ROBERT COSTA: Not backing down.

President Trump stands by his claims that Barack Obama wiretapped Trump Tower during the presidential race, but the Senate Intelligence Committee found no evidence.

I'm Robert Costa, and we'll talk surveillance, health care, and the skinny budget, tonight on Washington Week.

REPRESENTATIVE DEVIN NUNES (R-CA): (From video.)

We don't have any evidence that that took place.

I don't think there was an actual tap of Trump Tower.

ROBERT COSTA: But the White House continues to defend the president's unsubstantiated allegations, claiming the Obama administration spied on Trump Tower, insisting that the Intelligence Committees and the media are getting it all wrong.

WHITE HOUSE PRESS SECRETARY SEAN SPICER: (From video.)

Hold on, hold on.

Let me - and I am trying to answer your question, Jonathan, if you can calm down.

He stands by it, but again, you're mischaracterizing what happened today.

ROBERT COSTA: On Capitol Hill, mounting opposition from hardline Republicans to the GOP's health care plan, but the president thinks there's room for negotiation.

PRESIDENT DONALD TRUMP: (From video.)

We're doing it a different way, a complex way, it's fine.

The end result is when you have phase one, phase two, phase three.

It's going to be great.

ROBERT COSTA: And the Trump administration's "America first" budget prompts a backlash from Democrats.

HOUSE MINORITY LEADER NANCY PELOSI (D-CA): (From video.)

I can't see how this budget can survive the light of day.

ROBERT COSTA: And some Republicans who are reluctant to get behind a proposal that boosts military spending by slashing billions from government agencies and social service programs, many that support children and the elderly.

OMB DIRECTOR MICK MULVANEY: (From video.)

Meals on Wheels sounds great.

Again, that's a state decision to fund that particular portion.

But to take the federal money and give it to the states and say, look, we want to give you money for programs that don't work, I can't defend that anymore.

REPRESENTATIVE CHRIS COLLINS (R-NY): (From video.)

Meals on Wheels is a wonderful program.

It is one I would never vote to cut even one dollar.

ROBERT COSTA: We cover it all with Dan Balz of The Washington Post, Carol Lee of The Wall Street Journal, Peter Baker of The New York Times, and Ylan Mui of CNBC.

ANNOUNCER: Celebrating 50 years, this is Washington Week.

Once again, from Washington, Robert Costa of The Washington Post.

ROBERT COSTA: Good evening.

Meeting new people isn't always easy, and that was apparent at the White House, where President Trump hosted German Chancellor Angela Merkel for the first time.

It began with the traditional photo-op with reporters, where the two leaders notably did not shake hands.

Later, during a joint press conference in the East Room, a German reporter asked the president about remarks made by the White House press secretary, who suggested British intelligence helped the Obama administration wiretap Trump Tower.

PRESIDENT DONALD TRUMP: (From video.)

As far as wiretapping, I guess by, you know, this past administration, at least we have something in common, perhaps.

We said nothing.

All we did was quote a certain very talented legal mind who was the one responsible for saying that on television.

I didn't make an opinion on it.

That was a statement made by a very talented lawyer on Fox, and so you shouldn't be talking to me, you should be talking to Fox.

ROBERT COSTA: We could spend the whole show talking about body language, perhaps.

(Laughter.)

But, Peter, you've been on the front page today.

You'll likely be on the front page of the Times tomorrow.

This is becoming an international incident.

PETER BAKER: Well, it is.

I mean, it's - you know, and what a bizarre one it is, too, when the United States accuses, in effect, or at least airs the accusation that its closest ally somehow authorized spying on a presidential candidate.

And it would be one thing if there were something behind it, but there doesn't seem to be anything behind it.

Not only did Britain deny it today, even Fox disavowed it.

They said there's absolutely nothing that they could find that would justify what Andrew Napolitano, their commentator, said on their air.

So you've left in this position with the president refusing to back down on an allegation that seems to have zero material behind it, and in the process a relationship that has been cultivated for hundreds of years at this point is a little frayed today.

CAROL LEE: And also, if you go back and remember when Theresa May, the British prime minister, visited with President Trump, afterwards she took a lot of heat when she went home.

They issued the first travel ban, there was a lot of protests, there was petitions.

And so she's kind of stuck her neck out a little bit for him, and he's just not returning the favor in any way, shape or form, and for - it was remarkable for him to do that for that reason.

And then also here you have another very close American ally in Germany and you could tell Angela Merkel wanted nothing to do with what he was saying, and she was really uncomfortable with it.

So it was just a very strange moment.

ROBERT COSTA: What does the White House have to gain, Dan?

When I talk to my sources inside of the West Wing, they would prefer the president to move away from this topic, yet he keeps making these allegations.

DAN BALZ: You know, we're at the point where the question, it seems to me, is what is the level of evidence or proof that he would accept to say he was wrong about this.

I mean, everything that we have heard since he tweeted that two weeks ago has been contrary to it.

There's been no evidence put forward.

He keeps doubling down.

I mean, you would think based on what they did yesterday about the Brits that they would have cut their losses on that.

I mean, they had to - they had to kind of go, you know, nicely and say to the Brits we didn't really mean to mess you up on this.

They denied that they apologized to the Brits, but nonetheless they were contrite in some way or another.

You would think they would have just moved away from that today.

And, in fact, he re-raised it.

I mean, that was an extraordinary moment at that press conference.

ROBERT COSTA: Contrition is not part of his game.

CAROL LEE: No apologies.

YLAN MUI: Yeah, but this is what we've seen time and again from this administration, which is these off-the-cuff comments from the president end up obscuring, you know, the message he's trying to bring in his agenda.

We're talking about this viral moment, you know, out of the press conference instead of what the meeting was actually about, which was vocational education, which is something that is very important to the working-class voters who made up his base.

We're not talking about trade, right?

The president's trade advisor had called Germany the "enemy," so this had been a time when they could sort of repair those relations, but we don't know if that happened.

We're talking about this incident instead.

So, you know, we can see the president sort of getting distracted time and again from his core economic message by these conspiracy theories, perhaps, that keep arising.

ROBERT COSTA: When we are going to get some clarity on this issue?

The congressional committees - you have House Intelligence Committee Chairman Devin Nunes.

He says he hasn't seen any evidence of so-called wiretapping.

Next week, though, FBI Director James Comey is going to come to the Capitol and testify and talk to lawmakers.

Can we - do you think this can all be cleared up, Carol?

CAROL LEE: Potentially.

It's going to be a very interesting moment to hear from Comey on Monday because we haven't heard from him on this issue.

There's been all of this - these kind of strange exchanges between White House officials and the FBI, and they've asked them to knock down stories and other things.

And they're - you know, this is obviously not something that they're very happy about.

But we've seen - we've heard from now the House Intelligence and the Senate Intelligence, Republicans and Democrats, saying they have seen no evidence of this.

So it's hard to imagine, then, the director of the FBI coming out and saying, actually, we do.

And so, I mean, and what happens then?

You know, what does the White House do?

PETER BAKER: But here's the - here's the thing.

So what's going to probably come out at some point - I don't know if it's next week or not - is that there obviously were wiretaps of somebody somewhere, right?

If nothing else, the FBI obviously, and the NSA, wiretapped Russians, and we might have learned a lot from wiretapping Russians about contact, perhaps, with people around President Trump.

What they might try to do is take stuff like that and say, well, that's what we really meant - that's what the president really meant.

There's a huge difference between the FBI or the NSA tapping Russians and President Obama tapping President Trump - CAROL LEE: Which would be a felony.

PETER BAKER: - but they're going to try to conflate those two and say he was vindicated.

Yeah.

DAN BALZ: But that's what they've been doing - that's what they've been doing for the last week or so.

They're, I mean, in a sense - PETER BAKER: Yeah, they're redefining what - DAN BALZ: Yes.

I mean, it's this process of, well, we didn't mean what you think the literal words say, and to try to back away but nonetheless continuing to say that it was President Obama who ordered this.

ROBERT COSTA: Will this president, Dan, continue this defiant tone?

You look at his speech in Nashville this week.

I mean, this was classic campaign Donald Trump.

This is someone who's not backing away from this campaign style, this combative political personality.

DAN BALZ: Well, but, Bob, it's - you know, it's what got him to the Oval Office.

I mean, it is the style and technique he used as a candidate, which everybody said would not work and it worked, and he's the president of the United States at this point.

And part of it is he feeds on that.

I mean, he needs - like many politicians, he needs that kind of the roar of the crowd behind him.

He loves to tweak his enemies, more than tweak his enemies.

And those rallies are sustenance for him to be able to continue to kind of have that bravado of I'm going to change Washington in a big way.

CAROL LEE: I think that point about how this is a president that needs - you know, he needs the crowds and he has always, you know, used that as his way of - and that he's always proved everybody wrong, drives so much of what he does.

And I don't know at what point - it'd probably have to take him actually doing something and then being proven wrong to change that.

But he looks at any critic, at any criticism of what he's doing, and just sees, like, yeah, I've heard it all before and I won and it worked, and so - PETER BAKER: Well, and even like Sean Spicer, the press secretary who went out this week and read from all these news clips that they said proved his point, which they didn't.

And he's, you know, lost a lot of credibility among a lot of people in Washington.

But he's out on the trail, he goes to this Nashville rally, and they surround him.

And they're, like, cheering him on.

And they say, good for you.

Take on the establishment.

Don't - you know, don't let up.

And that's what gets both Trump and his people going.

YLAN MUI: But that's - the question is, though, can being cheerleader in chief, if you will, actually result in legislative action?

Can he use that bully pulpit to build support for health care reform?

Can he use it to build support for tax reform?

Can he use it to push through a trillion-dollar infrastructure spending package?

You know, it remains to be seen.

I mean, he can have as many rallies as he wants, but until we see actual concrete policies move through Capitol Hill, you know, his supporters are going to be wondering what happened.

ROBERT COSTA: Well, let's get to that.

Let's crunch some numbers.

The White House released President Trump's "America first" budget - that's what it was called - this week.

It boosts spending on Defense, Homeland Security, Veterans Affairs, and shrinks the budget for the State Department and other government agencies.

Talking about this, Ylan, he has to get this agenda through.

But a lot of people don't think this budget is actually going to be passed.

YLAN MUI: That's right.

So Democrats have laid out three things that could potentially be poison pills in this budget.

One is funding for the border wall.

Another one is defunding Planned Parenthood.

And the third one is increasing any type of deportation taskforce, right?

So we know that at least some of those things are in this budget.

So Democrats have already said that they will not vote for it.

They're even sort of holding over the specter of a government shutdown in order to make sure that those things don't come to pass.

But the way that the White House has characterized this is as a hard power budget.

This is sort of the president's campaign rhetoric being turned into numbers.

And you can really see that, because you, again, see the major increase in Defense spending, and you see his values in terms of privatizing education, of deregulating energy.

You see that translated into massive cuts for those - for those agencies.

So you know, it is a very principled document, but it is not necessarily one that has political power to move forward.

ROBERT COSTA: Is there any consequence, Peter, for these sweeping cuts across all of the federal agencies?

You look at a lot of Trump voters I met on the campaign trail, you met, we all met, and there's some people on Medicaid from poorer states.

And we've seen some opposition.

Talking to Senator Cotton this week at the Capitol, he says he wants this whole process to slow down.

Is this a Steve Bannon budget?

Is this a Donald Trump budget?

Talking about the White House chief strategist.

What's the consequence for the Trump voter here?

PETER BAKER: Well, it is a first bid budget.

Let's remember, he is a negotiator.

He's put out his most extreme version of what he wants to get.

And these - and, you know, there will be negotiations that will ratchet it back.

And I think you're right.

I don't think this budget is going to go through the way he's proposed it.

But what is striking, as you say, is how much of the cuts do actually impact the people who seem to be his most natural constituencies.

The one that strikes me is rural airports.

We spend money to help subsidize rural airports where they otherwise couldn't have air service.

Now, maybe that doesn't make any sense in an ideal world.

Maybe on principle that's a bad thing.

But the people who are going to lose their airports if we stop doing that are the people who voted for Donald Trump.

And that's a very interesting conundrum.

Maybe he deserves credit for, you know, taking on his own - his own base's priorities.

But it is an interesting political decision.

ROBERT COSTA: And, Dan, you had this great piece this week talking about Reagan '81 compared to Trump 2017.

DAN BALZ: Well, the reason I put it in that context is Reagan's first budget in 1981 had a similar set of priorities, which was to put a massive amount, in Reagan's case, into defense - basically starting a policy of trying to - trying to starve the Soviets to the bargaining table to cut an arms deal.

So massive increase in defense and a big cut in the domestic side of the budget.

This is smaller scale, but the approach is the same.

The idea is the same.

But you know, to your point, Peter, I think one of the questions is: Are the Trump loyalists people who care more about those specific kinds of programs, or the fact that he's building a border wall and making good on his promise about immigration, and doing something about the defense budget as part of security, and doing things that, in essence, blow up Washington - I mean, just sort of knock all the pieces off the chessboard?

So I think that's an - that's an unknown question or an unknown answer at this point.

And I think it's an important one politically, obviously, for him, and very much for the Republican Party.

CAROL LEE: Well, yeah, and he - well, he needs to get something, particularly on the border wall.

That's not - I mean, it's hard to imagine his supporters sticking with him if he can't deliver on that.

That was one of the things we heard most during the campaign.

But one other point on the budget, the Republican opposition to this is really remarkable.

And so it's not just Democrats.

It's Republicans.

It's Republican governors who don't like what he's agreed to do on Medicaid.

And it's, you know, the senators from some of those states.

And even, you know, some folks in the House - even though the White House is saying that they're winning people over more and more.

ROBERT COSTA: So, a quick follow-up on that.

When I'm watching Mick Mulvaney, this former Freedom Caucus member now director of the Office of Management and Budget, he's making the presentation.

And I want your take on this too, Ylan.

What actually passes this Republican Congress when it comes to the budget?

What gets through?

CAROL LEE: Well, that's - that remains to be seen.

I mean, I think they will try to do some of the immigration stuff or the border stuff.

And you know, they have - there's also different - this is a blueprint, right?

It's not only an opening bid; it's a blueprint.

There will be a more detailed budget in two months, and then they'll have a series of budget fights.

But mostly, these things tend to get done in pieces.

You know, it's not necessarily like someone comes in and there's a big sweeping budget that winds up being implemented.

YLAN MUI: Well, one thing that Mick Mulvaney emphasized in his press conference releasing this budget was that it's deficit neutral, right?

So that is something that's really important to a lot of fiscal conservatives, to ensure they're not increasing the national debt.

But one interesting thing to see will be whether or not that principle holds true through the negotiation and compromises it'll have to go through in order to get passed on Capitol Hill.

You can already see some, perhaps, loosening of that principle, because the supplemental that's included for FY 2017 already is not deficit neutral.

So the 2018 budget is deficit neutral, but not the 2017 budget.

So you can see where there might be some willingness to compromise there., ROBERT COSTA: The budget isn't the big fight yet.

And March madness is underway.

And so it's no surprise President Trump has launched his own full-court press to win support for the GOP's health care plan.

He met in the Oval Office today with a dozen members of the Republican Study Committee, and said afterward that he had converted all of the reluctant lawmakers to vote yes on the bill.

But the GOP support for this piece of legislation continues to waver, with more defections by hardline conservatives.

We're talking about the budget, but right now Speaker Ryan's thinking about bringing up the bill next week in the House.

And a lot of my sources there say they probably have the votes, but they're a little on edge, Peter.

PETER BAKER: Yeah, no, that's right.

And of course, we had this estimate this week that the plan would result in 24 million less people having insurance.

It would cut the deficit over 10 years $370-some billion.

But it's a big consequence.

And this is - big things are being done in a very fast way, and a lot of people are uncomfortable on the left and the right.

And that's what makes it interesting.

Make it through the House, but it's really hard to see how it goes through the Senate anywhere like what it is right now.

ROBERT COSTA: Carol.

CAROL LEE: Yeah, well, one interesting thing about all of this, where you have - you know, we're talking about the budget and health care - is after the Obama administration in 2009 and 2010 passed some very large pieces of legislation, Republicans were, you know, very much saying no more big, comprehensive bills.

That's just not something that we can do.

And here we are talking about these big comprehensive things that are moving extremely fast.

And in some ways we've kind of seen this movie before.

It was - it aired in 2009.

And, you know, there was a president who was out there trying to sell health care.

What is a little bit different is this president is willing to individually press the flesh in a way that we did not see with President Obama at all.

And so he's actually really working for it in that sense, even if he's not super-detailed on the policy.

ROBERT COSTA: But it's not typical President Trump.

He's doing a lot of these behind-the-scenes meetings, Dan.

He barely mentioned it in some of his public speeches this week.

DAN BALZ: Yeah.

But that may be the only way he can do what they need to do.

I mean, there's no - there's no logical way you see this getting passed at this point, just because of the opposition from a variety of directions, and the CBO numbers that - the Congressional Budget Office numbers that came out last week talking about the number of people who would lose coverage.

I mean, there are all these dead weights around this bill.

And yet, on the other hand, the Republican Party and the president can't afford not to get this done in some way or another.

And so you have this sense that they're going to end up passing something.

They may not know exactly how it's going to work.

You know, the - going back to the Reagan budgets, Howard Baker, who was then a senator from Tennessee, described that as a riverboat gamble.

And that may be kind of where the Republicans and Trump will be on this health care bill when they finally get to the moment of truth.

YLAN MUI: And I want to bring up another number that you highlighted, which is that $337 billion in deficit reduction.

I think that's really important, because the fear amongst conservatives had been that both it would be really expensive and it would reduce coverage.

So at least they won on one part, right, that it's not really expensive.

It actually reduces the deficit - PETER BAKER: And premiums would come down ultimately.

YLAN MUI: Yeah, and premiums would come down over time, though depending on who you are it would be more or less.

And you do see some movement, again, toward that compromise from the president, you know, answering states' concerns and some congressmen's concerns about block grants funding for Medicaid versus per capita.

You see them also backing the requirement for some Medicaid beneficiaries to have to work.

So again, that's answering some concerns that conservatives have had.

And that's how you start to build support for the bill.

ROBERT COSTA: That's so key.

The point about Medicaid - I talked to a member of the Republican Study Committee today.

And they said: Trump's willing to deal on Medicaid about whether - how it goes to the states, if it's per capita.

So you think if it goes to the Senate, let's say it passes the House, could Trump negotiate there?

PETER BAKER: Oh, certainly.

I think so.

But the problem is what he - you heard him say on your clip here is it's a three-stage process, right?

We've got phase one, phase two, phase three.

The problem is it's - they're asking people to take votes on the first stage of what's basically a promissory note.

Go ahead and vote for this, which is going to have a lot of possible downsides for you politically, and we'll fix it later with other legislation that's not at all guaranteed to pass.

So it's a real - it is a riverboat gamble.

DAN BALZ: And phase three is a series of bills.

PETER BAKER: Yes.

DAN BALZ: It's not like phase three is just one more bill.

So they've got to do all of that.

ROBERT COSTA: But Paul - Speaker Ryan's PowerPoint slides - CAROL LEE: That was amazing.

ROBERT COSTA: Phase one, phase two, phase three.

What's the politics, the sale of this?

Can this actually be sold to the country, Carol?

CAROL LEE: That is going to be the big challenge, because what you saw was the president - you know, he's out - when he's been engaging in the country, he's doing it in front of, like, big, supportive crowds.

The other issue is that, you know, even if they do pass something, and the way it's phased in, there's going to be - there will be hiccups.

There's going to be - and after that there's going to be political blowback.

And so that's all kind of set up to happen in a very tight space of time in which this is a president that will probably be running for reelection, and these members are certainty going to be running for their reelection.

So I don't know.

ROBERT COSTA: Thank you, everybody.

Appreciate it.

The Senate confirmation hearings for Supreme Court nominee Neil Gorsuch begin next Monday.

The PBS NewsHour will be streaming those hearings.

You can find that at PBS.org/NewsHour Monday starting at 11:00 a.m. Eastern.

Our conversation will continue online with the Washington Week Extra, where we'll talk about the latest legal challenges to the Trump administration's travel ban.

Will the White House take their case to the Supreme Court?

You can find it at PBS.org/WashingtonWeek later tonight and all week long.

I'm Robert Costa.

Have a great weekend.