THE PRESIDENT. Some of you have been here for previous meetings like this, I noticed. We've had several hundred editors and top news executives come to the White House for these small group meetings in the last 15 months, and they've been very helpful to us and, I hope, also helpful to your own readers and listeners and viewers.
What I've done as a matter of course is to outline some of the current questions that I'm addressing and problems that I'm trying to solve, and then spend what time we have available answering your questions.
Right now, I'd say that getting the energy legislation passed is a top domestic priority. Dealing with the Federal bureaucracy is always a constant challenge, and I think the crux of the whole reorganization effort is in civil service reform, which is now being considered by the Post Office and Civil Service Committee in the House.
We have tax reform in the Ways and Means Committee. I think we'll do much better on the floor of the House and the Senate, perhaps, than the present prospects appear to be in the Ways and Means Committee.
We have, in addition to that, a constant pressure from inflationary growth. Bob Strauss has been designated as my direct representative to deal with both wage and price increases, to try to hold them down. He's slowly getting control of that new assignment. He's keeping his former assignment as the Special Trade Representative. As you can see, those two items are very closely interrelated.
But this doesn't mean that the other Cabinet officers and executive personnel are not directly involved. Mike Blumenthal, Charlie Schultze, Ray Marshall, Juanita Kreps—all of our Cabinet on a domestic basis are trying to concentrate with an ever-increasing intensity on controlling inflation. The latest statistics this year don't look good. We've had a fairly rapid increase in farm prices, which I think were warranted and needed after the very low prices last year. That's showing up now on the Consumer Price Index, as well as the adverse effects from the ,winter weather and the coal strike.
But I believe our economy is very sound, and I think the recent indications on the value of the dollar in international monetary markets and the value of stock on the exchanges in New York have been a good indication of renewed confidence in the American economy, which, of course, is highly justified.
We have a couple of very controversial issues coming up in the Congress on foreign affairs of immediate consequence. One is a proposal to sell weapons to three Middle Eastern countries—Israel, Egypt, and Saudi Arabia—and the proposal to lift the arms embargo against Turkey to try to get the Turkish-Greek relationships improved and to make some movement on Cyprus, which has now been stalemated almost 3 years. This is a very serious matter in both instances, and both of these decisions by the Congress are highly controversial and have some potential political damage to individual Members of Congress as they make these decisions.
The last week's vote on the Panama Canal treaties is perhaps the worst political vote that the Senators will have to cast, certainly in my term of office. And I think they made the right decision in a very courageous way.
We have a lot of other items that I won't go into unless you have specific questions. I'll be getting our water policy proposals on my desk within the next few days. We've been working intimately with Congress Members and also Governors and others in the Midwest and Western States, particularly on water policy. I think it's crucial to our country to have some predictability about how we assign priorities, how we spend money, the benefit-cost ratios, environmental considerations, and I believe that there's never been an issue that's come before me that has warranted and has received any more close consultation with local and State officials who are directly involved.
Perhaps now it would be better for you to ask me questions, rather than my taking any more of your time. I would like to ask, if you don't mind, that we terminate this meeting about 5 minutes before the half hour, so that I can have an individual photograph made with you. Those of you who are philosophically adverse to it can destroy the photograph. [Laughter]
Q. Mr. President, Secretary Bergland told us there is consideration of tying the level of timber harvests more closely to the demands of the market and the price of wood products. Is that a serious consideration in your office, and if so, would it involve a deviation from traditional Forest Service harvest policies such as non-declining even-flow?
THE PRESIDENT. Well, we've had an almost unprecedented rate of growth in housing starts and construction in the last year and a half. And this has put additional pressures on the price of lumber, which I think are one of the major contributing factors to the inflation rate in, particularly, family homes. I think that we can increase the rate of timber harvest in public lands, both Federal and State lands, and also in the large land holdings of private individuals and companies.
I think we can do this without any adverse effect on environmental quality and without any adverse effect on ultimate total production of timber from these lands. I've had a meeting with some of the key harvesters of major quantities of timber here around this table from the Far West, and they have pledged to me-the processors of timber—that they will not only try to make their production more highly efficient, that is, waste less of the timber products, but also will try to increase the amount of timber that is processed in this country and ship a smaller portion of timber overseas in log form than has been the case in the past.
We will have a definitive analysis, that's been underway now since I've been in office, for publication in June, and the final decision in December. But I've asked in my anti-inflation speech before the American Society of Newspaper Editors that this report to me on how we can rapidly increase the rate of production on timberlands, to be on my desk within 30 days of that time.
PRESIDENT'S TRIP TO COLORADO
Q. Mr. President, your trip to Denver next week has been compared by some as a trip to a foreign country. Could you briefly assess your own views on your relationship with the West and, perhaps, comment on the solar energy package I understand you might address on your visit Wednesday?
THE PRESIDENT. Yes, I will. This will be my second trip to Denver since I've been President. The Last time, I had a public hearing there, primarily related to water projects, as you know, which I thought was very good and constructive, and, in the process, invited the Western Governors to come to Denver to meet with me for that purpose. I'll be making an additional stop in Colorado, as well. This will be, coincidentally, on Sun Day, and I will be making a speech, relatively brief, on the use of solar power in the future.
Colorado has been blessed, I think, by the decision that I made to place a major research facility for solar power in Colorado. But I look on this as a friendly visit with the prospect for reception to be good. We've devoted a lot of time to Western problems because they are unique, and some of them are long overdue in being addressed: grazing lands, basic water policy, the problems of impact aid for strip mining and other mineral harvesting—we proposed legislation, now, to the Congress for non-energy type mining operations, which I think will add stability to it—how to deal with the acreage limitation on federally subsidized, irrigated lands.
These are matters that have been in contention for decades or even generations. And although they are controversial-and that's the reason that previous Presidents have not been eager to address them—I think they should be addressed frankly and forcefully and fairly, and let those dissident arguments be laid to rest once and for all. So, I look forward to my trip, and it's not the first one to Denver, even since I've been in office.
MIDDLE EAST ARMS SALES
Q. Mr. President, Anthony Sampson, in "Arms Bazaar," quotes Kenneth Galbraith as saying that, in effect, the United States caused the India-Pakistan war by selling arms to Pakistan. In fact, they sold to both sides. It created an imbalance in that area, and that's what led to the war. Now, changing the balance in the Middle East, will it not likewise inevitably cause another war? Isn't it a repetition of a road to disaster if you lump these sales together, to sell both to the Arab countries and to Israel?
THE PRESIDENT. Well, as you know, our arms policy in the Mideast has been to sell moderate supplies of arms to all of our close allies there and to give an extra attention to the 'needs of Israel, pretty much as defined by Israel.
I think it's obvious that the Israeli military strength is overwhelming in the air. We have longstanding commitments made to the Saudi Arabians, dating back to September of 1975, by President Ford and Secretary Kissinger. I reconfirmed that commitment, because our Nation's word of honor is at stake, early in my own administration when the Saudi leaders visited here.
This arms sales package, as such, is not a package as far as the Congress is concerned. These proposals will be submitted to Congress individually. Each one, separately, will be assessed by Congress in the best interests of our own country and that of our allies.
My own belief is that the Saudis have made their choice of weapons and the appurtenances or armaments on the F-15 on a basis of defense. The 1:-16 is more of an offensive weapon, and the Saudis have not ordered air-to-ground armaments that would be used in an offensive mode. They've also indicated to us that they do not intend to station the planes at Tabuk, which is a base close to Israel, but will be stationing these planes near Iraq and South Yemen as a defensive mechanism.
Just to close, this is a proposal that, in my opinion, is best for Israel. I think it would be a serious mistake for us to sever the friendly relationships and the mutual trust and confidence that's crucial, that presently does exist between ourselves and the moderate Arab leaders. I think our being the ones to sell these weapons to the Saudis—which will not be delivered completely until 1983—is advantageous as compared to the Saudis' completely unrestricted ability to buy the same type of weapons and same quantity of weapons from the French or, perhaps even later, from the Soviets. And their peaceful intentions are well recognized and trusted by me.
As you know, the sale of the F-5's to Egypt is not something that's even opposed by the Israelis, so far as I know. I was with Prime Minister Begin—in this room and over privately in the Mansion at the White House and in my little back office for several hours—for 2 full days this year, and Prime Minister Begin never mentioned to me one time any concern that he might have about the sale of weapons to Saudi Arabia or Egypt.
So, I think that this is a well-balanced proposal. Each sale was made on its own merits. I think that it is moderate in quantity. The weapons for Saudi Arabia and Egypt are acknowledged to be defensive in nature, and I think this provides us with the kind of relationship and influence in the moderate Arab world which is conducive to peace for Israel.
Q. I was with Prime Minister Begin, Mr. President, after he left you, and it is of greatest concern to him. In fact, it is to every Israeli leader, going back to Rabin and Peres and all of them. It's of tremendous concern to them, because by the time these weapons are delivered in 1981 or '82, you may not have the present rulers in Saudi Arabia because of the conditions that are going on over there right now. You might be delivering it to a pro-Communist government.
THE PRESIDENT. I can't dispute what you say about Begin's importunities or concerns to you. But I'm telling you that for 9 days he had my undivided attention, and he never mentioned it.
Now, the second point that you make is that we will provide, as is the case in all of our major arms sales, a servicing in spare parts for these weapons over a long contractual period. And this gives us a great knowledge of the pilots who fly the planes, the security measures that accrue to prevent violation of our own secrecy, the point of stationing of these planes, any modification in their armaments, the transfer of the F-15's from a basically defensive plane to one of offensive nature.
This relationship that we will have with the Saudi Arabians will help to prevent any shift in their attitude toward an offensive design against Israel. I think that this is good insurance that ought to be maintained.
Q. Mr. President, Edward Fike, San Diego Union. You made a heartening speech in Wake Forest warning the Soviet Union against the continued buildup of armaments, and then you came back to Washington and your first official act was to announce a drastic slash in the Navy building program. I'm from an area which is very concerned about that. And we now learn that several naval bases around the country are scheduled to be closed, including, possibly the Marine Corps training facility in San Diego. How can we reconcile this reduction in the Navy with a continued Soviet naval buildup throughout the world?
THE PRESIDENT. Well, I might say that I used to live in San Diego and was on a submarine there, and I'm familiar with the interest of your neighbors in the Navy strength.
The makeup of the defense budget is primarily determined by submission from the Joint Chiefs and the Secretary of Defense and others to me through the Office of Management and Budget, and the portion of the total defense budget that is spent within the Navy circle is also determined by them. I make very slight modifications, although I study the issues.
When this proposal was made to me by Secretary of Defense Brown and by Graham Claytor, who came over to discuss it, the only change I made in their proposal was to add one submarine, Trident submarine, to their proposal. I think the Navy's portion of the budget is between 35 and 4-0 percent, about what it always has been. The size of the defense budget has been increased steadily since I've been in office. We added about 3 percent in total defense expenditures in this proposal for next year, above and beyond inflationary trends.
And I think that the Navy budget is a well-balanced budget. The argument that is going on in the Congress is whether we have a relatively few, highly expensive, large and nuclear-powered ships on the one hand, or a wider number, larger number of relatively inexpensive ships that are smaller and conventionally powered on the other hand. All the ships, as you know, are expensive.
But I don't have any apology to make for it. I think within the constraints of the overall budget—I think our deficit is excessive now and the portion of the total budget that is allotted to defense expenditures, the portion of the defense budget that's allotted to the Navy, that it is a well-balanced proposal.
And to repeat myself once, I did not modify the recommendation of the Secretary of Defense, except to add one Trident submarine. I didn't cut down the recommendation that came to me from the Defense Department.
ENERGY S SHORTAGE
Q. Mr. President, I'm Bob Hammes from St. Maries, Idaho. A spokesman for a previous administration said, "Don't pay any attention to what we say, but watch what we do." The people are seeing Government officials and high military figures using gas-guzzling automobiles, car races around the country every weekend, and other uses of petroleum, and they're thinking there really isn't a petroleum shortage. Can we somehow resolve this dichotomy?
THE PRESIDENT. It's hard to answer that question. My fear is that the dichotomy to which you refer will be resolved only when there is a tangible evidence of energy shortage brought about by suffering or deprivation of the American people themselves. Warnings about future shortages have apparently very little effect on the Congress or the public.
We have had some reduction in the rate of growth of energy consumption this year, and obviously our imports have dropped off somewhat with the increased influx of oil from Alaska.
We've done a great deal through Executive order of my own, and also among the top officials in the executive branch of National Government, in cutting down both the size of automobiles, and we cut drastically on the number of automobiles that are available and used. And we've also increased gasoline efficiency by mandatory law passed by the Congress and also by eliminating the large number of chauffeur-driven automobiles that were formerly used by literally hundreds of top executive officials. Those have been cut down to bare bones.
But I don't think I can answer your question any better than that. When lines are backed up at gas stations, at service stations, the public believes there's a need to conserve. When the lines disappear, then they don't believe it any longer.
But I believe that in the long run, that the legal restraints that have been placed on automobile efficiency will pay rich dividends. And the passage of the energy legislation that I have proposed to the Congress will be another major step forward, even in the absence of demonstrable shortages that work a deprivation on our public.
OIL SALES TO JAPAN
Q. Mr. President, Bob Thompson, Seattle Post-Intelligencer. We heard two officials of your administration this morning suggest there's renewed talk about selling Alaskan crude oil to Japan. Do you favor such a policy? What will the impact be on our energy crisis, and would you propose it to Congress?
THE PRESIDENT. No, I haven't made any decision on that proposal, which has been, I think, an historic one. It's a repetitive kind of proposal that originates from a lot of sources, and it's been given renewed life by the fact that now we have, with the Alaskan oil shipments to the west coast, a glut of oil in the California area.
Our own preference is that the Sohio line should be expedited, with its completion to bring California and Alaskan oil into the Texas area for refining and further distribution, and also that we expedite the completion of a gasline that would originate in your part of the country, heading east, to serve the Midwest. The proposal about transferring oil either from California, the heavy crude, to Japan or to transfer some of the Alaskan crude to Japan is not one that's been proposed to me.
PRESIDENT'S RELATIONSHIP WITH WESTERN STATES
Q. Mr. President, the West was one of the areas where you and Vice President Mondale did least well in the Presidential election, and I think opinion polls show that if the election were held again now, you might not get any more votes. Do you anticipate any difficulty for your party this year? Do you anticipate doing better or worse, should you run for reelection? And are there any policies that you are designing to improve your standing in the West?
THE PRESIDENT. Well, I think the recent polls—the only one I've seen lately is Harris poll that shows that on a nationwide basis, I would do better now than I did against Ford, because it was a very close vote, as you know. I think I had a 6 or 7 point lead over Ford in a hypothetical race, and only had I or 2 percent when I actually won. I think that it's almost inevitable that the Democratic Members of Congress this year will do better in the West than I did— [laughter] —in the Presidential race, because as you pointed out, I carried very few States in the West. I came very close in a few. But I think the Democrats will have a good success this year. They've got an excellent record when it's analyzed carefully.
I think when the Congress adjourns late this summer, there will be a much more careful and factual analysis of what has been accomplished and what has not been accomplished. So the record is going to be good. I think there's a minimal amount of coattail riding these days, not just because of me but also my immediate predecessors.
The new classes in Congress, the 94th and 95th Congresses, are highly independent. They ran their campaigns basically the same way I did, one priding oneself in not being a part of the establishment, not being dominated by the political leaders, being tied directly to constituents, or being independent in attitude and in the legislative process. So, I think there's a much more close welding now of Members of Congress, particularly the newer classes, to their own constituents than there has been in the past, historically, and a much less interrelationship between individual Members of Congress and the popularity or unpopularity of an incumbent President. Back in the days of Eisenhower, Roosevelt, back that far, there was a very close melding of the two. But I don't think that's the case anymore, regardless of who's in the White House.
So, I think that as I said earlier, the problems that we did have in 1976 in the West were primarily attributed to the fact that I was not well known, I had to concentrate my efforts where I thought my success would be most notable. And the second point is I think that we've had an exacerbation of that problem, because we've tried to address some very, very controversial issues that have been ignored for too long. But my belief is that after this year, when these issues have been resolved, either by us, by the Congress, or by the courts, that those problems will be lessened.
MR. WURFEL. Thank you, sir.
Q. Mr. President?
THE PRESIDENT. Yes, I may answer one more question.
PRESIDENT'S TRIP TO WESTERN STATES
Q. Have you decided who will accompany you on your trip, Mr. President, the Western trip—the Cabinet officers, some of your family, what Congressmen, White House staff?
THE PRESIDENT. I don't know yet. I would guess that it would be among the-Dr. Schlesinger, I'm sure, will be with me for part of the trip, Bergland will probably be with me, and Cecil Andrus will probably be with me for part of the trip. I really don't know. Do you happen to know, Walt?
MR. WURFEL. No, sir.
THE PRESIDENT. I haven't really seen the list of people who will go with me, but I know that those three will be there for part of the trip. I need Bergland particularly, for instance, for the timber area, Oregon and Washington. Schlesinger needs to be with me in Colorado for the solar energy question; Cecil Andrus in California and other places for addressing the question of maximum acreage to be owned by families in the irrigated regions where water comes from Federal sources. But I can't answer your question any better than that at this point.
Let me say that I always get a lot out of these sessions, because you ask the kind of questions that very seldom come up at a White House news conference. They are much more substantive and related directly to the people's interests and needs in the States and communities, and I thank you for coming.