Prager tries to defend himself. Ed Brayton has a great takedown. I'll add my two cents. Prager writes:
You don't have to be Christian to acknowledge that the Bible is the source of America's values. Virtually every founder of this country knew that and acknowledged it. The argument that founders such as Thomas Jefferson and Benjamin Franklin were deists, even if accurate (it is greatly exaggerated), makes my point, not my opponents'. The founders who were not believing Christians venerated the Bible as the source of America's values just as much as practicing Christians did.
Here's the problem -- the key Founders, including not just Jefferson and Franklin, but also Washington, Adams, and Madison -- did indeed think religious values were necessary for society. But they thought most world religions taught those same moral values as Christianity. Islam and Christianity were thus interchangeable in this respect. Now, they may have been wrong to believe this. But it is what they believed. Here is Jefferson in his September 27, 1809 letter to James Fishback:
Every religion consists of moral precepts, and of dogmas. In the first they all agree. All forbid us to murder, steal, plunder, bear false witness &ca. and these are the articles necessary for the preservation of order, justice, and happiness in society. In their particular dogmas all differ; no two professing the same. These respect vestments, ceremonies, physical opinions, and metaphysical speculations, totally unconnected with morality, and unimportant to the legitimate objects of society....We see good men in all religions, and as many in one as another. It is then a matter of principle with me to avoid disturbing the tranquility of others by the expression of any opinion on the [unimportant points] innocent questions on which we schismatize, and think it enough to hold fast to those moral precepts which are of the essence of Christianity, and of all other religions.
Likewise, Franklin believed all religions were interchangeable with Christianity in this respect. Franklin was theist but not a Christian and made no distinction between George Whitefield's orthodox Christianity and the Mufti of Constantinople's Mohammedanism:
Both house and ground were vested in trustees, expressly for the use of any preacher of any religious persuasion who might desire to say something to the people at Philadelphia; the design in building not being to accommodate any particular sect, but the inhabitants in general; so that even if the Mufti of Constantinople were to send a missionary to preach Mohammedanism to us, he would find a pulpit at his service.
Adams too agreed that all world religions provided the same indispensable morality as Christianity:
I have attended public worship in all countries and with all sects and believe them all much better than no religion .... Religion I hold to be essential to morals. I never read of an irreligious character in Greek or Roman history, nor in any other history, nor have I known one in life, who was not a rascal.
April 18, 1808 letter to Benjamin Rush.
... moral liberty resides in Hindoos and Mahometans, as well as in Christians.
Letter no. 13 to John Taylor in 1814
Though it's harder to find quotations from Washington that are this specific, virtually everything Washington said on religion is consistent with these above quotations. So for instance, when discussing religious oaths, Washington stated:
Of all the dispositions and habits which lead to political prosperity, Religion and morality are indispensable supports....Let it simply be asked where is the security for property, for reputation, for life, if the sense of religious obligation desert the oaths, which are the instruments of investigation in Courts of Justice? And let us with caution indulge the supposition that morality can be maintained without religion. Whatever may be conceded to the influence of refined education on minds of peculiar structure, reason and experience both forbid us to expect that National morality can prevail in exclusion of religious principle.
He likely believed, as did Adams, Jefferson and Franklin, that most world religions including Islam provided society "indispensable supports" and served the useful function that religious obligation provides for oaths. He certainly chose his words to be inclusive of "religion" in general and not "Christianity" in particular.
Finally, see this post where I discuss Dr. Gregg Frazer making a similar point and using many of these same quotations.