Dobbins Air Force Base, Georgia Question-and-Answer Session With Reporters on Arrival.

THE PRESIDENT. Hello, everybody. I'm glad to be back home in Georgia. This is the first time that I've had a chance to fly on Air Force One down here. And we are very grateful to spend Easter with my own family and in this State which is always my home.

This also gives me a chance to meet again with Governor Busbee to talk about some of the environmental questions that have been addressed so well by him, and some of the very interesting and exciting announcements that will be made soon about the Georgia coast which I love so much.

I'd be glad to answer a few questions, beginning with the local news media, if you have any.

REPORTER. [Inaudible]

THE PRESIDENT. That's correct.

ECONOMIC STIMULATION PACKAGE

Q. [Inaudible]

THE PRESIDENT. No, it won't have any effect on it. Obviously, it makes it much more important that we give a well-considered report to the Nation on what can be done to control inflationary pressures.

This has been a worldwide problem. And I think that part of the inflationary index increase last week was caused by the transient effect of the very severe winter and the damage to food and the excessive use of energy. But it's a constant problem, about 6-percent annual rate of inflation.

The economic stimulus package can be implemented completely without any adverse effect, in my opinion, on inflationary pressures. We've got about only 80 percent of our industrial capacity, factories and so forth, being used. We still have over 7 percent of our people who are out of work. And as a matter of fact, the amount of money that was collected from American taxpayers last year has been excessive compared to the expenditures this year as Congress had contemplated.

We will lack about $8 billion spending the money this year that Congress did appropriate. We've had an over collection of about $3 billion from the American taxpayers, more than we had anticipated. And I think the best thing to do with this extra money is to return it to the taxpayers immediately and directly, rather than having the Government spend it.

So, our economic stimulation package is necessary. I hope it will hold together, and the approaches to inflation are long-range in nature. And the message that I deliver next week to the American people will outline some of the problems, a few of the answers that we have, and emphasize the cooperation that's going to be required.

ANDREW YOUNG

Q. Mr. President, do you have any reservations or maybe second thoughts about Ambassador Young's comments on Great Britain?

THE PRESIDENT. Well, I think Andy has explained to the British what he meant. I think they've accepted his explanation well. The British Government considers it to be an end to the matter, and so do I.

BRUMBY ROCKERS

Q. Mr. President, have you received your Brumby rockers yet?

THE PRESIDENT. Yes, I have. As a matter of fact, on my desk is a photograph of the five Brumby rockers that I'm going to endorse and send back to the rocking chair manufacturing company when I get back to Washington Sunday night.

The first time we used them was when Cyrus Vance and Paul Warnke came to make a report to me and to Dr. Brzezinski and to Vice President Mondale. And the five of us used the Georgia rockers for the first time.

They are on the Truman balcony, and I've really enjoyed them. They remind me a lot of the Georgia mansion, where we had a large back porch and some Georgia made rocking chairs on it. So, we are proud of them. We've already used them, and I'll be using them regularly from now on.

GREAT BRITAIN AND RACISM

Q. Mr. President--[inaudible]--Ambassador Young's evaluation of the British stance on racism?

THE PRESIDENT. Well, I think all of the nations that were in such a dominant position in the last number of generations have obviously been guilty of racism. But I certainly wouldn't think the British are any more guilty than we are. I think we've all overcome that facet of our society in a very constructive way, and I don't believe that Great Britain deserves any special criticism.

THE MIDDLE EAST

Q. Mr. President, do you think that the resignation of Prime Minister Rabin may throw off your timetable for the Geneva talks and a settlement in the Middle East?

THE PRESIDENT. No, I don't. Obviously, the Israeli Labor Party will now be searching for a replacement candidate for Prime Minister Rabin in May. And I believe that the outcome of the election might very well be affected; nobody can anticipate how.

But there is a great realization among the Israeli leaders that 1977 is an important year. There is almost a unanimous commitment, I think, among all the Mideastern countries, that if we don't succeed this year in some major step toward peace that it will be a long time before we can mount such a mammoth multinational effort again.

So, it may be affected---the chances for peace--but no one can predict how. And I believe the Israelis will push forward with their own strong desire to have a permanent and lasting peace with the Arab neighbors, to have borders that they can defend, and that the Palestinian question be resolved. I don't think the identity of one particular political figure, even the Prime Minister, will affect that adversely.

Q. Mr. President, when you were meeting with President Sadat and you were talking about this Palestinian question, did you get any impression that there is a way to get the Palestinians to Geneva as part of some delegation? And if so, can you give us some of your thinking on that?

THE PRESIDENT. Well, as you know, President Sadat earlier had been the Arab leader that was courageous enough to espouse the idea that the Palestinians might be part of the Jordanian delegation. Whether or not that will evolve, I don't have any way to anticipate.

But I have good hope that we can resolve the question of Palestinian participation in some fashion or another. At this point, which is quite early in the year's efforts, I believe that it's primarily a responsibility of the Arab countries and the Palestinians. And for me to spell out what I think is a most likely prospect, I think would be counterproductive at this point.

Q. Mr. President, do you think they should be represented?

THE PRESIDENT. Well, obviously, one of the three crucial decisions to be made in the Middle East concerns the Palestinian people. And there will have to be a spokesman for their viewpoint during the conference itself. Whether that would be done by a surrogate or by them directly is something that hasn't been evolved.

The other two questions, obviously, are the definition of permanent peace and the assurance of it, and the border delineations. But I certainly think that in some fashion that the Palestinian people must be represented.

Q. Mr. President, President Sadat used the word entity when he came to Washington, instead of Palestinian nation or Palestinian state.

THE PRESIDENT. Yes.

Q. Did you get any impression from him that he is moving toward, or more willing now to accept a Jordanian-Palestinian nation, that is, a homeland that would be under the control of Jordan?

THE PRESIDENT. That's a question I wouldn't want to answer for President Sadat. I'll let him make his own statements publicly, and I don't intend to repeat what he tells me privately.

But I think that it's obvious that that's one avenue of success. It's one that I have espoused even during the campaign months; that perhaps some confederation or some relationship between the Palestinians and Jordan might be advisable.

As you know, there are approximately a million Palestinians who are part of the Jordanian society now, in very high positions in the government, and I think this is a natural possibility. Whether or not it will be the ultimate decision, I can't say.

Q. Can I go back to something you said earlier on another subject? That was the subject of the total $11 billion in under-spending and over-tax collection.

THE PRESIDENT. Yes.

ECONOMIC STIMULATION PACKAGE

Q. Wouldn't it be just as arguable that you should take that $11 billion and do less government borrowing; in other words, reduce the pressures on the credit market? Aren't you likely to get the kind of business investment then that would do the same thing for the economy you're talking about with the rebate?

THE PRESIDENT. I don't believe that would be a preferable approach, no.

We put together a stimulation package with tax reductions for business, which have fairly well been approved, even expanded; with a public works program, which has been adopted and even expanded; with public service jobs, which has been adopted by the Congress or even expanded.

And the only thing that's now lacking, as far as immediate prospect of success is concerned, is some benefit for the average working family who is employed and the low-income families who don't have employment.

I think that if this is omitted from an overall stimulus package, it would be grossly imbalanced against the people who need it most. So, my own approach to government is that when we do have a windfall of unexpended funds, plus increased tax collections, that the best approach would be to give it back to the taxpayers.

Q. But it isn't consumer confidence that's been staying low, it's business investment that has--[inaudible]--confidence.

THE PRESIDENT. I can't debate all the economic aspects of it, because I'm sure you are much more qualified than I am to do that. But I do feel that there is something to be said for giving consumers an opportunity to make extra purchases.

As you undoubtedly know, the GNP has shown favorable signs the last 2 months; so has the unemployment rate gone down somewhat. But consumer sales have still remained dormant. And people have been digging into savings recently to maintain even a limited level of consumer purchases.

I think to give them their part of their 1976 taxes back would be a good way to buy goods that would then cut down on inventories and allow the manufacturing plants to continue to manufacture goods.

But I don't know enough about it to say that that's the only possibility. In my opinion, it's the best approach.

INCOME TAX REBATE

Q. [Inaudible]--prospects for passage on the Hill of the rebate plan?

THE PRESIDENT. I think we have a good chance to pass the rebate, yes.

Q. [Inaudible]

THE PRESIDENT. Well, it's hard for me to say because I haven't had any accurate count on the attitudes of the Members of the Senate. I've talked to a number of the Senators in the last 2 days, whom I had heard were against the tax refund, and have found them to still have an open mind.

I believe that if they are presented with a factual picture about the need for a balanced program, the commitment of the Democratic leadership which was confirmed when they came down before Inauguration to meet with me in Plains, and the desire to give our economy some assured growth and consumers a chance to make purchases, to keep our factories going--I think with all these arguments in place, plus the $11 billion shortfall and tax collection that I described, I think all these arguments would pay off.

Also, the, I think, Michigan State public opinion poll has shown that about 78 percent of the American people favor the tax refund. And this always, of course, makes a good impression on Presidents and Members of Congress.

I think we've got a good chance to pass it, but it's not going to be easy. Obviously, its interrelated with a lot of other things that relate to specific Congress men and women's interests.

The water project question is going to be involved. I would like to keep them separated, but I'm sure that there will be some reaction there.

The low levels of minimum wage that I advocated, compared to what labor wanted, will be a factor. The relatively low levels of farm price supports compared to what the farmers wanted, will be a factor.

But I think that we ought to maintain the concept of nonlinkage in domestic affairs, as we have between SALT talks and human rights.

One more question.

THE SOVIET UNION

Q. Mr. President, what significance should be placed on Ambassador Dobrynin's visit to the State Department-[inaudible]--SALT talks? Does this indicate any softening in your mind on the part of the Russians?

THE PRESIDENT. It confirms my own unwavering opinion that the Soviets want a successful resolution of nuclear arms control, the same as we do.

It's always inevitable that in a political campaign or a SALT negotiation or a debate between myself and Congress, that the degree of combat and dispute and differences is the part that is emphasized. It's the most newsworthy part, and it's the part that's easier to understand.

There was a great deal of progress made in the recent Moscow talks. As you know, study committees were set up to explore new ideas that had never been put on the SALT negotiating table.

I believe that Mr. Dobrynin's conversation with Mr. Vance--and, of course, I've had a complete report on it--was encouraging. There is about a month between now and when the SALT negotiations will proceed in Geneva between Mr. Gromyko and Secretary Vance.

And during that period of time, we'll be reassessing some of the objections that the Soviets have raised to see if there is some alternative that would be equally fair to both sides, and we are now making projections of our own level of nuclear armaments in the number of missiles, the number of warheads, the throw weight and the diversity of nuclear capability that would be in existence in 1985, if our proposal was accepted.

If during this reanalysis we show that there is any inequity there, we would be very eager to change it. My own opinion so far--and I've done a good bit of work on it, even since the Moscow talks--is that our proposal was fair and was equitable. And if the Soviets can give us some explanation about which we were not aware concerning their own capabilities or plans, I would certainly take that into consideration.

But I believe that Dobrynin's visit to Vance is encouraging. I think if one reads Gromyko's entire text in his press conference, it was encouraging. And the private messages that I have had from Mr. Brezhnev have also been encouraging.

I am not discouraged. And I'm determined that we'll succeed in having not only a ratification of the Vladivostok agreements but substantive commitments on both sides to actually reduce nuclear weapons below what they have been in the past.

Q. Have you heard from Brezhnev lately, Mr. President?

THE PRESIDENT. No. I think that I've already said that was the last question.

Let me say in closing that I'm very grateful to be home. Thank you for coming out here.

There is a continual means by which I can communicate with Mr. Brezhnev, either through normal diplomatic sources or otherwise. It's a routine sort of exchange, nothing dramatic or startling, no new concepts that have been proposed, but just an assurance that the Soviet leadership is as determined as I am to continue with the efforts.

REPORTER. Thank you, Mr. President.

THE PRESIDENT. Thank you.

REPORTER. Happy Easter.

THE PRESIDENT. Thank you. Same to you all.