Philadelphia, Pennsylvania Remarks and a Question-and-Answer Session at a Townhall Meeting at Temple University.

THE PRESIDENT. Thank you, Mayor Bill Green, President Wachman, Members of Congress, ladies and gentlemen who have come here for what I hope and believe will be an exciting session:

I want to say first of all that you've got a dynamic and aggressive and courageous young and new mayor who is doing the courageous thing under difficult circumstances. He is having to face the difficult issues that fall on the shoulders of a chief executive, and I'm reminded, flying over here with some of your own congressional delegation this morning, that they and I and your mayor all share a great common responsibility and a partnership, because we represent the same people, and those people are you.

Coming here today reminded me of the great history of Philadelphia—also the great friendship which you extend to visitors ever since I was a midshipman at the Naval Academy, and later as a young ensign, then as a candidate in 1976, and coming back here—a beautiful city, dynamic, aggressive, confident about the future. And I'm extremely thankful that on my first outing in a number of months I was able to make a visit to cover three basic points, all relating to our Nation's security—international security, energy security, and economic security.

ADMINISTRATION POLICIES

Not too long ago downtown I spoke about our international security, how America's foreign policy must be tied in with ancient and unchanging principles of decency and honesty and strength and regard for human and basic rights, and also on an ability to accommodate rapidly changing circumstances in a very complex world. We are doing that well under difficult circumstances.

Lately we've been preoccupied with the unwarranted Soviet invasion of Afghanistan and the inhuman holding of 53 Americans captive by international terrorists in Iran. We will never rest until our 53 hostages are free and at home where they belong and we can show them how much we love them.

And we are a nation committed to strength so that we can maintain the peace.

The second thing that I would like to mention is energy security. In 1973 we were shocked in this country when the OPEC oil cartel proved that they could raise prices 300 percent overnight and declare an embargo to keep us from buying adequate oil to keep our Nation going.

When I became President, it was a burning issue. And a lot of experts told me the American people will never realize that we are importing too much oil and they will never cut back their rapid increase in the use and, sometimes, waste of oil and gasoline. That has not been the case. We now have almost completed a comprehensive national energy policy. Last year, we used 5 percent less oil than we had the year before, and so far this year, we have imported 1 million barrels of oil less every day than we did the same time a year ago. So, we are making good progress on energy security as well.

And the last thing I want to mention is economic security. We have really been afflicted in recent months, along with almost every other nation on Earth, with extraordinary, high inflation rates and high interest rates brought about primarily because of a 150-percent increase in the price of oil in a 16-month period.

Two months ago—almost exactly—I announced an anti-inflation program to restrain consumer spending to some degree and to exercise discipline at the Federal Government level. We are already beginning to see some results of that effort. Interest rates are dropping more rapidly than they ever have in the history of our country. I noticed that the largest savings and loan association in our Nation, in California, dropped its mortgage interest rates between 4 and 5 percent in 1 day this week. And now those mortgage rates are going down.

We had good news this morning, as you know, on the Producer Price Index-the Wholesale Price Index, and that will take away the biggest obstacle to jobs and employment and ending of the recession than anything we could possibly do. So, we're making good progress also, not only on the international security front, the energy security front, but also on the economic front. And if we can be resolved and unified and courageous and recognize frankly that there are no easy or simple answers and that America has never failed—never failed to overcome an obstacle, to solve a problem, to answer a question in our history, then I have no doubt that we will solve these problems in the future.

We're not the only ones who recognize that. Almost everyone in this audience is a descendant of or an actual immigrant to this country. We're a nation of immigrants; we're a nation of refugees. And as our ancestors came here, they came because of an intense love of this country-what it is, what it stands for, what it can be in the future. We are more different, one from another, than are the inhabitants of any other country on Earth about which I know. But those differences have been preserved. We cherish them. We believe that those ties to foreign countries, different ethnic background, historical background, language backgrounds, don't make us weak; they make us strong. And the beautiful picture that is our country, made up of different people, is what still attracts refugees to our shores, to have an America that we can love—and we do-and to have an America with a bright future, which we will have if we are unified and courageous, which we have always been.

If any other community in this country proves it, it's yours. And I'm thankful to be in Philadelphia.

I'm now looking forward to answering the questions from the audience.

QUESTIONS

FORMULATION OF FOREIGN POLICY

Q. Mr. President—

THE PRESIDENT. Yes.

Q. My name is Geoff Berman, and I'd like to ask a question. It has been reported that Secretary of State Vance resigned not only because of the aborted Iranian rescue mission but also because of a more fundamental conflict with your administration; namely that he viewed National Security Adviser Dr. Brzezinski as exercising too much influence within the foreign policymaking process of your administration, to the exclusion of the State Department. Would you comment on this and clarify what you believe to be the role of each in the process? And might the balance change with the introduction of Muskie?

THE PRESIDENT. Okay. There is one person in this Nation who's responsible for the establishment of and the carrying out of American foreign policy, and that's the President of the United States. It's not the National Security Adviser; it's not even the Secretary of State. Almost all of the policies that we have evolved in the last 3 1/2 years—and they've been good, sound, consistent policies—have been evolved through a practically unanimous consensus involving myself, the Vice President, the Secretary of State, the Secretary of Defense, the National Security Adviser, and sometimes a few other advisers on energy matters and finance matters from the Department of Energy or the Secretary of Treasury.

There have been no basic disagreements with foreign policy between Vance and me or between Vance and Brzezinski. Brzezinski is a Polish American—so is Ed Muskie, by the way. And I think it's inevitable that someone like Brzezinski is—he's kind of feisty, he's aggressive, he's innovative, he puts forth bright ideas, some of which have to be discarded, to State Department he has a very small bureaucracy—

Q. Which ones? [Laughter]

THE PRESIDENT. Well, I'm the one who decides, right? But that's the way I think it ought to be. To have a President who listens very carefully to bright ideas and to the maintenance of the status quo, who has to address changing times. But I can tell you absolutely that there have been no basic disagreements between myself and Vance, between myself and Brzezinski, nor between Brzezinski and Vance.

My hope is that with Ed Muskie coming on board as a part of our team last night at 7 o'clock, that he will play a somewhat different role than the one Secretary Vance played, because of a difference in background and temperament and attitude. I see Ed Muskie as being a much stronger and more statesmanlike senior-citizen figure who will be a more evocative spokesman for our Nation's policy; not nearly so bogged down in the details of administration of the State Department, perhaps; not quite so bogged down in the details of protocol, like meeting with and handling the visits of a constant stream of diplomats who come to Washington.

I would prefer that Ed Muskie not be so personally involved in detail and negotiations with other nations. Warren Christopher, the Deputy Secretary of State—and I hope he will stay on at least the rest of this year is fully capable of handling those kinds of problems. I think that Muskie is determined to be the spokesman for American policy, as has been Secretary Vance.

As Brzezinski pointed out, he explains policy sometimes both to newspeople in privacy and also on some occasions in public speeches. But the image that has been put forward of a division between NSC, National Security Council, and the State Department is primarily a creature of the American news media, and there is no basis in fact for it.

Q. Thank you.

THE PRESIDENT. Thank you.

EMPLOYMENT

Q. Mr. President, my name is Ed Ford. For the past several years Government jobs have been moved to the South at a fast rate. Since we have high unemployment in the inner cities and in view of your Executive order that says that military installations will be located to lessen urban decay, why does the administration continue to move Government jobs out of the Philadelphia area?

THE PRESIDENT. Mr. Ford, I don't think it's accurate to say that this administration has moved jobs out of the Philadelphia area. We have, obviously, some needs to change Federal placement of roles and functions on occasion. The arsenal was moved. We did the best we could to compensate for it. Of the roughly 3,500 people that were employed at the Frankfort Arsenal, at the end of last September more than 98 percent of them had been found new jobs or had retired.

We have worked as hard as possible, because of that move and because of other reasons, to bring one of our major aircraft carriers here to the navy yard, as you know, for an overhaul. This will be a multi-hundred million dollar project that will keep intact between 8,500 and 9,000 jobs that were threatened and add at least 2,500 or more new jobs in the repair or overhaul of the Saratoga.

I'm very conscious of the fact that we have high unemployment in our country. We've tried to orient job opportunities to those who've been deprived most. Last year, 1979, we had a good, sound economy going, and we had a 33-percent reduction nationwide in jobs for minority young people. ¹ When we put forward the proposals to the Congress for a balanced budget to bring down the inflation rate and to bring down the interest rates, we very carefully preserved those job opportunities.

¹ The President should have said "a 33-percent reduction in unemployment for minority young people." [White House correction.]

We will have a million summer jobs for disadvantaged youth beginning in about a month. We are proposing another 2 million jobs to be made permanent for disadvantaged youth primarily, with the new job employment program now before the Congress. But I'm determined that what you advocate as a past policy of our administration never happen in the future. It has not happened in the past.

The last point I want to make is this: All of the programs that we have had in the past, established over a long period of years, have been reexamined to bring the Federal thrust out of the more wealthy suburbs, quite often, into the downtown areas and also to shift the focus to the Northeast and to the older cities. This is true in transportation, it's true in housing, it's true in health services, it's true in education, and we'll continue that process. But I'll be very conscious of the fact in the future that there is a real need in cities like Philadelphia, and I'll be sure to compensate for them.

With the passage of the windfall profits tax that the Congress has now made a law with my signature, for instance, we'll have $50 billion more in the next 10 years to keep repaired and to improve public transportation, like your own transportation system here that's in a dilapidated state, and this is just typical of what we have been doing.

Q. Thank you.

MIDDLE EAST PEACE NEGOTIATIONS

Q. Mr. President, my name is Danyael Cantor. A major tenet of your Mideast policy has been that the reconciliation of the quote, unquote, "Palestinian issue" would ensure peace in that area and the security of our vital interests in that region. Israel and Egypt have made real progress together vis-a-vis the Camp David agreements, yet it is obvious that isolated and alone they cannot complete the urgent task they have begun.

THE PRESIDENT. That's right.

Q. My question is this: Given the resistance of the other Arab states to support the Camp David negotiations, not to mention the refusal of the PLO to even recognize Israel's right to exist, what pressures, let's call them initiatives, is this government ready to bring to bear on these other parties to ensure that this noble peace initiative does not result in failure?

THE PRESIDENT. One of the disappointments after Camp David accords were reached, for me, has been the unwillingness of the Jordanians, the Syrians, and the Palestinian Arabs to join in the peace talks. This is a serious matter, but it is not a fatal circumstance. You have to remember the importance of Egypt in the Arab world—35 million people, the strongest, most dynamic, most heavily populated nation in the Arab community, also the one that has been in the lead in the last four wars where Israeli and Egyptian young men died.

The peace between Israel and Egypt is assured through a permanent, far-reaching, very substantive treaty signed just a little bit more than a year ago. In the absence of cooperation by Jordan, Israel faces no serious military threat from the east. And Syria, as you well know, also is incapable of mounting a serious threat against Israel, as long as Israel and Egypt are bound together with a common commitment to peace.

We are now negotiating to carry out those provisions of Camp David which have been espoused and signed on a word of honor by both Begin and Sadat and witnessed by me. They involve the redressing of the needs of the Palestinians in addition to the insurance of Israel's stability, peace and security; the recognition of Palestinian rights; the resolution of Palestinian differences in all their aspects; the right of Palestinians to have a voice in the determination of their own future—those things I'm quoting from Camp David, and they've been signed by Menahem Begin, as well as they have by Jimmy Carter and Anwar Sadat. At the same time, Sadat has recognized and we have recognized that Israel mast have her security guaranteed.

The PLO is endorsed by many other Arab countries as being the spokesman for Palestinians. We don't believe that that's an accurate description of the PLO's function. Recently when Israeli settlers were murdered, the PLO immediately took credit for it. I am not going to recognize the PLO nor to negotiate with the PLO until after the PLO recognizes U.N. 242 as a basis for Mideast peace and also recognizes Israel's right to exist and to exist in peace. Those kinds of things must be carried out.

In closing, let me say that I don't know what the future will hold. I cannot dominate Israel or Egypt or any other people on Earth. We have to add our voice as a mediator to try to find some common ground on which they can reach agreement themselves. My hope is that they will. There is no doubt in my mind that both the Egyptian people and the Israeli people want peace, and God knows we want peace for that entire region. It's to our advantage as well to have a stable Mideast.

We've faced some difficult times in the past. The day before we left Camp David, none of us up there thought we would have an agreement. We got one. And a little more than a year ago, now almost a year and a half ago, when I went to the Mideast—the day before I left Jerusalem, we thought we had no chance of success. We had success. So, we're determined, we're tenacious, we're going to add our good voice. And I believe that world pressure and the pressure of the people in Israel and Egypt will bring those two leaders, with our help, together.

So, Israel must exist, Israel must exist securely, Israel must exist in peace. And also the Palestinian rights, recognized by Begin and the Israelis, need to be recognized in the future by all of us in order to keep stability in that troubled region.

Q. Thank you.

THE PRESIDENT. Thank you.

EQUAL RIGHTS AMENDMENT

Q. Mr. President, my name is Thomas Jones. I'm from Pine Hill, New Jersey. I want to ask you a very easy question.

THE PRESIDENT. I'd appreciate that. [Laughter]

Q. What are your personal feelings on the ERA? And also, how do you feel about women being drafted?

THE PRESIDENT. I am strongly in favor of the ratification of the ERA.

Since the basic concepts of equality of opportunity were first put forward here in Philadelphia, our Nation has made steady progress in increased democratization of our system, where people, for instance, could directly elect Senators; where women were given the right to vote; where discrimination because of race was wiped from the U.S. Constitution, and guaranteed equality was given there. Women still don't have a guarantee of equal treatment under the U.S. Constitution with men.

This equal rights amendment, in my opinion, will not weaken, but will strengthen, American families. It will not weaken, it will strengthen, the free enterprise system. It will not weaken, it will strengthen, in my judgment, the special characteristic of women which is unique to them.

I see no reason for us to draft anyone. What I have proposed to the Congress is, on the one hand, funds to renovate and to make ready the registration system, the Selective Service System; not to draft anyone, not even to examine anyone to place them in a physically qualified or unqualified status; but just to register them and get them on the books so that if we do have to marshal our forces in the future to defend our country, we'll have a 90- or 100-day head start, compared to what we have now.

I have also asked, as a separate piece of legislation—which I think has no chance of getting through the Congress—that that registration be not only young men but women. I prefer it, but I don't think Congress will do it. But I might say I do believe that the Congress will authorize the registration of young men, and I don't believe, with any prospect in the future that's apparent to me, that we will have to go to a draft of either young men or women. In my opinion, a good registration system would not only prepare us to protect ourselves rapidly if we have to, but it would also help to make our voluntary forces stronger.

So, I believe in the ERA..I believe in the registration of young men and women. I think we'll have the right very shortly to register young men, and I hope we'll never have to have a draft.

Q. Thank you.

THE PRESIDENT. Thank you.

LOCATION OF MILITARY INSTALLATIONS

Q. Mr. President, my name is Cecile Johnson. I am one of the 406 employees affected by the Secretary of Defense's decision to transfer the Philadelphia defense contract region to a suburban location in Georgia. In view of the following—one, your Executive order, which states military installations will be located so as to minimize urban decay; two, the abnormally high unemployment rate in Philadelphia; three, GAO's independent study, which concluded it is several million dollars cheaper to retain Philadelphia as headquarters; and four, the fact that the contract workload is concentrated in this area—why doesn't the Secretary of Defense reverse the decision?

THE PRESIDENT. I think the first part of your question is in error, and that is the assumption that the Secretary of Defense has made a decision to consolidate the two units in Georgia—I happen to be from Georgia. [Laughter] But when I heard about this prospective move, I asked the Department of Defense to reassess the tentative decision. We have restudied it and are still undergoing that process.

One of the major problems put forward by the Defense Department was that in order to keep the combined unit here in the Philadelphia area, it would cost $4 million to modify the facilities here. They have now found that it will not cost $4 million. I was informed recently that instead of $4 million, it will cost less than $1 million. I think that will be a very important factor when the decision is made.

But I am personally interested in it and if I were a betting man— [laughter] —I would say that the odds are not against Philadelphia. But I can't make a final commitment to you now.

Q. Thank you.

FORMULATION OF FOREIGN POLICY

Q. Hello, Mr. President. My name is John Dibernardino, and my question relates somewhat to the first question that was asked today. Referring to your recent appointment of Senator Muskie as Secretary of State, I would like to know if that appointment should be interpreted as a change in your foreign policy away from that advocated by National Security Affairs Adviser Brzezinski toward a more conciliatory policy, especially regarding Iran and the Soviet Union? And if that is so, what has changed your thinking?

THE PRESIDENT. I think if you would study—which the press has done—the public statements of Ed Muskie, not only in the last few days but in the months gone by, you would agree with me that, I believe invariably, Ed Muskie as a Senator has endorsed without reservation the foreign policy of our country as evolved under Secretary of State Cy Vance and with the cooperation and help of Zbigniew Brzezinski.

As I said earlier, it is a serious mistake, a serious error to exaggerate or to emphasize differences that do exist on occasion between National Security and State and Defense and Treasury and Energy and myself, and maybe the Vice President as well. Always when we evolve policy I encourage my advisers to put forward their own ideas on the best solution to a serious problem. And once we decide on a basic solution and I make the final judgment on it, unanimously we have had support. The one exception is on the rescue attempt in Iran, when Secretary Vance expressed strong reservations about it. And after the decision was made he said to me, "I will support your decision until the rescue operation is completed. Following that I would like to resign as Secretary of State." I accepted his resignation on that basis. That was the reason for it.

So, there has been no division between NSC and State, nor between either of them and me. The policy of our country is carefully considered and consistent. It is not expected to change under Ed Muskie, and he has been supportive of the policy in every public statement about which I'm familiar.

Q. Thank you.

THE PRESIDENT. Thank you.

AMERICAN HOSTAGES IN IRAN

Q. Good afternoon, sir.

THE PRESIDENT. Good afternoon.

Q. I am Larry Goldman from Philadelphia. I would like to know—I would like to touch on the Iran hostage crisis. Will you continue—number one, will you continue your sanctions against Iran, and what will your next steps be against them? Do you have a date for military actions? And how come such a few number of helicopters were used in the rescue attempt?

THE PRESIDENT. Thank you very much, Larry.

I will continue the sanctions against Iran. Up until this time we have stood practically alone in the implementation of sanctions. A few other nations have joined us. Many have withdrawn their Ambassadors and their diplomatic staff from Iran in protest against what Iran has done. They were condemned unanimously by the United Nations Security Council on two occasions, and the International Court of Justice, the so-called World Court, also ruled that Iran had violated international law in a very serious manner.

I don't have a specific date after which I will take advantage of the other options available to us. Military options are going to be kept for use if necessary. My preference has always been that we resolve this crisis in a peaceful fashion, and that's my hope and expectation in the future.

On the 17th of this month our other major allies, Japan and the European countries and Canada, for instance, have decided to impose economic sanctions against Iran similar in nature, not quite so far reaching, as those that we have imposed ourselves. We'd like to convince Iran not only that they are hurting us by keeping innocent people kidnap victims, but also they are hurting themselves.

When we began to study a possible rescue operation back in November of last year, it was obvious to us the difficulty that would be involved. It's a rare thing when helicopters of any kind have to fly 600 land miles, more than 500 nautical miles, nonstop. Ordinarily helicopters fly about 100 miles at the time. These helicopters were designed originally as minesweeping helicopters. They're very reliable. They operate over the water, as you can see, and they have a fairly extensive range. We only needed fix helicopters to go into Tehran and to help remove the hostages and the rescue team. But we had to have at least that many. So, from the U.S. carrier the Nimitz, we launched the eight helicopters, having two extra ones above and beyond what we anticipated needing.

We had a very unpredictable and heartbreaking series of coincidences that caused the termination of this rescue attempt. We had an unanticipated, very severe sandstorm that turned one of the helicopters back to the Nimitz. That same sandstorm forced down two helicopters that had to stay on the ground and be left by the others for more than 30 minutes, and we had two helicopters that developed mechanical difficulties.

It's impossible on a secret mission like this, where you had to go all the way across 500 miles of Iran without being detected and then stay overnight without being detected, to refuel without being detected, to take in the rescue team without being detected. It's a serious problem if you start trying to add extra planes or extra helicopters.

We thought that two extra ones would be plenty. We never dreamed that we would have three helicopters go out of commission. We had practiced different elements of the rescue mission in this country, both in the North Carolina area and out in the desert, similar to Iran territory, more than 25 times, and this was a surprise to us, a heartbreaking surprise to us. I have no doubt that the mission would have been successful had it been able to go ahead, but we could not anticipate the sandstorms nor the breakdown in the helicopters. It was just one of those streaks of bad luck. And we could not have added twice as many helicopters, because the operation would have been much too complicated. You have to remember that every helicopter that went in had to have fuel brought in by C-130's in the middle of the night in a desert, not on an airport, and transferred.

So, we wanted to keep the operation secret and simple and incisive. We were just plagued by bad luck.

Q. Thank you, sir. Good luck.

THE PRESIDENT. I wish now we had had another helicopter, but I didn't know ahead of time.

Q. Thank you very much.

THE PRESIDENT. Thank you.

OWNERSHIP OF ENERGY RESOURCES

Q. Mr. President, my name is Charles Cutler. Before I ask my question, I'd like to say that I think you've done a marvelous job in a very, very difficult set of circumstances over the last 3 1/2 years. I don't think it's very often that people off the street, like myself, get a chance to say thank you, but I sincerely appreciate the great effort you've given all of us in your time as President.

THE PRESIDENT. Thank you. So far, you've got my favorite question. Charles, I appreciate it.

Q. My question relates to energy and to the oil companies. It's been written that the oil companies are slowly purchasing interest and soon may be controlling interest in our other energy sources, principally coal. Given the oil companies' past history of insensitivity to the public's needs and their greater concern for the financial benefits they can gain, are there any measures that you're contemplating about this problem that I bring up?

THE PRESIDENT. You're right in that when the oil companies, in the past, have been quite restricted in the amount of oil they could produce, they've been inclined to go on what's called horizontal integration; that is, the lapping up of coal deposits, uranium deposits, or shale deposits, and they still are inclined to do that. I would personally favor, as I did during my campaign effort, a restraint on that kind of horizontal expansion or integration. I think we should have more competition, and we have put forward legislation accordingly.

The Justice Department has proposed to the Congress that there be a restraint on how much the oil companies could invest in those ancillary kinds of energy. So far, the Congress has not acted. We are monitoring the oil companies very carefully. If they abuse the privilege that they now have, in my judgment there will be a building up of additional commitment in the Congress and in the American public that would bring about a prohibition against the oil companies moving too much into the coal production field.

We will also try to increase the production of coal as much as possible by shifting over utilities that produce electricity from oil and gas to coal and by investing tremendous amounts of money—like tens of billions of dollars in the future—in the production of synthetic oil and natural gas, clean-burning fuels, from coal-about 75 percent from coal, the other 25 percent from other forms of energy.

So, I'm aware of the problem you express. I'm concerned about it. During my campaign I committed myself to be on guard against that horizontal movement of the oil companies into the coal field. And if they do abuse the privilege, to summarize, I will act and the Congress will act to prevent that practice, which will be deleterious to competition. We are fairly well protected now by the antitrust laws that are already part of our Justice Department responsibility. But I believe that we might very well have an additional need to prevent oil companies taking over the coal fields in the future.

Q. Thank you.

THE PRESIDENT. Thank you.

THE NATION'S ECONOMY

Q. Mr. President, my name is John Reiss. In your opening remarks you painted an improving picture of our economy. In fact, the inflation rate in this country, despite the very slight decline you mentioned, is still disastrously high, just recently hitting an historic 20-percent yearly level. Don't you think it is time for the Government to follow a different fiscal policy, rather than the clearly unsuccessful, presently practiced monetary policy which has resulted in our high inflation and unemployment rates? Why don't you consider, for example, a tax base incomes policy, TIP, which has been proven successful in Hungary?

THE PRESIDENT. It was John Reiss, right?

Q. Yes.

THE PRESIDENT. John, I don't think anyone could argue with you in that we are extremely disturbed at the excessively high interest rates and inflation rates. I considered the TIP proposition and presented a modified version of that to the Congress more than a year ago. The Congress was not even willing at that time to get it out of committee. It would have guaranteed that a labor group that voluntarily took a lower salary settlement, wage settlement, if the inflation rate went up an unexpected degree, would have a refund on their income tax, to kind of guarantee them that if the inflation rate was more than their wage settlement that they wouldn't have to pay for it. The Congress was not willing to do that.

I think that 2 months ago, when I evolved to the country a combination, along with the Federal Reserve-Board, of an anti-inflation package, that it was well-advised and adequate. The results have far exceeded what we anticipated.

We put some constraints on consumer spending, as you know, including a slight restraint on credit card use. The results of that have been many times greater than what we thought they would be. The Federal Reserve put some constraints on money lending by banks. Again, we thought there would be a very slow reduction in interest rates. At this time, the prime rate is falling about 1 percent per week. And as I said earlier, one of the savings and loan companies reduced their mortgage rates 4 or 4 1/2 percent in 1 day. Now the mortgage rate on a nationwide basis is in the neighborhood of 13 percent, and just a few days ago it was up as high as 17 percent.

No one knows what's going to happen in the future. My prediction to you is that in the summer we will see substantial reductions of an equivalent degree in the inflation rate. We have gotten results this morning of the Producer Price Index, that is, the Wholesale Price Index. It dropped to 6-percent annual rate. That's just 1 month's figures, based on April alone. I hope it will continue. I don't think it will continue that low. But I believe that we'll see now, with interest rates going down, a quick rejuvenation of homebuilding, automobile purchase, and the purchase of goods that go into homes, like refrigerators and stoves and so forth. We'll also see a rejuvenation of consumer spending, and perhaps saving, with the inflation rate dropping.

So, I believe that we are on the right track, and I don't have any intention of modifying that until we give it a thorough test. I think we'll know by, I would say, September whether or not the anti-inflation program is working. I believe though that I can tell you as sure as anything in economics that we will have reasonable interest rates and reasonable inflation rates certainly far below what they were even a month ago by the middle of this summer.

Q. I hope so. Thank you.

THE PRESIDENT. I hope so, too. Thank you.

EDUCATION

Q. Mr. President, my name is Marie Scrarretta. My question has to do with education. Since you have established the Department of Education as a separate and distinct department of the HEW, it is apparent that you're placing greater emphasis on the needs, functions, and goals of national education. What plans will this new department propose for the declining educational standards in our country and for the financing of areas such as ours here where we are financially strapped in our city schools?

THE PRESIDENT. In the last 3 years since I've been President, 3 1/2, we've increased the Federal contribution to education tremendously. At the same time we've been very careful not to take control of the school systems away from the local and State officials. We'll continue that policy. We've had a great increase in the allocation of different ways to finance the college education of young people who were able not just financially but educationally and mentally to do college work.

When I was Governor of Georgia, I spent about 25 percent of all my time working on education to improve the quality for the Georgia students. Since I've been President that has not been the case. Most of the problems that I have to deal with in education concern arguments and legal squabbles between a local school board or a State on the one hand, and HEW and the Justice Department on the other, because we have not had a single Cabinet-level official who could speak uniquely for education.

With the appointment of Shirley Hufstedler as the Secretary of Education and with a full Cabinet post now for her to fill, any school board member, any leader of a teachers group or any organization like the PTA, any Governor will know exactly where to go to get specifically allocated and focused Federal help, financial and otherwise, and to resolve a problem affecting social interrelationships like racial discrimination or otherwise to keep the school systems out of court. And I believe that I'll spend a lot more time now in trying to improve the quality of education with Shirley Hufstedler at my side than I could have ever done, no matter what my own motivations might have been, with health, education, and welfare, operated by the same Secretary or Cabinet officer with health and welfare being the dominant two problems and considerations.

So, I don't have any doubt that in every element of educational excellence or improvement or financing or cooperation or the end of this contention and argument that the new department will be constructive, to give our students of all ages a much better educational opportunity in the future.

Q. Thank you, Mr. President.

THE PRESIDENT. Thank you.

DOMESTIC PROGRAMS FOR MINORITIES

Q. Mr. President, my name is Elmore Johnson, and first I'd like to just express my appreciation in terms of being given the opportunity to even ask a question of the President of the United States, who also happens to be my father's favorite. I said father's, right? [Laughter] Mr. President, domestically—

THE PRESIDENT. I hope someday I can be the favorite of your father's son as well. [Laughter]

Q. You might be, you might be.

Mr. President, domestically this country seems to be in a declining state, and the consciousness of those who govern our society appears to be, at this time, somewhat misdirected in relationship to the poor and minority citizens—the budget balancing process currently underway, which has negative effects regarding minority youth programs, minority employment, regarding the CETA cutbacks, and now even the food stamp reauthorization, and I'll stop at this point. I would hope that you would do everything in your power to make sure that millions of Americans are not unnecessarily affected come May 15 in relationship to the continuation of the food stamps.

Somehow our priorities seem to be misdirected when the most underprivileged of our society are asked to do most of the sacrificing and continued suffering. Any and all cuts in domestic programs will adversely affect urban cities like Philadelphia, the youth, the senior citizens and poor and minorities, who are the ones who really rely on the Federal domestic programs.

And my question is, how do you as President of the United States propose to change this situation so that basically people can begin to feel positive again about themselves, about their communities, and about this Nation in order that the masses of the country will not continue to suffer in the present type of state that they are now?

Thank you.

THE PRESIDENT. I understand the reasons for your concern, because our Nation has not yet cast off or eliminated the consequences of generations of racial discrimination. We have made good progress lately, and we're continuing to make that progress. Legally, because of rulings by the Supreme Court and the Federal courts and also actions taken by the Congress, we have legal guarantees of equality, but because of ancient discriminatory practices" we've got a long way to go in letting minority citizens, blacks, those who don't speak English well and others, have an equal chance in life.

As we put forward our anti-inflation program I recognized, and I hope you will as well, that those who suffer most from an 18- or 20-percent inflation rate are the ones who are the poorest, who live on fixed incomes, or who live in a place where they cannot move to a better opportunity or to a better job when they don't have enough income to live. A 20-percent or an 18-percent inflation rate is almost the same as an 18-percent tax on their income.

When food prices go up, the wealthy people can drive to a convenient shopping center, buy large quantities of food at a discount price, come back home, and put it in a fancy deepfreeze, and the adverse effects of inflation are not felt so severely by them. Many poor families, though, have to live from hand to mouth. They get a limited check. They quite often go to a local grocery store where the prices are very high on basic necessities. Sometimes the check doesn't get there on time, and the local grocer will give them credit for a few days. And when they do get their income they are afraid to take their business somewhere else to buy food at a cheaper price.

We also have seen that as we take charge of the economy and cut down the inflation rate and the interest rates, that we ought to protect those programs that are most valuable to the poor and to the minority groups. We've done that. There have been no cuts in summer youth employment jobs. There have been no cuts in social security. There have been no cuts in SSI. There have been no cuts in aid for families with dependent children. There have been zero cuts in Meals on Wheels. As a matter of fact, in housing, which you mentioned, in 1981 budget, beginning the 1st of October, we've built in a 25-percent increase, not a decrease, in Federal assisted housing compared to this year—up to 300,000 units to be built with Federal assistance. On top of that, we've now come back, because of the troubles in the homebuilding industry, and added another 100,000 units on top of those 300,000. So, we are trying to protect those programs that are important to you and the people about whom you are concerned.

I'd like to add one other thing. It's not just enough to pass laws and appropriate money. I come from the Southeast. I could not have been standing here today as President had it not been for Martin Luther King, Jr., and others like him, for instance, who fought for equal rights for blacks and who took the yoke of racial discrimination from around the necks of the white people as well. It's been an opening up of a new opportunity in life for all Americans. I've tried, since I've been in office, to compensate for that ancient discrimination in my appointments.

I have appointed, for instance—I don't say this bragging, because I haven't done enough yet—I've appointed more [black] ² Federal judges in the 3 years that I've been in office than all the other Presidents put together since this Nation began. We've got 32 judges now who are women. I have appointed 28 of them. We put blacks on regulatory agencies to take care of the needs of people who quite often did not benefit from a competitive free enterprise system. I'm not saying these things to try to convince you that I have done enough. But we are making good progress.

² White House correction.

I'm concerned about the food stamp program as well; I'm on your side. And anybody who examines the budget proposals that I have put forward, which I'm going to fight for, compared to the budget proposals that came out of the House Budget Committee or the Senate committee will see that it's to your advantage to help me protect my programs, because they're the same kind of programs that you have just said you want to see for blacks and others who've felt the sting of and the suffering of discrimination.

We're in it together. We're partners, I believe, and I think we will prevail, because as we go into the summer months with interest rates and inflation rate going down, we're going to have a recession on our hands—there's no doubt about it-and those carefully focused programs to keep job opportunities open and to keep our industry strong and to let people buy homes and to let food stamps be provided for those who are hungry are just as important to me as they are to you. I believe that we will win this battle. It's not going to be an easy few months, and I need your help as well as the help of your father.

Q. All right. Thank you, Mr. President.

THE PRESIDENT. Thank you.

TAX REFORM

Q. Hi.

THE PRESIDENT. Hello.

Q. My name is Joan Pidot. I work at Temple, and I'm really proud to have you at our university today. And I want to thank you for the Christmas card you send me every year. [Laughter]

During the 1976 campaign, you described the then-current tax situation as a "disgrace." Have your views on that system changed, and if so, how?

THE PRESIDENT. My views haven't changed much, and neither has the tax system. [Laughter] I've tried, and I've put forward proposals to the Congress to eliminate some of the special privileges built into the income tax system, but I've not been successful yet.

We do have, however, a major step that has been accomplished this year. The biggest tax bill ever passed by the Congress in history was completed just a few weeks ago. That's the windfall profits tax on the oil companies. I was very pleased to sign that bill, because over the next 10 years it's going to take more than $120 billion away from the oil companies, out of their profits, and allot it to the American people to be used to conserve energy and also to produce more energy in our own country.

So, we do have some elements of success, but the inequities built into the income tax system, to a great degree, still remain. I've not given up, but the prospects for major improvements are not good. We've simplified it. If you'd get your present tax forms and go back 5 years and see what used to be, we've made some progress, and we've been able to reduce taxes a good bit. We'll reduce them more next year, in my judgment, when we get the budget balanced and get the inflation rate and the interest rates down where they ought to be.

Q. Thank you.

THE PRESIDENT. Thank you. I've got time for another one.

ASSESSMENT OF ADMINISTRATION POLICIES

Q. Mr. President, my name is Steve Alter. I'm a senior at Abington Friends School. The Iran crisis and the Afghanistan invasion have forced you to remain in Washington for the past 6 months. You've now abandoned that policy, saying that these situations are now more manageable. Could you please tell us what specific indications there are that this is true, in light of the recent aborted Iranian mission, Cyrus Vance's resignation, and the complications of having a brand-new Secretary of State?

THE PRESIDENT. I don't think it is accurate to say—and neither have I said—that the hostage situation in Iran is more manageable. With our hostages now moved to other countries [cities], ³ it's much more difficult for us to know where they are. However, we have presently achieved support from our allies which was not there before to help us exert common economic persuasion on Iran to resolve the hostage question. We've also clarified the issue, I believe, between ourselves and our allies, in mounting permanent economic and political pressure on the Soviet Union to convince them that they made a serious mistake in Afghanistan. Those crises are likely to continue on in the future.

³ White House correction.

Domestically we have made progress. We've basically completed now, with two exceptions, the total energy policy legislation for our country, and we've put in effect the commitment by the Congress to cut Federal spending enough to balance the budget and to turn the inflation rate and the interest rate down.

In my judgment the total complex list of the things with which I have to deal are more manageable, but it is not accurate to assume that we are any closer to getting our hostages back from Iran. It took an awful lot of my time and my advisers', as well, to plan and to mount the hostage rescue mission. I'm grieved that it did not succeed. I thought it was going to succeed. I am not at this time involved in that careful detailed planning leading up to an imminent rescue mission to repeat that one.

We are keeping all our options open, and I believe that it's better for me now, because of the rapidly changing circumstances in our country, the fairly well defined relationship between our allies and the Soviet Union and Iran, and the accomplishment of some of our major goals on this legislative year and the completion of some of my extra duties in marshaling support for the Olympics boycott and for economic boycotts against the Soviet Union, that I can say in totality those burdens are more manageable, certainly manageable enough so that on occasion, once a week or so, I can go out for a day. And I think the balancing of benefit to be able to come here with you to answer questions and to try to put all these things into focus and to make a major foreign policy address in downtown Philadelphia today right after lunch more than makes up for my absence from Washington.

When I made the commitment, by the way, to stay in the White House, I honestly thought we'd have the hostages out in a few weeks. I never dreamed that they would be held this long. So, it was time for me to make that move. I don't want to mislead anyone. I do not think that the hostage question is any more manageable than it was before.

Q. Thank you very much.

THE PRESIDENT. It's a good question.

FEDERAL CONTROL OF OIL IMPORTS

Q. One more. I've waited since November 13, so I'm really excited. I'd like to know if you would favor a plan that would permit only the United States Government to bring oil, import oil, into the country and then sell it to the oil companies. How do you feel about that?

THE PRESIDENT. That's one of the options that we've considered at great length and have not believed it to be a good decision.

It's still an option that will be kept on the shelf and used if necessary, but I don't believe that the other nations of the world who control the purchase of oil on a noncompetitive basis and by themselves as the only purchaser have benefited from it. Under the present market circumstances on a worldwide basis, the prices are fairly well set by long-term negotiations. And as you know, American oil companies have an investment in and a working relationship with the oil suppliers. As a matter of fact, many American oil companies supply oil to other major nations.

So, this is an option that we will consider if we think that our country is not being best served by competition among the oil companies in buying oil. And I believe that we would not be well served now by the Federal Government injecting itself into the free enterprise system and thinking it can do a better job of buying oil than the oil companies can.

It's easy to curse and to condemn the oil companies.

Q. That's true.

THE PRESIDENT. I think they know their business, and their desire is to buy oil as cheap as they can. And in general, I believe the free enterprise system is better able to carry out a function like that than the Federal Government. I think the Federal Government has got its hands into too many things now instead of not enough.

Q. Thank you very much.

THE PRESIDENT. They say no more questions, but I'll take one more question just to show that my staff and the NSC don't run me; I run myself.

MARTIN LUTHER KING, JR,

Q. Good afternoon, Mr. President and fellow citizens, my name is Jean McCall. I could speak about oil; I drive a car. I could speak about the children; I'm an educator. However, I came to speak about a man of peace, Dr. Martin Luther King, Jr. Dr. King's birthday is a holiday here in our State of Pennsylvania. Many citizens here in Philadelphia gathered signatures, and we gathered them from 40 States. We got 100,000 signatures. And we want to honor a man of peace. All of our holidays, most of them, allude to war—Memorial Day, Fourth of July, you name it. I ask you, Mr. President, when will we honor Dr. Martin Luther King, Jr.?

THE PRESIDENT. I have worked very closely with Coretta King and others who share the same desire you've expressed, to get a national holiday set aside to commemorate his birthday. I might point out, though, in the essence of accuracy, that we do have holidays like Christmas and, sometimes, Easter, which are not oriented completely toward war. And I think the birthday of George Washington and Lincoln are not really oriented toward war. Memorial Day is obviously the recognition of those who were killed in a war to preserve peace and freedom, and, of course, the Fourth of July would not be associated with war, because it's the birth of a great Nation.

So, I do agree with you that we need to honor Dr. Martin Luther King in that fashion.

Let me say, just assuming that I've answered your question adequately, I'd like to say this in closing. It's really good for me as President to get out of my house for a change and to come out and be with you. The questions have been challenging; some have been difficult. I think the breadth of them and the diversity of them emphasizes the complexity of this modem day in which we live.

Ours is a great country, and quite often because we are such a dynamic, aggressive, diverse, advanced society, when changes take place on Earth, they affect us first. And because we have such a freedom of speech and such a burning desire on the part of the American press to put forward new ideas and to explain controversy and to report debates and to emphasize disagreements and to let us know about transient disappointments and temporary aggravations, that American people are always aware of what's going on much better than in societies which are closed and where the people only hear what the government wants them to hear.

So, in this process of hearing about these things in the evening as you watch the network news or reading about them in the newspaper, listening to them on the radio all day long, we get the impression in this country that all there is to it is the debate or the argument or the temporary inconvenience or the transient disappointment. What we tend to forget is the blessing that each of us has to live in the United States of America—because God has blessed us far more than we recognize, and he's given us opportunities in this country and natural resources that are the envy of the rest of the world.

We are a superpower, not just because we're the strongest nation on Earth militarily and economically and politically, but because, in my judgment, we are the strongest nation on Earth morally and ethically. We believe in human rights, not just for ourselves but for others. We believe in peace, not just for ourselves but for others. And some might say that we stick our nose in other people's business too much, but we are trying to get peace for Israel and for Egypt. We worked hard to try to get a new nation born in Africa recently—to change Rhodesia into Zimbabwe and let the people there who had been in the majority, who had never had a right to vote or to shape their own government, now have a new government. And we've opened up friendship not only with the people of Rhodesia, now Zimbabwe, but Nigeria. And within the last 18 months, we have also opened up a new prospect of friendship to the largest nation on Earth, China, with more than a billion people, who were formerly our avowed enemies.

So, as we go forward, kind of the cutting edge of a rapidly changing dynamic human society, we ought to remember how strong we are and how blessed we are to have a chance to come together like this with a President and the people that I represent and let me listen to your questions and listen to your comments and listen to your criticisms and learn and let you learn, so that we can commit ourselves jointly, in freedom, valuing each human life and valuing the principles that were shaped here in Philadelphia, to commit ourselves to make the greatest nation on Earth even greater in the future.