The President's News Conference

THE PRESIDENT. I'm glad to be in Kansas City, and I would like to call on Mr. Scott Feldman [KNBC-TV, Kansas City] for the first question.

FARM SET-ASIDE PROGRAMS

Q. Thank you, Mr. President. It's been suggested that American farmers would be immensely helped if the Government were to drop its set-aside programs and urge farmers to produce simply everything they could, while at the same time the Government would push agricultural exports even harder.

My question to you, sir, is would you consider dropping the farm set-aside program, and how far will your administration go in demanding in world trade talks that the United States not open its market any wider to foreign goods unless those countries let in more American farm goods?

THE PRESIDENT. Thank you, Mr. Feldman.

I think it's highly likely that we will have set-asides. On a nationwide basis, we have had very good crop in corn, this year in particular, averaging for the first time over 100 bushels per acre.

The policy of our own Government, my administration, has been to try to increase farm income, and we've increased farm income about 25 percent.

We've also, every year, set records on farm exports. We have gotten recent information that the worldwide feed grain stocks are fairly high, but we anticipate very large exports of farm products this coming year.

I would say a moderate set-aside program, continued storage of farm products under the farmer's control, not so that the middle grain dealers can make the extraordinary profits as they have in the past, no embargoes on the shipment of farm products in the future, as they have been under previous administrations-this combination, I think, is the best to pursue.

I don't believe that the erection of tariffs or trade barriers would help us at all in the agricultural economy, because we export so many more agricultural products that we import. But we have recently signed a bill—as a matter of fact, in Kansas—passed by the Congress, that would improve greatly our opportunity to export farm products in the future with additional loans for those that might purchase our farm products, with additional opening of farm export offices to represent our farmers in foreign countries where markets are possible.

Mr. Pippert [Wes Pippert, United Press International].

RESULTS OF THE ELECTION

Q. Mr. President, I'm very interested in your assessment of the election, and a couple of specific questions: Why did Democrats do so poorly in this region of the Middle West; and secondly, with regard to Congress, how much does the more conservative nature of the Senate jeopardize approval of a SALT agreement, either as a treaty or as an executive agreement? And will the new makeup of the Senate make you hesitate to introduce such legislation as urban aid and welfare reform?

THE PRESIDENT. I hope I can remember those four questions. Well, in the first place, I think the Democrats did fairly well on a nationwide basis. We lost some very key races, some of them in the Midwest. I'd say one of the most serious was the loss of the Senate seat, Dick Clark in Iowa. But I just rode in from the airport with the new Governor-elect of Kansas, who happens to be a Democrat.

I think there was a general expression around the country of approval for the Democratic Party and its policies. I don't look on it as a referendum of whether I've done a good job or not. We retained well over 60 percent of the Members of the House of Representatives, Congress, about 60 percent in the Senate, and about 60 percent in the Governorships.

The election of Republican Senators and their effect on the SALT ratification—I think both liberals and conservatives, Democrats and Republicans favor an agreement with the Soviet Union which would limit the threat of nuclear arms in the future. We have been negotiating the SALT II agreement now for almost 2 years, even longer, including the time my own predecessors spent on this effort. And I believe that if the SALT treaty is well balanced—and it certainly will be—it will be infinitely superior to no treaty at all and much better than the SALT I agreement under which we presently live.

So, I believe that we will have a tough fight in the Senate, as we've always anticipated, but I don't anticipate that partisanship will play a role in the passage or ratification of the SALT agreement.

I would never be hesitant about presenting any sort of controversial legislation to Congress because I feared failure. If I had had this inclination toward fear, I would not have been able to sign an energy bill this morning; we would not have had the Panama treaties ratified; we would not have had many achievements that we've already realized.

So, I wouldn't let the makeup of the Congress, which is still heavily Democratic by the way, prevent my introducing bills that I thought were good for the country.

Mr. Brooks Jackson [Associated Press].

DEFENSE SPENDING

Q. Mr. President, as you draw up the budget for next year, which you will be doing the next few weeks, you're facing the choice between, to some extent, guns and butter. We've committed to our NATO Allies to let the military budget grow. At the same time, you want to hold down, decrease the Federal deficit to $30 billion or below.

Is it true, as reported, that you've decided to let the whole military budget grow by about 3 percent faster than the rate of inflation while ordering a $4 billion, $5 billion cut of the projected gross of social programs? And if so, where are those cuts going to come from—Amtrak subsidies or Federal pensions or farm programs or where?

THE PRESIDENT. Well, I've been working on the 1980 fiscal year budget for months. I had my first hearings, preliminary hearings with the agency heads last April or May, and now almost daily, I meet with the Office of Management and Budget on future decisions to be made in the budget itself. I won't make final decisions on the fiscal year '80 budget until sometime next month, after meeting with the heads of the different agencies and departments of the Federal Government to let them appeal, in effect, decisions that the OMB, Office of Management and Budget, and I have made together.

There's no way that I can cut down the ability of our Nation to defend itself. Our security obviously comes first. And we have encouraged our NATO Allies in particular to increase their expenditures for a joint defense of Europe, and therefore us, by 3 percent a year above the inflation rate. I intend to honor that commitment. The final figures, though, on individual departments, and clearly the Defense Department, have not yet been decided.

I might point out I will meet my goal, which I announced in the anti-inflation speech a couple of weeks ago, of having a budget deficit less than half what it was when I was running for President. The budget deficit will be below $30 billion. It's going to be a very tight, very stringent, very difficult budget to achieve, but I will achieve it. And I'm sure Congress will back me in this effort. I'm also continuing a freeze on hiring of Federal employees. I have limited this year, with the Congress approval, the pay increases for Federal employees—there is no increase at all for executives in the Federal Government. And I'll do other things as well to control inflation.

I consider it to be my top domestic commitment, and I don't intend to fail.

MEAT IMPORTS

Q. Mr. President, Jim Fitzpatrick, Kansas City Times.

Do you intend to sign the meat import bill, and if not, why not?

THE PRESIDENT. The bill has not gotten to my desk yet. And I expect to receive it tomorrow or Saturday. I'll make a decision then.

I might point out that I'm strongly in favor of the countercyclical approach to beef imports, where on a predictable basis, when the supply of beef in this country is high, that imports would be lower, and vice versa.

There are some factors that concern me about the beef import bill. One is the—I understand to be a severe limitation on the President's right to make decisions in case of emergency. But I'll have to assess the bill in its entirety. If I should make a decision against the legislation, however, because of the feature that I just described to you, then I would work with the Congress to include early next year a countercyclical approach. I think it's a very good approach. And I'll just have to make a decision before the end of this week.

Judy [Judy Woodruff, NBC News].

REVENUE ACT OF 1978

Q. Mr. President, the tax bill that you have signed contains cuts in capital gains taxes, which is the opposite of what you would have liked. It also contains cuts for people in the middle-income level, who are making between $10,000 to $15,000 a year. That is not going to be enough to offset the increases in social security taxes.

Why did you sign the bill?

THE PRESIDENT. Well, there were many features about the tax bill which were not my original preference. The reforms included in the bill—and they're substantial-did not measure up to what I asked the Congress to do. The final reduction in capital gains taxes was substantially below that approved by either the House or Senate. It was as low as the conference committee could go.

I think that we do need tax reduction, and the bill involves about $21 billion in tax reductions—and a part of it, by the way, is the continuation of the present tax reductions, which would have increased $13 billion, roughly, had I not signed the bill at all.

We did the best we could in the last few days—as a matter of fact, the last few hours—of the congressional session to make the bill more acceptable to me. In balance, it was acceptable. It was necessary. And I think that we do benefit greatly from the fact that the people of our country will not be saddled with $20 to $30 billion in increased taxes at the first of next year, had I not signed the bill.

I've not given up on my hope that we can have additional reforms in the future. And I think the capital gains reductions were reasonable, compared to what the House and Senate had both considered.

SOCIAL SECURITY PAYMENTS

Q. In line with that, Mr. President, last week in Kansas City, Senator Eagleton expressed concern over the social security tax increase, the bill that was passed. He termed it as a bad bill and one that needed to be reviewed. Do you agree with the review and possibly a reduction in the social security tax increase?

THE PRESIDENT. The original proposal that I made to the Congress last year, in 1977, was that the social security be handled slightly different from the way it was and that we have a reduction, as you know, in social security payments. The Congress—and I approved, finally—decided that the social security system was in such imminent danger of bankruptcy that it had to be saved; and it was saved by increase in rates.

I have no present plans to advocate a substantial change in the present legislation. If so, if I did have a reduction in social security payments, that reduction would have to be made up by allocations of funds from the general Treasury. I know for a fact that Senator Long, head of the Finance Committee in the Senate, is strongly opposed to this procedure. And I think even if I desired it, it would be highly unlikely that we could achieve it. It's one of the options that we will consider, but I certainly have no present plans to do so.

ANTI-INFLATION PROGRAM

Q. Mr. President, considering George Meany's reaction to your anti-inflation proposals, and in view of the fact that negotiations are coming up in a number of industries, major industries, during the next few months, what do you intend to do to keep the unions involved to adhere to your 7-percent wage cap?

THE PRESIDENT. Well, Mr. Meany did not reject the voluntary wage and price standards that I proposed. He expressed a preference that the Congress be called back into session to impose an extensive, mandatory Government wage and price standard throughout the entire free enterprise system of our country. I do not have any intention of doing this. And if I attempted it, I have no feeling at all that the Congress would approve.

In the absence of that, Mr. Meany, I think, made clear in one of the Sunday afternoon talk shows that he did encourage individual labor unions to cooperate, within the bounds of their desires and what's best for their own members. So, I've got, I'd say, a minimal, at least, degree of support from the AFL-CIO president. Of course, he recognized, as do I, that we have international presidents, themselves, to make decisions. There are several thousand bargaining units in the country. We've gotten fairly substantial encouragement from the UAW, one of the major labor unions, and also from the Teamsters, who will be negotiating a contract next year.

I'm determined, as is Alfred Kahn and other members of my administration, to make the anti-inflation package work. I don't intend to back down. I'll do everything I can that's legal within the bounds of my own authority and my influence with Congress to assure that the anti-inflation package is successful. And I think that most labor members, in organized unions or otherwise, feel that it's much better for them to control inflation than it is to let it run rampant, even if they were to get some small increases in-temporary increases in wages that are then overcome by increased inflation.

Everybody wants inflation to be controlled, including the members of labor unions.

Q. Mr. President, Stan Karmack, KCMO, Kansas City. We have confirmed with the Hershey Corporation this morning that the price of a Hershey bar is going up 9.3 percent. Since that is above your wage and price guidelines, will you try to put the bite on the Hershey bar? [Laughter]

THE PRESIDENT. If the report is true, then I would disapprove it strongly. We do have some persuasion that we can exercise. I would hope that the Hershey Company and all other companies would comply with our policy proposed, that any increase that they implement would be at least one-half percent below the average of their increase for 1976 and 1977. I'm not adequately familiar with the Hershey prices in the past to see if this is in compliance with it.

But through purchasing policies of the Federal Government, through competition, through the disapproval expressed by myself, other leaders of our Nation, and individual consumers, I would hope that any deviation from our policies could be controlled.

THE MIDDLE EAST

Q. Mr. President, question on the Middle East. Do you agree with President Sadat's view that the two agreements, the one on the West Bank and the agreement now being negotiated for peace between Israel and Egypt, have to be linked in some way?

THE PRESIDENT. Well, there's never been any doubt in my mind, nor President Sadat's, nor Prime Minister Begin's, that one of the premises for the Camp David negotiations was a comprehensive peace settlement that includes not just an isolated peace treaty between Israel and Egypt but includes a continuation of a solution for the West Bank, Gaza Strip, and ultimately for the Golan Heights as well. There is some difference of opinion between the two leaders about how specifically it should be expressed in the Sinai treaty.

I personally favor the presently negotiated language, which in the preamble does say that both nations commit themselves to carry out the comprehensive peace agreement as was agreed at Camp David. This is a matter for negotiation between the two leaders.

I have heard President (Prime Minister) ¹ Begin say in my presence that he did not desire a separate peace treaty with Egypt. And, of course, this is also the opinion and strongly felt view of President Sadat.

¹ Printed in the transcript.

We've been negotiating on the Mideast peace agreement for months. I have personally put hundreds of hours into it. We have reached, on more than one occasion so far, agreement on the text between the negotiators themselves. When they refer the text back to the leaders at home in Egypt and Israel, sometimes the work that has been done is partially undone. But I think that the present language as approved by the negotiators is adequate, and our presumption is to adhere to that language as our preference. But I would like to point out that we are not trying to impose our will on the leaders themselves or on those nations, and we hope that they will rapidly reach a conclusion.

There's no doubt in my mind that this kind of difference in language and how a linkage is actually expressed is a matter for negotiation. It does not violate the commitments made at Camp David, no matter what the decision might be as reached jointly by Egypt and Israel.

FARM SET-ASIDE PROGRAMS

Q. Mr. President, may I retrack to the '79—Sam Nelson, Commodity News Service-may I retrack to the '79 feed grain set-aside program?

THE PRESIDENT. Yes.

Q. You said you plan on a moderate program. Is a 20-percent acreage set-aside considered by you moderate, and do you plan to wait until the November 15 deadline to make your announcement?

THE PRESIDENT. I did not plan to wait until the November 15 deadline. I intend to move on it as quickly as I can. We did want to wait until after today, because as you know, this is the date on which we get November crop estimates. And we wanted to have that information available before we put the final touches on the decision.

I would not want to give you any figure yet, because I haven't decided. But I will try to decide that either this week or very early next week. I don't intend to wait until the 15th.

RESULTS OF THE ELECTION

Q. Mr. President, looking at the won-and-lost column of the Democratic candidates for whom you campaigned in this election, how would you assess your impact in these races?

THE PRESIDENT. I would say when they lost, I had a substantial impact. When they won, they did it on their own merit. [Laughter]

Q. Mr. President, may I follow up? Seriously, do you believe that in modern times that a President coming into a city to campaign for a candidate really does sway the voter one way or the other?

THE PRESIDENT. It's hard to say. My time to campaign around the country is very limited. There are hundreds and hundreds of candidates, as you know. I think I tried to help roughly 50 candidates for the Congress, in the Senate and House, including Governors, I believe. And a few more than half those won. But I couldn't say that my presence either caused a victory or a defeat.

We did choose for my own presence those elections in almost every instance where there were marginal prospects for victory. When you go into a State, for instance, like California, it's obvious that (governor Brown was a heavy favorite. There were other Democrats running for the Congress, for instance, in the Sacramento area, whose elections were quite doubtful, and the same thing applied all over the country.

So, I don't think the President has too much of an impact on an individual race. The major purpose of my last swing was to encourage American people to get out to vote. The vote turnout was higher than we anticipated. It was not nearly high enough. I think three voters out of eight went to the polls. Five voters out of eight did not. But that was the primary purpose of my last swing, to help Democrats, yes, but to get out a large vote. I doubt that my presence had much of an impact on the outcome of those who won.

AGRICULTURAL ECONOMY

Q. Mr. President, Steve Saunders from KBCM Radio. You've already mentioned the countercyclical measure and the set-aside program. But aren't you playing with the profits of agriculture, maybe one of the only facets of our economy by itself that can help with the inflation problem, the devaluation of the dollar problem, and the balance-of-trade deficit, all in one, by not signing the countercyclical bill, by waiting until this late for that set-aside program, when most farmers wanted it earlier, and by allowing about 50 percent of the world's reserves of grain stocks to build up in this country?

THE PRESIDENT. No. [Laughter] We inherited a situation in the agricultural communities that was very depressing and of great concern to me. The farmers were actually faced with another depression. The Congress passed, with bipartisan support last year, a comprehensive agriculture bill. It went into effect the first day of October 1977. Since then, farm income has increased $7 billion this year compared to last year, a 25-percent increase in farm income.

In spite of very depressed prices in 1977, the exports hit an all-time record. This year, we expect to export over $27 billion, which is substantially above the all-time record set last year. We'll continue this balanced approach.

The farmers will have to do some sacrificing along with all other Americans. We can't concentrate all of our government's effort and ignore inflationary pressures, erect trade barriers just to protect farmers. I'm a farmer myself, and I never have met a farmer who, in a showdown, wanted to do something deleterious or harmful to his own country just for selfish advantage.

I think we've been very fair with farmers; I continue to be fair with the farmers; and of course my own stand is corroborated by the action taken by the Congress. And my decisions will be made very shortly, before the statutory limit, after the information on production that was received today, with which I'm not yet familiar. And I'm not waiting until the last minute.

The reporter with the large diamond ring on her finger. ² [Laughter]

² Ann Compton of ABC News had recently announced her engagement to be married.

NATIONAL ENERGY BILLS

Q. Mr. President, you said when the energy bill finally passed that you were not pleased with all aspects of it and that you would work year after year to try to improve it. What specifically will you propose in January to change the energy bill that you signed today?

THE PRESIDENT. I don't know yet. As was pointed out this morning in the signing ceremony, this is one of the most difficult legislative tasks that the Congress has ever undertaken, possibly, in the history of our country. It's complicated; it's contentious; it's very difficult to understand. It has international implications, and politically I don't think anyone could win from it. It was not something that's politically attractive.

The proposal that I made originally with substantial taxes imposed on oil, the taxes to be refunded to the American people immediately, would have saved additional oil consumption. The bills that I signed this morning will result in savings of about 2 1/2 million barrels of oil per day by 1985. The original proposals would have saved an estimated 4 1/2 million barrels per day. So, we've got about 60 or 65 percent of what we asked for. But we do now have a comprehensive energy policy for the first time.

As we go into the implementation of this legislation, we'll obviously have some accomplishments, which means that regulation can be reduced. We'll obviously find some defects, I'm sure, in this complicated legislation, that I'll try to correct. But I've not given up on my original proposal that there should be a constraint on the excessive consumption of oil and therefore the excessive importation of oil. How we'll go about it, I don't yet know.

THE PRESIDENT'S RELIGION

Q. Mr. President, you're in the Bible Belt of the United States. And I was wondering if it's made a difference to you that you're a born-again Christian, in the last 2 years in office?

THE PRESIDENT. I think my religious beliefs are well known. And in my own opinion, a deep religious faith is a very sound basis on which to make difficult decisions and to have some assurance that you are doing the proper things. But I've been very careful not to interrelate my Christian beliefs with my responsibilities as President. But it is a great personal gratification for me to have that religious faith.

NICARAGUA

Q. Mr. President, you're being confronted with a growing number of pleas to help bring about a mediated peace in the Latin American country of Nicaragua. Is the U.S. going to act to prevent further bloodshed and repression, or do you feel that your hands are tied because you don't want to interfere in the internal affairs of another country? What can you do?

THE PRESIDENT. We are participating actively and daily in the negotiations to bring about a settlement in Nicaragua. I get daily reports from Mr. Bowdler. He was one of the three major negotiators there. We're working in harmony with two other Latin American countries in this effort.

We are trying to bring about a resolution of the Nicaraguan question. And I think you know in the last few weeks since these negotiations began, the bloodshed has certainly been drastically reduced. It's one of the most difficult tasks that we've undertaken.

And we proposed others to be the negotiators at first. We were unable to find an acceptable group. With our absence, both sides—I guess all sides, there are many more than two—wanted the United States to be negotiators. So, we are negotiating actively now to reach an agreement in Nicaragua to control bloodshed, to minimize disputes, and to set up a government there that will have the full support of the Nicaraguan people.

RIGHT-TO-WORK LAWS

Q. Mr. President, Bill Stilley of Raytown and William Jewell College Radio Station, KWPB. Missouri voters defeated the right-to-work amendment Tuesday. And I was wanting to know what effect do you see will this have on the right-to-work movement in efforts to repeal section 14(b) of Taft-Hartley?

THE PRESIDENT. I think obviously the outcome of the vote in Missouri will have a great effect on attempts that might have been made in other States to repeal right- to-work or to establish right-to-work laws.

This is a matter that I doubt the Congress will address in any concerted fashion during the coming year. So, I don't think that the Missouri decision will have a great effect on the National Government. It's a very highly controversial issue. The Missouri people spoke, I think, clearly, by a 3-to-2 margin. And I think this would be certainly a discouragement for an attempt in other States to impose right-to-work.

MR. JACKSON. Thank you, Mr. President.

THE PRESIDENT. Thank you very much. I've enjoyed being here. And I'm going now to speak to the 50th anniversary of the FFA organization of our country, of which I was a member early in my life.