This is a rush transcript from "Special Report," April 11, 2012. This copy may not be in its final form and may be updated.


CHARLES BLAHOUS, SOCIAL SECURITY/MEDICARE TRUSTEE: This is the most far reaching and economically significant law passed by the Congress in many years. And as a consequence it's going to affect federal deficits either hundreds of billions of dollars to the good, as is implied by the score keeping convention, or, in reality, hundreds of billions of dollars to the bad, which is the case under the actual change in law.


BRET BAIER, ANCHOR: That is Charles Blahous with a study out saying that the health care law actually will add $340 billion to the deficit over the next decade. Jay Carney, the White House press secretary, responded with this, quote, "This is obviously a partisan analysis that does not comport with the official presentations put forward by the CBO" -- the Congressional Budget Office.

It should be noted that Blahous was actually approved by President Obama to be the Republican trustee for Medicare and Social Security. The White House is saying that he was appointed in consultation with Republican lawmakers and it's not that the president agreed with his analysis in this study.

Back with the panel. How significant is this study, even though the center he works for, the Mercatus Center, is funded by Republican donors, the Koch brothers and others? It seems like it is what this panel has been saying numerous times, that the health care law double counted in its addition.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: I'm not sure its effect on the election, but he is absolutely right that under the CBO rules and it actually acknowledges that the rules it's under requires a double counting. Under the CBO rules, they were double counting half a trillion dollars that was going to the Medicare trust fund. It was also using that same half a trillion to stand on Obamacare. Now, in the real world you can only spend a dollar once. You ask the president when you had him in an interview about what, a year ago, about this three times, about the double counting, and he danced around it because there is no answer. So if you do the ordinary accounting that anybody, any rational observer would look at, and say actually, it was half a trillion dollars underestimated in terms of costs. So it's in deficit.

BAIER: John, the new poll from Washington Post/ABC News support or oppose the healthcare law, support 39 percent, oppose 53 percent. That poll is actually lower in the opposition than some polls have been. You have often had on your show the whole stack of pages of the health care law to point out how big it is. How big a problem do you think this is for the administration?

JOHN STOSSEL, FOX BUSINESS HOST: This particular study?


BAIER: No, the health care law in general.

STOSSEL: I hope it's a big problem. The conceit of a 2,400 page bill making anything better is an affront to free people. Government has already mucked up medicine with all its rules. And we don't even know what things cost when we go to doctor's office. Nobody says, gee doc, do I really need this MRI or is there a cheaper place where I can get it? Even the doctors don't know what things costs because other people pay. And this would make that worse. And I think the CBO estimate also assumes that they're gonna cut the reimbursement to doctors, which they've never done and are not going to do. So I hope this goes down. It would be bad for America.

BAIER: If it goes down, there is really nothing right now in its place. There are proposals, but they would have to get through congress.

STOSSEL: Right. And once again, I say no, they can't get it through Congress, and good, because doing nothing and leaving some of this to the free market would be a good thing. Lasik eye surgery, that is free market. What happens? The prices go down, quality goes up. Doctors give out their cell phone numbers and e-mail addresses because they want to please the customer. If government and insurance companies lurch in, that doesn't happen.

BAIER: And for the people who fall through the cracks, or the millions of people who don't get coverage?

STOSSEL: We have Medicaid for poor people. And we have private charity. If government got out of the way they would really step in.

BAIER: Kirsten?

KIRSTEN POWERS, COLUMNIST, NEW YORK POST: The problem with our health care system is not going to be solved by the free market. The free market has been in charge of our health care system. The problem is fee-for-service. And it's something that was not addressed in this Affordable Care Act, it's something that has to be addressed or health care costs are never going to go down. They pad all of the costs. And you are right, nobody knows how much they're paying. But they pad all of the costs, and they have an incentive to actually charge you more money and to drive up the cost. And so I don't think there is some magical free market that's gonna come in and save this.

BAIER: Charles?

KRAUTHAMMER: Do we get a commission every time we hold --




BAIER: Jonah Goldberg tweeted he wants to bring his sign for his book in as well.

KRAUTHAMMER: The other problem, the major problem in the incredible cost of health care is the absence of tort reform. We have an insane system where anybody who's practiced as I have, knows how much is wasted on defensive medicine, tests and referrals and admissions, which are done entirely for no other reason than to prevent a lawsuit. It amounts to quarter of a national bill. That is half a trillion dollars wasted a year. And Howard Dean is the only Democrat who is honest enough to explain why there is not a word about it in that whole monstrous 2,000-page bill. He said the bill and Democrats have enough enemies. We didn't want to make enemies of the trial lawyers who are big supporters of the Democrats. To have a huge overhaul of a sixth of the American economy and to leave the fundamental cost of the increase in spending on it is a scandal.

BAIER: One word answer -- big deal or not? Health care and the general election.

KRAUTHAMMER: It will be the major issue after jobs.

POWERS: Not a big deal.

STOSSEL: Yes, a big deal.

BAIER: That is it for the panel. John, thanks for coming on. Stay tuned to find one guest who was really not welcomed.

Content and Programming Copyright 2012 Fox News Network, LLC. ALL RIGHTS RESERVED. Copyright 2012 CQ-Roll Call, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ-Roll Call. You may not alter or remove any trademark, copyright or other notice from copies of the content.