This is a rush transcript from "Hannity," October 22, 2009. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: When South Carolina Congressman Joe Wilson, interrupted the president's Joint Session of Congress with his now famous outburst, "You lie", he was addressing the president's statement that illegal immigrants would not be covered by his plan. So who is right? We did a little investigating.


PRESIDENT BARACK OBAMA: The reforms — the reforms I'm proposing would not apply to those who are here illegally.

REP. JOE WILSON, R-S.C.: You lie!

HANNITY (voice-over): It was the outburst heard around the world. South Carolina Congressman Joe Wilson calling out the president during a speech to Congress for denying that his health-care plan would cover illegal immigrants.

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Once Wilson apologized for this comment, the spotlight moved from the man asking the questions to the question itself. Does this new health-care plan apply to those who are in the U.S. illegally?

JIM EDWARDS, NUMBERS USA: What this legislation does is allow — or at least opens the door to allowing illegal aliens to receive taxpayer- funded health care.

HANNITY: Iowa Senator Chuck Grassley is the ranking Republican on the Senate Finance Committee, the same committee that, despite Grassley's vote to the contrary, recently voted in favor of the Baucus bill.

SEN. CHUCK GRASSLEY, R-IOWA: Both sides say they do not want illegal immigrants to get health care, but the issue comes from lack of enforcement.

HANNITY: Although technically, both the Senate and House versions of the bill contain language barring illegal immigrants from receiving federal subsidies to purchase health care coverage, Grassley argues that this language means nothing without additional laws to enforce it.

GRASSLEY: It doesn't go far enough to guarantee that some illegal aliens will not end up getting the subsidy to buy health insurance, which is taxpayer support for health care.

EDWARDS: You have to have verification in order to make sure that illegal aliens are screened out.

HANNITY: Senator Grassley insists the only way to make certain illegal immigrants are not getting benefits under this program is to verify citizenship by photo identification.

GRASSLEY: You can check with Social Security. That number might go with the name that's presented, but you need a photo I.D. to know that the person that has that number is the person who says that they are.

HANNITY: To this end, Senator Grassley proposed an amendment to the bill that would have required photo I.D. verification, but the motion was defeated by Democrats on a party-line vote in committee.

GRASSLEY: How silly can you be for something like getting into a federal program where you're using federal dollars? Why do you have any question about using a photo id?

HANNITY: Why, then, would Democrats vote against such a measure?

GRASSLEY: They know that it's critically sensitive. They don't want to upset the advocacy groups for illegal aliens by nailing down that absolutely nobody can get help through this bill that's here illegally.

HANNITY: In addition, some Democrats argue that, not only should an illegal immigrant be allowed to pay for coverage out of his or her own pocket, but also, if doing so, he or should would be allowed to participate in a government-funded marketplace exchange.

GRASSLEY: People who have no respect for American law come here illegally. They shouldn't be in the first place. So how do you get to the point of justifying, well, if they pay for it themselves, they ought to be able to have it? Because that's like saying it's OK to come to our country illegally, and you can benefit from the same programs that the people that came here legally.

HANNITY: So what's to stop illegal immigrants from breaking the law to slip through loopholes the Democrats have left wide open to get health care coverage they want, paid for by your hard-earned tax dollars?

EDWARDS: Nothing. That's — that's the main point. If you don't confirm someone is eligible for the program based on the immigration or citizenship status, you're saying, "Yes, come on, enroll."

HANNITY: In the meantime, this nightmare appears to be inching closer and closer to becoming a reality. Now that the Baucus bill just made it past the Senate Finance Committee, what's next?

GRASSLEY: I think it's going to be made worse by being merged with the bill out of the Senate Health Committee, and I think it's going to have a public option in it. And that's going to lead us to the federal government running our health care system from here to eternity.


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