Remarks and a Question-and-Answer Session at the Annual Dinner of the Business Council

The President. What I want to do is just make a few remarks, and then respond to a few questions, and then get out of here so you all can eat. But first I want to salute the former Chief Justice -- I still refer to him as Chief -- Warren Burger, and the members of my Cabinet that are here -- many of you met them -- other top officials in the White House scattered through the audience here. All, I might add, doing a first-class job.

I want to pay my respects to the Speaker, who is here tonight, Tom Foley, an outstanding, decent human being. I don't know where he is, but I don't want to overdo it because tomorrow I've got to fight with him on one or two things, but he's here somewhere. And to the other Members of Congress -- the House -- I saw John Dingell, I saw my old friend Chairman Don Riegle here. I know I'm going to miss, so I better stop right here, but I'm delighted that the Members of the Congress are here.

I also know how I got into this line of work, and when I look around this room -- and I seldom speak for Barbara, but I will this time -- we are very, very grateful for the terrific support that I had from so many in this room that have given me this opportunity, now going into the second year being President of the United States. And I will never forget how the political process works, and I will never get over being grateful to many of you friends of long standing.

We're living, as Roger [Roger B. Smith, chairman of the Business Council] pointed out, in fascinating times. President Havel just left here, and I just wish that each and every one of you could have been a fly on the wall or standing at his side to see his feeling about our institutions or our country when he came to the White House yesterday, using the expression "pinching himself to believe that it was really happening." To see him when I took him up to Lincoln's Bedroom to show him the very room in which Abraham Lincoln had signed the Emancipation Proclamation -- it was a tremendously moving experience, and a privileged one, for me to witness this son of freedom, this playwright, who not long over a year ago was languishing in a prison and who is now the President of a free and, hopefully, democratic country. And it is mind-boggling, and I wish I could tell you that any of us in this room were smart enough to foresee the rapidity of change.

So, what I am trying to do, as your President, is to manage it in a prudent fashion to avoid moves that will inadvertently encourage some kind of a bad action out of the Soviet Union. We have a lot at stake in the success of perestroika. In this room we have some that pioneered doing business with the Soviet Union and were ahead -- a lot of us here -- in terms of understanding this new generation of Soviet leaders. But my view is, and I've said this in my public statements, we have a major stake in seeing perestroika succeed. And of course it has a major effect on the playwright, now President, that was here today. And it has the same kind of effect on a lot of other countries not only in Eastern Europe but in Western Europe.

I've elevated -- or moved a little bit in the comments I've made and mentioned Gorbachev by name a time or two. And we're doing that deliberately, not to try to intervene into the internal affairs of the political process of the Soviet Union but rather to express our belief in the way in which he himself has managed the rapidity of change. Who would have thought that they would have not only accepted but encouraged the peaceful evolution that we now see has taken place all through Eastern Europe?

Somebody says to me -- you know, when we get up into a big fight on trying to keep what I think are reasonable levels of defense, the big new question, the hot one they think they're going to really burn you with it in these press conferences is: Okay, who's the enemy? It's not a bad question. But the enemy is, in my view, complacency or arrogance or something of this nature. So, I will try to manage these fascinating times, changes, in a prudent fashion; but I will be encouraging the Congress to keep prudent levels of defense because it isn't all that clear as to what is exactly going to happen.

At the same time, we'll be working on an arms control agenda with the Soviet Union that I think will result in sound agreements on conventional forces. [Secretary of State] Jim Baker got a major breakthrough the other day on the chemical weapons, and I think we can do something there. And of course the START talks -- I see Cap [former Secretary of Defense Caspar W. Weinberger] here -- that he was instrumental in, now. I hope we can bring a deal to fruition on that before too long. And so, I'm looking forward to our visit with Gorbachev that will happen this spring or early summer. And I think we can have some real progress going with the Soviet Union.

On the domestic side, I would be remiss if I didn't start these few remarks by thanking so many of you in this room. I still talk about a Thousand Points of Light. And I think the American people are beginning to understand that this isn't an escape from the responsibility of the Federal Government; rather, that it is an attempt to enlist the noblest impulses of the American people in one helping another, the concept that you shouldn't measure a successful life without throwing in the equation of doing something for someone else.

And I look around this room, and I think of some of our priorities, one of them education, another the fight against drugs. And in this room, just sitting here, are people that, when they pool the resources -- and I'm not just talking about money; I'm talking about talent and mobilizing people -- can do more just in this room combined than the Federal Government can do, particularly in the field of education.

And I am grateful to those who are in the forefront of this educational reform. I have in my mind a set role for the Federal Government. I don't believe the Federal Government needs to take over the local school boards. I don't believe we should set curriculum. I don't believe that we need to intervene in a salary dispute for teachers -- God bless them because they do do a good job. But I do think that we have a proper role in joining with the Governors, as we did, in defining national education goals.

And several people in this room -- I won't embarrass them by singling them out -- have been extraordinarily helpful to me and to my team in the White House by making recommendations on the goals, recommendations that, for the most part, have been accepted by the Governors as we have set out national goals as to where we want to do the achievement levels, testing levels, excellence in math and science -- that certainly will render us more competitive in the years ahead.

And so, I will press forward on an educational agenda. We have got to keep pushing the Congress to think anew. Many want to stay with the old programs that have failed and plow more money into those, and I think we've come to a point where we really have to come up with, as I say, not only these goals but the implementation of them. And it will not be done by the Federal Government alone, although the total dollars on educational spending is up.

On the antinarcotics fight, it's a prime fight. And I am grateful for the fact that Bill Bennett [Director of National Drug Control Policy] is our drug czar. I've never understood why we refer to people here as czars, but nevertheless, he is doing a good job. And we went down to Cartagena the other day and met with the Andean Presidents and Barco of Colombia. And we could show them that we are beginning to make progress on the demand side of the narcotics problem. I think we disarmed Barco and Alan Garcia [President of Peru] and Paz Zamora [President of Bolivia] by saying right up front: "Look, we know we're a problem. We know we're the big market. But let me tell you what we're doing about it."

And I bragged on the work of Jim Burke [chairman of the Partnership for a Drug-Free America] and others in this room who are out front trying to -- in a private way, no government involvement -- making the American people and the kids, particularly, aware that this use of narcotics cannot be condoned. And once we got by the demand side, then we spelled out a rather broad agenda of working with those countries not only to abort but to interdict what was left of the supply of coca coming into this country.

But as I see many business people here that do business in that area, I remain convinced that the best answer to helping in Colombia and Peru and Bolivia is your end of the line: the business. And we've got to remove some of the regulatory burdens that we have. And it isn't easy because there are strong political influences for very legitimate reasons that are protecting, but we have got to have viable economies there that depend less on growing these insidious coca leaves. But again, the reason I want to mention that subject is because I think the business community has an enormously constructive role to play. And I am, once again, very grateful to you.

I'll mention just one more topic. There are many, many subjects. I see Don Riegle here, and I am very grateful to him for his leadership in the Senate on the savings and loan business. And all these things we can talk about briefly in a question period, but there is another area I want to mention, and that has to do with the environment. I am very pleased that the business community -- large business and small -- are in general support of our efforts to do something about clean air in this country. Today there was an attack leveled mainly against John Sununu [Chief of Staff to the President]. That suits me just fine, but they'll get around to me tomorrow. [Laughter] But the point I want to make is this: that there are no divisions in all of this. And I, obviously, must accept responsibility. But I believe that we are in a proper position.

I want to see market incentives, as much as we possibly can, in terms of cleaning up the environment. I do not want to throw people out of work, and yet I proudly proclaim that I am an environmentalist. And we've got a clean air bill that we've sent up, which is a first, and -- several of you had a very important input into this very important legislation. And now we find that it's being pulled one way or another by the congressional process. And some of it I might be able to accept. Nobody's going to cross the "t" exactly the way we want or dot the "i", but there's certain limits beyond which I should not go if I remain true to my belief that we have got to find a balance between economic growth and environmental protection. And yet I'm optimistic that we can do that. And we're in a big battle now, and I would ask either your indulgence or support, depending on how you come down on these questions.

But I think we have a pretty good package, and I am convinced that we can do a good job for the environment. But it cannot be driven by the extremes. And it will not be driven by the extremes as long as I have something to say about what legislation becomes law. So, we're working on these issues.

There's others that I will be glad to take questions on, but I'll make just a general comment. I'm glad that my wife, Barbara, is working for so many of you -- or put it the other way around, that you are working for her -- I'm not sure which. But you have been fantastic in terms of the support for literacy and for putting an emphasis where it belongs in terms of the children of the United States of America. And I know that Bar joins me in that sentiment, and I am very grateful for the support that she has received from so many in this room in her work on literacy, other facets of education, the homeless, and just plain caring about the American people.

So, there we are. Thank you very much for inviting me up here. And now, with no further ado, I will be glad to take a few questions until Roger gives me the hook and I will go peacefully. Who's got one?

German Reunification

Q. [Inaudible]

The President. Well, first place, there is concern about it, that you properly put your finger on. I think there is more concern in certain of the Western European countries and in Poland than perhaps in some other countries. The Soviets, obviously, have expressed their concern, mainly on the timing. They have now accepted the concept of reunification. What we are doing is to back [West German] Chancellor Kohl in the concept and let the Germans sort out the time. The longstanding NATO position, just for history, has been self-determination. Let the people decide, and then the border should not be changed without agreement of all the parties. But Kohl is talking about, and I think properly so, a Germany reunited but that remains a part of NATO.

And NATO will take on a broader role. It will have more of a political role; and that is, I think, a very stabilizing thing. I had a long talk with [Czechoslovakian President] Havel, who came here with an approach: Well, let's get all of the Soviet troops out and all the U.S. troops out, and life will be beautiful. Everything will be pruning hooks and plowshares. But I think I convinced him that the United States -- wanted by Western Europe and, indeed, by some of the countries in Eastern Europe -- is there as a stabilizing force. And my approach will be -- and Helmut Kohl is coming up this weekend to Camp David -- to support the concept, let the Germans make the determination. You may remember the formula two-plus-four: Let the two Germanys discuss it, and then we go to the Four Powers that have responsibilities under the post-World War II peace agreement -- their agreement there -- sort out the details.

But the way we see it is a Germany that is unified, a U.S. presence in Western Europe, no advance of what are known as allied troops into the GDR [German Democratic Republic], and a withdrawal of Soviet troops from places where they are not wanted. And that, I think, will take place regardless of what happens to Germany, just given the momentum and the feeling of these newly found democracies. And I think that will provide a rather stable environment.

Now, some of you do an awful lot of business in the Federal Republic, and you know that the German political scene is sometimes highly volatile. And we can't foresee what's going to happen with the Socialists in Germany; and when they align with the Socialist Party, SPD, in East Germany, you're going to have an equation that nobody can analyze. Are the East Germans Socialists -- are they going to join automatically with their brethren in the Federal Republic? Or are they going to say: Hey, wait a minute, we have no linkage there because we're the ones who now want to throw off the yoke of socialism in a classic sense.

So, I still think unification -- we're not going to do anything about it; nothing can be done about it -- a U.S. presence, forces in the Federal Republic but that do not move in any threatening way to the Soviet Union -- and I believe the Soviets have accepted this pretty much.

And then the other question is the Polish border. All of us know that could be highly contentious and emotional and inflammatory. But there I think we're going to see an agreement out of the two-plus-four -- the six -- that there will be no changes in that border certainly without the consensus and agreement of all the countries involved. And that would include in that instance the Soviet Union.

So, that's the way we're going, and I think it will result in stability. I hope it will. But we are not pressing the timetable. We're not pushing it, nor do I think it's the role of the United States to try to impede it. Gorbachev did that for awhile, and he felt something was moving awful fast. And that's why he said what he did to Kohl about 10 days ago in Germany -- which was, look, in principle, we understand reunification. I can tell you that a month and a half ago he didn't feel that way, because I talked to him directly about it, and they were urging a real cautionary approach to German reunification.

Education

Q. In the area of education, first, I think we all want to commend you for your leadership in this area. Do you have any suggestions which the private sector -- particularly the major companies of our country -- can do to give some help in this area?

The President. Yes, and there's a lot of great examples in this room. I will refer you to John Akers [chairman, International Business Machines Corp.] or David Kearns [chairman of the executive committee, Procter and Gamble Co.] or John Smale [chairman and chief executive officer of Xerox Corp.] or so many others because there are some marvelous examples of how a corporation can get involved in programs like mentoring. I understand that many companies have agreed to actually take a significant role in working with the localities and freeing up corporate personnel to go in and help on some of these programs. And I think that's an important area. But I think right in this room there are some marvelous examples of corporate involvement. And we have a program at the White House, an office, Thousand Points of Light -- a young man, a dedicated, idealistic guy named Gregg Petersmeyer [Deputy Assistant to the President and Director of the Office of National Service]. Some of you knew his dad when he was in the communications business. And Gregg, if you just get in touch with him, can send you the best of what small business and large are doing. And I think and hope it would be helpful. And maybe the council staff itself could be involved in disseminating some of that information.

Defense Spending

Q. [Inaudible]

The President. Well, I'm concerned about it. And they have some legitimate questions. We're up for two missiles, and that may be a difficult -- the Soviets having modernized a couple of really advanced type of missiles. And we're up for that. We're going forward with requests on the B - 2 and the SDI. And the question we get back is: Who's the enemy? And the answer I send back up there is: Well, let's be prudent and careful until we can see extraordinarily clearly where we're going. And I'm not suggesting that Ligachev [Soviet Politburo Member and Chairman of the Agrarian Policy Committee] will come in and you'll have a diametric, different approach or that Soviet military's going to take over.

But we just don't know, and therefore, we have to have prudent levels. And we may have to take some hits. We're way down from what the previously recommended levels were in defense spending. And I know very well that the constituency is being whittled away all the time. And we're rethinking the kind of force we need. But until, one, the international situation is clear, and until we have completed the review of the kind of force we need -- and General Powell [Chairman of the Joint Chiefs of Staff] is involved in that right now -- I will simply be urging that we not make imprudent cuts in defense.

But in the areas that I've mentioned it's going to be a hard hold for me. It's going to be difficult because people are looking at it that we have to choose between one missile, not two. Or you have to -- here's Don Atwood [Deputy Secretary of Defense]. The poor guy lives with this every single day. And I might say I'm glad one of your former members is willing to undertake, really, the sacrifice involved to come into a high level in this government. But we're under fire. He can talk to you later about the details of it. But I think there's a recognition that we don't want to do anything silly, and we don't want to make cuts that are too drastic.

Having said that, I think our troop level, CFE proposal has been well received. Our allies are saying: Please, until we get CFE done, let's have that as a floor, not some ceiling, and let's hold it. And I think we need to do that to keep our allies together on it. But that's a hard sell because people say: Hey, the Soviets are going to have to get out. Why don't we do more? So, there's another area that we're going to have some difficulty. But I want to see a CFE agreement brought to fruition and, hopefully, to be signed at a CSCE meeting this summer. I think we can do that, as a matter of fact.

But Soviets are making representations of declined spending on defense. And yet a big percentage of the GNP -- Bill Webster [Director of Central Intelligence] can give you a close number -- I think 17 percent, maybe more, going into defense. And you might say, Well, if everything [is] plowshares and pruning hooks, why are they doing this? So, my innate caution says, Let's have a sound defense program. But those areas I mentioned are the ones that are going to be the toughest to hold, I think.

And we got another question. And I see Don here. And I expect John Dingell would agree there is still a sentiment up there in the Congress that perhaps I would have indulged in if I were still a Member from the 7th District of Texas, and that is if you're going to close a base, that's great, but be sure to close it in somebody else's State or somebody else's congressional district. We've got in [Secretary of Defense] Dick Cheney and Don Atwood, people that have looked at this without any politics involved at all. Some say: Hey, that's a Democratic congressional district. And I say: Yes, and it's a Republican Governor in the State of California. So, come on with something else; don't give me that one. And so, what we're going to try to do is have a prudent approach to defense spending in this country as well. And it isn't easy, as Don knows, but we're going to keep with it and try to encourage the American people to support what we're doing there.

And then we need a lot of programs to help alleviate the suffering or the economic reversal that goes with the closing of a base. But if you look at some of the places, they have been closed, the record is pretty good on economic diversification. But that one is one where we'll be taking the offense. And I've been around here long enough to know that it's not going to be easy, but I'm determined to go forward with it.

China

Q. Just a minute on your thoughts about China, the direction they're going?

The President. Well, I'll have to confess to a certain discouragement. And I would point -- a turning point, as what happened to the Ceausescus [former Romanian first family] in Romania and what happened to that Romanian revolution. But as you know, I was in a different posture -- a fairly lonely one -- with the Congress in terms of whether the way to handle the students in this country was through legislation or through Presidential Executive order. I maintain to this day that the Executive order that I signed and put into effect did more than the legislation, the Pelosi bill, would have done.

But the students sent everybody Christmas cards. Three of the student groups -- the two biggest ones, ironically -- were supporting the President's position, and so were some of the biggest benevolent associations in China-America -- I'm thinking in the San Francisco, Steve -- and some of these groups gave me strong support. But the Chinese students, those that were most vociferous, were well-financed from someplace and did a very good job, saying the only way to guarantee their ability to stay in this country was through legislation.

And my view is, in dealing with China the way I did, I am not condoning tyranny. I am not doing as the Democratic leader said up there today: turning my back on human rights. What I am trying to do is preserve enough contact so the United States can have some influence. And it is my belief that the Fulbright program, the fledgling Peace Corps program is the way you approach bringing about change, and especially with China. And when Mr. Fairbank, a very distinguished Chinese scholar, said the worst way you deal with China -- they are different, and if you think the way to do it is to slap them publicly in the face, that's not the way to do it.

But I cannot tell you that I'm happy about it, David [Kearns], because since the Romanian thing, there has been less forward motion. There's been some. They lifted martial law, and then the liberal press jumped all over me, saying it didn't amount to anything. It did, in my view. They've done a few other things, but they're small. But I can't tell you that the results of trying to keep contact have been totally satisfactory, but I'm going to do it because I believe that we will be in a position to effect change in China by this kind of at least having some contact with them.

And the idea that China is exactly the same as these other countries -- I don't believe it. So, I'm on a little different wavelength with many, and yet I'm convinced that someday this policy will pay off. It hasn't. We want to see the release for Fang Lizhi, this dissident that's in the American Embassy. That has not taken place. They have lifted the ban on VOA [Voice of America] coming in there, but they're still jamming it.

So, there's a mixed review at this point. And yet I have a feeling that China works in more mysterious ways than other countries. And I don't know what internal struggles are going on right now, but I'll guarantee you there are some. And Deng Xiaoping [Chairman of the Central Military Commission] was out three times and bounced back four. And who knows what's going to happen to Zhao Ziyang [former General Secretary], who has not been stripped of all his party powers. He's still a member of the Communist Party there. And let's just see how it works. But I say, it's a little lonely.

Thank you all very much.