This partial transcript of Special Report with Brit Hume panel discussion, July 6, 2001, was provided by the Federal Document Clearing House. Click here to order the complete transcript.

TONY SNOW, HOST:  And we're back with our panel, Fred, Mort and Jeff.  Mort, earlier in the broadcast, Brian Wilson reported that a number of pro-choice groups are now opposed to an idea that the federal government supply prenatal care for women who can't afford it on their own, arguing that somehow this is taking money away from women and giving it to fetuses. 

MORT KONDRACKE, ROLL CALL:  You know, there is -- there is a fringe, and these are the fringe.  That is just beyond defense.  You know, I mean, if -- if -- prenatal care is one of the most basic services that it seems to me government should be providing to poor women.  And how any organization -- I mean, the only thing I can say is that these organizations are not pro-choice.  They are pro-abortion.  And they would rather have fetuses die than to have them be born healthy.  There's no -- there's no defending it. 

FRED BARNES, THE WEEKLY STANDARD:  I don't disagree at all.  In fact, what they clearly are is anti-Bush.  Anything that Bush wants to do they're against.  That's the only explanation. 

Well, their complaint is, of course, that this would -- under this plan of Tommy Thompson, the unborn children would be treated as children, and they don't want an unborn child to be treated as a real human being.  And so...

SNOW:  But the thing is...

BARNES:  They don't mind the WIC program, which just provides prenatal care to mothers.  They're not opposed to that.  It's the way the child is treated.  And I agree with Mort.  They do take an extreme position. 

SNOW:  OK, Jeff, stock market closes the week on a down note.  Let's take a quick look at what happened with the Dow and the Nasdaq as the week ended.  Dow Jones Friday closed down 227.18.  Do we have Nasdaq?  I think we do.  There we go -- down 79.95.  Nasdaq perilously close to slipping below the 2,000 mark again.  What's going on?

JEFF BIRNBAUM, FORTUNE MAGAZINE:  Well, it was a combination of two things today.  There was an uptick in unemployment to 4.5 percent from 4.4 percent, and there were some more profit warnings from some bellwether tech stocks: EMC, which is a storage company, and Advanced Micro Systems.  In any case, we have more of the same, and the prospect of more to come: that is of low profits and higher unemployment.  And I don't think
the stock market has much confidence that the economy will rebound until anytime next year. 

SNOW:  Treasury Secretary Paul O'Neill has been making suggestions that by the end of the year we'll be up to 4 percent, to 3 1/2 to 4 percent growth.  Does anybody share that view, Fred?

BARNES:  Well, it's possible.  You know, when all of these things come into effect and when the rebates are sent out, when people recognize there's a whole trajectory of tax cuts, more -- when the Fed rate cuts -- now, what have we had?  Four of them?  All -- I mean, it really takes six months for those to go into effect.  Theoretically, it should happen later in the year.  But Jeff is exactly right.  I mean, the market goes up and down depending on earnings reports and good news or bad news.  And almost all the news is bad news. 

I think there's another factor that the market worries about not as much as earnings, and that is what's going to happen in Congress.  All of a sudden, they see talk of the tax cuts being annulled or repealed and more spending, and I think there's some worry about that as well. 

KONDRACKE:  Right.  Well, this is a major correction in the stock market, clearly.  You know, and people -- remember when people said that no, no, no, the new tech economy operates differently from the old...

SNOW:  Invincible. 

KONDRACKE:  That's right, exactly. 


BARNES:  ... said that for a while.

KONDRACKE:  Well, that is obviously baloney.  What we haven't had yet is a recession.  I mean, we are not officially in a recession, and -- but the earnings reports are so bad and the stock market keeps going down that you wonder whether we're not going to dip into zero growth. 

BIRNBAUM:  Yea, that's true.  And by the way, the company that I was referring to before was Advanced Micro Devices.  Sorry about that.

SNOW:  So don't go sell your stocks...


BIRNBAUM:  Yeah.  I think that's right.  This was the worst single-day sell-off in three months.  It looked like there had been something of a plateauing at a low level for the stock market and a rise.  What this means is that we may have some further to go down and that
the economy itself is rocky. 

A bad retail sales report, by the way, that's another very bad sign.  Usually retail sales start to go up when we're pulling out of a slow or recessional.  That's not what we're doing now. 

BARNES:  Yeah, my family is fighting against that. 


SNOW:  OK.  Fred, Mort and Jeff, thanks.  That's all the time we have for the panel.

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