The President's News Conference in Austin, Texas

[Held with Gardner Ackley, Chairman, Council of Economic Advisers, and Joseph A. Califano, Jr., Special Assistant to the President]

THE PRESIDENT. [1.] Mr. Ackley came into the office a little after 9 o'clock, and I arrived a little before 9 o'clock.

We have been reviewing some of the Council's evaluations during the morning, and will be doing so during the day.

Mr. Califano brought some matters down to discuss with me and for me to act upon.

I will ask George Christian to prepare the necessary releases.

RELEASE OF COPPER FROM NATIONAL

STOCKPILE

[2.] I am authorizing the release of 150,000 tons of copper to be allocated solely to the defense and defense-supporting users. We will plan to distribute more of it in the early part of the year than in the latter part of the year.

The set-aside levels for the first and second quarters have been tentatively agreed upon.

The Attorney General has given me an opinion that I am acting on under the authority contained in section 5 of the Strategic and Critical Materials Stock Piling Act.

The release is based upon the recommendations of Mr. Ackley, as Chairman of the Council, Mr. McNamara, Mr. Katzenbach, Mr. Connor, Mr. Fowler, and Mr. Bryant of the Office of Emergency Planning.

The details will be made available to you. ¹

¹ See Item 636.

REPORT OF PRESIDENT'S COMMISSION ON THE

PATENT SYSTEM

[3.] I am today also releasing the report of the Presidential Commission on Patent Policy. It is a result of more than a year's study. The Commission was appointed on July 23, 1965.

I asked them to determine how well the patent system currently serves our national needs and international goals, and, secondly, to devise possible improvements and recommend any changes required to strengthen the entire system.

This has been a very fine and constructive commission. I am turning over their report to the Secretary of Commerce, the Acting Attorney General, and my Science Adviser, Dr. Hornig.

In releasing the report, I want to commend it to the attention of all interested Americans. I want to especially express my appreciation to the cochairmen, Dr. Harry Huntt Ransom, chancellor of the University of Texas, and Judge Simon H. Rifkind, of New York, and the other gentlemen who gave so generously of their time.

They are listed in the release that will be available to you. ²

² See Item 637.

QUESTIONS

[4.] I will be glad to take any questions that you may have to ask. Then Mr. Ackley and Mr. Califano will be glad to explain anything to you that you may want them to elaborate upon.

GOVERNMENT INCOME

[5.] Q. Mr. President, what is the Council's evaluation of Government income for this fiscal year?

THE PRESIDENT. The Council is following the gross national product figures and the figures that they report to me now are generally the figures that have been made available to you.

At this stage of the game, it looks like something in the neighborhood of $117 billion, but there are still 7 months yet to go.

We must say that that is speculative and a guess at the best. If it is up or down, as it will be, no one can guess on what 65 million workers are going to pay in 7 months ahead of the time that it is all in.

That seems to be the best prudent guess of the fiscal experts, which includes the Council.

NATIONAL INCOME BUDGET

[6.] Q. Mr. President, do you have any estimate on the deficit or surplus in the national income budget?

THE PRESIDENT. Yes. The economists give a great deal of attention to that budget, I think much more to that than they do to the administrative budget, because that determines how much comes out of the economic bloodstream and how much goes into it.

I think their present estimates are that this year it will be very close to a balance, perhaps a billion or two off.

Q. Sir, would that be a deficit or a surplus?

THE PRESIDENT. I say a balance. I would think if you are dealing with $140 billion-odd, you are getting into a pretty close range. I would say there has been a surplus up until now, but we would expect at the end of the year it would be reasonably close to balance.

RELEASE OF COPPER AND THE PRICE SITUATION

IN METALS

[7.] Q. Mr. President, this is probably covered in the release we will get, but is the release of this copper connected in any way with the price situation in metals?

THE PRESIDENT. No. We don't discuss price. We make available this copper. We want to keep these commodities that are extensively used in war products at as low a price as possible.

We regret there has been an increase in some of them. But due to the copper supply situation and due to the restraints that have been placed on certain production, and our inability to substantially increase our own production above what we have tried to get, they have felt that this was the wise and prudent thing because of the needs of the defense users.

DECISIONS ON BUDGET AND TAX INCREASE

[8.] Q. Mr. President, did Mr. Ackley bring you down any definitive figures that will help you make a decision on the budget, tax increase, et cetera?

THE PRESIDENT. Yes, but they all may change tomorrow. These things do change in our society.

He reviewed with me in some detail some of the things that I mentioned to some of you I had seen. The employment figures are released today by the Bureau of Labor Statistics. They show that there are almost 65 million people working in nonfarm jobs.

They show that employment is up 2.9 million this year.

They show that unemployment is down to 1.7 percent for married persons, and there have been reductions in teenage and nonwhite unemployment.

They show that the average manufacturing weekly wage is about $114--$113.98 or $113.99, I believe.

All of those things have a bearing on what we are guessing our revenue will be and what we are guessing our gross national product will be.

You can imagine the shock that would come to the UP if you put a lead on that 2.9 million people lost their jobs this year.

But if you do, and I assume you will, write that 2.9 million more men are working today and have new jobs. I hope that shocks them, too, because that is good news and that is something they are glad to hear.

We hope that every person that can have a job, who needs one, gets one. That is the goal we are working toward.

They do give us problems. You have problems in whatever you do, whether you have unemployment or full employment. We like the problems we have now that we are discussing this morning much more than we do those we would discuss if we had a depression.

THE ECONOMY GENERALLY

[9.] Q. Mr. President, on the basis of these figures, how does the economy look, generally?

THE PRESIDENT. I just told you. It is $114 a weekly wage, 2.9 million people working this year that were not working last year, roughly 65 million working on nonfarm jobs. It is very healthy and very strong.

PRESSURES ON THE ECONOMY

[10.] Q. Mr. President, are you and your advisers working with any estimate yet of the overall pressure on the economy next year? That is, the overheating. Could you tell us about what your estimates are?

THE PRESIDENT. We are working with it every day but we don't have our estimates at hand.

We have the plant investment figures which are a factor to be taken into consideration. They will be announced a little later.

We discussed them this morning.

Q. They are ready?

THE PRESIDENT. They are, yes.

They are down, as expected. They may be announced in time for your deadline.

A NEW ATTORNEY GENERAL

[11.] Q. Mr. President, do you think we could expect an announcement shortly on a new Attorney General?

THE PRESIDENT. No.

THE ECONOMY

[12.] Q. Mr. President, are there any signs at the present that the overheating of the economy is lessening which raises the possibility of a tax increase, if one should be put into effect, which might have an adverse effect on the economy?

THE PRESIDENT. We have to weigh all the factors before reaching a decision like that. I do not want to evaluate them now. I don't want to mislead any of you.

I recall one time when I told you three or four factors that had to be considered. I received a nice big lead that said the intimation was very strong that a tax increase would be forthcoming promptly.

So I do not think we had better go into that. We will make the decision. We will weigh these things carefully.

There are a good many things we have to look at. We have time to do it. We will use that time.

Then we will be making a guess. But we do not want to guess until we have more information.

EASING CREDIT

[13.] Q. Mr. President, is there any possibility that the Federal Reserve Bank or any other Government agency can do anything more to ease credit right now?

THE PRESIDENT. There is always the possibility, surely. The answer is yes.

Q. Is there anything in the works?

THE PRESIDENT. You will have to ask the Federal Reserve about their operations.

THE MEXICAN TRIP

[14.] Q. Mr. President, are you prepared to say now who might be going to Mexico with you tomorrow?

THE PRESIDENT. Yes. George ^2a will give that to you.

^2a George Christian, an assistant press secretary.

I have said it a time or two. Secretary Rusk will be going. You have the names of the others: Assistant Secretary Lincoln Gordon, and the Members of Congress who are on the border of Mexico who represent our areas.

Senator Tower, Senator Yarborough, and the Governor have been invited. They can give you the tabulations on those who have accepted. There will also be Congressman Pickle, who represents this district, plus the Congressmen on the Rio Grande, Mrs. Johnson, and staff people. Ambassador Linowitz of the OAS is coming down to make a report to me and will go with me.

I believe he is coming tonight with Mrs. Johnson.

Q. Mr. President, is there some prohibition against the President of Mexico crossing the border without the consent of Congress that will bar his coming over?

THE PRESIDENT. ] don't know whether it will bar it. I will answer your question as to the last part of it.

I think the President has to have the consent of the Congress to leave the country. I don't know what he has done about it. I don't know what his plans are. I do not need consent. I plan to go into Mexico and I look forward with great pleasure to making the trip.

Q. Mr. President, will there be an occasion for you to make a speech of some kind there?

THE PRESIDENT. It will not be a very long one. You do not need to be troubled about it.

Q. I was hoping we could have an advance text before we leave in the morning.

THE PRESIDENT. If you will take it and say that this is my speech and use it and stand on it without writing two paragraphs that this is the text which I released, which I did not deliver. I cannot guess whether I will deliver it or not. I have one prepared and I will give it to you.

Q. That is fine.

RELEASE OF COPPER

[15.] Q. Mr. President, I did not understand how many tons of copper you mentioned. Was it 150,000 tons?

THE PRESIDENT. Yes. They will give you the release. Can you hold that a moment?

Q. Surely, Mr. President.

FURTHER TALKS WITH MR. ACKLEY

[16.] Q. Do you expect to see Mr. Ackley down here again soon, Mr. President?

THE PRESIDENT. I expect him to be in and out wherever I am.

Q. Is there any kind of a December 10--I know you do not like the word "deadline"--

THE PRESIDENT. The answer is no, again.

Q. He recommended, when you were in the hospital, that you come to some sort of a decision by December 10, I believe.

THE PRESIDENT. He makes a lot of recommendations. But I have answered your question.

ROLE OF BUDGETS IN DETERMINING TAXES

[17.] Q. Mr. President, going back to the national income budget, does it play a larger role in determining the tax question than the administrative budget? How do they stack together?

THE PRESIDENT. The economists tell me that they give much more weight to the income account budget than they do the administrative budget because it reflects a much more accurate figure of the economy. I have to give considerable attention to all three of them.

Have you any other questions of me? Does anyone have any other questions?

Gardner, do you want to state what you have been doing? And take any questions?

MR. ACKLEY'S COMMENTS ON THE ECONOMY

[18.] MR. ACKLEY. Very briefly, the President asked me to come down to review some of the more recent economic news, and I did. I told him what had been going on in the economy, not that he did not follow it about as closely as I did.

But I gave him my views about it. We talked about various problems that are present and pending, problems that the President described as the pleasant problems of a prosperous economy; and about the decisions that have to be made.

That is about all I need to say.

Q. Mr. Ackley, what sort of GNP do you project for this year?

MR. ACKLEY. You will find that in our Council Economic Report. For which year?

Q. For 1967.

MR. ACKLEY. We will give that to you about the 20th of January.

Q. Did you bring any new information which throws light on the fiscal and monetary situation as the President approaches his decision?

MR. ACKLEY. I think every piece of information is relevant. The employment numbers that were released at 11 o'clock today are certainly very relevant as showing where the economy stands now.

The plant and equipment figures that I brought down and discussed with the President also are obviously very relevant.

New numbers come in almost every day which add one little bit of information that is helpful in assessing where we are and where we are going.

Q. Mr. Ackley, how would you sum up the outlook for the economy in the 1967 calendar year in terms of prosperity continuing? Will there be a slowdown? Is there a chance of a recession?

MR. ACKLEY. I would summarize it in very general terms. Of course, prosperity will continue. We will have an expanding economy.

No one can ever say that a recession is absolutely out of the question. I don't think anyone has yet been able to do that.

I certainly see no reasonable prospect of recession. We are hoping the growth of the economy will continue to be along the moderate course that it has been ever since early this year.

If it is, it will be a very rewarding kind of an economy in terms of sustaining jobs and incomes.

We are also hoping and looking for movement back toward price stability with less of an advance in prices than we have had in 1966.

Q. Mr. Ackley, what plant equipment figures are you talking about that you brought down? Are these projections for next year?

MR. ACKLEY. These are the results of the Commerce Department-SEC Survey of Investment Intentions by Business Firms.

Q. What do those figures say and what do they indicate to you?

MR. ACKLEY. Unfortunately, they are not yet released. I do not want to speak about them.

Q. They are only for the first quarter?

MR. ACKLEY. No. They will be for the first and the second quarters of 1967, plus the preliminary estimate for the fourth quarter and a revision for the quarter just past.

Q. They are pretty early, are they not?

MR. ACKLEY. This is about the time when these figures come out. A year ago they came out at about just this time. They were rather startling figures.

Q. Could you, without violating the release, say whether they serve to whip up or to calm any concern about an overheated economy?

MR. ACKLEY. I would rather not comment on the figures at all before they are released.

Q. Mr. Ackley, you said you talked about various problems. Is there anything more specific you can give us on that? What problems?

MR. ACKLEY. Prices, wages, the balance of payments, jobs, and the budget--they are all problems.

THE PRESIDENT. We have talked, since he came, to the Director of the Budget, to the Secretary of Defense, and to the Director of the Budget the second time. We will be doing that.

This is not an attempt to build up anything. It is just an activity report.

Q. Mr. Ackley, you said you were looking for and hoping for more price stability in the next year. Just taking the second part, hoping for, what reason do you have to hope for more price stability? What indicators are there in the economy?

MR. ACKLEY. I think there are several things that are very relevant there.

In the first place, we don't expect a repetition of the large increase in farm and food prices that we had this year.

In the second place, the growth of the economy at a moderate balanced rate will not require the large additions to employment, as large as we had going in 1965 to 1966, when we pulled into the labor force large numbers of teenagers, women, and unskilled workers.

It ought to be a more balanced, moderate kind of a growth that will not create the same kind of bottlenecks and pressures that had contributed to rising prices in some sectors this past year.

THE PRESIDENT. Are there any other questions?

Q. Do you care to comment on Mr. Heller's ³ proposal of a surtax of something like 5 or 6 percent?

MR. ACKLEY. No, I don't think so.

THE PRESIDENT. If there are no other questions, Joe Califano can discuss with any of you who have an interest the 150,000-ton copper allotment and the first and second quarter percentage distribution, answering any other questions you may want to ask.

³ Walter W. Heller, Chairman, Council of Economic Advisers, January 1961-November 1964.

FEDERAL TAX SHARING WITH STATES

[19.] Q. Mr. President, the House Republicans have said that their big legislative goal of 1967 is sharing of Federal tax revenues with the States. Do you care to comment on that?

THE PRESIDENT. No.

MR. CALIFANO'S COMMENTS ON DISPOSAL

OF COPPER

[20.] MR. CALIFANO. The figure I think you asked for, which the President just gave, is 150,000 tons which comes out of the stockpile.

The set-aside figures for the first quarter are 26 percent of the average quarterly copper supply in 1965, and 29 percent of the average quarterly copper supply in 1965 is the set-aside figure for the second quarter. This is roughly 10 percent of the copper supply in 1967.

Q. What do you mean by "set-aside figures"? Is that to be added to the stockpile?

MR. CALIFANO. These are percentages that the Secretary of Commerce determines shall be used for defense purposes, by defense users, just as 150,000 tons is a release for defense users and defense-supporting users.

Q. Mr. Califano, where will that leave the stockpile?

MR. CALIFANO. The stockpile was at 409,000 tons before the release. It leaves it at 259,000 tons.

Q. Is part of this disposal aimed at keeping the price down, or is it entirely just to satisfy defense needs?

MR. CALIFANO. It has nothing to do with that.

THE PRESIDENT. It could affect it, but that is not the purpose of it. Don't let them get you hung on that.

MR. CALIFANO. I might add in connection with the size of the stockpile that you will all recall that the President ordered, last March, the General Services Administrator, Lawson Knott, to set up a program to expand copper production.

Mr. Knott has reported to the President that beginning in 1968 and continuing through 1971, this program will bring in a total of about 200,000 tons of additional copper, and that starting in 1972 it will bring in 200,000 tons each year? ⁴

⁴ The President's memorandum of March 29 to the Director, Office of Emergency Planning (see note to Item 636) was also transmitted to the Administrator of General Services.

THE PRESIDENT. Are there any other questions?

Reporter: Thank you, Mr. President.