Interview With Reporters From the Los Angeles Times

Views on the Administration

Mr. Nelson. Mr. President, I'd like to start by asking you, you frequently have referred to the tremendous impact that Franklin D. Roosevelt had in reshaping the country, and in your first year, you've made a tremendous impact in starting to reshape the country. And I wondered how you judge your impact in the first year and also what sort of legacy you hope to leave.

The President. Well, I believe that we have started government on a different course, different than anything we've done in the last half century since Roosevelt began with the New Deal. And that is the recognition that there must be a limit to government size and power and that there has been a distortion of the relationship between the various echelons of government-Federal, State, and local. And I think that we have the most to do with yet, because the higher levels of government are reluctant to give up authority once they have it.

History shows that no government has ever voluntarily reduced itself in size. So, in effect, you know, we're part of government. We're trying to bring about that change. Now, this does not mean that we don't recognize government's basic responsibilities, the things it is required to do. And with all of the criticism of national defense, one of the top priorities that is listed constitutionally for the Federal Government is the defense of the Nation, the national security. That prime function has been one that has been sadly neglected in recent years.

But I think the very fact that we were successful in getting the biggest single package of budget reductions ever adopted, the single biggest package of tax reductions-and ongoing—that have ever been adopted, has set us on a course of trying to bring back the idea heralded by all our Founding Fathers, and reiterated so often by leaders in government. It's that government must stay within its means. And we haven't achieved that yet. But by cutting the rate of growth in government more than in half or about in half, we're trying to bring those two lines closer together—the line of the normal increase in revenues that comes from the tax structure, and the growth of the country and the economy and the normal increase in government spending, which would reflect the growth in the country.

Today, you have to add to that inflation has been responsible, because government's expenses go up, too, with inflation, just as the individual's do. But this is why inflation is the thing we must turn around.

Now, I know I'm getting very lengthy with this answer, but let me just add one thing. For years out on the mashed-potato circuit, long before I ever thought I'd be a part of government—never had any ambition to be that—I called attention to the fact that years ago, the Democratic majority which prevailed in the Congress for most of this half century, almost all of it—

Mr. Nelson. And you were a Democrat once.

The President. Yes—had adopted deliberately a policy of planned inflation. And they heralded it as the "New Economics," that was their term. And they said that a little inflation was necessary to create prosperity. And they claimed that it could be controlled, that you could have a small percentage that we could easily absorb, and growth would take care of it and people's earnings would stay ahead of it. And I used to proclaim in my mashed-potato appearances that it was like radioactivity, that it was cumulative. And you could not continue it without it one day getting out of control. And one day, it got out of control.

Mr. Nelson. So, could you just sum up very quickly, though, what do you hope your legacy will be as President?

The President. I hope my legacy will mean that we restore the balance between the levels of government, meaning that we restore to local and State government functions that are properly theirs and belong there, and restore to them the tax sources necessary to support them, which have been also usurped by the Federal Government; that we set a policy that I would hope could be legally imposed, barring an emergency such as war, that the Federal Government, like the various States, must live within its means. And a policy, before I leave, that we could begin, no matter how small, paying installments on the national debt as a signal to those who will follow, that the national debt is not something-that we will either default on, as all other governments in the past have done when it got unmanageable and too big—that we'd not default on and that it will not hang over, forever, succeeding generations.

Federal Budget

Mr. Skelton. Let me just interject there before I ask a question. Would you favor a constitutional convention to propose a balanced budget?

The President. Well, constitutional conventions are kind of prescribed as a last resort, because then once it's open, they could take up any number of things. I've always thought that the regular procedure that is prescribed first, of a constitutional amendment—

Mr. Skelton. Would you like to see Congress pass a constitutional amendment?

The President. There's one thing, though, about a constitutional amendment just to balance the budget. There must also then be some limitation on the percentage of the people's earnings or the gross national product that the government can take in taxes, because you can always balance your budget just by taking more money away from people. So, that wouldn't help any.

I remember once that Milton Friedman said that the problem is the cost of government, not just necessarily the deficit. And he said he would prefer—this was a time when the budgets were approaching $400 billion and so forth—he said he would prefer an unbalanced budget of $200 billion to a balanced budget of $400 billion, because 400 would be taking more money from the people than it should.

Mr. Skelton. I was going to ask you a question about the balanced budget. We took a poll, and it showed that three times as many people would rather have a balanced budget as increase defense spending or even income tax cuts. And you seem to be moving in a direction where your top priorities are a defense buildup and also tax cuts, and the balanced budget is not quite so high anymore on your priority list. And I wondered if you could explain why that is?

The President. Well, George—and without appearing to be personally critical or anything of your profession—isn't this perhaps a reflection of what is constantly thrown at the public, publicly, that—and all of us are responsible. We all talk about the evils of deficit spending, and—just as I've finished talking here—we want to get back to where we stay within our means.

But I also promised all during the campaign-and I don't know who took that poll, who they talked to—but I remember—if you remember, I used to do Q and A an awful lot, and I remember when repeatedly the question would be asked, if the choice came down to restoring our military security or balancing the budget, which side would I come down on? And I said I would come down on the side of restoring our defenses, our national security. And inevitably, I never—in fact, I never gave that answer to an audience that I did not get enthusiastic applause.

Mr. Skelton. So you feel you have a mandate to do that. The President. But what I do think lately is when you start talking about all the cuts and everything, and then usually the military budget is treated as a swollen thing and out of proportion and so forth—actually, it isn't. We're spending a smaller percentage of the gross national product on national defense than we used to do years ago in what were considered normal times. But we're playing catch-up. We are restoring something that was allowed to diminish and deteriorate.

I think that the people hear that, and the people have heard so much about that their troubles are due to the deficit—in part they are. It's harder to explain that reducing the tax rates can result in even the government getting more money, that the tax cuts aren't just simply to relieve an individual of tax burden. They are to restore a balance in government and private spending that will increase productivity, broaden the base of the economy, help provide the jobs for those people that are unemployed. And when that all happens, as it did in the Kennedy years, the government itself ended up getting more money.

The people—we talk tax cuts. We should talk tax-rate reductions. And it's a difficult thing to explain to people, that those reductions in rates for each individual are intended to result in more people paying taxes and better earnings so that government will get a normal percentage increase, even though the individual is better off.

Mr. Skelton. Do you see any circumstances where you might want to delay or cancel these tax-rate cuts of last summer in order to balance the budget?

The President. No. As a matter of fact, I will tell you, I firmly believe—and I have the support of a number of economists on this—that had we not been forced to compromise, had we been able to make these tax cuts—first of all, we asked for 30 percent, not 25, over the 3 years. We had to take that cut to get it.

The second thing was we had asked for it to be retroactive to last January 1st so that the people would have been having a tax cut immediately—retroactively, in fact. And we then first had to compromise down to July—last July lst—and finally it ended up October 1st, the beginning of the fiscal year. So, in effect, the actual tax cut for 1981 is only about 1 1/4 percent. Well, that's not exactly a stimulant to the economy that we had in mind.

Now, these people, these other economists—and, as I say, I myself—believe that had we not had to compromise, very possibly we wouldn't have had this recession. And if we had had, it would not be as severe as it is.

So, rather than push it back or postpone—no, the thing that I would yield to if it could practically be done would be to move it forward. And there have been proposals to do that. But politically it might be impossible, because if we once open that subject, that we know is what will happen.

The Nation's Economy

Mr. Skelton. Let me jump in here with another impact-type question. When you ran against Carter and during the debate, you asked people to judge his impact on their lives, and you asked them to ask themselves whether they were any better off now than when he first became elected. Do you think it's now fair to ask people whether they're better off than when you became elected? And if not, when will it be fair?

The President. Yes, but I was asking at the end of 4 years. Mr. Skelton. Okay, 4 years from now—

The President. Now they're comparing me to 1 year ago—and with a recession. I think by actual figures I could prove that they are better off.

First of all, the interest rates are over five points lower than they were when I took office. The inflation rate is down to single digit, when it was almost 14 when I took office. Their rate of taxation is now lower than it was when I took office.

So, I would suggest that if the people actually looked at the figures—but I think in a recession it's easy to find people out there who say, "No, I'm not," and particularly if you ask around Washington, because we have drastically reduced the size of government. There are fewer government employees -[inaudible]-and one of them, if he hasn't found another job would say. "No I'm not as well off as I was a year ago."

Federal Deficit

Mr. Cooper. Mr. President, in your first year you had extraordinary success in cutting the rate of growth in Federal spending. The deficit projections are still mushrooming nonetheless, probably, primarily because the basic entitlement programs have not been changed very much. Would you favor, to hold down the deficits, beginning to cut into those entitlement programs, social security and such, or perhaps go to the excise taxes on gasoline and cigarettes?

The President. Well, social security, of course, is now in the hands of a commission-and that was something else, again, that I'd always spoke of during the campaign, and then thought maybe we were going to be able to get something done without going that route. But we're going back to it. So, I except that and take the others. They have to be looked at. And it isn't a case as—when you say cut down, immediately the impression is given to anyone who's dependent on government that they're now going to have less than they had before.

I think that there are great improvements that can be made with regard to eligibility and ensuring that those who are getting entitlements are truly in need of them and justified in getting them. There are corrections that can be made, such as our own Inspector General's finding out in the last 6 months that 8,500—and this is not the final check, this was just on a first check, partial check—that 8,500 social security recipients have been receiving checks for an average of 7 years, that they've been dead that long.

Unemployment

Mr. Nelson. Mr. President, one of the measures that you supported last year in budget-cutting was the elimination of 13 extra weeks of jobless compensation. With the unemployment rate now at 8.9 percent—and some predictions it'll go higher-do you see any chance that you might support a move to restore that extra 13 weeks?

The President. Well, this is one that I just don't think I could give you an answer on this, because we haven't discussed that. That is, there's been no discussion of this, and I haven't seen the facts or figures on that.

Mr. Nelson. Also, on the unemployment picture you were asked, I think, at the press conference about what did you plan to do about the 17-percent rate among blacks, and you pointed to the local newspaper and said you'd made it a point to count the number of pages in the want ads, 24 pages. And then you said that you needed to get more qualified people to apply for those jobs, and you would do what you could to see that there were more qualified people. Do you have a specific program in mind?

The President. Well, we have been working with this national task force that we have on voluntarism, and they have been discussing some plans that employ a combination of government and private for this.

Now, there are a number of programs that are going forward. For example, in five States, started by the governments—which ought to restore some people's faith that our turning back of things to the State governments is not—in these five States they have started programs, not statewide, but in several important, key cities as an experiment-and a very successful one so far—in which the private sector is involved in taking the least-likely-to-succeed seniors in high school into job-training programs. They don't go for the best—they don't, those they figure—but they found some actual statistics of the percentage of high school students that were—you could really conceive that they were going to have trouble when they got out and they probably were not going to go on to any additional education in college or anything. And 60 percent of them wind up within 2 years on welfare. So, they started this experiment, and it has been, I think it's something like up in the 90 percent of salvage of these students who were judged by their associates and their teachers and so forth to be the least likely to make it.

Now, there are things like this going on all over the country to—

Mr. Nelson. But you don't have a specific government program in mind at the time to do anything?

The President. Well, only to the extent of—as I say, right now the government is working with the private sector on some programs of this type. And it's a little premature for me now to say what they're doing or how they're succeeding.

Mr. Skelton. You're going to comment on this in your State of the Union?

The President. What?

Mr. Skelton. Will this be in your State of the Union?

The President. I don't know whether that specific subject, but there will be some others.

National Security Adviser

Mr. Nelson. On another matter, in bringing Bill Clark here as your assistant for national security you brought a longtime associate and close friend who, other White House officials say, will have enormous influence beyond this area of national security, both because of this rapport with you and because he knows so many other people in the administration. Can you comment on that? And do you see the so-called troika that people say runs the White House will now be transformed into a quartet?

The President. No, there's no change in that. The team is working very well. And I think that you'll find that the job that Bill Clark has, that is a round-the-clock job, and he is working very well in that position. That's what it will be.

Now, we had always planned—well, not always, but I mean recently planned having started on one system before there was ever any thought of a change of personnel, we were looking toward a more direct access on the foreign policy matter. We found that what we had, the system we were working with was more cumbersome than it had to be. So, that change is already taking place.

Mr. Nelson. But he obviously discusses matters other than national security with you, doesn't he? Or will he, since he knows you so well and —

The President. With the state of the world today, I could tell you honestly, every conversation he and I have had has been on national security.

National Defense and Arms Reduction

Mr. Skelton. Speaking of the state of the world, some people in the Pentagon are worried that after a year or two, because of the realities and pragmatism of economics and politics, that your commitment to a defense buildup may slack off and that you won't be able to carry through with the big defense spending that you're now planning to. How committed are you to carrying forth with a—

The President. No, I am committed to—

Mr. Skelton.——600-ship Navy and the B-1—

The President. I don't think that the people—I think they sense it; they did all during the campaign—that we're not where we should be with regard to our ability and security, and we're not. That "window of vulnerability" term that we used, that exists. But I am optimistic that there can come a day when we can slack off, if we're successful, in what I believe goes along with this. And that is true, legitimate, verifiable arms reductions of our adversaries, such as the Soviet Union.

Now, up till now, my criticism of the negotiations that have been held, such as the SALT talks, my criticism was that on one side of the table sat the Soviet Union in the midst of an enormous—the greatest that man has ever seen—in the buildup of their military. And they were seeing us across the table in these recent years, unilaterally disarming, which meant that all we could do to them was ask them, "Why don't you do it, too?" They didn't have to give up anything. And we were already giving it up voluntarily.

Now, as we go forward with our program, the Soviet Union realizes they're no longer going to have that free ride. And I believe since they have strained their economy to the limit, they are not really able to adequately provide their people with consumer goods and food, because everything is devoted to the military buildup. So, strained to the limit as they are and suddenly faced with the prospect of maybe trying to have to match the great industrial capacity of the United States now turning to a military buildup, that we can get legitimate reductions in arms.

Mr. Skelton. Do you think that's likely in the next 3 or 4 years, in your term?

The President. Well, I think it's going to take a while to build up, but we've started in Geneva with the intermediate-range missile program.

Now, if we had not gone forward with a program of promising missiles and cruise missiles to our NATO allies to match the SS-20's and -4's and -5's that the Soviet has based, targeted on Europe, they could wipe Europe out. And there's nothing to deter them. But now, faced with our buildup in which we will put a deterrent force in Europe aimed at their cities, they're willing to sit down in Geneva and have a meeting with us on this.

Where would we be in those kind of talks if we were sitting there with no plan of a deterrent force at all and simply asking them to give up their SS-20's?

Mr. Skelton. What you're saying is you're going full speed ahead on the arms buildup, at least until we get a verifiable arms control pact.

The President. Yes, until things can develop that we can—in other words, I am very willing to talk arms reduction. And I have, again, promised that during the campaign: legitimate arms reduction.

But let me tell you what—out of the SALT talks, to illustrate what I was talking about. I have been given figures that if the SALT II treaty had been ratified, it would have permitted the Soviet Union to add to its arsenal nuclear explosive power equal to what we dropped on Hiroshima every 11 minutes for the life of the SALT II treaty. Now, how do you call that strategic arms limitation?

Draft Registration

Mr. Skelton. On a corollary issue, do you see any circumstances where you might approve of a peacetime draft, reassess your opposition

The President. No.

Mr. Skelton.——that could please the allies?

The President. My change of mind on the registration was only because I had accepted, as most people did, even when the head of the Selective Service himself testified in 1980 that that rather costly operation would only shorten mobilization time by a few days. Well, it just wasn't cost-effective. However, I have now since—and greater study has been made and the information has been brought to me that, no, we can shorten mobilization by as much as 45 days. Well, that makes it cost-effective. And so, I've said, "Okay. I'll continue the registration."

The peacetime draft—we have now seen an upgrading in the type of personnel enlisting, an increase in the numbers, an increase in the numbers who have reenlisted. There's an entirely different spirit in the armed services, and I believe that the voluntary military, which has been traditional in our country, other than in wartime, will work.

If there were anything at all—you said, could anything make it peacetime—I would have to hark back to the days preceding World War II, and there for the first time we instituted a peacetime draft. But the rest of the world was at war; the whole world was going up in flames. And so, hypothetically you'd have to say there could be a situation where you thought the risk was so imminent that you might do this. But I don't see that risk as imminent now, and I am philosophically opposed and practically opposed to the peacetime draft.

Soviet Military Power

Mr. Nelson. But are you concerned though that there's sort of a growing movement in the United States of people who don't seem to take seriously the warning that you've given about the Soviet buildup and who don't think that we should be preparing for the possibility of a nuclear war? And what can you do to convince the American people that you're right about that?

The President. We tried one thing. We put out that booklet, that pamphlet—

Mr. Nelson. But there are a lot of skeptics about that booklet, aren't there?

The President. Well, yes, and a great many of those skeptics are people that I think could be described as "figures don't lie, but liars figure." I think the skeptics are wrong, and I think they're doing a disservice to the country and to the people of this country, because our situation is dangerous.

Mr. Nelson. Is it more dangerous now, do you think, than in recent years? I mean, in the past year or so has the world situation changed so much that it's more dangerous?

The President. Well, our own deterioration had continued right on down to when we took office and then started to reverse it. We've now put into operation the first realistic buildup of forces and strategic forces in over 20 years.

David A. Stockman

Mr. Nelson. May I ask you a question on another subject? David Stockman, your budget director, is a very important figure in your economic program in the first year. Of course, he offered his resignation after the article in the Atlantic Monthly criticizing your program came out. A lot of Republicans-not just Democrats but Republicans—have said he's lost his credibility on Capitol Hill. In view of that, do you expect him to continue as budget director throughout your term?

The President. Yes, because I think that in that Atlantic Monthly story he was the victim, not the villain, and—

Mr. Nelson. But he still lost credibility though?

The President. The funny thing is, no. Recently, in the last efforts up on the Hill there on the thing of getting the continuation that we wanted for covering these months and so forth, he was the man with the figures and the man that certainly our side was relying on. And I had any number of them come down and say that they would have been lost without him.

Mr. Nelson. Is he going to resume dealing with Democrats, because he has not been doing that since the article came out, according to Congressman Jim Jones, the chairman of the House Budget Committee.

The President. Well, maybe he was speaking from a partisan standard. I would not have seen where there was much of a need lately. He will be involved now as we go forward with the—as we present the 1983 budget.

Mr. Nelson. Don't you think that the Democrats are waiting in ambush for him when he comes on Capitol Hill next time, with the information from the Atlantic Monthly article?

The President. I think that they're laying and waiting ambush for me. [Laughter]

Deputy Press Secretary Speakes. Stockman said that it's not uncommon for him, when he's preparing our budget, not to be talking to Democrats.

Environmental Issues

Mr. Skelton. I've got to ask you an environment question. When you became Governor of California, people were very concerned about your environmental positions. So, the first thing you did was appoint as your resources secretary, Livermore, who had great environmental credentials from the Sierra Club president, and he gave you environmental credentials. You did just the opposite here, it seems in many people's view. You appointed a guy Interior Secretary who is perceived to be the extremist on the developmental side. And I'm wondering, do you have second thoughts about maybe the way the environmental issues were handled? Should it have been handled more delicately?

The President. No, not at all. And, George, let me remind you of something. I fancy myself an environmentalist.

Mr. Skelton. But a lot of people don't fancy Watt as that.

The President. I know, except that I can remember when a man from the Federal Environmental Protection Agency came to Sacramento to make a speech toward the end of my terms there and said that California was ahead of the National Government in what it had done.

Mr. Skelton. That's why I'm wondering whether you might have second thoughts about what you've done here.

The President. No, let me point something out. The highway commission, before I became Governor, as you know was kind of a bulldozer. It was considered to be autonomous, and no one could control it. And if you remember, there were always battles going on in the State because if they decided this is where the highway's going to go, they didn't care whether it went through a grove of redwoods.

Do you remember Pat Brown once saying, when it was going to go through a grove of redwoods, "Well, we'll plant some more"? And the people were very—well, one of the first things I did when I got in was make a change in the highway commission and dictated that if a slight curve was necessary to preserve an historical monument or something unique, like a grove of trees or a beauty spot or something, they'd make the slight curve. And the result was that California won in 9 out of 13 national awards for highway building that preserved the environment and historical artifacts and so forth.

Mr. Skelton. How about all that offshore drilling that your administration has to do now?

The President. We were the ones who stopped the offshore drilling until we were satisfied after the oil spill—and the oil spill was Federal, not State. And, George, the head of the oil company told me afterward, he was not—he had risen to his point from the commercial end of it, not from the engineering end—and he said what he had learned in that whole thing was that had they been drilling outside the limit, under the State regulations instead of the Federal, there'd never have been a blowout.

Mr. Skelton. You don't think Watt's a political liability then?

The President. What?

Mr. Skelton. Do you think Watt's a political liability?

The President. No, because—and I wonder why everyone—I saw—again, that was—was it "60 Minutes" or someone did the thing on Watt and the million petitions that the Sierra Club got, asking for his resignation. Why hasn't anyone mentioned that in response to that, a petition of over 7 million signatures was brought in wanting him retained?

I think that what happened, and what happened in our own State was—and I was seeing it happen—that the environmental movement—there .hadn't been such a thing before our administration. It started during my terms as Governor. I don't say I started it—it started. But it got out of control. And we had environmental extremism that was going beyond all bounds of reason. And I felt that way then, and I feel that way now. And I think that Jim Watt—he's not going to destroy the environment, but he is going to restore some common sense.

Views on the Presidency

Mr. Nelson. Mr. President, Larry's waving us out of here, so may I ask you one very quick question and make it a couple of parts? One, did the assassination attempt in any way sort of change your outlook on the Presidency and what you, you know, on how you're proceeding in your job, how you look toward the future? And most of your aides say you really enjoy the job here. Do you really enjoy the job—

The President. Yes.

Mr. Nelson. — and do you miss the California weather very much?

The President. Oh, well, I think anyone from California is kind of perpetually homesick. I am, and particularly because California means to me that ranch, which I love very much, and that kind of life and all.

But, yes, I enjoy it. I have talked for so many years without ever thinking that I would ever do anything except—when I say talk, make speeches; you know, I've always described it that in Hollywood, if you didn't sing or dance, you ended up as an afterdinner speaker—about the things that I felt should be corrected. And it was the same thing I discovered as Governor, that the satisfaction in being able—instead of just talking—to cope with them and try to get things changed—yes, I like very much.

Mr. Nelson. So, we can expect you to be running for reelection in 1984?

The President. Well, I've always said the people tell you that, whether you—

Mr. Skelton. So the people tell you you should run?

Mr. Nelson. Will you talk about how the assassination attempt really changed any way you look at life or the way you approached your job or the way you feel about things?

The President. Well, I think you're more aware, and I'm also very aware that the Lord certainly was watching out for me on that day. And I guess—from now on my time is His time.

Mr. Cooper. Give you some sense of redoubling your efforts?

Mr. Nelson. Yeah, does it give you some sense of redoubling your efforts to do what you're trying to do as President, or is that—

The President. Well, yes. As I say, I think that He has the first claim on my time from now on.

You were going to ask a question, I thought.

The Soviet Union

Mr. Cooper. I was just going to follow up and ask one there. I also was really wondering-if we've got half a second—to ask you about—you were talking about the danger that the country is in and the threat of nuclear war. What's your personal view of the intentions of the Soviet Union? Do you think, as some people do, that they're primarily a sort of a defensive, fearful country, looking in Afghanistan and Poland for buffers, or do you think they still have an appetite for other people's territory?

The President. Well, I think there's a combination of both. At least they talk a great deal about their fear that the world is going to close in on them, but the other, you can't deny that the Marxian theory and Lenin's theory and every Soviet leader since has at some time or other publicly reaffirmed his dedication to this—and that is that Marxism, the theory, can only succeed when the entire world has become Communist.

Mr. Cooper. So is it a little naive, perhaps, to think that if we just reassure them, placate them, that they will moderate their—

The President. That's it. They've got to, and maybe the failures of their own system, which make them dependent on the rest of us for help—as they are—maybe this will help them see the fallacy of this. But this is why I mean it's a combination not only of fear; it's not just defense. They believe that—that religion of theirs, which is Marxist-Leninism, requires them to support world revolution and bring about the oneworld Communist state. And they've never denied that.

Mr. Cooper. And we have to, you feel, have to contain that, have to stop that, not just in places like Poland but in Africa—

The President. Yes, because I they've proven that their system is not of increased freedom. It's one of dictation. Can anyone say that the Tsar any more repressive on the Soviet people than this regime is? Did the aristocracy in the old days, did they have any different elevation of luxury over the peasantry than the hierarchy has over the average Soviet citizen, the so-called masses, today? Beach homes on the Black Sea, private jets, helicopters, country homes outside, special stores where only they can purchase the certain special kind of goods—they've created an aristocracy. What's ever happened to that equality of man that they teach?

Messrs. Nelson, Cooper, and Skelton.

Thank you very much.

Unemployment

The President. Incidentally, since it's almost time that you'll be hearing it anyway—why didn't you, in your interview, ask about yesterday's press conference and the fuss about the number of unemployed in '80 and '81?

Mr. Nelson. Well, we'll ask about it. What about it? [Laughter]

The President. Well, I was right.

Mr. Nelson. You were right?

The President. In fact—and the others were right. But the others compare the number of unemployed in December 1980 and December 1981. But the figures that are normally taken are the average for the year. And in 1981 the average number of people employed for the year was 1,048,000 [1,043,000] ¹ more than it was in 1980, and the Department of Labor will confirm that.

¹ White House correction.

Mr. Nelson. What about the other figures on the last 6 months of the Carter administration on the inflation rise? You said it was a steadily increasing rate, and the figures show that it actually went down from 7.8 percent in July to—

Mr. Skelton. Unemployment figures.

The President. No, you're talking about unemployment.

Mr. Nelson. Sorry—unemployment figures went down to 7.4 percent.

The President. The only thing that I can figure that might have happened there-and that wasn't very much of a down-you'll remember that there was a great-during the campaign—the great layoffs began in the steel industry and the automobile industry and so forth. It could have been in that latter part, that then as they started for the new models that people that were on layoff, there were actually more indeterminate layoffs in the automobile industry in '80 than there were in '81 or than there are now even. But that could have been the revving up for the new models and so forth, some things of that kind, that contributed to that.

Mr. Nelson. But if you look at the figures, you didn't inherit what was an escalating unemployment rate if you look at the employment figures

Mr. Speakes. Basically flat.

Mr. Nelson. Basically flat, right.

The President. Yeah, basically flat. Yeah.

Mr. Nelson. Well, thank you very much, sir.