MR. NEWMAN: Mr. Reynolds.

MR. REYNOLDS: Governor Carter, I'd like to turn - to what we used to call the energy crisis. Yesterday a British - government commission on air pollution, but one headed by a nuclear physicist, recommended that any further expansion of nuclear energy be delayed in Britain as long as possible. Now this is a subject that is quite controversial among our own people and there seems to be a clear difference between you and the President on the use of nuclear power plants, which you say you would use as a last priority. Why, sir, are they unsafe?

MR. CARTER: Well among my other experiences in the past, I've - I've been a nuclear engineer, and did graduate work in this field. I think I know the - the capabilities and limitations of atomic power. But the energy - policy of our nation is one that has not yet been established under this administration. I think almost every other developed nation in the world has an energy policy except us. We have seen - the Federal Energy Agency established, for instance, in the crisis of 1973 it was supposed to be a temporary agency, now it's permanent, it's enormous, it's growing every day. I think the Wall Street Journal reported not too long ago they have a hundred and twelve public relations experts working for the Federal Energy Agency to try to justify to the American people its own existence. We've got to have a - a firm way to handle the energy question. The reorganization proposal that I have put forward is one first step. In addition to that, we need to have - a realization that we've got about thirty-five years worth of oil left in the whole world. We're gonna run out of oil. When Mr. Nixon made his famous speech on Operation Independence we were importing about 35 percent of our oil. Now we've increased that amount 25 percent. We now import about 44 percent of our oil. We need to shift from oil to coal. We need to concentrate our research and development effort on coal burning and extraction, with safer mines, but also it's clean burning. We need to shift very strongly toward solar energy and have strict conservation measures. And then as a last resort only, continue to use atomic power. I would certainly - not cut out atomic power altogether. We can't afford to give up that opportunity until later. But to the extent that we continue to use atomic power, I would be responsible as president to make sure that the safety precautions were initiated and maintained. For instance, some that have been forgotten; we need to have the reactor core - below ground level, the entire power plant that uses atomic - power tightly sealed and a heavy - heavy vacuum maintained. There ought to be a standardized design. There ought to be a full-time - atomic energy specialist, independent of the power company in the control room, full time, twenty-four hours a day, to shut down a plant if an abnormality develops. These kinds of - procedures, along with evacuation procedures, adequate insurance, ought to be initiated. So, shift from oil to coal, emphasize research and development on coal use and also on solar power, strict conservation measures, not yield every time that the special interest groups - put pressure on the president like this administration has done, and use atomic energy only as a last resort with the strictest possible safety precautions. That's the best overall energy policy in the brief time we have to discuss it.

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

MR. CARTER: Yes, I would. Some of the things that can be done about this is a change in the rate structure of electric power companies. We - now encourage people to waste electricity, and - by giving - the lowest rates to the biggest users. We don't do anything to cut down on peak load requirements. We don't have an adequate requirement for the insulation of homes, for the efficiency of automobiles. And whenever the - automobile manufacturers come forward and say they can't meet the - amendments that the Congress has put forward, this Republican administration has delayed the implementation dates. In addition to that, we ought to have a - a shift toward the use of coal, particularly in the Appalachian regions where the coal is located. A lot of - very high quality, low-carbon coal, - low-sulfur coal is there, it's where our employment is needed. Uh - this would - would help a great deal. So mandatory conservation measures - yes. Encouragement by the president for people to voluntarily conserve - yes. And also the private sector ought to be encouraged to - to bring forward to the public the benefits from efficiency. One bank in - Washington, fo- for instance, gives lower interest loans for people who adequately insulate their homes or who buy efficient automobiles. And some major - - manufacturing companies, like Dow Chemical, have through - very effective efficiency mechanism cut down the use of energy by - as much as 40 percent with the same out-product. These kinds of things - ought to be done, they ought to be encouraged and supported, and even required by the government, yes.

MR. NEWMAN: President Ford.

MR. FORD: Governor Carter skims over a very serious and a very broad subject. In January of - 1975 I submitted to the Congress and to the American people the first comprehensive energy program recommended by any president. It called for an increase in the production of energy in the United States. It called for - conservation measures so that we would save the energy that we have. If you're going to increase domestic oil and gas production - and we have to - you have to give those producers an opportunity to - develop their land or their wells. I recommended to the Congress that we should increase production in this country from six hundred million tons a year to twel- a- a billion two hundred million tons by 1985. In order to do that we have to improve our extraction of coal from the ground; we have to improve our utilization of coal - make it more efficient, make it cleaner. In addition we - have to expand our research and development. In my program for energy independence we have increased, for example, solar energy research from about $84 million a year to about a hundred and twenty million dollars a year. We're going as fast as the experts say we should. In nuclear power we have increased the research and development, - under the Energy Research and Development Agency - very substantially, to insure that our ener- - nuclear power plants are safer, that they are more efficient, and that we have adequate safeguards. I think you have to have greater oil and gas production, more coal production, more nuclear production, and in addition you have to have energy conservation.

MR. NEWMAN: Mr. Gannon.

MR. GANNON: Mr. President, I'd like to return for a moment to this problem of unemployment. You have vetoed or threatened to veto number of job bills passed or - in development in the Democratic Congress - Democratic-controlled Congress. Yet at the same time the government is paying out, - I think it is $17 billion, perhaps $20 billion a year in unemployment compensation caused by the high unemployment. Why do you think it is better to pay out unemployment compensation to idle people than to put them to work in public service jobs?

MR. FORD: The bills that I vetoed, the one for an additional $6 billion, was not a bill that would have solved our unemployment problems. Even the proponents of it admitted that no more than four hundred thousand jobs would be - made available. Our analysis indicates that something in the magnitude of about one hundred fifty to two hundred thousand jobs would - be made available. Each one of those jobs would've cost the taxpayers $25 thousand. In addition, the jobs would not be available right now. They would not have materialized for about nine to eighteen months. The immediate problem we have is to stimulate our economy now so that we can get rid of unemployment. What we have done is to hold the lid on spending in an effort to reduce the rate of inflation. And we have proven, I think very conclusively, that you can reduce the rate of inflation and increase jobs. For example, as I have said, we have added some four million jobs in the last seventeen months. We have now employed eighty-eight million people in America, the largest number in the history of the United States. We've added five hundred thousand jobs in the last two months. Inflation is the quickest way to destroy jobs. And by holding the lid on federal spending we have been able to do an- a good job, an affirmative job in inflation and as a result have added to the jobs in this country. I think it's - also appropriate to point out that through our tax policies we have stimulated uhh - added employment throughout the country, the investment tax credit, the tax incentives for expansion and modernization of our industrial capacity. It's my - my opinion that the private sector, where five out of six jobs are, where you have permanent jobs, with the opportunity for advancement, is a better place than make-work jobs under the program recommended by the Congress.

MR. GANNON: Just to follow up, Mr. President: the - the Congress has just passed a three point seven billion dollar appropriation bill which would provide money for the public works jobs program that you earlier tried to kill by your veto of the authorization legislation. In light of the fact that - unemployment again is rising - or has in the past three months - I wonder if you have rethought that question at all; whether you would consider - allowing this program to be funded, or will you veto that money bill?

MR. FORD: Well, that bill has not yet come down to the Oval Office, so I am not in a position to make any judgment on it tonight. But that is an extra $4 billion that would - add to the deficit which would add to the inflationary pressures, which would help to destroy jobs in the private sector - not make jobs, where the jobs really are. These make-work, temporary jobs - dead end as they are - are not the kind of jobs that we want for our people. I think it's interesting to point out that - in the - two years that I've been president I've vetoed fifty-six bills. Congress has sustained forty-two vetoes. As a result, we have saved over $9 billion in federal expenditures. And the Congress by overriding the bills that I did veto, the Congress has added some $13 billion to the federal expenditures and to the federal deficit. Now Governor Carter complains about the deficits that - - this administration has had. And yet he condemns the vetoes that I have made that has - that have saved the taxpayer $9 billion and could have saved an additional $13 billion. Now he can't have it both ways. And therefore, it seems to me that we should hold the lid, as we have, to the best of our ability so we can stimulate the private economy and get the jobs where the jobs are - five out of six in this economy.

MR. NEWMAN: Governor Carter.

MR. CARTER: Well, Mr. Ford doesn't seem to put into perspective the fact that when - when five hundred thousand more people are out of work than there were three months ago, while we have two and a half million more people out of work than were when he took office, that this touches human beings. I was in - a city in - Pennsylvania not too long ago, near here, and - there were about four or five thousand people in the audience - it was on a - on a train trip. And I said, "How many - adults here are out of work?" About a thousand raised their hands. Mr. Ford - actually has fewer people now in the private sector in non-farm jobs than when he took office. And still he talks about - success. Seven point nine percent unemployment is a terrible tragedy in this country. He says he's learned how to match unemployment with inflation. That's right. We've got the highest inflation we've had in twenty-five years right now, except under this administration, and that was fifty years ago. And we've got - the highest unemployment we've had - under Mr. Ford's administration, since the Great Depression. This affects human beings, and - and his insensitivity in providing those people a chance to work has made this a welfare administration, and not a work administration. He hasn't saved $9 billion with his vetoes. There's only been - a net savings of $4 billion. And the cost in unemployment compensation, welfare compensation, and lost revenues has increased $23 billion in the last two years. This is a - a typical attitude that really causes havoc in people's lives, and then it's covered over by saying that our country has naturally got a 6 percent unemployment rate, or 7 percent unemployment rate and a 6 percent inflation. It's a travesty. It shows a lack of leadership. And we've never had a president since the War between the States that vetoed more bills. Mr. Ford has vetoed four times as many bills as Mr. Nixon - per year. And eleven of 'em have been overridden. One of his bills that was overridden - he only got one vote in the Senate and seven votes in the House, from Republicans.

MR. NEWMAN: Governor Carter. So this shows a breakdown in leadership.

MR. NEWMAN: Under the rules, I must stop you there. And Mrs. Drew.

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

MR. CARTER: Right.

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

MR. CARTER: Now we have such a grossly unbalanced tax system - as I said earlier, that it is a disgrace - ah of all the tax - benefits now, 25 percent of 'em go to the 1 percent of the richest people in this country. Over 50 percent - 53 to be exact - percent of the tax benefits go to the 14 percent richest people in this country, and we've had a 50 percent increase in payroll deductions since Mr. Nixon went in office eight years ago. Mr. Ford has - has advocated since he's been in office over $5 billion in reductions for corporations, special interest groups, and the very, very wealthy who derive their income - not from labor - but from investments. That's got to be changed. A few things that can be done: we have now a deferral system so that the multinational corporations who invest overseas - if they make a million dollars in profits overseas - they don't have to pay any of their taxes unless they bring their money back into this country. When they don't pay their taxes, the average American pays the taxes for them. Not only that, but it robs this country of jobs, because instead of coming back with that million dollars and creating a shoe factory, say in New Hampshire or Vermont, if the company takes the money down to Italy and - and builds a shoe factory, they don't have to pay any taxes on the money. Another thing is a system called DISC which was originally designed, proposed by Mr. Nixon, to encourage exports. This permits a company to create - a dummy corporation, to export their products, and then not to pay the full amount of taxes on them. This costs our - government about - $1.4 billion a year. And when those rich corporations don't pay that tax, the average American taxpayer pays it for 'em. Another one that's - that's very important is the - is the business deductions, - jet airplanes, - first class travel, the fifty-dollar martini lunch. The average working person can't - - can't take advantage of that, but the - the wealthier people - can. Uh - another system is where uhh - a dentist can invest money in say, raising cattle and - can put in a hundred thousand dollars of his own money, borrow nine hundred thousand dollars - nine hundred mi- thousand dollars - that makes a million - and mark off a great amount of - of loss - through that procedure. Uh - there was one example, for instance, where - somebody - produced pornographic movies. They put in $30 thousand of their own money and got a hundred and twenty thousand dollars in tax savings. Well, these special kinds of programs have - have robbed the average taxpayer and have benefited those who are powerful, and who can employ lobbyists, and who can have their CPAs and their lawyers to help them benefit from the roughly - eight thousand pages of the tax code. The average American person can't do it. You can't hire a lobbyist out of unemployment compensation checks.

MS. DREW: Ah - Governor, to follow up on your answer. Uh - in order for any kind of tax relief to really be felt by the middle and lower-income people

MR. CARTER: Yes. You need about, according to Congressional committees on this, you need about $10 billion. Now you listed some things - the - deferral on foreign income as estimated: that would save about $500 million. DISC, you said, was about 1.4 billion. - The estimate of the outside, if you eliminated all tax shelters, is 5 billion. So where else would you raise the revenue to provide this tax relief - would you, in fact, do away with all business deductions, and what other kinds of preferences would you do away with?

MR. CARTER: No, I wouldn't do away with all - business deductions. I think that would be a - a very serious mistake. But - if - if you could just do away with the ones that are unfair, you could lower taxes for everyone. I would never do anything that would increase the taxes for those who work for a living, or who are presently required to list all their income. What I wanna do is not to raise taxes, but to eliminate loopholes. And this is - the point of my first statistics that I gave you - that - that the present tax benefits that have been carved out over a long period of years - fifty years - by sharp tax lawyers and by lobbyists have benefited just the rich. These programs that I described to you earlier - the tax deferrals for overseas, the DISC, and the tax shelters, - they only apply to people in the $50 thousand-a-year bracket or up, and I think this is the very best way to approach it. It's to make sure that everybody pays taxes on the income that they earn and make sure that you take whatever savings there is from the higher income levels and give it to the lower- and middle-income families.

MR. NEWMAN: President Ford.

MR. FORD: Governor Carter's answer tonight does not coincide with the answer that he gave in an interview to the Associated Press a week or so ago. In that interview - Governor Carter indicated that - he would raise the taxes on those in the medium or middle-income brackets or higher. Now if you - take the medium or middle-income taxpayer - that's about $14 thousand per person - - Governor Carter has indicated, publicly, in an interview that he would increase the taxes on about 50 percent of the working people of this country. I think - the way to get tax equity in this country is to give tax relief to the middle-income people who have an income from roughly $8 thousand up to twenty-five or thirty thousand dollars. They have been short-changed as we have taken ten million taxpayers off the tax rolls in the last eight years, and as we have - added to the minimum tax - provision to make all people pay more taxes. I believe in tax equity for the middle-income taxpayer, increasing the personal exemption. Mr. Carter wants to increase taxes for roughly half of the taxpayers of this country. Now, the Governor has also played a little fast and loose with the facts about vetoes. The records show that President Roosevelt vetoed an average of fifty-five bills a year. President Truman vetoed on the average, while he was president, about thirty-eight bills a year. I understand that Governor Carter, when he was Governor of Georgia, vetoed between thirty-five and forty bills a year. My average in two years is twenty-six. But in the process of that we have saved uhh - $9 billion. And one final comment, - Governor Carter talks about the tax bills and all of the inequities that exist in the present law. I must remind him the Democrats have controlled the Congress for the last twenty-two years and they wrote all the tax bills.