EDWARDS: Am I personally attacked?

I think the truth is that what they're doing is talking about an issue that really doesn't have a great deal to do with what's happening with medical policy in this country, which I think is a very serious issue.

And I would be the first to say that what the vice president described a few minutes ago, problems with malpractice premiums, that's true, it's real. It's very real. What doctors talk about is very serious.

And they're getting squeezed from both sides. I mean, because, they have trouble getting reimbursed, first of all, for the care that they provide, you know, from the government or from health-care companies. And, on the flip side, their malpractice costs are going up.

That's very real, which is why we have proposed a plan to keep cases out of the system that don't belong there.

But it's very important to put this in context. Because, in context, everything they're proposing, according to the bipartisan Congressional Budget Office, amounts to about half of 1 percent of health-care costs in this country -- half of 1 percent.

We have double-digit inflation in health care costs. We've seen the largest rise in medical costs in the last four years in the country's history: $3,500 nationally. And nobody who's watching this debate needs me to explain this to them. They know it.

Medicare premiums are up 17 percent on their watch. Again, largest increase in Medicare premiums in the history of Medicare.

We think we have a plan to keep cases that don't belong in the system out, but we also do what they haven't done.

Five million Americans have lost their health care coverage. Medical costs are skyrocketing. We have a serious health care plan to bring down costs for everybody, to cover millions more Americans and to actually stand up to drug companies and insurance companies which this administration has been unwilling to do.

IFILL: Mr. Vice President?

CHENEY: Gwen, we think lawsuit abuse is a serious problem in this country. We think we badly need tort reform.

I was in Minnesota the other day, where I visited an aircraft manufacturing plant. It's a great success story. This is a company that started 20 years ago with nothing. Today they're the second- leading producer of piston-driven aircraft in the country.

He told me that if it weren't for the increased cost of his liability insurance, in this case product liability, he could hire 200 more people in his factory. We've built into the system enormous costs as a result of our practice with respect to litigation. We have to find ways to get a handle on it.

He mentioned Medicare up 17 percent, somehow that that was something we caused. No. The 17 percent increase in Medicare premiums was the direct result of a statute adopted in 1997. John Kerry voted for it.

It establishes the formula for Part B of Medicare that says, in effect, it has to cover 25 percent of the cost of the program. And the reason the money had to go into the trust fund was to make certain that we could cover those eligible for benefits.

While you were in private practice in law and as a senator, you had the advantage of a special tax loophole, Subchapter S corporation, which you set up so you could avoid paying $600,000 in Medicare taxes that would have gone into the fund.

And it's those kinds of loopholes that necessitate a premium increase under the law that was enacted in 1997, supported by John Kerry.

IFILL: You have 30 seconds to respond.

EDWARDS: Well, first of all, I have paid all the taxes that I owe.

When the vice president was CEO of Halliburton, they took advantage of every offshore loophole available. They had multiple offshore companies that were avoiding taxes.

Those are the kind of things that ought to be closed. They ought to be closed. They ought to be closed for anybody. They ought to be closed whether they're personal, and they ought to be closed whether they apply to a corporation.

But the reality is health care costs are going up every day for the American people, and I hope we're going to get a chance to talk more about health care.

IFILL: Thirty seconds, Mr. Vice President.

CHENEY: We've done a lot to reduce the cost of health care. The Medicare drug benefit that we'll be providing to seniors beginning in '06 will provide upwards to $1,300 a year to help them buy prescription drugs.

The drug savings -- drug discount card that's now available saves an estimated 15 percent to 30 percent off the cost of prescription drugs for senior citizens.

So we're moving in as many areas as we can to make certain we hold down and reduce the health care costs.