 We do this, yes, this is the only thing we do in case anybody wants it. It hasn't gotten it or, and we've had to several times supply them where we can supply you with the transcript or the tape and whatever you'd like. That's the only taping that goes on right out in the open. What's your next trip south? What are you planning anything? Oh golly, I don't look that far ahead on the schedule. I get scared if I do. Nancy's there today, she's in Houston, but that's on the drug matter down there. You got a sore throat? Huh? You got a sore throat? No, I think I was talking, and see I'm a little addicted to allergies. I was a hay fever sufferer until I began taking shots for it, but I have found out that Washington and Sacramento have something in common. They're both allergy capitals. I didn't sound this way up at Camp David, but I do when I come back here. And I think as much of it is inside as out. And I can go away for a few days and it's fine. You want to venture a guess? What? You want to venture a guess on who's going to come out on top tomorrow, Democratic Hill? No, I'll let them have that all to themselves and decide. You want to tell us who you would prefer to face? Nope, nope. I'll offer no help in who they might want to select. Would you tell us if you've been at all surprised about Gary Hart's surge in the primary so far? Well, maybe we might not have picked that, and yet I think I can understand a kind of a new face. But I still think that it's too early to really be naming any front runners or anything in that race. Having gone through a series of primaries, there's a long way to go. A generational conflict, and I recall you in the past talking about how, fondly, how America needs to return to the stature and to the values of its past. Will you be adjusting that strategy if you are facing an opponent who talks about, appears himself backing the future as opposed to the politics of the past? No, I have always felt and based any campaigning or anything that I do on what we do, not what the other fellow says is going to do, what we do and what we plan to do, and that's the way I would campaign. I don't see any need for any generational struggle in here, but if there is, maybe we can settle it with an arm wrestle. Is it true what Gary Hart says that you and Walter Mondale represent the politics of the past? No, as a matter of fact, it might be in the past in the extent that some of the things were principles that this country was based on, but I think that what we've done has been a departure certainly from the past 40-odd years of democratic domination in the country, which they have held both houses of the Congress. Mr. President, can you give us some idea about what you would do in the next term to control the deficits? Are you considering possibly another increase or an increase in taxes by changing the system, say, or would you make any further cuts in entitlement programs? We are looking at and have been, and this is nothing new, what we think are so-called loopholes that offer not quite fair benefits to some and not to all. I've also discussed, and I've asked the Treasury Department to look into something that can't happen in this coming year. It's going to take more study than this, and that is a simplification of our tax structure. We need to look at ways to get the billions and billions of dollars that are not being paid in taxes, owed by people legitimately, and not by way of loopholes. In this instance, just outright violations of the tax code. To that extent, yes, we're going to do that, but for the future, we have to bring down the percentage of the gross national product that government is taking in this country. See, I have a degree in economics myself. Now, that doesn't make me an authority, because I don't think economists are authorities. It's an inexact science. But I do remember that when I was getting my degree, it was more or less a standard acceptance in economics that the business cycles, so-called, and the lean periods previous to that to what we now call recessions and depressions, when they did occur, but usually it was when the government had gone beyond a certain point in the percentage of gross national product that it was taking. And that was just more or less accepted as standard. Well, I think it is very true today, and I think that after we get what we've called a down payment, which is about all we can get in this year with the limited time that Congress is going to be here, then I think in a bipartisan way, we're going to have to continue to look at government as to how structurally we can reduce the share that government is taking. Can you give us some specifics about what you might do? Well, let me give them to this extent. Some of them you could look at, and they could be contained in the Grace Commission or committee reports. Here was a look at government by almost 2,000 top business and leaders in the private sector, not only from institutions and so forth, but from the business and financial world, that looked at government as they would look at a business if they were thinking of merging or taking it over, as to things that are wrong and that could be changed. And we are really seriously looking at these recommendations, 2,400 and 78 or 28, but anyway it's almost 2,500 recommendations that they've made, and many of them would require legislative action because they would result in changes in procedure and the processes of government. What concessions have you expressed willingness to make and what concessions might you be willing to make for your part of these? Well, frankly, I've lost a little faith in the bipartisan approach to this because the other side seemed more interested, I think, in politics than they did in meetings in any way on trying to achieve this down payment. So I am and have been meeting with the leadership of our own in the House and in the Senate on that very thing and will be willing, once we all come to agreement and have settled on a plan, and I can't go beyond that because we haven't, but I will be willing then to go forward with our own proposal and hope that we can with the support of the people that we can get bipartisan support for it. So you're saying you haven't even put forth a proposal yet? What? If you have not even yet put forth a proposal in these negotiations, I don't quite understand. Well, this is in our own discussions within, I might say the family, meaning the Republican leadership in both the House and Senate. We are discussing and there are a number of viewpoints on figures having to do with spending reductions and I think we pretty much agreed on that tax revenues would be, if there aren't, it would be obtained from corrections in the tax program and not in any change in the rates. Mr. President, not too long ago, your finance chairman in Mississippi, William Munger, was reflecting back on the Republicans' defeat to move an editorial race in that state last year and he said that in order for Republicans to do well in Mississippi, they had to attract black votes, but if they went, did the things necessary to attract black votes, they'd be going in for Republican philosophy. Do you agree with that? No, I don't. No, I think everything that we've done in our economic approach has benefitted of everyone. I know that there are charges being made. Listen to the debate that somehow our attempts at economies and all have penalized people who were dependent on government aid. That is a falsehood. The simple fact of the matter is we're spending more on help for the people and for the needy than has ever been spent before in history. Our budget cuts have been reductions in the increase planned in spending. We haven't come to some place where we're spending less than have been spent. But Sir Blacks in Alabama say that they're not going to vote for you. They say they're going to vote for the Democrat, whoever he is. How are you going to counter what they perceive to be an administration that it doesn't have their interest at all? Well, you said the key word that they perceive to be and I'm just going to hope that in the campaign we can reveal to them that they have not been given the truth, that they are the victims of a lot of demagoguery that has portrayed us as guilty of things that we haven't done. Do you think that all the campaigning among eight contenders for the Democratic nomination has changed public perception of you along those lines and along other lines? Well, even before a campaign started, this has been pretty much the theme of the other side. I have been held up as eating my young. That we have been hostile to the poor and our tax program benefits the rich. How can a program that cuts taxes evenly percentage-wise across the board, thus leaving the same rate of progression in our progressive tax system, how can that be beneficial to the rich and detrimental to the others? How can it be unfair to the people of lower income or the poor to reduce inflation from double digits, twelve and a half percent we came here, down to a third of that or less, less than a third of that when the people with the least, let's take someone with $10,000 of income through two years, 1979 and 1980, before we got here. By the end of 1980, that $10,000 would only buy $8,000 worth. He was getting $5,000 a year. He got a $1,000 cut in his ability to buy each year. That was probably the worst tax on the elderly with fixed incomes, the worst tax on the poor who have to spend most of their earnings on subsistence, on the necessities. The person with a luxury income who spends a minor portion of it on necessities, the rest of the luxuries, they weren't really penalized as much by inflation. So I think that everything we've done has been beneficial to everyone at every level. You mentioned the elderly. If I could ask about that, a large elderly population in Florida, and many voters seem to be convinced that you more than the Democrats have been trying to restrain the growth or cut back entitlement programs such as Social Security and Medicare. First of all, is that a correct perception and is it possible in the second term that you would be advocating further cutbacks? I have said repeatedly that programs like that there are things that need to be done, but we must never pull the rug out from those people presently receiving their payments in the program and dependent on it. You can't suddenly undermine them or break your contract with them. Reforms, if there are such to be made, must be made looking toward the future. People not yet dependent and would have plenty of time and warning with regard to such changes. Again, this was, if you remember, that was the issue of the 1982 campaign and nothing had been done. We were guilty of trying to tell the Congress and our opponents that Social Security was facing financial disaster and it could hit it as early as July 1983. They denied that. I remember hearing the Speaker of the House himself deny that that was true. And then after the election was over, we all got together in a bipartisan group and without any animus came up with a plan to save Social Security because it would be broke by July of 1983 and we came up with that program. It wasn't a permanent answer to some of the problems but it did buy us a great many years down the road before we would again be in a fiscal spot of that kind. Now, as to what we've done in Social Security, since we've been here, the average married couple in Social Security has had $180 a month increase. So I again don't think that we were double-crossing anyone. Mr. President, in 1980, West Virginia was one of, I think half a dozen states have voted for Carter and now four years later unemployment is hovering around 15% in the coal industry and steel industry are ailing and some federal programs at West Virginia have depended on it and cut. What would you say to the guy in the street in West Virginia to convince him that he should vote for you in 1984? First of all, we know that unemployment is never consistent with the national average. I described this to some of our own people a little while ago that to think that it is is like the man that drowned trying to wait across a river whose average depth was three feet. There are those pockets in certain areas that are going to be hit harder than others but in the surge in reducing unemployment which is greater than anything we've seen in the last 30 years, even those hard hit areas are being benefited. More will have to be done. This is why we have for a couple of years now been trying to get the enterprise zone legislation through the Congress and it's been blocked. This is a program and I was amazed when one of the candidates in the debate last night started talking about we must look at tax incentives to help industry and so forth put people back to work. Well, that's what the enterprise zones are all about, picking those hard hit spots, both rural and urban, and generating employment through the use of tax incentives. So far a number of states have gotten tired of waiting for the Congress to act and do it at a national level and have put in their own enterprise zone programs and every one of them is proving tremendously successful. But knowing that you might get around to unemployment, I just decided some figures might be of interest to you. You represent two, four, six, eight states. And on the same region, in every one of them the figures for the peak of unemployment and the figures for I can't give them to you except for one state now, but in December as of the December level of the comeback, we're considerably down from the peak and in the state that you just mentioned your own, at the peak unemployment in West Virginia was 21. By December it was down to 15.7. Now I don't know what it is today. We won't know for a while because when Labor Department gives you the overall statistics, they don't break it down to states. At the present figure, it takes them a while to break it down as to states. So all I have are the November figures except for Florida. And that's because they do break it down for the 10 most populous states earlier than they do for the rest. Florida was 8.6 at its peak. Wait a minute. Florida was 10.4 at its peak and in December it was down to 7.5. But to give you an idea of what the rest of the figures may look like when we get them for the present, Florida is now down to 6. Ours was at 11.4 in December and in January it was back up to 13.5. And some of that has to do with seasonal Alabama. Alabama, yes. It's creeping back up. At the peak you were 16.7. In December you were 12.3. Now I don't know what the present one is. Well in January it was 13.5. 13.5. Well, I think there'll be these fluctuations. I'd be very interested in seeing what it comes out as from February. Is there anything else that you think that the states could do to help pull themselves up? Well I think most states as far as I can see are doing all they can just as we are. Maybe, and you know all of your states, particularly there in the Sun Belt, you're going to have to recognize also that your reduction in unemployment may be a little slower because of the migration to the Sun Belt. And that means that newcomers coming in without jobs and looking for jobs are temporarily going to distort the figures. Just one minute. I'm back to the budgetary thing. When you campaigned for president, one of your promises of course was to balance the budget by 1984. Obviously it's not balanced. I wonder what you look at is the main reason for that. What happened to Reaganomics that made it not work like you wanted it to? Nothing happened to Reaganomics. And I'm glad you asked this question. Yes, I had the help of some of the finest economists in the country in working on the program that I call the Economic Recovery Program. And toward the end of the summer, 1980, I announced that plan and based our projections that yes, it could balance the budget by 83 based on all the projections of those economists at that time. Before the election, between that announcement and November, that projection was no longer valid because the economy in 1980 was deteriorating so fast and had not been projected to do so by any of these notable economists. No one had. So it continued to worsen. And by the time of the inaugural, then even a later time was beyond any prediction that it continued to get worse. That's when interest rates were 21.5. Inflation then for 79 and 80 had been double-digit both years. Now, when I started, you've got to remember that the president comes in not with his own budget. You are still bound until the following October by the budget of the previous administration. Nor was my program in effect. We were still trying to get it. And in July of 1981 was when the further big dip came. Now, some economists have said, well, we had a 1979, 80 recession and then the thing that happened in July was another different recession. Well, I don't think so. It was a continuation and the bottom fell out with the interest rates that stayed high. The automobile industry, the housing industry, was either one of which could start a recession by itself. So nothing of what happened and the great surge to 10.8% in unemployment. None of that could be attributed to our program because our program hadn't started. And then as our program was implemented and remember it was only implemented in stages, it took three years to get the 25% tax cut, other things that were implemented and we never got all of the spending cuts. As a matter of fact, we got a little less than half of what we asked in spending cuts and to that's to this day. Now, I could turn around and say that maybe the recovery might have been even better if we had gotten, remember that one stage of our tax cut, 10% of it, was going to go into effect retroactively to January of 1981. And we didn't get it then and when we did get it after the drop had occurred, it was only 5% and it didn't go into effect until October, which meant that it was about one and a quarter percent when it only went on for three years or three months. And so I have to say that all of the recovery has taken place after our program went into effect and none of our program was in effect when the bottom fell out. Mr. President, can I get clear on one thing? Your comments earlier about this bipartisan meetings over the deficit, you said you're now pursuing your own plan with other Republican leaders. Are you saying that you've abandoned altogether any hope of reaching any kind of compromise for the Democrats? No, I hope that maybe when we come forth with this plan and say, look, here's something now we'll tell you we're ready to go with. Here is a plan I would like to have because we can't get such a plan unless we have bipartisan support. I would like to think that they would do it but what I meant was that to sit down with them and start from scratch to negotiate, they were very unwilling. We had great difficulty getting them to even meet. And finally, one meeting, they just simply walked away on one issue and refused to talk. Then they came back and it wasn't very encouraging to us. And you still don't have any idea about how soon you might have a plan ready to put forward? Before the elections, though. Oh, Lord, I'm hoping very soon, the election, we've got to move in this deficit matter and move fast. Some of your economic advisors have been saying for some time now, and Wall Street analysts, that we've got to do something about the deficit. And you've just said it needs to be handled or taken by the horns as soon as possible. But you have been saying for some time that are painting the picture that things are going to be fine, things are going to be okay. And that's not exactly the picture that's come from some of your advisors if we don't take control of the deficit immediately. And I'm wondering how... It isn't in exact science and some of the economists and some of them, I think, are trying to scare the Congress into recognizing that we should be dealing with it. But let me just point out... Not scare you, but the Congress... No, not scare me, no. Because, look, I'm not one to underestimate the deficits. I've been talking about them for 30 years. Is it impossible for us to... Well, no, you can't remember when you were too young. So it would have to be history for you. But for almost half a century, the other party has been in control, as I said earlier, of both houses of the Congress. And the Congress is the only one that can deal with these things. A president has a veto power, but a president cannot spend a single dime. There's nothing in the Constitution gives the president the right to spend anything. But for almost this half century, we have every year run deficits. It was almost a trillion dollars by the time we came here. And there were many of us who opposed this. And we were told at the time that national debt didn't matter because we owed it to ourselves. That was the explanation. We were told that deficit spending and a little inflation was necessary to maintain prosperity. Well, some of us didn't think that added up. And I can show you speeches I made as in 20, 25 years ago, in which I said inflation cannot continue without going out of control eventually. You cannot go down this road. The deficit spending and the piling up of the debt that has never worked in history, it never will. Well, now suddenly, with the big debt that came in July and that recession, with millions more people added the unemployed who became wards of the government which increased the spending but who were no longer paying the taxes, which decreased that, the very fact that we improved the inflation figure also militated against government revenues because inflation is a source of tax increase and we didn't think we could reduce inflation that fast. We thought that there would be higher revenues than it turned out to be because of licking inflation. Well, all of this, for them now, to suddenly become aware of deficits and yet when you try to talk to them, there's the only answer that they have for clearing the deficit, increased taxes. Well, and they'll also agree to cut defense spending. Well, defense spending right now is down to a little more than a fourth of the budget. Defense spending historically, days of Jack Kennedy, was virtually a half of the budget. Under Jack Kennedy was 47.8%. So, and the increase in taxes, they doubled taxes in the five years before we got here and the deficits increased because when you increase taxes, they increased spending and may I point to the 1983 budget resolution passed by the Democratic majority in the House and they really didn't think that it would ever mount to anything or be passed by anyone else but you'll remember they described it as a reaffirmation of Democratic principles and it did call for somewhere around 70 billion dollars. Recovery that we're now having and put us back where we were but beyond that, they've made it plain and indeed their own candidates talk of new spending programs. Well, you're on the campaign trail. How much of an issue are you going to make about the prayer issue and the abortion? Well, I'm hoping that before I get out there that we'll have a school prayer amendment passed in the Congress. And here again, the effort that is being made to portray that as some way, somehow we're talking compulsory prayer we're going to compel the schools. I'm sure there would be some schools, all we're asking is that they have the right to if they want to. Now there may be some schools that will decide not to maybe some that will decide they will. But I think it's a right that we had for the bulk of our entire history in this country and it didn't destroy the country at all. Matter of fact, crime rates were lower and we didn't have drug epidemics and all sorts of things. There's a lot of reports including administration reports. There are more illegal drugs coming into this country than ever, especially cocaine, which are coming through Florida despite intensified enforcement in Florida and elsewhere. Would you say that that represents a failure of that drug strategy? And what would you want to do to would you be advocating anything important? I'm going to have to ask for, I have to tell you something about this room. I don't know whether you've noticed it or not. Out there in that center of the room under the dome you kind of disappear a little on me. A mild manner of reporting, let's take that. Oh dear. I'm having so much fun. I was asking about the illegal drug shipments into the country and the evidence is that there's more illegal drugs coming in than ever before, at least in recent years and despite intensified enforcement in Florida and other places. What I'm wondering is whether you think that because of that there's going to be a need to change the drug enforcement strategy and whether the drug enforcement strategy to employ it has been a success. Oh well, wait a minute. If this is a new figure that I haven't obtained our task force in Florida which is the first time that we have ever put the federal government, the state government, the local authorities, the drug enforcement authorities and the military involved in trying to head this off this shipment from out of the country coming in was so successful in Florida that this is where why we went to 12 such task forces all around the country on our borders to to try and have the same success. Of course there's no question when you've got the coastlines that we've got and the borders that we have I don't think you will ever solve the problem totally by intercepting the drugs. The answer is going to be the kind that has Nancy down in Houston to really be successful you're going to have to take the customer away from the pusher. The customer is going to have to start saying no and this is, this were embarked on also as you know with great efforts all through the country but the figures that we have is that and the reason for the arrest of the other 11 task forces were that we so slowed it down in Florida and reduced it in Florida that they began seeking new entry points around the country but we're the owner now of a fleet of cabin cruisers and yachts and airplanes and helicopters and trucks and cars and down there the last time I was in Florida I remember being taken into a big building there at the airport and shown what we had intercepted but also on a table that was about the size of that desk the first time in my life I saw $20 million in cash stacked up there in bills that had been taken away from the drug dealers that had to hurt but no, I think the program is being very successful but we know that it is, it's a whole sale business it isn't just a fellow on a corner with something in his pocket to sell it is coming in in freighters it's coming in airplanes and everything else but we've stepped up our efforts and have been tremendously successful Do you think the military can be used to stop particularly some of the drug smuggling that's coming in on that mobile corridor that's being flown inland? What we used was we used their radar facilities also their air surveillance for information that we needed we don't think they actually participated in any of the arrests but they provided the surveillance and the information for us if they can see an enemy coming in I can see that I had just one of my funds for chemical weapons production and of course Congress has narrowly defeated these proposals for the last two years there's been a suggestion made in the last week by some Democratic House members that any proposal for funding could be tied to legislation requiring the administration to make a new initiative on talks with the Soviets on chemical weapons control so my question is first do you think that the United States is doing all it can in this area would you agree to a proposal like that and also do you see any reasons now why Congress might be willing to pass chemical weapons appropriation when they have it? If they were responsible they would because the very thing that they're talking about we are going to be ready very shortly to table a treaty for discussion of banning chemical weapons we know that's the way to go but the reason why they would be more of help if they would okay the spending is how better to get the other side then to agree to a treaty with us banning this the better able will be if they know that if they don't do that they will have to face the fact that we have chemical weapons that we can use against them in other words it's the same as in the nuclear field it's a deterrent and so this is exactly our own plan yes we want to get them into a verifiable treaty banning nuclear or banning chemical weapons would you agree to have it written into the legislation would you agree then to have it written into the authorizing legislation that the U.S. would have to do this I don't know whether that would I don't know whether that would help or not there wouldn't be any reason why we shouldn't be willing since we ourselves are working on such a treaty you've got the whole batch of congressmen so we've got to break out it serves them right well I'm sorry we've got them all here have you talked to Mr. Wick just lightly about the possibility of designing is he a letter of no not a kind there's never been a hint of it I don't know where that came from not a word of it so he's not spoken to you and you still think that he's you still want him to stay on I sure do yes he's done a great job would you like to hear about your own states since I talked about a few of them Alabama 16.7 down to 12.3 Arkansas 11.3 and remember these are December figures down to 9.4 you know about Florida you know about Georgia Mississippi 13.8 is down to 10 South Carolina 11.6 is down to 7.9 only two tenths of a point above the norm or the average 13.7 for Tennessee down to 10.3 and 21 down to 15.7 and that was December and we've done even better in January and February you're going to continue to insist on Mr. Meese is your nominee for the attorney general questions being raised now about the Carter papers and about his loans we happen to know that they sent for those when they couldn't get him on anything else they sent for those from the albasta committee those are part of the record that the FBI said as far as they're concerned there was no criminal action there was no misdeeds and close the investigation but you don't believe any ethical questions have been raised at all I don't think he violated them I have every trust in his ethics and have known him for a great many years and I think he'd be a fine attorney general I'd be able to trust him You think the American people would be able to trust him as attorney general? I trust him more than some of the senators that have been raising these issues Thank you very much I understand Lisa Wallace gave you a note Are you going to act on it? Mrs. George Wallace No No No