The President's News Conference

THE PRESIDENT. I'd like to comment first on two very courageous actions that have been taken recently.

CAMP DAVID AGREEMENTS

The first is by the Israeli Knesset, their parliament, late last night, when they voted overwhelmingly by more than a 4-to-1 margin for peace in the Middle East, including the removal of the Israeli settlers from the Sinai, which is Egyptian territory.

This is a continuation of the courageous action that has already been demonstrated by Prime Minister Begin, who led the parliament debate, gave his full weight to this peace move, and by President Sadat who cooperated at Camp David in making it possible.

Since the Knesset vote, I have talked to Prime Minister Begin; also, just a few minutes ago, since lunch, to President Sadat. Both of them agree that there are no remaining obstacles to proceeding as rapidly as possible to conclude a peace treaty between Israel and Egypt.

I'm very proud of this action on their part. We will cooperate again as full partners in the negotiations to conclude the final terms of the Israeli-Egyptian peace treaty.

NATURAL GAS LEGISLATION

The other courageous vote that was taken yesterday was by the United States Senate, under the great leadership of Majority Leader Robert Byrd and committee chairman, Senator Scoop Jackson, to approve the natural gas legislation. This is a bill that will provide the centerpiece for establishing a United States energy policy. It's very good for consumers, particularly in those States that are faced with a very urgent shortage of natural gas in years to come. It's also fair to producers. I think it would make us much less dependent upon imported foreign oil.

And I congratulate the Senate on this action. Now the House must act on the same legislation. I hope that they will do so expeditiously and expect that this will be the case.

RAILWAY LABOR DISPUTE

One other report, briefly: We have not been successful, after 28 hours or more of negotiation, to reach a settlement between the striking railway workers and the rail lines. We now have almost a complete shutdown of rail service in our country. I have just recently issued an order establishing an emergency board which will take over the responsibility for negotiating a settlement between the workers and the railroads themselves.

This is necessary action. I think it's accurate to say that both sides do want a settlement. The differences between them are relatively small compared to what they were originally. This will take the railway workers back on the job. If there is any opposition to this action, then I would not hesitate to go to Federal court to enforce it. And I believe that this is the first step to getting our railway service back into operation in our country.

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

QUESTIONS

ISRAELI SETTLEMENTS; PRESIDENTIAL TRIP TO MIDDLE EAST

Q. Mr. President, what will you do to make Prime Minister Begin comply with your understanding that Israel must eventually withdraw from the West Bank and, further, to build no settlements there during the 5 years of negotiation? And will you consider a Christmas trip. to the Middle East for the signing of the peace treaty?

THE PRESIDENT. There's nothing that I can make Prime Minister Begin do. He's an independent leader of an autonomous and independent nation, and I can only use persuasion and depend upon the mutual trust that exists between me and him.

There were 20 or 30 very crucial issues that were obstacles at the beginning of the Camp David negotiations. This was one of them. And I would guess that it was after midnight Saturday, less than 24 hours after the final agreement was signed, that we reached these agreements.

There are two elements of the dispute. One is at what time will the agreement not to build any more settlements be concluded. Prime Minister Begin's interpretation is that this is to be maintained, the prohibition against new settlements, during the negotiations concerning the Sinai with Egypt. My very clear understanding is that it related to the negotiation for conclusion in the West Bank, Gaza Strip, of the establishment of a self-government.

The other question concerns whether or not Israel would initiate new settlements after this negotiating period was concluded and the self-government was established. I think the best answer to that is that this is an honest difference of opinion.

The best answer I can give is to quote from a statement by Foreign Minister Dayan, who was with us at that midnight meeting, and this is a statement he made at the Ben Gurion Airport on the 19th of September, when he arrived in Israel. "Let us not delude ourselves"-I'm quoting him—"I have no doubt that when we enter into deliberations with the other three parties concerning what is to happen in the area in the 5 years of transition"—that's the West Bank, Gaza Strip—"this question will come up and will be discussed and agreement will have to be reached on this subject."

So, the degree of participation of the residents of the West Bank has still got to be determined. But it's an honest difference of opinion. It would certainly be no obstacle to the progress towards peace.

But I can't say that we've resolved it yet. There's no personal animosity between myself and Prime Minister Begin. I certainly do not allege any improper action on his part. It's just an honest difference of opinion, which I think will be resolved.

As far as my going to the Middle East is concerned, nothing would please me more than to participate in the signing of a peace treaty at an early date. But that's still to be negotiated. The only request that President Sadat made of me in the entire Camp David proceedings was that I come to Egypt. I promised him that I would sometime in the future.

AIRBASES IN THE NEGEV

Q. May I follow up? If Prime Minister Begin persists, would you consider cancelling the U.S. agreement to build airbases in the Negev for Israel?

THE PRESIDENT. No. The letter to Israel concerning the two airports to be put in the Negev—I have already directed that that letter be sent to Israel. It's not being sent from me to Prime Minister Begin; it's being sent from Defense Secretary Harold Brown to Defense Minister Weizman.

We have not agreed to build the airbases. We've agreed to consult with the Israelis and participate in the cost of those rebuilt airbases, to the degree that we negotiate in the future. We will certainly participate in the cost, the degree to be determined in the future.

PRESIDENT'S RATING IN THE POLLS

Q. Mr. President, I'm sure you've been enjoying your big resurgence in the polls lately, but I wonder if you're fairly confident you can keep them up there.

THE PRESIDENT. I'm not sure about that. I hope so. My interpretation is that the polls have been much more accurate the last week or two than they were before. [Laughter] But I'll do the best I can.

I think it's not an accurate conclusion that the culmination of our efforts on, say, natural gas, civil service reform, and other major endeavors in the Congress, is the result of the Camp David accords. Obviously my own reputation as a capable leader was enhanced by that agreement, but we've been working very long months to bring about the conclusion of some highly controversial issues. And I will continue to do the best I can, but my actions will never be predicated on what is the most popular. But I'll do what I think is best for our country, and I'll take my chances on whether the people approve or not.

CAMP DAVID MEETINGS; HUMPHREY-HAWKINS BILL

Q. Mr. President, it was recently reported that you said in a meeting with the Congressional Black Caucus that a Camp David-type meeting on the Humphrey-Hawkins full employment bill would be ill-advised.-

THE PRESIDENT. Yes, that's correct.

Q.—-causing John Conyers to storm out, as everyone knows. And I was wondering, first, why would such a meeting be ill-advised, and secondly, if Camp David meetings are to be focused on international affairs, might such a meeting take place involving the principal ones in South Africa and Rhodesia, where these situations could be equally as violent and turmoil could equally exist?

THE PRESIDENT. I've been in office now for 20 months. I've faced many very difficult issues, in foreign affairs and domestic affairs. I've never called a caucus or a meeting at Camp David except once in my life. This was a unique set of circumstances where I felt that extended negotiations over several days—as you know, it turned out to be 2 weeks—in almost complete seclusion, was absolutely necessary to reach an agreement.

I would guess that this might never again occur. It may on very rare occasions. But I don't ever intend to use a Camp David meeting to settle matters that ought best to be resolved within the Congress, where they can best handle them. I will use my utmost influence to determine the outcome of those deliberations in the Congress.

As far as the Humphrey-Hawkins bill goes, I think it's very important that this bill be passed. It's a full employment commitment of our country, which I share. We have helped to get the bill passed through the House. It is now on the Senate calendar. I talked to Majority Leader Byrd since lunch about this. He's proceeding as rapidly as he can. He's trying to get a time certain, an agreement by some Republican Members of the Senate to vote on the Humphrey-Hawkins bill.

But it's just not appropriate and I think it would be ill-advised for me to take a, group of Senators or Congressmen in the last 2 weeks of the session up to Camp David to spend a week or two in seclusion. It's just impractical.

STRATEGIC ARMS LIMITATION

Q. Mr. President, we hear reports that you feel pretty good about how the SALT negotiations are coming along these days. How close are we to a SALT agreement now?

THE PRESIDENT. The issues that divide us and the Soviet Union on SALT have been constantly narrowed over the last 18 months of negotiation. Now the issues are quite few.

I also talked to Secretary Vance since lunch. He's been meeting today and yesterday with Foreign Minister Gromyko of the Soviet Union. I think that both men are negotiating aggressively and in good faith to reach a conclusion of the differences.

I don't know what the outcome will be. It takes two to reach agreement. We hope to conclude a SALT agreement this year, and I will be meeting with Foreign Minister Gromyko Saturday to capitalize upon the progress that I hope that Vance and Gromyko are making now. I don't see any insurmountable obstacles. But if the Soviets are forthcoming and cooperative and are willing to compromise some of their positions, we will have an agreement.

FRAUD BY WELFARE RECIPIENTS

Q. Mr. President, it's been reported this week that some Federal employees who are on the payroll and also drawing welfare benefits have been charged. It's also reported outside of Washington recently that the Federal Government has made what amounts to a conscious decision not to pursue fraud by individual welfare recipients and leave that instead to the local and State governments. Are you aware of this policy, and do you approve of it?

THE PRESIDENT. When I came into office, we were determined, I and my administration, I think shared by the Congress, to proceed aggressively to eliminate fraud from government. We've got a problem in GSA. We've had good success in other areas, including the rooting out of people who have tried to defraud the Government by drawing welfare payments when they were on a payroll and didn't deserve it, according to the law.

My own inclination would be to let the Justice Department decide whether or not an indictment and a prosecution should be pursued or whether a repayment of the funds with some penalty would be adequate. I'm not familiar with the individual cases. But the fact is we have initiated, for the first time, an attempt to root out these violators of the law and to make them provide some recompense to the Government that's according to what is proper and right.

I wouldn't say that every case ought to be pursued as a criminal proceeding, to put them in jail. Sometimes they might be discharged from their job, sometimes to repay the money, sometimes to pay a penalty. If it's a gross case, I would favor them going to jail.

INFLATION AND INTEREST RATES

Q. Mr. President, the Fed's discount rate is now nearly 10 percent. You're about to announce some top anti-inflation measures. How can any anti-inflation program be credible when you have interest rates this high, and do you think 10 percent interest rates is the proper way to fight inflation?

THE PRESIDENT. The discount rate is not that high, but I think it's too high and I wish it was lower.

There are three entities in the Government that have a great individual, independent impact on either controlling inflation or enhancing inflation. One is the President and my Cabinet members—in the preparation of the budget, do we advocate reducing the deficit; do we advocate spending too much.

The other one is the Congress, who makes the final determination on the budget and also prescribes, to a major degree, tax policy. The third, of course, is the independent Federal Reserve.

My own hope is that our present efforts to control inflation will be so successful that those interest rates now, as determined by the Federal Reserve, can be brought down.

When I came into office, we had a budget deficit of almost $70 billion—I think, $66 billion. By the end of this congressional session, I hope that we will almost have brought that down below $40 billion, maybe even lower. We're cutting down the Federal deficit. We have a very tight constraint on spending. This is important in controlling inflation.

I'm going to be very persistent in my own role as President in holding down unwarranted spending in individual bills that come to me from the Congress. I think the time for wasteful spending is over. And I think if we can show that we can get inflation under control through those actions by me and the Congress, that would be an inducement for the Federal Reserve to start bringing the interest rate down.

But each one of those elements of our Government—Federal Reserve, Congress, President—are independent. I can't control the other two. I can set a good example; that's what I'm trying to do.

STRATEGIC ARMS LIMITATION

Q. Mr. President, going back to SALT, the military is pushing an idea of digging a lot of holes in the ground for our landbased intercontinental ballistic missiles. So, you truck them around; the Russians never know which hole the missile is in. The theory is the Russians have to hit all the holes in order to get all the missiles. Do you think that's a good idea, and how does that affect the SALT negotiations?

THE PRESIDENT. That is one among many ideas. I think over a period of time, it has become obvious that our fixed silotype intercontinental ballistic missiles are becoming more and more vulnerable because of the accuracy of the Soviet missiles—ours are even more accurate—and the MIRVing of the Soviet missiles, where they have many warheads on each missile—which we've had for a long time.

The so-called multiple aim points, or many silos for each missile, is one idea that has been put forward. It has some very serious defects. I can only mention two at this time. One is, how do you verify that all the holes don't have missiles in them? It's obvious that we would be keeping the agreement, and we would not violate it. We don't know that that would be the case on the other side. And I believe that we would find, as we proceed further with it, that it would not only be very difficult if the Soviets adopted this same policy, but very expensive as well.

But that is one option that we are considering. And I would guess that by the end of this year, we would have gone through all the options including that one. And at that time, certainly at the time that SALT II agreement is reached, I will explain to the American people in the most careful and complete terms what our future plans for adequate strategic strength will be, probably going for the next 5 years.

That's just one of the options now. It has some very serious defects. It's being considered.

LEBANON

Q. Mr. President, there's a report that you are working for a settlement in Lebanon and that Syria and Israel would be involved. Could you verify this, sir?

THE PRESIDENT. This is a subject that President Sadat raised with me several times at Camp David. It's one in which we've been involved, as you know, for many months.

There's a tragedy in Lebanon that the rest of the world has not adequately addressed, including ourselves. The suffering of the people of Lebanon, through no fault of their own in almost every case, has been extraordinary.

Obviously, the responsibility for resolving the Lebanon question rests primarily on the shoulders of those who live there. My commitment has been to strengthen the Sarkis government, politically, economically, and militarily. We gave them some aid so that the President of that country can control the affairs of the country itself. When we were flying back from Camp David on the helicopter, President Sadat and I were talking about this; Prime Minister Begin joined in the conversation. All three of us committed ourselves to renew our support for the Sarkis government, the Lebanese Government. So, they have the prime responsibility.

The next two nations, I would say, that are the most intimately involved are Syria, which has large forces in Lebanon—invited in by the Lebanese Government because they cannot maintain order by themselves under existing circumstances- —and Israel, who obviously wants a stable government, stable people on their northern border.

Other countries more removed geographically also have an intense interest and influence in Lebanon. I would say two of them would be Saudi Arabia and Egypt.

More distantly, other countries that have a direct historical interest, like the United States and France, would be involved. All this could be done under the aegis of the United Nations.

But I think it's time for us to take joint action to call a conference of those who are involved, primarily the people who live in Lebanon, the different factions there, and try to reach some solution that may involve a new charter for Lebanon. I'm not in favor of a partitioned Lebanon. I'd like to see a unified Lebanon, at peace, with a strong enough central government to control the situation there and protect its own people.

PRESIDENTIAL VETOES AND INFLATION

Q. Mr. President, I understand that you're considering vetoing the public works/water projects bill and, in addition to that, that you're considering vetoing four other bills—tuition tax credit, surface transportation, tax cut bill, and Labor-HEW. Can you tell us, is this part of your anti-inflation program? Will you veto the bills? Or is this a President Carter who has come down from Camp David and is now trying to show that he can handle his own Congress as well as the Israelis and the Egyptians?

THE PRESIDENT. 1 don't want to show that I can handle the Congress. What I want to do is to work in harmony with the Congress. I think we've done that to a substantial degree, a provable degree.

The legislation to which you refer causes me deep concern, because some of it is wasteful, some of it has elements in it which I consider to be unconstitutional. And my own objection to certain features of that legislation has been well known to the Congress and also to the public.

The public works bill has now passed the conference committee, and both the House and Senate have adopted the conference report. This bill in its present form is completely unacceptable to me. And I will decide whether or not to veto it when it gets to my desk. It's up to the leaders of the Congress to decide when to submit it to me. My objection to some of its features are well known.

I think that we have got to establish a policy in Washington, the Congress and I, particularly in these crucial days when inflation is our number one concern, at least on the domestic scene, that will be an example for the rest of the Nation to follow.

If we continue the age-old policy of pork barrel allocations in the public works bill, this is a horrible example to set for the rest of the country. It would make it very difficult for me to control inflation if the Congress and I couldn't set a good example for the rest of the Nation. So, I'm willing to meet the Congress on this issue—we have an honest difference of opinion with some of the Members of the Congress—and have it resolved in a constitutional and appropriate way.

If it involves a veto, the Congress has a right to express their displeasure by attempting to override my veto. I'm going to do the best I can, if I do veto the bill, to get enough votes to sustain my veto. There have been some allegations made that the Congress might try to connect this bill with the energy bill. I don't believe they will do that. The proper way for the Congress to express its displeasure over the veto of the public works bill is to try to override the veto. I believe the energy legislation is too important for any responsible Member of the House of Representatives to connect it with the public works bill.

Judy [Judy Woodruff, NBC News].

INFLATION AND UNEMPLOYMENT

Q. Mr. President, President Ford said this week that you made a mistake last year in concentrating on unemployment rather than inflation. Do you agree with that, first of all, and secondly, do you wish that you had moved sooner to do something about inflation?

THE PRESIDENT. No, I don't agree with that at all. When I was running for President, after I became President, I never singularly attacked the unemployment problem without also trying to deal with the inflationary problem. President Ford left me with a $66 billion deficit. We've tried to turn that around and cut down deficit spending. We've been remarkably successful.

At the same time, we have provided the American people with a much better life, better education programs, better housing programs, better transportation programs, substantial tax reductions—$6 or $7 billion last year; perhaps as much as $20 billion this year.

I believe that we have seen in 1977 a very substantial reduction in the inflation rate. The last 6 months of 1977 the inflation rate was down quite low, 4 1/2 to 5 percent; an average for the entire year of about 6 or 6 1/2 percent. It grew this year more than we had anticipated for several reasons, the most important of which was the high food prices that occurred the first 6 months of the year.

We have always had a very strong anti-inflation program. Since we have had very good luck so far, success in bringing down the unemployment rate, adding 6 1/2 million new jobs, bringing the unemployment rate down about 25 percent already, we are now able to focus our attention much more specifically on inflation.

It's much more of a threat now than it was a year ago. But I'm determined to deal with inflation as effectively as we have already proven we could deal with unemployment.

EGYPTIAN-ISRAELI PEACE NEGOTIATIONS

Q. Mr. President, you said in your opening statement that both President Sadat and Prime Minister Begin said there are no remaining obstacles to concluding the Sinai treaty. Have they set a date yet for starting these talks? And how long would you estimate that it would take to go through the formalities that still remain?

THE PRESIDENT. I would hope that we could commence the talks within 2 weeks, but no specific date has been set. Both Prime Minister Begin and President Sadat today, when I talked to them on the phone, on their own initiative said that they were expecting us to be full partners, as I was at Camp David, and they could see no obstacle to the peace talks beginning without delay.

I think it will take 2 weeks to prepare for the talks. There are some official responsibilities that President Sadat has in his own country that will take place and be concluded within 2 weeks. But that would be the approximate time frame. I'm not trying to be presumptuous, because no date has been set.

Q. If I could follow that up, Prime Minister Begin is supposed to be sending a letter dealing with the Israeli position on the West Bank. Has that letter been received yet? And would any delay on that letter perhaps hold up these talks on the Sinai?

THE PRESIDENT. Prime Minister Begin has sent me a letter expressing his position, and I've also sent him a letter expressing my position. Now I think the next step would be for me and him, in good faith and in a friendly, cooperative attitude, to try to work out the differences between us.

Q. Will you make those letters available?

THE PRESIDENT. I'll think it over. I can't answer because I would really—it suits me okay for the letters to be made available, but I can't unilaterally release the letter that I sent to him or received from him without his approval.

My own inclination is to let all the correspondence be made public that relates to the Mideast settlements. We've done that so far, even when we had differences of opinion. But I would have to get his permission before we could release the letters.

STEEL INDUSTRY

Q. Mr. President, your trigger price program for steel has managed to reduce the foreign imports. But foreign steel still takes a large part of the U.S. market, and the floor under steel prices does drive up the inflationary forces. What modifications, if any, do you plan in your trigger price program?

THE PRESIDENT. Well, as you know, the steel trigger price program went into effect, I think, only in May. We've only had a few months of experience with it. So far, it's been very successful.

We've had a net increase this year of, I think, 24,000 jobs in the steel industry alone. And in spite of a fairly dormant construction industry we've had 5-percent increase in the shipments of domestic steel. I understand that the Japanese steel exports have actually gone down this year. The most important measure, I think, of success so far is that a year or so ago the steel industry plants were only being used at about 76-percent capacity. Now that use has increased to almost 90-percent capacity. So, we've got a very vigorous steel industry now.

I think the price of steel has been held reasonably well under control. We are obviously fine-tuning the trigger price system as we get more experience with it. There are special kinds of steel that might be involved. And we have some problems still in Europe, because the steel price, as you know, is based on Japanese cost. But I think we've stopped the unwarranted dumping of foreign steel on our American market. I think we've protected the jobs of steelworkers, and we've added a new degree of prosperity to the steel industry.

I believe that the second quarter this year, compared to the second quarter of last year, steel industry profits were up 71 percent, which means that they have a lot more to invest back into more modern plants and more jobs for better steel production in our country.

EGYPTIAN-ISRAELI PEACE NEGOTIATIONS

Q. Mr. President, can you tell us a little more, sir, about the nature of your participation in this next round of talks? You mentioned full partnership. Will you be personally involved with that, or will Secretary Vance be?

THE PRESIDENT. I would guess that I would not be personally involved, except in a case where the leaders of the other two nations were involved. If there was a dispute about a particular drawing of a line, or a phased withdrawal, or something of that kind that could not be resolved at the Foreign Minister or delegate level, then I would get involved if necessary.

I wouldn't want to see the talks break down because of any timidity on my part. I consider it to be one of the most important responsibilities that I have. I would guess, though, that the negotiations will be carried on at a fairly high level, below the President and Prime Minister level.

I understand from Prime Minister Begin that the leader of his delegation will be Foreign Minister Dayan. I don't know yet who will head the Egyptian delegation, and I've not yet decided on the American delegation leader. But it'll be at a fairly high level.

And the principles for settling the Sinai disagreements have all been resolved. Now the details, which I don't think are going to be highly controversial, are the only things remaining to be resolved. The exact decision of whether a particular road intersection or a hilltop would be at the first withdrawal line, those are the kind of things that would be settled. And I believe we have a good relationship between the two leaders that wouldn't cause a deterioration in the negotiations.

FRANK CORMIER [Associated Press]. Thank you, Mr. President.

THE PRESIDENT. Thank you very much. I enjoyed it.