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, through conservation, are importing much less oil today than we were even a year ago. And yet, U.S. reliance on Arab oil as a percentage of total imports is much higher today than it was during the 1973 Arab oil embargo. And the substantial loss of Arab oil could plunge the United States into depression. The question is whether the development of alternative energy sources, in order to reduce this dependence, can be done without damaging the environment, and will it mean for American families steadily higher fuel bills?

MR. REAGAN: I'm not so sure that it means steadily higher fuel costs, but I do believe that this nation has been portrayed for too long a time to the people as being energy-poor when it is energy-rich. The coal that the President mentioned - yes, we have it - and yet one-eighth of our total coal resources is not being utilized at all right now. The mines are closed down; there are 22000 miners out of work. Most of this is due to regulations which either interfere with the mining of it or prevent the burning of it:. With our modern technology, yes, we can burn our coal within the limits of the Clean Air Act. I think, as technology improves, we'll be able to do even better with that. The other thing is that we have only leased out - begun to explore - 2% of our outer continental shelf for oil, where it is believed, by everyone familiar with that fuel and that source of energy, that there are vast supplies yet to be found. Our Government has, in the last year or so, taken out of multiple use millions of acres of public lands that once were - well, they were public lands subject to multiple use - exploration for minerals and so forth. It is believed that probably 70% of the potential oil in the United States is probably hidden in those lands, and no one is allowed to even go and explore to find out if it is there. This is particularly true of the recent efforts to shut down part of Alaska. Nuclear power: There were 36 power plants planned in this country. And let me add the word safety; it must be done with the utmost of safety. But 32 of those have given up and canceled their plans to build, and again, because Government regulations and permits, and so forth, take - make it take - more than twice as long to build a nuclear plant in the United States as it does to build one in Japan or in Western Europe. We have the sources here. We are energy rich, and coal is one of the great potentials we have.

MR. SMITH: President Carter, your comment?

MR. CARTER: To repeat myself, we have this year the opportunity, which we'll realize, to produce 800 million tons of coal - an unequaled record in the history of our country. Governor Reagan says that this is not a good achievement, and he blames restraints on coal production on regulations - regulations that affect the life and the health and safety of miners, and also regulations that protect the purity of our air and the quality our water and our land. We cannot cast aside these regulations. We have a chance in the next 15 years, insisting upon the health and safety of workers in the mines, and also preserving the same high air and water pollution standards, to triple the amount of coal we produce. Governor Reagan's approach to our energy policy, which has already proven its effectiveness, is to repeal, or to change substantially, the windfall profits tax - to return a major portion of $227 billion back to the oil companies; to do away with the Department of Energy; to short-circuit our synthetic fuels program; to put a minimal emphasis on solar power; to emphasize strongly nuclear power plants as a major source of energy in the future. He wants to put all our eggs in one basket and give that basket to the major oil companies.

MR. SMITH: Governor Reagan.

MR. REAGAN: That is a misstatement, of course, of my position. I just happen to believe that free enterprise can do a better job of producing the things that people need than government can. The Department of Energy has a multi-billion-dollar budget in excess of $10 billion. It hasn't produced a quart of oil or a lump of coal, or anything else in the line of energy. And for Mr. Carter to suggest that I want to do away with the safety laws and with the laws that pertain to clean water and clean air, and so forth. As Governor of California, I took charge of passing the strictest air pollution laws in the United States - the strictest air quality law that has even been adopted in the United States. And we created an OSHA - an Occupational Safety and Health Agency - for the protection of employees before the Federal Government had one in place. And to this day, not one of its decisions or rulings has ever been challenged. So, I think some of those charges are missing the point. I am suggesting that there are literally thousands of unnecessary regulations that invade every facet of business, and indeed, very much of our personal lives, that are unnecessary; that Government can do without; that have added $130 billion to the cost of production in this country; and that are contributing their part to inflation. And I would like to see us a little more free, as we once were.

MR. SMITH: President Carter, another crack at that?

MR. CARTER: Sure. As a matter of fact,. the air pollution standard laws that were passed in California were passed over the objections of Governor Reagan, and this is a very well-known fact. Also, recently, when someone suggested that the Occupational Safety and Health Act should be abolished, Governor Reagan responded, amen. The offshore drilling rights is a question that Governor Reagan raises often. As a matter of fact, in the proposal for the Alaska lands legislation, 100% of all the offshore lands would be open for exploration, and 95% of all the Alaska lands, where it is suspected or believed that minerals might exist. We have, with our five-year plan for the leasing of offshore lands, proposed more land to be drilled than has been opened up for drilling since this program first started in 1954. So we're not putting restraints on American exploration, we're encouraging it in every way we can.

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

MR. REAGAN: Yes. If it is a well-known fact that I opposed air pollution laws in California, the only thing I can possibly think of is that the President must be suggesting the law that the Federal Government tried to impose on the State of California - not a law, but regulations - that would have made it impossible to drive an automobile within the city limits of any California city, or to have a place to put it if you did drive it against their regulations. It would have destroyed the economy of California, and, I must say, we had the support of Congress when we pointed out how ridiculous this attempt was by the Environmental Protection Agency. We still have the strictest air control, or air pollution laws in the country. As for offshore oiling, only 2% now is so leased and is producing oil. The rest, as to whether the lands are going to be opened in the next five years or so - we're already five years behind in what we should be doing. There is more oil now, in the wells that have been drilled, than has been taken out in 121 years that they've been drilled.