Good evening from the Kentucky Center for the Arts in Louisville, Kentucky. I'm Dorothy Ridings, president of the League of Women Voters, the sponsor of tonight's first presidential debate between Republican Ronald Reagan and Democrat Walter Mondale. Tonight's debate marks the third consecutive presidential election in which the league is presenting the candidates for the nation's highest office in face-to-face debate.
Our panelists are James Wieghart, national political correspondent for Scripps-Howard News Service; Diane Sawyer, correspondent for the CBS program "60 Minutes," and Fred Barnes, national political correspondent for The Baltimore Sun. Barbara Walters of ABC News, who is appearing in her fourth presidential debate, is our moderator.
WALTERS: A few words, as we begin tonight's debate, about the format. The position of the candidates -- that is, who answers questions first and who gives the last statement -- was determined by a toss of the coin between the two candidates. Mr. Mondale won, and that means that he chose to give the final closing statement. It means, too, that the president will answer the first question first. I hope that's clear -- if it isn't, it will become clear as the debate goes on.
Further, the candidates will be addressed as they each wanted, and will therefore be called Mr. President and Mr. Mondale.
Since there will also be a second debate between the two presidential candidates, tonight will focus primarily on the economy and other domestic issues.
The debate itself is built around questions from the panel. In each of its segments, a reporter will ask the candidate the same general question. Then -- and this is important -- each candidate will have the chance to rebut what the other has said. And the final segment of the debate will be the closing segment, and the candidates will each have four minutes for their closing statements, and as I have said, Mr. Mondale will be the last person on the program to speak.
And now I would like to add a personal note if I may. As Dorothy Ridings pointed out, I have been involved now in four presidential debates, either as a moderator or as a panelist. In the past there was no problem in selecting panelists. Tonight, however, there were to have been four panelists participating in this debate. The candidates were given a list of almost 100 qualified journalists from all the media and could agree on only these three fine journalists. As moderator and on behalf of my fellow journalists, I very much regret, as does the League of Women Voters, that this situation has occurred.
And now let us begin the debate with the first question . . . . BALANCING THE BUDGET
Mr. President, in 1980 you promised the American people in your campaign a balanced budget by 1983. We've now had more and bigger deficits in the four years you've been in office. Mr. President, do you have a secret plan to balance the budget sometime in the second term and if so, would you lay out that plan for us tonight?
REAGAN: I have a plan, not a secret plan. As a matter of fact, it is the economic recovery program that we presented when I took office in 1981. It is true that earlier, working with some very prominent economists, I had come up during the campaign with an economic program that I thought could rectify the great problems confronting us, the double-digit inflation, the high tax rates that I think were hurting the economy, the stagflation that we were undergoing.
Before even the election day, something that none of those economists had even predicted had happened, that the economy was so worsened that I was openly saying that what we had thought on the basis of our plan could have brought a balanced budget, that was no longer possible. So, the plan that we have had and that we're following is a plan that is based on growth in the economy, recovery without inflation and reducing the share that the government is taking from the gross national product, which has become a drag on the economy.
Already, we have a recovery that has been going on for about 21 months to the point that we can now call it an expansion. Under that, this year, we have seen a $21 billion reduction in the deficit from last year, based mainly on the increased revenues the government is getting without raising tax rates. Our tax cut, we think, was very instrumental in bringing about this economic recovery. We have reduced inflation to about a third of what it was. The interest rates have come down about nine or 10 points, and we think must come down further. In the last 21 months, more than 6 million people have gotten jobs -- there have been created new jobs for those people to where there are now 105 million civilians working where there were only 99 million before, 107 if you count the military.
So we believe that as we continue to reduce the level of government spending -- the increase, rate of increase in government spending, which has come down from 17 to 6 percent -- and at the same time as the growth in the economy increases the revenues the government gets without raising taxes, those two lines will meet. And when they meet, that is a balanced budget.
Mr. President, the Congressional Budget Office has some bad news. The lines aren't about to meet, according to their projections. They project that the budget deficit will continue to climb; in the year 1989, they project a budget deficit of $273 billion. In view of that and in view of the economic recovery we are now enjoying, would it make sense to propose a tax increase or take some other fiscal measures to reduce that deficit now, when times are relatively good?
REAGAN: The deficit is a result, it is the result of excessive government spending. I do not, very frankly, take seriously the Congressional Budget Office projections because they have been wrong on virtually all of them, including the fact that our recovery wasn't going to take place to begin with. But it has taken place.
But as I said, we have the rate of increase in government spending down to 6 percent. If the rate of increase in government spending could be held at 5 percent -- we're not far from there -- by 1989 that would have reduced the budget deficits down to a $30 or $40 billion level. At the same time, if we can have a 4 percent recovery continue through that same period of time, that will mean, without an increase in tax rates, that will mean $400 billion more in government revenues. And so I think that the lines can meet.
Actually, in constant dollars, in the domestic side of the budget there has been no spending increase in the four years that we have been here.
Mr. Mondale, the Carter-Mondale administration didn't come close to balancing the budget in its four years in office, either, despite the fact that President Carter did promise a balanced budget during his term. You have proposed a plan combining tax increases and budgetary cuts and other changes in the administration of the government that would reduce the projected budget deficit by two-thirds, to approximately $87 billion in 1989. That still is an enormous deficit that we'll be running for these four years. What other steps do you think should be taken to reduce this deficit and position the country for economic growth?
MONDALE: One of the key tests of leadership is whether one sees clearly the nature of the problems confronted by our nation. And perhaps the dominant domestic issue of our times is what do we do about these enormous deficits. I respect the president, I respect the presidency, and I think he knows that. But the fact of it is, every estimate by this administration about the size of the deficit has been off by billions and billions of dollars. As a matter of fact, over four years they've missed the mark by nearly $600 billion.
We were told we would have a balanced budget by 1983. It was $200 billion deficit instead. And now we have a major question facing the American people as to whether we will deal with this deficit and get it down for the sake of a healthy recovery. Virtually every economic analysis that I've heard of, including the distinguished Congressional Budget Office, which is respected by I think almost everyone, says that even with historically high levels of economic growth, we will suffer a $263 billion deficit. In other words, it doesn't converge, as the president suggests; it gets larger, even with growth.
What that means is that we will continue to have devastating problems with foreign trade -- this is the worst trade year in American history by far. Our rural and farm friends will have continued devastation. Real interest rates, the real cost of interest, will remain very, very high. And many economists are predicting that we're moving into a period of very slow growth because the economy is tapering off. And maybe a recession.
I get it down to a level below 2 percent of gross national product with a policy that's fair. I've stood up and told the American people that I think it's a real problem, that it can destroy long-term economic growth, and I've told you what I think should be done. I think this is a test of leadership and I think the American people know the difference.
Mr. Mondale, one other way to attack the deficit is further reductions in spending. The president has submitted a number of proposals to Congress to do just that, and in many instances the House, controlled by the Democrats, has opposed them. Isn't it one aspect of leadership for prominent Democrats such as yourself to encourage responsible reductions in spending and thereby reduce the deficit?
MONDALE: Absolutely. And I have proposed over $100 billion in cuts in federal spending over four years. But I am not going to cut it out of Social Security and Medicare and student assistance and things that people need. Applause These people depend upon all of us for the little security that they have. And I'm not going to do it that way. The rate of defense spending increase could be slowed. Certainly we can find a coffee pot that costs something less than $7,000. And there are other ways of squeezing this budget without constantly picking on our senior citizens and the most vulnerable in American life. And that's why the Congress, including the Republicans, have not gone along with the president's recommendations.
WALTERS: I would like to ask the audience please to refrain from applauding either side. It just takes away from the time for your candidates. And now it is time for the rebuttal. Mr. President, one minute for rebuttal.
REAGAN: Yes. I don't believe that Mr. Mondale has a plan for balancing the budget. He has a plan for raising taxes. As a matter of fact, the biggest single tax increase in our nation's history took place in 1977, and for the five years previous to our taking office, taxes doubled in the United States and the budgets increased $318 billion. So there is no ratio between taxing and balancing a budget.
Whether you borrow the money or whether you simply tax it away from the people, you're taking the same amount of money out of the private sector unless and until you bring down government's share of what it is taking. With regard to Social Security, I hope there'll be more time that just this minute to mention that, but I will say this: a president should never say never. But I'm going to violate that rule and say never. I will never stand for a reduction of the Social Security benefits to the people that are now getting them. Applause
WALTERS: Mr. Mondale.
MONDALE: Well, that's exactly the commitment that was made to the American people in 1980 -- he would never reduce benefits. And of course what happened right after the election is they proposed to cut Social Security benefits by 25 percent, reducing the adjustment for inflation, cutting out minimum benefits for the poorest on Social Security, removing educational benefits for dependents whose widows, with widows trying to get them through college. Everybody remembers that. People know what happened.
There is a difference. I have fought for Social Security and Medicare and for things to help people who are vulnerable for all my life. And I will do it as president of the United States. Applause
WALTERS: Thank you very much. We'll now begin with segment number two, with my colleague Diane Sawyer. PERSONAL LEADERSHIP
Mr. President. Mr. Mondale. The public opinion polls do suggest that the American people are most concerned about the personal leadership characteristics of the two candidates, and each of you has questioned the other's leadership ability. Mr. President, you have said that Mr. Mondale's leadership would take the country down the path of defeatism and despair, and Vice President Bush has called him whining and hoping for bad news. And Mr. Mondale, you have said that President Reagan offers "showmanship," not leadership, that he has not mastered what he must know to command his government.
I'd like to ask each of you to substantiate your claims. Mr. Mondale first. Give us specifics to support your claim that President Reagan is a showman, not a leader, has not mastered what he must know to be president after four years; and then second, tell us what personal leadership characteristics you have that he does not.
MONDALE: Well, first of all, I think the first answer this evening suggests exactly what I'm saying. There is no question that we face this massive deficit, and almost everybody agrees unless we get it down, the chances for long-term healthy growth are nil. And it's also unfair to dump these tremendous bills on our children. The president says it will disappear overnight because of some reason. No one else believes that's the case. I do, and I'm standing up to the issue with an answer that's fair.
I think that's what leadership is all about. There's a difference between being a quarterback and a cheerleader. And when there's a real problem, a president must confront it. What I was referring to, of course, in the comment that you referred to was the situation in Lebanon. Now for three occasions, one after the other, our embassies were assaulted in the same way by a truck with demolitions. The first time, and I did not criticize the president because these things can happen once, and sometimes twice. The second time the barracks in Lebanon were assaulted, as we all remember, there were two or three commission reports, recommendations by the CIA, the State Department and the others, and the third time there was even a warning from the terrorists themselves.
Now, I believe that a president must command that White House and those who work for him. It's the toughest job on Earth and you must master the facts and insist that things that must be done are done. I believe that the way in which I will approach the presidency is what's needed because all my life that has been the way in which I have sought to lead. And that's why in this campaign I'm telling you exactly what I want to do, I am answering your questions, I am trying to provide leadership now before the election so that the American people can participate in that decision.
You have said, Mr. Mondale, that the polls have given you lower ratings on leadership than President Reagan because your message has failed to get through. Given that you have been in public office for so many years, what accounts for the failure of your message to get through?
MONDALE: Well, I think we're getting better all the time, and I think tonight, as we contrast for the first time our differing approach to government, to values, to the leadership in this country, I think as this debate goes forward, the American people will have, for the first time, a chance to weigh the two of us against each other. And I think as a process, as a part of that process, what I am trying to say will come across -- and that is that we must lead, we must command, we must direct, and a president must see it like it is. He must stand for the values of decency that the American people stand for and he must use the power of the White House to try to control these nuclear weapons and lead this world toward a safer world.
Mr. President, the issue is leadership in personal terms. First, do you think, as Vice President Bush said, that Mr. Mondale's campaign is one of whining and hoping for bad news? And, second, what leadership characteristics do you possess that Mr. Mondale does not?
REAGAN: Well, whether he does or not, let me suggest my own idea about the leadership factor, since you've asked for it -- and incidentally, I might say that with regard to these 25 percent cuts in Social Security, before I get to the answer to your question, the only 25 percent cut that I know of was accompanying that huge 1977 tax increase was a cut of 25 percent in the benefits for every American who was born after 1916.
Now, leadership. First of all, I think you must have some principles you believe in. In mine, I happen to believe in the people and believe that the people are supposed to be dominant in our society. That they, not government, are to have control of their own affairs to the greatest extent possible with an orderly society.
Now having that, I think also that in leadership, well, I believe that you find people in positions such as I'm in who have the talent and ability to do the things that are needed in the various departments of government. I don't believe that a leader should be spending his time in the Oval Office deciding who's going to play tennis on the White House court. And you let those people go with the guidelines of overall policy, and not looking over their shoulder and nitpicking the manner in which they go at the job. You are ultimately responsible, however, for that job.
But I also believe something else about that. I believe that -- and when I became governor of California I started this and I continue it in this office -- that any issue that comes before me, I have instructed Cabinet members and staff they are not to bring up any of the political ramifications that might surround the issue. I don't want to hear them. I want to hear only arguments as to whether it is good or bad for the people. Is it morally right? And on that basis, and that basis alone, we make a decision on every issue.
Now with regard to my feeling about why I thought that his record bespoke his possible taking us back to the same things that we knew under the previous administration, his record is that he spoke in praise of deficits several times, said they weren't to be abhorred, and as a matter of fact, he at one time said he wished the deficit could be doubled because they stimulate the economy and help reduce unemployment.
As a follow-up, let me draw in another specific if I could, a specific that the Democrats have claimed about your campaign -- that it is essentially based on imagery. And one specific that they allege is that, for instance, recently you showed up at the opening ceremony of a Buffalo N.Y. old-age housing project when in fact your policy was to cut federal housing subsidies for the elderly. Yet you were there to have your picture taken with them.
REAGAN: Our policy was not to cut subsidies. We have believed in partnership, and that was an example of a partnership between not only local government and the federal government, but also between the private sector that built that particular structure. And this is what we've been tyring to do, is involve the federal government in such partnerships. We are today subsidizing housing for more than 10 million people. And we're going to continue along that line. We have no thought of throwing people out into the snow, whether because of age or need. We have preserved the safety net for the people with true need in this country, and it has been pure demagoguery that we have in some way shut off all the charitable programs, or many of them, for the people who have real need. The safety net is there, and we're taking care of more people than has ever been taken care of before by any administration in this country.
WALTERS: Mr. Mondale, an opportunity for you to rebut.
MONDALE: Well, I guess I'm reminded a little bit of what Will Rogers once said about Herbert Hoover. He said, "It's not what he doesn't know that bothers me, it's what he knows for sure that just ain't so." Laughter and applause
The fact of it is, the president's budget sought to cut Social Security by 25 percent. It's not an opinion -- it's a fact. And when the president was asked the other day, "What do you want to cut in the budget?" he said, "Cut those things I asked for but didn't get." That's Social Security and Medicare.
The second fact is that the housing unit for senior citizens that the president dedicated in Buffalo was only made possible through a federal assistance program for senior citizens that the president's budget sought to terminate. So if he'd had his way, there wouldn't have been any housing project there at all. This admiministration has taken a meat cleaver out in terms of federal assisted housing and the record is there. We have to see the facts before we can draw conclusions.
WALTERS: Mr. President.
REAGAN: Well, let me just respond with regard to Social Security. When we took office, we discovered that the program that the Carter-Mondale administration had said would solve the fiscal problems of Social Security for the next 50 years wouldn't solve them for five. Social Security was due to go bankrupt before 1983. Any proposals that I made at that time were at the request of the chairman, a Democrat, of one of the leading congressional committees, who said we have to do something before the program goes broke and the checks bounce. And so we made a proposal. And then in 1982 they used that proposal in a demagogic fashion for the 1982 campaign. And three days after the election in 1982 they came to us and said: "Social Security we know is broke." Indeed, we had to borrow $17 billion to pay the checks.
And then I asked for a bipartisan commission, which I'd asked for from the beginning, to sit down and work out a solution. And so the whole matter of what to do with Social Security has been resolved by bipartisan legislation and it is on a sound basis now for as far as you can see into the next century.
WALTERS: Mr. President, we begin segment No. 3 with Fred Barnes. RELIGIOUS BELIEFS
Mr. President, would you describe your religious beliefs, noting particularly whether you consider yourself a born-again Christian, and explain how these beliefs affect your presidential decisions?
REAGAN: Well, I was raised to have a faith and a belief, and have been a member of a church since I was a small boy. In our particular church, we did not use that term "born again," so I don't know whether I would fit that particular term.