Telephone Interview With Don Cannon of WTAE-TV in Pittsburgh, Pennsylvania

Social Security

Mr. Cannon. Mr. President, my name is Don Cannon. I'm with WTAE television in Pittsburgh, and my first question deals with Social Security. You have proposed, and Congress is about to dispose of, an increase in payments to recipients. Now today, Mr. Pickle, chairman of the House Social Security Committee, is saying that the tax, FICA, will have to be raised next year, or the taxable base will have to be raised to cover this increase. How do you respond to that, sir?

The President. No, I don't think it will, but I'll tell you why we felt it was fair to do what I announced the other night.

It is true that the regulations for governing Social Security COLA's, as they're called—cost-of-living increases—prescribes that there is no cost-of-living increase if inflation is below 3 percent. Now, there is a possibility that it may fall just below 3 percent in the third quarter of this year, which is the measuring point as to whether or not—or what the COLA will be.

And we have asked, as a part of our program that put Social Security on a sound financial footing, when it was due to go bankrupt along about July of 1983—and the bipartisan commission that came up with a proposal to fix this—part of it called for a 6-month delay in a cost-of-living adjustment for the people on Social Security. And because of that, because of their taking that 6-month delay, we just felt that it was only fair that even if inflation went below the 3 point mark—and it may very well do that, because for the last 3 months it's been running at 3.3 percent—that it would only he fair for us for one more time to give this cost-of-living increase. Then, if we continue on down with inflation, why, this would be the end. This would be a one-time thing. We think that's only fair.

Tax Increases

Mr. Cannon. Mr. President, Mr. Mondale, in his acceptance speech last Thursday in San Francisco, said you had a secret tax plan; that regardless of who was elected President next year, or this year, taxes would have to be raised; that he was leveling with the American people, and you would not. What's your response to that, sir?

The President. Well, my response is that he was half right. He was right about the fact that he would give us a tax increase, because if you look at his record when he was a Senator, he's voted for every tax increase ever proposed—and, I think, sometimes has proposed them himself. So, I'm quite sure that he would raise taxes.

I'm quite sure that I would not, because to me a tax increase is a last resort, when there is no other thing to do. A tax increase, I think, could very well upset the recovery that we have.

I believe the biggest single factor in the recovery that we have right now which has resulted in a restoration of profits to the automobile industry, to the housing industry-we're building twice as many homes as we were building in 1980, now. I mention those two industries because either one of them can start a recession all by itself. Well, to have a tax increase could very well upset this recovery. The tax cut that we've had is the biggest factor, as I say, in that recovery. And so, I have no secret plan.

What we do have—I have asked the Treasury Department to study and bring to me by December some proposals for tax reform—number one, to simplify it. The tax code has become so complicated that the average citizen just cannot compute what they owe the Government. And we want to have a more simple and a more fair tax system, and we want to see if we can't have one that will broaden the base so that we can actually reduce the rates on the individuals paying.

When you stop and think that because of the complexity of the tax law right now, there is probably a hundred billion dollars of tax that is legitimately owed and not being paid. And those who are freeloading on their fellow taxpayers, I think, should be brought into the payment of tax.

Steel Imports

Mr. Cannon. Mr. President, will you accept the recommendations of the U.S.. International Trade Commission that the domestic steel industry needs relief in the form of tariffs and quotas over the next few years to bail out the industry?

The President. Well, we have their finding that the steel industry has been harmed by imports, but they, then, will be coming back with recommendations as to what the answer should be, sometime in September. And my comment can only be that I am waiting to see what their recommendations are going to be.

Pittsburgh Pirates

Mr. Cannon. Finally, sir, you had a benediction for the Tigers. Do you have one for the Pirates? We're in last place, as you know. [Laughter]

The President. Well, you know, in the job that I'm in, I know that I can't really take sides with anyone. So, having been a sports announcer broadcasting major baseball myself, I can just wish them well.

Mr. Cannon. Thank you, Mr. President.