 And the fact that you brought that to the federal government, like no president's done is, I think, pretty significant. Right, even right against the chair over there. There you go. Well, who's- Hi, how are you? Hi, how are you? Well, gentlemen, sit down and get wired up for sound. Our usual safety measure here. We're all for it. Very helpful. A good example of big government. No, personalized government. Seeing the individuals' problems. Well, as you recall, we had a conversation just last week, and this will be somewhat in the nature of following up and elaborating on some of those points. On the domestic side, as you look ahead, is tax reform the biggest specific domestic goal? Oh, no, I think it's a very important one, and I think it's been a long time coming. If there is a way I know how complicated and difficult it is. I haven't seen any evidence of what they're going to come up with. They've been studying it for a long, hard time, which indicates how difficult it is. But we do have a tax system that, first of all, when you have a system that can have at least $100 billion estimated, that is not being collected from people who legitimately owe it, there is a flaw. And there certainly is a flaw when you have a tax system that has become so complicated that even the government has to warn people, the kind of people who normally go down to the tax office with their papers and fill out their tax form there. And the government has had to warn the people that not even the government employees understand the regulations enough that, in other words, the people will still be at blame to blame, even if that's the way they've made out their tax. Well, I think it's time that we applied ourselves to doing something about that. But no, it's a part also of the whole economic problem that faces us and the thing that we've been working on, and I think we've made a good start with our economic program. And this is a case now of going further with it. If, for example, in the, just to throw one figure out at you, our estimate of what we have saved, business and the people, the consumers, just in the reducing of needless regulations, we estimate over a 10-year period about $150 billion savings to the people, not the reduction in government costs. And things of that kind reveal what a fertile field is out there. Will you insist that whatever tax program you finally settle on and propose, whatever tax reform, be presented, when you present it, that it be revenue neutral? It has to be. Yes, I've, as a matter of fact, if anything, I would hope that if we really could broaden the base that we could even make it a little on the taxpayers' side that it would be more than neutral that they would actually individually get a break. One thing above all, I won't stand still for anything that, under the guise of reform, is just another way of saying the tax increase. So this is designed not to have any impact on lowering the deficit, the tax reform package? Well, only in the sense of that $100 billion out here we're not getting now, that that might help. But the real impact on the deficit must come from continued growth. And there again, taxes figure. I believe that our tax cut was a major factor in the recovery and the expansion that we're having. And I tried with my fingers once before some of you to explain what it is. If we can, at the same time, we bring down the rate of increase in government growth in spending. At the same time that with the growth in the economy, the overall revenues for government increase because of that economic growth, not because of any rate increase. There's got to be a point up here where those lines come together. And when they do, you have a balanced budget. Do you think it's possible to close the deficit gap without cutting back on entitlement programs? You've ruled Social Security out, let's say Medicare and some of the other. Well, let's look at Social Security for example. I know there are a number of things that are called entitlement programs. All of them must be looked at. In the case of Social Security, I claim that Social Security cannot be linked to the deficit in any way. This program is based on and totally funded by a payroll tax dedicated to that purpose alone. So if you reduced in some way Social Security, that money would simply go back in the trust fund or you would wind up having to reduce, if you could, the Social Security payroll tax. But in no way is that, I know that Social Security is counted in to the entire budget. But since you have an earmarked special tax that is totally supporting that, then it isn't responsible for the deficit. You said the other day that on foreign policy now, that you wouldn't buy the Russians back to the bargaining table indicating you would not make any particular concessions. But what do you do? Just wait them out, confident that they'll see the light themselves. No, we're going to keep that. I just meant, and I want to make sure that this is understood, that in buying them back to be in the position that they would be able to say that they forced concessions from us simply by refusing to negotiate. That would be the worst thing that you could do if you're going to have ongoing negotiations. But what we want them to understand is that if they will present to us whatever it is that they were unwilling to discuss in ours or whatever it is that they wanted to add as an item for discussion. Fine, we've told them over and over again. We're flexible. Here's an example. We went at them in the intermediate range missiles. And since we are supplying the allies with a deterrent at their request, and the request was approved by the previous administration, so we're carrying out what had already been approved, and the Soviets already had in place more than a thousand nuclear warheads targeted on our NATO allies in that theater there. And yet they don't want us to come in and provide the allies with a deterrent. And we said, then why don't we agree to a nuclear-free zone? Why don't we come to the point of neither side having any at all of those intermediate-range weapons? And the Soviets wouldn't negotiate that, but they did indicate that maybe they might listen to reductions. And we said, all right, fine. We'll tell you now that we still, our ultimate goal would be to hope that we could arrive at a nuclear-free zone, 0-0. But in the interim, we'll be very happy to sit down and discuss with you a reduction of the number of weapons of that type. And they still walked away on the grounds that they'd bought half our proposal. They'd bought 1-0. We were to be 0. And they would continue to have a monopoly on the weapons there. And there was no way that we could hold still for that. Do you think there's a need for a kind of super arms control coordinator in the White House who would report directly to you and Bud McFarland and Secretary Schultz? I'm surprised to see this subject brought up, something of that kind. We never really sat down and said or asked ourselves, is such a thing needed? Would it be advantageous? Would it add anything or not? We've talked many ways of how to approach the Russians or what is the best way. We've volunteered proposals to them. And I did to Gromyko about how can we maintain a continued conversation here? What would be pleasing to them? Have, like we did in the Middle East, have some special emissary or not? So there's been no agreement of anything of any kind in that. So I couldn't rule it out or rule it in if we sit down and talk about it. And that sounds to them as if that's something they might want to get along with. Fine. Prairie fire, that marvelous phrase back from 1967. You used it again in Sacramento this week. I guess that's another way of talking about political realignment or political sea change. Do you have the feeling that what's happening out there with your reelection by what we gather is going to be a pretty large margin? Is such a sea change? Is it bigger than Ronald Reagan? How do you describe what's happening there? Well, remember what the prairie fire term was used in connection with? It was the whole philosophy of government that is at issue right now. As I said, California was a perfectly imitator of what was happening at the federal level. The runaway government spending, the runaway government authority, the more and more intrusiveness in the part of... I said once that if Washington caught cold, California sneezed. So what I was talking about then was the reforms that we started here in California to get more authority back in local government here, to reduce government spending and the rapid growth of it. All the things that we're talking about with regard now to the national scene. And that was what I said when I said the prairie fire, that if we can succeed, if we can do these things, we can start a prairie fire. Well, I think in a way maybe there has been some prairie fire that reached the shores of the Potomac. One, for example, our reform of welfare. Nothing had ever been done in the country. Such as we did here. And I think that the fact that we have the federal government for four years now that has not been talking about spending programs, which was always the subject of discussion before the last 50 years, but the discussions and the debates have been over cuts. How much do we reduce? What do we eliminate? But now you're going to have that burning for another four years. At least you anticipate. We anticipate. I think we can take a poll in this room and we'll all anticipate. I'll throw a little kindling on the fire if I can. But has it become bigger than your own personal victory? I hope so. I think what we're seeing out there is... I've never taken it personally. I think what we're seeing is that a lot of people who more and more felt the hand of government on their shoulder and a restraining hand, not urging them forward, more and more awareness that the government was getting unmanageable and beyond their control and certainly unmanageable as to cost, stopped to think that the federal government in 1974, the Congress adopted this plan supposedly to get control of the budget. And I don't think we've had a budget since. So I think this is what's happened. The people have seen an opening and they've said, yes, let's carry it through. Do you think this is a beginning, more evidence of a long-lasting political realignment? This what looks to be a large victory today on top of your victory in 1980? Well, again, for the philosophy, yes. I don't think the people having seen that some changes could be made. I don't think they're suddenly going to turn around and walk away and let the big government advocates creep back in and put everything back in place. Of course, whether they do or not depends to a large extent where your party goes in the coming years. Now, there's been some speculation which got into print. I don't think you've ever been asked about it directly to the effect that you would consider midway through a second term stepping down and letting George Bush carry it forward. I don't know where that came from, either, and it was a surprise to me. No, I haven't considered anything of the kind. And wouldn't? And wouldn't. But what do you think of the idea of the incumbent helping to choose his own heir? Are you for that in principle or against it as you enter your last term? If you look back, you'll find that I have avoided that very much. And I think that's a decision for the people to make. You wouldn't endorse George Bush for the nomination before the nomination? I'm not even going to let myself think about that. I have the greatest admiration for him. He has been, I think, thinking of a vice president as a partner of the presidency. I can't recall any history that I know about that is equal to his participation in government. But now, if the years go by and the time comes around, there are choices to be made. That's something I haven't thought about or faced. You rarely talk about what you feel about being president. Could you tell us what are the one or two things that you have found most satisfying and fulfilling as president? What are the one or two things that you have found most frustrating or disappointing? Well, I think the frustrating and the disappointing thing is trying to get the ponderous wheels of the legislative process in motion on things that you feel desperately need to be done. The other one, maybe it comes down to smaller things than great legislative battles or anything. The ability sometimes to have brought to your attention, even if it's an individual case or something, and to be able to do something about it. An individual case of personal hardship, is that what you mean? Yes, and to, say, rectify some injustice that's being done, those are wonderful and rewarding moments. Surely getting the 25 percent tax cut must have been pretty hard. Oh, yes. Oh, yes. Oh, yes. Many times, I can't deny there are things like that. You go back upstairs feeling ten feet tall and you've actually made something come true. Well, right now, for example, take a look with all of the so-called deficit and everything. We came in with government increasing its rate of spending over 17 percent a year. And it's down around 6 percent a year now. Well, when I think back over the last half-century of this just skyrocketing of government costs and then to see that that line that was going up that way has least been brought down here, well, it makes you feel you can bring it down a little lower. Mr. President, thank you very much. How's Mrs. Reagan? How's Mrs. Reagan? Is she feeling better? Well, it's a funny thing. I'm kind of concerned. She seems to...she feels a little unsteady yet she really hurt herself. It was in the middle of the night there. I wish her our best. Well, you know how the fault took place. Not exactly. Well, the luxury of the hotel and all and one of those were very attractive. Looking, the bed is up on a platform. And in the middle of the night she got cold and there was an extra cover in the room and she got up and forgot all about that platform and the next step went out and there was nothing there. And she did a header into a chair and she's got quite an egg concealed under her hairdo. Well, as I say, we sure are our best. I will. Thank you very much, sir. Congratulations. You must feel ten feet tall today. I do. Thank you, gentlemen. Who is that? Who is that in Montana? A guy named Cosens is running against Volkus. Against Volkus? Is he leading him? He's running against Volkus. That's the sleeper that I think. Volkus. Somebody told me that we might have a shot at that. Well, you know, he was a guy that we thought we might be able to. But then he called. The senator came back to me and said, I need to recruit a good candidate. So I wrote the rate. Of course, let me see. That one is only two hours difference. This one's only one hour difference. This is very early. I wouldn't back put anything in the last few months. I really wouldn't. But these races here in West Virginia, evidently, is very good. Kentucky, which we didn't, you know, we didn't go in. If we could win that one, wow. All right.