Sept. 21 (Bloomberg) -- Democratic presidential rivals Hillary Clinton and John Edwards sparred during an Iowa debate over the role of special interests and who can best provide expanded, affordable health-care coverage to all Americans.

``I don't believe you can take money from health insurance, drug-company and insurance company lobbyists, sit at the table with those people, let them pay to play, and negotiate and compromise your way to universal health care,'' Edwards, 54, said during last night's televised forum in Davenport. He said he was first to offer his health-care plan and Clinton followed it.

The New York senator brushed aside his criticism. ``Fifteen years ago, I was advocating for universal health care,'' Clinton, 59, said. ``It was kind of lonely back then. And I never gave up.''

The 90-minute forum, sponsored by AARP, a Washington-based advocacy group for Americans over 50, included five of the eight Democratic hopefuls. The third frontrunner, Illinois Senator Barack Obama, 46, didn't attend. His campaign said the senator is limiting his participation in such forums. Ohio Representative Dennis Kucinich and former Alaska Senator Mike Gravel didn't meet the criteria of having a campaign office in Iowa.

The Democrats participating largely had praise for Federal Reserve Chairman Ben S. Bernanke, while railing against predatory mortgage lenders. The Fed Sept. 18 lowered its benchmark interest rate by a half point to protect the U.S. from sinking into a recession sparked by the housing-market collapse.

`Good Grades' for Bernanke

``I give him good grades at this point,'' said Christopher Dodd, 63, of Connecticut, chairman of the Senate Banking Committee.

Joseph Biden, 64, a Delaware senator, said cutting interest rates alone wouldn't solve the problems brought on by the housing slump and called for greater regulation of hedge funds.

Hedge funds ``essentially bought up these mortgages,'' Biden said. ``They're the ones going out and collecting on them. No one knew they owned all these things.''

New Mexico Governor Bill Richardson, 59, blamed President George W. Bush for much of the subprime crisis, saying that mortgage lenders ``are not regulated; they become loan sharks.''

On Social Security, Clinton and Edwards disagreed over whether to increase the income subject to payroll taxes. Edwards said that the income cap is currently about $97,000, and advocated extending it for individuals earning more than $200,000 a year. ``These millionaires on Wall Street ought to be paying their Social Security taxes,'' he said.

When asked, Clinton said she opposed this increase of the payroll tax and is focused instead on the budget deficit. ``We have a lot of work to do in Washington to clean up the fiscal mess we're going to inherit from President Bush,'' she said.

Retirement Age

The candidates all agreed that the government shouldn't raise the retirement age for Social Security recipients to help fund future shortfalls in the program.

On another issue, Clinton and Edwards called for changing, while not eliminating, the alternative minimum tax, originally designed to make sure affluent Americans couldn't avoid taxes.

``The problem is it's now hitting many middle-class families,'' said Edwards. ``We are going to have to change it'' as part of a broader tax overhaul.

Clinton called for eliminating the impact of the minimum tax ``on middle-income and people who are not really able to afford that kind of hit.'' Still, she said, ``we want to keep some differential on very high-income people.''

Edwards, a former North Carolina senator, cast himself as the outsider best equipped to take on the special interests of drugmakers and insurers in the fight for universal health care, while Clinton portrayed herself has the most knowledgeable.

Clinton Cites `Experience'

``I think my experience, having gone through it, makes me a lot better prepared to deal with it and get it done this time,'' Clinton said.

During the debate, also sponsored by Iowa Public Television, the candidates agreed on the need to make prescription drugs cheaper and provide some expanded benefits, such as tax credits, to defray the cost of home health care for the elderly.

``We have in all of our states a system whereby if someone takes someone into a foster home they get paid for it,'' Biden said. People who struggle financially to take care of their parents at home should be compensated in the same way, he said.

Clinton proposed Sept. 17 using tax credits to help all Americans get health insurance. She would require everyone to have medical coverage, funded partly by eliminating Bush's income tax cuts for those earning more than $250,000 a year.

Edwards, in the plan he proposed in February, would ensure universal coverage by expanding federal programs for the poor, giving tax credits to make insurance more affordable, and creating markets for selling lower-cost policies.

``Six, seven months later, Senator Clinton came out with a plan that is very similar to mine,'' Edwards said.

While all of the candidates warned about the dangers of global warming, Dodd said he was the only candidate on the stage who supports a corporate carbon tax. ``As long as it's cheaper to use fossil fuels, we're not going to move to these alternative technologies and fuels,'' he said.

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Last Updated: September 21, 2007 00:02 EDT