Interview With the President Remarks and a Question-and-Answer' Session With Members of the American Press Institute.

THE PRESIDENT. I appreciate your letting me interrupt your meeting. I'd like to restrict our time, which. was set up for 30 minutes, to 25 minutes, so that the 5 I might have an individual picture made with you if you have no objections to that. And I'll try to abbreviate my answers so you won't have to suffer because of a lack of time.

ADMINISTRATION POLICIES

Today is, I guess, a typical day in the life of a President. I thought I might just outline briefly a few of the things that we are addressing on a very current basis.

I've been on the phone and meeting privately with Cy Vance this morning and last night on the Israeli-Lebanese question, which is a matter of great concern to us and which involves not only our nations but also the United Nations today.

We're working to try to understand the possibilities of the coal strike being resolved. As you know, this is the third contract that has been negotiated, the second one that the bargaining council has approved, and we're trying to monitor that progress and also to continue the good increase in coal production that has taken place since the Taft-Hartley Act was invoked. We've had a good many nonunion members go back to work. There's been a minimum of violence around the country. And some union mines are back in operation, and the rate of coal production is increasing steadily.

At the same time, we are trying to help with the Rhodesian question and monitoring carefully the withdrawal, now complete, of the Somalis from the Ogaden area.

We are dealing in the House with the Humphrey-Hawkins bill. The vote is today. We're trying to hold our tax package together, prevent a reopening of the entire question of social security, and in the Senate, of course, we have the crucial vote on the Panama Canal treaties this afternoon. Debate is going on now, and I understand another Senator just endorsed the treaties, which is very encouraging to us.

These are some of the matters that are my responsibility just today, and I don't go into the minor ones. I've got to make a major speech on defense policy tomorrow morning at Wake Forest College in Winston-Salem, and that's what I've just been working on when I came in here. And I'm going to go out tomorrow morning and afternoon on one of our major nuclear aircraft carriers to see at first hand some of the new weapons systems that I have to decide about in preparation of the budget and in shaping our defense capabilities.

I'd like to answer any questions you might have, and I'll try to be rapid—and brief answers.

QUESTIONS INTERNATIONAL ECONOMY

Q. Mr. President, I'm Bob Wicker from Dothan, Alabama. And I'm working in West Germany with Stars and Stripes. As you probably know, the value of the dollar, declining dollar, is of great value to our troops over there. I just wonder if you could shed any light on the impact this is going to have on NATO in the near future.

THE PRESIDENT. Well, I've been pleased in the last few weeks to see the dollar stabilizing as it relates to the deutsche mark. When I was overseas, it was down, hovering around two deutsche marks per dollar, and now I think it's up to 2.05, 2.06, 2.04, right in that neighborhood. So, we have been acting with the Germans and with the prospect of acting in an equivalent way with the Japanese to stabilize the irregularities in the market.

We have a strong reason to believe that this year we'll see an improvement in the dollar, in its value, related to other currencies. And I'll give you two or three very quick reasons.

One is that we don't anticipate our imports of oil to increase in 1978 as they did in 1977. That's one of the major reasons for our adverse trade balance.

Secondly, last year we had about a 3-percent higher growth rate than the average of all our major trading partners. This year, because the other economies are improving somewhat, that 3-percent difference is likely to narrow considerably. Obviously, when our economy is booming, compared to theirs, we have extra money that we can use to buy their goods; they can equivalently afford to buy our own goods.

Because of many factors, which I won't describe, to save time, interest rates in our country have now gone up, compared to interest rates abroad. Yesterday the equivalent to the prime rate in Japan was lowered again. This means that it's more attractive now for foreigners who have money to invest it in our country than it was last year.

I think we'll have an energy bill before too many weeks go by. We are making some progress already in the Senate. We have an agreement now. We're introducing this Senate agreement—the Senators are; I think Senator Jackson, in the lead, Senator Bumpers was helping him—today to the House, and I hope that will resolve the question.

I think a doubt and an uncertainty about what we are going to do on the energy question has been an adverse factor. And although the results of an energy package will be slow in being realized, they will be sure and steady and give some predictability about the future markets.

Temporary things hurt the dollar, too. The invasion of Lebanon by Israeli forces caused the market to be shaky yesterday. And the news reports that the kidnapping in Italy causes the dollar to be a little bit shaky.

So, these matters, as they are resolved, if and when they are resolved, that don't relate to any decision that I might make, have an adverse effect on the stability of the international markets.

We don't try to stop long-range trends, of course, in currency values. These are determined primarily by trade relationships. But we do intercede in an increasingly effective way and an increasingly aggressive way to compensate for disorderly movements in the market.

But I think the trends this year, based on these factors and a few others, show that the dollar is likely to strengthen during 1978.

SPACE PROGRAM

Q. Mr. President, my name's Ron Thornburg; I'm with Today newspaper in Brevard County, Florida. We're the home of Kennedy Space Center, so we're very interested in space policy. I have a doublebarreled sort of question for you.

Do you have any plans to put funding for the fifth space shuttle orbiter back into the budget? And secondly, what do you see as the role of the United States in space in the next 10 years?

THE PRESIDENT. No, at this time I don't intend to put the fifth space shuttle orbiter back in the budget. We have four that I have recommended to the Congress, and we believe this is completely adequate to take care of our needs for a long time in the future and also give us a standby vehicle if we need it. We will upgrade, however, the early models produced to make sure that they are fully operational in character. This was not in the original plan.

I think that our space program in the future, the next 10 years, will be stable, well planned, carefully considered. I think the space shuttle capability that we will have will greatly expand the customer market for space services far beyond our own country. Other nations and private enterprises will now be using our space shuttle capability when they couldn't really use the very limited and tightly controlled space capability of independently launched missiles.

I don't need to go into detail about geodetic survey capabilities, geological survey capabilites, astronomical capabilities, weather monitoring, crop assessments to detect diseases in trees. Every time I have a foreign visitor, I give that person a 400-page summary of the kind of space data that we have available to them.

One of the things that we've just done recently, for instance, is put in a communications system for the first time in the Southwest Pacific. The United States took in new territory for the first time since 1912, this January, when we added one commonwealth and one protectorate to our resources, and we put up a space satellite capability for communications there.

So, I see a great possibility in meeting our human daily needs—research and development, astronomy, geology, geodetic surveys—that can keep these space shuttles busy.

CENTRAL UTAH PROJECT

Q. J. Heslop, Deseret News, Salt Lake City, Utah. We worry a lot about water in Utah. And our Central Utah project was on the famous hit list, then off, and now we get the impression that we may be starved to death by increased costs and lack of money. What do you see that can be done to help us in the completion of that project before we're priced out of business?

THE PRESIDENT. I haven't known about any changes lately. So far as I know, the Central Utah Project is approved and will be completed on schedule.

Q. Very minimum budget.

THE PRESIDENT. Well, the budget is evolved, as you know, over a long period of years, sometimes 10, 15, 20, 25, 30 years. And whatever the budget is required to complete a project once it's approved will be provided. The increase in the budget is necessary to compensate for inflationary factors, increased costs. And this is accommodated by my budget recommendations to Congress and by their action.

I might say that many of the projects that are not warranted began just with tiny apportionments of money, tens of thousands or hundreds of thousands of dollars, later growing into hundreds of millions of dollars in a project, once it gets a momentum of its own.

But we've reassessed several times, with a great deal of concern, the Central Utah Project, and the final determination by me, Secretary of Interior and the Corps of Engineers as advisers, has been that it's a worthy project, and so far as I know, it will be completed.

PANAMA CANAL TREATIES

Q. I am Phil Dessauer, Tulsa World. I'm interested in—would you tell us who the name of the last Senator you had on the Panama—

THE PRESIDENT. Paul Hatfield, I think, endorsed the treaty just a few minutes ago. He's the newly appointed Senator from Montana.

Q. How do you size up the prospects now?

THE PRESIDENT. I think the prospects are good, but extremely close. And these last few hours of debate, obviously, are crucial. This is a focusing of the amendments on which the Senators feel intensely. And I think there's going to be a very close vote. It is the most difficult political problem that I have ever faced. I think I would almost equate it with the difficulty of being elected President. [Laughter]

We started out a year ago, inheriting this important matter from my three predecessors. And at that time, obviously I had to decide whether it was a good treaty or not. I decided that it was a good treaty—two treaties. And we began the slow, laborious, difficult process of acquainting the American people with the facts—and obviously, the Members of the Congress. We've made good progress.

I think that the most recent poll results from all the known sources show that a plurality of Americans now favor the treaties with the leadership amendments on them.

I will be very glad when this vote's over. That is on the neutrality treaty that takes effect at the end of 1999. And then we'll have another major and difficult vote on the treaty to take place between now and the end of this century. So, I feel hopeful, but still somewhat in doubt.

Q. You have any conversations with Senator Bellmon?

THE PRESIDENT. I have had conversations with every Senator on the Hill. [Laughter] Senator Bellmon is a statesman— [laughter] —and I have confidence in his judgment.

URBAN POLICY

Q. I'm Sue Reisinger from the Dayton Daily News. We understand you're going to introduce your urban policy at the end of this month. We would appreciate you being as frank as possible about how much money and what kind of programs will be in that policy.

THE PRESIDENT. I don't know yet, you know, about the details. I met most of the afternoon yesterday with the Secretary of HUD and with my own advisers on domestic policy and also economics, to go over the general principles and policies and the strategies for the urban policy.

We want to have as much as possible authority and responsibility at the local level of government and among nongovernmental entities. We realize that in the broad scope of things a relatively small portion of any future budget within a city's boundaries will come from the Federal Government. The overwhelming portion of it has got to come from private enterprise, from local persons. Neighborhood groups, volunteers, local authorities, regional authorities, State authorities have got to play a major role. And that will be one of the thrusts.

Among the cities of our country, there's over a $3 trillion investment just in buildings, factories, and homes, and we feel that they ought to be preserved.

We have now analyzed all the programs, about 160 programs, to measure their effectiveness in dealing with urban problems. And it was .a very stringent analysis. We've also required for the first time our major heads of department, agency heads, to come together to share both criticisms and some hope for the future.

We'll probably phase out Some programs. We are starting our analysis with the first of last year to put together a comprehensive approach to what the urban problems were when I took office. Some of the proposals have already been introduced to Congress. Some have actually been passed by Congress. A few have actually already been funded and now are being implemented. But it'll be very comprehensive, and I think it will result in a great improvement in dealing with urban problems.

But the exact additional budget above and beyond what we've already done has not yet been determined, but I will issue the urban policy analysis by the end of this month.

Also, we'll come out, I hope and expect, with a brochure that might be used as kind of a textbook or handbook for people who are interested, at all levels of government, including from myself all the way down to the average homeowner, so that there can be a delineation of what programs are available, what responsibilities should be assumed by private citizens or by business leaders or by local, State, and Federal officials. And this, I think, will help also.

But it's a very good discipline for us. We've been working on it for literally months. And although I don't know the final details of it—if I did, I would really rather wait until the end of this month, but I don't yet. And I think you'll be pleased with it. I hope you will.

SOCIAL SECURITY PAYMENTS

Q. I'm Nancy Keil with the Daily Oklahoman. In Oklahoma, as almost everywhere, the sentiment about the social security program is getting pretty strong, now that the effects have been going in on paychecks. And I was wondering if you're doing any reassessment of the program that you've gotten through, now that there is some talk about retrenching on it.

THE PRESIDENT. Well, I think you know that none of the increases in social security payments that have taken place this year were a result of recent legislation. This is a built-in increase schedule that was passed years ago. The Congress, I think very courageously, acted under emergency circumstances in a mandatory way. Had the Congress not increased the contributions to the social security system, it would have gone bankrupt. A couple of the major funds would have been bankrupt by next year, 1979, so the Congress had to take that action.

We have proposed to the Congress a tax reform measure and a tax reduction measure consisting of about $25 billion in net savings to the American taxpayer, and there'll be very few families in our country who would have a net increase this year or next year, once the tax reductions go into effect. I advocated to the Congress some reduction in contributions from wage payments from the general fund, in case the inflation rate is more than 6 percent and other circumstances, to pay for the nonretirement type benefits-survivors benefits and death benefits.

The Congress did not do this, which added about $30 billion in net additional cost to come from payroll deductions. I think this is something the Congress might go back and reassess. But my guess is that because of an extremely crowded calendar this year, that no substantial modification will take place in the present social security law.

GOVERNOR REUBIN ASKEW OF FLORIDA

Q. Mr. President, Walker Lundy from Tallahassee, Florida. Most people in Florida think Reubin Askew is going to come work for you after he finishes being Governor. What kind of job would you predict he might have?

THE PRESIDENT. I think Reubin Askew could fill any job in Washington, including the one I hold. [Laughter]

Q. He disagrees.

THE PRESIDENT. Well, I feel that way. Reubin has been very helpful to me already. We have added a dimension of competence, I think, to the appointment of diplomatic officials around the world because of the committee that Reubin has headed. Typically of him, he's done an extremely conscientious job, and every appointment that I've made to any diplomatic post—ambassadors and so forth-have been made after the screening process that Reubin has supervised.

I have asked Reubin before, I might say, to come to Washington and work with me, before I was inaugurated, at a Cabinet level. And I think he knows that my hope still stands that he might do this, to fill a vacancy that he and I could agree upon. But he made it clear to me at the time that although he was honored by the invitation, that he had duties to perform in Florida. So, I have not discussed with him any specific thing. I don't know what opportunities would present themselves if and when he decided he might move. But he loves Florida, and he's dedicated to be a full-time Governor. And we've not discussed it since I offered him the Cabinet post, if he would take it.

But you can tell from my comments how much I think of him.

PUBLIC OPINION POLLS

Q. Mr. President, Curtis Sitomer, Christian Science Monitor, in Boston. The Gallup Poll today shows a 51 percent approval rating for you among the public. This is a slight increase, but is only about half of the electorate. Going into a midterm year, what will you do to improve your status with the American public and help your party in its congressional and local and State elections?

THE PRESIDENT. Of course, I was pleased to see the trend going up. [Laughter] It's quite a pleasant change. My own personal popularity is still quite high, around 70 percent or better. The measurement that Gallup and Harris and them use, of course, is how the American people assess my performance as President. And this has varying factors that go into the public's opinion.

One is how well the Congress and I can cooperate on very difficult questions, like energy legislation or tax reform or Government reorganization or the Panama Canal treaties. It also measures the effectiveness of my administration as it relates to dealings with the Soviet Union on SALT and the comprehensive test ban, on dealing with the problem in the Middle East, on trying to retain a semblance of peace around the world.

Of course, a lot of it is determined by just visceral human reactions to my own personal activities and statements. So, I would guess that the measurement of my effectiveness as President by the public opinion polls would primarily be determined by whether or not I'm successful in bringing to a conclusion many of those problems that I outlined to you at the first of this meeting.

If we got a solution in the coal strike, that would be helpful for my personal opinion polls, although there's very little that I can do to require a coal strike resolution. And the Panama Canal treaty vote will have an impact, the energy package being passed would have an impact. We undertook a lot of very difficult and controversial subjects, tasks, when I became President. We have not yet had time to be successful in many of them, and I think that is the major factor.

All of us work hard, and we do the best we can. We make mistakes. But I think the public's been very gracious in their analysis of my administration. And I'm pleased with that upturn that came at a very good moment.

I told the Democratic fundraising group last night—a banquet that raised about a million dollars, the best one we've ever had—that some days I had a very hard time, and that one night, after having two or three Senators announce they were not going to vote for the Panama Canal, I went home, and I thought I would at least have to relax by getting in a warm tub bath. And my Ivory soap sank. [Laughter]

So, some days are ,good and some days are bad. The Gallup Poll has helped a little bit this morning.

TAXATION AT LOCAL LEVELS

Q. Jim Houck, San Francisco Examiner. The major political issue in California right now is a ballot initiative which would dramatically reduce the amount of revenue through the property tax available to local governments. I suspect this is an issue elsewhere in the country. Are there any Federal initiatives that are being considered in this area?

THE PRESIDENT. No, not to put a statutory limit on what a local government can do on taxation. I don't know of any Federal—obviously, as we increase Federal contributions in the field of transportation or health, environmental quality, education, that cuts down on the amount of contribution that local taxpayers have to pay.

When I was Governor of Georgia, I did have a responsibility in that field, and we cut property taxes substantially by giving refunds from the State government derived from sales tax and income tax. We have a pretty good income tax in Georgia, but there is no Federal movement to control the actions of local governments or directly to restrain how much property tax they can levy. I think that is a responsibility of the State governments.

U.S. ATTORNEY DAVID MARSTON; SELECTION OF U.S. ATTORNEYS AND JUDGES

Q. I'm Mike Renshaw, Mr. President, from the Courier Times in Bucks County, Pennsylvania. In retrospect, do you feel that the Marston affair could have been handled in a less inflammatory manner?

THE PRESIDENT. I think so. I have literally hundreds of appointments to make, and the Marston affair never came to my attention at all. I never heard of Marston until out in November.

This has become a very highly publicized issue. If I had known a year ago what I know now, I would have looked in personally to what the circumstances were, would have consulted very closely with the Attorney General, who probably had not much more knowledge of it than did I, and would have handled it more expeditiously and more openly and frankly.

This is an issue that I think has been distorted. You know, my commitment to the American people has been completely honored, that the appointments to the judiciary and to the Attorney General's office would be handled on the basis of merit. And in spite of dozens of appointments, we have never been accused of making an appointment that wasn't meritorious.

And in my debate with President Ford, I said that all things being equal, float I would appoint people to the Supreme Court and to lesser offices who were compatible with my own basic philosophy. I think the Attorney General has done the best he could with it.

We initiated as aggressively as possible, with the constraints placed on me by custom and tradition in the Senate, a merit selection of judges. And we've, for instance, got in every Federal judicial circuit now a merit selection board. And they give to me recommendations, three, four, five, six of the top quality, the best nominees that they can discern for each vacancy. And I've always chosen my appointments from those recommended.

On the district court judges, primarily limited to the bounds of one State, I've written all of the Democratic Senators a personal letter, my first few weeks in office, asking them to appoint a similar merit selection board. And I think 17 or 18 of them have already done that. So, we are moving as strongly as we can toward merit selection.

But the Marston case has been obviously a very serious problem for us, and I regret that it happened. And had I known a year ago what I know now, I think we could certainly have handled it better.