Steve Forbes' Question and Answer session 
The Oyster River High School, Durham, NH
February 3, 1996 Transcribed by Alexandra Jewett
Questions were delivered without the aid of a microphone.

Question from student.
What are we going to do about this country's crime rate?

Answer:
 The question is what are we going to do about America's crime rate? As
you know violent crime has increased five fold in the last thirty years in
America, there is a lot that can be done starting with something called
truth in sentencing. That is if you committee a violent crime you should
serve the full sentence the first time, there is no reason why if a
criminal is sentenced to ten years in jail, there is no reason why that
criminal, violent criminal should be out in two or three years to
terrorize us again. 
 Do you know there is something called three strikes and your out if you
committee three violent crimes, you serve a life sentence. My attitude is
why should you have two violent crimes on the house? If you serve the
sentence, the full sentence th e first time, there might not be a second,
third, or fourth or fifth time. Start with truth in sentencing, that's
where we should begin. Also too, if it is necessary, we must build more
prisons, to hold violent criminals. The state of Texas, for example has
done that for several years. 
 Violent crime has made a dramatic decline there. Keep the violent
criminals off the streets, there's less likely they are going to harm us.
Third thing to be done is community policing, more pro-active approach in
our big cities. New York City's tried that, removing arms from people who
shouldn't have them, people who are felons, people who are members of
gangs, people who violate the law, and in a period of two years by taking
that pro-active approach and not harassing law abiding people, but going
after those who are breaking the law as a result in New York City, the
murder rate, the murder rate has fallen by almost 35% in the last two
years. Those are the kind of steps that can be taken. Now with those with
those steps, we don't have to be passive about it, we don't have to be
accepting of it, we can do something about it, it is high time we did,
because when we do we can make real progress against violent crime. 
 [Applause]
Gentleman over there

Question from student:
 What's your views on education?

Answer:
 The question concerns education. I believe that that the key to reforming
education in America is getting it back as close to the parents as
possible. And that means I think that in many of our districts in America,
to get education back on track again, we do need genuine parental control,
through school choice, vouchers, charter schools, in the light. 
 [applause] 
 And it means it means the busting up the Education department,
it means busting up the monopoly the National Education Association holds
on too many districts in America. 
 [applause] 
 It also means that one of the
first things I'll do as president is scrap Goals 2000. 
  All you all you have to do is look at their recommendations on American
history, they're an atrocity, it's as if they took everyo ne who had
something against America, every enemy asked them to write American
history. That's got to go, it's got to get down to the parental level. Yes
sir. 

 Question:
  First of all I would like to ask the fellow in the red jacket to stop
flashing that light, [inaudible] it's getting in my eyes, second of all as
you mentioned the flat tax, does that mean that we people are going to
have our money, that means the government is going to have less, that
means government has to [inaudible], you mentioned the Internal Revenue is
willing Have you worked out a plan for other departments in ah and other
agencies in the federal government and ah what would that plan be? 

Answer: The question concerns how can we move ahead in terms with reducing
the government with the flat tax. One of the reasons why, let me give you
the reasons why the flat tax is not going to hurt the govern.., hurt the
American people, it's going to help the economy. First were going to have
greater growth, that will increase government revenues. Also we are going
to have greater compliance. Greater compliance, this is something that the
opponents of the flat tax refuse to understand. By greater compliance, the
simplicity will raise billions of dollars. Also what's not well known that
in America today, because of the complexity of the tax code, we spend up
to three billion dollars a year just complying with this monstrosity. The
American people spend up to six billion hours a year filling out tax
forms. So with the flat tax, we already start to improve the quality of
life in America, you'll have a couple of billion extra hours to do what
you want to do, not what the IRS wants you to do.
 [Applause]
 And, and in terms of spending cuts, I mentioned the IRS, there are other
things that can be down in terms of downsizing or eliminating departments,
including education, energy, a lot that can be privatised there, commerce,
the weather bureau can be privatised, other programs can be shut down,
Housing and Urban development, the same thing. Agencies, I mentioned the
IRS, but also the FCC and other agencies. There is a heck of a lot of
things that need to be done to reduce the size and scope of government, we
won't be able to do it in one session of Congress. But we will do it,
we'll stick right to it and therefore to reform Washington's finances,
we'll do it in a way that leaves America stronger. Stronger economy, more
opportunity, more jobs and more better paying job s. 

Applause

Question:
 Do believe in choosing a strong Secretary of State and who would be your
dream choose? 

 Answer:
 Ah, the question concerns, would I want a strong Secretary of State, I do
want a strong Vice President and I do want a strong cabinet. I don't mind
strong people, I don't mind those kinds of internal debates in give and
take. I don't mind it at all, because that's how we can move ahead. The
people I am looking for are people, who recognize the mission that we're
there for, who have a share vision, who are smart enough and experienced
enough to know, that life is not a straight line, there are plenty of  
ditches in the road, plenty of curves, we're not going to become, we are not
going to become prisons of Washington's in boxes. We're not going to
forget the purpose that we are there for, we need a sensible foreign
policy, we need a strong foreign policy, but a sensible one. America must
not make the mistake we made in the twenties and thirties, by withdrawing
from the world. We and the world paid a fearful price for it. We are a
stabilizing influence in the world, so I want a Secretary of State who
underst ands that. But also understands, including the Secretary Of
Defense, that our military is there to defend us, they can't do social
work in other countries. 

 Applause
 The gentleman there with the cap

 Question:
 Yes I was wondering how you felt about the issue of abortion?

 Answer:
 The question concerns the issue of abortion. On abortion, I want
abortions to disappear, vanish in America. That can only happen in a
democracy, if you have a change of heart, a change of attitude, change of
conscience, change of opinion. To move the issue forward, I think we
should start where we have a consensus, by banning abortions in late
pregnancy, barring a life threatening emergency, banning abortion for the
purposes of sex selection for the baby, not having mandatory Government
funding on a sensitive issue like that. Being the father of five girls, I
certainly would want parental notification in the case of minors. To move
beyond that is going to take persuasion. Can persuasion take place, yes it
can. It's happened before in our history. We have
 to remember that to change the law, you must first change the culture.
You change the culture, you change the law, little by little, must bring
the American people each step of the way, there is no other way in a
democracy. I have of a goal of someday having abortions disappear in
America, but we are going to have to do it step by step. There's no short
cuts in a democracy. 

 [Applause]
 Yes ah mum

 Question:
 I certainly see the critiques on your tax plan, but on the other hand all
of us have read articles over the years how major corporations, or very
wealthy never pay tenure in past, I think it would be very helpful if you
have any examples, how these things happened in the past and they got away
with it and the government didn't seem too severe and how your proposal,
[inaudible] on that. 

 Answer:
 Well the virtue of the flat tax, concerning noncompliance with the tax
code, is that when you have a simple tax code that everyone understands,
you don't have it loopholed, you don't have it riddled with exemptions.
Therefore if you make more more taxes paid. It's that simple, there's no
way with the flat tax, the ways to jiggle the tax code almost go down to
zero. So you're right that in the past the very complexity of the tax
code, left plenty of room for maneuvering around the provisions of the tax
co de. This way it is simple, honest, everyone understands it, it's filled
out on a postcard. I think by the way of the tax's very simplicity, is
it's best guarantee that the politicians can't fool with it again.
Simplicity is a virtue, everyone understands it, very hard for the
politicians to manipulate it again. Why donıt we take the young man over
there. Oh, oh, we'll do both, why don't you go first and then then... 

Question:
If your tax code wins you the oval office, what makes you think that 
you're going to get it through the Washington politicians?

Answer: Question is, how do we get the flat tax through the barriers of
the Washington culture and the Washington politicians? The answer is two
fold, one is we need an unmistakable mandate for the voters that this is
what the American people want. That's what we can do in 1996. Without a
real mandate from the voters, it is going to be extremely hard to get any
mandate through. Also after I take office of President, there will be
moments when Congress will bog down on it for all the reasons we know and
at those m oments, I am going to have to go over the heads of Congress,
appeal to the people. To you the people, to put pressure on your
representatives with letters, telephones, telegraphs, faxes, email,
whatever, to put pressure to move the thing a long. We have a good
democracy and when pressure is applied, the people in Washington like to
stay there. If the American people are unmistakeful in their voice, we can
get something done. I think with Ronald Reagan who said, "If you applied
enough heat, even the politicians will see the light." And with your help
we can have a very enlightening session in Congress. 

 [Laugh, applause]
 The gentlemen there

 Question:
 Um I'm interested in where you stand on Americaıs involvement in Bosnia. 

 Answer:
 The question concerns Americaıs involvement in Bosnia. As you know, some
of you may have heard the news today that we have had our first casualty
in Bosnia, victim of a land mine, our hearts and prays go out to the
man's, the soldier's family. But in Bosnia, it's no secret that I was on
record of opposing putting our people there, and the reason for it was
that I thought that there was a better way to do it. Now that our people
are there, we must support them and rally around them. But two things that
sh ould have been done a few years ago, are still two things that should
be done today, because eventually our people will come out. The first is,
make sure that the Bosnian Muslims have the arms to defend themselves. That
way they're less likely to be victims of aggression. When an aggressor
knows, that they are going to be fiercely resisted, they're less likely to
attack in the first place. Second, along the same lines, we should make it
very clear, that we will use NATO air power, to strike against military
build ups by other the Serbs or the Croats, if that becomes necessary. If
we do those two things, I think that there is a chance, at least a chance,
that the war won't have a full scale resumption, when the peace keepers
are withdrawn. If we don't do th ose two things, I am afraid that the war
will resume when our people are withdrawn.  

 Applause 
 Question from student: What do you have to say about the issue of health
care? 

 Answer:
 The question is what do I have to say about the issue of health care. I
think that in America, we can reform health care in a very positive way.
And get off a treadmill and face the, what I fear is a treadmill,um ever
rising expenses and ever lessening benefits, not only with Medicare, but
also even in the private sector, where there maybe growing hostility on
the part of some manage care firms to innovations, because initially they
are very expensive. 
 So I would start with Medicare and put in a concept called medical
savings accounts. Let me just quickly describe how medical savings
accounts would work, each beneficiary of Medicare on the virtue of Medical
savings accounts is simply each beneficiary has more control, more
coverage and less costs. It works like this, each beneficiary gets between
$1500 and $2000 a year in the medical savings account. The exact amount
will depend upon whether beneficiary choices fee for service or some form
of manage care.  It should be your choice, the beneficiaries ch oose, not
a bureaucrats choice, genuine choose, then that way with your medical
savings account, you can pay for routine expenses, prescriptions, doctor's
visits and the like. You don't have to worry whether the medical
bureaucracy approves of it or not, your position does, you can do it. If
your blessed with good health at the end of the year, at the end of the
year, you get to keep what is left in your medical savings account. That's
one part of it, the second part is, you have full total catastrophic
coverage above the Medicare, the $3000 level. No more of gaps, you have
you full coverage above that level. 
 Now between the $1500 and the $2000 and the $3000, you'll still come out
ahead if you are a beneficiary of Medicare, because as you know, Medicare
has huge gaps, huge holes in it. And therefore beneficiaries have to buy
most of them something called meda-gap insurance, which is now becoming
very expensive. More over on part A on Medicare, you have a high hospital
deductible, a little over $700, on part B of Medicare you have to have
copays on many situations of 20%, with no cap on your ultimate liability.
That's how you can go bankrupt with those lack of those caps. In your
medical savings account your liability is limited, you have more coverage,
you spend less out of pocket, because you don't have to buy meda-gap
insurance or worry about those high deductibles anymore. So you come out
ahead.
 So why the Republicans in Congress didn't move ahead with that, I don't
know why they didnıt they make that their center piece. They have a
variation of it, but they did not make it their center piece. In Forbe's
magazine we tried a variation of medical savings accounts a few years ago,
expenses went down, they're still lower today than they were four years
ago. No one was forced in to manage care, no one was stripped of their
benefits. It works and ultimately I would like to see medical savings
accounts, once we show that it can work with Medicare, go in widely used
in the private sector, because millions of people who are without
insurance are often people in between jobs. Either because they have lost
it or they wish to change jobs. In medical savings accounts you own the
policy, your employer might pay for it, but its your property, you take it
with you wh en you want. That way you have more freedom and less anxiety
and better coverage. 

 [Applause]
 Yes mam

 Question:
 [Inaudible phrase] your flat tax program frees up your money for 
investment, um what is...

 Forbes:
 But also takes the burden off the American people

 Question:
 Okay, well what would be the the assurances that you would be able to
offer working people who are dependent on jobs. If that money would be
reinvested in jobs for this country rather than for example in the merging
markets, which is one of the problems that happened in Mexico and then US
tax payers were forced to bail out Mexico, um would you have any
assurances that money would be plugged back into our economy to give
Americans jobs so that we can pay it back. 

 Answer:
 The reason that the money, the reason that you would see a boom in
America, is when the American people are unleashed and the opportunities
that we'll have here at home, you will see not only money from America
being invested in America, you will see that the other countries will
catch on to what we have done to our tax code, a flood of foreign
investment as well in America. We will be the investment mecca of the
world. 
 What they see now starting to happen, BMW putting up a facility in
South Carolina, Mer cedes putting a facility in Alabama, we will become a
flood tide, we will be the mecca, we will be the center. Don't worry about
money coming to America, in fact some will complain that too much will be
coming in. We'll have an investment boom that will rival and exceed
anything that we have seen in our history. This is very important to
understand why we must have this rapid growth in America, we are at a time
of significant change. 
 There is no safe harbor left. Any one of us could wake up in a morning
and suddenly find out that the rug has been pulled out from under us in
terms of something happening in the work place. If we have the kind of
slow growth, sluggish pace that we had in the recent years, we aren't
going to create the jobs that enable people to quickly get back on their
feet for better opportunities if something happens in their current
situation. We're right now like a patient that has walking pneumonia, not
enough to put you in bed, but certainly not enough to run that marathon
race. That's why we must removeŒs why we must remove these barriers, there
is no reason for them anymore. The quicker we do it , the better all of us
are going be and the more nights that weıre going be able to sleep. Yes
mam

Question:
[inaudible]

 Answer:
 She asked about the environment. This concerns the policy on the
environment. I think that one of the things that we should be very proud
of in the last twenty-five years, is that we have made real progress in
America in terms of air and water quality. It doesn't mean that we rest on
oars
 [applause], but we have made we have made some real progress and there
are some basic principles that I think should apply to environmentalism,
one is that we do have to curb bureaucratic excesses, that is why there is
be some kind of back lash. For example we saw it on wetlands, there is no
reason why, if you get a rain storm, your front lawn should qualify as a
wetland. But unfortunately too often that can happen, there are have been
real abuses. Second there should be a respect for science, not fall into a
motion no more alar on the apples that we had a few years ago, where an
industry was nearly destroyed based on bogus science. So lets stick to the
facts. Third, there is no harm in trying to have cost benefit analysis to
make sure that we are getting something for those dollars that we spend in
terms in improving our quality of life. 
 A favorite story of mine, several years ago in Columbus, Ohio, one of the
papers ran a story, they wanted to put in a parking lot, the way the regs
were written they had to dig up all of the dirt in the parking lot, for
the proposed parking lot, ship it to be burned and cleansed, brought back
again, put it in the hole and then the tar put back, put on top of it.
Kind of a waste of resources, and for what, that should be avoided. Also
too we should get the job done, where we need to get the job done. I.E.
Super Fund, right now, much of that money if not the majority are going to
lawyers and court room fees. If you have a haz hazard clean the darn thing
up, don't let the lawyers, I know that there are some lawyers here but you
can get rich other ways 
 [laughter]. 
 No no need no need to suck off of Super Fund, lets get the job done and
finally allow for a little bit of innovation and imagination. There's no
need for ten thousand page blue prints, instruction manuals from
Washington. Set a goal and let the American people figure out the most
innovative, imaginative way to do it. And then I think we will continue to
make progress in imp roving the quality of life in our country. 

 [Applause]
 Okay, we'll do you

 Question from student
 [inaudible] Other then getting parents back into control in the schools,
and letting them choose what public school we can go to, what else do you
plan on doing with education? 

 Answer:
 The question is in addition to parental control in the schools, what else
can we do for education? On the federal level I mentioned doing away with
some things that I call harm the patient. I do believe though that it is
absolutely vital to get it back to the parents. There are various ways of
doing school choose. Minnesota has a way of doing it, Milwaukee has a way
of doing it, there are various ways of doing it. I'm not going to dictate
it from Washington. But in terms of when parents get more control o f
schools, I think you are going to see higher standards. I think you are
going to see higher standards of discipline even in the faces of some
adverse court decisions. 
 On the collegiate and university level, I think that there is no harm for
the federal government, certainly will do it when Iım president, there are
folks that say why can't these institutions get control of their costs
better.  
 Applause 
 And and you do that, you do that just by asking a very
simple question, and that is how many hours do tenured professors teach
undergraduates in the classroom each week verses thirty or forty years
ago. That's where we start. 
 [Applause]
 I I have to confess a few years ago, a few months ago I was at the
university and made that suggestion, I made sure I knew where the exit
sign was... 
[laughter] But one of the deans came up to me afterwards and
said that there was a heck of a lot that could be done more out of the
resources there. 

 Question from student: Um, in the environment do plan to make it a law,
well its not actually going to happen unless you make a law, to have
several cars that use less gas to allow that [inaudible]. 

 Answer:
 Ah the question concerns tightening tightening air emissions for
automobiles. And the answer is that the real progress has been made in the
last twenty years. The real problem with air emissions are with older
vehicles, there was once a proposal to buy up some of the clunkers,
because they do have the real air pollution problems. But knew vehicles
today, air emissions are very very much smaller. There is a separate
question that is in terms of food and fuel efficiency, I don't want to get
the Government in that even more. We do have fuel efficient cars today and
the problem is that when you put regs on, you get some crazy situations
where companies end up skewing their fleets, skewing their marketing plans
in ways that to meet these things, but do it in a way that does no good
for the American people. The abuses have been real and so w I think we
have a good emissions standard today. I don't think that we need to
tighten them further. The real problem is with older vehicles, the real
concentration should be, how do we get those off of the road as fast as we
can. And one way to do it is with a vibrant economy, so we want to buy new
cars and send the others to the junk yard.  

 [Applause] Yes mam

 Question:
How  did you arrive at 17% for the tax rate, why not why not 13% or 19% or...

 Answer: The question is how did I arrive at the tax rate for my flat tax
plan. I took off from a proposal by House Republican leader, Dick Army,
was a three year phase into 17%. My plan has some higher exemptions,
because I believe in a dynamic economy.He is cons trained by the
Congressional Budget office, which doesn't believe that good things come
when you release people from these tax burdens. So my exemptions are a
little generous, more generous than his, my phase in is a little faster.
But it goes down to sev enteen and you're right, we should not stop at
seventeen, once the American economy is moving again, I want to reduce the
rate, further and further and further. We won't get it to zero emissions
you might say but ah that wouldn't be a bad goal.  
 [Applause]
 Yes sir
 Question: In lew of the ah the term limit for Congressmen, what would
you feel about having ah the politicians evolve in Washington going back
to their own district for ten months of the year and only go to Washington
stay one week a quarter, two months of the year total for national
business and that doing local business [inaudible]. How do you think
that would help you as president and where do you think that would leave
the government as a whole in general? [inaudible]

 Answer:
 The question is until we get term limits having politicians spend more
time outside of Washington, than in Washington. Given the harm that
sometimes Congress does, I almost double their pay to keep them out of
Washington. 
 [Laughter]
 But seriously, seriously, the way to start getting out of Washington is
stripping away the power in Washington. Because otherwise they'll find
ways ah of still doing mischief. There will still be people knocking on
their doors, and so you remove the sourc e of the pollution, which I think
is the complicated tax code that the principle source. There are other
things that have to be done, but strip away their source of power and
there will be less time for things for them to do. Less reasons for
petitioners to knock on their doors, so that's where I want to start. Take
away their source of power. That's the way to do it.
 By the way, I know
that this is going to be misinterpreted by my opponents. You'll soon see
ads on it. I can't help but share with you a su ggestion made by an
audience like this a few weeks ago. A person raised his hand and he said, "I
have a proposal to curb the expenses of Congress." I said,"Okay what is it?"
And he said, "We should raise their pay, it is now about $140,000 a year,
to a million dollars a year."  All of us scratched our heads wondering ah
ought oh, does he understand what he is saying, and he saw the puzzlement
on my face and said, no you don't understand. I haven't finished this this
proposal yet, he said. He said in return for that million dollar salary,
they have to give up their three to four million dollar budgets for office
staff, they have to pay for all the mailings they do, they have to pay for
their own pensions, they have to pay for their own overseas trips. And he
said that way, when they they realize their own money instead of
taxpayers money. They would probably spend less of it .... 
 [Applaus] Now
now, I know what's going to happen you are going to soon see an ad on
t.v., Steve Forbes proposes raising Congressional salaries.  
 [Laughter] Yes sir

Question: Yes ah Steve, first congratulations on winning the dessert poll
and choosing apple pie. One of your opponents who choose grand marie
crepes favors protectionism and high tariffs. I was wondering whether you
would commit on protectionalism and high tariffs , as well as the current
enthusiasm for possibibly that or a national sales tax. 

Answer: Ah, in terms of tariffs, tariffs is a fancy word for taxes. Don't
forget that. Tariff is a tax. And we tried that version of high taxes and
in the past in American history, every time we did it the economy
suffered. The most horrendous example was 1929, 1930. We enacted
something called the Smoot-Holly tariff, to help bring on the great
depression. So we've tried it before and it doesnıt work. 
 In terms of a national sales tax, I believe that it has two problems, the
national sales tax verses the flat tax. One is compliance, when you have a
national sales tax at 15% to 30 %, a compliance comes in two forms. First
you have not just a tax on products, like we do with sales today, but also
it will apply to services. And services, taxes on services are very ha rd
to collect. When a kid comes in the summer and cuts your lawn, you may
have to pay a 30% sales tax, in which you pay there, that is going to be
very hard to comply with. The other part of the compliance problem, comes
with something, can be summed up in the words, "We can get it for you
whole sale."  You'll see a lot of that with the 15% to 30 % rate. And so
the Europeans tried it years ago, thatıs why they went to a value added
tax, which is very I think pernicious for two reasons, one it pos, poses a
real burden on small businesses, and also it is a hidden tax and hidden
taxes politicians love, because it's easy to raise. The other problem with
the national sales tax is the fairness problem, it does impact people with
lower incomes more than other people with higher incomes. And so I think
that the flat tax gets around that, because of those high exemptions, some
studies like to ignore. I'll say it again, every Washington, $13,000 for
each individual, $5000 for each ah child, family of four $36,000 t ax
free, family of five, $41,000 tax free. I keep having to say this, because
I can't seem to get through certain people, in Washington and else where. 
Yes Sir

 Question: Um [inaudible] with the deficit, part of the spending that you
addresses um seems to be only the discretionary spending which only
accounts for one third of the budget, and a major source of the deficit is
the entitlements, which accounts for two thirds and I was wondering what
was your plan to curb the growth in spending in entitlements and I was
wondering if you had your plan in writing available for the public. 

 Answer: The question concerns, the question concerns entitlements, the so
called entitlements in government, there, I think that the key way that
you are going to get Washington reformed, is not to do business as usual
in Washington. I explained a few minutes ago , the concept of medical
savings accounts, which introduces a whole new dynamic into American
health care. I mentioned that it gives beneficiaries, more control, more
coverage at less cost. And I emphasis the less cost, returning it
particularly to the consumers means you have better control. And just to
put this in perspective, over a seven year period with the medical savings
accounts in Medicare, you would spend one hundred and ninety-five billion
dollars less, than what they're projecting today. and that's the way to
do it, don't see it as either or zero sum. Do it a new and better way. 
Now you say what about Social Security. I have an idea there as well.
 I know it is the third rail of politics, youıre not suppose to touch it, but
being an outsider, I have been touching a lot of things that I shouldn't,
but go a head with this one. In terms of Social Security, we do have to
keep our promises, to those who are on the system in terms of benefits and
those that are going to go on the system in the next twelve to fifteen
years. But we all know and especially younger people know, that the 
system  is going to be broke, broken, bankrupt, hemorrhaging, by the time they
retire. So while we still have time and this one of the faults of
Washington, when it is clear that you're going to have a problem twenty to
twenty-five years down the road, the temptation is to say itıs going to
be on somebody else's watch, don't worry about it, sluff it off, I'll just
win the next election. 
 In the Forbe's administration, we're not going to
do that, we are going to deal with the problem and while we still have tim
e, what we are going to do, while we keep the old system for those who are
on it, and those that are going to be on it for a period of time. For the
next twelve to fifteen years, people are going to go on the system, we we
will meet those promises, but for younger people we are going to
introduce a new system. A new system where a portion of the young people's
pay roll tax that now goes directly to Washington, will instead go to
those young people's own individual savings or retirement accounts. 

[Applause] 
 This way this way we keep the contract, the younger people have something
there when they retire, when they will now with the current system. The
money is out of the hands of the Washington politicians, the same people
who brought you S and L's, it also it also means the money will be
invested in the real American economy, which will make America stronger.
You make those kinds of changes, positive changes and I guarantee you that
we will reform the finance of the Washington, but do so in a way that
leaves America stronger. 

 Questioner: Do have that in writing?

 Forbes:
 Ah there are various, on the medical savings accounts, there's a lot of
literature on it. There one of the best sources is the National Center of
Policy Analysis in Dallas. [inaudible]
 Yeah a variation of that and also in terms of ah medical in terms of ah
reforming Social Security, there are a number of think tanks that are
doing some studies on it. CATO is one, there's ah another author, who ah
writes from time to time and has done some real work on it. A man name
Sam Beard, he did a Journal article in the Wall Street Journal a few
months ago, on his concept, and then there ah I think institutes, like ah
Center for Policy for Progressive Analysis or something, but there are
several think tanks that are doing it. Ah they can... 

 Question: Which ones do you endorse? 

Answer: Ah I don't endorse those positions specifically, but they do have
some good concepts that I think could form the basis of what we're doing.
It's going to take a group of experts natuaries to determine what portion
of the payroll tax at what age, goes int o your account, but those can be
worked out. It's doable, the thing is the longer we wait, the longer we
wait the more difficult it is going to be to do. We do have time now,
window of opportunity. If we wait another ten to twelve years it's going
to be very very hard and difficult to do.  Yes sir

Question:
Hi, my name is Chris Pacheko, I'm a resident here. My question for you is 
on your flat tax rate and forget my ah ignorance, but what is to keep 
that value of 17% from rising? I mean it seems like you have a lot more 
exemptions which are great, you've raised that level,  but the value of 
17%, but what is going to keep that from rising to the 24%, which is 
described in this handout. 

Answer: Ah the question is how do we keep the flat tax 17%, and not let
the politicians raise it. I emphasize that the best defense for the flat
tax, is its very simplicity, everyone sees it, everyone knows what the
rate is. And if they try and jigger the rate, t he American people will
know about it. I guarantee you that what after we've been through in
recent years, I think that any politico that runs for office trying to
raise that rate is going to have a very short time in office. Moreover I
see that 17% rate , not as the end go, but simply the beginning to
rational down further. But vigilance as Thomas Jefferson said in another
context, vigilance is the price you pay, eternal vigilance is the price
you pay for keeping tax rates low, by having a simple tax code, a simple
understandable rate and then we all can be vigilant about it. Not get
bamboozled by the Washington insiders again.  
 [Applause]
 Yes ah, yes sir

Question: I was wondering what you thought the federal government's
responsibility is concerning arts and humanities? 

Answer: The question concerns arts and humanities and ah the federal
government's role. Here again, I will ah offend some people. I believe
that America is different from Europe. If you look at what [switch
tape]..... what is art, what is a worthy institution, wh at is not a
worthy institution, and when you get involved with politics, I don't care
how many so called expert committees you have, somebody's not going to be
satisfied with it. I don't mind if the state does it or a municipality
does it or if the town w ants to do something, because they think that it
improves the quality of life to ah subsidize something, but when you do it
on the federal level, it's using tax payers' money in an area where a kind
of vibrant era, that I see ahead, that is not going to be necessary. Just
simply too much contention for too little return. We were known in the
past, we got great museums, long before the fed's got involved in the mid
1960's. I think that we can have that kind of era again. I see now that
unfortunately even though some you still have questions, that time is
running out. Let me say how grateful I am that you took the time to be
here today and how much I look forward to working with you and seeing you
in the days and weeks ahead. Thank you very much.