[applause] ms. Walters im sorry to do this, but i really must talk to the audience. Youre all invited guests. I know im wasting time in talking to you, but it really is very unfair of you to applaud, sometimes louder, less loud, and i ask you, as people who were invited here, and polite people, to refrain. We have our time now for rebuttal. Mr. President. The president yes. Well, with regard to this being a personal choice, isnt that what a murderer is insisting on, his or her right to kill someone because of whatever fault they think justifies that . Now, im not capable, and i dont think you are, any of us, to make this determination that must be made with regard to human life. I am simply saying that i believe that thats where the effort should be directed, to make that determination. I dont think that any of us should be called upon here to stand and make a decision as to what other things might come under the selfdefense tradition. That, too, would have to be worked out then, when you once recognize that were talking about a life. But in this Great Society of ours, wouldnt it make a lot more sense, in this gentle and kind society, if we had a program that made it possible for when incidents come along in which someone feels they must do away with that unborn child, that instead we make it available for the adoption . There are a million and a half people out there standing in line waiting to adopt children who cant have them any other way. Ms. Walters mr. Mondale. Mr. Mondale i agree with that, and thats why i was a principal sponsor of a liberal adoption law, so that more of these children could come to term, so that the Young Mothers were educated, so we found an option, an alternative. Im all for that. But the question is whether this other option proposed by the president should be pursued. And i dont agree with it. Since ive got about 20 seconds, let me just say one thing. The question of agriculture came up a minute ago. Net farm income is off 50 percent in the last 3 years, and every farmer knows it. And the effect of these economic policies is like a massive grain embargo, which has caused farm exports to drop 20 percent. Its been a big failure. I opposed the grain embargo in my administration. Im opposed to these policies as well. Ms. Walters im sitting here like the great schoolteacher, letting you both get away with things, because one did it, the other one did it. May i ask in the future that the rebuttal stick to what the rebuttal is. And also, Foreign Policy will be the next debate. Stop dragging it in by its ear into this one. [laughter] now, having admonished you, i would like to say to the panel, you are allowed one question and one followup. Would you try, as best you could, not to ask two and three, i know its something we all want to do, two and three questions as part one and two and three as part two. Having said that, fred, its yours. Mr. Barnes thank you. Mr. Mondale, let me ask you about middleclass americans and the taxes they pay. Now, im talking not about the rich or the poor, i know your views on their taxes, but about families earning 25,000 to 45,000 a year. Do you think that those families are overtaxed or undertaxed by the federal government . Mr. Mondale in my opinion, as we deal with this deficit, people from about 70,000 a year on down have to be dealt with very, very carefully, because they are the ones who didnt get any relief the first time around. Under the 1981 tax bill, people making 200,000 a year got 60,000 in tax relief over 3 years, while people making 30,000 a year, all taxes considered, got no relief at all or their taxes actually went up. Thats why my proposal protects everybody from 25,000 a year or less against any tax increases, and treats those 70,000 and under in a way that is more beneficial than the way the president proposes with a sales tax or a flat tax. What does this mean in real life . Well, the other day, Vice President bush disclosed his tax returns to the American People. Hes one of the wealthiest americans, and hes our Vice President. In 1981 i think he paid about 40 percent in taxes. In 1983, as a result of these tax preferences, he paid a little over 12 percent, 12. 8 percent in taxes. That meant that he paid a lower percent in taxes than the janitor who cleaned up his office or the chauffeur who drives him to work. I believe we need some fairness. And thats why ive proposed what i think is a fair and a responsible proposal that helps protect these people whove already got no relief or actually got a tax increase. Mr. Barnes it sounds as if you are saying you think this group of taxpayers making 25,000 to 45,000 a year is already overtaxed, yet your tax proposal would increase their taxes. I think your aides have said those earning about 25,000 to 35,000, their tax rate would go up, their tax bill would go up a hundred dollars, and from 35,000 to 45,000, more than that, several hundred dollars. Wouldnt that stifle their incentive to work and invest and so on, and also hurt the recovery . Mr. Mondale the first thing is, everybody 25,000 and under would have no tax increase. Mr. Reagan, after the election, is going to have to propose a tax increase, and you will have to compare what he proposes. And his secretary of the treasury said hes studying a sales tax or a valueadded tax. Theyre the same thing. They hit middle and moderateincome americans and leave wealthy americans largely untouched. Up until about 70,000, as you go up the ladder, my proposals will be far more beneficial. As soon as we get the economy on a sound ground as well, id like to see the total repeal of indexing. I dont think we can do that for a few years. But at some point, we want to do that as well. Mr. Barnes mr. President , let me try this on you. Do you think middleincome americans are overtaxed or undertaxed . The president you know, i wasnt going to say this at all, but i cant help it. There you go again. [laughter] i dont have a plan to tax, or increase taxes. Im not going to increase taxes. I can understand why you are, mr. Mondale, because as a senator you voted 16 times to increase taxes. Now, i believe that our problem has not been that anybody in our country is undertaxed, its that government is overfed. And i think that most of our people, this is why we had a 25percent tax cut across the board which maintained the same progressivity of our tax structure in the brackets on up. And, as a matter of fact, it just so happens that in the quirks of administering these taxes, those above 50,000 actually did not get quite as big a tax cut percentagewise as did those from 50,000 down. From 50,000 down, those people paid twothirds of the taxes, and those people got twothirds of the tax cut. Now, the Social Security tax of 77, this indeed was a tax that hit people in the lower brackets the hardest. It had two features. It had several tax increases phased in over a period of time, there are two more yet to come between now and 1989. At the same time every year, it increased the amount of money, virtually every year, there may have been one or two that were skipped in there, that was subject to that tax. Today it is up to about 38,000 of earnings that is subject to the payroll tax for Social Security. And that tax, there are no deductions, so a person making anywhere from 10, 15, 20, theyre paying that tax on the full gross earnings that they have after they have already paid an income tax on that same amount of money. Now, i dont think that to try and say that we were taxing the rich, and not the other way around, it just doesnt work out that way. The system is still where it was with regard to the progressivity, as ive said, and that has not been changed. But if you take it in numbers of dollars instead of percentage, yes, you could say, well, that person got 10 times as much as this other person. Yes, but he paid 10 times as much, also. But if you take it in percentages, then you find out that it is fair and equitable across the board. Mr. Barnes i thought i caught, mr. President , a glimmer of a stronger statement there in your answer than youve made before. I think the operative position you had before was that you would only raise taxes in a second term as a last resort, and i thought you said flatly that im not going to raise taxes. Is that what you meant to say, that you will not, that you will flatly not raise taxes in your second term as president . The president yes, i had used, last resort would always be with me. If you got the government down to the lowest level, that you yourself could say it could not go any lower and still perform the services for the people, and if the recovery was so complete that you knew you were getting the ultimate amount of revenues that you could get through that growth, and there was still some slight difference there between those two lines, then i had said once that, yes, you would have to then look to see if taxes should not be adjusted. I dont foresee those things happening, so i say with great confidence im not going to go for a tax. With regard to assailing mr. Bush about his tax problems and the difference from the tax he once paid and then the later tax he paid, i think if you looked at the deductions, there were great Legal Expenses in there, had to do, possibly, with the sale of his home, and they had to do with his setting up of a blind trust. All of those are legally deductions, deductible in computing your tax, and it was a 1year thing with him. Ms. Walters mr. Mondale, here we go again. Its time for rebuttal. Mr. Mondale well, first of all, i gave him the benefit of the doubt on the house deal. Im just talking about the 12. 8 percent that he paid, and thats whats happening all over this country with wealthy americans. Theyve got so many loopholes they dont have to pay much in taxes. Now, mr. President , you said, there you go again, right . The president yes. Mr. Mondale you remember the last time you said that . The president mmhmm. Mr. Mondale you said it when president carter said that you were going to cut medicare, and you said, oh, no, there you go again, mr. President. And what did you do right after the election . You went out and tried to cut 20 billion out of medicare. And so, when you say, there you go again, people remember this, you know. [laughter] and people will remember that you signed the biggest tax increase in the history of california and the biggest tax increase in the history of the United States, and what are you going to do . Youve got a 260 billion deficit. You cant wish it away. You wont slow defense spending, you refuse to do that, ms. Walters mr. Mondale, im afraid your time is up. Mr. Mondale sorry. Ms. Walters mr. President . The president yes. With regard to medicare, no, but its time for us to say that medicare is in pretty much the same condition that Social Security was, and something is going to have to be done in the next several years to make it fiscally sound. And, no, i never proposed any 20 billion should come out of medicare, i have proposed that the program we must treat with that particular problem. And maybe part of that problem is because during the 4 years of the cartermondale administration medical costs in this country went up 87 percent. Ms. Walters all right. Fine. The president i gave you back some of that time. [laughter] ms. Walters we cant keep going back for other rebuttals, therell be time later. We now go to our final round. The way things stand now, we have time for only two sets of questions, and by lot, it will be jim and diane. And well start with jim wieghart. Mr. Wieghart mr. President , the economic recovery is real, but uneven. The census bureau, just a month ago, reported that there are more People Living under poverty now, a million more People Living under it, than when you took office. There have been a number of studies, including studies by the urban institute and other nonpolitical organizations, that say that the impact of the tax and budget cuts and your economic policies have impacted severely on certain classes of americans, working mothers, head of households, minority groups, elderly poor. In fact, theyre saying the rich are getting richer and the poor are getting poorer under your policies. What relief can you offer to the working poor, to the minorities, and to the women head of households who have borne the brunt of these economic programs . What can you offer them in the future, in your next term . The president well, some of those facts and figures just dont stand up. Yes, there has been an increase in poverty, but it is a lower rate of increase than it was in the preceding years before we got here. It has begun to decline, but it is still going up. On the other hand, women heads of household, single women heads of household have, for the first time theres been a turndown in the rate of poverty for them. We have found also in our studies that in this increase in poverty, it all had to do with their private earnings. It had nothing to do with the transfer of payments from government by way of many programs. We are spending now 37 percent more on food for the hungry in all the various types of programs than was spent in 1980. Were spending a third more on all of the, well, all of the programs of human service. We have more people receiving food stamps than were ever receiving them before, 2,300,000 more are receiving them, even though we took 850,000 off the food stamp rolls because they were making an income that was above anything that warranted their fellow citizens having to support them. We found people making 185 percent of the Poverty Level were getting government benefits. We have set a line at 130 percent so that we can direct that aid down to the truly needy. Some time ago, mr. Mondale said something about education and College Students and help of that kind. Half, one out of two of the fulltime College Students in the United States are receiving some form of federal aid. But there, again, we found people that there under the previous administration, families that had no limit to income were still eligible for lowinterest college loans. We didnt think that was right. And so, we have set a standard that those loans and those grants are directed to the people who otherwise could not go to college, their family incomes were so low. So, there are a host of other figures that reveal that the Grant Programs are greater than they have ever been, taking care of more people than they ever have. 7. 7 million elderly citizens who were living in the lowest 20 percent of earnings, 7. 7 million have moved up into another bracket since our administration took over, leaving only 5 million of the elderly in that bracket when there had been more than 13 million. Mr. Wieghart mr. President , in a visit to texas, in brownsville, i believe it was, in the rio grande valley, you did observe that the economic recovery was uneven. The president yes. Mr. Wieghart in that particular area of texas, unemployment was over 14 percent, whereas statewide, it was the lowest in the country, i believe, 5. 6 percent. And you made the comment, however, that man does not live by bread alone. What did you mean by that comment . And if i interpret it correctly, it would be a comment more addressed to the affluent who obviously can look beyond just the bread they need to sustain them, with their wherewithal. The president that had nothing to do with the other thing of talking about their needs or anything. I remember distinctly, i was segueing into another subject. I was talking about the things that have been accomplished, and that was referring to the revival of patriotism and optimism, the new spirit that were finding all over america. And it is a wonderful thing to see when you get out there among the people. So, that was the only place that that was used. I did avoid, im afraid, in my previous answer, also, the idea of uneven, yes. There is no way that the recovery is even across the country, just as in the depths of the recession, there were some parts of the country that were worse off, but some that didnt even feel the pain of the recession. Were not going to rest and not going to be happy until every person in this country who wants a job can have one, until the recovery is complete across the country. Mr. Wieghart mr. Mondale, as you can gather from the question to the president , the celebrated war on poverty obviously didnt end the problem of poverty, although it may have dented it. The poor and the homeless and the disadvantaged are still with us. What should the federal governments role be to turn back the growth in the number of People Living below the Poverty Level, which is now 35 million in the United States, and to help deal with the structural unemployment problems that the president was referring to in an uneven recovery . Mr. Mondale number one, weve got to get the debt down to get the Interest Rates down so the economy will grow and people will be employed. Number two, we have to work with cities and others to help generate Economic Growth in those communities, through the urban Development Action grant program. I dont mind those enterprise zones, lets try them, but not as a substitute for the others. Certainly education and training is crucial. If these Young Americans dont have the skills that make them attractive to employers, theyre not going to get jobs. The next thing is to try to get more entrepreneurship in business within the reach of minorities so that these businesses are located in the communities in which theyre found. The other thing is, we need the Business Community as well as government heavily involved in these communities to try to get Economic Growth. There is no question that the poor are worse off. I think the president genuinely believes that theyre better off. But the figures show that about 8 million more people are below the poverty line than 4 years ago. How you can cut school lunches, how you can cut student assistance, how you can cut housing, how you can cut disability benefits, how you can do all of these things and then the people receiving them, for example, the disabled, who have no alternative, how theyre going to do better, i dont know. Now, we need a tight budget, but theres no question that this administration has singled out things that affect the most vulnerable in american life, and theyre hurting. One final point i