Interview With the President Remarks and a Question-and-Answer Session With a Group of Editors and News Directors.

THE PRESIDENT. I apologize for interrupting your meeting. [Laughter]

What I'd like to do very briefly is to outline some of the questions that face me at this moment that are both time-consuming and also of importance to our country, and then spend what time we have available answering your questions.

ADMINISTRATION POLICIES

I think the overriding concern that I have is about inflation. It's very bad, getting worse. And I don't think yet we've marshaled an adequate degree of support in the Congress or around the Nation to join in a concerted effort to control this threat to the economic structure and stability of our country.

Whenever a tangible, specific effort is made to control inflation, it always touches a very powerful constituency group, sometimes quite benevolent in nature, sometimes, perhaps, otherwise.

I think the primary thing that the Congress can do this year in positive legislation is to pass the hospital cost containment bill. We've seen hospital costs go up almost like a skyrocket the last few years and profits along with it.

The average costs have gone up about 17 percent per year, which is between two and three times as much as the average increase in costs for services and supplies that the hospitals have to buy.

As you know, many of these hospitals are tightly controlled, both by private investors, also by medical doctors who supply the patients for them and who determine the level of care to be derived. And I think that some control over these costs is imperative. The lobbying effort against this legislation is formidable, and the issue is in doubt.

We are also trying to provide some mechanism by which we can control and make the Federal bureaucracy more effective, to manage it better. We have civil service reform legislation before the Congress, also reorganization plans. The difference is that the legislation requires positive action by Congress.

The reorganization plan goes into effect automatically if the Congress doesn't take adverse action within 60 days. I think we have a fairly good prospect for getting this passed. It will give the very fine, competent, dedicated, loyal, sometimes self-sacrificial, public employees a chance to perform their work better. We could recognize excellence of performance and dedication and also have more flexibility in making their jobs more effective for the Government. If there are instances of inadequate performance, it gives us a chance to chastise or discharge that employee or transfer him to a more productive position.

We have taken some administrative actions. We've been considering for quite a long time now, several years in fact, how to control cotton dust in the air and textile mills. And I think we've now worked out a very good compromise position which still adheres strictly to the proposition that workers ought to be protected from cotton dust levels and at the same time would have a minimal adverse economic impact on the textile industry, which is already under severe strain from excessive imports.

So, we're getting into the regulatory business with inflation impact a major factor. But we're very desperately trying-and I think we will succeed—in not endangering workers' health, not endangering the quality of our environment on environmental standards, and trying to get the Government as much as possible out of the role of unwarranted regulation of the private enterprise system.

We've gotten good support and cooperation from business and labor. As you know, the Retail Clerks (Union)¹ the other day endorsed our deceleration plan. Several of the major industries in our country have done so, General Motors, A. T. & T., and so forth, volunteering to hold down executive salary increases and also to have their prices be less in this year than they were on an average for the last 2 years, the price increases.

¹ Printed in the transcript.

I've taken administrative action yesterday to renegotiate beef import levels, which I think is very important to our country. We have a shortage of lean beef in particular. And in order to market existing trimmings from our very fat beef that we grow in our country, in grain-fed cattle, we need to have this importation of lean beef.

So, the State Department, working with the Agriculture Department, will negotiate to get an increased level of lean beef imports. This will help the consumers; it won't hurt the American farmers, because there is a worldwide shortage of livestock now—in particular, beef.

The other point I'd like to make is a general one, and that is we are going to have to hold the line on the budget. And I presented a very adequate budget to the Congress, prepared back in November and December, when the prospect of inflation was not nearly so alarming. The Congress has been inclined to take these adequate proposals and expand them considerably over a broad range of interests-education, labor, defense, agriculture, transportation, health, and so forth. And this has got to be controlled.

And I believe that you can see the necessity for me to deaf firmly with the overall impact of inflation, because if I don't, I don't think anyone will. And I think any one of these proposals, if examined alone, could be justified: increased spending for transportation, increased spending for defense, increased spending for the handicapped, increased spending for college student aid programs, increased spending for agriculture, and so forth.

Briefly, on foreign matters, we are still working toward some settlement of the Mideast dispute. I will be delivering or exchanging the treaty documents with Panama next weekend, the Panama Canal Treaty.

We are negotiating on a daily basis with the Soviet Union on a SALT II agreement. I think the prospects, as I said a couple of days ago, are good. We have narrowed down the difference to a very small number of items, still very significant. We don't see the end in sight yet.

The comprehensive test ban negotiations between ourselves, the Soviet Union, and Great Britain are making good progress. We've just recently initiated talks with the Soviet Union on two important items. One is to limit the sale of conventional weapons to other countries, and the other one is to prohibit the attack on peaceful satellites by either the Soviets or us or to develop that capability.

We are quite concerned about Africa. Our Nation has had a late-blooming interest in Africa. I think it's true that 2 or 3 years ago we had very little interest there. But we have strengthened our ties of friendship, trade, understanding, communication with many of the African leaders who in the past looked on our Nation with great concern or distrust. I think this is a step in the right direction.

And, of course, we had a notable success last week in putting together a very strong recommitment of our Nation to the support of NATO. And our allies in that fine organization have reaffirmed their commitment to providing strength. I believe that only through a strong national defense posture can we have enough sense of security among American people to give us a flexibility to negotiate reduction in arms levels on a mutual basis or to deal with our allies with a sense of mutual commitment and partnership.

Well, these are just a few of the items. I could list a dozen or so more. But I think I would prefer to take what time we have available answering your questions.

QUESTIONS

MAYOR RICHARD G. HATCHER OF GARY;

PETER F. FLAHERTY

Q. Mr. President, my name is Dennis Schatzman, Pittsburgh Courier. My question is two-fold. One, Mayor Hatcher's recent refusal to accept the position within the White House as one of your advisers raises the question, what is the problem that people like Mayor Hatcher and other notable blacks are refusing this position? Is it because of the fact that they are not satisfied with the amount of power and accessibility that they want in reference to you? If that's the case, what is it they want, and why can't they get it?

And part two, your friend Peter Flahetty is running for Governor in my State and has a very bad image in the black part of Pittsburgh, his native Pittsburgh. If he asked you to come in and campaign for him, would you, for instance, go into the black community and support him? And if you would, what kind of way would you posture yourself in an atmosphere that's quite hostile to Mr. Flaherty?

THE PRESIDENT. To answer your last question first, I would be glad to help Pete Flaherty in any way I could if he requested it, either I or the members of the Cabinet or the Vice President or my wife or family. I think Pete did a good job as mayor; I know him very well. He was occupying one of the most difficult positions in the Nation, that is, the mayor of a major city. And I saw the progress that was made in Pittsburgh. I don't claim that he could meet the needs of all the constituency groups to their satisfaction.

I've also been able to observe Pete Flaherty as he performed as a Deputy Attorney General responsible for the administration and enforcement of the laws of our country, and he performed superbly in protecting minority interests and in every way that could be examined or cross-examined by black groups or any other. So, my confidence in him is very high.

We've not talked to anybody about coming to the White House except Mayor Hatcher. And the first time I ever met him and as far as I ever went with him was to explore the possibility of his coming in in a very tentative way. We didn't offer him a position; he did not refuse it. When I first talked to him on an exploratory basis, he said that he would like to come very much, he would enjoy working here.

He had complete confidence in our administration, which he's repeated since then. But he had obligations in Gary that he didn't think he could leave. And also the legislature there has passed a recent law saying that if he did leave, his successor would not be chosen on an open election basis, but they would be appointed by Democratic precinct chairmen or some sort of an arrangement where the political structure that has been his political enemies in the past would choose his successor. Now, those were the reasons that he gave me.

So, you said a series of blacks have refused to serve. I don't know of any black leader who's refused to serve, because we've only talked to Mayor Hatcher and I've described the essence of the conversation.

MAINE INDIAN LAND CLAIMS

Q. Mr. President, I'm Don Snyder from Bar Harbor Times in Bar Harbor, Maine. You were in Maine recently and addressed a town meeting, at which time I felt you demonstrated a sincere concern for the Maine Indians. As you know, we're having a sticky negotiation with two Indian tribes in Maine now that are claiming ownership of a considerable portion of land and some damages and trespass as well.

Some of the political leaders in Maine today are saying that Maine citizens should not accept a resolution to this problem that is not wholly Federal. In other words, they should not accept a resolution that involves any Maine land or Maine dollars. And insofar as this case might be a harbinger to other cases across the country, would you care to comment about that?

THE PRESIDENT. Well, there's no way that I could comment any further than I did when I was in Maine, and I expressed my position very clearly then. In my opinion, the proposal that was worked out between the Justice Department, the Interior Department, the Indians, and some of the private interests—and with no participation much by the State, because they would not participate; they were invited to do so—I thought was quite reasonable.

Judge Gunter, a distinguished jurist, was the referee, in effect, who made a proposal, and I think that it's a very fair one to the Indians and to the people of Maine. Obviously, this is a political issue in Maine during an election year. And someone running for office for a high position in Maine would naturally be inclined to want the Federal Government to pay all the costs and for the taxpayers of Maine or the property owners in Maine not to pay any. But I think this is a very reasonable resolution of a longstanding problem that has been proposed that would be fair to the Indians and fair to the people of Maine, fair to the private property owners both large and small.

We have obviously nothing to gain politically by trying to inject ourselves into the proposition. We could have just said "hands off" and let it languish in court for years, but this would have prevented in effect any property in that region from even being sold with a clear title. So, because of the best interests in Maine being foremost in our own mind, the Indians', and others', we did propose a solution. I still stand by the fact that the proposal that has been put forward is good, sound, and fair.

FEDERAL AND STATE TAX REDUCTION

Q. Mr. President, Bill Bayer, from Miami. The wins of Tuesday in California concern you, I'm sure. What if Congress comes back and says, "We want a Proposition 13 here with the Federal budget. We want to cut Internal Revenue income tax by one-third, or half," or whatever? And the wins—I'm sure you've heard from Georgia and Florida and you-name-it. What's going to happen?

THE PRESIDENT. I would be greatly surprised. You know, we've put forward a proposal to the Congress to cut income taxes.

Q. But not that much.

THE PRESIDENT. Well, we put forward a proposal to cut income taxes by $20 billion. The Congress has not been willing to go along with cutting income taxes at all so far. They finally, reluctantly, agreed to consider $13 or $14 billion. But our proposal to cut taxes is much higher than the Congress has shown any willingness to accept.

Also, the inclination of Congress is not to cut my budget figures that I proposed, but to increase spending above what we proposed.

So, our main concern about Congress is not unacceptable levels of spending too low, but too high.

Q. Don't you think they're going to get a message from Tuesday?

THE PRESIDENT. Well, I hope so, but we've had one vote in the Congress already that hadn't indicated any substantial decrease. And I would guess that they will certainly get a message.

The Federal Government, as you know, has no role to play with property taxes. This is basically a local thing and up to each individual State to make that decision. I would have been quite concerned, as Governor of Georgia, had the property taxes been cut 50 percent.

Obviously, this is a very good thing for property owners who are economically able to take care of their own needs. The ones who suffer are those who don't own property and those who are more dependent upon government services and have to send their kids to the public schools or have to be more dependent upon other public health services and that kind of thing.

But I think that this is a judgment that has been made by the California people by a 2-to-1 margin. They've spoken very clearly. And I certainly don't have any criticism of what they've done.

I might add one other thing: that our system of federalism has been set up to benefit from this sort of action, which you might identify as experimentation. The States reserve to themselves all the rights that they did not specifically grant to the Federal Government at the time our Nation was formed, plus the Federal Government has gained additional responsibility by Supreme Court rulings since then as they interpreted the commerce clause and others in the Constitution. But this leaves the States with much more responsibility and ability, when new circumstances evolve, to act as test cases.

In addition to this action that the California people have taken, I could point out a couple of others. One, for instance, was in environmental law. The first environmental laws were passed because of local problems with excessive air or water derogation. And the States eventually passed laws, scattered around the Nation— -some States, very strict environmental laws, some with no environmental laws or lax ones. Eventually it worked up to the point where the Federal Government, in order to provide some uniformity, passed federal laws.

But the first experimenters and the first innovators were and should be the States. And as the Federal Government observed which States' environmental laws were effective, which ones were not, then we could make a much more sound judgment here in Washington. I was a Governor back in those days.

Another example has been no-fault automobile insurance, where States have tried out no-fault insurance. Some provisions or proposals have worked well; some have not. Now the Federal Government is in the posture of trying to evolve some uniform standards by which no-fault insurance laws could be assessed.

But this is part of our Federal system that gives us a way for 1 State out of 50 to try a new idea to see how well it works. And I think the whole Nation, including myself and the Congress, will be watching very closely in the next few months to see how California deals with it.

As you know, California has a fairly large State budget surplus, which was one of the causes of criticism and concern by the California people—that you would collect more taxes than you needed and hold those taxes in a reserve fund. That created some disturbance. But once that $4, $5 billion is spent, then a 50-percent reduction in property taxes is going to be a very difficult reduction to accommodate, because in California, for instance, a substantial part of the welfare costs are paid for by local property taxes. This is not the case in Georgia; we eliminated those while I was there as Governor.

But I think that this is the kind of thing that's going to work a very great challenge to Governor Brown, who's acting, I think, in a very responsible way now, and also to the people in California, because the ones who suffer are the poor and the dependent. The ones who celebrate and who enjoy reduction in property taxes are those who are affluent enough to be property owners. And, of course, that's not just rich people, that's average folks that have been able to buy a home or buy equity in a home.

It's an unpredictable sort of thing, and I think everyone in the country has gotten the message. I certainly welcome this kind of experimentation in our country.

ETHICS IN GOVERNMENT

Q. President Carter, I'm Ron De Fatta, KNOE Radio, Monroe, Louisiana. I have a question pertaining to the Korean influence buying scandal. What measures are you taking to ensure that this type of thing will not happen during your administration?

THE PRESIDENT. Well, as you know, this is something that I don't think ever touched the executive branch of Government, so far as I've heard it described. It primarily was an allegation of lobbying efforts within the Congress. We have done everything we could to reveal the facts and also to provide testimony from Mr. Park,² who was here and who has been very forthcoming in giving information about what did occur.

² Tongsun Park, former Korean lobbyist.

He was willing to be examined and cross-examined; he was willing to do this examination with a lie detector in place. As far as we can tell, his testimony was complete and accurate. And all this information has been turned over to the Justice Department, who derived it, and also to the congressional investigating committee.

I think that the best way to deal with this sort of thing is to put a major portion of the financing of congressional elections in the public sector, as they already are now in the Presidential elections, and remove the possibility of unwarranted influence on Members of Congress because of heavy financial contributions. I think the ethics legislation and the public financing law that was proposed last year—and was blocked, as you know, by a Senate filibuster—is a step in the right direction.

And I think citizen groups and others who want the Congress to make decisions based on the merits of an issue, and not because they have some obligation to someone who gave them financial contributions in the past, would be a major step in the right direction—one step, by the way, that I support very strongly.

We have also pushed, as a carrying out of a campaign commitment, very strong legislation on revealing the activities of lobbyists. Now the law is primarily honored in its breach. But I think the new lobbying legislation that's making its way through the Congress will be another step in the right direction. I think public disclosure of the financial status of Members of Congress is another step in the right direction.

Those kinds of things to make sure that the interaction between both executive officers like myself and my subordinates and the Members of Congress on the one hand, and lobbyists on the other, or major contributors, is the best way to prevent this happening in the future.

LABOR LAW REFORM

Q. I am Mel Toadvine, Salisbury Times, Salisbury, Maryland. Mr. President, what do you think your chances are of getting your labor reform bill through the Senate this year, and how much are you willing to give in to get it through?

THE PRESIDENT. I think the chances are good. As you know, the bill has very strong support in the Congress. The House passed it with a large majority. The legislation is needed; it's very moderate in its nature. I analyze every paragraph or portion of the reform legislation from the point of view not only as President but a small businessman who would have been affected by it.

I think the primary thrust of the legislation is just to make sure that the labor relations act that was passed many years ago can be enforced to expedite the resolution of employee-employer differences by open and free elections—which is the way the labor act now calls for, but which is subverted by unwarranted delays—and also to prevent the punishment of employees who might want to honor or to carry out their legal prerogatives and rights.

The law has some component parts that have been opposed by some people. I think the period of time during which the elections have to be held is somewhat flexible in the minds of the Senators. There's been an amendment already introduced, as you know, to exclude about, I think, 78 percent of all the businesses in the country, the very small businesses. And perhaps there would be some other amendments that the Senators would offer. But I think that with those amendments to be offered to remove the more difficult political aspects of the bill, that it will be passed, and its basic thrust and substance will not be modified appreciably.

Q. Do you believe the charge by American business that it is a push to unionize the Nation?

THE PRESIDENT. No, I don't think it's a push to unionize the Nation.

Q. This is the charge, unionizing America, when today, many times there are many people who are saying no to the union movement, greater numbers than ever before.

THE PRESIDENT. Under the National Labor Relations Act, passed many years ago, workers were given the right to form a union or to organize if they choose, if they choose freely, exercising their own judgment. And this is what the bill does. It doesn't expand that proposition or that principle at all. It just gives them the right that ostensibly has been guaranteed to them over decades in our country.

BEEF IMPORTS

Q. President Carter, Gary Watson, the Idaho Statesman, in Boise. Your announcement yesterday on beef brought, predictably, some very negative reactions from farmers and ranchers. And the initial reaction part was that this was just another evidence of a lack of concern by your administration for the West. I'm just curious to get your reaction to this.

THE PRESIDENT. Well, as you know, beef is produced all over the country, including Georgia as well as the West. [Laughter] This is another one of those difficult decisions that a President has to make. And I think we made the right decision.

There is a worldwide shortage of beef. In our country in particular, there will be a shortage of beef for the next 3 years at least, maybe 4 years. The early false news that we were removing all import quotas did have an adverse effect on the futures market. The spot market for farm grown and sold beef actually went up a dollar.

So, I think the beef industry, particularly the farm sale barn level, was not adversely affected, even when many thought that we were going to remove import quotas altogether. We took a very modest approach to it: to negotiate new beef imports of a particular kind and quality that we need in this country, so that we wouldn't remove controls on beef imports as was feared.

One aspect that I think is important is that when we produce in our country grain-fed beef, which has a lot of marbling in the texture and also a lot of fat trimming, that fat has to be used for one purpose or the other. Historically in our country we've taken the fat from the very high quality fed beef and mixed it with lean beef in a very reasonable and responsible way to make hamburger. About 50 percent of all the beef that's sold, as you know, in our stores to consumers is hamburger.

So, we have a real shortage of lean beef to mix with the fat from our grain fed cattle. And this is the kind of beef that will be imported. I think 200 million pounds will be actually needed. If this is not done, then that fat portion of the grain-fed beef will have to be melted down for tallow, which is a very low-priced item.

So, in my judgment, this decision will not have an adverse effect on beef producers in the long run. It will protect the consumers to a very limited degree because of a worldwide shortage of beef. And the projections are that even when the beef comes in, it won't affect the price of hamburger more than 4 or 5 cents. It'll reduce it about that much. It's something that needs to be done, though, to provide adequate supplies of beef for the people to eat, to protect the interests of the beef producers, and to have some moderating effect on inflation trends.

MR. WURFEL. Thank you, sir.

THE PRESIDENT. I'll answer one more.

Q. Still on the beef subject—I'm Sue O'Brien from Denver, Colorado, KOA [radio and television]—people from Colorado contend that ultimately there will be inflationary impact from the quota increase, saying that it will impede ranchers from recovering from 4 years of drought, that some more of them will go out of business, and extend the shortage of beef in this country or deepen it. Can you respond to that?

THE PRESIDENT. I've heard those arguments. I think I just responded to it adequately, because, as I said, there was an incorrect report put out that we were going to remove beef import quotas altogether. This information went all over the country. And even in spite of that, the spot market prices of beef at the sale barns went up a dollar, a dollar a hundred. So, I don't think that the American beef industry, which is very knowledgeable about its own characteristics and circumstances, is going to exaggerate a very small increase in imported beef. I don't think there will be any material change, for instance, in the number of brood cows kept for future herd growth.

And I think that it's obvious that the farmers who grow beef would prefer no imports, and I think it's obvious that the consumers would prefer lower prices. But what we've done is not to take action that would change prices very much, unfortunately, but we have done something that will prevent any adverse effect on beef producers, to let them have a prosperous future, to provide an adequate stimulus for further growth in the size of beef herds. And I think over 3 or 4 years those herds will be back up to the point where the rapid increase in beef prices will not be such a severe blow to the American consumers.

The fact is that since the first of January, beef sold by the farmers has jumped 36 percent. And I think this is an extraordinary growth. As you know, it's now up in the 50-cent to 60-cent bracket. It fluctuates up and down. But that's a very high increase. And I think that those present levels are going to be sustained. There's not going to be any adverse drop in beef prices to farmers, in my opinion. And none of my economic advisers disagree with that.

If you all don't have any objection, would you come by and let me get a photograph with each one of you?