The President's News Conference

Held in Providence, Rhode Island

THE COAL STRIKE

THE PRESIDENT. It's nice to be here in New England, in Rhode Island, and I'm very proud to have a press conference here for the Nation.

I've just talked to the Secretary of Labor about progress on the settlement of the coal strike. They are making good progress. No final agreement has been reached.

I've been in coal mines in Pennsylvania and other places to see the miners at work. I know that they are hard-working and patriotic Americans. They and the industry leaders both recognize that there is a tremendous responsibility on their shoulders, because the future of the unions, the future of an effective collective bargaining process, the future of the coal industry, and the we]fare of our Nation depends upon the success of these negotiations.

They've been bargaining now, steadily, since they began at the White House a day and a half ago. They continued in their discussions until 2 o'clock this morning, and then after that, management with the Secretary of Labor from 2:30 until 5 in the morning. And I've asked them to stay at the bargaining table until a final agreement is reached.

I have confidence that they will be successful, because they and I want to avoid the necessity for me, as President, to take more serious action if the bargaining process is not effective. The whole Nation is looking to them with hope and with confidence.

THE NATION'S ECONOMY

Before I answer your questions, I'd like to cover one other point that's very crucial to New England, and that is the Nation's economy. In many ways, our economy last year was good. The inflation rate went down, and wages, profits, production, housing starts, real income, investment all went up.

Four million new jobs were created, an all time record, and many of these jobs, I'm glad to say, were in New England. Employment here in New England last year went up 5 1/2 percent. The unemployment rate dropped 3 full percentage points, from 8 1/2 percent down to 5 1/2 percent. But unemployment and inflation is still higher than I'm willing to accept, and so my top priority this year on the domestic scene is still the economy.

I've asked the Congress to help me put into effect a coherent program to make more jobs and to bring inflation closer under control. We need a cooperative anti-inflation effort, with voluntary action being taken by industry and by labor to keep wages and prices from pushing each other up.

We need an expanded jobs program to help those who are hit hardest by unemployment. Next week I will send to the Congress legislation that would reauthorize the $12 billion Comprehensive Employment and Training Act, provide for 725,000 public service jobs and for a billion dollar youth employment and training program.

Also, we need tax reduction and tax reform. They go together. They add up to $25 billion in net cuts in the income taxes Americans have to pay, and they are also designed to create an additional 1 million new jobs. Seventeen billion dollars of this tax cut will be for working families in our country, personal income tax reductions, and the rest in corporate tax reductions.

Corporations will also receive higher tax credits for investing in the sort of new plants, new equipment that will make New England and the rest of the Nation competitive with aggressive foreign exports.

But we can't have these cuts in taxes unless we help pay for them by eliminating some of our unnecessary and unwarranted income tax subsidies. Two of these are the deferral subsidy and the DISC subsidies. Both have a particularly bad effect in New England, where competition from abroad has had such a terrible effect on businessmen and on workers alike.

The deferral subsidy sets a situation in effect where multilateral corporations pay lower taxes on foreign profits than they pay on their U.S. profits. This amounts to subsidizing corporations to export jobs overseas. The so-called DISC subsidies are just as bad. They let U.S. corporations set up dummy corporations to handle foreign exports, so as to keep from paying U.S. taxes on half their profits. Both these giveaways go overwhelmingly to a few of the largest multinational corporations, and both mean that the average taxpayer has to pay the bill, more taxes, just to take up the slack caused by these subsidies. And both cost America, and particularly New England, jobs. Both loopholes should be closed.

As for the famous three-martini lunch, I don't care how many martinis anyone has with lunch, but I am concerned about who picks up the check. I don't think a relatively small minority has some sort of divine right to have expensive meals, free theater tickets, country club dues, sporting events tickets paid for by heavier taxes on everybody else.

If the Congress will help me by getting rid of these tax loopholes and by enacting the entire economic program, we can have a good start on correcting unemployment and inflation.

The economy won't turn around overnight, of course, any more than an ocean liner can turn around on a dime. The job will require slow, careful planning, not dramatic master strokes. It will require small corrections, of course, that we adhere to very patiently. It will require careful planning, careful adjustment, careful tuning and cooperation.

The machinery of the American economy is sound. We have a lot to be thankful for. It's worked well despite severe shocks, but it can work better, and that's our major goal in this country this year.

And now, I'd be glad to answer your questions.

Ms. Thomas [Helen Thomas, United Press International].

QUESTIONS

MIDDLE EAST ARMS SALES

Q. Do you think that Congress will go along with your decision to send sophisticated fighter jets to the Middle East? And can you give us your rationale for including, for the first time in these sales, Egypt and Saudi Arabia along with Israel?

THE PRESIDENT. Yes. I think Congress will go along with the proposal to sell a limited number of airplanes in the Middle East. F-15 planes are already being delivered to Israel, and in the new proposal Israel will receive additional F-15's and F-16's, very advanced fighter planes.

We have for a long time sold military equipment to Saudi Arabia, one of our closest allies, staunchest friends, and economic partners. This is the first time we've sold F-15's to Saudi Arabia, but they have other advanced equipment.

The first planes will be delivered to Saudi Arabia not this year or next year, but in 1981 or 1982. The planes that we have agreed to sell to Egypt are the F5E's, not nearly so advanced a weapon as the F-15's or F-16's. But as you know, a few years ago, Egypt, which is now one of our staunchest friends and allies, severed their close relationship with the Soviet Union and, in effect, became an ally of ours. And I don't believe that there's any danger of this relatively short-range, not advanced fighter causing any disruption in the peace between Egypt and Israel.

So for those reasons, I am advocating to the Congress that they approve these sales, and I believe the Congress will agree.

THE COAL STRIKE

Q. Mr. President, without asking you to announce a deadline for a coal settlement, can you give us any clue as to the extent of your patience with the situation?

THE PRESIDENT. Well, the country is suffering already from the consequences of the coal strike. I have asked the Secretary of Labor and I've asked the negotiators from the workers and from the coal operators to stay at the bargaining table in constant sessions until they reach an agreement. There has been some progress made to date.

As you know, there is a division within the labor union itself. But the bargaining council, which consists of 39 members, is being kept as close as possible to the negotiating team that represents labor. We hope that when an agreement is reached that this will be in such a form and with close enough consultations ahead of time that it will be presented immediately to the membership of the United Mine Workers for approval.

So, I think that all of us are determined. I've met personally at the White House with labor and management in the coal industry, and I can testify to you that they are sincere in wanting to reach an agreement.

Q. Would you be willing to see it go on for another week?

THE PRESIDENT. No. I don't think we could afford another week of negotiations. I would hope that they could conclude their negotiations within the next few hours or a day or so.

DISASTER ASSISTANCE FOR NEW

ENGLAND

Q. Mr. President, Dan Rea, WBZ-TV, channel 4, in Boston, Westinghouse Broadcasting. Last week, as I'm sure you very well know, New England was hit with a very bad blizzard, and hundreds of thousands of hourly production workers in Massachusetts lost wages, wages that will be made up in some part by the State unemployment compensation fund. But the difference between the unemployment compensation fund and their total salaries in some families is up to $100 or $125. Is the Federal Government prepared to do anything for these workers?

THE PRESIDENT. Well, as you know, your own State and others in New England that were so heavily damaged by the snowstorm and also by the actions of the seas and wind have been declared major disaster areas. This involves several elements of aid. One was an immediate dispatching here of Sea Bees and members of the other military forces to actually help in the clearing of the highways and the restoration of normal life in your economy.

I have also authorized personal loans for those who have damage to their homes, those who have serious economic problems, and we've worked very closely in harmony with the State and local officials on this element as well.

These loans are at very low interest. Sometimes the interest payments are almost nonexistent. We hope that there can be some additional economic aid, if necessary, granted within the bounds of the law. But I don't know of any specific feature that would permit us to compensate workers for lost wages.

(The President's disaster declaration for Massachusetts, as well as for Rhode Island, does provide for the full legal amount of Federal unemployment compensation benefits to workers unemployed by the disaster.) ¹

¹ Printed in the transcript.

I think most of the industry here that employs people has now been restored to full employment almost to full employment-but with that one exception, I think we are providing the maximum amount of aid that can be under the U.S. law.

Q. Ed McHugh, Worcester Telegram. Considering how deeply some of the New England States are already in hock to the Federal Government, do you consider it proper for some of them to convert their unemployment insurance programs into disaster relief funds for people who lost wages during the storm?

THE PRESIDENT. I don't know enough about the answer to give you a response. I think in every instance of this kind, the primary responsibility has got to be for the Governor or local officials in the State to make a judgment on what's best for that particular area. And if a Governor or a legislature or a mayor has made that decision, I would not want to contradict it. Whether the unemployment compensation payment is more crucial—at that one moment during or immediately following a disaster—or whether it's more important to correct the consequences directly if there's a disaster in physical terms, I would not want to judge. That's a decision the Governor will have to make.

NUCLEAR POWERPLANT CONSTRUCTION

Q. Steve Bascade, WJAR-TV in Providence. The Federal appeals judge, Mr. President, has asked the Environmental Protection Agency to reconsider the approval of a cooling system for the nuclear plant in Seabrook, New Hampshire, part of his reasoning based on the fact that opponents of the plant didn't have access to all the relevant information.

My question: How much say should people have over construction of a plant, and should they specifically have veto power in a referendum to oppose a nuclear plant if they so wish?

THE PRESIDENT. Well, as you know, there are now no legal prohibitions at the Federal Government level from proceeding with the Seabrook plant. The Nuclear Regulatory Commission has not yet given a license. But the Environmental Protection Agency has ruled that the cooling system, as proposed, was adequate.

I do think that a State, or the people within a State, should have the right to determine the degree of shifting to nuclear power as a source for energy. As you know, some States have had referenda on this subject. This is a prerogative that the State legislature and the Governor and, in some instances, through referenda, can be accomplished.

But the Federal Government does not have and would not want to have the right to prohibit the construction of a nuclear powerplant in a State if the Federal laws were met. But I do think that in New Hampshire or Vermont or other States, that the legislature certainly should have a right to set the standards by which those plants should be built.

Q. What about the voters themselves in a referendum not the legislature, the individual?

THE PRESIDENT. Well, that depends upon whether or not there's a provision for a referendum to override a State law. As you know, in California, for instance, there is an initiative by which citizens can pass a law absent the legislature taking a stand.

But I think that—I know New Hampshire fairly well, having visited there several times during 1976, and I know how close your members of the legislature are to the people. I think there are just a very few people per member of the House. And I think that your legislators are adequately responsive.

U.S. ATTORNEY LINCOLN ALMOND

Q. Mr. President, Jim Roberts, WEAN News in Providence. We have a U.S. attorney here, Lincoln Almond, who's a Republican. You have not yet fired him, but Tom Murray of Newport has been recommended to take his place.

During your campaign, you promised to take the politics out of the selection process for U.S. attorneys. Can you tell me first of all if you intend to replace Mr. Almond and, if so, why?

THE PRESIDENT. I don't know. This matter has not come to my attention yet. Ordinarily, I wait until the Attorney General gives inc a recommendation about a replacement before I get involved in the process.

The number of Republican U.S. attorneys still in office now, I think, are about 25 out of 90-something. I think during the last 8 years, before I came in office, there was never a Democrat appointed to a U.S. attorneyship. But we've tried to keep in office those who were doing a good job, and when we have made a replacement, I believe in every instance that the selection has been made on the basis of merit.

Whether or not that particular person is going to be replaced, I do not know.

MIDDLE EAST ARMS SALES

Q. Mr. President, given the tension that already existed over the Israeli settlement policy, do you have any second thoughts about the timing of your announcement to sell warplanes to Egypt, or was the timing of that announcement and our public statements about the Israeli settlement policy a message to the Israelis to become more flexible in the current negotiations?

THE PRESIDENT. The two were not interrelated in my decisionmaking process. When I was in Saudi Arabia early in January, I told them that shortly after the Congress reconvened I would send up a recommendation for military sales to the Middle East.

Every time I've ever met with Prime Minister Begin, both in the public sessions, that is, with staff members, and also in my private sessions with just him and me present, this has been the first item that he's brought up: "Please expedite the approval of the sales of military planes to Israel."

I think that the timing is proper. We're not trying to shortcircuit the allotted time for the Congress. As a matter of fact, we will not begin the process until after the Congress reconvenes, the Senate reconvenes. So there will be a full 50 days for the Congress to consider the matter. Twenty days after this coming Monday, I'll send up the official papers.

So, I don't think it's a bad time to send it up. I recognized ahead of time that there would be some controversy about it. And we did give it second and third thoughts before I made a decision about the composition of the package and the date for submitting it.

Mr. Bradley [Ed Bradley] with CBS.

THE COAL STRIKE

Q. Mr. President, back on the subject of the coal talks, does that 2-day deadline that Secretary Marshall talked about yesterday-is that still in effect? And if at the end of that period they have not reached agreement, you can invoke the Taft-Hartley Act, but the miners have said they will not mine the coal and the Army can't. If you do invoke those provisions and they refuse to mine coal, what can you do, sir?

THE PRESIDENT. Well, that's all spelled out in the law. The miners, the coal operators, the Secretary of Labor, I, the Attorney General, the Governors all would like, if possible, to avoid an invocation of the Taft-Hartley law and to let the coal dispute, through collective bargaining, lead to a new and acceptable contract. So there's no rigid time limit.

If it's obvious to me that progress is being made, then my preference would be to keep the bargaining process going.

In the last 24 hours I have detected progress, and we have not yet been able to get a final settlement. Even after a settlement is reached at the Labor Department, even after the bargaining council, who represents the coal miners, approve the terms that have been derived with the negotiating team, it would still have to be submitted to the union members back home for their approval. So that would take 2, 3 weeks. And I think it would probably take an additional week or so before coal could start flowing to its destination after it has been mined.

So we still face a substantial delay. And I recognize that it's one of the most serious problems that I've faced as President. And I believe that the negotiators do, too. But I'm not trying and don't want to predict exactly what will happen in the future. And I don't want to set a rigid time limit on anyone. But I have had the urgency of this question imparted by me personally and constantly by the Secretary of Labor during the negotiating times.

HUMPHREY-HAWKINS BILL

Q. Mr. President, Robert Goldman, University of Rhode Island. You're an advocate of the Humphrey-Hawkins bill. Will the bill help with providing job opportunities for college graduates?

THE PRESIDENT. Yes, I think the Humphrey-Hawkins bill, if passed—and I think it has a good chance to be passed—would provide enhanced job opportunities for college graduates as well as others. It would set a goal of a 4-percent unemployment rate, and it would permit me to judge when this was in conflict with a control of inflation.

It would also bring into being a much closer coordination of effort between the President, the Federal Reserve Banks, the Congress, and others in the Government and in private industry to work together.

It would require me to submit to the Congress an economic plan over several years, 4 or 5 years, that would ultimately lead to the realization of those goals. So, I think the planning concept, the involvement of all the elements who determine the outcome of our economic goals, would be a step in the right direction itself, and it would put a heavy emphasis on the reduction of unemployment.

INDIAN LAND CLAIMS

Q. Mr. President, John Day of Bangor News. Mr. President, last October you were quoted as saying that Judge Gunter's recommendations for settling the Maine Indian suit were fair and equitable.

THE PRESIDENT. Yes.

Q. The new proposals which your task force has recently recommended have been severely criticized. What leads you to believe that the new recommendations are more fair and equitable than the old ones submitted by Judge Gunter, the difference being that the new recommendations call for substantial contributions from the private landowners of the State as opposed to no contributions under Judge Gunter's proposal?

THE PRESIDENT. Well, as you know, Judge Gunter's proposal concerning the Maine land issue involving the Indians was not accepted by the Indians. And when it was rejected by the State, the landowners, and the Indians, then I appointed a task force headed up by Bo Cutter (Eliot Cutler), who happens, coincidentally, to be from Bangor, Maine, to try to work out an agreement.

We have now reached an agreement as far as the Federal Government is concerned, represented by me, and the Indian tribes. It would not require any further negotiation nor litigation by any landowner in Maine who owns less than 50,000 acres of land.

It does leave up to the State of Maine and, I think, 14 landowners who have more than 50,000 acres, an option without any constraint on them—they can either accept the negotiated settlement, they can negotiate further for a better settlement for themselves, perhaps, or they can continue to litigate in court.

The reason that I got involved in it, reluctantly, I might say, was because almost every piece of property in Maine was potentially tied up in a lawsuit, could not be bought or sold, and I could foresee a very serious economic consequence to Maine unless I made some effort to address it.

This settlement would cost the Federal Government about $25 million. But I would like to point out, too, that we are bound by law—that is, the Department of Interior, represented legally by the Attorney General—to represent the Indians.

And this is a recent development, brought about, as you know, by the discovery of some old treaty papers, I think in 1971, and we've tried to expedite the process. But there is no constraint on the large landowners nor the State to accept the settlement that we have evolved. That's up to them.

THE COAL STRIKE

Q. Mr. President, as you know, the coal strike has passed all records in length.

THE PRESIDENT. Yes.

Q. Do you feel that the negotiators have really reached a point of being irresponsible in not reaching a settlement?

THE PRESIDENT. No, I don't ascribe irresponsibility to the negotiators.

When the negotiations broke down, when the bargaining council refused to accept for presentation to the miners the first agreement, that's the point at which I decided to intercede.

I invited both sides to come to the White House, which they did, and the union expanded their negotiating team from six members to nine members to try to bring in some of those who did not agree with the first settlement, to more closely assure that when another settlement was reached the miners would accept it. Now we are keeping the bargaining council in an adjacent room to the negotiators themselves, and there's a constant interrelationship of communications with them.

But I believe that all of the negotiators and the bargaining council, on behalf of the union, are negotiating in good faith.

THE NATION'S ECONOMY

Q. Mr. President, Joshua Resnek, the Chelsea Record, Chelsea, Massachusetts. Earlier you said that the machinery of our economy is sound despite shocks. However, shortly before the American Revolution, the great economist Adam Smith wrote about governments like our own which incessantly spend far more than they raise in taxes and which, as a result of such practices, are doomed to inevitable bankruptcy.

First, I'd like to ask you if you agree with economic reasoning like Mr. Smith's. And second, will your administration continue to spend moneys it is clearly incapable of raising?

THE PRESIDENT. Well, my goal, as you know, is to balance the budget. This year we are faced with a deficit that's about $15 or $20 billion higher than it would have been because we're trying to give a tax break, tax reduction, to the American people. In every instance, you have to make a judgment on that.

One of the reasons that we are giving the tax reduction is because the taxes are too high; another one is that it would result in a stimulated economy, a million more people at work and paying taxes rather than on the Federal dole. And so you have to make a judgment.

We have expectations, with some fairly accurate projections, that the budget deficit next year, fiscal year 1980, will be considerably below 1979. And if the economy continues to progress, then I have good hopes that in 1981 we will reach my goal. Obviously, I don't have complete control over the economy. But I've not given up in trying to carry out the principles that Adam Smith espoused in your quote.

MIDDLE EAST ARMS SALES

Q. Mr. President, on the Middle East, arms to the Middle East, I want to ask a kind of a philosophic question. How do you rationalize the idea of selling weapons, more sophisticated weapons of war, with the argument that they would help to bring about peace?

And does it bother you that these more and more sophisticated weapons are being sold to both sides and that if a new war were to break out, it would be a more violent confrontation than any in the past?

THE PRESIDENT. Well, as you know, we are not introducing new weapons into the Middle East. F-15's are already being delivered into the Middle East. Also, I have pledged myself to cut down on the volume of weapons each succeeding year as long as I'm in office, barring some unpredictable, worldwide military outbreak. This year there will be less weapons sales than last year, and this will include, of course, the Middle East.

I think it's very good for nations to turn to us for their security needs, instead of having to turn to the Soviet Union as they have in the past. I'm talking specifically about Egypt. And you have to remember that Saudi Arabia has never had any active aggression against Israel. Saudi Arabia is our ally and friend. Egypt is our ally and friend. Israel is our ally and friend.

To maintain security in that region is important. Egypt has other threats against its security. The Soviets are shipping massive quantities of weapons into the Middle Eastern area now, into the Red Sea area—Ethiopia, into Syria, Iraq, Libya-and we cannot abandon our own friends. So, I don't think that it's wrong at all to ensure stability or the right to defend themselves in a region with arms sales.

We are continuing multinational negotiations with other sellers of weapons to get them to join with us in a constant step-by-step, year-by-year reduction in total arms sales. If they do, I think the world will be much more peaceful in the future.

FRANK CORMIER [Associated Press]. Thank you, Mr. President.

THE PRESIDENT. Thank you.