The MacNeil/Lehrer Report; Carter Responds to Liberal Criticism

ROBERT MacNEIL: Good evening. President Carter has been getting a bashing recently, not from Republicans but liberal members of his own party. Former Presidential candidate Senator George McGovern started it ten days ago, saying that when he looked at Carter`s economic policies it was difficult to remember who won last fall. Senators Edward Kennedy and Edmund Muskie, AFofL-CIO President George Meany, and New York Governor Hugh Carey have added their voices to the chorus accusing Carter of neglecting social policies in favor of fiscal conservatism. In Los Angeles yesterday the President chose the convention of the United Auto Workers, the most liberal big union around, to defend himself. Jim?

JIM LEHRER: Yes, Robin, and tonight we want to examine the President`s answers to his liberal critics, bouncing excerpts of the President`s speech back and forth between Senator McGovern himself and another Democratic U.S. Senator, Dale Bumpers of Arkansas, known as a New South Democrat of the Jimmy Carter mold. But first, some on-the-scene flavor: comments on the speech from three UAW delegates who were there in the Los Angeles Convention Center when the President delivered it.

(Los Angeles, Yesterday.)

FIRST UAW DELEGATE:I don`t think he`s carrying out on his policies for the people. I think he`s carrying out on policies for big business and not for those of the people. I think he`s told us already that things have changed. For instance, on the question of the military, he says, Well, those things that I said before have changed now; things have changed since then and therefore I have a new position.

SECOND UAW DELEGATE: I wouldn`t exactly say that we`re angry. We may be a little bit dissatisfied with the promises that he made and the delivery of those promises. We know he`s been in office a little over four months now, and we felt that he should have moved a little bit faster on some of the issues that we as labor leaders were involved and concerned with.

JO FRANKLIN: What are those issues?

SECOND DELEGATE: Specifically, we talked about, and Senator Kennedy talked about, the Medicare issue -- the National Health Security system...

THIRD UAW DELEGATE: If he introduces that gas guzzler bill, he may be faced with more unemployment than what we have now due to the fact that the imports will be coming in, people will be buying imports; our people will be laid off. Now you tell me how a person with five children, or four children, or a family of three or four or five can buy a small car and drive around. It`s impossible. There is nothing there. We have to have the big car. So I believe that the UAW will agree with him on everything he`s mentioned here except the gas guzzler bill, and I think the UAW will fight him on that bill.

FRANKLIN: Well, he made some large promises here about programs that are important to the UAW. Are you skeptical -- do you feel like they`re just campaign promises again, or do you feel he`ll deliver?

THIRD DELEGATE: Well, he`s only been in four months. I feel we should give him a little time to see if he delivers. If he doesn`t deliver, then I think the UAW and the rest of the big unions should sit down and have along talk with him and find out why he`s not delivering the promises that he`s made to us.If he wants our support, he`ll have to deliver.

LEHRER: All right, initially, Senators, your general view. Senator McGovern, based on what you`ve read and heard of the President`s speech, are you now desirous of editing the tone of your comments?

Sen. GEORGE McGOVERN: No, I`ll stand on what I said. I think what we have to recognize is that a President -- this President or any other -- is partly the product of the pressures that are on them, and there`s no question in my mind that big business is having their voice. They`re being heard, and they should be. They have a right to speak. They have their representatives in the cabinet. They have Arthur Burns, who was one of the principal architects of the Ford-Nixon policy, still sitting there at the President`s right hand. I just think that some of us have to make sure that the little people of America -- the small farmers, the jobless, the hungry, the people that don`t have as well-organized lobbies -- that they`re also heard. And I`m still hopeful that President Carter is going to respond to those pressures from some of us that have spoken out. We`re not trying to hurt him, we`re trying to make him a better President.

LEHRER: All right. Senator Bumpers, what`s your general reaction to the President`s message he delivered yesterday?

Sen. DALE BUMPERS: First of all, I didn`t come here to be a defender of the administration, but I certainly take a more moderate view of it, I think, than my friend Senator McGovern does. Number one, I think that President Carter has only been in less than four months, and I think it`s premature and unfair really to be hypercritical. Number two, I think that no President, and certainly in modern times, has come into office with more complex problems facing him, such as the energy problem, a raging inflation rate, terrible unemployment rate, a bureaucratic government that the people of this country have sort of lost confidence in. So to expect him to deal with all of that in such a short period of time I think is unfair. But I do think, for example, he`s addressed nuclear proliferation, he has come with an economic stimulus, he`s come with a tax stimulus, he has come with an energy reorganization, he`s come with an energy proposal, he says that this fall he will come with welfare reform and tax reform and early next year with a national health insurance program; so I don`t know what else we could expect of him. At the same time, he has to deal with the inflation problems that all of this generates; and the budget deficit -- frankly, I think my liberal friends are too critical of the fact that he has said he wants to balance the budget. And I think by saying he wants to do it in 1981 he has demonstrated an understanding of the fact that you can`t have all the social programs that I would like, that Senator McGovern would like, and come to grips with that very difficult problem.

LEHRER: All right, you gentlemen have given us a good road map now to explore some of the specifics of what he said in that speech yesterday. Robin?

MacNEIL: The specific which made the headlines today was Carter`s most explicit promise since the inauguration to introduce that national health insurance scheme. Senator Kennedy had told the same convention that health reform looked like becoming the administration`s missing promise. Perhaps with Kennedy in mind, the President addressed that one firmly.

PRESIDENT CARTER: I`m committed to the phasing-in of a workable national health insurance system.(Applause.)

MacNEIL: He went on to say what he`s done and what he hopes to do, starting with efforts to reduce medical costs:

CARTER: I propose hospital cost containment legislation that would put the brakes on these increases. Sixty other nations have managed to come up with national health programs that meet the needs of their people. It`s not beyond our own ingenuity to do the same, and I want this program to be established during my time in office.

MacNEIL: Senator McGovern, does that answer your anxieties about Carter`s sincerity on health care?

McGOVERN: Well, I would like to think that possibly the President`s strong commitment that we just watched on television on health insurance was partly an outgrowth of the urging that he got from Senator Kennedy and from me and from others who feel that we`re not being too impatient on this matter of health insurance. After all, this is an idea that we have been talking about ever since President Truman. We`ve committed ourselves to it time after time in Democratic National Platforms. Even President Carter said when he was a candidate last year that he would have a plan ready to submit by Inaugural Day. So I think we`re justified in speaking out on these matters. I`m glad for the slight progress, at least, we see in the President`s commitment to the UAW when he said that he believed in at least phasing in the plan. I don`t know when we can expect it to be phased in, but I think we`ve debated this matter long enough and we ought to be about the business of implementing it.

MacNEIL: You told the Americans for Democratic Action in your speech which has now become so widely quoted ten days ago, what`s really missing is the will to withstand the special interests of the medical establishment and the insurance companies. Did you see any change in that?

McGOVERN: As I say, I`m thankful that the President is moving on some kind of control on hospital costs, but that still doesn`t match the commitment that was made in the campaign. And I think what has happened on national health insurance is that we`ve had so much propaganda, so much lobbying from the medical establishment, that people in public life are somewhat afraid of that issue. That`s the real reason why we haven`t moved on it in the past. Now, one thing that we need to understand on that issue is that we`re not proposing that medical costs be increased. We`re simply saying that this present system where a sudden illness could suddenly bankrupt any family has to be changed, that those risks ought to be spread over the whole society in a carefully thought-out national health insurance program of the kind that Senator Kennedy and others have been working on for many years.

MacNEIL: Let me ask Senator Bumpers: do you feel that liberal goading has pushed Mr. Carter just a little further down that path as a result of the quote we just heard from last night`s speech?

BUMPERS: I`m not naive enough to think that goading by people like Senator McGovern and Senator Kennedy wouldn`t have an impact on the President; by the same token, I don`t know of a single thing he said during the campaign that he has not addressed in one way or another, either by policy statements, deadlines for submitting legislation and that sort of thing, with the exception of national health insurance. And I think that he is eminently correct when he talks about a phased-in program, because nobody knows what it`s going to cost, nobody knows what effect it`s going to have on the health delivery system. If you had national health insurance -- we passed a bill today and the President signed it -- you`d probably totally wreck the health delivery system in this country, because that would be like saying that everybody in this country can ride on an airplane tomorrow; and there are only so many airplanes to ride. So I think the phased-in approach is good from two standpoints: number one, the health delivery system will have to gear up for it; and number two, the cost is going to be fairly staggering and nobody knows what it`s going to be.

MacNEIL: Has Mr. Carter hardened his commitment as a result of this pushing, do you think, and that quote we heard from yesterday?

BUMPERS: No, I think he`s extremely dedicated to keeping all of his commitments. I know him well; I served with him as Governor for four years, and he`s extremely sensitive about his commitments and his promises, and I honestly think that he will come forth with a national health insurance program. I hope he does; I favor it. I favor all of these laudable goals and worthy purposes which Senator McGovern espouses, and I think we need to get at the business of doing it. But I do think that President Carter is sensitive to not leaving the runaway fiscal problems of this country to another generation. I think he wants to tackle it himself, and I think it takes a lot of courage to say to people who are accustomed to getting all kinds of federal funds, that we`re going cut here and we`re going to cut there and we`re going to have a balanced budget.

MacNEIL: Thank you, sir. Jim?

LEHRER: And that brings us to another issue raised by Senator McGovern and others, and that`s the trade-off between a balanced budget and social programs. In your speech, Senator McGovern, you said, "Let us insist that we will not balance the federal budget on the backs of the poor, the hungry and the jobless." And here`s what the President had to say about that:

CARTER: One point is that we aim to balance the budget in 1981 in a strong and healthy economy with the revenues that come into the government when people are employed and our industrial capacity is being used. It`s not legitimate spending on human needs that causes federal deficits; it`s principally the inadequate revenues that come in from a sluggish economy that create those deficits. Understanding that is a very good move in the right direction. Cutting back programs that really help people is not the way to balance the budget. (Applause.) But even with adequate revenues we`ll still have to make some hard choices about how we spend the taxpayers` money. We can`t afford to do everything.

LEHRER: We can`t afford to do everything, says the President. What do you say, Senator McGovern?

McGOVERN: Nobody can quarrel with that. You know, we have a tendency in these debates to set up straw men and then knock them down. I don`t know anyone who has argued that we can afford to do everything we want to do. The issue is not so much whether we`re going to have more government spending or less, but how the money is going to be spent -that`s the thing that we want to keep our eye on. One of the United Auto Workers members who spoke here a moment ago that you had on the screen said that the President had indicated in 1976 that he believed that military spending was too high; and he did express that repeatedly. He talked in terms of a five to seven billion cut in military outlays, but that isn`t what happened. What happened this year was a budget from this administration that called for almost a twelve billion dollar increase above the level we were at in 1976, or in fiscal 1977. Yet when the new farm program from the administration was submitted to our Committee on Agriculture, there was a flat cut-off on that program that would have had the effect, if we had accepted it, of putting farm returns at about fifty percent of the fair price -- about fifty percent of what we used to call parity. So the economy axe went into play when it came to the farmers, when it came to the small landholders, but the military were told, twelve billion dollars more this year than you got last year. That`s not, in my judgment, the way to balance the budget. I`d like to see the budget balanced, too, but not while we give the Pentagon everything they want and then call on the ordinary people of this country to make the sacrifices.

LEHRER: Senator Bumpers, do you agree with Senator McGovern that this question of balancing the budget versus social programs is a straw man issue?

BUMPERS: No, I don`t. I think that -- as I said a moment ago -I agree with Senator McGovern on one thing: I still think the defense budget is too high. But you must bear in mind that the President submitted a budget that was $2.7 billion less than President Ford, his predecessor, had suggested. And I think that this coming year, as he has had a year to operate on it, he`ll do even better than that. By the same token, you know, the liberals want to balance the budget out of that inexhaustible bank, the Defense Department; and the conservatives, of course, want to balance it out of welfare and food stamp programs and other very worthwhile social programs. And no matter what the President wants he`s going to have a very difficult time balancing the budget with the Congress because we all have our own pet interests. Some are military, some are social programs and what have you. But I think that what he`s trying to do is not to disrupt the economy of this country so that literally hundreds of thousands or millions of people lose their jobs while he`s trying to balance the budget and come to grips with the most critical problem, and that`s energy.

LEHRER: Do you get the feeling, Senator Bumpers, that President Carter is willing to sacrifice some of these crucial social things, to use Senator McGovern`s word, to balance the budget? Is the balanced budget too much of an end for you, do you think?

BUMPERS: I don`t know, but I hope not. I think that, for example, it`s very pap in this country and popular in a lot of sections to talk about food stamps and welfare and the waste in those programs; that`s be cause that`s so visible. But if you go down to the Pentagon, you know, if you look in the right places you`ll find some waste that makes that look like peanuts. And the only point I`m trying to make is, I would hope that President Carter would understand -- and I`m inclined to agree with Senator McGovern on this -- that there are millions of disenchanted people in this country that are legitimately disenchanted because they have never really had a chance, they`ve never had an opportunity. So to answer your question, I hope that he doesn`t feel that he can balance the budget almost totally in that direction.

LEHRER: All right. Robin?

MacNEIL: The liberal grievances of Mr. Carter include what they feel is his failure to move aggressively enough to reduce unemployment. Senator McGovern pointed out that last year Jimmy Carter said that full employment was his first priority. Here`s how President Carter answered that yesterday:

CARTER: To get our economy moving again in the short four months that I`ve been in office we`ve proposed both direct creation of jobs and permanent tax reduction for the low-income and middle-income taxpayers. Last week I signed a bill: public works which will provide both necessary community improvements where you live, plus about 600,000 jobs, concentrated in areas of high unemployment. We have proposed more than doubling the existing job program for the long-term unemployed and the young, and Congress has already appropriated the money that we requested to increase public service jobs from 310,000 to 725,000.

MacNEIL: Senator McGovern, in your ADA speech you accused this administration of resorting to the Republican economics of tolerating unemployment to temper inflation. After that list of the President`s claims of his accomplishments in that field, do you still believe that?

McGOVERN: Well, we used to get the same kind of claims from the previous administration, Mr. MacNeil. I want to give President Carter credit for these steps that he has just ticked off; they are worthwhile. The problem is that they`re so timid in comparison with the problems that confront this country. We used to talk in the 1960`s about the crisis in the cities. It`s still there: the deterioration of the neighborhoods, the despair, the bad housing; all of those things that were with us ten years ago are with us today. And I don`t think the vision of the administration has yet encompassed the dimensions of these problems that confront the country. We had an opportunity in my part of the nation to move ahead on water projects that had been carefully studied by the Congress, that were desperately needed in the drought-stricken West and that would have provided tens of thousands of jobs in programs that were already ready to go. And yet, within a few days after taking office the administration moved to slow down, possibly to destroy those programs. So while the President has done some things that I applaud, including these matters that have just been quoted on television, I`m dissatisfied with the pace and the sense of urgency with which we`re moving.

MacNEIL: Senator Bumpers?

BUMPERS: Well, Robert, first of all, I think you ought to bear in mind that we are presently at an unemployment rate which had been set as a goal for the end of this year. When President Carter took office the unemployment rate in this country was 7.8 percent. As of the first day of May it was seven percent; that`s a drop of eight-tenths of one percent, and that`s almost 700,000 more people in jobs. Now, I think that`s a fairly dramatic - - frankly, I don`t think the President can take credit for that. I think those things were sort of in motion at the time he took office. By the same token, I think it bodes well for the whole country. That`s one of the most dramatic drops in unemployment in the history of the country, and I think the decline is going to continue. And just in the last three weeks his economic stimulus, which contains almost $16 billion in cyclical revenue sharing for cities who have high unemployment rates; in public service jobs, almost nine billion dollars; four billion dollars for public works projects; and then in addition to that something like a five billion dollar tax cut for this year which expands to a twelve billion dollar tax cut next year. The President has a $1.8 billion youth unemployment act that`s ready to pass the House and I think will pass the Senate with flying colors. All of those things can`t help but have a very dramatic effect on continuing to decrease the unemployment rate. I don`t see how it could be going any faster.

MacNEIL: Thank you, sir. Jim?

LEHRER: On the subject of taxes Senator McGovern said to the ADA, "It is a curious double standard which tells only the worst off among us to ask what they can do for the economy. Thus, a tax cut for individuals was withdrawn as inflationary, while a tax credit for industry was defended as expansionary." Carter addressed that point as well.

CARTER: We support extending the earned income tax credit for working people and a general personal tax credit, which together add up to $6.8 billion annually in individual tax relief, mostly for low- and middle- income families, including those families too poor to owe any income tax. And also I will sign into law within the next few days - Congress has already passed -- a permanent four billion dollar tax cut through increases in the standard deduction. Eighty eight percent of this tax relief will go to families with incomes of less than $15,000, and 3.3 million low-income taxpayers who now pay taxes will not have to pay any federal income taxes at all.

LEHRER: Senator McGovern, does that adequately answer your complaint?

McGOVERN: No, I`m afraid it does not.

(Laughter.)

McGOVERN: Again, I want to give the President credit for what he has done. I feel a little bit embarrassed, always being on the critical end of this discussion...

LEHRER: (Laughing.) You started it, Senator.

McGOVERN:...because I do want to recognize the progress that has been made; it`s really a question of degree that we`re talking about here. We`d probably have to give the President, if we were grading this, maybe about a B minus or a C plus.

LEHRER: What kind of grade would you give him? Would you give him a grade that high?

BUMPERS: I`d give him between a B and a B plus, yes.

McGOVERN: Some of the things that he was talking about here were things that the Ford administration did and that were simply extended. I`m glad he used the word "extend," because some of these tax credits that he was referring to were there. But you have to keep in mind that we have a tax system that was described by President Carter when he was a candidate a year ago as a disgrace to the human race. He didn`t say it needed to be tinkered with a little bit, two or three billion here and a billion there; he said it was a disgrace. And one of those disgraces is that if you look at eleven of the major loopholes in that tax law, or tax exemptions, thirty-three percent of the value of that goes to about one percent of our people. That tax code is unfair. It`s still loaded on the side of the rich and the powerful and the clever, and the ordinary working people of this country are paying a disproportionate share of the load.

LEHRER: Senator Bumpers.

BUMPERS: I agree with Jimmy Carter that our tax system is a disgrace to the human race, and I agree with Senator McGovern that something ought to be done about it; and President Carter has said that he is going to come with a tax program this fall. It`s an immensely complex thing. You can`t do it overnight. But I think he`s dedicated to it. I came here not to defend the administration; I found myself in a position of defending it more than I had intended to, but I believe what I`m saying and I would say I don`t think the President really addressed Senator McGovern`s criticism as well as he could have. Because what Senator McGovern said was that he thought it was curious that the tax rebate -- and he said tax cut; I assume you meant the fifty dollar tax rebate that he was proposing to the American people which he dropped -- at the same time he also said, "I want these business tax cuts dropped." And it was Senator Long in the Senate Finance Committee that kept those in, it was not the President. He asked that they be dropped.

McGOVERN: I agree with that, and I want to commend what Senator Bumpers had said. If you look at my speech you`ll see that I didn`t blame that on the President.

LEHRER: All right. We just have a couple of minutes left, gentlemen. Some people say that the underlying issue in all this -- what the President said, what you said, and all the comments that have followed -- is that President Carter and others may be redefining what a Democrat means. Senator Bumpers, do you agree with that?

BUMPERS:I watched my good friend and colleague from Colorado yesterday on another television show...

LEHRER: Right. Senator Hart on "Meet the Press" --NBC.

BUMPERS: Senator Gary Hart, right, and I thought Senator Hart said something extremely well, and that is that there are a lot of people -and I like to consider myself a member of them -- who don`t feel that, number one, throwing money at problems is any necessary cure-all, and number two, that those so-called "New Deal" solutions are any longer viable solutions. And I think the whole thing needs to be re-evaluated for the kinds of approaches we use to solving problems. I resent, for one, being labeled, and I`d like to think this country`s becoming politically mature enough to drop liberal and conservative labels, because I happen to think that the Pentagon spends too much money and that makes me a liberal. But I also think there`s waste in a lot of social programs, and that makes me a conservative. All I`m trying to do is be realistic and strike some kind of a balance.

LEHRER: Senator McGovern, is Jimmy Carter a new Democrat or an old conservative Democrat, or do those terms mean anything any more -- do you agree with Senator Bumpers?

McGOVERN: I don`t think they mean all that much. I don`t know anybody in the United States Senate who likes a label. Nobody particularly enjoys being labeled because we want to preserve our freedom; we want to be able to think through each issue on its own merits. I would disagree with my friend Gary Hart that the basic difference today is among generations. I don`t think that`s true. There`s probably nobody in the Senate that spends any more time probing the minds of young people than I do, and some of them are very creative and some of them aren`t as creative and innovative as some of my senior colleagues, so I don`t think that`s the answer, either.

LEHRER: But he raised the point, and it was reiterated just now by Senator Bumpers, and that`s the question of, can the government do everything? He calls for a re-examination of that as basic liberal ideology, and are you willing to do that?

McGOVERN: Absolutely, and I`ve been advocating that for five or six years. There`s no question that some of the old New Deal solutions are out of date and we have to have some new approaches. But if you`re sitting there without a job, especially if it`s been going on for two or three years, you don`t want too much theorizing, you want some action.

LEHRER: Senator, we`re sitting here without time. Gentlemen, thank you both very much. Robin?

MacNEIL: Thank you both, Senators. Good night, Jim. That`s all for tonight. Jim Lehrer and I will be back tomorrow night, when we`ll examine the meaning of Israel`s upset election. I`m Robert MacNeil. Good night.