Remarks on the Persian Gulf Crisis and an Exchange With Reporters

The President. Well, I just want to say a couple of things here, and be glad to take just a handful of questions.

First, I want to publicly acknowledge and express my appreciation for the decision by the Japanese Government to make additional contributions to the effort that we're all making in the Gulf. Specifically, Japan will be providing significant economic assistance to key countries in the region that are most severely affected by the sanctions and higher energy prices. Japan is also increasing its support for the multinational forces involved in the collective defense effort. And I gave my personal thanks to Prime Minister Kaifu last night when he called me to tell me about this news. And we are grateful to the Japanese -- significant contribution.

And second, and in a similar vein, I want to say that early this morning Prime Minister Thatcher phoned to give me the additional good news of her country's latest contribution. She informed me that the United Kingdom would be sending a full armored brigade along with the additional helicopters and aircraft to Saudi Arabia. Some Americans may remember the name, the Desert Rats. And that's who will be going. As I told the Prime Minister over the phone, given all that the United Kingdom is already doing, this truly comes as the icing on the cake, a significant move by the Brits.

And I also called President Mitterrand a few minutes ago to consult with him on the outrageous Iraqi break-in at the French Embassy residence in Kuwait. These developments not only underscore the brutal behavior of Iraq but also the international support that exists and is marshaled against Iraq's occupation of Kuwait. I've often said that it is not the United States against Iraq but Iraq against the world. And for our part, we will continue to do everything possible to ensure that the sanctions work as intended and to deter and, if need be, defend Saudi Arabia against armed attack.

And here I just want to reiterate what I said when I first ordered the U.S. forces to Saudi Arabia -- namely, that the United States forces were sent to Saudi Arabia at the request of the Saudi Government. And those same U.S. forces will depart as soon as they are no longer needed or wanted. And they will remain not one day longer than is absolutely necessary.

Q. Are we any closer to armed combat because of what has happened at the French Embassy and also because a U.S. warship apparently has now fired across the bow of an Iraqi tanker? What do you know about that, sir?

The President. I wouldn't put it closer to a war situation. I still hope that this matter can be peacefully resolved. And the way for that to happen is for Iraq to comply with the sanctions. Yes, an American vessel did, in accordance with United Nations resolutions and in accordance with the sanctions, cause another Iraqi vessel to heave to, and it has been boarded. And I expect confidently that if it indeed is not carrying any contraband or anything that will violate the sanctions, it will be permitted to go on its way. But it did require a bit of a warning before the captain pulled over and permitted the boarding party to have a look.

Q. Mr. President, what can you tell us about the U.S. consul that was detained in the Canadian Ambassador's house? Any protest or any action about that?

The President. I don't have all the details on that one. But again, I would lump that into the unacceptable action category. I don't have the facts on that.

Mr. Scowcroft. They've been released, Mr. President.

The President. They have been released.

But any of these incidents -- all of them add up to clear violations of international law. And I think they do raise tensions; they clearly do.

Q. Mr. President, how is Ambassador Howell [U.S. Ambassador to Kuwait], and would the U.S. have to respond militarily if Iraq entered the United States compound in Kuwait City?

The President. That's too hypothetical, the last part of the question. But I have no reason to believe that Ambassador Howell is not in good shape. I haven't heard anything to the contrary.

Q. How long are you going to keep him there, sir?

The President. I've not made a determination on that.

Q. Mr. President, gasoline prices are up dramatically, and heating oil is at a record level in today's wholesale price report. What kind of warning signals does that send to you about the overall economic situation related to the Gulf crisis?

The President. Well, I think anytime you have price inflation, sudden inflation, it is a matter of concern, given the state of the economy. What it does is make me argue even more vociferously for a budget agreement. But the shortages -- this speculation -- we're talking about future market prices. We're talking about futures. That speculative atmosphere belies the reality, which is that there are sufficient petroleum products so that the market should not be going for higher prices. In other words, it's speculation. It's futures speculation.

Q. What's your reading on -- --

The President. I believe you're talking about October prices that are quoted on the crude market.

Yes.

Federal Budget Negotiations

Q. What's your reading on the budget negotiations as the clock ticks out?

The President. Well, kind of up and down like a roller coaster. This morning, there was the feeling -- Dick Darman and John Sununu, Secretary Brady felt that they were closing the gap. Last night it was a little more pessimistic. So, I can't tell you; I haven't talked to our negotiators in the last 2 hours.

Persian Gulf Crisis

Q. Is France going to take action as a result of the Embassy incursion? Will the United States take action as a result of that?

The President. I don't know what France is going to do. But clearly, I will continue close consultation with Mr. Mitterrand because I told him I view this as a matter that is of grave concern to the United States. It happens to be the French Ambassador's residence, but it is a matter that we look at as -- it concerns everybody, and told him that I would do anything I could to support whatever he decides to do. And he will be back -- I found him in Czechoslovakia, and he will be back, and I believe he has a Cabinet meeting tomorrow. So, we'll simply wait and see what they recommend.

Q. Does that include help militarily?

Q. Mr. President, you're suggesting that the Iraqis are, in fact, tightening the screws in a number of areas. Is there an escalation now required from you and your allies?

The President. When an escalation is required from me, Saddam Hussein will know it.

Q. What about the tape, Mr. President?

The President. The tape? Haven't heard. I think it's there now. Do we know if the tape has arrived?

Mr. Fitzwater. It should be there tonight.

The President. It got off to a slow start with that Eagleburger handoff, but it should be there tonight. [Laughter] One of the classic scenes. [Laughter]

Supreme Court Nominee

Q. Mr. President, have you had a chance to see any of Judge Souter's testimony, and do you have any kind of a feeling for how it's going?

The President. I have seen it, and I think it has been magnificent. I haven't seen it all, but I must confess, slight confession -- and maybe it's because our budgeteers were out at the summit doing all the heavy lifting -- I watched it for about an hour and a half yesterday, and I watched it for about 20 minutes today. And my admiration for Judge Souter, respect for him is even higher. I really think he's conducted himself extraordinarily well.

Q. Do you believe the questioning has been fair?

The President. What I've seen so far, yes. And a Senator has the right to ask any question he wants. And what I think has been masterful is the way Judge Souter has gone as far as he possibly can and yet has handled it with such intellect, in such a knowledgeable manner. I don't think anybody gets the feeling that he is improperly avoiding things.

Federal Budget Negotiations

Q. Senator Dole this morning said that if you can't get the capital gains issue resolved, maybe you shouldn't continue with the budget talks. Is it fair to hold the budget talks hostage to the capital gains differential?

The President. Listen, Senator Dole is doing a magnificent job out there. I don't know in what context he placed that. I think everybody in the summit knows of my commitment to it. I am absolutely convinced that it would not even be a revenue loser, although it's scored that way, and it is something that is fundamentally important to the continued growth in the economy, a growth that, frankly, is far too slow right now. So, I hope it's put into effect. But I'm not going to kind of go beyond that.

Q. But last November, on November 2d, you issued a statement to the effect that if you were ever going to get a deficit cut deal arranged, you should pursue capital gains as a separate vehicle. Why don't you do that now if you're serious about -- --

The President. Because we've got a strategy. And I think it's working, and I think all our people are on the same side on this issue.

Rita [Rita Beamish, Associated Press], and then I've got to go.

Persian Gulf Crisis

Q. Mr. President, I couldn't hear what Charles [Charles Bierbauer, Cable News Network] asked, but did you tell Mitterrand that you would back him with military retaliation if that's the way he wants to go?

The President. We didn't go into the details of the backing, but I just told him he has the full support of the United States. And he does.

Q. Have you talked to Ambassador Howell about what he should do if Iraqi forces -- --

The President. I haven't talked to Howell in the last week.

Last one, John [John Cochran, NBC News], and then I've really -- --

Q. Mr. President, is it different, sir, from the American Embassy being invaded, however?

The President. I'm not sure I'd make that distinction.

Q. Well, are you rattling at least one saber? You talk about -- --

The President. No, I'm not rattling sabers. You're trying to get me to sound like I'm rattling sabers. When I rattle a saber, the man will know it.

Q. But you talked about grave concern, but you also talked about the fact that you'll pull the troops back as soon as you can. So, we saw a mixed signal there.

The President. Oh, no, there should be no connection between those at all. I mean, what I was trying to do is there's been some speculation, some of it mischievous, in the Middle East that the United States wants to remain there. And so, what I want to do is just reiterate what I think I said in the meeting to the Joint Session, and that is that we want those people, all of them, out as soon as possible. And so, that should be separated from anything I'm saying here. I'm glad you asked. Let me clarify that.

Q. Are the Saudis getting anxious about having so many American troops there?

The President. I haven't heard that at all, and I don't think so. I know I would have heard it if that were the case. They're totally clued in on what our plans are. So, there's no disquiet on that at all.

Thank you all.

Federal Budget Negotiations

Q. Do you expect a budget agreement this weekend?

The President. Expected one a week ago.