Nicaragua Policy

Mr. President, you've often given your views of Nicaragua and called it the war machine and said it posed a threat to its neighbors and also our security, but the Sandinistas appear to be firmly in control and there are few signs that they are changing. What, looking back on your policy on the last four years, has it actually accomplished as far as Nicaragua is concerned?

Well, yes, I think there are more people who are opposing the regime right now in Nicaragua than actually fought in the revolution against Somoza. And it seems to be growing. The unhappiness of the people -- you only have to look at the flood of refugees that are escaping from Nicaragua to realize that the people of that country are not happy with that totalitarian regime.

With what final result?

Well, I know the Contadora is still trying to find an answer of that kind. The contras themselves have offered to lay down weapons and go into negotiations in an effort to have what they had fought the revolution for. And that is a democracy. And so, I think, as long as the people of Nicaragua are still striving for the goals of the revolution that they themselves fought, I think that we're obligated to try and lend them a hand.

In this country, even though your popularity remains very high, on the issue of Nicaragua polls show that there are many Americans opposed to your policy there and the Congress shows very little inclination to give you the $14 million you've asked, but do you have any new proposals or ideas that would change this view in Congress?

Well, nothing that I can talk about here. But let me just say, I know this about what the polls show and I know what happens up on the Hill. But we've been subjected, in this country, to a very sophisticated lobbying campaign by a totalitarian government -- the Sandinistas. There has been a disinformation program that is virtually worldwide, and we know that the Soviets and the Cubans have such a disinformation network that is beyond anything that we can match.

And, of course, I don't think the people have heard actually the thing that we're trying to explain of what is going on. People go down, some people, to Nicaragua and claim they come back now with views that are favorable to that totalitarian government, but why don't they go to some of the neighboring countries and talk to the thousands and thousands of refugees and ask them why they fled Nicaragua?

Is there anything that you can do, as president, that your administration can do to help the contras and their supporters if Congress does not vote this money?

I don't know. That's something I'd have to face if they do this. We're not alone in helping them. As a matter of fact, in spite of the polls there is more and more private support for the contras. Meeting Gorbachev

On another subject, sir, have you heard back from the Soviets on your proposal for a meeting with Mr. Gorbachev?

Lou, let me just say -- and this I know will be kind of frustrating -- I've had a response to my letter but I never talk about the content of communications between myself and other heads of state.

Well, without putting it then in the context of the letter, we've heard that the Soviets have given some indication that they would like to meet with you but they have not given a time and place. Could you --

Well, again, as I say, that would be commenting, and that would be opening a door to all kinds of speculation. I wrote, and he answered, and we're in negotiations, and we'll just leave it like that.

Well, do you expect that you will meet with him some time? Without reference to the letters, do you foresee a summit meeting or a high-level meeting between you and him?

Well, I'm going to continue. I made it plain that I would have liked such a thing with his predecessors. And I'm going to continue, and hopeful that we can have such a meeting. U.S. Officer's Killing

Has the killing of Maj. Nicholson a U.S. Army liaison officer shot by a Soviet guard in East Germany last week had an impact on these negotiations?

No. There seems to be a little misunderstanding on the part of some columnists about my answer the other day to that, that it made me even more anxious for a summit meeting. Some have made it seem as if I was being an appeaser or something. Not at all. This was a murder, a cold-blooded murder. And it reflects on the difference between two societies -- one that has no regard for human life and one like our own that thinks it's the most important thing. And, yes, I want a meeting even more so. To sit down and look someone in the eye and talk to him about what we could do to make sure nothing of this kind happens again. Strategic Defense Plan

Mr. President, on a related subject, the Strategic Defense Initiative. You have said that the world would be a safer place if the superpowers moved to strategic defense from mutual assured destruction. But the Soviets don't agree. Does this mean that the present negotiations in Geneva are really on hold until the Soviets come around to your point of view? Or is there some way that we can move now to have these talks deal with the immediate questions of medium-range or long-range missiles?

Well, I don't think there's any hold on the talks over there. They're in three groups. One group is talking about space, things of -- and defense weapons, one is talking about the strategic weapons, and the third one is talking about the intermediate-range weapons in Europe. And the negotiations are going forward.

The Strategic Defense Initiative is purely research and Mr. Gromyko the Soviet foreign minister said there's no way to control that, that it's not covered by any treaty, and the plain truth of the matter is they've been doing the same kind of research in the same areas, and started before we did.

Now I do mean that if this research could lead to the kind of a weapon that would make one have to think twice as to whether they could be successful with the use of nuclear weapons, then it would lead to the very thing that both the late Soviet leader Mr. Chernenko and Gromyko have said -- and that is that they would like to see the elimination of nuclear weapons. So would we. And if a defensive weapon that could be successful against them helped bring that about by making them too costly to take the chance of putting those costly things in the air only to be shot down, then we'd be further on the way toward the elimination of nuclear weapons. And we'd all be better off.

Do we need an interim agreement to keep the number of missiles down while we're having these talks?

Oh yes. I've never believed that, even though they said this, because my own response to Mr. Gromyko when he indicated that same thing to me, my own response was, 'Look, we can settle it right here. We're ready to go all the way on the elimination of nuclear weapons.' But I didn't get an answer.

But, yes, I would think that the logical thing would be to start with the reduction of the numbers of weapons to get them down to a lower level, and my hope has been that, once we start on that path, that gradually everyone would see that it makes more sense to keep on going until you've eliminated them.

Would it be wise to try to achieve that sort of interim agreement about the time the SALT II strategic arms limitations would have expired that have been generally observed by both sides?

Well, I hadn't really thought about whether that makes any difference or not. It's that the world is living under a threat and other people are going to try, as we know, to get missiles themselves, and some of them are less responsible than others, and they're not all superpowers, and I just think that it's a threat that humankind should not have to live under. State-Supported Terror

On another subject, Mr. President, a British newspaper reported yesterday that the United States has warned Iran that military retaliation would take place if any of the Americans who have disappeared in Lebanon were to be put on a show trial or murdered by pro-Iranian factions. Has such a warning been issued to Iran?

Well, here again, I don't think I should discuss anything of this kind. What I have said is that there is increasing evidence that some terrorists in the world are actually emissaries of sovereign governments. And if that's the case and can be established, then that business of trying to find and track down in all the world a few terrorist individuals for some crime, no, go to the source. And the government is -- supports them. But --

Would you put Iran in that category of a government that --

Well, as I say, I can't comment on this specific question that you asked, beyond that. But this -- we've been working as closely as we can with allied countries and friends to see if, together between us, we can't do something. And, well, we have done something. I think we've had some measure of success. But in the exchange of information to get a handle on this widening terrorist activity there -- we know it's not just one group. There are a number of groups representing different interests. Sometimes they apparently collaborate and it's a new form of warfare.

Can you tell us something about the accomplishments in this area that you believe you've achieved?

Well, we're making headway and have been successful in getting cooperation and trading information, intelligence information, getting agreements with other countries with regard to extradition and denying their countries as shelter for terrorists who then cross a border and are reasonably, have been in the past reasonably safe if they leave the country where they've been terrorizing, and just getting much more mutual agreement about the need for all of us to work together. South African Violence

Mr. President, on the subject of South Africa, there have been 38 fatalities and civil strife there in the past few weeks, and the government seems to be engaging in increasing repression, banning assemblies and meetings. Isn't it time to go beyond the policy of constructive engagement and silent diplomacy in our dealings with South Africa?

We think that we're doing is the best, has the best effect, the most effect of anything that we could do. Just walking away would leave us with no, no ability to influence them. We think some progress has been made. We do know that there is a factionalism. It isn't just a simple question of two groups, the government versus a group. Over in this group there is a division and there is a sector that wants violence as the answer, and they're even violent to the others, not to the government alone. And we think apartheid is the main problem that must be resolved, and we're going to continue doing all that we can to encourage the government in its course.

But have we done anything to try and discourage that government from its violence? It seems that it's gotten worse rather than --

Well, except that the violence, nothing can be solved by violence. And that isn't the answer. But remember the violence is not just alone stemming from a government putdown of demonstrators. You have, in the black community there, you've got rival factions and the violence is sometimes between them, fighting each other. And we've seen evidence of that, and we've seen murders. And some of the 40 deaths have been created in and among the people without the government participating.

When you've mentioned that in your recent news conference, some people in this country and around the world took that as condoning the government's actions. Did they take that wrong?

No, and it wasn't intended to be. But it is true, I think some people, and I would have to say that some who did maybe have a political bias, but they tried to read into it that I was voicing a bias. And I wasn't. I was trying to point out just what I did here. Maybe I should have taken more time. You know, in a press conference you feel a little pressed for time in your answers and maybe sometimes you don't make them as full as they should be. But I was trying to point out that from this being simply people opposed to apartheid against a government that is supporting apartheid, no, it has gone beyond that. There is an element that wants to overthrow the government by violence and is not just limiting its fighting to the government. It is fighting its own fellow citizens, and even in the same communities. Defense Budget Cuts

Mr. President, we could change a little bit to domestic matters. I wanted to ask you a question about the budget. You said in a Saturday radio speech recently that you would not accept cuts in vital conventional or strategic weapons systems. The Senate Armed Services Committee has voted to cut 175,000 from the defense payroll to bring down the deficit. Since you don't want to cut weapons systems, would this cut in personnel be acceptable for you?

Well, that wasn't adopted by the committee, was it? I understand it's --

It's part of an option directed toward zero real growth.

No, that is the type of thing I haven't had a chance to study since I heard that also, and see what the effect and where they're choosing these people to go. But as I've said with regard to defense, when you start to economize, you have to look at it from the standpoint not of the number of dollars that you're hoping to save, but what can you do without. Now I don't know whether we can do without that many people, and where they would come from, and what shortages it would create in our defensive capability.

So again, I say, if we can find additional ways -- and we have already reduced the original budget considerably -- if we can find additional ways in which there could be some postponements of something or other -- not weapons systems, there are a number of fairly civilian-type activities that take place in the military also -- if some of those would not in any way reduce our defensive capability and yet would provide some savings to help us as we try to get a handle on this budget, all right, that's one way to look. But I don't see where there could be any compromise on weapons systems that have been chosen because we believe they're necessary to redress the imbalance between ourselves and the Soviet Union.

I've heard some spokesmen, and some who should know better, in and out of government, some of the shows on television and sometimes in the newsprint voicing their opinions, that somehow we're on a parity -- they've even used that term -- with the Soviet Union. This is the most ridiculous thing I've ever heard. The Soviet Union virtually outnumbers us in any type of weapon you want to name, has consistently modernized their land-based nuclear missiles where we're just trying to do with the traumatic experience of the 21 MX missiles for which Congress voted to release funds these last few days, which is the first modernization of our land-based missiles in almost the lifetime of the men and women who are handling these weapons. They are about three-to-one in nuclear megatonnage over us. They outnumber us in conventional weapons in almost every category. Their navy has several hundred more ships than we have.

We've been making progress. We think that we have, we've achieved, I think, a deterrent to the effect that they'd have to think twice about taking us on. But we haven't caught up with them or surpassed them in any sense. Trade With Japan

Returning to trade with Japan, you have expressed sympathy with Prime Minister Nakasone's problems in trying to open up markets there. Nevertheless it appears that negotiations continue to be very difficult with Japan, particularly in telecommunications most recently. Are you satisfied after the report from your special envoy that some sort of agreement can still be reached, or do you think you're going to face an increasingly frustrated Congress on this issue?

Well, I'm going to place my confidence in Prime Minister Nakasone, and confidence that he wants to arrive at a solution to these trade problems as much as we do. And of course, just as I do, he's got some political problems of his own. But our representatives came back and they are reassured that there is no lack of intent on his part, and they're assured that he is going to continue doing his utmost to bring about some changes, evening up this trade imbalance. And so we're going to -- we'll just have to wait and see what he can accomplish.

We have made some progress so far, some time ago, with regard to citrus fruits, beef, things of that kind, and I'm -- the negotiations aren't over by any means.

Mr. President, for a long time you've been theoretically strongly committed to the idea of free trade. Will you make an active effort to try and oppose the legislation, the protectionist legislation that now appears to be building in the Congress?

Yes, I will. Because protectionism, if you go back over the years -- all of you have only read about it -- but the Great Depression, I think the Great Depression was extended and carried on and worsened because of a tariff situation on our part called Smoot-Hawley that reacted unfavorably against us. It was supposed to be protectionist. But protectionism is a two-way street. And it may be that here's an industry that is suffering from, let's say, some unfair competition. What we're trying to cure is unfair competition, to see that the markets are free to each other, both ways, that we're not competing with subsidized products, government-subsidized and so forth. And all of these things we're doing our best to change.

But in normal competition and international trade, to set down here a restriction that is based on some import in our country from another, they then may retaliate and affect another industry of ours. So to help one industry by protectionism, when you can't help all the others that are our exporters, then what's going to happen to them at the other end? We saw a little example of that, not exactly in this sense, but in the grain embargo we lost a market and we lost our -- a recognition of us as a reliable trading partner in doing that. A Visit to Dachau

Mr. President, you said in your last news conference that you didn't want to visit Dachau [Nazi concentration camp] during your upcoming European trip because of an unnecessary guilt feeling that you said had been imposed on the present-day German people. How do you respond to those American Jews who have interpreted this remark as minimizing the Holocaust and as passing up an opportunity to dramatize this idea of never again?

Well, here again is one that maybe -- well, no, maybe about it -- I guess I should have elaborated more in my answer. I have made it very plain and spoken publicly on a number of occasions and will continue to say: We should never forget the Holocaust. We should never forget it in the sense that this must never happen again, to any people, for whatever reason, in the world.

What I meant is that to be a guest in that country, at this particular time, when it is the coincident date with the end of the war, to recognizing that for most of the population -- I grant you that there are some people there at my age who remember the war and were participants in it, on that side -- but the bulk of the population, you might say everybody below 50 or 55 were either small children or were not born yet. And there's no question about it, there are great feelings of guilt even though they were not there to participate in it, of what their nation did.

And then to take advantage of that visit, that occasion to go there, I just think would -- is contrary to what I believe we should all start recognizing, the day of the end of the war, and make it more of a celebration of the fact that on that day, 40-odd years ago, began the friendship that we now know. Forty years of peace between us. And at the same time, you can say: and let us keep it and never go back that other way. And it just seemed to me that it would be just out of line to emphasize that when I was there, as a visitor in their country. I am supportive of the Holocaust Museum. I have done everything I can to be supportive of that. And I will say anytime that anyone wants me to say it, publicly as I can, that no, we must never forget that chapter in the history of humankind. That, and our determination it must never happen again. Tax Revision

Mr. President, on tax reform. [Treasury] Secretary Baker is at work, as you know, trying to come up with a revised proposal. And you have frequently talked about your desire to lower individual taxes. Yet the first Treasury plan envisioned a higher corporate tax burden. Are you willing to accept higher earnings on corporations a trade-off for lower burdens on individuals?

Well, no, the corporate tax was going to be cut even more than the top personal rate in their plan. What we are talking about is generally more money from the corporate sector, but by way of broadening the base -- that the rates would be lower for everyone, but there would be an end to some loopholes that probably were never intended to allow large profit-making corporations to escape tax, totally tax-free for years on end. And it would simply mean that there would be fairness -- that you'd know that your neighbor was paying a tax too and not getting off scot-free.

So you would envision, as a result of this effort, both lower corporate and individual rates and all the revenue that's lost made up entirely by base-broadening.

Yes. The rates, there's no question. The plan calls for a 33 percent top rate instead of 46 for corporations. And then it goest 50, 25 and 15 for the, I mean, 35, 25 and 15 instead of the 50 and other 13 tax brackets for individuals. So, no, we don't want to penalize some taxpayer into paying a higher share by way of higher rates. We want all of the rates to be lower, but as I say, close those loopholes that are permitted, this thing of very profitable businesses not paying any tax. Being President

Mr. President, you said at St. John's last week -- I know you were in a lighter mood -- you said that to the students that you're not a young man anymore. You are a person who's always celebrated your own vitality, and I guess I wanted to ask you whether you feel yourself aging or growing any older in this job.

I don't know; do I look older? I don't feel any older. No, I feel fine. No, I haven't; I think maybe part of it is there've been a lot of people who've sat at that desk and come from different experiences in government by way of the legislature, for example. I have to believe that eight years as governor of the most populous state in the Union, California, was a pretty good foundation. In other words, I didn't find things too different. I had eight years of dealing with many of the same problems. Granted, we didn't have the foreign policy in California. But I think that this is part of it . . . for eight years somebody handed me a piece of paper every night that told me what I was going to be doing the next day.

And when I became governor I had something of the same problems in California that we had here. I came in in the middle of the fiscal year. You don't quite come in in the middle here, you only come in four months into it. You've got eight months to go on the other fellow's budget. But the middle of the fiscal year and with already a deficit that had been piled up in California and the difference there -- and I wish I had it here -- the difference there was that, but in the six months remaining, to me in that -- when I took office of the budget, that first budget, I had to balance the budget, which was one of the reasons why, in contrast to everything I'd said in campaigning, I had to go for a tax increase because when July 1st came, that budget had to be balanced. But I promised the people that, as soon as we could, we would give it back. And we did. You know that. And every time there was a -- we got to the place where it was surpluses, not deficits, and every surplus we gave back to the taxpayers. Balanced Budgets

Well, Mr. President, speaking of the balanced budget, you apparently, or reportedly, got very upset at a congressman who quoted -- who said that he asked you: If you want a balanced budget, why don't you submit one? Well, I'd like to ask you: What was your response to that question?

That it was the most hypocritical question I've ever heard.

Why did you say that?

What?

They pulled you to the parson, didn't they?

Well, as a member of a party that for 50 years, with only a couple of years' exceptions, two or four years' exceptions, has been responsible for the government spending, the Democratic congresses of the past 50 years, and we've had deficit spending for 50 years, and a trillion dollars piled up in national debt before we got here, that for someone now to suggest, when they themselves have refused to give me the cuts I've asked for, to suggest that I should have asked for so many more cuts, that we had a balanced budget all at once, no.

It is hypocritical. He knows and everyone knows there's no way that you could pull the rug out from so many people by trying to balance this budget in one term, in one year. You have to -- the people have become accustomed for a half-a-century to many of the things that government is doing. So you've got to warn them that down the road here it's not going to be doing some of these things. And you start us on a downward path of reducing the deficits to where you can point to a time reasonably certain and say, here is where we can reach the balanced budget. And this is our goal.

But for him, as a member of the body that has refused to give me the cuts that I've asked for ever since I've been here -- if they'd given us the cuts in 1981 that we asked for, the budget deficit would be $50 billion less than it is today. And then for him to say, "Why don't you submit a balanced budget?" Yes, I told him that, in no uncertain terms, how I felt about it.