 Take a soft chair that will just get wired for our outfit here, and then as you know, you need anything or want a transcript or anything? Well, I would like a transcript because I can't talk in right shorthand at the same time, so I would like a transcript if I could get one. We'll have you all the way to the center. All right. First, I'll bring you greetings from son Christopher. Well, he insists you must come down to Charleston and see the destroyers. Who I wish I could. Stop going to all these aircraft carriers. I mean, destroyer people don't think much about the aircraft carriers. Come down and watch all the sea-going sailors. I don't know whether I ever told you. You can tell him that one of the first treasured toys that I had as a kid and didn't get it the first Christmas around, our Christmases were based on price tags and things, but through a catalog, the Lionel Company, no, Ives, Ives, that was the time of Lionel on Ives made model boats. But I remember those. You wound them up. In the 1920s. And one was a destroyer, and I just used to, I went to bed with that catalog itself where it took about three Christmases before I got it, and then they decided I was up to it. I'm going to tell Chris, your favorite boyhood toy was a destroyer. Yes. All right. I will please him greatly. I think I have 20 minutes, so maybe I better get at some of my questions here. Several of them relate to the budget, of course. Then I had some on the constitutional amendments that have been pending, and I had a series of kind of personal questions I wanted to ask. Let me go to the budget first. It's been said that you caved into the oil and gas interests. How do you respond to that criticism? Well, no, we didn't cave in in any way. When we got the Treasury proposal, I viewed it, and we all did, as, okay, here they'd given us the whole load, and we had to go at it then, point by point, on the basis of options of things that, whether we felt that they would be good or bad. With regard to oil, they had put that in, they'd wiped out everything. Right. Well, we have done away with the oil depletion allowance, except for stripper wells of under 310 barrels, and we put back in what has always existed, and that is the deduction of the actual costs of exploration and digging holes, drilling. But haven't you left in the intangible costs, so to speak? Yes, but they seem to me to be very definitely a part of the other. Now, almost 50% of our trade imbalance, Jack, is made up of the necessity to buy oil, to import oil. We know we've got more oil in this country than we found yet, and frankly, we just did not want to do anything that would discourage exploration. So what we put back in there is mainly for those wildcatters and those people, because the major oil companies aren't the ones that find oil. They move in after it's found, and we put it in for those people that go out and gamble their money that they can find in some oil. That's kind of a corollary criticism, has made that your program as it's outlined in this big book really skews in favor of the very wealthy, the families of, within comes more than $200,000 a year, that percentage-wise they will benefit more than the middle class. How do you respond to that criticism? Well, it just isn't true. Now, I grant you, Jack, that if you, when you're going to lower a bracket, the top bracket, which now there is no end up here to the top, you're going to lower that by 15 points from 50 to 35. I'm quite sure, yes, that someone with those really extravagant earnings, like some of our great athletes and so forth, obviously they're going to benefit once you get past that stage where deductions and so forth are important. Obviously the doubling of the personal exemption isn't going to mean one to somebody that's up there making a million and a half dollars a year. Is it fair? Is it fair that your outfielder, Winfield, earning a million dollars a year should get a greater percentage relief than your family with 30 or 40 thousand dollars? Well, it will total greater if, when he gets up to that amount. But right now the biggest criticism we're getting from many places is that the top bracket should be lower. But remember that we're talking about, you can almost count them on two hands, the few people that are way up there at that exotic thing. We're talking about a bracket that begins at $70,000, which I think in today's inflated world is not too far removed from what you could call upper middle glass. And actually the percentages as we show them overall don't show that up there they're getting that much benefit. One minor aspect of your program calls for elimination of this $1 check off for financing of presidential campaigns. The New York Times today said that you were acting like a sneak in doing that. How do you respond to the Times and others? Well, there's two things in that one. One of them is, remember part of this tax plan is to have more simplification. Yeah. So we're further simplifying. The second thing is, frankly I'll tell you, I've never believed in government funding of campaigns. Why? Because I think that the other is part of the First Amendment right of, that's a part of the expression of the people's wants is their contribution to campaigns. And the government funding has seemed to me to open a door to somebody guaranteed funding for a campaign and if that person's the only one in the world that thinks he or she should be a candidate. But given the opportunity for this simple check off on your tax form, isn't that a manifestation of First Amendment rights? Except that they don't choose who you're going to give it to. Ah, I see your point. The government decides who gets it. And therefore a lot of people, as I say, who probably, in other words, isn't it part of the political process that if an individual who chooses to go in to try for public life proves somehow that there's a legitimate reason for him by being able to raise support for people who will contribute to that individual knowing who they could contribute to. And if he can't get that kind of support, then you have to say that's part of the democratic process that then otherwise shouldn't be seeking public office. But if you get rid of the system we have now, the $1 check off and so on, don't you encourage the kind of, I don't want to say corruption or vice, but the kind of disadvantages that go with all the fat cats financing campaigns? Not as long as they have to, it has to be made public, reported what they give. Now as long as that takes place, before this came in I remember one instance in California and it happened in the Democratic Party, so I can talk about it. This was a fellow that decided to run for, he was a legislator, to run for one of the constitutional offices that are elected in California more than here, like Secretary of State and so forth, those are elective offices. This fellow got over a half a million dollars from two individuals. Now as I say, this was a Democratic candidate speaking to fat cats, and since I've been a Republican I've been kind of proud of the fact that the Republicans actually show the bulk of their contributions come from less than $100 each. The Democrats, the bulk of theirs is above $100. So who has the fat cats? But the thing is with this fellow, now this had to be made public, and here was two individuals put up a half a million dollars to get him elected to this office. He won. Now you mentioned disclosure a moment ago, is that the important thing in your eye? What, I'm thinking now in terms of the Federal Election Commission and all of the various papers that have to be filled in and so on, is the Federal Election Commission still serving a good purpose? Would you keep it? I think so to the extent that people have a right to know that there's this thing about the support and as I say in this instance in California it didn't change their votes for this fellow, but it was known and then the people had a right to say well does this make him totally beholden to two individuals or what well they ignored it and voted for him. Well let me leap to someone else, Social Security but in a particular way. Several studies including some by Kato and the Heritage Foundation have suggested as a long-range possibility the privatization of Social Security so that a worker entering the labor force say at age 20 or something would have the option of staying with the government Social Security or putting an equivalent amount in his own retirement fund. Do you see any prospect of that or would you encourage it? Does it seem a good thing to you? Jack I, you know how risky it is for me, the opposition has... That's the reason I asked the question. All right, they've planted this idea that I'm out to destroy Social Security. Every criticism I've ever made of Social Security or suggestion for approval has been based on the fact that there must be a guarantee to the people presently getting it, that nothing is going to happen or endanger them and what they're receiving. I have to tell you, now talking hypothetically, I believe the system has gone to something it was never intended to be and that yes, as long as you could guarantee that the people who worked at jobs that did not provide enough for them to provide for their old age, their non-working years or people that worked in businesses or industries that could not come forth with a pension plan, that to have a program that is aimed at seeing that there will not be destitution at old age, that this would go on and that the people presently getting it would be guaranteed what they're getting. Then I have to say there would be a lot of justice in offering, when you stop to think that you may now at the present rate, ever since 1977 of the taxes that were raised under the previous administration of Social Security taxes, that at the present rate it is possible that the individual could do better for him or herself if they had that same amount of money and some control over how it was invested or where it went. And I must say that if you did this, you'd have to have in the law a provision that someone every year would have to, let's say, with their income tax, submit proof that they were providing for their old age. You couldn't have somebody live it up with that money and then come around when it got to be 65 and say, hey, take care of it. I think that's a part of all the plans that have been proposed along that line. I think they should be... Because it seems to me so much in accord with all the conversations we've had over many years, your reliance upon the private marketplace, the enterprise system, self-reliance would seem to me this might be an idea that whenever it's politically sound, you might well embrace. Yes, and when you start to think that it is possible that this compulsory tax that they're paying, they may be paying in more than they're ever going to get back. Of course. And I know that I've seen evidence that some major insurance companies right now have retirement policies with life protection that actually provide more money for the same amount of tax that's being paid in far more than they can count on from Social Security. All right, I have to hurry my time here. A couple of senators calling for the resignation of Secretary Weinberg, worker by Thanksgiving. What's your reaction to that? My reaction is that they're out of their cotton-picking minds. I think the worst thing that has happened is that someone who has come in and is correcting abuses that have been of years and years long-standing that every time there's a success story and they find another thing like a $400 hammer, we don't buy that, we find it. We find that they've been doing that. I don't know how long they've been doing it, but it is under this administration and under his management of the Defense Department that all of these things are being uncovered. Yet every time he uncovers one, they turn it around and say that it's some kind of sin for which he's guilty. Well, how long have we been paying those kind of bills without anyone knowing anything about it? The very fact that we're uncovering this and correcting it, there have been hundreds of indictments. There are hundreds of millions of dollars of rebates. But one of the reasons why they say, well, you know, why didn't we do this in the first six months we were here? Well, there is something, as I understand it, like 16 million procurement items in the Defense Department. And you look at all of the accounting that has to be taking place of someone going through all of these. I saw a stack the other day for just one contract, a picture of it. And it was on a desk, and it was about four feet long and about that high of books. And this was one procurement contract. Well, now you stopped to think of 16 million of those, and you have to say it's going to take you a while to find them. Now, you brought up these abuses. You have any idea, I'm talking philosophically for a moment now, why these things have happened? You worked for one of the great corporations of America for many years. You identified with it. It now turns out the corporation, not his state used the word crook, but some of the charges against GE are approach scandal. What's happened to American industry, Mr. President, that these things are recurring? Well, Jack, I don't know whether this is a good answer to that or not. But having spent eight years doing the General Electric Theater for them and part of the contract called for me to make personal appearances and go out and meet the employees in the various plants. And I learned at that time that General Electric, to name that company, had taken the lead in decentralizing, in making a plant manager pretty much the same as if he were independently running that plant. Now, granted, the whole regulations were passed down by the board of directors, the heads of the hierarchy of General Electric. But I happened just by coincidence to be in the office of General Electric in New York, the headquarters, on one of those tours that I did for them, on a time when one plant, there's 139 of them in 38 states at that time, and one plant had violated all the company orders and policies, got engaged in a little price fixing. And happening to be there, I want to tell you, they were shell-shocked. Here was the headquarters of that great company, and there's one plant down there, now exposed, but it doesn't say one plant in one man, it says General Electric. Right. Well, you've had a series of these things. You've had banks that have failed because of flagrant mismanagement, had the Hutton Affair, you had General Dynamics in the scandal there, the kickbacks, the fraudulent bookkeeping, the Hutton Affair, all of these things come out. Is there something sick at the highest levels of American industry? Well, Jack, I don't know. I know about those things, as you've said. On the other hand, how many business and corporations are, there were nothing of that kind as happened. I know from this instant I just gave you that once this was, General Electric found out about this, they moved in on that plant and that individual right then because it was a violation of the company policy that had been laid down. This is the way they were going to do business and it was going to be honest. Now, someone went sliding off. What would be the advantage to him? It couldn't be financial. It could be only that obviously he would like to see that the books would look as profitable and as good as possible for his branch when they got up to headquarters. Over the years, you have many times expressed to me your confidence in the American industrial system. Have this string of events shaken that confidence at all? No, I think it proves that with all citizens, does it stop up there at that level? What about down here at the lower level? What about it? Is something sick down at the lower level? The mechanic and so forth that fudges. And how much of it, I've wondered sometimes, if there is more of this or is it just that we're better able to finding it, how much of this may be as due to what was said many, many decades ago or centuries that when government began taxing above a certain level of the people's earnings. Colin Clark, I believe, that then people began first to avoid and look for ways around it. And then there came a deterioration. Then there came actual evasion. And finally, a lessening of respect for law and order because there was a contempt for the government that was doing this to them. A couple more questions. Jim, how much time do I have? How much time? Pete, about six minutes, something like that. In times past, you've advocated pretty strongly a couple of constitutional amendments, one on balance of the budget, the other on abortion. Lately, you haven't had much to say about them. And the charge, if it is, a charge is leveled at. You've kind of lost interest in those amendments. How about it? No, I haven't lost interest at all. I recognize right now with some of the immediate things, such as handling the deficit and so forth and the tax reform, and I know also how much is on the plate up there. And I keep in touch with our own people in the Congress and they have just told me about, in the present situation, and with these things that are of immediacy, that they're on the back of the stove for a while. That's right. And that that's their counsel that they would not get any further than they've gotten before at this time. But I have not retreated from them a bit. Jack, I think I want about abortion and I know a lot of people try to put this on a religious basis or something or other. Certainly I am not opposed to religion. In fact, I fancy I'm very religious. But my belief in that is not based on religion. My belief in that is that all the medical evidence today is overwhelming that the unborn child is a living human being. And if that's the case, then that unborn child is entitled to the same constitutional protection that you and I are entitled to life, liberty, and the pursuit of happiness. I think I'm not going to argue the Constitution with you. It speaks as those citizens born in the United States. And of course, they're not yet born. But if, as I say, if someone could bring up medical proof for evidence that, no, this is not a living being. But look how prematurely some are born and they're now healthy adult human beings. Sandra Day O'Connor wrote last year that they were on a collision course. All the doctors on it, they're able to keep these premature babies alive so much longer. Brad Reynolds comes up for confirmation next week. Strong opposition from the civil rights groups to him. What about it? Is he doing a good job? I think he's doing a good job. And Jack, I think part of this is aimed at me. They've created this idea that somehow I'm an enemy of civil rights. I was working for civil rights before they used the term. Back in the 30s, when I was a sports announcer, I was one among a handful in the country of sports writers and commentators who opposed the banning of blacks from organized baseball. And finally, one baseball owner had the courage to move on it, Branch Rickey. And baseball is better for it. And America is better for it. But I was fighting that battle back then. But it's now said that in such cities as Indianapolis, you have sick-dead Meese and Brad Reynolds on a plan that is working well, apparently a satisfactory to the city government of Indianapolis. And now you want to break it up. And the question is asked, why? I don't know that I sick anyone on it. And right now, when you mention that, I'm trying to. Buck stops with you? Well, but I'm trying to think, what is that particular case? If it's quota. Yes, sir. Well, again, Jack, we grew up back in a time when there was discrimination against people for racial and religious ways or beliefs. And we know that at that time, the quota system was used to justify discrimination, the institution that would hire one or two or three of something and then say, our quota is filled. Well, they used it to keep from having open employment. Employment, neither because of nor in spite of race or religion. And I just I think the same thing is true today. I think a quota system is you're opening the door back to a kind of same kind of discrimination that once took place. Final questions. Department of Judges, could you tell me in just a sentence or two what kind of federal judges at every level, district, circuit court, Supreme Court, what kind of judges are you looking for, Mr. President? I'm looking for judges who interpret the Constitution and don't attempt to rewrite it. I find that one of the things in the past, and I found it when I was a governor in California, was a tendency among great many judges to legislate, to make decisions that actually should have been made in the legislature that changed policy or laws as we know it. And I want them to interpret the Constitution. How deeply are you yourself getting involved in the selection of judges? Well, I'm very much involved because I'm very proud of the fact that as governor, I said, I knew the price in the past that had been paid to become a judge in our state. And I said I was going to take the appointment of judges out of politics. And what we set up then was a kind of a screening in which any applicant or any person suggested for a judgeship. We had one group that was just, well, his fellow lawyers in the legal profession in that community. Another was just the Citizens Committee. And then one was the State Bar. And what came before me was a rating on every person that was proposed for a judgeship. And none of these committees worked with the other. In fact, I don't know if they knew about the other. But I would have a sheet here that would go across and it would say someone was EWQ, extraordinarily well-qualified or qualified, just Q, or N-qualified, non-qualified and so forth. And I made my choices from that. Now, are you looking for judges in a particular age bracket that would serve for a number of years? Well, I think that you want to make sure that you're just not appointing someone that's only going to be there for the next 18 months. You want them there for the next 18 years? I haven't. That hasn't been a major thing. But someone that's at least in their prime and you're going to get some years of judging out of them. But the other thing on this, too, was there was another factor that I was faced with. We know that because of past practice, there was a shortage of minority judges, shortage of women, so forth. But I found out that in all but the smallest population areas in the judicial districts, there would be enough judges that I still would have to make a decision, and there would be several all excellently well-qualified. Then I had the leeway to look at such things as, well, if some of them are of the minorities or some of women and so forth. Now, and we need some balancing up, then I can, without sacrificing quality, I can then choose so that we had a good record there of not only appointing excellently well-qualified, but that we did change the mix considerably by keeping that other thing in mind. You've appointed relatively few women and blacks so far. Would you be looking for more? Yes, we're always looking for them. And in fact, I keep egging on of how come there aren't more. One of the things that I have been told is that a predecessor who was given a great increase in the number of judges appointed so many, and is that one that you mentioned, they're being predominantly Democrat, an awful lot of them were appointed. There aren't as many around as there were before. I understand. I'm getting glances from Larry and Pete and Jim. Thank you, Mr. President. Say, you didn't ask me one thing in listening to all the talk shows and all the conversation about the tax policy, this thing about the local taxes and state taxes. Oh, I was going to ask that. You got all your heat on that. Are you going to stick to that one? Yes, because you know something that hasn't been mentioned much. More than two-thirds of the taxpayers in this country don't get that deduction now because they don't itemize. And so those that do get it are at the upper bracket, up there at the top level. And those others are kind of subsidizing that benefit for those people in the upper brackets. And we think that with that situation, that since you've got to give up some things in order to be able to cut the rates from top to bottom, that it was worth doing. Thank you, Jim, sir. All right. Now we're off to refugee. It's good to see you. Good to see you. Yeah.