Exchange With Reporters on the Situation in El Salvador and Budget Issues

Q. Mr. President, we'd like to invite you to drop by. [Laughter]

The President. Just a moment.

Q. All right, good.

Q. Could you tell us, Mr. President, why American soldiers are carrying M-16's in El Salvador?

The President. The only thing I can assume is that they were for personal protection, and I think that's understandable. But I'm asking for a full report, and we'll have one from the Defense Department.

Q. What is our policy in El Salvador with regard to American troops?

The President. The policy is that they do not engage in combat, nor were these gentlemen, as far as has been indicated, doing that, at all.

Q. Secretary Regan says that he doesn't think business has gotten the message-that's on the tax and economy—budget cuts.

The President. Well, I've heard from small business, and they're wholeheartedly in support of what we're doing. And I haven't had a chance to tell Don that.

Q. What about big business, Wall Street?

The President. I think that they're concerned about, again, that we might be going into an inflationary spiral. I don't think we are.

Q. But you're going to have to adjust the tax rates, aren't you, Mr. President? That's just something that's going to happen.

The President. No. I don't see any reason to. This is the only way to stimulate the economy, and that's the only way to really bring down the government spending to within its revenues, by expanding the economy. We've been limping along now for a few decades with these every once in a while, artificial stimulants that seem to be aimed at trying to get the economy going again. And every time, it's resulted in higher interest rates, higher inflation, greater unemployment, and now this is the worst that we've had in several of these last recessions.

Q. But can Congress really cut enough in an election year? Those poor fellows won't even be back if they make all the cuts you need.

The President. I think if they go out and meet the real people—and maybe they'll do that—they'll find out that the real people out there know that government has been—[ inaudible]—too much.

Q. Sir, your own Republican troops are deserting you. Your own friend Senator Laxalt came out yesterday and said that he needed the running room.

The President. Well, I gave him some running room. I think that's perfectly, naturally normal. We had a very fine meeting, and I don't think there's any desertion taking place at all.

Q. Mr. President, what about interest rates? Is there anything you can do specifically to—on your own or the administration's part—to bring down those interest rates in the next some months?

The President. The program that we have in place is aimed at that, but also I think that we have to have more cooperation between ourselves and the Federal Reserve on this whole problem with regard to the money supply and a more consistent pattern.

Q. Was Ambassador Hinton speaking for you when he said that there had been excesses in the field of human rights—against human rights in El Salvador?

The President. Well, I just heard all of you on the news not too long ago—not very much time was given to it—but there was a mention that the guerrillas had attacked a village up on the Honduran border, and it was reported that a hundred people were killed. I'd consider that a violation of human rights.

Deputy Press Secretary Speakes. Thank you.

Q. But the Ambassador seemed to be going against your policy, sir. The President. What?

Q. The Ambassador seemed to be complaining about the government in this case.

The President. Well, we know that there have been problems from both the left and the right. That's why we're supporting the Duarte government, which is between both of those factions, both of which have been somewhat extreme.

Q. Thank you, Mr. President.

Q. Do you think, Mr. President.—

Q. What are you giving your wife for Valentine's Day?

The President. A valentine.