The President's News Conference

VETO OF THE DEFENSE DEPARTMENT AUTHORIZATION BILL

THE PRESIDENT. I have one statement, and then I'd like to answer your questions.

As President of the United States, my ultimate responsibility is to the protection of our Nation's security, and as Commander in Chief of our Armed Forces, it's my obligation to see that those forces are operationally ready, fully equipped, and prepared for any contingency. Because I take these responsibilities seriously, I submitted this spring a defense budget designed to improve our military preparedness and calling for increased spending in real terms, above and beyond the cost of inflation, especially for enhanced readiness and for the urgent requirement of strengthening our NATO forces.

Because of these same obligations, and with the concurrence of the Secretary of Defense, I have decided to veto the defense authorization bill which the Congress passed last week.

This is not a question of money. The Congress has reduced only slightly the amount of money that I recommended for our Nation's defense. It's a question of how that money is going to be spent, whether it will be concentrated in the most vital areas of need, or diverted to less crucial projects.

We must have the strongest possible defense within the budget limits set by Congress. We cannot afford to waste our national defense dollars. We need better maintenance and logistical support, more research and development, a more flexible Navy. And we need these improvements now, not 8 or 10 years in the future. The defense authorization bill does not meet any of these requirements.

There are four particularly disturbing areas in which this bill, by cutting into the muscle of our military request, could weaken our defenses and erode our contributions to NATO.

This bill, for instance, cuts $800 million for weapons and equipment for our Army forces, undermining our commitment to NATO at the very time when our allies recognize the urgent need to improve the power and the readiness of our forces in Europe.

This bill would also cut $200 million for Air Force weapons and equipment which would add flexibility and strength to our military forces, not only in NATO and this country but throughout the world.

This bill would also cause a cut of half a billion dollars, $500 million, from readiness funds. This is an unglamorous part, but it's necessary for expenditures for ship overhauls, weapon repairs, spare parts, personnel training, and the logistical support which guarantees that we can move our forces and have them act immediately when they're needed.

And this bill also cuts very heavily from military research and development funds. I had requested a substantial increase in these funds to sustain our position of technical excellence in a world where circumstances change rapidly and where weapons are increasingly dependent on advanced technology. The bill that has passed the Congress could lead to an actual decrease in these funds for next year.

The ultimate effect of this bill would also weaken our Navy by aggravating the dangerous trend away from a larger number of different kinds of ships which can maintain our military presence on the high seas, and toward a disturbingly small number of ships which are increasingly costly.

What the Congress has done with the money being cut from these vital areas is to authorize a fifth nuclear-powered aircraft carrier, which we do not need. This would be the most expensive ship ever built. Its purchase price, even estimated now, would be at least $2 billion, and the aircraft it would carry and the extra ships required to escort and defend it would cost billions more in years to come.

In order to use our dollars for their maximum effect, we must choose the armor, artillery, aircraft, and support that will immediately bolster our strength, especially in NATO. By diverting funds away from more important defense needs in order to build a very expensive nuclear aircraft carrier, this bill would reduce our commitment to NATO, waste the resources available for defense, and weaken our Nation's military capabilities in the future.

I will be glad to cooperate with Congress in passing a more responsible bill, and I urge the Members of Congress to face that duty as soon as they return from their recess. The Nation's interest and my oath of office require me to veto this bill and to seek a stronger defense for our country.

Mr. Gerstenzang [James Gerstenzang, Associated Press].

QUESTIONS

CAMP DAVID MEETING ON THE MIDDLE EAST

Q. Mr. President, your direct involvement in the Middle East summit conference next month is seeming to be a high risk gamble. Could you say what led you to take this step and what are the risks? What happens if this effort fails?

THE PRESIDENT. Let me say, first of all, that we don't act just as a noninterested mediator or message carrier in the Mideast negotiations. Our own national security is vitally involved, not only in maintaining peace around the world but especially in the Middle East, and we have devoted our utmost effort to bringing about a peaceful resolution of the longstanding Middle Eastern disputes.

I have met in small groups and privately with Prime Minister Begin and with President Sadat on many occasions. I think I know them both quite well, and I am absolutely convinced that both men want peace and the people in both nations genuinely want peace.

All of us were pleased last November when the exchange of visits took place, Sadat going to Jerusalem, Begin going to Ismailia. It was one of the happiest few weeks of my career as President not to be involved in those negotiations and to see them face to face, trying to work out the differences between them.

Since then, the interrelationships which brought us such high hopes last winter have deteriorated rapidly. In spite of our best efforts, recently, those peace talks broke down completely, not only at the high level of the Prime Minister and President but even at a lower level involving cabinet officers themselves. Even when Secretary Vance had scheduled a trip to the Mideast, we could not get the leaders to agree to meet.

It is a very high risk thing for me politically, because now I think if we are unsuccessful at Camp David, I will certainly have to share part of the blame for that failure. But I don't see that I could do anything differently, because I'm afraid that if the leaders do not meet and do not permit their subordinates to meet in a continuing series of tough negotiations that the situation in the Middle East might be much more serious in the future even than it is now.

So, I decided on my own, and later got the concurrence of my top advisers, including Secretary of State Vance and the Vice President and others, to invite both those men to meet with me at Camp David. We do not have any assurance of success. I do not anticipate being completely successful there and having a peace treaty signed in that brief period of time. But if we can get them to sit down and discuss honestly and sincerely their desires for peace, to explore the compatibilities among them, to identify very clearly the differences, try to resolve those differences, then I think we can set a framework for peace in the future.

It may result only in a redetermination or recommitment to continue subsequent negotiations. We might make more progress than that. But we will go there as a full partner in the discussions, depending primarily, however, on the two national leaders themselves to work out the differences between them.

I pray and I hope the whole Nation, the whole world will pray that we do not fail, because failure could result in a new conflict in the Middle East which could severely damage the security of our own country.

VALUE OF THE DOLLAR

Q. Mr. President, you're said to be very deeply concerned about the dollar. Is there a dollar crisis? What are you going to do about it? And why haven't you done something yet? And I have a followup. [Laughter]

THE PRESIDENT. I am deeply concerned about the dollar. And I have asked Secretary of Treasury Mike Blumenthal and the Chairman of the Federal Reserve, Bill Miller, and others to consult with one another and to give me advice on steps that can be taken by them and by me.

There are some factors that are encouraging in the long run. Recent monthly data have shown that our balance-of-trade deficit is going down. I believe that we've made good progress in seeing an increase in the economic growth of other nations overseas so that they are better able now and in the future to buy our goods than they have been in the past, when we were growing fast and we could afford to buy their goods.

The Congress can contribute. The single most important thing that Congress can do to control inflation and also to ease the pressures on the dollar and to reduce our severe adverse trade balance is to pass an energy bill. I've done everything in the world that I could do and so have my Cabinet members and all my staff members and many hundreds of people around the country to induce Congress to go ahead and act on a comprehensive energy bill. They have not yet done so. They've been working on it since April of 1977. We still have hopes that the Congress will act successfully.

Another underlying problem, of course, is inflation, and we are dealing with that on many levels. One, of course, is to hold down the size of the Federal deficit. We've made good progress there. I know that when I ran for President in 1976, the Federal deficit was in the sixties of billions of dollars. By 1978, it was down to the fifties of billions of dollars; '79, the forties of billions of dollars, low forties; and by the 1980 fiscal year, I am determined to have it down in the thirties of billions of dollars.

We are eliminating excessive spending and demonstrating to our country and the rest of the world that we are determined to hold down inflation. But it's a tenacious thing. It would be erroneous for me to insinuate to the American people that it's easy and that we're going to solve it overnight. Everybody has got to help. But if we can top it out, the inflationary curve, this year, I think that will send a good signal to the world monetary markets.

So, we have a combination of problems, some of which we are addressing successfully, some of which are very difficult, but we are all working in concert. And I believe that the underlying economic strength of our Nation will prevent a further deterioration in the status of our Nation and a further deterioration in the dollar, particularly if the Congress will act and if we can act in this administration to address those questions that I've just described.

CAMP DAVID MEETING

Q. Mr. President, back to the summit and whatever preparations may have been made. I want to push one step further, if I may. Is there an agreement or an arrangement or even a slight arrangement already in place before you go into this big meeting?

THE PRESIDENT. Well, in my letter to both Prime Minister Begin and Sadat, I outlined some of the principles on which we should meet—not negotiating principles, but the need, for instance, to lessen the vituperation that had been sweeping back and forth between government leaders, to express in a positive fashion their determination to come to Camp David with flexibility and with an ability on the part of those government leaders to act.

The immediacy of their response—they did not delay at all, when they read my letter, to say "I will come to Camp David"—is indicative of good faith on their part. But I do not have any commitment from them to change their previously expressed positions as a prerequisite or prelude to coming to Camp David.

RELATIONS WITH THE CONGRESS

Q. Mr. President, your Agriculture Secretary was quoted as saying earlier this week that you intended to retaliate against the cheap shot artists in Congress who oppose some of your programs. What is your attitude toward Congress as you come up to the Labor Day recess?

THE PRESIDENT. I would say that in general, the Congress has been very cooperative and very constructive. I think any analysis of the accomplishments of Congress last year in the domestic field would be favorable. We addressed the most difficult questions of all successfully. The energy question was put off until this year and still has not yet been addressed.

In foreign affairs this year, I think the Congress has acted with great judgment and also with great courage to deal with some longstanding questions involving sales of weapons to the moderate Arab nations, approval of the Panama Canal treaties, removal of the embargo against Turkey, and so forth.

I have never discussed this subject with the Secretary of Agriculture, and he's never discussed it with me. But I certainly don't have any animosity against any Member of Congress. I do not have a list of Congress Members who are worthy of punishment. I have no inclination to do that; it's not part of my nature. And I think it would be counterproductive if I attempted it.

OIL IMPORTS

Q. Mr. President, earlier this year, you suggested that the time might come when you would have to move administratively to impose import fees or quotas on foreign oil. My question is, are we near that time, and if Congress should adjourn this year without passing what you consider to be a substantial energy bill, will you do it?

THE PRESIDENT. That's an option that I will maintain open for myself. Obviously there are several options that can be exercised, the most advantageous of which to consumers, to oil producers, to our own country, and, I think, to the rest of the world, is to pass the energy proposal as I presented it to the Congress-to impose a tax on oil, to reduce its waste, and to encourage more use of American oil in the first place, and to distribute the revenues from that tax back immediately to the American people. This would be a very constructive attitude.

The second one would be in the absence of congressional action, for me to impose, through Executive order under the present law, either import quotas, limiting the amount of oil that could come in, or import fees, which would charge extra for oil coming into the Nation. And, of course, the other option, which is one that I think would be at the bottom of the list, would be to permit the oil companies to unilaterally increase the price of their oil very high and to let the consumers pay for it to the enrichment of the oil companies themselves.

So, that's a list of the options that I can think of at this moment that exist for me. And my preference, of course, is for the Congress to act. But I cannot foreclose the option that I have to act unilaterally through Executive order if the Congress does not act.

MARGARET COSTANZA

Q. Why do you think Midge Costanza felt obliged to resign, and do you have a new appointee to take her place?

THE PRESIDENT. Midge resigned without any encouragement from me, and, matter of fact, I asked Midge to stay on. She left in very good spirits. She has announced to the press and has told me privately that she has several very good offers to utilize her superb services. And she's worked very closely with us, no later than yesterday, as a matter of fact, in the White House West Wing to help us choose a successor to take her place. So, I think that describes the situation quite accurately.

Q. Do you have a nominee for her replacement?

THE PRESIDENT. We have several ones whom we are considering. We have not yet made a choice.

U.S. TRADE WITH THE SOVIET UNION

Q. Do you plan to continue selective trade sanctions against the Soviet Union, since some allied nations, such as France, are unwilling to cooperate in technological boycotts?

THE PRESIDENT. We obviously don't have any inclination to declare a trade embargo against the Soviet Union to stop all trade. It's to the advantage of our country to have trade with the Soviet Union. I think embargoes that have been imposed in the past by previous administrations, for instance, an unannounced and unilateral stopping of shipments of feed grains and food grains and soybeans overseas, has been very detrimental to our country. I do not intend to do that. But we'll assess each individual sale on the basis of several criteria, one of the most important ones of which is, does this sale contribute to an enhancement of the Soviets' military capability and is this country the only reasonable source of a supply for that particular item? And we have a very well established procedure in the Government for carrying out that analysis. And I believe that my own cancellation of the sale of a very large computer a month or so ago was well-advised, but we'll have to consider each one of those additional items as they are proposed on its own merits.

It takes a long time for a decision like that to get to my desk. Most of them are simply canceled before they ever arrive-even come in to my attention. The Commerce Department and others assess it; the State Department has to approve it before it comes to me. But we'll have to assess them on an individual basis.

DEFENSE AUTHORIZATION VETO

Q. Mr. President, getting back to energy and the veto today, Senator Jackson was suggesting today, that this is going to be a big problem for the energy bill, now that you've vetoed the defense bill, because he says the aircraft carrier was kind of the glue that held that thing together, and it took them 6 months to get the bill. And he says now it's going to be a problem, and he says we've got so many headaches and this is another one. It seems rather significant to me, in that he's the man that is carrying that energy bill for you.

THE PRESIDENT. I met this morning with Senator Jackson and others to go over the reasons for my veto. He did not disagree with the reasons that I expressed. I have not had a single adviser who told me that we ought to go ahead with the nuclear aircraft carrier. The only concerns that anyone has expressed to me is that it might create additional work for Congress in correcting an error that I think they made, or that it might cause me political problems in having vetoed a bill and had a confrontation with Congress.

I don't desire to do anything with Congress but to cooperate with them. We are working now in the House, which will first take up the veto, since the bill originated in the House, to make sure that we can sustain my veto on the basis of its own merits. I don't see any reason to link the building of a nuclear aircraft carrier, which will be completed maybe in 1987, with the approval of a conference committee report on natural gas that's been negotiated now for almost 16 months.

Q. Yes, sir, but are you confident someone up there might not see it?

THE PRESIDENT. I cannot guarantee that nobody considers it, but I can tell you this: It won't be the first problem we've had with the natural gas bill. [Laughter]

TUITION TAX CREDITS

Q. Mr. President, the Congress appears bent on passing some sort of tuition tax relief this year. I'd like to know what your current position is now as regards to Congress passing tuition tax relief for parents with children in universities and your position on parents with children in parochial schools. Is it your intention to veto any tuition tax relief that comes down?

THE PRESIDENT. I do not favor the tuition tax credit approach to college students, and I even more strongly oppose on constitutional grounds Government financing of the elementary and secondary schools which are privately operated.

On the tax bill, I am not satisfied with the bill that the House has passed. It does not meet the basic criteria that I set for fairness, for equity, for simplicity, for progressivity and the efficient enhancement of capital investment funds.

A veto is a prerogative that a President is given under the Constitution. It's not an abnormal authority. It's one that should be a routine part of the interrelationship between the White House and Capitol Hill. And it's not only a pleasure to have that authority to make my own leverage more effective but it's a duty that falls on me. And I want to keep that option open. And I reserve the right after a bill gets on my desk to either veto it or sign it. I have no reticence about vetoing a bill that I think is contrary to the best interests of our country. My hope is that Congress would pass a bill after close consultation with us that would be acceptable.

My position on the tax credits is clear. I have not changed my position at all. I don't think anybody's position on the tax bill, the tax reduction bill, is clear. It is very, very confused, and my hope is that the Senate will correct some of the basic errors that the House made; if not, that in the conference committee the bill can be made acceptable to me. If it's not acceptable to me, I will have no hesitancy about vetoing it.

PEOPLE'S REPUBLIC OF CHINA

Q. Mr. President, during a recent interview you made the point that both we and the Chinese are patient on the subject of establishing full diplomatic relations. My question concerns the extent of that patience on your part, whether now it might be something indefinitely on the back burner or something you would like to see accomplished between now and, let's say, the end of 1980?

THE PRESIDENT. The normalization of relations with the People's Republic of China has always been a goal of my administration. It was a goal of my predecessors under the general provisions of the Shanghai Communiqué, that was signed by President Nixon on his historic visit to China.

The pace of negotiations must be one that's mutually set. We have a very good representative in China, Leonard Woodcock. They have a very fine representative here, a new representative not known as an ambassador, in Washington whom I've not yet met.

But we are constantly exploring ways to have better relationships with China. First of all, no matter what our relationship is with them on a bilateral basis, we want China to be a peaceful nation, to be secure, and to have their beneficial effects felt around the world. Secondly, we want our bilateral relationships with them to be better, to enhance trade, communications, student exchange, and so forth, whether or not we have diplomatic relations as such. And then, of course, the final thing is to hope for diplomatic relations when we're both willing to proceed expeditiously and when we're both willing to accommodate one another's wishes.

I can't tell you what the pace of that might be. It's not something that I could unilaterally impose upon them, and I have to judge by what their response might be.

I think there's a new impression—certainly that I have of the leadership in China—that they are more outreaching now, they're more outgoing.

The present visit of Chairman Hua, for instance, to Romania, is a good indication and an almost unprecedented thing for them to go out into the Eastern European world, and perhaps even other countries as well later on, to make visits.

So, I think that they are reaching out in a spirit of friendship. If they do, I will respond in good faith. I just cannot give you a time schedule.

RELATIONS WITH THE CONGRESS

Q. Mr. President, aside from the merits of the defense bill, which you've covered, some of your advisers are saying that part of your reason for vetoing it is a desire to undo the impression that you're a pushover, so to speak, when it comes to dealing with Congress. Do you think that you have been too willing in the past to go along with what the Members of Congress wanted, and how much does this veto have to do with an effort to make you appear tougher?

THE PRESIDENT. That really is not a factor involved in it. There have been times in the past when I've had a major difference with Congress—at least with a number of Congress Members—and have ultimately prevailed. Some of the foreign affairs debates which I just described a few minutes ago are examples of this. Early in the session last year, there was a great opposition in Congress, particularly the Democratic leadership, against reestablishing a reorganization authority for me. And they did it reluctantly, but now it's assumed to be a routine thing.

There have been cases when I have erred on the side of not vetoing a bill. I think that last year I should have vetoed the appropriation bill that authorized unnecessary water projects. If I had it to do over again, I would have vetoed it. But that's one of the rare occasions when I think I have been too lenient in accommodating the desires of Congress. But the Congress is now trying to reimpose those water projects on me as President and even additional ones that are worse.

So, I think that I've had a fairly well-balanced approach to Congress. We have close consultations with Congress on a continuing basis. I don't have any fear of the Congress. I'm sure they don't have any fear of me.

ADM. HYMAN G. RICKOVER

Q. Mr. President, in your book, "Why Not the Best?", you described Admiral Rickover as having had a great influence on your life. I wonder if in light of the veto, Mr. President, that you did discuss your decision against a new nuclear carrier of the Nimitz class with Admiral Rickover, and what that conversation consisted of?

THE PRESIDENT. No, I did not discuss it with him. When I had my first visit with Admiral Rickover after becoming President, it was obvious to me then and now that he's a very outspoken person. He presents his case to the Congress in an effective way, and he has a great influence on them and on me.

He pointed out then that his inclination was not to try to influence my decision on individual items in the defense budget, that he knew I had special problems as President and a special perspective that he could not have himself. And because of our close relationship in the past-which still exists, by the way—he was going to refrain from that particular aspect of my responsibilities.

He does meet with me quite frequently, and we have very frank discussions, but, I think, more in general terms. And he's not had any inclination to try to influence me on this particular matter.

Sarah [Sarah McClendon, McClendon News Service].

ROBERT T. GRIFFIN AND GEN. SAMUEL S. WALKER

Q. Sir, I want to point out to you to see if you think this is not an injustice. Robert Griffin of General Services Administration, the number two man, was fired because of his conduct there. And then a job was created for him by you, giving him $50,000 a year. Then we have a four-star general out in the Pentagon, Walton Walker, with an exemplary record, and he's having to get out of service and take retirement, which will cost the taxpayers a lot of money, simply because his position at NATO was abolished. They gave it to a Turkish general to ease the tension over the arms embargo, and there's no other four-star slot for Walton Walker, so a good man has to get out of the service. Don't you think that's an injustice?

THE PRESIDENT. I'll try to respond as best I can. [Laughter] In the first place, I don't know of any item that's been reported by the press in a more distorted way than the one relating to Robert Griffin. Griffin was not fired because he's incompetent. He was not fired because there was any allegation about his honesty or integrity. He was moved from the General Services Administration because he was incompatible with the director of the General Services Administration, Mr. Solomon. He was not promoted. He was transferred to another position with the same salary exactly and the same pay grade exactly. He is not a member of the White House staff. He works for the Special Trade Representative, which is not in the White House at all.

There's been a general distortion of what happened in that respect. I have no apology to make for having moved him out of GSA. I have no apology to make for having put a good man with great integrity and great knowledge in a productive job.

The general to whom you refer was recently promoted to four-star status. He was assigned to Turkey to fill a position. NATO leaders, not completely controlled by us, decided that that position would be filled by a non-American. It was no reflection on General Walker at all. There is no other four-star position in the entire Armed Forces, and he was offered a three-star position. He decided that in place of going back to a three-star position, which he had just recently occupied, that he would prefer to resign. And he is a good man also. There's no reflection on him; there's never been any reflection on him.

I've looked into both these cases myself. I'm familiar with both of them, and I can tell you that there's no reflection on either man. And they were given jobs, offered jobs compatible with their rank. General Walker performed superbly in Turkey, and I regret that he did not stay in the Army as a four-star general.

MR. GERSTENZANG. Thank you, Mr. President.