Gloucester City, New Jersey Remarks and a Question-and-Answer Session With Area Residents.

CAMPAIGN ISSUES

THE PRESIDENT. Well, to Cass and Jim and all the family, I want to say, first of all, thank you, and particularly to Eilene. [Laughter] She pointed out that the Phillies did the country a great service, recently, because, you know, nobody pays any attention to the Presidential election until after the World Series is over. [Laughter] And their getting through in 6 games saves us a little time, right? [Applause] Also, she pointed out that historically, whenever the National League wins the World Series, do you know what happens in the Presidential election? What happens? [Applause] The Democrats win, right? [Applause] The Democrats win, too. So thank you, Eilene, that's a good reminder.

Also, my mother has just about paid her hospital and doctor bills betting on the Phillies this last— [laughter] . She's taken all—the first time anybody ever took money from the doctors in the hospital. She did it this time.

Well, I'm very grateful to have a chance to come here to this Knights of Columbus Hall. It reminds me very deeply and personally that President Kennedy was active, as you know, in his own local Knights of Columbus, and that's where he learned, I think, to represent the true ideals and the principles of the Democratic Party-one of public service, community service in a generous and unselfish way, and that typifies what all of you feel in your own hearts.

This is a time of service. It's a time when our Nation's principles are tested. And every 4 years when we have a chance to present to the American people the record of an incumbent administration like ours, which is Democratic, to point out that we are in the history and the theme and commitment and principles and ideals and tradition of Franklin Roosevelt, Harry Truman, John Kennedy, Lyndon Johnson, it's kind of a reassuring thing to remind us every now and then of the sharp differences.

One of those differences, obviously, is to deal effectively with the economic affairs of our country. As you know, we were hit very severely last year by economics that endangered the well-being of the working families of our country, when OPEC Arab nations raised the price of oil more in 1 year than the price of oil had increased since it was first discovered in Pennsylvania in the 1800's. As you know, the inflation rate got up around 20 percent for a while, and we started taking action, tightening up on the Federal budget spending, working for a higher productivity of workers. And for the last 3 months, we've had the average down around 7 percent for the last 3 months. The figures we got today were a sharp reminder that now and in the future we've got to deal with inflation in a very effective and very firm way.

The proposal that we have advocated for next year—after the election, not during an election year—to have a tax stimulus to create new tools, new factories, new jobs for American workers, is anti-inflationary in its impact. It will not only give us a better life, better jobs, but will cut down inflation. Governor Reagan, on the other hand, has proposed the so-called Reagan-Kemp-Roth proposal, which gives great awards to rich people but saddles the rest of us with enormous inflationary pressures. It's just like pouring gasoline on a fire, to add the Reagan-Kemp-Roth proposal to high inflationary pressures. Governor Reagan's own running mate, George Bush, said it would cause inflation rates up to 30 percent, and he called it "voodoo economics." And we Democrats don't want any "voodoo economics." And so just like the Phillies won, Eilene, Democrats have got to win to keep this country on a stable basis, to keep our folks working good, okay?

Now I think it's good for me to answer questions that you might have and, I'm very eager to.

QUESTIONS

TAX REDUCTION PROPOSALS

Q. In view of what you've just said, do you think considering the independence of Congress during the recent years that you or any President can deal with them to put through a program in order to deal with our economic ills?

THE PRESIDENT. Yes, ma'am, I do. We've had very good success in dealing with the Congress the last 3 1/2 years. We've passed about 80 percent of all the legislation we've sent to the Democratic Congress. And on this particular tax proposal, we've consulted very closely with the leaders on the House and Senate side. I don't say that we'll come out 100 percent with what we advocate, but the basic thrust of it will be similar to what President Kennedy did back in 1963.

He put forward a proposal then, which you may remember; I do. It was 100 percent designed to let American industries reinvest their profits into new factories, new tools, new jobs to keep our people at work. At that time, the inflation rate was only about 1 percent; now it's much higher. And it's more important now than it was then even, not to have a highly inflationary tax proposal.

So, over 50 percent of our tax proposal will be designed to create those new tools, new factories, and new jobs for American workers. And the other part of it, which will help families and those who are wage earners, will compensate for the increases in social security taxes already on the law books; it'll give you a tax refund so you won't have to pay any more money. And it does one other thing which I think is important, long overdue. Now, when a husband and wife work and both have some income, they pay a higher income tax than a man and woman who both work and who live together who are not married. This is called a "marriage penalty," and so we are going to advocate that we remove that marriage penalty, which will be a tax reduction for married families that have more than one working and also remove the penalty on people for getting married.

So, with those two exceptions—on social security offsets and the marriage penalty—the rest of our tax reduction will go toward new jobs, new plants, and new tools. And the total effect of our tax proposal will be to cut down inflation rather than to make inflation higher.

Governor Reagan's proposal, 90 percent of it, goes for personal income taxes which will primarily reward the very rich. If you make $200,000 a year, any of you that are here that make that, you will probably be for Governor Reagan. [Laughter] And only 10 percent of it goes to create those new tools and new jobs for Americans. And it'll be highly inflationary, because it will dump, between now and 1987, a trillion dollars, which is a thousand billion dollars, into purchasing power to bid up the cost of a limited amount of goods because industry won't be producing more because they won't have that tax privilege.

So, mine doesn't go quite as far as President Kennedy's does, since almost 100 percent of his went for business investment and new jobs, but it goes along that line. So, yes, it will be anti-inflationary in nature, not inflationary in nature. I can't overlook you.

AMERICAN HOSTAGES IN IRAN

Q. Do you know when the American hostages are going to be released yet?

THE PRESIDENT. No, I don't.

You know, one thing that concerns me a lot lately has been a buildup in the American press—the television, radio, and newspapers—of expectations that the hostages are going to come home early, that I don't think are justified. I don't have any way to know when the hostages might come home. And I think for us to expect that they're going to come home this weekend or next week or the following week is going to lead to very bitter disappointments in our country if they don't come home when we think they might.

What we have done, since the very first day they were taken, is to protect their lives and their safety and make sure that someday they could come home to freedom and, also, not to violate our Nation's principles and our Nation's honor. But I think it would be a mistake for anyone to start trying to put a time schedule on When they're coming home. We've been disappointed too many times. So, let's just hope and pray they come home safely someday and don't plan on any particular date at this point.

Don't forget to pray for them, okay? Good.

ABORTION

Q. Mr. President, what is your stand on abortion, and how does it compare to Governor Reagan's?

THE PRESIDENT. I have a very deep, personal opposition to abortion. I don't think that the Federal Government ought to spend any money to pay for abortions, unless the mother's life is directly in danger or unless the pregnancy is a result of rape or incest and she reports that rape or incest very quickly after becoming pregnant. This has been my position for a long time, and I believe that that's the best approach to it.

As you know, an incumbent President has to take an oath of office, Joey, that if the Congress passes a law or if the Supreme Court rules on the matter of abortion, I have to carry out the law. And so that's my belief. I don't think we need a constitutional amendment on it, but I'll do everything I can, as I have in the past, not to let Federal funds be used to pay for abortions and to minimize any need for abortion in this country.

PRESIDENT'S PROUDEST ACHIEVEMENT

Q. What's your proudest achievement since you've been President?

THE PRESIDENT. Well, it's hard to know—well, you say what's your proudest achievement? Every President has to deal on a daily basis with crises, with troublespots around the world, and every President has available to him the enormous power of the United States—military weapons, troops, and so forth. I think my proudest achievement is having kept our Nation at peace, because it's a temptation, when there is a troubled area in the world, to want to stick American military forces in there to try to resolve it. I've not had to do that, and I believe that this is the most important, single thing that I've done.

My first responsibility is to keep our Nation secure and to have a strong defense. And all of the 8 years before I became President, the Republicans had let defense spending go down 37 percent, and I felt our Nation was in danger of not being the strongest nation on Earth. We have reversed that in every year. We have built up and will continue to build up our commitment to defense. I've said many times—I know the press here has heard me say a lot of times—that the best weapon is one that's never used in combat, and the best soldier is one that never has to lay his life down on the field of battle.

So, to keep our Nation strong and at peace, that's my proudest achievement. And I pray God that I'll have that record when I go out of office.

SOCIAL SECURITY SYSTEM

Q. Mr. President, I'd like to know what you and your administration's doing about the social security situation in this country right now. There's a lot of hullabaloo in the newspapers and television that it's going broke.

THE PRESIDENT. Yes.

Q. I'd like to know just what your position is on keeping it strong and saving a lot of people in this country that depend on it.

THE PRESIDENT. Yes, I'd like to answer that. You may or may not remember in 1976, almost exactly 4 years ago, when I was campaigning around the country and so was President Ford, the biggest concern that people had when I went to a group like this was, "The social security system is on the way to bankruptcy." But I and the Democratic Congress, particularly Jim Florio, Bill Bradley, and others, have worked to get the social security system back on a sound basis. And it will be kept sound and free of bankruptcy as long as you have a Democrat in the White House. We will not permit any taxation of social security benefits, and we will continue to have social security benefits increased enough to compensate for the rise in inflation.

I just read today a Wall Street Journal article. As you know, the Wall Street Journal is a strong Republican newspaper and a strong supporter of Governor Reagan. It had an article on the front page—maybe somebody's got it here—"Reagan's 23 Teams Feed Him Hot Ideas on How to Run the United States." One of the things that they propose is that they do away with the minimum wage. Another one is that they reduce social security payments and a whole series of things that accurately mirror what Governor Reagan has said in the past, even after he began running for President, and which he later says he's changed his mind about.

But I think this kind of article, in a paper that supports Mr. Reagan, shows what we might expect if he should go in office. And there are a lot of other things in here like that, too—that they would cut off Federal funding for any city, for instance, that had rent control and not permit any more housing funds coming in, and would let States do away with food stamps if they want to, and let States have their own kind of welfare programs and not let the Federal Government support them. And another thing that I know you all are concerned about—property taxes—Governor Reagan has also proposed that the cost of education, for instance, and the cost of welfare, be put on the States and local governments.

Those are the kind of things that concern me very deeply, and so far we've not been able to get Governor Reagan to be specific on how he's going to cut the budget so deeply. But I think this kind of shows who's going to get cut. But don't worry about social security being sound and maintained as I told you it was, as long as a Democrat is in the White House.

AID FOR PAROCHIAL SCHOOLS

Q. How do you feel about aid to parochial schools?

THE PRESIDENT. We have given, as you know, an increasing amount of aid to parochial schools, and we'll continue to do that. We've worked especially strongly on going along with the guarantee that every young child who finishes high school, regardless of how poor the family might be, to be guaranteed of a college education, either for direct grants, or Government-guaranteed loans, for work-study programs, and sometimes for scholarships. The only thing that I've disagreed with is the tax credit. But I believe that we will go ahead and continue to increase the allotment of Federal funds for the parochial and for the public schools.

PROSPECTS FOR HOME BUYERS

Q. Mr. President, first of all, I'd like to thank you very much for honoring Gloucester City—first of all, it's a great town—and secondly, for honoring our family. I would like to ask—I think one of the American dreams in our society today is for people to own a home. Many people in the age group around 21 to 35 are having a problem fulfilling this dream. Now, the mortgage rates approximately 6 months ago were very, very high; fortunately, the last few months, they have been lower. When you elect a President, you hope that these rates will stay down, and how would you try to make sure that they will stay down?

THE PRESIDENT. Well, obviously the best way to hold down mortgage rates is to control inflation. And I think another way is to make sure that the policies of banks are exposed to the public to analyze if they are or are not charging interest rates that are higher than the economic circumstances warrant. The American dollar has strengthened tremendously overseas. We've got a good sound economy. And the figures from last month showed that the housing starts in this country have jumped up substantially above 1 1/2 million home units per year, as you know. Interest rates are too high. And I'll continue to work on them. I think the main thing is what I've already described—is the tax policies for the future.

If you make American workers more productive—we're already the highest producing workers in the world, but we haven't been gaining as much lately-and if you may have good harmony between management and labor—you probably noticed a couple years ago, almost every headline showed that there were wildcat strikes in the coal mines. You haven't seen that in the last 2 years, because the mineworkers and the management have been cooperating on how we could produce more American coal. You might be interested in knowing that this year we'll produce more American coal than any year in the history of our Nation. And we've done the same thing in the steel industry, the same thing in the automobile industry, to get those industries working together toward the future, with government on the one hand, and with management and labor on the other.

Also, we've begun to work more closely with industry now, which we hadn't done before, on environmental protection laws, to make sure that the steel industry could put its investments back in their own modernized plants and still not cause a deterioration in the quality of our air.

The final point is this: We have a good working relationship with Congress. Jim Florio has been a very strong adviser for me and a good partner with me. He worked with me, for instance, to get approval for the Camden Veterans' Hospital that we're going to build—$75 million there—to serve several hundred thousand veterans in this area. That's part of a better life for people who have homes in this area. We've got a senior citizens home that's going to be built; I think it's got 90 units. And of course, we're also providing ways for people to buy their own homes by bringing the Saratoga in here to get it repaired, and which has created, as you know, about 8 or 9,000 jobs.

So, the combination of productive workers, holding down inflation, planning for the future, giving people a better life where they live, all will contribute to increased housing in this area. And we've had enormous increases in the number of home units allocated for New Jersey—I think much more on a per capita basis than have the average States had.

Yes, sir? In the back row.

ENERGY SOURCES

Q. Mr. President, the oil so critical to our national defense—have you considered the acceleration of conversion of our oil-fired electric generator units over to coal, and also increased their speeding up the licensing of those nuclear powerplants that are basically fully completed right now since the Three Mile Island incident?

THE PRESIDENT. Yes. We have identified over 100 oil-burning powerplants, mostly on the east coast—a few burn natural gas—all of which can be converted over to coal without lowering our air pollution standards. ,And we've asked the Congress to move expeditiously and already got the bill through the Senate, by the way. It's called oil back-out legislation. It will let a utility convert over to coal, help them pay for the cost of the conversion—sometimes with loans, sometimes with grants—and also gives them an extra allotment of funds when necessary to put in the air exhaust scrubbers to make sure that the air pollution standards are not lowered.

In addition to that, after the Three Mile Island incident, we had the so-called Kemeny report, that made recommendations on how the existing and planned nuclear powerplants could be made more standard in their design, constructed so they'd be more safe, operated more uniformly, and also have the personnel in them trained better. And we are now beginning to give licenses again to those atomic powerplants that had been held up for so long. The first licenses are going to those powerplants that are almost an exact copy of a powerplant that's working now successfully. And the Nuclear Regulatory Agency [Commission] is moving on that item to let those atomic powerplants start producing power and to let new ones be licensed.

So, I think that combination of backing out utilities from using oil and natural gas, shifting to coal, plus the licensing of nuclear powerplants, will help to meet the goals you described. Both of those are well on the way, and I hope this oil back-out legislation can now get through the House. I know Jim Florio's for it. He'll be helping us with it. It's already passed the Senate.

INFLATION

Q. Mr. President, I deal in the fresh food business all the time. And I come in contact every day with people that, through inflation, are having trouble getting the food on the table—every day, you know, and that's not just once a month or anything. And I was wondering if your economic advisers have ever come to you and said there is a possibility someday of a zero inflation rate?

THE PRESIDENT. In July we had a zero inflation rate, and I hope you enjoyed that month— [laughter] —because it's the first time we'd had one, I think in 13 years, and obviously we haven't had one since. That was kind of an aberration. But at that time, food prices had pretty well leveled off.

The high inflation rate that we've got today was to a large extent due to increased food prices. As you know, on a worldwide basis, grain prospects are very low. The Soviet Union will produce about 20 million tons of grain less than we thought they would a week or two ago. Our grain harvest is going to be down because of drought in some areas, including New Jersey. Argentina is having a poor grain year and also Australia and Canada. So all those nations—really the only ones that export any appreciable amount of grain; the Soviets import—have a short crop in prospect, and that tends to drive up the price of feed grain. The feed grain tends to drive up the price of beef and pork and poultry that eat the grain and milk cows that give milk.

So I think that those food price pressures have driven up the cost of living. As I pointed out, though, in the last 3 months we have had an inflation rate down to 7 percent, but these new figures-which is about 12 percent a year for this I month—show us that we've got to be extremely careful about inflation as the number one economic threat in the months ahead. We can't have a massive Federal deficit, we can't have a massive election year tax cut, we cannot have a lowering of our ability to control government spending. These are exactly the things that Governor Reagan has proposed with his Reagan-Kemp-Roth bill, to give people a massive election year tax cut which would fan the fires of inflation. So that's a basic difference between us on economics, and I hope the American people will understand it. Controlling inflation is our number one domestic commitment.

NATIONAL DEFENSE

Q. Mr. President, I've been reading for a couple of years now, in the press, that our defense, our general defense stature, is not what it's supposed to be, and yet I hear from the Federal Government that it is. Are we—is our defense in order, or is there much room for improvement?

THE PRESIDENT. Yes, our defense is in good condition. We are the strongest nation on Earth militarily, and we've taken steps since I've been in office to correct a downward trend. For the last 15 years, the Soviets have had a steady upward increase, every year, in their expenditures for defense, for armaments. Seven of the eight years when Presidents Nixon and Ford were in the White House, we had a decrease in American expenditure for defense. Over that 8-year period, our expenditures for defense went down 37 percent in real dollars.

Since I've been in the White House, I have every year increased our commitment to defense, above and beyond the inflationary cost. And for the next 5 years, I've presented to the Congress a projection of continued annual increases in our defense expenditures.

We've corrected a lot of things. You live near a shipyard and you probably have kept up with it, but before I came in office we didn't have any Trident submarine and Trident missile program ongoing. It was tied up with $2.4 billion of lawsuits, and the construction had almost come to a screeching start [halt]. Now the Trident submarine program and its missile are well on the way. We did not have any air-launched or groundlaunched cruise missile program. This next year, we'll manufacture about 3,000 of those and have them put into effect. We didn't have any way to defend our fixed silo missiles, which were becoming vulnerable to Soviet attack. Now we have the MX missile system that we've proposed to the Congress, and I predict it will be approved and will go into production. That's just in the nuclear weaponry alone.

We also didn't have any military presence in the Persian Gulf region. That was a very serious defect in our defense capability. That's a troubled part of the world. And now we have two major aircraft carrier task forces in the northern Indian Ocean around the Persian Gulf region, and we've made arrangements for facilities to be used in case of an emergency in five different locations in that region. We've now begun to build up our rapid deployment force, because it's something that we can send overseas in a hurry to any troublespot in the world. We have pre-positioned materiel for 10,000 marines to use if we need to bring them into that troubled region of the world, and 500 airplanes already have pre-positioned; fuel and armaments to use if we have to.

We've worked out with our NATO Allies a 15-year plan now. NATO was in the doldrums when I took office and was kind of dispirited. Now there's a new spirit, a new sense of communication and commitment in NATO. We've got a 15-year plan for steady increases in our buildup of forces there.

Some other things that have helped us, too, militarily. For instance, we've now formed a friendship with a fourth of the people on Earth, in China, with normal diplomatic relations which will help to stabilize the Asian continent in the future. We don't have a military treaty with them, but now we're working with them to help keep that strategic area calm. We still have maintained our good trade relationships with Taiwan, as you know. And in Japan and South Korea and Australia and New Zealand, where we have alliances, we've strengthened those as well.

The point is that all these things have been done in the last 3¼ years. And we've worked so that the Congress, and I, and the public who want to study it, know that this is what we've done, and this is what we're going to do over a full 8-year period, which keeps us strong, lets us meet any challenge, and lets us protect our interests. And by using those military strengths in a calm, carefully considered and effective way, we have kept our Nation at peace. We haven't had to prove that our military forces were all-powerful; we just want to make sure that people know it.

The last point is that in any election year, you're going to hear those who are outside the White House complaining because our country has been permitted to get too weak. I was down in Tampa, Florida, this past week, and I read a statement made by Governor Reagan. It said that the incumbent President and the Secretary of State had seriously let this Nation's defense capabilities deteriorate, so that now we were second in strength to the Soviet Union. That was a statement he made in 1976, by the way, when President Ford was in office. So, you always hear that in an election year, but I can tell you, our Nation is the strongest, and we'll never be second to any nation in military strength.

AID TO EDUCATION

Q. Could you explain to me about this: Why financial aid for nursing students was cut in the budget?

THE PRESIDENT. Why financial aid was cut—

Q. Financial aid for nursing students?

THE PRESIDENT. Well, the overall commitment for financial aid to students has been increased tremendously since I've been in office. I don't know which particular program you're talking about. David, do you know any that we've cut?

MR. RUBENSTEIN. There haven't been any cuts. [Inaudible]—the average—about a 73-percent increase.

THE PRESIDENT. There may have been some proposal that an individual person made that we couldn't finance. But since I've been in office, in just 3 1/2 years, we've increased Federal expenditures for education by 73 percent in that short period of time. And as I said earlier, there is no reason, now, for any student in this country who's able to do college work not to go to college, no matter how poor the family might be. If you know of any student like that, you let me know and I can guarantee you that that student can either get a loan or a scholarship or a grant or a work-study program, so they can go through college. That's one thing that we have done successfully since I've been in office—a lot of other things, too. [Laughter]

POLITICAL ENDORSEMENTS BY BLACK

LEADERS

Q. Mr. President, recently several black leaders have come out for Reagan. Do you think this is going to significantly affect your campaign?

THE PRESIDENT. No, sir. I considered that very carefully and decided not to withdraw from the campaign. [Laughter]

That's just a tiny minority of black-actually former black leaders, they're not black leaders now. I'm not trying to knock them or anything, but Ralph Abernathy is the main one. He used to be the head of SCLC, and all of the people who were associated with Martin Luther King, Jr., including the present president of the SCLC, the Southern Christian Leadership Conference, have all endorsed me for President. I'm not trying to low-rate Ralph Abernathy, but that's a tiny minority among the black community who've endorsed Governor Reagan.

Well, I wish I could stay and take more. I'm sorry. I'm sorry. I've got two or three more places to go before I get back home tomorrow.

AUDIENCE. Put on the hat!

THE PRESIDENT. Jody,¹ should I put on the hat? How's that look? [Applause] There goes Kansas City. [Laughter]

¹Jody Powell, Press Secretary to the President.

Well, let me say how proud I am to be with you. I'm very proud to be with you. This is the first time I've had a session like this when we depended on one family, primarily, just to arrange a little get-together and invite their friends and relatives in. But I think your questions have been extraordinarily good, ranging from housing to student aid and to inflation and to defense. Matters of that kind—and social security—are very important to me and to you, too. And I hope that after this session, that you'll remember the heritage of the Democratic Party, the differences that exist between me and Governor Reagan, and help me as much as you can to get elected.

God bless you all. Thank you again.