The President's News Conference

THE PRESIDENT. Good afternoon, everybody. One statement about energy, and then I'll answer questions.

ENERGY

First of all, we must move more aggressively to utilize the vast coal reserves in our country. In addition to the three agencies that regulate coal, which I mentioned in my speech to the Nation earlier this week, I've asked Governor Jay Rockefeller, who heads the President's Coal Commission as its Chairman, to hold public hearings within the next 60 days to identify acceptable ways to hasten the substitution of coal for oil.

The Nation's energy policy has been paralyzed for years over the question of controls over domestic energy prices. I have now cut the Gordian knot and put that decision behind us. The question is no longer whether or not we decontrol domestic oil prices; Congress mandated an end to controls effective September 1981. And they will be phased out to avoid a sudden inflationary shock in 1981, and also phased out to provide incentives in the immediate future for increased domestic production of oil and gas.

The issue now is to make sure that the necessary step is carried out in a way which is effective, fair, and equitable. What we must do now is to impose a windfall profits tax on the excess, unearned profits of the oil producers and to use these revenues to create an energy security fund to protect our Nation's energy future.

This tax proposal will be sent to Congress immediately after their return from their Easter recess. And this fund will be used for three critical needs: first, to help low-income Americans meet the increased cost of energy; second, to provide for a better transportation system, particularly mass transit; and third, greatly to expand research and development of alternative future sources of energy, with the same scientific effort that put a man on the Moon.

Even after all other taxes and royalties are taken into account, the windfall profits tax will still leave over $6 billion of new dollars, over the next 3 years, to plow back for domestic oil production and for domestic oil exploration. But I want to issue a warning. We have already begun to hear a good deal of talk from the oil companies about so-called plowbacks. But what this talk covers up is that this proposal, as it will be presented with the windfall profits tax, already provides $6 billion in increased revenue, after all taxes and royalties, to the oil companies over the next 3 years.

The Nation has a right to expect that all of this new income will be used for exploration for oil and gas and not to buy timberlands and department stores.

In addition to this built-in plowback for the oil companies to spend on domestic production, we must also have the windfall profits tax and the energy security fund it will finance. I'm committed to it; the country needs it; it's already clear that the people demand it. And I am also confident that we can get it.

The American people are willing to face the hard reality of the petroleum problem. And they are willing to see oil priced on a realistic basis. But they are not, and I am not, willing to see their sacrifices mocked by a wholly unjustified giveaway to the oil companies, particularly when the needs that would be met by the energy security fund are so urgent and pressing. That's why I am making the passage of this tax and the establishment of the security fund for energy one of my highest legislative priorities.

Thank you, and I would be glad to answer questions.

Mr. Cormier [Frank Cormier, Associated Press].

QUESTIONS

INFLATION

Q. Mr. President, you have already mentioned that you've reached some very difficult decisions on energy policy. Don't you at this point face, perhaps, equally painful decisions on inflation?

THE PRESIDENT. Yes. I don't think there's any doubt that the most urgent remaining issue for us to resolve on the domestic scene is the control of inflation. We have been very disappointed with recent statistics on inflationary pressures. They've been brought about to a great degree by oil prices and energy prices.

I think it's important that we adhere to the strict interpretation and the principle of the voluntary wage and price guidelines. Most of the wage settlements—and there have been hundreds of them in the last 6 months—have been within the wage guidelines. And most of the large corporations, the so-called Fortune 500, have adhered rigidly to the price guidelines.

But we are getting more and more effective in our ability to monitor and to encourage compliance with the guidelines, and I believe it's important that for the next few months we stick with them. I believe that we will see a turn very shortly in the inflationary trend downward, and we will continue to devote our utmost ability to this goal.

Q. Are you saying, Mr. President, that the guidelines should be enough?

THE PRESIDENT. Well, it's not just the guidelines, obviously. We are also working to cut down, for instance, the Federal deficit, to control inflation. We're also trying to remove redtape and Government regulation which adds to inflation. We're trying to encourage the American people, because of patriotic inclinations, to do everything they can within the family structure and within a business, individually, to cut down on inflation. And we're trying to reduce the importation of excessive amounts of goods from overseas compared to what we export. We're trying to strengthen the American dollar. We're doing everything we can to hold down OPEC oil price increases.

So, these things all go together. And I think there must be a recognition that no single scapegoat can be found and it's counterproductive for any American, including a President, to try to find someone else on whom to blame the cause of inflation. It requires a joint effort, a consistent effort, a persistent effort, and we shouldn't give up just because we have a few weeks of adverse statistics come forward.

NUCLEAR ENERGY

Q. Mr. President, in view of the Three Mile Island nuclear accident, and the

dangers that it exposed to the public—

THE PRESIDENT. Yes.

Q. —are you still as strong an advocate of nuclear power as you were, and are you going to still pursue this business of speeding up the licensing of nuclear plants?

THE PRESIDENT. The fact is that we now derive about 12 or 13 percent of our total energy supplies in the United States from nuclear power. I'll be establishing very quickly a Presidential commission to look into the causes of the accident at Three Mile Island. I've not yet decided on the chairman of that commission, nor the members. But it will be done expeditiously. They will present a report to me and, obviously, to the American people and to the Congress on the causes of the accident and how we can strengthen safety standards, better design techniques, and also operating procedures to make safety better in the future.

There is no way for us to abandon the nuclear supply of energy in our country in the foreseeable future. I think it does not contribute to safety to have a bureaucratic nightmare or maze of redtape as licensing and siting decisions are made. So, I think anything that we can do to clarify the procedure and to make it more open, more clear, more obvious to the American people what the issues are involved, would be a step in the right direction.

ALFRED KAHN

Q. MR. President, Alfred Kahn, your inflation adviser, appears to be constantly making impressions, though not the impression that you want to make or, perhaps, the impression that he wants to make. He says things which in their own terms may seem logical but then produce headlines which indicate floating trial balloons about possible mandatory price controls or perhaps predicting a recession. Do you think there is anything more that you can do now to set straight what it is that Mr. Kahn does that produces so much confusion?

THE PRESIDENT. It's obvious that neither Alfred Kahn nor I have discovered an ability to control the headlines. [Laughter]

I think he does the best he can under very difficult circumstances in putting forward to the American people the options that we have to control inflation. The particular recent incident to which you may have referred said that there are two unacceptable alternatives. One is mandatory price and wage guidelines, and the other one is a deliberate recession that would cause very high unemployment. Those are unacceptable to me.

I might point out, as a matter of interest to the public, because this is quite often not recognized, the President of the United States does not have the authority to impose mandatory wage and price guidelines. In 1973 President Nixon did have that standby authority, and he used it. I do not want such standby authority, and there would be no way, in my opinion, for the Congress to pass such legislation. I think it would arouse tremendous opposition in the Congress, including filibuster, and so it's a prospect that I don't think will be materializing at all.

If the Congress should attempt to grant standby wage and price authority, mandatory wage and price authority, I would resist it.

Q. Is your confidence in Mr. Kahn as a spokesman diminished?

THE PRESIDENT. My confidence in Mr. Kahn as a spokesman is undiminished.

INCOME TAX SURCHARGE

Q. Mr. President, we've heard a lot of talk recently about balanced budgets, and you've stated that's your goal. I'm wondering if you'd consider asking Congress for an income tax surcharge similar to the one former President Johnson asked for in the mid-sixties. You have a similar economic situation, demand-oriented inflation. If you could get an income tax surcharge, you would automatically wipe out your budget deficit, and it would make all these folks who want the balanced budget, you know, put up or shut up, so to speak. Or is this sort of thing not politically possible?

THE PRESIDENT. Well, I don't think it's advisable. Because of inflationary pressures, the income revenues inevitably go up year by year. Even before I became President, there was a routine reduction of income tax rates from time to time. And for me to ask for an increase in the income tax rate would be both inadvisable for the well-being of the Nation and, also, I think, impossible. So, I would not consider doing that.

STRATEGIC ARMS LIMITATION

Q. Mr. President, a question on SALT. Secretary Vance and Ambassador Dobrynin have met several times in the last few days. Secretary Brown and Dr. Brzezinski made some major statements last week. Would you tell us now, or give us your assessment of the current state of play on SALT, any detail you could give us on the remaining issues and the prospects for a Soviet-American summit?

THE PRESIDENT. After many mistakes, I have promised the public that I would not predict a date for a summit or for the conclusion of the SALT negotiations. But I can tell you that persistently we have made progress. There has never been an interruption in the negotiating process, there's never been a setback nor a delay. Recently, there have been additional steps toward concluding a SALT agreement. There are still a few issues that remain to be resolved, clarifications in the stance of the United States negotiators and the Soviet negotiators.

My guess is that we will not approach the question of where or when a summit meeting between myself and President Brezhnev will be held until after we resolve these remaining SALT differences.

HANDGUN CONTROL

Q. Mr. President, during the campaign you supported tighter controls on handguns. The White House helped draw a gun control bill last year. Now there are reports that the White House has abandoned lobbying efforts for gun control on the Hill. Can you tell us whether you do still support stiffer gun controls and whether an administration bill will go to Congress this year?

THE PRESIDENT. Well, we'd be glad to cooperate with the Congress on this. Last year, the Treasury Department issued a routine requirement concerning the registration of the serial numbers, I think, on certain types of handguns. The Congress not only rejected that idea, but they removed from the Treasury budget, I think, $4 1/2 million that could have been used to administer that program. I think that indicates the attitude of the Congress.

So, although I do favor increased safety of the American people because of this step, I think to pursue it aggressively in the Congress would be a mistake. But we will cooperate with the Congress.

LOANS TO CARTER'S WAREHOUSE

Q. Mr. President, about the peanut warehouse business, you have said and your spokesmen have said that no money was diverted into your '76 Presidential campaign for those loans. My question is, did you know in 1976 or anytime thereafter that the terms of the loans might not have been complied with, that is, that the bank might not have been repaid on the schedule and according to the terms that the loans were set out in?

THE PRESIDENT. I have never known, nor do I now know, of any illegal action taken at Carter's Warehouse. There have been allegations widely discussed in the press and verbally by some people about the channeling of loan funds to Carter's Warehouse into the campaign itself. I don't know of any evidence that's ever been put forward to the public from any source that could form a basis for those allegations. Those allegations are absolutely and totally untrue.

A special investigator has been now appointed to look into allegations about which there are no bases, so far as I know. We will cooperate completely with the special investigator. And I hope that his work will be thorough, and I hope that he will expedite a conclusion.

There is nothing at Carter's Warehouse that I know of or have ever heard of that would arouse any conviction in the mind of the special investigator that illegalities were present.

BALANCED BUDGET

Q. Mr. President, you brought up the matter of cutting Federal expenses as a means of controlling inflation.

THE PRESIDENT. Yes.

Q. This fits into quite a bit of activity in this area over quite a number of months, going back to Proposition 13 in California, efforts to amend the Constitution to get a balanced budget.

I wonder if I could ask you if, given your campaign pledge to balance the budget before your first term ends, whether you will, in fact, next January, submit a balanced budget?

THE PRESIDENT. My hope is to do so. Obviously, you can't predict what economic circumstances will be. We have cut down the budget deficit that I inherited by more than half, I think better than 55 percent. And there's a growing inclination, not only on the part of the American people but also the Congress, to cooperate in my efforts to balance the budget. So, that is my intention. But I can't predict all economic circumstances to guarantee it to the American people.

It would be a very attractive accomplishment politically. It would be completely compatible with my own economic and political philosophy. And it's a goal that I aspire to achieve.

ECONOMIC ASSISTANCE TO TURKEY

Q. Mr. President, 3 months have passed since the Guadeloupe summit, where you and the Western leaders made a pledge for an urgent economic aid to Turkey.

THE PRESIDENT. Yes.

Q. Where does the matter stand now, and what is the American Government doing on this subject? Would you give us some information?

THE PRESIDENT. Yes. At Guadeloupe, the decision was made by all four of the leaders there that Chancellor Helmut Schmidt and his government would take the leadership in trying to approach the Turkish economic problem from a multinational basis. We have cooperated with Chancellor Schmidt. We've also advocated to the Congress just recently that a total increase above and beyond our loans and grants of about $150 million would be added to our budget request.

We anticipate that Germany and, perhaps, other countries would more than match this allocation of our own aid to Turkey. We don't yet know what the outcome will be. We will certainly discuss this again at the Tokyo economic summit when we arrive there in June. And the Congress will make a decision on this matter unilaterally in our own country.

WINDFALL PROFITS TAX

Q. Mr. President, by decontrolling domestic oil prices without your hoped-for excess profits tax, and seemingly a lot of opposition to it in Congress and elsewhere, aren't you taking a heck of a chance on the good will of the oil companies and their desire to supply the Nation with oil, as opposed to making more and more money? And why should they be more inclined to do that now and to invest in exploration and development now than they were when they reaped their first windfall back in the early seventies?

THE PRESIDENT. I am not depending on the oil companies to get the windfall profits tax passed. My prediction is that they will not support this tax. [Laughter] But I believe that the tax will pass.

There's a different mood in the country now than there was when I proposed the crude oil equalization tax. There were several obstacles to the passage of that tax. One was that I had a multiplicity of responsibilities in energy, because it was a comprehensive package. I couldn't focus on one particular part of it. Secondly, if the Congress had passed the crude oil equalization tax that I proposed 2 years ago, they would at the same time have had to be responsible for decontrol. I have taken that responsibility on my own shoulders, as mandated by the Congress, to be accomplished by September of 1981.

I think the Congress is much more willing now to prevent the oil companies from reaping this great windfall from unearned profits. And I believe that the American people can focus much more accurately and intensely on this one basic issue.

One of the reasons that I decided to take the action which I announced on television the other night was to narrow down the focus of congressional debate, primarily on that one issue—should we or should we not let the oil companies capture about $15 billion which they have not earned, or should we retain a substantial portion of that to meet the needs of the American people?

That's the basic issue. And I think because the issue is so clearly defined and the mood of the country has changed and I can focus on that issue with the full resources of my own office, I believe that it will pass.

OIL COMPANY DIVESTITURE OR NATIONALIZATION

Q. By way of followup, Mr. President, are you any more in favor of divestiture or even nationalization now than when you were first asked about it?

THE PRESIDENT. No, I'm not in favor of nationalization. I think there is some exploration to be done on the subject of divestiture, particularly in horizontal divestiture, so-called, where there have been allegations made in the past, some of which I believe, that some of the major energy companies have invested—for instance, oil companies have invested in coal mining and then used their ownership of new coal mines to reduce production of those mines, therefore, to minimize competition and also to control prices.

I think the horizontal divestiture area should be explored thoroughly, but I am not in favor of nationalization of the energy industry in this country.

REINSTATEMENT OF THE DRAFT

Q. Mr. President, do you have a comment about the reinstatement of the draft? There are many young Americans that are worrying that the draft is going to be reinstated, sir. Do you have a comment on that, please?

THE PRESIDENT. I don't see any immediate prospect that we would want to reinstate the draft. We are meeting the needs of our regular Armed Forces adequately with the present voluntary recruitment program. There are some problems in the Reserve forces which we are trying now to address. We will continue to assess the needs. We do have the authority, as you know, to register persons for a draft in the future, if it's needed.

I would like to say that if we ever do institute a draft, I would like to make it universal in its scope. I don't think that just because someone is wealthy enough or influential enough to go to college that they ought to be excused from being susceptible to the draft. But at the present time, I see no immediate prospect of reinstitution of the draft.

PRAYER IN PUBLIC SCHOOLS

Q. As a born-again Christian, Mr. President, what is your position on prayers in public schools?

THE PRESIDENT. My preference is that the Congress not get involved in the question of mandating prayer in school. I am a Christian; I happen to be a Baptist. I believe that the subject of prayer in school ought to be decided between a person, individually and privately, and God.

And the Supreme Court has ruled on this issue. And I personally don't think that the Congress ought to pass any legislation requiring or permitting prayer being required or encouraged in school. Sometimes a student might object even to so-called voluntary prayer when it's public and coordinated. It might be very embarrassing to a young person to say, "I want to be excused from the room because I don't want to pray."

So, I don't know all of the constitutional aspects of this very difficult and sensitive of questions, but I think that it ought to be an individual matter between a person and God.

GASOLINE RATIONING

Q. Mr. President, we are still in a crisis that is, as you called it, a moral equivalent of war. Why not move to rationing? I mean, wouldn't that be the fair way of doing it? And isn't the American public now ready for that kind of a sacrifice?

THE PRESIDENT. I don't think the gasoline shortages are so severe that they warrant rationing. But we have asked the Congress for standby authority to impose rationing if and when it is needed in the future. Prior to then, though, we will pursue both voluntary and some mandatory conservative measures.

My own inclination is to let the States make the first effort to meet reduced gasoline consumption standards. If they don't, then we would turn to other measures, like the closing of service stations on weekends and so forth. But I would rather let the people do it voluntarily first, let the States do it secondly, and hold in reserve gas rationing for some time in the future.

I hope it would be a distant future, and I hope that we'll be so conscious of the need to produce gasoline in our own country, to have more efficient automobiles, to move toward carpooling and the use of mass transit, that we would not require gasoline rationing.

CONSTRAINTS ON OIL COMPANIES

Q. Mr. President, in your opening statement today, you said that the American people have the right to expect that the oil companies will use the profits they do receive to develop more oil.

THE PRESIDENT. Yes.

Q. Beyond the right to expect, is there or do you have in mind any way to compel the oil companies to do that, to use those profits for production and development and research?

THE PRESIDENT. The oil companies will get, after the windfall tax is levied, about $6 billion in increased revenue or income in the next 3 years. That money should be plowed back into increased production of oil and gas. And I would favor any constraints placed on the oil companies by the Congress or administratively, within my own sphere of influence, to encourage that use of increased revenues for oil and gas production.

Q. Would you require it?

THE PRESIDENT. Yes, I would be glad to put restraints on them. I don't know if you could require it in every instance, but I would certainly favor either laws or administrative actions to put constraints, so that they would plow back that oil into energy production.

As I said in my opening statement, for them to take that money and use it to buy circuses or to buy timberlands or to buy motels or department stores, I think contravenes the need of our country, and it contravenes the purpose that I and the Congress have in mind when we give them that additional income.

ITINERARY FOR EAST ASIAN TRIP

Q. Mr. President, you said that you're going to the economic summit conference in Tokyo in June, I believe.

THE PRESIDENT. Yes, in June.

Q. Will you also be going to South Korea? Will you also be going to any other countries?

THE PRESIDENT. I don't know yet.

Q. You are uncertain about South Korea?

THE PRESIDENT. That's right. We've not decided on the itinerary yet.

MIDDLE EAST

Q. Within the last few hours, Mr. President, a terrorist bomb was exploded in Tel Aviv, and Israel has bombed Lebanon. Isn't there likely to be even more violence in the Middle East than there was before the treaty, and what can you do about it? And would you be willing to stop arms sales, all arms sales to the Mideast?

THE PRESIDENT. First, I would not be willing to stop all arms sales to the Middle East, because I think the countries there must have an adequate means of defending themselves—Israel, Egypt, and others.

Secondly, I believe that the terrorist bombing is a longstanding problem. It's not something that just has arisen because the treaty has been signed. I think the terrorism threats are counterproductive. My own hope is that the best way to alleviate this constant dependence on death and hatred and destruction and terrorism is to prove the viability and the advantages of the peace process.

I would like to see, as early as possible, but by the end of next month, all the borders open between Israel and Egypt, a free passage of students and tradesmen, diplomats, tourists, and for the demonstrated advantages to Israel and Egypt to be very apparent to the citizens of Jordan and Syria and Lebanon and to the Palestinians, wherever they live, hoping to convince them that that's the best approach to achieve their own purposes and goals-that is, peace and a realization of the right to control their own future.

But I don't think there's any doubt that terrorism will continue in the coming months. I hope it will wane as it's proven that the peace treaty is permanent and that it is going to work.

An immediate step that will tend to convince everyone that it is permanent and cannot be disrupted by terrorist acts will be the quick ratification of the treaty by the Egyptian Parliament and the exchange of the documents themselves. And then the return of El Arish and the first part of the Sinai to Egypt—I think that will be a step in the right direction.

ENERGY CONSERVATION AT THE WHITE HOUSE

Q. Mr. President, in your speech last week, you asked the American people to cut back on the use of energy. Do you and your family have any plans to do likewise? And if so, could you elaborate on that a little bit, please?

THE PRESIDENT. Well, we comply with the thermostat settings and have ever since the first time I began to work on that in 1977. We've shifted, as you know, the White House fleet of cars to smaller and more efficient automobiles. Our travel is pretty much official, except for rare vacations, which we hope to take on Easter.

I hope we can set an example for the rest of the Nation. We have just begun the construction of a solar heating unit on top of the West Wing, just behind the Oval Office, this month, which will be completed before the end of April.

So, we are trying to do a few personal things to demonstrate our belief in the principles that I described the other night.

MR. CORMIER. Thank you, Mr. President.