THE PRESIDENT. First of all, let me say that I am very grateful that you would all come to Washington and particularly get acquainted with Jody Powell and talk to the different members of our staff and Cabinet about matters that are important to you. I know that you've had a chance to talk to Dr. Schlesinger and will be meeting with different people here in the White House and in other parts of Washington this afternoon.
It's very important to our administration to have the people of the country know what we are trying to do, and also to have some accurate assessment here in the White House about how the people feel about different issues that are so important to them. And we've seen that journalistic leaders like yourselves has been the best avenue for this exchange of crucial information in a democratic society.
I've been in office now a little over 2 months, and we've had, I think, a beginning, at least, for some substantial changes in domestic and foreign policy; also in the relationship that exists between the White House and the people of our Nation, between the White House and the Congress.
We've made some progress on many of the projects that we've undertaken: Government reorganization; zero-based budgeting; energy policy evolution; reorganization of the Energy Department; an effort in the Eastern Mediterranean, Turkey, Cyprus, and Greece; reestablish relationships with Vietnam; opening communications up with Cuba; a new start on SALT negotiations; a strengthening of our NATO position militarily; a reemphasis on close consultation with our allies and historical friends. These kinds of things are well underway.
Secretary Vance will be coming by in just a few minutes to have a brief discussion before he leaves for the Soviet Union. He'll be reporting to our allies in Europe on the results of his trip. We have hope that it will be a successful trip. So far we've had good cooperation from the Soviet leaders in arranging the agenda. They've not put on any pre-conditions; they've left it completely open to us, and we to them. So, there is a good spirit, I think, that surrounds this trip.
The last point I'd like to mention before I answer questions is that in the field of foreign affairs, at least in the Middle East, we see the potential progress in 1977 as being uniquely hopeful. We have strong indications that the Arab leaders want to reach a substantial agreement. I think, compared to previous periods, they are very moderate in their general philosophy and in their attitude toward Israel at this point compared to their predecessors, possibly compared to their successors when that happens.
And I believe that our country is willing this year to devote a great deal of attention to that crucial problem, and I know I am, personally, and the Department of State and my own staff, as well.
Southern Africa--we've got three simultaneous questions: one in Namibia, one in Rhodesia and, ultimately, South Africa itself.
On the domestic scene, we've become involved in long-range analyses of how to deal with inflation and unemployment simultaneously. I hope that what I consider to be a modest stimulation package will go through the Congress substantially in its present form. And within the next couple of weeks, we will make a major presentation to the country, to the Congress on controlling inflation.
These matters are sometimes in conflict with one another, as you can well see, but we're trying to balance them properly. And I announced yesterday in a press conference something that's obvious: that the authority and the power and leadership capabilities of any President are derived almost completely from the support that I have from the people of the country.
And if there has been one--been a broad-based criticism of me so far, it's that I've told the people too much and have been too frank in discussing matters that in the past were both sensitive and secret. I don't have any qualms about what I've done. I think that I've taken the right position, and when I have made a statement, it's been very carefully considered. And I might say that we have a very close working relationship and almost complete compatibility between myself and Dr. Brzezinski and Secretary of State Vance, the Secretary of Defense, the Secretary of Treasury, the Council of Economic Advisers. And this has not always been the case in our Government in the past. So, we do have a close working relationship so far, and I think it's improving as time goes on.
I think now I'd like to answer your questions.
MIGRATION OF AMERICANS
Q. Mr. President, within the last few days you've been dealing with water. Many in the Southwest, as I am, are very concerned about that. There is a growing concern or question about whether you, as the head of the Government, are giving any thought to dealing with some of the rumblings about inhibiting or trying to slow down migration from the colder weather areas to the drier, warmer areas. And I'd like to have your comment on that.
THE PRESIDENT. No, I'm not trying to modify the movement of Americans from one part of our country to another. I don't think I could do it if I wanted to, and I have no inclination to do it, and I've never discussed this subject with any member of my staff either before or after inauguration.
Q. It's been suggested that may have to be done, though, to solve part of the water shortage problem.
THE PRESIDENT. I agree. Obviously, there are some matters that will have to be addressed in the future. I don't see any particular problem with that yet. Obviously, the expenditure of $1 billion to $2 billion to transport large quantities of water from one part of the Nation to another--the result of which might be massive recruitment of additional population concentrations--is something that is there. Whether it's advisable, I don't know.
My own general inclination is that people will go, you know, where they want to live, and I ought not to interfere with it. But for the taxpayers all over the country to make it possible for additional heavy concentrations of people to live in an area which can't naturally support a large population, is something that I doubt.
We've got about 328  water projects now approved for the Department of Interior, Bureau of Reclamation and the Corps of Engineers. We are reassessing the need for, I think, 31  of them. I'm trying to keep an open mind about them. The reassessment will be completed by April 15.
I have personal doubts about the need for any of those projects, but I'm not trying to draw a conclusion yet. And I might add that even if I do draw a conclusion that a project is not needed, that's no guarantee that the Congress will go along with me on terminating funds. But the effort that I've made in this area has not been designed to control population at all.
Q. To clarify, you're saying water importation is not practical at this point, at least in your view?
THE PRESIDENT. I don't think either practical or desirable.
FARM SUPPORT PROGRAMS
Q. Sir, in your farm program, why have loan levels and target prices not met the costs of production?
THE PRESIDENT. I think they have. The loan--the support price is not designed to meet the cost of production. The support price is designed to meet the international competition for the same commodity, so that we can move our goods, at the support price level, in international trade. And that applies to wheat, corn, soybeans; it also applies to cotton, to rice, and to other commodities.
The income support level has been very carefully analyzed by me and by Bob Bergland, by my own Council of Economic Advisers, and by the economists in the Department of Agriculture, working with agricultural economists in many of the universities around the country, the land grant colleges.
We believe that we have recommended to the Congress an income support level-which is different from price supports, now--that will meet production costs. We can't guarantee that the very inefficient farmer can produce a bushel of wheat as efficiently as one that has extremely rich land and unlimited supplies of water, and so forth. But on an average--and we've done it fairly conservatively, I think-we've come up with the accurate cost.
I'll just give you one example, in order to save time. Wheat: The economists have computed that the actual out-of-pocket costs for the production of a bushel of wheat is $2.20. We added on 17 cents a bushel for a management fee. That would include gasoline for pickup trucks, and so forth--17 cents a bushel.
We also took the value of land as best we could determine it on a nationwide basis and figured that 1 1/2 percent of the value of land would legitimately be included in the price of the cost of production of a bushel of wheat. And we came up with a total of $2.60.
I think that's adequate, that the higher level of price supports that have been advocated by some farm groups and some Members of Congress would be extremely expensive. We're talking about an annual cost, with the proposal that we put forth, of about--I can't remember the exact figures, about $1.1 billion. The more liberal allotment of farm price income supports would be like $3 1/2 billion to $4 billion a year in costs to the taxpayers of this country.
I have always said, in all my presentations to farm groups around the country, that I would never recommend, as President, a profit for farmers to be supported by the taxpayers and consumers of this country. I would advocate 'a program that would meet production costs only.
Now, I believe that we've got the accurate production costs. Bob Bergland can give you a more detail analysis, if you wish it--and you can write him and he'll give it to you--about how we got the $2.20 of actual out-of-pocket costs, the 17-cents-a-bushel management fee, and the 1 1/2 percent return on investment in land is really an arbitrary decision that we made.
I might say one other thing. I'm a farmer myself. I've lived with production costs, and I've lived with price supports all my life. When land values go up, there is a real doubt about whether those land value increases should be considered a cost to the farmer or an income to the farmer. And I think we were quite liberal in saying that the 1 1/2 percent of the land value as a cost to the farmer should be included in the formula.
I know that one of the things that have kept me going, and a lot of other farmers in tough times, has been the increase in the value of my land. If land values were going down, it would be very difficult for a person that had bought the land on credit or had owned it as an inheritance. But with land values going up, that's really kind of a help to the farmer and not a cost to the farmer.
But those are the factors that we used, and I think it's a fairly substantial program, and I think it's adequate, although it does not suit many of the farm leaders. I realize that.
INCOME TAX RETURNS
Q. Mr. President, in regards to your drive on the waste of paper in the Government, all the forms that have to be filled out, we're also reaching the time of the IRS period of April. Can something be done to simplify for the average individual the Internal Revenue form that they must fill out each year? They tried to revise it several years ago, and last year, and the one that came out this year is even more complicated for the average individual.
THE PRESIDENT. That's right. There is no way that I can modify the form for the 1976 income tax returns. That's already been fixed in the law and the form can't be modified. It is grossly complicated.
I can guarantee you that when you fill out your income tax form for 1977, it will be much simpler. There is no doubt about it. If I don't do that, I will have broken my word of honor. And I don't intend to break it.
Q. Yesterday, Mr. President, you surprised the small business community with a minimum wage package which was below the union projections. Number one, was there some philosophy behind that lower wage, and number two, were the union leaders aware of your feeling prior to the announcement?
THE PRESIDENT. The answer to the first question is yes. The answer to the second question is no. I'll tell you what the philosophy was. I think it's been a mistake historically for us to have the minimum wage level slowly drop over a period of years, compared to the cost of living. And then we've gotten way behind with those very low-income earners and then-they're the ones who suffer most--and then we've had a substantial increase in the minimum wage which brought them up to where they should be. But it's been quite a shock to the economic system, and it's also created a great deal of political confusion and animosity.
I favor the concept of indexing so that every year you have an automatic increase in the minimum wage depending upon manufacturers' average wages.
I went back to 1938 when the minimum wage was 40 cents. That's when I got my first job at the minimum wage, 40 cents an hour. Since 1938 the average minimum wage compared to the manufacturers' average wage has been almost exactly 50 percent.
It has varied from, I think, from 41 percent up to the high of 56 percent, but the average has been 50 percent.
So, what I decided, and I hope my position will prevail, is to move this July to establish a minimum wage permanently at 50 percent of the previous year's average manufacturers' wage. And so, that's the philosophy behind it.
I didn't consult with anyone outside of my own administration. I talked to my economic advisers. I talked to Ray Marshall, the Secretary of Labor, who wanted a higher level. I met yesterday morning, I think, with Congressman Dent, who wanted a much higher level. And I made my own decision. Now, whether that decision will prevail in the Congress, I can't say. I might add one other thing that was erroneously reported: that the Secretary--I mean that President Meany came over here yesterday afternoon and complained about it. He did not complain about it at all. He came over to talk to me about the inadvisability of permitting Communist trade unionists to come into our country without constraints.
But I've never tried to mislead anyone. And on the situs picketing bill, I had earlier announced, throughout my campaign, that I would not work for the situs picketing bill. I did not work for it or against it.
And on the minimum wage, I think it's a reasonable level, as is the case with the farm price supports. I think that in both instances they are fair, not overly inflationary, and they don't please people that are extremes on either side of the argument.
WATER RESOURCE PROJECTS
Q. Mr. President, would you care for a moment to get back to the water projects. You've expressed some personal doubt, I believe. Could you be more specific in that area? And, secondly, in the State of Utah, a lot of people feel that perhaps your drought relief is being a little bit inconsistent in terms of the money that's already been spent on a lot of these projects. Would you address yourself to these questions, sir?
THE PRESIDENT. Well, I really am not prepared to address individual projects, although I have had individual projects brought to my attention by some of the Members of Congress. [Laughter]
But I'd really rather keep an open mind. It's obvious that if I hadn't had doubts about these projects I would not personally have advocated their reassessment. But I don't really know all the factors involved. I intend to know them by April 15.
But we want to have public hearings around the country, let Members of Congress, Members of the Senate, Chambers of Commerce, newspaper--news media representatives and environmentalists and farmers and others come and testify. I'll study that testimony, a lot of it personally, and then make my own decisions about a permanent commitment for or against those projects. I'm fairly determined about the projects.
If I should recommend that a project be terminated, and if I should not prevail this year, I then would pursue that effort next year. I can't hope to prevail in every instance, but I would rather not comment on an individual project now.
Q. Mr. President, if I may, I'd just like to thank you for allowing weekly publishers to come in and participate in this administration. This is a new day as far as weekly publishers are concerned. We want to thank you.
The last 2 months of my observation is that you have a philosophy of equitable treatment, and I think you would be commended for that. However, we have grave concerns over the Office of Minority Business Enterprises.
THE PRESIDENT. Yes, so do I.
We have grave concerns over the relevancy of that particular office. Those countless numbers of blacks who are attempting to go in business seem designed for failure. There are, I think, two laws, Executive Order 11246 and, I think, 11245. How do you envision handling that? I mean, what can we expect? If you do as you have done during the last 2 months, we will fare well, but we'd like to get some sense of your guidance in this.
THE PRESIDENT. Well, I have personal experience with that. I went home from the Navy way back before a lot of you were born, in 1953. I didn't have any money. I didn't have any business training. I was a professional naval officer and a nuclear physicist. I lived in the Government housing project. The rent was $31 a month. And I didn't make enough money in my first year to pay my house rent. I sold fertilizer on credit. And we had a terrible drought, the worst one we've ever had in Georgia--it was 1954. And then the following year, my wife went to work full-time with me keeping books. The third year I hired one employee. And I soon saw that my own remarkable talents weren't matched with the financial resources I had to expand, so I went to the Small Business Administration. They gave me a loan.
But by then I had built up a fairly substantial place in the community. I inherited a lot of substantiality from my father. And I think because of that, the Small Business Administration didn't just give me enough money to go broke--which they quite often do with people--they gave me a loan, and they assigned a very distinguished retired businessman from Atlanta who helped to start the Genuine Parts Company. He would come down to Plains and look over Carters Warehouse, which is my little business, and he would give me advice on accounts receivable, whether Or not I had parts of my .business that were wasteful, whether I was spending too much money on overhead, and then he would go back to Atlanta.
And I would consider what he recommended and try to put it into effect. About 3 months, and then he'd come back down to Plains--he'd let me know ahead of time--and just as a nonpaid adviser to me, he gave me a great deal of help. It was a voluntary thing on his part. He didn't even get any pay at all for it.
The minority business enterprise part of the small business needs to be rejuvenated. And, I think, we need to carefully assess the capabilities of the entrepreneur, both minority and otherwise. And when the Small Business Administration makes a loan, I think we ought to expand the volunteer counselor part of it so that every small business person, whether he's in the peanut warehouse business, like I was, or whether he's opened a service station or a laundry, ought to have somebody to come in there and kind of work with him like a big brother in business.
I believe this would help a lot to make sure that those loans are repaid. And I think it would make the local bank participation much more clearly assured. And we have a lot of retired business people who are looking for something to do that's worthwhile and interesting.
So, that's part of it. The other part is the quality of people that administer the program. And I'll make sure that when the decision is made on the administrator of that program, it's someone that you can trust to do a good job for the small business people.
FEDERAL ENERGY PROGRAMS
Q. Mr. President, on energy, you have made some proposals for a new Federal energy agency. I understand in April you're going to make some more. Those are long-term proposals.
Two questions: What about people who, in the natural gas crisis that hit the Northeast a few months ago, are paying two, three hundred dollars a month when they were paying $100? What help can they expect, if any, now, for this year? And if we have a cold weather winter next year as we did this time, as has been predicted, will we be prepared, or will we go through the same natural gas crisis again?
THE PRESIDENT. I can't guarantee that we'll be prepared next year because of several reasons. One, it takes a long time to change historical habits and trends and laws. Secondly, I don't know how the Congress is going to respond to my proposals on April 20. Third, I don't know whether or not the Congress will move expeditiously in setting up a new department of energy so that there can be some cohesion in the evolution and the consummation of energy policy. Fourth, I don't have any way to anticipate the severity of the winter next year. If it's very mild, we can handle it.
Fifth, we have had in the last number of years in natural gas and in oil production about a 6-percent reduction per year in domestic supplies. And my guess is that no matter what we do, that downward trend is going to continue. We're just running out of oil and natural gas.
Another point is I'm going to move as aggressively as I can to force industrial users away from natural gas toward more plentiful supplies of fuel; I'd say primarily coal for stationary heat generation.
Natural gas, as you know, in some form--some factories, is used as a raw material and also as the only available heat source because of the need for clean burning characteristics and so forth. So, I can't answer your question about that.
We had hopes that are not now going to be realized that we could put into effect the Government reorganization on establishing the department of energy before it was confused with an energy policy. But the Congress leaders, particularly the Republican leaders, have said they want to look at my energy policy before they'll go along with the establishment of a new department.
I think we can probably prevail in both instances if our proposals are good ones. And if I can convince the American people back in your communities that they're good, that's the best way to convince the Congress that they're good.
Q. Will there be short-term as well as long-term proposals in those policies?
THE PRESIDENT. Yes. We hope to initiate immediately a consciousness in America of the need for conservation. We hope to initiate changes in the law that will force conservation. We need to shift toward more plentiful supplies of energy as rapidly as possible and all these matters I hope would have not only immediate but long-term effect.
I'm personally not in favor of a very expensive, crash program to extract from our own resources additional rates of production of natural gas and oil. I think probably one of the best investments we can make is to keep oil and gas in the ground and quit wasting what is produced.
So, we're putting together now what I'm sure you can see clearly is one of the most complicated proposals that's ever been devised in our country, because it involves both incentives, patriotic motivations, mandatory constraints, shifts of vast sums of potential profit, or consumer costs back and forth.
It involves every level of government. There is not a single person in this Nation that doesn't use energy as a crucial element of necessities of life.
It involves the most unforeseeable kinds of research and development, short-term and long-term. So we're going to do the best we can. And I'm sure that when we come up with a policy which I will reveal to the joint session of Congress on April 20, it'll be modified in the future. It's not going to be the final policy that will never be changed. It'll obviously be changed for the next hundred years. But I think it's going to 'be a good one. I've got the best man in the United States to do it; that's Dr. James Schlesinger. And I feel confident about him.
Q. Dr. Schlesinger told us this morning that one of the toughest problems in the new proposals, the new plan, will be the regional political differences. Are you planning to take a personal and strong position in doing something about that?
THE PRESIDENT. Yes, I do. The only thing I see that can be done is to put together the entire package, no single component of which might be attractive to a group, but if they see that in its entirety it's fair and that the sacrifice that that group might have to make is not out of proportion to the sacrifice that other people might have to make, in that way I think we can sell it.
If I came up with any single part of a comprehensive energy policy, even though it might have every good merit, I couldn't put it across by itself. Regional differences are very significant. The differences between consumer and producing States is inherently one of conflict and difference.
I come from a consumer State. Georgia doesn't produce any significant quantities of energy--nothing but a little hydroelectric power. But now we've been very aggressive in trying to find oil off the coast. We have 600,000 acres of precious marshland that belong to all the citizens of Georgia. But we've already worked out with environmentalists, with the oil companies, with local and State officials and so forth, five different places along the coast of North and South Carolina and Georgia where we would like to bring oil ashore. We've already identified, with the approval of environmentalists and everybody else, five sites where oil refineries would be welcomed if oil is discovered. And we're trying to make plans accordingly.
Other States up here, like New Jersey, Maryland, and so forth, have said we don't want any oil explorations off our coast and, if it's discovered, we don't want to bring it ashore and refine it. Well, that's not a good attitude. So there is going to be some give-and-take on both sides.
Q. How about a crash program to develop solar energy?
THE PRESIDENT. That's something that we are pursuing. Dr. Schlesinger may have told you, but yesterday we announced that the Center for the Solar Energy Research Institute will be in Colorado.
This is a recommendation that was made by a group of scientists, I think, in a completely nonpolitical way. And we will be establishing two or three or four regional centers around the country for the actual additional solar research.
The only one that we know about the location of will be in the New England area. The reason for that is access to the ocean to determine temperature gradients and so forth, the access to the very large tidal movements in the Maine area, and the high concentration of existing knowledge and research capability in Harvard, MIT, and so forth, the area around Boston.
But we expect to have some other regional centers in the future. And I think that the percentage increases at least in solar energy research will be the most dramatic of all. We're going to cut back drastically on the concentration involving the breeder reactor and a plutonium society.
Q. As you were saying, there is a good chance we will have a winter energy crisis next year, too. Now what about bills and people who are still paying off this year's bills, fuel bills. Is there any provision for helping people meet these bills, for the very poor people in the Northeast, the lower middle class who are not on welfare, who are going to have trouble meeting their bills?
THE PRESIDENT. Yes, that's a question you asked me that I forgot to answer. I don't know how to answer that. The Congress has put forward a proposal, I think, of about $223 million attached to the countercyclical aid program that would let money go to help those very poor families pay their fuel bills.
We feel that the $50 tax refund will be a significant aid to families. And when and if it's forthcoming--about May--for the family in the $10,000 bracket, this is about a 30-percent reduction in their 1976 income tax returns. And for those low-income families, that much of a cash refund is a very significant amount. For a person with an income level equivalent to a newspaper editor's and so forth it's insignificant. [Laughter]
And I would guess that the winter that we've just experienced would not come along again in the next 100 years. In the 177 years that we've kept records, we've never had a winter that severe.
So, I think that's an extraordinary case, and I think we'll be much better prepared for it next year than we were. But I just can't guarantee that it still won't be a problem. I might say that there are so many things involved I can't go into detail. But mandatory insulation of homes and working through power companies to help pay for rapid insulation of homes is a very significant thing.
I'll just give you one quick example. The TVA program which used to be a very valuable demonstration project for progress and innovation has become dormant and just another power company in my opinion in the last 15 years or so. We expect to use the TVA again as a massive demonstration project. They are contemplating now, for instance, peak load payments where they put a little red light in everybody's kitchen. They have about 14,000 homes this way. That red light comes on when peak load is high. And if the housewife wants to wash--well, I guess the husband--wants to wash dishes-[laughter]--or wash clothes when that red light is on, it costs them a lot of extra money because the rate is higher. And if they'll use electricity when the red light is not on, then it doesn't cost them as much.
Another thing that they're trying to do is to pay for--TVA will pay for the blowing of insulation in attics and so forth to make sure that the house is more efficient. And then they charge for the electricity at the same monthly rate that existed last year. And the cost of the insulation is paid off by the difference between what electricity you used last year compared to what you save this year.
I hope you follow me. But that's the kind of thing that will be done. There are a lot of little tricks that you can use, some of them are voluntary, some of them are mandatory.
Q. If you take a look at the magnitude of the energy problem facing the United States now and in the near future and compare that with the--emerging the attributes of your energy program, the so-called sacrifices that are going to be made--are you concerned that there is quite a large gap between what's going to be proposed and what needs to be done?
For example, there is very little indication of much assault on the sprawling suburban lifestyle, on the commitment to individual mobility. Are you going to try to get at these kinds of factors?
THE PRESIDENT. Yes.
Q. And how?
THE PRESIDENT. Well, I can't answer your question on how yet. For instance, agriculture and transportation, that you've just described, are two aspects of the energy-use cycle that are very, very wasteful. And they will be part of the component parts.
Obviously, we can't fill in every detail, you know, in a brief period of time we've had to work on it. I promised when I was inaugurated that we'd have our report to the public in 90 days--3 months.
I was inaugurated on the 20th of January. We'll have the report the 20th of April. But we'll be continuing in the next 4 years to embellish upon and to implement the proposals that will be described on the 20th of April.
But I don't know how to answer your question better. We now waste as much energy that we can save as the total amount of oil imports that come into our country.
And through business and government and private homes, transportation, farming, we can save enormous quantities of fuel for the same level of the quality of life that exists say in West Germany and Sweden, and other European countries, Japan.
We use about twice as much energy per person. So, we have a tremendous means to implement a good energy program just because we've been so wasteful in the past, but the detail of how we could realize substantial improvements yet remains to be seen.
Q. Thank you, sir.
THE PRESIDENT. Thank you very much. I've enjoyed it. I hope you have a good stay here.