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

Mr. 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 that role ought to be limited. I think there ought to be a time limit on it. The--the--the reason we have a military is to be able to fight and win wars and to maintain it with sufficient strength so that would-be adversaries are deterred from ever launching a--a--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 yond.

Testimony just last week by the Joint Chiefs of Staff before the House Arms Services Committee that pointed out a lot of these problems, that the--for example, General Mike Ryan of the Air Force, that with 40 percent fewer aircraft, he's now undertaking three times as many deployments on a regular basis, as he had to previously. So we're--we're overcommitted and we're underresourced, and this has had some--some other unfortunate effects.

I saw a letter, for example, the other day from a young captain stationed down at Ft. Bragg, a graduate of West Point of 1995, getting ready to get out of the service because he's only allowed to train with his troops when fuel's available for the vehicles and--and only allowed to fire their weapons twice a year. He's concerned that if he ever had to send them into combat, it would mean lives loss. That is a legitimate concern. And this is a very important area. In fact, the US military is worse off today than it was eight years ago.

A major responsibility for us in the future and a high priority for myself and Governor Bush will be to rebuild the US military, to give them the resources they need to do the job we ask them to do for us and to give them good leadership.

SHAW: Senator, you're shaking your head in disagreement.

Sen. LIEBERMAN: Well, I am, Bernie. And--and most important, I want to assure the American people that the American military is the best trained, best equipped, most powerful force in the world, and that Al Gore and I will do whatever it takes to keep them that way. It--it's not right to--and--and--and it's not good for our military to--to run them down essentially in the midst of a partisan political debate. The fact is, that you've got to judge the military by what the military leaders say. And Secretary Bill Cohen, a good Republican, General Shelton, chairman of the Joint Chiefs of Staff, both will tell you that the American military is ready to meet any threat we may face in the world today. And the fact is, judging by its results from Desert Storm to--to the Balkans, Bosnia and Kosovo, to the operations that are still being conducted to keep Saddam Hussein in a box in Iraq, the American military has performed brilliantly.

In fact, this administration has turned around the drop in spending on the military that began in the mid-80s and went right through the Bush-Cheney administration in the early years of the Clinton administration. But now that's stopped. In fact, we passed the largest pay increase in a generation for our military. And the--the interesting fact here, in spite of the--the rhetoric that my--my opponent has just spoken, is that the--the reality is that if you look at our projected budgets for the next 10 years, Al Gore and I actually commit more than twice as much, $100 billion in additional funding for our military than Governor Bush does. And--and their budget allows nothing additional for acquisition of new weapons systems, and that's something that the same General Mike Ryan of the Air Force and all the other chiefs of the services will not be happy about because they need the new equipment, the new systems that Al Gore and I are committed to giving them.

Mr. CHENEY: Bernie, this is a special interest of mine. I'd like a chance to elaborate further, if I might. The--the--the--the facts are dramatically different. I'm not attacking the military, Joe. I have enormous regard for the men and women of the US military. I had the great privilege of working with them for the four years I was secretary of Defense, and no one has a higher regard than I do for them.

But it's irresponsible to suggest that we should not have this debate in a presidential campaign, that we should somehow ignore what is a major, major concern. And--and if you have friends or relatives serving in the US military, you know there's a problem. If you look at the data that's available, 40 percent of our Army helicopters that are not combat-ready, combat readiness level in the Air Force that's dropped from 85 percent to 65 percent, significant problems of retention.

The--the important thing for us to remember is that we're a democracy and we're defended by volunteers. Everybody out there tonight wearing the uniform standing on guard to protect the United States is there because they volunteered to put on the uniform. And when we don't give them the spare parts they need to maintain their equipment, when we don't give our pilots the flying hours they need to maintain their proficiency, when we don't give them the kind of leadership that spells out what their mission is and lets them know why they're there and what they're doing and why they're putting their lives at risk, then we undermine that morale. That is an extraordinarily valuable trust. There is no more important responsibility for a president of the United States in his role as commander in chief than the obligation that he undertakes on behalf of all of us to decide when to send our young men and women to war. When we send them without the right kind of training, when we send them poorly equipped or with equipment that's old and--and broken down, we put their lives at risk. We will suffer more casualties in the next conflict if we don't look to those basic fundamental problems.

Now, and with all due respect, Joe, this administration has a bad track record in this regard. And it's available for anybody who wants to look at the record and wants to talk to our men and women in uniform, who wants to spend time with the members of the Joint Chiefs, wants to look at readiness levels and--and other--other indicators.

Final point: The issue of procurement is very important, because we're running now off the build-up of the investment we made back during the Reagan years.

SHAW: Time, sir.

Mr. CHENEY: As that equipment gets old, it has to be replaced, and we've taken money out of the procurement budget to support other me--ventures. We have not been investing in the future of the US military.

Sen. LIEBERMAN: Bernie, I think it's very important to respond to this. Ye--yes, of course, it's--it's--it's an important debate to have as part of this campaign, but I--I--I don't want either the military to feel uneasy or the American people to feel insecure. And--and what I'm saying now I'm basing on service on the Senate Armed Services Committee, talking to exactly the people Dick Cheney has mentioned, the secretary of---of Defense, the--the chiefs of staff. I've visited our--our fighting forces around the world. And I'm telling you that we are ready to meet any contingency that--that might arise.

The--the good news here and the interesting news is that we have met our recruitment targets in each of the services this year. In fact, in--in the areas where our--our opponents have said we are overextended, such as the Balkans, the--the soldiers there have the higher rate of re-enlistment than anywhere else in the service because they feel a sense of purpose, a--a sense of mission. In fact, this administration has begun to transform the American military, to take it away from being a Cold War force, to prepare it to meet the threats of the new generation of tomorrow, of weapons of mass destruction, of ballistic missiles, of--of terrorism, even of--of cyberwarfare. And the fact is that--that Governor Bush recommended in his major policy statement on the military earlier this year that we skip the next generation of military equipment, h--helicopters, submarines, tactical air fighters, a--all the rest.

That would really cripple our readiness, exactly the readiness that ji--Dick Cheney is talking about. Al Gore and I are committed to continuing this acquisition program, transforming the military. There are--there are s--fewer people in uniform today, but person to person--person by person, unit by unit, this is the most powerful and effective military, not only in the world today, but in the history of the world.

SHAW: Time.

Sen. LIEBERMAN: And, again, Al Gore and I will do whatever is necessary to keep it that way.

SHAW: Senator Lieberman, this question to you. Once again, in the Middle East, peace talks on the one hand, deadly confrontations on the other, and the flash point, Jerusalem, and then there's Syria. Is United States policy what it should be?

Sen. LIEBERMAN: Yes, it is. It--it has truly pained me in the last week, Bernie, to watch the--the unrest and--and the death occurring in the Middle East between the Israelis and the Palestinians. So much work has been done by the people there, with the support of--of this administration. So much--much progress has been made in the original Oslo a--agreements between the Israelis and the Palestinians adopted in 1993, in the peace between Israel and Jordan thereafter. I mean, America has a--a national strategic interest and a principled interest in peace in the Middle East.

And Al Gore has played a critical role in advancing that process over the last eight years. What pains me as I watch the unrest in recent days between the Israelis and the Palestinians is that these two peoples have come, al--in some senses, generations forward, centuries forward in the last seven years. They are so close to a final peace agreement. I hope and pray that the death and--and the--and unrest in the last week will not create the kinds of scars that make it hard for them to go back to the peace table with American assistance and achieve what I'm convinced a great majority of the Israeli and Palestinian people want, indeed people throughout the Middle East, which is peace.

Secretary Albright has been in Paris meeting with Prime Minister Barak and Chairman Arafat. I hope and pray that her mission is successful, that there is a cease-fire and the parties return to the peace table. Now we--we've been on a very constructive course in the Middle East, played a--an--an unusual unique role, and I--I am convinced that Al Gore and I--I commit that Al Gore and I will continue to do that. I hope I might, through my friendships in Israel and throughout the Arab world, play a unique role in bringing peace to this--this sacred region of the world.

Mr. CHENEY: Bernie, it's--it has been a very, very difficult area to work in for a long time. Numerous administrations going back certainly to World War II have had to wrestle with the problem of--of what should happen in the Middle East. We made significant breakthroughs, I think, at the end of the Bush administration because of the Gulf War. In effect, we had joined together with Arab allies and--and done enormous damage to the Iraqi armed forces, and Iraq at the time was the biggest military threat to Israel. By virtue of the end of the Cold War, the Soviets were no longer a factor. They used to fish in troubled waters whenever they had the opportunity in the Middle East. But with the end of the Soviet Union, the implosion, if you will, of the empire, that created a--a vacuum, if you will, and made it easier for us to operate there.

We were able to, I think, reassure both Arabs and Israelis that the United States would play a major role there, that we had the--the ability and the will to deploy forces to the region if we had to, to engage in--in military operations to support our friends and oppose our foes. And, of course, we were able to convene the Madrid Conference that, in effect, was the first time Arab and Israelis sat down face to face and began this process of--of trying to move the peace process forward.

I think also a lot of credit goes to some great men, like Yitzhak Rabin. His tragic passing was of major consequence, a great tragedy for--for everybody who cares about peace in the Middle East. He was a man who had the military stature to be able to confidently persuade the Israelis, I think, to take some risks for peace. I think Prime Minister Barak has tried the same thing. I hope that we can get this resolved as soon as possible. My guess is that the next administration is going to be the one that's going to have to come to grips with the current state of affairs there. I think it's very important that we have an administration where we have a president with firm leadership, who has the kind of track record of dealing straight with people, of keeping his word so that friends and allies both respect us and our adversaries fear us.

SHAW: This question is for you, Mr. Secretary. If Iraq's President Saddam Hussein were found to be developing weapons of mass destruction, Governor Bush has said he would, quote, "take him out." Would you agree with such a deadly policy?

Mr. CHENEY: We might have no other choice. We'll have to see if that happens. The--the thing about Iraq, of course, was at the end of the war, we had pretty well decimated their military, we had put them back in a box, so to speak. We had a strong international coalition raid against them, effective economic sanctions and a very robust inspection regime that was in place. So that the--the inspection regime, under UN auspices, was able to do a good job of stripping out the--the capacity to build weapons of mass destruction, the work that he'd been doing that had not been destroyed during the war on biological, chemical agents, as well as a--a nuclear program.

Unfortunately, now we find ourselves in a situation where that's started to fray on us, where the--the coalition now no longer is tied tightly together. Recently, the United Arab Emirates in Bahrain, two Gulf states have reopened diplomatic relations with Baghdad. The Russians and the French now are flying commercial airliners back into Baghdad and sort of thumbing their nose, if you will, at--at the international sanctions regime. And, of course, the UN inspectors have been kicked out, and there's been absolutely no response. So we're in a situation today where I think our posture vis-a-vis Iraq is weaker than it was at the end of the war. I think that's unfortunate. I also think it's unfortunate that we find ourselves in the position where we don't know for sure what might be transpiring inside Iraq. I certainly hope he's not regenerating that kind of capability, but if he were--if, in fact, Saddam Hussein were taking steps to try to rebuild nuclear capability or--or weapons of mass destruction, you'd have to give very serious consideration to military action to--to stop that--that activity. I don't think you can afford to have a man like Saddam Hussein with--with nuclear weapons, say, in the Middle East.

SHAW: Senator?

Sen. LIEBERMAN: Bernie, i--it would, of course, be a very serious situation if we had evidence--credible evidence that Saddam Hussein was developing weapons of mass destruction. But I--but I must say I--I don't think a political campaign is the occasion to declare exactly what we would do in that case. I--I think that's a matter of such critical national security importance that i--it ought to be left to those--commander in chief, the leaders of the military, the secretary of State to make that kind of decision without the heat of a political campaign. The--the fact is, that we--we will not enjoy real stability in the Middle East until Saddam Hussein is gone. The--the Gulf War wa--was a great victory, and incidentally, Al Gore and I were two of the 10 Democrats in the Senate who crossed party lines to support President Bush and Secretary Cheney in that war. And we're both very proud that we did that.

But the--the war did not end with a--with a total victory, and Saddam Hussein remained there. And as a result, we have had almost 10 years now of--of instability. W--we have continued to operate, almost all of this time, military action to enforce a no-fly zone. We--we have been struggling with Saddam about the inspectors. We--we ought to do and we are doing everything we can to get those inspectors back in there. But in the end, there's not going to be peace until he goes, and that's why I was proud to co-sponsor the Iraq Liberation Act with Senator Trent Lott, why I have kept in touch with the indigenous Iraqi opposition, broad-based to Saddam Hussein. Vice President Gore met with them earlier this year. We are supporting them in their efforts, and we will continue to support them until the Iraqi people rise up and do what the people of Serbia have done in the last few days, get rid of a despot. We will welcome you back into the family of nations...

SHAW: Time.

Sen. LIEBERMAN: ...where you belong.

SHAW: Senator Lieberman, this question is to you. Many experts are forecasting continuing chaotic oil prices on the world market. Wholesale natural gas prices here in our country are leaping. Then there are coal and electricity. Have previous Republican and Democratic Congresses and administrations, including this one, done their job to protect the American people?

Sen. LIEBERMAN: Not enough. But this administration and Vice President Gore and I have had both a long-term strategy to develop energy independence and a short-term strategy. In fact, i--if the--this administration had been given the amount of f--funding that it had requested a--from the Republican Congress, we'd be further along in the implementation of that long-term strategy, which is aimed at developing alternative cleaner sources of energy, aimed at giving tax credits to individuals and businesses to conserve and use energy more efficiently, aimed at pa--a partnership for a new generation of vehicles with the American automobile industry, which is making great progress, and can produce a--a vehicle that can get 80 miles per gallon.

We also have a short-term strategy and a--to deal with exactly the kind of ups and downs of energy prices, and I know it was controversial. But Al Gore and I believed that it was important in the short term to reach into the Strategic Petroleum Reserve, take some of that oil that we have, put it in the market, show the big oil companies and the OPEC oil-producing countries that we've got some resources with which we can fight back. We're not just going to lay back and let them roll over our economy. And we did it also because gasoline prices were rising and home heating oil inventories were real low. And our--both of our tickets agree o--on LIHEAP, the low-income housing assistance program. But our opponents really offer no assistance to middle-class families who are hit by rising gas prices and a shortage of home heating oil. The fact is, that since the reserve was opened, the price of oil on world markets has dropped $6 a barrel. Now that's a--that's a good result. And I'm proud of it.

SHAW: Mr. Secretary?

Mr. CHENEY: Bernie, I--th--this is an area where, again, I think Joe and I have fairly significant disagreements. My assessment is that there is no comprehensive energy policy today; that, as a nation, we are in trouble because the administration has not addressed these issues. We have the prospects of brownouts in California. We have a potential heating--home heating oil crisis in the Northeast. We've got gasoline price rises at various other places. For years now, the administration has talked about reducing our dependence on foreign sources of oil, but they haven't done it. In fact, we've gone exactly in the opposite direction. We've got the lowest rate of domestic production of oil now in 46 years. You have to go back to 1954 to find a time when we produced as little oil as we do today.

Our imports are at an all-time record high. In the month of June, we imported almost 12 million barrels a day. That means we're more subject to the wide fluctuations and swings in price. We have other problems. We don't have refinery capacity. We haven't built a new refinery in this country for over 10 years, and the refineries are now operating at 96 percent or 97 percent of capacity, which means even with more crude available, they're probably not going to be able to do very much by way of producing additional home heating oil for this winter. We have a long-term--serious long-term problem of our growing dependence on foreign sources of energy. That will always be the case, but we ought to be able to--to shift the trend and begin to move it in the right direction.

We need to do a lot more about generating the capacity for power here at home. We need to get on with the business and we think we can do it very safely and in an environmentally sound manner. We don't think that--that we ought to buy into this false choice that somehow we cannot develop energy resources without being cautious with the environment. We can; we've got the technology to do it, and--and we ought to do it. We do support the low-income energy assistance program. We think that's very important so that senior citizens, for example, don't suffer this winter. But we need to get on with the business of having a plan to develop our domestic energy resources and producing more supplies, and this administration hasn't produced it.

Sen. LIEBERMAN: Bernie, can I add a word to that?

SHAW: Mr. Secret--Senator, I'm going to continue.

Sen. LIEBERMAN: I yield.

SHAW: Thank you, sir. Your congressional record--you sponsored a bill that said no to oil and gas exploration in Wyoming wilderness area, your home state. However, you co-sponsored a bill that said yes to drilling in the Arctic National Wildlife Refuge. Your explanation.

Mr. CHENEY: Well, Bernie, it just shows I've got a balanced approach to--to how we deal with environmental issues.

SHAW: Not a case of `not in my back yard'?

Mr. CHENEY: No. I think we have to make choices. And--and the Wyoming wilderness bill, frankly, was one of my proudest achievements as a member of Congress. I worked on that with my good friend Al Simpson, for example, for about four years. We set aside a part of Wyoming, nearly a million acres of wilderness that ought to be separate and not be developed. We think that was important. There are a lot of areas around the country where Governor Bush and I, for example, support restraints. We support the moratorium on drilling off the coast of California. But there are places where we think we ought to go forward and develop those resources. The Arctic National Wildlife Reserve is one of them. It's on the North Slope. It's right next to Prudhoe Bay. The infrastructure is there to--to be able to deliver that product to market. We think we can do it, given today's technology, in a way that will not damage the environment, will not permanently mar the--the countryside at all.

And so the--what--what we're looking for, I think, with respect to environmental policy and energy policy is balance. We do have to make choices. We recognize we have to make choices. But a--the--the way you phrased the question, frankly, I welcome because I think it shows that, in fact, we are trying to pursue a--a balanced approach. And the suggestion that somehow all we care about is energy development isn't true. But we do have to get on with developing those resources, or we're going to find ourselves ever more dependent on foreign sources, and we're going to find that--that our--the fact that we don't have an energy policy out there is one of the major storm clouds on the horizon for our economy. I think if you're to look for something that could develop, some problem that could arise, that might, in fact, jeopardize our continuing prosperity, it's the possibility that we might find ourselves without adequate supplies of energy in the future and there'd no--be no quicker way to shut down our economy than that.

SHAW: Senator.

Sen. LIEBERMAN: Bernie, we--we agree on--on the problem, but we couldn't disagree more o--on the response to the problem. The--the problem is accurately stated. No matter how strong we are economically, if we remain dependent on a source of energy that is outside our control, we're not going to be as strong as we should be. And others around the world can effectively yank our chain, and--and we cannot allow that to continue to happen. I--I--I'm afraid that our opponent's response to this is--is one-sided and it--and it is essentially to--to develop the resources within the United States almost regardless of where.

I--I'm against drilling in the Arctic Refuge. This is one of the most beautiful, pristine places that the good Lord has created on Earth, and it happens, fortunately, to be within the United States of America. It's just not worth it to--to do that for what--what seems to be the possibility of six months' worth of oil 7 to 12 years from now. That--that's not much of a response to the immediate problem that gasoline consumers and home heating oil customers are--are facing this winter. There are more resources within the United States that we can develop. In fact--and this isn't mentioned much and appreciated much--but in the last eight years, drilling for--for gas on federal lands has gone up 60 percent. And it's been done in an environmentally protective way. In fact, the administration has encouraged the drilling for deep gas and oil. It's going on in the western Gulf today.

But the answer here is--is new technology that will create millions of new jobs. Let me just say this. If we can get three miles more per gallon from our cars, we'll get a million--we'll save a million barrels of oil a day, which is exactly what the--the refuge, at its best, in--in Alaska would produce. Now the choice to me is clear. We've got to develop fuel cells, alternative energy. We've got to encourage people to conserve...

SHAW: Time.

Sen. LIEBERMAN: ...and to be efficient.

SHAW: This question is for you, Senator. We all know Social Security is the backgo--backbone of the retirement system in our nation. Can either of you pledge tonight categorically that no one will lose benefits under your plans?

Sen. LIEBERMAN: Yes, indeed. I--I can pledge to the American people, categorically, that no one will lose benefits under our plan for Social Security as far forward as 2054. And let me come back and--and say, Bernie, that Al Gore and I view Social Security as probably the best thing the government did in the second half--or--or the--the last century. It has created a floor under which seniors cannot fall. And--and so many of them depend on it for their basic living, for their livelihood. It is critically important to protect it. That's why Al and I have committed to--to putting that Social Security surplus in a lockbox, not touching it, and that's what allows us to keep Social Security solvent to 2054.

Our opponents have a--an idea for privatizing Social Security that will jeopardize Social Security payments to--to recipients. And I looked at this idea, and if I may use an oil industry analogy, which is to say that sometimes, as you know, Dick, better than I, you gotta drill deep to--to discover whether there's oil in a well. For--for a while I was drilling into this idea of privatization of Social Security, and the deeper I got, the drier the well became, and it seemed to me, at the end, that what it was going to do was dry up Social Security.

It requires taking as much as $1 trillion out of the Social Security fund. The independent analysts have said that would put the fund out of money in--in 2023, or if it's not out of money, benefits will have to be cut by over 50 percent. That's just not worth doing. Al Gore and I are going to guarantee Social Security and add to it the retirement savings plan that I mentioned earlier, which will help middle-class families looking forward have not only Social Security, but a--but a superb extra retirement account as well. Social Security plus from us; with all respect, Social Security minus from the Bush-Cheney ticket.

Mr. CHENEY: You won't be surprised, Bernie, if I disagree with Joe's description of our program. The fact of the matter is the Social Security system's in trouble. It's been a fantastic program. It's been there for 65 years. It provided benefits for--for senior citizens over that period of time; for my parents. It means a great deal to--to millions of Americans, and--and Governor Bush and I want to make absolutely certain that the first thing we do is guarantee the continuation of those payments, those benefits and keep those promises that were made.

But if you look down the road and you're, say, 30 years old today--and I have two daughters about that age--they seriously question whether or not there'll be any system left for them, and that's because the--the demographics that are at work out there, and it--it's almost an iron law. We know how many people there are. We know when they're going to reach retirement age. We know that baby-boom generation's coming along. We know how long people are likely to live after that. And it's going to drive the system into bankruptcy, unless we reform it and deal with it.

The reform we would like to offer is to allow our young people to begin to take a portion of the payroll tax, 2 percent of it, and invest it in a personal retirement account. That does several things. First of all, it gives them a stake in the Social Security system. That becomes their property; they own it. They can pass it on to their kids if they want. They don't have that kind of equity in--in Social Security today. Secondly, we can generate a higher return off that investment that you get--than you get in the existing system. Today you get about a 2 percent return and you're--what you pay into Social Security. We can generate, we think, at least 6 percent--all the evidence shows at least three times what we're able to get now. And, long term, by generating a longer--a bigger return, we'll put additional funds into the system that will help us survive that crunch that's otherwise going to hit in the future.

Bottom line is there's a choice here. With respect, frankly, to Al Gore and Joe's plan, they don't reform Social Security at all. They had another huge obligation on top of it that future generations will have to pay. They don't touch the basic system itself. They don't reform it. They don't save it. We have a plan to do that and a plan to give our young people a choice and more control over their own lives.

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