Interview With the President Remarks and a Question-and-Answer Session at a Breakfast With Members of the White House Correspondents Association.

THE PRESIDENT. First of all, let me say that I'm very glad that you could come and meet with me this morning. I think we've probably delayed this kind of breakfast excessively, and if it works out well, I'd like to do it on not a schedule, but a basis as determined by you and Jody.

PRESIDENT'S VISIT TO GUADELOUPE

I will be going to Guadeloupe on the 5th and 6th of December [January], taking only one staff person, meeting with the President of France, the Chancellor of Germany, and the Prime Minister of Great Britain. We'll be there for 2 days, we presently plan. And I think all four of us will be taking our wives. It'll be somewhat of a social affair, but we'll be discussing substantive issues.

I don't think there'll be any press conferences during that time. I think we'll just meet privately and discuss the broadest gamut of questions that affect us all.

This is a group that has met periodically, even before I became President, during the economic and other summit conferences, because we are directly related in the administration of Berlin and we have found the private meetings to be very helpful. And at the last meeting, when we were at Bonn, we all decided to explore this possibility, sometime during the late winter, to meet.

So, we will be going there on the 5th and 6th of December.

Q. Of January?

THE PRESIDENT. The 5th and 6th of January, I'm sorry.

Q. Will there be press briefings, Mr. President?

THE PRESIDENT. I don't know yet. I think that they will be minimal, if any, John [John Osborne, The New Republic]. We'll only be there 2 days. I think we'd like just to go and have a chance to meet in an unstructured way. There will not be any agenda prepared ahead of time, and we'll take one staff person. We have got a lot going on in Washing- ton, and I've tried to think about the staff person that could easiest be spared. If you have any suggestions for me [laughter] -

Q. You can take Jody?

THE PRESIDENT.—-I'd appreciate it. That sounds like a good suggestion.

QUESTIONS IRAN

Q. Mr. President, we appreciate this breakfast, and I'd like to ask a question that I might not pose at a broader meeting. As a former Democratic Member of the House who voted for you and who spent 2 years at our embassy in Iran, I find it a little difficult to reconcile your statements about the Shah's concern for human rights, democracy, and liberalization with the pretty well documented record of his regime.

I think that those of us who have been there—and I'm going back tonight could accept your policy a little better if you were to postulate it on the broader strategic and energy considerations. I'm wondering if you could enlighten us on that, both points, and anything else on the issue.

THE PRESIDENT. I'll try.

There are several basic premises on which our relationship with Iran is postulated. First of all, our bilateral relationships with Iran have been constructive for both countries. We consider the Iranian people's relationship with the West to be very important. Iran has been a stabilizing factor around the Persian Gulf. This stability is valuable in the region. It's valuable in the surrounding territory, reaching certainly as far as Israel and the Mediterranean, and it's important for world peace. Iran has been very helpful to us in economic matters concerning OPEC, and we have a good and longstanding relationship between Presidents—myself and my predecessors—and the Shah himself.

The Shah has attempted, in my opinion, while maintaining order in a very difficult period, to move toward social liberalization, sometimes directly in conflict with the desires of the more traditional religious leaders, and has on several occasions, increasingly, lately, offered to form coalition governments encompassing his political opponents there. These offers have been rejected.

I don't have any apology to offer for the difference in human rights values that our own Nation espouses and those that have been accomplished by the Shah in Iran. There have been abuses. There have been incarceration of people without formal charge and trial under the Shah's government that would not be acceptable in our own country.

But I think the trend has been, under the Shah, toward democratic principles and social liberalization. Some have thought he moved too fast; some have thought he has moved not long enough-not strongly and rapidly enough, rather. And, of course, there have been instances when human rights violations have occurred as measured by any objective standard. But I might hasten to add that we have those kinds of violations in our own country as well.

Q. Mr. President, I was going to ask you about the Shah. Do you think he could survive now, and how?

THE PRESIDENT. I don't know. I hope so. This is something that is in the hands of the people of Iran. We have never had any intention and don't have any intention of trying to intercede in the internal political affairs of Iran.

We primarily want an absence of violence and bloodshed, and stability. We personally prefer that the Shah maintain a major role in the government, but that's a decision for the Iranian people to make.

Q. Do you think there's still any chance that he'll form a civilian coalition government?

THE PRESIDENT. I think he has offered that publicly. And as you know, yesterday, I believe, he released two of his top political opponents. And I think, I would guess, surmise, that one of the reasons for those political leaders being released was to encourage them and their followers to join in some form of coalition government. That's the Shah's desire that's expressed to me personally by him and through his own Ambassador here, and I take him at his word.

EGYPTIAN-ISRAELI PEACE NEGOTIATIONS

Q. Mr. President, how important is it, do you feel, for Israel to accept a definite target date—by the end of next year, for example—for the transfer to Palestinian autonomy; how important to accept a target date, as opposed to a more general commitment that we will try to bring autonomy as soon as possible; how important in terms of bringing Palestinians into the process, bringing King Hussein of Jordan into the process? How critical do you feel is the issue of persuading the Israelis to accept a definite target date for transfer to autonomy?

THE PRESIDENT. I should make clear that the United States does not have a unilateral position that we try to force or even encourage the Egyptians and Israelis to adopt. Any mutually acceptable agreement which could be concluded between the Egyptians and the Israelis would be satisfactory to us.

My concern, however, is that we would like to see the Camp David accords carried out, first of all, completely. I think any violation of the Camp David accords would set a very serious precedent which would cast doubt upon the present treaty which is being negotiated.

We would also like to see the Camp 1)avid accords carried out, not grudgingly, but enthusiastically, in the same spirit that we saw exemplified in the White House when the accords were signed. This has not been the case during the negotiations. There have been unwarranted delays, quibbling over what seems to us to be insignificant language differences, and excessive public statements on both sides that have made the negotiating process excessively difficult.

We have made a proposal to the Israelis and Egyptians of a peace treaty text plus a separate letter which would endorse a definite timetable on the establishment of the self-government in the West Bank and Gaza Strip. The Israelis adopted the peace treaty text after they had previously rejected some of its component parts, and did not adopt the crucial and integral additional letter with few features in it, the most significant being the timetable. The Egyptians consider that the timetable is a mandatory element of a future

Success.

I'd like to add one other thing: If the Egyptians and Israelis violate the 3-month limit on negotiating this treaty, it will be a very serious matter to us and, I think, to them. That's why I am sending Cy Vance to Egypt, and perhaps then to Israel. If, because of mutual lack of agreement, we go past December 17, it would cast doubt on whether the Egyptians and Israelis would carry out the difficult terms of the upcoming peace treaty, and it would set a precedent that would have far-reaching, adverse effect.

So, we consider the December 17th date to be very, very important, perhaps at this point more important than Prime Minister Begin or President Sadat. I'm going to make that clear to both leaders during Secretary Vance's trip.

But, to summarize by repeating my first statement, we don't have an independent position. Any mutual agreement between the two nations that leads to peace and a peace treaty would be satisfactory to us

Q. May I just follow that up, sir?

THE PRESIDENT. Yes.

Q. Would you consider the establishment of four new settlements on the West Bank to be a violation of the Camp David agreements?

THE PRESIDENT. Yes, I would.

My interpretation of the Camp David agreements—and, as you know, Prime Minister Begin disagrees with this interpretation-is that there was a moratorium on the establishment of new settlements until the agreements had been reached on how to establish the autonomous government in the West Bank and Gaza Strip. I had never connected in my own mind or in my conversations with either leader the cessation of settlement construction as it related to an Egyptian-Israeli peace treaty concerning the Sinai. It was always connected in my mind and in the original versions and text of the proposals to be connected with the conclusion of discussions on how to establish the modalities and procedures of establishing the elections, self-government in West Bank, Gaza.

I might say I don't want that to be an obstacle to the Egyptian and Israeli progress. But that's my own personal opinion, and that's my recollection of what occurred at Camp David. It's the only extant difference, and it's already been explored in the press.

APPOINTMENTS OF FEDERAL JUDGES

Q. Senator Harry Byrd of Virginia sent you the names of white males for the judgeships there, and when he set up his commissions, he had several white males, one white female, and one black. The blacks did present some names, but the commissions rejected them.

Since that time, the civil rights organizations of Virginia have considered some black names to fill the judgeships. Are you going to consider those black names, or are you going to acquiesce to Virginia's all-time historical policy of never even considering a black for Federal judgeship?

THE PRESIDENT. I have, practically speaking, a great deal of influence on the selection of circuit judges, those above the district judges. And I've established Merit Selection Commissions to recommend to me a balanced list of well-qualified people when every vacancy occurs, and those are, in effect, under my control.

Because of the ability of any Senator to prevent the appointment of a district judge in his or, now, her State, the district judgeships have to be a partnership agreement between the Senators and the President. Either the Senator or I can, in effect, veto the appointment of a judge.

As we have received lists of judges, judge nominees, from the Senators—and they don't come to me, they come to the Attorney General—if they don't encompass women and minority groups, the Attorney General is asking the Senators to reassess their procedures and to broaden the list to encompass women and minority nominees, so that I can have that opportunity for my own selection.

We are proceeding with that aggressively. In some instances, there have been, since this legislation has been pending for so long, there have already been some commitments made by the Senators themselves. I think there have been 18 or 20—I've forgotten; I don't keep up with the list, but it's been growing—of the Senators who have established district or State selection commissions. And I hope that this will continue.

I'm not prepared to comment on an individual State. I have not seen the list, have not been involved in that at all in, you said, Virginia. But my influence will be used to the maximum degree practical in encouraging Senators to cooperate with me in appointing both and recommending both women and blacks, other minority groups, for those district judgeships.

Q. Could I follow that question up, Mr. President?

THE PRESIDENT. Yes.

Q. I wanted to follow up on that a minute.

Senator Byrd has said that he is not going to reconsider anything but what the commission has passed to him—and I do want to congratulate you on setting up these commissions that are formed at the State level—but he has said he's not going to consider any other names.

THE PRESIDENT. I understand.

Well, I might say that if something of that kind cannot be resolved, then there would be no appointment in Virginia, because the way the Senate operates—and this is not my preference—Senator Byrd could tell the Judiciary Committee that any Senate nominee was unacceptable to him, and the Senate Judiciary Committee would not act. That's the present prospect.

But we hope that as the process is demonstrated to be feasible, that—I'm not commenting specifically on Senator Byrd; I'm not familiar with his recommendations yet—but we hope that there will be a growing inclination on the part of the Senators to act in good faith and to accommodate my policy of broadening the appointments.

Q. Mr. President, would it be unfair to have you comment on any number, any specific number of minority or women Federal judges you expect to appoint in that 152 number? You know, that was the figure that was publicized as being the number of slots that you intend to fill, and, of course, you specified that you want minorities and women. But have you formulated in your own mind any estimate as to how many of that 152 would half be adequate in your estimation, less than half?

THE PRESIDENT. I'm not prepared to answer that question. I don't know. It's not a question of fairness; I just haven't made those decisions yet. The only thing I can say is that I think one of the recent legal journals—I don't know the name of it; I think I sent a copy of it to Jody-assesses what I have done already in that respect. You are welcome to look it over. And, of course, whenever I make a decision on judicial appointments or on the Federal budget or anything else, my action is subject to public scrutiny and public condemnation if I don't perform well. I do the best I can. Sometimes my authority is limited.

If I didn't have to get Senate confirmation of appointees, I could just tell you flatly that 12 percent of all my judicial appointments would be blacks and 3 percent would be Spanish-speaking and 40 percent would be women and so forth. But that's not a matter that's entirely in my hands. I'll do the best I can. And if I fail to satisfy you or others, then I'm certainly a good target for criticism or condemnation. I'll try to avoid that prospect.

WAGE INCREASES FOR PUBLIC OFFICIALS

Q. Mr. President, the first big challenge to your wage and price guideline program seems to be coming not from the Teamsters or one of the other big unions, but from some public officials of Illinois and Ohio at the State and local level. I'm wondering how important you consider that these pay increases be rolled back to the future of your program—in other words, whether smaller people down the line can be expected to adhere to the guidelines if the public officials don't adhere to them?

THE PRESIDENT. Certainly they're important symbolically. I think it's also important that I express myself very clearly through Alfred Kahn ¹ or personally when I believe these salary increases violate the standards.

¹ Advisor to the President on Inflation.

There are extenuating circumstances in some instances. For instance, the city of Chicago has a constitution which prevents any change in a city administrator's salary, elected official's salary, for a 4-year period, and any change in the salary has to be made before the next election so that the public can, in effect, approve the salary increase. Mayor Bilandic called me yesterday afternoon, very concerned about the altercation, and he is sending his city budget officer, I think today, to meet with Alfred Kahn or his people to work out a reasonable resolution of this question.

I think obviously some of the increases proposed have been excessive, but if they can justify the reason for it, if it's an increase that encompasses, say, an 8-year mandatory period of time, and if the change is made prior to an election, where the people that make the change can be condemned or removed from office by the populace, that certainly is an extenuating circumstance.

I'm not trying to comment on percentages or numbers. I'm not familiar with them. But I think it's a very serious challenge.

I might add one thing—not even parenthetically-that we don't have any authority over a city government or a State legislature. There's a limited amount of action that we can take even indirectly. We can't cut off humanitarian funds to a city or to a State, for instance, or cut off highway funds simply because the legislature votes to raise its own salary. But within the bounds of my authority, or practicalities of it, we consider this to be a serious challenge, and we are trying to meet it. I think my own statements last Friday and Fred Kahn's statements since then demonstrate that that's a fact.

MIG—23'S IN CUBA

Q. Mr. President, I was looking over the transcript of your answer at the last press conference on the presence of MIG23's in Cuba, and I'm not quite clear what exactly our intelligence does show with regard to those warplanes. And I wonder if you could answer whether or not we have any indication that there is even one nuclear-capable MIG down there? I'm not talking about whether or not there are any nuclear weapons down there, but whether or not there is a MIG that is capable of carrying nuclear weapons.

And secondly, your answer also seems to imply, the remarks about assessing the quantity and quality of such systems, that if there were perhaps only one or two, that that in itself might not constitute a violation of the '62 understanding we have with the Soviets. And I wonder if you could also comment on that, whether or not just one or two might be okay, but more than that might not be?

THE PRESIDENT. Well, I think it's obvious that there are planes in Cuba that can carry an atomic weapon if they are outfitted to do so, designed specifically to do so, and if the crew is trained to do so. There are many relatively small, commercial-type jets that have a physical capability of carrying a nuclear weapon, which in this modern technological age can be relatively small in weight. But I think that's as far as I want to go with my answer.

You know, the physical capability of picking up that much weight, carrying it to the shores of the United States and dropping it, is certainly there. But whether the planes are outfitted to do it, designed to do it, crews are trained to do it, is an entirely different matter, and we don't have any indication that this is the case. But we are continuing to monitor that circumstance, and act accordingly.

Q. Is there some sort of numerical mix or some sort of formula that we have worked out in our minds beyond which we would consider it a violation of the '62 agreement and under which we wouldn't consider it? In other words, if they just had half a squadron or only a couple of planes, well, you know, it's perhaps trouble, but it's not something we're going to call them on?

THE PRESIDENT. Well, there would certainly be a numerical mix that I can't describe and don't have in my mind now that we would consider in violation of the 1962 agreement. And the 1962 agreement was certainly very unclear on this. The technology and the capability of airplanes, almost all the extant airplanes then, have been modified or replaced, and there would be a mix of quality and quantity. Even if I knew, I wouldn't broadcast it publicly. There might be at that time of crisis, which does not presently exist, a difference between ourselves and the Soviet Union, but I don't think I could define it any more clearly.

The Soviets have assured us that they still stand behind the 1962 agreement, have not violated it, and I think my answer at the press conference was carefully worded. And I think it's adequate.

NICARAGUA AND SOUTHERN AFRICA

Q. Mr. President, I was going to ask you about the MIG's also, but I'll switch my question around to South Africa and Nicaragua— [laughter] —both places where the United States has had deadlines in concert with other countries to try and bring about some sort of settlement. In both places the deadlines have come and gone, and in both places you are working behind the scenes to try and bring about some kind of peaceful settlement.

Could you start with Nicaragua, and tell us what progress you're making with [President] Somoza?

THE PRESIDENT. We've got a little time. Let me tell you something in generic terms, general terms, that apply to all these efforts.

We don't have to be involved in trying to bring peace to Nicaragua, to Nigeria, to Rhodesia, to Cyprus, to the Mideast, but it's a voluntary responsibility assumed by us. It's in the best interests of the American people. It's certainly in the best interests of those people who are faced with expanded conflict. It's in the best interests of world peace.

The prospects for resolution of all these very difficult questions are sometimes quite undetectable or remote. They're certainly not a sure thing. We have been persistent and, as a nation, sometimes courageous in injecting ourselves into a thankless responsibility to try to induce reluctant adversaries to cooperate and to maintain or to enhance peace, sometimes even to conclude a final agreement that might be permanent in nature.

We're making some progress, I think, in Nicaragua. When we entered the Nicaraguan conflict, blood was being shed, massive violence existed. We tried to induce and were successful up until now in getting other American nations to join in with us, the Dominican Republic, and Guatemala, to get Somoza for the first time even to agree to an outside arbitration group to resolve the differences between himself and his political adversaries in Nicaragua, to stop the violence, to restrain the shipment of arms into Nicaragua to both sides, and to provide peace between Nicaragua and her immediate neighbors.

At that moment several months ago, I think the prospect of Somoza accepting any sort of plebiscite would have been very remote. He has agreed to a plebiscite under certain restraints. My understanding the last few hours is that his opponents have now tentatively agreed at least to those plebiscite terms. A lot of negotiation still needs to be done, but we are making progress.

And in the meantime, we have shifted-I don't say we've done it alone, but we have helped to shift the Nicaraguan circumstance from active and massive bloodshed and violence into a negotiation on the details of a democratic plebiscite, that would be monitored by the United Nations or by the OAS, that would decide on the future government of Nicaragua. We don't know that we'll be successful, but I think that in itself is progress.

The same thing applies in Rhodesia and certainly to a greater and perhaps better extent in Namibia.

Q. Have you been getting positive feedback on the Namibia situation in the last day or so?

THE PRESIDENT. Yes. I think the prospects for Namibian progress were dismal 2 weeks ago. With the Namibian election plan, which is now under way—I think the final results of it, it takes about 4 days to hold an election; first one they've had in a long time—the Secretary General had asked the Prime Minister of South Africa to take full steps—which I don't know have been revealed publicly, and I'm not going to reveal them this morning. The South Africans were very reluctant to accede to the Secretary General's request.

I invited Pik Botha, the Foreign Minister, to come and meet with me privately. I urged him to accept the importunities of the Secretary General. He went back to South Africa, talked to Prime Minister Botha, Pieter Botha, and they agreed to accept the Secretary General's request.

Q. They did?

THE PRESIDENT. Yes. This has been a kind of a one-sided proposition. Now, of course, the next step is to go to SWAPO and see if they will accept the present terms. There's nothing certain about it.

Our hope is that this elected body in Namibia will be looked upon as an interim step; and that South Africa will retain responsibility for dealing with the United Nations; that United Nations force will be put into Namibia to supervise future elections that would probably take place over, after 5 or 6, maybe 7 months; that the United Nations force will be patently fair and objective; and that the free expression of all the people who live in Namibia be felt in the establishment of a new government, with SWAPO and the Turnhalle group represented in accordance with a majority vote and one-person-one-vote, majority rule. These are the things that we hope for.

We've had less success in Rhodesia. Although the bloodshed has been more than we would want, it's been much less than could have been the case. ! think the British retain primary responsibility there from an outside point of view. We've joined in with the British at their request.

Now there's another effort being made more exclusively by the British. We are participating in this. They're exploring the possibility or getting the four powers together under some framework, and we don't know what the outcome will be. In the meantime, we're trying to encourage all of them to minimize bloodshed and violence and move toward, again, majority rule, one person-one vote, free expression for the will of the people in Zimbabwe, as it will be named, and let anyone who wants to run as a candidate do so. These are the kinds of things we want to do with the United Nations, retaining peace there.

But we can't guarantee success in any of these instances, including the Middle East or Cyprus. But we're doing the best we can, and I think to some degree just stabilizing the situation and continuing the negotiations is constructive.

I'll try to keep my other answers briefer.

BILLY GARTER Q. Could I shift gears, sir?

THE PRESIDENT. Please.

Q. About 6 weeks ago your brother appeared before an Atlanta grand jury that was investigating the Lance affair. And he later told reporters he'd invoked the fifth amendment two or three times and said—I don't know what his—there are various interpretations of his mood at the time—but he called it a Republican, Yankee-inspired investigation. Have you any general reaction to this, sir?

THE PRESIDENT. Not that I would like to express. [Laughter] I might say that I promised the American people that I would stay completely aloof from my own business and so forth. I have never discussed this with Billy, although I talk to him frequently about other things, but he understands my commitment. And any dealing with Carter's Warehouse, from my point of view, is done by Mr. Kirbo, and he'll make any statement that's appropriate. But I don't care to comment on it.

Q. Could you comment on his taking the fifth, sir?

THE PRESIDENT. No, I don't care to do that, either.

I've read the news reports, and Billy's explanation was that he was asked by the grand jury to bring the records for a certain date, a period of time, and that when questions were asked of him about financial details outside that period of time, he refused to answer because he did not have the documents with him. But I've only gotten that from the press. I've never asked either Kirbo or Billy about that.

U.S.-MEXICAN RELATIONS

Q. Mr. President, could I ask you about the Mexican policy that you have under development now? I understand you want to discuss immigration and some other things that have to do with our dealings with the Mexican Government. Can you tell us a little bit about how that's progressing and what you hope to accomplish?

THE PRESIDENT. Yes. In preparation for my visit to Mexico in February, the National Security Council has been assessing all the facets of our Mexican policy-political, economic, and so forth. We began this during the visit of President Lopez Portillo to our country. He was the first foreign visitor that I ever had. And we set up kind of a task force from the Commerce Department, the Treasury Department, the Attorney General's office, and Defense and Agriculture and so forth, and they have met at the sub-Cabinet level, at the Assistant Secretary level on several occasions to explore potential progress between ourselves and Mexico.

I consider our relationship with Mexico to be as important as any other that we have, and my relationship with President Lopez Portillo has been very good.

We've also had negotiations with them earlier this year on the purchase or pricing of natural gas and, perhaps, eventually oil, as those fields are developed. Because of the uncertainty of congressional action on the energy legislation, they were postponed, with agreement on both sides, until after the Congress adjourned. Those will be recommenced, and I would guess we'll do some background work on that before I arrive in Mexico to conclude, hopefully, these continuing negotiations.

I think that pretty well encompasses what we are doing at this point on Mexico. It's of very great importance to us. There'll be a great deal of staff work and Cabinet-level work between now and February in both nations, and I hope that my own visit with Lopez Portillo can conclude successfully these negotiations on a wide range of subjects.

STRATEGIC ARMS LIMITATION

Q. Could you tell us, Mr. President, about what progress is being made and what the prospects now are towards a SALT agreement? And I wonder if, without attempting to hang you up on any more predictions, you will have one to discuss at Guadeloupe in January?

THE PRESIDENT. I don't know—I doubt if we will have a final agreement to go over with the other European leaders in Guadeloupe, but we will have the SALT proposals that we have in almost final-our proposals, probably, in final form, when we get to Guadeloupe, and an accurate description to the other leaders of the remaining differences, if any, at that time.

I might say that we keep other leaders, certainly including Schmidt, Callaghan, Giscard d'Estaing, briefed very well on the progress of SALT negotiations on a continuing basis, either with direct secret messages from me to them, sometimes on a nonclassified basis in private telephone calls between me and them, and so forth. As you know, many facets of the SALT II agreement apply directly to the European theater, and, as we prepare for SALT III, this has a much more direct effect on the European theater.

I have been pleased recently with the progress being made on SALT. The remaining differences are minor, compared to what they were a year ago, and in my own mind I can see a way to resolve them. If the Soviets are adequately forthcoming, I would guess that any further delay would be minimal.

Q. What steps, say between now and then, can you anticipate in the way of contacts, meetings, and discussion between ourselves and the Soviets?

THE PRESIDENT. I think an almost inevitable progress would be to continue to define the narrowing differences. And there's been steady progress; there never has been a time when we retrogressed on SALT. Then I think there would be a preparation period for a summit meeting, certainly at the Foreign Minister level, between Secretary Vance and Gromyko, and possibly others, and then a summit meeting between myself and Brezhnev, whenever he and I agree there would be a reasonable opportunity for success.

I think because of their attitude, which I have assessed over the last—almost 2 years, President Brezhnev's inclination is not to have a summit meeting unless there is a sure conclusion of SALT in prospect. But I would like to have, if he should come over here, a 4- or 5-day period where we might discuss a broad range of agenda items and not narrowly focus it just on military items. And of course, that would require very careful preparation.

I can't give you any further information. I don't know anything about dates. It's still just a general outline of how it might go about. But that's my present thinking.

PRESS SECRETARY POWELL. About one more question here.

THE PRESIDENT. One more question? All right.

TAX-EXEMPT STATUS FOR PRIVATE SCHOOLS

Q. Mr. President, the IRS has a plan to penalize schools that desegregate by taking away their tax-exempt status. I wonder if you could comment on whether you favor that plan, or if you do not, what alternative do you think the IRS has, or anyone has, to get these Christian schools and other schools to desegregate?

THE PRESIDENT. I'm not familiar with a new IRS plan. You may know that I come from Georgia— [laughter] —and at the time of the civil tights legislation, a lot of schools were set up with the real purpose of circumventing the civil rights laws, which accepted students on a racial basis. At that time, the IRS passed some very restrictive rulings or interpretations of congressional acts or laws that prevented contributions to those schools from being included for tax benefits.

So far as I know, those rulings still apply, and they are very restrictive on the schools in my own area.

Q. They're holding 4 days of hearings right now on a plan that would require schools that are under court order to desegregate, i.e., private schools under court order to desegregate, or schools that have already—how do I phrase it?—that have already—I can't think of the other part of it, I'm sorry. Anyway, the schools that-Oh, I know, schools that set up around 1970, or when court orders in their area, public schools to desegregate, those schools would have to prove that they are having financial arrangements for minority students, and things like that.

THE PRESIDENT. I see. I don't know how to answer that question-

MR. POWELL. Mr. President, I think that that matter is in Treasury. It has not come to the White House at all, even at the staff level, I don't believe. I think I know what you're talking about, but it is at this point completely within the operation of the Treasury Department.

THE PRESIDENT. That probably—since I'm not familiar with it, it'd probably be better for Jody to look it up, talk to me, and then give you an answer. I don't know.

ANTI-INFLATION PROGRAM

MR. POWELL. Let's take one more here from Mr. Deakin [James Deakin, St. Louis Post-Dispatch]. I know you want to talk about inflation a little bit.

Q. You haven't really been asked a question about inflation—I mean, here we are—walk out of here without it. I was struck by something you said at your last press conference.

You were asked whether it wasn't really the case that if we are going to have a real attack on inflation in this country, really do something about it, the American people weren't going to make up their minds to pause in this expansion of expectations, this ever-rising standard of living. And your answer, as I heard it, was pretty much, no, we didn't have to pause like that, we can have our cake and eat it, too. That's what came across to me.

THE PRESIDENT. I might say I don't remember that question, or that answer. But go ahead. [Laughter]

Q. It was at your last press conference.

THE PRESIDENT. I remember the press conference. [Laughter]

Q. You were there, that's right. So was I.

I'm just wondering whether you really think that. I was struck, for instance, by what seemed to me to be a conflict between that and your whole approach to the energy problem at the beginning, when you were saying, in effect, this country had to cut back on its greed for energy and its sort of wild consumption of energy.

Do you really think, that we can have our cake and eat it, too? I'm talking about the question of sacrifice. Do you think you can sell the American people and have them believe in your inflation program without a major sacrifice?

THE PRESIDENT. I don't think so. I've said many times that the American people are going to have to sacrifice, and my responsibility, within the limited authority that I have, is to balance that sacrifice among the various groups.

No one here can imagine how difficult the last 2 or 3 weeks have been for me in the preparation of the 1980 fiscal year budget. It is a traumatic experience to try to reach the goal that I very carefully set for myself of reducing the deficit, imposing restraints from the Federal Government level as a needed step and also as a guide or example for others to emulate.

I will be judged, when the budget is revealed, as to whether I've done it fairly and objectively and have met my commitments. I intend to do so. But it is a tight budget, and there are going to be inevitable outcries from those who expect to continue things as they have been going in the last few years.

So, I think that the public is fairly well attuned to, as you say, a pause. At the same time, I don't believe we're going to have a recession or a depression. The rate of growth will certainly be much less than it has been in the last few years, when we've had 6 or 7 percent growth rate.

We have some demonstrations of what I say. I think anyone who reads the speech that I made to the National League of Cities would say that it was a very disappointing-type speech from the perspective of mayors expecting increased handouts or generous Federal Government policies in economics. But the response among the mayors, I think, was very supportive of me, both at the time I was there and their subsequent comments to the press.

So, I think that the sacrifice is inevitable. It ought to be reasonably shared. I'm going to persist in setting an example from the point of view of the Federal Government to control the deficit. And when the budget's revealed I think there's going to be a general conviction among the American people that the sacrifice will be imposed as I've described.

Q. Specifically, what you were asked at that press conference, Mr. President, was whether or not the American standard of living was going to have to—the level was going to have to pause.

THE PRESIDENT. I think the answer to the question was whether it was going to

Q. You said no, that the standard of living would continue to go up. Can we really have a successful campaign against inflation if the American standard of living-we are, after all, victims of our own standard of living—continues to go up?

THE PRESIDENT. Well, you know, I don't want to predict exactly what's going to happen. My belief is that the American standard of living can continue to go up, that the standard of living, however, is not measured simply by the rate of growth of our national product. I think the standard of living is determined by many things: the assurance of peace, stability, the strength of families, the quality of education, the enhancement of basic human rights, harmony among dissident groups.

This will certainly continue to improve. I think that we will not have a recession. We will have a rate of increase of growth in the national product that will even include additional economic benefits, but how fast the GNP grows will be less than it has been in the past.

But I don't think the American people are looking toward a life that's more dismal or with less hope, nor with less quality. But if you measure quality only by how fast someone's income goes up, then I think there is going to be a difference in the future, compared to what it has been in the past.

I haven't given you a very good answer, but it's the best I can do.

Well, let me say I appreciate a chance to meet with you and discuss subjects in more depth. I've taken more time to answer your questions this morning than I would at a press conference. But if you all think that these kind of sessions are beneficial, talk to Jody about it, and I'd be glad to do it additionally in the future.

I thank you all very much.

REPORTER. Thank you, Mr. President.

MR. POWELL. Let me ask, before everyone gets away, if you would, we're making this announcement on the Guadeloupe trip right away. If you didn't mind just holding onto that, particularly the wires, for just a few minutes, let me walk in there and make that announcement. We did it here so you'd have a chance to explore it in a little more depth. I was glad to see that you availed yourselves of that gracious opportunity. [Laughter] If you don't mind doing that, I'd appreciate it.