The President's News Conference

THE PRESIDENT. [1.] There are two statements that will be made available to you. We won't take all of your time by going through both of them. You can consider that I read each line and each word, it is mine, and I stated it at the press conference, if you choose.

They involve, first, the budget cutbacks, postponements, deferments, et cetera, and a proposed visit to Mexico on Saturday of this week.

FEDERAL BUDGET CUTBACKS 1

[2.] On the budget cutbacks, I have told you heretofore that in the last month, since returning from Asia and since Congress sent me the appropriation bills in the last 4 weeks, my advisers and I have analyzed the 1,250 appropriations and the 2,500 programs. We have now concluded the first review.

¹ For complete text, see Item 631.

There will be periodic reviews from time to time, and continuing ones. I emphasize that, not only for your benefit and the country's, but for the Cabinet members and agency heads.

On the basis of this review, I have approved the recommendations of the Cabinet and the agency heads for a fiscal 1967 budgetary cutback of $5 billion 300 million in Federal programs--emphasizing and capitalizing "Programs."

With this approved reduction, we then plan to achieve a $3 billion-plus cut in Federal spending for the next 7 months of this fiscal year.

I reviewed yesterday some 25 separate statements that I made last year, since the first of the year, stressing the need for reducing low-priority items and less essential Federal spending.

I met innumerable times with Members of the House and Senate and the leadership, the members of the Appropriations Committees, and had Cabinet officers such as the Secretary of the Treasury do likewise.

The Congress was urged, as you will remember, to keep its appropriations within the limits of the administration's budget, which was a little under $113 billion. Despite these urgings, Congress added $3 billion 200 million in new obligational authority, and something over $2 billion 500 million in expenditures this year.

These increases have been a major factor in the decision approved today. We have taken this action only after careful deliberation and discussion with the wisest and the most experienced advisers that are available to a President.

My economic advisers--the Secretary of the Treasury, the Chairman of the President's Council and the other members of the Council, the Director of the Bureau of the Budget--recommend these reductions that are being made. These reductions generally are fully endorsed by the Cabinet and the agency heads involved. From time to time they will be adjusting their expenditures within the department to cover their overall target goal and their commitment to US.

In addition, we have discussed this with 34 key members of the House and Senate, including the leaders of both parties, and the Members of the Appropriations Committees.

They, too, believe that reductions are prudent and are necessary for our national well-being. We took a chart of something with 34 names on it, with all of the principal members of the House and Senate Appropriations Committees, and got their suggestions on specific reductions and they were considered.

The largest portion of the Federal budget involves national defense and expenditures over which we have little control, such as interest on the public debt, veterans' assistance payments, agricultural price supports, and payments on prior contracts entered into. These reductions that we are making, therefore, come from the $29 billion of the 1967 Federal budget over which we have some control and from the highway construction program.

There will be some adjustments, some additions, and some deletions of individual items that we anticipate cutting as we get down to it, and issue the order.

You are probably familiar generally with the $1 billion 100 million order already on highway construction. I will give you a general list of other items and amounts as I reviewed it the other night. I will give you the amounts today.

Our economy, we believe, is strong. In the last 5 1/2 years our economic growth has brought us abundance far beyond our expectations.

But there are pressures in the economy which burden our continued growth. Inflation is the cruelest and most capricious burden of all. It strikes hardest at the poor, the old, and the middle-class families. It erodes the hard-earned savings of every citizen. It saps the strength of American industry and its competitiveness.

Last January 19th I recommended a special program to take several billion dollars out of our economy through a series of revenue measures. On March 15, the deadline I had stated, the Congress responded by enacting these proposals.

Some 6 months later, on September 8, 1966, I again outlined a further program to help fight inflation. Within 6 weeks the Congress responded by suspending the 7 percent investment tax credit and the use of accelerated depreciation on buildings. Our proposals were approved by the overwhelming votes of members of both parties.

Today, with the $5.3 billion reduction in Federal programs, we have taken another step to protect and to preserve our prosperity. By that action, we will stretch out and postpone, withhold and defer the less essential items of our programs--the low-priority ones. Nor will we stop there.

We are going to continue from day to day, week to week, to review and study all of our programs and to make further reductions where possible. I welcome suggestions for additional reductions from the Cabinet, from the Congress, the country--and you, if you have any.

I have asked the Cabinet officers to continue to comb through their budgets and to eliminate any further unnecessary items that they can detect in the days ahead.

I have asked Secretary McNamara to review again every aspect of the Defense budget to see where expenditures might be reduced.

Let me make clear one point: We have not forgotten that behind all of the dollar signs and behind all of the contracts, and all of the project grants, there are people. It would be shortsighted to shortchange the young or the needy, the ill or the old. We have not done that.

We would rather postpone the construction of some office buildings and stretch out the completion of some modern highways than to bring to a stop the momentum of our great programs for the people that hold out a promise of hope and opportunity, education and health, to so many.

Our economy at its root is people. When our people are at work and purposeful, our economy is healthy and stable. When our dollar is sound, our Nation is strong.

We have strengthened our Nation today. We appeal to every good American to do all that he can to help us.

INSPECTION OF AMISTAD DAM SITE WITH

PRESIDENT DIAZ ORDAZ ²

[3.] On another subject, President Diaz Ordaz of Mexico has asked me to join him on Saturday for a joint inspection of the Amistad Dam construction site on the Rio Grande.

² The President read the full text of this statement as released by the White House Press Office.

I will be accompanied by Mrs. Johnson, Secretary of the Interior Stewart Udall, Assistant Secretary of State for Inter-American Affairs Lincoln Gordon, Ambassador Fulton Freeman, Joseph Friedkin, Commissioner of the International Boundary and Water Commission, United States and Mexico, Governor and Mrs. John Connally, members of the Texas delegation who are able to accept, and other appropriate officials.

Some of you may know that Amistad Dam is the second major international storage dam to be built by our two Governments on the Rio Grande pursuant to the 1944 water treaty.

I had an extensive discussion with President Lopez Matcos in 1958 when I was Senate majority leader, involving this dam and the recreational grounds in that area at about the time we received our first appropriation for it.

The dam will prevent floods that originate in rivers on both sides of the boundary from causing loss of life and property damage such as occurred in 1954 and 1958. It will also assist in water conservation over potential power generation. It will enable the two Governments for the first time to control the waters of the Rio Grande throughout its international section.

QUESTIONS

BREAKDOWN OF PROGRAM CUTS

[4.] Q. Are we going to get a breakdown of where the program cuts are?

THE PRESIDENT. You have been given the total. We will give you a general summary. There will be adjustments, as I said, from time to time. I will give you the present decision. We hope that we can increase them. There may be transfers or changes within the departments, depending on what the States spend and what they don't, the reallocations, and so forth.

I will give you the program reduction first and the consequent expenditures second.

In highway construction it will be $1.1 billion in the Federal program.

In housing and urban development it will be in the neighborhood of $1 billion.

We have 1987 million in Federal programs. We believe we can produce an expenditure reduction of about $546 million. That will mostly be in the field of the add-ons of the Congress. We released $250 million but we had $1 billion.

In the Department of Health, Education, and Welfare we will have about $530 million in programs, and about $275 million in expenditure reductions. That will be in the delayed start of a good deal of construction and the transfer of certain allocations that are unspent in certain areas.

We don't want to stimulate them to spending in order to be sure that they are not transferred. For that reason, I do not want to go into any great detail on that.

We are going to meet this goal of $530 million. You can say that.

Q. Is that school construction that you referred to?

THE PRESIDENT. No. This is health, education, and welfare. It may involve some of the funds that are not used. It will involve construction of certain buildings in certain areas.

In the Corps of Engineers we will have a $436 million reduction, with $60 million in expenditures. That will be deferring some contracts and program reductions. Some of them are not really ready to advertise, where funds have been provided, and there are some that we will postpone advertising. It will effect a small reduction of $60 million.

In the Department of Agriculture program reductions will be in excess of $400 million and about $350 million in expenditure reduction.

That will involve some of the add-ons the Congress made, on loans to farmers and farm areas.

The Department of the Interior will have an across-the-board $206 million in program reduction and $110 million in expenditure reduction.

In the General Services Administration it will be a little over $100 million in program reduction, and there will be a reduction of about $30 million in expenditures. That will be primarily in warehouse buildings and public buildings. It will be delaying the start, stretching them out, and postponing their construction.

The Agency for International Development has taken a $400 million reduction in their budget already. We asked them to take another $25 million in program reductions and $10 million in expenditure reduction.

The Department of Commerce will have $65 million in program reduction and $12 million in reduction of expenditures.

In the Federal Aviation Agency we will have a program reduction of about $35 million. It will be primarily equipment and electronic devices and things of that kind. In the Small Business Administration, loans through different agencies will be reduced about $50-odd million and about $30 million in expenditure reductions.

The Department of Labor will be $25 million in programs and $25 million in expenditures.

The Department of the Treasury will be $20 million in programs and Six million in expenditures.

Veterans Administration will be $15 million in programs and $7 million in expenditures.

You can't change the payments, but you can change some of the administration.

In NASA there will be a $60 million program reduction. This will require some contract cancellations. They will be specifically brought to your attention as those things take place. About $30 million in expenditures is involved.

In the Office of Economic Opportunity there is about a $32 million program reduction. We will defer expenditures over $100 million. That is because we do make now an allocation on a 12-month basis. In this tense period, we will make them on a shorter basis--sometimes 6 months, so you don't have the funds stretched out.

Additional savings to help meet pay raise costs will be about $190 million. We put certain ceilings on agencies.

That will amount to about $3.3 billion in program reduction, and about $2.9 billion plus in expenditure reduction.

Then we have about $900 million in program deferral and about $600 million in expenditure reduction in several items. They are military construction, defense procurement authorizations.

Allied health professional personnel will be $21 million in programs and $10 million in expenditures.

Elementary and secondary education will be $530 million in program reductions and $395 million in expenditures.

I touched on that a moment ago, but this is largely increased congressional authorizations which we do not plan to fund. That should not be alarming to you because a good many of the Congressmen expected us to send up a supplementary after the authorization went to us. We didn't do it, so they are aware of that already, particularly in the education field.

In higher education facilities there is $22 million in deferral and $3 million in reduction.

Highway safety is $10 million deferral and $3 million in expenditures.

Water pollution is $12 million in deferral and $28 million in expenditure reduction.

A group including the Coast Guard and the National Air Museum, aid to libraries, food for peace, and so on, run about $225 million in programs and $125 million in reductions. That roughly is $900 million deferrals and $600 million-plus in reductions.

TAX DECISION

[5.] Q. Mr. President, what does this do to the prospects of a tax change?

THE PRESIDENT. Well, there is not a thing in the world we can tell you about that until we have the figures. This somewhat offsets the add-ons of the Congress.

Q. When do you think you will have that figure?

THE PRESIDENT. I would hope around the end of the year. We can never be exactly positive when we are projecting 18 months ahead, but we will have better information because the Joint Chiefs are working very diligently on each of the service budgets, and particularly the Vietnam budget, both for the supplemental and for the yearend. I hope to see them around the middle of the month.

I am asking for a revenue estimate from time to time through Internal Revenue and through the Treasury, and through various sources there. I am going to see the Chairman of the Council of Economic Advisers perhaps this week.

No decision has been made. No decision will be made until we have all of the facts. Guesses will be made from time to time. That is a democratic privilege. But at best, they are guesses.

Q. Do you put Hale Boggs ³ in the guessing category?

THE PRESIDENT. I think he puts himself there. I think that was his language.

³On November 27, 1966, Representative Hale Boggs of Louisiana was interviewed on the Columbia Broadcasting System's television-radio program "Face the Nation." During the program Mr. Boggs stated that he felt a $10-15 billion tax increase was an economic necessity but added that he had no information on the President's tax intentions.

Q. Mr. President, you say you don't think you will be able to tell until around the turn of the year. Does this mean that you do not expect to announce your decision on this question in the month of December?

THE PRESIDENT. No, I would not want to forecast that.

REDUCTION IN FEDERAL PAYROLL

[6.] Q. Would any of these program cutbacks involve a reduction in Federal payroll?

THE PRESIDENT. Yes, I would think so.

Q. There will be a reduction as a result?

THE PRESIDENT. You asked would any of these dollars involve a salary reduction, and the answer is yes.

Q. There will be fewer Federal employees?

THE PRESIDENT. Not necessarily. There may be, as a result of these, but then it may go up from time to time. We have put pretty strong ceilings on all of the departments already.

EFFECT OF BUDGET CUTS ON SPACE PROGRAMS

[7.] Q. Mr. President, will the changes in the NASA budget cause any postponement of any target dates for any of the space programs?

THE PRESIDENT. We don't think so. The general picture is a very tight one in that budget of theirs. We have our hopes and our plans. We realize it is conceivable they will have slip-ups. We don't want our credibility attacked if they do, because we realize that possibility. But $30 million out of some several billion dollars wouldn't cause a change in the target date of the moon schedule, if you are talking about that.

It will require some adjustment in some contracts that we entered into, maybe with some schools and others that will require adjusting.

FEDERAL WAGE BOARD RECOMMENDATION

[8.] Q. Mr. President, could you tell us your reaction to the recommendation from the Federal Wage Board for a 4 1/2 percent wage increase for the so-called blue-collar workers of the Government?

THE PRESIDENT. I haven't made a detailed analysis of that. The Civil Service Commission has received it. They have informed me of some of the recommendations made. They are presently evaluating those with the Council of Economic Advisers. It will be one of the matters that will be discussed when Mr. Ackley comes down.

WIRETAPPING

[9.] Q. Mr. President, there is a report that the Federal Crime Commission is going to come out with a recommendation that wiretapping be legalized. Could you support that?

THE PRESIDENT. I would think that report is premature. I have no such information that they are going to make any such recommendation.

Any recommendation they make to the President will be carefully considered. It would be better to announce the decision when their recommendation has been made and I have had a chance to study it.

AMISTAD DAM

[10.] Q. Mr. President, is the Amistad Dam now nearly completed?

THE PRESIDENT. It is in its second phase. It began in 1965. Bill 4 will give you the estimated completion date. I believe both countries have their contractors. They are now at work on the phase the Mexican contractor is building. The President of Mexico discussed with me the possibility of going out and observing their work. We will spend about ⁴ hours reviewing their progress.

⁴ Bill D. Moyers, Special Assistant to the President.

Q. Is that the park you discussed with the President of Mexico, the international park that was started?

THE PRESIDENT. We hope we can have an intensive development of both areas by both countries in the area of the dam. We expect to have a rather large national park on our side of the dam. We hope there can be an invitation to all of the country and the world to come and visit it. We think it will be developed into a very attractive area.

Q. Will you actually be in Mexico, on both sides of the river?

THE PRESIDENT. On the other side I will be in Mexico, and on this side I will be in this country.

Q. You intend to cross the river?

THE PRESIDENT. Yes.

TRUCE IN VIETNAM

[11..] Q. Mr. President, could you tell us if the troops in Vietnam are going to get a truce over Christmas and New Year's?

THE PRESIDENT. I have read what has been said in the briefings. That is where I will leave it now. As soon as we have any information, we will make it available to you. I would expect that, though, at an early date--perhaps sometime in the next few hours, but certainly before you go to Mexico, so you will be free to think about other matters.

Q. Does that mean today, Mr. President?

THE PRESIDENT. I do not know. If I had known it would be today, I would have said today.

Q. A few hours is pretty quick.

THE PRESIDENT. I understand it is open to criticism.

Q. I don't mean it is open to criticism. It is open to the opening of that door.

THE PRESIDENT. Maybe it would be better to put it in the next few hours or days, prior to your leaving for Mexico. We will have some further announcement on that.

It is now being carefully discussed. As you know, the South Vietnamese Government has hundreds of thousands of men involved, too. Views are being exchanged, and as soon as a decision has been made, you will be very promptly notified.

Q. Are you discussing the idea that perhaps this may lead--

THE PRESIDENT. I won't go into what we are discussing.

MESSAGE TO PRIME MINISTER HOLT OF

AUSTRALIA

[12.] Q. Did you send congratulations to Harold Holt?

THE PRESIDENT. We send wires to the heads of government and to Prime Ministers who have elections and who are successful. We even send them to members of the opposition party, sometimes, in this country.

Q. Well, in this case, this opposition leader says it is meddling in their elections.

THE PRESIDENT. We just send the wires.

THE PRESIDENT'S HEALTH

[13.] Q. How do you feel, Mr. President?

THE PRESIDENT. Fine.

THE PRESIDENT'S PLANS AND ACTIVITIES

[14.] Q. Do you feel you will be here for the rest of the year?

THE PRESIDENT. Well, I am not a man of an evening nature these days. I will be here for a good part of the afternoon. Then I will be going back to the ranch, and I will be coming back.

Q. Could you tell us generally, Mr. President, just, so to speak, in honor of the occasion of using this new office, what you were working on today?

THE PRESIDENT. I signed a good deal of correspondence, and there are several matters here. I have a matter from the Civil Service Commission. Here are some matters left with me by the leadership.

This is a review of the Presidential statements in connection with low priority items, and the congressional statements in connection with the same thing.

Here are some matters from Ambassador Goldberg that I have not had a chance to read and digest and get to the bottom of. Here is a memorandum from the Democratic National Committee, and a note from Mr. Cater ⁵ that I have not read, involving communication satellites and international education.

⁵ S. Douglass Cater, Jr., Special Assistant to the President.

Here are some members to be appointed to the Commission on Health and Manpower, on the recommendation of the Civil Service Commission.

There are various reports on prices. These are cattle and hog and wheat and potato prices, and the prices of international raw materials.

Q. How are the cattle prices? Are they pretty good?

THE PRESIDENT. I have not had a chance to read them, but it does not give the actual price. It says that cattle, hogs, and wheat were up a little.

Q. We know a Texas rancher who has cattle. That is why I wanted to ask the question.

THE PRESIDENT. We don't sell cattle for meat. We sell cattle for breeding purposes, so that the price does not affect that at all. I won't take your time to give you a rundown on the cattle we raise.

Q. While we are on that subject, how many cattle do you have at the present time?

THE PRESIDENT. It is a pure guess, and I do not want to be held to it, but it is somewhere in the neighborhood of 100. There are mother cows, and some of them have calves and some of them do not have.

Q. Stuart Long ⁶ has been bragging about a bull that he has, which he is very proud of.

THE PRESIDENT. Most men are proud of their bulls.

⁶ Stuart Long, founder and manager of Long News Service in Austin, Texas.

I also have a communication on the Asian Bank meeting, and here is a detailed report from Mr. Black.⁷ He will be here later in the month.

⁷ See Item 642[1].

There are appointments to other commissions, and there are a good many appointments involved here. Here are the November economic indicators. I also have some FBI reports.

USE OF OFFICE IN FEDERAL BUILDING

[15.] Q. Is this the first time you ever have used your office here?

THE PRESIDENT. No, it is in constant use. I have been here several times. We have some things that we keep here, and I have been here four or five times.

DEFERMENT OF EXPENDITURES

[16.] Q. In the 1940's and 1950's, when the President would sometimes refuse to spend money that was appropriated by Congress, they would call that impounding of funds. Is this similar to that, or does the fact that the congressional leaders have been consulted on this and have agreed to it, make it in a different category from the impounding of funds?

THE PRESIDENT. Wall, it makes it different from what was done then. I don't say it would be a different category. Here we have a good deal of deferment of contracts, but in line with Senator Dirksen's motion last year it does not mean that there is a cancellation of the funds or the expenditure.

Here we have an authorization, but the Executive is not asking to fund that. Here we have a postponement, we will say, maybe from January to March--a stretch-out.

I am not familiar with all of the details that may be involved in those questions in 1940 or 1950, the two decades there, but I would say this: It is a combination of not asking for funds that were authorized, and not spending funds in some instances which were appropriated.

Generally speaking, it is deferring expenditures and postponing expenditures, and stretching out expenditures, so that we do not shove them all into a period of 7 months and continue to put gasoline on this fire.

SITUATION IN THE MIDDLE EAST

[17.] Q. Mr. President, do you have anything to say about the current flare-up in the Middle East between Egypt and Israel, and that whole area?

THE PRESIDENT. We are concerned about it, and we are in very dose touch with it. We are doing everything we can to make a constructive contribution.

REACTION OF THE CONGRESSIONAL LEADERSHIP

TO CUTBACKS

[18.] Q. Mr. President, did the congressional leadership approve the cuts in general terms or specific terms?

THE PRESIDENT. I did not ask for their approval. I reviewed the situation with them, and I received their suggestions. I would not want to say anything that would permit you to develop or provoke a fight. I will leave it where it is, and we are doing very well on it now.

All of them have advocated the withholding, and motions have been offered to that effect, and this has been recommended very strongly by dozens and dozens of Congressmen and Senators.

We do not always at all times agree on what is nonessential. There is a general difference of opinion on that. It is nonessential until it affects you, and then it is essential.

I reviewed this with them, and there have been some adjustments and changes. Generally, they are the figures that I reviewed with you, and they understand them. I do not want to speak for them, or commit them. They spoke for themselves the other evening.

This is something that we have tried to do all year administratively. If you will recall, at one time it appeared that there could be an add-on of up to $7 billion or $8 billion. Because of these statements, and because of contact with the individual members, we kept that down to where it is a little over $3 billion on authorizations, and about $2 1/2 billion on expenditures.

This will move it down $5 billion more on programs, and over $3 billion in expenditures, if we are able to do it in 7 months as we anticipate.

Reporter: Thank you, Mr. President.