The President's News Conference

RESUME OF MEETING WITH THE GOVERNORS

OF ELEVEN STATES

THE PRESIDENT. [1.] Governor Moore of North Carolina and Governor Babcock of Montana were with us prior to our luncheon meeting as we visited in the Yellow Room.

They participated in the discussions during lunch, which has just been concluded, but they had engagements they had to keep. In order to meet their schedule they had to get to the airport, so they are not here.

Governor Love of Colorado is here with Governor Branigin of Indiana, Governor Reed of Maine, Governor Guy of North Dakota, Governor Rampton of Utah, Governor Rolvaag of Minnesota, Governor Campbell of New Mexico, Governor Bellmon of Oklahoma. and Governor Romney of Michigan.

We had participating with us Mr. Ackley of the Economic Council, Mr. Schultze of Budget, and Mr. Califano of my staff.

I told the Governors that this was part of a policy that we established the first week I was in office of continuing an exchange of viewpoints between the President and the chief executives of each of the States. We have had a dozen or more meetings of this general nature in the last 3 years.

I had a meeting last week with a group of Governors, I had one today, and I will have one tomorrow.¹ We reviewed the economic situation, the strength and health of the economy, the production, jobs, and incomes that are at record highs, the inflation problem, the consumer prices, the economic situation generally, and the need for restraint.

¹For the President's news conference following a luncheon with a group of Governors on September 30, see Item 494.

I will not go into any more details on that, although if you have any questions on it I will be glad to answer them.

I pointed up we have 10 million more jobs than we had in 1961; the average per capita income is up 31 percent. I think you are familiar with all of the statistics.

I reviewed with them the Vietnam situation as it exists today. I gave them the background of the Manila Conference as it has been given to you. I discussed the diplomatic conversations that had been taking place at the United Nations and certain conversations that I have had with leaders such as Prime Minister Wilson, Chairman Ne Win from Burma, President Marcos, Chancellor Erhard, President Senghor, and others.

We discussed the various programs-military, political, pacification, agriculture, health, civil-political relationships, inflation, et cetera--in Vietnam. I gave them an up-to-date report as received from General Westmoreland and Mr. Lodge, included in a general paper that I had prepared for the meeting.

I reviewed in some detail with them a statement on the crime situation and thanked the Governors for their cooperation. I told them that I was pleased to observe that 20 Governors have already acted and 14 have indicated their intention to form a statewide crime committee. I invited each one of them to send a representative to Washington for a major conference in October² to discuss ways of implementing the principal findings and recommendations of the Crime Commission.

²For the President's remarks to the Conference of State Committees on Criminal Administration on October 15, 1966' see Item 526.

I pointed out that this is an area in which the solution depends on cooperation from the officials of all 50 States, and also the President, Attorney General, and the FBI. The increase in crime is phenomenal. It is up some 50 percent since 1960. The arrest of persons under 18 increased nearly 50 percent since 1960. The cost of all crime in 1 year cannot be accurately estimated but the Attorney General estimates $27 billion.

I have a statement that I read to them-we discussed it in some detail--which will be made available to you when you leave, if you care to have it.³

³See Item 491.

I pointed up the problem that we had in our own Federal budget. I reviewed with them what I have reviewed with you before, namely, that we had eight appropriation bills that we were waiting to receive, that as they were received they would be dispatched promptly to the departments concerned.

I said that all 15 would be meticulously reviewed and the low-priority items would be selected for withholding, impounding, stretching out, postponing, or deferring; that we would point up to the Governors, as soon as we could, the areas of grants-in-aid to States. There are more than 100 of them now where we could hold down some of this expenditure to keep from overheating the economy any more than necessary and where they could withhold some.

I pointed out the logic behind the investment credit. I pointed up the fact that the Joint Economic Committee in the Congress recommended that we suspend the investment credit. The minority members, the Republican members of the Banking and Currency Committee, had made those recommendations. We had adopted them and the Ways and Means Committee had reported the bill, and we expected it to pass this week. We hoped it would pass in the House.⁴

⁴The bill suspending the investment tax credit and accelerated depreciation allowance was approved by the President on November 8, 1966 (see Item 596).

I told them when we got that bill, when we reviewed our appropriation bills and saw how we stood, we would then make an estimate of our revenue for this first quarter and make an estimate of our expenditures for the next year. Then we would try to collect whatever information we had on the military supplemental, the economic supplemental, and make available that information, together with our recommendations.

We told the Governors we were going to withhold placing on the market all the securities we could, exercise all the restraint we could in that respect, as well as all the restraint we could in spending and withholding expenditures.

We asked them to cooperate by doing likewise. They all agreed to cooperate. I asked no commitments. They made none, except I think it was the general expression of every Governor that he felt that in a time like this--a period of inflationary tendency and rising prices and a heated economy and the effort in Vietnam--that we should exercise all the restraint possible and that we could expect and would receive cooperation to the extent possible from every Governor present.

Have I overlooked anything, Governor Reed or Governor Romney or Governor Rolvaag?

GOVERNOR REED. I would say not, Mr. President. I thought it was an excellent meeting. This was the latest one you have given us the privilege of meeting with you in the Federal-State relationship. I personally felt it was very helpful. I am certain the Governors would cooperate insofar as possible in the various programs you will outline to us later in detail.

QUESTIONS

THE PRESIDENT. I will be glad to take any questions.

If any of the Governors want to make a statement they are free to do so, or they will take any questions.

RETURN OF FEDERAL REVENUES TO STATES

[2.] Q. Mr. President, did you discuss the Governors' proposal out of Los Angeles for greater return of Federal revenues to the State?

THE PRESIDENT. No.

DESEGREGATION GUIDELINES

[3.] Q. Did the subject of desegregation guidelines come up at all?

THE PRESIDENT. No.

HOPES FOR THE MANILA CONFERENCE

[4.] Q. Could you give us your hopes of Manila as you gave them to the Governors?

THE PRESIDENT. Yes. It is a repetition of what Mr. Moyers ⁵ already has told you, that the tentative date is in the area of October 20. We don't know yet. We have to get all of the nations together.

⁵Bill D. Moyers, Special Assistant to the President.

We will review with the leaders of the states our program in Vietnam. We will exchange views with President Park of Korea and President Marcos of the Philippines.

The Prime Minister of Australia and others have been very hopeful throughout the past several months that we could have a get-together among the allied interest in that area, exchange viewpoints and pursue solutions to the problems that we have.

They have suggested a place and a date that give problems to the various ones because of engagements that we have, the time of year, the Congress being in session.

But I think that it would be worked out sometime the latter part of October.

I know that one country this morning told me they had a problem with their parliament meeting in a couple of days and they didn't want to interfere with that. That was in the latter part of the month.

Then some of them have elections in the latter part of November and wanted to be sure we are going to get it over in time for them to get back.

But I expect it will be worked out in the next few days. A full agenda will be carefully prepared. We will be glad to participate and cooperate and to give any information we have to the other leaders of that Pacific area who are so concerned with the problems that exist for the area--as are we.

Q. Do you hope to expand the Manila meeting into state visits to other Pacific areas?

THE PRESIDENT. We didn't discuss that and I have no hopes or plans at this time.

For the 18th time I will repeat: Mr. Moyers will tell you as soon as I have made any plans.

AUTOMOBILE PRICES

[5.] Q. Mr. President, did you discuss with the Governors at all the impact of the auto price increases on the economy?

THE PRESIDENT. No.

VIETNAM

[6.] Q. Mr. President, back to Vietnam, did you discuss whether there were any proposals in these latest reports from Hanoi?

THE PRESIDENT. No.

COMMENT BY GOVERNOR ROMNEY

[7.] GOVERNOR ROMNEY. Mr. President, wouldn't it be accurate to say that--at least from my standpoint, I found very interesting what the President had to say on other subjects, but I think the only thing we really discussed extensively with you in terms of questioning and so on was the budget situation, the expenditure situation, the economic situation to some extent.

But we didn't get into any particular discussion of the other areas.

THE PRESIDENT. That is a correct statement.

I made a rather detailed statement on crime and on Vietnam, on inflation and on expenditures, and on taxes and the message I have sent to Congress on investment credit ⁶ and so forth.

⁶See Item 444.

But the questioning that took place and the exchange of viewpoints largely, I think, if not entirely, were confined to the Governors' questions about restraint, securities, grants-in-aid, withholdings, and things of that nature.

AREAS IN WHICH EXPENDITURES COULD BE

DEFERRED

[8.] Q. Mr. President, in that connection, was there discussion of a cutback or a slowdown on the interstate highway program?

THE PRESIDENT. We discussed withholding a whole general area covered by all 15 appropriations bills. There is no specific item decided upon. It would be a mistake to conclude that the conference this morning was an action or decision meeting at all.

Q. Mr. President, did you urge the postponement of issuance of such things as turnpike bonds?

THE PRESIDENT. No, we didn't go into turnpikes specifically. We urged the withholding, postponement, restraining, and deferring of every expenditure that could possibly be deferred without greatly injuring the public interest.

THE PRESIDENT'S REFUSAL TO SPECULATE ON

FISCAL MATTERS

[9.] Q. Mr. President, one of your guests last week at the Governors' meeting came away with an impression like an income tax increase was coming, and at least some figure which then caused us some confusion was mentioned about the Vietnam budget. Could we clear up the impressions at this point?

THE PRESIDENT. Yes. I learned about that about 25 years ago. Bill White ⁷ used to represent the Associated Press long before he got demoted by going to the New York Times. He used to come in my office and he was always confused. By the time I got him unconfused I found a big story on the front page involving me that took me a week to get myself unconfused.

⁷William S. White of United Feature Syndicate, who was a correspondent for the Associated Press, 1926-1945, and served on the Washington staff of the New York Times, 1945-1958.

I can't speculate on people's impressions. I made it very clear today that we had reached no decision. I made that very clear to you. I don't need to spend time on somebody else's decision. As soon as we make a decision we are going to remember it. As soon as we have the facts to make it on we are going to make it. We cannot tell whether we will have $60 billion for Defense or $55 billion at this stage of the game.

We do not know whether the poverty program will be $1 billion 750 million in the House or $2 billion 75 million in the Senate committee--and you don't either. Nobody can tell. It is just sheer speculation. The President can't make a speculation without sufficient information, and certainly a Governor cannot when he is not familiar with what the committee is doing in the Congress today.

As soon as these bills are out, we are going to review them. We are going to look and see what our revenue is. We are getting estimates. I have an estimate in my pocket. It is a guess. I will have what we take in in July and August. I will have what we take in in August and September. Then we will project that for the full year. That gives us a total revenue. Then we will look at what they have proposed and how much we are required to spend that we can't avoid.

Then we will look at what is optional, then we will try to cut out $3 billion. I believe we can. When you subtract $3 billion from that amount, you see how that compares with your income. Then we will make a decision on what we will recommend at that time.

In the meantime anybody that gets an impression, intimation, hunch, dream, or a little marijuana is going to mislead somebody because I don't know myself. I don't think the Congress does. I asked Senator Mansfield if he thought the Senate would uphold the recommendations of the committee to the Health, Education, and Welfare bill. He said he thought so.

Senator Dirksen, I think, thought he could get a reduction on that. But that has gone to conference now. We know pretty well that that is going to be within a $100 million range because both Houses have passed it that way and we can add several hundred million to my budget in that item. We don't know what is going to happen in poverty or with the millions extra that haven't been authorized in HEW. It is complex with $113 billion. Nobody wants to play or keep it in doubt or speculate foolishly.

I don't know what the foreign aid appropriation is going to be. The committee made a reduction. I shouldn't be surprised if the Senate makes an adjustment upward or downward. And then the conference will do likewise. I don't believe that anyone understood today that we had made any decision or had any idea what decision would be made.

Is that true, Governors? Do any of you have any comment on it? If you have any impressions, give them here now.

COMMENTS BY THE GOVERNORS

[10.] GOVERNOR ROMNEY. The only impression I got was that you wanted us to go back and do the same thing in our States that you are doing in the Nation. That is the understanding I got.

THE PRESIDENT. That is right.

Q. Governor Romney, did you agree across the board with the things the President and his assistants told you on this economic subject?

GOVERNOR ROMNEY. The President requested us, as I understand it, to go back and review expenditures in our States with a view to seeing what we could postpone, what we could defer, what we could impound, what we could do, and exercise all the restraint possible.

As far as I am concerned I indicated that I was quite willing to go back and undertake to do that--considering the current overall economic picture.

THE PRESIDENT. Do any other Governors have anything you want to say?

GOVERNOR REED. I would mention again, I think it is commendable that the President has outlined to us generally what he intends to do to help restrain expenses. He is going to give us some guidelines that he would like to have us apply back at the State level. I think this is very important, because without that it would be difficult formulating budgets the next biennium. I think this will be very helpful. We are all looking forward to the receipt of that information.

THE PRESIDENT. There will be an item here and there where we are making an expenditure that a Governor thinks could be withheld. I have asked them to write me and point that up if they found in their judgment we could withhold or defer one. And I hope to get some help.

As a matter of fact, I have already gotten some help from some Governors at the meeting. We are not going to pinpoint them and get each one of them involved, but their suggestions have been helpful to me and the Budget Director will follow through.

GOVERNOR BELLMON. Mr. President, I believe it would be in order to mention that this would be an approach you have asked us to take rather than relying on controls to achieve the same ends.

THE PRESIDENT. We have hoped, as I have pointed out in periods past--when we have had our capacity pretty well used up; we have found credit controls, security controls and regulations of various kinds, laws of various kinds affecting economy all the way from the NRA to the NYA to the OPA--to keep those at a minimum.

We want to keep those at a minimum. We are giving everybody an opportunity to volunteer and to understand the picture. There is nothing partisan in it.

There hasn't been the slightest trace of partisanship in any meeting I have had with any Governors since I have been President. We have to have different views. We do come from different parties. We do have different recommendations to make. But the subjects we talk about have been above those things.

None of us want runaway inflation. All of us want peace. All of us want to bring an end to the war as early as possible. All of us want to keep expenditures as close to revenue as it is possible to get them.

These are the subjects we discussed.

Q. Mr. President, a number of the Governors, as you know, have election races in which they are greatly involved this year.

THE PRESIDENT. Oh, I didn't know they were. [Laughter]

Q. Did any of them discuss with you the problem of promising greater improvements for the State and at the same time promising you to hold back on expenditures?

THE PRESIDENT. No, they didn't discuss that.

GOVERNOR ROLVAAG. I might say some of us have had elections.

Raymond L. Scherer, NBC News: Thank you, Mr. President.