The President's News Conference

ADMINISTRATION POLICIES

THE PRESIDENT. Although attention is naturally focused on domestic politics, events around the world and here at home still demand my attention and action in ways that affect the well-being of American citizens.

Yesterday we completed the normalization of relations with the People's Republic of China with four agreements—for trade, for consulates, for normal airline service, and for textiles. We've opened a new era of normal relationships now between our two great countries.

Also yesterday, the second anniversary of the signing of the Camp David accords, I met with Israeli Foreign Minister Shamir and Egyptian Foreign Minister Hassan Ali as efforts continue in our quest for a lasting peace in the Middle East, which is so important to the future of Americans and to the entire world. They have been, since that meeting with me, conducting negotiations or discussions with our own Ambassador responsible for the discussions for peace.

We're preparing now for preliminary exchanges with the Soviet Union on the control of theater nuclear weapons in Europe. These talks should begin next month, and Secretary Muskie will be addressing this important subject in his discussions with Foreign Minister Gromyko of the Soviet Union in New York in the near future.

We've also been concentrating on the slow, difficult, diplomatic effort to free our hostages in Iran.

Here at home there are some encouraging economic signs. The unemployment rate has been steady or slightly down for the last 4 straight months. Unemployment compensation claims, which is a weekly statistic that we receive, has been encouraging. In the last 2 months we've added some 470,000 new jobs. Housing starts are up now for the third month in a row. New orders for durable goods were up sharply in July, and for the past 90 days retail sales have also shown increases. But—and this is essential—while inflation has been dampened down, it's still a major, continuing concern.

I'm standing firm against any tax reduction in this preelection political climate. But I will press ahead to strengthen our economy, to increase productivity, to revitalize our American industrial system, and to create real jobs.

A tripartite automobile committee is now attacking this industry's problems on a continuing basis. A few hours ago Japanese Minister Tanaka made an encouraging statement in his estimate of Japanese exports of automobiles to this country for the remainder of this year. At the Venice summit conference we discussed with the Japanese the automobile situation, and they are sensitive to this transition period through which America is now going in changing consumer demand for the smaller and more efficient automobiles.

I'm also pleased to note that there are some initial recalls of steelworkers. And I look forward to receiving within just a few days a strong report from our tripartite committee on steel dealing with the pressing problems that face that basic industry so important to our country.

Finally, nowhere is America's progress more important than reducing energy dependence. The results so far have been excellent, far above what we had anticipated. Our imports of oil are down more than 20 percent below last year—about 1 1/2 million barrels less oil imported each day this year. A record number of drilling. rigs are in use. The number of oil and natural gas wells that will be drilled in 1980 will exceed any other previous year. American coal production in 1980 will be the highest in history, and we are now launching the most massive peacetime effort in our history to produce energy from shale, from coal, from the Sun, from farm products, geothermal sources, and many others.

Finally, I'm working with the Congress for the passage of critical bills. I think we will have a good legislative year—in dealing with youth employment, Alaska lands, toxic wastes, pay and incentives for military personnel, deregulation of the American free enterprise system, and the enhancement of civil rights.

In domestic and international affairs, the progress of America goes on.

I will now be pleased to answer any questions that you might have for me.

Ms. Santini [Maureen Santini, Associated Press].

QUESTIONS RONALD REAGAN

Q. Mr. President, in Atlanta on Tuesday, you referred to Ronald Reagan's campaign statements about the Ku Klux Klan and States rights. And then you said that hatred and racism have no place in this country. Do you think that Reagan is running a campaign of hatred and racism, and how do you answer allegations that you are running a mean campaign?

THE PRESIDENT. No. I do not think he's running a campaign of racism or hatred, and I think my campaign is very moderate in its tone. I did not raise the issue of the Klan, nor did I raise the issue of States rights, and I believe that it's best to leave these words, which are code words to many people in our country who've suffered from discrimination in the past, out of the election this year.

I do not think that my opponent is a racist in any degree.

AMERICAN HOSTAGES IN IRAN

Q. Mr. President, earlier this week you raised expectations on the release of the hostages, and then you seemed to back off. What is today's prospect for an early release of the hostages, and aside from the Shah's assets, over which we have no control, are all of the latest Iranian demands negotiable?

THE PRESIDENT. I've not changed my position on the prospects for the hostages release. I do not predict an early resolution of the issue, because it's not in my hands, unilaterally. It has to be done through very careful negotiations with the Iranians and quite often because of unilateral decisions to be made by them.

One of the major obstacles to progress in the past has been the absence of any viable government in Iran. Only in recent weeks, in fact in some instances in the last few days, have they had a parliament or a speaker of the parliament who could speak for them, or a Prime Minister. They have had a President for a long time. The President himself, Bani-Sadr, has been consistently in favor of the hostages being released. Now that their government is intact and now that the Ayatollah Khomeini has made a public statement for the first time outlining to some degree the demands to be pursued by Iran, obviously the situation has improved.

Our position has been consistent. We have two goals in mind that have not changed since the first day the hostages were taken. One is to preserve the honor and integrity of our Nation and to protect its interests. That's never changed. And the second goal has also never changed, and that is not to do anything here in this country that would endanger the lives or safety of the hostages nor interfere with their earliest possible release back to freedom.

This is an issue that's been constantly on my mind and on the minds of the American people.

Q. Does an apology rule out the question of honor?

THE PRESIDENT. Yes. The United States is not going to apologize.

We have long said that there would be a legitimate forum provided for the Iranians, who consider themselves to be aggrieved in many ways, to present their case. We encouraged the United Nations mission to go to Iran, to investigate the situation there, to have hearings in Iran, and to let there be a public exploration of Iran's claims or complaints. At the time we filed our suit in the World Court in the Hague we also invited Iran to participate with us, not in a combative way, but in a friendly way, to give them that forum, which would have been well covered by the world press, to express their concerns or their complaints about us or others in the past. So, this is not a new development at all. Our position has been very consistent.

I cannot predict what will happen in the near future, but we are pursuing every possible legitimate avenue, as we have for many months, to reach some agreement with Iran, with those two constraints that I described to you concerning our Nation's honor and the safety of the hostages, to relieve this problem between us, which is obviously damaging to the United States and also very damaging to the people of Iran.

PRESIDENT'S CAMPAIGN STYLE

Q. I'd like to return to a portion of Miss Santini's question. There are people who say that in political campaigns you get mean; that you attempt to savage your opponents. They cite Hubert Humphrey, Edward Kennedy, and now Ronald Reagan. Will you tell us why you think this is not correct, and will you discuss your campaign style from that standpoint?

THE PRESIDENT. I have not raised these issues today in the press conference; it's been raised twice out of three questions. And obviously in the heat of a campaign there is give and take on both sides. An incumbent Governor or a President is almost always the subject of the most enthusiastic attacks by those who seek his office, and quite often those kinds of political verbal exchanges from those who seek to replace someone are either accepted as a normal course in a political campaign or ignored. If an incumbent, a Governor or a Congressman or a Senator or a President responds, that's immediately given the highest possible notice as an attack on one's challengers.

So, I try to keep a moderate tone; I try to discuss the issues. And I do not indulge in attacking personally the integrity of my opponents, and I hope that I never shall.

1980 CAMPAIGN DEBATES

Q. Mr. President, the big debate really concerns who will occupy this place next January 21. And since Presidential elections are now federally funded, I was just wondering whether you might consider, as President, inviting your chief opponent, Ronald Reagan, to a debate here in the White House?

THE PRESIDENT. I would be glad to have a debate with my Republican opponent either here at this very spot or in the East Room of the White House or any other forum anywhere in this Nation, and as frequently as possible. We have already accepted three invitations to debate on a one-to-one basis between the Democratic nominee, myself, and the Republican nominee. One of the networks invited us both on a man-to-man basis; I accepted. The National Press Club invited us both to attend the debate; I accepted it. And a women's magazine with its organization invited us both to meet on a one-to-one basis to debate, and I accepted these invitations. So far, Governor Reagan has not chosen to accept this one-on-one debate.

I am very eager to pursue this idea and have no concern at all about the location or the time except that I want it to be anywhere in this Nation and as frequently as possible.

PRESIDENT'S PERSONAL LOANS

Q. Mr. President, on July 22, you said that it was inappropriate for your brother, Billy, to serve as a foreign agent and to accept the $220,000 loan from the Libyans. Yet from January of 1978 until March of 1980 you were personally liable for $830,000 to a Saudi-controlled financial institution. And in fact in 1978, contemporaneously with your decision to sell and advocacy of the sale of sixty F-15 jet fighters to Saudi Arabia, you accepted through Carter's Warehouse a loan accommodation from the Saudi-controlled bank which was worth $266,000 to you personally, free-tax dollars.

In light of your statement about the inappropriateness of your brother accepting a $220,000 loan accommodation, why do you think it was appropriate for you to accept what amounts to a $266,000 loan accommodation from a Saudi-controlled financial institution? And why do you think this does not represent an actual or potential conflict of interest, which you said you would rule out in your administration?

THE PRESIDENT. I have never accepted any loans from any organization—

Q. [Inaudible]—a loan accommodation—

THE PRESIDENT. Would you like for me to answer your question?

I've never accepted any loans from an organization that's owned or controlled by any foreign government or any foreign nationals. The only loans that I have gotten were loaned before I became President from American-owned banks in Atlanta, and I have so far paid those loans off as required by the bank itself.

Q. The bank was purchased by the Saudi citizen, and he now owns the bank, Mr. President—

NUCLEAR WARFARE

Q. Mr. President, in the context of your decisions about the MX missile and Presidential Directive 59, I'd like to ask if it's realistic for any American President to believe that he could limit his response to a Soviet nuclear first strike against U.S. missiles if that first strike incurred, let's say, 20 to 50 million casualties. Could you limit your response under those circumstances, or would you have to fire off everything that was left?

THE PRESIDENT. When anyone decides to run for President of our country with any expectation of being elected, the question of the use of atomic weapons has to be addressed, because it's crucial for our Nation, for our allies, and for our potential adversaries to know that, if necessary, atomic weapons would be used to defend our Nation. And that knowledge is the deterrent that would prevent a potential adversary from attacking our country and therefore destroying 100 million or more American lives.

I have done everything I possibly could as President not only to maintain peace-and I thank God we've been successful so far—but to lay the groundwork for continued maintenance of peace and the avoidance of ever having to use atomic weapons. There is a likelihood—I can't say how strong it might be; it's not an inevitability but it's certainly a likelihood-that if an atomic exchange of any kind should ever erupt that it might lead to a more massive exchange of intercontinental and highly destructive weapons that would result in tens of millions of lost lives on both sides. That very knowledge, which I have very clearly in my mind, is shared by the Soviet leaders, and I have discussed this common knowledge with President Brezhnev in Vienna when we signed the SALT II.

The policy of our two countries ever since President Eisenhower and President Truman were in office and everyone since then, Democratic or Republican, has been to try to reduce the dependence on atomic weapons and to have balanced atomic forces and, lately, to reduce constantly on an equal basis the arsenals that we have. I cannot tell you what would happen if an exchange should take place. I would try to defend my Nation's integrity and its security and the integrity and security of our allies without resort to atomic weapons, but if necessary to defend the freedom and security of Western Europe and this country, then I would use atomic weapons. I pray to God that that time will never come, but it's important for our people, our allies, and the Soviet Union to know that if necessary those weapons will be used. The best weapon of any kind is one that's never used, and the best soldier is one that never dies in war.

But the only way I know to maintain peace for my country and for those who depend on me is to be strong and to let potential attackers know that if they should attack us their attack would be suicidal.

AUTOMOBILE INDUSTRY

Q. Mr. President, the new K-Car Chrysler, there little itty-bitty cars are going to cost $6,000. Do we get any quid pro quo from the automobile industry, or can your administration—you've given them billions of dollars in the past year or so and, I think, a half billion dollars more today from air pollution. They've dropped the air bag. Can the consumer get any break in giving out all these Federal funds?

THE PRESIDENT. It's important to America for us to have modern-design cars, small, efficient, that comply with air pollution standards and are safe. As you know in the past, with extremely cheap gasoline, the efficiency of an automobile, its mileage per gallon, was not very important to the American consumer, because gas was so inexpensive.

Lately there has been a change in buying customs by America. There is no doubt in my mind that the automobiles produced today are much more efficient, much more clean-burning, and becoming more sate than they have been in the past, and I don't have any doubt that in 1985 they will continue that steady progress toward a clean-burning, efficient, safer car.

We have provided increasingly stringent standards for safety and for efficiency and for air pollution standards. And I think that's going to continue. But I don't look upon our Government as subsidizing or paying the automobile industry to make these changes.

We have made available loan guarantees to Chrysler because they were on the verge of bankruptcy. The reason the Congress did this, with my full support and approval, was to avoid the loss of hundreds of thousands of American jobs among automobile workers and to keep a highly competitive automobile industry in our country. These loan guarantees are sound investments by the American Government. We do not anticipate any loss of funds from taxpayers' money with this loan guarantee.

PRESIDENTIAL CANDIDATES' POPULARITY

Q. Mr. President, the opinion polls indicate that you've made quite substantial gains in recent as against Governor Reagan-according to one, marginally ahead; according to one, marginally behind—but certainly in a lot better position than you seemed to be a few weeks ago. Could you give us your analysis of why you think you've made these gains? To what extent you think now that John Anderson will be a factor and your analysis of what you expect to happen in this very volatile period of the next few months, politically speaking?

THE PRESIDENT. Well, I think you all have seen in the last year the extreme volatility of public opinion polls, perhaps more than has ever been the case in the past. I would guess they would be up and down between now and November 4.

My belief is that in a general election campaign for President there is a unique situation that's not extant in the election of any other official in our country nor the nominating process by the Democratic and Republican Parties even for President. As we approach November 4 there is a continual sobering among individual Americans as they approach a decision who is going to control the affairs of this Nation from the Oval Office for the next 4 years and realization that that choice is a profoundly important one for them individually, for their family, for their community, in economic life, the quality of life, war or peace. The issues begin to become paramount.

The personal characteristics of the candidates, as far as attractiveness or speaking style and so forth, in my opinion become less important and the questions come down to: Who cares more about me and my family and my future? Who can deal with the inevitable crises in a more calm and effective way, and who is most likely to keep this country at peace?

So, I don't know what's going to happen in the future. I'll just do the best I can. I think that the essence of it, though, is that the election will be decided ultimately, however, by that very calm, very reasoned, very sober analysis of the issues and the difference in the stand of the candidates on the issues, and not by the excitement or sometimes even the frivolity of the election campaign during the primary season.

THE NATION'S ECONOMY

Q. Mr. President, based on guidance you were given by your economic advisers and other information that's available to you, do you think that the country is now out of the recession or that it will be before the November 4 election?

THE PRESIDENT. Some of my economic advisers have told me within the last 2 days that the recession might very well be over. I don't know. Only in retrospect, several weeks after something occurs, can you be sure of that. The technical definition of recession with which you are familiar is really of not much significance. The point is, I believe that we'll have ups and downs during the next few months.

We still have an unemployment rate, although below 8 percent, which is too high. The chances are that it won't vary much for the rest of this year. I believe that the inflation rate, which is still too high, will stay below double-digit inflation the rest of this year. Recovery of our economic system seems to be progressing very well, with housing starts going up, investments going up, and with the number of jobs available to the American people continuing to rise. It's just hard to predict; but I believe that we will have a stable economy with statistics fluctuating from one month to another.

The thing that we must do, though, is to realize that the election pressures cannot be permitted to shape economic policy. We have got to keep inflation under control while we deal with the increase in productivity over a long period of time in the future; build permanent jobs for people in the private industry sector, not in make-work jobs that are very expensive to the American taxpayer; continue to deregulate the American free enterprise system, getting government's nose out of the affairs of American business and American families. These kinds of basic things—to increase productivity, to increase investment, and to have long-range, permanent jobs—are the major challenge that I face as President, and not to have an election-year-type quick fix by promising a major tax decrease that might simply be repaid to the working families of this country by increased inflation in the months ahead.

THE MIDDLE EAST

Q. Mr. President, yesterday, after meeting with Foreign Minister Berg of Israel and Hassan Ali of Egypt, you said without elaboration that unanticipated progress had been made in restarting those trilateral talks here in Washington on Palestinian autonomy.

THE PRESIDENT. Yes.

Q. But Foreign Minister Berg said today those initial discussions would not include the issue of Jerusalem. Given the importance of that issue, what progress has been made this week, and what's the cause of your optimism?

THE PRESIDENT. When Sol Linowitz went to Jerusalem and to Egypt a few weeks ago and met with Foreign Minister Shamir and with General Hassan Ali, and also with Prime Minister Begin and President Sadat, we were pleasantly surprised after a fairly long dearth of direct contacts between Israel and Egypt to find both nations eager to get back to the negotiating table.

Yesterday, after they left my office, Sol Linowitz, Mr. Shamir, General Ali, sat down to continue top-level negotiations to try to find a basis for carrying out the comprehensive peace.

Following Sol Linowitz' trip to the Mideast, President Sadat announced, both before and after he arrived, that he was eager to see a summit conference later this year. Prime Minister Begin had not until that time made that statement. Prime Minister Begin called me on the telephone to say that the Linowitz mission had been remarkably successful, to thank us for what he had contributed, and to say that he would be eager to meet with me and President Sadat at a summit conference either before or after the American elections were concluded.

We will work that out. I am determined that the prospect for a summit meeting will not interfere with the substantive negotiations that must precede it. And I think the fact that yesterday and today the Foreign Ministers of the two countries are negotiating again in the presence of the American Ambassador assigned that task is indeed encouraging in itself.

RONALD REAGAN

Q. Mr. President, you have been asked several times about some tough language you used in Atlanta regarding Ronald Reagan, and to be fair to you, and before I ask my question, we should point out that some tough language has been used against you in the past by Mr. Reagan and other of your opponents. I recall during an interview with Mr. Reagan he said that you had let our defenses slide and that was a great danger to war. So, I'm not impugning, putting upon you the exclusive use of tough language. But nevertheless I'd like to return to Atlanta and ask this question.

You have said here today that you do not consider Mr. Reagan a racist.

THE PRESIDENT. That's correct.

Q. I believe that to be true. You have said that you do not think he's running a campaign of hatred or racism. But you used all three of those words in connection with the discussion of Mr. Reagan. Do you regret that, or could you tell me how this could happen if you don't attribute any of those characteristics to Mr. Reagan?

THE PRESIDENT. I was speaking to a group at Ebenezer Baptist Church, leaders of a black community all the way from Maryland to Texas, leaders who had been involved in the civil rights movement in years gone by in the fifties and sixties, who had endangered their very lives to bring about equality of opportunity and an end to racial discrimination. Those people understand the code words, the use of the words "Ku Klux Klan" and the use of the words "States rights" in the South, and my message to them was that the Presidential election is no place for the reviving of the issue of racism under any circumstances. And that's the way I feel about it. It ought not to be a part of the Presidential race.

I was asked later by a newsperson as I was getting on the plane, "Do you think that Governor Reagan is a racist?" And I replied, "No." And I do not. And I would hope that from now on after this news conference that we could leave out references to allegations that anybody thinks that I'm a racist or that any of the other candidates in the race for President are racists. I don't believe they are, and I believe it ought to be dropped.

Q. Mr. President, it was your own Cabinet Secretary, Patricia Harris, who first interjected the KKK into the Presidential race. She said in Los Angeles essentially that Governor Reagan was running with the endorsement of the Ku Klux Klan and raised the spector of white sheets. So then, how can you blame Governor Reagan—

The PRESIDENT. I am not blaming Governor Reagan. That's just exactly the point. The press seems to be obsessed with this issue. I am not blaming Governor Reagan.

Q. You accused him of interjecting the Ku Klux Klan into the campaign.

THE PRESIDENT. The only thing that I said Governor Reagan injected into the campaign, was the use of the words "States rights" in a speech in Mississippi.

I hate, here on national television, to go through the procedure again. What happened was that the Ku Klux Klan endorsed Governor Reagan and stated that the Republican convention could have been written by a Klansman. Governor Reagan subsequently rejected, wisely and properly, any endorsement by the Ku Klux Klan. That was what injected the Klan into the Presidential race.

I regret it. I wish it had not been done. I would like to see it eliminated from the Presidential race. I do not blame Governor Reagan at all for the fact that that endorsement was made, and I admire him for rejecting the Klan endorsements.

HELEN THOMAS [United Press International]. Thank you.

THE PRESIDENT. Thank you very much.