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Remarks by President Bush and Senator Kerry in the Third 2004 Presidential Debate Part I

Location: Tempe, AZ

For Immediate Release

Office of the Press Secretary

October 14, 2004

Remarks by President Bush and Senator Kerry in the Third 2004 Presidential Debate Part I

Arizona State University

Tempe, Arizona

6:00 P.M. MST

MODERATOR: Good evening, from Arizona State University in Tempe, Arizona. I'm Bob Schieffer of CBS News. I want to welcome you to the third and last of the 2004 debates between President George Bush and Senator John Kerry.
As Jim Lehrer told you before the first one, these debates are sponsored by the Commission on Presidential Debates. Tonight the topic will be domestic affairs, but the format will be the same as that first debate. I'll moderate our discussion under detailed rules agreed to by the candidates. But the questions and the areas to be covered were chosen by me. I have not told the candidates or anyone else what they are.

To refresh your memory on the rules, I will ask a question; the candidate is allowed two minutes to answer. His opponent then has a minute-and-a-half to offer a rebuttal. At my discretion, I can extend the discussion by offering each candidate an additional 30 seconds. A green light will come on to signal the candidate has 30 seconds left; a yellow light signals 15 seconds left; a red light means 5 seconds left. There is also a buzzer if it is needed. The candidates may not question each other directly. There are no opening statements, but there will be two-minute closing statements.

There is an audience here tonight, but they have agreed to remain silent -- except for right now, when they join me in welcoming President George Bush and Senator John Kerry. (Applause.)

Gentlemen, welcome to you both. By coin toss, the first question goes to Senator Kerry.

Senator, I want to set the stage for this discussion by asking the question that I think hangs over all of our politics today, and is probably on the minds of many people watching this debate tonight, and that is: Will our children and grandchildren ever live in a world as safe and secure as the world in which we grew up?

SENATOR KERRY: Well, first of all, Bob, thank you for moderating tonight. Thank you, Arizona State, for welcoming us. And thank you to the Presidential Commission for undertaking this enormous task. We're proud to be here. Mr. President, I'm glad to be here with you again to share similarities and differences with the American people.

Will we ever be safe and secure again? Yes, we absolutely must be. That's the goal. Now, how do we achieve it is the most critical component of it. I believe that this President, regrettably, rushed us into a war, made decisions about foreign policy, pushed alliances away, and as a result, America is now bearing this extraordinary burden where we are not as safe as we ought to be.

The measurement is not, are we safer; the measurement is, are we as safe as we ought to be. And there are a host of options that this President had available to him, like making sure that at all our ports in America, containers are inspected. Only 95 percent of them -- 95 percent come in today uninspected. That's not good enough. People who fly on airplanes today -- the cargo hold is not X-rayed, but the baggage is. That's not good enough. Firehouses don't have enough firefighters in them. Police officers are being cut from the streets of America because the President decided to cut the COPS program.

So we can do a better job of homeland security. I can do a better job of waging a smarter, more effective war on terror, and guarantee that we go after the terrorists. I will hunt them down, and we'll kill them, we'll capture them. We'll do what's ever necessary to be safe. But I pledge this to you, America: I will do it in the way that Franklin Roosevelt and Ronald Reagan and John Kennedy and others did, where we build the strongest alliances, where the world joins together, where we have the best intelligence, and where we are able, ultimately, to be more safe and secure.

MODERATOR: Mr. President, you have 90 seconds.

THE PRESIDENT: Bob, thank you very much. I want to thank Arizona State, as well.

Yes, we can be safe and secure if we stay on the offense against the terrorists and if we spread freedom and liberty around the world. I have got a comprehensive strategy to not only chase down al Qaeda, wherever it exists -- and we're making progress; three-quarters of al Qaeda leaders have been brought to justice -- but to make sure that countries who harbor terrorists are held to account. As a result of securing ourselves and ridding the Taliban out of Afghanistan, the Afghan people had elections this weekend. And the first voter was a 19-year-old woman. Think about that. Freedom is on the march. We held to account a terrorist regime in Saddam Hussein.

In other words, in order to make sure we're secure, there must be a comprehensive plan. My opponent, just this weekend, talked about how terrorism could be reduced to a nuisance, comparing it to prostitution and illegal gambling. I think that attitude and that point of view is dangerous. I don't think you can secure America for the long run if you don't have a comprehensive view as to how to defeat these people.

At home, we'll do everything we can to protect the homeland. I signed the homeland security bill to better align our assets and resources. My opponent voted against it. We're doing everything we can to protect our borders and ports. But, absolutely, we can be secure in the long run. It just takes good, strong leadership.

MODERATOR: Anything to add, Senator Kerry?

SENATOR KERRY: Yes. When the President had an opportunity to capture or kill Osama bin Laden, he took his focus off of him, outsourced the job to Afghan warlords, and Osama bin Laden escaped. Six months after he said Osama bin Laden must be caught, dead or alive, this President was asked, where is Osama bin Laden? He said, I don't know, I don't really think about him very much, I'm not that concerned. We need a President who stays deadly focused on the real war on terror.

MODERATOR: Mr. President.

The President: Gosh, I don't think I ever said I'm not worried about Osama bin Laden. That's kind of one of those exaggerations. Of course, we're worried about Osama bin Laden. We're on the hunt after Osama bin Laden. We're using every asset at our disposal to get Osama bin Laden.

My opponent said this war is a matter of intelligence and law enforcement. No, this is a -- war is a matter of using every asset at our disposal to keep the American people protected.

MODERATOR: New question, Mr. President, to you. We're talking about protecting ourselves from the unexpected, but the flu season is suddenly upon us; flu kills thousands of people every year. Suddenly we find ourselves with a severe shortage of flu vaccine. How did that happen?

PRESIDENT BUSH: Bob, we relied upon a company out of England to provide about half of the flu vaccines for the United States citizen and it turned out that the vaccine they were producing was contaminated. And so, we took the right action and didn't allow contaminated medicine into our country. We're working with Canada to, hopefully -- that they'll produce -- help us realize the vaccine necessary to make sure our citizens have got flu vaccinations during this upcoming season.
My call to our fellow Americans is if you're healthy, if you're younger, don't get a flu shot this year. Help us prioritize those who need to get the flu shot, the elderly and the young. The CDC, responsible for health in the United States, is setting those priorities and is allocating the flu vaccine accordingly. I haven't gotten a flu shot and I don't intend to, because I want to make sure that those who are most vulnerable get treated.

We have a problem with litigation in the United States of America. Vaccine manufacturers are worried about getting sued, and so, therefore, they have backed off from providing this kind of vaccine. One of the reasons I'm such a strong believer in legal reform is so that people aren't afraid of producing a product that is necessary for the health of our citizens and then end up getting sued in a court of law.

But the best thing we can do now, Bob, given the circumstances with the company in England, is for those of us who are younger and healthy, don't get a flu shot.

MODERATOR: Senator Kerry.

SENATOR KERRY: This really underscores the problem with the American health care system. It's not working for the American family. And it's gotten worse under President Bush over the course of the last years. Five million Americans have lost their health insurance in this country. You got about a million right here in Arizona -- just shy, 950,000 -- who have no health insurance at all. Eighty-two thousand Arizonians lost their health insurance under President Bush's watch. Two hundred twenty-three thousand kids in Arizona have no health insurance at all.

All across our country -- go to Ohio, 1.4 million Ohioans have no health insurance; 114,000 of them lost it under President Bush. Wisconsin, 82,000 Wisconsinites lost it under President Bush.

This President has turned his back on the wellness of America. And there is no system. In fact, it's starting to fall apart -- not because of lawsuits, though they are a problem and John Edwards and I are committed to fixing them -- but because of the larger issue that we don't cover Americans. Children across our country don't have health care. We're the richest country on the face of the planet, the only industrialized nation in the world not to do it. I have a plan to cover all Americans. We're going to make it affordable and accessible. We're going to let everybody buy into the same health care plan the senators and congressmen give themselves.

MODERATOR: Mr. President, would you like to add something?

PRESIDENT BUSH: I would, thank you. I want to remind people listening tonight that a plan is not a litany of complaints. And a plan is not to lay out programs that you can't pay for. He just said he wants everybody to be able to buy into the same plan that senators and congressman get. That costs the government $7,700 per family. If every family in America signed up like the Senator suggested, it would cost us $5 trillion over 10 years. It's an empty promise. It's called bait and switch.

MODERATOR: Time is up.


SENATOR KERRY: Actually, it's not an empty promise. It's really interesting because the President used that very plan as a reason for seniors to accept his prescription drug plan. He said if it's good enough for the congressmen and senators to have choice, seniors ought to have choice.

What we do is we have choice. I choose Blue Cross/Blue Shield. Other senators, other congressman choose other programs. But the fact is we're going to help Americans be able to buy into it. Those that can afford it are going to buy in themselves. We're not giving this away for nothing.

MODERATOR: All right, Senator Kerry, a new question. Let's talk about economic security. You pledged during the last debate that you would not raise taxes on those making less than $200,000 a year. But the price of everything is going up, and we all know it. Health care costs, as you all are talking about, is skyrocketing, the cost of the war. My question is, how can you or any President, whoever is elected next time, keep that pledge without running this country deeper into debt and passing on more of the bills that we're running up to our children?

SENATOR KERRY: I'll tell you exactly how I can do it -- by reinstating what President Bush took away, which is called pay-as-you-go. During the 1990s, we had pay-as-you-go rules. If you were going to pass something in the Congress, you have to show where you were going to pay for it and how.

President Bush has taken -- he's the only President in history to do this. He's also the only President since -- in 72 years to lose jobs; 1.6 million jobs lost. He's the only President to have incomes of families go down for the last three years; the only President to see exports go down; the only President to see the lowest level of business investment in our country as it is today.

Now, I'm going to reverse that. I'm going to change that. We're gong to restore the fiscal discipline we had in the 1990s. Every plan that I have laid out -- my health care plan, my plan for education, my plan for kids to be able to get better college loans -- I've shown exactly how I'm going to pay for those. And we start -- we don't do it exclusively, but we start by rolling back George Bush's unaffordable tax cut for the wealthiest people, people earning more than $200,00 a year, and we pass, hopefully, the McCain/Kerry Commission, which identified some $60 billion that we can get. We shut the loophole which has American workers actually subsidizing the loss of their own job. They just passed an expansion of that loophole in the last few days; $43 billion of giveaways, including favors to the oil and gas industry and to people importing ceiling fans from China.
I'm going to stand up and fight for the American worker, and I'm going to do it in a way that's fiscally sound. I show how I pay for the health care, how we pay for the education. I have a manufacturing jobs credit. We pay for it by shutting that loophole overseas. We raise the student loans. I pay for it by changing the relationship with the banks. This President has never once vetoed one bill; the first President in 100 years not to do that.

MODERATOR: Mr. President.

PRESIDENT BUSH: Well, his rhetoric doesn't match his record. He's been a Senator for 20 years. He voted to increase taxes 98 times. When they tried to reduce taxes he voted against that 127 times. He talks about being a fiscal conservative, or fiscally sound, but he voted over -- he voted 277 times to waive the budget caps, which would have cost the taxpayers $4.2 trillion. He talks about pay-go -- I'll tell you what pay-go means when you're a senator from Massachusetts, when you're a colleague of Ted Kennedy -- pay-go means you pay and he goes ahead and spends.

He's proposed $2.2 trillion of new spending, and yet the so-called tax on the rich, which is also a tax on many small business owners in America, raises $600 million by our account -- billion -- $800 billion by his account. There is a tax gap. And guess who usually ends up filling the tax gap? The middle class.

I proposed a detailed budget, Bob. I sent up my budget man to the Congress, and he says, here's how we're going to reduce the deficit in half by five years. It requires pro-growth policies that grow our economy and fiscal sanity in the halls of Congress.

MODERATOR: Let's go to a new question, Mr. President, two minutes. And let's continue on jobs. You know, there are all kind of statistics out there, but I want to bring it down to an individual. Mr. President, what do you say to someone in this country who has lost his job to someone overseas, who is being paid a fraction of what that job paid here in the United States?

PRESIDENT BUSH: I say, Bob, I've got policies to continue to grow our economy and create the jobs of the 21st century, and here's some help for you to go get an education; here's some help for you to go to a community college. We've expanded trade adjustment assistance. We want to help pay for you to gain the skills necessary to fill the jobs of the 21st century. You know, there's a lot of talk about how to keep the economy growing, we talk about fiscal matters. But perhaps the best way to keep jobs here in America and to keep this economy growing is to make sure our education system works.
I went to Washington to solve problems. And I saw a problem in the public education system in America. They were just shuffling too many kids through the system, year-after-year, grade-after-grade, without learning the basics. And so we said, let's raise the standards. We're spending more money, but let's raise the standards and measure early and solve problems now, before it's too late.

You know, education is how to help the person who has lost a job. Education is how to make sure this -- we've got a work force that's productive and competitive. You got -- four more years, I've got more to do to continue to raise standards, to continue to reward teachers and school districts that are working, to emphasize math and science in the classrooms, to continue to expand Pell grants, to make sure that people have an opportunity to start their career with a college diploma.
And so to the person you talked to, I say, here's some help; here's some trade adjustment assistance money for you to go to a community college in your neighborhood, a community college which is providing the skills necessary to fill the jobs of the 21st century. And that's what we'd say to that person.

MODERATOR: Senator Kerry.

SENATOR KERRY: I want you to notice how the President switched away from jobs and started talking about education principally. Let me come back in one moment to that, but I want to speak for a second, if I can, to what the President said about fiscal responsibility. Being lectured by the President on fiscal responsibility is a little bit like Tony Soprano talking to me about law and order in this country. (Laughter.) This President has taken a $5.6 trillion surplus and turned it into deficits as far as the eye can see. Health care costs for the average American have gone up 64 percent. Tuitions have gone up 35 percent. Gasoline prices up 30 percent. Medicare premiums went up 17 percent a few days ago. Prescription drugs are up 12 percent a year. But guess what, America? The wages of Americans have gone down. The jobs that are being created in Arizona right now are paying about $13,700 less than the jobs that we're losing. And the President just walks on by this problem.

The fact is that he's cut job training money. A billion dollars was cut; they only added a little bit back this year because it's an election year. They've cut the Pell grants and the Perkins loans to helps kids be able to go to college. They've cut the training money. They've wound up not even extending unemployment benefits and not even extending health care to those people who are unemployed. I'm going to do those things because that's what right in America, help workers to transition in every respect.

MODERATOR: New question to you, Senator Kerry, two minutes, and it's still on jobs. You know, many experts say that a President really doesn't have much control over jobs. For example, if someone invents a machine that does the work of five people, that's progress. That's not the President's fault. So I ask you, is it fair to blame the administration entirely for this loss of jobs?

SENATOR KERRY: I don't blame them entirely for it. I blame the President for the things the President could do that has an impact on it. Outsourcing is going to happen. I've acknowledged that in union halls across the country. I've had shop stewards stand up and say, will you promise me you're going to stop all this outsourcing, and I've looked them in the eye and I've said, no, I can't do that.

What I can promise you is that I will make the playing field as fair as possible; that I will, for instance, make certain that -- with respect to the tax system, that you as a worker in America are not subsidizing the loss of your job. Today, if you're an American business you actually get a benefit for going overseas. You get to defer your taxes. So if you're looking at a competitive world, you say to yourself, hey, I do better overseas than I do here in America. That's not smart. I don't want American workers subsidizing the loss of their own job. And when I'm President, we're going to shut that loophole in a nanosecond, and we're going to use that money to lower corporate tax rates in America for all corporations 5 percent. And we're going to have a manufacturing jobs credit, and a job hiring credit so we actually help people be able to hire here.

The second thing that we can do is provide a fair trade playing field. This President didn't stand up for Boeing when Airbus was violating international rules with subsidies. He discovered Boeing during the course of this campaign after I've been talking about it for months. The fact is that the President had an opportunity to stand up and take on China for currency manipulation. There are companies that wanted to petition the administration. They were told, don't even bother; we're not going to listen to it.

The fact is that there have been markets shut to us that we haven't stood up and fought for. I'm going to fight for a fair trade playing field for the American worker. And I will fight for the American worker just as hard as I fight for my own job. That's what the American worker wants. And if we do that, we can have an impact. Plus, we need fiscal discipline. Restore fiscal discipline, we'll do a lot better.

MODERATOR: Mr. President.

PRESIDENT BUSH: Whoo! Let me start with the Pell grants. In his last litany of -- of misstatements, he said we cut Pell grants. We've increased Pell grants by a million students. That's a fact.

Here he talks to the workers -- let me talk to the workers. You got more money in your pocket as a result of the tax relief we passed and he opposed. If you have a child, you got a $1,000 child credit. That's money in your pocket. If you're married, we reduced the marriage penalty. The code ought to encourage marriage, not discourage marriage. We created a 10-percent bracket to help lower-income Americans. A family of four making $40,000 received about $1,700 in tax relief. It's your money. The way my opponent talks, he said we're going to spend the government's money. No, we're spending your money. And when you have more money in your pocket, you're able to better afford things you want.
I believe the role of government is to stand side-by-side with our citizens to help them realize their dreams, not tell citizens how to live their lives. My opponent talks about fiscal sanity. His record in the United States Senate does not match his rhetoric. He voted to increase taxes 98 times and to bust the budget 277 times.

MODERATOR: Senator Kerry?

SENATOR KERRY: Bob, anybody can play with these votes, everybody knows that. I have supported or voted for tax cuts over 600 times. I broke with my party in order to balance the budget, and Ronald Reagan signed into law the tax cut that we voted for. I voted for IRA tax cuts, I voted for small business tax cuts.

But you know why the Pell grants have gone up in their numbers? Because more people qualified for them, because they don't have money. But they're not getting the $5,100 the President promised them. They're getting less money. There are more people who qualify; that's not what we want.

PRESIDENT BUSH: Senator, no one is playing with your votes. You voted to increase taxes 98 times. When they voted -- when they proposed reducing taxes, you voted against it 126 times. You voted to violate the budget caps 277 times. You -- you know, there's a mainstream in American politics. You sit right on the far left bank. As a matter of fact, your record is such that Ted Kennedy, your colleague, is the conservative Senator from Massachusetts.

MODERATOR: Mr. President, let's get back to economic issues. But let's shift to some other questions here. Both of you are opposed to gay marriage. But to understand how you have come to that conclusion, I want to ask you a more basic question. Do you believe homosexuality is a choice?

PRESIDENT BUSH: You know, Bob, I don't know. I just don't know. I do know that we have a choice to make in America, and that is to treat people with tolerance and respect and dignity. It's important that we do that. I also know, in a free society, people, consenting adults, can live the way they want to live. And that's to be honored.

But as we respect someone's rights, and as we profess tolerance, we shouldn't change, or have to change, our basic views on the sanctity of marriage. I believe in the sanctity of marriage. I think it's very important that we protect marriage as an institution between a man and a woman.

I proposed a constitutional amendment. The reason I did so was because I was worried that activist judges are actually defining the definition of marriage. And the surest way to protect marriage between a man and woman is to amend the Constitution. It has also the benefit of allowing citizens to participate in the process. After all, when you amend the Constitution, state legislatures must participate in the ratification of the Constitution.

I'm deeply concerned that judges are making those decisions, and not the citizenry of the United States. You know, Congress passed a law called DOMA, the Defense of Marriage Act -- my opponent was against it -- it basically protected states from the action of one state to another. It also defined marriage as between a man and a woman. But I'm concerned that that will get overturned, and if it gets overturned, then we'll end up with marriage being defined by courts. And I don't think that's in our nation's interest.

MODERATOR: Senator Kerry.

SENATOR KERRY: We're all God's children, Bob, and I think if you were to talk to Dick Cheney's daughter, who is a lesbian, she would tell you that she's being who she was, she's being who she was born as. I think if you talk to anybody, it's not choice. I've met people who've struggled with this for years, people who were in a marriage because they were living a sort of convention, and they struggled with it. And I've met wives who are supportive of their husbands, or vice versa, when they finally sort of broke out and allowed themselves to live who they were, who they felt God had made them. I think we have to respect that.

The President and I share the belief that marriage is between a man and a woman. I believe that. I believe marriage is between a man and a woman. But I also believe that because we are the United States of America, we're a country with a great, unbelievable Constitution, with rights that we afford people, that you can't discriminate in the workplace, you can't discriminate in the rights that you afford people. You can't disallow someone the right to visit their partner in a hospital. You have to allow people to transfer property, which is why I'm for partnership rights and so forth.
Now, with respect to DOMA and the marriage laws, the states have always been able to manage those laws, and they're proving today, every state, that they can manage them adequately.

MODERATOR: Senator Kerry, a new question for you. The New York Times reports that some Catholic archbishops are telling their church members that it would be a sin to vote for a candidate like you because you support a woman's right to choose an abortion and unlimited stem cell research. What is your reaction to that?

SENATOR KERRY: I respect their views. I completely respect their views. I am a Catholic and I grew up learning how to respect those views. But I disagree with them, as do many. I believe that I can't legislate or transfer to another American citizen my article of faith. What is an article of faith for me is not something that I can legislate on somebody who doesn't share that article of faith. I believe that choice is a woman's choice. It's between a woman, God, and her doctor. And that's why I support that.

Now, I will not allow somebody to come in and change Roe v. Wade. The President has never said whether or not he would do that. But we know from the people he's tried to appoint to the court, he wants to. I will not. I will defend the right of Roe v. Wade.
Now, with respect to religion, you know, as I said, I grew up a Catholic. I was an alter boy. I know that throughout my life, this has made a difference to me. And as President Kennedy said, when he ran for President, he said, I'm not running to be a Catholic President, I'm running to be a President who happens to be Catholic.

Now, my faith affects everything that I do and choose. There's a great passage of the Bible that says, "What does it mean, my brother, to say you have faith, if there are no deeds; faith without works is dead." And I think that everything you do in public life has to be guided by your faith, affected by your faith, but without transferring it in any official way to other people. That's why I fight against poverty, that's why I fight to clean up the environment and protect this Earth. That's why I fight for equality and justice. All of those things come out of that fundamental teaching and belief of faith.

But I know this, that President Kennedy, in his inaugural address, told all of us that here on Earth, God's work must truly be our own. And that's what we have to -- so I think that's the test of public service.

MODERATOR: Mr. President.

PRESIDENT BUSH: I think it's important to promote a culture of life. I think a hospitable society is a society where every being counts and every person matters. I believe the ideal world is one in which every child is protected in law and welcomed to life. I understand there's great differences on this issue of abortion, but I believe reasonable people can come together and put good law in place that will help reduce the number of abortions.

Take, for example, the ban on partial birth abortion. It's a brutal practice. People from both political parties came together in the halls of Congress and voted overwhelmingly to ban that practice. It made a lot of sense. My opponent -- in that he's out of the mainstream -- voted against that law.

What I'm saying is, is that as we promote life and promote a culture of life, surely there are ways we can work together to reduce the number of abortions: Continue to promote adoption laws. That's a great alternative to abortion. Continue to fund and promote maternity group homes. I will continue to promote abstinence programs. At the last debate, my opponent said his wife was involved with those programs. That's great, and I appreciate that very much. All of us ought to be involved with programs that provide a viable alternative to abortion.

MODERATOR: Mr. President, let's have a new question. It goes to you and let's get back to economic issues. Health insurance costs have risen over 36 percent over the last four years, according to The Washington Post. We're paying more, we're getting less. I would like to ask you who bears responsibility for this? Is it the government? Is it the insurance companies? Is it the lawyers? Is it the doctors? Is it the administration?

PRESIDENT BUSH: Gosh, I sure hope it's not the administration. No. There is a -- look, there's a systemic problem. Health care costs are on the rise because the consumers are not involved in the decision-making process. Most health care costs are covered by third parties, and therefore, the actual user of health care is not the purchaser of health care. And there's no market forces involved with health care. It's one of the reasons I'm a strong believer in what they call health savings accounts. These are accounts that allow somebody to buy a low-premium, high-deductible catastrophic plan and couple it with tax-free savings. Businesses can contribute, employees can contribute on a contractual basis. But this is a way to make sure people are actually involved with the decision-making process on health care.

Secondly, I do believe the lawsuits -- I don't believe, I know -- that the lawsuits are causing health care costs to rise in America. That's why I'm such a strong believer in medical liability reform. At the last debate my opponent said, well, they only -- these lawsuits only cause costs to go up by one percent. Well, he didn't include the defensive practice of medicine that costs the federal government some $28 billion a year, and costs our society between $60 billion and $100 billion a year.
Thirdly, one of the reasons why there's still high costs in medicine is because this is the -- they don't use information technology. It's like if you looked at the -- it's the equivalent of the buggy and horse days compared to other industries here in America. And so we've got to introduce high technology into health care. We're beginning to do it. We're changing the language. We want there to be electronic medical records to cut down on error, as well as to reduce costs. People tell me that when the health care field is fully integrated with information technology it will wring some 20 percent of the costs out of the system.

And finally, moving generic drugs to the market quicker. So, those are four ways to help control the costs in health care.

MODERATOR: Senator Kerry.

SENATOR KERRY: The reason health care costs are getting higher -- one of the principal reasons is that this administration has stood in the way of common-sense efforts that would have reduced the costs. Let me give you a prime example. In the Senate, we passed the right of Americans to import drugs from Canada. But the President and his friends took it out in the House and now you don't have that right. The President blocked you from the right to have less expensive drugs from Canada.

We also wanted Medicare to be able to negotiate bulk purchasing. The VA does that. The VA provides lower-cost drugs to our veterans. We could have done that in Medicare. Medicare is paid for by the American taxpayer. Medicare belongs to you. Medicare is for seniors who are, many of them, on fixed income, to lift them out of poverty. But rather than help you, the taxpayer, have lower cost, rather than help seniors have less expensive drugs, the President made it illegal -- illegal -- for Medicare to actually go out and bargain for lower prices. Result: $139 billion windfall profit to the drug companies coming out of your pockets. That's a large part of your 17 percent increase in Medicare premiums. When I'm President, I'm sending that back to Congress and we're going to get a real prescription drug benefit.

Now, we also have people sicker because they don't have health insurance. So whether it's diabetes or cancer, they come to the hospitals later and it costs America more. We've got to have health care for all Americans.

MODERATOR: Go ahead, Mr. President.

PRESIDENT BUSH: I think it's important, since he talked about the Medicare plan. He's been in the United States Senate for 20 years. He has no record on reforming of health care, no record at all. He introduced some 300 bills and he's passed five. No record of leadership.

I came to Washington to solve problems. I was deeply concerned about seniors having to choose between prescription drugs and food, and so I led. And in 2006, our seniors will get a prescription drug coverage in Medicare.

MODERATOR: Senator Kerry, 30 seconds.

SENATOR KERRY: Once again, the President is misleading America. I've actually passed 56 individual bills that I've personally written. And in addition to that, they're not always under my name, there is amendments on certain bills.
But more importantly, with respect to the question of no record, I helped write -- I did write -- I was one of the original authors of the early childhood health care and the expansion of health care that we did in the middle of the 1990s. And I'm very proud of that. So the President's wrong.

MODERATOR: Let me direct the next question to you, Senator Kerry, and again, let's stay on health care. You have, as you have proposed and as the President has commented on tonight, proposed a massive plan to extend health care coverage to children. You're also talking about the government picking up a big part of the catastrophic bills that people get at the hospital. And you have said that you can pay for this by rolling back the President's tax cut on the upper two percent.

SENATOR KERRY: That's correct.

MODERATOR: You heard the President say earlier tonight that it's going to cost a whole lot more money than that. I just ask where are you going to get the money?

SENATOR KERRY: Well, two leading national news networks have both said the President's characterization of my health care plan is incorrect. One called it, fiction; the other called it, untrue. The fact is that my health care plan, America, is very simple. It gives you the choice. I don't force you to do anything. It's not a government plan. The government doesn't require you to do anything. You choose your doctor. You choose your plan. If you don't want to take the offer of the plan that I want to put forward, you don't have to. You can keep what you have today, keep a high deductible, keep high premiums, keep a high co-pay, keep low benefits. But I got a better plan, and I don't think a lot of people are going to want to keep what they have today.

Here's what I do. We take over Medicaid children from the states so that every child in America is covered. And in exchange, if the states want to -- they're not forced to, they can choose to -- they cover individuals up to 300 percent of poverty. It's their choice. I think they'll choose it, because it's a net plus of $5 billion to them.

We allow you, if you choose to -- you don't have to -- but we give you broader competition to allow you to buy into the same health care plan that senators and congressmen give themselves. If it's good enough for us, it's good enough for every American. I believe that your health care is just as important as any politician in Washington, D.C. If you want to buy into it, you can. We give you broader competition. That helps lower prices.

In addition to that, we're going to allow people 55 to 64 to buy into Medicare early. And most importantly, we give small business a 50-percent tax credit so that after we lower the cost of health care, they also get, whether they're self-employed or a small business, a lower cost to be able to cover their employees.

Now, what happens is, when you begin to get people covered like that -- for instance, in diabetes, if you diagnose diabetes early, you could save $50 billion in the health care system of America by avoiding surgery and dialysis. It works, and I'm going to offer it to America.

MODERATOR: Mr. President.

PRESIDENT BUSH: In all due respect, I'm not so sure it's credible to quote leading news organizations about -- well, never mind. Anyway. Let me quote the Lewin report. The Lewin report is a group of folks who are not politically affiliated, they analyzed the Senator's plan. It costs $1.2 trillion. The Lewin report accurately noted that there are going to be 20 million people -- over 20 million people added to government-controlled health care. It will be the largest increase in government health care ever.

If you raise the Medicaid to 300 percent, it provides an incentive for small businesses not to provide private insurance to their employees. Why should they insure somebody when the government is going to insure for them? It's estimated that 8 million people will go from private insurance to government insurance.

We have a fundamental difference of opinion. I think government-run health will lead to poor-quality health, will lead to rationing, will lead to less choice. Once a health care program ends up in a line-item in the federal government budget, it leads to more controls. And just look at other countries that have tried to have federally-controlled health care. They have poor quality health care. Our health care system is the envy of the world because we believe in making sure that the decisions are made by doctors and patients, not by officials in the nation's capital.


SENATOR KERRY: The President just said that government-run health care results in poor quality. Now, maybe that explains why he hasn't fully funded the VA when the VA hospital was having trouble, and veterans are complaining. Maybe that explains why Medicare patients are complaining about being pushed off of Medicare -- he doesn't adequately fund it.
But let me just say to America, I am not proposing a government-run program. That's not what I have. I have Blue Cross/Blue Shield. Senators and congressmen have a wide choice; Americans ought to have it, too.

MODERATOR: Mr. President.

PRESIDENT BUSH: You talk about the VA. We've increased VA funding by $22 billion in the four years since I've been President. That's twice the amount that my predecessor increased VA funding. Of course, we're meeting our obligation to our veterans. And the veterans know that. We're expanding veterans' health care throughout the country. We're aligning facilities where the veterans live now. Veterans are getting very good health care under my administration. And they will continue to do so during the next four years.

MODERATOR: Mr. President, the next question is to you. We all know that Social Security is running out of money, and it has to be fixed. You have proposed to fix it by letting people put some of the money collected to pay benefits into private savings accounts. But the critics are saying that's going to mean finding a trillion dollars over the next 10 years to continue paying benefits as those accounts are being set up. So where do you get the money? Are you going to have to increase the deficit by that much over 10 years?

PRESIDENT BUSH: Bob, first let me make sure that every senior listening today understands that when we're talking about reforming Social Security, that they'll still get their checks. I remember the 2000 campaign, people said, if George W. gets elected, your check will be taken away. Well, people got their checks and they will continue to get their checks.
There is a problem for our youngsters, a real problem, and if we don't act today the problem will be valued in the trillions. And so I think we need to think differently. We'll honor our commitment to our seniors, but for young -- for our children and our grandchildren, we need to have a different strategy. In recognizing that, I called together a group of our fellow citizens to study the issue. It was a committee chaired by the late Senator Daniel Patrick Moynihan of New York, a Democrat. And they came up with a variety of ideas for people to look at.

I believe that younger workers ought to be allowed to take some of their own money and put it in a personal savings account, because I understand that they need to get better rates of return than the rates of return being given in the current Social Security trust. And the compounding rate of interest effect will make it more likely that the Social Security system is solvent for our children and our grandchildren.

I will work with Republicans and Democrats. This will be a vital issue in my second term. It is an issue that I'm willing to take on. And so I bring Republicans and Democrats together, and we're, of course, going to have to consider the costs. But I want to warn my fellow citizens the cost of doing nothing, the cost of saying the current system is okay, far exceeds the cost of trying to make sure we save the system for our children.

MODERATOR: Senator Kerry.

SENATOR KERRY: You just heard the President say that young people ought to be able to take money out of Social Security and put it in their own accounts. Now, my fellow Americans, that's an invitation to disaster. The CBO said very clearly that if you were to adopt the President's plan, there will be a $2-trillion hole in Social Security, because today's workers pay into the system for today's retirees. And the CBO said -- that's the Congressional Budget Office, it's bipartisan -- they said that there would have to be a cut in benefits of 25 to 40 percent.

Now, the President has never explained to America, ever, hasn't done it tonight, where does the transitional money, that $2 trillion come from? He's already got $3 trillion, according to The Washington Post, of expenses that he's put on the line from his convention and the promises of this campaign, none of which are paid for, not one of them are paid for.

The fact is that the President is driving the largest deficits in American history. He's broken the pay-as-you-go rules. I have a record of fighting for fiscal responsibility. In 1985, I was one of the first Democrats, broke with my party, we balanced the budget in the '90s. We paid down the debt for two years. And that's what we're going to do. We're going to protect Social Security. I will not privatize it. I will not cut the benefits. And we're going to be fiscally responsible and we will take care of Social Security.

MODERATOR: Let me just stay on Social Security with a new question for Senator Kerry, because Senator Kerry, you have just said you will not cut benefits. Alan Greenspan, the Chairman of the Federal Reserve, says there's no way that Social Security can pay retirees what we have promised them unless we recalibrate. What he's suggesting, we're going to have to cut benefits or we're going to have to raise retirement age. We may have to take some other reform. But if you've just said you've promised no changes, does that mean you're just going to leave this as a problem, another problem for our children to solve?

SENATOR KERRY: Not at all. Absolutely not, Bob. This is the same thing we heard -- I remember I appeared on Meet the Press with Tim Russert in 1990-something -- we heard the same thing. We fixed it. In fact, we put together a $5.6 trillion surplus in the '90s that was for the purpose of saving Social Security. If you take the tax cut that the President of the United States has given -- President Bush gave to Americans in the top 1 percent of America, just that tax cut that went to the top 1 percent of America would have saved Social Security until the year 2075. The President decided to give it to the wealthiest Americans in a tax cut.

Now, Alan Greenspan, who I think has done a terrific job in monetary policy, supports the President's tax cut. I don't. I support it for the middle class, not that part of it that goes to people earning more than $200,000 a year. And when I roll it back, and we invest in the things that I've talked about to move our economy, we're going to grow sufficiently that we begin to cut the deficit in half, and we get back to where we were at the end of the 1990s when we balanced the budget and paid down the debt of this country. Now, we can do that.

Now, if later on, after a period of time, we find that Social Security is in trouble, then we'll pull together the top experts of the country, we'll do exactly what we did in the 1990s and we'll make whatever adjustment is necessary. But the first and most important thing is to start creating jobs in America. The jobs the President is creating pay $9,000 less than the jobs that we're losing. And this is the first President in 72 years to preside over an economy in America that has lost jobs -- 1.6 million jobs. Eleven other Presidents -- six Democrats and five Republicans -- had wars, had recessions, had great difficulties; none of them lost jobs the way this President has.

I have a plan to put America back to work. And if we're fiscally responsible and put America back to work, we're going to fix Social Security.

MODERATOR: Mr. President.

PRESIDENT BUSH: He forgot to tell he voted to tax Social Security benefits more than one time. I didn't hear any plan to fix Social Security. I heard more of the same. He talks about middle class tax cuts -- that's exactly where the tax cuts went. Most of the tax cuts went to low- and middle-income Americans. And now the tax code is more fair; 20 percent of the upper-income people pay about 80 percent of the taxes in America today because of how we structured the tax cuts. People listening out there know the benefits of the tax cuts we passed. If you have a child, you got tax relief. If you're married, you got tax relief. If you pay any tax at all, you got tax relief. All of which was opposed by my opponent. And the tax relief was important to spur consumption and investment to get us out of this recession.

People need to remember, six months prior to my arrival, the stock market started to go down, and it was one of the largest declines in our history. And then we had a recession, and we got attacked, which cost us 1 million jobs. But we acted. I led the Congress. We passed tax relief. And now this economy is growing. We added 1.9 million new jobs over the last 13 months.
Sure, there's more work to do. But the way to make sure our economy grows is not to raise taxes on small business owners; it's not to increase the scope of the federal government; it's to makes sure we have fiscal sanity and keep taxes low.


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