East Rutherford, New Jersey Interview With Dick Leone of WNET-TV.

MR. LEONE. Good evening, I'm Dick Leone.

We want to welcome President Carter to New Jersey. In a little while he will speak at a fundraising dinner here at the Meadowlands Sports Complex.

HOUSING FINANCING AND CONSTRUCTION

President Carter, earlier this week a couple of friends of mine, actually a young couple, told me that after months of looking for a new house, they had to give up the search, because there's no mortgage money. And in talking to bankers in the area, I find that's generally true, with the high interest rates. What kind of hope can you hold out to people like that?

THE PRESIDENT. Well, of course, the best hope is that we'll get the inflation rate coming down, which I think will happen before the end of this year, and therefore, interest rates can go down. We've had good luck throughout the country, Dick, and we are now making an assessment among the different communities around the Nation to see where mortgage money is short.

Up through the end of September, we had not experienced at all a reduction in new home starts, because the figures then were 1.9 million homes per year were still being built at an annual rate. We've sustained, in spite of high interest rates, so far, almost 2 million homes being built in our country per year, which is near the all-time record, and we've been very proud of this.

But Bill Miller, who's the Secretary of the Treasury, is now making a survey throughout the Nation to see where mortgage money might be scarce, and the Home Loan Bank Board is very concerned about the possible consequences of this.

So far, we've been able to reduce the unemployment rate among construction workers by more than 40 percent since I've been in office by focusing the attention of the Government to work with private sector interests to keep the construction business going well. We are concerned about this, but so far we've held up pretty well.

INFLATION AND ENERGY

MR. LEONE. I guess the more general economic question is, has the Fed gone too far in recent days in raising reserve requirements and forcing interest rates up to historically unprecedented highs?

THE PRESIDENT. That's always a question. I think the number one threat to our country, economically speaking, though is inflation. We've tried to approach it at a multiple level, that is, different ways at the same time.

As you well know, I don't have any control over the Fed, none at all. It's carefully isolated from any influence by the President or the Congress. This has been done for many generations, and I think it's a wise thing to do.

We've tried to hold down Government spending. We've cut the budget deficit considerably since I've been in office. We just got the figures for last year, for instance, and the deficit has been dropped down to $27 billion. It was $66 billion when I was running for President in 1976.

We've tried to approach the key cause of inflation after many years of delay, that is, the unnecessary and excessive importing of foreign oil. Energy is the main driving force in the high inflation rate now. As a matter of fact, energy alone, not counting anything else, adds 4 percentage points to the inflation rate and, therefore, indirectly, 4 percentage points onto the interest rates. As a matter of fact, if it were not for energy, which has been jacked up in price by OPEC because we import so much oil, our inflation rate this summer would be the same as it was in 1978, same as it was in 1977.

The Congress is approaching the end of their consideration of a package of legislation that, I believe, will be successful in the long run in cutting down our excessive oil imports. Next year we'll spend $70 billion on foreign oil. And we not only import a lot of foreign oil, but we also import inflation, which I've already mentioned, and also unemployment.

This is a long-overdue thing. It's been one of the most difficult political battles I've ever been in. But if the American people will conserve, save all they can, and we can shift toward supplies of oil and natural gas and coal that we already know about in our own country, and develop new sources of energy, like solar energy, for instance, I think in the future we'll see a much more stable economy and a much greater contribution to our Nation's security, because we won't be dependent on uncertain foreign sources of oil.

WINDFALL PROFITS TAX

MR. LEONE. In this part of the country, in the New Jersey, New York area, about 78 percent of all the energy is oil, and it's nearly all imported. So, I think people are aware of the pressures. On the other hand, while they recognize that OPEC is no friend of ours, they're more incensed than anything, I think, over the oil company profits which have, in the last week, been announced at over 100-percent increases for many of the largest companies. And I think they tend to say, "Why isn't the President doing something about those profits?"

THE PRESIDENT. Well, we've had a proposal to the Congress for more than 2 1/2 years, up in April of 1977, to put a tax on the oil companies, to take back part of the unearned profits that they've received, and turn that money over to the general public. We call it the windfall profits tax. And I believe that this year you'll see the Congress pass a windfall profits tax, if the people's voice can remain strong.

The House has already passed the windfall profits tax basically as we proposed it. The Senate Finance Committee has not passed an adequate windfall profits tax. It will now go to the Senate floor. I think it's accurate to say that Senator Pete Williams and Senator Bill Bradley from New Jersey are strongly in support of a good energy package, including the windfall profits tax.

When that is done, we'll cut clown tremendously on the amount of profits that the oil companies will keep—roughly $270 billion over the next 10 years—and that money can be used to help poor people pay the increasing cost of energy in their own homes, to develop better forms of transportation, including public transportation, and develop synthetic fuels and other energy supplies in our own country. If that profits tax does not pass, then the oil companies would keep those profits.

I might point out that a lot of the profits that are shown by the oil companies is earned overseas. And if the Congress doesn't pass an adequate windfall profits tax, then we would have to take other steps to make sure that the oil companies don't profit off of the increased prices of energy.

But I think if we can get the windfall profits tax, we'll have a good, sound energy program. We'll leave the oil companies with enough money to explore for new supplies of oil and natural gas in our own Nation. And we'll have great benefits to the poor people, to those who want better transportation, and those who want to see our country using energy derived from the United States.

But the windfall profits tax is the key to it. And I can predict to you, I believe, on this program, that it will pass the Congress in a satisfactory fashion this year, because the American people have finally become aroused about it.

HOME HEATING OIL

MR. LEONE. Let me ask you about a related prediction. The price of home heating oil is almost a dollar a gallon now in this area. There's a lot of concern about whether it'll be available. New York and Connecticut have passed laws already to help the poor pay for it; it's under discussion in New Jersey. I know that when you were in New Hampshire recently, you made a pledge that there would be enough heating oil to get them through. Can we get a similar kind of commitment here in this part of the country?

THE PRESIDENT. Late in the spring, early in the summer—I've forgotten the exact date—I made two promises to the people of New England, in fact, the entire country.

At that time we had a very short supply of home heating oil. There was a great danger that we would have severe shortages this winter. I promised that we would have 240 million barrels of oil on hand during October. Last year the total that we used was about 233 million barrels; 240 is an adequate supply. We've reached that goal already.

The other thing that I promised was that we would do everything we could in the Government to help the poor families pay the increased cost of home heating oil. And we've asked the Congress this year for $1.6 billion to help those low-income families pay that extra cost and also to pledge the Congress, through legislation that would be permanent, that for the next 10 years we would have $2.4 billion per year to go to the families to help them pay the increased cost of home heating oil.

I believe that I can also predict to you that within the next few weeks, we will have the Congress finally pass the legislation that I put to them to provide this financial assistance for the low-income families.

POSSIBILITY OF RECESSION

MR. LEONE. Mr. President, turning to the economy again, I think one of the most frustrating things for your supporters is explaining to people that we might need a recession in order to deal with the inflation problem. It frightens people in terms of the budgets of a Newark or a New York City, and the normal Democratic constituency doesn't understand how we can get to a point where that becomes the only policy available to us. How do you answer that kind of criticism of where we are?

THE PRESIDENT. We're doing everything we can to avoid a recession, and so far we've been successful. I can't say that we won't have temporary recessionary figures coming in. But the last month, for instance, showed a 2.4-percent increase in our total Nation's productivity, our gross national product, and that's far from a recession. A recession is defined arbitrarily that you have zero growth for two succeeding 3-month periods.

In addition to that, we've had extraordinary good luck in keeping business profits up. Since I've been in office, they've gone up about 50 percent. We've added a net total increase of 8 1/2 million jobs. We've cut the unemployment rate down by 25 percent nationwide, and in some industries, like the construction industry, we've cut the unemployment rate by 40 percent. These figures are accurate. We've got equivalent success in revitalizing the agricultural industry, the steel industry.

What we suffer from is a distortion in our economy, brought about by the fact that we import half our oil from overseas. And last month, for instance, the annual rate of increase of prices of energy was about 100 percent per year, and when you have to absorb that, because we have become too dependent on foreign oil, it's just going to take a while to get the economy straightened out again. But we're making good progress, and in the meantime we're holding up employment, growth, and the strength of our free enterprise system.

WAGE AND PRICE CONTROLS

MR. LEONE. I guess a number of people are beginning to talk about wage and price controls who didn't do so in the past, who basically agreed with you that they were a bad idea. I know that the standby authority to implement them has recently lapsed, and I wonder if you have any regrets that that instrument is not available if things get worse.

THE PRESIDENT. No, I don't have any regrets. The authority for the President to impose, without warning, wage and price controls did lapse. Nixon used it back, I think, in 1972, but I don't think that having mandatory price controls is feasible or advisable.

There is absolutely no way that the Congress would pass wage and price control authority. Just one Senator could filibuster that and prevent its being passed in the Senate, and there's an overwhelming feeling in the Congress that the mandatory price and wage controls would not work.

If the Congress started working on this, trying to pass it, then just knowing that the wage and price controls might come in a few months, in the future, would cause an extraordinary increase in the prices charged to people. I think it would make our inflation rate much greater.

I really believe that the best way to control inflation is to get at the roots of the problem: to control the Federal deficit, to have an efficient government, to cut down on our overdependence on foreign oil, to keep the supply of basic products stable, not to let our basic industries, like steel, for instance, go under, which it was threatened with for a while, and to make Americans more self-sufficient, and to generate more confidence in government. We've done all these things with fairly good success.

The inflation pressures are not only on our Nation, but they're all over the world. For instance, in Israel the inflation rate, I think, is over a hundred percent. And in Europe, where the countries 'have been deathly afraid of any inflation—and they have always accepted much higher unemployment, instead of inflation—now they're facing the same degree of inflation that we are.

So, I believe that we've got it under fairly good shape, if the people will be patient, not lose their confidence, work together, and help us address these basic questions.

Another thing that I didn't mention a few minutes ago is to increase American exports overseas. This helps to hold down inflation in our own country. And of course, we need to keep the dollar value stable—and the dollar values are stable. As a matter of fact, even a month ago, when the dollar seemed to be somewhat lower than the average, it had actually increased in value by 8 percent, compared to a year ago, among the things that the OPEC nations have to buy. These are very complicated matters, and it requires patience.

And I would say the crux of the whole issue of controlling inflation and keeping a strong economy is to have an adequate national energy policy, which we have never had. None of my predecessors in the White House proposed, effectively, a national energy policy. After I've gotten into it, I've seen why they postponed it until the next President .each time. It's a difficult issue.

But I think I can predict, again—this is my third prediction—that before the Congress goes home this year, we will have the total package of establishing in legislation, in law permanently, a national energy policy that will help address our problems.

ENERGY CONSERVATION

MR. LEONE. I sometimes get the feeling that a successful energy policy or anti-inflationary policy requires a lot of cooperation from the American people.

THE PRESIDENT. Yes, it does.

MR. LEONE. And I think about the fact, from everything one knows of you, you are a very disciplined man. I believe if you weren't President, you would drive 55 miles an hour and turn the lights off and try very hard.

THE PRESIDENT. Yes, I would.

MR. LEONE. Do you have any sense of frustration that you don't get that kind of response from the man in the street, that he just wants to know that there's gasoline down at the corner pump?

THE PRESIDENT. I did much more 2 1/2 years or 2 years ago or 1 year ago or 6 months ago than I do now. I think there's a growing awareness, very rapidly coming on us, among the American people that we do indeed have an energy problem and that every American needs to do something about it.

The thing that impresses me most strongly is that the conservation of energy, the saving of energy, the stopping of the waste of energy need not be an unpleasant thing; it need not be a sacrifice; it need not be something that disrupts America. It can be an exciting, positive, pleasant thing.

It's not necessary for us to drive around in automobiles that weigh 5,000 pounds, one person in an automobile, going 75 miles an hour. It's not necessary to have a house in the wintertime that's up to 80 degrees temperature or one chilled down to 55 or 60 degrees in the summer, where you have to wear a sweater.

You know, these kinds of things can give us a better life. And I think that I can say accurately that as we move toward more conservation, increased use of solar power, and the development of American energy resources, we will not have a lower quality of life. We can have an even better quality of life, safer and more enjoyable, and with the sense that we've done something not only for ourselves and our family but also for our Nation. It will be a patriotic thing.

PRESIDENT'S POPULARITY

MR. LEONE. Let me ask a more political question. You said about a year ago, I think, in an interview with Bill Moyers, that today the President is sort of a personification of problems. And I have a sense that you believe that's one of the difficulties with, one of the explanations behind your standing in the polls or the fact that people here in Jersey and elsewhere say Senator Kennedy's ahead right now, whatever it means at this stage. Do you think that's something you can over-come, yourself, in the coming months?

THE PRESIDENT. Yes, I think so.

When I made a speech in April of 1977 about energy, for instance, one of the lines that I put in the text to the American people was that just addressing this politically sensitive issue of a better energy policy would cost me 15 percentage points in the polls. The only mistake I made was that I underestimated how much popularity I would lose. There's no way to win when you address a difficult issue like SALT, Panama Canal treaties, energy, inflation, and so forth. There's no way to win. And I think that the best assurance that I have is the sound judgment and the fairness of the American people.

One of the great things about a political campaign is that it provides a forum for incumbents like me—as it did for Brendan Byrne when he ran for Governor this last time—to actually and accurately explain to the people who are going to vote what we have been doing, why we have taken these steps, why we have taken unpopular stands.

You know, it's easy for someone to get in office and not do anything because you're afraid that you might go down in the popularity polls or because some special interest group may not like it. But I don't believe that we have ever avoided a difficult issue that we thought was best for our country, just to keep our popularity up or the polls high or to get votes.

And this series of very difficult issues—which we have addressed, I think, very well—when they're inventoried by the American people, I think, will repair a lot of the damage that has been caused to me and other incumbents. I think a perfect example is the one I used—Brendan Byrne, when he ran for reelection.

PRESIDENT'S LEADERSHIP QUALITIES

MR. LEONE. You're in a place where Byrne was way behind here, Carey in New York, Grasso in Connecticut. You've come here for encouragement, I guess.

It seems to me that the likelihood of potential Democratic challengers differing widely with you on important issues is not great. By and large they seem to be saying, "We basically agree. Jimmy Carter is well intentioned, we have not great policy differences, but he's not a strong leader." And the issue on which the campaigns seem likely to be joined, perhaps the only important one, is the question of leadership: "He hasn't been effective in moving Congress or moving the American people."

And I think you're going to have to answer the question in the course of this campaign, and I'd like you to let your imagination roam a little bit.

THE PRESIDENT. I don't have to imagine. Any objective analysis of my administration and its success with the Congress would stack up very well with any previous administration in this century, and that would include the best days of Lyndon Johnson's relationship with the Congress immediately after the death of Jack Kennedy.

The difficulty of the legislation that I have put to the Congress, I think, is unequaled any time in my lifetime, but the percentage of the legislation that the Congress and I have have passed together is as high as it has ever been. And I believe that's one of the issues that will be assessed.

Another one is what we've achieved. You know, I don't particularly want to sit here and brag, but I'm the first President in 40 years who has served without there being a single American killed in combat. We've kept our country at peace. We've also strengthened NATO and all our alliances overseas. We're now very rapidly restoring the quality of our own forces, keeping a strong defense.

I've moved into areas that have been avoided for a long time in the past. I'm not criticizing my predecessors. But the Egyptians and the Israelis have been at war for 30 years. They've been filled with hatred for centuries. And to see now Sadat and Begin sitting down, working out a peace agreement between them, because of action that we took in this country, is gratifying, indeed.

We've raised the banner of human rights around the world to make our country proud once again. We've opened up the continent of Africa to good relations, sound relations, based on basic human rights, majority rule, democracy, freedom, equality. We've also opened up, for the first time, a good relationship with onefourth of the total population on Earth, in China, and at the same time we've not damaged our relationships with the people who live on Taiwan.

We've passed the Panama Canal treaties, which were condemned at first, but in the long run, I think, the American people will see this is one of the greatest things that's ever happened to benefit our own country.

None of these issues were considered to be easy, and many of them were not politically attractive. And I could go down the list a lot longer, if we had a longer program. But I think those are the kinds of things that exhibit leadership, and I am perfectly willing to stand on my record. I look forward to 1980 with a great deal of anticipation and also confidence.

SUCCESS OF PRESIDENT'S PROPOSALS

MR. LEONE. I might ask—I think this is bound to come up in the campaign-what are the things you feel didn't go well—the income tax reform or welfare reform? How do you deal with those things that were a big part of the campaign in '76 and we don't have them today?

THE PRESIDENT. We]], if there's one characteristic I have, it's tenacity. You know, I don't give up, in spite of discouragement.

Last year, for instance, after a year and a half of tough debate, we only got about 65 percent of what we asked for in the energy package. We've come back this year, hopefully to get the other 30 or 35 percent. Last year we didn't get a word of oil. This year we're addressing the oil issue. We haven't gotten welfare reform yet. I think that we will get it. I can't say that it'll be exactly as we originally proposed, but I think that we'll get welfare reform.

Our major agenda items have pretty ,cell been passed by the Congress. There's one on which we have failed, and that is tax reform. We need basic tax reform in this country, but the powerful special interest groups are so influential on Capitol Hill in Washington that it is almost impossible to have basic and good tax reform. And until the American people get aroused enough to let their individual Members of Congress in the House and Senate know that they demand equity and fairness, then the big shots in this country are going to continue to use their influence effectively and block basic tax reform.

With that one exception, however, I think we've had very good luck in the Congress, and the American people will benefit now and in the long run because of it.

PRESIDENT'S POLITICAL PHILOSOPHY

MR. LEONE. Let me ask you—neither you nor Senator Kennedy is an announced candidate yet, although both of you are around the country a lot talking like candidates these days. Politicians here in New Jersey and in this region say it'll be very tough for Carter to beat Kennedy; Kennedy has a mystique; there's a legend about it.

I was interested to see at the dedication of the Kennedy Library in Boston last week, you said that you felt in some ways you were closer to John F. Kennedy than Senator Ted Kennedy is. And I wonder if you could elaborate on that.

THE PRESIDENT. Well, philosophically, I think so. I don't believe that the Federal Government ought to do everything. I don't believe in establishing a whole big array of massive Federal Government spending programs to take care of the needs of our country. I believe in tight management; I believe in making the existing programs efficient. I believe in saving money; I believe in trying to have fiscal responsibility in managing the budget; and another, I believe that John Kennedy would have agreed with all those things.

In addition, I believe in a strong defense. I think the Nation can only be at peace if we are strong, that the best single way to get our Nation back into war, with massive loss of life of our own young people, is if any potential adversary ever thinks our country is weak. I believe in a strong defense.

I'm not criticizing Senator Kennedy, but I think those are going to be two of the issues. There are some others, too. In general, there's no basic, deep, philosophical difference between me and him. His voting record on issues that we've put forward and where I've taken a public stand is very good.

And you talk about the outcome of the election. We had our first skirmish in Florida. We were predicted to suffer a massive and very embarrassing defeat. We got about a 2-to-1 victory there, and I think that's a fairly good indication of the kind of response we'll get. I'm not predicting that we'll win everywhere, but I've never backed down. And when and if I get in the race, I'll be there to stay, and as I said before, I feel very confident.

NATIONAL MORALE

MR. LEONE. Let me ask you one final question. In August you made a stirring speech about energy and talked about the American people suffering from a malaise and being unresponsive. I wonder what your own assessment is of the response over the last couple of months.

THE PRESIDENT. I think the response has been good. Among the people who've worked in the White House for 25 or 30 years, the professionals who stay there as Presidents change, that speech, which I think was July 15, got the most response of anything that a President has ever done, and the response was overwhelmingly positive. People said, "You're right. We do have a long way to go in this country to have basic confidence in each other, in our Nation, respect for our government. What can I do to help?"

I think one thing that has caused people to take some positive action to help has been, for instance, the gasoline lines. It kind of shocked people to say, "You know, we do have a problem. What are we going to do about it?" And now there is a growing interest in it. The Congress positive action this year, which I predicted, I think will have a reassuring effect. And of course, the election, with the open debates, getting the American people deeply involved and much better educated on what has been going on in our country and what's got to be done in the future, all are good factors to bring about a restoration of confidence in our country.

We've got the greatest nation on Earth. I just want to make sure we keep it that way.

MR. LEONE. Well, Mr. President, it's nice having you here in New Jersey and talking to you about these problems that are of great concern to us. I want to thank you.

And on behalf of Date Line, New Jersey, this is Dick Leone. Good evening.