The Carter-Reagan Presidential Debate:
October 28, 1980

RUTH HINERFELD, LEAGUE OF WOMEN VOTERS, EDUCATION FUND: Good evening. I'm Ruth Hinerfeld of the League of Women Voters Education Fund. Next Tuesday is Election Day. Before going to the polls, voters want to understand the issues and know the candidates' positions. Tonight, voters will have an opportunity to see and hear the major party candidates for the Presidency state their views on issues that affect us all. The League of Women Voters is proud to present this Presidential Debate. Our moderator is Howard K. Smith.

MR. SMITH, ABC NEWS: Thank you, Mrs. Hinerfeld. The League of Women Voters is pleased to welcome to the Cleveland, Ohio, Convention Center Music Hall President Jimmy Carter. the Democratic Party's candidate for reelection to the Presidency. and Governor Ronald Reagan of California, the Republican Party's candidate for the Presidency. The candidates will debate questions on domestic, economic, foreign policy, and national security issues. The questions are going to be posed by a panel of distinguished journalists who are here with me. They are: Marvin Stone, the editor of U.S. News & World Report; Harry Ellis, national correspondent of the Christian Science Monitor; William Hilliard, assistant managing editor of the Portland Oregonian; Barbara Walters, correspondent, ABC News. The ground rules for this, as agreed by you gentlemen, are these: Each panelist down here will ask a question, the same question, to each of the two candidates. After the two candidates have answered, a panelist will ask follow-up questions to try to sharpen the answers. The candidates will then have an opportunity each to make a rebuttal. That will constitute the first half of the debate, and I will state the rules for the second half later on. Some other rules: The candidates are not permitted to bring prepared notes to the podium, but are permitted to make notes during the debate. If the candidates exceed the allotted time agreed on, I will reluctantly but certainly interrupt. We ask the Convention Center audience here to abide by one ground rule. Please do not applaud or express approval or disapproval during the debate. Now, based on the toss of the coin, Governor Reagan will respond to the first question from Marvin Stone.

MARVIN STONE, U.S. NEWS AND WORLD REPORT: Governor, as you're well aware, the question of war and peace has emerged as a central issue in this campaign in the give and take of recent weeks. President Carter has been criticized for responding late to aggressive Soviet impulses, for insufficient build-up of our armed forces. and a paralysis in dealing with Afghanistan and Iran. You have been criticized for being all too quick to advocate the use of lots of muscle - military action - to deal with foreign crises. Specifically, what are the differences between the two of you on the uses of American military power?

MR. REAGAN: I don't know what the differences might be, because I don't know what Mr. Carter's policies are. I do know what he has said about mine. And I'm only here to tell you that I believe with all my heart that our first priority must be world peace, and that use of force is always and only a last resort, when everything else has failed, and then only with regard to our national security. Now, I believe, also, that this meeting this mission, this responsibility for preserving the peace, which I believe is a responsibility peculiar to our country, and that we cannot shirk our responsibility as a leader of the free world because we're the only ones that can do it. Therefore, the burden of maintaining the peace falls on us. And to maintain that peace requires strength. America has never gotten in a war because we were too strong. We can get into a war by letting events get out of hand, as they have in the last three and a half years under the foreign policies of this Administration of Mr. Carter's, until we're faced each time with a crisis. And good management in preserving the peace requires that we control the events and try to intercept before they become a crisis. I have seen four wars in my lifetime. I'm a father of sons; I have a grandson. I don't ever want to see another generation of young Americans bleed their lives into sandy beachheads in the Pacific, or rice paddies and jungles in the in Asia or the muddy battlefields of Europe.

MR. SMITH: Mr. Stone, do you have a follow-up question for the Governor?

MR. STONE: Yes. Governor, we've been hearing that the defense build-up that you would associate yourself with would cost tens of billions of dollars more than is now contemplated. Assuming that the American people are ready to bear this cost, they nevertheless keep asking the following question: How do you reconcile huge increases in military outlays with your promise of substantial tax cuts and of balancing the budget, which in this fiscal year, the one that just ended, ran more than $60 billion in the red?

MR. REAGAN: Mr. Stone, I have submitted an economic plan that I have worked out in concert with a number of fine economists in this country, all of whom approve it, and believe that over a five year projection, this plan can permit the extra spending for needed refurbishing of our defensive posture, that it can provide for a balanced budget by 1983 if not earlier, and that we can afford - along with the cuts that I have proposed in Government. spending - we can afford the tax cuts I have proposed and probably mainly because Mr. Carter's economic policy has built into the next five years, and on beyond that, a tax increase that will be taking $86 billion more out of the people's pockets than was taken this year. And my tax cut does not come close to eliminating that $86 billion increase. I'm only reducing the amount of the increase. In other words, what I'm talking about is not putting government back to getting less money than government's been getting, but simply cutting the increase in in spending.

MR. SMITH: The same question now goes to President Carter. President Carter, would you like to have the question repeated?

MR. STONE: Yes, President Carter, the question of war and peace, a central issue in this campaign. You've been criticized for, in the give and take, for responding late to aggressive Soviet impulses, for an insufficient build-up of our armed forces, and a paralysis in dealing with Afghanistan and Iran. Governor Reagan, on the other hand, has been criticized for being all too quick to advocate the use of lots of muscle - military action - to deal with foreign crises such as I have mentioned. Specifically, what are the differences between the two of you on the uses of American military power?

MR. CARTER: Mr. Stone, I've had to make thousands of decisions since I've been President, serving in the Oval Office. And with each one of those decisions that affect the future of my country, I have learned in the process. I think I'm a much wiser and more experienced man than I was when I debated four years ago against President Ford. I've also learned that there are no simple answers to complicated questions. H. L. Mencken said that for every problem there's a simple answer. It would be neat and plausible and wrong. The fact is that this nation, in the eight years before I became President, had its own military strength decreased. Seven out of eight years, the budget commitments for defense went down, 37% in all. Since I've been in office, we've had a steady, carefully planned, methodical but, very effective increase in our commitment for defense. But what we've done is use that enormous power and prestige and military strength of the United States to preserve the peace. We've not only kept peace for our own country, but we've been able to extend the benefits of peace to others. In the Middle East, we've worked for a peace treaty between Israel and Egypt, successfully, and have tied ourselves together with Israel and Egypt in a common defense capability. This is a very good step forward for our nation's security, and we'll continue to do as we have done in the past. I might also add that there are decisions that are made in the Oval Office by every President which are profound in nature. There are always trouble spots in the world, and how those troubled areas are addressed by a President alone in that Oval Office affects our nation directly, the involvement of the United States and also our American interests. That is a basic decision that has to be made so frequently, by every President who serves. That is what I have tried to do successfully by keeping our country at peace.

MR. SMITH: Mr. Stone, do you have a follow-up for?

MR. STONE: Yes. I would like to be a little more specific on the use of military power and let's talk about one area for a moment. Under what circumstances would you use military forces to deal with, for example, a shut-off of the Persian Oil Gulf [sic] if that should occur, or to counter Russian expansion beyond Afghanistan into either Iran or Pakistan? I ask this question in view of charges that we are woefully unprepared to project sustained - and I emphasize the word sustained - power in that part of the world.

MR. CARTER: Mr. Stone, in my State of the Union address earlier this year, I pointed out that any threat to the stability or security of the Persian Gulf would be a threat to the security of our own country. In the past, we have not had an adequate military presence in that region. Now we have two major carrier task forces. We have access to facilities in five different areas of that region. And we've made it clear that working with our allies and others, that we are prepared to address any foreseeable eventuality which might interrupt commerce with that crucial area of the world. But in doing this, we have made sure that we address this question peacefully, not injecting American military forces into combat, but letting the strength of our nation be felt in a beneficial way. This, I believe, has assured that our interests will be protected in the Persian Gulf region, as we have done in the Middle East and throughout the world.

MR. SMITH: Governor Reagan, you have a minute to comment or rebut.

MR. REAGAN: Well yes, I question the figure about the decline in defense spending under the two previous Administrations in the preceding eight years to this Administration. I would call to your attention that we were in a war that wound down during those eight years, which of course made a change in military spending because of turning from war to peace. I also would like to point out that Republican presidents in those years, faced with a Democratic majority in both houses of the Congress, found that their requests for defense budgets were very often cut. Now, Gerald Ford left a five-year projected plan for a military build-up to restore our defenses, and President Carter's administration reduced that by 38%, cut 60 ships out of the Navy building program that had been proposed, and stopped the the B-l, delayed the cruise missile, stopped the production line for the Minuteman missile, stopped the Trident or delayed the Trident submarine, and now is planning a mobile military force that can be delivered to various spots in the world which does make me question his assaults on whether I am the one who is quick to look for use of force.

MR. SMITH: President Carter, you have the last word on this question.

MR. CARTER: Well, there are various elements of defense. One is to control nuclear weapons, which I hope we'll get to later on because that is the most important single issue in this campaign. Another one is how to address troubled areas of the world. I think, habitually, Governor Reagan has advocated the injection of military forces into troubled areas, when I and my predecessors - both Democrats and Republicans - have advocated resolving those troubles in those difficult areas of the world peacefully, diplomatically, and through negotiation. In addition to that, the build-up of military forces is good for our country because we've got to have military strength to preserve the peace. But I'll always remember that the best weapons are the ones that are never fired in combat, and the best soldier is one who never has to lay his life down on the field of battle. Strength is imperative for peace, but the two must go hand in hand.

MR. SMITH: Thank you gentlemen. The next question is from Harry Ellis to President Carter.

MR. ELLIS, CHRISTIAN SCIENCE MONITOR: Mr. President, when you were elected in 1976, the Consumer Price Index stood at 4.8%. It now stands at more than 12%. Perhaps more significantly, the nation's broader, underlying inflation rate has gone up from 7% to 9%. Now, a part of that was due to external factors beyond U.S. control, notably the more than doubling. of oil prices by OPEC last year. Because the United States remains vulnerable to such external shocks, can inflation in fact be controlled? If so, what measures would you pursue in a second term?

MR. CARTER: Again it's important to put the situation in perspective. In 1974, we had a so-called oil shock, wherein the price of OPEC oil was raised to an extraordinary degree. We had an even worse oil shock in 1979. In 1974, we had the worst recession, the deepest and most penetrating recession since the Second World War. The recession that resulted this time was the briefest since the Second World War. In addition, we've brought down inflation. Earlier this year, in the first quarter, we did have a very severe inflation pressure brought about by the OPEC price increase. It averaged about 18% in the first quarter of this year. In the second quarter, we had dropped it down to about 13%. The most recent figures, the last three months, on the third quarter of this year, the inflation rate is 7% - still too high, but it illustrates very vividly that in addition to providing an enormous number of jobs - nine million new jobs in the last three and a half years - that the inflationary threat is still urgent on us. I notice that Governor Reagan recently mentioned the Reagan-Kemp-Roth proposal. which his own running mate, George Bush, described as voodoo economics, and said that it would result in a 30% inflation rate. And Business Week, which is not a Democratic publication, said that this Reagan-Kemp-Roth proposal - and I quote them, I think - was completely irresponsible and would result in inflationary pressures which would destroy this nation. So our proposals are very sound and very carefully considered to stimulate jobs, to improve the industrial complex of this country, to create tools for American workers, and at the same time would be anti-inflationary in nature. So to add nine million new jobs, to control inflation, and to plan for the future with an energy policy now intact as a foundation is our plan for the years ahead.

MR. SMITH: Mr. Ellis, do you have a follow-up question for Mr. Carter?

MR. ELLIS: Yes. Mr. President, you have mentioned the creation of nine million new jobs. At the same time, the unemployment rate still hangs high, as does the inflation rate. Now, I wonder, can you tell us what additional policies you would pursue in a second administration in order to try to bring down that inflation rate? And would it be an act of leadership to tell the American people they are going to have to sacrifice to adopt a leaner lifestyle for some time to come?

MR. CARTER: Yes. We have demanded that the American people sacrifice, and they have done very well. As a matter of fact, we're importing today about one-third less oil from overseas than we did just a year ago. We've had a 25% reduction since the first year I was in office. At the same time, as I have said earlier, we have added about nine million net new jobs in that period of time - a record never before achieved. Also, the new energy policy has been predicated on two factors: One is conservation, which requires sacrifice, and the other one, increase in production of American energy, which is going along very well - more coal this year than ever before in American history, more oil and gas wells drilled this year than ever before in history. The new economic revitalization program that we have in mind, which will be implemented next year, would result in tax credits which would let business invest in new tools and new factories to create even more new jobs - about one million in the next two years. And we also have planned a youth employment program which would encompass 600,000 jobs for young people. This has already passed the House, and it has an excellent prospect to pass the Senate.

MR. SMITH: Now, the same question goes to Governor Reagan. Governor Reagan, would you like to have the question repeated?

MR. ELLIS: Governor Reagan, during the past four years, the Consumer Price Index has risen from 4.8% to currently over 12%. And perhaps more significantly, the nation's broader, underlying rate of inflation has gone up from 7% to 9%. Now, a part of that has been due to external factors beyond U.S. control, notably the more than doubling of OPEC oil prices last year, which leads me to ask you whether, since the United States remains vulnerable to such external shocks, can inflation in fact be controlled? If so, specifically what measures would you pursue`?

MR. REAGAN: Mr. Ellis, I think this idea that has been spawned here in our country that inflation somehow came upon us like a plague and therefore it's uncontrollable and no one can do anything about it, is entirely spurious and it's dangerous to say this to the people. When Mr. Carter became President, inflation was 4.8%, as you said. It had been cut in two by President Gerald Ford. It is now running at 12.7%. President Carter also has spoken of the new jobs created. Well, we always, with the normal growth in our country and increase in population, increase the number of jobs. But that can't hide the fact that there are eight million men and women out of work in America today, and two million of those lost their jobs in just the last few months. Mr. Carter had also promised that he would not use unemployment as a tool to fight against inflation. And yet, his 1980 economic message stated that we would reduce productivity and gross national product and increase unemployment in order to get a handle on inflation, because in January, at the beginning of the year, it was more than 18%. Since then, he has blamed the people for inflation, OPEC, he has blamed the Federal Reserve system, he has blamed the lack of productivity of the American people, he has then accused the people of living too well and that we must share in scarcity, we must sacrifice and get used to doing with less. We don't have inflation because the people are living too well. We have inflation because the Government is living too well. And the last statement, just a few days ago, was a speech to the effect that we have inflation because Government revenues have not kept pace with Government spending. I see my time is running out here. I'll have to get this out very fast. Yes, you can lick inflation by increasing productivity and by decreasing the cost of government to the place that we have balanced budgets, and are no longer grinding out printing press money, flooding the market with it because the Government is spending more than it takes in. And my economic plan calls for that. The President's economic plan calls for increasing the taxes to the point that we finally take so much money away from the people that we can balance the budget in that way. But we will have a very poor nation and a very unsound economy if we follow that path.

MR. SMITH: A follow-up, Mr. Ellis?

MR. ELLIS: Yes. You have centered on cutting Government spending in what you have just said about your own policies. You have also said that you would increase defense spending. Specifically, where would you cut Government spending if you were to increase defense spending and also cut taxes, so that, presumably. Federal revenues would shrink?

MR. REAGAN: Well. most people, when they think about cutting Government spending, they think in terms of eliminating necessary programs or wiping out something, some service that Government is supposed to perform. I believe that there is enough extravagance and fat in government. As a matter of fact, one of the secretaries of HEW under Mr. Carter testified that he thought there was $7 billion worth of fraud and waste in welfare and in the medical programs associated with it. We've had the Central Accounting. Office estimate that there is probably tens of billions of dollars that is lost in fraud alone, and they have added that waste adds even more to that. We have a program for a gradual reduction of Government spending based on these theories, and I have a task force now that has been working on where those cuts could be made. I'm confident that it can be done and that it will reduce inflation because I did it in California. And inflation went down below the national average in California when we returned the money to the people and reduced Government spending.

MR. SMITH: President Carter.

MR. CARTER: Governor Reagan's proposal, the Reagan-Kemp-Roth proposal, is one of the most highly inflationary ideas that ever has been presented to the American public. He would actually have to cut Government spending by at least $130 billion in order to balance the budget under this ridiculous proposal. I notice that his task force that is working for his future plans had some of their ideas revealed in The Wall Street Journal this week. One of those ideas was to repeal the minimum wage, and several times this year, Governor Reagan has said that the major cause of unemployment is the minimum wage. This is a heartless kind of approach to the working families of our country, which is typical of many Republican leaders of the past, but, I think, has been accentuated under Governor Reagan. In California - I'm surprised Governor Reagan brought this up - he had the three largest tax increases in the history of that state under his administration. He more than doubled state spending while he was Governor - 122% increase - and had between a 20% and 30% increase in the number of employees

MR. SMITH: Sorry to interrupt, Mr. Carter.

MR. CARTER: in California. Thank you, sir.

MR. SMITH: Governor Reagan has the last word on this question.

MR. REAGAN: Yes. The figures that the President has just used about California is a distortion of the situation there, because while I was Governor of California, our spending in California increased less per capita than the spending in Georgia while Mr. Carter was Governor of Georgia in the same four years. The size of government increased only one-sixth in California of what it increased in proportion to the population in Georgia. And the idea that my tax-cut proposal is inflationary: I would like to ask the President why is it inflationary to let the people keep more of their money and spend it the way that they like, and it isn't inflationary to let him take that money and spend it the way he wants?

MR. SMITH: I wish that question need not be rhetorical, but it must be because we've run out of time on that. Now, the third question to Governor Reagan from William Hilliard.

WILLIAM HILLIARD, PORTLAND OREGONIAN: Yes. Governor Reagan, the decline of our cities has been hastened by the continual rise in crime, strained race relations, the fall in the quality of public education, persistence of abnormal poverty in a rich nation, and a decline in the services to the public. The signs seem to point toward a deterioration that could lead to the establishment of a permanent underclass in the cities. What, specifically, would you do in the next four years to reverse this trend?

MR. REAGAN: I have been talking to a number of Congressmen who have much the same idea that I have, and that is that in the inner city areas, that in cooperation with the local government and the national Government, and using tax incentives and with cooperating with the private sector, that we have development zones. Let the local entity, the city, declare this particular area, based on the standards of the percentage of people on welfare, unemployed, and so forth, in that area. And then, through tax incentives, induce the creation of businesses providing jobs and so forth in those areas. The elements of government through these tax incentives For example, a business that would not have, for a period of time, an increase in the property tax reflecting its development of the unused property that it was making wouldn't be any loss to the city because the city isn't getting any tax from that now. And there would simply be a delay, and on the other hand, many of the people who would then be given jobs are presently wards of the Government and it wouldn't hurt to give them a tax incentive, because they... that wouldn't be costing Government anything either. I think there are things to do in this regard. I stood in the South Bronx on the exact spot that President Carter stood on in 1977. You have to see it to believe it. It looks like a bombed-out city - great, gaunt skeletons of buildings. Windows smashed out, painted on one of them "Unkept promises;" on another, "Despair." And this was the spot at which President Carter had promised that he was going to bring in a vast program to rebuild this department. There are whole or this area there are whole blocks of land that are left bare, just bulldozed down flat. And nothing has been done, and they are now charging to take tourists there to see this terrible desolation. I talked to a man just briefly there who asked me one simple question: "Do I have reason to hope that I can someday take care of my family again? Nothing has been done."

MR. SMITH: Follow-up. Mr. Hilliard:

MR. HILLIARD: Yes. Governor Reagan. Blacks and other non-whites are increasing. in numbers in our cities. Many of them feel that they are facing a hostility from whites that prevents them from joining the economic mainstream of our society. There is racial confrontation in the schools, on jobs, and in housing, as non-whites seek to reap the benefits of a free society. What do you think is the nation's future as a multi-racial society?

MR. REAGAN: I believe in it. I am eternally optimistic, and I happen to believe that we've made great progress from the days when I was young and when this country didn't even know it had a racial problem. I know those things can grow out of despair in an inner city, when there's hopelessness at home, lack of work, and so forth. But I believe that all of us together, and I believe the Presidency is what Teddy Roosevelt said it was. It's a bully pulpit. And I think that something can be done from there, because a goal for all of us should be that one day, things will be done neither because of nor in spite of any of the differences between us - ethnic differences or racial differences, whatever they may be - that we will have total equal opportunity for all people. And I would do everything I could in my power to bring that about.

MR. SMITH: Mr. Hilliard, would you repeat your question for President Carter?

MR. HILLIARD: President Carter. the decline of our cities has been hastened by the continual rise in crime, strained race relations, the fall in the quality of public education, persistence of abnormal poverty in a rich nation, and a decline in services to the public. The signs seem to point toward deterioration that could lead to the establishment of a permanent underclass in the cities. What, specifically, would you do in the next four years to reverse this trend.

MR. CARTER: Thank you, Mr. Hilliard. When I was campaigning in 1976, everywhere I went, the mayors and local officials were in despair about the rapidly deteriorating central cities of our nation. We initiated a very fine urban renewal program, working with the mayors, the governors, and other interested officials. This has been a very successful effort. That's one of the main reasons that we've had such an increase in the number of people employed. Of the nine million people put to work in new jobs since I've been in office, 1.3 million of those has been among black Americans, and another million among those who speak Spanish. We now are planning to continue the revitalization program with increased commitments of rapid transit, mass transit. Under the windfall profits tax, we expect to spend about $43 billion in the next 10 years to rebuild the transportation systems of our country. We also are pursuing housing programs. We've had a 73% increase in the allotment of Federal funds for improved education. These are the kinds of efforts worked on a joint basis with community leaders, particularly in the minority areas of the central cities that have been deteriorating so rapidly in the past. It's very important to us that this be done with the full involvement of minority citizens. I have brought into the top level, top levels of government, into the White House, into administrative offices of the Executive branch, into the judicial system, highly qualified black and Spanish citizens and women who in the past had been excluded. I noticed that Governor Reagan said that when he was a young man that there was no knowledge of a racial problem in this country. Those who suffered from discrimination because of race or sex certainly knew we had a racial problem. We have gone a long way toward correcting these problems, but we still have a long way to go.

MR. SMITH: Follow-up question?

MR. HILLIARD: Yes. President Carter, I would like to repeat the same follow-up to you. Blacks and other non-whites are increasing in numbers in our cities. Many of them feel that they are facing a hostility from whites that prevents them from joining the economic mainstream of our society. There is racial confrontation in the schools, on jobs, and in housing, as non-whites seek to reap the benefits of a free society. What is your assessment of the nation's future as a multi-racial society?

MR. CARTER: Ours is a nation of refugees, a nation of immigrants. Almost all of our citizens came here from other lands and now have hopes, which are being realized, for a better life, preserving their ethnic commitments, their family structures, their religious beliefs, preserving their relationships with their relatives in foreign countries, but still holding themselves together in a very coherent society, which gives our nation its strength. In the past, those minority groups have often been excluded from participation in the affairs of government. Since I've been President, I've appointed, for instance, more than twice as many black Federal judges as all previous presidents in the history of this country. I've done the same thing in the appointment of women, and also Spanish-speaking Americans. To involve them in the administration of government and the feeling that they belong to the societal structure that makes decisions in the judiciary and in the executive branch is a very important commitment which I am trying to realize and will continue to do so in the future.

MR. SMITH: Governor Reagan, you have a minute for rebuttal.

MR. REAGAN: Yes. The President talks of Government programs, and they have their place. But as governor, when I was at that end of the line and receiving some of these grants for Government programs, I saw that so many of them were dead-end. They were public employment that these people who really want to get out into the private job market where there are jobs with a future. Now, the President spoke a moment ago about that I was against the minimum wage. I wish he could have been with me when I sat with a group of teenagers who were black, and who were telling me about their unemployment problems, and that it was the minimum wage that had done away with the jobs that they once could get. And indeed, every time it has increased you will find there is an increase in minority unemployment among young people. And therefore, I have been in favor of a separate minimum for them. With regard to the great progress that has been made with this Government spending, the rate of black unemployment in Detroit, Michigan, is 56%.

MR. SMITH: President Carter, you have the last word on this question.

MR. CARTER: It's obvious that we still have a long way to go in fully incorporating the minority groups into the mainstream of American life. We have made good progress, and there is no doubt in my mind that the commitment to unemployment compensation, the minimum wage, welfare, national health insurance, those kinds of commitments that have typified the Democratic party since ancient history in this country's political life are a very important element of the future. In all those elements, Governor Reagan has repeatedly spoken out against them, which, to me, shows a very great insensitivity to giving deprived families a better chance in life. This, to me, is a very important difference between him and me in this election, and I believe the American people will judge accordingly. There is no doubt in my mind that in the downtown central cities, with the, with the new commitment on an energy policy, with a chance to revitalize homes and to make them more fuel efficient, with a chance for our synthetic fuels program, solar power, this will give us an additional opportunity for jobs which will pay rich dividends.

MR. SMITH: Now, a question from Barbara Walters.

BARBARA WALTERS: Mr. President, the eyes of the country tonight are on the hostages in Iran. I realize this is a sensitive area, but the question of how we respond to acts of terrorism goes beyond this current crisis. Other countries have policies that determine how they will respond. Israel, for example, considers hostages like soldiers and will not negotiate with terrorists. For the future, Mr. President, the country has a right to know, do you have a policy for dealing with terrorism wherever it might happen, and, what have we learned from this experience in Iran that might cause us to do things differently if this, or something similar, happens again?

MR. CARTER: Barbara, one of the blights on this world is the threat and the activities of terrorists. At one of the recent economic summit conferences between myself and the other leaders of the western world, we committed ourselves to take strong action against terrorism. Airplane hijacking was one of the elements of that commitment. There is no doubt that we have seen in recent years - in recent months - additional acts of violence against Jews in France and, of course, against those who live in Israel, by the PLO and other terrorist organizations. Ultimately, the most serious terrorist threat is if one of those radical nations, who believe in terrorism as a policy, should have atomic weapons. Both I and all my predecessors have had a deep commitment to controlling the proliferation of nuclear weapons. In countries like Libya or Iraq, we have even alienated some of our closest trade partners because we have insisted upon the control of the spread of nuclear weapons to those potentially terrorist countries. When Governor Reagan has been asked about that, he makes the very disturbing comment that non-proliferation, or the control of the spread of nuclear weapons, is none of our business. And recently when he was asked specifically about Iraq, he said there is nothing we can do about it. This ultimate terrorist threat is the most fearsome of all, and it's part of a pattern where our country must stand firm to control terrorism of all kinds.

MR. SMITH: Ms. Walters, a follow up?

MS. WALTERS: While we are discussing policy, had Iran not taken American hostages. I assume that, in order to preserve our neutrality, we would have stopped the flow of spare parts and vital war materials once war broke out between Iraq and Iran. Now we're offering to lift the ban on such goods if they let our people come home. Doesn't this reward terrorism, compromise our neutrality, and possibly antagonize nations now friendly to us in the Middle East?

MR. CARTER: We will maintain our position of neutrality in the Iran and Iraq war. We have no plans to sell additional materiel or goods to Iran, that might be of a warlike nature. When I made my decision to stop all trade with Iran as a result of the taking of our hostages, I announced then, and have consistently maintained since then, that if the hostages are released safely, we would make delivery on those items which Iran owns - which they have bought and paid for - also, that the frozen Iranian assets would be released. That's been a consistent policy, one I intend to carry out.

MR. SMITH: Would you repeat the question now for Governor Reagan, please, Ms. Walters?

MS. WALTERS: Yes. Governor, the eyes of the country tonight remain on the hostages in Iran, but the question of how we respond to acts of terrorism goes beyond this current crisis. There are other countries that have policies that determine how they will respond. Israel, for example, considers hostages like soldiers and will not negotiate with terrorists. For the future, the country has the right to know, do you have a policy for dealing with terrorism wherever it might happen, and what have we learned from this experience in Iran that might cause us to do things differently if this, or something similar, should happen again?

MR. REAGAN: Barbara, you've asked that question twice. I think you ought to have at least one answer to it. I have been accused lately of having a secret plan with regard to the hostages. Now, this comes from an answer that I've made at least 50 times during this campaign to the press, when I am asked have you any ideas of what you would do if you were there? And I said, well, yes. And I think that anyone that's seeking this position, as well as other people, probably, have thought to themselves, what about this, what about that? These are just ideas of what I would think of if I were in that position and had access to the information, and which I would know all the options that were open to me. I have never answered the question, however; second, the one that says, well, tell me, what are some of those ideas? First of all, I would be fearful that I might say something that was presently under way or in negotiations, and thus expose it and endanger the hostages, and sometimes, I think some of my ideas might require quiet diplomacy where you don't say in advance, or say to anyone, what it is you're thinking of doing. Your question is difficult to answer, because, in the situation right now, no one wants to say anything that would inadvertently delay, in any way, the return of those hostages if there if there is a chance that they're coming home soon, or that might cause them harm. What I do think should be done, once they are safely here with their families, and that tragedy is over - we've endured this humiliation for just lacking one week of a year now - then, I think, it is time for us to have a complete investigation as to the diplomatic efforts that were made in the beginning, why they have been there so long, and when they came home, what did we have to do in order to bring that about - what arrangements were made? And I would suggest that Congress should hold such an investigation. In the meantime, I'm going to continue praying that they'll carne home.

MR. SMITH: Follow up question.

MS. WALTERS: I would like to say that neither candidate answered specifically the question of a specific policy for dealing with terrorism, but I will ask Governor Reagan a different follow-up question. You have suggested that there would be no Iranian crisis had you been President, because we would have given firmer support to the Shah. But Iran is a country of 37 million people who are resisting a government that they regarded as dictatorial. My question is not whether the Shah's regime was preferable to the Ayatollah's, but whether the United States has the power or the right to try to determine what form of government any country will have, and do we back unpopular regimes whose major merit is that they are friendly to the United States?

MR. REAGAN: The degree of unpopularity of a regime when the choice is total authoritarianism totalitarianism, I should say, in the alternative government, makes one wonder whether you are being helpful to the people. And we've been guilty of that. Because someone didn't meet exactly our standards of human rights, even though they were an ally of ours, instead of trying patiently to persuade them to change their ways, we have, in a number of instances, aided a revolutionary overthrow which results in complete totalitarianism, instead, for those people. I think that this is a kind of a hypocritical policy when, at the same time, we're maintaining a detente with the one nation in the world where there are no human rights at all - the Soviet Union. Now, there was a second phase in the Iranian affair in which we had something to do with that. And that was, we had adequate warning that there was a threat to our embassy, and we could have done what other embassies did - either strengthen our security there, or remove our personnel before the kidnap and the takeover took place.

MR. SMITH: Governor, I'm sorry, I must interrupt. President Carter, you have a minute for rebuttal.

MR. CARTER: I didn't hear any comment from Governor Reagan about what he would do to stop or reduce terrorism in the future. What the Western allies did decide to do is to stop all air flights - commercial air flights - to any nation involved in terrorism or the hijacking of air planes, or the harboring of hijackers. Secondly, we all committed ourselves, as have all my predecessors in the Oval Office not to permit the spread of nuclear weapons to a terrorist nation, or to any other nation that does not presently have those weapons or capabilities for explosives. Third, not to make any sales of materiel or weapons to a nation which is involved in terrorist activities. And, lastly, not to deal with the PLO until and unless the PLO recognizes Israel's right to exist and recognizes UN Resolution 242 as a basis for Middle East peace. These are a few of the things to which our nation is committed, and we will continue with these commitments.

MR. SMITH: Governor Reagan, you have the last word on that question.

MR. REAGAN: Yes. I have no quarrel whatsoever with the things that have been done, because I believe it is high time that the civilized countries of the world made it plain that there is no room worldwide for terrorism; there will be no negotiation with terrorists of any kind. And while I have a last word here, I would like to correct a misstatement of fact by the President. I have never made the statement that he suggested about nuclear proliferation and nuclear proliferation, or the trying to halt it, would be a major part of a foreign policy of mine.

MR. SMITH: Thank you gentlemen. That is the first half of the debate. Now, the rules for the second half are quite simple. They're only complicated when I explain them. In the second half, the panelists with me will have no follow-up questions. Instead, after the panelists have asked a question, and the candidates have answered, each of the candidates will have two opportunities to follow up,. to question, to rebut, or just to comment on his opponent's statement. Governor Reagan will respond, in this section, to the first question from Marvin Stone.

MR. STONE: Governor Reagan - arms control: The President said it was the single most important issue. Both of you have expressed the desire to end the nuclear arms race with Russia, but by methods that are vastly different. You suggest that we scrap the SALT II treaty already negotiated, and intensify the build-up of American power to induce the Soviets to sign a new treaty - one more favorable to us. President Carter, on the other hand, says he will again try to convince a reluctant Congress to ratify the present treaty on the grounds it's the best we can hope to get. Now, both of you cannot be right. Will you tell us why you think you are?

MR. REAGAN: Yes. I think I'm right because I believe that we must have a consistent foreign policy, a strong America, and a strong economy. And then, as we build up our national security, to restore our margin of safety, we at the same time try to restrain the Soviet build-up, which has been going forward at a rapid pace, and for quite some time. The SALT II treaty was the result of negotiations that Mr. Carter's team entered into after he had asked the Soviet Union for a discussion of actual reduction of nuclear strategic weapons. And his emissary, I think, came home in 12 hours having heard a very definite nyet. But taking that one no from the Soviet Union, we then went back into negotiations on their terms, because Mr. Carter had canceled the B-I bomber, delayed the MX, delayed the Trident submarine, delayed the cruise missile, shut down the Missile Man - the three - the Minuteman missile production line, and whatever other things that might have been done. The Soviet Union sat at the table knowing that we had gone forward with unilateral concessions without any reciprocation from them whatsoever. Now, I have not blocked the SALT II treaty, as Mr. Carter and Mr. Mondale suggest I have. It has been blocked by a Senate in which there is a Democratic majority. Indeed, the Senate Armed Services Committee voted 10 to 0, with seven abstentions, against the SALT II treaty, and declared that it was not in the national security interests of the United States. Besides which, it is illegal, because the law of the land, passed by Congress, says that we cannot accept a treaty in which we are not equal. And we are not equal in this treaty for one reason alone - our B-2 bombers are considered to be strategic weapons; their Backfire bombers are not.

MR. SMITH: Governor, I have to interrupt you at that point. The time is up for that. But the same question now to President Carter.

MR. STONE: Yes. President Carter, both of you have expressed the desire to end the nuclear arms race with Russia, but through vastly different methods. The Governor suggests we scrap the SALT II treaty which you negotiated in Vienna or signed in Vienna, intensify the build-up of American power to induce the Soviets to sign a new treaty, one more favorable to us. You, on the other hand, say you will again try to convince a reluctant Congress to ratify the present treaty on the grounds it is the best we can hope to get from the Russians. You cannot both be right. Will you tell us why you think you are?

MR. CARTER: Yes, I'd be glad to. Inflation. unemployment, the cities are all very important issues, but they pale into insignificance in the life and duties of a President when compared with the control of nuclear weapons. Every President who has served in the Oval Office since Harry Truman has been dedicated to the proposition of controlling nuclear weapons. To negotiate with the Soviet Union a balanced, controlled, observable, and then reducing levels of atomic weaponry, there is a disturbing pattern in the attitude of Governor Reagan. He has never supported any of those arms control agreements - the limited test ban, SALT I, nor the Antiballistic Missile Treaty, nor the Vladivostok Treaty negotiated with the Soviet Union by President Ford - and now he wants to throw into the wastebasket a treaty to control nuclear weapons on a balanced and equal basis between ourselves and the Soviet Union, negotiated over a seven-year period, by myself and my two Republican predecessors. The Senate has not voted yet on the Strategic Arms Limitation Treaty. There have been preliminary skirmishing in the committees of the Senate, but the Treaty has never come to the floor of the Senate for either a debate or a vote. It's understandable that a Senator in the preliminary debates can make an irresponsible statement, or, maybe, an ill-advised statement. You've got 99 other senators to correct that mistake, if it is a mistake. But when a man who hopes to be President says, take this treaty, discard it, do not vote, do not debate, do not explore the issues, do not finally capitalize on this long negotiation - that is a very dangerous and disturbing thing.

MR. SMITH: Governor Reagan, you have an opportunity to rebut that. REAGAV: Yes, I'd like to respond very much. First of all, the Soviet Union if I have been critical of some of the previous agreements, it's because we've been out-negotiated for quite a long time. And they have managed, in spite of all of our attempts at arms limitation, to go forward with the biggest military build-up in the history of man. Now, to suggest that because two Republican presidents tried to pass the SALT treaty - that puts them on its side - I would like to say that President Ford, who was within 90% of a treaty that we could be in agreement with when he left office, is emphatically against this SALT treaty. I would like to point out also that senators like Henry Jackson and Hollings of South Carolina - they are taking the lead in the fight against this particular treaty. I am not talking of scrapping. I am talking of taking the treaty back, and going back into negotiations. And I would say to the Soviet Union, we will sit and negotiate with you as long as it takes, to have not only legitimate arms limitation, but to have a reduction of these nuclear weapons to the point that neither one of us represents a threat to the other. That is hardly throwing away a treaty and being opposed to arms limitation.

MR. SMITH: President Carter?

MR. CARTER: Yes. Governor Reagan is making some very misleading and disturbing statements. He not only advocates the scrapping of this treaty - and I don't know that these men that he quotes are against the treaty in its final form - but he also advocates the possibility, he said it's been a missing element, of playing a trump card against the Soviet Union of a nuclear arms race, and is insisting upon nuclear superiority by our own nation, as a predication for negotiation in the future with the Soviet Union. If President Brezhnev said, we will scrap this treaty, negotiated under three American Presidents over a seven-year period of time, we insist upon nuclear superiority as a basis for future negotiations, and we believe that the launching of a nuclear arms race is a good basis for future negotiations, it's obvious that I, as President, and all Americans, would reject such a proposition. This would mean the resumption of a very dangerous nuclear arms race. It would be very disturbing to American people. It would change the basic tone and commitment that our nation has experienced ever since the Second World War, with al Presidents, Democratic and Republican. And it would also be very disturbing to our allies, all of whom support this nuclear arms treaty. In addition to that, the adversarial relationship between ourselves and the Soviet Union would undoubtedly deteriorate very rapidly. This attitude is extremely dangerous and belligerent in its tone, although it's said with a quiet voice.

MR. SMITH: Governor Reagan?

MR. REAGAN: I know the President's supposed to be replying to me, but sometimes, I have a hard time in connecting what he's saying, with what I have said or what my positions are. I sometimes think he's like the witch doctor that gets mad when a good doctor comes along with a cure that'll work. My point I have made already, Mr. President, with regard to negotiating: it does not call for nuclear superiority on the part of the United States. It calls for a mutual reduction of these weapons, as I say, that neither of us can represent a threat to the other. And to suggest that the SALT II treaty that your negotiators negotiated was just a continuation, and based on all of the preceding efforts by two previous Presidents, is just not true. It was a new negotiation because, as I say, President Ford was within about 10% of having a solution that could be acceptable. And I think our allies would be very happy to go along with a fair and verifiable SALT agreement.

MR. SMITH: President Carter, you have the last word on this question.

MR. CARTER: I think, to close out this discussion, it would be better to put into perspective what we're talking about. I had a discussion with my daughter, Amy, the other day, before I came here, to ask her what the most important issue was. She said she thought nuclear weaponry - and the control of nuclear arms. This is a formidable force. Some of these weapons have 10 megatons of explosion. If you put 50 tons of TNT in each one of railroad cars, you would have a carload of TNT - a trainload of TNT stretching across this nation. That's one major war explosion in a warhead. We have thousands, equivalent of megaton, or million tons, of TNT warheads. The control of these weapons is the single major responsibility of a President, and to cast out this commitment of all Presidents, because of some slight technicalities that can be corrected, is a very dangerous approach.

MR. SMITH: We have to go to another question now, from Harry Ellis to President Carter.

HARRY ELLIS: Mr. President, as you have said, Americans, through conservation, are importing much less oil today than we were even a year ago. Yet U.S. dependence on Arab oil as a percentage of total imports is today much higher than it was at the time of the 1973 Arab oil embargo, and for some time to came, the loss of substantial amounts of Arab oil could plunge the U.S. into depression. This means that a bridge must be built out of this dependence. Can the United States develop synthetic fuels and other alternative energy sources without damage to the environment, and will this process mean steadily higher fuel bills for American families?

MR. CARTER: I don't think there's any doubt that, in the future, the cost of oil is going to go up. What I've had as a basic commitment since I've been President is to reduce our dependence on foreign oil. It can only be done in two ways: one, to conserve energy - to stop the waste of energy - and, secondly, to produce more American energy. We've been very successful in both cases. We've now reduced the importing of foreign oil in the last year alone by one-third. We imported today 2 million barrels of oil less than we did the same date just a year ago. This commitment has been opening up a very bright vista for our nation in the future, because with the windfall profits tax as a base, we now have an opportunity to use American technology and American ability and American natural resources to expand rapidly the production of synthetic fuels, yes; to expand rapidly the production of solar energy, yes; and also to produce the traditional kinds of American energy. We will drill more oil and gas wells this year than any year in history. We'll produce more coal this year than any year in history. We are exporting more coal this year than any year in history. And we have an opportunity now with improved transportation systems and improved loading facilities in our ports, to see a very good opportunity on a world international market, to replace OPEC oil with American coal as a basic energy source. This exciting future will not only give us more energy security, but will also open up vast opportunities for Americans to live a better life and to have millions of new jobs associated with this new and very dynamic industry now in prospect because of the new energy policy that we've put into effect.

MR. SMITH: Would you repeat the question now for Governor Reagan?

MR. ELLIS: Governor Reagan, Americans,