The President's News Conference

THE PRESIDENT. [1.] We had a very good meeting with the legislative leadership this morning, and I thought I would make a few announcements and review some of the things that I went over with them and which might be of interest to you. You may have a few questions if you want to, and if we have time.

It may be helpful to outline four basic themes that govern our policy in Southeast Asia.

First, America keeps her word.

Second, the issue is the future of Southeast Asia as a whole.

Third, our purpose is peace.

Fourth, this is not just a jungle war, but a struggle for freedom on every front of human activity.

On the point that America keeps her word, we are steadfast in a policy which has been followed for 10 years in three administrations. That was begun by General Eisenhower, in a letter of October 25, 1954, in which he said to President Diem:

"Dear Mr. President:

"I have been following with great interest the course of developments in Viet-Nam, particularly since the conclusion of the conference at Geneva. The implications of the agreement concerning Viet-Nam have caused grave concern regarding the future of a country temporarily divided by an artificial military grouping, weakened by a long and exhausting war and faced with enemies without and by their subversive collaborators within.

"Your recent requests for aid to assist in the formidable project of the movement of several hundred thousand loyal Vietnamese citizens away from areas which are passing under a de facto rule and political ideology which they abhor are being fulfilled. I am glad that the United States is able to assist in this humanitarian effort.

"We have been exploring ways and means to permit our aid to Viet-Nam to be more effective and to make a greater contribution to the welfare and stability of the Government of Viet-Nam. I am, accordingly, instructing the American Ambassador to Viet-Nam to examine with you in your capacity as Chief of Government how an intelligent program of American aid given directly to your Government can serve to assist Viet-Nam in its present hour of trial, provided that your Government is prepared to give assurances as to the standards of performance it would be able to maintain in the event such aid were supplied.

"The purpose of this offer is to assist the Government of Viet-Nam in developing and maintaining a strong, viable state, capable of resisting attempted subversion or aggression through military means. The Government of the United States expects that this aid will be met by performance on the part of the Government of Viet-Nam in undertaking needed reforms. It hopes that such aid, combined with your own continuing efforts, will contribute effectively toward an independent Viet-Nam endowed with a strong government. Such a government would, I hope, be so responsive to the nationalist aspirations of its people, so enlightened in purpose and effective in performance, that it will be respected both at home and abroad and discourage any who might wish to impose a foreign ideology on your free people.

"Sincerely, Dwight D. Eisenhower."

Dated October 25, 1954, addressed to President Diem.

Now, that was a good letter then and it is a good letter now, and we feel the same way. Like a number of other nations, we are bound by solemn commitments to help defend this area against Communist encroachment. We will keep this commitment. In the case of Viet-Nam, our commitment today is just the same as the commitment made by President Eisenhower to President Diem in 1954--a commitment to help these people help themselves.

We are concerned for a whole great geographic area, not simply for specific complex problems in specific countries.

We have one single, central purpose in all that we do in Southeast Asia, and that is to help build a stable peace. It is others, and not we, who have brought terror to small countries and peaceful peasants. It is others, not we, who have preached and practiced the use of force to establish dictatorial control over their neighbors.

It is others, not we, who have refused to honor international agreements that aim at reasonable settlement of deep-seated differences. The United States cannot fail to do its full share to meet the challenge which is posed by those who disturb the peace of Southeast Asia, but the purpose of America will not change. We stand for peace.

Our soldiers are doing great work, but what they are doing is only part of the job. The issues are political as well as military, economic as well as strategic. Our recent request for additional assistance funds is more than half for economic help.

We are very grateful for the very fine action taken by the House foreign Affairs Committee, and we hope to have prompt action on that request by the Congress.¹

¹ The Committee, on May 27, had met in executive session and had ordered reported favorably to the House the foreign aid bill (H.R. 11380). The bill was approved by the President on October 7, 1964 (78 Stat. 1009).

The agenda in Honolulu covers plans for progress as well as programs against terror. It is others who make war, and we who seek peace.

I should certainly say that the middle of the Honolulu meeting is not an appropriate time for the announcement of any additional specific programs. I do think as a result of constant reviews of our work in that area of the world that we will try to improve our effectiveness and our efficiency. Secretary McNamara and Secretary Rusk will both have more detailed reports when they return, and that is all I can say about the conference at this time.²

² The White House announced on May 28 that the President had asked a number of high-level U.S. officials to meet in Honolulu on June 1 and 2 for discussions of the situation in Southeast Asia. The release stated that the meeting would be chaired by Secretary of State Dean Rusk and would include Secretary of Defense Robert S. McNamara, General Maxwell D. Taylor, Chairman of the Joint Chiefs of Staff, and other officials from Washington, together with Ambassador Henry Cabot Lodge and other high-ranking Americans stationed in the area.

[2.] I have sent a wire to Prime Minister Shastri of India, extending a message of congratulations on his election as Prime Minister.³

³ Item 381.

[3.] This morning the legislative leaders and I discussed our request to Congress for an adjustment of the debt limits bill. The present limit, as you know, is $315 billion. It will drop to $309 billion on June 30th and $285 billion on the following day, July 1st. Neither figure, of course, is realistic. The Treasury Department's latest estimates indicate that the public debt will be $311.8 billion on June 30th.

I pointed out to the leaders this morning that Congress must adopt a reasonable and realistic debt limit for fiscal 1965 if we are to protect the credit standing of the Government. If the scheduled reductions in the debt limit were to take effect, the United States Government would not be able to pay its bills as they come due or refinance maturing obligations.

The debt limit is not a magic formula for promoting economy in Government. Effective control of Federal spending must take place in the appropriations process and in the agencies which spend the money, and we are concentrating our efforts in those areas. for instance, the expenditure figures for fiscal 1965 are now projected to be $600 million below the level we estimated in January, and $1 billion below the latest expenditure estimate for fiscal 1964.

The expenditure total for the 2 years combined is now estimated to be $700 million less than it was expected to be in January. Under these circumstances I am confident Congress will approve the $324 billion debt limit. This is the minimum figure consistent with meeting our financial obligations and handling the public debt in an economical and responsible fashion, and has been recommended strongly by the distinguished Secretary of the Treasury, Mr. Douglas Dillon.

[4.] The leaders and I also discussed the hearings which will begin this month before the House Ways and Means Committee on the Federal excise tax structure. Chairman Mills' hearings are always thorough and thoughtful, and this one will not be an exception. I believe these hearings will set in motion a responsible review of our excise tax system, paving the way to responsible changes in that system, if the hearings determine that changes are warranted. No changes should be made until we can complete the hearings.

There could be no sharper contrast to that sound and sensible procedure than the recent proposal that, without any hearings at all, we cut all Federal retail excise taxes in half starting July 1, 1964, and remove them altogether starting July 1, 1965.

[5.] We have just enacted an $11.6 billion tax cut, the largest in our history. I will discuss with you economic impacts with that tax cut, from the Council of Economic Advisers, in a minute. It may well be that future excise tax cuts are highly desirable, but the leaders and I agreed we must first have a fair chance to determine the full effects of the recent tax cut upon our economy, upon Federal revenues, and we must also have the kind of hearing Chairman Mills intends to hold before responsible action can follow.

Although it is much too soon for final judgment, early returns indicate that the economy is responding well to the tax cut. Sustained expansion, our record economic expansion which entered its 40th month yesterday, is showing new vitality. The administration's January forecasts of $623 billion GNP will be realized or bettered. The expansion will roll on through 1964 and, we believe, well into 1965.

Business optimism: Instead of hesitation and pessimism-often found at this stage of previous upswings--businessmen are confident and optimistic under the stimulus of the tax cuts. They are expecting sales to rise faster in 1964 than in 1963. They expect to spend 10 to 12 percent more on plant and equipment this year than last--more than double the 5 percent rise in 1963.

They more widely expect gains in profits than at any time in the past 17 years--according to Dun and Bradstreet's April survey-which is all the more remarkable when you consider that the rate of after-tax profits had already reached $31 billion in the first quarter, 62 percent above the recession low and 22 percent above a year earlier.

Consumers are responding strongly. Partly in expectation of the tax cut, the rate of consumer spending jumped by $8 billion in the January-March quarter--the biggest quarterly rise, by a wide margin, in our 1961-1964 expansion. In the 4 weeks ending May 23d, retail sales averaged 7 percent above a year earlier.

Manufacturers are reflecting the stronger markets: The industrial production index jumped a full point in April, the largest advance in 10 months. New orders for durable goods, which foreshadow future production, rose 6 percent in April, while machine tool orders ran 76 percent above a year earlier.

Unemployment was down from 5.7 percent in April 1963 to 5.4 percent this April. Total labor force time lost through unemployment and part-time work is down even more sharply--from 6.4 percent in April 1963 to 5.9 percent this April. Best of all, there was a gain of more than 1 million new nonfarm jobs from December to April.

No inflation is in sight, although some people feared "overhearing" of the economy. Wholesale prices are lower today than in January; lower than 3 years ago; lower than 6 years ago. Both our Government surveys and leading private surveys show confidence in future price stability.

Although I cannot and do not suggest that we now have evidence of the success of the tax cut, it is hard to explain the continued strong advance to date and the bright prospects ahead except in terms of the fresh confidence, the expanded purchasing power, and the new incentives created by the Revenue Act of 1964.

[6.] Through May it looks like we are running a balance of payments deficit of about $500 million to $600 million deficit for the first 5 months. We ran at a rate of $3.6 billion average for the last 6 years. Last year we ran at $3.3 billion. The first 5 months it looks like about $500 million.

Because of the improvements in our balance of payments, as well as the result of heavy Russian sales of gold for the year to date, Secretary Dillon informs me this morning that our overall gold stock has increased by $97 million through May.

I think it is important that you preface that with this statement:

"Because of the improvement in our balance of payments, as well as the result of heavy Russian sales of gold, for the year to date our overall gold stock has increased by $97 million."

I think that indicates the confidence that they have in the Government generally.

[7.] I have asked that a National Conference of Labor Leaders be called for June 8th here in Washington for the purpose of implementing the equal opportunity pledges signed by the great majority of AFL-CIO affiliates with the President's Committee on Equal Employment Opportunity. The presidents and other leading union executives who represent over 120 major unions will be on hand. Secretary Wirtz and President Meany will join in this discussion.

Now f will be glad to have any questions which you have.

[8.] Q. Mr. President, you have very forcefully said that you wanted the Senate to pass the civil rights bill as it went through the House. Now that cloture appears in sight, could you say how you feel about the compromise that has been worked out by the leadership?

THE PRESIDENT. I was very pleased with the bill as passed by the House, and I understand that a number of amendments have been proposed that have been reviewed with the administration. I believe that the administration lawyers feel that the suggestions generally have been helpful and would be acceptable.

I haven't reviewed each amendment that has been offered, but they will be debated in the Senate. I have confidence in the action that the Senate will take. I believe it will pass a good bill, and I hope it will.

[9.] Q. Mr. President, can you tell us whether you are giving any consideration to sending troops into Thailand?

THE PRESIDENT. I stated in the beginning that I would not think that in the middle of the Honolulu meeting would be the time for announcement of any specific program, and I do not plan to do that today.

[10.] Q. Mr. President, have you looked into these reports that the Americans in South Viet-Nam are equipped with obsolete and in some cases outmoded, broken-down equipment?

THE PRESIDENT. Yes. Each day, when I see a news story, I check on it. I think that Secretary McNamara's statement is a correct one and can be trusted by the American people. I think the military authorities are using the equipment that they think is best.

While in the best of equipment you will find flaws from time to time, in the helicopter, in the plane, that is true in every engagement that any people have ever been faced with. I found it true out in the Pacific in the early days of the war, and I found it true in the European theater.

From time to time remedies will have to be found and substitutions made, but I believe that we are furnishing good equipment, that it is being handled well, and I don't share any concern about the quality of it or the quality of the men handling it.

[11.] Q. Mr. President, at the conclusion of the Honolulu meeting and after you have received a report from Secretary Rusk and Secretary McNamara, do you intend--

THE PRESIDENT. I don't have any plans beyond that.

Q. I was going to say "to go before the American people?"

THE PRESIDENT. The answer is still the same.

[12.] Q. Mr. President, could you tell us how you feel about the Pennsylvania Avenue Plan that was submitted to you last week?

THE PRESIDENT. Yes. Last week the Commission on Pennsylvania Avenue, appointed by President Kennedy, unveiled their bold and creative plan for Pennsylvania Avenue, the Nation's ceremonial drive from the Nation's Capitol to the White House. I hope this proposal will be very carefully examined and thoroughly studied not only by Congress but by all the appropriate agencies in the executive branch, and by the American people as well.

Although as a Nation we have shunned pomp and ostentation, we have a deep and great pride in the Nation's Capital City. I think this is quite proper. The Commission's recommendations are worthy of our attention, and I look forward to reaction from all quarters.⁴

⁴ On May 31 the White House announced that the President had that day received the report of the President's Council on Pennsylvania Avenue. The 56-page report, entitled "Pennsylvania Avenue," was published by the Government Printing Office.

[13.] Q. Mr. President, you said that there is no inflation in sight. Does that indicate that you think that labor will accept the administration's guidelines, both labor and industry?

THE PRESIDENT. We have made our recommendations to both groups. They must, in their own judgment, act for what they think is best for the groups they represent as well as the people. We have responsibility for speaking for the public. We have done that.

We are very hopeful that our recommendations will be seriously considered and accepted by both groups. But there is not anything mandatory about them. They don't have the compulsion of law. We hope they will be persuasive, and we think they will be.

[14.] Q. Mr. President, there has been some talk up in New York about the Attorney General perhaps being Senate candidate. Are you willing to let him go out of the Cabinet to make that race?

THE PRESIDENT. That is a matter that the Attorney General and the people in New York will determine. Neither of them have discussed it with me. I would withhold making any announcement about developments there until the Attorney General makes some decision.

[15.] Q. Mr. President, Premier Khrushchev has suggested in an interview with a former Senator⁵ that the United States stop its reconnaissance flights over Cuba, and use its space satellites instead. In addition, he said that he would be very happy to show us pictures of American military installations taken by Soviet satellites if we show him some of ours.

⁵ Former United States Senator William H. Benton of Connecticut.

Could you give us your personal reaction to both of these suggestions by Mr. Khrushchev?

THE PRESIDENT. I haven't discussed his conversation with the Senator and I would like to do that before I make any detailed comments on what he was alleged or reported to have said.

I find that you can't always depend on reports that you get in the press. That is my own personal experience. But I will say this: that we, at the time of the Cuban missile crisis, attempted to work out an agreement for inspection, and that was refused. This Nation, in order to protect its people, must have a knowledge of what is taking place, and we propose to keep informed. As to what offers the best method, we will have to determine that.

[16.] Q. Mr. President, if I may ask, the Ways and Means Committee now seems to be coming to a showdown on the medicare bill. I was wondering whether you could tell us what you think the chances are of retaining at least the principle of social security financing for hospitalization?

THE PRESIDENT. Chairman Mills could probably give you a more accurate evaluation of that than I can, because he has been holding hearings on it. What I know is necessarily second-hand.

I strongly favor, as you know, the medicare program under social security, and I have urged the Congress to act favorably upon it. They have taken a good deal of testimony. I understand they are giving serious consideration to an overall measure which will include consideration of this type of program.

Now, what the overall recommendations will be, will be determined by the committee when it acts. I am unable to say, with any accuracy, just what they will be or what the result will be.

[17.] Q. Mr. President, would you say how you feel about the selection of Mr. Shastri as Prime Minister of India, and whether this affects our military assistance program to them?

THE PRESIDENT. That is, of course, a matter for the Indian people. I congratulated the Prime Minister this morning. We don't interfere in the selection of their government officials, but our relationship with Mr. Shastri has been good and we congratulated him on his selection and we expect to work closely with him.

[18.] Q. Mr. President, you said you had not talked with the Attorney General about New York. Have you talked to him recently about any of his plans for the future at all?

THE PRESIDENT. I have talked to him about the programs of Government, and I haven't talked about any personal plans, no.

[19.] Q. Mr. President, over the weekend Representative Laird of Wisconsin declared that the administration is preparing to move the Viet-Nam war into the North. Is there any substance to this claim?

THE PRESIDENT. I would say that Mr. Laird is not as yet speaking for the administration. He might next year sometime. To my knowledge he has no authority to speak for it at this stage.

Q. Mr. President, that doesn't mean that you expect the Republicans to win the election, does it?

THE PRESIDENT. No, that means just what I said. He doesn't have any authority to speak for it now. He could at some other time.

Q. Regardless of whether Mr. Laird is the spokesman or is not a spokesman for your administration, is there any substance to what he said, sir?

THE PRESIDENT. I know of no plans that have been made to that effect.

I attempted to answer that by saying he wasn't, and couldn't speak for it.

[20.] Q. Mr. President, are you giving the Senate leadership any aid, comfort, or assistance in their efforts to get the votes necessary for cloture?

THE PRESIDENT. I have talked to them about it. It is a matter for the Senate leadership, and not for me. They think that they have a good chance to be successful, as they reported this morning, and there are still some Senators who want to listen to the debate and determine when to vote. They have made no specific request of me.

I have seen, for propaganda reasons, some Senators who are on the opposite side make statements about what I am supposed to have done, but I am totally unaware of it. I must assume that they just state those things for the way they think it might affect the record.

Alvin A. Spivak, United Press International: Thank you, Mr. President.