Nuclear Power Policy Remarks and a Question-and-Answer Session With Reporters on Decisions Following a Review of U.S. Policy.

THE PRESIDENT. Good morning, everybody.

I have two items to discuss with you this morning. Then I'd like to answer a few questions.

ECONOMIC STIMULUS PACKAGE

One relates to the economy and the need for continuing emphasis on the stimulation package. Based on the best information available to us now, we'll have an accumulated spending shortfall for this current fiscal year, fiscal year 1977, plus revenue collections in excess of the anticipated amount, of about $10 billion. In other words, we have collected about $10 billion more from the American taxpayers than we anticipate spending in 1977.¹

¹Later in the day, the White House Press Office issued the following clarification of the President's statement: "The Federal deficit is expected to be $10 billion less than anticipated this year, because we are collecting more in taxes and spending less than we anticipated."

I feel very strongly that this money should go back to the American taxpayers. We need it for the economy to maintain its present strength. And the only equitable way that I see is through the already prepared tax refund which would average about $50 per person which, as I have said before, would be about 30 percent of the 1976 income taxes paid by a family making about $10,000 a year.

NUCLEAR POWER POLICY

The second point I'd like to make before I answer questions is concerning our Nation's efforts to control the spread of nuclear explosive capability. As far back as 30 years ago, our Government made a proposal to the United Nations that there be tight international controls over nuclear fuels and particularly those that might be made into explosives.

Last year during the Presidential campaign, both I and President Ford called for strict controls over fuels to prevent the proliferation--further proliferation of nuclear explosive capability.

There is no dilemma today more difficult to address than that connected with the use of atomic power. Many countries see atomic power as their only real opportunity to deal with the dwindling supplies of oil, the increasing price of oil, and the ultimate exhaustion of both oil and natural gas.

Our country is in a little better position. We have oil supplies of our own, and we have very large reserves of coal. But even coal has its limitations. So, we will ourselves continue to use atomic power as a share of our total energy production.

The benefits of nuclear power, particularly to some foreign countries that don't have oil and coal of their own, are very practical and critical. But a serious risk is involved in the handling of nuclear fuels--the risk that component parts of this power process will be turned to providing explosives or atomic weapons.

We took an important step in reducing this risk a number of years ago by the implementation of the nonproliferation treaty which has now been signed by approximately a hundred nations. But we must go further.

We have seen recently India evolve an explosive device derived from a peaceful nuclear power plant, and we now feel that several other nations are on the verge of becoming nuclear explosive powers.

The United States is deeply concerned about the consequences of the uncontrolled spread of this nuclear weapon capability. We can't arrest it immediately and unilaterally. We have no authority over other countries. But we believe that these risks would be vastly increased by the further spread of reprocessing capabilities of the spent nuclear fuel from which explosives can be derived.

Plutonium is especially poisonous, and, of course, enriched uranium, thorium, and other chemicals or metals can be used as well.

We are now completing an extremely thorough review of our own nuclear power program. We have concluded that serious consequences can be derived from our own laxity in the handling of these materials and the spread of their use by other countries. And we believe that there is strong scientific and economic evidence that a time for a change has come.

Therefore, we will make a major change in the United States domestic nuclear energy policies and programs which I am announcing today.

We will make a concerted effort among all other countries to find better answers to the problems and risks of nuclear proliferation. And I would like to outline a few things now that we will do specifically.

First of all, we will defer indefinitely the commercial reprocessing and recycling of the plutonium produced in U.S. nuclear power programs.

From my own experience, we have concluded that a viable and adequate economic nuclear program can be maintained without such reprocessing and recycling of plutonium. The plant at Barnwell, South Carolina, for instance, will receive neither Federal encouragement nor funding from us for its completion as a reprocessing facility.

Second, we will restructure our own U.S. breeder program to give greater priority to alternative designs of the breeder other than plutonium, and to defer the date when breeder reactors would be put into commercial use.

We will continue research and development, try to shift away from plutonium, defer dependence on the breeder reactor for commercial use.

Third, we will direct funding of U.S. nuclear research and development programs to accelerate our research into alternative nuclear fuel cycles which do not involve direct access to materials that can be used for nuclear weapons.

Fourth, we will increase the U.S. capacity to produce nuclear fuels, enriched uranium in particular, to provide adequate and timely supplies of nuclear fuels to countries that need them so that they will not be required or encouraged to reprocess their own materials.

Fifth, we will propose to the Congress the necessary legislative steps to permit us to sign these supply contracts and remove the pressure for the reprocessing of nuclear fuels by other countries that do not now have this capability.

Sixth, we will continue to embargo the export of either equipment or technology that could permit uranium enrichment and chemical reprocessing.

And seventh, we will continue discussions with supplying countries and recipient countries, as well, of a wide range of international approaches and frameworks that will permit all countries to achieve their own energy needs while at the same time reducing the spread of the capability for nuclear explosive development.

Among other things--and we have discussed this with 15 or 20 national leaders already--we will explore the establishment of an international nuclear fuel cycle evaluation program so that we can share with countries that have to reprocess nuclear fuel the responsibility for curtailing the ability for the development of explosives.

One other point that ought to be made in the international negotiation field is that we have to help provide some means for the storage of spent nuclear fuel materials which are highly explosive, highly radioactive in nature.

I have been working very closely with and personally with some of the foreign leaders who are quite deeply involved in the decisions that we make. We are not trying to impose our will on those nations like Japan and France and Britain and Germany which already have reprocessing plants in operation. They have a special need that we don't have in that their supplies of petroleum products are not available.

But we hope that they will join with us--and I believe that they will--in trying to have some worldwide understanding of the extreme threat of the further proliferation of nuclear explosive capability.

I'd be glad to answer a few questions.

QUESTIONS

FUEL REPROCESSING CENTERS

Q. Mr. President, in the last administration there was some proposal to have regional reprocessing centers which seem, to some people, to put the emphasis on the wrong thing. Does this mean that you are going to not favor regional reprocessing centers? And, secondly, would you be prepared to cut off supplies of any kind of nuclear material to countries that go nuclear?

THE PRESIDENT. Well, I can't answer either one of those questions yet. I have had detailed discussions with Prime Minister Fukuda, with Chancellor Schmidt, and also with Prime Minister Callaghan, for instance, just in recent days about a joint approach to these kinds of problems.

Obviously, the smaller nations, the ones that now have established atomic power plants, have to have someplace either to store their spent fuel or to have it reprocessed. And I think that we would very likely see a continuation of reprocessing capabilities within those nations that I have named and perhaps others.

We in our own country don't have this requirement. It's an option that we might have to explore many, many years in the future.

But I hope that by this unilateral action we can set a standard and that those countries that don't now have reprocessins capability will not acquire that capability in the future. Regional plants under tight international control obviously is one option that we would explore. No decision has been made about that.

If we felt that the provision of atomic fuel was being delivered to a nation that did not share with us our commitment to nonproliferation, we would not supply that fuel.

Q. Mr. President, this carries an assurance, which you had said earlier, for an assured and adequate supply of enriched uranium to replace the need for plutonium. Do you foresee any kind of price guarantees also for underdeveloped and poorer countries so that the supply would not only be assured but at a reasonable price in case lack of reprocessing drove prices up?

THE PRESIDENT. I don't know what the future prices of uranium might be. At the present time, of the enriched uranium that we produce, about roughly a third of it is exported, roughly a third of it is used for our domestic needs, and about a third of it is put in storage.

There has been an attenuation in recent years of the projected atomic power plant construction in our own country. Other nations, though, are moving more and more toward atomic power plants. But I can't tell you at this point that we will guarantee a price for uranium fuel that's less than our own cost of production, and that would be a matter of negotiation, perhaps even on an individual national basis.

I think that a standard price would probably be preferable, but then we might very well give a particular nation that was destitute or a very close friend of ours or who cooperated with us in this matter some sort of financial aid to help them with the purchase.

NUCLEAR POWER PLANTS

Q. You also said last year, a couple of times, that you hoped to call a world energy conference to discuss this as well as a lot of other things. Do you foresee that happening any time in the near future?

THE PRESIDENT. The item of nuclear power plants and the handling of spent nuclear fuels and the curtailment of the possibility of new nations joining us in their capability for explosives will be on the agenda in the discussions in London early in May. And this will be a continuing process for us.

I might add that Secretary Vance also discussed this question with the Soviet authorities on his recent visit to Moscow and asked them to join in with us in enhancing the nonproliferation concept. Their response was favorable. But it will entail a great deal of negotiation, and I can't anticipate what the results of those negotiations might be. We obviously hope for it to apply to all the nations in the world.

BREEDER REACTOR PROGRAM

Q. Mr. President, does your change in the domestic program mean that you will not authorize building the Clinch River breeder reactor in Tennessee?

THE PRESIDENT. The Clinch River breeder reactor will not be terminated as such. In my own budget recommendations to the Congress, we cut back--I can't remember the exact figure--about $250 million out of the plutonium breeder reactor--the liquid metal fast breeder reactor program.

I think that we would continue with the breeder reactor program on an experimental basis, research and development, but not move nearly so rapidly toward any sort of commercial use.

We also, obviously, are concerned about the adverse economic impact .of these changes. And in the areas that would lose employment that was presently extant, as we increase our capacity for producing nuclear fuels, even using new techniques, other than gaseous diffusion like centrifuse and laser beam use, then we would try to locate those facilities over a period of time--it's a very slow-moving process-in areas like Clinch River where they might be adversely affected.

NUCLEAR POWER PLANTS

Q. Mr. President, does this mean that Canada selling nuclear power equipment to France and others, and France selling to others--does this mean that we will supply those other countries so that they won't make more power?

THE PRESIDENT. Well, I might say that the two countries that most nearly share our commitment and even moved ahead of us in this field have been Canada-perhaps because of their unfortunate experience with India--and Australia. Both those countries, along with us, have substantial supplies of nuclear fuel themselves.

I would hope that we could develop an interrelationship with other countries to remove the competitive aspect of reprocessing itself. There is obviously going to be continued competition among our own Nation, Canada, France, Germany, England, in the selling of atomic power plants themselves. It ought to be a clearly drawn distinction between the legitimate and necessary use of uranium and other enriched fuels to produce electricity, on the one hand, and a prohibition against the use of those fuels for explosives.

It would be impossible, counterproductive, and ill-advised for us to try to prevent other countries that need it from having the capability to produce electricity from atomic power. But I would hope that we and the other countries could form an alliance that might be fairly uniform in this respect. I know that all the other countries share with us this hope.

The one difference that has been very sensitive, as it relates to, say, Germany, Japan, and others, is that they fear that our unilateral action in renouncing the reprocessing of spent fuels to produce plutonium might imply that we prohibit them or criticize them severely because of their own need for reprocessing. This is not the case. They have a perfect right to go ahead and continue with their own reprocessing efforts. But we hope they'll join with us in eliminating in the future additional countries that might have had this capability evolve.

FOREIGN NUCLEAR WEAPON CAPABILITY

Q. Mr. President, is it your assessment, sir, that some of the smaller nations that are now seeking reprocessing technology are doing so in order to attain nuclear weapon capability as well as or in addition to meeting their legitimate energy needs?

THE PRESIDENT. Well, without going into specifics--I wouldn't want to start naming names--I think it's obvious that some of the countries about whom we are concerned have used their domestic nuclear power plants to develop explosive capability. There is no doubt about it.

India, which is basically a peaceful nation, at least as far as worldwide connotations are concerned, did evolve an explosive capability from supplies that were given to them by the Canadians and by us.

And we feel that there are other nations that have potential capacity already for the evolution of explosives. But we are trying to make sure that from this point on that the increasing number of nations that might have joined the nuclear nations is attenuated drastically

We can't undo immediately the mistakes that have been made in the past. But I believe that this is a step in the right direction.

Just one more question.

WATER RESOURCE PROJECTS

Q. Mr. President, are you willing to trade off your scrapping of 30 water projects or even some of them in exchange for a tax rebate package?

THE PRESIDENT. Well, I am not much of a trader. That is one of my political defects for which I have been criticized a great deal. We will be receiving the report on the analysis of water projects about April 15. I am not sure if that exact date will be met. And I'll assess each one of those projects on its own merits. And I would hope that the $50 tax refund will also be assessed on its own merits.

I know enough about politics to realize that we will lose some votes perhaps within the Congress because of water projects that we don't advocate. I also realize that there might be water projects that would be completed, I think ill-advisedly, against my inclinations. I don't have the final say-so about it. So, there will have to be some interrelationship there. I wish and hope there is little, if any. But I can't prevent that.

But I am not inclined at all to trade a water project that's not needed or my approval of it in return for a vote on the tax refund which I think is needed for every Member of Congress and the people that look to that Congress Member for leadership.

Q. What's your forecast on the passage of the tax rebate?

THE PRESIDENT. I don't know yet. Majority Leader Byrd and Senator Cranston, Senator Humphrey, and others had a meeting, I believe, on Tuesday. They had additional meetings yesterday.

They are working very hard on this vote. I talked to Senator Byrd this morning, and he gave me a report on the progress that he thought we were making. And also the Vice President and I are contacting some of the Members of the Senate to let them know about our arguments on why the tax refund should be given back to the American people.

This morning I drafted about a 1 1/2 page summary of the arguments ² in favor of the tax refund to the American people, including the shortfall in spending and the over collection of taxes which is a recent development. I think that prospects still look good.

Thank you very much.

REPORTER. Thank you, Mr. President.

² Later in the day, the White House Press Office released the summary to which the President referred and announced that it had been sent to Democratic Senators and to those Republican Senators whose position on the rebate portion of the economic stimulus package had not been determined.

The text of the summary follows:

ARGUMENTS SUPPORTING THE CONTINUING NEED FOR THE REBATE

1. Rebate will help those most in need. It will provide added purchasing power for low and middle income persons. Over 60% will go to families earning less than $15,000 and another 23% to those between $15,000-$20,000. A working family of four will get $200. The program also covers senior citizens and working families who have no tax liability. For a family of four earning $10,000 this will mean a 30% reduction in their tax liability. Combined with our proposal to increase the standard deduction, their tax liability would be reduced by 50%.

2. The economy still needs fiscal stimulus to maintain strong growth rate and keep unemployment moving down steadily over the rest of this year.

(a) Recent pickup in economic activity partly reflects natural rebound from the depressing effects of the cold weather and business rebuilding inventories. These influences on the economy will be temporary.

(b) To date the Federal Government has unexpectedly spent less and collected more than we anticipated, to the tune of about $10 billion. This will certainly slow down the recovery unless we do something about it. The $11 billion tax rebate is the only way we can offset this economic drag now. It is the only fair way to do so for the American taxpayer.

3. Continued growth and reduction in unemployment depends on strong consumer spending. In the absence of the rebate, consumer spending could weaken in 1977. Added fuel bills and rising food prices will siphon off some consumer purchasing power.

4. The rebate will work. It is a tested method for stimulating consumer spending. (a) About 60% of the 1975 rebate was spent. The proportion could be higher in 1977 because consumer confidence is stronger now.

(b) The rebate will affect the economy quickly. The jobs and public works programs we have recommended will take some time to get underway.

5. The rebate means 250,000 more jobs and $15 billion in added GNP by the end of the year. Without the rebate, we will lose these jobs and the added income.

6. The rebate preserves options for the future.

(a) For permanent tax reform.

(b) For expansion of other needed programs.

(c) For balanced budget by fiscal year 1981.

7. With present levels of high unemployment and idle capacity, rebate should not add significantly to inflationary pressures.

8. Without the rebate, too large a proportion of the tax reduction would be going to businesses and not enough to consumers.