O'BRIEN: Mr. President, you have enjoyed a Republican majority in the House and Senate for most of your presidency.  In that time, you've not vetoed a single spending bill.  Excluding $120 billion spent in Iran and -- I'm sorry, Iraq and Afghanistan, there has been $700 billion spent and not paid for by taxes.

Please explain how the spending you have approved and not paid for is better for the American people than the spending proposed by your opponent.

BUSH: Right, thank you for that.

We have a deficit.  We have a deficit because this country went into a recession.  You might remember the stock market started to decline dramatically six months before I came to office, and then the bubble of the 1990s popped.  And that cost us revenue.  That cost us revenue.

Secondly, we're at war.  And I'm going to spend what it takes to win the war, more than just $120 billion for Iraq and Afghanistan. We've got to pay our troops more.  We have.  We've increased money for ammunition and weapons and pay and homeland security.

I just told this lady over here we spent -- went from $10 billion to $30 billion to protect the homeland.  I think we have an obligation to spend that kind of money.

And plus, we cut taxes for everybody.  Everybody got tax relief, so that they get out of the recession.

I think if you raise taxes during a recession, you head to depression.  I come from the school of thought that says when people have more money in their pocket during economic times, it increases demand or investment.  Small businesses begin to grow, and jobs are added.

We found out today that over the past 13 months, we've added 1.9 million new jobs in the last 13 months.

I proposed a plan, detailed budget, that shows us cutting the deficit in half by five years.

And you're right, I haven't vetoed any spending bills, because we work together.

Non-homeland, non-defense discretionary spending was raising at 15 percent a year when I got into office.  And today it's less than 1 percent, because we're working together to try to bring this deficit under control.

Like you, I'm concerned about the deficit.  But I am not going to shortchange our troops in harm's way.  And I'm not going to run up taxes, which will cost this economy jobs.

Thank you for your question.

GIBSON: Senator Kerry, a minute and a half.

KERRY: Let me begin by saying that my health-care plan is not what the president described.  It is not a government takeover.

You have choice.  Choose your doctor, choose your plan.  The government has nothing to do with it.

In fact, it doesn't ask you to do anything -- if you don't want to take it, you don't have to.  If you like your high premiums, you keep them.  That's the way we leave it.

Now with respect to the deficit, the president was handed a $5.6 trillion surplus, ladies and gentlemen.  That's where he was when he came into office.

We now have a $2.6 trillion deficit.  This is the biggest turnaround in the history of the country.  He's the first president in 72 years to lose jobs.

He talked about war.  This is the first time the United States of America has ever had a tax cut when we're at war.

Franklin Roosevelt, Harry Truman, others, knew how to lead.  They knew how to ask the American people for the right things.

One percent of America, the highest one percent of income earners in America, got $89 billion of tax cut last year.  One percent of America got more than the 80 percent of America that earned from $100,000 down.

The president thinks it's more important to fight for that top 1 percent than to fight for fiscal responsibility and to fight for you.

I want to put money in your pocket.  I am -- I have a proposal for a tax cut for all people earning less than the $200,000.  The only people affected by my plan are the top income earners of America.

GIBSON: I both -- I heard you both say -- I have heard you both say during the campaign, I just heard you say it, that you're going to cut the deficit by a half in four years.  But I didn't hear one thing in the last three and a half minutes that would indicate how either one of you do that.

BUSH: Well, look at the budget.  One is make sure Congress doesn't overspend.

But let me talk back about where we've been.  The stock market was declining six months prior to my arrival.

It was the largest stock market correction -- one of the largest in history, which foretold a recession.

Because we cut taxes on everybody -- remember, we ran up the child credit by $1,000, we reduced the marriage penalty, we created a 10 percent bracket, everybody who pays taxes got relief -- the recession was one of the shortest in our nation's history.

GIBSON: Senator Kerry, 30 seconds.

KERRY: After 9/11, after the recession had ended, the president asked for another tax cut and promised 5.6 million jobs would be created.  He lost 1.6 million, ladies and gentlemen.  And most of that tax cut went to the wealthiest people in the country.

He came and asked for a tax cut -- we wanted a tax cut to kick the economy into gear.  Do you know what he presented us with?  A $25 billion giveaway to the biggest corporations in America, including a $254 million refund check to Enron.

Wrong priorities.  You are my priority.

Q11 >