Interview With the President Remarks and a Question-and-Answer Session With Editors and Broadcasters From Minnesota.

THE PRESIDENT. I'm grateful that you've come this afternoon. We had a previous meeting planned, and we had a conflict of schedules, and you couldn't come. I'm glad to have you here.

I want to reserve as much time as possible for your questions, not for statements from me.

ADMINISTRATION POLICIES

We are constantly at work trying to preserve the peace which our Nation enjoys. I think it's been 10 Presidents ago since we've had a time when no service people were killed in combat—a remarkable fact that I just learned this morning: 56 years ago; I think President Harding was the last one. I hope we can keep that posture. And it's dependent entirely, I think, on having a strong nation, united with resolved will and an adequate defense capability.

We want to get along well with the Soviet Union and meet with them on a peaceful, competitive basis. We are proceeding with SALT, which I think is the most important decision that's likely to be made by our Government while I serve in this office. We've strengthened NATO.

I think we've moved very firmly and aggressively to encourage new friendships around the world. India now has very good relationships with us. Under Mrs. Ghandi, they were inclined strongly toward the Soviet Union. Our new opening with China, a fourth of the nations' populations, has been very successful so far. We've not damaged our relationship, so far as anyone can tell, with the people of Taiwan. And this is a fine balancing act, which I think has been fairly successful at this point. We've also had a chance to open up the possibilities for increased benefits with relations among the African nations and ourselves.

In the Mideast we've had some limited success so far in bringing a permanent peace to that region. We are continuing this effort, with a larger dependence at this time on direct negotiations between Egypt and Israel. We play a role; we will increase our role if desired by the two major participating parties. Both of them are bound by the Camp David accords, which extend in the future toward and including a comprehensive peace, involving, of course, the resolution of the very difficult question of the Palestinian rights.

In the domestic area we are trying to deal with the chronic inflation which has been on us now 10 or 11 years. A major factor here is the resolution of the energy question and the evolution within the Congress, in perhaps the most complicated and difficult legislative challenge the Congress has ever faced, and that is an energy policy for our country. At the present time the inflation rate is comprised of about 4 percent energy, and the balance of it is nonrelated to energy,. If it weren't for the energy. factor alone, the inflation rate now would be the same as it was in 1978 and 1977.

I think we'll be successful this year in completing the major portion of the energy proposals that I presented to the Congress in April of 1977. This has not been an easy thing; it's been a constant challenge.

There are many other matters that I would be glad to discuss with you, concerning agriculture or social programs, health, education, housing, transportation, Federal-State-local relationships, improving the quality of life in our cities. But I think the best thing for me to do is to answer your questions. Perhaps those who haven't had an opportunity to ask questions earlier today would like to start, and then I'll open it to anyone else. Or if you've all had a chance to ask questions, then just use your own judgment.

QUESTIONS

NUCLEAR EXPLOSION IN SOUTH AFRICAN REGION

Q. President Carter, I was wondering now, what's the latest on the atom explosion in the area of South Africa?

THE PRESIDENT. A few weeks ago, we had an indication that somewhere in that region, covering literally thousands of square miles, there was an explosion. We have been and are continuing to try to follow up that initial observation. There is no certain answer yet that anyone can derive.

Q. Does it appear as though it's South Africa?

THE PRESIDENT. That's hard to say. There's a lot of ocean surrounding South Africa, and I don't think it would be possible to pinpoint it any closer than a distance of literally hundreds of miles.

So, we don't really know, except just a general area where an indication was obtained. The people that got that indication feel quite sure, but followup checks have not been successful. This doesn't prove or disprove whether or not there was an actual explosion.

WINDFALL PROFITS TAX

Q. Mr. President, yesterday, sir, you expressed dissatisfaction with the windfall profits tax as it was, so far, in the Congress. What is the rockbottom level that you're willing to settle for, and what are some of the punitive measures that you are willing to take should the version that comes out of the Congress not please you?

THE PRESIDENT. I'd rather not describe the additional measures that I would take, because I'd like to keep all my options open.

The minimum thing that would satisfy me is the proposal that we put to the Congress at the very beginning, roughly $275 billion in income from that source. I think, if anything, that figure ought to be higher, if the Congress makes a change, than lower.

The House lowered it some, a considerable amount, 12 to 15 billion dollars, and also limited the time of application from a permanent tax on the unearned profits of the oil companies to a 10-year period-where some of these projects are very long range in nature, and I think the permanent aspect of the tax is important. That was a major change the House

made.

The Senate, however, slashed our proposal in half—the Senate Finance Committee did. So, we'll fight as hard as we can to restore the losses on the floor when the Senate debates and votes on this issue. And if we're not completely successful there, we'll take our battle to the conference committee and then back to the House and Senate floors for the assessment of the conference committee decision.

But if any change is made in what we originally proposed, it ought to be stronger, rather than weaker, because of subsequent events that have occurred.

WAGE AND PRICE GUIDELINES

Q. Mr. President, I believe two out of three American people holding jobs are not members of labor unions. What would you like to see for them in the year 1980 for the guideline for wage increases?

THE PRESIDENT. The most impor— Oh, I was preanticipating your question. I started to say that one of the most important things we could do is to pass the labor law reform legislation that was proposed by us to the Congress earlier in my administration.

We would like for all of the wage earners and business executives to comply with the voluntary wage and price guidelines that have been established by us. These have been and are being modified as we accumulate more information and more data. And of course, now we have what we call the national accord, a joint approach to this very sensitive question, where labor and business and the Government voluntarily work with one another, whereas previously, up until this month, the guidelines were imposed by the Government, in effect, on a reluctant labor and business community. This is a major step forward, and I think that the results will be good.

I'd like to add quickly that we've had excellent response on both prices and wages during this past year. Wage increases have been very compatible with those in previous years, in 1978, for instance. We've had good cooperation in almost every respect. On the items that can be put under the umbrella of our price guidelines, we've had very good response from business.

The major things that have broken the inflation control effort and forced prices up have been: number one, energy; secondly, things like forest products and heavy demand for homes—we've had an almost 2-million-home-per-year building rate—and, of course, food, which is impossible, in my opinion, to have prices controlled.

But on items that are sold, we've had good response from the business community as well. I think the new accord will help us in the future to make our guidelines more effective. And I hope that the same guidelines would apply equitably between members of labor unions and those who are not.

PUBLIC WORKS AND WATER PROJECTS

Q. Mr. President, in the area of public works and water projects, there's a bill in the House that's nearing the floor and one in the Senate committee that deals with cost-sharing ratios for the local units of government that are different from what you've previously said are your guidelines. Does that make it veto material that they haven't adhered to your guidelines on a higher local share of the total project cost?

THE PRESIDENT. I can't answer that question. My recollection is that the proposal we made to the Congress had at least tacit approval from State leaders and others in the country before we presented it. Subsequently, an alternative was put forward.

I would have to assess the legislation in its entirety before I could decide whether to veto or not veto it. If it was a decided improvement over what we have now and would make water projects, including dams, be built on the basis of merit and not political pork barrel considerations, then I would probably sign the legislation. If it was of great danger to the level of expenditures in the future or would encourage unwarranted projects being built, then I would veto it.

Q. In the Minnesota area, it's the flood control projects, three of them, where you have asked for a doubling of the local effort versus what Congress has acted upon.

THE PRESIDENT. In general, the local and State officials have been amenable to that local and State effort. It gives them some authority or influence over the decisions, which they haven't had in the past. It's been almost exclusively a Federal Government bureaucracy and the administration and Congress decision. The costs are relatively low. But I think this would prevent projects being approved with the wild support of chambers of commerce and so forth, when they don't have to bear any of the cost at all at the local level. So, I think a proper sharing of responsibility and cost is the best approach, as we've put forward to the Congress.

But the thing I don't want to do is to participate in conjecture about what kind of bill might ultimately get to my desk after it goes through the tortuous legislative procedures and say I will or will not veto something that I haven't seen.

CANADIAN OIL EXPORTS

Q. Mr. President, you'll be traveling to Canada early next month. At that point will you be trying to restore some of the cutbacks we've experienced in Canadian crude oil to this country?

THE PRESIDENT. That will be on the agenda. We will be discussing environmental questions, fishing rights questions, the future supplies of oil and natural gas, maybe even some sharing of electric power that might be generated on each side of the border, and a clearer understanding of what we might experience in the future.

As you know, Canada, like our own Nation, has a very serious problem of being, in effect, two nations, one a major producing nation, and the other one a major consuming nation. And sometimes it's delineated geographically. On the east coast of Canada, there's a fairly substantial shortage of oil, as you know. On the western part of Canada, in the north, there's sometimes a surplus of oil.

My understanding from the Canadian authorities is that over a period of the next number of years, until they can hope to get tar sands and shale production, that they are going to have to be importing a little more oil than they have in the past.

So, I think for the Americans to believe that we'll have large supplies of oil coming from Canada in the future would be a fruitless hope. But that will be one of the issues Prime Minister Clark and I will discuss.

ENERGY CONSERVATION

Q. Mr. President, do you think the American people, in their daily lives and daily habits, are sufficiently aroused about the gravity of the energy shortage? Have they given up enough? What's going to excite them about getting involved in carpools?

THE PRESIDENT. Well, in the last few months, since the California gas lines and some on the east coast, there's been a new interest in and concern existing among the American people themselves. For instance, I think last year, in the winterization of homes we 'had about a 9-percent participation rate in getting tax credits for weatherizing homes among the families of our country.

I've been pleased the last few weeks, maybe the last few months, about the response of the American people. One indication of this is that we have measured about 1 mile per gallon higher efficiency among all the automobiles in the Nation during this summer than we had anticipated, which shows that Americans are driving more carefully, trying to save gasoline, and also shifting, as rapidly as they are available, to more efficient automobiles.

I expect there's to be a large increase in the utilization of the tax credits to winterize homes. We've spot checked Government buildings around the Nation—and this has been done by the news media in some cases—and found a fairly surprising degree of compliance with the new thermostat control settings that I advocated.

So, to answer your question in one sentence, I think that in general, lately the American people's concern about energy has mirrored itself in increased conservation-not enough yet. I think more will come in the future.

One other point that's interesting is that for the last several years, the business community-industry, primarily—has practiced better conservation than before.

In 1973, for every 1-percent increase in the gross national product, energy consumption went up about 1 percent. Now, when the gross national product goes up 1 percent, energy consumption only goes six-tenths of a percent. So, that's a substantial saving that's been brought about just by business and industry attention to profits and losses. And now that intense interest in prices of energy and its adverse effect on a family budget is beginning to have a major effect, beneficially, on conservation.

HOUSING CONSTRUCTION AND FINANCING

Q. Mr. President, you mentioned that the cost of homes is one of the chief things that have risen, contributing to the inflation problem.

THE PRESIDENT. It's primarily the interest rates.

Q. Yes. Now, I have a letter here that was addressed to you by the president of the Minnesota AFL-CIO, who is one of the main supporters of yours in Minnesota, and he's extremely critical of the Federal Reserve Board, particularly of Mr. Volcker, on raising interest rates all the time In fact, he suggests you find a way of getting rid of Mr. Volcker. Do you have any comments on that?

THE PRESIDENT. Well, first of all, it's not possible to get rid of Mr. Volcker under the American law. And, secondly, the Federal Reserve has very wisely been isolated from political influence exerted by the White House or the Congress. It's an independent agency, and I think it ought to be independent.

Interest rates are almost directly related to the rate of inflation, and I think it would be expecting too much for the interest rates charges to be lower than the rate of inflation. The best way to get interest rates down is to lower inflation.

We've been effective in making alternative supplies of money available, Which did not exist several years ago, for Continued homebuilding in spite of high interest rates.

The interest rates have been fairly high, for instance, the last number of months, ever since—certainly all during this year—but the homebuilding rate in September was still near a 2-million-home-per-year mark. I think the highest it's ever been in history was a rate of about 2.3 million homes per year. We've sustained that level so far. What will happen in October, nobody can say.

Secretary Miller and the Home Loan Bank Board are now making a telephone survey for me around the Nation to see what is the degree of available money and how much has homebuilding been Constrained because of the high interest rates. This is a matter of great concern to us.

I might say that in the first 2 1/2 or so years that we've served, we have cut the unemployment rate among construction workers down by 40 percent, and I hope to keep that—the building in our Nation-at a reasonable, sustained level. But I'm also concerned about the high inflation and the attendant high interest rates, and I'm sure that Mr. Volcker is, too.

Q. Mr. President, don't the interest rates, though, contribute to and inflame inflation?

THE PRESIDENT. Yes, that's absolutely right, because the interest rates, through some strange quirk in the regulations, which is certainly an exaggeration, are applied to the Consumer Price Index as though every month every homeowner in the country had to renegotiate their home loan on the basis of the higher rates, which means that this greatly exaggerates in the Consumer Price Index the effect of high interest rates on home loans.

Obviously, many people are now paying off home loans at an interest rate of 5 or 6 percent, but within the CPI, it's as though all the homeowners in our country had just borrowed their money this past month. So, that is an exaggerated figure. But when the CPI goes up because of high interest rates at our current level, it feeds back into everything else, including the cost-of-living adjustments and other things.

RELIEF EFFORTS FOR KAMPUCHEANS

Q. Mr. President, you recently compared the situation in Cambodia to the Holocaust. And if it is so—and I agree it is—might it be worse because it's in a smaller population of 8 million, while there it was the European community? How do you explain the reaction, or is it adequate, of the Vatican, the Christian world, and the Western democracies, and why are we so timid in pointing out to the world who is causing the holocaust?

THE PRESIDENT. I don't think we've been timid. Have you all met with Secretary Vance yet?

Q. Yes, this morning.

THE PRESIDENT. I can get for you—I need not go into it now—just a calendar of what we have done, the voices that we've raised, our efforts in the United Nations, our condemnation, publicly and through diplomatic channels, of the authorities in Kampuchea over a period of months, beginning way back in 1978.

In the first place, it's hard to identify who is the government in Kampuchea-it's a very confused subject, the country is at war; secondly, the location of the people who are starving; and third, it's been very difficult to arouse the interest of the international community enough to force the combatant groups in Kampuchea to let food be delivered. There's no reason for us to deliver large supplies of food to a totalitarian government, who's responsible for the starvation, and have the food never get to the people who are starving. That was and has been an obstacle.

Only 5 days after we were successful in getting the United Nations, including the International Red Cross and UNICEF, to make a move, we made our pledge, and we've had our pledge on the line ever since I have known any way to get food to the starving people. We just arbitrarily said, "We'll provide a third of anything that goes to the Kampuchean starving people."

We still don't have a sure way to get the food to the people who are starving. It's been estimated that at least a third, maybe approaching a half, of the total population of Cambodia has already died, and they are still suffering very seriously.

My next meeting after this meeting with you is with the three United States Senators that have gone over there to try to convince the government in Phnom Penh to let 30,000 tons of food per month cross the Thai border and go into the area where the starving people exist, where they're trying to survive. We have food ready, on the way. We've already allocated enough money to accommodate every possible means to deliver the food.

It's one of those horrible examples of, I think, partially a deliberate attempt to decimate a population in the form of genocide. And now, I think, that the world has been aroused, I think the conflicting military groups in Kampuchea, including the Vietnamese, have been convinced that they must open up an avenue to alleviate the suffering. And we are in the forefront and have been in the forefront of making food and money and transportation capabilities available.

MR. EISELE. Thank you, Mr. President.

THE PRESIDENT. Thank you. I'll take one more question and then—

PRESIDENT'S LEADERSHIP QUALITIES AND ACCOMPLISHMENTS

Q. Mr. President, the question of leadership is apparently going to be a very large one in the coming Presidential campaign. And some of your critics contend that one of the problems you got into early on was that you had no grand vision of national goals, no overarching idea of what direction the country ought to go in. And they say that that's because you were an engineer and you were engrossed in details, but couldn't deal in the grand picture, particularly here in Washington. How do you react to that?

THE PRESIDENT. You know, in many ways our country has been built by people like engineers. I think Thomas Jefferson was a scientist, for instance. I was a farmer like George Washington was. I don't think there's any exclusive kind of person who has visions or who has leadership, to the exclusion of other kinds of people. We've had haberdashers who were great leaders, we've had military generals who've been great leaders, we've had ex-Governors who were great—Presidents, I meant to say—who were great Presidents. And I don't know how to respond to any particular categorization.

I think the fact that I was an engineer and have had some training in State government and also in science and also in agriculture—none of those things are debilitating experiences. [Laughter] I believe that any fair and accurate analysis of what we have proposed and accomplished would debunk that kind of allegation.

Before I was ever President, we had broad and extensive goals that we wanted to accomplish, and I think the difficulty that we've experienced with Congress originally has been because of the complexity of the proposals that we've put to them. I'll just give you two quick examples, one on the domestic scene.

We've never had an energy policy. For many years, back to Harry Truman, we've recognized that something needed to be done about energy. It's been in a crisis stage since 1973. This has been one of the most complicated and difficult political battles on the Hill that our country has ever seen. And I predict to you that before the end of this year we will have, almost in its totality, an adequate national energy policy. Had we had this earlier, we would have saved our Nation a great deal of suffering and threat to our very security.

In foreign affairs, we've had the same thing. You know, for 14 years Presidents have had the opportunity to complete a Panama Canal treaty and, for much longer than that, to open up China to trade and diplomatic relationships with our country, for even longer than that, to try to bring peace to the Mideast.

We've never flinched in any way from addressing an issue that I consider to be important to our Nation domestically or in foreign matters because of adverse political consequences. I can well understand now why some of my predecessors did not bring these issues up. [Laughter]

When I made my TV speech to the people of our country, I think, April 20 of 1977, on energy, I said then that I predict that my public opinion polls would drop at least 15 percent because of the energy proposals that I would make. That was one of the worst underestimations- [laughter] —I've ever made to the American people. But some of the things we've done have been very difficult, they've not been political winners, and we've been successful.

I might close by saying that the most difficult political undertaking I've ever had in my life, including a campaign for President, was getting the Panama Canal treaties ratified and the implementing legislation passed. When we began that effort, only 8 percent of the American people were in favor of any sort of Panama Canal treaty. And I think this will pay rich dividends for our country in the future. But it was obviously not politically attractive to do it.

So, I don't have any apology to make. We've still got problems. We haven't been 100 percent successful. But I think that when this Congress goes home, I predict to you that if you analyze what we proposed to the Congress versus what they passed, that there would not be a President in the last 20 years or more that's had a record as good as ours, and that would even include the relatively halcyon days of Lyndon Johnson's administration, immediately after the tragedy of John Kennedy's death.

We've got a good record, very difficult issues, an extremely fine, cooperative relationship between me and the Congress. And I think the facts—not just my voice, which certainly will be thought of as, perhaps, biased—the facts will show that what I've told you is accurate.