Interview With the President Remarks and a Question-and-Answer Session With Representatives of the American Jewish Press Association.

THE PRESIDENT. First of all, let me say that it's a pleasure to have all of you here at the White House, both yesterday, to some degree, and today.

What I'd like to do is what I ordinarily do with members of editors groups or with the media, electronic media, and that is to outline very quickly a few items that are important to me at this particular time, and then to receive questions from you on any subject that you might deem suitable.

ADMINISTRATION POLICIES AND ACTIVITIES

I'm preparing and will work this weekend on my briefing papers for the summit meeting in Venice. I'll make prior to that an official state visit to Italy, being in Rome primarily, following which I'll go to Yugoslavia, then to Spain and Portugal, and back here.

Yesterday I had press interviews with the media from both Italy and Yugoslavia to lay down the basic elements of our bilateral relationship with them. We are working hard to strengthen the support for our opposition of the Soviet invasion of Afghanistan and to strengthen our position on continuing economic sanctions against Iran until they release the hostages.

We'll also be dealing primarily at the summit with economic matters relating to energy—conservation and the production of alternate forms of energy—and, in general, how to deal with inflation and unemployment and rate of growth of the economies of the nations involved.

We have, in addition to this, a massive schedule of legislation in Congress. We had good results this week in the House on the fair housing legislation. We won the first test vote by one vote and had another narrow vote afterwards, but this is a very important civil rights legislation, perhaps the most important in the last 10 to 12 years. It'll now go to the Senate for a decision.

We've also got a budget resolution, the first budget resolution, agreed to, and we are approaching the final stages of a comprehensive energy policy which will be a major step forward in letting our Nation prevent the rise and fall of our economic status in an uncontrollable way imposed on us by OPEC. As you know, I attempted to impose a conservation fee on gasoline. It should've been done. We need to set an example for the American people, for our allies who are oil consuming nations, and also for the oil producing nations, that we will indeed conserve fuel in this country.

We will complete shortly a mechanism by which we can have a massive effort made that will stimulate the American economy and be an exciting thing for the 1980's in producing alternative forms of energy in this Nation.

I'll be coordinating with Ed Muskie the preparations for the resumption of the Mideast peace talks. We will have Foreign Minister Ali and Mr. Burg coming to our country, I believe the first week in July-I think the 2d or 3d; this was still to be confirmed. And we'll be discussing with them in the meantime and with the heads of state involved, how to keep the Camp David process going in an effective fashion. There's no doubt in my mind that both the Israeli and Egyptian people are deeply committed to the peace process.

We are monitoring very closely what is being done by others, notably the European Community, to make sure that they don't do anything that would interfere with or subvert the progress of the Camp David procedure. We will protect the U.N. Security [Council] Resolution 242 with a veto if necessary. We will continue our own deep commitment to the Camp David process, and we've made good progress, I think, lately with the European allies in stopping their previously announced effort, at least by some, to go to the Security Council to change U.N. 242.

The last point I'd like to make is that we face the economic circumstances in this country with concern about the recession and growing unemployment, but with gratitude that we've had such notable success in recent weeks in getting interest rates down. And the inflation rate will come down very rapidly now. This will stimulate consumer spending and, I think, help to rejuvenate the construction industry, particularly home building, automobile purchases, and other items that will use up consumer goods and put our people back to work. It's a long-term possibility for this to be correcting; I don't think there's any doubt about the fact that it will help.

But we will observe very closely the development on this economic scene and, within the bounds of a strict self-discipline being imposed by the Federal Government, and within the bounds that any action would be noninflationary in nature, we will take action, if necessary, in the future to help with the economy. And we are now protecting and enhancing the job opportunity bills that already are on the books or being considered by the Congress.

I think at this time it might be good to answer questions that you might have, and I'll be looking forward to it.

QUESTIONS

MIDDLE EAST: ISRAELI SETTLEMENTS

Q. I'm Leo Goldberger of The Hebrew Watchman of Memphis, Tennessee. Mr. President, Jordan occupied the West Bank when the armistice was signed following the war of 1948. No nation at that time or for 19 years later called for the autonomy for the Palestinians during that time. In 1967, Israel liberated Judea and Samaria, and the Israel Government started its settlements in that area. My question is, why do you call these settlements illegal, and what court or international body made this ruling on which you base your statement?

THE PRESIDENT. We consider these settlements to be contrary to the Geneva Convention, that occupied territories should not be changed by the establishment of permanent settlements by the occupying power. The ultimate status of the West Bank and Gaza area will be determined in accordance with the agreement reached at Camp David, through negotiations, after the self government is installed in the West Bank and Gaza.

We have long maintained this position under the administration of previous Presidents, back at least 15 years, that the establishment of settlements in that area was contrary to progress toward a comprehensive peace. I discussed this at length, as you can well imagine, with Prime Minister Begin and others in the Israeli Government. They obviously have a difference of opinion. And there's a strong difference of opinion, I might say, within Israel itself, about whether there should be a cessation of the construction of additional settlements until a peace agreement is reached. This is a very disturbing matter for the Egyptians and for others that would have to join in with Israel on a comprehensive peace agreement.

We have not changed the American policy since the time when Arthur Goldberg was our delegate to the United Nations and when U.N. 242 was hammered out. We've repeated this policy on our part. We have encouraged the Israelis to restrain themselves on the establishment of settlements.

I might point out that within the Camp David accords—and I wish all of you would reread the text, because this is the text that we follow meticulously—that was approved by Prime Minister Begin himself, that does call for the establishment of Israeli security posts at agreed locations ¹ to make sure that Israel does have adequate protection against any sort of outside invasion, and there can be forward-based troops as determined by Israel and others which would protect Israel in case of an invasion. That's our basic policy. It has not changed for many, many years.

¹ The correct quotation is "specified locations." [White House correction.]

MIDDLE EAST: EUROPEAN PROPOSALS FOR PEACE PROCESS

Q. Mr. President, our European allies in a meeting already have taken the position which indicates that the PLO should be made a part of the negotiating process. How would you characterize this action in keeping with your earlier remarks that you would attempt to restrain our allies from taking steps that would be injurious to the Camp David process?

THE PRESIDENT. I haven't seen the text of what the allies have decided. My understanding is that the foreign minister level has recommended to the heads of state a draft proposal. This is a sharp division among the heads of state themselves. It wouldn't be proper for me to reveal what I know about their attitudes. Some of them do not want to refer to the PLO specifically, but just refer to Palestinians or Palestinian Arabs. We have avoided any reference to the PLO as a negotiating partner, but we have referred-in agreement with Prime Minister Begin and President Sadat—we've referred to Palestinians and to Palestinian Arabs.

We will not negotiate with the PLO, and we will not recognize the PLO status until after the PLO recognizes Israel's right to exist and until the PLO also recognizes that U.N. 242—resolution—is a basis for further progress for a comprehensive settlement.

So, whatever the European allies might do about this, our position is clear and as I've just stated to you.

MIDDLE EAST: KING HUSSEIN'S ROLE IN PEACE PROCESS

Q. Mr. President, Doris Sky from the Intermountain Jewish News in Denver. Mr. President, King Hussein will be in Washington in a few days. Do you feel that at this time he may be ready to assume any active and public role in the Mideast peace process, and can you tell us if and how you plan to encourage him to take a more active role?

THE PRESIDENT. As you know, under the Camp David accords, as signed by all three heads of state, including myself, we call for Jordan to join the Camp David negotiations in two phases: The first phase is the one that's going on now, which would establish the self-governing authority, in effect, and with its very difficult but very important elements. And then following the establishment of that self-governing authority, there would be a period of 5 years under the self-governing authority, during which Israel and Jordan and the Palestinian Arabs who live in the West Bank/Gaza area would join in the negotiations to determine the permanent status of the West Bank and Gaza area.

I will certainly encourage King Hussein to join in these talks as soon as it's possible for him to agree to do so. This has been our position since the Camp David agreement was reached. I can't speak for him. His position has not been one of cooperation on the Camp David accords so far. One of the reasons that he states is that he was not adequately consulted before the terms of the Camp David accords were reached by me and Begin and Sadat and, therefore, this is an imposed agreement demanding that he join the talks when he was not involved in the decision itself.

But this will be the first time I've met personally with King Hussein since Camp David, and I'll use all of the persuasive power that I have to encourage him, within the bounds of his own decisions-of course, he represents an independent nation—to be constructive in bringing about a comprehensive peace. And I'll try to convince him that the best procedure for doing this is in accordance with the Camp David accord itself.

JEWISH EMIGRATION FROM THE SOVIET UNION

Q. Mr. President, the emigration of Jews from the Soviet Union is decreasing rapidly. There are some pessimists that believe that after the Olympics, it will dribble down to practically nothing. Now, in the light of the current status of relations between the United States and the Soviet Union, what leverage does the administration or Congress or anybody in the United States still have on the Soviet Union?

THE PRESIDENT. YOU know last year, I think, we reached the peak of Jewish emigration from the Soviet Union—about 50,000. So far this year, the early months, that rate has dropped off about 30 percent. It's still quite high compared to previous years, but not high enough. We have made some progress in the reuniting of divided families. This is a more generic concept involving other nationalities and those of other faiths. That's a glimmer of hope.

We have also a possibility and a duty at the Madrid Conference on the Helsinki Agreement, the CSCE conference, to point out any violations of human rights by the Soviet Union, including the restraint of emigration. The divided families being reunited is the triggering language Under the Helsinki Agreement to encourage the Soviet Union, and to force them by worldwide public opinion, to permit out-migration of Jews from the Soviet Union.

We provide to the Soviets monthly-annually—and we just did it last month; that's why it's fresh on my mind—a list of all the families that are known to be divided, and this is done and has been done for the last 20 years. We'll continue that. And every time I have ever met with a Soviet leader—the Ambassador here or the Foreign Minister or Brezhnev himself—that has been near the top of our agenda, to encourage the Soviets to permit increased emigration from their country.

We will continue this process through every means of diplomatic persuasion ourselves and to encourage worldwide opinion to focus itself on the Soviet's deprivation of human rights by the restraint of out-migration.

MIDDLE EAST: EUROPEAN INVOLVEMENT IN PEACE PROCESS

Q. Mr. President, at the United Nations, our Representative vetoed once, abstained two times in the past few weeks, on matters relating to Israel and the Middle East. Now, we had in that process complete opposition from the international community, including Scandinavian countries, England, and France. What hope is there of regaining some sort of cooperation from the international community in behalf of a peaceful resolution of the serious issues in the Middle East?

THE PRESIDENT. You've described the situation accurately. The best hope that I can see is demonstrable progress under the Camp David process. One of the reasons why there's such an absence of support for Israel's position is that many of the former friends and allies of Israel don't think that the Camp David talks are going to succeed.

To the extent that we make progress, those European nations—the Scandinavian countries and others—I think will come back to a more balanced approach to the question. And if we can ever get the Palestinian Arabs and the refugees represented in the talks through the West Bank mayors, the Gaza mayors, and others, I think this will alleviate tension considerably and not only will stop the rash of U.N. resolutions but also will strengthen support for a balanced decision on those matters.

So, I would say that—to answer your question—demonstrated progress on the Camp David accords, which we have reached at Camp David itself and with the Mideast peace talks, is the best solution to the problem.

ALLOCATION OF FUNDS FROM WINDFALL PROFITS TAX

Q. Mr. President?

THE PRESIDENT. Yes, sir?

Q. I'd like to ask you a question. Jimmy Wisch, Texas Jewish Post, Dallas and Fort Worth. The scourge of the Nation, of course, is inflation. We congratulate you on coming in With a balanced budget as of this morning's newspapers. We have a carrying charge of $82 billion on the national debt—the core of inflation. What would be wrong with the philosophy of using our windfall profits gasoline tax, say 50 percent of that, and telling the people at the gasoline pump that we're going to use 50 percent of that tax to go directly to reduce the national debt?

THE PRESIDENT. Well, the Congress, in passing the windfall profits tax, prescribed some guidelines. One of the major elements, the biggest single item to be used by the windfall profits tax, is to reduce taxes on the American people to stimulate growth and to create new jobs and to give a better quality of life in the future.

Another element of that commitment, the second largest, I believe, was to encourage the production of American energy—solar energy, increased exploration for natural gas through so-called unconventional means, the creation of synthetic oil and gas from coal and shale-these kind of things. And, in addition, there was a commitment expressed by Congress, which I share, to give the poorer families in our Nation some relief in heating their homes, in particular from the extremely high cost of energy which, as you know, on an international basis, has more than doubled in the last 12 months.

So, these are the basic thrusts. We have benefited so far and will benefit much more the rest of this year and next year by reduced interest rates. The prime rate, as you know, has been dropping about 1 percent a week for the last 6 weeks or so, and we hope this trend will continue downward to be followed very rapidly by inflation rate.

I don't think it would be possible to take the windfall profits tax specifically to pay off the existing Federal debt at this time. I can't say that that wouldn't be a good goal in the future, but the Congress has already expressed itself in the law on those

Q. Would you be against that philosophy if it could be passed?

THE PRESIDENT. At this time, I would not put that above the priorities that the Congress has already prescribed—the production of more energy in this country, the helping of the poorer families, and the reduction of taxes. I think the priorities, so far, are proper.

FOREIGN INVESTMENTS IN THE UNITED STATES

Q. Mr. President, I would like to know why you have not taken a more forceful stand with regard to Arab and other foreign investments in the United States, namely to demand full disclosure so the possible effects and influence on United States business and industry can be assessed?

THE PRESIDENT. Well, there are a couple of reasons. One is you can't single out a particular nationality or religious faith of a business or professional or financial person and say, "You have to disclose your holdings, but no one else does."

Q. How about across the board?

THE PRESIDENT. Well, you know—I think the way you phrased the question, though, you were just talking about Arabs, and I think if the same thing was done against Jews or against blacks or against the Baptists or against other specific groups, it would violate the equality of treatment under the law that's so precious to us.

Secondly, we export from the United States this year about $90 billion in cash money to OPEC nations to buy their oil—a grossly excessive figure. This amounts to about $400 for every person—man, woman, and child—in this Nation, and it would be a devastating blow to us if none of that money came back. As a matter of fact, the Arab countries—well, not just Arab countries but all the OPEC countries; some of them are not Arab as you know, like Venezuela and Nigeria—but the OPEC countries have to have a place to invest that money, and if they invested all of that money in countries other than ourselves, it would be a net drain from our economy of a greatly magnified and very damaging nature.

They do buy U.S. Government bonds, they do invest in American corporate stock, and on occasion, they buy property itself—a very small amount, by the way. The total foreign holdings in agricultural land, for instance, I believe is less than 1 percent. And quite often, an investment in a community by an Arab leader is a highly publicized fact, when a much larger investment by, say, a German corporation or a British or a Japanese corporation is publicized not at all or, if it is publicized, in a favorable light.

So, for those two reasons, that you cannot single out a particular religious faith and have a special law that puts restraints on them to the exclusion of others, and secondly, because we need the exported money to buy foreign oil to be reinvested in our country—those are the two major reasons.

And the third one is what I mention quite often—there is a very high publicized factor in Arab investments. I know that an Arab group here was going to buy, or might buy a bank—they bought one in Atlanta—and it was top headlines in all the newspapers. So, there is an inclination in the American press to publicize those Arab investments much more, I think, than any other nationality or group that I know.

MIDDLE EAST: ISRAELI MILITARY OUTPOSTS AND CIVILIAN SETTLEMENTS

Q. Mr. President, may I take you back to an earlier statement you made, that military outposts will be, and I quote you correctly, I believe, "to be determined by Israel and others."

THE PRESIDENT. Yes.

Q. Who else, besides Israel, is to determine Israel's security on the West Bank, and the second part of the question is—

THE PRESIDENT. The phrase that's used in the Camp David accord is agreed locations ² and the presumption there is that Israel would make proposals about where those outposts were to be made, and if there is a comprehensive settlement, the others would be involved. But I would say the primary choice of those outposts would be with Israel.

² The correct quotation is "specified locations." [White House correction.]

We discussed at Camp David, along with Mr. Weizman and Dayan and Prime Minister Begin, the possible location of those outposts and the possible level of military forces to be stationed there, but no decision was made. The tentative places and figures put forward by the military leaders seem to be generally acceptable. If Israel proposed a location or a series of locations that was not acceptable, then Israel would not have to agree to the overall settlement.

So, I would say that the basic presumption would be that Israel would make their choices, and the basic presumption is that within the framework of a comprehensive settlement—to be decided by Jordan and the Palestinian Arabs and others—that those choices would be approved, but nobody can take that away from Israel as the prime one.

Q. May I follow up on that, Mr. President, please? It could be possible, of course, and it has been the practice of Israeli governments, present and past, to establish settlements on the West Bank for security purposes.

THE PRESIDENT. I know that.

Q. And a civilian settlement could be for security, as well as a military-manned outpost.

THE PRESIDENT. Yes.

Q. Therefore; isn't it possible and legal, even under the Geneva Convention—and Israelis, many of them, think that the opposition to settlements is a political issue and not a legal issue—but apart from that, since a civilian settlement also could be considered military, would you then agree that it is worthwhile for Israel to establish settlements on the West Bank for defensive purposes?

THE PRESIDENT. In my opinion, the establishment of additional Israeli settlements on the West Bank is not necessary. It is an obstacle to peace, because it creates very serious problems in reaching a comprehensive agreement. In my opinion, the Camp David accords, signed by Prime Minister Begin and President Sadat and myself, prescribe an adequate commitment to Israel's security; that is, that the military government will be withdrawn and that security posts at agreed locations will be established.

We have not demanded from Israel that any settlements be dismantled. We have requested from Prime Minister Begin and others that the establishment of new settlements be ceased until after an agreement could be reached, in order to expedite the process. Israel disagrees. Their Government makes the decision, and they have so far carried those decisions out. What Prime Minister Begin has described to me is an extension of existing settlements, and he did agree to a temporary moratorium or delay in the establishment of new settlements after Camp David.

So, I would not be willing to endorse the concept of establishing civilian settlements on the West Bank, but I do endorse the concept that Jews should have a right to live where they choose and Jews should have a right to leave a place of their choosing.

The thing that is troubling about the establishment of settlements under the aegis and with the sponsorship and sometimes the financing of the Israeli Government is that it indicates to the Palestinian Arabs, to the Egyptians, and to others, that Israel will not carry out the principles of the Camp David accord in withdrawing their government, military government, and establishing the security outposts. This is a long-time position of the United States. It's one that has been discussed clearly with Prime Minister Begin, and it does not mean at all that we oppose Jews living where they choose, including on the West Bank.

Ms. BARIO. ³ Thank you, Mr. President.

THE PRESIDENT. Just one more. I'll take one more.

³ Patricia Y. Bario, Deputy Press Secretary.

Q. Mr. President, let me make one comment. I think the Camp David agreement talks about specified locations, not agreed locations. That was a clear difference that the Israelis had requested to make—at least from the Israeli point of view—clear that they were the ones that would specify the locations—there wouldn't be an agreement necessary.

THE PRESIDENT. You may be right. I'll let somebody bring the text back to you in just a few minutes and read it to you.

I need to go, but I would like to meet every one of you personally and thank you for coming and maybe get a quick photograph if you have no objections.