Presidential Campaign Debate Between Gerald R. Ford and Jimmy Carter
September 23, 1976

THE MODERATOR. Good evening, I am Barbara Walters, moderator of the last of the debates of 1976 between Gerald R. Ford, Republican candidate for President, and Jimmy Carter, Democratic candidate for President.

Welcome, President Ford, welcome, Governor Carter, and thank you for joining us this evening.

This debate takes place before an audience in Phi Beta Kappa Memorial Hall on the campus of the College of William and Mary in historic Williamsburg, Virginia. It is particularly appropriate that in this Bicentennial year we meet on these grounds to hear this debate. Two hundred years ago, five William and Mary students met at nearby Raleigh Tavern to form Phi Beta Kappa, a fraternity designed, they wrote, "to search out and dispel the clouds of falsehood by debating without reserve the issues of the day."

In that spirit of debate -- "without reserve," "to dispel the clouds of falsehood" -- gentlemen, let us proceed.

The subject matter of this debate is open, covering all issues and topics. Our questioners tonight are Joseph Kraft, syndicated columnist; Robert Maynard, editorial writer for the Washington Post; and Jack Nelson, Washington bureau chief of the Los Angeles Times.

The ground rules tonight are as follows: Questioners will alternate questions between the candidates. The candidate has up to 2 1/2 minutes to answer the question. The other candidate has up to 2 minutes to respond. If necessary, a questioner may ask a follow-up question for further clarification, and in that case the candidate has up to 2 minutes to respond. As was initially agreed to by both candidates, the answers should be responsive to the particular questions. Finally, each candidate has up to 3 minutes for a closing statement.

President Ford and Governor Carter do not have prepared notes or comments with them this evening, but they may make notes and refer to them during the debate.

It has been determined that President Ford would take the first question in this last debate, and Mr. Kraft, you have that first question for President Ford.

MR. KRAFT. Mr. President, I assume that the Americans all know that these are difficult times and that there is no pie in the sky and that they don't expect something for nothing. So, I'd like to ask you, as a first question, as you look ahead in the next 4 years, what sacrifices are you going to call on the American people to make? What price are you going to ask them to pay to realize your objectives?

Let me add, Governor Carter, that if you felt that it was appropriate to answer that question in your comments, as to what price it would be appropriate for the American people to pay for a Carter administration, I think that would be proper too.

Mr. President?

THE PRESIDENT. Mr. Kraft, I believe that the American people, in the next 4 years under a Ford administration, will be called upon to make those necessary sacrifices to preserve the peace -- which we have -- which means, of course, that we will have to maintain an adequate military capability; which means, of course, that we will have to add, I think, a few billion dollars to our defense appropriations to make certain that we have adequate strategic forces, adequate conventional forces.

I think the American people will be called upon to be in the forefront in giving leadership to the solution of those problems that must be solved in the Middle East, in southern Africa, and any problems that might arise in the Pacific.

The American people will be called upon to tighten their belts a bit in meeting some of the problems that we face domestically. I don't think that America can go on a big spending spree with a whole lot of new programs that would add significantly to the federal budget.

I believe that the American people, if given the leadership that I would expect to give, would be willing to give this thrust to preserve the peace and the necessary restraint at home to hold the lid on spending so that we could, I think, have a long overdue and totally justified tax decrease for the middle-income people. And then -- with the economy that would be generated from a restraint on spending and a tax reduction primarily for the middle-income people -- then I think the American people would be willing to make those sacrifices for peace and prosperity in the next 4 years.

MR. KRAFT. Could I be a little bit more specific, Mr. President?

THE PRESIDENT. Sure, sure.

MR. KRAFT. Doesn't your policy really imply that we're going to have a pretty high rate of unemployment over a fairly long time, that growth is going to be fairly slow, and that we're not going to be able to do very much in the next 4 or 5 years to meet the basic agenda of our national needs in the cities, in health, in transit and a whole lot of things like that?

THE PRESIDENT. Not at all.

MR. KRAFT. Aren't those the real costs?

THE PRESIDENT. No, Mr. Kraft. We're spending very significant amounts of money now, some $200 billion a year, almost 50 percent of our total federal expenditure by the Federal government at the present time, for human needs. Now, we will probably have to increase that to some extent, but we don't have to have growth in spending that will blow the lid off and add to the problems of inflation.

I believe we can meet the problems within the cities of this country and still give a tax reduction. I proposed, as you know, a reduction to increase the personal exemption from $750 to $1,000, with the fiscal program that I have. And if you look at the projections, it shows that we will reduce unemployment, that we will continue to win the battle against inflation, and, at the same time, give the kind of quality of life that I believe is possible in America: a job, a home for all those that will work and save for it, safety in the streets, health care that is affordable. These things can be done if we have the right vision and the right restraint and the right leadership.

THE MODERATOR. Thank you. Governor Carter, your response, please.

MR. CARTER. Well, I might say first of all that I think in case of the Carter administration, the sacrifices would be much less. Mr. Ford's own environmental agency has projected a 10 percent unemployment rate by 1978 if he is President. The American people are ready to make sacrifices if they are part of the process, if they know that they will be helping to make decisions and won't be excluded from being an involved party to the national purpose.

The major effort we must put forward is to put our people back to work. And I think that this is one example where a lot of people have selfish, grasping ideas now. I remember 1973 in the depth of the energy crisis when President Nixon called on the American people to make a sacrifice to cut down on the waste of gasoline, to cut down on the speed of automobiles. It was a tremendous surge of patriotism. "I want to make a sacrifice for my country."

I think we could call together -- with strong leadership in the White House -- business, industry and labor, and say, let's have voluntary price restraints, let's lay down some guidelines so we don't have continuing inflation.

We can also have an end to the extremes. We now have one extreme, for instance, of some welfare recipients who, by taking advantage of the welfare laws, the housing laws, the Medicaid laws, and the food stamp laws, make over $10,000 a year, and they don't have to pay any taxes on it. At the other extreme, just 1 percent of the richest people in our country derive 25 percent of all the tax benefits. So both those extremes grasp for advantage and the person who has to pay that expense is the middle-income family who is still working for a living and they have to pay for the rich who have privilege and for the poor who are not working.

But I think that a balanced approach, with everybody being part of it and a striving for unselfishness could help, as it did in 1973, to let people sacrifice for their own country. I know I'm ready for it. I think the American people are, too.

THE MODERATOR. Thank you. Mr. Maynard, your question for Governor Carter.

MR. MAYNARD. Governor, by all indications, the voters are so turned off by this election campaign so far that only half intend to vote. One major reason for this apathetic electorate appears to be the low level at which this campaign has been conducted. It has digressed frequently from important issues into allegations of blunders and brainwashing and fixations on lust in Playboy. What responsibility do you accept for the low level of this campaign for the Nation's highest office?

MR. CARTER. I think the major reason for a decrease in participation that we have experienced ever since 1960 has been the deep discouragement of the American people about the performance of public officials. When you've got 7 1/2, 8 million people out of work, when you've got three times as much inflation as you had during the last 8-year Democratic administration, when you have the highest deficits in history; when you have it becoming increasingly difficult far a family to put a child through college or to own a home, there's a natural inclination to be turned off. Also, in the aftermath of Vietnam and Cambodia and Watergate and the CIA revelations, people have felt that they've been betrayed by public officials.

I have to admit that in the heat of the campaign -- I've been in thirty primaries during the springtime; I've been campaigning for 22 months -- I've made some mistakes. And I think this is part of just being a human being. I have to say that my campaign has been an open one. The Playboy thing has been of very great concern to me. I don't know how to deal with it exactly. I agreed to give the interview to Playboy. Other people have done it who are notable -- Governor Jerry Brown, Walter Cronkite, Albert Schweitzer, Mr. Ford's own Secretary of the Treasury, Mr. Simon, William Buckley, many other people. But they weren't running for President. And in retrospect, from hindsight, I would not have given that interview had I to do it over again. If I should ever decide in the future to discuss my deep Christian beliefs and condemnation and sinfulness, I'll use another forum besides Playboy.

But I can say this: I'm doing the best I can to get away from that, and during the next 10 days, the American people will not see the Carter campaign running television advertisements and newspaper advertisements based on a personal attack on President Ford's character. I believe that the opposite is true with President Ford's campaign. And I hope that we can leave those issues, in this next 10 days, about personalities and mistakes of the past -- we've both made some mistakes -- and talk about unemployment, inflation, housing, education, taxation, government organization, stripping away of secrecy, and the things that are crucial to the American people.

I regret the things in my own long campaign that have been mistaken, but I'm trying to do away with those the last 10 days.

THE MODERATOR. Thank you, Governor Carter. President Ford, your response.

THE PRESIDENT. I believe that the American people have been turned off in this election, Mr. Maynard, for a variety of reasons. We have seen on Capitol Hill, in the Congress, a great many allegations of wrongdoing, of alleged immorality. Those are very disturbing to the American people. They wonder how an elected representative can serve them and participate in such activities, serving in the Congress of the United States. Yes, and I'm certain many, many Americans were turned off by the revelations of Watergate, a very, very bad period of time in American political history. Yes, and thousands, maybe millions of Americans were turned off because of the problems that came out of our involvement in Vietnam.

But on the other hand, I found on July 4 of this year a new spirit born in America. We were celebrating our Bicentennial. And I find that there is a movement -- as I travel around the country -- of greater interest in this campaign. Now, like any hardworking person seeking public office, in the campaign, inevitably, sometimes you will use rather graphic language. And I'm guilty of that just like, I think, most others in the political arena. But I do make a pledge that in the next 10 days when we are asking the American people to make one of the most important decisions in their lifetime, because I think this election is one of the most vital in the history of America, that we do together what we can to stimulate voter participation.

THE MODERATOR. Thank you, President Ford. Mr. Nelson, your question to President Ford.

MR. NELSON. Mr. President, you mentioned Watergate, and you became President because of Watergate, so don't you owe the American people a special obligation to explain in detail your role of limiting one of the original investigations of Watergate -- that was the one by the House Banking Committee? And I know you've answered questions on this before, but there are questions that still remain and I think people want to know what your role was.

Will you name the persons you talked to in connection with that investigation, and since you say you have no recollection of talking to anyone from the White House, would you be willing to open for examination the White House tapes of conversations during that period?

THE PRESIDENT. Mr. Nelson, I testified before two committees, House and Senate, on precisely the questions that you have asked. And the testimony under oath was to the effect that I did not talk to Mr. Nixon, to Mr. Haldeman, to Mr. Ehrlichman, or to any of the people at the White House. I said I had no recollection whatsoever of talking with any of the White House legislative liaison people.

I indicated under oath that the initiative that I took was at the request of the ranking members of the House Banking and Currency Committee on the Republican side, which was a legitimate request and a proper response by me.

Now that was gone into by two congressional committees, and following that investigation, both committees overwhelmingly approved me, and the House and the Senate did likewise.

Now, in the meantime the Special Prosecutor -- within the last few days after an investigation himself -- said there was no reason for him to get involved because he found nothing that would justify it. And then, just a day or two ago, the Attorney General of the United States made a further investigation and came to precisely the same conclusion.

Now, after all of those investigations by objective, responsible people, I think the matter is closed once and for all. But to add one other feature: I don't control any of the tapes. Those tapes are in the jurisdiction of the courts, and I have no right to say yes or no. But all the committees, the Attorney General, the Special Prosecutor, all of them have given me a clean bill of health. I think the matter is settled once and for all.

MR. NELSON. Well, Mr. President, if I do say so, though, the question is that I think that you still have not gone into details about what your role in it was. And I don't think there is any question about whether or not there was criminal prosecution, but whether you have told the American people your entire involvement in it and whether you would be willing -- even if you don't control the tapes -- whether you would be willing to ask that the tapes be released for examination?

THE PRESIDENT. That's for the proper authorities who have control over those tapes to make that decision. I have given every bit of evidence, answered every question that's been asked me by any Senator or any Member of the House. Plus the fact, that the Special Prosecutor, on his own initiation, and the Attorney General on his initiation -- the highest law enforcement official in this country -- all of them have given me a clean bill of health. And I've told everything I know about it. I think the matter is settled once and for all.

THE MODERATOR. Governor Carter, your response.

MR. CARTER. I don't have a response.


Then we'll have the next question from Mr. Kraft to Governor Carter.

MR. KRAFT. Governor Carter, the next big crisis spot in the world may be Yugoslavia. President Tito is old and sick and there are divisions in his country. It's pretty certain that the Russians are going to do everything they possibly can after Tito dies to force Yugoslavia back into the Soviet camp.

But last Saturday you said -- and this is a quote -- "I would not go to war in Yugoslavia, even if the Soviet Union sent in troops." Doesn't that statement practically invite the Russians to intervene in Yugoslavia? Doesn't it discourage Yugoslavs who might be tempted to resist? And wouldn't it have been wiser on your part to say nothing and to keep the Russians in the dark as President Ford did, and as I think every President has done since President Truman?

MR. CARTER. In the last two weeks, I've had a chance to talk to two men who have visited the Soviet Union, Yugoslavia, and China. One is Governor Averell Harriman [Governor of New York 1954-58 and Ambassador at Large 1961, 1965-68], who visited the Soviet Union and Yugoslavia, and the other is James Schlesinger [Secretary of Defense 1973-75], whom I think you accompanied to China. I got a complete report back from those countries from these two distinguished gentlemen.

Mr. Harriman talked to the leaders in Yugoslavia, and I think it's accurate to say that there is no prospect, in their opinion, of the Soviet Union invading Yugoslavia should Mr. Tito pass away. The present leadership there is fairly uniform in their purpose. I think it's a close-knit group, and I think it would be unwise for us to say that we will go to war in Yugoslavia if the Soviets should invade, which I think would be an extremely unlikely thing.

I have maintained from the very beginning of my campaign -- and this was a standard answer that I made in response to the Yugoslavian question -- that I would never go to war, become militarily involved in the internal affairs of another country unless our own security was directly threatened. And I don't believe that our security would be directly threatened if the Soviet Union went into Yugoslavia. I don't believe it will happen. I certainly hope it won't. I would take the strongest possible measures short of actual military action there by our own troops, but I doubt that that would be an eventuality.

MR. KRAFT. One quick follow-up. Did you clear the response you made with Secretary Schlesinger and Governor Harriman?

MR. CARTER. No, I did not.

THE MODERATOR. President Ford, your response.

THE PRESIDENT. Well, I firmly believe, Mr. Kraft, that it's unwise for a President to signal in advance what options he might exercise if any international problem arose.

I think we all recall with some sadness that at the period of the late 1940's, early 1950's, there were some indications that the United States would not include South Korea in an area of defense. There are some who allege -- I can't prove it true or untrue -- that such a statement, in effect, invited the North Koreans to invade South Korea. It's a fact they did.

But no President of the United States, in my opinion, should signal in advance to a prospective enemy what his decision might be or what option he might exercise. It's far better for a person sitting in the White House, who has a number of options, to make certain that the other side, so to speak, doesn't know precisely what you're going to do. And therefore, that was the reason that I would not identify any particular course of action when I responded to a question a week or so ago.


Mr. Maynard, your question to President Ford, please.

MR. MAYNARD. Sir, this question concerns your administrative performance as President. The other day, General George Brown, the chairman of the Joint Chiefs of Staff, delivered his views on several sensitive subjects, among them Great Britain, one of this country's oldest allies. He said, and I quote him now, "Great Britain, it's a pathetic thing. It just makes you cry. They are no longer a world power. All they have are generals, admirals, and bands." Since General Brown's comments have caused this country embarrassment in the past, why is he still this Nation's leading military officer?

THE PRESIDENT. I have indicated to General Brown that the words that he used in that interview, in that particular case, and in several others, were very ill-advised. And General Brown has indicated his apology, his regrets, and I think that will, in this situation, settle the matter.

It is tragic that the full transcript of that interview was not released, and that there were excerpts, some of the excerpts, taken out of context -- not this one, however, that you bring up.

General Brown has an exemplary record of military performance. He served this Nation with great, great skill and courage and bravery for 35 years. And I think it's the consensus of the people who are knowledgeable in the military field that he is probably the outstanding military leader and strategist that we have in America today.

Now he did use ill-advised words. But I think in the fact that he apologized, that he was reprimanded, does permit him to stay on and continue that kind of leadership that we so badly need as we enter into negotiations under the SALT II agreement or if we have operations that might be developing in the Middle East or southern Africa or in the Pacific -- we need a man with that experience, that knowledge, that know-how. And I think in light of the fact that he has apologized, would not have justified my asking for his resignation.


Governor Carter, your response.

MR. CARTER. Well, just briefly, I think this is the second time that General Brown has made a statement for which he did have to apologize -- and I know that everybody makes mistakes. I think the first one was related to the unwarranted influence of American Jews on the media and in the Congress. This one concerned Great Britain. I think he said that Israel was a military burden on us and that Iran hoped to reestablish the Persian Empire.

I am not sure that I remembered earlier that President Ford had expressed his concern about the statement or apologized for it. This is something, though, that I think is indicative of the need among the American people to know how the commander-in-chief, the President, feels. And I think the only criticism that I would have of Mr. Ford is that immediately when the statement was revealed, perhaps a statement from the President would have been a clarifying and a very beneficial thing.

THE MODERATOR. Mr. Nelson, your question now to Governor Carter.

MR. NELSON. Governor, despite the fact that you've been running for President a long time now, many Americans still seem to be uneasy about you. They don't feel that they know you or the people around you. And one problem seems to be that you haven't reached out to bring people of broad background or national experience into your campaign or your Presidential plans. Most of the people around you on a day-to-day basis are the people you've known in Georgia. Many of them are young and relatively inexperienced in national affairs. Doesn't this raise a serious question as to whether you would bring into a Carter administration people with the necessary background to run the Federal Government?

MR. CARTER. I don't believe it does. I began campaigning 22 months ago. At that time, nobody thought I had a chance to win. Very few people knew who I was. I came from a tiny town, as you know -- Plains -- and didn't hold public office, didn't have very much money. And my first organization was just four or five people plus my wife and my children, my three sons and their wives.

And we won the nomination by going out into the streets, barbershops, beauty parlors, restaurants, stores, in factory shift lines, also in farmers' markets and livestock sale barns, and we talked a lot and we listened a lot and we learned from the American people. We built up an awareness among the voters of this country, particularly those in whose primaries I entered -- 30 of them, nobody's ever done that before -- about who I was and what I stood for.

Now we have a very, very wide-ranging group of advisers who help me prepare for these debates and who teach me about international economics and foreign affairs, defense matters, health, education, welfare, government reorganization -- I'd say, several hundred of them, and they're very fine and very highly qualified.

The one major decision that I have made since acquiring the nomination -- and I share this with President Ford -- is the choice of a Vice President. I think this should be indicative of the kind of leaders I would choose to help me if I am elected.

I chose Senator Walter Mondale. And the only criterion I ever put forward in my own mind was who among the several million people in this country would be the best person qualified to be President, if something should happen to me and to join me in being Vice President if I should serve out my term. And I'm convinced now, more than I was when I got the nomination, that Walter Mondale was the right choice. And I believe this is a good indication of the kind of people I would choose in the future.

Mr. Ford has had that same choice to make. I don't want to say anything critical of Senator Dole, but I've never heard Mr. Ford say that that was his primary consideration -- who is the best person I could choose in this country to be President of the United States?

I feel completely at ease knowing that someday Senator Mondale might very well be President. In the last five Vice-Presidential nominees, incumbents, three of them have become President. But I think this is indicative of what I would do.

THE MODERATOR. President Ford, your response please.

THE PRESIDENT. The Governor may not have heard my established criteria for the selection of a Vice President, but it was a well-established criteria that the person I selected would be fully qualified to be President of the United States. And Senator Bob Dole is so qualified -- 16 years in the House of Representatives and in the Senate, very high responsibilities on important committees.

I don't mean to be critical of Senator Mondale, but I was very, very surprised when I read that Senator Mondale made a very derogatory, very personal comment about General Brown after the news story that broke about General Brown. If my recollection is correct he indicated that General Brown was not qualified to be a sewer commissioner. I don't think that's a proper way to describe a Chairman of the Joint Chiefs of Staff who has fought for his country for 35 years. And I'm sure the Governor would agree with me on that. I think Senator Dole would show more good judgment and discretion than to so describe a heroic and brave and very outstanding leader of the military.

So I think our selection of Bob Dole as Vice President is based on merit. And if he should ever become the President of the United States, with his vast experience as Member the House and a Member of the Senate, as well as a Vice President, I think he would do an outstanding job as President of the United States.

THE MODERATOR. Mr. Kraft, your question to President Ford.

MR. KRAFT. Mr. President, let me assure you and maybe some of the viewing audience that being on this panel hasn't been, as it may seem, all torture and agony. One of the heartening things is that I and my colleagues have received literally hundreds and maybe even thousands of suggested questions from ordinary citizens all across the country who want answers.

THE PRESIDENT. That's a tribute to their interest in this election.

MR. KRAFT. I'll give you that. But let me go on, because one main subject on the minds of all of them has been the environment, particularly curious about your record. People really want to know why you vetoed the strip mining bill. They want to know why you worked against strong controls on auto emissions. They want to know why you aren't doing anything about pollution of the Atlantic Ocean. They want to know why a bipartisan organization such as the National League of Conservation Voters says that when it comes to environmental issues, you are -- and I'm quoting -- "hopeless."

THE PRESIDENT. First, let me set the record straight. I vetoed the strip mining bill, Mr. Kraft, because it was the overwhelming consensus of knowledgeable people that that strip mining bill would have meant the loss of literally thousands of jobs, something around 140,000 jobs. Number two, that strip mining bill would have severely set back our need for more coal, and Governor Carter has said repeatedly that coal is the resource that we need to use more in the effort to become independent of the Arab oil supplies. So, I vetoed it because of a loss of jobs and because it would have interfered with our energy independence program.

The auto emissions -- it was agreed by Leonard Woodcock, the head of the UAW, and by the heads of all of the automobile industry, we had labor and management together saying that those auto emission standards had to be modified.

But let's talk about what the Ford administration has done in the field of environment. I have increased, as President, by over 60 percent, the funding for water treatment plants in the United States, the Federal contribution. I have fully funded the land and water conservation program; in fact, have recommended, and the Congress approved, a substantially increased land and water conservation program.

I have added in the current year budget, the funds for the National Park Service. For example, we proposed about $12 million to add between 400 and 500 more employees for the National Park Service.

And a month or so ago, I did likewise say over the next ten years we should expand -- double -- the national parks, the wild wilderness areas, the scenic river areas. And then, of course, the final thing is that I have signed and approved of more scenic rivers, more wilderness areas since I've been President than any other President in the history of the United States.

THE MODERATOR. Governor Carter.

MR. CARTER. Well, I might say that I think the League of Conservation Voters is absolutely right. This administration's record on environment is very bad.

I think it's accurate to say that the strip mining law which was passed twice by the Congress and only lacked two votes, I believe, of being overridden, would have been good for the country. The claim that it would have put 140,000 miners out of work is hard to believe when at the time Mr. Ford vetoed it, the United Mine Workers was supporting the bill. And I don't think they would have supported the bill had they known that they would lose 140,000 jobs.

There's been a consistent policy on the part of this administration to lower or delay enforcement of air pollution standards and water pollution standards. And under both Presidents Nixon and Ford, moneys have been impounded that would have gone to cities and others to control water pollution.

We have no energy policy. We, I think, are the only developed nation in the world that has no comprehensive energy policy, to permit us to plan in an orderly way how to shift from increasing the scarce energy forms -- oil -- and have research and development concentrated on the increased use of coal, which I strongly favor -- the research and development to be used primarily to make the coal burning be clean.

We need a heritage trust program, similar to the one we had in Georgia, to set aside additional lands that have geological and archeological importance, natural areas for enjoyment. The lands that Mr. Ford brags about having approved are in Alaska, and they are enormous in size, but as far as the accessibility of them by the American people, is very far in the future.

We have taken no strong position in the control of pollution of our oceans. And I would say the worst threat to the environment of all is nuclear proliferation. And this administration, having been in office now for 2 years or more, has still not taken strong and bold action to stop the proliferation of nuclear waste around the world, particularly plutonium.

Those are some brief remarks about the failures of this administration. I would do the opposite in every respect.

THE MODERATOR. Mr. Maynard to Governor Carter.

MR. MAYNARD. Governor, federal policy in this country since World War II has tended to favor the development of suburbs at the great expense of central cities. Does not the federal government now have an affirmative obligation to revitalize the American city? We have heard little in this campaign suggesting that you have an urban reconstruction program. Could you please outline your urban intentions for us tonight?

MR. CARTER. Yes, I'd be glad to. In the first place, as is the case with the environmental policy and the energy policy that I just described, and the policy for nonproliferation of nuclear waste, this administration has no urban policy. It's impossible for mayors or governors to cooperate with the President, because they can't anticipate what is going to happen next.

A mayor of a city like New York, for example, needs to know 18 months or 2 years ahead of time what responsibility the city will have in administration and in financing, in things like housing, pollution control, crime control, education, welfare and health. This has not been done, unfortunately. I remember the headline in the Daily News that said, "Ford to New York -- Drop Dead."

I think it's very important that our cities know that they have a partner in the Federal Government. Quite often, Congress has passed laws in the past designed to help people with the ownership of homes and with the control of crime and with adequate health care and better education programs and so forth. Those programs were designed to help those who need it most, and quite often this has been in the very poor people and neighborhoods in the downtown urban centers. Because of the greatly advantaged persons who live in the suburbs -- better education, better organization, more articulate, more aware of what the laws are -- quite often this money has been channeled out of the downtown centers where it's needed.

Also, I favor all revenue sharing money being used for local governments and also to remove prohibitions in the use of revenue sharing money, so that it can be used to improve education and health care. We have now, for instance only 7 percent of the total education cost being financed by the Federal Government. When the Nixon-Ford Administration started, this was 10 percent. That's a 30-percent reduction in the portion that the federal government contributes to education in just 8 years and, as you know, the education costs have gone up tremendously.

The last point is that the major thrust has got to be to put people back to work. We've got an extraordinarily high unemployment rate among downtown urban ghetto areas; particularly among the very poor and particularly among minority groups, sometimes 50 or 60 percent.

And the concentration of employment opportunities in those areas would help greatly not only to reestablish the tax base, but also to help reduce the extraordinary welfare costs. One of the major responsibilities on the shoulders of New York City is to finance welfare. And I favor a shifting of the welfare cost away from the local governments altogether and, over a longer period of time, let the Federal Government begin to absorb part of it that's now paid by the State government. Those things would help a great deal with the cities, but we still have a very serious problem there.

THE MODERATOR. President Ford.

THE PRESIDENT. Let me speak out very strongly. The Ford administration does have a very comprehensive program to help our major metropolitan areas. I fought for, and the Congress finally went along with, a general revenue sharing program whereby cities and states -- the cities, two-thirds, and the States, one-third -- get over $6 billion a year, in cash, with which they can provide many, many services, whatever they really want.

In addition, we in the Federal Government make available to cities about $3,300 million in what we call community developments. In addition, as a result of my pressure on the Congress, we got a major mass transit program over a 4-year period -- $11,800 million. We have a good housing program that will result in cutting the downpayments by 50 percent and having mortgage payments lower at the beginning of any mortgage period. We are expanding our homestead housing program.

The net result is, we think, under Carla Hills, who is the Chairman of my Urban Development and Neighborhood Revitalization program, we will really do a first-class job in helping the communities throughout the country. As a matter of fact, that committee, under Secretary Hills, released about a 75-page report with specific recommendations, so we can do a better job in the weeks ahead.

And in addition, the tax program of the Ford administration, which provides an incentive for industry to move into our major metropolitan areas, into the inner cities, will bring jobs where people are, and help to revitalize those cities as they can be.

THE MODERATOR. Mr. Nelson, your question next to President Ford.

MR. NELSON. Mr. President, your campaign has run ads in black newspapers saying that quote, "for black Americans, President Ford is quietly getting the job done." Yet, study after study has shown little progress in desegregation and, in fact, actual increases in segregated schools and housing in the Northeast.

Now, civil rights groups have complained repeatedly that there has been lack of progress and commitment to an integrated society during your administration. So how are you getting the job done for blacks and other minorities, and what programs do you have in mind for the next four years?

THE PRESIDENT. Let me say at the outset, I am very proud of the record of this administration. In the Cabinet I have one of the outstanding, I think, administrators as the Secretary of Transportation, Bill Coleman. You are familiar, I am sure, with the recognition given in the Air Force to General James. And there was just approved a three-star admiral, the first in the history of the United States Navy. So, we are giving full recognition to individuals, of quality in the Ford administration in positions of great responsibility.

In addition, the Department of Justice is fully enforcing, and enforcing effectively, the Voting Rights Act -- the legislation that involves jobs, housing for minorities, not only blacks but all others.

The Department of HUD is enforcing the new legislation that takes care of redlining. What we are doing is saying that there are opportunities -- business opportunities, educational opportunities, responsibilities -- where people with talent, black or any other minority, can fully qualify.

The Office of Minority Business in the Department of Commerce has made available more money in trying to help black businessmen, or other minority businessmen, than any other administration since the office was established.

The office of small business, under Mr. Kobelinski, has a very massive program trying to help the black community. The individual who wants to start a business or expand his business as a black businessman is able to borrow, either directly or with guaranteed loans.

I believe on the record that this administration has been more responsive and we have carried out the law to the letter, and I'm proud of the record.

THE MODERATOR. Governor Carter, your response, please.

MR. CARTER. The description just made of this administration's record is hard to recognize. I think it's accurate to say that Mr. Ford voted against the voting rights acts and against the civil rights acts in their debative stage. I think once it was assured they were going to pass, he finally voted for it.

This country changed drastically in 1969 when the terms of John Kennedy and Lyndon Johnson were over, and Richard Nixon and Gerald Ford became the Presidents. There was a time when there was hope for those who were poor and downtrodden and who were elderly or who were ill or who were in minority groups. That time has been gone.

I think the greatest thing that ever happened to the South was the passage of the civil rights acts and the opening up of opportunities to black people, to have the chance to vote, to hold a job, to buy a house, to go to school, and to participate in public affairs. It not only liberated black people but it also liberated the whites.

We have seen in many instances in recent years a minority affairs section of a small loan administration, Small Business Administration, lend a black entrepreneur just enough money to get started, and then to go bankrupt. The bankruptcies have gone up an extraordinary degree.

The FHA [Federal Housing Administration], which used to be a very responsible agency that everyone looked to to help own a home, lost $600 million last year. There have been over 1300 indictments in HUD, over 800 convictions relating just to home loans. And now the federal government has become the world's greatest slum landlord.

We've got a 30-percent or 40-percent unemployment rate among minority young people. And there has been no concerted effort given to the needs of those who are both poor and black, or poor and who speak a foreign language. And that's where there's been a great generation of despair and ill health and lack of education and lack of purposefulness and the lack of hope for the future.

But it doesn't take just a quiet, dormant, minimum enforcement of the law. It requires an aggressive searching out and reaching out to help people who especially need it. And that's been lacking in the last 8 years.

THE MODERATOR. Mr. Kraft, to Governor Carter.

MR. KRAFT. Governor Carter, in the nearly 200-year history of the Constitution, there have been only, I think it is, 25 amendments, most of them on issues of the very broadest principle. Now we have proposed amendments in many highly specialized causes like gun control, school busing, balanced budget, school prayer, abortion, things like that. Do you think it's appropriate to the dignity of the Constitution to tack on amendments in wholesale fashion, and which of the ones that I listed -- that is, balanced budget, school busing, school prayer, abortion, gun control -- which of those would you really work hard to support if you were President?

MR. CARTER. I would not work hard to support any of those. We have always had, I think, a lot of constitutional amendments proposed, but the passage of them has been fairly slow, and few and far between. In the 200-year history there's been a very cautious approach to this. Quite often we have a transient problem. I am strongly against abortion. I think abortion is wrong. I don't think the government ought to do anything to encourage abortion, but I don't favor a constitutional amendment on the subject. But short of a constitutional amendment, and within the confines of a Supreme Court ruling, I will do everything I can to minimize the need for abortions with better sex education, family planning, with better adoptive procedures. I personally don't believe that the Federal Government ought to finance abortions, but I draw the line and don't support a constitutional amendment. However, I honor the right of people who seek the constitutional amendments on school busing, on prayer in the schools, and on abortion, but among those you named, I won't actively work for the passage of any of them.

THE MODERATOR. President Ford, your response, please.

THE PRESIDENT. I support the Republican platform, which calls for the constitutional amendment that would outlaw abortions. I favor the particular constitutional amendment that would turn over to the States the individual right of the voters in those States the chance to make a decision by public referendum. I call that the peoples' amendment. I think if you really believe that the people of a State ought to make a decision on a matter of this kind, that we ought to have a federal constitutional amendment that would permit each one of the 50 States to make the choice.

I think this is a responsible and a proper way to proceed. I believe also that there is some merit to an amendment that Senator Everett Dirksen proposed very frequently, an amendment that would change the Court decision as far as voluntary prayer in public schools. It seems to me that there should be an opportunity, as long as it's voluntary, as long as there is no compulsion whatsoever, that an individual ought to have that right.

So in those two cases I think such a constitutional amendment would be proper. And I really don't think in either case they are trivial matters. I think they are matters of very deep conviction as far as many, many people in this country believe, and therefore they shouldn't be treated lightly, but they are matters that are important. And in those two cases, I would favor them.

THE MODERATOR. Mr. Maynard, to President Ford.

MR. MAYNARD. Mr. President, twice you have been the intended victim of would-be assassins using handguns, yet you remain a steadfast opponent of substantive handgun control. There are now some 40 million handguns in this country, going up at the rate of 2.5 million a year, and tragically those handguns are frequently purchased for self-protection and wind up being used against a relative or a friend. In light of that, why do you remain so adamant in your opposition to substantive gun control in this country?

THE PRESIDENT. Mr. Maynard, the record of gun control, whether it's one city or another or in some States does not show that the registration of a gun, handgun, or the registration of the gun owner, has in any way whatsoever decreased the crime rate or the use of that gun in the committing of a crime. The record just doesn't prove that such legislation or action by a local city council is effective.

What we have to do -- and this is the crux of the matter -- is to make it very, very difficult for a person who uses a gun in the commission of a crime to stay out of jail. If we make the use of a gun in the commission of a crime a serious criminal offense, and that person is prosecuted, then in my opinion we are going after the person who uses the gun for the wrong reason. I don't believe in the registration of handguns or the registration of the handgun owner. That has not proven to be effective. And therefore, I think the better way is to go after the criminal, the individual who commits a crime in the possession of a gun and uses that gun for a part of his criminal activity.

Those are the people who ought to be in jail. And the only way to do it is to pass strong legislation so that once apprehended, indicted, convicted, they'll be in jail and off the streets and not using guns in the commission of a crime.

MR. MAYNARD. But Mr. President, don't you think that the proliferation of the availability of handguns contributes to the possibility of those crimes being committed? And, there's a second part to my follow-up. Very quickly, there are, as you know and as you've said, jurisdictions around the country with strong gun control laws. The police officials in those cities contend that if there were a national law to prevent other jurisdictions from providing the weapons that then came into places like New York, that they might have a better handle on the problem. Have you considered that in your analysis of the handgun proliferation problem?

THE PRESIDENT. Yes, I have, and the individuals with whom I have consulted have not convinced me that a national registration of handguns or handgun owners will solve the problem you are talking about. The person who wants to use a gun for an illegal purpose can get it whether it's registered or outlawed -- they will be obtained -- and they are the people who ought to go behind bars. You should not, in the process, penalize the legitimate handgun owner. And when you go through the process of registration, you, in effect, are penalizing that individual who uses his gun for a very legitimate purpose.

THE MODERATOR. Governor Carter.

MR. CARTER. I think it's accurate to say that Mr. Ford's position on gun control has changed. Earlier, Mr. Levi, his Attorney General, put forward a gun control proposal which Mr. Ford later, I believe, espoused that called for the prohibition against the sale of the so-called Saturday Night Specials. It would have put very strict control over who owned a handgun.

I have been a hunter all my life and happen to own both shotguns, rifles, and a handgun. And the only purpose that I would see in registering handguns and not long guns of any kind would be to prohibit the ownership of those guns by those who have used them in the commission of a crime or who have been proven to be mentally incompetent to own a gun. I believe that limited approach to the question would be advisable, and I think adequate, but that's as far as I would go with it.

THE MODERATOR. Mr. Nelson, to Governor Carter.

MR. NELSON. Governor, you've said the Supreme Court of today is, as you put it, moving back in a proper direction in rulings that have limited the rights of criminal defendants, and you've compared the present Supreme Court under Chief Justice Burger very favorably with the more liberal Court that we had under Chief Justice Warren. So, exactly what are you getting at, and can you elaborate on the kind of court you think this country should have? And can you tell us the kind of qualifications and philosophy you would look for as President in making Supreme Court appointments?

MR. CARTER. While I was Governor of Georgia, although I am not a lawyer, we had complete reform of the Georgia court system. We streamlined the structure of the court, put in administrative offices, put a unified court system in, and required that all severe sentences be reviewed far uniformity; and, in addition to that, put forward a proposal that was adopted and used throughout my own term of office -- selection of all judges and district attorneys or prosecuting attorneys, on the basis of merit.

Every time I had a vacancy on the Georgia Supreme Court -- and I filled five of those vacancies out of seven total, and about half the Court of Appeals judges, about 35 percent of the trial judges -- I was given from an objective panel the five most highly qualified persons in Georgia, and from those five I always chose the first or second one. So, merit selection of judges is the most important single criterion. And I would institute the same kind of procedure as President, not only in judicial appointments but also in diplomatic appointments.

Secondly, I think that the Burger Court has fairly well confirmed the major and most far-reaching and most controversial decisions of the Warren Court. Civil rights has been confirmed by the Burger Court. It hasn't been reversed. And I don't think there is any inclination to reverse those basic decisions -- of one man-one vote rule, which is a very important one that struck down the unwarranted influence in the legislature of sparsely populated areas of the States. The right of indigent or very poor accused persons to legal counsel -- I think the Burger Court has confirmed that basic and very controversial decision of the Warren Court. Also, the protection of an arrested person against unwarranted persecution in trying to get a false confession.

But now, I think there have been a couple of instances where the Burger Court has made technical rulings where an obviously guilty person was later found to be guilty. And I think that in that case some of the more liberal members of the so-called Warren Court agreed with those decisions.

But the only thing I have pointed out was what I've just said, and that there was a need to clarify the technicalities so that you couldn't be forced to release a person who was obviously guilty just because of a small technicality in the law. And that's a reversal of position by the Burger Court with which I do agree.

MR. NELSON. Governor, I don't believe you answered my question, though, about the kinds of people you would be looking for the Court, the type of philosophy you would be looking for if you were making appointments to the Supreme Court as President.

MR. CARTER. Okay, I thought I answered it by saying that it would be on the basis of merit. Once the search and analysis procedure had been completed, and once I'm given a list of the 5 or 7 or 10 best qualified persons in the country, I would make a selection from among those persons. If the list was in my opinion fairly uniform, if there was no outstanding person, then I would undoubtedly choose someone who would most accurately reflect my own basic political philosophy, as best I could determine it, which would be to continue the progress that has been made under the last two Courts -- the Warren Court and the Burger Court.

I would also like to completely revise our criminal justice system to do some of the things at the Federal level and court reform that I've just described, as has been done in Georgia and other States. And then I would like to appoint people who would be interested in helping with that. I know that Chief Justice Burger is. He hasn't had help from the administration and from the Congress to carry this out.

The emphasis, I think, of the court system should be to interpret the Constitution and the laws equally between property protection and personal protection. But when there's a very narrow decision -- which quite often is one that reaches the Supreme Court -- I think the choice should be with human rights, and that would be another factor that I would follow.

THE MODERATOR. President Ford.

THE PRESIDENT. I think the answer as to the kind of person that I would select is obvious. I had one opportunity to nominate an individual to the Supreme Court, and I selected the Circuit Court of Appeals judge from Illinois, John Paul Stevens. I selected him because of his outstanding record as a Circuit Court of Appeals judge. And I was very pleased that an overwhelming Democratic United States Senate, after going into his background, came to the conclusion that he was fit and should serve, and the vote in his behalf was overwhelming.

So, I would say somebody in the format of Justice Stevens would be the kind of an individual that I would select in the future, as I did him in the past.

I believe, however, a comment ought to be made about the direction of the Burger Court, vis-a-vis the Court that preceded it. It seems to me that the Miranda case was a case that really made it very, very difficult for the police, the law enforcement people in this country to do what they could to make certain that the victim of a crime was protected and that those that commit crimes were properly handled and sent to jail. The Miranda case, the Burger Court is gradually changing. And I'm pleased to see that there are some steps being made by the Burger Court to modify the so-called Miranda decision.

I might make a correction of what Governor Carter said, speaking of gun control. Yes, it is true, I believe that the sale of Saturday night specials should be cut out, but he wants the registration of handguns.


MR. KRAFT. Mr. President, the country is now in something that your advisors call an economic pause. I think to most Americans that sounds like an antiseptic term for low growth, unemployment, standstill at a high, high level, decline in take-home pay, lower factory earnings, more layoffs. Isn't that a really rotten record and doesn't your administration bear most of the blame for it?

THE PRESIDENT. Well, Mr. Kraft, I violently disagree with your assessment, and I don't think the record justifies the conclusion that you come to. Let me talk about the economic announcements that were made just this past week.

Yes, it was announced that the GNP real growth in the third quarter was at 4 percent. But do you realize that over the last 10 years that's a higher figure than the average growth during that 10-year period? Now it's lower than the 9.2-percent growth in the first quarter, and it's lower than the 5-percent growth in the second quarter. But every economist -- liberal, conservative -- that I'm familiar with recognizes that in the fourth quarter of this year and in the first quarter of next year that we'll have an increase in real GNP.

But now let's talk about the pluses that came out this week. We had an 18-percent increase in housing starts. We had a substantial increase in new permits for housing. As a matter of fact, based on the announcement this week, there will be at an annual rate, 1 million 800-some thousand new houses built, which is a tremendous increase over last year and a substantial increase over the earlier part of this year.

Now in addition, we had some very good news in the reduction in the rate of inflation. And inflation hits everybody -- those who are working and those who are on welfare. The rate of inflation, as announced just the other day, is under 5 percent; and the 4.4 percent that was indicated at the time of the 4 percent GNP was less than the 5.4 percent. It means that the American buyer is getting a better bargain today because inflation is less.

MR. KRAFT. Mr. President, let me ask you this. There has been an increase in layoffs and that's something that bothers everybody because even people that have a job are afraid that they're going to be fired. Did you predict that increase in layoffs? Didn't that take you by surprise? Hasn't your administration been surprised by this pause? In fact, haven't you been so obsessed with saving money that you didn't even push the government to spend funds that were allocated?

THE PRESIDENT. Mr. Kraft, I think the record can be put in this way, which is the way that I think satisfies most Americans: Since the depths of the recession, we have added 4 million jobs. Most importantly, consumer confidence as surveyed by the reputable organization at the University of Michigan is at the highest since 1972.

In other words, there is a growing public confidence in the strength of this economy. And that means that there will be more industrial activity; it means that there will be a reduction in the unemployment; it means that there will be increased hires; it means that there will be increased employment. Now we've had this pause, but most economists, regardless of their political philosophy, indicate that this pause for a month or two was healthy, because we could not have honestly sustained a 9.2 percent rate of growth which we had in the first quarter of this year.

Now, I'd like to point out as well that the United States' economic recovery from the recession of a year ago, is well ahead of the economic recovery of any major free industrial nation in the world today. We are ahead of all of the Western European countries. We are ahead of Japan. The United States is leading the free world out of the recession that was serious a year and a half ago.

We are going to see unemployment going down, more jobs available, and the rate of inflation going down. And I think this is a record that the American people understand and will appreciate.

THE MODERATOR. Governor Carter.

MR. CARTER. With all due respect to President Ford, I think he ought to be ashamed of making that statement, because we have the highest unemployment rate now than we had at any time between the Great Depression, caused by Herbert Hoover, and the time President Ford took office.

We have got 7 1/2 million people out of jobs. Since he's been in office, 2 1/2 million more American people have lost their jobs. In the last four months alone, 500,000 Americans have gone on the unemployment roll. In the last month, we've had a net loss of 163,000 jobs.

Anybody who says that the inflation rate is in good shape now ought to talk to the housewives. One of the overwhelming results that I have seen in the polls is that people feel that you can't plan anymore, there's no way to make a prediction that my family might be able to own a home or to put my kid through college. Savings accounts are losing money instead of gaining money. Inflation is robbing us.

Under the present administrations -- Nixon's and Ford's -- we have had three times the inflation rate that we experienced under President Johnson and President Kennedy. The economic growth is less than half today what it was at the beginning of this year. And housing starts -- he compares the housing starts with last year, I don't blame him, because in 1975 we had fewer housing starts in this country, fewer homes built than any year since 1940. That's 35 years. And we've got a 35-percent unemployment rate in many areas of this country among construction workers. And Mr. Ford hasn't done anything about it. And I think this shows a callous indifference to the families that have suffered so much. He has vetoed bills passed by Congress within the congressional budget guidelines -- job opportunities for 2 million Americans. We will never have a balanced budget, we will never meet the needs of our people, we will never control the inflationary spiral as long as we have 7 1/2 or 8 million people out of work who are looking for jobs. And we have probably got 2 1/2 more million people who are not looking for jobs any more because they've given up hope. That is a very serious indictment of this administration. It's probably the worst one of all.


MR. MAYNARD. Governor Carter, you entered this race against President Ford with a 20-point lead or better in the polls. And now it appears that this campaign is headed for a photo finish. You have said how difficult it is to run against a sitting President. But Mr. Ford was just as much an incumbent in July when you were 20 points ahead as he is now. Can you tell us what caused the evaporation of that lead, in your opinion?

MR. CARTER. Well, that's not exactly an accurate description of what happened. When I was that far ahead, it was immediately following the Democratic Convention and before the Republican Convention. At that time 25 or 30 percent of the Reagan supporters said that they would not support President Ford, but as occurred at the end of the Democratic Convention, the Republican Party unified itself, and I think immediately following the Republican Convention there was about a 10-point spread. I believe that to be accurate. I had 49 percent; President Ford had 39 percent.

The polls are good indications of fluctuations, but they vary widely one from another, and the only poll I've ever followed is the one that, you know, is taken on Election Day. I was in 30 primaries in the spring and at first it was obvious that I didn't have any standing in the polls. As a matter of fact, I think when Gallup ran their first poll in December 1975, they didn't even put my name on the list. They had 35 people on the list -- my name wasn't even there. And at the beginning of the year I had about 2 percent. So the polls, to me, are interesting, but they don't determine my hopes or my despair.

I campaign among people. I have never depended on powerful political figures to put me in office. I have a direct relationship with hundreds of thousands of people around the country who actively campaign for me. In Georgia alone, for instance, I got 84 percent of the vote, and I think there were 14 people in addition to myself on the ballot, and Governor Wallace had been very strong in Georgia. That's an overwhelming support from my own people who know me best. And today, we have about 500 hundred Georgians at their own expense, just working people who believe in me, spread around the country involved in the political campaign.

So the polls are interesting, but I don't know how to explain the fluctuations. I think a lot of it depends on current events -- sometimes foreign affairs, sometimes domestic affairs. But I think our core of support among those who are crucial to the election has been fairly steady. And my success in the primary season was, I think, notable for a newcomer, from someone who's outside of Washington, who never has been a part of the Washington establishment. And I think that we will have a good result on November 2 for myself and I hope for the country.

THE MODERATOR. President Ford, your response.

THE PRESIDENT. I think the increase in the prospects as far as I'm concerned and the less favorable prospects for Governor Carter, reflect that Governor Carter is inconsistent in many of the positions that he takes. He tends to distort on a number of occasions. Just a moment ago, for example, he was indicating that in the 1950's, for example, unemployment was very low. He fails to point out that in the 1950's we were engaged in the war in Vietnam -- I mean in Korea. We had 3,500,000 young men in the Army, Navy, Air Force and Marines. That's not the way to end unemployment or to reduce unemployment.

At the present time, we are at peace. We have reduced the number of people in the Army, Navy, Air Force and Marines from 3,500,000 to 2,100,000. We are not at war. We have reduced the military manpower by 1,400,000. If we had that many more people in the Army, the Navy, the Air Force, and Marines, our unemployment figure would be considerably less.

But this administration doesn't believe the way to reduce unemployment is to go to war, or to increase the number of people in the military. So you cannot compare unemployment, as you sought to, at the present time, with the 1950s, because the then administration had people in the military. They were at war, they were fighting overseas. And this administration has reduced the size of the military by 1,400,000. They are in the civilian labor market, and they are not fighting anywhere around the world today.

THE MODERATOR. Thank you, gentlemen.

This will complete our questioning for this debate. We don't have time for more questions and full answers. So now each candidate will be allowed up to 4 minutes for a closing statement. And, at the original coin toss in Philadelphia a month ago it was determined that President Ford would make the first closing statement tonight.

President Ford.

THE PRESIDENT. For 25 years, I served in the Congress under five Presidents. I saw them work, I saw them make very hard decisions. I didn't always agree with their decisions, whether they were Democratic or Republican Presidents. For the last 2 years, I've been the President, and I have found from experience that it's much more difficult to make those decisions than it is to second guess them.

I became President at the time that the United States was in a very troubled time. We had inflation of over 12 percent; we were on the brink of the worst recession in the last 40 years; we were still deeply involved in the problems of Vietnam; the American people had lost faith and trust and confidence in the Presidency itself. That situation called for me to first put the United States on a steady course and to keep our keel well-balanced, because we had to face the difficult problems that had all of a sudden hit America.

I think most people know that I did not seek the Presidency. But I am asking for your help and assistance to be President for the next four years. During this campaign we've seen a lot of television shows, a lot of bumper stickers, and a great many slogans of one kind or another. But those are not the things that count. What counts is that the United States celebrated its 200th birthday on July fourth. As a result of that wonderful experience all over the United States, there is a new spirit in America. The American people are healed, are working together. The American people are moving again and moving in the right direction.

We have cut inflation by better than half. We have come out of the recession and we are well on the road to real prosperity in this country again. There has been a restoration of faith and confidence and trust in the Presidency because I've been open, candid and forthright. I have never promised more than I could produce and I have produced everything that I promised. We are at peace -- not a single young American is fighting or dying on any foreign soil tonight. We have peace with freedom.

I've been proud to be President of the United States during these very troubled times. I love America just as all of you love America. It would be the highest honor for me to have your support on November second and for you to say, "Jerry Ford, you've done a good job, keep on doing it."

Thank you, and good night.

THE MODERATOR. Thank you, President Ford.

Governor Carter.

MR. CARTER. The major purpose of an election for President is to choose a leader, someone who can analyze the depths of feeling in our country, to set a standard for our people to follow, to inspire our people to reach for greatness, to correct our defects, to answer difficulties, to bind ourselves together in a spirit of unity.

I don't believe the present administration has done that. We have been discouraged and we've been alienated. Sometimes we've been embarrassed, sometimes we've been ashamed. Our people are out of work, and there is a sense of withdrawal.

But our country is innately very strong. Mr. Ford is a good and decent man, but he's been in office now more than 800 days, approaching almost as long as John Kennedy was in office. I would like to ask the American people what has been accomplished. A lot remains to be done.

My own background is different from his. I was a school board member and a library board member, I served on a hospital authority, and I was in the State senate, and I was Governor and I am an engineer, a Naval officer, a farmer, a businessman. I believe we require someone who can work harmoniously with the Congress, who can work closely with the people of this country, and who can bring a new image and a new spirit to Washington.

Our tax structure is a disgrace, it needs to be reformed. I was Governor of Georgia for 4 years. We never increased sales taxes or income tax or property taxes. As a matter of fact, the year before I went out of office we gave a $50 million refund to the property taxpayers of Georgia.

We spend $600 per person in this country -- every man, woman and child -- for health care. We still rank 15th among all the nations of the world in infant mortality, and our cancer rate is higher than any country in the world. We don't have good health care. We could have it.

Employment ought to be restored to our people. We have become almost a welfare state. We spend now 700 percent more on unemployment compensation than we did 8 years ago when the Republicans took over the White House. Our people want to go back to work. Our education system can be improved. Secrecy ought to be stripped away from government, and a maximum of personal privacy ought to be maintained. Our housing programs have gone bad. It used to be that the average family could own a house, but now less than a third of our people can afford to buy their own homes.

The budget was more grossly out of balance last year than ever before in the history of our country -- $65 billion -- primarily because our people are not at work. Inflation is robbing us, as we've already discussed, and the government bureaucracy is just a horrible mess.

This doesn't have to be. I don't know all the answers. Nobody could. But I do know that if the President of the United States and the Congress of the United States and the people of the United States said, "I believe our nation is greater than what we are now," I believe that if we are inspired, if we can achieve a degree of unity, if we can set our goals high enough and work toward recognized goals with industry and labor and agriculture along with government at all levels, we can achieve great things.

We might have to do it slowly. There are no magic answers to it, but I believe together we can make great progress, we can correct our difficult mistakes and answer those very tough questions.

I believe in the greatness of our country, and I believe the American people are ready for a change in Washington. We have been drifting too long. We have been dormant too long. We have been discouraged too long. And we have not set an example for our own people, but I believe that we can now establish in the White House a good relationship with Congress, a good relationship with our people, set very high goals for our country, and with inspiration and hard work we can achieve great things and let the world know -- that's very important -- but more importantly, let the people in our own country realize -- that we still live in the greatest Nation on earth.

Thank you very much.

THE MODERATOR. Thank you, Governor Carter, and thank you, President Ford. I also would like to thank the audience and my three colleagues -- Mr. Kraft, Mr. Maynard and Mr. Nelson, who have been our questioners.

This debate has, of course, been seen by millions of Americans, and in addition tonight is being broadcast to 113 nations throughout the world.

This concludes the 1976 Presidential debates, a truly remarkable exercise in democracy, for this is the first time in 16 years that the Presidential candidates have debated. It is the first time ever that an incumbent President has debated his challenger, and the debate included the first between the two Vice-Presidential candidates.

President Ford and Governor Carter, we not only want to thank you but we commend you for agreeing to come together to discuss the issues before the American people.

And our special thanks to the League of Women Voters for making these events possible. In sponsoring these events, the League of Women Voters Education Fund has tried to provide you with the information that you will need to choose wisely.

The election is now only 11 days off. The candidates have participated in presenting their views in three 90-minute debates, and now it's up to the voters, and now it is up to you to participate. The League urges all registered voters to vote on November 2 for the candidate of your choice.

And now, from Phi Beta Kappa Memorial Hall on the campus of the College of William and Mary, this is Barbara Walters wishing you all a good evening.

Note: The debate began at 9:30 p.m. at the Phi Beta Kappa Memorial Hall on the Campus of the College of William and Mary in Williamsburg, Virginia. It was broadcast live on radio and television.

Presidential Campaign Debate Between Gerald R. Ford and Jimmy Carter
September 23, 1976

THE MODERATOR. I am Edwin Newman, moderator of this first debate of the 1976 campaign between Gerald R. Ford of Michigan, Republican candidate for President, and Jimmy Carter of Georgia, Democratic candidate for President.

We thank you, President Ford, and we thank you, Governor Carter, for being with us tonight.

There are to be three debates between the Presidential candidates and one between the Vice-Presidential candidates. All are being arranged by the League of Women Voters Education Fund.

Tonight's debate, the first between Presidential candidates in 16 years and the first ever in which an incumbent President has participated, is taking place before an audience in the Walnut Street Theatre in Philadelphia, just 3 blocks from Independence Hall. The television audience may reach 100 million in the United States and many millions overseas.

Tonight's debate focuses on domestic and economic policy. Questions will be put by Frank Reynolds of ABC News, James Gannon of the Wall Street Journal, and Elizabeth Drew of the New Yorker magazine.

Under the agreed rules the first question will go to Governor Carter. That was decided by the toss of a coin. He will have up to 3 minutes to answer. One followup question will be permitted with up to 2 minutes to reply. President Ford will then have 2 minutes to respond.

The next question will go to President Ford, with the same time arrangements, and questions will continue to be alternated between the candidates. Each man will make a 3-minute statement at the end, Governor Carter to go first.

President Ford and Governor Carter do not have any notes or prepared remarks with them this evening.

Mr. Reynolds, your question for Governor Carter.

MR. REYNOLDS. Mr. President, Governor Carter.

Governor, in an interview with the Associated Press last week, you said you believed these debates would alleviate a lot of concern that some voters have about you. Well, one of those concerns--not an uncommon one about candidates in any year--is that many voters say they don't really know where you stand.

Now, you have made jobs your number one priority, and you have said you are committed to a drastic reduction in unemployment. Can you say now, Governor, in specific terms what your first step would be next January, if you are elected, to achieve that?

MR. CARTER. Yes. First of all it's to recognize the tremendous economic strength of this country and to set the putting back to work of our people as a top priority. This is an effort that ought to be done primarily by strong leadership in the White House, the inspiration of our people, the tapping of business, agriculture, industry, labor, and government at all levels to work on this project. We will never have an end to the inflationary spiral, and we will never have a balanced budget until we get our people back to work.

There are several things that can be done specifically that are not now being done: first of all, to channel research and development funds into areas that will provide large numbers of jobs; secondly, we need to have a commitment in the private sector to cooperate with government in matters like housing. Here, a very small investment of taxpayers' money in the housing field can bring large numbers of extra jobs, in the guarantee of mortgage loans, in the putting forward of 202 programs for housing for older people and so forth, to cut down the roughly 20-percent unemployment that now exists in the construction industry.

Another thing is to deal with our needs in the central cities where the unemployment rate is extremely high--sometimes among minority groups, those who don't speak English or who are black or young people--a 40-percent unemployment. Here, a CCC [Civilian Conservation Corps]-type program would be appropriate, to channel money into the sharing with private sector and also local and State governments to employ young people who are now out of work.

Another very important aspect of our economy would be to increase production in every way possible, to hold down taxes on individuals, and to shift the tax burdens on to those who have avoided paying taxes in the past.

These kinds of specific things, none of which are being done now, would be a great help in reducing unemployment.

There is an additional factor that needs to be done and covered very succinctly, and that is to make sure that we have a good relationship between management, business on the one hand and labor on the other.

In a lot of places where unemployment is very high, we might channel specific, targeted job opportunities by paying part of the salary of unemployed people and also sharing with local governments the payment of salaries, which would let us cut down the unemployment rate much lower before we hit the inflationary level.

But I believe that by the end of the first 4 years of the next term, we could have the unemployment rate down to 3 percent--adult unemployment--which is about 4 to 4 percent overall, a controlled inflation rate, and have a balanced growth of about 4 to 6 percent, around 5 percent, which would give us a balanced budget.

MR. REYNOLDS. Governor, in the event you are successful and you do achieve a drastic drop in unemployment, that is likely to create additional pressure on prices. How willing are you to consider an incomes policy; in other words, wage and price controls?

MR. CARTER. Well, we now have such a low utilization of our productive capacity, about 73 percent--I think it's about the lowest since the Great Depression years--and such a high unemployment rate now--7.9 percent--that we have a long way to go in getting people to work before we have the inflationary pressures. And I think this would be easy to accomplish, to get jobs now without having the strong inflationary pressures that would be necessary.

I would not favor the payment of a given fixed income to people unless they are not able to work. But with tax incentives for the low-income groups, we could build up their income levels above the poverty level and not make welfare more profitable than work.

THE MODERATOR. Mr. President, your response?

THE PRESIDENT. I don't believe that Mr. Carter has been any more specific in this case than he has been on many other instances. I notice particularly that he didn't endorse the Humpbrey-Hawkins bill, which he has on occasions and which is included as a part of the Democratic platform. That legislation allegedly would help our unemployment, but we all know that it would have controlled our economy. It would have added $10 to $30 billion each year in additional expenditures by the Federal Government. It would have called for export controls on agricultural products.

In my judgment the best way to get jobs is to expand the private sector, where five out of six jobs today exist in our economy. We can do that by reducing Federal taxes, as I proposed about a year ago when I called for a tax reduction of $28 billion, three-quarters of it to go to private taxpayers and one-quarter to the business sector. We could add to jobs in the major metropolitan areas by a proposal that I recommended that would give tax incentives to business to move into the inner city and to expand or to build new plants so that they would take a plant or expand a plant where people are and people are currently unemployed.

We could also help our youth with some of the proposals that would give to young people an opportunity to work and learn at the same time, just like we give money to young people who are going to college.

Those are the kind of specifics that I think we have to discuss on these debates, and these are the kind of programs that I will talk about on my time.

THE MODERATOR. Mr. Gannon, your question to President Ford.

MR. GANNON. Mr. President, I would like to continue for a moment on this question of taxes which you have just raised. You have said that you favor more tax cuts for middle-income Americans, even those earning up to $30,000 a year. That presumably would cost the Treasury quite a bit of money in lost revenue.

In view of the very large budget deficits that you have accumulated and that are still in prospect, how is it possible to promise further tax cuts and to reach your goal of balancing the budget?

THE PRESIDENT. At the time, Mr. Gannon, that I made the recommendation for a $28 billion tax cut--three-quarters of it to go to individual taxpayers and 25 percent to American business--I said at the same time that we had to hold the lid on Federal spending--that for every dollar of a tax reduction, we had to have an equal reduction in Federal expenditures--a one-for-one proposition. And I recommended that to the Congress with a budget ceiling of $395 billion, and that would have permitted us to have a $28 billion tax reduction.

In my tax reduction program for middle-income taxpayers, I recommended that the Congress increase personal exemptions from $750 per person to $1,000 per person. That would mean, of course, that for a family of four that that family would have $1,000 more personal exemption, money that they could spend for their own purposes, money that the Government wouldn't have to spend. But if we keep the lid on Federal spending, which I think we can with the help of the Congress, we can justify fully a $28 billion tax reduction.

In the budget that I submitted to the Congress in January of this year, I recommended a 50-percent cutback in the rate of growth of Federal spending. For the last 10 years the budget of the United States has grown from about 11 percent per year. We can't afford that kind of growth in Federal spending. And in the budget that I recommended, we cut it in half--a growth rate of 5 to 5 percent. With that kind of limitation on Federal spending, we can fully justify the tax reductions that I have proposed. And it seems to me, with the stimulant of more money in the hands of the taxpayer and with more money in the hands of business to expand, to modernize, to provide more jobs, our economy will be stimulated so that we will get more revenue, and we will have a more prosperous economy.

MR. GANNON. Mr. President, to follow up a moment, the Congress has passed a tax bill which is before you now which did not meet exactly the sort of outline that you requested. What is your intention on that bill since it doesn't meet your requirements? Do you plan to sign that bill?

THE PRESIDENT. That tax bill does not entirely meet the criteria that I established. I think the Congress should have added another $10 billion reduction in personal income taxes, including the increase of personal exemptions from $750 to $1,000. And Congress could have done that if the budget committees of the Congress and the Congress as a whole had not increased the spending that I recommended in the budget. I am sure you know that in the resolutions passed by the Congress, they have added about $17 billion in more spending by the Congress over the budget that I recommended. So, I would prefer in that tax bill to have an additional tax cut and a further limitation on Federal spending.

Now, this tax bill that hasn't reached the White House yet--but is expected in a day or two--it's about 1,500 pages. It has some good provisions in it; it has left out some that I have recommended, unfortunately. On the other hand, when you have a bill of that magnitude, with those many provisions, a President has to sit and decide if there is more good than bad. And from the analysis that I have made so far, it seems to me that that tax bill does justify my signature and my approval.

THE MODERATOR. Governor Carter, your response.

MR. CARTER. Well, Mr. Ford is changing considerably his previous philosophy. The present tax structure is a disgrace to this country. It's just a welfare program for the rich. As a matter of fact, 25 percent of the total tax deductions go for only 1 percent of the richest people in this country, and over 50 percent of the tax credits go for the 14 percent of the richest people in this country.

When Mr. Ford first became President in August of 1974, the first thing he did in October was to ask for a $4.7 billion increase in taxes on our people in the midst of the heaviest recession since the Great Depression of the 1940's. In January of 1975, he asked for a tax change, a $5.6 billion increase on low and middle-income private individuals, a $6 billion decrease on the corporations and the special interests. In December of 1975, he vetoed the roughly $18 to $20 billion tax reduction bill that had been passed by the Congress. And then he came back later on in January of this year, and he did advocate a $10 billion tax reduction, but it would be offset by a $6 billion increase this coming January in deductions for social security payments and for unemployment compensation.

The whole philosophy of the Republican Party, including my opponent, has been to pile on taxes on low-income people, to take them off on the corporations. As a matter of fact, since the late sixties when Mr. Nixon took office, we've had a reduction in the percentage of taxes paid by corporations from 30 percent down to about 20 percent. We've had an increase in taxes paid by individuals, payroll taxes, from 14 percent up to 20 percent. This is what the Republicans have done to us. This is why tax reform is so important.

THE MODERATOR. Mrs. Drew, your question to Governor Carter.

Ms. DREW. Governor Carter, you've proposed a number of new or enlarged programs, including jobs and health, welfare reform, child care, aid to education, aid to cities, changes in social security and housing subsidies. You've also said that you want to balance the budget by the end of your first term. Now, you haven't put a price tag on those programs, but even if we priced them conservatively, and we count for full employment by the end of your first term, and we count for the economic growth that would occur during that period, there still isn't enough money to pay for those programs and balance the budget by any estimates that I've been able to see.

So, in that case, what would give?

MR. CARTER. Well, as a matter of fact, there is. If we assume a rate of growth of our economy equivalent to what it was during President Johnson and President Kennedy, even before the Vietnamese war, and if we assume that, at the end of the 4-year period we can cut our unemployment rate down to 4 to 4 percent. Under those circumstances, even assuming no elimination of unnecessary programs and assuming an increase in the allotment of money to finance programs increasing as the inflation rate does, my economic projects, I think confirmed by the House and the Senate committees, have been, with a $60 billion extra amount of money that can be spent in fiscal year '81--which would be the last year of this next term--within that $60 billion increase, there would be fit the programs that I promised the American people. I might say, too, that if we see that these goals cannot be reached--and I believe they are reasonable goals--then I would cut back on the rate of implementation of new programs in order to accommodate a balanced budget by fiscal year '81, which is the last year of the next term.

I believe that we ought to have a balanced budget during normal economic circumstances. And these projections have been very carefully made. I stand behind them. And if they should be in error slightly on the down side, then I will phase in the programs that we've advocated more slowly.

Ms. DREW. Governor, according to the budget committees of the Congress that you referred to, if we get to full employment, what they project at a 4-percent unemployment and, as you say, even allowing for the inflation in the programs, there would not be anything more than a surplus of $5 billion by 1981. Conservative estimates of your programs would be that they'd be about $85 to $100 billion. So, how do you say that you are going to be able to do these things and balance the budget?

MR. CARTER. Well, the assumption that you have described that's different is in the rate of growth of our economy.

Ms. DREW. No, they took that into account in those figures.

MR. CARTER. I believe that it's accurate to say that the committees to whom you refer, with the employment rate that you state and with the 5 to 5 percent growth rate in our economy, that the projections would be a S60 billion increase in the amount of money that we have to spend in 1981 compared to now.

And in that framework would be fit any improvements in the programs. Now, this does not include any extra control over unnecessary spending, the weeding out of obsolete or obsolescent programs. We will have a safety version built in with complete reorganization of the executive branch of Government, which I am pledged to do.

The present bureaucratic structure of the Federal Government is a mess. And if I am elected President, that's going to be a top priority of mine--to completely revise the structure of the Federal Government to make it economical, efficient, purposeful, and manageable for a change. And also, I am going to institute zero-base budgeting, which I used 4 years in Georgia, which assesses every program every year and eliminates those programs that are obsolete or obsolescent.

But with these projections we will have a balanced budget by fiscal year 1981 if I am elected President, keep my promises to the American people. And it's just predicated on very modest, but I think accurate, projections of employment increases and a growth in our national economy equal to what was experienced under Kennedy, Johnson, before the Vietnam war.

THE MODERATOR. President Ford.

THE PRESIDENT. If it is true that there will be a $60 billion surplus by fiscal year 1981, rather than spend that money for all the new programs that Governor Carter recommends and endorses and which are included in the Democratic platform, I think the American taxpayer ought to get an additional tax break, a tax reduction of that magnitude. I feel that the taxpayers are the ones that need the relief. I don't think we should add additional programs of the magnitude that Governor Carter talks about.

It seems to me that our tax structure today has rates that are too high. But I am very glad to point out has since 1969, during a Republican administration, we have had 10 million people taken off of the tax rolls at the lower end of the taxpayer area. And at the same time, assuming that I sign the tax bill that was mentioned by Mr. Gannon, we will, in the last two tax bills, have increased the minimum tax on all wealthy taxpayers.

And I believe that by eliminating 10 million taxpayers in the last 8 years and by putting a heavier tax burden on those in the higher tax brackets, plus the other actions that have been taken, we can give taxpayers adequate tax relief.

Now, it seems to me that as we look at the recommendations of the budget committees and our own projections, there isn't going to be any S60 billion dividend. I've heard of those dividends in the past. It always happens. We expected one at the time of the Vietnam war, but it was used up before we ever ended the war, and taxpayers never got the adequate relief they deserved.

THE MODERATOR. Mr. Reynolds.

MR. REYNOLDS. Mr. President, when you came into office, you spoke very eloquently of the need for a time for healing. And very early in your administration you went out to Chicago and you announced, you proposed a program of case-by-case pardons for draft resisters to restore them to full citizenship. Some 14,000 young men took advantage of your offer, but another 90,000 did not. In granting the pardon to former President Nixon, sir, part of your rationale was to put Watergate behind us, to, if I may quote you again, truly end "our long national nightmare."

Why does not the same rationale apply now, today, in our Bicentennial Year to the young men who resisted in Vietnam and many of them still in exile abroad?

THE PRESIDENT. The amnesty program that I recommended in Chicago in September of 1974 would give to all draft evaders and military deserters the opportunity to earn their good record back. About 14 to 15,000 did take advantage of that program. We gave them ample time. I am against an across-the-board pardon of draft evaders or military deserters.

Now, in the case of Mr. Nixon, the reason the pardon was given was that when I took office this country was in a very, very divided condition. There was hatred; there was divisiveness; people had lost faith in their government in many, many respects. Mr. Nixon resigned, and I became President. It seemed to me that if I was to adequately and effectively handle the problems of high inflation a growing recession, the involvement of the United States still in Vietnam, that I had to give 100 percent of my time to those two major problems.

Mr. Nixon resigned; that is disgrace--the first President out of 38 that ever resigned from public office under pressure. So, when you look at the penalty that he paid, and when you analyze the requirements that I had to spend all of my time working on the economy, which was in trouble, that I inherited, working on our problems in Southeast Asia, which were still plaguing us, it seemed to me that Mr. Nixon had been penalized enough by his resignation in disgrace. And the need and necessity for me to concentrate on the problems of the country fully justified the action that I took.

MR. REYNOLDS. I take it, then, sir, that you do not believe that you are going to reconsider and think about those 90,000 who are still abroad? Have they not been penalized enough? Many of them have been there for years.

THE PRESIDENT. Well, Mr. Carter has indicated that he would give a blanket pardon to all draft evaders. I do not agree with that point of view. I gave in September of 1974 an opportunity for all draft evaders, all deserters, to come in voluntarily, clear their records by earning an opportunity to restore their good citizenship. I think we gave them a good opportunity. I don't think we should go any further.

THE MODERATOR. Governor Carter.

MR. CARTER. Well, I think it's very difficult for President Ford to explain the difference between the pardon of President Nixon and his attitude toward those who violated the draft laws. As a matter of fact now, I don't advocate amnesty; I advocate pardon. There is a difference, in my opinion, and in accordance with the ruling of the Supreme Court and in accordance with the definition in the dictionary.

Amnesty means that what you did was right. Pardon means that what you did, whether it's right or wrong, you are forgiven for it. And I do advocate a pardon for draft evaders. I think it's accurate to say that 2 years ago, when Mr. Ford put in this amnesty, that three times as many deserters were excused as were the ones who evaded the draft.

But I think that now is the time to heal our country after the Vietnam war. And I think that what the people are concerned about is not the pardon or the amnesty of those who evaded the draft, but whether or not our crime system is fair.

We have got a sharp distinction drawn between white collar crime. The bigshots who are rich, who are influential, very seldom go to jail. Those who are poor and who have no influence quite often are the ones who are punished. And the whole subject of crime is one that concerns our people very much. And I believe that the fairness of it is what is the major problem that addresses our leader, and this is something that hasn't been addressed adequately by this administration.

But I hope to have a complete responsibility on my shoulders to help bring about a fair criminal justice system and also to bring about an end to the divisiveness that has occurred in our country as a result of the Vietnam war.


MR. GANNON. Governor Carter, you have promised a sweeping overhaul of the Federal Government including a reduction in the number of Government agencies you say would go down to about 200 from some 1,900. That sounds indeed like a very deep cut in the Federal Government. But isn't it a fact that you are not really talking about fewer Federal employees or less Government spending, but rather that you are talking about reshaping the Federal Government, not making it smaller.

MR. CARTER. Well, I've been through this before, Mr. Gannon, as the Governor of Georgia. When I took over we had a bureaucratic mess like we have in Washington now. And we had 300 agencies, departments, bureaus, commissions--some fully budgeted, some not--but all having responsibility to carry out that was in conflict. And we cut those 300 agencies and so forth down substantially; we eliminated 278 of them. We set up a simple structure of government that could be administered fairly, and it was a tremendous success. It hasn't been undone since I was there.

It resulted also in an ability to reshape our court system, our prison system, our education system, our mental health programs, and a clear assignment of responsibility and authority, and also to have our people once again understand and control our Government.

I intend to do the same thing if I am elected President. When I get to Washington, coming in as an outsider, one of the major responsibilities that I will have on my shoulder is a complete reorganization of the executive branch of Government.

We now have a greatly expanded White House staff. When Mr. Nixon went in office, for instance, we had S3 million spent on the White House and its staff. That has escalated now to $16 million in the last Republican administration. This needs to be changed. We need to put the responsibilities back on the Cabinet members. We also need to have a great reduction in agencies and programs. For instance, we now have in the health area 302 different programs administered by 11 major departments and agencies. Sixty other advisory commissions are responsible for this. Medicaid is in one agency; Medicare is in a different one; the check on the quality of health care is in a different one. None of them are responsible for health care itself. This makes it almost impossible for us to have a good health program.

We have just advocated this past week a consolidation of the responsibilities for energy. Our country now has no comprehensive energy program or policy. We have 20 different agencies in the Federal Government responsible for the production, the regulation, the information about energy, the conservation energy spread all over Government. This is a gross waste of money. So, tough, competent management of Government, giving us a simple, efficient, purposeful, and manageable Government will be a great step forward. And if I am elected--and I intend to be--then it's going to be done.

MR. GANNON. Well, I'd like to press my question on the number of Federal employees--whether you would really plan to reduce the overall number or merely put them in different departments and relabel them? In your energy plan, you consolidate a number of agencies into one, or you would, but does that really change the overall?

MR. CARTER. I can't say for sure that we would have fewer Federal employees when I go out of office than when I come in. It took me about 3 years to completely reorganize the Georgia government. The last year I was in office our budget was actually less than it was a year before, which showed a great improvement.

Also, we had a 2-percent increase in the number of employees the last year, but it was a tremendous shift from administrative jobs into the delivery of services. For instance, we completely revised our prison system. We established 84 new mental health treatment centers, and we shifted people out of administrative jobs into the field to deliver better services. The same thing will be done at the Federal Government level.

I accomplished this with substantial reductions in employees in some departments. For instance, in the Transportation Department we cut back about 25 percent of the total number of employees. In giving our people better mental health care, we increased the number of employees. But the efficiency of it, the simplicity of it, the ability of people to understand their own government and control it was a substantial benefit derived from complete reorganization.

We have got to do this at the Federal Government level. If we don't, the bureaucratic mess is going to continue. There is no way for our people now to

understand what their Government is, there is no way to get the answer to a question. When you come to Washington to try to--as a Governor--to try to begin a new program for your people, like the treatment of drug addicts, I found there were 13 different Federal agencies that I had to go to to manage the drug treatment program. In the Georgia government we only had one agency responsible for drug treatment.

This is the kind of change that would be made. And it would be of tremendous benefit in long-range planning, in tight budgeting, saving the taxpayers' money, making the Government more efficient, cutting down on bureaucratic waste, having a clear delineation of authority and responsibility of employees, and giving our people a better chance to understand and control their Government.

THE MODERATOR. President Ford.

THE PRESIDENT. I think the record should show, Mr. Newman, that the Bureau of Census--we checked it just yesterday--indicates that in the 4 years that Governor Carter was Governor of the State of Georgia, expenditures by the government went up over 50 percent. Employees of the government in Georgia during his term of office went up over 25 percent. And the figures also show that the bonded indebtedness of the State of Georgia during his Governorship went up over 20 percent.

And there was some very interesting testimony given by Governor Carter's successor, Governor Busbee, before a Senate committee a few months ago, on how he found the Medicaid program when he came into office following Governor Carter. He testified, and these are his words, the present Governor of Georgia, he says he found the Medicaid program in Georgia in shambles.

Now, let me talk about what we've done in the White House as far as Federal employees are concerned. The first order that I issued after I became President was to cut or eliminate the prospective 40,000 increase in Federal employees that had been scheduled by my predecessor. And in the term that I have been President--some 2 years--we have reduced Federal employment by 11,000.

In the White House staff itself, when I became President we had roughly 540 employees. We now have about 485 employees. So, we've made a rather significant reduction in the number of employees on the White House staff working for the President.

So, I think our record of cutting back employees, plus the failure on the part of the Governor's program to actually save employment in Georgia, shows which is the better plan.


Ms. DREW. Mr. President, at Vail, after the Republican convention, you announced that you would now emphasize five new areas. Among those were jobs and housing and health, improved recreational facilities for Americans, and you also added crime. You also mentioned education.

For 2 years you've been telling us that we couldn't do very much in these areas because we couldn't afford it, and in fact, we do have a $50 billion deficit now. In rebuttal to Governor Carter a little bit earlier, you said that if there were to be any surplus in the next few years, you thought it should be turned back to the people in the form of tax relief. So, how are you going to pay for any new initiatives in these areas you announced at Vail you were going to now stress?

THE PRESIDENT. Well, in the last 2 years, as I indicated before, we had a very tough time. We were faced with heavy inflation--over 12 percent; we were faced with substantial unemployment. But in the last 24 months we've turned the economy around, and we've brought inflation down to under 6 percent. And we have added employment of about 4 million in the last 17 months to the point where we have 88 million people working in America today, the most in the history of the country. The net result is we are going to have some improvement in our receipts, and I think we will have some decrease in our disbursements. We expect to have a lower deficit in fiscal year 1978.

We feel that with this improvement in the economy, we feel with more receipts and fewer disbursements, we can, in a moderate increase, as recommended, over the next 10 years a new parks program that would cost a billion and a half dollars, doubling our national park system.

We have recommended that in the housing program we can reduce down payments and moderate monthly payments. But that doesn't cost any more as far as the Federal Treasury is concerned.

We believe that we can do a better Job in the area of crime, but that requires tougher sentencing--mandatory, certain prison sentences for those who violate our criminal laws. We believe that you can revise the Federal Criminal Code, which has not been revised in a good many years. That doesn't cost any more money. We believe that you can do something more effectively with a moderate increase in money in the drug abuse program.

We feel that in education we can have a slight increase, not a major increase. It's my understanding that Governor Carter has indicated that he approves of a $30 billion expenditure by the Federal Government, as far as education is concerned. At the present time we are spending roughly $3,500 million. I don't know where that money would come from.

But, as we look at the quality of life programs--jobs, health, education, crime, recreation--we feel that as we move forward with a healthier economy, we can absorb the small, necessary costs that will be required.

Ms. DREW. But, sir, in the next few years would you try to reduce the deficit, would you spend money for these programs that you have just outlined, or would you, as you said earlier, return whatever surplus you got to the people in the form of tax relief?

THE PRESIDENT. We feel that with the programs that I have recommended, the additional $10 billion tax cut, with the moderate increases in the quality of life area, we can still have a balanced budget, which I will submit to the Congress in January of 1978. We won't wait 1 year or 2 years longer, as Governor Carter indicates.

As the economy improves, and it is improving--our gross national product this year will average about 6-percent increase over last year--we will have a lower rate of inflation for the calendar year this year, something slightly under 6 percent; employment will be up; revenues will be up. We will keep the lid on some of these programs that we can hold down, as we have a little extra money to spend for those quality of life programs, which I think are needed and necessary.

Now, I cannot and would not endorse the kind of programs that Governor Carter recommends. He endorses the Democratic platform which, as I read it, calls for approximately 60 additional programs. We estimate that those programs would add $100 billion minimum and probably $200 billion maximum each year to the Federal budget. Those programs you cannot afford and give tax relief.

We feel that you can hold the line and restrain Federal spending, give a tax reduction, and still have a balanced budget by 1978.

THE MODERATOR. Governor Carter.

MR. CARTER. Well, Mr. Ford takes the same attitude that the Republicans always take. In the last 3 months before an election, they are always for the programs that they fight the other 3 years. I remember when Herbert Hoover was against jobs for people. I remember when Alf Landon was against social security. And later President Nixon--16 years ago--was telling the public that John Kennedy's proposals would bankrupt the country and would double the cost.

The best thing to do is to look at the record of Mr. Ford's administration and Mr. Nixon's before his.

We had last year a $65 billion deficit, the largest deficit in the history of our country, more of a deficit spending than we had in the entire 8-year period under President Johnson and President Kennedy. We've got 500,000 more Americans out of jobs today than were out of work 3 months ago. And since Mr. Ford has been in office, in 2 years we've had a 50-percent increase in unemployment, from 5 million people out of work to 2 million more people out of work, or a total of 7 million. We've also got a comparison between himself and Mr. Nixon. He's got four times the size of the deficits that Mr. Nixon even had himself.

This talking about more people at work is distorted because with the 14-percent increase in the cost of living in the last 2 years, it means that women and young people have had to go to work when they didn't want to because their fathers couldn't make enough to pay the increased cost of food and housing and clothing.

We have, in this last 2 years alone, $120 billion total deficits under President Ford, and at the same time we've had in the last 8 years a doubling in the number of bankruptcies for small business. We've had a negative growth in our national economy, measured in real dollars. The take-home pay of a worker in this country is actually less now than it was in 1968, measured in real dollars. This is the kind of record that is there, and talk about the future and a drastic change or conversion on the part of Mr. Ford at the last minute is one that just doesn't go.

THE MODERATOR. Mr. Reynolds.

MR. REYNOLDS. Governor Carter, I'd like to turn to what we used to call the energy crisis.

Yesterday a British Government commission on air pollution, but one headed by a nuclear physicist, recommended that any further expansion of nuclear energy be delayed in Britain as long as possible. Now, this is a subject that is quite controversial among our own people, and there seems to be a clear difference between you and the President on the use of nuclear powerplants, which you say you would use as a last priority. Why, Sir? Are they unsafe?

MR. CARTER. Well, among my other experiences in the past I've been a nuclear engineer, and I did graduate work in this field. I think I know the capabilities and limitations of atomic power.

But the energy policy of our Nation is one that has not yet been established under this administration. I think almost every other developed nation in the world has an energy policy except us.

We have seen the Federal Energy Agency [Administration] established, for instance, in the crisis of 1973. It was supposed to be a temporary agency; now it's permanent. It's enormous; it's growing every day. And I think the Wall Street Journal reported not too long ago they have 112 public relations experts working for the Federal Energy Agency [Administration] to try to justify to the American people its own existence.

We've got to have a firm way to handle the energy question. The reorganization proposal that I've put forward is one first step. In addition to that, we need to have a realization that we've got about 35 years worth of oil left in the whole world. We are going to run out of oil. When Mr. Nixon made his famous speech on operation independence, we were importing about 35 percent of our oil. Now we've increased that amount 25 percent. We now import about 44 percent of our oil.

We need a shift from oil to coal. We need to concentrate our research and development effort on coalburning and extraction that's safe for miners, that also is clean burning. We need to shift very strongly toward solar energy and have strict conservation measures and then, as a last resort only, continue to use atomic power.

I would certainly not cut out atomic power altogether. We can't afford to give up that opportunity until later. But to the extent that we continue to use atomic power, I would be responsible as President to make sure that the safety precautions were initiated and maintained. For instance, some that have been forgotten: We need to have the reactor core below ground level, the entire power plant that uses atomic power tightly sealed, and a heavy vacuum maintained. There ought to be a standardized design. There ought to be a full-time atomic energy specialist, independent of the power company, in the control room full-time, 24 hours a day, to shut down a plant if an abnormality develops. These kinds of procedures, along with evacuation procedures, adequate insurance, ought to be initiated.

So, shift from oil to coal; emphasize research and development on coal use and also on solar power; strict conservation measures--not yield every time the special interest groups put pressure on the President, like this administration has done; and use atomic energy only as a last resort with the strictest possible safety precautions. That's the best overall energy policy in the brief time we have to discuss it.

MR. REYNOLDS. Well, Governor, on the same subject, would you require mandatory conservation efforts to try to conserve fuel?

MR. CARTER. Yes, I would. Some of the things that can be done about this is a change in the rate structure of electric power companies. We now encourage people to waste electricity by giving the lowest rates to the biggest users. We don't do anything to cut down on peak load requirements. We don't have an adequate requirement for the insulation of homes, for the efficiency of automobiles. And whenever the automobile manufacturers come forward and say they can't meet the limits that the Congress has put forward, this Republican administration has delayed the implementation dates.

In addition to that, we ought to have a shift to the use of coal, particularly in the Appalachian regions where the coal is located--a lot of very high-quality, low-carbon coal--I mean low-sulfur coal is there--it's where our employment is needed. This would help a great deal.

So, mandatory conservation measures, yes. Encouragement by the President for people to voluntarily conserve, yes. And also the private sector ought to be encouraged to bring forward to the public the benefits from efficiency. One bank in Washington, for instance, gives lower interest loans for people who adequately insulate their homes or who buy efficient automobiles. And some major manufacturing companies, like Dow Chemical, have, through very effective efficiency mechanisms, cut down the use of energy by as much as 40 percent with the same out-product.

These kind of things ought to be done; they ought to be encouraged and supported and even required by the Government, yes.

THE MODERATOR. President Ford.

THE PRESIDENT. Governor Carter skims over a very serious and a very broad subject. In January of 1975, I submitted to the Congress and to the American people the first comprehensive energy program recommended by any President. It called for an increase in the production of energy in the United States. It called for conservation measures so that we would save the energy that we have.

If you are going to increase domestic oil and gas production--and we have to--you have to give to those producers an opportunity to develop their land or their wells. I recommended to the Congress that we should increase coal production in this country from 600 million tons a year to 1,200 million tons by 1985. In order to do that, we have to improve our extraction of coal from the ground; we have to improve our utilization of coal, make it more efficient, make it cleaner.

In addition, we have to expand our research and development. In my program for energy independence, we have increased, for example, solar energy research from about $84 million a year to about $120 million a year. We are going as fast as the experts say we should. In nuclear power we have increased the research and development under the Energy Research and Development Agency [Administration] very substantially to ensure that our nuclear powerplants are safer, that they are more efficient, and that we have adequate safeguards.

I think you have to have greater oil and gas production, more coal production, more nuclear production, and in addition, you have to have energy conservation.


MR. GANNON. Mr. President, I'd like to return for a moment to this problem of unemployment. You have vetoed or threatened to veto a number of jobs bills passed or in development in the Democratic-controlled Congress. Yet, at the same time, the Government is paying out, I think it is, $17 billion, perhaps $2O billion, a year in unemployment compensation caused by the high unemployment. Why do you think it is better to pay out unemployment compensation to idle people than to put them to work in public service jobs?

THE PRESIDENT. The bills that I've vetoed, the one for an additional $6 billion was not a bill that would have solved our unemployment problems. Even the proponents of it admitted that no more than 400,000 jobs would be made available. Our analysis indicates that something in the magnitude of about 150 to 200,000 jobs would be made available. Each one of those jobs would have cost the taxpayer $25,000. In addition, the jobs would not be available right now; they would not have materialized for about 9 to 18 months.

The immediate problem we have is to stimulate our economy now so that we can get rid of unemployment. What we have done is to hold the lid on spending in an effort to reduce the rate of inflation. And we have proven, I think very conclusively, that you can reduce the rate of inflation and increase jobs.

For example, as I have said, we have added some 4 million jobs in the last 17 months. We have now employed 88 million people in America--the largest number in the history of the United States. We've added 500,000 jobs in the last 2 months.

Inflation is the quickest way to destroy jobs. And by holding the lid on Federal spending, we have been able to do a good job, an affirmative job in inflation and, as a result, have added to the jobs in this country.

I think it's also appropriate to point out that through our tax policies we have stimulated added employment throughout the country--the investment tax credit, the tax incentives for expansion and modernization of our industrial capacity. It's my opinion that the private sector, where five out of the six jobs are, where you have permanent jobs with the opportunity for advancement, is a better place than make-work jobs under the program recommended by the Congress.

MR. GANNON. Just to follow up, Mr. President, the Congress has just passed a $3.7 billion appropriation bill which would provide money for the public works jobs program that you earlier tried to kill by your veto of the authorization legislation.

In light of the fact that unemployment again is rising or has in the past 3 months, I wonder if you have rethought that question at all, whether you would consider allowing this program to be funded, or will you veto that money bill?

THE PRESIDENT. Well, that bill has not yet come down to the Oval Office so I am not in a position to make any judgment on it tonight. But that is an extra $4 billion that would add to the deficit, which would add to the inflationary I pressures, which would help to destroy jobs in the private sector, not make jobs where the jobs really are. These make-work, temporary jobs, dead end as they are, are not the kind of jobs that we want for our people.

I think it's interesting to point out that in the 2 years that I've been President, I've vetoed 56 bills. Congress has sustained 42 vetoes. As a result we have saved over $9 billion in Federal expenditures. And the Congress--by overriding the bills that I did veto--the Congress has added some $13 billion to the Federal expenditures and to the Federal deficit.

Now, Governor Carter complains about the deficits that this administration has had, and yet he condemns the vetoes that I have made that have saved the taxpayer $9 billion and could have saved an additional $13 billion. Now, he can't have it both ways. And, therefore, it seems to me that we should hold the lid as we have to the best of our ability so we can stimulate the private economy and get the jobs where the jobs are--five out of six--in this economy.

THE MODERATOR. Governor Carter.

MR. CARTER. Well, Mr. Ford doesn't seem to put into perspective the fact that when 500,000 more people are out of work then there were 3 months ago, where we have 2 million more people out of work than were when he took office, that this touches human beings.

I was in a city in Pennsylvania not too long ago near here, and there were about 4,000 or 5,000 people in the audience--it was on a train trip--and I said, "How many adults here are out of work?" About a thousand raised their hands.

Mr. Ford actually has fewer people now in the private sector in nonfarm jobs than when he took office, and still he talks about a success; 7.9 percent unemployment is a terrible tragedy in this country.

He says he has learned how to match unemployment with inflation. That's right. We've got the highest inflation we've had in 25 years right now--except under this administration--and that was 50 years ago-and we've got the highest unemployment we've had under Mr. Ford's administration since the Great Depression. This affects human beings. And his insensitivity in providing those people a chance to work has made this a welfare administration and not a work administration.

He hasn't saved $9 billion with his vetoes. It has only been a net saving of $4 billion. And the cost in unemployment compensation, welfare compensation, and lost revenues has increased $23 billion in the last 2 years. This is a typical attitude that really causes havoc in people's lives. And then it's covered over by saying that our country has naturally got a 6-percent unemployment rate or 7-percent unemployment rate and a 6-percent inflation. It's a travesty. It shows a lack of leadership. And we've never had a President since the War Between the States that vetoed more bills. Mr. Ford has vetoed four times as many bills as Mr. Nixon, per year, and 11 of them have been overridden. One of his bills that was overridden--he only got one vote in the Senate and seven votes in the House from Republicans. So, this shows a breakdown in leadership.

THE MODERATOR. Governor Carter, under the rules I must stop you. Mrs. Drew.

Ms. DREW. Governor Carter, I'd like to come back to the subject of taxes. You have said that you want to cut taxes for the middle- and lower-income groups.

MR. CARTER. Right.

Ms. DREW. But unless you are Willing to do such things as reduce the itemized deductions for charitable contributions or home mortgage payments or interest or taxes or capital gains, you can't really raise sufficient revenue to provide an overall tax cut of any size. So, how are you going to provide that tax relief that you are talking about?

MR. CARTER. Now we have such a grossly unbalanced tax system, as I said earlier, that it is a disgrace. Of all the tax benefits now, 25 percent of them go to the 1 percent of the richest people in this country. Over 50 percent--53 to be exact--percent of the tax benefits go to the 14 percent richest people in this country.

We've had a 50-percent increase in payroll deductions since Mr. Nixon went in office 8 years ago. Mr. Ford has advocated, since he has been in office, over $5 billion in reductions for corporations, special interest groups, and the very, very wealthy, who derive their income not from labor, but from investments.

That has got to be changed. A few things that can be done: We have now a deferral system so that the multinational corporations, who invest overseas, if they make $1 million in profits overseas, they don't have to pay any of their taxes unless they bring their money back into this country. Where they don't pay their taxes, the average American pays their taxes for them. Not only that but it robs this country of jobs because instead of coming back with that million dollars and creating a shoe factory, say, in New Hampshire or Vermont, if the company takes the money down to Italy and builds a shoe factory, they don't have to pay any taxes on the money.

Another thing is a system called DISC [Domestic International Sales Corporation], which was originally designed and proposed by Mr. Nixon, to encourage exports. This permits a company to create a dummy corporation to export their products and then not to pay the full amount of taxes on them. This costs our Government about $1.4 billion a year, and when those rich corporations don't pay that tax, the average American taxpayer pays it for them.

Another one that is very important is the business deductions. Jet airplanes, first-class travel, the $50 martini lunch--the average working person can't take advantage of that, but the wealthier people can.

Another system is where a dentist can invest money in, say, raising cattle and can put in $100,000 of his own money, borrow $900,000--$900,000, that makes a million--and mark off a great amount of loss through that procedure. There was one example, for instance, where somebody produced pornographic movies. They put in $30,000 of their own money and got $120,000 in tax savings.

These special kinds of programs have robbed the average taxpayer and have benefited those who are powerful and who can employ lobbyists and who can have their C.P.A.'s and their lawyers to help them benefit from the roughly 8,000 pages of the tax code. The average American person can't do it. You can't hire a lobbyist out of unemployment compensation checks.

Ms. DREW. Governor, to follow up on your answer, in order for any kind of tax relief to really be felt by the middle- and lower-income people, according to congressional committees on this, you need about $10 billion. Now, you listed some things. The deferral on foreign income is estimated it would save about $500 million. DISC, you said, was $1.4 billion. The estimate of the outside, if you eliminated all tax shelters, is $5 billion.

So, where else would you raise the revenue to provide this tax relief? Would you, in fact, do away with all business deductions, and what other kinds of preferences would you do away with?

MR. CARTER. No, I wouldn't do away with all business deductions. I think that would be a very serious mistake. But if you could just do away with the

ones that are unfair, you could lower taxes for everyone. I would never do anything that would increase the taxes for those who work for a living or who are presently required to list all their income.

What I want to do is not to raise taxes, but to eliminate loopholes. And this is the point of my first statistic that I gave you, that the present tax benefits that have been carved out over a long period of years--50 years--by sharp tax lawyers and by lobbyists, have benefited just the rich. These programs that I described to you earlier--the tax deferrals for overseas, the DISC, and the tax shelters--they only apply to people in the $50,000-a-year bracket or up. And I think this is the best way to approach it, is to make sure that everybody pays taxes on the income that they earn and make sure that you take whatever savings there is from the higher income levels and give it to the lower- and middle-income families.

THE MODERATOR. President Ford.

THE PRESIDENT. Governor Carter's answer tonight does not coincide with the answer that he gave in an interview to the Associated Press a week or so ago. In that interview Governor Carter indicated that he would raise the taxes on those in the medium- or middle-income brackets or higher. Now, if you take the medium- or middle-income taxpayer--that's about $14,000 per person--Governor Carter has indicated, publicly, in an interview, that he would increase the taxes on about 50 percent of the working people of this country.

I think the way to get tax equity in this country is to give tax relief to the middle-income people who have an income from roughly $8,000 up to $25 or $30,000. They have been shortchanged as we have taken 10 million taxpayers off the tax rolls in the last 8 years and as we have added to the minimum tax provision to make all people pay more taxes.

I believe in tax equity for the middle-income taxpayer--increasing the personal exemption. Mr. Carter wants to increase taxes for roughly half of the taxpayers of this country.

Now, the Governor has also played a little fast and loose with the facts about vetoes. The records show that President Roosevelt vetoed on an average of 55 bills a year. President Truman vetoed on the average, while he was President, about 38 bills a year. I understand that Governor Carter, when he was Governor of Georgia, vetoed between 35 and 40 bills a year. My average in 2 years is 26, but in the process of that, we have saved $9 billion.

And one final comment. Governor Carter talks about the tax bills and all of the inequities that exist in the present law. I must remind him the Democrats have controlled the Congress for the last 22 years, and they wrote all the tax bills.

THE MODERATOR. Mr. Reynolds.

MR. REYNOLDS. I suspect that we could continue on this tax argument for some time, but I'd like to move on to another area.

Mr. President, everybody seems to be running against Washington this year, and I'd like to raise two coincidental events, then ask you whether you think perhaps this may have a bearing on the attitude throughout the country.

The House Ethics Committee has just now ended its investigation of Daniel Schorr, after several months and many thousands of dollars, trying to find out

how he obtained and caused to be published a report of the Congress that probably is the property of the American people. At the same time the Senate Select Committee on Standards and Conduct has voted not really to begin an investigation of a United States Senator because of allegations against him that he may have been receiving corporate funds illegally over a period of years.

Do you suppose, Sir, that events like this contribute to the feeling in the country that maybe there is something wrong in Washington, and I don't mean just in the executive branch, but throughout the whole Government?

THE PRESIDENT. There is a considerable anti-Washington feeling throughout the country but I think the feeling is misplaced. In the 2 years we have restored integrity in the White House and we have set high standards in the executive branch of the Government.

The anti-Washington feeling, in my opinion, ought to be focused on the Congress of the United States. For example, this Congress very shortly will spend a billion dollars a year for its housekeeping, its salaries, its expenses, and the like. The next Congress will probably be the first billion dollar Congress in the history of the United States. I don't think the American people are getting their money's worth from the majority party that runs this Congress.

We, in addition, see that in the last 4 years the number of employees hired by the Congress has gone up substantially, much more than the gross national product, much more than any other increase throughout our society. Congress is hiring people by the droves, and the cost, as a result, has gone up.

And I don't see any improvement in the performance of the Congress under the present leadership. So, it seems to me, instead of the anti-Washington feeling being aimed at everybody in Washington, it seems to me that the focus should be where the problem is, which is the Congress of the United States, and particularly the majority in the Congress.

They spend too much money on themselves. They have too many employees. There is some question about their morality. It seems to me that in this election the focus should not be on the executive branch, but the correction should come as the voters for their Members of the House of Representatives or for their United States Senator. That's where the problem is. And I hope there will be some corrective action taken, so we can get some new leadership in the Congress of the United States.

MR. REYNOLDS. Mr. President, if I may follow up, I think you have made it plain that you take a dim view of the majority in the Congress. Isn't it quite likely, sir, that you will have a Democratic Congress in the next session if you are elected President, and hasn't the country a right to ask whether you can get along with that Congress or whether we will have continued confrontation?

THE PRESIDENT. Well, it seems to me that we have a chance, the Republicans, to get a majority in the House of Representatives. We will make some gains in the United States Senate. So there will be different ratios in the House as well as in the Senate, and as President I will be able to work with that Congress.

But let me take the other side of the coin, if I might. Supposing we had had a Democratic Congress for the last 2 years and we had had Governor Carter as President. He has, in effect, said that he would agree with all of--he would disapprove of the vetoes that I have made and would have added significantly to expenditures and the deficit in the Federal Government. I think it would be contrary to one of the basic concepts in our system of government, a system of checks and balances.

We have a Democratic Congress today, and fortunately, we've had a Republican President to check their excesses with my vetoes. If we have a Democratic Congress next year and a President who wants to spend an additional $100 billion a year or maybe $200 billion a year, with more programs, we will have, in my judgment, greater deficits with more spending, more dangers of inflation.

I think the American people want a Republican President to check on any excesses that come out of the next Congress if it is a Democratic Congress.

THE MODERATOR. Governor Carter.

MR. CARTER. Well, it's not a matter of Republican and Democrat; it's a matter of leadership or no leadership. President Elsenhower worked with a Democratic Congress very well. Even President Nixon, because he was a strong leader, at least, worked with a Democratic Congress very well.

Mr. Ford has vetoed, as I said earlier, four times as many bills per year as Mr. Nixon. Mr. Ford quite often puts forward a program just as a public relations stunt and never tries to put it through the Congress by working with the Congress. I think under President Nixon and Eisenhower--they passed about 60 to 75 percent of their legislation. This year Mr. Ford will not pass more than 26 percent of all the legislative proposals he puts forward.

This is government by stalemate. And we've seen almost a complete breakdown in the proper relationship between the President, who represents this country, and the Congress, who, collectively, also represent this country.

We've had Republican Presidents before who have tried to run against a Democratic Congress. And I don't think it's--the Congress is Mr. Ford's opponent. But if he insists that I be responsible for the Democratic Congress, of which I have not been a part, then I think it's only fair that he be responsible for the Nixon administration in its entirety, of which he was a part. That, I think, is a good balance.

But the point is that a President ought to lead this country. Mr. Ford, so far as I know, except for avoiding another Watergate, has not accomplished one single major program for his country. And there has been a constant squabbling between the President and the Congress, and that's not the way this country ought to be run.

I might go back to one other thing. Mr. Ford has misquoted an AP news story that was in error to begin with. That story reported several times that I would lower taxes for lower- and middle-income families, and that correction was delivered to the White House. And I am sure that the President knows about this correction, but he still insists on repeating an erroneous statement.

THE MODERATOR. President Ford, Governor Carter, we no longer have enough time for two complete sequences of questions. We have only about 6 minutes left for questions and answers. For that reason we will drop the follow-up questions at this point, but each candidate will still be able to respond to the other's answers.

To the extent that you can, gentlemen, please keep your remarks brief.

MR. GANNON. Governor Carter, one important part of the Government's economic policy apparatus we haven't talked about is the Federal Reserve Board. I would like to ask you something about what you have said, and that is that you believe that a President ought to have a Chairman of the Federal Reserve Board whose views arc compatible with his own.

Based on the record of the last few years, would you say that your views are compatible with those of Chairman Arthur Burns, and if not, would you seek his resignation if you are elected?

MR. CARTER. What I have said is that the President ought to have a chance to appoint the Chairman of the Federal Reserve Board to have a coterminus term; in other words, both of them serve the same 4 years.

The Congress can modify the supply of money by modifying the income tax laws. The President can modify the economic structure of the country by public statements and general attitudes and the budget that he proposes. The Federal Reserve has an independent status that ought to be preserved.

I think that Mr. Burns did take a typical erroneous Republican attitude in the 1973 year when inflation was so high. He assumed that the inflation rate was because of excessive demand and, therefore, put into effect tight constraint on the economy, very high interest rates--which is typical, also, of a Republican administration--tried to increase the tax payments by individuals, cut the tax payments by corporations. I would have done it opposite. I think the problem should have been addressed by increasing productivity, by having put people back to work so they could purchase more goods, lower income taxes on individuals, perhaps raise them if necessary on corporations in comparison. But Mr. Burns in that respect made a very serious mistake.

I would not want to destroy the independence of the Federal Reserve Board. But I do think we ought to have a cohesive economic policy with at least the Chairman of the Federal Reserve Board and the President's terms being the same and letting the Congress of course be the third entity with independence, subject only to the President's veto.

THE MODERATOR. President Ford, your response.

THE PRESIDENT. The Chairman of the Federal Reserve Board should be independent. Fortunately, he has been during Democratic as well as Republican administrations. As a result, in the last 2 years we have had a responsible monetary policy.

The Federal Reserve Board indicated that the supply of money would be held between 4 to 4 1/2, and 7 and 7 1/2. They have done a good Job in integrating the money supply with the fiscal policy of the executive and legislative branches of the Government.

It would be catastrophic if the Chairman of the Federal Reserve Board became the tool of the political party that was in power. It's important for our future economic security that that job be nonpolitical and separate from the executive and the legislative branches.


Ms. DREW. Mr. President, the real problem with the FBI--in fact, all of the intelligence agencies--is there are no real laws governing them. Such laws as there are tend to be vague and open-ended. Now, you have issued some Executive orders, but we have learned that leaving these agencies to executive discretion and direction can get them and in fact the country in a great deal of trouble. One President may be a decent man, the next one might not be.

So, what do you think about trying to write in some more protection by getting some laws governing these agencies?

THE PRESIDENT. You are familiar, of course, with the fact that I am the first President in 30 years who has reorganized the intelligence agencies in the Federal Government--the CIA, the Defense Intelligence Agency, the National Security Agency, and the others. We've done that by Executive order. And I think we've tightened it up; we've straightened out their problems that developed over the last few years. It doesn't seem to me that it's needed or necessary to have legislation in this particular regard.

I have recommended to the Congress, however--I'm sure you are familiar with this--legislation that would make it very proper and in the right way that the Attorney General could go in and get the right for wiretapping under security cases. This was an effort that was made by the Attorney General and myself working with the Congress. But even in this area where I think new legislation would be justified, the Congress has not responded.

So, I feel in that case as well as in the reorganization of the intelligence agencies--as I've done--we have to do it by Executive order. And I'm glad that we have a good Director in George Bush; we have good Executive orders.

And the CIA and the DIA and NSA are now doing a good job under proper supervision.

THE MODERATOR. Governor Carter.

MR. CARTER. Well, one of the very serious things that's happened in our Government in recent years and has continued up until now is a breakdown in the trust among our people in the . . .

[At this point, there was an audio failure which caused a delay in the debate until 11:18 p.m.]

THE MODERATOR. Ladies and gentlemen, probably it is not necessary for me to say that we had a technical failure during the debates. It was not a failure in the debate; it was a failure in the broadcasting of the debate. It occurred 27 minutes ago. The fault has been dealt with, and we want to thank President Ford and Governor Carter for being so patient and understanding while this delay went on.

We very much regret the technical failure that lost the sound as it was leaving the theatre. It occurred during Governor Carter's response to what would have been and what was the last question put to the candidates. That question went to President Ford. It dealt with the control of Government intelligence agencies. Governor Carter was making his response and had very nearly finished it. He will conclude that response now, after which President Ford and Governor Carter will make their closing statements.

MR. CARTER. There has been too much Government secrecy and not enough respect for the personal privacy of American citizens.

THE MODERATOR. It is now time for the closing statements which are to be up to 4 minutes long.

Governor Carter, by the same toss of the coin that directed the first question to you, you are to go first now.

MR. CARTER. Well, tonight, we've had a chance to talk a lot about the past, but I think it is time to talk about the future. Our Nation in the last 8 years has been divided as never before. It's a time for unity. It is time to draw ourselves together, to have a President and a Congress that can work together with mutual respect for a change, cooperating for a change, in the open for a change, so the people can understand their own Government. It is time for Government, industry and labor, manufacturing, agriculture, education, other entities in our society to cooperate. And it's a time for Government to understand and to cooperate with our people.

For a long time our American citizens have been excluded, sometimes misled, sometimes have been lied to. This is not compatible with the purpose of our Nation. I believe in our country. It needs to be competent, the Government needs to be well managed, efficient, economical. We need to have a Government that's sensitive to our people's need's, to those who are poor, who don't have adequate health care, who have been cheated too long by our tax programs, who've been out of jobs, whose families have been torn apart. We need to restore the faith and the trust of the American people in their own Government.

In addition to that, we've suffered because we haven't bad leadership in this administration. We have got a Government of stalemate. We've lost the vision of what our country can and ought to be. This is not the America that we've known in the past. It's not the America that we have to have in the future.

I don't claim to know all the answers, but I've got confidence in my country. Our economic strength is still there. Our system of government, in spite of Vietnam, Cambodia, CIA, Watergate, is still the best system of government on Earth. And the greatest resource of all are the 215 million Americans who still have within us the strength, the character, the intelligence, the experience, the patriotism, the idealism, the compassion, the sense of brotherhood on which we can rely in the future to restore the greatness to our country.

We ought not to be excluded from our Government anymore. We need a President that can go in who derives his strength from the people. I owe the special interests nothing. I owe everything to you, the people of this country. And I believe that we can bind our wounds. I believe that we can work together. And I believe that if we can tap the tremendous untapped reservoir of innate strength in this country, that we can once again have a Government as good as our people and let the world know what we still know and hope for--that we still 1ive in the greatest and the strongest and the best country on Earth.

THE MODERATOR. President Ford.

THE PRESIDENT. On November 2 all of you will make a very, very important decision. One of the major issues in this campaign is trust. A President should never promise more than he can deliver, and a President should always deliver everything that he has promised. A President can't be all things to all people. A President should be the same thing to all people.

Another issue in this campaign: Governor Carter has endorsed the Democratic platform, which calls for more spending, bigger deficits, more inflation, or more taxes. Governor Carter has embraced the record of the present Congress, dominated by his political party. It calls for more of the same. Governor Carter in his acceptance speech called for more and more programs, which means more and more Government. I think the real issue in this campaign--and that which you must decide on November 2--is whether you should vote for his promises or my performance in 2 years in the White House.

On the Fourth of July, we had a wonderful 200th birthday for our great country. It was a superb occasion. It was a glorious day.

In the first century of our Nation's history, our forefathers gave us the finest form of government in the history of mankind. In the second century of our Nation's history, our forefathers developed the most productive industrial nation in the history of the globe. Our third century should be the century of individual freedom for all our 215 million Americans today and all that join us.

In the last few years government has gotten bigger and bigger; industry has gotten larger and larger; labor unions have gotten bigger and bigger; and our children have been the victims of mass education.

We must make this next century, the century of the individual. We should never forget that a government big enough to give us everything we want is a government big enough to take from us everything we have.

The individual worker in the plants throughout the United States should not be a small cog in a big machine. The member of a labor union must have his rights strengthened and broadened, and our children in their education should have an opportunity to improve themselves based on their talents and their abilities.

My mother and father, during the Depression, worked very hard to give me an opportunity to do better in our great country. Your mothers and fathers did the same thing for you and others. Betty and I have worked very hard to give our children a brighter future in the United States, our beloved country. You and others in this great country have worked hard and done a great deal to give your children and your grandchildren the blessings of a better America.

I believe we can all work together to make the individuals in the future have more, and all of us working together can build a better America.

THE MODERATOR. Thank you, President Ford. Thank you, Governor Carter. Our thanks also to the questioners and to the audience in this theatre. We much regret the technical failure that caused a 28-minute delay in the broadcast of the debate. We believe, however, that everyone will agree that it did not detract from the effectiveness of the debate or from its fairness.

The next Presidential debate is to take place on Wednesday, October 6, in San Francisco, at 9:30 p.m., eastern daylight time. The topics are to be foreign and defense issues. As with all three debates between the Presidential candidates and the one between the Vice-Presidential candidates, it is being arranged by the League of Women Voters Education Fund in the hope of promoting a wider and better informed participation by the American people in the election in November.

Now, from the Walnut Street Theatre in Philadelphia, good night.

Note: The debate began at 9:31 p.m. at the Walnut Street Theatre in Philadelphia, Pa. It was broadcast live on radio and television.

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