The President's News Conference

THE PRESIDENT. I am ready if you have any questions.

QUESTIONS

ADDRESS BEFORE FOREIGN SERVICE INSTITUTE

[1.] Q. Can you tell us anything about the nature of your speech tomorrow? ¹

THE PRESIDENT. No, it is going to be very brief. It is before a group Secretary Rusk wanted me to come over and visit with. I do not imagine it would be more than 15 minutes, 10 or 15 minutes. I am working on it now.

¹ See Item 142.

POLITICAL SITUATION IN SOUTH VIETNAM

[2.] Q. Mr. President, sir, can you give us an assessment of the political situation in South Vietnam?

THE PRESIDENT. I think you have about the same information I do. I don't think that there is much I have received which would shed any light on what has been reported.

TAXES AND THE STATE OF THE ECONOMY

[3.] Q. Mr. President, a lot of the economists would like you to raise taxes, and ask Congress to raise taxes soon. Have you any comment on that?

THE PRESIDENT. We get a lot of advice on economics from time to time. I think that is natural. We try to weigh it all and study it and draw our own conclusions. We conferred with the economists available to the President and the leaders in this field in the House and Senate last fall and concluded that it would be desirable, in addition to the $6 billion we would begin taking out on Medicare in July, to have a tax adjustment act of roughly another $6 billion, a little over $4 billion, or which would be running at a rate of a little over $4 billion at the end of this year.

So we had $6 billion come out in January, and medical care that we provided again in January, and something over $4 billion that we provided in March. We are watching developments every day. I get reports on what is happening.

Retail sales for January and February have just been reported to me. They are slightly below November and December. New orders for durable manufactures declined in February. Housing starts have fallen to the lowest level in 3 years. I believe they are 17 percent under January--I would like to check this figure, Bill ²--and some 11 percent under February of last year, the same month last year. It is about 11 percent under.

² Bill D. Moyers, Special Assistant to the President.

Some farm prices and foods are leveling off. The money supply declined in February and the growth of business loans slowed down. Numerous municipal bond issues and some corporate issues have been postponed.

The increase of inventories in January was a moderate increase. Unemployment exceeds 6 percent in about 19 or 20 of the major labor markets, so we still have some problems there.

We are running just a little under our estimated expenditures in Vietnam the first 3 months of this year. We hope to pick that up and accelerate it some in the next 3 months. We had planned to run at roughly $50 billion, or at the rate of $50 billion a year for the first 6 months, that is, June 30 to January 1, and $58 billion from January 1 to June 30, for an average of $54 billion compared to $49 billion last year.

That would add about $5 billion or $6 billion, or maybe $7 billion to the economic bloodstream for extra expenditures, so we have taken out $6 billion for Medicare and we will take out $4 billion or $5 billion more with $6 billion for taxes, and this will bring us about to $12 billion to be pulled out.

We have to see what effect that has. If more needs to be taken out, we will give consideration to it. Some of that will depend, I think, on appropriations.

We are asking all of the departments, as I have told you from time to time--I do this every few months--to take a new look at their expenditures to see if there is anything that appears to be obsolete, or that is unnecessary, and forgo anything that they can.

Congress is adding some expenditures that we did not ask for. They may add some more. I read the Record every morning and it looks like there are some things that we tried to make some reductions in that they might put back in. So we will have to watch our expenditures.

There are three things that the economy suggests for consideration in a period where you are having as full employment as we are having now, and the gross national product has reached the level this one has. One of them is control of prices and wages, but very few people want to go to controls as we had to in World War II, and as we had to in Korea. Of course I don't want to, and I hope we won't have to, but that is something we have to consider always.

The second thing is the tax bill³ a that would take some more money out or draw it off. That will depend on our appropriations and our expenditures, what reaction we get from this March action of taxes, and the January action of Medicare.

³ See Item 132.

Third, is curtailing expenditures. Now they are being curtailed in some State governments and some city governments, and some of the bond issues are being held back. There has been some slowdown in our own operations, withholding construction in certain areas. We will watch it very closely and see what happens in these unemployment markets, in retail sales, in housing, and in the money market, and then take whatever action is indicated.

We don't want to act prematurely. We don't want to put on the brakes too fast, but it is something that requires study every day, and we are doing that.

THE OPERATING ENGINEERS UNION

[4.] Q. Mr. President, are you taking action against the Operating Engineers Union in New Jersey, which seems to have exceeded the wage-price guidelines in their contract demands?

THE PRESIDENT. No, I have not.

FURTHER QUESTIONS ON THE STATE OF THE ECONOMY

[5.] Q. Mr. President, frequently in the past when you reviewed the economy with us, you have emphasized largely the prosperity aspects with things improving. Today you cited a number of negative or down factors. I wonder, sir, is it fair to conclude that you are saying that the inflation or the threat of an inflation is probably not as bad as some of the economists or politicians have maintained?

THE PRESIDENT. My statement is made without reference to economists or politicians. This just happened to be the report that I received on the 20th. There are some good things in it, like increase of inventories in January. There was a moderate increase.

The decline in NASA's budget for 1967 will free many highly skilled workers that are now in tight supply. They estimate we will have between 50,000 and 100,000 people that will be freed unless we accelerate that budget.

The relationship between unfilled orders and shipments of durable goods today remains in sharp contrast with the situation a decade ago, when this sector got us into trouble. There are current backlogs of 3 1/2 months of shipments. In 1956 they ran 4 1/2 to 5 months. That would be on the negative side. The decline of $150 million in military family housing will help ease the tight supplies of building materials.

Widespread indication is that banks are rationing customers by tightening credit standards and rejecting loan requests of their less profitable customers, and in the municipal field notable was a cancellation of a $440 million New Jersey issue. Stock prices are down. They were up the last 2 days.

Throughout the next 15 months, the increases in Federal revenues which are drawn out of the economy will exceed the increases in Federal expenditure that add to private purchasing power.

That is a significant thing.

Even though defense expenditures continue to increase, the shift toward restraint emerges by any measure of the budget because of the austerity in nondefense expenditures.

We are up to $600 million over last year with new tax laws and increased revenues from the growth of the economy.

In fiscal 1967 the cash budget will move into surplus, thus swinging toward restraint by more than $7 billion from the current fiscal year. On the administrative budget the move toward restraint shows up in a decline of the deficit from $6.4 billion to $ 1.8 billion.

Durable shipments meanwhile inched up one-tenth of 1 percent. I think that durable manufacturers' new orders declined 1.3. The biggest element was a 20 percent drop in aircraft orders. Machinery showed a decline. Steel orders shot up 20 percent. It goes back and forth, both of them. I think some days the news is good and some days it is different.

NATO PROBLEMS

[6.] Q. Mr. President, sir, in the light of the developments of the past few weeks, could you give us your assessment of NATO's problems and future?

THE PRESIDENT. I may do that in the morning, and I don't want to take the bloom off the rose.

U.S. POLICY TOWARD COMMUNIST CHINA

[7.] Q. Mr. President, there has been quite a bit of discussion about China lately on Capitol Hill and elsewhere. I wonder if you could tell us how you view the China problem in the light of these discussions, and specifically whether you favor the admission of Communist China to the United Nations in the foreseeable future?

THE PRESIDENT. I think the Secretary of State covered the administration's position very thoroughly Sunday. If he didn't, the Press Secretary did. If not, I would call to your attention that we have watched with interest and complete understanding the testimony of various committees, those of Mr. Zablocki in the House, and Mr. Fulbright in the Senate,⁴ and the testimony about that part of the world. We think that it is very good to have the opinion of these professors and experts, and Ambassadors and other people.

⁴ Representative Clement J. Zablocki of Wisconsin, member of the House Foreign Affairs Committee, and Senator J. W. Fulbright of Arkansas, Chairman of the Senate Foreign Relations Committee.

As far as I am aware, it is not the position of this country that creates the problems with China. It is China's own position. We are very anxious to try to have more contact with her and more exchanges with her, but as has been explained by all of these people, she hangs up the phone. Until there is some change on China's part, I doubt that these academic discussions will do much more than satisfy people's yearning for information.

APPOINTMENT OF SPECIAL ASSISTANT TO THE PRESIDENT: ROBERT KOMER

[8.] THE PRESIDENT. I am naming Robert Komer, of Chicago, Illinois, as my Special Assistant, and he will primarily have the assignment of duties involving the peaceful reconstruction in Vietnam.

As you know, Mr. Komer is a dedicated man on the National Security Council staff. I am promoting him to be Special Assistant at $30,000 a year. He will be leaving for Vietnam on Tuesday morning with Secretary Vance ⁵ and Mr. Bill Moyers, my Press Secretary and Special Assistant, for a few days of visit in that area.

⁵ Cyrus R. Vance, Deputy Secretary of Defense.

Q. Did you say Mr. Moyers was going?

THE PRESIDENT. Yes, sir.

INDEPENDENCE OF LABOR

[9.] Q. Sir, what do you think about labor going into independence? You have had your ups and downs with labor before. Are you worried about this or not?

THE PRESIDENT. Are you informing me or asking me?

Q. Both. I am reminding you and asking you.

THE PRESIDENT. Well, I would say that as far as I have been aware, labor has always been independent and should be. I am very pleased with the attitude of their leaders. You are probably more distressed than I am, and perhaps not as happy.

SURVEY WORK IN VIETNAM

[10.] Q. Could you give us a little more detail on the survey work that Mr. Moyers and Mr. Vance and Mr. Komer will be doing?

THE PRESIDENT. We have had Mr. Freeman⁶ out there. He came back with about 50 recommendations. We have had Mr. Gardner out there and he has come back with a few which will be available to me. I sat up until 2 o'clock this morning talking to General Rudder, Dr. Cain, and others who were on the Gardner mission.⁷

⁶Orville L. Freeman, Secretary of Agriculture.

⁷The task force, headed by Secretary of Health, Education, and Welfare John W. Gardner, which was established by the President on March 6, 1966, to study the health and education needs of the Vietnamese people (see Item 106). James E. Rudder, President of Texas A. & M. College, College Station, Texas, and Dr. James C. Cain of the Mayo Clinic, Rochester, Minn., were among the 15 experts who left for Saigon on March 12.

We have the best experts available in this country involved in studying the peaceful reconstruction of Vietnam, their education problems and health problems, productivity problems and agricultural problems. We selected Ambassador Porter ⁸ the latter part of last year and called him here in January. We had meetings down here at Warrenton. We are trying to concentrate our energies and all of our expertise and knowledge to help these people help themselves and have a better way of life.

⁸William J. Porter, U.S. Deputy Ambassador to the Republic of Vietnam.

Mr. Komer will be the counterpart in Washington of Mr. Porter in the field. I want him to go there and meet with Ambassador Lodge and General Westmoreland ⁹ and try to get an on-the-ground picture and come back here and help me see that these people get what they need in that particular field.

⁹Henry Cabot Lodge, U.S. Ambassador to the Republic of Vietnam, and Gen. William C. Westmoreland, Commander, United States Military Assistance Command, Vietnam.

Mr. Komer met yesterday with Secretary Rusk, with Secretary McNamara, with Mr. Gaud in Mr. Bell's department,¹⁰ and spent a good deal of time with me and Mr. Moyers. Cy Vance is going out there. I asked him if they could ride along with him. Bob McNamara and I agreed that we would try to work it out. That is Tuesday morning after the Indian dinner here Monday night for the Prime Minister.¹¹ They will leave in the morning.

¹⁰ David E. Bell, Administrator, Agency for International Development, and William S. Gaud, Deputy Administrator.

¹¹ Prime Minister Indira Gandhi of India (see Item 149).

MILITARY SITUATION IN SOUTH VIETNAM

[11.] Q. Mr. President, could you bring us up to date on the military situation in Vietnam?

THE PRESIDENT. I do not have any information that you do not have. You see the reports. There is nothing to speculate about. You can see what is happening. Our men are doing a very fine job. Their morale is high. Their competence is to be applauded.

This is Earl Rudder, this old friend of mine who is a rancher from Brady, Texas, of whom General Bradley¹² General of the Army Omar N. Bradley, former Chairman of the Joint Chiefs of Staff. says, "No soldier in my command has ever been wished a more difficult task than which befell the 34-year-old commander . . . James E. Rudder (who) was to take a force of 200 men, land on a shingled shelf under the face of a 100-foot cliff, scale the cliff, and there destroy an enemy battery of coastal guns," while they were dropping hand grenades on their heads.

12 General of the Army Omar N. Bradley, former Chairman of the Joint Chiefs of Staff.

He commanded at Normandy. He has been out at the front with our boys in Vietnam. He said that he had never seen the morale of any troops as high and never seen an army any more effective. He never saw better coordination, that it was absolutely marvelous, unbelievable, that you could move 200,000-odd men that far, that fast, that effectively. We moved their housing and their medicine and their food and their ammunition and their equipment and everything with them.

He said they have had a wonderful effect on the Vietnamese, and that the boys felt they had a mission and they were fond of the Vietnamese people and they were working very well together. He said that they would protect themselves during the day and advance and take the valleys, and spend the evenings trying to fix up the schools and teach the children.

Dr. Cain said that they saw 30 men brought in, all of them wounded and in terrible shape. He said in less than an hour he went down the line to each one of them, and most of them were wanting to get back. Probably over half of them would be back in a short time. Dr. Cain said he didn't believe there would be a single casualty in the group because of the prompt treatment they received.

So I would say that the reports from that front are good. We must not be too optimistic and we must not exaggerate what is taking place. But I get about 100 letters a week from them, and I would say they are my greatest source of strength. If I get real depressed when I read how everything has gone bad here, I just ask for the letters from Vietnam so I can cheer up.

THE NOVEMBER ELECTIONS

[12.] Q. Mr. President, a number of Congressmen, Democrats running from marginal districts in the House, are worried about what Vietnam is going to do to their chances in November. How do you think about it?

THE PRESIDENT. I don't believe the Congressmen are as worried as the Republican leaders are. I have watched that, and I discussed that yesterday some. We have had 18 polls made from New York to the west coast, and they compare to 1964. We found yesterday, I think, 12 of them showed that they were in better shape than they were in 1964, 3 were in the same shape, and 3 may drop.

But they had dropped in one case from 61 to 56. In another case they dropped from 63 to 61. In another one, they dropped two or three points.

The Congressmen don't feel that way. What you have been reading are the handouts. We interviewed 270 of the Congressmen. We asked a series of questions about Vietnam. They are all worried about the sacrifices our men are making there, but there are not many of them who have any doubt about the justice of our cause or the wisdom of our course.

The vote today shows that. I have been reading where you called this a mutiny, with a vote of 87 to 2 in the Senate today. In the case of the economic aid bills, we had fewer votes cast against them than we have ever had before.

The achievements before Easter are surprising to anyone who has watched the developments in this town as long as I have. The Congressmen on both sides have done a good job, and I don't think that the Republican Congressmen, except in rare instances, have too much to be worried about. Most of them have a chance to be reelected. There are some of their Senators that are going to have some trouble, but it has been a productive year. I think we will probably have 15 or 20 measures signed before Easter, which is something unusual.

We have the Southeast Asia bank development, the economic aid, the military aid, the North Carolina seashore bill, the minimum wage here in the District, and the tax bill. I have seen tax bills take 2 years to get through.

This passed in 2 months, and we received it the day we asked for it. That is a $13 billion bill today. They did not take a dime from it. We asked for $6 billion, and you said we had "mutiny" running around here for 2 or 3 days. Then we received it, and it was $6 billion 10 million.

That is the kind of "mutiny" we like, where you give us all that we ask for, and then add a little supplement to it.

Congress has done a good job. They are doing a good job. Some folks play politics. They give out statements. I see them on the ticker--about three or four handouts a day. They are usually some new pressman who has been hired, or a fellow who thinks he is being paid by the column, like a stringer. He gives out these handouts and provokes fights. He puts a little twist on it. But the Congress is doing a good job, and the people know it. We are moving along with the program and they know it.

I had lunch today with Mr. McNamara. He spent almost 30 days testifying all morning and all afternoon. But he has cleared every single bill for which he is responsible, even next year's appropriations. That is for 1967.

He testified on economic aid and the military supplemental before the House Armed Services Committee, the Senate Armed Services Committee, the House Appropriations Committee, the Senate Appropriations Committee, then had a week's vacation.

Secretary Rusk is doing the same thing. The Congress is doing fine, and the elections are going to be fine. We are glad to have them, and they are a good thing. There is not any real indication of a serious problem for either group. There are these people who pick these figures out of the air. I heard someone the other night talking about 74 or 80 House seats. It was amusing. I wondered how much he knew about any House seat.

Q. Mr. President, do you have any plans to get out in the campaign, to explain your attitude on the Congress or to help any particular Congressman?

THE PRESIDENT. I am explaining my attitude now, and that is why I want you to help me. My attitude is good. I think the Congress has done a good job. I am not just talking about Democrats. I am talking about the Congress generally. I think that the people know it. I would not forgo a chance to give my advice if it was solicited in the right way, under the proper auspices, with appropriate sponsorship. But I have no dates set yet.

I want to try to complete this campaign to prevent aggression, to defeat social misery, and to find a way to the peace table in Vietnam. This is occupying our time now. We are trying to get our Alliance for Progress program in top flight shape. I have spent some time with former Ambassador and now Secretary Gordon.¹³ We are very proud of what has happened in Latin America. The last 2 years we have raised their growth rate from 1 percent to 2 ½ percent. We think that is a real achievement.

¹³ Lincoln Gordon, Assistant Secretary of State for Inter-American Affairs, and former U.S. Ambassador to Brazil.

We are very interested in the developments on the African Continent. We have just named a new Assistant Secretary to succeed Mr. Williams,¹⁴ Assistant Secretary Joe Palmer, who was in to see me this morning. He is one of the distinguished heads of the Foreign Service Institute who headed the Congo task force for us.

¹⁴ G. Mennen Williams, former Assistant Secretary of State for African Affairs.

We are talking about inviting Ambassador Gronouski ¹⁵ home for consultation in the next few weeks. He has done a very outstanding job in Poland for us. We want to talk to him and encourage him in his work.

¹⁵ John A. Gronouski, U.S. Ambassador to Poland.

We have a good many world problems. We have spent some time in the last few days conferring with our allies about General de Gaulle's views on the NATO alliance. We will be having more to say about that.

POSSIBILITY OF A EUROPEAN TRIP

[13.] Q. Mr. President, is there any chance of your taking a trip to Europe before the end of the summer?

THE PRESIDENT. I have no plans at all along that line. I think that is something for you and Bill Moyers to talk about from time to time, which you all enjoy.

Q. Mr. President, have we overlooked anything? We are trying to get another news story.

THE PRESIDENT. I would say we all ought to be commended for our good spirits and jolly frame of mind. I appreciate the good humor you are all in. I don't know how to account for it.

HANOI

[14.] Q. Have you heard anything at all from Hanoi that has changed the picture in the last few months? Has there been any sign of an interest in going to the peace table, as you mentioned a moment ago?

THE PRESIDENT. No. We work at that every day, and we have discussions around the world in that field. We have some of our top men, and some that are not at the top level, always carrying on discussions. But there is nothing that would justify my responding in the affirmative to what you have said.

DISCUSSIONS WITH PRIME MINISTER GANDHI

[15.] Q. Mr. President, can you say anything at all about what you may be discussing with Prime Minister Gandhi?

THE PRESIDENT. Yes. I am looking forward with a great deal of pleasure to seeing the Prime Minister again. We have met on several occasions. Mrs. Johnson and I spent some time with her when we were in her country in 1961. I had lunch with her Ambassador today, and spent a good while visiting with him about the agenda.

We will be talking about our relations and what the American people can do, working with the people of India, to promote peace and prosperity. I want to hear about her ideas and any suggestions she may have as to what we can do that we are not doing in these fields.

We will, of course, talk about some of the things that were on the agenda last year when a visit was postponed, and again when I planned to see Prime Minister Shastri and was prevented from doing so by his death. We will take up where we left off there. We look forward to a very pleasant and very productive visit.

MR. KOMER'S NEW DUTIES

[16.] Q. Mr. President, would Mr. Komer continue to handle the same duties in addition to the new assignment, or is this a change?

THE PRESIDENT. No, this will be a new assignment and a very responsible one. He will be working very closely with Secretary Rusk, Secretary McNamara, Administrator Bell, and Mr. Marks of the USIA,¹⁶ on my behalf, as my Special Assistant.

¹⁶ Leonard H. Marks, Director, United States Information Agency.

I think he will have his hands pretty full on that. We are going to call him, for our in-house purposes, "Special Assistant for Peaceful Reconstruction in Vietnam."

I have talked to each Secretary about what I expect him to do. I talked to Mr. Komer at some length. It has been a matter that has been evolving since the first of the year.

Reporter: Thank you, Mr. President.