President Reagan yesterday defended his policies toward minorities, his economic record and his policy on Poland at a news conference on the eve of his first anniversary in office.
Reagan said he made a mistake in his handling of the issue of tax exemptions for private schools that discriminate racially, but added that "I am opposed with every fiber of my being to discrimination."
"I'm the originator of the whole thing, and I'm not going to deny that it wasn't handled as well as it could be," Reagan said of the Jan. 8 decision to keep the Internal Revenue Service from denying tax subsidies to segregated schools.
The president did not mention a marginal note he made on a report that Rep. Trent Lott (R-Miss.) had asked the White House to intervene to grant tax exemptions. "I think we should," Reagan wrote, according to the document obtained by CBS. Lott obtained a copy of the document with the marginalia and forwarded it to Treasury Secretary Donald T. Regan, according to CBS.
Lott also sent the president's marginal notes to the Justice Department, one of his aides said last night.
Deputy Attorney General Edward C. Schmults said last night that he received Lott's letter and the report with the president's notation, but said they did not trigger the administration's change in position. "The Justice Department was already looking at the legal issues by that time," he said.
A few days after the Jan. 8 decision, Reagan said he would move to deny such tax exemptions through legislation. He ignored the fact that several courts have ruled that the Internal Revenue Service should deny the exemptions and said he acted to stop the IRS from "determining national social policy all by itself."
The president also defended his economic record with a string of figures on unemployment, every one of which was inaccurate.
Reagan said that rising unemployment, which hit 8.9 percent last month, is "a continuation of an increase that got under way" in the last months of the Carter administration. He added that the unemployment rate in 1981 averaged 8.1 percent and averaged 7.4 percent in 1980. Reagan went on to say that a million more people are working "than there were in 1980." However, according to published government figures:
* In the last three months of the Carter administration unemployment declined slightly from 7.6 percent to 7.5 percent to 7.4 percent. It also was 7.4 percent last January, the month of Reagan's inauguration and it declined to 7.0 percent last July before beginning the present climb.
* In 1981 the unemployment rate averaged 7.6 percent and in 1980 it averaged 7.1 percent.
* In addition, there were 508,000 fewer people working in December than when Reagan took office.
When asked for an explanation, a White House spokesman said the president misspoke on unemployment.
Reagan reiterated his confidence that his tax cuts will bring an upswing in the economy that will bring new jobs.
He observed correctly that the inflation rate is lower than when he took office, which he joined with an assertion that interest rates also have come down.
Short-term rates are down, but long-term rates, on which businessmen base their investment decisions as Reagan himself noted in answering another question at the news conference, are higher. The rate for corporate AAA bonds, for example, has gone from about 13 percent to over 15 percent. The rate on tax-free municipal bonds went from under 10 percent to over 13 percent.
Reagan cited interest rates as a reason that capital investment was not stimulated in 1981 although that was one of his economic goals. "I think there's a little caution at work, and perhaps a part of that is waiting to see what the Federal Reserve System is doing . . . . In other words, investors want to be more sure that interest rates and inflation are going to continue coming down as they have been," Reagan said.
He went on to duck when asked whether he would like to see Fed Chairman Paul A. Volcker resign. The effect was that he seemed to be disowning Volcker. A White House spokesman said later Reagan was not calling for Volcker to resign. Reagan noted that members of the Fed serve fixed terms and cannot be dismissed by the president.
On Poland, Reagan said he thinks the sanctions he imposed on the Soviet Union "have had an effect, although there's no question that the situation in Poland is deteriorating."
The president said he has had a long letter from Pope John Paul II approving of the actions he has taken so far. "He believes it has been beneficial, and yet, we're not going to wait forever for improvement in the situation there," Reagan said.
"We have other steps that we can take," he added without elaboration.
On the issue of tax exemptions for segregated private schools, which brought a wave of criticism, Reagan conceded his mistake but said: "Don't judge us by our mistakes. I'm probably going to make more of them. But judge us on how well we recover and solve the situation." He insisted that he was seeking only to change a procedural matter, and said his action in reversing a 12-year-old ban on tax exemptions for schools practicing discrimination had been "misinterpreted." He did not explain why he failed to anticipate that many would see his action as undermining minority rights won over a period of years.
Reagan reiterated the opinion expressed earlier by administration lawyers that there was "no basis in law" for the IRS to deny exemptions. The 4th U.S. Circuit Court of Appeals ruled against such tax exemptions in December, 1980.
The U.S. Commission on Civil Rights declared yesterday that there is ample legal basis for denying tax exemptions and cited Title VI of the 1964 Civil Rights Act.
On another subject, Reagan said that recent leaks have been destructive to his foreign policy, but declined to cite examples. He said that his new efforts to plug leaks "will not interfere with our determination to have an open administration."