The following is a rush transcript of the May 29, 2011 edition of "Fox News Sunday With Chris Wallace." This copy may not be in its final form and may be updated.

CHRIS WALLACE, ANCHOR: I'm Chris Wallace.

On this holiday weekend, Americans look for answers some of the nation's biggest problems.

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WALLACE: Budget battles on Capitol Hill. Is there a deal be made over the debt ceiling, spending cuts and the future of Medicare? We'll have a fair and balanced debate between two of the young guns in the House, Republican Allen West and Democrat Donna Edwards.

Then, turmoil in the Middle East -- from the "Arab Spring" demands for reform to the military operation in Libya. We'll talk foreign policy hot spots with Senator John McCain. It's "Fox News Sunday" exclusive.

Also, as the GOP presidential field takes shape, what will Sarah do? We'll ask our Sunday panel what Palin's decision means for the Republican race.

And our "Power Player" of the week honors our nation's fallen military in 24 musical notes.

All right now on "Fox News Sunday."

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WALLACE: And hello again from Fox News in Washington.

As we observe this Memorial Day weekend, we promise some 4th of July fireworks as we discuss some of the nation's most pressing problems two of the newer voices on Capitol Hill, Republican Allen West Florida, a Tea Party favorite, and Democrat Donna Edwards of Maryland, a member of the Progressive Caucus.

And we welcome both of you to "Fox News Sunday."

REP. DONNA EDWARDS, D-MD.: Thank you.

REP. ALLEN WEST, R-FLA.: Good morning. Thanks for having us.

WALLACE: Let's start with Medicare. And Paul Ryan's plan to turn it from a fee-for-service plan into a voucher system -- Congressman West, even though this wouldn't start until 2022, you've got some push-back at one of your town hall meetings recently. Let's watch.

(BEGIN VIDEO CLIP)

PROTESTER: Hands off Medicare! Hands off Medicare!

WEST: I will take my hands off Medicare, and when there is no Medicare, then I will come and see you, sir!

(END VIDEO CLIP)

WALLACE: Congressman West, as we saw in the special election up in New York state this week, where the Democrat beat the Republican and Medicare was a big issue, as we see in the national polls a lot of people, especially seniors, don't want to see Medicare changed this way.

WEST: Well, I think when you look at Paul Ryan's plan, first of all, there is no change for anyone who is a senior 55 years and above. But as I sit here right now, I'm 50 years of age. And we already know that the board of trustee has said, you got 13 years and something very bad is going to happen with Medicare. So, what is going to be there for myself when I get 63 to 65?

So, I think the thing that we see is at least there's a plan out there to try to have some type of reform.

And there was a great article by Mr. Stanley Druckenmiller in The Wall Street Journal back in the 15th of May that talked about the fact that the financial markets, a lot of these, you know, bond markets are looking to see: are we going to have some type of long- term viable solution and plan as we go forward?

WALLACE: But let me pick up on that, Congressman Edwards, because the knock against the Democrats is you don't have a plan, that congressional Democrats didn't pass a budget last year. Senate Democrats aren't offering a budget this year -- President Obama talks having an independent panel of medical experts who are going to find $20 billion of cuts somewhere. At least they've got a plan.

EDWARDS: Well, I think it's not true that we don't have a plan. And, in fact, when we passed the Affordable Care Act last year, we put in some real markers for Medicare that in fact reduced Medicare costs. We invested in preventive care for seniors because we know that the real drivers of Medicare are these long-term costs for chronic care that happens at the -- you know, at the end of life.

You know, Republicans are very interesting because in their budget what they would do is repeal preventive care. Prescription drug coverage -- we also closed the donut hole there, which is costing seniors a boatload of money and is not very efficient on the system.

So, to say that Democrats don't have a plan I think is incorrect. I mean, in fact, the plan is to preserve and protect Medicare for future generations. And Republicans want to dismantle that.

WEST: Yes, but I think as you sit here and look at the two of us, one of us has voted to cut Medicare. When you look at the fact you voted for the Patient Protection and Affordable Care Act, which had $500 million of cuts of Medicare. And we also have this independent payment advisory board, these 15 bureaucrats, that are supposed to control the cost of Medicare. I mean, that's something that really does scare seniors.

What we are talking is something that does not affect any senior, anyone 55 years and above. We're talking about something that does put in some type of viable plan to sustain Medicare for the future, because as we know, it was put out three weeks ago, it won't be there.

EDWARDS: Well, the congressman thinks the seniors are only interested in what's good for them. And what we know about seniors, whether they're in south Florida or in Maryland, is that they actually care about what happens with that next generation. They care about whether we're going to cover preventive care and prescription drug.

WEST: But if you don't have a plan, there is nothing for the next generation.

EDWARDS: And that they are -- and that they are not sent in the private market to negotiate with insurance companies. We know that that would be a failure. And that's exactly what the Republican plan calls for. I can't negotiate on --

WALLACE: Let me move on to another thing, because the biggest difference, it seems to me, looking at your two positions on how to deal with the deficit is over taxes.

Congresswoman Edwards, you have a big plan to increase revenues. And let's put it up on the screen. You would raise tax rates for the wealthy. You would raise the estate tax. You would tax capital gains and dividend as ordinary income and you would end tax subsidies for oil and gas companies.

So, raise taxes in the middle of a weak recovery?

EDWARDS: Well, let's be clear -- raise tax on the wealthiest 2 percent who have run away with the store for the last 10 years and haven't put money back into the economy. I mean, that's a fact, because if that trickle-down theory had worked, our economy would be in good shape right now.

And so, we do -- I do subscribe to a plan that says, you know what? Middle income earners, you've already shared a fair burden of your taxes. But the wealthiest 2 percent have not.

And there's no excuse whatsoever for continuing taxes for people who make over $500,000 a year.