PBS Democratic debate transcript: 5 key moments

Bernie Sanders and Hillary Clinton faced off in Milwaukee, Wisconsin for the seventh Democratic primary debate Thursday night — their last formal one-on-one exchange before the primaries in South Carolina and Super Tuesday.

The two candidates parsed through their differences on race, campaign finance and admiration (or lack thereof) for former Secretary of State Henry Kissinger.

Below is an edited transcript of the five key moments in the debate.

1. White people had a moment

Moderator: When we talk about race in this country, we always talk about African-Americans, people of color. I want to talk about white people, okay.

White people. I know.

Many people will be surprised to find out that we are sitting in one of the most racially polarized metropolitan areas in the country. By the middle of this century the nation is going to be majority nonwhite. Our public schools are already there. If working class white Americans are about to be outnumbered, are already underemployed in many cases and one study found they are dying sooner, don't they have a reason to be resentful, Secretary Clinton?

Clinton: Look, I'm deeply concerned about what is happening in every community in America. And that includes white communities where we are seeing an increase in alcoholism, addiction, earlier deaths, people with a high school education or less are not even living as long as their parents lived. This is a remarkable and horrifying fact.

And that's why I have come forward with, for example, a plan to revitalize coal country. The coal field communities that have been so hard hit by the changing economy, by the reduction in the use of coal. You know coal miners and their families who help turn on the lights and power our factories for generations are now wondering, has our country forgotten us? Do people not care about all of our sacrifice?

And I'm going to do everything I can to address distressed communities. Whether they are communities of color, whether they are white communities, whether they are in any part of our country. I particularly appreciate the proposal that Congressman Jim Clyburn has, the 10-20-30 proposal to try to spend more federal dollars in communities with persistent generational poverty.

And you know what, if you look at the numbers, there are actually as many, if not more, white communities that are truly being left behind and left out. So yes, I do think if would be a terrible oversight not to address the very real problems that white Americans, particularly those without a lot of education, whose jobs have no longer provided them or even no longer present in their communities. Because we have to focus where the real hurt is. And that's why as president, I will look at communities that need special help and try to deliver that.

Moderator: Senator, I want you to respond to that but I also want you to — is it even right to be describing this as a matter of race?

Sanders: Yeah, you can. Because African-Americans and Latinos not only face the general economic crises of low wages and high unemployment and poor educational opportunities, but they face other problems as well.

So yes, we can talk about it as a racial issue. But it is a general economic issue. And here's what the economic issue is. The wages that high school graduates received today are significantly less, whether you are white or black, then they used to be. Why is that? Because of the series of disastrous trade policies which have allowed corporate America through nafta and permanent Normal trade relations with China, Secretary Clinton and I disagree on those issues.

But the idea is that those trade issues have abled corporate America to shut down in this country, so millions of people out on the street. No no one thinks working in the factory is the greatest job in the world. But you know what, you can make a middle class wage, you have decent health care, decent benefits. You once had a pensions. Those jobs in many cases are now gone. They're off to China.

Now you are a worker, white worker, black worker, who had a decent job, that manufacturing job is gone. What are you doing now, working in McDonald's. That is why there is massive despair all over this country.

People have worked their entire lives. They're making a half, two thirds what they used to make. Their kids are having a hard time find any work at all. And that's why this study which shows that, if you can believe it today, for white, working class people between 45 and 54, life expectancy is actually going down. Suicide, alcoholism, drugs that's why we need to start paying attention to the needs of working families in this country and not just a handful of billionaires who have enormous economic and political power.

2. Clinton deflected Sanders' Super PAC attack with Obama

Moderator: Secretary Clinton your campaign has recently ramped up criticism of Sen. Sanders for attending democratic party fundraisers from which you say he benefited. But nearly half of your financial sector donations appear to come from just two wealthy financiers, George Soros and Donald Sussman for a total of about $10 million. You have said that there is no quid pro quo involved. But is that also true of the donations that wealthy Republicans give to Republican candidates, contributors including the Koch brothers?

Clinton: I can't speak for the Koch brothers.

Are you referring to a super PAC that we don't coordinate with, that was set up to support President Obama that has now decided they want to support me? They are the ones who should respond to any questions.

Let's talk about our campaigns. I'm very proud of the fact that we have more than 750,000 donors. And the vast majority of them are giving small contributions. So I am proud of Sen. Sanders, and his supporters. I think it's great that, you know, Sen. Sanders, President Obama and I have more donors than any three people who have ever run and certainly on the Democratic side.

That's the way it should be. And I am going to continue to reach out, to thank all my online contributors for everything they are doing for me. To encourage them to help me and do more. Just as Sen. Sanders is. And I think that is the real key here. We both have a lot of small donors. I think that sets us apart from a lot of what is happening on the Republican side.

The Koch brothers have a very clear political agenda. It is an agenda in my view that would do great harm to our country. We're going to fight it as hard as we can. And we're going to fight whoever the Republicans nominate who will be very depend ent upon the Koch brothers and others.

3. Sanders hates Kissinger, but Clinton thinks he was "effective"

Sanders: Where the secretary and I have a very profound difference, in the last debate and I believe in her book – very good book, by the way – in her book and in this last debate, she talked about getting the approval or the support or the mentoring of Henry Kissinger.

Now I find it kind of amazing. Because I happen to believe that Henry Kissinger was one of the most destructive Secretaries of State in the modern history of this country.

I'm proud to say that Henry Kissinger is not my friend.

I will not take advice from Henry Kissinger. And in fact, Kissinger's actions in Cambodia, when the United States bombed that country, over -- through Prince Sihanouk, created the instability for Pol Pot and the Khmer Rouge to come in who then butchered some 3 million innocent people – one of the worst genocides in the history of the world.

So count me in as somebody who will not be listening to Henry Kissinger.

Moderator: Secretary Clinton.

Clinton: Well, I know journalists have asked who you do listen to on foreign policy and we have yet to know who that is.

Sanders: Well, it ain't Henry Kissinger, that's for sure.

Clinton: That's fine. I listen to a wide variety of voices. That have expertise in various areas. I think it is fair to say whatever the complaints that you want to make about him are, that with respect to China, one of the most challenging relationships we have, his opening up China and his ongoing relationship with the leaders of China is an incredibly useful relationship for the United States of America. So if we want to pick and choose, and I certainly do, people I listen to, people I don't listen to, people I listen to for certain areas, then I think we have to be fair and look at the entire world because it is a big, complicated world out there.

Sanders: It is.

Clinton: Yes, people we may disagree with on a number of things, may have some insight, may have some relationship that are important for the president to understand in order to best protect the United States.

Sanders: I find a very different historical perspective here. Kissinger was one of those people during the Vietnam era who talked about the domino theory, not everybody remembers that. You do, I do. The domino theory.

You know, as Vietnam goes, China, da, da, da. That is what he talked about.

The great threat of China. And then after the war, this is the guy who, in fact, yes, you are right, he opened up relations with China. And now pushed various type of trade agreements resulting in American workers losing their jobs as corporations moved to China, the terrible authoritarian dictatorship he warned us about, now he is urging companies to shut down and move to China. Not my kind of guy.

4. Clinton and Sanders competed to see who loves Obama more

Clinton: Today Sen. Sanders said that President Obama failed the presidential leadership test. And this is not the first time that he has criticized President Obama in the past he's called him weak. He has called him a disappointment. He wrote a forward for a book that basically argued voters should have buyer's remorse when it comes to President Obama's leadership and legacy.

And I just couldn't agree, disagree more with those kinds of comments. You know, from my perspective maybe because I understand what President Obama inherited – not only the worst financial crisis but the antipathy of the Republicans in Congress. I don't think he gets the credit he deserves for being a president and sending us into the future.

And it is the kind of criticism that we've heard from Sen. Sanders about our president I expect from Republicans. I do not expect from someone running for the Democratic nomination to succeed President Obama.

Sanders: Madam Secretary, that is a low blow. I have worked with president Obama for the last seven years. When President Obama came into office we were losing 800,000 jobs a month. 800,000 jobs a month.

We were in a 1.4 trillion dollar deficit and the world's financial system is on the verge of collapse. As a result of his efforts and the efforts of Joe Biden against unprecedented, I was there, unprecedented Republican obstructionism, we have made enormous progress.

But you know what? Last I heard we lived in a democratic society. Last I heard, a United States senator had the right to disagree with the president including a president who has done such an extraordinary job. So I have voiced criticism. Maybe you haven't. I have.

But I think to suggest that I have voiced criticism, this blush that you talk about, you know what the blurb said, it said that the next president of the United States has got to be aggressive in bringing people into the political process. That's what I said. That is what I believe.

President Obama and I are friends. As you know, he came to Vermont to campaign for me when he was a senator. I have worked for his re-election. His first election and his re-election. But I think it is really unfair to suggest that I have not been supportive of the president. I have been a strong ally with him on virtually every issue. Do senators have the right to disagree with the president? Have you ever disagreed with a president. I suspect you have.

Clinton: Senator, what I am concerned about, is not disagreement on issues saying that this is what I would rather do, I don't agree with the president on that. Calling the president weak, calling him a disappointment, calling several times that he should have a primary opponent when he ran for re-election in 2012, you know, I think that goes further than saying we have our disagreements.

As a senator, yes, I was a senator. I understand we can disagree on the path forward. But those kinds of personal assessments and charges are ones that I find troubling.

Sanders: One of us ran against Barack Obama. I was not that candidate.

5. Both candidates really grappled with mass incarceration

Moderator: Wisconsin is number one in African-American male incarceration, according to the University of Wisconsin study. They found that Wisconsin's incarceration rate for black men, which is at 13 percent, was nearly double the country's rate. What can we do across the nation to address this? Senator Sanders.

Sanders: This is one of the great tragedies in our country today. And we can no longer continue to sweep it under the rug. It has to be dealt with. Today a male African-American baby born today stands a one in four chance of ending up in jail. That is beyond unspeakable.

So what we have to do is the radical reform of a broken criminal justice system. What we have to do is end overpolicing in African-American neighborhoods. The reality is that both African-American communities and the white community do marijuana at about equal rates.

The reality is four times as many blacks get arrested for marijuana. Truth is that far more blacks get stopped for traffic violations. The truth is that sentencing for blacks is higher than for whites. We need fundamental police reform, clearly, clearly, when we talk about a criminal justice system. I would hope that we could all agree that we are sick and tired of seeing videos on television of unarmed people often African-Americans shot by police officers. What we have got to do is make it clear that any police officer who breaks the law will, in fact, be held accountable.

Clinton: You know, I completely agree with Sen. Sanders. The first speech I gave in this campaign back in April was about criminal justice reform and ending the era of mass incarceration. The statistics from Wisconsin are particularly troubling. Because it is the highest rate of incarceration for African-Americans in our nation, twice the national average.

And we know of the tragic, terrible event that lead to the death of Dontre Hamilton right here in Milwaukee — a young man, unarmed, who should still be with us. His family certainly believes that. And so do I. So we have work to do. There have been some good recommendations about what needs to happen.

President Obama's policing commission came out with some. I have fully endorsed those. But we have to restore policing that will actually protect the communities that police officers are sworn to protect.

And then we have to go after sentencing and that's one of the problems here in Wisconsin because so much of what happens in the criminal justice system doesn't happen at the federal level, it happens at the state and local level.

But I would also add this. There are other racial disparities, really systemic racism in this state and in others in education, in employment, in the kinds of factors that too often lead from a position where young people particularly young men are pushed out of school early, are denied employment opportunities. So when we talk about criminal justice reform and ending the era of mass incarceration. We also have to talk about jobs, education, housing and other ways of helping communities do better.