• This is a partial transcript from "Your World with Neil Cavuto," October 30, 2006, that was edited for clarity.

    NEIL CAVUTO, HOST: This is a FOX News Alert: the Dow generally holding its own, defying a lot of worrisome news again; an administration talking up an economy again; but much more disturbing numbers coming out of Iraq again.

    Welcome, everybody. I'm Neil Cavuto and this is "Your World."

    And, today, a look at your vice president, arguably the most powerful one in American history, on this most unusual of crossroads in American history: a booming economy, amidst a very troublesome war.

    Today, with me, Dick Cheney addresses both.

    (BEGIN VIDEOTAPE)

    CAVUTO: Mr. Vice President, welcome. Always good to have you.

    RICHARD B. CHENEY, VICE PRESIDENT OF THE UNITED STATES: Good to see you again, Neil.

    CAVUTO: We have now word of the 100th U.S. serviceman who has died in combat this month. And there's a perception that that is what is taking Americans' minds off what is inarguably a pretty strong economy.

    Do you agree with that?

    CHENEY: Well, there's no question but what Iraq is very much on everybody's minds. It ought to be. It's a very important problem, of course. And we have got a lot young Americans committed over there, doing some very, very difficult things.

    And, unfortunately, obviously, we have lost a number, as well, too. It's one of the toughest things any president ever has to do, is to make a decision. But it's absolutely essential that — that we get it right in Iraq.

    And I think that, in fact, we're on the right course. I think it's the right thing for us to be doing. Now, it's not the only issue, I'm sure, in this fall's campaign. There are a lot of other issues, too. But I would expect it's one of the — one of the important ones.

    CAVUTO: Do you suspect that these insurgent attacks are — are timed to influence our midterm elections?

    CHENEY: That's my belief. I think they are, very, very cognizant of our schedule, if you will.

    They also — you have got to remember what the — the strategy is of — of the terrorists. I mean, they specifically can't beat us in a stand-up fight. They never have. But, whether it's Al Qaeda or the other elements that are active in Iraq, they are betting on the proposition they can break the will of the American people.

    They think we won't have the stomach for the fight long-term. Usama bin Laden says as much. He talks about this. And, in fact, their belief is that the same thing will happen here that happened in Beirut in 1983 or Somalia in 1993, when, after we lost a number of people, then, we packed it in and came home.

    The thing that's different, of course, is 9/11. And there may have been a time when we would be safe behind our oceans in the past, but that pretty well went by the boards on 9/11. And, since then, Neil, we clearly have to be engaged. We have got to be active. We have got to prosecute the global War on Terror.

    We have been able to defend the country successfully for five years now, have not had other attacks against the U.S., although they have tried. But that's primarily because we have gone on offense. We have put in place some very robust measures here at home to protect the country, as well as taking the fight to the enemy overseas.

    CAVUTO: Do you think, though, that the insurgents are better at these polls than even we are, that they are reading them and seeing frustration growing with the war, and, regardless of the good economy, saying: Let's keep up the attacks; let's keep up the pressure?

    CHENEY: It's my belief that they're very sensitive of the fact that we have got an election scheduled.

    And, you know, they can get on the Web sites like anybody else. There isn't anything that's on the Internet that's not accessible to them. They're on it all the time. They're very sophisticated users of it. And I do believe that that's a part of it.

    I think we have also seen, of course, a higher level of violence because of Ramadan. Traditionally, there's a spike about this time of year, in terms of level of activity.

    So — but, again, I come back to the proposition, they know that the way they win is if they can, in fact, force America to withdraw, on the basis that we aren't going to stay and finish the job, their basic proposition that they can break the will of the American people. That's what they believe. And that's what they're trying to do.

    CAVUTO: Your wife, Mr. Vice President, created a little bit of a stir in an appearance on a rival news network last week, taking exception to the way that network portrayed the economy, the government, that things are going to hell in a hand-basket. I'm sort of paraphrasing here. Actually, she was much more — much more to the point that I'm being.

    What did you think of that?

    CHENEY: I thought it was great. We refer to it around the house as the "slap-down."

    And she was very tough, but she was very accurate and very aggressive. And, of course, she was in the business for a while. There was a time, on that network, when she used to host the show they had on for a long time called "Crossfire," on Sundays for a couple of years. So, she spoke her mind, and I thought it was perfectly appropriate.

    CAVUTO: Did she go into that kind of ticked off, because she saw this weeklong series on — one day a time — everything that's bad with America, and she just said: You know what, I'm going to let her rip?

    CHENEY: I'm sure she had seen part of it. But, no, I think she just responded to the moment. And — but she's pretty tough and pretty aggressive. And — and that's exactly the way it ought to be. She presented, I though, a very strong case.

    CAVUTO: Did you talk to her prior to her going on?

    CHENEY: No.

    CAVUTO: Did you talk to her afterwards?

    CHENEY: I did.

    CAVUTO: What did you tell her?

    CHENEY: I told her I thought it was a sterling performance.

    CAVUTO: All right. So, the potential CNN analyst job for her is now out the window, I guess.

    (LAUGHTER)

    CAVUTO: All right.

    Let's talk a little bit about the economy, an overview, sir. We got indications today consumer spending was up a tenth-of-a-percent, still good, still the smallest increase in almost a year, GDP in the latest quarter up still a respectable 1.6 percent, but it's been going down quarter by quarter. And there are some who are saying that that is the angst that's being reflected in polls and surveys about the economy.