Spokane, Washington Remarks and a Question-and-Answer Session at a Town Meeting.

THE PRESIDENT. No one could be in a better political position than to be preceded and introduced by men like Tom Foley and Senator Warren Magnuson. I know of no one in the Congress than these two men who are more respected, more dedicated to serving their own people well, but who have also reached, because of their experience and knowledge, sound judgment and commitment, a position of national and even international renown and leadership.

I'm also glad to be here with you, the people who had enough good judgment to elect men like this to come to Washington, D.C.

I ran for President as an outsider, as an independent person, a Democrat, but one who didn't owe special interest groups anything. And when I began my own campaign, as you certainly remember, at least in retrospect, no one knew who I was, no one cared who I was. When I came here to Spokane the first time, I was a Governor of a great State, but my prospects for being President were considered to be almost nonexistent. I cast my lot with you and people like you all over the country. And I promised that I would stay in close touch with you as I made decisions about very difficult and challenging questions.

I didn't claim nor do I now claim that I know all the answers. I've had press conferences at least twice a month to let the national news media cross-examine me in an unconstrained, unrehearsed way on the most difficult issues that any human being could possibly face, domestic and international issues involving the very life of our country and our people.

And I've had experiences like this where citizens cross-examine me without so much time constraint for a full hour and a half in places like New Hampshire and Mississippi, Massachusetts, to listen to your voice, to the tone of your voice, to the thrust of your question, and then to try to respond.

Again, I don't claim to know all the answers, but I'm not afraid to face them. And I look forward to the time when people will begin to see much more clearly that we are now addressing some of the most difficult questions that our Nation has ever faced, at least in peacetime.

Almost 200 years ago, Congress voted to place our National Capital at what was then almost the exact center of the United States. But even then, Washington, D.C., seemed to be a very distant, a remote place to some parts of our Nation, like Georgia, because it took several days, many days, to go from Georgia to see the Congress or even to send a letter to Washington, D.C., and get a reply back. And I think that you all know, without my having to explain it to you, that Washington, D.C., is no longer the center of our country geographically. It's way over on one side of the Nation—some people say on the wrong side. But the sheer size of our country today would obviously amaze our Founding Fathers.

Technology, the innovation of American people, has shrunk those distances. We can now communicate directly by telephone or other means in a matter of seconds, and we can visit with one another personally after a delay of only a few hours. So the distances are less in those respects. But still Washington, D.C., is 2,500 miles from Washington State. And it can still seem distant and remote.

One of the reasons I ran for President was because I thought I could reduce that sense of distance or alienation or remoteness. This trip is part of that effort.

I've come here to the great Northwest to talk about the most pressing issues that all of us face together, and to listen to what you have to say about those issues. We have a lot to do and a lot to discuss.

ADMINISTRATION POLICIES

One of the issues that is ever present on my mind is the question of inflation, which hurts every family in this country. It's perhaps the toughest domestic problem we face, and there are no easy answers to it. It's going to take a lot of time and a lot of ingenuity to bring inflation under control, and it is going to take some sacrifice, some sacrifice from all of us.

I'm going to take the leadership as President through a series of specific actions, including holding down pay increases for Federal employees—for those at the executive management level, zero increase this year. I'm going to cut down wasteful spending and make sure that we don't have any greater deficit than the one we already face.

I'm going to work for legislation to control hospital costs, which have been going up for all our people at twice the rate of other inflation, increased 15 percent last year. And I'm going to reduce unnecessary government regulations and intrusion into the lives of American people, sometimes very costly in inflation, like in the deregulation of the airline industry. But all of us need to work together in a spirit that puts the national interest above our narrow, selfish concerns.

We have made great progress in our economy—without bragging on myself, because the credit goes to you and an enlightened Congress. Remember this time last year when the prime consideration, the prime concern was unemployment? Your unemployment a year ago in this State was 3 1/2 percent higher than it is now, and on a nationwide basis, 2 percent greater than it is now.

We've made this progress by working together, government at all levels, private industry, individual citizens. It shows that American people, if they're given a chance to work, would rather have a job. And it's making our country more productive. We need to keep that momentum going, and I hope the Congress will agree with me—I'm sure you all agree—that we need to and must cut American income taxes by at least $25 billion this year.

Another problem is making the Government work better. I'm a farmer and an engineer and a businessman, and it grieves me to see an unmanageable entity, even in government, that's supposed to take the ideals of the American people, the actions of Congress, and to carry out programs that help you, and to see a bureaucracy there that's almost completely unmanageable.

The American Government employees are good people. They're dedicated. Quite often they serve at a financial sacrifice. They've devoted their one life to trying to serve the public. But with a complicated and confused bureaucracy based around a civil service system that's outdated and outmoded, it's become impossible to reward good service, to give promotions and salary increases to those who really do an outstanding job. And it's almost impossible to discharge or to demote someone who occupies a position in the Federal Government and refuses to do their jobs. So, we have proposed to the Congress this year basic civil service reform. It must be passed. And I hope that all of you will help me to encourage the Congress to put this reform into effect.

Another very serious problem is that of energy. For all these years in our country we've not had an understandable energy policy. We've been extremely wasteful. We've grown now to import so much oil that it's hurting every person in our country. Last year we imported about half the oil we used, $45 billion worth of American money going overseas to pay for oil, when much of that is unnecessary. But still now more than a year after I presented a comprehensive energy policy to the country, the Congress still has not acted.

Tom Foley, Senator Magnuson, your own Scoop Jackson have been in the forefront of trying to get the Congress to act. But we still don't have a good policy on saving the energy that we can save, on producing more in our own country, on cutting down imports which rob us all, and enhancing other kinds of energy that ought to be produced in much greater quantities, like solar energy. These changes must be made.

Well, in the last 15 months, the short time, or long time that I've been in office, we've tried to address these and many other difficult questions—forest management, water policy, caring for the environment, and at the same time keeping employment and growth sustained.

There are no easy answers to these domestic issues. We have tried to keep a strong American military capability; at the same time, to reach our hand out to guarantee peace for ourselves, for our children, for our grandchildren—a very difficult question to resolve. There are no easy answers there, either.

I know that in the past we've made some very serious mistakes. The Vietnam war, Watergate, the CIA revelations have kind of torn the fabric of our society, because the American people were not involved in making those decisions. We were faced with mistakes for the first time after they were revealed to us. And we create, sometimes, in the minds of American people, an image that we don't know exactly what we want to do.

I don't claim to know everything about what we want to do. But we try to bring the debate out into the open and let various voices be heard, so that when I do make a final decision about SALT talks or nonproliferation, or the use of solar power, or the control of the waste of energy, or farm agriculture policy, or urban policy, I will have listened to hundreds, even thousands of voices of Americans who know better answers than I do about a specific subject and who care deeply about our country.

So, to me it's important that we do have some confusion, that we do have an open debate, that we do have disputes on occasion and even outright criticisms. I think that's good in a strong, democratic society. I don't fear it. I also don't fear addressing some very difficult questions that have been ignored too long and have now become crises in our Nation.

Well, now, in order to help me in that process, I'm glad to respond to your questions.

QUESTIONS

TAX REDUCTION AND REFORM

Q. Mr. President, my name is Corky Burns, and, Mr. President, in examining some current legislation, it seems apparent that you support measures that will strip the small businessman of some of the tax advantages in regard to insurance, welfare, and retirement plans. Since these small businessmen are the foundation of our free enterprise system, and often have everything at risk, what justification is there for such an attack on them?

THE PRESIDENT. Mr. Burns, thank you. The overall thrust of the tax reform and tax reduction package that I've proposed would give $6 or $7 billion in decreased taxes, net, to the business community of our country; and another 18 or so billion dollars in net decreases for the private citizens of our country, many of whom are involved as employees or employers in small business.

So, the net result of all these changes would be a substantial reduction in income taxes for almost every element of our society. There are some changes that ought to be made to eliminate loopholes and special privileges that have been enjoyed in the past. Those have been carved out by people and by organizations that have a very powerful and very effective lobby existent in the past and now on Capitol Hill.

I'm a small businessman myself. I ran, before I became President and went to Washington, a farm and a farm supply center. I employed between 10 people and sometimes 50 or 60 people in the harvest season in Georgia. And I know the difficulty in dealing with the Federal Government.

Later on, within the next 12 months, we'll have at the White House a Small Business Conference. We are studying now what can be done to improve the life and the profitability of American small business. But if specific items are removed as a tax privilege from those who own small businesses, it's just to make more equitable and simpler our entire income tax structure.

The net result is for small business-you'll pay less taxes. And the overall net result is that some of the special privileges that have been enjoyed by business will now be made more equitable for the average American taxpayer.

So, I'm in favor of a dynamic community, a growing economy, a net reduction in taxes, a simpler tax system, one that's more fair.

Thank you, Mr. Burns.

ADMINISTRATION POLICIES

Q. My name is George Sparks. Mr. President, this question involves priorities. When historians look back at your term in office, what major domestic accomplishment do you hope will be identified with your Presidency?

THE PRESIDENT. As I said many times during the campaign, I would like to have a government that's as honest and decent and truthful and compassionate and, I said, as filled with love as the American people. This is a statement that was scorned and sometimes made the butt of jokes by people who are cynical in our country.

I think the strength of our government has got to be derived directly from the people. I would like for the government to be efficient, effective, sensitive, open, and fair. I would like for the decisions made on the domestic and international scene to be derived from the combined wisdom and idealism of the American people.

I would like to see us, on the international scene, project accurately the tone and the ideals that were envisioned 200 years ago. I've made a major commitment to let our country be identified on a worldwide basis as the protector of basic human rights. At the same time, in our own Nation we've got to be sure that we set a good example.

I spoke yesterday to the Los Angeles County Bar Association, and I spelled out then some defects in our legal systems. In many instances, the very progress that has been made in giving black people the right to vote, to hold a job, to own a home, has been obstructed by the most prestigious members of the legal profession during those times of transition and change. I know that lawyers are concerned about their clients. But when they organize into a bar association, the responsibility of that group is to protect the interests not of clients, but of lawyers.

I know that doctors care very seriously about their patients. But when you get doctors organized into the American Medical Association and their interest is to protect the interests not of patients, but of doctors. And they've been the major obstacle to progress in our country in having a better health care system in years gone by.

So, I look upon myself as a spokesman for the client and the medical patient and the student in a classroom, the elderly person, the mentally ill person. And I think this sense that I am that person would be the greatest achievement that I could derive for myself on the domestic scene.

I also want to be sure that the conflicting interests that exist in our country because of competition—and Americans are competitive people—are resolved to a great degree.

I would like to go out of office with the people understanding what will be the future possibilities in oil production, natural gas production, coal production, imports, exports, the use of solar power, the constraints on nuclear power, proper disposition of nuclear wastes, all the varied elements of an energy question. That's never been resolved in our country before. It's never been even addressed by a President and the Congress. It's a very difficult thing, because we are one of the greatest producing nations. We are by far the greatest consuming nation of energy. And to resolve those building conflicts around me as President would be a great achievement, and to bring an awareness of the harmony that ought to exist among American people, rather than emphasizing the differences that will always exist.

The last thing I'd like to say is this: I would like to go out of office having accomplished a resurgence in idealism in our country, reaching for greatness, acknowledging our mistakes, having American people realize that the local government, the mayor, the State government, the Governor, the National Government, the Congress, and the President are basically good people; not dishonest, not thieves, not trying to steal, but dedicated to the deepest commitment that we can possess of serving others.

We've got a good country, and when we have a temporary setback on unemployment or a temporary setback on inflation, or a temporary disharmony or argument with a foreign country, or a need to address the questions of agriculture or environment, this is just a temporary, transient sort of challenge; its not a catastrophe. But quite often Americans are too much inclined to condemn their own society and their government.

We've got the best government on Earth, we've got the best nation on Earth, and I'd like to go out of office with a renewed commitment among American people to prove that not only to ourselves but to the whole world.

MIDDLE EAST PEACE NEGOTIATIONS, ARMS SALES

Q. Mr. President, thank you for this opportunity. My name is Dennis Redford. I would like to know why we are involving ourselves in the sale of arms to Sadat and Begin on the one hand, and at the same time, not only advocating peaceful settlement but taking the posture of peacemaker in an active role with their negotiations? Aren't these positions realistically, diametrically opposed? Isn't this hard to justify morally?

THE PRESIDENT. No. And I'll explain why. There have been disputes in the Middle East for 30 years, even centuries, even before the time of Christ. And I think part of the involvement of American people in shaping my own decisions and the policy of our Government are very well illustrated by the Middle Eastern question. If you think back 12 months or 15 months, we've made a great deal of progress.

Never before have Arab leaders and Jewish leaders been willing to communicate directly with one another. I think the reason that Sadat went to Jerusalem and was received by Begin and Begin went to Ismailia in Egypt and was received by Sadat is because we helped in a limited way, I admit, to convince Begin and Sadat that both of those leaders genuinely wanted peace.

There's no doubt in my mind that Sadat wants peace perhaps as much as anybody in the world, and there's no doubt in my mind that Begin wants peace just as deeply.

One surprise that struck Begin and Sadat, they both told me that—in fact, Begin just a few days ago—one surprise was they underestimated their own people. When Sadat went into the streets of Jerusalem, the expression on the faces of public officials, women, children, every citizen along the street, was one of hope and welcome, even love for an Arab leader who in the past had been involved in war and the most intense hatred against the Israelis, against the Jews.

The same experience was witnessed when the negotiators went into Cairo. They couldn't walk down the street without being surrounded by Arab Egyptians who tried to give them gifts, some of them who were there—Ezer Weizman ¹ told me that people would come out of their jewelry stores and try to put in their hands very expensive rings and diamonds, just as a gift from the Egyptian people for trying' to strive for peace.

¹ Israeli defense minister.

So, the essence of what we've tried to do is to capitalize on the genuine desire of the Arabs and Israelis to find peace, and a great deal of progress has been made. The first time I talked to Sadat in the seclusion of the upstairs bedroom area of the White House, he said, "What do you want, Mr. President, me to do?"

And I said, "I want you first of all to recognize that Israel has a right to exist, to exist permanently and to exist in peace. Secondly, I want you to reach out your hand and talk directly with the leaders of Israel, not through us as an intermediary. And third, I want you to recognize that there can be genuine peace between the Egyptians and Israelis, open borders, trade, tourist exchange, student exchange, diplomatic recognition."

He said, "Mr. President, that will never happen in my lifetime." Less than a year later, Sadat adopted all those requests of mine and laid them on the table. The Israelis responded accordingly. Begin has now put forward some good ideas.

Now, it comes to the arms question. Our interest in the Mideast is not as a distant observer. It's not just as a postman to carry messages back and forth between the Israelis and the Egyptians and others. Most of the time the messages are not received well, as you know, because each side wants more than the other one is willing to offer. We're not just a disinterested person or party.

We have an intense, serious, national interest in Middle Eastern peace, first of all, because of our total commitment that will never be shaken, that Israel shall be free, protected, secure, and peaceful. That overrides everything else.

The second, though, is my realization that the best way to do that is to also have the friendship and the trust and the partnership of the moderate Arab leaders, leaders like Sadat, a peaceful man, leaders like the Saudi Arabians, who have been staunch friends and allies of ours-there's no other government that I can think of that's been more helpful to me as President than those from Saudi Arabia.

We don't want them to turn against each other. We don't want them to turn against Israel. We don't want them to turn to even other European countries or to the Soviet Union for their own security.

The Saudis, for instance, in the most controversial part of the arms package, have requested 60 F-15 airplanes to be delivered between now and 1983. It's a very modest request.

When President Ford was in office, Secretary Kissinger promised the Saudi Arabians, with the full knowledge of the Defense Department, many leaders in the Congress, "We will give you whichever you want, F 16's" which are primarily offensive planes— "or the F 15"—which is the finest defensive fighter plane in the world.

I reaffirmed this commitment when I first became President, and again in January when I went to Saudi Arabia to meet with King Khalid and the leaders. I said, "We will make this delivery." They chose the F-15, the defensive fighter. They did not ever ask us to put bombracks or offensive weapons on the F-15.

I think it's much better for us to keep that sense in Saudi Arabia that we are their friends, they- can trust us when we make a commitment or a promise on the part of the President and the Congress, it will be honored. And I believe that it's best for Israel, for us to have this good, firm, solid, mutually trustful, friendly relationship with the moderate Arab leaders.

So, I believe that this proposal that I have made to Congress is minimal. I hope and believe the Congress will honor my recommendation. It will never be in any way a derogation of Israeli superiority in the air. They'll still be superior in every sense of the word. There's no threat to them.

The Saudis do not want to station these planes close to Israel. They want to put them up near Iraq and South Yemen, where the major threat against Saudi Arabia might come.

So, the totality of it is that we will go ahead with this proposal. It's good for us, it's good for Israel, it's good for peace in the Middle East. It helps us to keep a good trade relationship with those countries involved. It reinforces the commitment of Egypt and Saudi Arabia to look to us for their future prosperity and security. And in the whole process we will keep my honor—my commitment to the American people, that year by year, completely contrary to what we've done in the past, we're going to cut down each year the quantity of arms we sell overseas. I'm committed to doing this, and I'm going to do it.

SOCIAL SECURITY SYSTEM

Q. My name is Charlotte Lebsack. Mr. President, bearing in mind that the money I am paying into social security for my retirement is being used now, today, to pay for the benefits of those individuals who paid into the program 20 to 30 years ago, I would like to know what type of benefits, if any, I can expect to receive when I retire, and who is going to pay for them?

THE PRESIDENT. An excellent question. This is another one of those questions that I faced when I became President last year. There are three major reserve funds that have been set up since the late 1940's to meet the payment requirements of the social security system. Two of those reserve funds were facing bankruptcy—one within another year, and the other one about 3 years later.

So, I studied this question for about 6 months, with the help of many Members of Congress, and made a proposal to the Congress, a proposition that we had to bring some constraint on the over-rapid increase in benefits that, in effect, doubled the inflation rate in some respects, and at the same time provide some firm commitment to finance the social security system on a permanent basis.

Congress acted last year. They guaranteed that the social security system will not go into bankruptcy. This was necessary so that for the next 25 years, if the Congress doesn't change the law any further, benefits will be guaranteed and those reserve funds will build up very slowly but steadily in the quantity of money available and there will be no threat to the social security system in years to come.

The people don't like to pay any more in social security payments, I realize that. But the amount that will be increased for you, the average American citizen, over the next 10 years is very, very tiny. The ones who will have a substantial social security increased payment to make are those that make $20,000, $25, $30, $35, or $40,000. And in the process of paying more, they also will have a higher base on which to derive benefits once they retire. It's a good investment for them.

So, you can rest assured that the social security will be sound. We've got accurate projections on how many people will be employed and how many will be contributing to the social security system in the future. And you need not worry, if the future Presidents and future Congresses don't change the system, that when you retire, the money will be there to pay your justly deserved retirement benefits back that you put in because of your hard work.

TUITION TAX CREDITS

Q. Mr. President, I am Catherine McGourin, and my question has to do with tuition tax credits. And first I would like to ask if any of your children attended private or nondenominational schools with tuition grants from the State, and second, I would ask if you intend to hold to your promise to help parents of children in private and parochial schools obtain help?

THE PRESIDENT. Fine. I've had four children. We had three boys while I was in the Navy, and then my wife and I had a 14-year argument that I finally won. [Laughter] Amy came along later. They've all attended the public schools, except my youngest son, Jeffery, who had problems with his health and who attended a private school for 1 year. We paid the tuition there without any State help.

When I was Governor, I instituted a program to give financial assistance to students who attended the private colleges. We started off $400 per year per student. It was increased later during my term to $600 a year per student. This was constitutional in Georgia.

I don't think that tuition tax credits ought to be authorized in the United States. We have put forward an alternate proposal to help the average American family pay for college tuition and other costs in a much more effective way. The tuition tax credits, because of the design of the income tax system, help much more greatly those families with a very high income.

My own belief is that to provide tuition tax credits for elementary and secondary schools would not only be ill-advised, because it would rob away from the public schools, but also is unconstitutional.

So, I don't favor tuition tax credits. And if the Congress does pass the tuition tax credit bill, I intend to do everything I can to keep it from becoming law, including vetoing the legislation. I'm committed to the public school system at the elementary and secondary level.

Within the confines of court rulings and other determinations under the United States Constitution, however, I am in favor of credits of many kinds, not through the tax system, being given to the parochial schools and other private schools. But the tuition tax credit system and the route is the wrong action in my opinion, and I oppose it now very deeply and believe it would be a serious mistake and will do all I can to prevent tuition tax credits from being the means by which we give aid to the private colleges for tuition, for scholarships, for loans for students—I think that's a better alternative. So, tuition tax credits I oppose.

SOLAR ENERGY

Q. Mr. President, my name is Chris Salisbury.

THE PRESIDENT. Saltsburg?

Q. Salisbury. There is presently a bill in Congress with over 100 cosponsors, called the solar energy bank bill. This is designed to set up a solar energy bank with a $5 billion revolving fund to provide long-term, low-interest loans for the purchase and installation of solar energy systems in commercial and residential buildings.

Do you support this?

THE PRESIDENT. No, I don't support that particular legislation. I think that a $5 billion allocation this next year for solar energy would be completely excessive. I don't think there's any way that we could either finance it without destroying the American budget, nor do I think that we could administer it for the benefit of the American people.

The first step that the Congress ought to take, including those 100 Members who signed that legislation, is to get passed the comprehensive energy package that's been considered by the Congress for the last 13 months. They've been too slow acting, and we need to expedite that process. Included in that legislation, by the way, is a $2,000 tax credit for any family who wants to install solar heating equipment in their own homes.

There is also direct grants, guaranteed loans for that purpose. The day before yesterday in Golden, Colorado, I announced that we were increasing by $100 million more the amount of money that we had already requested for solar energy research and development and demonstration projects.

In some areas of solar energy, we have passed the demonstration stage. We don't need to finance the installation anymore of units to heat water in a home, or even to heat a home. We know the technology. There are a million of those units in Japan right now. There are 300,000 of those units in Israel right now. It's time for us to move from research, development, and demonstration there to marketing. And I believe the best way to improve the rate with which American families install solar heating units and air-conditioning units on their homes is to make it possible for them to get loans to buy the unit, and to give them tax credits to encourage these purchases.

The manufacturers are ready to go to work on that, and I think we have made a proposal that's adequate to the Congress. We are going to increase, however, research and development into other forms of solar energy—temperature gradients in the ocean, windmill powerplants, the research and development on photovoltaic cells, the biomass processes, by which wood products or waste products or even garbage is changed into useful energy, and so forth.

That's where the research and development ought to be in solar energy, and not a $5 billion program as you've just described that would distort the whole energy picture and I don't think is necessary. I think we'll have a strong, good, aggressive, adequate solar energy stimulus package if the Congress will simply act expeditiously on a proposal that I've just outlined to you, which has already been made to them.

HOMEOWNERSHIP

Q. Mr. President, my name is John J. Hastings. I wish to preface my question with this statement about you. I believe that you are the best President this country has known in its 201-year history.

I am interested in economics and in inflation. Will you please tell me how a young couple in the 25-year-old age bracket might secure the collateral to buy an average home in the $70,000 to $80,000 bracket here in the Spokane Valley?

THE PRESIDENT. Well, first of all, I liked the first part of your presentation better. [Laughter] I'm not the best, and when I walk around the White House and realize the quality of my predecessors, it's a very sobering experience and a very inspirational thing.

We have a lot of meetings, for instance, in what they call the State Dining Room. And looking down on that room is a very somber and a very serious portrait of Abraham Lincoln. And down in the Map Room there's a little rough-looking wooden box—and when you open it up, there are writing materials in there, and sand to blot the ink, and quill pens. That was designed and built and all carried around the country by Thomas Jefferson, as he made trips like this to the then-existing country.

We've had some great leaders and some great Presidents who faced much more difficult questions than I do today. We are in a time of peace, and it's a good opportunity for us to reexamine what we are and what we stand for and to pull ourselves back together and to strengthen our country once again. So, I don't claim by any means to be the best person who's lived there. I'm not.

The second part of your question is one that's very difficult to answer. There are times in every young person's life when you have to make a decision on whether to buy a home that is acknowledged to be very expensive, or whether you want to continue to rent a home that might be a little bit less expensive per month. And the quality of the kind of home you buy is also a decision for you to make.

I lived in 15 houses before I was able to own a home. When I moved to Plains from the Navy in 1953, I didn't have any money, and I lived in a concrete block, low-rent, government housing project. I only paid $31 a month, which is all the government determined that I could pay. And I lived in three more houses before I built my present home in Plains. So, that judgment of when to buy and when to continue to rent and how expensive the quality of a home is one that you'll have to make.

We are trying to eliminate some of the disharmonies and obstacles that exist for young men and women to own their own homes. We are increasing substantially the effort in the Housing and Urban Development program to make homes available. And since I've been in office, not because of me, but because of the inclination of the American people and Congress action, we've had a very strong homebuilding program.

Last year more than 2 million new homes were built. Last night I spent the night in Portland with a young family, Paul and Janet Olson. They were living in a home that they bought a few years ago for $15,000. It was in a dilapidated part of town, and they bought it at a sacrifice, because the area was disgraceful rather than a source of pride. But other people around them bought homes, and using government funds like the 312 program and others they refurbished their own home, and now it's really a showpiece.

He's a man of moderate income. He has two small children, 5 and 3 years old, but now his home is one that Good Housekeeping or Better Homes and Gardens could go in and take photographs of as a kind of a showpiece. They've done the work themselves. So, there are many options now under Federal programs.

The other thing that's happened is that yesterday, just to illustrate, I was in the Watts area, where in 1965 the whole area was destroyed. It's been rejuvenated. There's a new tone of confidence and commitment among those black people who live there—almost entirely black or Spanish-speaking as well. There's the highest proportion of homeowners in Watts now than any other black community in the Nation. And a lot of it's been brought about by new kinds of government help.

When I campaigned around the country, one of the common things I heard in the ghetto areas of our Nation's cities, was redlining, where lending institutions, banks, savings and loans would say that "In this neighborhood or on this block no loans will be made, no matter what the status of that family might be, no matter what their income might be. We're not going to make any loans in this area," which condemned that part of a city to death. And under the leadership of Bob McKinney, who now heads up the Home Loan Board, that's been prohibited. And we are trying to eliminate redlining around our country.

So, I can't tell you that we have a program in government now or in the future that would let a young couple with a very limited income buy a $70,000 home. But we are trying to do other things that would tailor government programs through guaranteed loans, renovation of old houses, rent supplements for those with very low income, public housing projects where they are needed, Section 212 programs for retired people, older people, high-rise houses or homes in downtown urban areas, like in New York, the renovation of homes that I've just described in Watts—we're trying to have a comprehensive program.

And the last thing I'd like to say is this: Under the leadership of Pat Harris, who happens to be a black woman, head of the Housing and Urban Development Department, we have a group of people who are genuine homebuilders working. They are not there to try to find some excuse not to build homes. They're there to work with knowledge of their past experience on how to rejuvenate these old areas and put people in homes that they own themselves or can afford to rent.

I haven't given you a good answer to your specific question, but that's the best answer I can give. And I believe that over a period of time you will see that the kinds of programs that we are now implementing, with the help of Congress and the enthusiastic administration of the programs that already exist and the new urban policy that's just now beginning to have life, these things collectively will correct a lot of the defects that have long existed in the desire of American people to have a home that they can call their own.

SOVIET INVOLVEMENT IN AFRICA

Q. Mr. President, my name is Steve Rothschild, and I would like to ask you, do you view the recent intervention of Russia and Cuba in Africa as a test of U.S. policy? In other words, what is U.S. policy toward Soviet intervention in Third World nations?

THE PRESIDENT. I think we are holding our own in the so-called peaceful competition with the Soviet Union, in Africa and in other parts of the world. Again, I hate to refer repeatedly to what existed in the past, but I think it's accurate to say that never before in the history of our Nation have we shown any substantial interest in the continent of Africa.

Just a few weeks ago I visited Nigeria, the greatest nation in Africa in many ways—economically, population, vigor, influence, growing influence. There are about 100 million people who live in Nigeria. It's one of the present and future leaders of black Africa. I was the first American President, by the way, in the history of our country who had ever made an official visit to a black African nation.

Two or three years ago when Secretary Kissinger wanted to go and visit Nigeria, the country would not even let him enter that country. But I was received with open arms in a tremendous outpouring of friendship and realization of mutual purpose.

We are trying to do the same thing in other parts of Africa, particularly where the black nations exist. We've got a good advantage in having a man like Andrew Young head our United Nations delegation. He's trusted by black people, not only in Africa but in the Caribbean area, in Latin America, and around the world-also in this country, of course. But just the fact that I appointed him to be our U.N. Ambassador is a demonstration to those people in tangible terms that we care about them for the first time in 200 years.

Now, the Soviets are obviously trying to use their influence in Africa and other parts of the world. In many instances when they have come into a nation that has a changing government, their major input has been weapons, and they are much more easy to buy weapons from than we are. They will supply excessive weapons to countries like Somalia and Ethiopia, in the Horn of Africa, resulting in this instance by an attack on Ethiopia by Somalia with Soviet weapons. Both countries got them from the Soviet Union.

The Soviets have gone into Ethiopia, using Cuban troops to fight against Somalia. I deplore this very much. In the strongest possible terms we have let the Soviets and the Cubans know that this is a danger to American-Soviet friendship and to the nurturing and enhancement of the principle of detente.

The Soviets know very clearly how deeply I feel about this. I've communicated directly with Brezhnev through private, sealed messages. And Cy Vance just came back from Moscow recently, having repeated to the Soviets, "Be careful how you use your military strength in Africa if you want to be a friend of the United States and maintain peace throughout the world."

So, I think that they are mistaken. There's a strong sense of nationalism in Africa. Once the Soviets are there to help with military weapons when a new government is formed, then the people of that country almost invariably want the Soviets to get out and let them run their own affairs.

I think there's an innate racism that exists toward black people within the Soviet Union, as compared to us. We know how to live with white and black people together. We respect each other. We've learned this the hard way. But there's a great deal of appreciation in Africa for this attitude on the part of the United States, as contrasted with the Soviet Union. And there's another very major factor that I mentioned yesterday morning in Denver at the Governor's Prayer Breakfast, and that is that there's a strong sense of religious commitment throughout black Africa and indeed the northern part of Africa as well, Egypt and the others. They may be Arabs, they may be Moslems, they may be Christians or others, but they worship God.

And this is a sense or a mechanism of a feeling of brotherhood and sisterhood that binds us together very strongly. They recognize that the Soviet Union is a Communist and an atheistic nation, and it's a very present concern in the minds and hearts of Africans who, on a temporary basis, will turn to the Soviets to buy weapons because we won't sell the weapons to them.

We come in later with economic aid, with trade, with friendship, with the commitment to democracy and freedom, to human rights, and I believe in the long run our system will prevail. We could compete more directly and effectively with the Soviets on a temporary basis by trying to sell our weapons to every country that calls for them. I don't think that's the right approach.

I'd rather depend on the basic commitment of American people to human rights, to religious commitment and freedom, and to a sense of equality with those people who might be brown or yellow or black, than to depend on the Soviets trying to buy friendship through the sale of destructive weapons designed to kill.

CRIMINAL JUSTICE SYSTEM

Q. Mr. President, I'm George G. Paul, I work at the Veterans Administration Hospital. On April 12, I wrote you a letter giving you five constructive suggestions: one, helping to stabilize the national economy; two, fighting poverty; three, curing illiteracy; four, bringing drug abuse to a standstill; five, other dollar savings by the Federal Government. Because of the time element, I will dwell briefly on the former, helping to stabilize the national economy.

Question: Is it possible to propose a 10-percent surcharge on all fines of misdemeanor court and felony cases? Last year Spokane, with its 180,000 population, grossed over $1 million in fines; 10 percent of that would be over $100,000, or 60 cents per capita.

Using that as a yardstick, you could say that with the national population of over 180 million, we could realize about $108 million. The end result would be a healthier nation, due to more money or less crime—either way the Nation wins. As I see it, the only opposition to this type of program would be the chronic offenders. What's your comment?

THE PRESIDENT. I wish that you would give your mailing address to one of our staff members, Stu Eizenstat, right over here, so that he can send you a copy of the speech that I made yesterday to the Los Angeles Bar Association, where I covered some of those very points that you've just reached.

One of the things that I did describe is that just legal fees paid by corporations last year amounted to $24 billion. A lot of the legislation—I mean, a lot of the litigation involved was unnecessary. And in some of those lawsuits, they've been dragging out 8, 9, 10 years. There was one lawsuit that lasted 30 years, and as you can well see, the people who were involved in a lawsuit to begin with were dead by the time the final decision was made. That's 12 times as much as our society spends on all local, State, and Federal courts.

So, bringing some quality into the entire judicial system and crime control is a very great commitment of my own administration.

Whether to finance it out of a system that you've described is something that I have not addressed, but I will take your recommendation and consider it very carefully.

We were pleased last year to see the overall crime rate drop for the first time in many years. It dropped 4 percent. Perhaps this is an omen of things to come.

One of the reasons that the crime rate did drop, in my opinion, is the much tighter control over the habit-forming drugs that were coming into our country. Under the leadership of Dr. Peter Bourne, who heads up my drug abuse program in the White House, we worked out an agreement with the new President of Mexico, Lopez Portillo, to hold down the production and the distribution in our country of heroin derived from poppies that were being grown in the mountain areas of Mexico. Lopez Portillo is committed to controlling this source of crime in our country as much as I am. So, we worked out with him a means to cut down the opium smuggling into the United States from Mexico by 90 percent. It means now that the opium sold on our city streets is much less pure. It's much more expensive, and just that fact alone has helped to cut down many of the violent crimes.

So, your recommendation that we use money from the court system itself to finance a better criminal justice system is a very good idea. But I would like for you to give your name and address over here so that we can give you a complete analysis of what I hope to do to cut down crime in our country and to make our criminal court system, our entire bar association more responsive to the needs of our people.

Thank you very much.

Stu Eizenstat is over there with his hand up. He can get your name and address.

TUITION TAX CREDITS

Q. Mr. President, my name is Sandra Felix, and I would like to ask you if you would elaborate on why you are opposed to tax credit for college students and specifically what you would foresee doing instead.

THE PRESIDENT. All right. I don't think there's any constitutional prohibition against tax credits at the college level. There is, in my opinion and in the opinion of the Supreme Court, and also the Attorney General, for elementary and secondary schools, because people have to pay taxes to finance those schools.

At the college level, however, I think that a much more effective way to meet the needs of the low-, middle-, and even upper-class families for helping students go to school is to expand the existing programs for grants for those who have low incomes or either a large number of children with a moderate income, loans for students who can pay back those loans after their college tuition time is over. And this concentrates the benefits for a given amount of payment from the Federal Treasury or loss in tax collections exactly among those families who need it most.

Tuition tax credits also don't take into account the problem that a middleincome family has if they have two or three children going to college at the same time. There's only one tuition tax credit for a wage earner, whereas the proposition that I've made to Congress, which is not any more costly but much more effective, would let several children in a given family derive the same benefits with grants, loans, tuition credits, and other aids.

So, for a given amount of loss to the Federal Treasury, you get much more benefit for students and much more benefit for the kind of family, the average American family that needs it most.

I have to admit that the very high income family would derive more help from tuition tax credits, but most American families would not.

I might say I don't know of a single college administrator nor a single State university system leader who favors the tuition tax credit proposal over the one that I've just described to you. Educators at all levels prefer what I've just described. It's better for the taxpayers of our country, it's better for the students involved, it's better for the colleges, it's also better for the families who have to educate those children.

ENHANCED RADIATION WEAPONS

Q. Mr. President, my name is Peter Hammer. I was just going to ask you a question about the neutron bomb.

THE PRESIDENT. Good.

Q. Are you going to scrap it altogether, or are you just maybe delaying it for a while until a better time to bring it out? My second part of that was, I'd like to know where your values are at, with property or with people, because the neutron bomb would have a greater kill value, but it wouldn't hurt the property. Are you for that?

THE PRESIDENT. Good question. Thank you.

As you may know, Peter, a decision to go ahead with the design of the .neutron bomb was made before I became President. I didn't know about it until it was published in the newspaper. And at that time I began to assess whether or not we needed to go ahead to produce the neutron weapon itself.

We have a serious problem in Western Europe and Eastern Europe. The Soviet Union has built up a tremendous quantity of tank force, military force of all kinds, nuclear weapons like the SS-20, which is 30 times more destructive than any neutron weapon that we've ever considered, and which has a range of more than a thousand miles, where the range of the kind of neutron weapon we're talking about is only 15 or 20 or 25 miles.

There has never been any thought that neutron weapons, which are not bombs, but either shells or missiles, would be deployed on American soil. They're not feasible at all for use in this country or where Americans live. If ever produced, they would be deployed on the ground or in the lands of the West Germans or the Belgians or other Europeans.

Another factor to make is that if the Soviets did invade, then the lives that would be saved by a weapon with a very narrow destructive area would be West Germans, Belgians, those who live in Holland, perhaps the French, that are our friends and allies. I never had a single European country who told me that if we produced the neutron weapon that they were willing to deploy it.

West German leaders said that, "If other nations in Europe will deploy it, we will?' So, that's why I terminated any consideration of the production of the neutron weapon for the time being.

If the Soviets continue to build up their own forces to a degree that increases the threat against the West Europeans, who are our NATO Allies, and we have about 300,000 American soldiers in the Western European area, who would be directly threatened, then I would consider going ahead with the neutron bomb as one of the alternatives that faced me.

I would not want to close that option completely. But there is no plan now to go ahead with the neutron weapon.

I hope that the Soviets will caution themselves and not build up their forces any further. We've also got another negotiation going on with them, Peter, with which you may or may not be familiar, called the mutual and balanced force reductions. We've just for the first time put on the table a list of all the armed forces we have in Western Europe. The Soviets did the same thing for the first time. They put on the table a list of all the armed forces they have in Eastern Europe. And once those inventories are confirmed on both sides, then the next step would be to start reducing the armed force commitment by NATO and the so called Warsaw Pact on opposite sides of the boundaries between Eastern and Western Europe for the first time.

So, we want peace. We want to eliminate nuclear weapons altogether. We can't leave our country defenseless, and we can only go so far in putting constraints on ourselves until we are sure that the Soviets are willing to meet our constraints.

So far, the Soviets have negotiated in good faith on SALT. We hope for the first time to have a comprehensive test ban, where we eliminate completely the testing of nuclear weapons. We are still testing those right and left. So, another thing that Congress has done recently on the same subject is to pass legislation again for the first time preventing non-nuclear nations from developing explosives, but permitting them to go ahead and produce atomic power.

So, in all aspects of the use of nuclear power, my commitment, as I'm sure is yours, is to reduce the prospect of new atomic weapons on a mutual basis with the Soviets and others and start reducing the inventory of existing nuclear weapons with the ultimate goal, by the American people at least, to eliminate nuclear weapons from the Earth altogether.

NATIONAL HEALTH CARE

Q. Mr. President, my name is Kyra Coffey. And I know what I want to say, first of all, is really unprofessional and un—what am I trying to say?—not really related, but I think you're really cute. I do. [Laughter]

THE PRESIDENT. You're the first questioner that's made me blush. [Laughter]

Q. Okay. Now I'd like to ask my question. If you're going to reduce the government interference in the lives of the American people as you said, why then are you pushing for a national health care plan which will only increase our income tax and increase our national debt, just as it has in England and Sweden? Thank you.

THE PRESIDENT. Thank you. If that was the result of a national health plan, just to increase the burden on the American people financially, I of course would never consider it. Beginning with President Truman's administration, there has been a growing interest and desire among the American people to have a more farreaching or comprehensive health plan for our Nation.

There would be several emphases in the new plan that don't presently exist, and I'll just mention a few of them.

One is prevention of disease, and not just a commitment to treat an affliction or a disease after it occurs in the human body. Fifteen months ago the immunization program for children, for instance, had almost been completely forgotten. Now with our new CHAPS program, so called, we are trying to test young people at an early age, 4 or 5 years old, to see what defects they do have, immunize them against prospective diseases for a change, as did occur in my childhood, perhaps in yours, and make sure that the emphasis is on prevention.

The second thing we want to do is to let Americans prepay through a routine monthly payment, for instance, for this kind of care and not just depend upon concerted and very expensive care after they become ill.

We need to get away from the commitment of medical doctors, hospital administrators, even patients, to go into a hospital for treatment when they could get adequate treatment in an out-patient clinic. As you know, many hospital insurance policies won't pay off unless you are admitted to the hospital as a patient.

Obviously, this is more convenient for the doctors perhaps. It's much more profitable for those who own or operate a hospital. You're quite often given services or treatment that you don't need, and of course it makes the expense of hospital care in our country far greater per person than any other nation on Earth, including Sweden, Canada, England, where they do have a more comprehensive health care program.

Another thing that we want to emphasize in the new proposals is the use of paramedical personnel, not just medical doctors. Of course, this care would have to be under the supervision of qualified medical doctors, psychiatrists, and others, but I think that the greater use of licensed practical nurses, registered nurses, laboratory assistants, physicians assistants, and so forth would let this examination-type care and routine treatment in out-patient clinics be much less expensive.

We've seen in recent years an unbelievable explosion in health care costs. Last year, for instance, the hospital costs went up in our country 16 percent. The inflation rate went up about 6 percent. And this has been typical of the last few years.

Our hospital costs for a given degree of treatment has doubled, has been doubling every 5 years, an unbelievable, unwarranted increase in health care costs. We now spend about $6 or $700—I'm not sure of the exact figure—for every man, woman, and child in this country for health care, and we don't nearly have the best health care in the world.

So, I think that a much more effective program can be evolved than the one now. A step in the right direction was Medicaid and Medicare. We've now got health care responsibilities scattered all over the Federal Government. I think to bring that together and have one tight, good administration would be better.

I personally want to keep open the option of the insurance portion being administered by private insurance companies. I don't want to see the Government take over this full responsibility. And I'm also committed to the proposition that individual American citizens would continue to have the right to choose their own family physician. I don't want the Federal Government telling a patient you have to go to that particular physician to get your care.

Another aspect that we are trying to move on is to cut down the cost of drugs and to cut down the cost of all kinds of treatment mechanisms that are very, very expensive. Generic drugs sometimes cost only one-fifth as much as brand-name drugs that are identical in composition, taste, and everything else, including quality.

So, you can see that we've got a very serious problem in our country on health care. But within the bounds that I've just described to you very briefly, I believe that we can evolve over a period of years to be implemented very slowly but very cautiously a comprehensive health care program that the American people would see is not any more costly, is much more effective, and would improve substantially the health of the American people.

Now, where exactly to start the first year, we've not yet decided. It might be on health care for very young people, it might be health care in the case of catastrophic illnesses, where it's far beyond the capability financially of a family. But we'll feel our way very cautiously, but I think the American people are ready for the kind of changes that I've described to you.

OIL SURPLUSES

Q. Mr. President, I'm John Bjork. Reportedly we have an oil glut here on the west coast now, supposedly because of Alaskan oil. Would you support, perhaps on a temporary basis, trading Alaskan oil to Japan and redistributing Middle East oil that would be going to Japan to other parts of our country?

THE PRESIDENT. Since the Alaskan oil began to come down to the mainland, about 1.2 million barrels a day, we've got a surplus of oil on the west coast. Five and a half million to maybe—550,000 to maybe 700,000 barrels of oil extra come into our country daily on the west coast that we are not presently using.

This situation is aggravated by the fact that most of the oil that is produced in California has a high sulfur content called sour oil and is a very low viscosity or thick oil. And the refineries in California for instance are not designed to use the California oil.

What to do about the subject is a question that we've not adequately resolved. One proposal is that there be placed into use an existing pipeline owned by the Sohio Company that presently brings natural gas from Texas, Louisiana fields into California—to change that pipeline into one that can carry oil from the southern part of California into the refineries in Texas-Louisiana-Alabama area. This would let us move that oil where it is needed.

We have now been required by law to take that surplus oil and to transport it to the gulf coast through the Panama Canal, which is a fairly expensive process and which works a financial hardship on the State of Alaska because they have to share in the transportation costs along with the oil companies.

I could not presently route that oil to Japan. The law prohibits it at this point. I believe it was the law that set up the Alaskan pipeline that said that the Alaskan oil had to be used on the mainland of our country. But this is one of the options that we are considering. I think a lot of it depends on how rapidly we can turn the Sohio line around and transport oil across the southern part of our country to the presently existing refineries.

If that should fall through as a proposition, then I think trade for some of the surplus oil on a temporary basis with Japan would be one of the options that we would consider very seriously. I just don't know yet. Yes, sir?

Q. Mr. President, my name

THE PRESIDENT. The Japanese want it, by the way.

MENTAL HEALTH PROGRAMS

Q. Mr. President, my name is Stephen Balburg, and I'm concerned about mental health-related issues in our country. I know that your wife is very much involved in mental health throughout the country. I'm especially concerned about possible budgetary cuts or additions within the next fiscal year. Could you comment on what the future is of mental health in regards to those concerns in the next year or two?

THE PRESIDENT. Yes. Within the past week I received a report from the mental health study commission that was headed by my wife, who's honorary chairman. She was a very active chairperson, participated in public hearings all over the country, had, I think, 21 people to work with her, representing all elements of the mental health care problem in our country; had a very fine professional doctor, Dr. Tom Bryant, to help her with it.

It's a good report. It advocates a further move toward community health care centers, where mental patients of all kinds could live as well as possible within their own homes or either near their own homes, to continue to cut down the population of mental patients who are in hospitals, mental hospitals, because we know that once they are there, it is an extremely expensive thing for the taxpayers to support them, costing anywhere from $30,000 to $50,000 per patient. To take care of a patient under normal circumstances in a mental health treatment center would cost maybe one-fifth that much or even less.

In Georgia, under my wife's leadership again and with me giving her some aid as Governor, we established a large number of these community health treatment centers. They were supervised by psychiatrists or professional psychologists. But in the process we used a lot of parents or people who had, for instance, a retarded child or a child with some other mental defect. They worked under the supervision there in the center of maybe retired schoolteachers or those who quit teaching to come to work in this kind of environment. Existing social workers joined in to help, volunteers helped, and there was a revitalization of the lives of some of those patients who were quite old, who had been scorned, hidden in the closets or in the basements of homes, or dwelt all their lives, perhaps, in a mental institution.

The thrust of their study, in addition to what I've just described, is again on the prevention of mental illness of all kinds. Research and development will be greatly enhanced. The cohesion of Federal programs that presently are scattered all over the Federal Government into one central organizational structure is another recommendation.

There are in all 117 specific recommendations that have been put to me. My desire is to carry out all of them. And the best lobbyist in the United States will be there with me every day and alongside of me every night to remind me that I have a responsibility to the mentally ill people of this country. So, I think we are going to see a new day in mental health in our Nation.

One of the biggest problems that Rosalynn identified in traveling around the country was the so-called stigma that is attached to people who have mental illnesses. Now, about one out of seven American people need mental treatment. And quite often—even perhaps some of you have been reluctant to admit that those who have suffered in the past or presently suffer from mental illness are good citizens and can be good employees and can be good neighbors.

So, just the acceptance of these people into our arms and into our hearts as those who are worthy, do have a problem, in almost every instance temporary, and can be constructive and good citizens in the future if we care for them, is the main benefit that I believe we'll derive from this study and from the implementation of it.

We know that there must be a close relationship between government at all levels and the private citizenry of our country, but there also must be a close relationship between those who treat physical illnesses and mental illnesses. Quite often the two in a single person are closely interrelated. One becomes physically ill if mentally ill, and vice versa.

So, I believe that because of this study and because of my commitment to carry it out, we're going to see some very good changes made in the months ahead.

Do I have time for another question? I'll take it anyhow. Okay.

CANADA

Q. My name is Mike Huber, and, Mr. President, if Quebec secedes from Canada, would you favor U.S. Statehood for any of the remaining provinces, should they desire it?

THE PRESIDENT. I always make a practice whenever I have a townhall meeting of this kind to avoid answering at least one question— [laughter] —and I think I'll choose your question for that response.

I'll let the Canadian people decide about the cohesion of their great country, and when they make a decision, I'll abide by it.

Let me say in closing this: I've learned a lot today by being with you. I've gotten to know the feeling that you have, and I've become better able to understand the concerns that exist in your mind and the answers to questions that I've not previously made clear to you. It is very difficult for a President, in the limited availability that I have to reach your hearts and minds through the evening news or maybe by news conferences twice a month or brief statements with a fireside chat, to understand you and to let you understand me.

I think this has been a very constructive meeting. You've honored me by inviting me back to Spokane. You live in one of the most beautiful parts of the world. And I always feel better as a President when I return to the White House from a trip like this. I feel closer to you.

I realize again the innate, unchanging greatness of our country, and I am again reminded of the wisdom and judgment and common sense and the natural friendship toward one another that exists among the American people.

It's been a great occasion for me. I thank you from the bottom of my heart.