Question-and-Answer Session With Reporters on Domestic and Foreign Policy Issues

The President. I'm kind of surprised to be over here on the side. I thought that in the event of rain they were going to have me up there under the roof and— [laughter] .

Q. Share and share alike.

Q. With us out here, sir?

1983 Federal Budget

The President. Listen. This afternoon, as you know, representatives of the administration and the Congress are sitting down for an important round of discussions on the budget. And I think all Americans have an interest in the outcome.

It's my fervent plea that—and hope that from these meetings there will soon come a balanced, bipartisan package that will help to revive our economy. And I think the economy is now poised for a recovery. Inflation has fallen sharply, and I hope we'll have more good news on that front this Friday. There's also evidence that interest rates are softening. I know of nothing that would be a greater tonic for the economy right now than for the Congress and the White House to come together on a plan that would lower the deficits and create new jobs.

This morning I met with the Republican leadership in the Congress and then later spoke by phone with Speaker Tip O'Neill. To both of them I delivered the same message: So long as we can reach consensus on a budget plan that is balanced and commands bipartisan support, I'm personally prepared to go the extra mile.

And now your questions.

Q. Mr. President, Senator Laxalt indicated earlier today that he felt that compromise agreement will have to include some kind of tax increases. He was careful to say tax increases that didn't disturb your basic tax program.

The President. Yes.

Q. cuts in costs of living, for social security as well as other things, and defense cuts. Now, can you go along with that?

The President. Well, those are the very things that I know the group is discussing, but I am going to reserve the position I think I should—and that is not to comment on the specifics in what they're talking about until they come with a consensus on a balanced program.

Q. But, Mr. President, how can you agree to any kind of tax increases without violating your "no tax increase" pledge, even if it's a surtax combined with a minimum income tax or some kind of energy tax?

The President. Well, now, wait a minute. I think, if you'll remember, always I pointed out that there were areas for changes in the taxes, government revenue, that we would seek, that in some instances were correcting unjustified tax breaks and so forth. And I've always emphasized that what I'm talking about is that tax program of ours which is based on providing an incentive, both for individuals and business—the business tax cuts, the across-the-board, 3-year cuts in personal income tax.

Now, I have not changed on that. That, as I stand. They started in—remember, we presented a package of some $13 billion with our budget in proposed ways of raising additional revenues. Now, what they've done from there with that package I'm waiting to see.

Q. But, sir, just to follow up, does the surtax somehow violate that incentive package that you've supported and won last year?

The President. Well, again, let's see what we come up with in the interest of a balanced program.

Situation in the Falkland Islands

Q. Mr. President, if Argentina attempts to invoke the Treaty of Rio, sir—if Argentina attempts to invoke the Treaty of Rio, what will our position be? And what do we do?

The President. Well, they have voted to take this up, I believe, on Thursday, that they're going to take this matter up that Argentina has asked about.

Secretary Haig has been working almost around the clock for all these days since we sent him down there to Argentina and doing a magnificent job of trying to bring these—to bring about a position that both countries could subscribe to. The Argentinians made some proposals that were then forwarded to the United Kingdom—some changes in things that had been discussed before. The Foreign Minister of the United Kingdom is coming here this week to meet further.

And I just hope that we can keep this process going and that there will be a restraint on both countries from taking any action that may endanger it.

Q. Are you calling on Argentina to delay any request to have a final vote on the-invoking the Treaty of Rio? Should we not delay that then until its process runs?

The President. I think that that would be advantageous, yes.

Senate Republican Campaign Committee

Q. Mr. President, are you going to discipline Senator Bob Packwood? Are you going to let Republicans contribute the money for the Republican Senators' campaigns under his leadership?

The President. I have never suggested that our party members should stop giving to that fund. I think that fund is an essential if we're going to maintain our lead in the Senate and have a majority in the Senate. And I'm not punishing or disciplining anyone. I want the contributions made to that committee.

1983 Federal Budget

Q. Sir, if Speaker O'Neill refuses to meet with you and a compromise is not forthcoming, would you be willing to submit your budget package as it stands before the House for a straight up-or-down vote?

The President. Well, it could come to that if they refuse to cooperate on the other side. But I think that the best answer that we could give today that would reinstill confidence in the people and in the money market would be to come with a balanced program that both sides could subscribe to. And that's why, as I've indicated when I said "go the last mile," that I am willing to meet on that basis because of the value that I think there would be in that.

I don't know that the Speaker is going to refuse to meet with me. He had not met yet with the Democratic representatives who have been a part of this discussion group, and he's meeting with them this afternoon. And, of course, I can always hold him to the clock. He told me once that after 6 o'clock we're friends, so I might just invite my friend over.

Q. You talked to him this morning, sir. Did you say that you might get together this week?

The President. No, because he had not yet met with his own people. So, I told him that I had met with the Republican leadership in here and those who had been a party to these discussions and-

Q. Mr. President, did you give the Republican leadership a timetable? Is it as crucial as Senator Laxalt says it is, that you move quickly?

The President. Well, the essence of time is because of the state of the economy right now and the interest rates staying up there. I think it's very encouraging that various private business groups are taking steps to lower interest rates—the announcement on the part of one of the automobile manufacturers that they're going to lower them for cars. I have been citing a gentleman in Indiana, a banker, who made money available for car loans at 4 percent—or 4 points below the present interest rates and now find out that another group in Ohio—a group of bankers—had done this back in March and had great increase in the sales of automobiles in both of those regions. That type of thing, I think, is indicating that

Q. Do you, sir, feel that Chase Manhattan Bank would go along with something like that just to get business?

The President. Well, let's see. When other banks have.

Situation in the Falkland Islands

Q. Mr. President, the British Government has indicated that the proposals Secretary Haig has brought back from Buenos Aires do not go far enough. Is Mr. Haig's effectiveness as a mediator at an end?

The President. No, it is not. He's done a magnificent job. And let me just lay one thing to rest now regarding some of the rumors that have gone on. This idea of whether or not we've endangered any prestige of ours in doing what we've done—I think we would have lost prestige if we had not been willing to undertake this job of trying to broker an agreement between these two parties and forestall violence. And however it may turn out, my only regret would be if it didn't work.

Q. Are you as hopeful now, sir, as you were a day ago?

The President. What?

Q. Are you as hopeful now as you were before Mr. Haig returned?

The President. It's very difficult. All I can tell you is, there have been some changes made; they've been relayed to the United Kingdom.

1983 Federal Budget

Q. Mr. President, back on the subject of the budget, do you plan this week, sir, to

Deputy Press Secretary Speakes. This will have to be the last question, John [John Palmer, NBC News], please.

Q. Excuse me?

Mr. Speakes. This will have to be the last question.

Q. Why?

Q. Why?

Q. Mr. President, do you plan to meet with Speaker O'Neill? Will you ask him this week for a meeting to try to wrap up this whole budget process?

The President. Well, I don't think that it's a case of one of us asking the other or not. I think—and there's no way to project whether it'll be this week. It's when that group that is meeting comes to both of us and says that they have a consensus on a package that they believe is balanced and merits now our taking a look at it from the standpoint of getting together.

Q. Senator Baker, sir, says now is the time.

The President. What?

Q. Senator Baker said today he felt now was that time.

The President. Well, I think that "now" was a kind of figure of speech thing meaning that now, in this immediate period, to break this logjam and get the economy moving again.

Ground Zero Movement; Soviet President Brezhnev

Q. Mr. President, do you think that Ground Zero is detrimental to this country, and are you going to meet with Brezhnev in October?

Mr. Speakes. I would never cut Ms. Thomas [Helen Thomas, United Press International] off.

Q. And she has a follow-up. [Laughter]

The President. Ground Zero

Q. And Brezhnev.

Q. And meeting with Brezhnev later, sir.

The President. I have to be heart and soul in sympathy with the people that are talking about the horrors of nuclear war and the fact that we should do everything we could to prevent such a war from happening. As a matter of fact, it's my understanding the leader of Ground Zero, however, does not believe in the freeze.

A freeze, yes, but after, as we've said so many times, a verifiable, substantial reduction to bring us down to parity and at a reduced number.

I would hope that some of these people, however, who are insisting on some of these things would realize that I'm with them as to the need to do something to lessen the possibilities of nuclear war. But I would also ask them to consider that no matter how sincere and well intentioned, only in this position do you have all the facts necessary to base decisions on action. And, therefore, I would ask their trust and confidence that feeling as sincerely as I do, the same as they feel, that they would allow us to take the actions that we think are necessary to lessen this threat.

Now, with regard to Mr. Brezhnev, I would still hope that he would come, because it is arms reduction that is being discussed at the United Nations in June. And I would hope that he would find it possible to be there and that we could have a meeting-but not in any sense that that would replace a later summit meeting, full summit meeting, in which there would be adequate preparation on both sides for such a meeting.

Q. For October?

The President. Well, whatever the time is. We'll just wait. So far all we know is what he said in the paper. And, you know, not speaking of the American press, but that foreign press—sometimes you have to worry about whether they can be depended on.

U.K.-Argentine Dispute

Q. Sir, if they start shooting in the South Atlantic, which side are we on? Do we have to choose sides at all—

Mr. Speakes. We've got to quit, Sam [Sam Donaldson, ABC News]. I'm sorry. or do we stay out of it?

The President. He's just

Q. I think he wants to answer.

Q. He wants to answer.

The President. Sam, you just think because you're standing right behind Helen that you can get in another question.

Q. She's taught me everything I know, sir.

The President. My keeper says I've got to go back in. Thank you.

Q. Whose side would we be on, sir? I mean, if worse comes to worse, do we have to takes sides, or can we stay out of it?

The President. No answer to that question now. That would be a terrible thing to say in the midst of all the delicate negotiations that are going on.

Q. I think that's the sound of concrete cracking around the surtax. [Laughter] And for us poor people that surtax is going to hurt. [Laughter]

The President. We'll make it up to you, Sam. [Laughter]