LEHRER: Now question for Mr. Perot. You have 2 minutes to answer, and Ann will ask it.

COMPTON: Mr. Perot, even if you've got what people say are the guts to take on changes in the most popular, the most sacred of the entitlements, Medicare, people say you haven't a prayer of actually getting anything passed in Washington.

Since a president isn't a lone ranger, how in the world can you make some of those unpopular changes?

PEROT: Two ways. Number one, if I get there, it will be a very unusual and historical event -- because the people, not the special interests, put me there. I will have a unique mandate. I have said again and again, and this really upsets the establishment in Washington, that we're going to inform the people in detail on the issues through an electronic town hall so that they really know what's going on.

They will want to do what's good for our country.

Now, all these fellows with thousand-dollar suits and alligator shoes running up and down the halls of Congress that make policy now -- the lobbyists, the PAC guys, the foreign lobbyists, and what-have-you, they'll be over there in the Smithsonian, you know -- because we're going to get rid of them, and the Congress will be listening to the people. And the American people are willing to have fair, shared sacrifice. They're not as stupid as Washington thinks they are. The American people are bright, intelligent, caring, loving people who want a great country for their children and grandchildren. And they will make those sacrifices.

So I welcome that challenge, and just watch -- because if the American people send me there, we'll get it done. Now, everybody will faint in Washington. They've never seen anything happen in that town.

This is a town where the White House says, Congress did it; Congress says, the White House did it. And I'm sitting there and saying, well, who else could be around, you know? Then when they get off by themselves, they say nobody did it. And yet the cash register's empty and it used to have our money, the taxpayers' money, in it, and we didn't get the results.

No, we'll get it done.

LEHRER: Governor, one minute.

CLINTON: Ross, that's a great speech, but it's not quite that simple.

I mean, look at the facts. Both parties in Washington, the president and the Congress, have cut Medicare. The average senior citizen is spending a higher percentage of income on health care today than they were in 1965, before Medicare came in.

The president's got another proposal to require them to pay $400 a year more for the next 5 years.

But if you don't have the guts to control costs by changing the insurance system and taking on the bureaucracies and the regulation of health care in the private and public sector, you can't fix this problem. Costs will continue to spiral.

And just remember this, folks. A lot of folks on Medicare are out there every day making the choice between food and medicine; not poor enough for Medicare-Medicaid, not wealthy enough to buy their medicine. I've met them, people like Mary Annie and Edward Davis in Nashua, New Hampshire. All over this country, they cannot even buy medicine.

So let's be careful. When we talk about cutting health care costs, let's start with the insurance companies and the people that are making a killing instead of making our people healthy.

(Applause)

LEHRER: One minute, President Bush.

BUSH: Well, first place, I'd like to clear up something because every 4 years, the Democrats go around and say, Republicans are going to cut Social Security and Medicare. They started it again.

I'm the president that stood up and said, don't mess with Social Security, and I'm not going to and we haven't and we are not going to go after the Social Security recipient.

I have one difference with Mr. Perot on that because I don't think we need to touch Social Security.

What we do need to do, though, is control the growth of these mandatory programs. And Ross properly says, okay, there's some pain in that. But Governor Clinton refuses to touch that, simply refuses. So what we've got to do is control it, let it grow for inflation, let it grow for the amount of new people added, population, and then hold the line.

And I believe that is the way you get the deficit down, not by the tax-and-spend program that we hear every 4 years, whether it's Mondale, Dukakis, whoever else it is. I just don't believe we ought to do that. So hold the line on Social Security and put a cap on the growth of the mandatory program.

LEHRER: New question, it is for Governor Clinton, 2 -minute answer. Sandy will ask it.

VANOCUR: Governor Clinton, Ann Compton has brought up Medicare. I remember in 1965, when Wilbur Mills of Arkansas, the chairman of Ways and Means, was pushing it through the Congress. The charge against it was it's socialized medicine.

CLINTON: Mr. Bush made that charge.

VANOCUR: Well, he served with him 2 years later, in 1967, where I first met him. The 2nd point, though, is that it is now skyrocketing out of control. People want it. We say it's going bonkers.

Is not the Oregon plan applied to Medicaid rationing the proper way to go even though the federal government last August ruled that it violated the Americans with Disabilities Act of 1990?

CLINTON: I thought the Oregon plan should at least have been allowed to be tried because at least the people in Oregon were trying to do something. Let me go back to the main point, Sandy.

Mr. Bush is trying to run against Lyndon Johnson and Jimmy Carter and everybody in the world but me in this race. I have proposed a managed competition plan for health care. I will say again: you cannot control health care costs simply by cutting Medicare. Look what's happened. The federal government has cut Medicare and Medicaid in the last few years, states have cut Medicaid -- we've done it in Arkansas under budget pressures. But what happens? More and more people get on the rolls as poverty increases. If you don't control the health care costs of the entire system, you cannot get control of it.

Look at our program. We set up a national ceiling on health care costs tied to inflation and population growth set by health care providers, not by the government. We provide for managed competition, not government models, in every states. And we control private and public health care costs.

Now, just a few days ago a bipartisan commission of Republicans and Democrats -- more Republicans than Democrats -- said my plan will save the average family $1200 a year more than the Bush plan will by the year 2000, $2.2 trillion in the next 12 years, $400 billion a year by the end of this decade. I've got a plan to control health care costs. But you can't just do it by cutting Medicare; you have to take on the insurance companies, the bureaucracies. And you have to have cost controls, yes.

But keep in mind we are spending 30% more on health care than any country in the world, any country, and yet we have 35 million people uninsured, we have no preventing and primary care. The Oregon plan is a good start if the federal government is going to continue to abandon its responsibilities. I say if Germany can cover everybody and keep costs under inflation, if Hawaii can cover 98% of their people at lower health care costs than the rest of us, if Rochester, New York, can do it with two-thirds of the cost of the rest of it, America can do it, too. I'm tired of being told we can't. I say we can. We can do better, and we must.

LEHRER: President Bush, one minute.

BUSH: Well, I don't have time in 30 seconds, or whatever -- a minute -- to talk about our health care reform plan. The Oregon plan made some good sense, but it's easy to dismiss the concerns of the disabled. As president I have to be sure that those waivers, which we're approving all over the place, are covered under the law. Maybe we can work it out. But the Americans with Disabilities Act, speaking about sound and sensible civil rights legislation, was the most foremost piece of legislation passed in modern times, and so we do have something more than a technical problem.

Governor Clinton clicked off the things -- he's going to take on insurance companies and bureaucracies. He failed to take on somebody else -- the malpractice suit people, those that bring these lawsuits against -- these frivolous trial lawyers' lawsuits that are running the costs of medical care up 25 to 50 billion. And he refuses to put anything, controls, on these crazy lawsuits.

If you want to help somebody, don't run the costs up by making doctors have to have 5 or 6 tests where one would do for fear of being sued, or have somebody along the highway not stop to pick up a guy and help him because he's afraid a trial lawyer will come along and sue him. We're suing each other too much and caring for each other too little.

(Applause)

LEHRER: Mr. Perot, one minute.

PEROT: We got the most expensive health care system in the world; it ranks behind 15 other nations when we come to life expectancy, and 22 other nations when we come to infant mortality. So we don't have the best.

Pretty simple, folks -- if you're paying more and you don't have the best, if all else fails go copy the people who have the best who spend less, right?

Well, we can do better than that. Again, we've got plans lying all over the place in Washington. Nobody ever implements them. Now I'm back to square one. If you want to stop talking about it and do it, then I'll be glad to go up there and we'll get it done. But if you just want to keep the music going, just stay traditional this next time around, and 4 years from now you'll have everybody blaming everybody else for a bad health care system.

Talk is cheap; words are plentiful, deeds are precious. Let's get on with it.

(Applause)

LEHRER: And that's exactly what we're going to do. That was, in fact, the final question and answer. We're now going to move to closing statements. Each candidate will have up to 2 minutes. The order, remember, was determined by drawing, and Mr. Perot, you are first.

PEROT: Well, it's been a privilege to be able to talk to the American people tonight. I make no bones about it. I love this country. I love the principle it's founded on. I love the people here. I don't like to see the country's principles violated. I don't like to see the people in a deteriorating economy in a deteriorating country because our government has lost touch with the people.

The people in Washington are good people. We just have a bad system. We've got to change the system. It's time to do it because we have run up so much debt that time is no longer our friend. We've got to put our house in order.

When you go to bed tonight, look at your children. Think of their dreams. Think of your dreams as a child and ask yourself, isn't it time to stop talking about it? Isn't it time to stop creating images? Isn't it time to do it? Aren't you sick of being treated like an unprogrammed robot? Every 4 years, they send you all kinds of messages to tell you how to vote and then go back to business as usual.

They told you at the tax and budget summit that if you agreed to a tax increase, we could balance the budget. They didn't tell you that that same year they increased spending $1.83 for every dollar we increased taxes. That's Washington in a nutshell right there.

In the final analysis, I'm doing this for your children when you look at them tonight.

There's another group that I feel very close to, and these at the men and women who fought on the battlefield, the children -- the families -- of the ones who died and the people who left parts of their bodies over there. I'd never ask you to do anything for me, but I owe you this, and I'm doing it for you. And I can't tell you what it means to me at these rallies when I see you and you come up and the look in your eyes -- and I know how you feel and you know how I feel. And then I think of the older people who are retired. They grew up in the Depression. They fought and won World War II. We owe you a debt we can never repay you. And the greatest repayment I can ever give is to recreate the American dream for your children and grandchildren. I'll give you everything I have, if you want me to do it.

(Applause)

LEHRER: Governor Clinton, your closing statement.

CLINTON: I'd like to thank the people of St. Louis and Washington University, the Presidential Debate Commission and all those who made this night possible. And I'd like to thank those of you who are watching.

Most of all, I'd like to thank all of you who have touched me in some way over this last year, all the thousands of you whom I've seen. I'd like to thank the computer executives and the electronics executives in Silicon Valley, two-thirds of whom are Republicans who said they wanted to sign on to a change in America. I'd like to thank the hundreds of executives who came to Chicago, a third of them Republicans, who said they wanted to change. I'd like to thank the people who've started with Mr. Perot who've come on to help our campaign.

I'd like to thank all the folks around America that no one ever knows about -- the woman that was holding the AIDS baby she adopted in Cedar Rapids, Iowa who asked me to do something more for adoption; the woman who stopped along the road in Wisconsin and wept because her husband had lost his job after 27 years; all the people who are having a tough time and the people who are winning but who know how desperately we need to change.

This debate tonight has made crystal clear a challenge that is old as America -- the choice between hope and fear, change or more of the same, the courage to move into a new tomorrow or to listen to the crowd who says things could be worse.

Mr. Bush has said some very compelling things tonight that don't quite square with the record. He was president for 3 years before he proposed a health care plan that still hasn't been sent to Congress in total; three years before an economic plan, and he still didn't say tonight that that tax bill he vetoed raised taxes only on the rich and gave the rest of you a break -- but he vetoed it anyway.

I offer a new direction. Invest in American jobs, American education, control health care costs, bring this country together again. I want the future of this country to be as bright and brilliant as its past, and it can be if we have the courage to change.

(Applause)

LEHRER: President Bush, your opposing statement.

BUSH: Let me tell you a little what it's like to be president. In the Oval Office, you can't predict what kind of crisis is going to come up. You have to make tough calls. You can't be on one hand this way and one hand another. You can't take different positions on these difficult issues. And then you need a philosophical -- I'd call it a philosophical underpinning. Mine for foreign affairs is democracy and freedom, and look at the dramatic changes around the world. The Cold War is over. The Soviet Union is no more and we're working with a democratic country. Poland, Hungary, Czechoslovakia, the Baltics are free.

Take a look at the Middle East. We had to stand up against a tyrant. The U.S. came together as we haven't in many, many years. And we kicked this man out of Kuwait. And in the process, as a result of that will and that decision and that toughness, we now have ancient enemies talking peace in the Middle East. Nobody would have dreamed it possible.

And I think the biggest dividend of making these tough calls is the fact that we are less afraid of nuclear war. Every parent out there has much less worry that their kids are going to be faced with nuclear holocaust. All this is good.

On the domestic side, what we must do is have change that empowers people -- not change for the sake of change, tax and spend. We don't need to do that any more. What we need to do is empower people. We need to invest and save. We need to do better in education. We need to do better in job retraining. We need to expand our exports, and they're going very, very well, indeed. And we need to strengthen the American family.

I hope as president that I've earned your trust. I've admitted it when I make a mistake, but then I go on and help, try to solve the problems. I hope I've earned your trust because a lot of being president is about trust and character. And I ask for your support for 4 more years to finish this job.

Thank you very, very much.

(Applause)

LEHRER: Don't go away yet. I just want to thank the three panelists and thank the three candidates for participating -- President Bush, Governor Clinton and Mr. Perot. They will appear again together on October the 15th and again on October 19th, and next Tuesday there will be a debate among the three candidates for vice president.

And for now, from Washington University in St. Louis, Missouri, I'm Jim Lehrer. Thank you, and good night.