This is a partial transcript from "Your World with Neil Cavuto," August 26, 2004, that was edited for clarity.

(BEGIN VIDEOTAPE)

SEN. JOHN KERRY, D-MASS., PRESIDENTIAL CANDIDATE: Five million Americans for five years who have lost their health insurance. We now have 45 million Americans who go to bed at night worried about the choices they are going to make.

(END VIDEOTAPE)

NEIL CAVUTO, HOST: That was Senator John Kerry after the U.S. Census Bureau announced that the number of Americans living without health insurance has increased.

Is this a dose of bad news for the Bush campaign?

Joining us now, Health and Human Services Secretary Tommy Thompson.

Secretary, thank you for coming. Good to have you.

TOMMY THOMPSON, HEALTH & HUMAN SERVICES SECRETARY: It’s always a pleasure, Neil. And let me just respond very quickly to what Senator Kerry has said.

CAVUTO: Sure.

THOMPSON: He is absolutely wrong. In 20 years in the United States Senate he has never really pushed for any major health reform package whatsoever.

Since President Bush has been in office, he’s done several things. We have used the administration to expand waivers to allow for an additional 2.2 million people to be covered under the Medicaid system. He has absolutely increased community health centers by over 600, serving an additional three million low-income Americans.

He has cut taxes so that we could get the economy moving. And these figures are in fiscal year 2003, when we were the height of the recession, which was, of course, from the Clinton administration.

CAVUTO: So you think we’re up from those levels?

THOMPSON: Oh, absolutely. This is 2003.

CAVUTO: So if you had to guesstimate how many more would be without health insurance, are you saying it’s a net gain or a net loss?

THOMPSON: Oh, I’m saying that we would certainly a reduction in the number, for these 2004 numbers, because we’ve had 1.2 million additional new jobs in 2004. And this, of course, indicates that the economy is improving. Therefore, people have more money and would be able to have more insurance.

But, truly, Neil, the problem has been that the president has advanced many new proposals, tax credits, association health plans, and many other ways in which we could get people covered, such as health savings accounts. But the Congress, especially the Democrats in the Congress, have been opposed to every proposal the president has advanced. We are waiting for Congress...

CAVUTO: But, Secretary, to be fair, you know both bodies are controlled by Republicans, right?

THOMPSON: That is true. But as you also know, the liability insurance, which has been one in which the president has been pushing for to control medical costs, has been hung up in the United States Senate because the Republicans want to pass it but the Democrats in the Senate have refused to take it up. That is a direct — you know, if there is a direct relationship, it’s controlling costs to hold down medical costs. Therefore, we could have more people covered.

CAVUTO: Do you think, though, that this issue is registering, Secretary, that the number of Americans without health insurance — and many might be, as I know your administration has claimed, be young people who either don’t want it or think they are bullet-proof. But many are not, and that this is going to be a divisive issue come the fall?

THOMPSON: Oh, I think it is going to be a major issue, because I think people are concerned about health insurance, and rightly so. And this president has made many proposals, like controlling costs such as liability insurance, such as transferring a new technology out to the medical fields, by having the Medicare Modernization Act, which is going to be up and running 2006, which is going to allow for low-income Americans to be covered for the first time after many years of attempts, to be able to be covered with prescription drugs. So I think it is going to definitely be an issue. But I think the president is well-positioned to show that he has advanced proposals to hold down costs, expand services through community health centers.

CAVUTO: All right. Secretary, thank you for taking the time. We appreciate it.

THOMPSON: It’s always a pleasure, Neil. Thank you very much.

CAVUTO: Secretary Tommy Thompson.

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