This is a rush transcript of "Special Report With Bret Baier" from April 16, 2010. This copy may not be in its final form and may be updated.


PRESIDENT BARACK OBAMA: I've been a little amused over the last couple of day s where people have been having these rallies about taxes. You would think they would be saying thank you.



BRET BAIER "SPECIAL REPORT" HOST: Well, that was President Obama at a fundraising event in Miami last night talking about the Tea Parties. Obviously a big Tea Party on the national mall here in Washington, D.C., yesterday. The Tea Partiers are mobilizing, as we talked about, for a smaller government, lower taxes, not just now, but in the future, and concern about the deficits and the growing debt.

Also a new poll in The New York Times says there is a big concern about socialism and moves toward it. Not only that, there you see it, all respondents throughout the country in this particular poll, The New York Times/CBS News, 52 percent say Obama's policies move the country toward socialism.

What about the president's remarks and the Tea Parties? Let's bring in the panel, Steve Hayes, senior writer for the Weekly Standard, A.B. Stoddard, associate editor of The Hill, and syndicated columnist Charles Krauthammer. Steve?

STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: The president I think gets very comfortable when he speaks to a partisan audience. So last night he was amused by the Tea Partiers and he was a little flip and I think came off as condescending and arrogant.

He has done this before. Remember, he did this the weekend before the election that Scott Brown won in Massachusetts where he mocked the idea of somebody buying a truck. Well, anybody can buy a truck. And he did this at the fundraiser in San Francisco I think he thought was off the record or private, and he talked about people clinging to religion and their guns.

If you take it all together, what it suggests he has a disdain for people I think, I consider working class Americans, people who hold the kind of values that I hold and a lot of people throughout the Midwest and elsewhere in the country hold. And it's exactly those voters he had trouble connecting with in the primary. It's a problem for him going forward.

BAIER: A.B., Democrats say the president was pointing to taxes this year that are going down, the White House says for all of the different groups, including middle class voters. Republicans say this was arrogant and smug and dismissive of a big movement in the country.

A.B. STODDARD, ASSOCIATE EDITOR, THE HILL: The president is going to be riling up the crowd at Democratic fundraisers for sure. It's not the same remarks he'd give in the Rose Garden.

The White House is well aware of the potency of the Tea Party movement and they know they will come out and vote Republican in this fall election and that Democrats are in very deep question.

As for the question of taxation, our taxes are low. Will we be taxed in the future? Yes, we will. The healthcare reform bill contains a new tax, a mandate to purchase insurance, and Medicare payroll tax, there is the value-added tax coming. We are facing taxation in the future and we don't know how much.

He's defensive because right now he has not raised our taxes yet. The stimulus provided over $200 billion in tax relief and he has not broken his campaign promise. That is why to friendly audiences like that he's making jokes about how he should be thanked.

BAIER: Charles?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: I think it was Obama with the usual condescension except he ratcheted it up to code orange in snootiness, which is where he's at now, where he looking down his nose to the gun and god crowd, the lumpen-proletariat, as he sees it. And he ridicules them because they're not grateful enough to him.

Look, it's quite obvious what he is talking about. He thinks that they are stupid because they don't recognize that he hasn't raised their taxes.

The point is the movement began a year ago before there were any hikes in taxes, but it was prescient movement and it understood, and it wasn't really that hard to see, although a lot of the press entirely overlooked it, that if you expand the government hugely as he has you have to raise taxes. There is no other way.

That's why we are all talking about a VAT. You know, he is assuming that these people are paranoid or agitated because they are expecting the taxes are going to rise. We just had the chairman of the Federal Reserve, who is not exactly a member of the Tea Party who said exactly that. In order to sustain our economy we have to raise taxes.

So it's a fact. And I think it is in his character to ridicule. This is the man on the day he won the Democratic nomination said that day would mark a day on which the earth began to heal and the oceans recede. He does not have a low opinion of himself.

BAIER: Meantime, a former president today speaking up, first in an interview with The New York Times. Former President Bill Clinton saying this — and this is a quote from the online article. Former President Bill Clinton Thursday drew parallels between the anti-government tone that preceded the devastating attack in Oklahoma City and the political turmoil of today, saying "Government critics must be mindful that angry words can stir violent actions.

There can be real consequences when what you say animates people who do things you would never do." This is what he said in an event about Oklahoma City today.


FORMER PRESIDENT BILL CLINTON: I think it's important before we overdo that to put this in the context of what happened, to try to understand what happened then and what it meant for America. What we learned from Oklahoma City is not that we should gag each other or that we should reduce our passions for the positions we hold, but that the words we use really do matter.


BAIER: He took a walk back a little bit. He was talking about the tea-partiers, we shouldn't overdo that, the linkage in if public remarks, but in the "New York Times" it was clear he was trying to draw a parallel.

KRAUTHAMMER: And I think it's disgusting. It's a replay of what he did, his administration did after Oklahoma City. Remember, that happened shortly after he got crushed in the mid-term election, the Gingrich revolution that he began his comeback by exploiting Oklahoma City and implying it had minions involved, that it was a result of Newt and Rush and all the agitated, angry white males as it was called by the media at the time. This is a replay.

Look, when there was dissent in the Bush years, he was called a Nazi, Cheney a war criminal, and there was actually a play on the assassination of George Bush, and you didn't hear a word from him or others about agitated language.

When a Republican is in power, dissent is highest form of patriotism. And when a Democrat is in power, dissent is near treasonous and a call to mutiny and insurrection. This is really disgraceful.

BAIER: Steve?

HAYES: I agree. I think if you look at what he said and what he said in the first place that angry words can incite violence, that's indisputable. Of course they can. It's one thing we talk about in connection with the Islamic radicals we fight across the globe today.

But to link it to Tea Parties and to suggest there is some bridge or a connection is grossly irresponsible. And when you talk about the Tea Parties, it's important to remember the "New York Times" poll that was fascinating, 20 percent of the country, 18 percent say they support the Tea Parties. If that is the fringe, that's a huge fringe.

BAIER: And there are other polls that have that number even higher.

HAYES: Right.

BAIER: All right, you can find out more about all the stories we talk about on the home page Foxnews.com/specialreport.

The Friday lightning round is next with your choice online topic of the week first.


BAIER: Every week on foxnews.com/specialreport homepage, viewers vote what topic we should discuss this in this, the Friday lightning round. Today's winner you see right here, a landslide, a topic we really haven't discussed in a couple of weeks — healthcare, namely, what are some hidden elements within the new law.

That is where we begin tonight's discussion. We're back with the panel. A.B., hidden elements in the new healthcare law?

STODDARD: All right, well, everyone likes to beat up on healthcare reform, so I would like the viewers at home to know that seniors will be getting their $250 rebate this year if they fall into the doughnut hole. And that plans need to ensure 80 percent of premiums are spent on medical care.

I'd also like the audience to know there is a $7.5 million project to establish indicators to determine how America is doing to assess our position in progress in the world. It's called a key national indicator study.

And then there is also a $1.5 billion program for pregnant teenagers to be visited by a nurse once a month before delivery and for years afterwards to learn parenting and coping skills.

BAIER: $1.5 billion?


BAIER: And there is also a segment in there about nursing rooms.

STODDARD: Yes. Yes. Yes. If you are a nursing mother, you are entitled to express milk as often as necessary in a private place other than a bathroom, but only if you work for a company 50 employees or larger.

BAIER: That is in the law?

STODDARD: Companies with 50 employees or more — I mean, 50 employees are less are exempt from this requirement.

BAIER: OK, quite a lightning round. Charles?

KRAUTHAMMER: As Pelosi promised, once you pass the bill you will learn what is in it.

My favorite is the fact members of Congress have urgently requested of the congressional research service to determine if they and their staffer are going to lose their current coverage or not. They are unsure about that. These are people who assured everybody in the country that you will be able to keep your own coverage and they aren't even sure about their own.

BAIER: Steve?

HAYES: The Wall Street Journal had a great report on the IRS, the role of the IRS, which was discussed before healthcare passed, but we are seeing now that all of the predictions about the expanded role of the IRS and the horror stories of what the IRS may or may not do are actually true.

You are seeing the IRS may, in fact, hold back withholding — or hold back refunds from people who can't prove they have insurance, which ensures that the IRS becomes this even greater bureaucracy that some of the Republicans predicted beforehand.

BAIER: This may be a topic again because there are many more.

Next topic, value-added tax. There has been a lot of talk about it. Paul Volcker, President Obama's economic advisor, former Fed chair, said that it's not as toxic as it used to be recently. The value-added tax is a sales tax, but it's levied on each stage of production of a different good. And so it's not just at the end.

Here is a quick percentage of in Europe, and overseas, where the value-added tax is. You see the countries and what percentage they are hit. And there you see Greece down there on the next page, 19 percent. And obviously, we've done a lot of stories about Greece and their economic situation. Value-added tax, Charles?

KRAUTHAMMER: Well, here is the syllogism. If you enact Obama care it follows as the night the day that you have to have a VAT, and the reason is if you legislate yourself as we just have into European levels of entitlements, you are going to have the European-level of debt or — I mean of taxation, or you will end up with Greek levels of debt.

And the easier option ultimately is going to be the VAT. It's not going to be today. It won't even happen after the 2010 elections, but I assure you if Obama is reelected it will all of a sudden be a big issue and big proposal of Democrats.

BAIER: And when you talk about inflation, A.B., concerns about inflation, when you think about raising the price of goods, each good, that is an added issue.

STODDARD: Well, any new tax in these tough economic times, people cutting back anyway, is really going to have a huge impact on consumer spending. It is obviously politically appealing because you can raise taxes subtly and raise it again. It will come in at a low percentage and then escalate very quickly.

Obviously, there are problems. The Europeans have had problems with implementation, with corruption, with evasion, fraud, there are a lot of issues. It ultimately it doesn't guarantee you deficit reduction. The only way to do that is spending reduction, and no one wants to touch entitlements. So I think Charles is right that the VAT is coming.

BAIER: Without publicly endorsing it at the White House.

HAYES: I don't expect them to anytime soon. That is the problem is that it's a hidden tax. Not only does it not guarantee spending reduction, I think it encourages much greater spending.

And the only country that is initiated a VAT that has seen the level of taxation go down is Canada. All of the other countries have seen their level of taxation, the percentages climb, sometimes double or triple.

BAIER: I have one minute left. Florida Senate race, the Republican side of that race. You have Charlie Crist against Marco Rubio, and the latest poll has Rubio up 23 points. There is word now that Charlie Crist is saying he is considering a run as an independent. Yes or no, Steve?

HAYES: Well, of course he is. That is his only option at this point. I think in his interview with Chris Wallace when the question was put to him directly, he was so painfully assuring people that he was going to stay Republican, it was clear then he wanted to go.


STODDARD: He has to pull out of the Senate race all together or run as an independent. The Republican primary is over.

BAIER: Does he do it?

STODDARD: I think he is not going to hang it up. I agree, I think he will run as independent.

BAIER: Charles?

KRAUTHAMMER: If you are running and you are as behind as he is, you have to say I won't consider an independent run, that's the norm. If you deviate as he has, and he actually said, as the "Miami Herald" reported, "I'll think about it," and that means he's going to do it.

BAIER: That is it for panel.

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