Remarks and a Question-and-Answer Session With Newspaper Editors

The President. Thank you all for coming. I'm particularly looking forward to this because you do represent a unique category of journalism. What I want to do is just make a few brief comments and then take your questions for awhile.

First, just a word on the recent Malta visit -- I think it was very promising. Mr. Gorbachev and I agreed to hold a summit in the United States next year in June. We agreed that our foreign ministers would meet in the Soviet Union next month. We are on the brink of exciting, new U.S.-Soviet relations. And having said that, there are still some difficulties. Our Secretary of State's abroad right now, talking about some of the problems facing Europe. But basically, I end the year more optimistic than when I began it, and very encouraged about the change that's taking place inside the Soviet Union and all across Eastern Europe.

On the Third World debt question, we came up with a proposal for solving it -- the so-called Brady plan. I want to be sure that we move further during next year in terms of implementation. At least we spelled out some broad parameters with which to try to help solve the problems of Third World debt. But as one who is very interested in this hemisphere, I can tell you that there's enormous interest in the part of our friends to the south -- small countries and large -- that we get on with this, and that our allies and others -- private banking interests -- help us get on with this.

On the economy -- we end the year with a still-growing economy, the lowest unemployment rate in 15 years, and 20.5 million new jobs created over the last several years. I've been able to keep my pledge of no new taxes for this year. And generally, I feel pretty good about it. There's some signs of concern that have been expressed from time to time by the Fed [Federal Reserve Board], but I think the main thing now is to keep it growing until every American benefits by this -- the longest recovery in history.

And on the ethics package -- we sent an ethics package up early. Congress did incorporate many of the provisions in our governmentwide ethics package into the law passed recently that was coupled with the congressional pay raise. I think the reform is long overdue. We didn't get everything we want, but we made a beginning out there.

On S&L's -- the package, which was not easy to come by, guarantees depositors that money will be safe and sets tough new standards to ensure that the crisis doesn't happen again. I'm disappointed, in some ways, with the Congress and with our progress -- or lack thereof -- in some areas.

The crime package -- we sent a comprehensive violent crime control package which proposes augmenting enforcement and prosecutions, strengthening current law, restricting certain semiautomatic weapons, and expanding prison capacity. But, very candidly, it has not been acted on, so I'm going to have to come back now after the first of the year and try to push on that.

Clear air -- the House and the Senate took some steps toward passing our bill this year. But we had some good clear air proposals. They were widely received, bipartisan fashion, but I'm disappointed that we haven't gone further there.

Child care -- I'm in a fight with the Congress in terms of philosophy on child care. I want to have as much choice as possible. We sent up a new child care bill and proposed $250 million increase in Head Start this year, too. And now we're in the final throes of our budget process, addressing these questions again, but I think you'll see early action on child care.

All in all, it's been a productive year. We've proposed a lot of new initiatives. I exercised the veto 10 times and to date was not overridden on it. We made progress. I didn't mention the minimum wage, for example, but I had to hold the line on what I thought was right, and then we did pass it at the level that I suggested. But I'm not overly satisfied, but I think generally that the first year has gone pretty well.

I do want to make one comment, before taking questions, on the recent visit of General Scowcroft to China -- a lot of interest in that. And following the meeting with Mr. Gorbachev, it seemed to me that it would be appropriate to brief the Chinese leaders. I made clear to them before the Malta meeting that I wanted to do this. I must say I was very pleased today, in the wake of General Scowcroft's visit, to notice that the Chinese Foreign Ministry stated that they would not sell missiles to any Middle East countries. That subject was raised by General Scowcroft and, in my view, it's a very sound development.

And I do not want to isolate the Chinese people; I don't want to hurt the Chinese people. We have certain sanctions. I hope I needn't reiterate my concerns about the events that took place in Tiananmen Square. I think we were positioned in the forefront of human rights concerns, and I think the Chinese know that they still have to address themselves to the problems that were inherent in this episode. But I don't want to see that China remains totally isolated. I don't want to take any further steps that are going to hurt the Chinese people. And I was very pleased that this statement on the missiles, the subject having been raised by General Scowcroft, took place before he barely hit the ground here.

There was some discussion about the Pelosi bill, and some political figures accusing me of not caring about human rights because I would not sign that bill. We have enacted by Executive order everything that that bill would have done. And I want to keep control of managing the foreign policy of this country as much as I can, and I didn't think that legislation was necessary. And I hope that the Congress comes back and takes a hard look at that, and then we'll go forward together, as we have in the past. But, generally speaking, I realize the difficulty of this relationship, but I don't want to make it any worse. I'd like to think it would improve. We have contacts with countries that have egregious records on human rights, and so I'm going to keep looking for ways to find common ground. But I realize that -- I would say to those who are out there churning around saying that we have normalized relations with China that they simply do not know what they're talking about.

Now I'll be glad to take any questions.

Vice President Quayle

Q. Mr. President, Bill Cheshire, Arizona Republic. Since the Malta summit, Vice President Quayle has expressed some disappointment with regard to the Soviet Union's activities in Central America, essentially. Does this reflect the views of the administration, or did you pick up at the Malta meeting some indication that the Soviets may be more forthcoming and cooperative as our relationship develops?

The President. Well, I expressed the views of the United States Government at the Malta meeting that I was concerned about their actions in Central America, and so I think the Vice President was reiterating a view that he knew I held. I'd like to think there would be some change in their philosophy there. I had a phone call that I told Mr. Gorbachev about from Oscar Arias [President of Costa Rica] in which Arias simply asked me to raise with Gorbachev the question of Soviet support for Cuba -- Arias putting a lot of blame on Cuba for the export of revolution into these fragile democracies in Central America and, indeed, in South America. So, I raised the question very forcefully, and I hope that the Soviet Union got the message that it is impossible to have totally smooth relations with us as long as they are supporting the export of revolution into these democratically elected countries. So, there's no difference between myself and the Vice President on this matter. And he was reiterating, really, a position that I have taken.

Middle East Peace Process

Q. Tom Dearmore, of the San Francisco Examiner. Do you think the PLO is inspiring or orchestrating at least part of the Intifada riot activity? And if so, do you think Israel should be pressured or obliged to negotiate on any more than elections until this violence subsides?

The President. I don't think Israel should be pressured into negotiating with the PLO. Is that the question?

Q. Yes.

The President. No, they should not be. [Secretary of State] Jim Baker is working out a very difficult formulation with the Israelis, with the Egyptians, under which the representatives of the Palestinian people would sit down and talk. And it has been very difficult. Mubarak [President of Egypt], you remember, had his 10 points. Baker came up with five points. There has been progress on that, incidentally, but I don't think it is the role of the United States to force Israel to negotiate with the PLO.

China

Q. Mr. President, Eric Briendel, New York Post. Can you envision any steps the Chinese Government might take that would lead to the lifting of the sanctions that are now in place?

The President. Yes, but I'm not going to detail them for you. The question was: Can I envision steps that the Chinese Government can take that would result in the lifting of the sanctions? Yes, and we have had an opportunity to discuss that with very high levels in the Chinese hierarchy. And I think it is important that they know how we feel on this question, as to what changes need to take place. But let me reiterate, there has not been normalization of relations because General Scowcroft, at my request -- and it was my idea, my suggestion -- went over there and had very high-level talks in China.

German Reunification

Q. Joseph Sterne, of the Baltimore Sun. Mr. President, could you discuss the question of German reunification? Particularly, what steps need to be taken internationally to deal with that question -- the Helsinki conference, possibly a second one, possibly a peace conference to settle borders?

The President. Well, I think the Helsinki agreement speaks to the question of borders, and it does provide for peaceful change, but it mainly recognizes existing borders. And that is a given -- that is a position that we respect and that we support.

I think it's very important that the United States not appear to be trying to accelerate the change in Germany, that we not be out setting timetables or suggesting how fast this question -- very difficult question for some -- of German reunification be addressed. And so, what we've done is simply let the process go forward.

Look, I haven't been able to predict the rapidity of change in Eastern Germany, and if you find somebody that has, please let me know who that clairvoyant so-and-so is, because I don't think there is anybody that has been totally right. But we put on the table -- and I don't have them with me -- four points that should guide the question of German reunification. But it is one that is highly sensitive to the Soviet Union. And we don't have to do it just their way. It is of some concern to some of our European allies. But the NATO position and the position at Helsinki guide the U.S. view still on German reunification.

Q. Just one followup to that. [West German] Chancellor Kohl has made the point that Helsinki solves it only in a political context, and you need a peace treaty to deal with the border question and international law.

The President. Well, eventually, I think that we can address ourselves to that question. As you know, you have the Four Power occupying provisions, but I don't think that it's in our interests to be setting dates for the finalization of this. Secretary Baker is discussing that at this very minute with our various friends abroad. And I don't want to come out looking like I oppose change from the status quo in the GDR, but I just don't want to be in the position of trying to accelerate the question of German reunification. It's too sensitive, and it's not the role for the United States to do that.

China

Q. Mr. President, Bob White, from the Star Tribune in Minneapolis. I was interested in your observation about Chinese missiles, and I wondered what makes that different. The Chinese, for years, when we're so concerned about the missiles at the Strait of Hormuz, were denying that they had sent missiles to anybody. Why is this substantively different, and why is it suddenly important now?

The President. Well, because we've represented, sir, that they ought not to be selling missiles into the unstable Middle East. And for this to have been raised now, and then having this instant response -- I view that as good.

Q. But they've said that before.

The President. Well, if they prove to not be telling the truth, that wouldn't be good. You say what's different about it? I think the fact that it was raised and then responded to with this rapidity is a good sign. There are many issues of difference that we have with the Chinese, or potential difference. So, I think that one does not address itself to human rights in China, but I think it's important. I think it's important that a top U.S. official sat down with China -- 24 hours later, we are told this. And if it works out badly, why, that wouldn't be productive.

Andean Drug Summit

Q. Rena Pederson, Dallas Morning News. At a time when a powerful individual such as [West German banker] Alfred Herrhausen can be killed by terrorists, doesn't it seem extremely risky to be attending the drug summit in Colombia? I've wondered if you've reconsidered attending it?

The President. Well, I'm going to take a look at that situation. But we've got a courageous President in Mr. Virgilio Barco. And I don't know that -- well, put it this way: I don't want to send some signal that Virgilio Barco cannot provide the proper security for three heads of state visiting his country. I don't want to undermine the courageous stance he's taking by taking a view that would hurt what he's trying to do. And I'm sure that if the security concerns are raised to him that -- we have a long time before the meeting, but near the time of the meeting -- he would agree with the objective assessments. But right now I'm very hopeful that the meeting will take place in Cartagena. And I have so much respect for him, and I know the enormous problem he's under from people that want him to give up the fight on extradition, or fight against the narco traffickers. And I don't want to be the one that sends a signal that nobody should go to Colombia because they can't be protected.

So, I've got time to take a final decision on that. I will listen to the experts. I will not do anything imprudent. Nobody has ever accused me of being too daring. [Laughter] So, I will -- but I don't want to undermine this courageous leader.

German Reunification

Q. Mr. President, Jim Klurfeld, from Newsday. I was wondering -- in terms of the German question -- whether you can give us better, more detailed sense of your discussions with President Gorbachev on that matter? And also, what type of steps the United States, with or without the Soviet Union, can take to prevent that situation from kind of reaching hyperspeed, the type of situation you seem to be concerned about now?

The President. How the U.S. can affect that?

Q. How the U.S. can do it by itself, or if there's a need for the U.S. and the Soviet Union to work jointly?

The President. Well, one thing you do is keep from doing imprudent things. There was a while when I was being criticized for not waxing enthusiastic enough. Some even suggested that it would be appropriate for the President to rush over to the Berlin Wall to show his excitement. I was excited, but I thought it would be foolish to go to the Berlin Wall because you could evoke a response that could have been totally counterproductive.

But this is the kind of subject that we can discuss with the head of the Soviet Union, but it's not going to be determined between Bush and Gorbachev. That's the kind of spirit of -- that's in the past -- that he and I would sit down and try to determine the fate of Germany. That is not the role that I'm going to play. That's not the role for the President of the United States. And so, we will watch the procedures. We'll have the talks that you've read about in the last couple of days, these Four Power talks at an ambassadorial level. We will stay in touch so we don't miss a signal of some sort. But this is a matter for the German people to decide. It isn't a matter that is going to be determined by the United States. And so, that's the way I look at it, and that's the way our policy is being conducted now.

Free and Fair Trade

Q. Peter Schrag, from the Sacramento Bee newspaper. Mr. President, I think it can be said -- and I think most people agree -- that the events of the last year indicate that the cold war has been going our way. Can we say the same thing about the economic competition that we've had overseas? And given the events that have unfolded in the last few months, is your administration now going to put more focus on the latter rather than the former?

The President. Well, I don't know about more focus, but we're going to put plenty of focus on it, because you raise a very important question, the question of fairness in trade. And we have tried, through a very tough and honest negotiator, our Trade Representative Carla Hills, to make the point that if we're going to go forward with these trade relationships, we've got to be -- they have to be fair -- fair trade. I have made the point on several occasions to Mr. Delors [President of European Communities Commission] in the EC and to our trading partners in various settings with our European friends that the American people are properly insisting that the barriers come down. I remain committed to free trade, but it's got to be fair, and I do think we can do a better job of showing our concern about that.

And I'm going to try to resist protectionist legislation when it comes down the pike -- pure protectionist -- but the way to avoid it is for us to make more progress in the negotiations. So, I think you'll see a heightened attention to trade matters. I'm going to avoid bashing some trading partner -- popular though that might be in the political arena. I think it's bad foreign policy, and I think it's bad for the United States as a whole. But I am not sanguine -- I am not relaxed about where we stand. And I will fight hard to have our people -- Secretary of Agriculture, USTR, Secretary of Commerce -- make progress in all these forums on international trade.

I hope that the political changes continue around the world, thus lessening tensions, so that we can put a lot more attention on the trade sector. I don't want to reply to that part of your question that I think that things are so good in terms of the change in Eastern Europe or changes with the Soviet Union that we can totally relax. I know they're not that good with China, for example.

China

Q. Edward Fike, San Diego Union. Mr. President, are you not concerned that your warming relationship with China may send the wrong signal to the Kremlin about future possible oppression of the unrest?

The President. No, I have no concern about that at all as long as we're positioned in favor of human rights and against totalitarian oppression. And I think we are properly positioned. China is a billion-plus people. They have a strategic position in the world that remains important to us. And I'd like to think that they will redress some of the grievances that continue to exist. And as long as the Soviet Union knows that we're not sending a signal of total normalization, I think there's no risk in your question, but I will be very careful that we don't send that signal. And I think, given the recent meeting with Mr. Gorbachev, I think there's very little likelihood of that misunderstanding cropping up.

Republican Party

Q. I'm Ed Grimsley, of the Richmond Times-Dispatch. As you know, we've just had a very close election in Virginia, and the Democratic candidate, we think, has won -- we have to wait for a recount on that -- by a very narrow margin. And some say that he won primarily because of the Republican candidate's rigid opposition to abortion.

Many Democrats are very gleeful over the fact also that as the Berlin Wall collapses, so will the Republican Party because anticommunism has been the fuel that kept the party moving all these years. My question to you as leader of the Republican Party: Are you losing any sleep these days over the future of your party?

The President. No. [Laughter] None at all. And I've read some of that balderdash out there. [Laughter] Democrats hold a gubernatorial seat, and they dance around the grave of what they hope is the Republican Party. And they're wrong, because the American people have not changed their fundamental views that had them support me over my opponent. And so, these elections come and go. The Virginia election was a Democrat holding the seat of another Democrat.

So, I don't see an enormous amount to rejoice in that, nor do I see a turning down of the Republican Party because a mayor in New York wins by two percentage points over a Republican. The story is -- please write it down -- [laughter] -- that a Republican got 48 percent of the vote in New York City.

And so I don't accept all that, and I know there's a lively debate on some of these social issues. But I also know that we are getting credit as a party for handling, I hope properly, some of the changes that are taking place in the world and having a global vision and trying to do at home those things that the American people want. I cited some of my frustrations, but I also cited some steps that have gone reasonably well. But I think we have a sound agenda, a national agenda, and I think that will benefit the party in the future. So, for those who want to read something into Virginians holding on to the gubernatorial seat, that's their pleasure. But I hadn't lost a wink, really.

Congressional Relations

Q. Mr. President, Philip Terzian, the Providence Journal. In your Inaugural Address, you called for a higher level of cooperation between the executive and legislative branches. And I was wondering: In the past year I realize the House leadership had some unexpected turmoil, but have you been pleased, distressed, surprised by the character of White House-Capitol Hill relations?

The President. Well, being somewhat of a realist, I can't say I was surprised, but -- and there have been some negative and highly partisan comments. I pride myself on the fact that I don't believe anybody can point to a personal observation on the negative side by me about any of the Democratic leaders, and I am going to continue that way.

And I try to debrief them when we came back from Malta. I try to give them a preview and ask for their advice before I go to Malta. We talked about these domestic issues in a very open way with the leaders, and I am going to continue that. And I think in some ways that's been good. I've taken some flak on board from some of our own party for doing that too much, for trying to work with the Democrats. But I was elected to make certain things happen, and I am going to continue to try to make certain things happen.

I cited an unfulfilled agenda here. But if I had to sum up my feelings at the end of the year, I'd say there are some frustrations, but I am determined when the Congress comes back to hold out the hand and try again. We have good relationships with the Speaker and the Senate side -- reasonably good. And so we are going to keep working on that. But there have been some good moments, and there have been some enormous frustrations, I guess is the way to wrap it up.

El Salvador

Q. John Zakarian, from the Hartford Courant, Hartford, Connecticut. How likely is it for Jennifer Casolo to receive a fair trial in El Salvador, given the breakdown of law and order in that country and also given the initial remarks that came out of the White House when she was arrested?

The President. Well, I think it's essential that she receive a fair trial. And I have instructed our Ambassador and, indeed, talked to Cristiani [President of El Salvador] personally, to represent to the Salvadorans that it's essential that a fair trial be granted. And having said that, I'm satisfied so far that that will take place. But it is essential that it not only take place but have all the appearances of fairness. And I think that's what Mr. Cristiani is determined to do.

That one is very complex, but so far I have seen no indication that she will not receive a fair trial. I have expressed my own concern about the FMLN shooting up civilians and shooting up a -- going after a democratically elected government that was elected in certifiably free elections. And I think when Oscar Arias calls and urges that the Soviets intervene to see that this kind of thing doesn't go on -- it makes an impression on me. But we ought to separate these cases and just do everything we can to insist that whoever it is be granted a fair hearing and a fair trial. And I hope that will be the case in Jennifer Casolo.

Savings and Loan Crisis

Q. Byron White, Cincinnati Post. Cincinnati being the home of Marvin Warner and Charles Keating, we've had quite an interest in the S&L crisis. You mentioned in your remarks that you saw the fact that the S&L package guaranteed depositors their money as being a positive. However, some have suggested that the fact that that maximum level of insurance is so high is part of the problem. And I was just wondering what your thoughts were on that.

The President. On deposit insurance?

Q. The maximum level of insurance, $100,000 on depositors insurance as being part of the reason for some of the problems with Lincoln Savings and so forth.

The President. I don't want to dodge your question, but I don't know enough about the specifics in that case to give you an opinion as to whether the $100,000 limit on savings deposits affected it or not. All I do know is that we've got to clean it up and it's a whale of a mess. And we'll see where we go, but we had this one refinancing. I am now told that that might not be enough. And whether you can attribute it to your question or not, I am embarrassed to say I just don't have a good answer for you.

Urban Poverty

Q. David Boldt, of the Philadelphia Enquirer. It sometimes seems that missing from your agenda and from your comments today has been anything relating to the problems of American cities, particularly the problems of urban poverty. And it leads to an inclination to think that perhaps you don't think these problems are amenable to Federal initiative. Is that correct?

The President. No, that's incorrect. I thought child care had a lot to do with that. I thought the question of anticrime legislation has a lot to do with that because those areas are the most severely impacted. But I am glad you raised it because it is totally incorrect. I also mentioned the creation of jobs -- that's very important to the inner cities.

Federal Budget

Q. Chris Colford -- I'm from the Cleveland Plain Dealer. As we await your next budget for next year there is some anxiety that there may be another round of cuts in human and domestic services -- for example, the Legal Services Corporation, where you recently offered a recess appointment for a new Chairman. Can you give us some assurances that the kinder, gentler administration will have adequate funding for human services?

The President. I think you'll be pleasantly surprised when you take the overall budget and its concerns for city affairs, human affairs -- whatever.

Q. Legal services?

The President. Well, I can't. I don't know the exact levels on legal services. We're in the final processes of budget right now. I go from this meeting to another marvelous meeting with Dick Darman and a big thick notebook over there. So, I'm not ducking it; I just don't know the answer. But generally speaking, I think you are going to find that we are able to finance the initiatives that I talked about -- some of which I mentioned here -- that do affect the welfare of the American people, particularly those that are disadvantaged.

Panama

Q. Sterling Holmesly, San Antonio Express-News. Mr. President, could you tell us when a decision will be announced on the relocation of the Southern Command in Panama?

The President. No, sir, I don't know. I'm not ducking it; I just don't know the answer. Can anyone help with that? Bob [Robert Gates, Deputy Assistant to the President for National Security Affairs]? I know people in San Antonio have a keen interest in this, and I can understand why, but I just don't know the answer to that one.

El Salvador

Q. Shelly Cohen, from the Boston Herald. There have been widely divergent accounts this morning of the credibility of a witness to the murder of those priests in El Salvador. Is it not time to go public with that investigation? If not now, when?

The President. Widely -- --

Q. We have a report -- --

The President. -- -- as to whether she's a credible witness or not?

Q. Yes. We have a report out of El Salvador that she had flunked lie detector tests. We have other reports from the clergy in El Salvador that she's being brainwashed. Could you respond to that?

The President. Yes, I can respond to the last part of it, because when I read that, I looked into that and am assured that is not the case. But I think you ask a good question, as to when all this will become public. It should be, and I'd like to see it as soon as possible.

But I think there are some concerns, and all I would say is that this -- she was accompanied by a person from the U.S. Embassy. I believe the Justice Department has had the custodianship or taken a keen interest in all of this. And I have confidence that our Attorney General would not permit the kind of inquisition process that was alluded to in the papers today. And so, it is very important, just as in the Casolo case, that this be resolved fairly and to the satisfaction of the American people. And that is going to mean the disclosure that you're asking about. And so, I want to just assure you that this will take place. I think it's important that it's done in a way so there's no -- not tampering with evidence but prejudicing the legal proceedings that are taking place. I think that's very important.

Q. Will you order the FBI to make this investigation public in the reasonably near future?

The President. Well, I'll do it within the confines of the legal proceedings. I don't want to order them to do something and then have them say the very fact you have done this is making it difficult to get a reasonable solution to the question everybody is asking -- what happened? But I think, in fairness to her, I've already guaranteed to my satisfaction that she is not being mishandled. And I don't think that people would tell me something that's not true there, because there would be a price to pay for that. Thank you all very much.