Interview With Joseph Rice of the Cleveland Plain Dealer

November 30, 1981

Libya

Mr. Rice. Mr. President, there were reports recently that Libya had sent people to the United States to assassinate both yourself and other top government officials. Do you give any credence to these reports? And exactly how far will your administration go in dealing with people, such as Qadhafi, who obviously hate the United States?

The President. Well, we're studying right now our economic relations with them. I think he has made it obvious that he is against most of the things that we're trying to achieve, such as peace in the Middle East, appealing to the moderate Arab nations, and so forth.

As to his threats personally against me, I think in view of the record, you can't dismiss them out of hand. On the other hand, they're not going to change my life much.

Beyond that, I never comment on security matters.

Mr. Rice. There has not been any hard evidence, though, to substantiate the rumors, has there?

The President. Well, I can't go beyond what I've said.

Richard Allen

Mr. Rice. Ed Meese said today that there was no guarantee that Richard Allen would return to the White House if, in fact, the investigation cleared him. I wonder how you personally feel about the entire Allen affair, and would you like to see him back there if he is given a clean bill of health?

The President. I think that we have to wait and see. And, again, as long as this is under review, or it is, again, it's one of those things I don't think I can or should comment.

So far, most of it has just simply been innuendo and accusation. And what I'm hoping a review will do will be what we've always held as a fair thing in our system, and that is wait until the facts are in and then make a judgment and a decision.

Mr. Rice. But could he still function effectively in your administration after this cloud, even if, in fact, the investigation had him cleared?

The President. That certainly would reveal that there was no wrongdoing.

Mr. Rice. That's not to say he would necessarily keep the position, though?

The President. What?

Mr. Rice. That's not to say that he would necessarily keep his job, though, the fact he's cleared?

The President. Again, as I say, I can't comment beyond the fact that, obviously, they all hope that the review will be favorable.

Economic Recovery Program

Mr. Rice. You said at your October news conference that it was unrealistic to expect to cure in 40 days problems that developed over 40 years. Now, at what time do you think it will be fair for the American people to make a judgment on whether or not your economic program has been a success, and what goals would you set in your own mind in terms of inflation, unemployment, home interest rates?

The President. Well, we ourselves had evolved a plan that was to go into effect over a period of 3 years to try and bring spending down within reason. Our tax program is implemented over a 3-year span. I think at least we should wait until that program is actually functioning and that there has been time to see some indication of whether the tax program, for example, has contributed to an increase in productivity, a broadening of the economy. I couldn't pin a particular time on it. I think that we have to go by trends.

Now, there are so many imponderables. We made, in good faith, some projections based at 1984 on the basis of things as they were. Well, the interest rates stayed up longer than had been anticipated. And I'm sure they had something to do with the recession, which, while no one ruled it out as a possibility, everyone was hopeful that while the economy was -- well, the economy we inherited was down, with great unemployment, steel and the automobile industries and construction hurting. We still had thought that we knew the economy would be soft. But the recession came, and this has obviously changed our own estimates.

Mr. Rice. You think it might not be possible to see this recovery by the congressional elections next year?

The President. Well, it's what you call economic recovery.

No, I would think that we're going to begin to see a turn in the economy before then. But that's it. It's got to be a progressive thing. But the direction is set, and you see the direction that we're going, that it is up and not down. And right now, we see the interest rates are going down. We certainly have had an impact on inflation.

And, as I said in my remarks tonight, even though recently the figures in what I think is a rather haphazard way of determining unemployment in this country, you know, there's no real hard and fast count. It's taken by a telephone poll of some thousands of households. But, even so, when they came up with the word that there were 500,000 more unemployed than there had been, you can count the figures of the employed much more accurately. And there are 266,000 more people working, in the work force, than there were when I took office.

Mr. Rice. But in your own mind you had some goal as to what the inflation rate, the unemployment rate should be by next year, you'd call successes?

The President. Well, I'll say single digit.

Mr. Rice. On the annual rate of inflation.

The President. But let me -- Don Regan pointed something out one day, when someone was challenging, ``Well, you made estimates and then you had to change the estimates.''

When you're talking about, over the next few years, getting to a $4 trillion gross national product, if you make a 1-percent error, if you're 99 percent right, that 1 percent can throw you off by $40 billion.

Now, the error can go either way. If you were ultraconservative, were off 1 percent, you'd be $40 billion better off. If you go the opposite way, such as this recession could have done to us, you could be $40 billion off in your estimates and under what your projections had been.

Mr. Rice. What about home interest rates? Do you have any guess as to what you'd like to see them down to?

The President. Oh, sure. I want to see them down. I think that if we can get down to around 10 percent it would be a great boon to the construction industry particularly and to the automobile industry.

Mr. Rice. Is that a realistic expectation, though, for next year? Or do you have a goal -- --

The President. No, I can't really tell you on this. I do know this: People have to be aware that with the interest rates starting to come down, a lull in these industries that are affected can continue. Because once they start down, history shows us people then tend to wait, thinking, well, they're going down; I'll wait till they get lower.

Federal Revenue Sharing

Mr. Rice. You said in 1975 that the Federal Government should shift some of the Federal programs back to the States and at the same time give them the tax resources to finance these programs. Now, we're faced with the budget deficit now, and given the current Federal financial situation, how far in the future do you think it might be before we might see some of these tax sources transferred back to the States? And do you envision the government being able to do anything in the next year or two to cushion the impact that the budget cuts have had on the cities and the States?

The President. We have a task force working right now on this whole front, men working with local and State governments. You see, it isn't -- when I say a total loss to the Federal Government, if the Federal Government could find a tax, let's say a tax of an excise nature, and turn it over to local government along with a function that it's to perform, it simply replaces grants, where the Federal Government is taking the money in taxation from the people, taking it to Washington, then going through the administrative process of doling it out again. Well, if you turn the tax source over to that other level of government, then you would cancel the grant that it is replacing. And the idea is that there would be a lot less administrative overhead.

We have been working -- and not as successfully as I wish we could have been with the Congress -- to transfer what are called categorial grants to block grants. Now, having been a Governor, I can tell you what the categorical grants do. They come to you with Federal money, but with enormous amounts of redtape and regulation prescribing exactly what the priorities are and how this money must be spent. Well, no one in Washington can set rules of that kind that will fit New York City and some small town in the urban area or a city in the South that doesn't have the same problems or the West. So, it makes those programs needlessly extravagant.

As I say, we haven't been able to persuade Congress to change as many as we'd like, but we have -- as one thing, this answers the part of your question about helping local and State government -- we have been able to get some of those changed into block grants. And in so doing, they will have the flexibility to make better use of the money.

Mr. Rice. Is there any promise of immediate relief, though, for the States and the local governments who are now faced in situations such as Ohio where they had to raise taxes to offset a budget deficit?

The President. Well, you've got several States like Ohio that have abnormal unemployment rates because of the industries that were predominant here and in Michigan, other States like that. And so, they have the abnormal unemployment rate, their revenues are down because of that, and costs are greater.

One of the things that we're talking about is the program we're trying to get underway of the free enterprise zones in cities, that we should, if we get those operating -- I hope we can soon -- that we should put those into States that have these problems that we're talking about, and on a kind of an experimental basis before you're actually going nationwide with a program.

Mr. Rice. But there's no immediate relief, though, in sight, though?

The President. No. You know, as bad off as many of the States are, who's worse off than the Federal Government? We've got a trillion dollar debt. Any program of help to these States would be coming out of the pockets of the same people that they must tap for taxes.

Corporate Mergers

Mr. Rice. Mobil Oil Company is now trying to take over Marathon Oil Company, which is an Ohio-based company, against the wishes of the officers of Marathon. My question is, do you feel that it's in the best interests of the public to have a large conglomerate such as Mobil take over a smaller, locally based company, and what position might your Justice Department take in terms of any antitrust action?

The President. Well, let me say on this one that I understand there are several companies now that are in the bidding for this takeover, and we try to leave that to the private marketplace unless there is violation of the antitrust laws and unless it is felt that under the fair trade practices and the Justice Department that there is some violation of those. Then the Federal Government has to intervene. But other than that, I don't think it's the place of the Federal Government to intervene in the marketplace.

Mr. Rice. So, you wouldn't make a judgment whether or not it's a good thing?

The President. No.

El Salvador

Mr. Rice. Mr. President, approximately a year ago four American churchwomen, two of them from Cleveland, were killed in El Salvador. Since then the Salvadoran Government has been holding some soldiers for questioning. Now, they recently released a report that contained little new and did not contain anything on the events after February 17th, which was before the soldiers were arrested. Are you satisfied with the way the Salvadoran Government has handled this situation?

The President. I have to tell you that I don't have an answer to that. This doesn't mean I haven't been interested and we haven't been trying to keep track. I haven't had the latest report back on this situation. I do know that earlier we were informed that there was no real hard evidence with regard to the people who had been arrested. Now, I would have to -- and will, of course -- attempt to find out what we know about this, and we have been keeping close track of it.

I think that the Duarte government is trying very hard to have a democratic regime and to bring about a political settlement of this war that's going on down there, not a military settlement. And I think that they are doing what we ourselves have advocated, which is, they are in the middle and they are opposed to both extremists of the right and left.

Air Traffic Controllers

Mr. Rice. Mr. President, you're meeting at the White House, Wednesday, with Lane Kirkland and some other labor leaders who have been somewhat critical of you in the past. There is some speculation among labor leaders that you might offer some kind of an olive branch, possibly on the PATCO situation, to organized labor. Is there anything in the works on PATCO, or what do you expect to come out of this meeting?

The President. No, I can't say that there is. I intend to, before this meeting, talk to the Department of Transportation, Secretary of Transportation, about PATCO. I have to call your attention again that they had plenty of warning. They were informed in the negotiations that the strike, if they took one after they'd threatened, it was illegal, that they themselves had taken personal oaths, and that there was no way that we could stand by and not recognize that the law had been broken. So, what we informed them was that they might call it a strike, but in reality they were quitting their jobs.

Now, I think a great consideration we must have -- we're not trying for vengeance or anything else of that kind, but I do think that there must be great consideration given to those who did continue to work.

Mr. Rice. You cannot see then offering any PATCO striker his job back then?

The President. I'd be very happy to hear any suggestions that they may have, but I also feel that they ought to recognize that the people they represent, the members of their unions, are the employers of public servants. And when there's a strike, it's a strike against them, the people.

And labor once recognized that. I've a little background in labor myself, but when public employees first began to organize, unionize, organized labor said they would help them only if public employee unions put in their constitutions that they would not strike.

Mr. Rice. Mr. President, are you ruling out then any chance that they might get a job back, if that's brought up by labor?

The President. No.

1984 Candidacy

Mr. Rice. You made a reference tonight to the senior Senator from Ohio, John Glenn, who has been in New Hampshire and other States testing the waters. I wonder in your own mind, sir, what your current thinking is about whether you'll run for reelection and exactly how formidable an opponent you view Senator Glenn as.

The President. Oh, I don't know. He's very popular in his own State. I meant my line humorously.

As for myself in 1984, I don't think about it, because I set a policy for myself when I was Governor for 8 years -- well, the second 4 years didn't matter. But I said that there would be no consideration of political matters in any decision that our administration had to make, because the minute you do that then you begin compromising in your own mind. And I said we would meet every issue simply on the basis of was it right or wrong for the people.

So, as far as 1984 is concerned, the only time I consider it is when I'm worrying about what the deficit will be by 1984.

Nuclear Force Negotiations

Mr. Rice. The arms control talks, sir, began today in Geneva. Do you expect the current round of negotiations to produce anything substantive, or is it more likely to lead to a summit meeting with yourself and President Brezhnev?

The President. Well, I don't think the two are related in that way. I've not ruled out a summit meeting. As a matter of fact, I think that's something that has to be thoroughly prepared for. But I am very hopeful about these negotiations.

It is the first time in a great many years that we will have met with them on supposed arms limitation -- I prefer to call it arms reduction -- when we ourselves were not unilaterally disarming. The Russians could sit at the negotiating table, and they didn't have to give up anything. We were doing it to ourselves. And this time, with our determination to rebuild our military, I think they may find they have a reason to want to meet us halfway on disarmament.

And so, as I say, I'm hopeful that -- I think it would be wonderful for the world and for Europe if those missiles planted there near the NATO border, in that vicinity -- able to hit every population center in Europe -- if those were taken out and we did not have to counter them by poising the same kind of missiles aimed at their country.

Mr. Rice. Mr. President, thank you very much.

Deputy Press Secretary Speakes. You know, one thing we ought to point out on this State -- money for the State governments, that the first relief that they will begin to feel is when the economic program starts to work. And that'll benefit State governments as well as their own citizens.

The President. Yeah, it sure will. I just talked to a man tonight that's starting a new plant in Ohio. But the other thing also I should have mentioned -- one thing for the States. You've got to remember that they also benefit a little in the reduction of their costs as inflation comes down. Governments spend money, too, and then feel inflation.

Mr. Rice. Mr. President, thank you so much.

The President. You bet.

Note: The interview was conducted on board Air Force One as the President was returning to Washington, D.C., from Cincinnati, Ohio.

The transcript of the interview was released by the Office of the Press Secretary on December 2.