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

THE PRESIDENT. Well, the first thing I want to do is to welcome you to the White House. Since I've been living here and serving here, this is the 53d meeting I've had with the editors and broadcasters from outside the Washington area, in addition to the press conferences and other encounters I've had with the press here in Washington.

I would like to just describe two or three major items of concern to me here at the moment and then spend the rest of the time answering your questions about any issue which you want to raise.

ADMINISTRATION POLICIES

Domestically, the most significant challenge that I face is the high inflation rate, which is attributable in a major degree to the fact that after all these years we still do not have a comprehensive energy policy. And even after we've reached a crisis stage in energy supplies and inflation, the three major bills that will help to resolve this issue are still languishing in congressional conference committees. We hope that the Congress will be encouraged to pass this legislation expeditiously, but so far the action of the Congress has been very disappointing.

Secondly, we're dealing on a continuing basis with the problem of our hostages being held in Tehran. This criminal act continues .at this very moment, as you know, with 53 innocent Americans being held against their will and against every provision of international law and international diplomatic propriety. We're doing the best we can to resolve this crisis. I think it's important that we be calm and persistent, dealing with almost insurmountable obstacles with patience. My assessment is the American people have been remarkably united in backing me in this effort.

One day is obviously too long. But I think that there have been some encouraging developments recently, with the election of a government in Iran—at least the President—and also with the arrival there of the international commission established under the aegis of the Secretary-General of the United Nations. They have begun their meetings now, and we hope that this will be a step toward resolving the crisis.

The other issue, of course, is the protection of our interests in Southwest Asia.

We've tried, in every case that I've described, all three cases, to marshal as broad a base of international support for the American position as possible. Often in the past, in international affairs, in times of crisis, our Nation has stood almost alone in meeting those challenges. I think at this time, in these issues, we are remarkably supported by our own allies, by nonaligned countries, and by the less developed countries of the world, who in the past have not been at our shoulder when we've had to meet these kind of challenges.

We don't know how soon we'll be able to resolve any of these problems—inflation, energy, hostages, Soviet aggression in Afghanistan—but we are acting in a persistent fashion, a clear fashion, an open fashion, an understandable fashion. We're getting as much unified support in our own country as possible, and support from around the world. Every action that I've taken has been designed toward peace and toward the resolution of these problems with peaceful means.

We are acting through strength, from a position of strength. And I am convinced that we can only maintain peace for our country as a strong nation, with our strength recognized here in this country, by our allies and by others, including our potential adversaries.

There are obviously many other issues on which you might want to predicate your questions. I'll be glad to answer them.

QUESTIONS

SOVIET INVASION OF AFGHANISTAN

Q. Mr. President, considering the level of rhetoric that we've heard both from the Soviet Union and from the U.S., especially following Afghanistan, I think this frightens a good many people, in that we know that conventional war can become nuclear war very easily. Can you point to any specific steps that you have taken in this time to ensure that diplomatic channels remain open and active so that there aren't misinterpretations that cause this to escalate beyond where it should be?

THE PRESIDENT. I would say about half the international conflicts in history, in recorded history, have been caused by a misjudgment on the part of a potential aggressor nation concerning the reaction of other countries or peoples. We've tried to make our position very clear. We've not acted unilaterally except through economic sanctions.

We had political, economic, and military action as options open to us, to me. Our grain embargo, the termination of the sale of high technology equipment, other similar actions to put more restraints on commerce with the Soviet Union have been clear, unequivocal, and well understood. We've had good support among our allies in this respect. Politically, we've acted through the United Nations. And I think that you notice that 103 other countries joined us in the condemnation of the Soviets' action and the call for the Soviets to withdraw their invading forces from Afghanistan.

We have not been the leaders, but we have certainly approved and encouraged, whenever appropriate, regional action of a similar nature. Thirty-four countries assembled themselves in Islamabad-Moslem countries—and they voted unanimously, in much stronger terms than the U.N. used, to condemn the Soviets and to demand the withdrawal of Soviet troops. Some of these countries were either subservient to or heavily dependent upon the Soviet Union for economic and military aid.

We've been persistent in not yielding our position as events proceeded. I think the Soviets made a serious miscalculation, not only in our own actions and the world reaction but also in the intensity with which the freedom-loving people of Afghanistan have resisted the Soviet domination.

The Soviets continue to build up their troop placements in Afghanistan. They only control, really, most of the major highways and some of the major cities. They've been, I'm sure, very unpleasantly surprised at the refusal of most of the Afghan military forces to cooperate with the Soviets. A lot of them have defected, taken their weapons with them, and are now opposed to the Soviet Union. There's been a substantial loss of life, both among the military and civilian population of Afghanistan and also among the Soviet invaders.

We don't want to return to the cold war; we don't want to have a confrontation with the Soviet Union. But it's imperative that we make it clear that we will protect American interests in Southwest Asia. We would like for the Soviets to withdraw. We certainly did not precipitate the incident in Afghanistan. We played no role at all, now or in the past, that would cause any concern to the Soviet Union about their own security.

So, the Soviets have tried to mislead the world; they have failed. They have tried to invade a country and subjugate it quickly, but they have failed. And in my opinion, the best thing that we can do is to remain firm, united, peaceful, persistent, clear in what our position is. And I believe that's the best way to encourage peace and to enhance the peace that we already have maintained.

WAGE AND PRICE CONTROLS

Q. Mr. President, to get back to your domestic concerns, we had very discouraging reports at the end of last week, resulting in a flurry of suggestions or pleas again for mandatory price controls and wage controls. Your views are well known. Is there anything that you're seeing now that is causing you to review your previously stated position on mandatory—

THE PRESIDENT. No, I don't see any prospect at all of my supporting mandatory wage and price controls. I think it would be counterproductive. I think history has shown that it has never worked except during a time of intense crisis when the very existence of our Nation was threatened—through, for instance, the Second World War. I think it would precipitate a wild escalation in existing inflation.

As you all, I'm sure, understand, the President at this time has no authority to impose wage and price controls even if it was desired, which it is not. The Congress would have to go through the entire process of holding hearings, with long delays, with inevitable filibusters in the Senate, before wage and price legislation could possibly be passed. During that entire process, when the business community and labor could anticipate a possibility of mandatory wage and price controls, they would undoubtedly escalate their wages and prices in preparation for the mandatory imposition of controls.

So, I don't see any possibility of my supporting any move toward mandatory wage and price controls. There are other things that we can do. We are assessing a wide gamut of possibilities, and we're doing it very carefully and very cautiously. I would like to point out that the basic principles that we've espoused and the basic policies that we've espoused suit me fine; the tuning of those and the enhancement of those is something that we intend to do.

1980 SUMMER OLYMPICS

Q. Mr. President, did any of the Olympic athletes that you met with today ask you if there is .any way around the boycott of the summer games? And secondly, do you think that domestic support for you will wane at all as the dates of the Olympics near?

THE PRESIDENT. Immediately after the Soviet-American hockey match the other night, I called Herb Brooks, the coach of the U.S. Olympic team, and congratulated him and then told him how proud the Americans were of their victory. His first response was, "Mr. President, we want you to know that we stand firmly with you in your attitude toward the Olympics games not being held in Moscow this summer."

I can't claim that Herb Brooks speaks for the entire American Olympic team, but I do believe that the overwhelming support that I've so far seen in America will not wane for our refusal to go to the Olympics in Moscow, the Soviets being an invading nation against Afghanistan. We have seen no evidence at all that the Soviets are contemplating withdrawal of their troops; on the contrary, because of unanticipated opposition, their troop levels are being built up.

I am going to pursue aggressively-already am—the holding of international, quality, alternate games. I'll be meeting in the near future with some advisers on how to put together this effort, and will also be meeting, by the way, with some representative members of the Summer Olympics team, although we don't know their identities specifically yet.

But I believe the Americans will support this alternative effort. I do not believe, under any circumstances, that Americans would support our going to the Moscow Olympics this summer.

INFLATION

Q. You met with your economic advisers last night. Are you coming up with some type of a solution to the high interest rates and the inflation problem we're seeing?

THE PRESIDENT. It would be misleading for me to tell any of you that there is a solution to it. As you know, this is a worldwide, all-pervasive problem, with oil prices having been increased almost 100 percent during the last 13 or 14 months. Some countries suffer inflation rates much greater than our own; for instance, Israel, I think, the inflation rate is more than 100 percent per year. We're dealing with the problem with every possible means.

I have been disappointed that the Congress has not acted. For instance, hospital cost containment legislation should be passed by the Congress in the strictest possible fashion. It would help to lower the inflation rate substantially. Our having a clear national energy policy would help us to move away from excessive dependence on foreign oil and would send a clear signal that, I think, would have an immediate moderating impact on international prices set by OPEC, over which we have no direct control.

We have had a tightly restrained budget. We have slashed the deficit down substantially. We've lowered the number of Federal employees 20,000 below what they were when I came here. We are enhancing research and development to give us a long-range approach to the inflation problem. We've held down unemployment, have added a net of 9 million new jobs in the Nation since I've been in office. And we'll take other steps as appropriate.

One of the reasons for the meeting last night was to go down again the long list of possible options open to us. And we'll assess those, as we have been in the past, and take action as necessary.

But in general, I would say that our policies are sound. We are caught up in circumstances over which we have very little control. Mandatory wage and price controls are out of the question for me. We'll take other action as we determine it to be appropriate.

FEDERAL INCOME TAX SYSTEM

Q. Mr. President, the Northern States, from roughly Maine to Minnesota, send about $35 billion more tax money to Washington than comes back in Federal spending. Do you plan any particular policy to either change your tax policy, for example, indexing inflation below the cost-of-living differences, or in spending policy such as closing military bases only in one section of the country, which is about 87 percent of them in the South or West, and expanding them in the North? Anything like that of a major sort you would try to equalize the balance-because it does amount to about $350 per person?

THE PRESIDENT. No. The only feasible solution to that would be to lower the per capita income in the North and to increase it in other parts of the country- [laughter] —which is a proposal that I have no intention of adopting.

But as you know, the income tax system is designed to derive revenue for the Federal Government, depending on the level of income of the people who are taxed. And most of the Federal programs, not all of them, are designed to give assistance on a per capita basis, with most of the aid going to the very low income people.

Q. The problem is there's not an adjustment for cost-of-living differences, Mr. President, in those per capita figures. And while, for instance, New York or Boston may have incomes that are 5 percent above the national average, their cost of living is 16 or 15 percent above. So, it's really not well balanced.

THE PRESIDENT. I know. I can't claim to you that that has been accomplished. I see no feasible way to do it. It may be theoretically equitable to make, for instance, certain kinds of payments for social security to be higher in one community than the other. But the bureaucratic maze required to determine how to allot a different level of social security payments for each recipient, depending on their particular cost of living, would be, I think, impossible to surmount.

Also, as you know, within a certain community, like New York City, you would have a wide diversity of costs among people in different communities within New York City.

Another thing is that you have to remember, the poorer the person is, the less likely they are to be able to purchase bargains, because they're not mobile and they quite often can't shop around. Their credit rating, their flexibility, their ability to buy bargains off-season and save them until they're actually needed are much less, because they live hand-to-mouth, you might say, than a wealthy person, who can shop around for a bargain on an automobile or a home or clothing, and so forth.

So, I don't think it would be possible to do what you've suggested.

SOVIET AGGRESSION

Q. Mr. President, in accordance with history, Turkey was never a true ally of any country. What guarantees do you have, in the event the Soviet Union invades Iran, that Turkey will become a shield for the Western World and will not join the Soviet Union?

THE PRESIDENT. What we've tried to do so far is not to prepare for an inevitable conflict, but to take action to prevent a confrontation with the Soviet Union. I think that the surest way to prevent further aggression by the Soviets is to let them know that their present aggression into Afghanistan has been counterproductive, that they have suffered serious consequences, and that the world is aroused against the Soviet Union's action in a very clear and unmistakable way.

The first line of defense for any prevention of aggression is within a nation itself. And we want to have, for instance, Turkey, Iran, Pakistan, and other countries to be united, to be filled with the spirit of resistance and independence, to be free of unwarranted subversion that might bring down an established government, to be secure in their own military capability. And that would be the first line of defense.

The second line of defense for people in that region would be a community of nations—perhaps, for instance, the Moslem nations who assembled in Islamabad—to pledge each other their support. And of course, the third level of defense would be from countries like our own, who have vital interests in the Persian Gulf region and who would be there, available to help, if necessary, to prevent aggression.

As I said in my last press conference, we would not yield to the Soviets the choice of either terrain or tactics. We would not let the Soviets choose a particular place for a response to aggression to be mounted. And we would not let them determine the tactics to be used in resisting their future aggression. But we let the Turks and the Iranians and the Pakistanis know that if they need our help, then that help is available.

Now, as you know, we don't have a relationship with Iran that would permit continued assistance. But my hope is that Iran will be united, free, independent, secure, and would not be subject to interference in their internal affairs from any country. I think this kind of approach is the best guarantee not to have conflict, and to preserve the peace.

LEBANON; U.S. BASES IN PERSIAN GULF AREA

Q. Mr. President, Senator Jackson recently suggested that this country work together with Israel and Egypt to provide bases and military support to secure the Persian Gulf area. Is the Government planning to do this? And would you also comment on recent reports that the Soviet Union has delivered 60 tanks, as well as other military equipment, to the Palestinian terrorists in southern Lebanon?

THE PRESIDENT. We don't have any evidence of that delivery of tanks to the Palestinian terrorists in southern Lebanon, but I can't certify that they have not delivered some tanks.

Secondly, we've not had any offer by either country of a U.S. base on their own territory. We have had offers of the use of facilities. For instance, during the recent crisis, when we were moving our sea forces into the Gulf of Arabia, we did use Egyptian facilities for some of our observation planes and other Air Force units. The Israelis have offered us the use of their facilities in Haifa for some of our naval forces. There have been occasions when the Israelis offered us the use of Egyptian bases, and perhaps vice versa.

But I think that all of the countries, including Israel and the Arab countries, would not want American bases to be established on their own territory, because this has the connotation of American sovereignty there. We do have some bases around the world, as you know, based on our controlling that actual territory.

But an alternative that's adequate for us is to have the right, through prior agreement, to use facilities for planes or ships, and this is what we are exploring in that region. Three nations that you didn't mention, by the way, would be Kenya and Oman and Somalia. But to establish a so-called American base with an implied sovereignty over an area of land, even though it would just encompass a military base, is something that we are not exploring.

Q. So, you feel that you already have that use of facilities from Egypt and Israel?

THE PRESIDENT. We are developing that use of facilities in several countries in that region, including the ones I've just named, but not as a military base. We do have the offer from Israel and Egypt to use their facilities when necessary in time of crisis.

SOVIET GRAIN EMBARGO

Q. Mr. President, Vice President Mondale came to Iowa before the Iowa caucuses and said that Iowa farmers would not be left "holding the bag"—was the phrase he used—because of the grain embargo. And I'm just wondering if you can give me anything to take back to Iowa about further actions that might be taken to hold to that pledge.

THE PRESIDENT. Well, when Vice President Mondale and Secretary Bergland and other members of my Cabinet and my family came to Iowa after we imposed the grain embargo against the Soviet Union, they gave that pledge. Subsequently, as you know, the U.S. Government assumed the responsibility of purchasing grain in fairly large quantities and providing CCC [Commodity Credit Corporation] loans where the farmers had difficulty marketing their grain at the so-called country elevators.

After that we had normal market developments that caused fluctuations, both up and down, in grain prices, both feed grain and food grains. One of the developments was a prediction of a much higher yield this year than we had anticipated, because of good winter weather. That ordinarily depresses the price and did somewhat. Another development was that worldwide markets would be provided with higher levels of grain supplies than we had anticipated from other countries. That also has a tendency to depress the market.

But in my opinion we have seen the adverse impact of the grain embargo eliminated. I might point out that in January our total shipments of grain from American ports exceeded the shipments from American ports in January of 1979, in spite of the embargo this year. And we anticipate that this year we'll have a higher level of exports of grain than we did last year, which set world records for grain exports, as did the previous year.

We will constantly monitor the question of price-support levels, target-support levels, storage capability, and storage payments on farms, and also try to enhance the sale of American grain to compensate for the loss of sales to the Soviet Union. And in the entire gamut of agriculture policy, we will constantly remember the impact of the embargo, on the Midwestern farmers primarily, because they were the ones primarily affected on both corn and wheat.

Another thing that we've done is to accentuate our effort to sell grain to our previous customers at a higher level-Mexico, Japan—and to open up new markets, like in China.

So, we are making every effort to make sure that no one suffers in an inordinate way. But I have to say that all Americans, either through paying taxes to finance the higher expenditures in agriculture or otherwise, are required to share in some level of sacrifice to meet the Soviet threat.

MS. BARCO. Thank you, sir.

THE PRESIDENT. Thank you.