• With: Juan Williams, K.T. McFarland, Charles Krauthammer

    The following is a rush transcript of the July 16, 2010, edition of "Special Report With Bret Baier." This copy may not be in its final form and may be updated.

    (BEGIN VIDEO CLIP)

    CHARMAINE YOEST, AMERICANS UNITED FOR LIFE: The problem is that an executive order doesn't trump what Congress does, and so the fact that Congress passed the healthcare reform act without any ban to federal funding of abortion in it really left with us a huge gaping loophole we are seeing come out in Pennsylvania and other states working to implement the law.

    REP. BART STUPAK, D - MICH: This is the first real test we've seen the high risk pools, and when you see states like New Mexico reversing themselves as the federal government said based on the executive order we cannot give you money to fund abortions, and they're reversing their state position, that is a big victory for right to life.

    (END VIDEO CLIP)

    BRET BAIER, ANCHOR: Pro-life groups are worried. They think there is a loophole here in the federal healthcare law that may have states when they implement this law essentially provide federal funding for abortions in high risk pools are the taxpayer funded insurance pools, the coverage plans, for uninsured Americans who have preexisting conditions.

    Initially, New Mexico and Pennsylvania had said that the plans would include abortion coverage, but then they reversed course.

    What about this controversy, and is it true that there is a loophole? Lets' bring in our panel, Juan Williams, news analyst for National Public Radio, K.T. McFarland, Fox News national security analyst -- we welcome her to the panel -- and syndicated columnist Charles Krauthammer. Juan, Bart Stupak who obviously fought for the president to sign this executive order, says this is a win that New Mexico and Pennsylvania backed off. Pro-life groups say listen, there is still a loophole. What about it?

    JUAN WILLIAMS, NEWS ANALYST, NATIONAL PUBLIC RADIO: From the pro-life point of view there is a loophole. They were upset with the law was passed and they thought Bart Stupak was a sucker. They thought he was played for the fool when he signed on to the business about an executive order.

    And the point they are making is the executive order has no staying power when you get to the state level or once the Congress might decide to act. That is their concern.

    The other side of the story is that much of this would apply to what they call the high-risk pool, for people who are poor and don't have health insurance, who would now be eligible to get health insurance under the president's healthcare plan.

    Those folks should be eligible because if the states are setting the standards, and remember, this is nothing that the federal government is doing, state standards for Medicare, Medicaid, welfare, whatever, it is up to the state. If the state sets the standard why should people be ineligible?

    The response, of course, from President Obama and the White House so far is we're going to tell places like New Mexico, Pennsylvania, don't do it. And Pennsylvania and New Mexico have complied so far. But you can understand why those who are strong supporters of pro-life might be concerned.

    BAIER: K.T., what do you think?

    K.T. MCFARLAND, FOX NEWS NATIONAL SECURITY ANALYST: Well, I find this confusing. I think this was sold to pro-choice Democrats as, look, the federal funding is not going to be used for abortion, period. Now you're hearing this sort of, well, maybe, under these circumstances and these states. To me it's a bait and switch. It was sold one way and now it turns out it's something else.

    It's a system, and sort of pattern of bait and switch. We'll do healthcare, right, because it will save money. Now it's going to cost billions. We're going to do the stimulus plan because it will get us jobs and reduce unemployment. Well, unemployment is still high. It's a typical bait and switch.

    BAIER: Charles?

    CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: If it was, it was one that was pretty obvious to most. The healthcare bill they way it was written did have a large loophole to allow federal money used for abortion.

    Stupak and the "Stupak six" went against it and they said it's such an important principle we are willing to stop healthcare reform even though it's a principle we believe in to save the pro-life principle. And then he signed on in return for executive order, which I think is really paper thin.

    We already had, as of this instance, two states prepared to fund abortion with pressure at the last minute, have reversed themselves. But it tells you how tentative is this.

    As Juan indicates if it is not in the law, the executive order can be repealed by this president or the next president. It doesn't have the force of law. The law itself has an obvious loophole.

    And I think Stupak was taken. He couldn't stand the heat on this. If he wanted to stand really firm on stopping any subsidies for abortion, he should have voted against the law. It was quite clear what he had to do.

    BAIER: And it's not in the law, the executive order tying this all together.

    Another development with federal regulations went into effect this week dealing with the healthcare, stipulating that all electronic health records include a body mass index, a BMI in every electronic health record by 2014.

    So what this means, and it's confirmed by HHS officials today that in fact that is in the regulation, that perhaps every American eventually will have to get a BMI, a body mass index?

    MCFARLAND: Women have lied about their weight on their driver's license for years. This takes away the ability to do that. In one sense it's funny.

    But in the other sense, you know, what if we do, I mean this is the first bit of information we're collecting. So what if in the end we do start rationing healthcare? You are too fat. You have a lousy body mass index.

    BAIER: Are you pointing to me, K.T.? Do you want to come back on the panel?

    (LAUGHTER)

    MCFARLAND: No, I'm one of the people that lie on my driver's license. Or if you a smoker, you don't get the same healthcare attention that you get if you are a non-smoker.

    KRAUTHAMMER: They are going to use this to ration food, not healthcare.

    (LAUGHTER)

    BAIER: I mean, we're chuckling about this.

    WILLIAMS: I'm worried about that, now.

    BAIER: We're chucking about it, but, literally, Juan, is it the beginning of something that's much broader. When you talk about the federal regulations that are buried deep in some of the huge documents, could we be seeing the beginning of something that is a lot broader than that?

    WILLIAMS: I think it's appropriate to be concerned, but I think it's speculative at this point. We don't know that.

    There is a lot of information in the records. I think the bigger threat, the one that would concern me, is that they put this now electronically available. It doesn't matter if Bret Baier lives in Washington, D.C., or Bret Baier moves out to San Diego, that your medical files are available.

    What if somebody violates them? All the time, people get your Social Security and credit card information and violations -- because your medical information I think is more personal than your credit card or Social Security number. And that suddenly is a worry because it would impact your employment opportunities if you had some debilitating illness. That could be a problem.

    BAIER: Charles, last word.