Following are excerpts from President Carter's comments on some of the issues raised at yesterday's press conference. Energy and Taxes
Action on a national energy policy is a test of the ability of our democratic system to respond to a recognized threat before it seriously damages our nation and our economy, and we will all be measured by the courage which are able to muster to face up to this energy problem.
The debate that is now going on concerning the national energy plan is not a contest between the executive branch and the Congress nor between the House of Representatives and the Senate. It is a test of our national will.
We must protect the American people and also avoid unfair windfall profits.We must also meet our stated objectives on conservation, on production and on the shift of consumption to other sources of energy other than gas and oil. And we must not let the formation of a national energy policy break our budget.
Nothing less is at stake than the ability of our own nation to act independently as a country. We cannot allow uncertain foreign oil supplies to obtain a stranglehold over the United States. We cannot continue to import $45 billion worth of oil annually, almost half the total amount that we consume and about how much we waste that we don't need to waste.
And we cannot let this excessive dependence on foreign oil continue to increase our trade deficit to purchase, to drain off purchasing power of our economy and also to affect our economic stability.
Both the Congress and I know that enactment of comprehensive energy legislation must be our top priority. As you know, I had planned to send by now to the Congress a major tax reform package. Although most of the work has already been done, I have decided to submit that program after Congress completes its work on both Social Security and also energy legislation.
The Congress right now needs an opportunity to concentrate its attention more fully on the entire energy package, including the tax proposals.
I will have more time working with my staff and with the Congress and with labor and business leaders to evolve the difficult answers to complicated tax proposals. We have an early need to simplify the tax system, to provide more equity to modify the tax rates and to improve capital formation.
The tax reform proposals will be a major element in a comprehensive economic program designed to promote a strong economy and to deal further with reducing inflation, which has recently been on the way down, to reduce unemployment, which is also going down quite slowly, and to do this both immediately and in the years ahead.
The principal component parts of this program have to be carefully integrated also in our budgetary proposals for fiscal year 1979, I prefer to make these final decisions on the tax reform program after the Congress has completed action on the energy program, particularly its tax components and Social Security, which has heavy tax connotations.
Both of these proposals can be assessed, obviously, after the Congress adjourns. By the end of the year we will have more information also on the state of the economy, to know how much of our tax reform proposals should be devted to stimulating the economy.
We have a full agenda this year and I have discussed this delay in the tax reform proposals until after the Congress adjourns with the leaders of Congress and I might say they unanimously agree with this decision. . . Tax Reform
I think the tax reform package has got to fulfill three basic elements. One is improved equity, which means more progressivity, and an end to many of the unneccessary tax incentives and loopholes: secondly, to create investment capital: and third, greatly to simplify the entire tax structure. The degree to which we will have tax cuts to stimulate the economy can only be assessed after we see how much of a drag on the economy the increased Social Security taxes might be and the rate of growth in the economy.
We have just gotten returns this morning, for instance, from overseas balance of trade. We had the highest rate of exports last month in the nation's history. And imports were reduced somewhat. Obviously, the trade imbalance comes from energy imports.
We have had a substantial decrease in the last couple of months in the inflation rate, but a very slow decrease in unemployment.
So I would say that the rate of tax reduction and stimulation from the tax reform measures could only be assessed at the end of this year . . . Arthur F. Burns
I haven't decided about reappointment, but, as you well know, Mr. Burns is a very able and outspoken and independent man.And the Federal Reserve System is legally an independent agency.
I, as President, the Congress and the Federal Reserve System all have independent roles to play in the evolution of tax law, budget proposals and, of course, the supply of money primarily from the Federal Reserve Board.
I think Mr. Burn's primary concern is that we have created uncertainty in the business community by our major proposals, and this is a concern which I share. But when I am faced with the problem of whether to ignore a depleting reserve, for instance, on Social Security and letting the integrity of the Social Security system be threatened on the one hand, or proposing bold measures to correct the Social Security problems - and I, of course, propose those corrections to the Congress.
I think we have delayed too long the addressing of the energy crisis, and these weeks when there is a time of uncertainty creates a dampening effect on the economy and on the attitude of businessmen toward future investment. But the alternative was to ignore the energy problem additionally for months and perhaps years.
The same thing applies to welfare reform and the same thing applies to tax reform. I believe these kinds of criticisms that might have come from Mr. Burns that the volume of proposals might have created uncertainty are just honest differences of opinion. I think I made the right decision. I agree with Mr. Burns that the rpofitability of our free enterprise system, the business profits ought to be up, and one of the things I hope to do with the tax reform proposals and others is to improve capital retention so that new investments can be made to provide new jobs . . . South Africa
. . . My decision has been to support strong sanctions against the sale of weapons to South Africa. This will be carried out immediately by us.
My prediction is that the United Nations will adopt such a resolution and it will be overwhelming supported by the nations of the world. This will be joined with a direction from me that this will be carried out. It would include prohibition against the sale of spare parts to weapons and we will also, of course, assess other actions that might be taken in the future. Arms Talks
. . . I would guess that we have a fairly good prospect within the next few weeks of a description of the general terms of a settlement. The details, the exact procedures by which we might verify, and so forth, would take a long and tedious negotiation.
As you know, the SALT I agreement, the so called interim agreement, provides for a heavy disparity between us and the Soviets with the Soviets having the right to have about one-third more submarine missiles than we have.
The Vladivostok agreement which, as you know, has never been ratified. set a 2,400 limit on launches, 1,320 limit on MIRVed missiles. We hope to reduce those levels, and there is general agreement now that those levels will be reduced.
Also for the first time we have discussed in very strong terms and are close to an agreement on how many landbased ICBM MIRVed missiles will be permitted. This is a new development. But we have not reached final agreement between ourselves and the Soviet Union. But as I said both in Iowa and Los Angeles, within a few weeks we will have a demonstration of real progress. The detailed signing of a treaty will take longer than that.