 All right guys, I just, the purpose is not that I would leave it since you've got to roll it your way. Oh wow, I've never had anybody else do the taping. I was probably down there all the way. Do you want me to take that for you? What? That's all right. I'll just leave it here for you. All right. I'll take my fork out. Is that side of the microphone? It should get, it should. All right. Well, if yours does, mine and yours will get it. Well, this is, we don't have really all that much to ask you. I mean, for news, so far as news breakers are concerned. But we just have one small favor to add. I mean, are you running? Just one small favor. That's when we can't answer yet. What about the fact that Paul Axol is going to take the chairmanship or basically take over the arm and seeing a lot of people feel that he would never have taken it unless he at least, you had given him a hint that you might run? He, he's got his own opinions of what I'm going to do. And the only thing is, I just feel there's, there are any number of reasons. If, if I was going to run, this would be too early. Because it would automatically then make everything I did be tagged and investigated, just whether it was for political purposes. If I were not going to run, the same thing, it would be too early because I would have automatically taken myself, put myself in a really lame duck situation. And so, I just don't think it's the time to do it or to even think about it with what we have to do. And as I've said so often, before the time comes when you're going to have to make a statement about that, I think the people kind of let you know whether, whether you should or not. Well, you make it soon. Will you have any chance of making it soon? Can you give us a time limit at all? No, I know there is a time out there when, but I think again that you, you should be aware of when that time comes. Okay, we struck out on that one. Let me ask you, and I also said we were going to do it, since we, human events itself has been, you know, obviously critical of some of your decisions from time to time. And, but can you just encapsulate what you think in your last years of office that you feel have been your most important accomplishments? You know, why don't you just take domestic policy first and encapsulate that and we'll go to foreign policy? Well, let me take that, because I think there are a number of accomplishments, but one of the biggest is simply some of it all up is the very fact that today and for the first time in about, virtually since the war, the Congress, one house of which is dominated by the other party, is now debating not whether we should cut spending, but by how much. And we, on the other hand, on the Republican side, are not fighting a rear-guard action against further growth of the welfare state and the federal government expanding and more social programs and so forth. But when you look at it, we inherited the situation in which there was double digit inflation for two years in a row. It had been steadily going up during the entire previous administration. It is now down to, for the year 1982, only the second year there, 3.9% and the last three months of that year, it was running at 1.1% on an annualized basis. That has brought the interest rates down, which again were up there at the highest they'd been in a hundred years but more than a hundred years ago, it's been around the Civil War in this country. We have put into place in this government and at those positions, I'm not talking about cabinet members now, I'm talking about people that will be in sub-positions here, getting experience that are solid conservatives and any number of them that will be here for years to come if there are conservative administrations, people they can call on in government that will be in place because I think one of the characteristics for many, many years since the New Deal has been the fact that the permanent structure of government was more or less of the New Deal flavor had been put in place years ago with the Democrats and had continued on and this is a powerful force within the bureaucracy. I know as one socialist clergyman many years ago who was a great note and wrote a book about it, said that one person in government of their philosophies worth a thousand on the outside. But the things economically that we have done, they're very self-evident, but as I say the second thing is what is the nature of the debate in the Congress? It's on our grounds, switching to the international scene. We have in these two years a broad defense and our whole posture of defense to a standing that it didn't even have when we had the draft in effect. The level of people of an intelligence level and up is higher and greater numbers than has ever been true even in the draft army. The percentage of high school graduates is the greatest we've ever had. The re-enlistment rate is up at a figure we've never had, 68% re-enlistment. We have a waiting list out there. That's for that part. The weapons systems that have already been approved and we're going forward with and yet with all of the drumbeat about the excessive spending for defense, we're taking a smaller percentage of the gross national product and a smaller percentage of the total budget that has been characteristic in the past under when those people who were crabbing and complaining today were the ones in power and could have done something about it. Under Kennedy, it was 46% of the budget. Our defense budget is 26.7% of that budget. We had what they just wrote off as uncontrollables. These were things they said were in the budget that were by law and were uncontrollable. Therefore, they just had to keep on going up. Well, we've gotten a hold of the uncontrollables and in the budget we've submitted for 1984, we are recommending reforms in those uncontrollables. The entitlement programs and it's going to have a long lasting effect when we get a hold of these. Let me get back to the defense spending just a little bit. Right now, you have even conservative congressman asking me to cut the military and even American conservative union chairman Mickey Edwards has talked about that but you obviously feel it's very important to continue with this... Yes, because this gets down to the other part of the international scene other than the domestic and the accomplishments that we've made. We're in total disarray. There was great friction with our allies in Europe. We saw the communist expansionist movement all over the world. Well, they haven't advanced a foot since we came here and we have restored the bonds with our European allies and we've made great progress there. The same is true with our ally in the Pacific, Japan and others. I think our whole set of international relations is in very good shape compared to what it was. We aren't submitting treaties to the Senate, the Soviet Union that in reality were detrimental to us of advantages to them. In terms of these conservatives that were criticizing, are you bringing them in or are you trying to convince them? Yes, I think part of it just has to do with the drumbeat because this is all they're hearing. Well, it's in the press but it's also up there in the Hill and the majority of the party and part of it is the deficits and they want to explain only the deficits. Well, in desperation, what our opponents have done down over the years any time they felt they needed money, cut defense and that's why we were in the shape we were in. Now, I think some of our own people hypnotized by deficits are saying, well, in desperation, cut defense spending. Well, if we eliminated all of the major weapon systems that we have asked for and put into effect, it would make a very little contribution to reducing the deficit. The biggest part of our defense budget is the pay for people and the maintenance and readiness of our forces. When we came here, 50% of our planes on any given day couldn't fly for lack of spare parts. 50% of our ships couldn't leave port either for lack of spare parts or lack of non-commissioned officers and so forth, crew. That's all corrected. So we have a readiness posture and this is what is taking the bulk of the money. I don't think they realize that. The other thing about the deficits is I've noticed that those who want to criticize, they use figures the way to make their point. If it's better for them to use percentages, they use percentages. If it's better for them to use, say, dollar figures instead of percentage, yes, we're faced with some bigger deficits we've had before, but they aren't bigger as a percentage of the gross national product than we've had before. It's like... Or the budget. Now, this is what we're aiming at, is that percentage to get that budget down and to get also the tax take that we were taking down to a certain level and to get the two of them together so that we're living within our means. Now, when I first presented the economic program in October in the campaign in Chicago, to show you what projections now ridiculous they are, I had the best economic advice I could get and I based our plan on those figures. By the time I'd won the election, those figures were out of date. Those projections were wrong. By the time I was inaugurated, they were really wrong. The inflation, the unemployment, the interest of 21.5% and so forth. So we had to revamp the figures in our own program because the projections were wrong and yet the law says that we have to make projections. Now, in October of 1980, it did look as if our plan could bring us close to a balanced budget by 84. We know that isn't possible. We're still aiming at that. It's going to take longer. Our goal now, and I think that the plan we've submitted to the Congress right now, we'll do it, is to start the budget deficits on a decline. We're not as concerned about the next two, the 83 and 84 deficits as we are from there on, the out years. And our plan brings those down to where a balanced budget is within sight. You could see that as that line continues. You're going to make that. I'll get back to that as well, but I wanted to ask you one more thing about defense. Do you still have confidence in the defense secretary, Castro Weinberg? And the reason I'm saying this is this. As you know, he's come under considerable criticism and those who want to cut military spending. But even more surprising is the report by columns Joseph Kraft and I quote here, that quote, the move is now afoot in the Senate and the White House to replace the secretary of defense. Do you know of such a move? Not at all. I don't know. I don't even know of any rumors that could have led to that Kraft column. No. Cap is, I am very satisfied with our entire cabinet. I think we've got one of the finest funds this country's had in years and years. Well, to many concerns, he is considered now a symbol of a strong defense posture. Many people would feel that if there is any sort of move to get rid of him, they would be very concerned. No way. And let me just tell you the things that they're ignoring up there in a hill with him. We submitted in February our projection for five years of defense spending. He, as we went on and his inflation came down faster than we thought, he found and volunteered $41 billion for reduction in that plan that we'd submitted over the five years. Now, Congress has taken some more that we've had to swallow. They didn't take enough to really set us back. But now he has come forward with $55 billion more that he can meet without our lowering, our posture. I told him the other day, I said, Cap, you're being a poor politician. You want to leave that in and then let the Congress take it out and they think they've accomplished something. But he takes it out and then they start trying to reduce the figure they wanted to reduce by on whatever he submits, no matter how small. But for Mickey and the fellas who feel this, I say that's why it dwells so long on the deficits. I think they panic a little on this and they don't realize that we do know what we're doing and we've got a plan in place. But they also don't realize the importance of this defense buildup. And this is why I'm 100% behind Cap and no one in here is gunning for it. Believe me, no one is. The thing is, right now in the world we have restored a conference in the United States that they hadn't had for several years. They now have it again. If the Congress did what some of them are talking about doing to defense, we would be right back where we were. But more than that, we would have no chance of getting the Soviet Union to a table to discuss disarmament. We've got three disarmament negotiations going right now with them. All of them aimed not at regulating the growth of armaments, but at actually reducing the amount of arms in the world. Now I don't say that the Soviet Union is giving in, but I do say they came to the table because of our defense posture. They wouldn't have been there otherwise. Let me get back to the domestic achievements here. I know you've mentioned that you've striven hard and your administration has to check the growth of federal spending. But the truth is the budget as well as the deficits, it seems to us anyway, keep racing upwards. Under President Carter, spending went up approximately $64 billion annually. But as we read your figures, spending is going up over 70 billion annually. Stan Evans, he argues that while the rate of spending growth has fallen from an annual average of 15 percent in Carter's last two years to under 11 percent in your first two, this ignores inflation. And he says in real spending growth Carter's last two years, he argues, averaged 4.5 percent. Under yours it will be actually 5.7 percent or higher. No, I read that down too. My good friend and I found myself getting quite angry at him. Again, here we are. What should we going to use? What figures? In his last year in 1980, his spending increased with 17 percent. Now remember in all of 1981, now in all of 1981, we're bound by a budget that's not ours. We come in three months after the fiscal year, started almost four months with a budget that was put in place for the previous administration. And even so, we managed to squeeze a few billion dollars out of that simply through management improvements that we found where we could actually save some money. But we spent our 1981 trying to get our program passed. And coming up with the budget that is in place now for night, well it isn't in place due to this Mickey Mouse budgeting system, we find that we're still operating on continuing resolutions. Although they did pass the budget resolution, but the budget resolution unlike in the state of California isn't binding. So now we have to deal with them on every appropriation bill. But his was 17 percent and he had said that his goal was somewhere in the neighborhood of 10 percent by 1984. What is somewhere in the neighborhood of 10 percent? Not 11 percent now. Or I mean it was yes, for 80, 83. But by 1984 we will be down to four or five percent. And remember that that is including very frankly the increase in defense spending that we've added over and above what he had planned for his five year figure. Okay, well let me just say something about the projections though. In other words I should have the projections right here which I don't. As I recall fiscal 80 to what was it 728 or something like that it came in at 728. And now the next budget you project it up to about 756 or 758 something around there. And now you're projecting at fiscal 80 three you're projecting actually an $805 billion budget. And the fiscal 80 three year isn't even over. Alright. So it might be well above this $70 billion. Let me also point out that with a recession which no one had predicted. No one had projected that. No economists of the outside or the other side or us and the having to the loss of revenue from people not working but also the benefits in order to sustain those people and we've extended them as you know twice for those who've used up their benefits. This is increased spending beyond which you could count also the high interest rates. The one thing that we should talk about is the part that is played by interest government borrowing which is a figure that is greater in the total government budget 20 years ago. Now his figure his projection was $739 billion. And we came in at 728 which is $11 billion less than he had projected. But had he had to add the things that we had to do because of this recession which he had not anticipated nor had we this would have added about $20 billion more to his $739. So our $728 is actually in comparison to his projection of what would have been about $760. I'll let it ride here for a minute. Okay let me ask another point about in Thailand. The administration budget in your speeches and you've made a major point and we think it's absolutely right on target is that there's a great deal of emphasis that the entitlements are really what are driving up this federal spending. And for instance in one of your budget briefs one of the budget manuals that quote that the social contract claim unquote bites off bigger and bigger chunks of the gross national budget. You can say quote the social contract base of the budget which rose dramatically during 62 through 1981 has proved to be not only locked in but a rising claim on GNP. So that's the premise here but then so I want to here's the question but how do you expect to put a check on these entitlements when the bipartisan social security package you're pressing for contains virtually no breaks on social security spending one time six month and that's it so far as we can see Bill Armstrong a member of the commission which produced the package says that higher taxes account for more than 75% of the assumed deficit in the short run and more than 91% in the long run. A major fan of yours columnist William Buckley considered this solution of the commission of virtual surrender to the liberal Democrats. I'd like you to answer that. Especially social security we consider the amount yes and I'd like to recall a little history I'd like to recall in 1981 we came forth with a plan aimed at getting control of that program it would not have taken benefits away from those people now dependent on them just as we've always promised we wouldn't we supported that program and you saw it successfully made into a political football that threatened everything we were trying to do I think it was the biggest single issue in the 82 campaign it was dishonest in the way in which they did it they charged us with things that we weren't guilty of at all it is significant that the the Democratic National Chairman even now with the bipartisan agreement on this plan has the nerve to send out to social security recipients a fundraising letter in which he states that the Republicans are out to take social security away from them now at this point, not a year ago he's saved this and asked for $500,000 in contributions to fight us on the social security issue now all during the campaign I had said that I thought that remember for about 30 years I've been making speeches that social security my speech for Goldwater is 64 in there I pointed that right then it was $300 billion out of actuarial balance and no one was saying anything about it or proposing doing anything about it so they kept on not doing anything about it and now we were faced with this immediate problem back again in 81 they stood right up there in the Hill in the halls of Congress and stated that we were telling a falsehood that it could not get by of 83 without going broke they said that wasn't true so when we finally had to give up on that and saw what they were going to do and they had made it successfully a political football and because publications that I thought should have been defending me like human events and all didn't but let me say this though to show you how successful 100% of the people and the polls actually state an answer to a direct question yes, Ronald Reagan has cut my social security benefits now there's been no cut no reduction in COLA nothing of that kind until now but this is how well they were able to fold alright I said and all during the campaign I said that I believed that we should put together a commission to study social security in Seattle could be reformed so when they did this there was no way of curing them when I went up on the hill and tried to talk to the leadership on the other side about it couldn't we not get together on this problem they refused they said we will not discuss social security with you they knew they had a fairly good football now I went back to the commission idea we appointed the commission and it was bipartisan and so you had both viewpoints in there we would raise in taxes the other side wanted the other approach we came up with a compromise that I don't think is as bad as they say and I'm going to explain it in a moment but this compromise completes about 70% of the overall plan the long term leaves about 30% to be solved now I'm very happy about that because this gives us a chance now that it is taken out of politics now this gives us a chance to come again on the long range plan and then try for the structural reforms that we think should be made applying to the younger people in the workforce now not the people presently getting their benefits beyond this call of thing but let's take the thing that they say are taxes first of all the biggest amount of the taxes aren't ours these taxes were put in place all the way to 1990 in the 1977 legislation every year they raise the percentage of income that will be taxed and there are about three more actual increases in rates now we agree in return for getting the call of thing we agreed to move that bracket of taxes just about one year but to protect the worker who will now find his social security taxes that were going to be raised anyway to find them raised a year earlier we give him a tax credit on his income tax equal to the amount one year it wasn't only for months but I think that that makes the bridge and compensates for it starting a year earlier if you did it all the way out then you'd be reducing the tax now that's one the second tax is we're going to ask the people who have single individuals on income of $20,000 $20,000 not counting their social security to now pay income tax on the social security part of their income if a couple $25,000 this in my view is one of the structural steps to actually help take us back to where we should have been from the very beginning the man who's over 90 years old today had a social security was in a nursing home had a full page article in the Washington Post about the mistakes they had made and one of the mistakes was no means test in other words to keep everybody feeling proud or not embarrassed they said also social security has got to go to the millionaires so everybody's equal this is ridiculous and people that are otherwise able to provide for themselves should be collecting it it doesn't make any sense that I am now eligible for social security I'm not going to take it but I'm eligible now so this I think taxing the social security part of these people with that kind of earnings end up is a very good thing to do the third tax is the one of the self employed now right now he pays 75% the total paid by employer and employee in social security tax now the self employed is really employer and employee so what we've done with him is say he's now going to pay the same total of employer and employee but just as business can take the social security tax that they pay as a tax deduction a business expense he will now be able to take that half of his social security payment as a tax deduction against his income tax now we don't think that that makes very much of a change to him in what he was paying and maybe in many instances it might make a that he's paying less because now like the employer he's getting the deduct I have seen different figures but do you think you're holding in check or don't you believe I think that you hinted that you might believe that we need certain structural reforms let me just say this I think a lot of people will have this feeling that if Ronald Reagan got onto television and really explained what would happen to the average worker as he's getting taxed to the social security system and if he saw you on television explain what was happening and why we needed these structural reforms that even this short term solution was not just tremendous and people would have really seen and in other words you are operating in the back of me Claude Pepper and Mr. Minot and everything can say anything they want to about Ronald Reagan and what he's trying to do unless Ronald Reagan goes out on television and actually says what the problem is because the papers aren't going to carry it and the media and you are the one that has command over that media I think the timing is a little wrong but remember this they didn't just present a plan we gave in we had as many people on that commission and fighting back on that and it really got down to where it was either going to come apart and there was going to be nothing or there was going to be a compromise and this represents a compromise that when both sides said okay we can buy this this to me was such progress and finally getting the issue out of politics because once this has passed as I say now you can go back and no one can throw a rock at the other side and say well they can't throw rocks at us and say well you are trying to destroy Social Security now we can go back because we still have to resolve that 30% but we bought time we bought enough time we can wait till things are a little better our way okay let me ask you now okay about how also do you expect conservatives to believe that you can contain federal spending when you put in charge of the health and human services department we call that the Pac-Man of the federal budget Mrs. Heckler who over her years in Congress repeatedly fought to liberalize all the many programs that this department runs well first of all I have heard pledge almost blood on my forehead that she will support my policies and what it is that this administration wants to do with those programs now would you turn this off for a second there we go wait a second I think you'll see I want this off the record Margaret made a statement the other day that I think explains a lot of why she can do this a congress person represents a district and a constituency and has to be somewhat influenced by that constituency they're there or here representing those people and their views and she said this but she said now as a member of the administration she said my constituency is the whole United States and what must be done for the country is a whole and so she said I don't foresee any trouble at all and as I said she pledged completely her support of our administration policies many conservatives believe whether failure or not that you are retreating somewhat rapidly at times from your initial goals on the subject of taxes and particularly they point to the August tax hike that the foundation referred to is the greatest tax in American history I know you don't believe that but that's what they said the imposition of the highway taxes your agreement to embrace new social security taxes the newly proposed tax health insurance benefits the standby tax etc I was going to ask you why do you think all these taxes are necessary but there's a sort of a follow up a former assistant secretary treasurer Dr. Craig Roberts all the tax breaks to first the American people in 1981 will be gone by 1987 and I disagree completely with it again we've got to bring something up here in kind of a historical pattern we knew when we submitted our program that literally we were we were faced with a built-in tax increase over the next several years not only the social security tax which as I say has already had a couple of increases since we've been here that was passed in 77 and then those that hook string of taxes increases whether by actual increase or by increasing the amount of earnings that are taxed we were aware of all that but we were also aware that bracket creep was a built-in tax increase you know inflation is deliberately brought about in many instances by government because it is a tax increase people move up into they get a cost of living pay raise they know better off than they were before but then they're moved into another tax bracket and our progressive tax system and they're worse off than they were before and this was happening real earnings of the American people were going down steadily before we got here now we didn't get all the tax cuts that we wanted but we did get in advance more than we wanted they postponed and cut in half our first installment of the income tax they changed some other things but once the bill was up there before congress it became a Christmas tree and then everybody including our opponents started hanging their own goodies on that treaty and what we got back was a tax package bigger than we'd intended I had said in the economic plan there's a portion of the federal government down to about 20.6% of gross national product we went way below that at the time that we passed it we were talking then of a second tax program not only were there other things we wanted to do like tuition tax credits and so forth that would be tax cuts in the few when we got by with this first one and when we could do the other but we were also talking about closing some what we called I don't like to use the word loophole because they've used the word loophole to describe some pretty legitimate tax deductions but unintended benefits tax legislation that was passed with regard to a certain industry and suddenly the industry founded and created a benefit that was never intended and that they were getting millions and millions of dollars each year in tax benefits from this we said we wanted to look at that look at strict reinforcement ability to collect tax that was old but not now being paid that would come with the second package when we found out that the Christmas tree thing had set us back not only was our faster decline in inflation shutting off bracket creep so that revenue estimates were off we were down below but we just weren't collecting because of these things that have been hung on there now in August faced with this fact some of the things we put in that tax bill were some of the Christmas tree ornaments that we got rid of the other part of it, a third of it a full third of that tax bill is improved collection to collect money from people that are not now paying it but old I think the average taxpayer that pays wants to know that there isn't some joker living across the street that's getting a free ride at his expense so this was part of that bill a full third of it now that covers that one why I was willing to go forward I said reluctantly but I had to realize that I can't line item veto as I could when I was governor so when that tax bill came back I wanted the tax bill even the withholding on dividends and interest for the reason for that being in there and incidentally everyone's forgotten how many people aren't covered by that the people up to a certain level they don't have to pay they're not going to be withheld it's only at an upper level but that was in there because we found out that was one of the biggest sources of evasion that one of the biggest sources of people getting by without paying the tax is in that and there's just no way that the Treasury Department the IRS without building it up is because the Army can catch that intercept it and this was the practical way to get the people that are not now paying on that there are disputes as to whether that many people are evading the Chamber of Commerce people well I had to go by what the Treasury Department says in their records now we come to the gasoline tax yes I stood before the press conference about a year before and said when someone asked about a gas tax and I said the only way they'd get it would be by way of a palace coup that time they were talking about the gas tax as just another way of increasing general revenues well I spent eight years in California fighting liberal Democrats who wanted to open the gas tax of California to become general revenue they want to get their hands on it in California it is a user's fee the gas tax pays everything the highway patrol and maintenance even provides money to local and county governments for help on their roads and so forth we come here and over a year ago Drew Lewis came to me with a horrendous report on our highway system, the federal highway system as well as primary highways and the states and the bridges and it was a frightening report we companies that have to do a lot of shipping that lose millions of dollars a year by having to reroute their trucks to avoid stretches of highway or bridges that they do not believe their trucks can go over anymore and I asked him then when he did that bad as it was I said this was the first year when we were talking about our tax bills and everything and Drew can you come back next year with that and we'll see what we can do but right now we just can't he came back a year later on the dot and reminded me and now the report was worse bridges all over the country where school buses stop and unload the kids and make them walk across a bridge and then the driver with his fingers crossed drives the empty bus across they don't want the tragedy of them and they think the bridge is that dangerous and so it was presented as a user fee to be used for that was only coincidental really that a sideline benefit might be the how much sideline benefit would be how much would it be jobs but we would have done it anyway for that fact but in my view this is purely for that and this is temporary once this job is done so this is what made the difference on that but now final figure that I know on filibustering here the final figure will be this even if the contingency tax plan which the only reason I bought that was because that one says to the congress it's only a contingency plan if you have the spending as we ask and a couple of other provisions in there too if the recession is full recovery we don't have it but even if that is passed over these years out to 1988 we the taxpayer in the united states will have 735 billion dollars more in their pockets than they would have it had not been for our tax plan so you're disputing obviously Mr. Ray Roberts and even the Washington Post but maybe they're not figuring it the right way, read the way I'm saying the built-in tax increases that we inherited are there and you know there's no way you're going to get rid of those they're there and they would be reducing the amount of money in the people's our tax cuts have seen that not only will they not be reduced they will have no they will have 735 billion dollars more than they would have had with those tax increases and without our tax cuts so I think we're ahead of them ahead of the game but we weren't responsible for those but it's still going to be in terms of tax take as a percent of gross natural product it's still going to be supposedly going out but we did go down below where we were supposed to be and we are now we think that all of this would bring us back to about where we originally about 20.6 about 1980 levels or something back to your Chicago plan my Chicago plan 20.6 percent in terms of years though I just want to know what year would it be back in I understand that but what in other words the level of taxation of 1980 or 79 so it will take me the five year projection that would be to you have to project five years over the next five years I just want to know what year would bring it back to approximately as a percent but also remember that this includes I will not give in on the indexing of the third phase of the tax you will not give in will you veto will you flatly veto a plan if the Congress decides to get rid of the third year or and or the indexation I have always been reluctant to say what I will veto what I won't because sometimes an orange turns into an apple on its way to your desk go ahead you've got the other need to understand okay okay so let me just put it this way I will fight to the death with regard to those two now you were going to ask about indexing let me just ask something about indexing what I think belongs in this story we're reducing inflation at such a rate that indexing cannot mean an awful lot to the average taxpayer because cost of living pay raises would be so low but I want indexing even if we've totally eliminated inflation I want indexing for the future to permanently take away from government the inducement to create inflation in order to get a tax increase without a passing one okay I don't think our readers will like that let me ask you this is, I know it will take this question but as you are undoubtedly aware that many conservatives are unhappy with your chief staff Tim Baker for the most part they like it personally they acknowledge his efficiency and competency and they believe that he's loyal to you when he's in his life they believe his views are not necessarily compatible with your own as evidence they cited January 1983 Dallas Morning News interview in which Mr. Baker took some sharp jabs and an awful lot of people all of which happened to be conservatives who are working for you or who have worked for you beyond that the article suggested that his views were not very much in court with yours and he was quoted as saying I'm considerably more moderate in this period not more moderate, just considerably more moderate the question is, don't you believe it is extremely difficult for Mr. Baker to implement your views since he seems to be at odds with you philosophically well first of all there isn't any way he could not implement them when I've made a decision and I make the decisions Jim came in here and he was I know how he felt about that interview while sitting in a turkey blind out there talking but incidentally he'd been told that that interview was to be one subject and one subject alone and which was turkey shooting so he sat there with a fella that he knew and I think it was a little bit like Dave Stockman's being victimized earlier in the administration but anyway I know how he felt about that I have never seen any instance of Jim he's presented all views as everyone else does when we sit in there in that cabinet room we you know this is that's what I brought about was cabinet government I want a cabinet that everybody gets into this and I hear all sides of every issue and then I make the decision I don't take a vote I make a decision based on what I've heard and what I think and I think that Jim feels that sometimes maybe there is another view that should be presented or a more moderate view sometimes at least so that I have it but I've never seen him once question or rebel when I've made the decision you do not believe as a lot of people do that there is an effort by Mr. Baker and others to work with some of the senators and try to work very hard on to sort of change your view no I don't think that happens because I first of all I know some of those senators and I know some of their loyalty to me they wouldn't hold still for it for a minute is Jim Watt going to resign we read that now I hope not here's a man who's gotten probably the worst of being painted into a corner that anyone in this administration if anyone will look at the record of the Department of Interior and what they have done with regard to the National Park system what they have done with regard to wilderness lands all of these things they will find the Department of Interior has never run more efficiently and done more what the people want I'll give you one example of figures this 800,000 acres of supposed proposed wilderness land that he sent a recommendation to the Congress that it not be included everyone has immediately portrayed this the general public believes that he has taken 800,000 acres of wilderness land and freed it from being wilderness land we've got 80 million acres of wilderness land under the Carter administration they propose that 180 million they propose that 174 million acres be looked at to see if any of it should be added to the wilderness that we now have while that administration was still here they rolled off 155 million of those 174 acres that it should not and it was around 150 million I should say because it left about 24 million acres that was still under study this was land now the law specifies why it can be ruled out if it's got roads built on it it can't be wilderness land if it is in dual ownership if someone owns the mineral rights if some other element of government is in partial ownership with the federal government it cannot be considered so he comes in the continuing study after the previous administrations already ruled out 150 million of those 174 million acres 24 million acres he takes less than a million acres 800,000 and says well here the continued study reveals that these are like the 150 they got roads on them or the dual ownership and so forth and says they should be crossed off and the feathers hit the fan he's still studying the remainder the whole land study is going on but this is the type of thing that's been happening to him all the way in here and I have to tell you he has been as big a friend of the outdoors as any environmentalist would want and they just can you give an example here because I think you would like that well the national parks had deteriorated terribly and he came in and found that under the previous administrations maintenance money was being cut down like that for the maintenance of the parks or the rehabilitation of them and yet they were putting up additional money to buy more park land he said we're not going to buy more park land until we use some money to refurbish the parks that we've got and this is what he has done his spending on re-instituting these parks and putting them back to the shape they should be in is far greater than the previous administrations spending ever was one question on Taiwan because I know that's one of our concerns but in the US during the 1980s began to upgrade their military in a way that it becomes a de facto threat to Taiwan even though the mainland issues no menacing statements at all would you and or your successor feel obligated to upgrade the military on Taiwan well I think all of this is covering the Taiwan Relations Act when I said those things in the campaign I knew that the act was there but the act was not being lived up to in other words things were still being done that were humiliating the Taiwanese contrary to what the act called for now our communique is a very carefully worked out deal and we did not give an inch in that communique the People's Republic has agreed that they are going to try and peacefully resolve the Taiwanese issue between the two of them as being an internal affair we in turn linked our statement about weaponry to that and said in other words the understanding of this is that if they make progress and do indeed peacefully work out a solution agreeable to both sides obviously there would no longer be any need for arms and this is all a reference to reducing arms is tied to progress in that as long as there is no progress made we will abide by the Taiwan Relations Act which says that we will maintain Taiwan's defensive posture and capability what if there is a progress of the sort but the point is that Taiwan but that the mainland feels because they say they are sovereign but it must still increase its military in other words it must modernize then it just seems to me what happens then at that point to Taiwan do we still go along with the idea that their military cannot be upgraded we are doing all the things that we had always done the shipments are regularly going forward but nothing is in advance of what they already have there is an F5E but there is nothing beyond an F5E there is no F16 or F whatever only on the basis that it was ruled and they were agreeable that it was not necessary they are satisfied with what they are getting right now they are getting F104's and on the other we are making progress in that other now their people meet our people in offices and so forth but at the same time we want to say this we want to go forward I think it would be foolish of us not to go forward with trying to keep good relations with the People's Republic of China improve those relations the very fact that under three previous presidents including the one who opened up the relations in the first place there was and still remains a solid reason for doing that but not at the expense of Taiwan and we will carry out the terms of the Taiwan Relations Act if the day ever comes that those two find that they can get together and be one China peacefully then as I say there wouldn't be any need and that's all it was meant in the communication nothing was meant beyond that we are not going to say well just because time goes by we are going to reduce the arms to them I don't think we are going to reduce we are just not going to upgrade that's the key phrase when I was there and talked to those people and their leaders their point was that we couldn't give them advanced bombers or advanced fighter planes and we can't even give them certain defensive weapons because these defensive weapons haven't gone to them prior to this communique I don't think we are bound what we mutually agree on when their people come here and sit down and go over this what we mutually agree is necessary to their defense and I will see that that continues thank you very much Mr. President I got a run for the basement thank you you didn't ask about it I was just going to show you there is a list of conservative people we have just the last handful of appointees