LEHRER: Mr. Perot, based on your experience at General Motors, where do you come down on this? This has been thrown about, back and forth, during this campaign from the very beginning about jobs and CAFE standards.

PEROT: Well, everybody's nibbling around the edges. Let's go to the center of the bull's-eye, the core problem. And believe me, everybody on the factory floor all over this country knows it. You implement that NAFTA, the Mexican trade agreement, where they pay people a dollar an hour, have no health care, no retirement, no pollution controls, et cetera, et cetera, et cetera, and you're going to hear a giant sucking sound of jobs being pulled out of this country right at a time when we need the tax base to pay the debt and pay down the interest on the debt and get our house back in order.

We've got to proceed very carefully on that. See, there's a lot I don't understand. I do understand business. I do understand creating jobs. I do understand how to make things work. And I got a long history of doing that.

Now, if you want to go to the core problem that faces everybody in manufacturing in this country, it's that agreement that's about to be put into practice. It's very simple. Everybody says it'll create jobs. Yes, it'll create bubble jobs.

Now, you know, watch this -- listen very carefully to this. One-time surge while we build factories and ship machine tools and equipment down there. Then year after year for decades, they will have jobs. And I finally -- I thought I didn't understand it -- called all the experts, and they said, oh, it'll be disruptive for 12 to 15 years.

We haven't got 12 days, folks. We cannot lose those jobs. They were eventually saying, Mexican jobs will eventually come to $7.50 an hour, ours will eventually go down to $7.50 an hour. Makes you feel real good to hear that, right?

Let's think it through here. Let's be careful. I'm for free trade philosophically, but I have studied these trade agreements till the world has gone flat, and we don't have good trade agreements across the world.

I hope we'll have a chance to get into that tonight, because I can get right to the center of the bull's-eye and tell you why we're losing whole industries in this country.

LEHRER: Just for the record, though, Mr. Perot, I take it, then, from your answer, you do not have a position on whether or not enforcing the CAFE standards will cost jobs in the auto industry?

PEROT: Oh, no, it will cost jobs, but that's not -- let me say this. I'd rather, if you gave me 2 bad choices --

LEHRER: Okay.

PEROT: I'd rather have some jobs left here than just see everything head south, see?

LEHRER: So that means -- in other words, you agree with President Bush; is that right?

PEROT: No, I'm saying our principal need now is to stabilize the tax base, which is the job base, and create a growing, dynamic base. Now please, folks, if you don't hear anything else I say, remember where the -- millions of people at work are our tax base.

One quick point. If you confiscate the Forbes 400 wealth, take it all, you cannot balance the budget this year. Kind of gets your head straight about where the taxes, year in and year out, have gotta come from. Millions and millions of people at work.

LEHRER: Yes, sir.

BUSH: I'm caught in the middle on NAFTA. Ross says, with great conviction, he opposes the North American Free Trade Agreement. I am for the North American Free Trade Agreement. My problem with Governor Clinton, once again, is that one time he's gonna make up his mind, he sees some merit in it, but then he sees a lot of things wrong with it. Then the other day he says he's for it, however then we've got to pass other legislation.

When you're president of the U.S., you cannot have this pattern of saying well, I'm for it but I'm on the other side of it. And it's true on this and it's true on CAFE.

Look, if Ross were right when we get a free trade agreement with Mexico, why wouldn't they have gone down there now? You have a differential in wages right now. I just have an honest philosophical difference. I think free trade is going to expand our job opportunity. I think it is exports that have saved us when we're in a global slowdown, a connected global slowdown, a recession in some countries. And it's free trade, fair trade that needs to be our hallmark, and we need more free trade agreements, not fewer.

LEHRER: Governor, quick answer on trade and I want to go on to something else.

(Applause.)

CLINTON: I'd like to respond to that. You know, Mr. Bush was very grateful when I was among the Democrats who said he ought to have the authority to negotiate an agreement with Mexico. Neither I nor anybody else, as far a I know, agreed to give him our proxy to say that whatever he did was fine for the workers of this country and for the interests of this country.

I am the one who's in the middle on this. Mr. Perot says it's a bad deal. Mr. Bush says it's a hunky-dory deal. I say on balance it does more good than harm if, if we can get some protection for the environment so that the Mexicans have to follow their own environmental standards, their own labor law standards, and if we have a genuine commitment to reeducate and retrain the American workers who lose their jobs and reinvest in this economy.

I have a realistic approach to trade. I want more trade, and I know there are some good things in that agreement. But it can sure be made better.

Let me just point out, just today in the Los Angeles Times Clyde Prestowitz, who was one of President Reagan's leading trade advisers and a life-long conservative Republican, endorsed my candidacy because he knows that I'll have a free and fair trade policy, a hard-headed, realistic policy, and not get caught up in rubber-stamping everything the Bush administration did. If I wanted to do that, why would I run for president, Jim? Anybody else can run the middle class down and run the economy in a ditch. I want to change it.

(Applause.)

LEHRER: We've got about 4 --

BUSH: I think he made my case. On the one hand, it's a good deal but on the other hand I'd make it better. You can't do that as president. You can't do it on the war, where he says well, I was with the minority but I guess I would have voted with the majority.

This is my point tonight. We're talking about 2 weeks from now you've gotta decide who's gonna be president. And there is this pattern that has plagued in him the primaries and now about trying to have it both ways on all these issues. You can't do that. And if you make a mistake, say you made a mistake and go on about your business, trying to serve the American people.

Right now we heard it. Ross is against it. I am for it. He says on the one hand I am for it and on the other hand I may be against it.

LEHRER: The governor --

(Applause.)

CLINTON: That's what's wrong with Mr. Bush. His whole deal is you've gotta be for it or against it, you can't make it better. I believe we can be better. I think the American people are sick and tired of either/or solutions, people being pushed in the corner, polarized to extremes.

GOVERNOR CLINTON (continuing): I want think they want somebody with common sense who can do what's best for the American people. And I'd be happy to discuss these other issues, but I can't believe he is accusing me of getting on both sides. He said trickle-down economics was voodoo economics; now he's it's biggest practitioner.

(Laughter and applause)

He promised -- he -- you know -- let me just say --

BUSH: But I've always said trickle-down government is bad.

CLINTON: I could run this string out a long time, but remember this, Jim. Those 209 Americans last Thursday night in Richmond told us they wanted us to stop talking about each other and start talking about Americans and their problems and their promise, and I think we ought to get back to that.

I'll be glad to answer any question you have, but this election ought to be about the American people.

(Applause)

LEHRER: Mr. Perot.

PEROT: Is there an equal time rule tonight?

BUSH: Yes.

PEROT: Or do you just keep lunging in at will? I thought we were going to have equal time, but maybe I just have to interrupt the other 2. Is that the way it works?

LEHRER: No, it's -- Mr. Perot, you're doing fine. Go ahead. Whatever you want to say, say it.

PEROT: Now that we've talked all around the problem about free trade, let's go again to the center of the bull's- eye.

LEHRER: Wait a minute. I was going to ask -- I thought you wanted to respond to what we're talking about.

PEROT: I do, I do.

LEHRER: All right.

PEROT: I just want to make -- foreign lobbyists, this whole thing. Our country has sold out to foreign lobbyists. We don't have free trade. Both parties have foreign lobbyists on leaves in key roles in their campaigns. And if there's anything more unwise than that, I don't know what it is. Every debate I bring this up, and nobody ever addresses it.

I would like for them to look you in the eye and tell you why they have people representing foreign countries working on their campaigns. And you know, you've seen the list, I've seen the list, we won't go into the names, but no wonder they -- if I had those people around me all day every day, telling me it was fair and free, I might believe it. But if I look at the facts as a businessman, it's so tilted, the first thing you ought to do is just say, guys, if you like these deals so well, we'll give you the deal you gave us.

Now, Japanese couldn't unload the cars in this country if they had the same restrictions we had, and on and on and on and on and on. I suggest to you that the core problem -- 1 country spent $400 million lobbying in 1988, our country. And it goes on and on. And you look at a who's who in these campaigns around the 2 candidates. They're foreign lobbyists taking leaves. What do you think they're going to do when the campaign's over? Go back to work at 30,000 bucks a month representing some other country. I don't believe that's in the American people's interest.

I don't have a one of them, and I haven't taken a penny of foreign money, and I never will.

(Applause)

LEHRER: Mr. President, how do you respond to that? Mr. Perot's made that charge several times. The fact that you have people working in your campaign who are paid foreign lobbyists.

BUSH: Most people that are lobbying are lobbying the Congress. And I don't think there's anything wrong with an honest person who happens to represent an interest of another country for making his case. That's the American way. And what you're assuming is that that makes the recipient of the lobbying corrupt or the lobbyist himself corrupt. I don't agree with that.

But if I found somebody that had a conflict of interest that would try to illegally do something as a foreign -- registered lobby, the laws cover this. I don't know why -- I've never understood quite why Mr. Perot was so upset it, because one of the guys he used to have working for him, I believe, had foreign accounts. Could be wrong, but I think so.

PEROT: And as soon as I found it out, he went out the door.

(Laughter)

BUSH: Well --

(Applause)

But I don't -- I think you got to look at the integrity and the honor of the people that are being lobbied and those that are lobbyists. The laws protect the American taxpayer in this regard. If the laws are violated so much, but to suggest if somebody represents a foreign country on anything, that makes him corrupt or against the taxpayer, I don't agree with that.

PEROT: One quick relevant specific. We're getting ready to dismantle the airlines industry in our country, and none of you know it. And I doubt in all candor if the president knows it. But this deal that we're doing with BAC and U.S. Air and KLM and Northwest, guess who's on the president's campaign big time: a guy from Northwest. This deal is terribly destructive to the U.S. airline industry. One of the largest industries in the world is the travel, tourist business. We won't be making airplanes in this country 10 years from now if we let deals like this go through.

If the president has any interest tonight, I'll detail it to you; I won't take 10 minutes tonight. All these things take a few minutes. But that's happening as we sit here today.

We hammerlock the American companies -- American Airlines, Delta -- the last few great we have, because we're trying to do this deal with these 2 European companies. And never forget, they've got Airbus over there, and it's a government-owned, privately owned, consortium across Europe. They're dying to get the commercial airline business. Japan is trying to get the commercial airline business.

I don't think there are any villains inside government on this issue, but there's sure a lot of people who don't understand business. And maybe you need somebody up there who understands when you're getting your pocket picked.

(Applause)

CLINTON: Jim.

LEHRER: Governor, I'm sorry, but that concludes my time with -- well, you...

CLINTON: Why, I had a great response to that.

LEHRER: All right, go ahead, quick, quickly.

CLINTON: Just very briefly. I think Ross is right and that we do need some more restrictions on lobbyists. We ought to make them disclose the people they've given money to when they're testifying before congressional committees; we ought to close the lawyers' loopholes; they ought to have to disclose when they're really lobbying. And we ought to have to limit -- we ought to have a much longer period of time, about 5 years, between the time when people can leave executive branch offices and then go out and start lobbying for foreign interests. I agree with that.

We've wrecked the airline industry already because of all these leverage buyouts and all these terrible things that have happened to the airline industry. We're going to have a hard time rebuilding it.

But the real thing we got to have is a competitive economic strategy. Look what's happening to McDonnell Douglas; even Boeing is losing market share -- because we let the Europeans spend $25-$40 billion on Airbus without an appropriate competitive response.

What I want America to do is to trade more but to compete and win by investing in competitive ways. And we're in real trouble on that.

(Applause)

LEHRER: I'm going to be in real trouble if I don't bring out -- it's now time...

BUSH: I promise it's less than 10 seconds.

LEHRER: OK.

BUSH: I heard Gov Clinton congratulate us on 1 thing -- first time he said something pleasant about this administration. Productivity in this country is up, it is way up -- productivity is up. And that's a good thing. There are many good ones, but I was glad he acknowledged that. Thank you.

LEHRER: Now we're going to move to the 2nd half...

PEROT: Now give me 1 second...

LEHRER: We're going to move to the...

PEROT: I've volunteered. Now, look, I'm just kind of a, you know, cur dog here; I was put on the ballot by the people, not special interests. So I have to stand up for myself. Now, Jim, let me get it out. On the 2nd debate, I offered, since both sides want the enterprise zones and we can't get together, I said I'll take a few days off and go to Washington and hold hands with you and we'll get it done. I'll take a few days off and hold hands with you and get this airlines thing straightened, because that's important to this country. That's kind of pathetic I have to do it -- and nobody's called me yet to come up, I might mention.

(Laughter)

LEHRER: All right, I want to bring in...

PEROT: But if they do -- if they do, it's easy to fix. If you all want the enterprise zones, why don't we pass the dang thing and do it, right?