Interview at a Breakfast of Associated Press Editors in Washington, DC

Q. I would like to start if we could in the area of taxes. You proposed a comprehensive, total overhaul of the tax laws, which is probably the one thing the federal government does that more directly touches more people than any other single action. You said in New York that these laws were a disgrace to the human race. Can you give some idea of some of the specific changes you envision as they would touch the average taxpayer?

Governor Carter. I can tell you what I intend to do. First of all, we've never had a comprehensive reform of the income tax laws since the constitutional amendment was passed in the 1900's—1913. Any tax reform package has always kept as a base the present multiplicity of rules and regulations, tax incentives, and loopholes that have accumulated over from one period to another. So I intend to take on myself as a President's responsibility at one time, a complete, a comprehensive tax reform effort.

Secondly, there would be some specific and very dramatic themes followed. One is, that the tax code would be drastically reformed and simplified, and not consist of more than 40,000 pages. And I would like to make the tax code as simple as possible.

I would move to treat all income the same, and remove the sharp distinction now drawn depending on where income is derived. There would be a couple of exceptions which I could envision now. One would be the question of local and state properties—including bonds—I don't know what the constitutional provisions are, but I understand that there have been rulings by the court saying that this is property owned by the state and local government, and the federal government has no authority to touch it. Also, I would continue the encouragement of beneficent gifts but would tighten up on the rules or laws relating to foundations to make sure that the overhead expenses of foundations and salaries are paid and purposes of offices in foundations and accumulation of corpus was severely restricted and the income from foundations should have to go the causes for which the foundation was set up.

So shifting toward a fitting income basically the same would be a major and a drastic revision. Another thing that I would like to do is to guarantee a truly progressive tax rate, so that the higher income one has, the higher percentage of one's income one pays. This is not the case now. The low income families actually pay a greater proportion of their income or at least the same. In almost every instance we have a flat tax rate now, on the average, independent of what the income is. Another thing would be to tax income only once, instead of twice. The tax expenditures or tax exemptions would be severely curtailed, and this would result in a commensurate reduction in the rate of taxation for a particular income. But I would not try to include an overall increase or decrease in tax revenues along with the tax reform effort. I would try to keep the revenue about the same, and modify the percentage of income. The overall effect would be to shift a substantial increase toward those who have the higher incomes and reduce income on the lower income and middle income families.

Q. Governor, what do you mean when you say "shift the burden toward those who have a higher income?"

Governor Carter. That means that people who make a higher income would pay more taxes.

Q. But, in dollars, what are you thinking of as higher?

Governor Carter. I don't know yet. I would say, I would take the mean or median level of income. Anything above that would be higher, anything below that would be lower.

Q. Your median family income today is somewhere around $12,000, which is not—somebody these days who is earning $15,000 a year is not what people commonly think of as rich.

Governor Carter. Well, you know, I can't answer that question, because I haven't gone into it. I don't know how to write the tax code now, in specific terms. It's just not possible to do that on the campaign trail. But, I'm committed to do it, and have talked to congressional leaders in the House and Senate about the need, and have found an agreement among them, among the leaders. And as far as telling you specifically what a tax bill would be, there's no way that I could do that.

Q. Does that present a problem for your potential supporter, Governor, you're saying you'd like him to make you his President, and yet, you're not able to say what the impact on him or her on a given level might be of this great major change you're talking about. How would you respond to that problem, if a supporter would raise it with you?

Governor Carter. It hasn't created a problem, so far as I've been able to detect. I think the principles that I've spelled out to you would in every instance convince the average American family that their taxes are going to be no higher, or perhaps even lower in some instances depending on their income. And that the taxes, as levied, will be fair. I don't think most of them want to see their taxes lowered, but they want to be sure that when they do pay taxes that they're being given the same treatment as those who are more influential and more wealthy and have a wider range of opportunities on tax income.

Q. Governor, you mentioned local and state bonds. Do you mean you don't think you can change the federal tax code so as to tax the dividends on those bonds?

Governor Carter. That's one of the questions that I have. I don't know if it's possible to do that or not. The federal government should provide some alternatives for this, to reduce its dependence on bonds, but I've had legal advice both ways—there have been rulings that say that this has been state and local property and can't be taxed. It's a constitutional question that I don't know the answer to yet.

Q. One area that's been something of a problem for you since back in the Massachusetts primary, is this home mortgage tax deduction. Are you still thinking in terms of eliminating that and substituting legislation to benefit the homeowner in some way outside the tax code?

Governor Carter. We now have about $10 or $11 billion set up as tax incentives, or tax expenditures to encourage homeownership, and home construction. I think that level is possibly correct, and I would maintain that level of encouragement for home construction and home ownership. There again, we have in the tax code a heavy reward for those in the higher income brackets and a much lower reward for those in the low income brackets.

Second, we have authorization now for those tax incentives to apply to second and third homes, vacation homes and so forth. I would like to channel as much of that encouragement as I can to the family who is trying to purchase that first home.

Q. But, would or would it not be done through the tax code?

Governor Carter. It may or may not be. The two incentives now given, as you know, are for interest on mortgage payments, and for credit for property taxes paid, and it may be that the tax code is the easiest way to handle that, that incentive. I would guess that it will stay in the tax code.

Q. You said that you don't think that you do have a problem with people being concerned about your lack of specificity. The latest Harris poll that just came out showed that 49 pmni of the voters fid that youfve ducked steads on the issues, and they think you're wrong. Whether you've done thu or not, it indicates that 49 percent of the people seem to feel that way. Does that bother you at all?

Governor Carter. I wish it was zero.

Q. How do you get to zero?

Governor Carter. I don't know what—I haven't seen the Harns polL I don't know whether most of the people in the Hanis poll prefer that I be President or Mr. Ford. You've seen it, I guess you could interpret that. I think one of the questions is that I derived support'from a wide range of public figures and from different kinds of voters. Every time there has been a post-election analysis, I've gotten support from those who call themselves conservative or moderate or liberal, and I've also gotten support as you know of an almost complete group of Democrats ranging from George McGovern to George Wallace, and I think that this broad range of support causes some concern in the voter's mind about exactly where I stand on the political spectrum. I'm a typically complex person. In some areas I would be placed on the liberal end of the spectrum; in other areas I would be on the conservative end. But the fact that Fm not a clearly identifiable political idealogue is possibly one reason for the concern. But as you know, I've been tested against, I think, 12 or 15 other candidates in the Democratic primaries for the Presidential nomination, and have fared rather well. Although I'm not familiar with your quoted poll, and don't know how I came out against President Ford, in general Tve been pleased. But I wish that everybody knew me well enough to trust me.

Q. I was just wondering about your attitude, Governor [toward aspects of 1976 tax reform legislation] ... [wording garbled in taping] ... Can you characterize your feelings about that bill ... have you had a chance to study it?

Governor Carter. No; I haven't. I talked to Congressman Ullman, I guess 8 or 10 hours when he came down to Plains io visit me, and he expressed some of his concerns about some unwarranted tax incentives and loopholes that have been placed in the bill, but I understand from the news media that most of those were removed in conference committee. And I would guess that the tax reform bill passed is a step in the right direction. But I would approach the tax reform effort in a much more generic or comprehensive way than has been done in the Congress this year.

Q. What kind of reading do you get from Congressman Ullman and others on the Hill about the feasibility of a total overhaul of the tax code? They tried a few years ago, Wilbur Mills and Mansfield to get through legislation that would have, in effect, been a phase out of loopholes and advantages that were not specifically approved by the Congress, and they couldn't even get that.

Governor Carter. Well, I would let Mr. Ullman speak for himself, but I was encouraged by his attitude concerning the intention that I have. There's a great difference between a Congress trying to initiate a comprehensive tax reform in a vacuum, and having the President spearhead the effort. The President is the center of comprehension quite often among the electorate about what is proposed, particularly in a complicated subject like basic tax reform, and I believe that I could speak clearly enough to the American people to arouse their support. I think I could also in the first 6 months of my own administration arouse the attention of the Members of Congress enough to get them to consider this proposal clearly, and if it was attractive to their folks back home, which I'm sure it will be, then I think we could pass it. But to have the Congress initiate, and then try to pass legislation as far-reaching as I envision, would be a very difficult thing, with the withdrawal of the White House from responsibility altogether, or with implied threat to veto it if it should pass.

Q. Is what you envision a tax code where everybody in the country would be able to write their tax return, and would not have to have a consultant or a lawyer? How subtle do you think it could be?

Governor Carter. That would be my goal, and I can't guarantee it will be quite that simple, but it would be much more nearly that simple than it is now.

Q. If you were President now, Governor, would you sign the tax reform bill that was passed in Congress this week?

Governor Carter. Well, not having read it, I can't say for sure. My assessment from the news media reports is that that would be one that would be a step in the right direction.

Q. Have you read the new estate tax provisions of that bill?

Governor Carter. No.

Q. Maybe we better get on to another subject ... Another area, of course, of enormous interest is employment, which has been the focus of much of your campaigning. As we understand it, you have endorsed Humphrey-Hawkins, correct?

Governor Carter. Yes.

Q. What about the specific terms of the bill? It makes the federal government the employer of last resort. Right now to carry out the terms of that bill would mean the creation of something over 3.2 million jobs. Do you see the federal government fulfilling that role, and how does that fit with the goals you've set down of a leaner, trimmer, more efficient federal establishment?

Governor Carter. Well, I'm not sure you're referring to the latest version of the Humphrey-Hawkins bill, when you say that the government would provide 3.2 million jobs. That's not my understanding of it. The amendments that have been incorporated into the bill by the education committee of the House recently, would lessen substantially the number of jobs that would be provided directly by the federal government. When the bill was first introduced, it had a heavy emphasis on government planning for the private sector, a very tight definition of unemployment or full employment which was 3 percent overall unemployment at the end of an 18-month period, and some other provisions that were heavily oriented toward public employment rather than private. That's all been changed, and all of the biU hasn't reached a point where it will be considered by the full House or Senate this year, it's my guess. The principles of the Humphrey-Hawkins bill are good— to set for our nation a clear goal for a level of unemployment which is now at the end of 4 years to have 3 percent or less unemployment among those who are 20 years old or older. Another thing about the Humphrey-Hawkins bill that I believe has now been passed is the level of payment for workers who are employed in the public sector or with help in the public sector, with partial payments for salaries in the private sector. Originally it was a requirement that ... [tape garbled] and any employment given had to be at existing wage rates. That's also been eliminated, and the authority for the federal government to plan for the private sector has been completely eliminated.

So I see the Humphrey-Hawkins bill as being one that's in the process of being constantly modified toward much more responsible legislation which I spelled out quite a long time ago. And with those modifications that I've described, I do support it, but I don't know if the Humphrey-Hawkins bill will pass this year. I don't know what the latest amendments are. But if they've been included—the ones that I've just described to you—I think it's a good bill.

Q. Are you urging your fellow Democrats in Congress to support the bill and pass it?

Governor Carter. Yes. I issued a press release the morning that the House Education Committee considered the bill, spelling out these provisions, which Mr. Hawkins assured me had all been included, and under those provisions expressed my support of the bill.

Q. You also said you thought that chances for passage this year were highly doubtful. Do you think that Congress should vote on it this year?

Governor Carter. Well, I can't answer that question, Walter. They—the Senate is going to adjourn, you know, very shortly, and I don't think the bill has even moved out of any Senate committee. I don't think it's likely to come to the floor of the Senate.

Q. Well, the word around town is that a lot of the Democrats in the House told the leadership they'd just as soon adjourn without having to go on record on this one before the elections.

Governor Carter. I'm not inclined to push the passage of the bill for the House or Senate this year.

Q. You seem to be saying that you agree with the goals of the Humphrey-Hawkins bill, but not necessarily the mechanisms that they've devised in the first place to get there.

Governor Carter. As you possibly know, when the Humphrey-Hawkins bill was first introduced, I came out against it. I and my economic advisers spent a lot of time studying the original Humphrey-Hawkins bill, and we delineated a list of the amendments that we thought were necessary before the Humphrey-Hawkins bill should be passed. So far as I know the House Education Committee version of the Humphrey-Hawkins bill has now incorporated all my suggestions, partially because they were suggested by me after the convention and I became the nominee, but I think because they were right, and made that original bill modified into one that was reasonable and not too costly, and would put a heavy emphasis on employment in the private sector, but set goals for unemployment The goals that I've set for my own administration, that I spelled out in a conference to the news media in Plains, are compatible with the goals that are now included in the Humphrey-Hawkins bill

Q. Their bottom line is still public employment, isn't it?

Governor Carter. No, it's not

Q. As a last resort?

Governor Carter. Well, with the emphasis on "last," yes.

Q. Governor, whether you use public or private employment to get the current unemployment rate, which is 7.9 percent, down to an overall rate of 4.5, you need 3 million jobs. Whether you get them from the public sector, or the private sector, or out of thin air—how do you get 3 million jobs?

Governor Carter. Well, we've had them many times before, and we've jumped to an extraordinary degree of increased unemployment since Mr. Ford's been in office. There are 2l/i million people out of work, more people out of work now than there were when he took office in August of 1974. We have about a 75 percent industrial capacity now being utilized; and as you know, there's no effort being made by the federal government now, except over Mr. Ford's adamant opposition, to encourage employment in the private or the public sector. I think there are actually fewer private jobs now on nonfarm employment than there were when Mr. Ford took office. So in the channeling of research and development funds, and the instigation of the increased activity in the housing industry, and using funds for law enforcement, recreation, better health care, pollution control, in the guaranteeing of local bond issues for public improvements, these kinds of things would all instigate an increase in employment. Also in some areas the federal government might very well supplement salaries in the private sector in areas very high in unemployment, and I would favor a substantial expansion with federal funds combined with private funds for those who are young, and particularly in communities where unemployment is very high.

One of the things that we are working on and that will be unique, I think, compared to what we've had in the past is highly targeted employment opportunities where with a countercyclical concept applied, which, by the way, Mr. Ford vetoed. But I think the economy of our country is amenable to improvement. Historically, we've maintained a 4/a percent, 5 percent annual growth in economy, in the last 8 years we've averaged about 2 percent, and that 2 percent growth is well below the growth in other developed nations like our own.

Q. Governor, you talk now about research and development, housing, law enforcement, pollution control, as areas where spending might create jobs. How much is that going to cost and where is the money to come from?

Governor Carter. Well, I think you know the well accepted statistic that every time you reduce the unemployment rate 1 percent, you add $16 billion toward balancing the federal budget—about $2 billion in reduced welfare and unemployment compensation payments, and the other $14 billion in increased tax revenues. We now are paying about $17 billion this year for welfare payments and unemployment compensation for able-bodied adults who are fully able to work, just because of the extraordinarily high unemployment rate. So that's where the money comes from—from increased national growth and increased federal revenues and reduced payments for welfare and unemployment compensation. It's worked historically in this country: it's not a revolutionary innovation at all. This is just to go back to the kind of economy we experienced all the way from when Roosevelt turned the economy around until Nixon went into office.

Q. Governor, let's go back over that. Some of us are a little confused by that. Let's take this job creation step by step. In the platform, your party's platform and this morning you've said that every 1 percent of unemployment costs $16 billion in welfare. The Congressional Budget Office says that for about $1 billion in federal spending you can create something in the neighborhood of 350,000 jobs. That means that for about $3 billion you could create enough jobs to lower the unemployment rate by 1 percent. Now if all those figures are right, the government ends up with a $16 billion gain, and 900,000 people have jobs they didn't have before. That seems to be too simple, and if it's that simple, why hasn't it been done, again and again and again? Why is there ever unemployment if it works that neatly and simply?

Governor Carter. Well, I don't follow your figures that you quoted, but I think almost any—I've got about 15 or 20 economists who help me, and I think the range of their political philosophy would be quite broad, and they are unanimous in agreeing with that basic figure, that a 1 percent reduction in unemployment is the equivalent of about $16 or $17 billion—I use $16 billion—that would go toward balancing the budget, and what the Congress is trying to do is provide that opportunity for our country. Mr. Ford has vetoed the legislation whenever there has been an attempt made for public jobs, and quite often has impounded funds, he and Mr. Nixon, or reduced the incentive for people to work. I think there's a heavy emphasis in the Republican Administration on high interest rates, tight money in order to hold down and cool the economy off and control inflation in that way, and this has been a devastating choice to us all. But, historically, when we've had high unemployment, at least in the period since Roosevelt became President, we've also had fairly low inflation, and relatively closer balanced budgets. So to put our people back to work is the only mechanism that I know where we can control inflation and have a reasonable growth in our economy, 4 or 5 percent per year, but it's not extraordinary at all, and well below most developed countries. But, I have read Mr. Mears' analysis of my economic statistics. I think that mine are accurate and his are wrong. He might even agree.

Q. I don't agree [garbled, laughter].

Governor Carter. I didn't mean to make you blush, Mr. Mears. But I think that, I think the statistics are accurate, and I think historically what I have described to you is the case. When Johnson and Kennedy were in office— when Nixon and Ford are in office, we had a dramatic comparison between the difference in our economy, our incomes when people were employed. When Mr. Nixon took office, I think there was a projection of a $3.2 billion surplus. There was a very slight deficit (the next year) that was the year he took over. In the next year, because of high unemployment, we had a dramatic reduction in revenues, and I believe we had about a $20-something billion deficit. But the key to a balanced budget and the key to revenues that can be used to provide services is, in my opinion, employment.

Q. Can the government create jobs at a profit—I think that's what Lou was getting to with you. The government by pump-priming, by hiring people who can't find jobs otherwise lowers the rate I percent and thus realizes the $16 billion in benefits. Are they then in the black on that transaction?

Governor Carter. No, no. Mr. Klein and other economic advisers have computed it. It costs about $10,500 to provide one federal job. The administration of it and the allocation of the funds, as well. And the more that you can use federal money, to be magnified and provide the jobs in the private sector, the more jobs you can provide for any given amount of money, obviously. The guarantee, for instance, of home mortgage loans, which was formerly a flourishing stimulation for the economy under FHA and in the early stages of HUD, worked, and had a greatly magnified beneficial effect. The competent management of the Small Business Administration where you made loans to small businesses and then guaranteed those loans to a local bank, and at the same time provided counseling services for small businessmen, as I experienced, is a very slight cost thing to the taxpayers, but provides large numbers of jobs for every dollar spent. So the more you can channel federal moneys into areas that stimulate private employment, the greater you can cut down that $10,500 per job and shift it down to maybe not more than a couple thousand dollars per job. But, that's where you get your magnification factor, and that's where you get your increased revenues compared to the money that you spent.

Q, To go back to my analysis of your figures: granted when Kennedy took office, it was at a time of recession late in the Eisenhower Administration; his first year in office there was a 6.7 percent unemployment problem part of the time. It stayed over 5 percent for several years and the Democratic Administration with all these efforts couldn't get it down quickly, until the war in Vietnam.

Governor Carter. Well, I think it's an exaggeration to lay the whole improvement under Kennedy and Johnson on the war in Vietnam. I think when they went out of office the unemployment rate was about 3.4 percent.

Q. But when Johnson left office the war in Vietnam was quite a heated------

Governor Carter. There's no question about it. And I don't deny, obviously, that the war in Vietnam created some jobs. Obviously, we had 500,000 people in Vietnam. We had, I think, maybe 3 million people in the armed services. We now have 2.1 million people in the armed services. So it's obviously a contributive factor. But the point I'm making is that the attitude of the government in money availability, the loan availability for the small businessmen, the ease with which a family can purchase a home—these things require very little tax expenditure, and greatly stimulate the economy to provide a large number of jobs in the private sector. That's a basic Democratic philosophy, sharply contrasted with the Republican philosophy almost historically, of high interest rates, a tight constraint on the economy, let unemployment go where it will.

Q. How does the government make it easier for the average person to buy a home without it costing the government money?

Governor Carter. I didn't say that it didn't cost the government any money. What I said was the cost of the government is very small compared to the benefits derived in tax revenues and in people employed, and ancillarily in letting families own their homes. As you know, we had a very good 202 program, for instance, to build condominiums for older people. We had very aggressive ... functioning of FHA in providing home mortgage guarantees through private and public lending agencies. We had money made available to rehabilitate homes in which a family was already living. These programs have been almost completely voided by the Republican Administration. I think the only program they have ongoing now with any enthusiasm is the Title VIII program which leans heavily on the rental of homes, and which has been a terrible failure so far. But it obviously costs the government some money. I think that under the Democratic Administrations the FHA had very, very few defaulted loans. Last year for the first time there was almost a scandalous loss of money by the FHA because of mismanagement and because of the general Republican policy; I think they've lost about $600 million last year. But when the FHA has been in the past functioning properly, there was practically no net cost to the federal government at all.

Q. Governor, do you still envision starting zero-based budgeting early in your administration? At what point do you think you could begin it?

Governor Carter. When I went in office as governor [in 1971] it had never been done before in any government. We had to devise all the procedures and all the forms from scratch and study the techniques. I went in office in January, and I put zero-based budgeting into effect that same April, 100 percent for every expenditure in the state government. I can't say whether I could do it that rapidly at the federal government level, but my intention would be to prepare my first executive budget using zero-based budgeting in its entirety.

Q. The budget year when you take office would begin in October, since they changed the fiscal year. Is that the year you9re talking about?

Governor Carter. I would like to do that.

Q. Would you want to amend the Ford budget?

Governor Carter. I would hope that by January 20, 1977, I would have my major amendment to the Ford-prepared budget ready to present to the Congress. But I could obviously not do that, using zero-based budgeting. We just have to do that in a very hurried way, beginning in November; it would give me about 2 months to see if I wanted to shift emphasis toward other programs to fulfill my promises during the campaign.

Q. Have you started on that, started putting together the figures that comprise the Carter budget the first year?

Governor Carter. Well, I haven't been directly involved in it, but it is being done, yes.

Q. Can you give us an idea of what magnitude of a budget it would be?

Governor Carter. No.

Q. You said that the Republicans gave us the first $200, $300, and $400 billion dollar budget, which is true. Is Carter going to give us the next under $400 billion?

Governor Carter. I don't think it would be reasonable to expect that the budget would be reduced.

Q. You mentioned that some of the spending programs you've talked about are relatively small in terms of the employment gain, or in terms of the benefit gain. President Ford says that if you fulfill all the promises you've made and the promises in the platform, it'll cost $100 billion a year in spending. You said, I believe, that by 1980 or something that we'll have a $60 billion surplus, more than we have. That doesn't seem to jibe. Ford says a hundred billion; what do you say your programs would cost?

Governor Carter. It's hard to say. We will fulfill all the promises I've made to the American people; and we have projected using computer analysis from the Conference Board, from the Wharton School of Business, some help from MIT and others, that by 1981, with a reasonable expectation of economic growth, employment at the encFof the 4 year period we've already discussed, and a reasonable inflation rate, that we will have that year about $60 billion more in income than we have now. Within that framework, assuming a balanced budget for fiscal year 1981, the programs that we have advocated will be implemented. We have not yet decided, obviously, and this will be subject to future experience, whether those increases in available funds would be used for partial tax reductions or implementation of new programs. But as we put into effect welfare reform and health insurance programs, health care program, they'll be phased in to accommodate the increased money available to us.

Q. I don't want us to misunderstand what you said there. Your response to the $100 billion figure is that it's too high.

Governor Carter. Yes; it is.

Q. Do you have another figure or not?

Governor Carter. As I said, we'll fit the rapidity of implementation of these programs in to accommodate the revenues that I've just described to you.

Q. Without a tax increase, is that what you're saying?

Governor Carter. Yes; that's correct.

Q. You mentioned welfare reform, and I'd just like to touch on it briefly because I seem to be a little confused. As I understood it, your position was that the burden should be lifted from the cities and that it should be shared by the federal government and the states.

Governor Carter. And the states; yes, that's correct.

Q. You said in answer to a question in a New York Magazine interview you were asked "Do you favor the idea of the state and the city eventuedly paying nothing for welfare, and the full cost being picked up by the federal government?" They quote you as saying in the answer, on the basis welfare package, "Yes, but I would never remove the constitutional right of a city or state to vote bonus payments or additional payment' above and beyond the national welfare standards." Do you see the federal government ultimately taking over the basic welfare payment that would be required?

Governor Carter. Ultimately. I would move first of all, though, to remove the responsibility of the local governments to pay for it. The local governments are heavily strapped for a tax base and for funds to finance their mandatory programs. They have no flexibility. The local governments are quite often required to provide services by their state legislators, and also have a heavy restraint on what they can raise in revenue; that also has to be approved by the state legislatures. So the first step would be to relieve the local governments of the responsibility for welfare. Over a period of time, I think the goal ought to be to also freeze and reduce and maybe ultimately to remove the state responsibility for paying any part of the mandatory package of welfare compensation. But if local or state governments want, in addition to an adequate minimum package of welfare payments, to supplement them, then as that statement says, they would certainly have that right. You couldn't prohibit a city or state that wanted to supplement the basic nationwide package of welfare payments from doing so.

Q. But ultimately the federal government would be responsible for basic minimum standard welfare?

Governor Carter. Ultimately. But I don't want to mislead anyone by insinuating that we would be able to absorb the state portion of it. I think the state governments in general are able to pay part of the welfare costs for the foreseeable future.

Q. Do you anticipate difficulty in getting the states that are now at the low end of the average welfare payment picture to come up to the levels that some of the higher states are. The difference is on the range of several hundreds dollars a week in some cases. How would you bring one up, or would you bring one up and the other down. Would you raise them by the federal mechanisms to a uniform level? How would you accomplish that?

Governor Carter. I don't understand what you mean by several hundred dollars a week.

Q. A month, excuse me, I meant a month. I think it ranges from $50 a month, on the average in Mississippi, to something like $324 in New York City.

Governor Carter. The basic welfare package which would provide, hopefully, a simple one payment to a person or family, would be guaranteed by the federal government on a fairly uniform basis throughout the country. A percentage of that package that would be paid for by the states would probably be based on the ability of the state to pay. I think there might be some difficulty among the states that pay practically no part of the cost; but still, if you put into the formula, which I think is only fair, the ability of the state to participate, the shock would be minimal. And it might require, it certainly would require a phasing-in period for this purpose.

We now have a multiplicity of welfare programs that are very confusing, and also create havens for those who commit fraud or who cheat, and provide great inequities in overall payments. But, I think that this is a goal that would be approved by Senator Long from Louisiana, and by Mr. Ullman from Oregon, and others who have been reluctant in the past to change. I have talked this over with them, and I believe that what I propose is acceptable, and also highly necessary.

Q. Governor, there's some other subjects I think we ought to try to cover. We're running out of time. Your basic speech, which is still evolving, doesn't include foreign policy. Is that because you don't think it's a matter of major concern, I mean that it's not one of the preeminent issues. Dn not suggesting that you don't discuss it, because you answer questions about it in great detail, but it isn't in the basic stump speech.

Governor Carter. Well, there's a general feeling among our people that Mr. Kissinger both shapes and carries out our foreign policy and that President Ford is only peripherally involved in the process; and I think that's a major concern among the people of our country. Another concern that was expressed yesterday in the news media which is easily discernable is that our foreign policy has no compatibility with the inclinations of the American people to be open, to be consistent, to be of a high moral nature, to treat other nations with respect, to be compassionate when we deal with countries that are afflicted because of some catastrophe. That we've lost our influence in the United Nations and international councils. All these are concerns that I cover quite frequently. The additional matter of concern is on narrowly focused issues-Cyprus, I issued a statement last night on Cyprus; and on nuclear proliferation; control of atomic wastes, on which I've made, as you know, major speeches; on the Middle East; on the degree of involvement we have in South Korea. So, you know, on occasion, and I think quite frequently, these issues are discussed. But I think there are pool results that show when people are asked to list the things that concern them the most, that you have to go down to about the 13th or 14th thing before you start running into foreign policy questions. But those that I've described to you, and others are important to me and I think also important to the American people when [tape garbled] ...

Q. You have said on foreign policy, there should be an understanding with the Soviet Union, that we would settle any dispute without resorting to nuclear force. Doesn't that mean that you would have to increase manpower in NATO substantially since the concept there has been that our nuclear shield offsets their superior manpower on the ground?

Governor Carter. No, not necessarily. I would hate to think that that's true. I don't know if you've read General Maxwell Taylor's recent book, I think the name of it is Precarious Security. He points out that a better deployment of existing manpower in Western Europe, combined with a better utilization of advanced technology and anti-tank weapons and other weapons would provide us with an adequate defense capability in Europe without dependence on atomic weapons. I agree with that premise. And I would intend to maintain our present level of troop deployment in Europe for the foreseeable future. But I think when we can move with the Soviet Union to reduce atomic weapons; I would even be willing to increase ground forces or conventional forces if necessary—if that was what it took to give us equivalent strength. That would be a good tradeoff, if it was necessary.

Q. You said the other day in Billings that you would not shy from having a strong, powerful, I shouldn't say powerful, but a strong Secretary of State. You mentioned Truman's Secretaries of State. How would that work with the Secretary of State, given the structure that now exists between the White House and the State Department, where there has grown up in the White House the National Security Advisor's role as a counterbalance to the Secretary of State—except when Kissinger had both jobs. And when he now still has his stable of people in the White House.

Governor Carter. Well, I can only judge by my own inclinations and what I did as governor. I selected the best and most competent and strongest leaders that I could to lead the major departments in the state government I would do the same thing this way. As President, I would not try to run a department of the federal government from the White House staff. I would have the best qualified analysts and technicians to help me in the White House that I could possibly find. But I hope that I could maintain, as I said in Billings, I didn't remember where it was, I've said it many times, the kind of relationship with the Secretary of State that Truman had with Acheson and Marshall. I think that there was a general recognition in this country and around the world that the Secretaries of State were very strong, very capable men, able to shape long-range basic policy, perhaps independently of the President. But it was always a sure feeling in this country that the final decision to evolve or to consummate the foreign policy rested with the President. I'd like to restore that. In addition, the bipartisan support for our foreign policy now has been almost completely destroyed.

There has been no consultation on a regular basis with the congressional leaders, I don't think either Democratic or Republican. I would restore that immediately. And there is no open discussion or debate in this country as we shape foreign policy decisions. When we decide to try to intervene, for instance, in Angola, there had not been any analysis in this country, either through public speeches or statements by the President or the Secretary of State about the problems of what they hoped to do when the Portuguese withdrew. It was obviously a potential trouble spot in the world, but Mr. Kissinger laid down an ultimatum to Cuba, which was later forgotten. There was no prior consultation with the key leaders of Congress, Mansfield or others. But I think this weakens us very severely. I would be a spokesman for our country. I would make the final decisions about our nation's foreign policy. I would be responsible for carrying out what decisions were made. I would consult very closely with the Secretary of State. I would not have a higher more officious or influential person within the White House that would dominate the Secretary of State at all. The Secretary of State would be the major Cabinet person including the White House staff to evolve foreign policy along with me, and I would restore the bipartisan nature of foreign policy and also let the people know, as best I could, what was going on. All those are changes.

Q. Do you have personnel talent searchers talent scouts, looking for people to fill those roles now?

Governor Carter. That's not quite an accurate description. I've worked now with a couple of dozen, I think, highly qualified people, in foreign affairs. Some are experts on southern Africa, some are experts on the Middle East, some are experts on the northern part of the Far East and on the southern part of the Far East, some are generalists, some are experts on international economics, and some have been in previous administrations, some of them have not. But as I work with these people personally, when they come to Plains and when I meet with them, quite often in Washington, I'm able to size up their compatibility with my basic philosophy and their ability to express themselves and their ability to analyze the policy decisions that are being made so, ultimately, at least in the foreign affairs field, I think I could make a judgment about whom I would prefer as Secretary of State. I would also, of course, consult with this group of advisors in whom I have confidence on the subject. But we have, I think, a good transition setup, that will be going out of business if I don't get elected, but will be prepared to give me recommendations if I am elected. And they work very closely with our issues staff, and help people help me to analyze our foreign affairs or economics and so forth. This is a good testing ground for future selections to help me if I'm elected.

Q. I was thinking more broadly than I spoke. There are hundreds of jobs, literally, that have to be filled by an incoming administration in quite a hurry. I just wondered what you were able to do to get ready for this.

Governor Carter. Well, I think we'll be as prepared as any previous Presidentelect has ever been, if I am elected. And, of course, we'll have a maximum of a 2 month period at least after the election, before I have to make the final decisions. But I would hope to be prepared to move rapidly. There are about, probably, 200 positions that I would have to consider personally.

Q. Do you have an idea, generally, of the kind of Secretary of State you're thinking of?

Governor Carter. I have in mind a kind of Secretary of State, I think that's what Mr. Mears referred to.

Q. [Tape garbled] ...

Governor Carter. No, I have not decided on a particular person. I could if I wanted to, which I don't; I could probably list five people who would be the most likely candidates.

Q. It was said that John Kennedy never met McNamara until a day or two before he appointed him Secretary of Defense. But you're saying that you won't be in that position when you make your choices?

Governor Carter. No, I don't think Kennedy had ever met Dean Rusk before he was chosen Secretary of State.

Q. Do you think that was a mistake?

Governor Carter. Well, it's different from what I hope to do. I might very well choose Cabinet members after I'm elected whom I've never met. But my early nomination and the length of time that's been available to us since the Ohio, New Jersey, California primaries when my nomination was fairly well assured, has given me a chance to get to know a lot of these people and then, over a 2 year period before that, before the convention, I've worked very hard with large groups of people on economics and welfare and health and transportation, agriculture and the different aspects of foreign affairs. So I've had a good chance to learn, you know, in that way. It's just my nature to plan far ahead and become involved personally in the evolution of policy. I don't say that in a critical way, I don't think it was a mistake that Kennedy chose either McNamara or Rusk.

Q. Governor, Gregg says we have time for one more question. Walter, you wanted to ask about the campaign.

Q. I simply wanted to ask if you could give us your feelings at this point on where it stands, and what you've been able to accomplish in your first 2 weeks, and what you think the impact of the debates is going to be now?

Governor Carter. My overall feeling is one of success the first 2 weeks. We are running an almost unprecedented campaign as far as complexities concerned, and as far as an all-out commitment is concerned to meet as many people as we can, to let as many people get to know me, to cover as wide a range of issues, to make as many different major statements, to subject myself to cross-examination and knowledge among the American people. Not only is this going on in my own case, but my wife, my three sons and their wives are all campaigning full time, and so is Senator Mondale and his wife. There are 13 of us who are constantly scheduled. We have staff people, advance people, whom we are paying ourselves, by the way, and not having the taxpayers pay, as is the case with President Ford. And the complexity of this is challenging, but I think it's fruitful. A couple of times a week I talk to Rosalynn, my wife, late at night, and every weekend we have a chance to talk to my sons and their wives, and I see Senator Mondale and talk to him a couple of times a week. And we've all been pleased so far.

The acceptance of our visits has been good; the size of the crowds has been good; the enthusiasm and response has been gratifying. I think our advance people and our issues people and our state coordinators—we have a coordinator in all 50 states—have reached a better compatibility this week than they had last week. Many of these have been brought into our campaign for the first time since the convention, but in general I've been well pleased. I think that the accumulative impact of our repeated visits will pay off. I was in Indiana, a state that doesn't get visited very much, my wife and I and Chip have all been to Indiana already. I was in Alabama, Monday morning.... I'm the first Democratic nominee who ever visited the State of Alabama in the history of the country. My sons have already been there; my wife has been there; I've been there; and this is typical. Last week we visited 37 different states. This week about the same. And we hope to maintain this rate of campaigning, except I am going to take a couple of days off before each debate.

I think the debates, unless President Ford or I make a serious mistake, will probably solidify support and naturally, leaning voters—it would make their degree of commitment more solid. I think it would help to alleviate a lot of the concerns about me. President Ford is much better known than I am. He is much more predictable than I am. And I think the juxtaposition of myself with him in the debates will accrue to my own benefit if I do a good job in the debates—which I intend to do.

So I look forward to the debates with a great deal of anticipation. I think they will show that, contrary to the rhetoric that was constant in the Republican Convention, that I am not a radical, that I am not completely ignorant about defense or foreign affairs, that I am a substantial person. And if I can project that image in the debates, it would be a great asset for me, I think.

Q. Do you think it will take care of the concerns mentioned in that Harris poll?

Governor Carter. I wish I had seen the poll. I think that to strike one element out of a poll is a substantial and, I might say, unwarranted distortion. The overall results of our polls show that when you ask, "Does Jimmy Carter care about people like me?" and compare it with, "Does Gerald Ford care about people like me?" which is an element, a measurement of trust, I came out better than he does.

Q. I think Harris put you ahead of Ford. But he says there is a problem among your supporters because their perception of you as a handler of issues is more troubled—that was at the time of the convention.

Governor Carter. Well, I can't deny that. As I say, I wish everybody had complete trust in me, and I believe that the debates will help to alleviate concern that has been pointed out.