investors in china that whenever you don't have strong ip enforcement, the incentive is to go with the lowest risk possible, and that's not the biggest innovation. if you put money in research and development, and you don't protect it and have a high return, nobody makes that bet. it seems like they got the message, but they have to get the software side of innovation right to do what they realliment to do, encourage novel innovations to pull the chinese economy up the development chain from where they are now in upper middle income to a high income society. that has been reflected in actual policy statements starting in may with the bureau meeting, and then there's a new document from the chinese communist party on state coup sell on 0 focusing on building a

systemic environment to support innovation. that gets into ipr enforcement in financing. .. in determining whether china can move forward through not only the short term gdp growth but also this longer-term

challenge of avoiding the middle-income trapping and not faulting the pathway of malaysia and the philippines steaming on i had from where they are into a higher income society. that will, however, be very difficult to do. one case study we can look at as an example of china's solar industry. a lot of people i've heard about the trade conflict between the united states and china on solar panels. this is an interesting prism to view the chinese economy more broadly because this is a classic case of china really pushing hard for big innovation and winding up with little innovation that doesn't get them to where they want to go and part of china's innovation policy is targeting strategic emerging industries. these are the industries that beijing thinks will be the industry's of the future. the biggest is green energy including solar and wind and electric vehicles and other green energy technologies so they have unleashed a lot of funding to support grain energy innovation. most of that funding has created

instead of mosul products continuing the same old model process innovation which is making the products created in the west faster and cheaper and therefore using that to take away some of the u.s. market share. they've been very successful doing that on solar energy. china is making solar panels at lower prices than other countries around the world and therefore they are substantially increased their share of the solar panel market. the problem is they've not been so good at the domestic consumption side. chinese companies export 95% of the solar panels to produce that is a big problem for chinese citizens and environmental ngos because they are saying this is about clean energy cleaning up the environment but we are getting the factories that make solar panels and have a lot of pollution from factories and then exporting solar panels to the united states so they have cleaner air but we do not and that is a big problem. that's an old model that china has been following the past few decades. the new model would be if they can not only create the

manufacturing solar panels but also creating new innovative types of technology that might be way more efficient than we have here and also installing them and consuming them at home. but that is difficult to do because that requires the central government to break past some very powerful interests including coal companies, power generation companies and state grid, the state grand corporation controls china's national utility grid, 88% of the chinese territory and they've been dragging their heels with connecting wind and solar resources so getting that side of the equation right is going to be critical going forward but very, very difficult to do. and so that raises the question of whether this new leadership is going to be able to get things done. we don't know the full duenas bureau committee. we do know the top three most important for answering the question. xi jinping will be the party

secretary as we believe that 99% secretary as mr. cheng li put on earlier. he will be basically acting as the head of state and serving as a decision maker one among equals on the politburo standing committee. we believe that li will be the next leader. the big question is going to be what happens with wong. he has the nickname of a firefighter because he's brought in to fix a range of crisis and he's a protege, the former premier that rolled out some very ambitious banking system reforms and the question is going to be how well wong be able to work with li to actually pushed the destructive reforms passed the rest of the standing committee, and more importantly passed the standard enterprises

in local government interest that might resist them. at present, it doesn't look good because at present, a's pilot committee only has one economic portfolio, that's the portfolio of the premier. he has that portfolio right now. wen jiabao has been a relatively weak economic manager. his predecessor did not rely much on the bureaucracy's behind him to come up with ideas. he had his own team and reform plans and ram them through and didn't rely on agencies. wen jiabao is different. very dependent on the national development commission. those of us with the national development commission really respect or colleagues but also realize the policies that make it to the top of the organization are often not as cutting edge as with china needs to be putting forward so it would be great if we get at the other leader of the top that could reliably external team and not get bogged down on the

politics. i do believe that li has his own team effort least one sector of the economy. that team is not -- it is located externally. that is interesting. if li comes in with some new policy proposals ready to rollout and pushes those, is able to push those from the top, would be very promising however the best pusher that china has is probably going to be wong but since he doesn't have the permission but isn't clear that he will have the ability to influence things going forward. he may be given the title of something like the executive vice premier and be given a secondary economic role to focus on specific sectors of the economy but that isn't clear going forward. that will be something there will be keeping a close eye on whether he is given some kind of a great economic portfolio to supplement li keqiang or the political consultant conference with the npc which would significantly reduce his ability to push things forward >> thank you very much, melanie.

thank you very much to bear it for inviting me. i want to keep this relatively brief, so i want to focus today on china's internal economics, because my book and even the peace i have today in the financial times is about the rise of china means for the united states comes of that is a more gloomy message i don't want to carry here. so let's focus on china itself. if you want the message i am giving a public lecture tomorrow so do come and listen to that. i want to make a couple points. first i think as people in the previous panel also said i think it's a different conjecture in china because a combination of things going on. one is of course the leadership transition.

the second is the economy is relatively weak and uncertain, but the other big things going on our the fact for the first time there is the party's legitimacy has been seriously questioned which orders the politics which mentions in the previous panel and above all something that you may have alluded to i think the growth model is kind of running out of steam so these are four things coming together and that is the context for the reform going forward and the big challenge for china is how to rebalanced the economy and it means many things to many people, but i think at one level it's about how to move towards a more consumption based economy. at another level it is also about moving resources from essentially producing a lot of trade goods and exports to producing services and non-treat

so that is a part of the rebalancing. and, you know, another kind of rebalancing which is to move away from producing cheap goods to producing more high-tech kind of goods and that's to take issue. so, my claim is i think the political incentives are moving in favor of the reality. i don't have a clue as to who is going to be on the personal preferences are. melanie will give you a sense of that if you look at the underlying thing i am going to make the claim that the incentives are going to move towards reform and rebalancing. and i think over the medium term china, this is about 15 or 20 year horizon, china can get a growth rate of 6.5 to 7% which i think it should be if it were that would be fantastic and i

think that's something that's feasible, and i'm going to show why it is going to be feasible in the medium and long-term. now i think as i said, china in recent discussions talked about the balance problem but also there's been the to imbalances and one of them has been cured or address. the one in balance china related lot of the external demand and on domestic demand. and the most egregious case was in 2007 when the external was about 11% of gdp. so too much of foreign market. today it is 2 percent. so, china has it seems apparently moved from, moved away from relying on the foreign markets to the domestic markets. is whether this would remain is an issue for the future, but at least one of the two has been

partially address to the other one that has not been addressed and in fact in some ways substituted for the rebalancing problem is that china hasn't moved towards consumption it's moved in fact words more investment. 50% of the gdp that is completely out of that as anything we have seen in history. so that imbalance i think remains consumption remains low and investment remains high. so the question is what does china to? one is to get back to the external balance, go back to more exports and so on, but i think that is unlikely both because of the pressure is going to face from the outside, but it is also unlikely for the domestic reasons because i think that is going to involve a continuation of, you know, cheap credits, undervalued exchange rates and a whole panoply of policies that i think china itself does not want. china does not want to be so

reliant on the foreign markets because in the 2008 crisis, that makes it very, very vulnerable. in fact 20 to 40 million people are going to be displaced after the 2008 crisis and for its ability to step in with more investment and monetary stimulus i think there could have been a quite a lot of social disruption in china. china is critical back to the external imbalance. that is the only high-growth strategy available to china. once it has to move away from external alliance it is a local strategy because in the history of the marquee nobody's grown at eight to 10% based on the domestic demand. ain't going to happen, never happened in the past. so the question is it busta move -- if it goes to external demand it has to be a lower growth strategy so then there are two options. continue in the high investment strategy, or to move finally we from investment towards consumption. i think the politics of this is

increasingly moving in favor of the rebalancing and the consumption strategy for the following reason. i think if china can continue to invest more in the strategy, more in balance is in the financial system, cheap credit, rising inequality because cheap credit means intensive, welfare and lower consumption to use a colliding that's what that strategy is. if it goes towards higher consumption, less quality, less equal become higher employment and higher consumption. now the question is why do i see the politics is meeting in that direction? i think one simple reason i think that because of the political changes that have taken place i think the risks -- industry the current strategy of vantage is that china doesn't have to take on the vested interest essentially the kinds melanie diluted to and the banks

are state-owned and provide cheap credit to the state enterprises who are all a part of the party, so the combination of the state enterprises and state banks create a kind of massive interest that's blocking this move away from -- towards the consumption based strategy but what is working in favor of that is the whole legitimacy of the party from the political of restiveness and the fact that there is in fact a clamor for change so this sense of crisis or high anxiety as you've said i think if that continues and in fact i would like to see a few more quarters of even worse growth to kind of exaggerate the sense of the crisis because i think that sense of crisis well at the margin to the balance in favor of moving towards because of the party wants to retain the legitimacy, ironically it has to give up power to retain power, and that means the

million-dollar question going forward this will they be able to do the kind of, some kind of political reform bill would be necessary for economic reform notably taking on the vested interest in the state-owned enterprises and the state financial sector. but i mean i can't say for sure that it's going to happen, but i think the balance of the forces is building towards reform, taking on the vested interest because there is a larger populace that is clamoring for change, and i think the current strategy will not deliver on this change. now, my last point is about the medium term. i think one of the problems the chinese party has locked itself into unfortunately is a growth narrative. china necessarily has to slow

down, not because it is doing badly that because it is doing well. because it has done so well it has to slow down. it is an odierno wall of growth. the faster you grown and the richard that you become you have to slow down because opportunities are producing things cheaply necessarily decline. so, slow down. it's been growing at about 8.5% per capita for about 30 years. i think it has to slow down to about 5.5% per capita which is like 6.5% now, i think it is eminently feasible because china still remains a very poor country. it's still about 20 to 25% of the u.s. living and therefore it still has tremendous scope to continue growing based on the fact. so i fundamentally disagree with melanie and saying the future

has to be based on the intellectual property. if that happens that is a bonus that china doesn't need that because of this stuff about 20, 25% of the standard of living of the united states. and that level of income, korea, japan, taiwan, etc. did not do ip or high-tech. they were still basically relying on the relatively cheap labor. of course china has all the other reforms, the finances, but it does not require some fancy high-tech thing to sustain its growth. that i cannot fundamentally disagree with. and if china grows at the rate i projected about six, 6.5%, than even at the end of 20 years it is still 45, 50% of the u.s. standard. so there is a tremendous growth to grow and catch up without feeling under the pressure. and the sort of one point that i will make here is that, you know, my colleague estimates

that still in china there are 200 million people employed in agriculture who are potentially a labor force to finance the next stage of growth. so china hasn't reached the lowest point where it needs to become on comparative because we have just become so expensive. what are the threats to growth? i think the whole there are lots of financial imbalances and that is a short-term issue but i think china still has more policies base than any country in the world in the event that things go badly to kind of rough things up so there's a lot of talk about china having a hard landing and the way that i described to you is development is kind of a long-term flight with many takeoffs and landings so the question is not whether china will and hard about whether it has the ability to recover and i think for some considerable period of time

they've brought political will and macroeconomic policies based to recover from these jobs. now, the ultimate point you shall a lot about the middle-income in china. in fact i was in china to discuss the 2013 report in the drc and the world bank and tomorrow again i am going to be speaking to them as well. i fundamentally have a problem with china and the middle-income. let me tell you why i say this. so, in my book but i do is i say look i am protecting china about 6% which i think is very reasonable given how well it has done so far. what is the chance that -- what does history tell us about countries failing and the comparable stage of development? so i went back and looked at all those countries who were at various points in time where china is today and i mean it's about 20 to 20% of u.s.

standards of living where were all these countries in the past? about one-third of the countries that i looked at actually did grow subsequently at what i predicted china. so the unconditional probability of that china will not fall into the middle-income trap as i defined it is one in three but if you look at that list of countries that did make it and didn't make you ask yourself the question is china going to be more like japan, hong kong, germany, korea, portugal or is it going to be like iraq, jordan, bolivia, you know, the question answers itself. so the conditional probability that china will avoid the middle-income front is much higher than 50, 60 in three quarters when. so the notion that china i just

don't think is likely at least if it reaches 50, 55% of the u.s. standards of living. yes, there is aging. it's a problem, but i think my number, my projection of 6.5% takes into account aging and as i said, there are lots of things china can do to overcome because it is very hard to avoid this problem. i forgot to mention that american boosters and u.s. boosters and china deniers say japan had this bubble, japan slowed down, china is in the same situation. and i say that that is fundamentally a long and how much because when china -- when japan reached that state in the late 80's and early 90's, japan was at the standard of living close to that. so, the scope for catch up to japan had was over.

china is about 25%, so china japan and now what she is just plain wrong so it is related to the aging plant, so the demography's on the way that, but equally is on the way down and china has things that it can. now, does it mean that it is going to be a rosy scenario for china? absolutely not. i think china does have a lot of serious challenges, and i think what could be the these could be real china would be a combination of all of these social and political challenges if they were to come together. then of course i think it would be up for some considerable especially with the underlying politics that have been changed i think there is a scenario where there are scenarios where china really does lose it, but i think given the pressures the leadership is going to face, given that it needs to kind of

legitimate itself, i think the odds are that we will see the kind of rebalancing strategy that i think china needs, and i think they do have a kind of problem. i think they do need to hire the best american firms to change this narrative from the growth obsessed narrative to something different because remember the point that i forgot to make is that china has been growing at about 8.5% per capita. it's been delivered invoke presumption growth by six and half to seven. so this is an economy that is done badly that is complete nonsense. in the history of humanity no economy has the word as much growth us china even though it's been so imbalanced. the way that it works going forward is you get gdp growth down to the kind of numbers i said that because it is a

rebalanced kind of growth away from domestic demand, china can in fact maintain the same levels of per capita consumption growth that it does and has delivered so far and that is the way the politics and economics are you get as consumptwth and welfare and less unequal become a higher employment and the chinese leadership is smart enough to recognize that. >> that's great, arvind. >> i mention that if you want to buy my book in chinese as well. [laughter] >> the last person on the two panel even has to keep everybody awake, and i have the disadvantage that melanie and arvind stake on opposite positions a little bit on the chinese transition so i just going to say really outrageous things and if people the audience don't look like they are paying attention i will say

more outrageous things, so don't provoke me because if you do you know i can get really outrageous. let me start with a background i'm not going to spend a lot of time on this because i've been saying it for a long time but it's worth noting we are not in a position of saying well, will china continue on the path of reform? the current government, the one that is leaving left the path of market reform years ago. 2003, but first party plan and the government and i bring that up because the income government year from now was going to be important, in 2003 the first government cannot with a bunch of statements about industrial policy and i wrote to my clients of the time we have a problem. this is not the same as the government. we have had a change in the chinese policy and about five years later the american business community realized this. but if you look back at the investment consumption balance, which arvind just referred to in 2001 was fine. china wasn't an unbalanced country and has always been. it wasn't an unbalanced country in 2001 it was created by this

government from the government has moved away from balance consumption and growth, excuse me, balanced consumption and growth to an imbalance. it is created the problems china now needs to solve and that's important to realize because it is extremely positive and i think that you see that in a lot of the presentations when you take 30 years aggregates a lot of really nice numbers about china use a people are mischaracterizing china if you look at the long term and that's true it's just this government is taking time off the path of you look at the economic reforms in 2001 not only was it very strong it was sustainable. on the other hand, unfortunately, that means the situation has gotten worse. china was in a much structurally sound position five, ten years ago than it is now so the trend, as melanie referred to is negative and that is why we have this difference. over the course of the reform, china has done well. we know that it's worth remembering when people start talking about it now. the reason the chinese weakness

is especially pacelli and now is because the government took them off track and because i don't want to make this too long at the end i want to talk about two things. is the next government going to also change, as this government did in the positive direction and what do those options been for the u.s.? and that is a fun one because we might hear a little bit about it tonight. i think i won't be taking this bragging if i say you might learn all but more from me than you would this evening. >> and even more if you read my finances. [laughter] >> i shouldn't have lined up advertisements. we are getting out advertised here. cheng li has his event. okay. so, you know, one of the things india is a great comparison because i did this trip to india in 2009 and i kept hearing from the indians it's their term in 2009. countries don't have terms. just because you have the condition to do well doesn't mean you're going to do well. it's on the policies you choose.

so i don't think arvind disagrees with this. the conditions are still there for china to grow strongly for another generation. that doesn't mean they will. and so, we had to evaluate what the new government is going to do rather than what might happen. i can easily imagine a situation where u.s. growth averages more than 3% the next ten years and i can also imagine where it is 1%. those are huge differences. the difference in china may face with 7.5% growth or 4% growth over the tenure period in the new government are gigantic. how are we going to decide how can we anticipate what they are going to do, and melanie touched on a lot of this. the party has diverged away from what was best for china as a whole and we even refer to that in the first panel. when he responded in 79 and again in '92 -- this important. laws and just 79, and took the party on to the market reform path he did it for the party sake. we need to keep in power but

also because it was best for china. .. something that you need to fix? that is not pragmatic,

right? there is no pragmatism in this decision of the party moved away from pragmatism on the economic side. the question, can they move back. now we get into the discussion a lot of you are familiar with and we'll hear a lot about over the next six months and the year how rich cadres have gotten. this richest people in china and all their ties to the government. we have the list that the deputies of the national peoples congress are much richer than members of the u.s. congress. may i say from our perch from the u.s. congress. our u.s. congress is not poor. not like they have gotten to struggle last few years. they have gotten blown away about the members congress. there was a big ft spread picked up in a lot of places on the politburo as a whole. there are huge personal incentives that didn't exist in 2002. in 2002 the party diverted from the what was good for

the country for no good rhine. now they have good reason, for their own wallets and friends and families. so it will be a really, really big challenge. there are encouraging signs. you seen the world bank report. you seen repeatedly in stayed media senior officials quoted in english and chinese and the language difference is important, we need more private investment. we need more private investment you didn't hear any of that for year. private sector is fine, private sector is fine. we don't need to do anything. to be fair i will switch over to the optimistic side. forget this government. this government is louse sir, right? five years ago i was telling people that hu jintao would be remembered as a terrible leader and everyone disagreed with me. well, he is a terrible leader and china is reaping benefits in quotes now. this government is a lost cause. the fact you're even getting talk in 2012 of possible reform is encouraging, that people recognize this. arvind wanted more problems. that's a positive. the more you can reflect badly on what this government, this

nonreforming government, this stateist government has done, the more political pressure will build up for change. now you're going to want a bottom line on this. the bottom line in china is the status quo will hold for a while. you don't show up in office. if governor romney wins, he gets 100 days or whatever to do something new. and he is supposed to do it right away. he is not supposed to say i will think about it for a while. i will get back to you in july. he is supposed to act right away. china is exact opposite. you don't come into office even if you're convinced the previous government was wrong in everything, to denounce them. you make it difficult for yourself. the date is the first party plenum. that was in 2002. when it was ratified formally in 1992 first party plenum will be in october and november of 2013. it will not bring massive reforms that are already being implemented. that is not the chinese way. it will give us a sense of the direction of the new government. whether they say something lying, you know, the

previous government responded so well to the financial crisis but there are these things that got a little carried away and we really need to fix them and and example. some state firms should go bankrupt, that would be a sign. just have to say it. don't have to do anything. that would be a big step. if we get everyone's done well, china is on the right course, we need to stablize. great leaders of the communist party, if you want to know what i'm talking about a sign of status quo, read any announcement by the state statistical bureau. this is the thing that tells us how china is doing. start off by saying under great leadership of the party, blah,ma you. very difficult it take them serious after that. the kind of announcement at the party plenum that's a sign we have more and more years of stagnation ahead of us, policy stagnation. if we get some sort of breakthrough, doesn't have to be five breakthroughs, just has to be one, one thing they're willing to do, you know, ownership of land, i think we need a modification. we've had modifications before. of course the state will

still control land but we need a modification. we need a firm to go bankrupt. we said we will open a capital account. here is actual schedule to open capital account because we've been saying it for a decade. those are things at party plenum a sign of reform. we don't get them, we don't get reform. that is the deciding factor. it is policy. not conditions. the policies will determine whether we go down more like, i don't mean to put words in my colleague's mouth, more like the path melanie was suggesting. it will be very hard. china will continue slowing or more like the path arvind is suggesting, they can get back to, rather hold a sustain consumption driven 7% growth. both are possible. i think my colleagues will agree with that. i think we'll get a sense of it about a year from now. i don't think we should be saying whatever the trend in china we think now will continue that is not true. policies really matter. they mattered in 1992 in a of to way. they matter in 2002 in a negative way. the policies will be adopted over next couple years what

will determine china's situation. implications for the u.s. of course i have to say how we do things in this country matters more for us than china. let's, i hope we don't lose track of that tonight and it sounds like our economic future is determined by what other people do. we're still twice as large as china on a gdp basis. as arvind pointed out, much richer. what we do here will determine our future and our competitiveness. what china does matter that is where terry started. this government will set the direction for 10 years. the u.s.-china relationship in tweblt 12 is very different than it was in 2002 and very different than it was in 1992. when i first went to beijing in '94 i had all the u.s. up telik walls. nobody cares about china. now the u.s. cares about china. so things have changed quite a lot. they will change quite a lot again if we're all fortunate to be here in 10 years, we're going to find out that the status quo didn't hold.

one way or another it got broken. that's not the way chinese economic policy and economic performance has worked in the reform era. it has not been an era of status quo. we had dramatic changes sometimes recognized after the fact and sometimes recognized at the time f we see this reform i'm talking about the u.s. needs to help. that seems really challenging at the current time. we're supposed to help someone else? we can't even help ourselves. for example, we really want china to open the capital account to allow money to move freely in and out of the country. right now there is distortion in the entire global financial system because china is gotten bigger and bigger and bigger. it contains capital. it is a sticking point. we want them to open it but there are risks to open it. someone completely free market fanatic as am doesn't think you can snap your fingers and left money leave the chinese banking system and it will be fine. there's a risk. we need help. the main place the chinese banking system will leave for is the u.s. it is already doing that. we need to offer technical

cooperation. we need to quote president obama in completely different area, reach our hand out to the people's bank and say, come on, do it wooflt hem you. we'll share information. we'll coordinate our policies. we'll listen to you if something we're doing is spurring capital flight. be more assertive on the reform front that is an example. again i want to stop very soon. i don't want to go into lots of other examples but there plenty of ways u.s. can help at the margin. china has to make the decision we'll not influence them significantly. it is too important. it will be made internally. but the u.s. can help. having the idea u.s. wants to help china reform is small positive politically for the chinese. might make it more likely they will choose reform the flip side is we also have to prepare for unpleasantness. ten more years of statism. all right? that has two-prongs to it. it means as a partner china becomes more and more difficult, more and more subsidies. less and less responsiveness. more and more criticism of

american policy. undermining the transpacific partnership as a threat to china and so on. flip side, complimenting that, china's growth will slow down. there are american partners who have done on the very well on basis of china's growth, australia being obvious example. china's growth slowing down is not a positive for the world. sometimes in washington we kind of lose that. china's reform, different kinds of growth as arvind discussed would be a positive for the world but slower growth and stagnation is not a positive. japan's stag anything -- stagnation, which a lot of people in washington wanted 20 years ago has not turned out to be positive for anyone including the u.s.-japan alliance. there are challenges involved in chinese weakness. we need to prepare for those just as we need to reach out and try to encourage chinese reform. the bottom line on all this is very simple. the government that's coming in now is going to determine the direction of chinese economy. not historical trend. not what they did before. not the mistake they made in 2009.

they're there for 10 years. 10 years is a long time to change the path. we're going to get a year of trying to figure out what they're going to do, if they reform, that opens up a challenge to the united states but also many opportunities. if they don't reform china has a challenger of the united states goes away but china causing difficulties in the world may increase. thank you. >> thank you, derek. i think arvind wants to say one thing. then it will be your turn. >> you know, you know, agree with a lot of what derek said. i mean there is one thing which i have to point out and because it's something that's common to both china and india. which is, you know, i want to show this chart here which i wasn't able to show before. is it up? is it up? >> no. just my bald head. sorry. you can draw lines, if you want. [laughter]

essentially, you know, essentially the point is that the path over the last 10 years or eight, nine years between this regime and china and this regime and india is that this has been the era of fastest gdp growth and fastest consumption growth even compared to before. so when people say, you know, these guys screwed up, they didn't reform, true. same is true in india. but the outcomes are spectacular. now, so let me be careful in what i say. so factually, unfortunately despite not doing very much, actually the chinese and indian economy did spectacularly well. i think the difference is intrinsic to that good performance of china was also the building up of imbalances and problems. but that's a different story from saying it was an unmitigated disaster. far from it. >> okay.

thanks. >> can i -- >> let's let the audience have a chance. you've got a question, please raise your hand. wait for the microphone and then please identify yourself and ask your question and keep it as brief as possible, please. right down here in the front. >> thank you. china news agency of hong kong. my question is for mr. arvind. yesterday in the article published on "the financial times" you mentioned that renminbi is becoming the reference currency for many asian countries and do you think this trend will continue? and finally challenge the dominance of u.s. dollars? what should be done for china, for renminbi to become an international reserve currency, thank you? >> that's, thank you for the,

another -- for my financial times piece. essentially, i just done some research on which this new piece in "the ft" is based. essentially what is happening more and more rush ken ren sis in the world, -- currencies in the especially east asia are tracking the renminbi and than tracking the dollar. the dollar block in asia is over. it is now the yuan or renminbi wlok. the reason it is happening, countrying integrating with china in the region and integrating with china the fear of losing competitiveness vis-a-vis china because of chinese policies. both are at work and that is why it is tracking the policy. this does not in itself the remini by will become international currency. china has to undertake a lot of reforms derek has to be

operating about. it has to open up its capital account and so on. all these things are adding up little by little to the kind of dominance i speak about in my book which is that the chinese economy becomes very big. it is huge trader. it has been a net creditor. it's currency is becoming the top currency. i see it kind of semi inevitability about all these developments but again, derek is absolutely right. this has to be facilitated by serious chinese reforms, not just of the capital account but also of the financial system. because otherwise outsiders will never have confidence in holding the renminbi as a currency. now they track the currency which is what the piece is about but holding the reserve currency, holding confidence that it is a store of value, that will require more reforms. >> okay, he asked me, i saw him. you can't stop me. you know, i agree with much at that of that.

the renminbi is still pegged to the dollar. it is a loose peg. so the one qualifier i would add it is an important qualifier and it is stated more strongly than he would state it, is, you know, when countries are tracking the renminbi they're tracking a derivative of the dollar and they will be tracking a derivative dollar until china is actually going to let the recommend enminute by float. i have a problem with the dollar renminbi marriage because it gives too much weight to the u.s. dollar policy around the world. it is a, not a challenge until the chinese are willing to make these reforms. what the situation is setting up, we're getting distortions as china grows bigger and doesn't have its independent currency. if china ever takes those steps we will have a sudden move into a new world. we will have independent currency which we don't have now backed by the second largest economy. that was a big change. we thought we were getting that with eurozone and euro, and until it shot itself in

the foot. china may do the same thing. what agree with arvind, if china is will being to reform, they haven't done it yet, if china is willing to reform we have rapid, much more rapid than we're used to change in the international monetary system. >> can i -- >> sure. >> he always gets the last word. >> derek is absolutely right when he says that you know, so these currencies follow the renminbi but the renminbi is still tracking the dollar. i wish i could tell you a joke which captures this and you won't understand and my translation, translation doesn't come out very well. derek, the differences the renminbi was also tracking the dollar in 2005 to 2008. i mean the last several years. but what i'm talking about now has changed. so, from 2010 to onward tracking the dollar even though the recommend minute by is tracking the dollar. even though the renminbi was tracking dollar, these

countries were tracking the dollar, not the renminbi. that is the big change that >> wait for the microphone. >> sir, professor, yeah, you mentioned that the chinese economy actually need to change from the consumption to the absence of consumption. the thing is, one if you look at the expert itself, rather than the import, export is 60 or 70% of the gdp, right? actually what is really contributing to the gdp growth is net export. which is net export minus import. that part is less than 5% of the chinese gdp. actually consumption part is up to 50% of the gdp world. we can not compare with the

u.s., u.s. is 70%. you are developed country. we're developing. we do have more investment that is part of the gdp. that is one thing. the other thing is, that actually the part contribute to the gdp growth because the china is actually, last part of the value span and value chain employ a lot of people. so that a poor people get money from export part so that they have money in their pockets. so actually contribute to the consumption. so that is actually, i don't feel so far the china is now the focus on the consumption. we are. if you look at the absolute number of the consumption it is actually going up very quickly. >> all right. let me just quickly respond to that. china is own official figures on consumption which have some problems, consumption shun 35% of the gdp, at end of last year,

35%, not 50. official figures have issues, including net exports and net government spending and so on. the disturbing me for thing is the not level but the trend. chinese consumption was bigger share of gdp, labor income was larger share of gdp versus capital 10 years ago. so what you would want as a country gets richer is the consumption share to rise as the country moves closer to developing countries that have higher consumption. what happened in china the consumption share is falling. that trend needs to be reversed. that is what i would argue. >> i would disagree with arvind a little bit. i would also warn we shouldn't be too excited about consumption as an opportunity. we want china to grow consumption and rebalance from export investment toward consumption innoization but that requires increasing interest rates. right now china has very low interest rates and not many options for saving money. if you're an average chinese citizen not of the type with

overseas investment opportunities but if you're an average chinese citizen basically your biggest opportunity for saving money for your future is put it in the bank and bank interest rates are really low. so then the bank takes the very cheap capital at very low interest rates, turns around and give is to the soes. so their enterprises can get huge amounts of capital at very low rates. that is a way they're basically subsidizing the state sector on the back of the chinese consumers. they're also as derek mentioned have a very closed capital account. if as the consumer you don't like the fact that your options at the bank are not good, you can't take your money approved. you don't have many options other than some mutual fund type invests also have relatively low interest rates. so in order to grow consumption, one of the big changes that china would have to make would be to let interest rates rise so that households can get more from their savings. they would then not be saving as my chinese in-laws do, every penny they can so

if they have a medical expense they know they can cover that because china also doesn't have a good social safety net. there is very complex set of policies china will have to roll out to actually increase household consumption that involves things soes really don't like. the first will be raising interest rates as interest rates go up soes have to pay more for their loans. they no longer have the soft budget restraint that is good for china as a whole. maybe not so good if you're ahead of china mobile or companies getting a lot of government credit. the other side of that soes will have to pay more taxes for things like social security so the chinese citizens have a better package of welfare policies and don't have to worry so much about keeping money in the bank instead of buying things like cars and bigger houses and better refrigerators. so it is a much more complex picture in terms of actually growing consumption. those are entirely separate set of really difficult policy choice that is the current leaders, incoming leaders may or may not be able to make. >> thanks.

next question down here in the front. >> i would like to ask the panel how do you evaluate the influence of chinese investment in the u.s. on the u.s.-china relations and its international image given that china based telecom companies, even the renewable energy company rose, has been labeled as u.s. national security threats. and do you have any recommendations to the chinese companies that plan to invest in the u.s.? >> as you may know we have cheer nine global investment tracker which tracks chinese outward investment all over the world and i've been doing that for more than a decade. so i would say, for people here and in washington and in china general, don't pay too much attention to the short term. we're all focused on this intelligence committee report about wawe and the president's decision to

block the investment. u.s.-chinese investment has set a record. arguably set a record even though we're in october, an annual record. it is more diversified than previous years when it was more heavily in financial. i'm not saying you should ignore it, take out the controversy the best year for chinese investment in the u.s. by far, both in terms of numbers and diversity with china moving out into the services and also in energy which is a breakthrough after the initial problems. so i think the negative spin is unwarranted. the facts say otherwise. now if i were advising chinese companies i don't know why rawls picked this fight. you're pbing a fight right before an election. you're never going to win. this is somebody giving them bad at vice. if you want to pick the fight, do later after november. wawe and zt guesting bad advice. i told a executive for wawe

four years ago you will never have a major telecom market share in the united states. it's not going to happen. why are you spending all this time doing this? but they keep doing this and keep complaining. there are certain doors closed in u.s. technology is not available here for chinese firms. on the other hand land is. a lot of chinese investments, small scale in u.s. property. a lot of countries in the world don't like that. they're land poor. the u.s. is land riff. take the country for the opportunities that it has, land, resources, huge consumer market. don't try to take it for opportunities that are not going to be open to you and never have been open to you. that is the advice to chinese firms. very similar advice is handed out to foreign first in china all the time but there are far more restrictions. we're only giving you this. just accept it. there is an element of false crisis here. chinese investment in the u.s. is doing fine. if chinese firms know where their opportunities are they will continue to do very well. >> arvind? or medical melanie. >> i've been working on this

topic as well, interesting conversations between these companies. i would say china and the u.s. both still have a lot to learn about chinese inward direct investment that is new. united states does not have comprehensive investment policy on inward direct investment in this country. that is something we're only focusing on and realizing we need a better solution and better approach. the obama administration has made some progress on this. they come out and said the united states does welcome and encourage chinese companies to directly invest in the united states to create jobs. when i talk to chinese companies but the only policy is cfius and cfius is blocking our investment. on the u.s. side we need more to clarify where the investments are welcome and where the risks are higher. where they are welcome we need to create better policies to make those invests more attractive. for example, i do a lot of work in clean energy. clean energy is really a sector where we could stand to use some chinese investment dollars and chinese investment know how because china is very strong

in a lot of clean energy sectors and a lot of investors are very interested in the united states. but, for example, our investment in policies focus on tax rebates not that useful for foreign first. we have a cfius policy recently brought in the department of energy into that committee and focusing a lot on the electricity grid as potential security risk. a lot of sectors of the clean energy economy involve the electric grid. we need to clarify for chinese companies from a washington perspective which sectors of these industries will be simply high-risk, potentially no reward sectors and which are the sectors where it's a win-win for china and the u.s. and washington doesn't really have any big national security concerns. chinese companies also have a lot of learning to do about investing in the united states. wawe being the premier example. if you look at some of wawe's past investment attempts they tried to do something i have been taught you never do in washington and that is

to surprise people. really don't want to surprise people if you want them to back your deal. wawe basically always waited to the last minute an tried to get the deals completed before the information hits the type of people that would be weighing in on cfius. that does not work well. chinese companies in general are very bad at lobbying. i think reason for that because the past few decades because u.s. companies are doing it for them. u.s. companies were so excited about the chinese market they were running halls of congress we have to open up and bring china into the wto. and grant them the status and all these things and environment is changing. a lot of u.s. companies are more wary of their ability to compete with chinese rivals and china is simply going to have to get better being their own lobby in washington. that matters in the big washington policy sense and in terms of individual deals. when you talk to chinese companies and u.s. companies. they don't want to hire the lawyers and lobbyist. lobbyist is corruption.

this is bureaucratic society you need to hire lobbying service firms to walk you through the red tape. chinese companies tend to not really do that. they run into really big walls and go home and say the united states is prejudiced against and we'll never make it in this market. here in the u.s. we need to recognize chinese direct investment in this country is a major opportunity. i think washington has recognized that. but we haven't figured out where exactly it is it a major company and where is it more risk than opportunity. on chinese side whereas the u.s. companies had to do local marketing and cultural understanding to figure out how to operate in china a couple decades ago, chinese companies are actually going to have to do the same in reverse to find out how to operate in the united states and in a successful way and both sides still have a lot of work to do on that. >> arvind, did you want to

add anything to that? no. we have time for one more quick question if there is one from the audience. in the back there. >> i have a question to, my name is xina from voice of america chinese branch. a lot of chinese indicating the firefighter won't exactly be vice premier. if that is the case. li xinping will be handling national economy. what will you expect li will take if he is going to take control the chinese economy? a lot of reading i have done indicating that the particularly from the american perspective that we don't have a very strong confidence on the based on his background and governor in hunan and other northeastern provinces in china.

willie sheen ping well that be good for china? >> i've been asking a lot of people in china to find out what exactly is he like behind the scenes. don't forget he has been the executive vice premier for a while. he has in hand in hand with when. >> because. those are the processes. ly kequiang has been heavily involved in. i haven't heard him of taking leading role. when you talk to people like the head of the central organization department. we have great stories there are reforms people were staunchly against but he ran through, passed a lot of opposition. got hu jintao to back him and it was a done deal. he is used to going against opposing voices. i haven't seen anything quite that from li kequiang.

seems like the economic leader and knows how to ram things back against opposing voices would be wang quishan. rumors would not be a executive vice premier with economic portfolio. a few years ago, he denied something else. he thought that person was not a strong enough economic managetory handle it. i think it would be shame if li kequiang denies him executive vice premier an economic portfolio because he thinks li kequiang would be too strong. potentially overshadow him. fli kequiang is more of consensus builder is it will be how and whether he will be able to pull in the talent like wang

quishan and use specialabilitied for the klein niece people and not be challenged for that and not concerned about rumors in the press that they compete with one another and be able to reach across and use wang quishan's ability to bolster what he himself can do. i think that will have a lot to do with li keqiang's character and other people behind closed doors making that. >> i want to say i have a completely different read than melanie. not like one of us is right. it shows how much guesswork we're engaged in. wang quishan has the reputation basis of never being a reformer at all. he is very effective pushing bad policies in my opinion. i don't want him here anywhere near economic policy makings. i can't praise li keqiang, one thing encouraging as a reformer, is more encouraging than anything wang quishan has done is name associated with world bank report. i'm not saying she is wrong and i'm right. if i had to take the guess i

would take the opposite guess. i want li keqiang taking control of the economy because i don't have a good option. i think wang quishan, pulling. >> because's. do i know what li keqiang would do, no. but i think he would put himself out in front of a long-term plan. >> that has to be the last word. please join me in thanking our panel. . .

what you're looking at is a predebate pool party on the campus, two or three blocks from where the tbawl debate is taking place tonight. let's take a listen and a look. ♪ [inaudible conversations] ♪

♪ [cheers and applause] and, again, a predebate pool party there under 80 degree something weather in boca raton, florida, that university campus,

the site of the third and final presidential debate. looks like they are in the mood for a debate. watch and engage with c-span live tonight from lynn university in boca raton. preview at 8 eastern, and at 9, the chief washington correspondent of "face of nation" bob schieffer, the moderator for the debate. we look for your comments, e-mails, calls, and tweets. c span's 2012's debate hub at c-span.org/debates. you'll fine past year's debates and question and answer segments from all debates. there's tools there to create and share your own video clips from the debates at c-span.org/debate. c-span hosting an online chat at

c-span.org/chat. continue to watch and engage in the debate in realtime. throughout the debate, chat and interact directly with each other and the c-span moderator. that's tonight beginning at 9 eastern on c-span.org/chat. >> when i watch c-span, in particular, i like the congressional hearings. sometimes you actually have the hearings on various pieces of legislation, but more importantly, you carry of house of representatives when they have proceedings and speeches. i found the congressional hearing coverage of interest on subject matters like veteran affairs or appropriations. reading it in the newspaper, it's the public answer, but you want depth. go to c-span, and you can get the live testimony, the raw data, raw information. >> tom burch, jr. watches

c-span brought to you as a public service by your television provider. a look now rat previous presidential debates on foreign policy. this is from the 2004 campaign where president george w. bush was running for re-election against the democratic nominee, senator kerry from massachusetts. this debate on foreign policy and national security took place a year and a half after the u.s. led invasion in iraq. jim lehrer was the moderator. this runs an hour and a half. [applause] [cheers and applause]

>> moderator: good evening, mr. president, senator kerry. as determined by a coin toss, the first question goes to you, senator kerry. you have two minutes. do you believe you could do a better job than president bush in preventing another 9/11 type terrorist attack on the united states?ck? kerry: yes, i do, but before i answer further, let me thank you for moderating. i want to thank the university of miami for hosting us, and i know the president will join me in welcoming all of florida to this debate. you've. through the roughest weeks anybody could imagine.nk y our hearts go out to you, and we admire your pluck andluck perseverance. ipe can make america safer than president bush has made us, and

i believe president bush and i both love our country equally, but we have a different set of convictions about how you make america safe. i believe america's safest and strongest when we are leading the world, and we are leading strong alliances.ng i'll never give a veto to any country over our security, but i also know how to lead those alliances. this president left them in shatters across the globe, and we're now 90% of the casualties in iraq and 90% of the costs. i thinkis that's wrong.' i think we can do better. i have a better plan for homeland security. i have a better plan to be able to fight the war op terror by strengthening our military, oura intelligence, by going after the financing more authoritatively, doing what we need to do to rebuild the alliances, but reaching out to the muslimthen world, which the president has almost not done, and beginning to isolate the radical islamic

muslims, not have them isolate d the united states ofon america. i can do a better job in iraqhe where i have a plan with theob i summit of all the allies, something this president has not done to bring people to the table, do a better job of training iraqi forces to defend themselves, and i know we can do a better job of preparing fora e elections. all of these, and especially homeland security, which we'll talk about a little bit later. >> moderator: mr. president, you haveof 90 second redoesn'ta. bush: i, too, thank the university of miami, and say our prays are with the good people of this state who suffered a lot.u ha september the 11th changed how o america must lookf at the worl, and since that day, our nation has been on a multiprong strategy to keep our country safer. we pursueded al-qaeda wherever al-qaeda tries to hide, 70% of

known al-qaeda leaders broughtow to justice. the rest of them know we're after them. we upheld the doctrine that if you harbor a terrorist, you're equally as guilty as a terrorist. the taliban no longer have 10 million people to vote in theer election of afghanistan. we saw a threat, and after september 1 # 1th, we have to take threats seriously before they fully materialize.l. america and the world are safer for it.the we continue to pursue our policy of disrupting those whoapon proliferate weapons of massa ha destruction. libya's disarmed. the aq kaun network is brought c to justice. i understand free nations rejece terror and answer the hopes and aspirations of their people, and

free nations achieve the peace that we all want. >> moderator: new question, mree. president, two minutes. do you believe the election of senator kerry on november 2ve t increases the chances of the u.s. to be hit by another terrorist attack? bush: i don't believe it's going to happen. i believe the i'm going to win because the american people know i know how to lead. i have shown the american people i know how to lead.o le i have -- i understand everybody in this country doesn't agree with the decisions i made, and i made some tough decisions, butit people know where i stand. people out there listening know what i believe. that's how best it is to keep the peace.peop this nation of ours has got a solemn duty to defeat thishe p ideology of hate, and that's what they are. this is a group of killers who will not only kill here but kili

children. at'll attack unmercifun iraq, hoping to shake our will. we have a duty to defeat this enemy. we have a duty to protect our children and grandchildren. the best way to defeat them is to never waver, to be strong, to use every asset at our disposal, is to constantly stay on the offensive and, at the same time, spread liberty. and that's what people are seeing now is happening in afghanistan. ten million citizens have registered to vote. it's a phenomenal statistic. that if given a chance to be free, they will show up at the polls. forty-one percent of those 10 million are women. in iraq, no doubt about it, it's tough. it's hard work. it's incredibly hard. you know why? because an enemy realizes the stakes. the enemy understands a free iraq will be a major defeat in

their ideology of hatred. that's why they're fighting so vociferously. they showed up in afghanistan when they were there, because they tried to beat us and they didn't. and they're showing up in iraq for the same reason. they're trying to defeat us. and if we lose our will, we lose. but if we remain strong and resolute, we will defeat this enemy. >> ninety second response, senator kerry. >> i believe in being strong and resolute and determined. and i will hunt down and kill the terrorists, wherever they are. but we also have to be smart, jim. and smart means not diverting your attention from the real war on terror in afghanistan against osama bin laden and taking if off to iraq where the 9/11 commission confirms there was no connection to 9/11 itself and saddam hussein, and where the reason for going to war was weapons of mass destruction, not the removal of saddam hussein. this president has made, i regret to say, a colossal error of judgment.

and judgment is what we look for in the president of the united states of america. i'm proud that important military figures who are supporting me in this race, former chairman of the joint chiefs of staff john shalikashvili, just yesterday, general eisenhower's son, general john eisenhower, endorsed me, general admiral william crown, general tony mcbeak, who ran the air force war so effectively for his father -- all believe i would make a stronger commander in chief. and they believe it because they know i would not take my eye off of the goal, osama bin laden. unfortunately, he escaped in the mountains of tora bora. we had him surrounded. but we didn't use american forces, the best trained in the world, to go kill him. the president relied on afghan warlords and he outsourced that job too. that's wrong. >> new question, two minutes, senator kerry." colossal misjudgments." what colossal misjudgments, in your opinion, has president bush

made in these areas? >> well, where do you want me to begin? first of all, he made the misjudgment of saying to america that he was going to build a true alliance, that he would exhaust the remedies of the united nations and go through the inspections. in fact, he first didn't even want to do that. and it wasn't until former secretary of state jim baker and general scowcroft and others pushed publicly and said you've got to go to the u.n. , that the president finally changed his mind -- his campaign has a word for that -- and went to the united nations. now, once there, we could have continued those inspections. we had saddam hussein trapped. he also promised america that he would go to war as a last resort. those words mean something to me, as somebody who has been in

combat." last resort." you've got to be able to look in the eyes of families and say to those parents, "i tried to do everything in my power to prevent the loss of your son and daughter." i don't believe the united states did that. and we pushed our allies aside. and so, today, we are 90 percent of the casualties and 90 percent of the cost, $200 billion -- $200 billion that could have been used for health care, for schools, for construction, for prescription drugs for seniors, and it's in iraq. and iraq is not even the center of the focus of the war on terror. the center is afghanistan, where, incidentally, there were more americans killed last year than the year before, where the opium production is 75 percent of the world's opium production, where 40 to 60 percent of the economy of afghanistan is based on opium, where the elections have been postponed three times. the president moved the troops, so he's got 10 times the number of troops in iraq than he has in afghanistan, where osama bin laden is. does that mean that saddam hussein was 10 times more important than osama bin laden -- than, excuse me, saddam

hussein more important than osama bin laden? i don't think so. >> ninety-second response, mr. president. >> my opponent looked at the same intelligence i looked at and declared in 2002 that saddam hussein was a grave threat. he also said in december of 2003 that anyone who doubts that the world is safer without saddam hussein does not have the judgment to be president. i agree with him. the world is better off without saddam hussein. i was hoping diplomacy would work. i understand the serious consequences of committing our troops into harm's way. it's the hardest decision a president makes. so i went to the united nations. i didn't need anybody to tell me to go to the united nations. i decided to go there myself. and i went there hoping that, once and for all, the free world would act in concert to get saddam hussein to listen to our demands. they passed the resolution that said, "disclose, disarm, or face serious consequences." i believe, when an international body speaks, it

must mean what it says. saddam hussein had no intention of disarming. why should he? he had 16 other resolutions and nothing took place. as a matter of fact, my opponent talks about inspectors. the facts are that he was systematically deceiving the inspectors. that wasn't going to work. that's kind of a pre-september 10th mentality, the hope that somehow resolutions and failed inspections would make this world a more peaceful place. he was hoping we'd turn away. but there was fortunately others beside myself who believed that we ought to take action. we did. the world is safer without saddam hussein. >> new question, mr. president. two minutes. what about senator kerry's point, the comparison he drew between the priorities of going after osama bin laden and going after saddam hussein? >> jim, we've got the capability of doing both. as a matter of fact, this is a

global effort. we're facing a group of folks who have such hatred in their heart, they'll strike anywhere, with any means. and that's why it's essential that we have strong alliances, and we do. that's why it's essential that we make sure that we keep weapons of mass destruction out of the hands of people like al qaida, which we are. but to say that there's only one focus on the war on terror doesn't really understand the nature of the war on terror. of course we're after saddam hussein -- i mean bin laden. he's isolated. seventy-five percent of his people have been brought to justice. the killer -- the mastermind of the september 11th attacks, khalid sheik mohammed, is in prison. we're making progress. but the front on this war is more than just one place. the philippines -- we've got help -- we're helping them there to bring -- to bring al qaida affiliates to justice there. and, of course, iraq is a central part in the war on terror.

that's why zarqawi and his people are trying to fight us. their hope is that we grow weary and we leave. the biggest disaster that could happen is that we not succeed in iraq. we will succeed. we've got a plan to do so. and the main reason we'll succeed is because the iraqis want to be free. i had the honor of visiting with prime minister allawi. he's a strong, courageous leader. he believes in the freedom of the iraqi people. he doesn't want u.s. leadership, however, to send mixed signals, to not stand with the iraqi people. he believes, like i believe, that the iraqis are ready to fight for their own freedom. they just need the help to be trained. there will be elections in january. we're spending reconstruction money. and our alliance is strong. that's the plan for victory. and when iraq if free, america will be more secure. >> senator kerry, 90 seconds. >> the president just talked

about iraq as a center of the war on terror. iraq was not even close to the center of the war on terror before the president invaded it. the president made the judgment to divert forces from under general tommy franks from afghanistan before the congress even approved it to begin to prepare to go to war in iraq. and he rushed the war in iraq without a plan to win the peace. now, that is not the judgment that a president of the united states ought to make. you don't take america to war unless have the plan to win the peace. you don't send troops to war without the body armor that they need. i've met kids in ohio, parents in wisconsin places, iowa, where they're going out on the internet to get the state-of- the-art body gear to send to their kids. some of them got it for a birthday present. i think that's wrong. humvees -- 10,000 out of 12,000 humvees that are over there aren't armored. and you go visit some of those kids in the hospitals today who

were maimed because they don't have the armament. this president just -- i don't know if he sees what's really happened over there. but it's getting worse by the day. more soldiers killed in june than before. more in july than june. more in august than july. more in september than in august. and now we see beheadings. and we got weapons of mass destruction crossing the border every single day, and they're blowing people up. and we don't have enough troops there. >> can i respond to that? >> let's do one of these one- minute extensions. you have 30 seconds. >> thank you, sir. first of all, what my opponent wants you to forget is that he voted to authorize the use of force and now says it's the wrong war at the wrong time at the wrong place. i don't see how you can lead this country to succeed in iraq if you say wrong war, wrong time, wrong place. what message does that send our troops? what message does that send to our allies? what message does that send the iraqis? no, the way to win this is to be steadfast and resolved and to follow through on the plan that i've just outlined.

>> thirty seconds, senator. >> yes, we have to be steadfast and resolved, and i am. and i will succeed for those troops, now that we're there. we have to succeed. we can't leave a failed iraq. but that doesn't mean it wasn't a mistake of judgment to go there and take the focus off of osama bin laden. it was. now, we can succeed. but i don't believe this president can. i think we need a president who has the credibility to bring the allies back to the table and to do what's necessary to make it so america isn't doing this alone. >> we'll come back to iraq in a moment. but i want to come back to where i began, on homeland security. this is a two-minute new question, senator kerry. as president, what would you do, specifically, in addition to or differently to increase the homeland security of the united states than what president bush is doing? >> jim, let me tell you exactly what i'll do. and there are a long list of thing. first of all, what kind of mixed

message does it send when you have $500 million going over to iraq to put police officers in the streets of iraq, and the president is cutting the cops program in america? what kind of message does it send to be sending money to open firehouses in iraq, but we're shutting firehouses who are the first- responders here in america. the president hasn't put one nickel, not one nickel into the effort to fix some of our tunnels and bridges and most exposed subway systems. that's why they had to close down the subway in new york when the republican convention was there. we hadn't done the work that ought to be done. the president -- 95 percent of the containers that come into the ports, right here in florida, are not inspected. civilians get onto aircraft, and their luggage is x-rayed, but the cargo hold is not x- rayed. does that make you feel safer in america? this president thought it was more important to give the wealthiest people in america a tax cut rather than invest in homeland security. those aren't my values. i believe in protecting america first.

and long before president bush and i get a tax cut -- and that's who gets it -- long before we do, i'm going to invest in homeland security and i'm going to make sure we're not cutting cops programs in america and we're fully staffed in our firehouses and that we protect the nuclear and chemical plants. the president also unfortunately gave in to the chemical industry, which didn't want to do some of the things necessary to strengthen our chemical plant exposure. and there's an enormous undone job to protect the loose nuclear materials in the world that are able to get to terrorists. that's a whole other subject, but i see we still have a little bit more time. let me just quickly say, at the current pace, the president will not secure the loose material in the soviet union -- former soviet union for 13 years. i'm going to do it in four years. and we're going to keep it out of the hands of terrorists. >> ninety-second response, mr. president. >> i don't think we want to get

to how he's going to pay for all these promises. it's like a huge tax gap. anyway, that's for another debate. my administration has tripled the amount of money we're spending on homeland security to $30 billion a year. my administration worked with the congress to create the department of homeland security so we could better coordinate our borders and ports. we've got 1,000 extra border patrol on the southern border, want 1,000 on the northern border. we're modernizing our borders. we spent $3. 1 billion for fire and police, $3. 1 billion. we're doing our duty to provide the funding. but the best way to protect this homeland is to stay on the offense. you know, we have to be right 100 percent of the time. and the enemy only has to be right once to hurt us. there's a lot of good people working hard. and by the way, we've also changed the culture of the fbi to have counterterrorism as its number one priority.

we're communicating better. we're going to reform our intelligence services to make sure that we get the best intelligence possible. the patriot act is vital -- is vital that the congress renew the patriot act which enables our law enforcement to disrupt terror cells. but again, i repeat to my fellow citizens, the best way to protection is to stay on the offense. >> yes, let's do a little -- yes, 30 seconds. >> the president just said the fbi had changed its culture. we just read on the front pages of america's papers that there are over 100,000 hours of tapes, unlistened to. on one of those tapes may be the enemy being right the next time. and the test is not whether you're spending more money. the test is, are you doing everything possible to make america safe? we didn't need that tax cut. america needed to be safe. >> of course we're doing everything we can to protect america. i wake up every day thinking

about how best to protect america. that's my job. i work with director mueller of the fbi, comes in my office when i'm in washington every morning, talking about how to protect us. there's a lot of really good people working hard to do so. it's hard work. but, again, i want to tell the american people, we're doing everything we can at home, but you better have a president who chases these terrorists down and bring them to justice before they hurt us again. >> new question, mr. president. two minutes. what criteria would you use to determine when to start bringing u.s. troops home from iraq? >> let me first tell you that the best way for iraq to be safe and secure is for iraqi citizens to be trained to do the job. and that's what we're doing. we've got 100,000 trained now, 125,000 by the end of this year, 200,000 by the end of next year. that is the best way. we'll never succeed in iraq if the iraqi citizens do not want to take matters into their own hands to protect themselves. i believe they want to. prime minister allawi believes

they want to. and so the best indication about when we can bring our troops home -- which i really want to do, but i don't want to do so for the sake of bringing them home, i want to do so because we've achieved an objective -- is to see the iraqis perform and to see the iraqis step up and take responsibility. and so, the answer to your question is, when our general is on the ground and ambassador negroponte tells me that iraq is ready to defend herself from these terrorists, that elections will have been held by then, that their stability and that they're on their way to, you know, a nation that's free, that's when. and i hope it's as soon as possible. but i know putting artificial deadlines won't work. my opponent at one time said, "well, get me elected, i'll have them out of there in six months." you can't do that and expect to win the war on terror. my message to our troops is, "thank you for what you're

doing. we're standing with you strong. we'll give you all the equipment you need. and we'll get you home as soon as the mission's done, because this is a vital mission." a free iraq will be an ally in the war on terror, and that's essential. a free iraq will set a powerful example in the part of the world that is desperate for freedom. a free iraq will help secure israel. a free iraq will enforce the hopes and aspirations of the reformers in places like iran. a free iraq is essential for the security of this country. >> ninety seconds, senator kerry. >> thank you, jim. my message to the troops is also, thank you for what they're doing, but it's also help is on the way. i believe those troops deserve better than what they are getting today. you know, it's interesting. when i was in a rope line just the other day, coming out here from wisconsin, a couple of young returnees were in the line, one active duty, one from the guard.

and they both looked at me and said, we need you. you've got to help us over there. now i believe there's a better way to do this. you know, the president's father did not go into iraq, into baghdad, beyond basra. and the reason he didn't is, he said -- he wrote in his book -- because there was no viable exit strategy. and he said our troops would be occupiers in a bitterly hostile land. that's exactly where we find ourselves today. there's a sense of american occupation. the only building that was guarded when the troops when into baghdad was the oil ministry. we didn't guard the nuclear facilities. we didn't guard the foreign office, where you might have found information about weapons of mass destruction. we didn't guard the borders. almost every step of the way, our troops have been left on these extraordinarily difficult missions. i know what it's like to go out on one of those missions when you don't know what's around the corner. and i believe our troops need other allies helping. i'm going to hold that summit. i will bring fresh credibility,

a new start, and we will get the job done right. >> all right, go ahead. yes, sir? >> i think it's worthy for a follow-up. >> sure, right. (crosstalk) >> we can do 30 seconds each here. all right. >> my opponent says help is on the way, but what kind of message does it say to our troops in harm's way, "wrong war, wrong place, wrong time"? not a message a commander in chief gives, or this is a "great diversion." as well, help is on the way, but it's certainly hard to tell it when he voted against the $87- billion supplemental to provide equipment for our troops, and then said he actually did vote for it before he voted against it. not what a commander in chief does when you're trying to lead troops.

>> senator kerry, 30 seconds. >> well, you know, when i talked about the $87 billion, i made a mistake in how i talk about the war. but the president made a mistake in invading iraq. which is worse? i believe that when you know something's going wrong, you make it right. that's what i learned in vietnam. when i came back from that war i saw that it was wrong. some people don't like the fact that i stood up to say no, but i did. and that's what i did with that vote. and i'm going to lead those troops to victory. >> all right, new question. two minutes, senator kerry. speaking of vietnam, you spoke to congress in 1971, after you came back from vietnam, and you said, quote, "how do you ask a man to be the last man to die for a mistake?" are americans now dying in iraq for a mistake? >> no, and they don't have to, providing we have the leadership that we put -- that i'm offering. i believe that we have to win this. the president and i have always agreed on that. and from the beginning, i did vote to give the authority, because i thought saddam hussein was a threat, and i did

accept that intelligence. but i also laid out a very strict series of things we needed to do in order to proceed from a position of strength. then the president, in fact, promised them. he went to cincinnati and he gave a speech in which he said, "we will plan carefully. we will proceed cautiously. we will not make war inevitable. we will go with our allies." he didn't do any of those things. they didn't do the planning. they left the planning of the state department in the state department desks. they avoided even the advice of their own general. general shinsheki, the army chief of staff, said you're going to need several hundred thousand troops. instead of listening to him, they retired him. the terrorism czar, who has worked for every president since ronald reagan, said, "invading iraq in response to 9/11 would be like franklin roosevelt invading mexico in response to pearl harbor." that's what we have here. and what we need now is a president who understands how to bring these other countries

together to recognize their stakes in this. they do have stakes in it. they've always had stakes in it. the arab countries have a stake in not having a civil war. the european countries have a stake in not having total disorder on their doorstep. but this president hasn't even held the kind of statesman-like summits that pull people together and get them to invest in those states. in fact, he's done the opposite. he pushed them away. when the secretary general kofi annan offered the united nations, he said, "no, no, we'll go do this alone." to save for halliburton the spoils of the war, they actually issued a memorandum from the defense department saying, "if you weren't with us in the war, don't bother applying for any construction." that's not a way to invite people. >> ninety seconds. >> that's totally absurd. of course, the u.n. was invited in. and we support the u.n. efforts there. they pulled out after sergio de mello got killed. but they're now back in helping with elections. my opponent says we didn't have any allies in this war. what's he say to tony blair?

what's he say to alexander kwasniewski of poland? you can't expect to build an alliance when you denigrate the contributions of those who are serving side by side with american troops in iraq. plus, he says the cornerstone of his plan to succeed in iraq is to call upon nations to serve. so what's the message going to be, "please join us in iraq. for a grand diversion. join us for a war that is the wrong war at the wrong place at the wrong time?" i know how these people think. i deal with them all the time. i sit down with the world leaders frequently and talk to them on the phone frequently. they're not going to follow somebody who says, "this is the wrong war at the wrong place at the wrong time." they're not going to follow somebody who says this is the wrong war at the wrong place at the wrong time. they're not going to follow somebody whose core convictions keep changing because of politics in america. and finally, he says we ought to have a summit. well, there are summits being held. japan is going to have a summit for the donors, $14 billion pledged.

and prime minister koizumi is going to call countries to account, to get them to contribute. and there's going to be an arab summit, of the neighborhood countries. and colin powell helped set up that summit. >> 30 seconds, senator. >> the united nations, kofi annan offered help after baghdad fell. and we never picked him up on that and did what was necessary to transfer authority and to transfer reconstruction. it was always american-run. secondly, when we went in, there were three countries, great britain, australia and the united states. that's not a grand coalition. we can do better. >> thirty seconds, mr. president. >> well, actually, he forgot poland. and now there's 30 nations involved, standing side by side with our american troops. and i honor their sacrifices. and i don't appreciate it when a candidate for president denigrates the contributions of these brave soldiers. you cannot lead the world if you do not honor the contributions of those who are with us. he called them coerced and the bribed.

that's not how you bring people together. our coalition is strong. it will remain strong, so long as i'm the president. >> new question, mr. president, two minutes. you have said there was a, quote, "miscalculation," of what the conditions would be in post-war iraq. what was the miscalculation, and how did it happen? >> no, what i said was that, because we achieved such a rapid victory, more of the saddam loyalists were around. i mean, we thought we'd whip more of them going in. but because tommy franks did such a great job in planning the operations, we moved rapidly, and a lot of the baathists and saddam loyalists laid down their arms and disappeared. i thought they would stay and fight, but they didn't. and now we're fighting them now. and it's hard work.

i understand how hard it is. i get the casualty reports every day. i see on the tv screens how hard it is. but it's necessary work. and i'm optimistic. see, i think you can be realistic and optimistic at the same time. i'm optimistic we'll achieve -- i know we won't achieve if we send mixed signals. i know we're not going to achieve our objective if we send mixed signals to our troops, our friends, the iraqi citizens. we've got a plan in place. the plan says there will be elections in january, and there will be. the plan says we'll train iraqi soldiers so they can do the hard work, and we are. and it's not only just america, but nato is now helping, jordan's helping train police, uae is helping train police. we've allocated $7 billion over the next months for reconstruction efforts. and we're making progress there.

and our alliance is strong. and as i just told you, there's going to be a summit of the arab nations. japan will be hosting a summit. we're making progress. it is hard work. it is hard work to go from a tyranny to a democracy. it's hard work to go from a place where people get their hands cut off, or executed, to a place where people are free. but it's necessary work. and a free iraq is going to make this world a more peaceful place. >> ninety seconds, senator kerry. >> what i think troubles a lot of people in our country is that the president has just sort of described one kind of mistake. but what he has said is that, even knowing there were no weapons of mass destruction, even knowing there was no imminent threat, even knowing there was no connection with al qaida, he would still have done everything the same way. those are his words. now, i would not. so what i'm trying to do is just talk the truth to the american people and to the

world. the truth is what good policy is based on. it's what leadership is based on. the president says that i'm denigrating these troops. i have nothing but respect for the british, tony blair, and for what they've been willing to do. but you can't tell me that when the most troops any other country has on the ground is great britain, with 8,300, and below that the four others are below 4,000, and below that, there isn't anybody out of the hundreds, that we have a genuine coalition to get this job done. you can't tell me that on the day that we went into that war and it started -- it was principally the united states, the america and great britain and one or two others. that's it. and today, we are 90 percent of the casualties and 90 percent of the costs. and meanwhile, north korea has got nuclear weapons. talk about mixed messages. the president is the one that said, "we can't allow countries to get nuclear weapons." they have. i'll change that. >> new question. senator kerry, two minutes. you just -- you've repeatedly

accused president bush -- not here tonight, but elsewhere before -- of not telling the truth about iraq, essentially of lying to the american people about iraq. give us some examples of what you consider to be his not telling the truth. >> well, i've never, ever used the harshest word, as you did just then. and i try not to. i've been -- but i'll nevertheless tell you that i think he has not been candid with the american people. and i'll tell you exactly how. first of all, we all know that in his state of the union message, he told congress about nuclear materials that didn't exist. we know that he promised america that he was going to build this coalition. i just described the coalition. it is not the kind of coalition we were described when we were talking about voting for this. the president said he would exhaust the remedies of the united nations and go through that full process. he didn't.

he cut if off, sort of arbitrarily. and we know that there were further diplomatic efforts under way. they just decided the time for diplomacy is over and rushed to war without planning for what happens afterwards. now, he misled the american people in his speech when he said we will plan carefully. they obviously didn't. he misled the american people when he said we'd go to war as a last resort. we did not go as a last resort. and most americans know the difference. now, this has cost us deeply in the world. i believe that it is important to tell the truth to the american people. i've worked with those leaders the president talks about, i've worked with them for 20 years, for longer than this president. and i know what many of them say today, and i know how to bring them back to the table. and i believe that a fresh start, new credibility, a president who can understand what we have to do to reach out to the muslim world to make it clear that this is not, you know -- osama bin laden uses

the invasion of iraq in order to go out to people and say that america has declared war on islam. we need to be smarter about now we wage a war on terror. we need to deny them the recruits. we need to deny them the safe havens. we need to rebuild our alliances. i believe that ronald reagan, john kennedy, and the others did that more effectively, and i'm going to try to follow in their footsteps. >> ninety seconds, mr. president. >> my opponent just said something amazing. he said osama bin laden uses the invasion of iraq as an excuse to spread hatred for america. osama bin laden isn't going to determine how we defend ourselves. osama bin laden doesn't get to decide. the american people decide. i decided the right action was in iraq. my opponent calls it a mistake. it wasn't a mistake. he said i misled on iraq. i don't think he was misleading when he called iraq a grave threat in the fall of 2002. i don't think he was misleading when he said that it was right to disarm iraq in the spring of

2003. i don't think he misled you when he said that, you know, anyone who doubted whether the world was better off without saddam hussein in power didn't have the judgment to be president. i don't think he was misleading. i think what is misleading is to say you can lead and succeed in iraq if you keep changing your positions on this war. and he has. as the politics change, his positions change. and that's not how a commander in chief acts. let me finish. the intelligence i looked at was the same intelligence my opponent looked at, the very same intelligence. and when i stood up there and spoke to the congress, i was speaking off the same intelligence he looked at to make his decisions to support the authorization of force. >> thirty seconds. we'll do a 30 second here. >> i wasn't misleading when i said he was a threat. nor was i misleading on the day that the president decided to go to war when i said that he had

made a mistake in not building strong alliances and that i would have preferred that he did more diplomacy. i've had one position, one consistent position, that saddam hussein was a threat. there was a right way to disarm him and a wrong way. and the president chose the wrong way. >> thirty seconds, mr. president. >> the only thing consistent about my opponent's position is that he's been inconsistent. he changes positions. and you cannot change positions in this war on terror if you expect to win. and i expect to win. it's necessary we win. we're being challenged like never before. and we have a duty to our country and to future generations of america to achieve a free iraq, a free afghanistan, and to rid the world of weapons of mass destruction. >> new question, mr. president. two minutes. has the war in iraq been worth the cost of american lives, 1,052 as of today? >> you know, every life is

precious. every life matters. you know, my hardest -- the hardest part of the job is to know that i committed the troops in harm's way and then do the best i can to provide comfort for the loved ones who lost a son or a daughter or a husband or wife. you know, i think about missy johnson. she's a fantastic lady i met in charlotte, north carolina. she and her son bryan, they came to see me. her husband pj got killed. he'd been in afghanistan, went to iraq. you know, it's hard work to try to love her as best as i can, knowing full well that the decision i made caused her loved one to be in harm's way. i told her after we prayed and teared up and laughed some that i thought her husband's sacrifice was noble and worthy. because i understand the stakes of this war on terror.

i understand that we must find al qaida wherever they hide. we must deal with threats before they fully materialize. and saddam hussein was a threat, and that we must spread liberty because in the long run, the way to defeat hatred and tyranny and oppression is to spread freedom. missy understood that. that's what she told me her husband understood. so you say, "was it worth it?" every life is precious. that's what distinguishes us from the enemy. everybody matters. but i think it's worth it, jim. i think it's worth it, because i think -- i know in the long term a free iraq, a free afghanistan, will set such a powerful example in a part of the world that's desperate for

freedom. it will help change the world, that we can look back and say we did our duty. >> senator, 90 seconds. >> i understand what the president is talking about, because i know what it means to lose people in combat. and the question, is it worth the cost, reminds me of my own thinking when i came back from fighting in that war. and it reminds me that it is vital for us not to confuse the war, ever, with the warriors. that happened before. and that's one of the reasons why i believe i can get this job done, because i am determined for those soldiers and for those families, for those kids who put their lives on the line. that is noble. that's the most noble thing that anybody can do. and i want to make sure the outcome honors that nobility. now, we have a choice here. i've laid out a plan by which i think we can be successful in

iraq, with a summit, by doing better training, faster, by cutting -- by doing what we need to do with respect to the u.n. and the elections. there's only 25 percent of the people in there. they can't have an election right now. the president's not getting the job done. so the choice for america is, you can have a plan that i've laid out in four points, each of which i can tell you more about or you can go to johnkerry.com and see more of it, or you have the president's plan, which is four words, more of the same. i think my plan is better. and my plan has a better chance of standing up and fighting for those troops. i will never let those troops down, and will hunt and kill the terrorists wherever they are. >> all right, sir, go ahead. thirty seconds. >> yes, i understand what it means to the commander in chief. and if i were to ever say, "this is the wrong war at the wrong time at the wrong place," the troops would wonder, how can i follow this guy?

you cannot lead the war on terror if you keep changing positions on the war on terror and say things like, "well, this is just a grand diversion"" it's not a grand diversion. this is an essential that we get it right. and so, the plan he talks about simply won't work. >> senator kerry, you have 30 seconds. you have 30 seconds, right. and then the president. >> secretary of state colin powell told this president the pottery barn rule, if you break it, you fix it. now, if you break it, you made a mistake. it's the wrong thing to do. but you own it. and then you've got to fix it and do something with it. now that's what we have to do. there's no inconsistency. soldiers know over there that this isn't being done right yet. i'm going to get it right for those soldiers, because it's important to israel, it's

important to america, it's important to the world, it's important to the fight on terror. but i have a plan to do it. he doesn't. >> speaking of your plan, new question, senator kerry. two minutes. can you give us specifics, in terms of a scenario, time lines, et cetera, for ending major u.s. military involvement in iraq? >> the time line that i've set out -- and again, i want to correct the president, because he's misled again this evening on what i've said. i didn't say i would bring troops out in six months. i said, if we do the things that i've set out and we are successful, we could begin to draw the troops down in six months. and i think a critical component of success in iraq is being able to convince the iraqis and the arab world that the united states doesn't have long-term designs on it. as i understand it, we're building some 14 military bases there now, and some people say they've got a rather permanent concept to them. when you guard the oil ministry, but you don't guard

the nuclear facilities, the message to a lot of people is maybe, "wow, maybe they're interested in our oil." now, the problem is that they didn't think these things through properly. and these are the things you have to think through. what i want to do is change the dynamics on the ground. and you have to do that by beginning to not back off of the fallujahs and other places, and send the wrong message to the terrorists. you have to close the borders. you've got to show you're serious in that regard. but you've also got to show that you are prepared to bring the rest of the world in and share the stakes. i will make a flat statement, the united states of america has no long-term designs on staying in iraq. and our goal in my administration would be to get all of the troops out of there with a minimal amount you need

for training and logistics as we do in some other countries in the world after a war to be able to sustain the peace. but that's how we're going to win the peace, by rapidly training the iraqis themselves. even the administration has admitted they haven't done the training, because they came back to congress a few weeks ago and asked for a complete reprogramming of the money. now what greater admission is there, 16 months afterwards." oops, we haven't done the job. we have to start to spend the money now. will you guys give us permission to shift it over into training?" >> ninety seconds. >> there are 100,000 troops trained, police, guard, special units, border patrol. there's going to be 125,000 trained by the end of this year. yes, we're getting the job done. it's hard work. everybody knows it's hard work, because there's a determined enemy that's trying to defeat us. now, my opponent says he's going to try to change the dynamics on the ground. well, prime minister allawi was here. he is the leader of that country. he's a brave, brave man. when he came, after giving a speech to the congress, my opponent questioned his credibility.

on can't change the dynamics the ground if you've criticized the brave leader of iraq. one of his campaign people alleged that prime minister allawi was like a puppet. that's no way to treat somebody who's courageous and brave, that is trying to lead his country forward. the way to make sure that we succeed is to send consistent, sound messages to the iraqi people that when we give our word, we will keep our word, that we stand with you, that we believe you want to be free. and i do. i believe that 25 million people, the vast majority, long to have elections. i reject this notion -- and i'm suggesting my opponent isn't -- i reject the notion that some say that if you're muslim you can't free, you don't desire freedom. i disagree, strongly disagree with that. >> thirty seconds. >> i couldn't agree more that the iraqis want to be free and that they could be free. but i think the president, again, still hasn't shown how he's going to go about it the

right way. he has more of the same. now, prime minister allawi came here, and he said the terrorists are pouring over the border. that's allawi's assessment. the national intelligence assessment that was given to the president in july said, best-case scenario, more of the same of what we see today, worst-case scenario, civil war. i can do better. >> yes, let me. >> yes, 30 seconds. >> the reason why prime minister allawi said they're coming across the border is because he recognizes that this is a central part of the war on terror. they're fighting us because they're fighting freedom. they understand that a free afghanistan or a free iraq will be a major defeat for them.

and those are the stakes. and that's why it is essential we not leave. that's why it's essential we hold the line. that's why it's essential we win. and we will. under my leadership we're going to win this war in iraq. >> mr. president, new question. two minutes. does the iraq experience make it more likely or less likely that you would take the united states into another preemptive military action? >> i would hope i never have to. i understand how hard it is to commit troops. never wanted to commit troops. when i was running -- when we had the debate in 2000, never dreamt i'd be doing that. but the enemy attacked us, jim, and i have a solemn duty to protect the american people, to do everything i can to protect us. i think that by speaking clearly and doing what we say and not sending mixed messages, it is less likely we'll ever have to use troops. but a president must always be willing to use troops. it must -- as a last resort. i was hopeful diplomacy would work in iraq. it was falling apart. there was no doubt in my mind that saddam hussein was hoping that the world would turn a blind eye.

and if he had been in power, in other words, if we would have said, "let the inspectors work, or let's, you know, hope to talk him out. maybe an 18th resolution would work," he would have been stronger and tougher, and the world would have been a lot worse off. there's just no doubt in my mind we would rue the day, had saddam hussein been in power. so we use diplomacy every chance we get, believe me. and i would hope to never have to use force. but by speaking clearly and sending messages that we mean what we say, we've affected the world in a positive way. look at libya. libya was a threat. libya is now peacefully dismantling its weapons programs. libya understood that america and others will enforce doctrine and that the world is better for it. so to answer your question, i would hope we never have to. i think by acting firmly and decisively, it will mean it is less likely we have to use force. >> senator kerry, 90 seconds.

>> jim, the president just said something extraordinarily revealing and frankly very important in this debate. in answer to your question about iraq and sending people into iraq, he just said, "the enemy attacked us." saddam hussein didn't attack us. osama bin laden attacked us. al qaida attacked us. and when we had osama bin laden cornered in the mountains of tora bora, 1,000 of his cohorts with him in those mountains. with the american military forces nearby and in the field, we didn't use the best trained troops in the world to go kill the world's number one criminal and terrorist. they outsourced the job to afghan warlords, who only a week earlier had been on the other side fighting against us, neither of whom trusted each

other. that's the enemy that attacked us. that's the enemy that was allowed to walk out of those mountains. that's the enemy that is now in 60 countries, with stronger recruits. he also said saddam hussein would have been stronger. that is just factually incorrect. two-thirds of the country was a no-fly zone when we started this war. we would have had sanctions. we would have had the u.n. inspectors. saddam hussein would have been continually weakening. if the president had shown the patience to go through another round of resolution, to sit down with those leaders, say, "what do you need, what do you need now, how much more will it take to get you to join us?" we'd be in a stronger place today. >> thirty seconds. >> first of all, of course i know osama bin laden attacked us. i know that. and secondly, to think that another round of resolutions would have caused saddam hussein to disarm, disclose, is ludicrous, in my judgment. it just shows a significant difference of opinion. we tried diplomacy. we did our best.

he was hoping to turn a blind eye. and, yes, he would have been stronger had we not dealt with him. he had the capability of making weapons, and he would have made weapons. >> thirty seconds, senator. >> thirty-five to forty countries in the world had a greater capability of making weapons at the moment the president invaded than saddam hussein. and while he's been diverted, with 9 out of 10 active duty divisions of our army, either going to iraq, coming back from iraq, or getting ready to go, north korea's gotten nuclear weapons and the world is more dangerous. iran is moving toward nuclear weapons and the world is more dangerous. darfur has a genocide. the world is more dangerous. i'd have made a better choice. >> new question. two minutes, senator kerry. what is your position on the whole concept of preemptive war? >> the president always has the right, and always has had the right, for preemptive strike.

that was a great doctrine throughout the cold war. and it was always one of the things we argued about with respect to arms control. no president, through all of american history, has ever ceded, and nor would i, the right to preempt in any way necessary to protect the united states of america. but if and when you do it, jim, you have to do it in a way that passes the test, that passes the global test where your countrymen, your people understand fully why you're doing what you're doing and you can prove to the world that you did it for legitimate reasons. here we have our own secretary of state who has had to apologize to the world for the presentation he made to the united nations. i mean, we can remember when president kennedy in the cuban missile crisis sent his secretary of state to paris to meet with degaulle. and in the middle of the discussion, to tell them about the missiles in cuba, he said, "here, let me show you the photos." and degaulle waved them off and said, "no, no, no, no. the word of the president of the united states is good enough for

me." how many leaders in the world today would respond to us, as a result of what we've done, in that way? so what is at test here is the credibility of the united states of america and how we lead the world. and iran and iraq are now more dangerous -- iran and north korea are now more dangerous. now, whether preemption is ultimately what has to happen, i don't know yet. but i'll tell you this, as president, i'll never take my eye off that ball. i've been fighting for proliferation the entire time -- anti-proliferation the entire time i've been in the congress. and we've watched this president actually turn away from some of the treaties that were on the table. you don't help yourself with other nations when you turn away from the global warming treaty, for instance, or when you refuse to deal at length with the united nations. you have to earn that respect. and i think we have a lot of earning back to do. >> ninety seconds. >> let me -- i'm not exactly sure what you mean, "passes the global test," you take preemptive action if you pass a global test. my attitude is you take preemptive action in order to

protect the american people, that you act in order to make this country secure. my opponent talks about me not signing certain treaties. let me tell you one thing i didn't sign, and i think it shows the difference of our opinion -- the difference of opinions. and that is, i wouldn't join the international criminal court. this is a body based in the hague where unaccountable judges and prosecutors can pull our troops or diplomats up for trial. and i wouldn't join it. and i understand that in certain capitals around the world that that wasn't a popular move. but it's the right move not to join a foreign court that could -- where our people could be prosecuted. my opponent is for joining the

international criminal court. i just think trying to be popular, kind of, in the global sense, if it's not in our best interest makes no sense. i'm interested in working with our nations and do a lot of it. but i'm not going to make decisions that i think are wrong for america. >> new question, mr. president. do you believe that diplomacy and sanctions can resolve the nuclear problems with north korea and iran? take them in any order you would like. >> north korea, first, i do. let me say -- i certainly hope so. before i was sworn in, the policy of this government was to have bilateral negotiations with north korea. and we signed an agreement with north korea that my administration found out that was not being honored by the north koreans. and so i decided that a better

way to approach the issue was to get other nations involved, just besides us. and in crawford, texas, jiang zemin and i agreed that the nuclear-weapons-free peninsula, korean peninsula, was in his interest and our interest and the world's interest. and so we began a new dialogue with north korea, one that included not only the united states, but now china. and china's a got a lot of influence over north korea, some ways more than we do. as well, we included south korea, japan and russia. so now there are five voices speaking to kim jong il, not just one. and so if kim jong il decides again to not honor an agreement, he's not only doing injustice to america, he'd be doing injustice to china, as well. and i think this will work. it's not going to work if we open up a dialogue with kim jong il. that's what he wants.

he wants to unravel the six- party talks, or the five-nation coalition that's sending him a clear message. on iran, i hope we can do the same thing, continue to work with the world to convince the iranian mullahs to abandon their nuclear ambitions. we worked very closely with the foreign ministers of france, germany and great britain, who have been the folks delivering the message to the mullahs that if you expect to be part of the world of nations, get rid of your nuclear programs. the iaea is involved. there's a special protocol recently been passed that allows for inspections. i hope we can do it. and we've got a good strategy. >> senator kerry, 90 seconds. >> with respect to iran, the british, french, and germans were the ones who initiated an effort without the united states, regrettably, to begin to try to move to curb the nuclear possibilities in iran. i believe we could have done

better. i think the united states should have offered the opportunity to provide the nuclear fuel, test them, see whether or not they were actually looking for it for peaceful purposes. if they weren't willing to work a deal, then we could have put sanctions together. the president did nothing. with respect to north korea, the real story, we had inspectors and television cameras in the nuclear reactor in north korea. secretary bill perry negotiated that under president clinton. and we knew where the fuel rods were. and we knew the limits on their nuclear power. colin powell, our secretary of state, announced one day that we were going to continue the dialog of working with the north koreans. the president reversed it publicly while the president of south korea was here. and the president of south korea went back to south korea bewildered and embarrassed because it went against his policy. and for two years, this administration didn't talk at all to north korea. while they didn't talk at all,

the fuel rods came out, the inspectors were kicked out, the television cameras were kicked out. and today, there are four to seven nuclear weapons in the hands of north korea. that happened on this president's watch. now, that, i think, is one of the most serious, sort of, reversals or mixed messages that you could possibly send. >> i want to make sure -- yes, sir -- but in this one minute, i want to make sure that we understand -- the people watching understand the differences between the two of you on this. you want to continue the multinational talks, correct? >> right. >> and you're willing to do it. >> both. i want bilateral talks which put all of the issues, from the armistice of 1952, the economic issues, the human rights issues, the artillery disposal issues, the dmz issues and the nuclear issues on the table. >> and you're opposed to that. right? >> the minute we have bilateral talks, the six-party talks will unwind. that's exactly what kim jong il wants. and by the way, the breach on the agreement was not through plutonium.

the breach on the agreement is highly enriched uranium. that's what we caught him doing. that's where he was breaking the agreement. secondly, he said -- my opponent said where he worked to put sanctions on iran -- we've already sanctioned iran. we can't sanction them any more. there are sanctions in place on iran. and finally, we were a party to the convention -- to working with germany, france and great britain to send their foreign ministers into iran. >> new question, two minutes. senator kerry, you mentioned darfur, the darfur region of sudan. fifty thousand people have already died in that area. more than a million are homeless. and it's been labeled an act of ongoing genocide. yet neither one of you or anyone else connected with your campaigns or your administration that i can find has discussed the possibility of sending in troops. why not? >> well, i'll tell you exactly why not, but i first want to say something about those sanctions on iran. only the united states put the sanctions on alone, and that's exactly what i'm talking about. in order for the sanctions to

be effective, we should have been working with the british, french and germans and other countries. and that's the difference between the president and me. and there, again, he sort of slid by the question. now, with respect to darfur, yes, it is a genocide. and months ago, many of us were pressing for action. i think the reason that we're not saying send american troops in at this point is severalfold. number one, we can do this through the african union, providing we give them the logistical support. right now all the president is providing is humanitarian support. we need to do more than that. they've got to have the logistical capacity to go in and stop the killing. and that's going to require more than is on the table today. i also believe that it is -- one of the reasons we can't do it is we're overextended. ask the people in the armed forces today. we've got guards and reserves who are doing double duties. we've got a backdoor draft taking place in america today, people with stop-loss programs where they're told you can't get out of the military, nine out of

our 10 active duty divisions committed to iraq one way or the other, either going, coming or preparing. so this is the way the president has overextended the united states. that's why, in my plan, i add two active duty divisions to the united states army, not for iraq, but for our general demands across the globe. i also intend to double the number of special forces so that we can do the job we need to do with respect fighting the terrorists around the world. and if we do that, then we have the ability to be able to respond more rapidly. but i'll tell you this, as president, if it took american forces to some degree to coalesce the african union, i'd be prepared to do it because we could never allow another rwanda. it's a moral responsibility for us and the world. >> ninety seconds. >> back to iran, just for a second. it was not my administration that put the sanctions on iran. that happened long before i arrived in washington, d.c. in terms of darfur, i agree it's genocide.

and colin powell so stated. we have committed $200 million worth of aid. we're the leading donor in the world to help the suffering people there. we will commit more over time to help. we were very much involved at the u.n. on the sanction policy of the bashir government in the sudan. prior to darfur, ambassador jack danforth had been negotiating a north-south agreement that we would have hoped would have brought peace to the sudan. i agree with my opponent that we shouldn't be committing troops. we ought to be working with the african union to do so -- precisely what we did in liberia. we helped stabilize the situation with some troops, and when the african union came, we moved them out. my hope is that the african union moves rapidly to help save lives.

and fortunately the rainy season will be ending shortly, which will make it easier to get aid there and help the long- suffering people there. >> new question, president bush. clearly, as we have heard, major policy differences between the two of you. are there also underlying character issues that you believe, that you believe are serious enough to deny senator kerry the job as commander in chief of the united states? >> that's a loaded question. well, first of all, i admire senator kerry's service to our country. i admire the fact that he is a great dad. i appreciate the fact that his daughters have been so kind to my daughters in what has been a pretty hard experience for, i guess, young girls, seeing their dads out there campaigning.

i admire the fact that he served for 20 years in the senate. although i'm not so sure i admire the record. i won't hold it against him that he went to yale. there's nothing wrong with that. my concerns about the senator is that, in the course of this campaign, i've been listening very carefully to what he says, and he changes positions on the war in iraq. he changes positions on something as fundamental as what you believe in your core, in your heart of hearts, is right in iraq. you cannot lead if you send mixed messages. mixed messages send the wrong signals to our troops. mixed messages send the wrong signals to our allies. mixed messages send the wrong signals to the iraqi citizens. and that's my biggest concern about my opponent.

i admire his service. but i just know how this world works, and that in the councils of government, there must be certainty from the u.s. president. of course, we change tactics when need to, but we never change our beliefs, the strategic beliefs that are necessary to protect this country in the world. >> ninety second response, senator. >> well, first of all, i appreciate enormously the personal comments the president just made. and i share them with him. i think only if you're doing this -- and he's done it more than i have in terms of the presidency -- can you begin to get a sense of what it means to your families. and it's tough. and so i acknowledge that his daughters -- i've watched them. i've chuckled a few times at some of their comments. (laughter) and.

>> >> i'm trying to put a leash on them. (laughter) >> well, i know. i've learned not to do that. (laughter) and i have great respect and admiration for his wife. i think she's a terrific person. >> thank you. >> and a great first lady. but we do have differences. i'm not going to talk about a difference of character. i don't think that's my job or my business. but let me talk about something that the president just sort of finished up with. maybe someone would call it a character trait, maybe somebody wouldn't. but this issue of certainty. it's one thing to be certain, but you can be certain and be wrong. it's another to be certain and be right, or to be certain and be moving in the right direction, or be certain about a principle and then learn new facts and take those new facts and put them to use in order to change and get your policy right. what i worry about with the president is that he's not acknowledging what's on the ground, he's not acknowledging the realities of north korea, he's not acknowledging the truth of the science of stem-cell research or of global warming

and other issues. and certainty sometimes can get you in trouble. >> thirty seconds. >> well, i think -- listen, i fully agree that one should shift tactics, and we will, in iraq. our commanders have got all the flexibility to do what is necessary to succeed. but what i won't do is change my core values because of politics or because of pressure. and it is one of the things i've learned in the white house, is that there's enormous pressure on the president, and he cannot wilt under that pressure. otherwise, the world won't be better off. >> thirty seconds. >> i have no intention of wilting. i've never wilted in my life. and i've never wavered in my life. i know exactly what we need to do in iraq, and my position has been consistent, saddam hussein is a threat. he needed to be disarmed. we needed to go to the u.n. the president needed the authority to use force in order to be

able to get him to do something, because he never did it without the threat of force. but we didn't need to rush to war without a plan to win the peace. >> new question, two minutes, senator kerry. if you are elected president, what will you take to that office thinking is the single most serious threat to the national security to the united states? >> nuclear proliferation. nuclear proliferation. there's some 600-plus tons of unsecured material still in the former soviet union and russia. at the rate that the president is currently securing it, it'll take 13 years to get it. i did a lot of work on this. i wrote a book about it several years ago -- six, seven years ago -- called "the new war," which saw the difficulties of this international criminal network. and back then, we intercepted a suitcase in a middle eastern country with nuclear materials

in it. and the black market sale price was about $250 million. now, there are terrorists trying to get their hands on that stuff today. and this president, i regret to say, has secured less nuclear material in the last two years since 9/11 than we did in the two years preceding 9/11. we have to do this job. and to do the job, you can't cut the money for it. the president actually cut the money for it. you have to put the money into it and the funding and the leadership. and part of that leadership is sending the right message to places like north korea. right now the president is spending hundreds of millions of dollars to research bunker- busting nuclear weapons. the united states is pursuing a new set of nuclear weapons. it doesn't make sense. you talk about mixed messages. we're telling other people, "you can't have nuclear weapons," but we're pursuing a new

nuclear weapon that we might even contemplate using. not this president. i'm going to shut that program down, and we're going to make it clear to the world we're serious about containing nuclear proliferation. and we're going to get the job of containing all of that nuclear material in russia done in four years. and we're going to build the strongest international network to prevent nuclear proliferation. this is the scale of what president kennedy set out to do with the nuclear test ban treaty. it's our generation's equivalent. and i intend to get it done. >> ninety seconds, mr. president. >> actually, we've increased funding for dealing with nuclear proliferation about 35 percent since i've been the president. secondly, we've set up what's called the -- well, first of all, i agree with my opponent that the biggest threat facing this country is weapons of mass destruction in the hands of a terrorist network. and that's why proliferation is one of the centerpieces of a multi-prong strategy to make the

country safer. my administration started what's called the proliferation security initiative. over 60 nations involved with disrupting the trans-shipment of information and/or weapons of mass destruction materials. and we've been effective. we busted the a.q. khan network. this was a proliferator out of pakistan that was selling secrets to places like north korea and libya. we convinced libya to disarm. it's a central part of dealing with weapons of mass destruction and proliferation. i'll tell you another way to help protect america in the long run is to continue with missile defenses. and we've got a robust research and development program that has been ongoing during my administration. we'll be implementing a missile- defense system relatively quickly.

and that is another way to help deal with the threats that we face in the 21st century. my opponent opposed the missile defenses. >> just for this one-minute discussion here, just for whatever seconds it takes, so it's correct to say, that if somebody is listening to this, that both of you agree, if you're reelected, mr. president, and if you are elected, the single most serious threat you believe, both of you believe, is nuclear proliferation? >> in the hands of a terrorist enemy. >> weapons of mass destruction, nuclear proliferation. but again, the test or the difference between us, the president has had four years to try to do something about it, and north korea has got more weapons, iran is moving towards weapons. and at his pace, it will take 13 years to secure those weapons in russia. i'm going to do it in four years, and i'm going to immediately set out to have bilateral talks with north korea. >> your response to that? >> again, i can't tell you how big a mistake i think that is, to have bilateral talks with north korea. it's precisely what kim jong il wants.

it will cause the six-party talks to evaporate. it will mean that china no longer is involved in convincing, along with us, for kim jong il to get rid of his weapons. it's a big mistake to do that. we must have china's leverage on kim jong il, besides ourselves. and if you enter bilateral talks, they'll be happy to walk away from the table. i don't think that'll work. >> all right. mr. president, this is the last question. and two minutes. it's a new subject -- new question, and it has to do with president putin and russia. did you misjudge him or are you -- do you feel that what he is doing in the name of antiterrorism by changing some democratic processes is ok? >> no, i don't think it's ok, and said so publicly. i think that there needs to be checks and balances in a democracy, and made that very clear that by consolidating power in the central government, he's sending a

signal to the western world and united states that perhaps he doesn't believe in checks and balances, and i told him that. i mean, he's also a strong ally in the war on terror. he is -- listen, they went through a horrible situation in beslan, where these terrorists gunned down young school kids. that's the nature of the enemy, by the way. that's why we need to be firm and resolved in bringing them to justice. that's precisely what vladimir putin understands, as well. i've got a good relation with vladimir. and it's important that we do have a good relation, because that enables me to better comment to him, and to better to discuss with him, some of the decisions he makes. i found that, in this world, that it's important to establish good personal relationships with people so that when you have disagreements, you're able to disagree in a way that is effective.

and so i've told him my opinion. i look forward to discussing it more with him, as time goes on. russia is a country in transition. vladimir is going to have to make some hard choices. and i think it's very important for the american president, as well as other western leaders, to remind him of the great benefits of democracy, that democracy will best help the people realize their hopes and aspirations and dreams. and i will continue working with him over the next four years. >> ninety seconds, senator kerry. >> well, let me just say quickly that i've had an extraordinary experience of watching up close and personal that transition in russia, because i was there right after the transformation. and i was probably one of the first senators, along with senator bob smith of new hampshire, a former senator, to

go down into the kgb underneath treblinka square and see reams of files with names in them. it sort of brought home the transition to democracy that russia was trying to make. i regret what's happened in these past months. and i think it goes beyond just the response to terror. mr. putin now controls all the television stations. his political opposition is being put in jail. and i think it's very important to the united states, obviously, to have a working relationship that is good. this is a very important country to us. we want a partnership. but we always have to stand up for democracy. as george will said the other day, "freedom on the march, not in russia right now. " now, i'd like to come back for a quick moment, if i can, to that issue about china and the talks. because that's one of the most critical issues here, north korea. just because the president says it can't be done, that you'd

lose china, doesn't mean it can't be done. i mean, this is the president who said "there were weapons of mass destruction," said "mission accomplished," said we could fight the war on the cheap -- none of which were true. we could have bilateral talks with kim jong il. and we can get those weapons at the same time as we get china. because china has an interest in the outcome, too. >> thirty seconds, mr. president. >> you know my opinion on north korea. i can't say it any more plainly. >> well, but when he used the word "truth" again. >> pardon me? >> talking about the truth of the matter. he used the word "truth" again. did that raise any hackles with you? >> oh, i'm a pretty calm guy. i don't take it personally. >> ok. all right. >> you know, we looked at the same intelligence and came to the same conclusion, that saddam hussein was a grave threat. and i don't hold it against him that he said grave threat. i'm not going to go around the country saying he didn't tell the truth, when he looked at the same intelligence i did. >> it was a threat. that's not the issue. the issue is what you do about it. the president said he was going

to build a true coalition, exhaust the remedies of the u.n. and go to war as a last resort. those words really have to mean something. and, unfortunately, he didn't go to war as a last resort. now we have this incredible mess in iraq -- $200 billion. americanwhat the people thought they were getting when they voted. >> all right, that brings us to closing statements. and, again, as determined by a coin toss, senator kerry, you go first, and you have two minutes. >> thank you, jim, very much. thank you very much to the university, again. thank you, mr. president. my fellow americans, as i've said at the very beginning of this debate, both president bush and i love this country very much. there's no doubt, i think, about that. but we have a different set of convictions about how we make our country stronger here at home and respected again in the world. i know that for many of you

sitting at home, parents of kids in iraq, you want to know who's the person who could be a commander in chief who could get your kids home and get the job done and win the peace. and for all the rest of the parents in america who are wondering about their kids going to the school or anywhere else in the world, what kind of world they're going to grow up in, let me look you in the eye and say to you, i defended this country as a young man in war, and i will defend it as president of the united states. but i have a difference with this president. i believe when we're strongest when we reach out and lead the world and build strong alliances. i have a plan for iraq. i believe we can be successful. i'm not talking about leaving. i'm talking about winning. and we need a fresh start, a new credibility, a president who can bring allies to our side. i also have a plan to win the war on terror, funding homeland security, strengthening our military, cutting our finances, reaching out to the world, again building strong alliances.

i believe america's best days are ahead of us because i believe that the future belongs to freedom, not to fear. that's the country that i'm going to fight for. and i ask you to give me the opportunity to make you proud. i ask you to give me the opportunity to lead this great nation, so that we can be stronger here at home, respected again in the world, and have responsible leadership that we deserve. thank you. and god bless america. >> mr. president, two minutes. >> thank you very much tonight, jim. senator. if america shows uncertainty or weakness in this decade, the world will drift toward tragedy. that's not going to happen, so long as i'm your president. the next four years we will continue to strengthen our homeland defenses. we will strengthen our intelligence-gathering services. we will reform our military. the military will be an all-

volunteer army. we will continue to stay on the offense. we will fight the terrorists around the world so we do not have to face them here at home. we'll continue to build our alliances. i'll never turn over america's national security needs to leaders of other countries, as we continue to build those alliances. and we'll continue to spread freedom. i believe in the transformational power of liberty. i believe that the free iraq is in this nation's interests. i believe a free afghanistan is in this nation's interest. and i believe both a free afghanistan and a free iraq will serve as a powerful example for millions who plead in silence for liberty in the broader middle east. we've done a lot of hard work together over the last three and a half years. we've been challenged, and we've risen to those challenges. we've climbed the mighty mountain. i see the valley below, and it's a valley of peace. by being steadfast and resolute and strong, by keeping our

word, by supporting our troops, we can achieve the peace we all want. i appreciate your listening tonight. i ask for your vote. and may god continue to bless our great land. >> and that ends tonight's debate. a reminder, the second presidential debate will be a week from tomorrow, october 8th, from washington university in st. louis. charles gibson of abc news will moderate a town hall-type event. then, on october 13th, from arizona state university in tempe, bob schieffer of cbs news will moderate an exchange on domestic policy that will be similar in format to tonight's. also, this coming tuesday, at case western reserve university in cleveland, the vice presidential candidates, vice president cheney and senator edwards, will debate with my pbs colleague, gwen ifill, moderating.

for now, thank you, senator kerry, president bush. from coral gables, florida, i'm jim lehrer. thank you and good night. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] [applause]

[applause] right now we are live on the campus university in boca raton florida. a sunny day there and it tonight president obama and a republican candidate mitt romney meet in their third and final presidential debate. looking at a pre-debate festival on the campus there of lynn university. let's watch and listen for a moment.

[background sounds] ♪

♪ the sights and sounds at lynn university in boca raton florida, to light the final debate. we want to hear about that on the facebook page we are all asking what question would you like to see asked at tonight's presidential debate on foreign policy. if you would like to get in on the elon to facebook.com/c-span

the level playing field is so important a law in california to see growing sales as customers walk into their stores instead of by an online. people buy online for convenience for choice and lower prices without even getting into the sales tax.

vice president walter mondale challenge president ronald reagan in the 1984 campaign discussed foreign policy issues in the second of the debates that year. this hour and 20 minute debate was sponsored by the league ofhn women voters and held in kansas city missouri. >> good evening from the municipal auditorium in kansas city. i am dorothy ridings the president of the league of womee voters and sponsor of theucky. presidential debate of the 1984e campaign between republican ronald reagan and a democrat

walter mondale. our panelists for tonight's debate on defense and foreign policy issues are georgie anne geyer, syndicated columnist for syndersal press syndicate's. marvinic kalb, chief diplomaticp correspondent forlo nbc news. morton konracke executive editor of the new republic magazine. and henry trewhitt diplomatic ltimor correspondent for the "baltimore sun." edwin newman formerly of nbc sws and now syndicated columnistyn is our moderator. >> moderator: dorothy ridings, thank you. a brief about the procedure the first question will go to walteu mondale. he will have to and half minutes to reply and then the panel member who puts the question-up. that will be limited to one minute. after that the same question will be put to president reagan

and there will be a follow up and each man will have one minute for battle. the second question will go to president reagan and and the alternating will continue. then there will be four minutes summations. we have asked the question is to be brief. let's begin. your question to mr. mondale. >> two related questions on the issue of central america. you and the democratic party have said the only policy in central america should be on the economic development and to negotiations with a quarantine of nicaragua. you believe these answers would solve the conflict there? to you believe there is no need? are these solutions to these problems too weak and too late?

>> i believe the question oversimplifies the difficulties of what we must do in central america. our objective should be to strengthen democracy, stop communist influences, and stabilize the community. to do that, we need a three pronged attack, one is military assistance to our friends who are being pressured. and a strong and sophisticated economic assistance program and human rights program that offers a better life and a sharper alternative to the alternative offered by the totalitarian to oppose us and a strong diplomatic effort that pursues the possibilities of peace in the area. that is one of the disagreements we have with the president. they have not pursued in the

diplomatic opportunities and have lost time during which we might have been able to achieve peace. this brings up the question of what presidential leadership is all about. i think the lesson in central america, this embarrassment where we are giving instructions for hired assassins, hiring criminals, all of this has strengthened our opponents. a president must not only ensure we are tough, we must also be whys and smart in the exercise of that policy. we saw the same thing in london on where we spent a good deal of assets because the leadership of this government did not pursue wise policies. we have been humiliated. the bottom line of national

strength is the president must be in command. he must lead. when he does not know that you can recall at sub -- submarine missiles, this covers three years into his administration that our arms control efforts have failed because he did know -- these are things a president must know to command. the president is called a the commander-in-chief. he is called that because he is supposed to be in charge. >> if i could abroad and the question a little bit. since world war ii, every conflict we have been involved with has been in nonconventional terms and yet we keep fighting in conventional or traditional military terms. the central american wars are very much in the same place as

iran and cuba. d.c. any possibility we are going to realize the change in warfare in our time? >> we absolutely must which is why i responded the way i did. it is much more complex. you must understand the region and the politics, you must provide a strong alternative and you must show the strength all at the same time. that is why i object to the covert actions. that is a classic example of a strategy that has embarrassed us and strengthened our opposition and undermined the moral authority in the region. strength requires knowledge and command. we have seen in the example a policy has hurt us strengthen our opposition and undermines the moral authority of our country.

>> mr. president, the last few months it has seen as your policies in central america were beginning to work. we are confronted with the story of a cia manual which advocates not only assassinations but the hiring of criminals to assassinate the girl as we are supporting in order to create martyrs. is this not state supported terrorism? >> i am glad you asked because i know what is on many people's minds. i have ordered an investigation. we have eight gentlemen who is on contract to the cia advising on military tactics. he created this manual. it was turned over to the

agency head of the cia to be printed. the number of pages were cut by that agency and he sent it to the cia were more pages were cut before it was printed. there were 12 of the original copies that got out and were not submitted for this printing process. those are the details as we have them. as soon as we have an investigation and a find out where the blame lies, we certainly are going to do something about that. we will take the proper action at the proper time. i was interested to hear about central america and our process down there and i thought that instead of a debate i was going to find mr. mondale in complete agreement with what we are doing because the plan he has outlined

has the -- has been the one we have been following including diplomatic processes throughout central america. and working closely with the group. i can only tell you about the manual, we are not in the habit of assigning guilt before there has been proper evidence produced. if guilt is established, whoever is guilty, we will treat with that situation and they will be removed. >> you are implying that the cia is directing the contras. i would also like to ask whether having the cia investigate in such a sensitive area is not like sending the fox into the chicken coop. >> i am afraid i misspoke when i said it -- there is not someone at their directing all of this

activity. there are man stationed in other countries in the world and central america. it was a man down there in that area, this was delivered to. he recognized what was in the manual was a contradiction of my own executive order that we had -- would have nothing to do with political associations. >> what is a president to wing when he takes his oath of office? he promises to faithfully execute the laws of the land.

a president can't know everything, but a president has to know those things that are essential to his leadership and the enforcement of our laws. this manual -- several thousands of which were produced -- was distributed, ordering political assassinations, hiring of criminals, and other forms of terrorism. some of it was excised, but the part dealing with political terrorism was continued. how can this happen? how can something this serious occur in an administration and have a president of the united states in a situation like this say he didn't know? a president must know these things. i don't know which is worse, not knowing or knowing and not stopping it. and what about the mining of the harbors in nicaragua which violated international law? this has hurt this country, and a president's supposed to command. >> mr. president, your rebuttal. >> yes. i have so many things there to respond to, i'm going to pick out something you said earlier. you've been all over the country repeating something that, i will admit, the press has also been repeating-that i believed that nuclear missiles could be fired and then called back. i never, ever conceived of such a thing. i never said any such thing. in a discussion of our

strategic arms negotiations, i said that submarines carrying missiles and airplanes carrying missiles were more conventional- type weapons, not as destabilizing as the land-based missiles, and that they were also weapons that -- or carriers-that if they were sent out and there was a change, you could call them back before they had launched their missiles. but i hope that from here on you will no longer be saying that particular thing, which is absolutely false. how anyone could think that any sane person would believe you could call back a nuclear missile, i think is as ridiculous as the whole concept has been. so, thank you for giving me a chance to straighten the record. i'm sure that you appreciate that. [laughter] >> mr. kalb, your question to president reagan. >> mr. president, you have often described the soviet union as a powerful, evil empire intent on world domination. but this year you have said, and i quote.

"if they want to keep their mickey mouse system, that's okay with me." which is it, mr. president? do you want to contain them within their present borders and perhaps try to reestablish detente -- or what goes for detente -- or do you really want to roll back their empire? >> i have said on a number of occasions exactly what i believe about the soviet union. i retract nothing that i have said. i believe that many of the things they have done are evil in any concept of morality that we have. but i also recognize that as the two great superpowers in the world, we have to live with each other. and i told mr. gromyko we don't like their system. they don't like ours. and we're not going to change their system, and they sure better not try to change ours. but between us, we can either destroy the world or we can save it. and i suggested that, certainly, it was to their common interest, along with ours, to avoid a conflict and to attempt to save the world and

remove the nuclear weapons. and i think that perhaps we established a little better understanding. i think that in dealing with the soviet union one has to be realistic. i know that mr. mondale, in the past, has made statements as if they were just people like ourselves, and if we were kind and good and did something nice, they would respond accordingly. and the result was unilateral disarmament. we canceled the b-1 under the previous administration. what did we get for it? nothing. the soviet union has been engaged in the biggest military buildup in the history of man at the same time that we tried the policy of unilateral disarmament, of weakness, if you will. and now we are putting up a defense of our own. and i've made it very plain to them, we seek no superiority. we simply are going to provide a deterrent so that it will be too costly for them if they are nursing any ideas of aggression against us.

now, they claim they're not. and i made it plain to them, we're not. there's been no change in my attitude at all. i just thought when i came into office it was time that there was some realistic talk to and about the soviet union. and we did get their attention. >> mr. president, perhaps the other side of the coin, a related question, sir. since world war ii, the vital interests of the united states have always been defined by treaty commitments and by presidential proclamations. aside from what is obvious, such as nato, for example, which countries, which regions in the world do you regard as vital national interests of this country, meaning that you would send american troops to fight there if they were in danger?

>> ah, well, now you've added a hypothetical there at the end, mr. kalb, about where we would send troops in to fight. i am not going to make the decision as to what the tactics could be, but obviously there are a number of areas in the world that are of importance to us. one is the middle east, and that is of interest to the whole western world and the industrialized nations, because of the great supply of energy upon which so many depend there. our neighbors here in america are vital to us. we're working right now in trying to be of help in southern africa with regard to the independence of namibia and the removal of the cuban surrogates, the thousands of them, from angola. so, i can say there are a great many interests. i believe that we have a great interest in the pacific basin. that is where i think the future of the world lies. but i am not going to pick out one and, in advance, hypothetically say, "oh, yes, we would send troops there." i

don't want to send troops any place. >> i'm sorry, mr. president. sir, your time was up. >> all right. >> mr. mondale, you have described the soviet leaders as, and i'm quoting, ". . . cynical, ruthless, and dangerous," suggesting an almost total lack of trust in them. in that case, what makes you think that the annual summit meetings with them that you have proposed will result in agreements that would satisfy the interests of this country? >> because the only type of agreements to reach with the soviet union are the types that are specifically defined, so we know exactly what they must do; subject to full verification, which means we know every day whether they're living up to it; and follow-ups, wherever we find suggestions that they're violating it; and the strongest possible terms. i have no illusions about the soviet union leadership or the nature of that state. they are a tough and a ruthless adversary, and we must be prepared to meet that challenge, and i would. where i part with the president is that despite all of those differences we must, as past presidents before this one have done, meet on the common ground

of survival. and that's where the president has opposed practically every arms control agreement, by every president, of both political parties, since the bomb went off. and he now completes this term with no progress toward arms control at all, but with a very dangerous arms race underway instead. there are now over 2,000 more warheads pointed at us today than there were when he was sworn in, and that does not strengthen us. we must be very, very realistic in the nature of that leadership, but we must grind away and talk to find ways of reducing these differences, particularly where arms races are concerned and other dangerous exercises of soviet power. there will be no unilateral disarmament under my administration. i will keep this nation strong. i understand exactly what the

soviets are up to, but that, too, is a part of national strength. to do that, a president must know what is essential to command and to leadership and to strength. and that's where the president's failure to master, in my opinion, the essential elements of arms control has cost us dearly. he's 3 years into this administration. he said he just discovered that most soviet missiles are on land, and that's why his proposal didn't work. i invite the american people tomorrow-because i will issue the statement quoting president reagan -- he said exactly what i said he said. he said that these missiles were less dangerous than ballistic missiles because you could fire them, and you could recall them if you decided there'd been a miscalculation. >> i'm sorry, sir -- >> a president must know those things. >> a related question, mr. mondale, on eastern europe. do you accept the conventional diplomatic wisdom that eastern europe is a soviet sphere of influence?

and if you do, what could a mondale administration realistically do to help the people of eastern europe achieve the human rights that were guaranteed to them as a result of the helsinki accords? >> i think the essential strategy of the united states ought not accept any soviet control over eastern europe. we ought to deal with each of these countries separately. we ought to pursue strategies with each of them, economic and the rest, that help them pull away from their dependence upon the soviet union. where the soviet union has acted irresponsibly, as they have in many of those countries, especially, recently, in poland, i believe we ought to insist that western credits extended to the soviet union bear the market rate. make the soviets pay for their irresponsibility. that is a very important objective -- to make certain that we continue to look forward to progress toward greater independence by these

nations and work with each of them separately. >> mr. president, your rebuttal. >> yes. i'm not going to continue trying to respond to these repetitions of the falsehoods that have already been stated here. but with regard to whether mr. mondale would be strong, as he said he would be, i know that he has a commercial out where he's appearing on the deck of the nimitz and watching the f- 14's take off. and that's an image of strength -- except that if he had had his way when the nimitz was being planned, he would have been deep in the water out there because there wouldn't have been any nimitz to stand on -- he was against it. [laughter] he was against the f-14 fighter, he was against the m-1 tank, he was against the bi bomber, he wanted to cut the salary of all of the military, he wanted to bring home half of the american forces in europe. and he has a record of weakness with regard to our national defense that is second to none. >> indeed, he was on that side virtually throughout all his years in the senate. and he opposed even president

carter, when toward the end of his term president carter wanted to increase the defense budget. >> mr. mondale, your rebuttal. >> mr. president, i accept your commitment to peace, but i want you to accept my commitment to a strong national defense. [applause] i propose a budget -- i have proposed a budget which would increase our nation's strength, in real terms, by double that of the soviet union. i'll tell you where we disagree. it is true over 10 years ago i voted to delay production of the f-14, and i'll tell you why. the plane wasn't flying the way it was supposed to be; it was a waste of money. your definition of national strength is to throw money at the defense department. my definition of national strength is to make certain that a dollar spent buys us a dollar's worth of defense. there's a big difference between the two of us. a president must manage that budget. i will keep us strong, but you'll not do that unless you command that budget and make certain we get the strength

that we need. you pay $500 for a $5 hammer, you're not buying strength. >> i would ask the audience not to applaud. all it does is take up time that we would like to devote to the debate. mr. kondracke, your question to -- >> mr. mondale, in an address earlier this year you said that before this country resorts to military force, and i'm quoting, "american interests should be sharply defined, publicly supported, congressionally sanctioned, militarily feasible, internationally defensible, open to independent scrutiny, and alert to regional history." now, aren't you setting up such a gauntlet of tests here that adversaries could easily suspect that as president you would never use force to protect american interests? >> no. as a matter of fact, i believe every one of those standards is essential to the exercise of power by this country. and we can see that in both lebanon and in central america. in lebanon, this president exercised american power, all

right, but the management of it was such that our marines were killed, we had to leave in humiliation, the soviet union became stronger, terrorists became emboldened. and it was because they did not think through how power should be exercised, did not have the american public with them on a plan that worked, that we ended up the way we did. similarly, in central america: what we're doing in nicaragua with this covert war-which the congress, including many republicans, have tried to stop -- is finally end up with a public definition of american power that hurts us, where we get associated with political assassins and the rest. we have to decline, for the first time in modern history, jurisdiction in the world court because they'll find us guilty of illegal actions. and our enemies are strengthened from all of this. we need to be strong, we need

to be prepared to use that strength, but we must understand that we are a democracy. we are a government by the people, and when we move, it should be for very severe and extreme reasons that serve our national interests and end up with a stronger country behind us. it is only in that way that we can persevere. >> you've been quoted as saying that you might quarantine nicaragua. i'd like to know what that means. would you stop soviet ships, as president kennedy did in 1962? and wouldn't that be more dangerous than president reagan's covert war? >> what i'm referring to there is the mutual self-defense provisions that exist in the inter-american treaty, the so- called rio pact, that permits the nations, our friends in that region, to combine to take steps -- diplomatic and otherwise -- to prevent nicaragua, when she acts irresponsibly in asserting power in other parts outside of her border, to take those steps,

whatever they might be, to stop it. the nicaraguans must know that it is the policy of our government that that leadership must stay behind the boundaries of their nation, not interfere in other nations. and by working with all of the nations in the region -- unlike the policies of this administration and unlike the president said, they have not supported negotiations in that region -- we will be much stronger, because we'll have the moral authority that goes with those efforts. >> president reagan, you introduced u.s. forces into lebanon as neutral peacekeepers, but then you made them combatants on the side of the lebanese government. eventually you were forced to withdraw them under fire, and now syria, a soviet ally, is dominant in the country. doesn't lebanon represent a major failure on the part of your administration and raise serious questions about your capacity as a foreign policy strategist and as commander in chief? tono, morton, i don't agree all of those things.

first of all, when we and our allies -- the italians, the french, and the united kingdom -- went into lebanon, we went in there at the request of what was left of the lebanese government to be a stabilizing force while they tried to establish a government. but the first -- pardon me -- the first time we went in, we went in at their request because the war was going on right in beirut between israel and the plo terrorists. israel could not be blamed for that. those terrorists had been violating their northern border consistently, and israel chased them all the way to there. then we went in with the multinational force to help remove, and did remove, more than 13,000 of those terrorists from lebanon. we departed. and then the government of lebanon asked us back in as a stabilizing force while they established a government and sought to get the foreign forces all the way out of lebanon and that they could then take care of their own borders.

and we were succeeding. we were there for the better part of a year. our position happened to be at the airport. oh, there were occasional snipings and sometimes some artillery fire, but we did not engage in conflict that was out of line with our mission. i will never send troops anywhere on a mission of that kind without telling them that if somebody shoots at them, they can darn well shoot back. and this is what we did. we never initiated any kind of action; we defended ourselves there. but we were succeeding to the point that the lebanese government had been organized- if you will remember, there were the meetings in geneva in which they began to meet with the hostile factional forces and try to put together some kind of a peace plan. we were succeeding, and that was why the terrorist acts began. there are forces there -- and that includes syria, in my mind -- who don't want us to succeed, who don't want that kind of a peace with a dominant lebanon, dominant over its own territory. and so, the terrorist acts

began and led to the one great tragedy when they were killed in that suicide bombing of the building. then the multilateral then the multilateral force withdrew for only one reason: we withdrew because we were no longer able to carry out the mission for which we had been sent in. but we went in in the interest of peace and to keep israel and syria from getting into the sixth war between them. and i have no apologies for our going on a peace mission. >> mr. president, 4 years ago you criticized president carter for ignoring ample warnings that our diplomats in iran might be taken hostage. haven't you done exactly the same thing in lebanon, not once, but three times, with 300 americans, not hostages, but dead? and you vowed swift retaliation against terrorists, but doesn't our lack of response suggest that you're just bluffing? >> morton, no. i think there's a great

difference between the government of iran threatening our diplomatic personnel, and there is a government that you can see and can put your hand on. in the terrorist situation, there are terrorist factions all over. in a recent 30-day period, 37 terrorist acts in 20 countries have been committed. the most recent has been the one in brighton. in dealing with terrorists, yes, we want to retaliate, but only if we can put our finger on the people responsible and not endanger the lives of innocent civilians there in the various communities and in the city of beirut where these terrorists are operating. i have just signed legislation to add to our ability to deal, along with our allies, with this terrorist problem. and it's going to take all the nations together, just as when we banded together we pretty much resolved the whole problem of skyjackings sometime ago. well, the red light went on. i could have gone on forever.

>> mr. mondale, your rebuttal? >> groucho marx said, "who do you believe? -- me, or your own eyes? " and what we have in lebanon is something that the american people have seen. the joint chiefs urged the president not to put our troops in that barracks because they were indefensible. they went to him 5 days before they were killed and said, "please, take them out of there." the secretary of state admitted that this morning. he did not do so. the report following the explosion of the barracks disclosed that we had not taken any of the steps that we should have taken. that was the second time. then the embassy was blown up a few weeks ago, and once again none of the steps that should have been taken were taken. and we were warned 5 days before that explosives were on their way, and they weren't taken. the terrorists have won each time. the president told the terrorists he was going to retaliate. he didn't.

they called their bluff. and the bottom line is that the united states left in humiliation, and our enemies are stronger. >> mr. president, your rebuttal? >> yes. first of all, mr. mondale should know that the president of the united states did not order the marines into that barracks. that was a command decision made by the commanders on the spot and based with what they thought was best for the men there. that is one. on the other things that you've just said about the terrorists, i'm tempted to ask you what you would do. these are unidentified people, and after the bomb goes off, they're blown to bits because they are suicidal individuals who think they're going to go to paradise if they perpetrate such an act and lose their life in doing it. we are going to, as i say, we're busy trying to find the centers where these operations stem from, and retaliation will be taken.

but we're not going to simply kill some people to say, "oh, look, we got even." we want to know when we retaliate that we're retaliating with those who are responsible for the terrorist acts. and terrorist acts are such that our own united states capitol in washington has been bombed twice. >> mr. trewhitt, your question to president reagan? >> mr. president, i want to raise an issue that i think has been lurking out there for 2 or 3 weeks and cast it specifically in national security terms. you already are the oldest president in history. and some of your staff say you were tired after your most recent encounter with mr. mon dale. >> i recall yet that president kennedy had to go for days on end with very little sleep during the cuban missile crisis. is there any doubt in your mind that you would be able to function in such circumstances? >> not at all, mr. trewhitt, and i want you to know that also i will not make age an

issue of this campaign. i am not going to exploit, for political purposes, my opponent's youth and inexperience. [laughter] [applause] if i still have time, i might add,mr. trewhitt, i might add that it was seneca or it was cicero, i don't know which, that said, "if it was not for the elders correcting the mistakes of the young, there would be no state." >> mr. president, i'd like to head for the fence and try to catch that one before it goes over, but i'll go on to another question. you and mr. mondale have already disagreed about what you had to say about recalling

submarine-launched missiles. there's another, a similar issue out there that relates to your -- it is said, at least, that you were unaware that the soviet retaliatory power was based on land-based missiles. first, is that correct? secondly, if it is correct, have you informed yourself in the meantime? and third, is it even necessary for the president to be so intimately involved in strategic details? >> yes, this had to do with our disarmament talks. and the whole controversy about land missiles came up because we thought that the strategic nuclear weapons, the most destabilizing are the land-based. you put your thumb on a button and somebody blows up 20 minutes later. so, we thought that it would be simpler to negotiate first with those. and then we made it plain, a second phase, take up the submarine-launched or the airborne missiles. the soviet union, to our surprise -- and not just mine -- made it plain when we brought this up that they placed, they thought, a greater reliance on the landbased missiles and, therefore, they wanted to take up all three. and we agreed. we said, "all right, if that's what you want to do." but it was a surprise to us, because they outnumbered us 64 to 36 in submarines and 20 percent more bombers capable of carrying nuclear missiles than we had. so, why should we believe that

they had placed that much more reliance on landbased? but even after we gave in and said, "all right, let's discuss it all," they walked away from the table. we didn't. >> mr. mondale, i'm going to hang in there. should the president's age and stamina be an issue in the political campaign? >> no. and i have not made it an issue, nor should it be. what's at issue here is the president's application of his authority to understand what a president must know to lead this nation, secure our defense, and make the decisions and the judgments that are necessary. a minute ago the president quoted cicero, i believe. i want to quote somebody a little closer to home, harry truman. he said, "the buck stops here." we just heard the president's answer for the problems at the barracks in lebanon, where 241 marines were killed. what happened? first, the joint chiefs of

staff went to the president, said, "don't put those troops there." they did it. and then 5 days before the troops were killed, they went back to the president, through the secretary of defense, and said, "please, mr. president, take those troops out of there because we can't defend them." they didn't do it. and we know what happened. after that, once again, our embassy was exploded. this is the fourth time this has happened -- an identical attack, in the same region, despite warnings -- even public warnings -- from the terrorists. who's in charge? who's handling this matter? that's my main point. now, on arms control, we're completing 4 years. this is the first administration since the bomb went off that made no progress. we have an arms race underway instead. a president has to lead his government or it won't be done. different people with different views fight with each other.

for 3 1/2 years, this administration avoided arms control, resisted tabling arms control proposals that had any hope of agreeing, rebuked their negotiator in 1981 when he came close to an agreement, at least in principle, on medium-range weapons. and we have this arms race underway. and a recent book that just came out by perhaps the nation's most respected author in this field, strobe talbott, called "deadly gambits," concludes that this president has failed to master the essential details needed to command and lead us, both in terms of security and terms of arms control. that's why they call the president the commander in chief. good intentions, i grant. but it takes more than that. you must be tough and smart. >> this question of leadership

keeps arising in different forms in this discussion already. and the president, mr. mondale, has called you whining and vacillating, among the more charitable phrases-weak, i believe. it is a question of leadership. and he has made the point that you have not repudiated some of the semidiplomatic activity of the reverend jackson, particularly in central america. did you approve of his diplomatic activity? and are you prepared to repudiate him now? >> i read his statement the other day. i don't admire fidel castro at all. and i've said that che guevara was a contemptible figure in civilization's history. i know the cuban state as a police state, and all my life i've worked in a way that demonstrates that. but jesse jackson is an independent person. i don't control him. and let's talk about people we do control. in the last debate,1 the vice president of the united states said that i said the marines had died shamefully and died in shame in lebanon. i demanded an apology from vice president bush because i had,

instead, honored these young men, grieved for their families, and think they were wonderful americans that honored us all. what does the president have to say about taking responsibility for a vice president who won't apologize for something like that? mr. mondale was referring to an earlier debate between george bush and geraldine ferarro, the vice-presidential candidates. >> mr. president, your rebuttal? >> yes. i know it'll come as a surprise to mr. mondale, but i am in charge. and, as a matter of fact, we haven't avoided arms control talks with the soviet union. very early in my administration i proposed -- and i think something that had never been proposed by any previous administration -- i proposed a total elimination of intermediate-range missiles, where the soviets had better than a 10 -- and still have -- better than a 10-to-1 advantage over the allies in europe. when they protested that and suggested a smaller number, perhaps, i went along with that. the so-called negotiation that you said i walked out on was the so-called walk in the woods between one of our representatives and one of the soviet union, and it wasn't me that turned it down, the soviet union disavowed it.

>> mr. mondale, your rebuttal? >> there are two distinguished authors on arms control in this country-there are many others, but two that i want to cite tonight. one is strobe talbott in his classic book, "deadly gambits." the other is john neuhaus, who's one of the most distinguished arms control specialists in our country. both said that this administration turned down the "walk in the woods" agreement first, and that would have been a perfect agreement from the standpoint of the united states in europe and our security. when mr. nitze, a good negotiator, returned, he was rebuked, and his boss was fired. this is the kind of leadership that we've had in this administration on the most deadly issue of our times. now we have a runaway arms race.

all they've got to show for 4 years in u.s.soviet relations is one meeting in the last weeks of an administration, and nothing before. they're tough negotiators, but all previous presidents have made progress. this one has not. >> ms. geyer, your question to mr. mondale >> mr. mondale, many analysts are now saying that actually our number one foreign policy problem today is one that remains almost totally unrecognized: massive illegal immigration from economically collapsing countries. they are saying that it is the only real territorial threat to the american nation-state. you, yourself, said in the 1970's that we had a "hemorrhage on our borders." yet today you have backed off any immigration reform, such as the balanced and highly crafted simpson-mazzoli bill. why? what would you do instead today, if anything?

>> this is a very serious problem in our country, and it has to be dealt with. i object to that part of the simpson-mazzoli bill which i think is very unfair and would prove to be so. that is the part that requires employers to determine the citizenship of an employee before they're hired. i'm convinced that the result of this would be that people who are hispanic, people who have different languages or speak with an accent, would find it difficult to be employed. i think that's wrong. we've never had citizenship tests in our country before, and i don't think we should have a citizenship card today. that is counterproductive. i do support the other aspects of the simpson-mazzoli bill that strengthen enforcement at the border, strengthen other ways of dealing with undocumented workers in this difficult area and dealing with the problem of settling people who have lived here for many, many years and do not have an established status. i have further strongly

recommended that this administration do something it has not done, and that is to strengthen enforcement at the border, strengthen the officials in this government that deal with undocumented workers, and to do so in a way that's responsible and within the constitution of the united states. we need an answer to this problem, but it must be an american answer that is consistent with justice and due process. everyone in this room, practically, here tonight, is an immigrant. we came here loving this nation, serving it, and it has served all of our most bountiful dreams. and one of those dreams is justice. and we need a measure -- and i will support a measure-that brings about those objectives but avoids that one aspect that i think is very serious. the second part is to maintain and improve relations with our friends to the south. we cannot solve this problem all on our own.

and that's why the failure of this administration to deal in an effective and a good-faith way with mexico, with costa rica, with the other nations in trying to find a peaceful settlement to the dispute in central america has undermined our capacity to effectively deal diplomatically in this area as well. >> sir, people as well-balanced and just as father theodore hesburgh at notre dame, who headed the select commission on immigration, have pointed out repeatedly that there will be no immigration reform without employer sanctions, because it would be an unbalanced bill, and there would be simply no way to enforce it. however, putting that aside for the moment, your critics have also said repeatedly that you have not gone along with the bill or with any immigration reform because of the hispanic groups -- or hispanic leadership groups -- who

actually do not represent what the hispanic-americans want, because polls show that they overwhelmingly want some kind of immigration reform. can you say, or how can you justify your position on this? and how do you respond to the criticism that this is another, or that this is an example of your flip-flopping and giving in to special interest groups at the expense of the american nation? >> i think you're right that the polls show that the majority of hispanics want that bill, so i'm not doing it for political reasons. i'm doing it because all my life i've fought for a system of justice in this country, a system in which every american has a chance to achieve the fullness in life without discrimination.

this bill imposes upon employers the responsibility of determining whether somebody who applies for a job is an american or not. and just inevitably, they're going to be reluctant to hire hispanics or people with a different accent. if i were dealing with politics here, the polls show the american people want this. i am for reform in this area, for tough enforcement at the border, and for many other aspects of the simpson-mazzoli bill, but all my life i've fought for a fair nation. and despite the politics of it, i stand where i stand, and i think i'm right, and before this fight is over we're going to come up with a better bill, a more effective bill that does not undermine the liberties of our people. >> mr. president, you, too, have said that our borders are out of control. yet this fall you allowed the simpson-mazzoli bill -- which would at least have minimally protected our borders and the rights of citizenship -- because of a relatively unimportant issue of reimbursement to the states for legalized aliens. given that, may i ask what

priority can we expect you to give this forgotten national security element? how sincere are you in your efforts to control, in effect, the nation-state that is the united states? >> georgie anne, we, believe me, supported the simpson-mazzoli bill strongly -- and the bill that came out of the senate. however, there were things added in in the house side that we felt made it less of a good bill; as a matter of fact, made it a bad bill. and in conference -- we stayed with them in conference all the way to where even senator simpson did not want the bill in the manner in which it would come out of the conference committee. there were a number of things in there that weakened that bill. i can't go into detail about them here. but it is true our borders are out of control. it is also true that this has been a situation on our borders back through a number of administrations. and i supported this bill. i believe in the idea of amnesty for those who have put down roots and who have lived here even though sometime back they may have entered illegally.

with regard to the employer sanctions, we must have that not only to ensure that we can identify the illegal aliens, but also, while some keep protesting about what it would do to employers, there is another employer that we shouldn't be so concerned about, and these are employers down through the years who have encouraged the illegal entry into this country because they then hire these individuals and hire them at starvation wages and with none of the benefits that we think are normal and natural for workers in our country, and the individuals can't complain because of their illegal status. we don't think that those people should be allowed to continue operating free. and this was why the provisions that we had in with regard to sanctions, and so forth -- and i'm going to do everything i can, and all of us in the administration are, to join in again when congress is back at

it to get an immigration bill that will give us, once again, control of our borders. and with regard to friendship below the border and with the countries down there, yes, no administration that i know has established the relationship that we have with our latin friends. but as long as they have an economy that leaves so many people in dire poverty and unemployment, they are going to seek that employment across our borders. and we work with those other countries. >> mr. president, the experts also say that the situation today is terribly different quantitatively -- qualitatively different from what it has been in the past because of the gigantic population growth.

for instance, mexico's population will go from about 60 million today to 120 million at the turn of the century. many of these people will be coming into the united states not as citizens, but as illegal workers. you have repeatedly said recently that you believe that armageddon, the destruction of the world, may be imminent in our times. do you ever feel that we are in for an armageddon or a situation, a time of anarchy, regarding the population explosion in the world? >> no. as a matter of fact, the population explosion, if you look at the actual figures, has been vastly exaggerated -- over exaggerated. as a matter of fact, there are some pretty scientific and solid figures about how much space there still is in the world and how many more people we can have. it's almost like going back to the malthusian theory, when even then they were saying that everyone would starve with the limited population they had then. but the problem of population growth is one, here, with regard to our immigration.

and we have been the safety valve, whether we wanted to or not, with the illegal entry here, in mexico, where their population is increasing and they don't have an economy that can absorb them and provide the jobs. and this is what we're trying to work out, not only to protect our own borders but to have some kind of fairness and recognition of that problem. >> mr. mondale, your rebuttal? >> one of the biggest problems today is that the countries to our south are so desperately poor that these people who will almost lose their lives if they don't come north, come north despite all the risks. and if we're going to find a permanent, fundamental answer to this, it goes to american economic and trade policies that permit these nations to have a chance to get on their own two feet and to get prosperity, so that they can have jobs for themselves and their people.

and that's why this enormous national debt, engineered by this administration, is harming these countries in fueling this immigration. these high interest rates -- real rates that have doubled under this administration -- have had the same effect on mexico and so on, and the cost of repaying those debts is so enormous that it results in massive unemployment, hardship, and heartache. and that drives our friends to the south up into our region, and we need to end those deficits as well. >> mr. president, your rebuttal. >> well, my rebuttal is i've heard the national debt blamed for a lot of things, but not for illegal immigration across our border -- -- and it has nothing to do with it. but with regard to these high interest rates, too, at least give us the recognition of the fact that when you left office, mr. mondale, they were 21 1/2 -- the prime rate. it's now 12 1/4, and i predict it'll be coming down a little more shortly. so, we're trying to undo some of the things that your administration did.

[applause] >> no applause, please. mr. kalb, your question to president reagan. >> mr. president, i'd like to pick up this armageddon theme. you've been quoted as saying that you do believe, deep down, that we are heading for some kind of biblical armageddon. your pentagon and your secretary of defense have plans for the united states to fight and prevail in a nuclear war. do you feel that we are now heading perhaps, for some kind of nuclear armageddon? and do you feel that this country and the world could survive that kind of calamity? >> mr. kalb, i think what has been hailed as something i'm supposedly, as president, discussing as principle is the recall of just some philosophical discussions with people who are interested in the same things; and that is the prophecies down through the years, the biblical prophecies of what would portend the coming of armageddon, and so forth, and the fact that a number of theologians for the last decade or more have believed that this was true,

that the prophecies are coming together that portend that. but no one knows whether armageddon, those prophecies mean that armageddon is a thousand years away or day after tomorrow. so, i have never seriously warned and said we must plan according to armageddon. now, with regard to having to say whether we would try to survive in the event of a nuclear war, of course we would. but let me also point out that to several parliaments around the world, in europe and in asia, i have made a statement to each one of them, and i'll repeat it here: a nuclear war cannot be won and must never be fought. and that is why we are maintaining a deterrent and trying to achieve a deterrent capacity to where no one would

believe that they could start such a war and escape with limited damage. but the deterrent -- and that's what it is for -- is also what led me to propose what is now being called the star wars concept, but propose that we research to see if there isn't a defensive weapon that could defend against incoming missiles. and if such a defense could be found, wouldn't it be far more humanitarian to say that now we can defend against a nuclear war by destroying missiles instead of slaughtering millions of people? >> mr. president, when you made that proposal, the so-called star wars proposal, you said, if i'm not mistaken, that you would share this very super-sophisticated technology with the soviet union. after all of the distrust over

the years, sir, that you have expressed towards the soviet union, do you really expect anyone to take seriously that offer that you would share the best of america's technology in this weapons area with our principal adversary? >> why not? what if we did-and i hope we can; we're still researching-what if we come up with a weapon that renders those missiles obsolete? there has never been a weapon invented in the history of man that has not led to a defensive, a counter-weapon. but suppose we came up with that? now, some people have said, "ah, that would make war imminent, because they would think that we could launch a first strike because we could defend against the enemy." but why not do what i have offered to do and asked the soviet union to do? say, "look, here's what we can do. we'll even give it to you. now, will you sit down with us and once and for all get rid, all of us, of these nuclear weapons and free mankind from that threat?

" i think that would be the greatest use of a defensive weapon. >> mr. mondale, you've been very sharply critical of the president's strategic defense initiative. and yet, what is wrong with a major effort by this country to try to use its best technology to knock out as many incoming nuclear warheads as possible? >> first of all, let me sharply disagree with the president on sharing the most advanced, the most dangerous, the most important technology in america with the soviet union. we have had 'for many years, understandably, a system of restraints on high technology because the soviets are behind us. and any research or development along the star wars schemes would inevitably involve our most advanced computers, our most advanced engineering. and the thought that we would share this with the soviet union is, in my opinion, a total non-starter. i would not let the soviet union get their hands on it at

all. now, what's wrong with star wars? there's nothing wrong with the theory of it. if we could develop a principle that would say both sides could fire all their missiles and no one would get hurt, i suppose it's a good idea. but the fact of it is we're so far away from research that even comes close to that, that the director of engineering research at the defense department said to get there we would have to solve eight problems, each of which are more difficult than the atomic bomb and the manhattan project. it would cost something like a trillion dollars to test and deploy weapons.

the second thing is this all assumes that the soviets wouldn't respond in kind. and they always do. we don't get behind. they won't get behind. and that's been the tragic story of the arms race. we have more at stake in space satellites than they do. if we could stop, right now, the testing and the deployment of these space weapons-and-the president's proposals go clear beyond research; if it was just research we wouldn't have any argument, because maybe someday, somebody will think of something -- but to commit this nation to a buildup of antisatellite and space weapons at this time, in their crude state, would bring about an arms race that's very dangerous indeed. one final point. the most dangerous aspect of this proposal is, for the first time, we would delegate to computers the decision as to whether to start a war. that's dead wrong. there wouldn't be time for a president to decide; it would be decided by these remote computers. it might be an oil fire, it might be a jet exhaust, the computer might decide it's a missile -- and off we go. why don't we stop this madness now and draw a line and keep the heavens free from war? [applause] >> mr. mondale, in this general area, sir, of arms control, president carter's national

security adviser, zbigniew brzezinski, said, "a nuclear freeze is a hoax." yet the basis of your arms proposals, as i understand them, is a mutual and verifiable freeze on existing weapons systems. in your view, which specific weapons systems could be subject to a mutual and verifiable freeze, and which could not? >> every system that is verifiable should be placed on the table for negotiations for an agreement. i would not agree to any negotiations or any agreement that involved conduct on the part of the soviet union that we couldn't verify every day. i would not agree to any agreement in which the united states security interest was not fully recognized and supported.

that's why we say mutual and verifiable freezes. now, why do i support the freeze? because this ever-rising arms race madness makes both nations less secure. it's more difficult to defend this nation. it's putting a hair-trigger on nuclear war. this administration, by going into the star wars system, is going to add a dangerous new escalation. we have to be tough on the soviet union, but i think the american people -- >> your time is up, mr. mondale. >> -- and the people of the soviet union want it to stop. >> president reagan, your rebuttal? >> yes, my rebuttal, once again, is that this invention that has just been created here of how i would go about rolling over for the soviet union -- no, mr. mondale, my idea would be with that defensive weapon that we would sit down with them and then say, "now, are you willing to join us? here's what we" -- give them a demonstration and then say -- "here's what we can do. now, if you're willing to join us in getting rid of all the

nuclear weapons in the world, then we'll give you this one, so that we would both know that no one can cheat; that we're both got something that if anyone tries to cheat -- " but when you keep star-warring it -- i never suggested where the weapons should be or what kind; i'm not a scientist. i said, and the joint chiefs of staff agreed with me, that it was time for us to turn our research ability to seeing if we could not find this kind of defensive weapon. and suddenly somebody says, "oh, it's got to be up there, and it's star wars," and so forth. i don't know what it would be, but if we can come up with one, i think the world will be better off. >> mr. mondale, your rebuttal. >> well, that's what a president's supposed to know -- where those weapons are going to be. if they're space weapons, i assume they'll be in space. if they're antisatellite weapons, i assume they're going to be aimed against satellites. now, this is the most dangerous

technology that we possess. the soviets try to spy on us, steal this stuff. and to give them technology of this kind, i disagree with. you haven't just accepted research, mr. president. you've set up a strategic defense initiative, an agency, you're beginning to test, you're talking about deploying, you're asking for a budget of some $30 billion for this purpose. this is an arms escalation. and we will be better off, far better off, if we stop right now, because we have more to lose in space then they do. if someday, somebody comes along with an answer, that's something else. but that there would be an answer in our lifetime is unimaginable. why do we start things that we know the soviets will match and make us all less secure? that's what a president's for. >> mr. kondracke, your question to mr. mondale. >> mr. mondale, you say that with respect to the soviet

union you want to negotiate a mutual nuclear freeze, yet you would unilaterally give up the mx missile and the b-1 bomber before the talks have even begun. and you have announced, in advance, that reaching an agreement with the soviets is the most important thing in the world to you. now, aren't you giving away half the store before you even sit down to talk? >> no. as a matter of fact, we have a vast range of technology and weaponry right now that provides all the bargaining chips that we need. and i support the air launch cruise missile, the ground launch cruise missile, the pershing missile, the trident submarine, the d-5 submarine, stealth technology, the midgetman -- we have a whole range of technology. why i disagree with the mx is that it's a sitting duck. it'll draw an attack. it puts a hair-trigger, and it is a dangerous, destabilizing weapon. and the b-1 is similarly to be opposed, because for 15 years the soviet union has been preparing to meet the b-1.

the secretary' of defense himself said it would be a suicide mission if it were built. instead, i want to build the midgetman, which is mobile and thus less vulnerable, contributing to stability, and a weapon that will give us security and contribute to an incentive for arms control. that's why i'm for stealth technology, to build a stealth bomber -- which i've supported for years-that can penetrate the soviet air defense system without any hope that they can perceive where it is because their radar system is frustrated. in other words, a president has to make choices. this makes us stronger. the final point is that we can use this money that we save on these weapons to spend on things that we really need. our conventional strength in europe is under strength. we need to strengthen that in

order to assure our western allies of our presence there, a strong defense, but also to diminish and reduce the likelihood of a commencement of a war and the use of nuclear weapons. it's in this way, by making wise choices, that we're stronger, we enhance the chances of arms control. every president until this one has been able to do it, and this nation -- or the world is more dangerous as a result. >> i want to follow up on mr. kalb's question. it seems to me on the question of verifiability, that you do have some problems with the extent of the freeze. it seems to me, for example, that testing would be very difficult to verify because the soviets encode their telemetry. research would be impossible to verify. numbers of warheads would be impossible to verify by satellite, except for with on-site inspection, and production of any weapon would be impossible to verify. now, in view of that, what is going to be frozen? >> i will not agree to any arms control agreement, including a freeze, that's not verifiable. let's take your warhead

principle. the warhead principle-there have been counting rules for years. whenever a weapon is tested we count the number of warheads on it, and whenever that warhead is used we count that number of warheads, whether they have that number or less on it, or not. these are standard rules. i will not agree to any production restrictions -- or agreements, unless we have the ability to verify those agreements. i don't trust the russians. i believe that every agreement we reach must be verifiable, and i will not agree to anything that we cannot tell every day. in other words, we've got to be tough. but in order to stop this arms madness, we've got to push ahead with tough negotiations that are verifiable so that we know the soviets are agreeing and living up to their agreement. >> mr. president, i want to ask you a question about negotiating with friends. you severely criticized president carter for helping to undermine two friendly dictators who got into trouble with their own people -- the shah of iran and president somoza of nicaragua. now there are other such leaders heading for trouble, including president pinochet of

chile and president marcos of the philippines. what should you do, and what can you do to prevent the philippines from becoming another nicaragua? >> morton, i did criticize the president because of our undercutting of what was a stalwart ally -- the shah of iran. and i am not at all convinced that he was that far out of line with his people or that they wanted that to happen. the shah had done our bidding and carried our load in the middle east for quite some time, and i did think that it was a blot on our record that we let him down. have things gotten better? the shah, whatever he might have done, was building low-cost housing, had taken land away from the mullahs and was distributing it to the peasants so they could be

landowners -- things of that kind. but we turned it over to a maniacal fanatic who has slaughtered thousands and thousands of people, calling it executions. the matter of somoza -- no, i never defended somoza. and, as a matter of fact, the previous administration stood by and so did i -- not that i could have done anything in my position at that time -- but for this revolution to take place. and the promise of the revolution was democracy, human rights, free labor unions, free press. and then, just as castro had done in cuba, the sandinistas ousted the other parties to the revolution. many of them are now the contras. they exiled some, they jailed some, they murdered some. and they installed a marxist-leninist totalitarian government. and what i have to say about this is, many times -- and this has to do with the philippines, also, i know there are things there in the philippines that do not look good to us from the standpoint right now of democratic rights, but what is the alternative?

it is a large communist movement to take over the philippines. they have been our friend since their inception as a nation. and i think that we've had enough of a record of letting -- under the guise of revolution-someone that we thought was a little more right than we would be, letting that person go, and then winding up with totalitarianism, pure and simple, as the alternative. and i think that we're better off, for example with the philippines, of trying to retain our friendship and help them right the wrongs we see, rather than throwing them to the wolves and then facing a communist power in the pacific. >> mr. president, since the united states has two strategically important bases in the philippines, would the overthrow of president marcos constitute a threat to vital

american interests and, if so, what would you do about it? >> well, as i say, we have to look at what an overthrow there would mean and what the government would be that would follow. and there is every evidence, every indication that that government would be hostile to the united states. and that would be a severe blow to our abilities there in the pacific. >> and what would you do about it? >> sorry. i'm sorry, you've asked the followup question. mr. mondale, your rebuttal? >> perhaps in no area do we disagree more than this administration's policies on human rights. i went to the philippines as vice president, pressed for human rights, called for the release of aquino, and made progress that had been stalled on both the subic and the clark airfield bases. what explains this administration cozying up to the argentine dictators after they took over? fortunately, a democracy took over, but this nation was embarrassed by this current administration's adoption of their policies.

what happens in south africa, where, for example, the nobel prize winner, 2 days ago, said this administration is seen as working with the oppressive government of south africa. that hurts this nation. we need to stand for human rights. we need to make it clear we're for human liberty. national security and human rights must go together. but this administration time and time again has lost its way and time again has lost its way in this field. >> president reagan, your rebuttal. >> well, the invasion of afghanistan didn't take place on our watch.

i have described what has happened in iran, and we weren't here then either. i don't think that our record of human rights can be assailed. i think that we have observed, ourselves, and have done our best to see that human rights are extended throughout the world. mr. mondale has recently announced a plan of his to get the democracies together and to work with the whole world to turn to democracy. and i was glad to hear him say that, because that's what we've been doing ever since i announced to the british parliament that i thought we should do this. human rights are not advanced when, at the same time, you then stand back and say, "whoops, we didn't know the gun was loaded," and you have another totalitarian power on your hands. >> in this segment, because of the pressure of time, there will be no rebuttals, and there will be no followup questions. mr. trewhitt, your question to president reagan. >> one question to each candidate? >> one question to each candidate. >> mr. president, could i take you back to something you said earlier, and if i'm misquoting you, please correct me. but i understood you to say that if the development of space military technology was successful, you might give the soviets a demonstration and say, "here it is," which sounds to me as if you might be trying to gain the sort of advantage that would enable you to dictate terms, and which i will then suggest to you might mean scrapping a generation of

nuclear strategy called mutual deterrence in which we, in effect, hold each other hostage. is that your intention? the president, well, i can't say that i have roundtabled that and sat down with the chiefs of staff, but i have said that it seems to me that this could be a logical step in what is my ultimate goal, my ultimate dream, and that is the elimination of nuclear weapons in the world. and it seems to me that this could be an adjunct, or certainly a great assisting agent in getting that done. i am not going to roll over, as mr. mondale suggests, and give them something that could turn around and be used against us. but i think it's a very interesting proposal, to see if we can find, first of all, something that renders those weapons obsolete, incapable of their mission. but mr. mondale seems to approve mad -- mad is mutual assured destruction-meaning, if you use nuclear weapons on us,

the only thing we have to keep you from doing it is that we'll kill as many people of yours as you'll kill of ours. i think that to do everything we can to find, as i say, something that would destroy weapons and not humans is a great step forward in human rights. >> mr. mondale, could i ask you to address the question of nuclear strategy then? the formal doctrine is very arcane, but i'm going to ask you to deal with it anyway. do you believe in mad, mutual assured destruction, mutual deterrence as it has been practiced for the last generation? >> i believe in a sensible arms control approach that brings down these weapons to manageable levels. i would like to see their elimination. and in the meantime, we have to be strong enough to make certain that the soviet union never tempts us. now, here we have to decide

between generalized objectives and reality. the president says he wants to eliminate or reduce the number of nuclear weapons. but, in fact, these last 4 years have seen more weapons built, a wider and more vigorous arms race than in human history. he says he wants a system that will make nuclear wars safe, so nobody's going to get hurt. well, maybe someday, somebody can dream of that. but why start an arms race now? why destabilize our relationship? why threaten our space satellites upon which we depend? why pursue a strategy that would delegate to computers the question of starting a war? a president, to defend this country and to get arms control, must master what's going on. i accept his objective and his dream; we all do. but the hard reality is that we must know what we're doing and

pursue those objectives that are possible in our time. he's opposed every effort of every president to do so, and in the 4 years of his administration he's failed to do so. and if you want a tough president who uses that strength to get ar >> another live look at the campus of lynn university in florida. tonight president obama and mitt romney meet in the third and final presidential debate. what you're looking at now is media folks, reporters, and camera crews from all over the world. you can see the set up there. some of the technicians, some of the reporters doing what are called "standups," and let's take a look and listen as we set the scene for tonight's debate. [inaudible conversations]

[inaudible conversations] >> so there you saw the international media there, and there's a building where the debate will be held tonight at nine o'clock eastern time getting underway. the coverage getting under c-span at seven o'clock. we want to hear from you on facebook. what question do you want to hear asked at tonight's presidential debate on foreign policy? make your voice heard logging into facebook.com/ cspan.

..

the subject matters like something of a veterans affairs or appropriations but if you're reading about something in the newspaper, you want to go to c-span and that is where you can actually get that testimony in an hour or two you can get the data and information he. brought to you as a public service lawyer television provider. the famous argument is really so important. i guess a week into it we would expect a lot of stores in california to seek growing sales as customers flocking to their stores instead of buying on-line. don't hold your breath. it's not likely to be the case. they buy online for convenience,

choice and lower prices without getting into the sales tax. this feedback to october 13th, 1988 for the debate between republican president george h. w. bush and massachusetts democratic governor michael dukakis. the debate took place in los angeles. this is an hour and a half. >> the call is on the panel are ann compton of abc news. week margaret warner of newsweekchell ngazine, and andrea mitchell of nbc news. the candidates are vice eorge but george bush the

republican nominee and governor michael dukakis, t nominee for the next 90 minutes we'll be questioning the candidates designed by representatives of the two campaigns. however, there are no restrictions on the questions that my colleagues and i can ask this evening and the candidates have no prior knowledge of our questions. by agreement between the candidates, the first question goes to governor dukakis. you have two minutes to

respond. governor if kitty dukakis were raped and murdered, would you favor an irrevocable death penalty for the killer? >> no, i don't, bernard. and i think you know i opposed the death penalty. i don't see any evidence that it's a deterrent and i think there are better an more effective ways to deal with violent crimes. we've done so in my own state. it's one of the reasons why we've had the biggest drop in crime of any industrial state in america, why we have the lowest murder rate of any industrial state in america. but we have work to do in this nation. we have work to do to fight a real world not a phony war against drugs an that's something i want to lead and something we haven't had even though the vice president has been allegedly in charge of that war. we have much to do to step up that war, to double the number of government agents, to fight both here and abroad to work with our neighbors in this

hemisphere. i want to call a he misfeerick summit to fight that war but we also have to deal with drug education prevention. that's something i hope to lead personally as president of the united states. we've had great success in my own state. we've reached out to families and have been able to help them by beginning early education in the early elementary grades. so we can fight this war an we can win this war. we can do so in a way that marshalls our forces, that provides real support for local law enforcement officers, do it in a way which will bring down violence in this nation, will help our youngsters to stay away from drugs, will stop this avalanche of drugs pouring into the country and will make it possible for our kids and our family to grow up in safe, secure, and decent neighborhoods. >> mr. vice president, your

one-minute rebutal. >> a lot of what this campaign is about it seems to me, mr. bernie is a question of values. here i have on this particular question a big difference with my opponent. you see, i do believe that some crimes are so heinous, so brew that, so outrageous and i would say particularly those that result in the death of a police officer. say when those real brutal crimes i do believe in the death penalty. and i think it is a deterrent. and i believe we need it. and i'm glad that the congress moved on this drug bill and finally called for all that related to these narcotics drug king pens. and so we just have an honest difference of opinion. i support it. and he doesn't. >> now to you, vice president bush. i quote to you this from article three of the 20th

amendment of the constitution. "if at the time fixed or the beginning of the term of the president, the president elect shall have died, the vice president elect shall become president, meaning if you are elected and die before inauguration day -- >> ernie. [laughter] >> automatically -- automatically dan quayle will become the 41st president of the united states. what would you say? >> i made a confident senate. and i made a good selection. i've never seen an unfair pounding on a young senator in my entire life. and i've never seen a presidential campaign where the presidential nominee runs against my vice presidential nominee. never seen one before.

but you know lloyd bentsen jumped on dan quayle when he had two terms in the senate serving his second term. he founded the -- authored the job training partner at ship act. it says to american working men and women that are thrown out of work through no fault of their own, that they're going to have job. we're moving into a new competitive age and we need that kind of thing. he unlike my opponent, is an expert on national defense, helped amend the i.n.f. treaty. so we had a good, sound treaty. when these people over here, we're talk about a freeze. if we would listen to them, we would never have a treaty. i have confidence in him. it's turning around. you know, the american people are fair. they don't like it when there's an unfair pounding and hooting about people. they want to judge it on the

record itself. i don't think age is the only criterion. i'm proud that people who are 30 years old, 40 years old now have people in their generation that are going to be vice president of the united states. i made a goodand he could do th. >> gov. dukakis, your one- minute rebuttal. >> bernard, this was the first presidential decision that we as nominees were called upon to make. and that's why people are so concerned. because it was an opportunity for us to demonstrate what we were looking for in a running mate. more than that, it was the first national security decision that we had to make. the vice president talks about national security. three times since world war ii, the vice president has had to suddenly become the president and commander in chief. i picked lloyd bentsen, because i thought he was the best qualified person for the job.

[applause] >> mr. bush picked dan quayle, and before he did it, he said, watch my choice for vice president, it will tell all and it sure did. it sure did. [applause] >> ann compton for the vice president. >> thank you, bernie. mr. vice president, yes, we read your lips -- no new taxes. but despite that same pledge from president reagan, after income tax rates were cut, in each of the last five years, some federal taxes have gone up, on social security, cigarettes, liquor, even long distance telephone calls. now that's money straight out of people's wallets. isn't the phrase, no new taxes, misleading the voters? >> no, because i'm pledged to that, and yes, some taxes have gone up. and the main point is, taxes have been cut, and yet income is up to the federal government by

25% in the last three years. and so what i want to do is keep this expansion going. i don't want to kill it off by a tax increase. more americans at work today than at any time in the history of the country, and a greater percentage of the work force. and the way you kill expansions is to raise taxes. and i don't want to do that, and i won't do that. and what i have proposed is something much better. and it's going to take discipline of the executive branch. it's going to take discipline of the congressional branch. and that is what i call a flexible freeze that allows growth about 4% or the rate of inflation but does not permit the congress just to add on spending. i hear this talk about a blank

check. the american people are pretty smart. they know who writes out the checks. and they know who appropriates the money. it is the united states congress. and by two to one, congress is executive branch eficits. answer is to discipline both the executive branchholding the lin so i'm pledged to do that. and those pessimists who say it can't be done, i'm sorry, i just have a fundamental disagreement with them >> gov. dukakis, your one-minute response. >> ann, the vice president made that pledge. he's broken it three times in the past year already. so it isn't worth the paper it's printed on. and what i'm concerned about is that if we continue with the policies that mr. bush is talking about here this evening, the flexible freeze somebody described it the other day as a kind of economic slurpee. he wants to spend billions on virtually every weapons system around. he says he's not going to raise taxes, though he has broken that pledge repeatedly. he says he wants to give the wealthiest 1% of the people in this country a five-year $40

billion tax break, and we're going to pay for it. and he's been proposing all kinds of programs for new spending costing billions. now if we continue with these policies, this $1.5 trillion worth of new debt that's already been added on the backs of the american taxpayer is going to increase even more, and if we continue with this for another four years, then i'm worried about the next generation, whether we can ever turn this situation around. no, we need a chief executive who is prepared to lead, who won't blame the congress, who will lead to bring down that deficit, who will make tough choices on spending >> governor -- >> who will go out and do the job that we expect of him and do it with the congress of the united states. [applause] >> and to governor dukakis. >> governor, let me follow up on that by asking you you've said it many times that you have balanced ten budgets in a row in massachusetts. are you promising the american people here tonight that within a four-year presidential term, you will balance the federal budget? >> no, i'm not sure i can promise that. i don't think either one of us can really.

there is no way of anticipating what may happen. i will say this. that we will set as our goal a steady, gradual reduction of the deficit, which will require tough choices on spending. it will require a good strong rate of economic growth. it will require a plan that the president works out with the congress doesn't blame them, works it out with them, which brings that deficit down. it will require us to go out and collect billions and billions of dollars in taxes owed that aren't being paid in this country. and that's grossly unfair to the average american who is paying his taxes and paying them on time and doesn't have any alternative. it's taken out of his paycheck. mr. bush says we are going to put the irs on every taxpayer. that's not what we are going to do. i'm for the taxpayer bill of rights. but i think it's unconscionable, ann, that we should be talking or thinking about imposing new taxes on average americans when there are billions out there, over $100 billion, in taxes owed that aren't being paid. now, i think if we work together on it, and if you have a president that will work with the congress and the american people, we can bring that

deficit down steadily, $20, $25, $30 billion a year, build economic growth, build a good strong future for america, invest in those things which we must invest in economic development, good jobs, good schools for our kids, college opportunity for young people, decent health care and affordable housing, and a clean and safe environment. we can do all of those things, and at the same time build a future in which we are standing on a good strong fiscal foundation. senator bentsen said, as you recall at the debate with senator quayle, that if you give any of us $200 billion worth of hot checks a year, we can create an illusion of prosperity. but sooner or later that credit card mentality isn't going to work. and i want to bring to the white house a sense of strength and fiscal responsibility which will build a good strong foundation under which this country, or above which country can move, grow, invest, and build the best america for its people and for our kids and our grandkids. >> mr. vice president, your

response. >> the governor has to balance the budget in his state he is required to by law. he has raised taxes several times. i wish he would join me, as a matter of fact, in appealing to the american people for the balanced budget amendment for the federal government and for the line-item veto. [applause] i'd like to have that line-item veto for the president, because i think that would be extraordinarily helpful. and i won't do one other thing that he's had to do -- took $29 million out of his state pension fund that's equivalent at the federal level of taking out of the social security trust fund. i'm not going to do that. i won't do that. [applause] and so i'm still a little unclear as to whether he's for or against the tax increase. i have been for the taxpayer bill of rights all along. and this idea of unleashing a whole bunch-an army, a conventional force army, of irs agents into everybody's kitchen -- i mean, he's against most defense matters, and now he wants to get an army of jrs auditors going out there.

i'm against that. i oppose that. [boos and applause] >> i'm going to say this and i'm going to say it once to every person in this auditorium. what these candidates are about is of utmost seriousness to the american voters; they should be heard and you should be quiet. if you are not quiet, i am going to implore the candidates to do something about quieting their own partisans. but we cannot get through this program with these outbursts. margaret warner for governor dukakis. >> good evening, governor, mr. vice president. governor, you won the first debate on intellect, and yet you lost it on heart. >> just a minute. >> you'll get your turn. >> i don't know if the vice president agrees with that. >> the american public admired

your performance, but didn't seem to like you much. now, ronald reagan has found his personal warmth to be a tremendous political asset. do you think that a president has to be likable to be an effective leader? >> margaret, may president that i didn't raid the pension fund of massachusetts you are dead wrong, george, we didn't do that. as a matter of fact, i'm the first governor in the history of my state to fund that pension system, and i'm very proud of that. [applause] i have been in politics for twenty-five years, margaret. i've won a lot of elections. i've lost a few, as you know, and learned from those losses. i won the democratic nomination in fifty-one separate contests. i think i'm a reasonably likable guy. [laughter, scattered applause] i'm serious though. i think i'm a little more lovable these days than i used to be back in my youth when i began in my state legislature. but i'm also a serious guy. i think the presidency of the united states is a very serious office, and i think we have to address these issues in a very

serious way. so i hope and expect that i will be liked by the people of this country as president of the united states. i certainly hope i will be liked by them on the 8th of november. [laughter] but i also think it's important to be somebody who is willing to make those tough choices. now, we have just heard two or three times from the vice president he's not going to raise taxes. i repeat, within days after you made that pledge, you broke it. you said, well, maybe as a last resort we'll do it. and you supported legislation this year that's involved tax increases not once, but twice. so that pledge isn't realistic, and i think the vice president knows it. i think the people of this country know it. the fact of the matter is that the next president of the united states is going to have to go to the white house seriously, he is going to have to work with the congress seriously. he can't turn to the congress and blame them for the fact that we don't have a balanced budget

and that we have billions and billions of dollars in red ink. and i am going to be a president who is serious, i hope and expect will be liked by the american people. but more than that, to do the kind of job that i'm elected to do, will do it with as much good humor as i can, but at the same time will do it in a way which will achieve the goals we want for ourselves and our people. and i think we know what they are -- a good strong future, a future in which there is opportunity for all of our citizens. >> one minute from the vice president. questiont think it's a of whether people like you or not to make you an effective leader. i think it's whether you share the broad dreams of the american people, whether you have confidence in the people's ability to get things done or whether you think it all should be turned over, as many of the liberals do, to washington, d.c. you see, i think it's a question of values, not likability or lovability, it's a question in foreign affairs in experience, knowing world leaders, knowing how to build on a superb record of this administration in arms control, because you'd know exactly how to begin. you have to learn from experience that making

unilateral cuts in defense system is not the way that you enhance peace. you've got to understand that it is only the united states that can stand for freedom and democracy around the world and we can't turn it over to the united nations or other multilateral organizations. it is, though, trying to understand the heartbeat of the country. and i know these campaigns get knocked a lot, but i think i'd be a better president now for having had to travel to these communities and understand the family values and the importance of neighborhood. [applause] >> please. >> margaret warner for the vice president. >> i'd like to follow up on that mr. vice president. the tenor of the campaign you've been running, in terms of both the issues and your rhetoric has surprised even some of your friends. senator mark hatfield who's known your family a long time and who knew your father, the late senator prescott bush, said, and i quote, "if his father were alive today, i'm sure his father would see it as a shocking transformation."

is senator hatfield right? >> what was he referring to? >> he was referring to your performance in the campaign. >> i think my dad would be pretty proud of me, because i think we've come a long, long way and i think, you know three months ago, i remember some of the great publications in this country had written me off. and what i've had to do is define, not just my position, but to define his and i hope i've done it fairly. and the reason i've had to do that is that he ran on the left in the democratic primary, ran firmly and ran with conviction and ran on his record. and then at that democratic convention, they made a determination and they said there, ideology doesn't matter, just competence. and in the process the negatives began. it wasn't me that was there at that convention. thank god i was with jimmy baker camping out and i didn't have to hear all the personal attacks on me out of that democratic convention.

and i'm not the one that compared the president of the united states rotting from like a dead fish from the head down. i didn't do that. but i have defined the issues and i am not going to let governor dukakis go through this election without explaining some of these very liberal positions. he's the one a liberal, traditional liberal a progressive liberal democrat. he's the one that brought up, to garner primary votes, the whole question of the aclu. and i have enormous difference with the aclu on their politic agenda. not on their defending some minority opinion on the right or the left. i support that. but what i don't like is this left wing political agenda and therefore i have to help define that and if he's unwilling to do it, if he says ideology doesn't matter, i don't agree with him. [applause]

>> one minute from governor dukakis. >> well, margaret, we've heard it again tonight and i'm not surprised, the labels. i guess the vice president two or three times, said i was coming from the left. in 1980, president reagan called you a liberal for voting for federal gun control. and this is something republicans have used for a long time. they tried it with franklin roosevelt and harry truman and john kennedy. it's not labels. it's our vision of america. and we have two fundamentally different visions of america. the vice president is complacent, thinks we ought to stick with the status quo, doesn't think we ought to move ahead, thinking things are okay as they are. i don't. i think this is a great country, because we've always wanted to do better, to make our country better, to make our lives better. we've always been a nation which was ambitious for america and we move forward. and that's the kind of america i want. that's the kind of leadership i want to provide. but i don't think these labels mean a thing and i would hope that tonight in the course of the rest of this campaign, we can have good solid

disagreements on issues. there's nothing the matter with that. but let's stop labeling each other and let's get to the heart of the matter which is the future of this country. [applause] >> andrea mitchell, for the vice president. >> mr. vice president, governor. mr. vice president, let me return for a moment to the issue of the budget, because so much has already been put off limits in your campaign that most people do not believe that the flexible freeze alone will solve the problem of the deficit. so, let's turn to defense for a moment. pentagon officials tell us that there is not enough money in the budget to handle military readiness, preparedness, as well as new weapons systems that have been proposed, as well as those already in the pipeline. you were asked in the first debate what new weapons systems you would cut. you mentioned three that had already been canceled. can you tonight share with us three new weapons systems that you could?

>> if i knew of three new weapons systems that i thought were purely waste and weren't protected by the congress, they wouldn't be in the budget. they would not be in the budget, but you want one now? i'll give you one, that hmet, that heavy truck, that's cost -- what is it -- $850 million and the pentagon didn't request it and, yet, a member of congress, a very powerful one, put it in the budget. i think we can save money through this whole very sophisticated concept, andrea, that i know you do understand of competitive strategies. it is new and it is very, very different than what's happened, but it's not quite ready to be totally implemented. but it's very important. i think we can say, through the packard commission report -- and i'm very proud that david packard, the originator of that report, is strongly supporting me. so, it's not a question of saying our budget is full of a lot of waste. i don't believe that. i do think this. we're in the serious stages of negotiation with the soviet

union on the strategic arms control talks. and we're protecting a couple of options in terms of modernizing our strategic forces. my secretary of defense is going to have to make a very difficult decision in which system to go forward with. but we are protecting both of them. we are moving forward with negotiations and, you see, i just think it would be dumb negotiating policy with the soviets to cut out one or the other of the two options right now. the soviets are modernizing. they continue to modernize and we can't simply say we've got enough nuclear weapons, let's freeze. we can't do that. we have to have modernization, especially if we achieve the 50% reduction in strategic weapons that our president is taking the leadership to attain. and, so, that's the way i'd reply to it and i believe we can have the strongest and best defense possible if we modernize, if we go forward with competitive strategies and if we do follow through on the packard commission report.

>> governor dukakis, one minute. >> well, andrea, we've just had another example of why the vice president's mathematics just don't add up. i think you know because you've covered these issues, that there's no way that we can build all of the weapons the vice president says he wants to build within the defense budget. everybody knows that including the people at the pentagon. now, my defense secretary is going to have a lot to do with those decisions, but it's going to be the president who's going to have to ultimately decide before that budget goes to the congress what weapons systems are going to go and what are going to stay. we are not going to spend the billions and trillions that mr. bush wants to spend on star wars. we're not going to spend billions on mx's on railroad cars, which is a weapons system we don't need, can't afford and won't help our defense posture at all. we're not going to spend hundreds of millions on a space plane from washington to tokyo. those are decisions that the chief executive has to make. yes, we're going to have a strong and credible and effective nuclear deterrent. we're going to go forward with the stealth and the d-5 and the

advance cruise missile and good conventional forces. but the next president of the united states will have to make some tough and difficult decisions. i'm prepared to make them, the vice president is not. >> governor, andrea has a question for you. >> governor, continuing on that subject, you say we have to do something about conventional forces. you have supported the submarine launch missile, the d- 5 you just referred to. yet, from jerry ford to jimmy carter to ronald reagan, there has been a bipartisan consensus in favor of modernizing the land based missiles. now, you have ruled out the mx and the midgetman. more recently, some of your aides have hinted at some flexibility you might show about some other new form of missile. can you tell us tonight why you have rejected the wisdom of people as diverse as sam nunn, henry kissinger, al gore, people in both parties, and what type of land based missile would you consider? >> well, andrea, today we have

13,000 strategic nuclear warheads, on land, on air and in the sea. that's an incredibly powerful nuclear deterrent. i don't rule out modernization, and there are discussions going on now in the congress, i know with the pentagon, about a less expensive modernized land-based leg of the triad. but there are limits to what we can spend. there are limits to this nation's ability to finance these weapons systems. and one of the things that the vice president either ignores or won't address is the fact that you can't divorce our military security from our economic security. how can we build a strong america militarily that's teeter-tottering on a mountain of debt? and if we go forward with the kinds of policies that the vice president is suggesting tonight and has in the past, that debt is going to grow bigger and bigger and bigger. so military security and economic security go hand in hand. and we will have a strong and effective and credible nuclear deterrent. we're going to have

conventional forces that are well maintained, well equipped, well trained, well supported. and we have serious problems with our conventional forces at the present time, and they'll get worse unless we have a president who is willing to make some of these decisions. and we also have important domestic priorities, in education and housing and health care, in economic development, in job training, in the environment. and all of these things are going to have to be addressed. that's why i say again to all of you out there who have to deal with your household budgets and know how difficult it is that the next president has to do the same. i want the men and women of our armed forces to have the support they need to defend us, the support they need when they risk our lives to keep us free and to keep this country free. but we cannot continue to live on a credit card. we cannot continue to tell the american people that we're going to build all of these systems, and at the same time, invest in important things here at home, and be serious about building a strong and good america. and that's the kind of america

i want to build. >> one minute for the vice president. >> i think the foremost [applause] >> can we start the clock over? i held off for the applause. >> you can proceed, sir. >> i think the foremost responsibility of a president really gets down to the national security of this country. the governor talks about limits, what we can't do, opposes these two modernization systems, talks now about well, we'll develop some new kind of a missile. it takes eight years, ten years, to do that. he talked about a nuclear freeze back at the time when i was in europe trying to convince european public opinion that we ought to go forward with the deployment of the inf weapons. and thank god, the freeze people were not heard. they were wrong. and the result is, we deployed, and the soviets kept deploying, and then we negotiated from strength. and now we have the first arms control agreement in the nuclear age to ban weapons.

you just don't make unilateral cuts in the naive hope that the soviets are going to behave themselves. world peace is important, and we have enhanced the peace. and i'm proud to have been a part of an administration that has done exactly that. peace through strength works. >> ann compton for gov. dukakis. >> governor, today they may call them role models, but they used to be called heroes, the kind of public figure who could inspire a whole generation, someone who was larger than life. my question is not who your heroes were. my question instead is, who are the heroes who are there in american life today? who are the ones who you would point out to young americans as figures who should inspire this country? >> well, i think when i think of heroes, i think back, not presently, ann.

but there are many people who i admire in this country today. some of them are in public life in the senate, the congress. some of my fellow governors who are real heroes to me. i think of those young athletes who represented us at the olympics were tremendously impressive. we were proud of them. we felt strongly about them, and they did so well by us. i can think of doctors and scientists, jonas salk who for example discovered a vaccine which cured one of the most dread diseases we ever had. and he's a hero. i think of classroom teachers, classroom teachers that i have had, classroom teachers that youngsters have today who are real heroes to our young people. because they inspire them. they teach them. but more than that, they are role models. members of the clergy who have done the same. drug counselors out there in

the street who are providing help to youngsters who come up to me and others who ask for help and want help, are doing the hard work, the heroic work, which it takes to provide that kind of leadership, that kind of counseling, that kind of support. i think of people in the law enforcement community who are taking their lives in their hands everyday, when they go up to one of those doors and kick it down and try to stop this flow of drugs into our communities and into our kids. so there are many, many heroes in this country today. these are people that give of themselves everyday and every week and every month. in many cases they are people in the community who are examples, and are role models. and i would hope that one of the things i could do as president is to recognize them, to give them the kind of recognition that they need and deserve so that more and more young people can themselves become the heroes of tomorrow, can go into public service, can go into teaching, can go into drug counseling, can go into law enforcement, and be heroes themselves to generations yet to come. >> one minute for vice president bush. >> i think of a teacher right here, largely hispanic school, jaime escalante, teaching calculus to young kids, 80% of

them going on to college. i think of a young man now in this country named villadaris, who was released from a cuban jail. came out and told the truth in this brilliant book, "against all hope," about what is actually happening in cuba. i think of those people that took us back into space again, rick houk and that crew, as people that are worthy of this. i agree with the governor on athletics. and there's nothing corny about having sports heroes, young people that are clean and honorable and out there setting the pace. i think of dr. fauci. probably never heard of him. you did, ann heard of him. he's a very fine research, top doctor, at the national institute of health, working hard doing something about research on this disease of aids. but look, i also think we ought to give a little credit to the president of the united states. he is the one who has gotten us that first arms control agreement. >> mr. vice president >> and the cynics abounded. and he is leaving office with a

popularity at an all-time high, because american people -- >> mr. vice president, your time has expired. >> say, he is our hero. [applause] >> ann has a question for you, mr. vice president. >> let's change the pace a little bit, mr. vice president. in this campaign some hard and very bitter things have been spoken by each side about each side. if you'd consider for a moment gov. dukakis and his years of public service, is there anything nice you can say about him, anything you find admirable? >> you're stealing my close. i had something very nice to say in there. >> somebody leak my question to you? >> no, let me tell you something about that. and barbara and i were sitting there before that democratic convention. and we saw the governor and his son on television the night before and his family, and his mother who was there. and i'm saying to barbara, you know, we've always kept family as a bit of an oasis for us. you all know me, and we've held it back a little. but we used that as a role

model, the way he took understandable pride in his heritage, what his family means to him. and we've got a strong family. and we watched that. and we said, hey, we've got to unleash the bush kids. and so you saw ten grandchildren there jumping all over their grandfather at the convention. you see our five kids, all over this country, and their spouses. and so i would say that the concept of the dukakis family has my great respect. and i would say, i don't know whether that's kind or not, it's just an objective statement. i think the man anybody that gets into this political arena and has to face you guys everyday deserves a word of praise. because it's gotten a little ugly out there. it's gotten a little nasty. it's not much fun sometimes. and i would cite again dan quayle. i've been in politics a long time, and i don't remember that kind of piling on, that kind of ugly rumor that never was true, printed. now, come on.

so some of it is unfair. but he's in the arena. teddy roosevelt used to talk about the arena, you know, daring to fail greatly or succeed, no matter. he's in there. so i salute these things. i salute those who participate in the political process. sam raybum had a great expression on this. he said here were all these intellectuals out there griping and complaining and saying it was negative coverage. rayburn says, yeah, and that guy never ran for sheriff either. michael dukakis has run for sheriff, and so has george bush. >> governor, a one-minute response. >> i didn't hear the word "liberal" or "left" one time. i thank you for that. >> that's not bad. that's true. >> and doesn't that prove the point, george, which is that values like family and education and community, decent homes for young people. that family on long island i visited on monday were lou and betty tolamo, bought a house

for some $19,000 back in 1962, have had seven children, they're all making good livings. they can't live in the community which they grew up in. those are basic american values. i believe in them. i think you believe in them. they're not left or right. they're decent american values. i guess the one thing that concerns me about this, ann, is this attempt to label things which all of us believe in. we may have different approaches. we may think that you deal with them in different ways. but they're basically american, i believe in them. george bush believes in them. i think the vast majority of americans believe in them. and i hope -- >> governor. >> the tone we've just heard might just be the tone we have for the rest of the campaign. i think the american people would appreciate that. [applause]

>> margaret warner for the vice president. >> vice president bush, abortion remains with us as a very a minute with i'ke bortion asabortion as murder yet he would makexcepti exceptions in the case of rapeia and incest my question is for instance, that the baby will live at most two years, and those two years in incredible pain, be forced to carry the fetus to term, and yet a woman who becomes pregnant through incest would be allowed to abort her fetus? >> because you left out one other exception, the health of the mother. let me answer your question, and i hope it doesn't get too personal or maudlin. barb and i lost a child, you know that we lost a daughter, robin. i was over running records in west texas, and i got a call from her, come home. went to the doctor, the doctor said, beautiful child, your child has a few weeks to live. and i said, what can we do about it? he said, no, she has leukemia,

acute leukemia, a few weeks to live. we took the child to new york. thanks to the miraculous sacrifice of doctors and nurses, the child stayed alive for six months and then died. if that child were here today, and i was told the same thing, my granddaughter, noel for example that child could stay alive for ten or fifteen years, or maybe for the rest of her life. and so i don't think that you make an exception based on medical knowledge at the time. i think human life is very, very precious. and, look, this hasn't been an easy decision for me to meet. i know others disagree with it. but when i was in that little church across the river from washington and saw our grandchild christened in our faith, i was very pleased indeed that the mother had not aborted that child, and put the child up for adoption. and so i just feel this is where i'm coming from. and it is personal.

that don't assail him on issue, or others on that issue. but that's the way i, george bush, feel about it. [scattered applause] >> one minute for governor dukakis. >> margaret, kitty and i had very much the same kind of experience that the bushes had. we lost a baby, lived about twenty minutes after it was born. but isn't the real question that we have to answer not how many exceptions we make, because the vice president himself is prepared to make exceptions. it's who makes the decision, who makes this very difficult, very wrenching decision? [applause] and i think it has to be the woman, in the exercise of her own conscience and religious beliefs, that makes that decision. who are we to say, well, under certain circumstances, it's all right, but under other circumstances it isn't?

that's a decision that only a woman can make, after consulting her conscience and consulting her religious principles. and i would hope that we would give to women in this country the right to make that decision, and to make it in the exercise of their conscience and religious beliefs. [applause] >> governor, margaret has a question for you. >> governor, i'd like to return to the topic of the defense budget for a minute. you have said in this campaign that you would maintain a stable defense budget, yet you are on the board, on the advisory board >> and, incidentally, may i say that that's the decision of the congress, and the president has concurred. >> yet you are on the board of a group called jobs with peace, in boston, that advocates a 25% cut in the defense budget and the transfer of that money to the domestic economy. my question is, do you share that goal perhaps as a long-range goal, and, if not, are you aware of or why do you permit this group to continue to use your name on its letterhead for fundraising? >> i think i was on the advisory committee, margaret.

no, i don't happen to share that goal. it's an example of how oftentimes we may be associated with organizations all of whose particular positions we don't support, even though we support in general the hope that over time, particularly if we can get those reductions in strategic weapons, if we can get a comprehensive test ban treaty, if we can negotiate with the soviet union and bring down the level of conventional forces in europe with deeper cuts in the soviet side, yes, at some point it may be possible to reduce defense outlays and use those for important things here at home, like jobs and job training and college opportunity and health and housing and the environment and the things that all of us care about. but i do think this, that the next president, even within a relatively stable budget and that's what we are going to have for the foreseeable future will have to make those tough choices that i was talking about and that mr. bush doesn't seem to want to make. and that really is going to be a challenge for the next president of the united states.

i don't think there's any question about it. but i also see a tremendous opportunity now to negotiate with the soviet union to build on the progress that we've made with the inf treaty, which i strongly supported and most democrats did to get those reductions in strategic weapons, to get a test ban treaty, and to really make progress on the reduction of conventional forces in europe. and if we can do that and do it in a way that gets deeper cuts on the soviet side, which is where they ought to come from, then i think we have an opportunity over the long haul to begin to move some of our resources from the military to important domestic priorities that can provide college opportunity for that young woman whose mother wrote me from texas just the other day, from longview, texas. two teachers, a mother and a father who have a child that's a freshman in college, an electrical engineering major, a very bright student and they can't afford to keep that child in college. so i hope that we can begin to move those resources. it's not going to happen overnight.

it certainly will have to happen on a step-by-step basis as we make progress in arms negotiation and arms control and arms reduction. but it certainly ought to be the long-term goal of all americans and i think it is. >> one minute for the vice president. >> the defense budget today takes far less percentage of the gross national product than it did in president kennedy's time, for example moved tremendously. and you see, i think we're facing a real opportunity for world peace. this is a big question. and it's a question as to whether the united states will continue to lead for peace. see, i don't believe any other country can pick up the mantel. i served at the u.n. i don't think we can turn over these kinds of decisions of the collective defense to the united nations or anything else. so, what i'm saying is, we are going to have to make choices. i said i would have the secretary of defense sit down. but while the president is negotiating with the soviet union, i simply do not want to make these unilateral cuts. and i think those that advocated the freeze missed the point that there was a better

way, and that better way has resulted in principle asymmetrical cuts. the soviets take out more than we do and the principle of intrusive verification. and those two principles can now be applied to conventional forces, to strategic forces, provided -- >> mr. vice president -- >> we don't give away our hand before we sit down at the head table. [applause] >> andrea mitchell for governor dukakis. >> governor, you've said tonight that you set as a goal the steady reduction of the deficit. and you've talked about making tough choices, so perhaps i can get you to make one of those tough choices. no credible economist in either party accepts as realistic your plan to handle the deficit by tightening tax collection, investing in economic growth, bringing down interest rates, and cutting weapons systems -- >> and some domestic programs as well, andrea. >> and some domestic programs as well. so, let's assume now, for argument purpose, that it is the spring of 1989 and you are

president dukakis, and you discover that all of those economists were right and you were wrong. you are now facing that dreaded last resort increase taxes. which tax do you decide is the least onerous? >> may i disagree with the premise of your question? >> for the sake of argument, no. [applause] >> as a matter of reality, i'm going to have to because we have had not one but two detailed studies which indicate that there are billions and billions of dollars to be collected that are not being paid these are not taxes owed by average americans. we don't have an alternative. we'll lose it when it's taken out of our paycheck before we even get it. but it's the internal revenue service which estimates now that we aren't collecting $100 billion or more in taxes owed in this country. and that is just absolutely unfair to the vast majority of americans who pay their taxes and pay them on time. the dorgan task force, which included two internal revenue commissioners, one a republican, one a democrat.

it was a bipartisan commission, a study by two respected economists, which indicated that we could collect some 40, 45, 50 billion dollars of those funds. the point is you've got to have a president who's prepared to do this and to begin right away and, preferably, a president who was a governor of a state that's had very, very successful experience at doing this. in my own state, we did it. in other states, we've done it. republican governors as well as democratic governors. and we've had great success at revenue enforcement. now, the vice president will probably tell you that it's going to take an army of irs collectors again. well, his campaign manager, who used to be the secretary of the treasury, was taking great credit about a year ago and asking and receiving from the congress substantial additional funds to hire internal revenue agents to go out and collect

these funds, and i'm happy to join jim baker in saying that we agree on this. but the fact of the matter is that this is something that we must begin it's going to take at least the first year of the new administration. but the dorgan task force, the bipartisan task force estimated that we could collect about $35 billion in the fifth year, $105 billion over five years, the other study even more than that -- >> governor. >> and that's where you begin. >> one minute response, mr. vice president. >> well, andrea, you didn't predicate that lack of economists' support for what i call a flexible freeze, because some good very good economists do support that concept. and i think where i differ with the governor of massachusetts, because i am optimistic. they jumped on me yesterday for being a little optimistic about the united states. i am optimistic and i believe we can keep this longest expansion going. i was not out there when that stock market dropped wringing my hands and saying this was the end of the world as some political leaders were, because it isn't the end of the world. and what we have to do is restrain the growth of spending. and we are doing a better job

of it. the congress is doing a better job of it. and the dynamics work. but they don't work if you go raise taxes and then the congress spends it continues to spend that. the american working man and woman are not taxed too little. the federal government continues to spend too much. [applause] >> hold it. >> mr. vice president, andrea has a question for you. >> mr. vice president, you have flatly ruled out any change in social security benefits, even for the wealthy. now, can you stand here tonight and look at a whole generation of 18 to 34 year olds in the eye the very people who are going to have to be financing that retirement and tell them that they should be financing the retirement of people like yourself, like governor dukakis, or for that matter, people such as ourselves here on this panel? >> more so you than me.

>> we could argue about that. >> no, but you got to go back to what social security was when it was created. it wasn't created as a welfare program. it wasn't created -- that is it was created as a whole retirement or supplement to retirement program. it wasn't created as a welfare program. so, here's what's happened. we came into office and the social security trust fund was in great jeopardy and the president took the leadership working with the democrats and the republicans in congress some tough calls were made and the social security trust fund was put back into sound, solvent condition. so, i don't want to fool around with it. and there are several there's a good political reason because it's just about this time of year that the democrats start saying the republicans are going to take away your social

security. it always works that way. i've seen it. in precinct politics in texas and i've seen it at the national level. we have made the social security trust fund sound. and it is going to be operating at surpluses, and i don't want the liberal democratic congress to spend out of that social security trust fund or go and take the money out for some other purpose. i don't want that. and i will not go in there and suggest changes in social security. i learned that the hard way and the governor and i both supported slipping the cola's for one year. he supported it at the national governors conference and i supported it in breaking a tie in a major compromise package and we got assailed by the democrats in the election over that. and i am going to keep that social security trust fund sound and keep our commitment to the elderly and maybe down the line, maybe when you get two decades or one into the next century, you're going to have to take another look at it, but not now. we do not have to do it. keep the trust with the older men and women of this country.

>> governor, you have one minute, sir. >> andrea, i don't know which george bush i'm listening to. george bush, a few years ago, said that social security was basically a welfare system. >> oh, come on. >> and in 1985, he flew back from the west coast to cut that cola. i voted against that at the national governors association. we won a majority. we didn't win the two-thirds that was necessary to pass that resolution, george. but everybody knew what we were doing and i've opposed that. the reason that we raise concerns, not just in election years, but every year, because republicans, once they're elected and start cutting. you did it in 1985. the administration tried to do it repeatedly, repeatedly in 1981 and 1982. and i'm sure you'll try to do it again. because there's no way you can finance what you want to spend. there's no way you can pay for that five year, $40 billion tax cut for the rich and still buy all those weapons systems you want to buy unless you raid the social security trust fund. [applause] >> ann compton for the vice president. >> mr. vice president, there are three justices on the supreme court who are in their 80's and it's very likely that the next president will get a chance to put a lasting mark on

the supreme court. for the record, would your nominees to the supreme court have to pass something that has been called a kind of conservative ideological litmus test and would you give us an idea of perhaps who two or three people on your short list are for the court? >> one i don't have a list yet. i feel pretty confident tonight, but not that confident. [laughter] >> secondly, i don't have any litmus test. but what i would do is appoint people to the federal bench that will not legislate from the bench, who will interpret the constitution. i do not want to see us go to again -- and i'm using this word advisedly -- a liberal majority that is going to legislate from the bench. they don't like the use of the

word, but may i remind his strong supporters that only last year in the primary, to capture that democratic nomination, he said, "i am a progressive liberal democrat." i won't support judges like that. there is no litmus test on any issue. but i will go out there and find men and women to interpret. and i don't have a list, but i think the appointments that the president has made to the bench have been outstanding, outstanding appointments. >> including bork? >> yeah. i supported him. [applause] >> if the vice president of the united states thinks that robert bork was an outstanding appointment - [cheers and applause] >> that is a very good reason for voting for mike dukakis and lloyd bentsen on the 8th of november. [cheers and applause] >> and i think the vice president supported the bork nomination. you know, mr. bush has never appointed a judge. i've appointed over 130, so i have a record.

[laughter] >> and i'm very proud of it. i don't ask people whether they're republicans or democrats. i've appointed prosecutors, i've appointed defenders. i don't appoint people i think are liberal or people who think -- who i think are conservative. i appoint people of independence and integrity and intelligence, people who will be a credit to the bench. and those are the standards that i will use in nominating people to the supreme court of the united states. these appointments are for life. these appointments are for life. and when the vice president talks about liberals on the bench, i wonder who he's talking about. is he talking about a former governor of the state of california, who is a former prosecutor, a republican named earl warren? because i think chief justice earl warren was an outstanding chief justice, and i think most americans do too. >> ann compton has a question for you, governor dukakis. >> governor, millions of americans are entitled to some americans are entitled to some of the protections and benefits