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LIEBERMAN: Before I answer that very important question, let me first thank you for moderating the debate. Let me thank the wonderful people here at Centre College and throughout Kentucky for being such gracious hosts, and let me give a special thank you to the people of Connecticut without whose support over these last 30 years I would never have had the opportunity Al Gore has given me this year. And finally let me thank my family that is here with me. My wife, Hadassah, our children, our siblings and my mom. My 85-year-old mom gave me some good advice about the debate earlier today. She said, sweetheart -- as she's prone to call me -- remember, be positive and know that I will love you no matter what you're opponent says about you. Well, Mom, as always, that was both reassuring and wise. I am going to be positive tonight. I'm not going to indulge in negative personal attacks. I'm going to talk about the issues that matter to the people of this country; education, health care, retirement security and moral values. I'm going to describe the plan that Al Gore and I have for keeping America's prosperity going and making sure that it benefits more of America's families, particularly the hard-working middle class families who have not yet fully benefitted from the good times we've had. And Bernie, I'm going to explain tonight how we're going to do all this and remain fiscally responsible. Let me get to your question.

MODERATOR: You have about ten seconds.

LIEBERMAN: We're not spending any more than is projected from the experts. We're setting aside $300 billion in a reserve fund. The projections the nonpartisan experts make aren't quite right. Keeping America out of debt is a way to keep interest rates down and the economy growing.

MODERATOR: Secretary Cheney.

CHENEY: I want to thank the people here in Danville, Kentucky, and I'm delighted to be here tonight. I want to avoid any personal attacks. I promise not to bring up your singing. (LAUGHTER)

LIEBERMAN: I promise not to sing.

CHENEY: Good. I think this is an extraordinarily important decision we'll make on November 7th. We're really going to choose between what I consider to be an old way of governing ourselves or a new course, a new era, if you will, of high levels of spending, high taxes, ever more intrusive bureaucracy. And Governor Bush and I want to offer that new course of action. With respect to the surplus, Bernie, we have to make some kind of forecast. We can't make 12-month decisions in this business. We're talking about the kinds of fundamental changes in programs and government that are going to affect people's lives for the next 25 or 30 years. And while it may be a little risky in some respects from an economic standpoint to try to forecast surpluses, I think we have to make some planning assumption to proceed. We care a great deal about the issues at stake here. One of the difficulties we have, frankly, for the last eight years we ignored a lot of these problems. We haven't moved aggressively on Social Security, on Medicare. There are important issues out there that need to be resolved. It's important for us to get on with that business. That's what Governor Bush and I want to do.

MODERATOR: You alluded to problems. There's no magic bullet -- Secretary Cheney, in this question to you -- no magic bullets to solve the problems of public education. What is the next best solution?

CHENEY: I think public education is a solution. Our desire is to find ways to reform our educational system, to return it to its former glory. I'm a product of public schools, my family, wife and daughters all went to public schools. We believe very much in the public school system. But if you look at where we are from the standpoint of the nation, recent exams. For example, the National Assessment of Educational Progress, an independent testing service, shows there's no progress on reading scores in the last eight years. Almost no progress on math. We've had a significant increase in spending for education nationwide, but it has produced almost no positive results. That's unacceptable from our standpoint. If you look at it and think about it, we now have in our most disadvantaged communities, 70% of our fourth graders can't read at the basic level of understanding. We've graduated 15 million kids from high school in the last few years who can't read at a significant level. What we want to do is to change that. We think we know how to do it. Governor Bush has done it in Texas. We want to emphasize local control. We want to insist on high standards. One of the worst things we can do is fail to establish high standards. To say we don't have the same kind of expectations from you that we have from everybody else. We want accountability. We have to test every child every year to know whether or not we're making progress with respect to achieving those goals and objectives. We think it's extraordinarily important. Probably the single most important issue in this campaign. Governor Bush has made it clear that when he's elected this will be his number one priority as a legislative measure to submit to the Congress.

MODERATOR: Senator.

LIEBERMAN: Al Gore and I are committed to making America's public schools the best in the world. I disagree with what my opponent has said. A lot of progress has been made in recent years. Average testing scores are up and a lot of work is being done by tens of thousands of parents, teachers and administrators all around America. There is more to be done. If you'll allow me, I want to go back to your last question. It leads to this question. I think both of us agree that leaving aside the Social Security and Medicare surpluses, there's $1.8 trillion in surplus available to spend over the next ten years. We're being fiscally responsible about it. We're taking $300 billion off the top to put in reserve fund. The rest we'll use for middle class tax cuts and invest in programs like education. There's a big difference between these two tickets. Our opponents with spend $1.6 trillion of the surplus projected on a big tax cut that Al Gore talked about the other night so effectively. We're saving money to invest in education. You cannot reform education and improve it in this country without spending some money. Al Gore and I have committed $170 billion for that purpose. To recruit 100,000 new teachers to reduce the size of classrooms. To help local school districts build new buildings so our children are not learning in crumbling classrooms. And we're not just going to stop at high school. We're going to go on and give the middle class the ability to deduct up to $10,000 a year in the cost of college tuition. Now, that is a tremendous life-saving change which will help people carry on their education and allow them to develop the kinds of skills that will help them succeed in the hi-tech economy of today.

CHENEY: This is a very important issue, Bernie. Maybe we could extend on education for a moment.

MODERATOR: You're asking me to invoke the moderator's discussion?

CHENEY: Yes.

MODERATOR: It is so granted.

CHENEY: Thank you, sir.

LIEBERMAN: Do I have a chance to respond?

MODERATOR: The secretary will have two minutes and then you'll have two minutes.

CHENEY: The question of the surplus drives a lot of what we're talking about here, Joe. If you look at our proposal, we take half of the projected surplus and set it aside for Social Security. Over $2.4 trillion. We talk roughly a fourth of it for other urgent priorities such as Medicare reform and education, several of these other key programs we want to support. And we take roughly one-fourth of it and return it in the form of a tax cut to the American taxpayer. We think it's very important to do that. It is a fundamental difference between our two approaches. If you look, frankly, by our numbers and the numbers of the Senate Budget Committee, which has totaled up all the promises that Vice President Gore has made during the course of the campaign, there's some $900 billion in spending over and above that surplus already and we still have a month to go in the campaign. The fact is that the program that we put together we think is very responsible. Suggestion that somehow all of it is going for tax cuts isn't true. Another way to look at it is over the course of the next ten years we'll collect roughly $25 trillion in revenue. We want to take about 5% of that and return that to the American taxpayer in the form of tax relief. We have the highest level of taxation now we've had since World War II. The average American family is paying about 40% in federal, state and local taxes. We think it is appropriate to return to the American people so that they can make choices themselves in how that money ought to be spent; whether on education, retirement or on paying their bills. It is their choice and prerogative. We want to give them the opportunity to make those kinds of choices for themselves and we think this is a totally reasonable approach.

MODERATOR: Senator?

LIEBERMAN: Let me start with the numbers. With all due respect, the Senate Budget Committee estimates that Dick Cheney has just referred to are the estimates of the partisan Republican staff of the Senate Budget Committee. We're using the numbers presented by the nonpartisan Congressional Budget Office. We start with an agreement which the surplus in the Social Security fund should be locked up and used for Social Security. That's where the agreement ends. We also agree and believe and pledge that the surplus in the Medicare trust fund should also be locked up with a sign on it says that politicians keep your hands off. Our opponents do not do that. In fact, they raid the Medicare trust fund to pay for, well, their tax cut and other programs that they can't afford because they've spent so much on the tax cut. Let me come back to the remaining $1.8 trillion that we both talked about. The numbers show that $1.6 trillion goes to the big tax cut which, as Al Gore said the other night, sends 43% to the top 1%. Worse than that, when you add on the other spending programs that our opponents have committed to, plus the cost of their plan to privatize Social Security, they're $1.1 trillion in debt. That means we go back down the road to higher interest rates, to higher unemployment, to a kind of self-tax increase on every American family. Because when interest rates go up, so, too, do the cost of mortgage payments, car payments, student loans, credit card transactions. So if we've learned anything over the last eight years, it is that one of the most important things the government can do, the federal government, probably the most important, is to be fiscally responsible. And that's why Al Gore and I are committed to balancing the budget every year. In fact, the paying off the debt by the year 2012, when by our calculation our opponent's economic plan still leaves America $2.8 trillion in debt.

MODERATOR: Time. The next question goes to you. Gentlemen, this is the 21st Century. Yet on average an American working woman in our great nation earns 75 cents for each $1 earned by a working male. What do you males propose to do about it?

LIEBERMAN: It's a good and important question. Obviously in our time, fortunately, great advances have been made by women achieving the kind of equality that they were too long denied. Bernie, your question is absolutely right. Women -- actually the number I have received 72 cents for every $1 a man receives in a comparable job. Al Gore and I have issued an economic plan in which we've stated specific goals for the future. And one of those goals is to eliminate the pay gap between men and women. It's unfair and it's unacceptable. And the first way we will do that is by supporting the Equal Pay Act which has been proposed in Congress which gives women the right to file legal actions against employers who are not treating them fairly and not paying them equally. Secondly, we're going to do everything we can using governmental support of business agencies such as the Small Business Administration to help women business owners have an opportunity to invest and begin businesses and make larger incomes themselves. And there are other civil rights and human rights laws that I think can come to play here. So bottom line, this is an unfair and unacceptable situation. And even though, as the economy has risen in the last eight years, America's women have risen with it and received more income, until women are receiving the same amount of pay for the same job they're doing as a man receives, we've not achieved genuine equality in this country. Al Gore and I are committed to closing that gap and achieving that equality. In so many families women are a significant bread earner or the only bread earner. So this cause affects not only the women, but families and the children as well.

MODERATOR: Mr. Secretary.

CHENEY: I share the view that we ought to have equal pay for equal work regardless of someone's gender. We have made progress in recent years, but I think we have a ways to go. It's not just about the differential with respect to women. If you look at our opponent's tax proposal, they discriminate between stay-at-home moms with children that they take care of themselves and those who go to work or who, in fact, have their kids taken care of outside the home. You, in effect, as a stay-at-home mom get no tax advantage under the Gore tax plan as opposed to the Bush proposal. It provides tax relief for everybody who pays taxes. It's important to understand the things we're trying to change and address in the course of the campaign and what our agenda is for the future, or plans are for the future focus very much about giving as much control as we can to individual Americans, be they men or women, be they single or married, as much control as possible over their own lives, especially in the area of taxation. We want to make certain that the American people have the ability to keep more of what they earn and then they can get to decide how to spend it. The proposal we have from Al Gore, basically, doesn't do that. It in effect lays out some 29 separate tax credits. If you live your life the way they want you to live your life, if you behave in a certain way, you qualify for a tax credit and at that point you get some relief. Bottom line, though, is 50 million American taxpayers out there get no advantages at all out of the Gore tax proposal, whereas under the Bush plan everybody who pays taxes will get tax relief.

LIEBERMAN: Might I have an opportunity to respond?

MODERATOR: I caution you if you do this consistently we won't cover a lot of topics. After the Senator responds, you don't have to feel compelled to respond to the Senator. Depending on what he says.

LIEBERMAN: This is an important difference between us. I want to clarify it briefly if I can. The first thing is the tax relief program that we've proposed, one of the many tax credits for the middle class includes a $500 tax credit for stay-at-home moms just as a way of saying we understand that you are performing a service for our society. We want you to have that tax credit. Second, the number of 50 million Americans not benefitting from our tax cut program is absolutely wrong. It's an estimate done on an earlier form of our tax cut program and it's just plain wrong. And secondly, although Governor Bush says that his tax cut program, large as it is, gives a tax cut to everybody, as the newspapers indicated earlier this week, the Joint Committee on Taxation, a nonpartisan group in Congress, says the 27 million Americans don't get what the governor said they would in the tax program. Al Gore and I want to live within our means. We won't give it away as a tax cut and certainly not to the 1% of the public that doesn't need it now. We're focusing on the middle class in the areas they tell us they need it. Tax credits for better and more expensive child care, tax credits for middle class families that don't have health insurance from their employers. The tax deduction I talked about earlier. Very exciting deduction for up to $10,000 a year in the cost of a college tuition. A $3,000 tax credit for the cost -- well, actually for a family member who stays home with a parent or grandparent who is ill. And a very exciting tax credit program that I hope I'll have a chance to talk about later, Bernie, that encourages savings by people early in life and any time in life by having the federal government match savings for the 75 million Americans who make $100,000 or less up to $2,000 a year. Very briefly, if a young couple making $50,000 a year saves $1,000, the government will put another $1,000 in that account. By the time they retire, they'll not only have guaranteed Social Security, but more than $200,000 in that retirement fund. Now, that's --

MODERATOR: Your time is up, Senator.

CHENEY: You have to be a CPA to understand what he just said. The fact of the matter is the plan is so complex that the ordinary American is never going to ever figure out what they even qualify for. It's a classic example of wanting to have a program, in this case a tax program, that will, in fact, direct people to live their lives in certain ways rather than empowering them to make decisions for themselves. It is a big difference between us. They like tax credits, we like tax reform and tax cuts.

MODERATOR: Mr. Secretary, this question is for you. Would you support the effort of House Republicans who want legislation to restrict distribution of the abortion drug RU-486?

CHENEY: The abortion issue is a very tough one, without question, and a very important one. Governor Bush and I have empathy. We want to reduce the incidence of abortion on our society. Many on the pro-choice side have said the same thing. Even Bill Clinton has advocated reducing abortion to make it as rare as possible. With respect to the question of RU-486, we believe that -- of course, that it's recently been approved by the FDA. That really was a question of whether or not it was safe to be used by women. They didn't address the sort of the question of whether or not there should or should not be abortion in the society so much as evaluate that particular drug. What we would like to be able to do is to look for ways to reach across the divide between the two points of view and find things that we can do together to reduce the incidence of abortion. Such things as promoting adoption as an alternative. Encouraging parental notification. And we also think banning the horrific practice of partial birth abortions is an area where there could be agreement. Congress has twice passed by overwhelming margins, a significant number from both parties, the ban on partial birth abortions. Twice it's been vetoed by Bill Clinton and Al Gore. We hope eventually they would recognize that's not a good position for them to be in. With respect to the RU-486 proposal, at this stage I haven't looked at that particular piece of legislation. Governor Bush made it clear the other night he did not anticipate that he would be able to go in an direct the FDA to reverse course on that particular issue, primarily because the decision they made was on the drug, not the question of whether or not it would support abortion.

LIEBERMAN: It's a very important question and one on which these two tickets have dramatically different points of view. My answer is no, I would not support legislation that is being introduced in Congress to override the Food and Drug Administration decision on RU-486. The administration, FDA worked 12 years on this serious problem. They made a judgment based on what was good for women's health. A doctor has to pescribe and care for a woman using it. I think it's a decision we ought to let stand because it was made by experts. But let me say more generally that the significant difference here on this issue is that Al Gore and I respect and will protect a woman's right to choose. Our opponents will not. We know that this is a difficult personal, moral, medical issue, but that is exactly why it ought to be left under our law to a woman, her doctor and her God. Now, one area in which we agree, Al Gore and I, we believe that the government ought to do everything it can to reduce the number of unwanted pregnancies. And, therefore, the number of abortions. Incidentally, here there is good news to report. The number of abortions is actually down in America over the last eight years. In fact, over the last eight years the number of teenage pregnancies has dropped 20%. And the reason it has is that there are good programs out there that Al Gore and I will continue to support, such as family planning and programs that encourage abstinence. But when the health of a woman is involved, I think the government has to be respectful. I supported, in fact, a bill in the Senate that would have prohibited late-term abortions except in cases where the health or life of the mother was involved. I did not support the so-called partial birth abortion bill because it would have prohibited that form of abortion at any stage of the pregnancy regardless of the effect on the health and life of the woman. That's unacceptable.

MODERATOR: This question is for you, Senator. If Yugoslavia President Slobodan Milosevic prevails, notwithstanding the election results, would you support his overthrow?

LIEBERMAN: Well, there's good news from Belgrade today, Bernie, as you know. It's unconfirmed. The encouraging news is that the state news agency is reporting that Mr. Kostunica is the president-elect. Some press reports say that Milosevic has actually left Belgrade. They're not confirmed. That is a very happy ending to a terrible story. It's the end of a reign of terror. If that is not confirmed and does not happen, then I think the United States, with its European allies, ought to do everything we can to encourage the people of Serbia to do what they've been doing to rise up and end the reign of terror by Milosevic and bring themselves back into the family of nations where they will be welcomed by the United States and others. You know, I'm very proud on this night as it appears that Milosevic is about to or has fallen, of the leadership role the United States played in the effort to stop his aggression and genocide in Bosnia and Kosovo. I know opponents have said they thought it was overreaching. It wasn't. It was a matter of principle in America's national interest and values. The fact is that we stopped the aggression, we stopped the genocide, and therefore strengthened our relationship with our European allies in NATO. And, in fact, made the United States more respected and trusted by our allies and more feared by our enemies. I think that Vice President Gore played a critical role, passionate role in leading the administration, along with Republican supporters like Bob Dole and John McCain, to do the right thing in the Balkans. And hopefully tonight we're seeing the final results of that bold and brave effort.

MODERATOR: Secretary Cheney.

CHENEY: I noted, like Joe, I'm pleased to see what happened in Yugoslavia today. I hope it marks the end of Milosevic. I think probably more than anything else it's a victory for the Serbian people. They've taken to the streets to support their democracy, to support their vote. In some respects this is a continuation of a process that began ten years ago all across eastern Europe and has only now arrived in Serbia. We saw it in Germany, Rumania, Czechoslovakia, and the people of eastern Europe rose up and made their claim for freedom. And I think we all admire that. I think with respect to how this process has been managed most recently, we want to do everything we can to support Mr. Milosevic's departure. Certainly, though, that would not involve committing U.S. troops. I do think it's noteworthy that there appears to be an effort underway to get the Russians involved. I noted the other night, for example, Tuesday night at the debate in Boston, Governor Bush suggested exactly that we ought to try to get the Russians involved to exercise some leverage over the Serbians. It's now clear from the press that, in fact, that's exactly what they were doing. It's -- Governor Bush was correct in his assessment and his recommendation. He has supported the administration on Kosovo. He lobbied actively against passage of the Byrd-Warner provision which would have set a specific deadline, one he felt was too soon, for forcing the U.S. troops out. He's been supportive of the policy that we've seen with respect to Yugoslavia. And I think he deserves a lot of credit for that. I would go beyond that. I think this is an opportunity for the United States to test President Putin of Russia. Now is the time we ought to find out whether he's committed to democracy. Whether he's willing to support the forces of freedom and democracy there in the area of eastern Europe. And it's a test for him whether he represents the old guard in the Soviet Union. One of the most important challenges we face as a nation is how we manage that process of integrating those 150 million eastern Europeans into the security and economic framework of Europe.

MODERATOR: Your question, Mr. Secretary. You and Governor Bush charge the Clinton-Gore administration have presided over the deterioration and overextension of America's armed forces. Should U.S. military personnel be deployed as warriors or peacekeepers?

CHENEY: My preference is to deploy them as warriors. There may be occasion when it's appropriate to use them in a peacekeeping role, but I think the role ought to be limited, a time limit on it. The reason we have a military is to be able to fight and win wars. And to maintain with sufficient strength so that would-be adversaries are deterred from ever launching a war in the first place. I think that the administration has, in fact, in this area failed in a major responsibility. We've seen a reduction in our forces far beyond anything that was justified by the end of the Cold War. At the same time we've seen a rapid expansion of our commitments around the world as troops have been sent hither and yon. There was testimony before the Joint Chiefs of Staff before the Armed Services Committee that pointed out a lot of these problems. General Mike Ryan of the Air Force with 40% fewer aircraft, he's now undertaking three times as many deployments on a regular basis as he had to previously. We're overcommitted and underresourced. This has had some other unfortunate effects. I saw a letter the other day from a young captain stationed in Fort Bragg, a graduate of West Point in '95 getting ready to get out of the service because he's only allowed to train with his troops when fuel is available for the vehicles and only allowed to fire their weapons twice a year. He's concerned if he had to ever go into combat there would be lives lost. It's a legitimate concern, the fact the U.S. military is worse off today than it was eight years ago. It's a high priority for myself and Governor Bush to rebuild the U.S. military and to give them good leadership and build up the forces.

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