The President's News Conference

NATIONAL GOALS

THE PRESIDENT. My fellow citizens and men and women of the press:

Ten days ago, I spoke to you about my deep concern for the future of our country—about a crisis of the American spirit, which I know to be just as real as the problems that face us on energy or inflation or any other problem of a material nature. But I also know that we can overcome these crises by uniting in a common purpose as we have done so often in the past when our Nation faces a serious challenge. The opportunity which we now have is to seize control of our energy future—to work together to overcome our dangerous overdependence on foreign oil.

Millions of Americans have responded positively to what I said—because they know that I'm telling the truth.

We have lost confidence in our government, and we have lost confidence in many other institutions—all of us know that. But we also know that we can overcome the pessimism, and with patriotism and with hard work, we can move forward together as Americans.

In these 10 days since I addressed the Nation, I have moved swiftly—I do not believe too swiftly—to create a better administration team to work with me, a team that will be unified, a team that will be filled with confidence, a team that will be in good fighting shape to face the problems together.

And during this same period, I have proposed to the Congress a bold program to harness American ingenuity and to harness American strength to lay a groundwork for American energy security. This massive effort will cost a great deal of money, funds that can only come from a windfall profits tax on the oil companies, a tax on profits which the oil companies have not earned.

The American people overwhelmingly support such a tax, a message clearly demonstrated by the action already taken by the House of Representatives of our U.S. Congress, which has passed a bill which will finance the energy proposal that I have made and still leave plenty of new funds, additional funds, for the oil companies to proceed with exploration and production of new oil and new gas within our own country.

Now it is the turn of the United States Senate to act, and there will be a massive struggle to gut the windfall profits tax bill. If this happens, then we cannot reach our energy goals.

I want to serve notice tonight that I will do everything in my power as President to see that the windfall profits tax is passed, because I consider it to be crucial to our Nation's future.

I need your help. I need the help of the people of America. This is a democracy. Your voice can be heard. Your voice must be heard. Those of you who believe in the future of our country, those of you who believe that our energy program must be passed, please speak to the Congress of the United States and especially to the United States Senate, which still has the responsibility to act.

Based on this windfall profits tax on the oil companies, we will have the resources to meet the energy challenge which we must face together in the future. And we will have taken a major step toward uniting our country in the effort to restore our spirit, the spirit of America, and our confidence, our confidence as people in the future of our great country.

Thank you very much. And now I'd like to answer questions.

Mr. Cormier [Frank Cormier, Associated Press].

QUESTIONS

FEDERAL BUDGET

Q. Mr. President, Republicans in the House are talking about introducing what they call a budget of hope, as contrasted to what they call your budget of despair. And their budget of hope, so-called, they say is going to be roomy enough to accommodate a very large election year tax cut for all of us. Now, that might be pretty hard to vote against in an election year. I wonder what you think about it.

THE PRESIDENT. I believe the Congress and the American people have enough judgment to know that you can't get something for nothing, that there is no free lunch involved. This is not a time for wastefulness. It's not a time to destroy our budget. It's not a time to avoid the responsibilities that we all have to make some sacrifice based on a belief and a confidence in the future of our Nation.

I think we will be restoring hope if we pass a program which, by the way, the House has already passed, with the support of some Republicans, with the opposition of others. But I think that the bold proposals that we have made do have the confidence of the American people, do have the support of the American people, and my prediction is that before the Congress adjourns in 1979, we will have this program passed with or without the support of the Republicans in the House.

CABINET CHANGES; 1980 PRESIDENTIAL

CAMPAIGN

Q. Mr. President, was it worth it to you to cause some destabilization of the dollar and demoralization of the Federal Government, spreading doubt through the land, in order to repudiate much of your Cabinet? And do you agree with Senator Jackson that your problems will force you to .forgo any reelection plans and hand the Democratic nomination to Senator Kennedy?

THE PRESIDENT. Well, let me answer the first question first.

I felt, and still feel, that I had to make some changes in my Cabinet, as I said earlier, to create a new team to work with me, a team that will be united, that will be forceful and aggressive and confident in facing the problems that we must meet in the months ahead. I have no apology to make for it. Some people thought it was made too rapidly. I had the choice of either dragging it out week after week after week, with speculation and doubt and confusion, or getting it over, in effect, in 48 hours. And I felt that the abrupt action, based on a long and careful consideration, was the best approach.

Senator Jackson. Three or four years ago I was running for President against Senator Jackson. At that time he predicted that he would be the next President, beginning in 1977. His judgment was not very good then.

And now I'm ready for the next question. [Laughter]

PRESIDENT'S HEALTH; SECRETARY OF ENERGY

Q. Sir, could you please tell me about your pick of Mr. Duncan as the new Energy Secretary?

THE PRESIDENT. Yes.

Q. That's the second in a line of Energy Secretaries from the Defense Department. Is this a signal to the American people that the White House is going to be taking control of energy decisions, sir, and that in fact the Energy Department is going to be taking a second place? And also, sir, there has been some concern on your health in the recent months? Could you please comment on that, please?

THE PRESIDENT. I feel perfectly healthy.

The President is the one who makes the basic decisions on policy of the administration, whether it be in health, education, welfare, transportation, housing, energy, defense, foreign affairs. The President, I and all my predecessors seek—all of us seek the widest possible area of consultation and advice, because we desperately want to make the right decisions for our country. That's my motivation.

Jim Schlesinger, the present Secretary of Energy, has done an excellent job in putting together a new department under the most difficult circumstances and putting through Congress the major parts of an energy program that he and I shaped along with the help of many others early in 1977, more than 2 years ago. About 65 percent of that package was passed in November of 1978. At that time, Secretary Schlesinger asked that he be permitted to step down. I asked him to stay on, to help me during this session of the Congress. In February he asked again that he be permitted to step down. Since we had not passed any legislation at that time, because of the efforts of the oil lobby concerning oil, I wanted Jim Schlesinger to stay and help me evolve and present to the Congress the program that I have just outlined to the American people.

Now I've decided to let Jim Schlesinger step down as Secretary of Energy. The change will be made in an orderly fashion. The transition will be done methodically and properly, as soon as Charles Duncan is confirmed.

Charles Duncan is an outstanding manager. He has done an absolutely superb job as [Deputy] ¹ Secretary of Defense. I consider him to be qualified to be Secretary of any department in the Government, including that of Defense. I asked him to take the Energy Department, because I think at this point it does need to begin to implement the programs that Congress has already passed and will be passing this year. He's a tough, competent manager. In addition to doing a good job in Defense, he's also had a superb career, educational background, and experience in the management of some of the largest responsibilities in the free enterprise system of our country. I have no doubt that he will do an equally good job as Secretary of Energy.

¹ Printed in the transcript.

HAMILTON JORDAN

Q. Mr. President, sir, what qualifications does Hamilton Jordan have, aside from the loyalty to you, to be chief of staff in the White House, and to what extent will he be making decisions at a level below your level?

THE PRESIDENT. This event, my designation of Hamilton Jordan as chief of staff, has been one of the most grossly distorted of my career in politics. Hamilton Jordan will be chief of staff—chief of the White House staff. Because of Hamilton's knowledge of me, his closeness to me, his superb leadership capabilities, the trust that other people in the White House have in him repeatedly since I've been President, the other top members of my staff have asked me to let Hamilton be chief of staff. Had he been willing earlier, he would have already been chief of staff, like a year or a year and a half ago.

Recently I asked Hamilton again to take over the job of chief of staff. He's agreed to do it. He has my full support, he has the full support of all others who work in the White House with us. He will not be the chief of the Cabinet; I will be chief of the Cabinet. He will not be the chief of the Congress; the Congress is an independent body. We'll have the same relationship with the Congress, with the same people that we have all the time.

Hamilton Jordan will be chief of-the White House staff. That's his responsibility, assigned by me. That's the job he will fulfill, and I have absolutely no doubt, based on his past experience and my knowledge of him, that he will do a superb job.

RELATIONS WITH THE NEWS MEDIA

Q. Mr. President, you were reported to have told some of those whom you saw at Camp David about reservations that you had about the Washington press corps. It was reported that you have expressed those reservations, to use a mild word, even more strongly to the Cabinet last Tuesday. Tonight you appear, tonight, before the Washington press corps and others. You are reported to have said you wanted to speak more to the press outside Washington.

To put the question simply: What bugs you about the Washington press corps? [Laughter]

THE PRESIDENT. I'm sure that if I said that the Washington press corps was a group of superbly qualified, highly objective, extremely intelligent analysts of the American news scene, that all of you would agree completely— [laughter] —if I said it.

I have nothing against the White House press corps nor the Washington press. My own judgment is that for the first 2 1/2 years, when I felt it was extremely important for me in effect to get acquainted with the American people, to get acquainted with the Washington scene, that I have had, I think, between 50 and 60 press conferences exclusively with the White House press corps. Now I will continue to have interviews with the White House press corps, as we are doing tonight, but not twice a month.

In lieu of that, and I don't think with any reflection on the White House press corps, my decision is now to go to different places around the country. I'll be going to Louisville, Kentucky, area next week. And then sometimes to Miami and Bangor, Maine, and San Francisco, and perhaps Des Moines, Iowa, to have press conferences there and to answer questions both from professional members of the press and also from American people in a townhall meeting format. The Washington press corps will accompany me, the White House press corps, and I will answer questions from you, too.

But I think it's better for me not to have all the questions focused on me by a group that's almost exclusively oriented within Washington as a prime place of their residence and interest, and I would like to let my voice be heard and felt and the questions be heard by me and felt from various places in the country.

1980 PRESIDENTIAL CAMPAIGN

Q. Mr. President, if I may follow through on part of the thrust of Helen's [Helen Thomas, United Press International] earlier question; as you know, there have been suggestions that in order to restore the confidence that you have talked about in the country, and in order to restore confidence in the Presidency, that perhaps you might consider withdrawing yourself from politics next year, turning your attention primarily to governing the Nation. Now, although recent suggestions come from a Republican Member of the Senate—you have in recent months advocated the concept of a one-term, 6-year Presidency. I wonder if you might have considered not entering the 1980 campaign.

THE PRESIDENT. I think it's a compliment to me that Republican leaders are advocating that I not run again. I have considered all the options, and my decision will be announced later on this year.

VALUE OF THE DOLLAR

Q. Mr.. President, are you planning to install any foreign exchange controls or capital controls in order to protect the decline of the dollar, and are you planning any further appointments from the corporate section?

THE PRESIDENT. I do not contemplate taking action of that kind. I think the dollar is sound. In the long run, the principles which will decide the value of the dollar are determined by bow effective we are in dealing with the energy question, how effective we are in dealing with the inflation question, how much we act to resolve the adverse balance of payments, how we deal with the Federal budget deficit, and so forth. The basic underlying economic factors will be what causes the value of the dollar, not some contrived action that I might take to interfere with the normal operation of the international monetary scene.

I have just announced today that I'm appointing Paul Volcker, a highly qualified person, internationally respected as a knowledgeable man on monetary systems, on whom I can depend. There's no doubt that he will work harmoniously with me, with Bill Miller, who will be the new Secretary of the Treasury. And I believe that this new team will be very effective.

I would like to reserve the right to make future appointments from the corporate world or the academic world or the journalistic world or from among mayors and Governors or Members of the Congress. But I can't exclude the corporate sector. But I can't say now where I'll make future appointments from.

Yes. sir. In the back row.

NICARAGUA

Q. Mr. President, I wonder, in looking at Nicaragua, if we are in danger of another Cuba there, and what the White House plans to do in terms of taking some positive steps to assure their safety?

THE PRESIDENT. It's a mistake for Americans to assume or to claim that every time an evolutionary change takes place, or even an abrupt change takes place in this hemisphere, that somehow it's the result of secret, massive Cuban intervention. The fact in Nicaragua is that the incumbent government, the Somoza regime, lost the confidence of the Nicaraguan people. There was a broad range of forces assembled to replace Somoza and his regime as the head of the Nicaraguan Government.

We worked as closely as we could without intervening in the internal affairs of Nicaragua with the neighboring countries and with the so-called Andean Group in the northern part of South America to bring about an orderly transition. Our effort was to let the people of Nicaragua ultimately make a decision on who should be their leader, what form of government they should have. We also wanted to minimize bloodshed and to restore stability. That is presently being done. We have a good relationship with the new government. We hope to improve it. We are providing some minimum humanitarian aid for the people of Nicaragua, who've suffered so much.

I think that our posture in Nicaragua is a proper one. I do not attribute at all the change in Nicaragua to Cuba. I think the people of Nicaragua have got enough judgment to make their own decisions, and we will use our efforts in a proper fashion without interventionism, to let the Nicaraguans let their voice be heard in shaping their own affairs.

CHANGES IN THE CABINET

Q. Mr. President, I would like to follow up on the earlier question about Hamilton Jordan.

THE PRESIDENT. Good.

Q. Some of your fellow Democrats on Capitol Hill feel you've misdiagnosed your biggest problem—leading effectively. They claim it lies largely in the senior White House staff, and that the Cabinet shakeup won't cure it. Have any congressional Democrats made that criticism to you directly, and how would you respond to it?

THE PRESIDENT. No, they have not. A few have said that in the heat of the publicity focused on the changes that took place over a 2- or 3-day period-and that is expectable—to be expected.

I did not make the rapid changes in my Cabinet without, obviously, some sense that there would be a disturbance in Washington, in the Congress, and otherwise. But I have no doubt that the changes I made are in the best interests of me as President, in the best interests of my administration, which is trying to serve the American people in the finest fashion, and also in the best interests of our country, whom we all serve.

I have had many congratulations given to me by Members of the Congress, and I might say that some of those changes that I did make were long advocated by Members of the Congress.

So, I don't have any hesitancy at all to say that the changes I made were the best, and I don't have any hesitancy to say that I think it was better to go ahead and get it done in about 2 days, rather than to drag it out over a period of weeks or months.

THE NATION'S ECONOMY

Q. Mr. President, with the country apparently headed into a recession, and with unemployment expected to go up, what new ideas do you have, sir, to deal with the worsening economy?

THE PRESIDENT. I think this is a time for stability. I think it's a time for the continuation of our present economic monetary and budgetary policies. While I was at Camp David, I invited a fairly large group of Members of the Congress-Democrats, Republicans, from the House and the Senate—to consult with me. And there was almost unanimity there, surprisingly so, that we ought to maintain our commitment, that inflation is the biggest single threat to the American people, both rich and poor, and to the future of our Nation's economy in the months ahead.

There will be a period of slow growth in our country. I believe that next year we'll see this growth restored to a moderate rate. We will watch this situation very closely. Obviously inflation is not the only factor. I am deeply concerned about the chronic unemployment in some of the types of people in our country. We've done the best we could to reduce unemployment. We've had remarkable success in creating 8 million new jobs. I saw some figures the other day that said the unemployment compensation had been slashed 55 percent. But we're going to watch unemployment.

But my judgment now is to maintain our steady course and to dwell as best I can on a balanced growth in the economy as best we can manage, but let us remember that inflation is the biggest threat to all Americans at this time.

WINDFALL PROFITS TAX

Q. Mr. President, related to your earlier statement about energy, there's talk in the Senate about exemptions of the first 3,000 barrels of oil produced daily by independent oilmen from the windfall profits tax. How would this or a plowback provision or other exemptions affect your energy security corporation, the other parts of your bill, and how much room does the Senate have to tamper with the House-passed bill?

THE PRESIDENT. We need the revenues that would have been derived from my original windfall profits tax proposal to the House. The net income from the House-passed bill is roughly the same as I proposed. My proposal was a permanent tax; the House passed a tax that will be terminated in 1990.

There's a threat now that the oil lobby will focus its attention on the Senate. I think it's almost a sure thing. And unless the American people speak out, because of one reason or another claimed by some of the Members of the Senate, we'll see the windfall profits tax robbed under the proposals that you described of about $54 billion, which will make it impossible for us to have an adequate synthetic fuels program, to have an adequate mass transit program, to have an adequate care for the poor people who are severely impacted by rapidly rising energy costs. It would in effect make it impossible for us to meet our crucial energy goals.

And I think that I cannot prevail alone here in Washington with an oil lobby working quietly unless the American people let their voice be heard. But if these exemptions are made, it'll be a grant of $54 billion to the oil companies on top of greatly increased income to the oil companies by the phased decontrol, and they'll be able to spend these new revenues, which 'they have not earned, in order to increase production of oil and gas in our own country.

So, what you describe is a great threat to the very program that is so important to me and to the country.

PATRICIA ROBERTS HARRIS

Q. Mr. President, does Mrs. Harris have your full approval and encouragement to continue such HEW programs as the desegregation of the North Carolina college system, the desegregation of public schools in Chicago and other cities, and the antismoking campaign? And if the answer to that question is yes, why did you fire Secretary Califano?

THE PRESIDENT. The answer is yes.

I think the reasons for my replacement of the Cabinet are something that I don't care to discuss publicly. I have nothing but gratitude and admiration for the people that have served in my administration and left.

I expect Mrs. Harris to carry out the provisions of the laws of this country, to represent our Nation in the courts when suits are brought concerning equal opportunity in all its phases, and to be responsible for the health of Americans. And she will have my support just as the previous Secretary had.

I have no doubt that she will do an excellent job both in the administration of that very complicated bureaucracy-Health, Education, and Welfare—and I have no doubt that she has a basic commitment to the service of the constituent groups that are uniquely dependent upon government, particularly HEW. And I have no doubt that she will be a superb teamplayer, able to work with me, to work with the White House staff, to work with the Congress, and to work with other Cabinet members to carry out the policies of my administration, once those policies have been established by me.

VALUE OF THE DOLLAR

Q. Sir, you said earlier that you think that the U.S. dollar is sound. The dollar seems to be taking a pounding on the foreign exchange markets, and it's approaching the low levels that once before you had to launch a dramatic rescue program last November.

In addition to that, you've just named Paul Volcker, a conservative Republican, to head the Federal Reserve Board. How do the poundings that the dollar is undergoing on the exchange markets and your naming of Mr. Volcker square with your earlier description?

THE PRESIDENT. I see no incompatibility at all. Mr. Volcker, by the way, happens to be a Democrat. But he, I think, is a conservative in that he believes in controlling inflation and he believes in maintaining a sound dollar.

I can't guarantee what the exact value of the dollar might be in months ahead. We don't freeze the value of the dollar. That's determined by international monetary considerations. What I said was that the basic value of the dollar will be determined not by the identity of a President or even the identity of the Chairman of the Federal Reserve; it will be shaped by how effectively our Nation moves to meet the energy challenge. There is some present doubt that the Congress will pass the proposals that I have put forward. I have no doubt that the dollar will increase in value when the Congress has passed the programs that I proposed. And, obviously, the dollar will be adversely affected if inflation should increase.

My prediction is that inflation will decrease in the months ahead. And I'm sure that the dollar would be adversely affected if I abandoned my commitment to a responsible Federal budget and start on wild spending programs when they are not needed.

So, basic decisions made of fiscal soundness in our Government is a much more important factor in shaping the value of the dollar than is the identity of officials who might serve in a transient time.

STANDBY GASOLINE RATIONING PLAN

Q. Mr. President, the House of Representatives today amended a standby rationing plan bill to give either House the authority to veto any rationing plan that you would come up with. Now, is that acceptable to you, or if that survives in both Houses, would you veto the legislation?

THE PRESIDENT. This action today by the House illustrates once again the timidity of the Congress in dealing with a sensitive political issue. I criticized the House when they failed to pass the rationing plan a few months ago. The House leadership has now promised me that an adequate rationing standby plan would be passed.

I don't object to the one-House veto if it's done expeditiously. I think only 15 days would elapse. What I do object to are the other restraints that have been placed on the evolution of a standby gasoline rationing plan. Under the proposed plan, even before it got to the floor of the House today, for instance, we could have a 50-percent shortage of gasoline, which would almost devastate our Nation's economy, and unless that shortage lasted for 20 days, I could not implement a rationing plan.

So, I hope that the House and the Senate will rapidly pass an adequate standby rationing plan so that I can develop one, have it on the shelf, if we have a severe and sustained shortage of gasoline, assure that we have equitable distribution. And I have no objection to the House, within 2 weeks, either approving the plan that I have tried to put into being, or if either House wants to veto it, they can do that. But I need the authority to go ahead with a good plan and make sure that it can be implemented rapidly when and if it's needed.

MR. CORMIER. Thank you, Mr. President.

THE PRESIDENT. Thank you.