The President's News Conference in Huntsville, Alabama

The President. Well, first, I want to thank our hosts here at the Center and thank Admiral Truly, who is doing an outstanding job at NASA, for coming down here and thank Mr. Lee and all the others. It's inspiring to be here, and it just reinforces my conviction that we must have a vigorous, forward-looking space program. And I'm convinced we will. But I think anybody who sees the dedication of the workers here and then hears what the possibilities are will be supportive. But I salute the workers here in Huntsville and across our whole space agency.

But today I have an announcement I'd like to make, and then I'll be glad to take a few questions here.

Well, based on the recommendation of the Secretary of State, I have decided to suspend the dialog between the United States and the PLO, pending a satisfactory response from the PLO of steps it is taking to resolve problems associated with the recent acts of terrorism, in particular, that May 30th terrorist attack on Israel by the Palestinian Liberation Front, a constituent group of the PLO.

By way of background, on December 14, 1988, Yasser Arafat, speaking on behalf of the PLO Executive Committee, recognized Israel's right to exist. He accepted the United Nations Security Council Resolutions 242 and 338, and he renounced terrorism. Now, subsequently, the United States announced that because the PLO had met our longstanding conditions for dialog we would begin a substantive dialog with the PLO. And at the time, we applauded Chairman Arafat for taking these essential steps. And we have conducted such a dialog with the PLO through our Embassy in Tunis.

Over the past 18 months, representatives of the United States and the PLO regularly exchanged views about the political and security situation in the region. On balance, we believe that these exchanges contributed to progress in the peace process.

On May 30th, 1990, the Palestinian Liberation Front attempted a seaborne terrorist infiltration into Israel. Palestinian Liberation Front Leader Abu Abbas represents the PLO on the Executive Committee of the PLO. The size of the force and the geographical target area strongly indicate that civilians would have been the target.

That day we issued a statement deploring this attempted terrorist attack. On May 31st, we raised this incident with the PLO in Tunis. We told them that it could not avoid responsibility for an attempted terrorist action by one of its constituent groups and needed to take steps to deal with the matter by condemning the operation, disassociating itself from it, and by also beginning to take steps to discipline Abu Abbas, the perpetrator.

We've given the PLO ample time to deal with this issue. To date, the PLO has not provided a credible accounting of this instance or undertaken the actions outlined above. The U.S. does take note of the fact that the PLO has disassociated itself from this attack and issued a statement condemning attacks against civilians in principle, but as we previously indicated this is not sufficient -- this alone is not sufficient.

The U.S.-PLO dialog has demonstrated that it can advance the Arab-Israeli peace process. And at the same time, the dialog is based on the assumption that the PLO is willing to abide by the conditions it accepted in December, 1988, including renunciation of terror.

At anytime that the PLO is prepared to take the necessary steps, we are prepared to promptly resume the dialog. In the meantime, we would hope and expect that the peace process would proceed as intended and without delay. We remain committed to the pursuit of a comprehensive settlement of the Arab-Israeli conflict and to a just and lasting peace. And as is often stated, it is our view that such a peace must be based on those two resolutions, U.N. Resolution 242 and 338, and the principle implicit therein of territory for peace, and provide for Israel's security and Palestinian political rights.

We believe that Palestinian participation is vital to any successful process and that there are real opportunities for Palestinians in this process. We strongly hope that Israelis, Palestinians, and the Arab States will recognize these opportunities and take the necessary steps to create an environment in which a viable peace process can thrive.

We denounce violence in the area and call upon all parties to eschew violence and terror and opt instead for dialog and negotiation. We're prepared to continue working with the parties toward this end.

I'll be glad to take a few questions.

Middle East Peace Process

Q. Mr. President, doesn't your announcement of today, coupled with Secretary Baker's words that the Israelis should call the White House when they're serious, mean that the U.S. position in the peace process, though, in the Middle East is dormant right now?

The President. John [John Mashek, Boston Globe], it's not moving forward right now. And the offer still stands. I have sent a letter to Prime Minister Shamir [of Israel]. I have very specifically asked questions that relate to seriousness about the peace process. But I would like to see the peace process move forward. Nothing herein should indicate anything different. Because here we are simply taking a narrow shot at terrorism.

Norm [Norman Sandler, United Press International] -- excuse me, I forgot my protocol.

Savings and Loan Crisis

Q. Mr. President, yesterday, Marlin [Marlin Fitzwater, Press Secretary to the President] seemed to have lit a fairly short political fuse with his comments on the S&L bailout in accusing the Democrats of having a big part in that mess. Are you ready to play that game this election year and blame the Democrats for a problem that others have laid on years of kind of permissive regulation by the Reagan administration?

The President. Norm, you're almost getting me into the fight by the way you ask the question, but I know I'm not going to. No, I want to get the savings and loan problem solved. And Marlin, properly, seeing a couple of shots across my bow from certain distinguished Members of the United States Senate, decided not to acquiesce in those attacks without some response. What he did was appropriate.

But what I'm trying to do is not respond to individuals and to simply keep moving forward on this process and not try to be out there saying here's who's to blame and here's who's not to blame. But it was interesting because I think you're right, a spark seemed to be ignited there. And I think more important than continuing to pour fuel on that spark is to work cooperatively with Congress in trying to get this mess solved. And of course, that is a part of what will be discussed in the budget process.

I would say to the American people on this one: The obligation is to protect the depositor. That's what our obligation is. And another obligation is to prosecute those who have broken the law, and there has been an active prosecution underway. I talked with Dick Thornburgh at lunch yesterday. I got some impressive numbers -- of the numbers of cases that are being followed up on now -- and I expect we'll see plenty more. So, protect the depositor; put those that are guilty into the dock, where they belong; and see that they are brought to responsibility for what they've done.

Q. Do you, in retrospect, though, agree with the argument that deregulation or unregulation of the savings and loans, the financial industry, occurred too quickly, went too far in the eighties?

The President. Well, I think -- in looking back -- I think some of the excesses of the loan policies are rather obvious. Basically, we made some proposals, I think, in that task force that I headed that might have corrected some of the abuse. But I don't want to argue in favor of reregulation of industries. But I will say that I think some of the loan policies instituted after the changes were made were foolish and were certainly ill-advised. And the result is a pounding for the original purpose of the S&L's, which was primarily financing housing in this country.

Palestine Liberation Organization

Q. Is it true that none of our allies, with the exception, of course, of the Israelis, wanted you to suspend these talks with the PLO? And you said you have given the PLO enough time. I mean, why now? Is there some reason it's happening today?

The President. No, I don't think of any reason today, and I didn't set in my mind x numbers of days. But, John [John Cochran, NBC News], I think there will be a lack of agreement with what I've done here on the part of some of our strongest allies. And I know this is true on the part of some of the most reasonable and moderate Arab States. But I would simply remind them of the conditions upon which the dialogs started in the first place, and I would also remind them that if they look at this statement and remedial action is taken the dialog from the U.S. side can promptly be restored.

Israeli-Occupied Territories

Q. Mr. President, at the same time you're having this trouble with the PLO, you've also got a new Israeli government that has an avowed policy of settling in the West Bank more rapidly than it's been settled in the past. How are you going to deal with that government? What's your policy going to be on aid toward that government, specifically on housing guarantees for Soviet emigrants?

The President. Jerry [Gerald Seib, Wall Street Journal], my position on settlement in the territories is probably as well-known as anything. And our policy is not to have new settlements, and our policy is certainly not to finance new settlements. Is that responsive, or is there another part to your question?

Q. This is a specific question now, though, of whether we'll provide housing guarantees for Soviet emigrants -- $400 million.

The President. But not to settle in the post-'67 territory -- in the territories beyond the '67 lines.

Q. Are you going to seek specific new guarantees from this new government that that won't happen with that money?

The President. Well, I will, and I hope I'm successful. But I think there is no question that the Shamir government knows my position on this, knows the standing position of the United States.

Economic Sanctions Against South Africa

Q. Mr. President, as you know, Nelson Mandela [South African antiapartheid leader] arrived in the United States today, and you're going to meet with him next week. What are you going to tell him on the sanctions question? And the second part: There have been reports some weeks ago that the United States Central Intelligence Agency was involved in the process that led to his arrest many years ago, and there have been suggestions that you should apologize on behalf of the United States Government and the American people. Will you do that?

The President. No, I will take my leadership on that question from Mr. Mandela, who put it very well when he said let bygones be bygones. And that is not to agree with or disagree with the charge.

On the second point -- your first, my second: The sanctions under the law cannot be lifted until certain additional steps are taken by South Africa. Let me be very clear. I salute Mr. de Klerk [President of South Africa] for what he's done. He's come a long, long way. And I salute Mr. Mandela for his approach to De Klerk. I think that demonstrates a willingness to talk that few of us might have predicted a couple years ago.

But there still are things that have to be done under our law in order to lift the sanctions, and I've listed them here. But anyway, you don't want to go into the details on it -- but if you do I'll be glad to click them off for you. But in any event, there has to be progress. And I'd like to find a way to show Mr. de Klerk that we, the United States, are grateful for this new approach that is having South Africa evolve to a much more open society and, hopefully one day, to one which is colorblind in terms of participation in the political process. But I can't lift the sanctions under existing U.S. law.

But I'm looking forward to talking to Mr. Mandela about this. There are black leaders in South Africa that disagree with him on this question of sanctions. Foremost of those that come to mind is Mr. Buthelezi, with whom I have talked about this question. And I historically have not felt that, certainly, adding to the sanction base would help at all. And I had some original reservations about sanction approach, but I will say that it seems to -- if you can credit sanctions with the evolution towards democracy in South Africa, I'd have to say, well, it seems there are some good things to it.

But it's delicate because I want to find a way to show our appreciation to De Klerk, and yet I don't want to pull the rug out from under Mr. Mandela.

Economic Assistance for the Soviet Union

Q. Mr. President, are you planning to support a G - 7 initiative to offer economic aid to the Soviet Union at next month's economic summit? And if so, what has caused you to change your mind about the wisdom of such a program?

The President. No, I'm not planning to do that. And I expect, though, that matter may be discussed. I've tried to be very up-front with Mr. Gorbachev, when he was here, about difficulties in terms of financial support. I talked to him in Malta about that. Indeed, we presented him with a list of things that might be done to improve our ability to work in full cooperation with him on that. But I don't plan a new initiative.

And yet I want to see perestroika continue. I haven't changed my view that economic reform is important, and I recognize that support from the West can well help the economy. But there's an awful lot of reform that has to take place in the market, in the distribution systems. There are some political problems that we have that I've discussed very frankly with Mr. Gorbachev, not the least of them $5 billion a year going down to Cuba. So, we've still got some problems there. But discount the fact that we are planning some bold new initiative. On the other hand, I'm perfectly prepared to talk to our allies on any subject, and I think that will probably be one of them.

Q. There are reports that President Mitterrand [of France] will propose such a plan. Do you expect that?

The President. Well, the Germans are interested, too. I'm not saying we're not interested but I'm saying there are some formidable obstacles.

Palestine Liberation Organization

Q. Back on the PLO. One of the theories passed around in your own administration was that the intent of this terrorist attack was to derail the peace process. Are you at all concerned that by suspending the dialog you're playing into the hands of the hardliners like Abu Abbas? And is there also a danger -- --

The President. Yes. Let me stop you there just to respond so I don't forget the question. Yes, I am concerned about that. Go ahead. [Laughter]

Q. Well, if you're so concerned about it then why did you take the stand?

The President. Well, because we had to weigh the whole question; and the question was complicated by the fact that there were three specific undertakings, one of which, a very important one in my view, has clearly been violated. It's not an easy call because I know some feel that the PLO dialog is totally unproductive, and as I indicated in this statement, I don't. The question up here was: Well, do our allies -- will they agree with the steps that I've taken here in Huntsville today? And the answer is no; some of them will not agree because they do feel that the dialog has kind of helped calm things in some parts of the Middle East.

So, what the answer to it is, is for the PLO to take the action that I've called for and to satisfy us that those who were responsible will be disciplined and condemn this specific act. It's not enough to simply reiterate one's concern on terror.

Q. If I may follow up?

The President. Please.

Q. Is there a danger, too, that those Palestinians who had put some hope in the dialog between the PLO and the U.S. might now throw up their hands in desperation and resort to violence?

The President. Well, I hope that's not the case, and yet I would refer you to my last paragraph or two of the statements when I did call for no violence. And I think it's fair to say that anytime you're dealing with something as complicated as the Middle East you worry about that. But I hope that's not the case. And I hope they'll see in my statement a rather temperate view here: that we're specific in calling for the condemnation of this particular terrorist act; that once that is done, in keeping with Arafat's undertaking, that we can resume talks.

There has been a frustration, Jim [Jim Miklaszewski, NBC News], in the Arab world that this dialog has not resulted in more progress. And I understand the frustration. I don't happen to agree with it. I think things are better because we've had the dialog. But Israel has strongly objected to it; and some Palestinians have been, as we can clearly see, concerned about it. But I believe we ought to try to find a way to get it back at some point.

Q. But the flip side of that coin, if I might: As you grappled with this, did you worry, and are you worried now, that Israel will just take this and say, See, we've been right about the PLO all along, and we won't talk to them?

The President. I'm not so troubled on that because I think they will see here that I am not accepting the premise that there is no good to come from talking to the PLO. So, I don't worry too much about that point.

Middle East Peace Process

Q. Do you see Mr. Shamir as too hardline, as the kind of leader who is going to say, Well, we were right, and therefore, we'll stay away from the table even longer?

The President. Well, I'm hoping that's not the case. And one of the reasons I sent him this long and lengthy letter was to make clear to him that it is our view the peace process ought to go forward. And it's going to be difficult for him, but it must go forward. And it must go forward along the lines of what originally was the Shamir plan, and then it became -- Mubarak [President Hosni Mubarak of Egypt] got interested and he played a useful role in it. Then Jim Baker got involved and done a heroic job in trying to get the talks going.

So, I hope that the U.S. will have a useful role to play, regardless of the step I've taken here in the PLO, because as we all know, we were not proposing that the PLO be at the table. This was a charge made against us by some in Israel, and that doesn't happen to be the case. And I think the government knows that.

Family and Medical Leave Legislation

Q. Mr. President, during the campaign you said often that we've got to find a way that people who have children won't be threatened with the loss of their jobs, and now you're saying that that has to be a voluntary position on the part of employers to give parental leave. How does that fulfill your campaign promise for people who work for employers who won't give voluntary leave, and what do you have to say to those people?

The President. You've got to keep working for them until they do because my campaign promise did not go to what they call mandated benefits. Just to be sure I was right we looked it up again yesterday. But my position has not changed, and I see that I must convince some Republicans as well as many Democrats that it hasn't changed.

Q. Do you have any point of view on how you're going to convince these employers? Many of them say if it's not a mandatory requirement, why should they do it?

The President. Well, I have a great faith that collective bargaining and market forces move towards progress. And we've seen it in the private sector, and I want to see it faster and quicker in the private sector without burdening every business by the same formula of mandated benefits.

Palestine Liberation Organization

Q. Mr. President, you specified that the PLO dialog has been positive and productive, but you haven't really told us in what way. Could you be a little more specific about that? What productivity do you see in it?

The President. I think the very fact we are talking can -- and that's one of the reasons I would hope that it can be restored -- can eliminate differences. And I would like to feel that the PLO, because of our dialog, doesn't see us as quite the hostile country that once they did. There's all kinds of small points that are taken up by our Ambassador Pelletreau in Tunis that I think have reduced the levels of misunderstanding.

I don't want to leave you the wrong impression: that I think the dialog has resulted in a more dynamic peace process. But I do think that it's good, and I think that it encourages moderation within the PLO ranks. I think we lose sight of the fact that Arafat did something that was predicted no Palestinian leader could do when he recognized Israel's right to exist as a state. And some might say, Well, it's about time. And I'm one of them. But that was quite a step forward. It was quite a step forward when he recognized Resolution 242, and I think that was positive. And then I think we've had a chance to solidify those gains, modest though they might have been, through dialog. But I can't point to the fact that that has really solved the question of Middle East peace. I just feel that talking offers more potential than stiff-arming each other. And yet we can't digest it as long as this terroristic act is sticking in our throat. And properly so, as a country that decries international terrorism.

Space Program Funding

Q. A question about space. How serious are you about this lunar base and Mars mission proposal? Would you go so far as to veto the bill that contains NASA appropriations if Congress decides to delete all the money?

The President. I haven't even contemplated any veto strategy. I'd like to get what I want. I think it's in the national interest. I think that the United States must remain way out front on science and technology; and this broad program that I've outlined, seed money that I've asked for, should be supported. But I think it's way too early to discuss veto strategy. We took one on the chops in a House committee the other day, and I've got to turn around now and fight for what I believe.

Q. Mr. President, how far will you go to protect the NASA budget in the future? Can you remove it from HUD and give it some security?

The President. It's pretty hard, given the way Congress functions, and that is a function of the Congress, not of the executive branch -- to decide under what committees these budgets are worked. But I think it is fair to say that I will fight for a fully funded space program. We've put forward what I think is a bold one. I've taken some shots -- saying, Hey, how can you propose something this big when we have such a large deficit? And I understand the question. But we're talking about stretched-out financing, and we're talking about, hopefully, a continued dynamic economy. And between the two, we can accommodate this goal if we all get with it.

Palestine Liberation Organization

Q. Was there not a need here, sir, to not appear to be indulging to the PLO at a time when the administration has been tougher than perhaps any recent administration has been with Israel?

The President. That's not what made my decision. And I don't know that we've been tougher. I'm the President of the United States. The United States has a policy. And I'm supposed to, I think, go forward with our policy. And one of the big problems we've had is the question -- between ourselves and the Israeli Government -- is this question of settlements. But I wouldn't read my decision here to go as follows: He made this decision because he's concerned about a complicated relationship with Israel at this point. That's not why I made the decision, but some may read it as that. But we're staying with our concept on the peace process, and we are staying with our policy on settlements. And this action that I've taken today is consistent with our policy on antiterror.

Violence and Terrorism in the Middle East

Q. Mr. President, do you feel that Israel has committed acts of terrorism when it bombs Palestinians?

The President. We spoke out on the recent violence in the Gaza. And please note my last comment calling for peaceful resolution to these questions as opposed to violence and international terror. And that's the way I would respond on that.

Governor Guy Hunt of Alabama

Q. Mr. President, sir, can we go back to why you're here in Huntsville, sir? If you are here to help raise money for Governor Guy Hunt's gubernatorial campaign -- --

The President. I'm not standing right here to do that, but I was downtown doing exactly that. And I hope we were successful because I am totally committed to his reelection. I have respected the progress the State of Alabama has made under his leadership. And as I look at the way my philosophy of government works, the Governors are very, very important on all this. I cite not just the education summit, in which I worked closely with Guy, but this whole concept that the States and localities have a significant role to play not just in the money end of it but in the whole setting of objectives and goals. So, I'm glad you raised it; and, yes, that part of the trip was strongly to support him, to support other political leaders, too.

Q. You have goals for your space initiative. Do you believe Governor Hunt can help you reach some of those by being so strong in the Tennessee Valley?

The President. I think he's a proponent of the space program that I've set forth. I think he's got great credibility with other Governors. If I'm not mistaken, I think he's hosting the national Governors down here, and that will give him to have an opportunity to make the case for space or any other initiatives for. But he is seen by other Governors to know what he's talking about in this area and clearly to be a strong proponent. So, I guess the bottom line is, yes, I think Governor Hunt here can be helpful to our objectives in terms of a vibrant space program.

Tennessee Valley Authority Appointment

Q. Mr. President, are you going to nominate or appoint Governor Hunt's nominee to the TVA board?

The President. I don't know that I'm going to carry my enthusiasm that far. [Laughter] But he's made a strong case for a person that he believes in, and he did it in his typical way, typical of Guy Hunt: right, direct. He told me exactly why he favored a certain nominee and then seemed to be saying, look, I recognize that you have a lot of factors to weigh in this decision. But I leave here understanding exactly why he has taken the position he has, and the position has respect. And I'm not prepared to discuss further what I might or might not do in this TVA -- you're talking about the TVA appointment.

Q. Did you say how long you would take to make an appointment?

The President. Matter of days. [Laughter]

Offshore Oil Drilling

Q. What about OCS [outer continental shelf]?

The President. A few days, a few days. Not for him, for this.

Thank you all very much.