RUTH J. HINERFELD, CHAIR, LEAGUE OF WOMEN VOTERS EDUCATION FUND: Good evening. I'm Ruth Hinerfeld of the League of Women Voters Education Fund. We're pleased to be in Baltimore for the first of our 1980 Presidential Debates. The League is a non-partisan organization. We're presenting these debates to provide citizens an opportunity to see and hear the candidates state their positions on important issues of concern to us all. Our moderator is Bill Moyers.

MR. MOYERS, HOST AND EXECUTIVE EDITOR, "BILL MOYERS' JOURNAL," PUBLIC BROADCASTING SYSTEM: Thank you, Mrs. Hinerfeld. My colleagues and I agreed to participate tonight, although the questioners are limited by the constraints of the format, because we thought with the League of Women Voters, that it is desirable to seek a comparison of views on a few issues in a joint appearance by the men who would be the next President of the United States.

Former Governor Ronald Reagan, a Republican Party candidate, and Congressman John Anderson, who is running as an Independent, accepted the League of Women Voters' invitation to be here. President Carter declined. Mr. Reagan and Mr. Anderson will respond with their views on certain issues posed by questions from my colleagues: Carol Loomis of Fortune Magazine; Daniel Greenberg, a syndicated columnist; Charles Corddry of the Baltimore Sun; Lee May of The Los Angeles Times; James Bryant Quinn. Jane Bryant Quinn of Newsweek; and Soma Golden of The New York Times. None of the questions has been submitted in advance to either the League of Women Voters, or to the candidates, or to their representatives.

Gentlemen, thank you both for coming. The ground rules you agreed upon with the League are brief. Each panelist will ask a single question. You will have two and a half minutes in which to respond. After you've stated your positions in those two and a half minutes, each of you will have one minute and 15 seconds for response. At the close of the debate, each of you will have three minutes for closing remarks.

We ask the Convention Center audience to abide by one simple ground rule: Please do not applaud or express approval or disapproval during the debate. You may do that on November 4.

Having won the toss of the coin, Mr. Anderson will respond to the first question from Carol Loomis.

CAROL LOOMIS, BOARD OF EDITORS, FORTUNE MAGAZINE: Mr. Anderson, opinion polls show that the American public sees inflation as the country's number one economic problem, yet, as individuals, they oppose cures that hurt them personally. Elected officials have played along by promising to cure inflation while backing away from tough programs that might hurt one special interest group or another, and by actually adding inflationary elements to the system, such as indexing. They have gone for what is politically popular, rather than for what might work and amount to leadership.

My question, and please be specific, is what politically unpopular measures are you willing to endorse, push and stay with, that might provide real progress in reducing inflation?

REP. JOHN B. ANDERSON: Miss Loomis, I think it's very appropriate that the first question in this first debate of Campaign '80 should relate to the economy of the country, because it seems to me that the people who are watching us tonight - 221 million Americans - are truly concerned about the poor rate of performance of the American economy over the last four years. Governor Reagan is not responsible for what has happened over the last four years, nor am I. The man who should be here tonight to respond to those charges chose not to attend. But I want to answer as specifically as I can the question that you have just put to me. Let me tell you that I, first of all, oppose an election year tax cut, whether it is the 10% across-the-board tax cut promised to the taxpayers by my opponent in this debate tonight, or whether it is the $27.5 billion tax cut promised on the 20th of August by President Carter. I simply think that when we are confronting a budget deficit this year - and this fiscal year will end in about 10 days, and we are confronted with the possibility of a deficit of $60 billion, perhaps as much as $63 billion - that that simply would be irresponsible. That, once again, the printing presses will start to roll; once again we will see the monetization of that debt result in a higher rate of inflation. Even though we've seen some hopeful signs, perhaps, in the flash report on the third quarter, that perhaps the economy is coming out of the recession, we've also seen the rise in the rate of the prime; we have seen mortgage rates back up again, a sure sign of inflation in the housing industry. What I would propose, and I proposed it way back in March when I was a candidate in my own state of Illinois, I proposed $11.3 billion, specifically, in cuts in the Federal budget. I think we've got to have fiscal restraint. And I said at that time that one of the things that we could do, that perhaps would save as much as $5 billion to $7 billion, according, to one of the leading members of the House Budget Committee, was to recalculate the index that is used to determine the cost of living benefits that are paid to civil service retirees, to military retirees. That we ought to ... in addition to that, we ought to pay those retirement benefits on the basis of once a year, rather than twice a year, and save $750 billion. In other words....

MOYERS: Mr. Anderson.

ANDERSON: fiscal restraint, I think is necessary.

MOYERS: your time is up. Ms. Loomis?

LOOMIS: Governor Reagan, repeating the question, and I would ask you, again, to engage in as many specifics as you possibly can. What politically unpopular measures are you willing to endorse, push and stay with that might provide real progress in reducing inflation?

GOV. RONALD REAGAN: I believe that the only unpopular measures, actually, that could be, or would be applied, would be unpopular with the government, and with those. perhaps, some special interest groups who are tied closely to government. I believe that inflation today is caused by government simply spending more than government takes in, at the same time that government has imposed upon business and industry, from the shopkeeper on the corner to the biggest industrial plant in America, countless harassing regulations and punitive taxes that have reduced productivity at the same time they have increased the cost of production. And when you are reducing productivity at the same time that you are turning out printing-press money in excessive amounts, you're causing inflation. And it isn't really higher prices, it's just, you are reducing the value of the money. You are robbing the American people of their savings. And so, the plan that I have proposed - and contrary to what John says, my plan is for a phased-in tax cut over a three-year period, tax increase and depreciation allowances for business and industry to give them the capital to refurbish plant and equipment, research and development, improved technology - all of which we see our foreign competitors having, and we have the greatest percentage of outmoded industrial plant and equipment of any of the industrial nations - produce more, have stable money supply, and give the people of this country a greater share of their own savings.

Now, I know that this has been called inflationary by my opponent and by the man who isn't here tonight. But I don't see where it is inflationary to have people keep more of their earnings and spend it, and it isn't inflationary for government to take that money away from them and spend it on the things it wants to spend it on. I believe we need incentive for the individual, and for business and industry, and I believe the plan that I have submitted, with detailed backing, and which has been approved by a number of our leading economists in the country, is based on projections. conservative projections out for the next five years, that indicates that this plan would, by 1983, result in a balanced budget. We have to remember, when we talk a tax cut, we're only talking about reducing a tax increase, because this Administration has left us with a built-in tax increase that will amount to $86 billion next year.

MOYERS: Your time is up.

REAGAN: ...and $500 billion over the next five.

MOYERS: Mr. Anderson?

ANDERSON: Mr. Moyers, in addition to saying that this is no time for a tax cut, in view of the incipient signs of renewed inflation, in addition to calling for restraint in Federal spending, 15 months ago, I also suggested we ought to have an emergency excise tax on gasoline. I say that because I think, this year, we will send $90 billion out of this country to pay for imported oil, even though that. those imports have been reduced. And since I first made that proposal 15 months ago, the price of gasoline, which was then $.80, has gone up to about $1.30. In other words, we've had a huge increase of about $.50 a gallon since that time, and all of that increase has gone out of this country - or much of it - into the pockets of OPEC oil producers. Whereas I have proposed we ought to take. put that tax on here at home, reduce our consumption of that imported oil. Recycle those proceeds, then, back into the pockets of the American workers by reducing their tax payments. their Social Security tax payments by 50%. That, I think, in addition, would be an anti-inflationary measure that would strengthen the economy of this country.

MOYERS: Mr. Reagan.

REAGAN: Well, I cannot see where a $.50 a gallon tax applied to gasoline would have changed the price of gasoline. It would still have gone up as much as it has, and the $.50 would be added on top of that. And it would be a tax paid by the consumers, and then we're asked to believe that some way, they would get this back to the consumers. But why? Why take it in the first place if you're going to give it back? Why not leave it with them? And John spoke about 15 years ago, on the position that he. or 15 months ago, on what he believed in. Fifteen months ago, he was a cosigner and advocating the very tax cut that I am proposing, and said that that would be a forward step in fighting inflation, and that it would be beneficial to the working people of this country.

MOYERS: The next question goes to Mr. Reagan from Daniel Greenberg.

GREENBERG, SYNDICATED COLUMNIST: Well, gentlemen, what I'd like to say first is, I think the panel and the audience would appreciate responsiveness to the questions, rather than repetitions of your campaign addresses. My question for the Governor is: Every serious examination of the future supply of energy and other essential resources - including air, land and water - finds that we face shortages and skyrocketing prices, and that, in many ways, we're pushing the environment to dangerous limits. I'd like to know, specifically, what changes you would encourage and require in American lifestyles in automobile use, housing, land use and general consumption, to meet problems that aren't going to respond to campaign lullabies about minor conservation efforts and more production?

REAGAN: Well, I believe that conservation, at course, is worthy in and of itself. Anything that would preserve, or help us use less energy, that would be fine, and I'm for it. But I do not believe that conservation alone is the answer to the present energy problem, because all you're doing then is staving off, by a short time, the day when you would come to the end of the energy supply. To say that we are limited, and at a dangerous point in this country with regard to energy, I think, is to ignore the fact. The fact is, that in today's oil wells, there is more oil still there than we have so far taken out and used. But it would require what is known as secondary or tertiary efforts to bring it out of the ground. And this is known oil reserves, known supplies. There are hundreds of millions of acres of land that have been taken out of circulation by the Government for whatever reason they have, that is believed by the most knowledgeable oil geologists to contain probably more oil and natural gas than we have used so far since we drilled that first well 121 years ago. We have a coal supply that is equal to 50% of the world's coal supply, good for centuries, in this country. I grant you that prices may go up, because as you go further and have to go deeper, you are adding to the cost of production. We have nuclear power, which, I believe, with the safest. the most stringent of safety requirements, could meet our energy needs for the next couple of decades while we go forward exploring the areas of solar power and other forms of energy that might be renewable and that would not be exhaustible. All of these things can be done. When you stop and think that we are only drilling on 2%. have leased only 2% of the possible. possibility for oil of the continental shelf around the United States; when you stop to think that the government has taken over 100 million acres of land out of circulation in Alaska, alone, that is believed by geologists to contain much in the line of minerals and energy sources, then I think it is the Government, and the Government with its own restrictions and regulations, that is creating the energy crisis. That we are, indeed, an energy-rich nation.

MOYERS: I would like to say at this point that the candidates requested the same questions to be repeated, for the sake of precision, on the part of the interrogator. So, Mr. Greenberg, you may address Mr. Anderson.

GREENBERG: Mr. Anderson, I'd like to know specifically, what changes you would encourage and require in American lifestyles in automobile use, housing, land use and consumption, to meet problems that aren't going to respond to campaign lullabies about minor conservation efforts and more production?

ANDERSON: Well, Mr. Greenberg, I simply cannot allow to go unpassed the statements that have just been made by Mr. Reagan, who once again, has demonstrated, I think, a total misunderstanding of the energy crisis that confronts, not only this country, but the world, when he suggests that we have 27 years' supply of natural gas, 47 years' supply of oil, and all the rest, and that we really. all we have to do is to get the Government off the back of the oil industry, and that's going to be enough.

I agree with what I think is the major premise of your question, sir, that we are going to have to create a new conservation ethic in the minds of the American people. and that's simply why I proposed, 15 months ago, the emergency excise tax on gasoline that I did. I did it as a security measure to be sure, because I would rather see us reduce the consumption of imported oil than have to send American boys to fight in the Persian Gulf. But at the same time, I think it's going to take a dramatic measure of that kind to convince the American people that we will have to reduce the use of the private automobile.

We simply cannot have people sitting one behind the wheel of a car in these long traffic jams going in and out of our great cities. We are going to have to resort to van pooling, to car pooling. We're going to have to develop better community transportation systems, so that with buses and light rail, we can replace the private automobile in those places where it clearly is not energy-efficient. I think that, with respect to housing, when we are consuming, even though our per capita income today is about the same as that of the Federal Republic of Germany, we are consuming about, by a factor of two, the amount of energy that they consume in that country. Surely, there are things that we can do in the retrofitting, ;n the redesign of our homes, not only of our houses, but of our commercial structures, as well, that will make it possible for us to achieve. According to one study that was published a short time ago - the Harvard Business School study - indicated that just in the commercial sector alone of the economy, we could save between 30% and 40% of the energy that we consume in this country today. So I think, yes, we will have to change in a very appreciable way, some of the lifestyles that we now enjoy.

MOYERS: Mr. Reagan.

REAGAN: Well, as I've said, I am not an enemy of conservation. I wouldn't be called a conservative if I were. But, when my figures are challenged, as the President himself challenged them after I made them, I think it should be called to the attention of John and the others here that my figures are the figures of the Department of Energy, which has not been overly optimistic in recent years as to how much supply we have left. That is the same Government that, in 1920, told us we only had enough oil left for 13 years, and 19 years later, told us we only had enough left for another 15 years. As for saving energy and conserving, the American people haven't been doing badly at that. Because in industry today, we're producing more, over the last several years, and at 12% less use of energy than we were back in about 1973. And motorists are using 8% less than they were back at that time of the oil embargo. So, I think we are proving that we can go forward with conservation and benefit from that. But also, I think it is safe to say that we do have sources of energy that have not yet been used or found.

MOYERS: Mr. Anderson.

ANDERSON: Mr. Greenberg, I think my opponent in this debate tonight is overlooking one other very important fact. And that is, that we cannot look at this as simply a national problem. Even though it's true that, perhaps, between now and the end of the decade, our total consumption of oil may not increase by more than, perhaps, a million or 2 million barrels of oil a day. The rest of the Western world, we are told, may see its consumption increase from 51 million barrels to about 66 million. And that additional 15 million barrels is going to cause scarcity. It is going to cause scarcity in world markets because there are at least five reputable studies, one even by the American Petroleum Institute itself, that, I think, clearly indicate that somewhere along around the end of the present decade, total world demand for oil is simply going to exceed total available supplies. I think that conservation - I think that a change in lifestyles - is necessary, and we had better begin to plan for that now rather than later.