, I think the President of the United States, under Title II, ought to order the attorney general of the United States as chief law enforcement officer --

KARL: Or fire him if he doesn't?

BANNON: As chief law enforcement officer of the United States. And he ought to tell the attorney general you're going to -- and by the way, this is not a coverup. This is to unearth a coverup. This is to get sunshine and accountability in this process. This IG report is just the beginning.

(CROSSTALK)

BANNON: -- full and thorough vetting of what went on.

KARL: On the other special counsel, Paul Manafort is now in a jail cell. And there's talk of Michael Cohen going state's witness. And Rudy Giuliani said something very interesting. He said, "When the whole thing is over, things might get cleaned up with some presidential pardons."

Do you think the president's going to start pardoning Michael Flynn --

BANNON: Let me bifurcate these for a second --

KARL: -- Paul Manafort --

BANNON: -- let me bifurcate these for a second. Let's take the Southern District off to the side and let's --

KARL: OK. OK.

BANNON: OK, here’s what I believe has to happen. If you look at this I.G. report on cross wind hurricane, OK, the -- Strzok could not -- he’s a bureaucrat, could not wait to wrap up the report in July because he had to get on -- he had to get on the Russian investigation.

The other texts you’ve got to see with Page is where he says this matters in all capital letters. OK, he was on, he weaponized the FBI. There are subpoenas out from House Intel, from House Oversight, from Senate Intel and Senate Oversight, and there’s two more committees, the House Judiciary and the Senate Homeland Security.

So there’s five have had -- have had either subpoenas or a request of information from the deputy attorney general, deputy attorney general and the president of the United States --

KARL: But my questions on pardons.

BANNON: It’s going to get to this.

KARL: OK.

BANNON: Because you’re not going to need pardons. The president of the United States tomorrow should direct Rosenstein, order him within 48 hours he will comply with every subpoena of documents and witnesses to Capital Hill to all five committees.

KARL: OK (inaudible).

BANNON: And if he does not do it in 48 hours, he’s fired, OK. And you’re going to see -- by the way, with the exposure of all this, as we go into it, we’re going to get into the sub straight and the foundation of the entire Mueller investigation.

(CROSS TALK)

-- I’ve been an active participant in that. I’ve been there with -- with Bob Mueller, and I’m not saying Bob Mueller is a -- is not a good guy. He’s a combat Marine, OK, I kind of admire him.

But the underpinnings of his investigation, we have to go back and see how it’s started. Remember, all this -- all this stuff that’s come out now about Cambridge and about Stiefenhofer (ph) and all this, about maybe potential other foreign services.

And it’s not James Bond, these things run like the post office. There’s a chain of title of every e-mail of every --

(CROSS TALK)

-- when you see --

(CROSS TALK)

KARL: (Inaudible) we have to take a quick break, but let me just ask you, you mentioned the southern district. Very quickly, how worried should the president be about Michael Cohen?

BANNON: I think that the southern district this -- this whole thing of going into the Trump organization is another -- is another witch hunt. OK --

(CROSS TALK)

What does that have to do -- what does that have to do with Russian collusion? How did the southern district of Manhattan even get involved here? What -- you know, why are they going after the Trump organization and why are they going after the president’s personal attorneys?

I thought this was about Russian collusion. OK, if it’s about Russian collusion --

(CROSS TALK)

-- no, no, they’re all (inaudible) this is (inaudible) with Mueller. Let’s go back and see what the foundation is. By the way --

KARL: You had just told me they were separated. I mean --

(CROSS TALK)

BANNON: -- the southern district should have never started in the first place. To go after President Trump’s business, OK, is just another example. And it’s not the deep state, it’s another -- hang on, it’s another example of the apparatus trying to go after Donald Trump.

KARL: All right, we have to take a quick break, don’t go away, we have much more coming up with Steve Bannon. A republican senator this week said that the party has become a cult of Trump.

I will put that to the Mr. Bannon when we return.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

TRUMP: I will never lie to you. I will never tell you something I do not believe. I will always tell you the truth.

(END VIDEO CLIP)

KARL: That was President Trump on the campaign trail in August 2016, telling the American people he will never lie to them.

We're back with Steve Bannon.

Now you famously kept the white board of presidential promises to keep track of what he was keeping. That is a promise he obviously broke. He has not always told the truth.

BANNON: I don't know that.

(CROSSTALK)

KARL: Steve.

BANNON: From what I see is, he has. This is another thing to demonize him.

KARL: The president's never lied?

BANNON: Not to my knowledge, no.

KARL: What about when he says that the --

BANNON: Except when he called me Sloppy Steve. That's the only --

(CROSSTALK)

KARL: What about when he stays IG report exonerates him of collusion.

BANNON: You want to go back to that?

You want to go back to that?

(CROSSTALK)

BANNON: You want to go back to the IG report that weaponize the FBI against Donald Trump?

(CROSSTALK)

KARL: He says things that are not true all the time.

BANNON: I don't believe that.

KARL: Come on.

BANNON: I think he speaks in a particular vernacular that connects to people in this country.

KARL: Let me play you what Mark Sanford said right after he lost. He was the --

BANNON: Mark Sanford, the king of the Never Trumpers, right?

(BEGIN VIDEO CLIP)

MARK SANFORD: There is no seeming consequence to the president and lies. And, if we accept that as a society, either it's going to have incredibly harmful consequences in the way that we operate going forward.

(END VIDEO CLIP)

BANNON: Look. This is -- this is the problem. You have a Republican Party establishment, OK, that hates the fact that if you look at the total 2016 primaries of all the anti-establishment candidates, you had 84 percent voted for the anti-establishment, 16 percent voted for the establishment. Donald Trump is re-forming the Republican along the policies into a worker-based, more populist, more economic nationalist party and, by the way --

KARL: -- the truth and lies. So the president himself acknowledged that what he said about that Trump Tower meeting was not true. He said, basically, it doesn't matter because I told the failing "New York Times."

Are some lies OK?

BANNON: I don't know if that's a lie or not or, or, or --

(CROSSTALK)

KARL: You yourself said the meeting was treasonous.

BANNON: I said for Paul Manafort. I corrected that later on.

(CROSSTALK)

BANNON: -- I would have taken that thing. It was a dumb meeting. It was a stupid meeting.

This is the thing, Jonathan. With as many issues -- look at this week. The terrorist, the geostrategic engagement with China, where we're standing up for ourselves. The nuclear situation in North Korea. The crisis on the southern border.

(CROSSTALK)

BANNON: The credibility, look at the institution of the FBI. You know what ought to happen right now? We ought to have another church commission like they had in the '70s. By the way, I'm a right winger. And I'm saying we should have a church commission, we ought to have a bipartisan commission in the Senate --

KARL: Go after the intel community?

BANNON: And the FBI. By the way, you have to, not to go after them. But right now, you need the dry rot in our institutions. Why do people point at Donald Trump for some of the stuff he says?

We have the institutions in this city --

(CROSSTALK)

BANNON: -- are rotted at core. And we know it.

That IG report, which is just a sliver, remember when the thing on the IG and about this thing right here? That was their government phones. We haven't even gotten to their personal communications. You want something on Michael Cohen? Michael Cohen they...

(CROSSTALK)

BANNON: Michael Cohen they took 16 of his Blackberrys, his computers, his kids' computers, OK? In the IG report they just went to the government phones. You wait until the special prosecutor that will be...

(CROSSTALK)

BANNON: You want to see the dry rot...

KARL: Let me nail down...

BANNON: No, don't go after the splinter in somebody's eye when you're missing the plank, OK? This city's institutions are rotten to the core and they must be investigated. And that's why Donald Trump came to the city and said, hey, I'm not kicking the can down the road anymore. I'm not going to pass on to the successor to come, regardless of political party, the situation we have in China, the situation we have in Korea, the crisis we have in the southern border.

This is what leadership is all about. They say he is a disrupter. This is a guy that is saying, you want to talk about the Trump doctrine? The Trump doctrine is "not on my watch." When my watch is over, I will help sort these things out and won't kick the can down so that the next president of the United States, regardless of the political party.

We'll have to deal with the crisis on the southern border. And we will finally have our situation with China worked out.

KARL: Let me ask you about something you're quoted as saying in the book "Fire and Fury" by Michael Wolff. You say that the president's longtime attorney Marc Kasowitz had paid off many women who claimed to have affairs with the president.

Here's the quote from the book. "Kasowitz has gotten him out of all kinds of jams. Kasowitz on the campaign, what did we have, a hundred women? Kasowitz took care of all of them."

Were there?

BANNON: First, I haven't read the book, although the book was designated that Kellyanne Conway and Hope Hicks walked that book through, and everybody who was interviewed was brought in by them. But I want to talk about that.

Kasowitz and Jason Miller and I did work a unit with all those incomings we had -- a hundred is way too much, I think it was like 20 or 25. All of those were refuted.

(CROSSTALK)

BANNON: Well, in the campaign. Remember, I think after the Billy Bush weekend, I think it was like, I forget, 20 or 25?

KARL: Did you know about Stormy Daniels during the campaign?

BANNON: No. Well, I think something came up about the -- publicly about there was another porn star that was...

KARL: Did you know about the payment, the 130,000?

BANNON: Absolutely not. Absolutely not.

KARL: OK. So let's talk about the midterms. How engaged are you going to be? I've seen reports that you're setting up a war room.

BANNON: Well, I've got a C4. We've already got a war room up for messaging, just on policies, right, to get -- make sure Trump's policies are understood, make sure economic nationalism is understood, make sure...

KARL: So you're going to be running ads. You're going to be campaigning. You're going to be...

BANNON: I think we're going to be putting up ads. We're definitely going to be helping with the ground game. And just to get the issues out. If the issues -- look, the Democrats got what they wanted, OK? They've tried to nullify his election from day one with an opposition party media, OK?

So they did get one thing, they're going to have a do-over. This is Trump's first re-elect. It's going to be this November.

KARL: So Trump is on the ballot?

BANNON: Absolutely. He's on the ballot. He's on the ballot nationwide.

KARL: There are some Republicans that are acting like he's not on the ballot.

BANNON: No, because -- no, no, because the Republicans -- by the way, the Republican establishment has spent all this money trying to get people to love the tax cut. And you saw when Charlie Cook went out there to the Republican House guys and said, hey, guys, if you run on that you're going to lose 40 seats.

You put Trump on the ballot, it's very simple, November 6th, up or down vote. It's a national election, up or down vote on the impeachment of Donald Trump. I'll tell you what, you get to then look at Trump's economic policies, the growth of the economy.

You get to look at what he's doing in national security. You get to look at...

(CROSSTALK)

KARL: So is Bob Corker right then that the Republican Party has become the cult of Donald Trump?

BANNON: It's not a cult of Donald Trump at all.

KARL: You're saying basically swear allegiance to...

(CROSSTALK)

BANNON: No, it's absolutely not a cult of Donald Trump. What Trump has done, extraordinarily, in this country is stepped in here and said, hey, guess what, the things have got to change and I'm an agent of change. That's why he beat Hillary Clinton.

He's just living up to what was on that white board. He's checking boxes. And what he's saying, that's changing the Republican Party from being a donor -- by the way, a donor-based party that were running dogs to the donors to now more of a worker-based and middle class party.

That is what Donald Trump has changed.

KARL: But a lot of the Republicans say you have a very bad record in terms of who you have supported. And I want to play something that you said when you were over in France talking to the National Front over there. Take a listen.

(BEGIN VIDEO CLIP)

BANNON: Let them call you racist. Let them call you xenophobes. Let them call you nativist. Wear it as a badge of honor.

(END VIDEO CLIP)

KARL: Steve, how can it be a badge of honor to be called a racist?

BANNON: OK, here's the thing. You walked into the same trap the BBC walked into and CNN walked into. Look at -- just don't take the clip, look at the lead-up to the clip. I was talking specifically about Donald Trump and his policies.

I said his economic...

(CROSSTALK)

BANNON: His economic nationalism doesn't care about your race, your religion, your ethnicity, your gender, your sexual preference. Here's what it cares about, that you're a citizen of the United States of America.

We have all-time low unemployment among blacks in this country, a 20-year low among Hispanics. The black working class, Hispanic working class are now getting the benefits, OK, of border security and economic...

(CROSSTALK)

BANNON: By the way, that -- no, hang on. The lead-in to that was saying when they can’t fight you on the facts, they’re going to call you racist.

(CROSSTALK)

BANNON: No, no, no. When I first -- when I first -- when I first took over the campaign --

KARL: Yes.

BANNON: -- they said, oh Trump’s going to lose by 20 points, brought this mad bomber in, (inaudible) enemies on the way (ph) down. Hillary Clinton comes off the beach, off the Hamptons and she gives her identity politics. White nationalism, white racism. And I said at the time, sitting in the war room (ph) with the guys, I said hey, if she runs on that and we continue to press economic nationalism and jobs, OK, and brining jobs back from -- from China, we’re going to run the tables on her and we did.

KARL: OK.

(CROSSTALK)

BANNON: -- lead up to that -- that’s what -- by the way, the mainstream media, what BBC did and what you just did, you want to take the last two seconds -- you don’t take the lead up --

KARL: It’s more than two seconds, it’s what you said --

(CROSSTALK)

BANNON: -- Martin Luther King -- I want to (inaudible) -- he would be proud of what Donald Trump has done for black and Hispanic working class, OK --

KARL: I think there are a lot of -- a lot of civil rights leaders that would adamantly disagree with you on that. But let me -- let me -- we’re almost out of time. I want to ask you --

BANNON: Yes, sir.

KARL: The president, of course, you alluded to, called you sloppy Steve. He said that when you got fired you not only lost your job, you lost your mind.

BANNON: Right.

KARL: Have you patched things up with the president? When was the last time you spoke to him?

BANNON: By the way, before I took over -- before I stepped in as C.O. of the (ph) campaign, I probably talked to Donald Trump 10 times my entire life. OK? I don’t need to talk to Donald Trump. Donald Trump --

(CROSSTALK)

KARL: But have -- have you -- have you patched things up?

BANNON: Donald -- Donald -- Donald Trump is accomplishing everything he committed to the American people on the campaign that I stepped in as CEO (ph). I couldn’t be prouder of the guy. All he’s got to do is continue to hit those marks on that white board and he’s going to run the tables -- you’re not going to --

KARL: Are you talking to him, though? Are you --

BANNON: No.

KARL: No?

BANNON: By the way, I -- I -- I talk to him every day through the press and through the media. By the way, he’s got too many guys to (ph) talk to right now. All he’s got to do is listen to his own inner voice. And that’s going to lead -- write this down. That’s going to lead to a astounding victory in November. He is going to run the tables in the House and he’s going to pick up a couple seats in the Senate.

KARL: All right. Steve Bannon. Thank you for joining us here on THIS WEEK. Up next, the powerhouse roundtable debates President Trump’s historic summit with Kim Jong-un, the escalating battle over immigration and what it all means for 2018. Don’t go away. We’ll be right back.

(COMMERCIAL BREAK)

KARL: The roundtable is all here, ready to take on Steve Bannon and all the week's headlines. All week long, you can get the latest on politics with breaking news alerts on the ABC app. Download it during the break.

(COMMERCIAL BREAK)

KARL: Let's bring in the roundtable. Democratic strategist and former Clinton campaign spokesperson, Karen Finney.

Chair of the American Conservative Union, Matt Schlapp.

Congressman Ben Ray Lujan of New Mexico, the chair of the Democratic Congressional Campaign Committee.

Greta Van Susteren, anchor of Voice of America's "Plugged In."

And ABC News' own political director, Rick Klein.

So, Karen, let me start with you. The president said Donald Trump's on the ballot.

(CROSSTALK)

KAREN FINNEY, MSNBC HOST: You mean Bannon.

(LAUGHTER)

FINNEY: He's not the president yet. Whoo. That was a slip.

KARL: Steve Bannon says Donald Trump is on the ballot. What do you think?

FINNEY: He wants you to believe that.

KARL: Don't you want to believe that, too?

FINNEY: No. Here's the thing. In the work that I've been doing, what people really care about is their own lives. They're not as concerned about Donald Trump right now. He's not as much of a motivating factor in the way that he is potentially for Republicans. What Bannon is trying to do is keep the base stoked and fired up.

(CROSSTALK)

KARL: Isn't this all about fighting, pushing back on --

FINNEY: But here's part of the problem they have. At the same time, talking about immigration. We were just talking about the images of children. If you're a Republican House member in a moderate district, you're on your own. This president is not going to do anything to help you show your constituents that you care about those kids.

The other problem these guys have is that those images are heart-breaking. As much as Donald Trump wants to tell us he had the biggest crowd on his inaugural day that we've ever seen in the history of the world, we now can see with our own eyes that he's making the United States do something completely immoral.

KARL: Matt, the president has said that he doesn’t want those kids to be separated --

(CROSSTALK)

MATT SCHLAPP: October 7th, he sent a letter to Congress to change those policies.

KARL: But Bannon fully embraced it.

SCHLAPP: Yes, but this is Obama's policy.

KARL: Zero tolerance.

SCHLAPP: This is also Obama's policy.

(CROSSTALK)

FINNEY: That's not true.

SCHLAPP: It absolutely is true.

KARL: Come on.

SCHLAPP: Jonathan, let's get the facts --

KARL: The attorney general said it was zero tolerance.

SCHLAPP: Let's get the facts on the table. George Bush signed a law in 2008 on unaccompanied minors. It's a Flores decision from the 1990s that says the kids can't go with the adults to the adjudication process. I hate the policy. I want them to change the policy. But this is the rule of law.

(CROSSTALK)

KARL: -- is that the parents were freed to come back for their hearing.

SCHLAPP: It takes five to 10 days to adjudicate whether or not someone is here to be a political asylee. If they're not a political asylee, they can go back with their children to their home. Otherwise, we have to go through this process.

And you want to change the law, that's fine. But you don't get to decide which laws. And Obama followed this law.

(CROSSTALK)

FINNEY: It can be done differently. You're trying to tell me that Donald Trump, the all-powerful Donald Trump couldn't stop this from happening if he really wanted to?

(CROSSTALK)

KARL: Lindsey Graham says all it would take is a phone call.

SCHLAPP: The Congress changes the law. The president execs the law. I get it that Obama did whatever he wanted. But that's the way separation of powers works. When you criticize Trump on this, you're also criticizing Obama.

KARL: So Congressman Lujan, you're actually going to the border after the show take a look at all of this.

What was your reaction from what we heard from Steve Bannon?

LUJAN: Once we finish up today we'll head down to meet with our colleagues. (INAUDIBLE) put together a trip in South Texas. Michelle Ohan Grisham (ph) is leading an effort down in Southern California as well.

I think this policy is disgusting. There's no reason the children should be treated this way. Tearing apart children from their mothers and their families, where you're hearing them cry and scream, this is just not American.

And one of the concerns that we also have is how House Republicans have seemed to walk away from a piece of legislation that would allow us to address this and to fix it. And very -- remember, Carlos Curbelo (ph) who helped lead the effort on the discharge petition is the gentleman who went to visit with Speaker Ryan.

Turned his back on the vulnerable Republicans that were coming forward. One, this is horrific. This is ugly. But I think this will be devastating for House Republicans who made promises to their constituents.

GRETA VAN SUSTEREN: OK, it's terrible to take the children from the kids -- from the parents. It's just absolutely horrendous. But let's not -- I think Republicans and Democrats both have a lot of gall blaming each other. It's really disgusting. They all want to be voted to come to Washington to solve this problem. They're all say they're going to solve the problem.

But they come here and fight. Listen, President Trump has the House, he has the Senate but not a filibuster proof Senate.

But President Obama he had the House and the Senate, not a filibuster proof Senate back in July 2010. I went to American University when he gave his grave immigration speech.

So let's not have the tears from the two parties about how horrible the other party. They all say they can fix it. Well, they ought to fix it. And they ought to do it. And it's disgusting that they'll do is point fingers at each other and blame each other.

UNIDENTIFIED MALE: Amen.

LUJON: Jon, as for the circumstance now, there is no realistic chance of Congress passing a fix to this, a change to this. It's part of the immigration legislation that will be on the House floor next week, including the Paul Ryan plan.

But the president on Friday initially said he was against that plan. Later in the day he tried to clean it up. I talked to some people around House leadership. They think that the damage is already done, that this was already tenuous.

(CROSSTALK)

UNIDENTIFIED MALE: -- so-called moderate bill.

(CROSSTALK)

UNIDENTIFIED MALE: It's pretty hard line.

LUJON: Yes. Even though the president says that now, it's because of people like Steve Bannon, on TV, there are a lot of Republicans who are afraid the president will change his mind again and say, wait a second, this is amnesty or this is not something I can support.

And it strikes me that this is the fight that President Trump’s been looking for for a very long time, virtually since the moment he declared his candidacy three years ago, fight over immigration, fight over the border.

But these real world circumstances get (ph) so much more complicated.

VAN SUSTEREN: But if they (inaudible) -- but if they actually did work together and stop pointing the fingers at each other in the House and the Senate and presented a bill, I mean if they actually did sit down and do their jobs instead of coming to Washington just to fight, I mean -- you know, the -- there would be a bill a president could sign.

FINNEY: But Greta, you can’t possibly say that when right now, part of the problem is there is no bill that this president will sign. That’s part of the problem. I don’t -- I don’t buy that.

(CROSSTALK)

VAN SUSTEREN: The House Democrats -- the House Democrats and Republicans, Senate House -- Senate Republicans, Senate Democrats did their jobs, what they all claim that they would do if they came to Washington if we put them in office and actually did fix these problems and put a bill together, a strong bill, a president would sign it. Whether it’s a President Trump or a President Obama.

(CROSSTALK)

SCHLAPP: I think -- look, I think that the president has taken some tremendous steps which would upset a lot of people I work with on the conservative side. They’re worried about this concept of citizenship for people who came here illegally --

KARL: Well Bannon hates this --

SCHLAPP: I understand.

KARL: Yes.

SCHLAPP: But I’m saying the president took some steps to say look, I will go towards you if you go towards me. The problem with immigration, it always becomes this huge, comprehensive bill. I would advocate more for fixing things that we know are problems. We know this idea of separating kids from their parents is a problem. Nobody likes it. It doesn’t make anybody comfortable. I hate the policy.

The president said on October seventh he wanted to change it. Why don’t we change it? Why don’t we do things that make sense to both sides? Why don’t we get -- as Greta’s saying, why don’t we get moving and get these things done.

LUJAN: Matt, the president could pick up the phone and stop it today, number one.

SCHLAPP: No he can’t.

LUJAN: Yes, he could.

(CROSSTALK)

LUJAN: -- the one piece of legislation that could move through the floor is the one that Speaker Ryan just abandoned. Democrats and Republicans did get together with the USA Act to begin to address these issues and again, it’s those vulnerable Republicans that are turning their back on this process and it is --

(CROSSTALK)

LUJAN: -- they’re taking this apart.

VAN SUSTEREN: You know what? It’s -- look, you know, I hate the -- you know, I hate hearing I’ve been in Washington too long, hear all the Democrats say how awful the Republicans are, it’s the Republicans (inaudible) all Republicans say how awful the Democrats are, the Democrats (ph). But you know, the American people I think are probably pretty sick of this.

(CROSSTALK)

VAN SUSTEREN: They want you to do your job.

LUJAN: We are (ph). Amen.

VAN SUSTEREN: They want you to do your job. They want you to --

KARL: I want to turn to North Korea, first by -- by playing this amazing video that was played at the president’s press conference that he played himself for Kim Jong-un. Here’s a little excerpt of it.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Two men. Two leaders. One destiny. A story on a special moment in time. When a man is presented with one chance that may never be repeated. What will he choose? To show vision and leadership? Or not?

(END VIDEO CLIP)

KARL: All right. First of all, when that started playing at the press conference -- I was there, it was first played in Korean. I thought that maybe that somebody had hacked into the system.

UNIDENTIFIED MALE: I like the basketball (ph) (inaudible).

KARL: Yes, the basketball was a nice touch. But shouldn’t the president get some credit for trying this? I mean, we are -- we are a step further away -- we may not have solved the nuclear issue. We’re far from that. But -- but we -- we were on the brink of what seemed possible war just a few months ago.

FINNEY: Well, we were on the brink of what possibly seemed like war because we had a president who was going around actually saber-rattling. So that didn’t help. So it’s one thing to sort of --

(CROSSTALK)

KARL: President Obama did tell him this was the -- the -- the biggest challenge that he was going to face --

FINNEY: And look --

KARL: -- on the national security front.

FINNEY: -- I give this president credit for at least taking this step. The problem is we don’t know yet how significant this step will be. Because as we know, it will -- a lot of it will depend on everything we now need to find out in terms of what are going to be the ways that we can verify how --

(CROSSTALK)

FINNEY: No, no. But in all seriousness, it may be an important step. We just don’t know because then there’s now the 20 other things that have to happen --

SCHLAPP: That’s life.

FINNEY: -- and we’ll know --

SCHLAPP: That’s life. You have to take a step and you have to determine that the policy we were on was going to result in a destabilized globe because they are -- they are a nuclear power. We were going to do the same thing on Iran --

FINNEY: They’re still a nuclear power today, by the way.

SCHLAPP: Let me finish. That’s right. And so the policy resulted in a very bad outcome and the president came in and said we got to try something different. You have to make some kind of promo video, if you have to put the American flag out there -- it’s very distasteful for all of us -- these are steps to try to -- to undo a stupid policy that presidents we all served were a part of and to try to get us on a better path to denuclearize the Korean Peninsula. It’s clearly the right thing.

Yes, we’re worried about the next step. You have to take the first step to determine the second step.

KARL: This is interesting, though, Rick, because Republicans would have eviscerated Barack Obama if he had gone and met with Kim Jong-un, wouldn’t they have?

KLEIN: No question, and to me it’s another statement about Trumpism is republicanism, republicanism is Donald Trump right now, because he has remade what it means to be a republican.

And I agree with you, I think -- I think this is the kind of step that if a democrat had done, the republicans would have gone nuts on. The fact that they have rallied behind him on this -- I think, look, a lot of folks look at this and say it’s better than the alternative.

I think we see that in our poll out this morning, at least it’s a possibility of -- of a better outcome, and I think you see he’s --

KARL: He’s popular (inaudible) --

(CROSS TALK)

KLEIN: Right, relatively.

KARL: (Inaudible) you interviewed the president right after the -- right after the meeting.

VAN SUSTEREN: And I’ve been to North Korea three times, and look, you know there’s so many times when we deal with people we don’t want to deal with. We had Nixon in 1972 at (inaudible) and met -- he met (inaudible).

We had President Obama shaking hands with an American flag and a -- and a Cuban flag in Cuba with Raul Castro, and now we’ve got our president with Kim Jong-un in Singapore with both the flags (inaudible).

You know, we deal with these -- with these horrible people because we’re hoping that we can get solutions. We even had a situation where we lifted sanctions in Myanmar hoping that they would improve of the democracy instead (ph) they do ethnic cleansing with the Rohingya.

So we deal with awful people because -- because Mother Theresa and the pope don’t have nuclear weapons, it’s these awful people who have these things. So we -- so we deal with it and -- and -- and it’s a terrible situation that we have to and they are (ph) horrible human rights.

But I -- but I agree with Matt and I agree with Karen, it was a start. We don’t know where this is going to lead, and North Korea has been deceitful before and probably deceitful this time, but this is an important start.

KARL: All right, unfortunately we are out of time. Thank you very much for being here, thanks for the round table. We will be back in just 60 seconds with the moment of hope and good will on the baseball field this week in Washington.

(COMMERCIAL BREAK)

Before we go this morning, we wanted to wish a very happy Father’s Day to republican Congressman Steve Scalise of Louisiana. You see him there making the first play at this week’s annual congressional baseball game, exactly one year after he was shot and seriously injured during a team practice.

We’re all cheering on his remarkable recovery. That’s all for us today, thank you for sharing part of your Sunday with us, check out WORLD NEWS TONIGHT, and to all the dad’s out there, happy Father’s Day.

END