The President's News Conference

[ This is a complete transcript of the news conference of this date. All of the President's replies were released for broadcasting or direct quotation at that time.

THE PRESIDENT. Good morning. Please be seated.

I have no general announcements this morning, ladies and gentlemen. So we will go right to questions.

Q. Robert E. Clark, International News Service: Mr. President, can you tell us how you feel about the Democratic proposal to cut everybody's taxes by

THE PRESIDENT. The question affects this proposal for cutting the income taxes of every individual in the United States You have asked a question, Mr. Clark, that takes some time to answer, because you asked for my opinion about it.

Now, in the first place, any proposal to reduce taxes is, of course, popular; and at first glance this is a kind of proposal that should make an appeal to low income brackets.

Let's take a little closer look at this proposal and start off with this one observation. Whenever you have inflation, the immediate effect, of course, is to hurt first the people of fixed incomes--white-collar workers and others who for the moment at least are on relatively fixed incomes. But in the long run, the person that is hurt most is the person who lays aside savings in the forms of pension, insurance plans, and savings bonds for use in his older age. For example, anybody who paid up all of his share of a pension by as early as 1939 was getting in 1953 half of the worth of the pension plan he had bought.

When we talk about decreasing revenues at a time when the Government, in spite of every saving we have been able to make, is still spending somewhat more than it takes in, we are reaching some kind of heights in fiscal irresponsibility. Because this does have on the surface a popular or appealing appearance, these people apparently hope it may be passed. They have not had the courage to put it in as a bill on its own merits. They have attached it as an amendment to a bill which is for the continuation of the 52 percent as opposed to the 47 percent taxes on corporations and for the continuation of excise taxes on liquor, tobacco, gasoline, automobiles, transportation, and the like.

From those two continuations of tax programs, we expect and anticipate getting 2,800 million, roughly that kind of money. This $20 exemption would in the first full year of its operation reduce our income by 2,300 million.

We inherited in 1953 a budget that contemplated a 9.9 billion deficit in Federal financing. By hard work--and I assure you it is hard work when you realize that every bureau of Government feels it should have more money--we have reduced that to an expected deficit in 1956 of less than two and a half billion, or in that neighborhood, estimated.

Now we are going back to deficit spending, the most insidious thing that can happen to a free economy, and particularly in its bad effect upon low income groups. I should like to call your attention to a statement by economists of the American Federation of Labor, which said the year 1954 was their finest overall salary year of their history. In spite of the fact that their salary increases were only 5 to 9 cents, or something of that order, in general insignificant or small as compared to salary increases of the past, their purchasing power, due to the stability of the dollar, their overall position in the salary angle was the best of their history.

In the last 2 years, the cost of living has varied less than onehalf of 1 percent. From 1939 to 1953 the dollar went from 100 cents to 52 cents. It is that kind of thing that must be stopped if we are to preserve the principles on which this country was established. It is based on a free economy which in turn is based on a stable dollar, which in turn is more important to all low income and fixed income groups than it is to rich people.

Rich people can buy equities, can afford to invest in equities, and as the dollar cheapens, the amount of dollars that they have invested goes up and up. But the fixed income group, the man who is buying an insurance policy, I repeat, or looking forward to living on his pension, is the one that is hurt.

We simply cannot have this kind of thing in responsible government.

Now, I might remark that obviously these people have put this $2,300 million reduction in a tax bill that will keep this 5,800 million for us in the belief that there cannot, then, anything be done about it.

I say if this thing is to be tested in the Congress--and I admit, of course, they have the perfect right to do it--let them do it on its own merits and not attach it to these other bills.

Q. Merriman Smith, United Press: Mr. President, in the light of what you have just said, how, then, do you feel about your goal as you announced in your state of the Union message of achieving a tax reduction in 1956?

THE PRESIDENT. As you know, through the efforts of reducing governmental expenditures, I talked to you awhile ago, we returned last year to the people the greatest tax reduction in history, 7,600 million. With the increased confidence brought about to business, to investors, to purchasers, to everybody else, we have a very healthy upturn in our economy. We hope that will continue. We hope to continue to reduce expenditures. We hope that gross national product will continue to go up, and with no higher taxes we will probably, and believe we can, get to the point that we can return some more in 1956. But it must be done on a thoroughly worked out, analytical basis, so as to achieve the kind of stability in living costs and the proper distribution of taxes that was achieved in the plan of last year which was worked out by so many different groups.

Q. Mrs. May Craig, Maine Papers: Mr. President, would you veto a tax bill with such a rider on it, and require a two-thirds vote?

THE PRESIDENT. Mrs. Craig, I have told this group many times, I have never yet been able to predict for myself exactly what I am going to do in such cases until it comes up to me. If the bill comes up to me in exact form, I might predict, now, what I could do. But the fact is, it could come up in so many different forms, with so many different angles, that I think it is best to wait to see what happens before I make my own predictions to myself.

Q. Marvin Arrowsmith, Associated Press: Mr. President, is this Government studying whether to offer surplus wheat to Russia?

THE PRESIDENT. Well, as you know, this suggestion has been brought up, and I have directed certain people who have to deal with this in our Government to look it over.

For myself, I look at it askance. I would not go overboard on such an idea until everybody who is trained in the whole business of psychological conflict and all the rest of these things look at it very coldly and carefully, because I am afraid that what the United States might mean as a fine gesture of good will could be twisted and turned to our disadvantage. But in any event, it will be studied carefully. There will be a recommendation made to me on it.

Q. Laurence H. Burd, Chicago Tribune: Mr. President, can you say what recent steps have been taken with regard to the flyers being held by Red China and whether you think the chances are better or worse for their release than a few weeks ago?

THE PRESIDENT. Well, there has been no recent development of note or of great significance. I could not give you an evaluation of chances, whether or not they are now better than they were. I just believe this: in all of these directions in which we believe the Chinese Communists have been acting wrongfully toward us, including these flyers of which you speak, we have got to insist upon a just and decent settlement and never cease doing so, never to accept anything as a completion of the problem until justice has been done.

Q. Mr. Burd: Are we leaving it with the United Nations for quite a lot longer time?

THE PRESIDENT. Well, you say, "leaving it with the United Nations." We use every avenue open to us--through third parties, through the United Nations, everywhere that we can exercise any of our influence, we try to do it, as I say, to get a just solution to these problems.

Q. Chalmers M. Roberts, Washington Post and Times Herald: Mr. President, after the Atomic Energy Commission's report last week on the hydrogen bomb fallout, you commented through Mr. Hagerty that it demonstrated your belief that there should be some agreement on arms, international agreement on armaments. With the U.N. arms meeting about to open in London this week, could you tell us, sir, whether you have anticipated any possibility of agreement, or does the matter appear to still be in deadlock?

THE PRESIDENT. Past history would not give us any great reason for tremendous optimism in this line. However, it is something that I have worked on for years. I know that the war in Europe was scarcely over before I was pleading for some kind of arrangements among the great powers of the earth so that these fears and burdens could be lifted from the backs of men, and particularly once we had found out that the atomic bomb was in existence.

Now, as of today: my views, I must say, have changed very little, if at all, since that time. We must have ways and means of determining that each principal nation party to any kind of agreement is acting in good faith. There must be ways and means of determining that; and once we can determine and make certain, have confidence in the ways and means that this is to be done, then as far as we are concerned we would like to put everything in the pot and go just as far as anybody else would.

Q. Mr. Roberts: Mr. President, may I ask further in that connection, there have been suggestions studied here and elsewhere that there might be a sort of an interim set of agreements to ban further tests of thermonuclear weapons. Has that been brought to your attention, and could you comment on it?

THE PRESIDENT. Well, yes, it has been brought to my attention. We have discussed pro and con. We see nothing of an ad interim nature about this. If this would come about, naturally, if we could get a decent and proper disarmament proposal, I see nothing to be gained by pretending to take little bits of items of that kind and deal with them separately.

Q. Alan S. Emory, Watertown Times: Sir, could you tell us the difference between cutting $ 1.4 billion in taxes for fiscal 55 and not cutting the taxes for fiscal '56? I believe that the deficit of the current fiscal year minus the tax cut gives approximately $3.2 billion, and the estimated deficit for fiscal '56 plus the tax cut for half of that year under the Democratic plan would also come to $3.2 billion.

THE PRESIDENT. Well, I don't know about '56. I know this, that the actual effect for a full fiscal year under this proposal is something on the order of $2.3 billion. Now, after all, these tax programs and things that are needed to bring confidence to American business and the American consumers are long-term problems, not things that look attractive at the moment because, you say, "we will only go in debt a little bit more next year."

I am talking about a long-term, sound fiscal program for the United States. And remember this: when we talk about these things, as far as I am concerned, I am not talking about any partisan advantage of any kind. I am not talking about a personal attitude. It is not I that may be defeated. What we are talking about here is 163 million people and what is good for them, how they are going to prosper, how they are going to grow constantly stronger and have a better life. That is what we are talking about. The Government owes it to every citizen to live as economically as it can, to cut down expenditures, to keep working on it, and intelligent people ought never to give up on this.

But when we get down to that point, let us by no means live beyond our income, because if we do, we will damage ourselves irrevocably.

Q. Raymond P. Brandt, St. Louis Post-Dispatch: Mr. President, can we interpret that to mean that there will be no tax reduction until the budget is balanced?

THE PRESIDENT. Well, I don't know that you could make such an interpretation. For example, last year we gave a tax reduction in the belief that that particular tax reduction, worked out carefully, would help in the long run to balance the budget. I believe you can anticipate savings; I believe you can anticipate certain good results from things that you do, administratively and otherwise. Certainly you want to return taxes, because I assure you, every political party likes to cut taxes; there is no question about that. So we will do it as soon as we can, and I would not say by any manner of means that the budget has to be in perfect balance before you can contemplate sincerely another tax cut.

Q. Mr. Brandt: One other question, Mr. President.

THE PRESIDENT. Yes.

Q. Mr. Brandt: Does that mean that a balanced budget is not in sight at this time?

THE PRESIDENT. Well, a balanced budget--I believe I quoted to you from one of my favorite authors, myself, not long ago. [Laughter] I read to you a statement I made in '52, I think, that I believed that within 4 years, with careful administrative procedures, with businesslike methods, with examining every expenditure and arranging our tax program, reforming it, we could achieve a balanced budget within 4 years and at a rate of taxation bearable by the American people.

I still believe that, if we do it logically and sensibly.

Q. William Theis, International News Service: Mr. President, do you share the hope expressed by Sir Anthony Eden that there might be at least discussion and possibly settlement of the Formosa problem at the Bangkok Conference?

THE PRESIDENT. I didn't see his statement, but the United States is, and this Government is, on record as seeking every possible means for a cease-fire with justice to everybody in that region.

Q. Mr. Theis: Could you say, sir, whether the Secretary of State went with any special instructions on that matter to Bangkok?

THE PRESIDENT. AS you may know, the Secretary of State and I, just before he left, had half a dozen conferences. This subject, of course, was talked at great length, and his plan for having conversations with Mr. Eden and others concerned was very clear and definite. But exactly what could be done, we had no prognostications, you might say, as to outcome.

Q. Charles E. Shutt, Telenews: Would you comment, sir--I know Congress has not been in session too long--as to the harmony in relationship with the Democratic-controlled Congress and your office?

THE PRESIDENT. Well, on a personal basis and meeting with these individuals, it is completely satisfactory. Every time I have asked any individual, any leader of the opposing party to confer with me, or he wanted on his own initiative to institute such a conference, it has been on the most friendly and, as far as I know, profitable basis possible.

Q. Clark R. Mollenhoff, Des Moines Register: Mr. President, in the past you have made it clear that you deplored the fact that certain members of Congress have attacked individuals unjustly on the floor, but you at the same time said that that was a matter for Congress to decide upon for itself.

Now, I wondered what steps you would take if it should come to your attention that someone in the executive agency would call an individual a member of a subversive organization when they had no evidence to sustain that and it was absolutely clear that there was no evidence to sustain it.

THE PRESIDENT. Well, now, I am not a member of the Supreme Court, but I understand they don't answer these very long hypothetical questions. [Laughter] When you bring to me facts such as you just now allege, and bring them so that I can study them and not answer them in a press conference where I have nothing of any other side except a statement of accusation, then I will give you my opinion; but not now.

Q. Mr. Mollenhoff: Mr. President, is that an invitation to permit this--

THE PRESIDENT. If you have any information that you believe of wrongdoing in this administration, you are not only at liberty to submit any facts you have, I strongly urge that you do. I assure you they will get the finest kind of consideration.

Q. Frederick Kuh, Chicago Sun-Times: Mr. President, I would like to ask a question in view of our experience with EDC. What alternative have you in mind in the event of an inordinate delay or blockage in ratification and putting into operation of the Paris agreements?

THE PRESIDENT. Well, I must answer the question in this way. As you know, these efforts have been going on now literally for years. At every stage, almost every day, anyone who had official position with respect to these plans--and as you know, I did in Europe before I came back here--had to have alternatives in mind, in part, or sometimes on a whole plan. Always, though, you keep these as a sort of insurance against any catastrophe such as you now again bring up as a possibility.

I strongly hope we won't have to consider any further alternatives. I do not regard this one to be as effective as was the concept of EDC. EDC had the great virtue of bringing about almost involuntarily and, you might say, as one of its corollaries, a greater unification of Western Europe. I must tell you, ladies and gentlemen, today I just cannot overemphasize the importance to the security of the free world of a great economic, industrial, and social connection and indeed finally some greater and better political connection between the nations of Free Europe.

They are a great power if united, 950 million highly educated people, a great productive capacity, great resources; but split up into contesting smaller governments and smaller economies, it is indeed failing to achieve the strength of which it is capable.

So at this moment, this particular plan seems to be the best that can be accomplished, and I am going to put my full strength behind getting this one done. I will take up alternatives afterwards.

Q. Sarah McClendon, El Paso Times: Mr. President, for some reason there seems to be no channel of communications between your office and the office of Speaker Sam Rayburn of the House of Representatives. He says that every time there is a message from the President coming to the Congress that the press get it in advance but he doesn't hear it until it is on the floor; no copy is sent to him and he can't get a copy unless Charlie Halleck or Joe Martin bring him one.

Then recently he has given out three statements publicly aimed at your office, and apparently your office has never received these statements and doesn't know. One was on Dixon-Yates and two were on the Flemming report on oil and gas.

Is there some means--do you know this, and if you didn't know it, will you do something about establishing this channel of communications? [Laughter]

THE PRESIDENT. I doubt that the Speaker has to bring to me any complaints about my office through a roundabout course of communication. He and I have been personal friends for years. He is the representative of the district where I was born, indeed, and based on that there has been a sentimental attachment. He has been invited, as has every other Democratic leader, to bring to me anything by reaching for a telephone and calling me up, just exactly as any leader of the Republican Party has. So I cannot believe that he is disappointed or feels any sense of frustration about any lack of communication.

Q. Mrs. McClendon: Well, sir

THE PRESIDENT. That will be all I have to comment on that.

Q. Robert G. Spivack, New York Post: Mr. President, Senator Knowland said yesterday in a speech that he thought the U.N. could no longer be considered an effective instrument of collective security. I wonder if you could give us your evaluation of the work of the U.N. in recent years.

THE PRESIDENT. Well, of course, ladies and gentlemen, it would take a long time to go back through the entire history of the United Nations. I think I can best sum up my opinion about the need for the United Nations and about its work, about the reasons we should support it, in a very short simple analogy.

We do not cease our efforts in research in cancer, nor do we abolish the laboratories in which this research goes on merely because of lack of success; and we have had a tremendous lack of success.

Here is a laboratory where nations come together and they explore and they talk, and I am not even going to bother this morning to recite to you some of the good things they have done in the Mid-East and elsewhere. They have. But I must say, as long as we have got a forum, regardless of the fact that our opponents do deliberately use it as a propaganda platform, it is a good thing to keep it going. Here is something for which mankind has had a yearning ever since the dawn of history, and I am not going to give up in my time on it.

Q. Edward P. Morgan, American Broadcasting Company: Sir, there seems to have been some confusion in the past about what the administration thought was necessary in terms of aid to Asia, particularly Southeast Asia--military, economic, and in technical assistance. Could you give us now, sir, at this point what you think should be done in that regard?

THE PRESIDENT. You are asking a question that has no final and definite answer. The situation in Asia changes daily, as it does everywhere else in the world. It is human. We have, as far as I know, never had real disagreement in any moment, at least what I call disagreement as to principle, in the whole administration. But there are changing situations. We had a war in Indochina. That war is not going on actively now. We have danger situations developing in a number of these weaker countries. We are constantly working and trying to deal with them on a case by case method, on the merits of each problem, in such a way as to advance the security and progress of the United States of America and her real friends in the free world.

Now, that is what we are trying to do, and there is just no final answer at any one time.

Q. Charles S. von Fremd, CBS News: Mr. President, there has been a considerable amount of talk in the past 2 days over this tax matter, sir, among Republicans on Capitol Hill who accuse the Democrats of making this step as a political gesture rather than one where they are truly trying to help a good many people, and yesterday, after coming out of a conference with you in the White House, Congressman Arends said that it smacked of politics 100 percent. I wonder if that also represents your views or at least to a certain extent.

THE PRESIDENT. I think my record is perfectly clear on one point. I have often criticized here, in front of you people, ideas, plans, and programs. I think I have never challenged anybody's motives. If you are going to talk about motives, you will have to do it on your own responsibility or get someone else to talk.

Q. Louis C. Hiner, Indianapolis News: Mr. President, the Hoover Commission task force this week sent certain recommendations to Congress to cut the volume of Government paperwork. They recommended that you issue an Executive order to support a Government-wide paperwork management program. What are your feelings about their suggestion?

THE PRESIDENT. If they have found a practical way to accomplish something along this line, I am going to design some new type of medal for them--[laughter]--because I have been working on it a good many years, particularly in the Defense Department, but even in some other places where I have collaborated on a confidential basis.

It is the hardest thing in the world, and particularly when there are so many growing reasons for every department of Government to get into some new function, to study some new idea, to prepare some new report. With all kinds of needs arising, it seems difficult to cut it down. But if they have found a practical way, they are going to find a very great ally in me. That I assure you.

Q. Garnett D. Horner, Washington Evening Star: Mr. President, could you tell us what you think the effect might be on the work of the Federal Communications Commission of its recent experience of having two witnesses change their testimony in the Edward Lamb case and charge that FCC personnel had coached them into giving false testimony?

THE PRESIDENT. As a matter of fact, that has not come to me officially. I know about it; it has been brought up in conversation in my office. I will have to take a much closer look before I can express any kind of opinion whatsoever.

Q. Roscoe Drummond, New York Herald Tribune: Mr. President, would you give us your reaction to the size of the Republican vote against your trade bill in the House last week?

THE PRESIDENT. Well, Mr. Drummond, I should say this: I was, of course, highly gratified that in the final vote a majority of both parties went for the affirmative side of this bill. This is because I so deeply believe that the welfare of the free world, which so inescapably involves the welfare of the United States, is bound up in a growing volume of trade and trade traffic.

Now, as to the other votes that were not final, there were, of course, times when there was a majority of the Republican Party on the other side. Exactly why these maneuvers were carried out I think puzzled even some of their own leaders. In conversations with them, they did announce themselves as puzzled.

Merriman Smith, United Press: Thank you

THE PRESIDENT. Well, I just want to say this one thing. [Laughter] I have only this one thing left, Mr. Smith, which is not news.

I am grateful to the entire body of the Congress, as I said before, finally for looking at this thing in a statesmanlike way and trying to decide on the basis of what's good for all America.

Thank you very much.