And maybe I can illustrate what I'm trying to say was when I was Governor of California, every year they used to bring to the capital a group of students who'd come from other countries and who, on an exchange-student basis, would spend a year in our schools, usually in high school. And every year I had the same question for them. I would say, ``Tell me'' -- these students from all over, Europe and every place else -- I'd say, ``Tell me, how do our schools compare? Are they tougher than yours? Is the work harder?'' And then I'd have to wait until they stopped laughing. That was their assessment of the difference, and I'm talking about schools that weren't like yours. I wish we could get some of them in here. I don't think they'd laugh, because I think they'd find out that you met the same educational levels they do.

The other day, yesterday, about a hundred miles south of here at the little college I attended, I spoke at the graduation down there. And I used that occasion to talk to them about something that's very close to my heart and, I'm sure, must be to yours. And that is our intention to engage the Soviet Union in negotiations to reduce the nuclear weapons that are threatening the world and to reduce all of our military power on both sides and then get down to where we can begin to exchange ideas and convince them that the world doesn't mean them harm and that we can get along in the world together -- because there've been four wars in my lifetime. There's one dream I have; if I can do one thing with this job, it is to see that no other generation of young Americans will ever have to go out and bleed their lives into somebody's battlefield. And I hope that we can bring that peace about.

But I'm not going to go on talking other than to tell you that you have every reason to be proud, and I'm going to see that a lot of people find out about you and are proud themselves of what you've done. You have reason to be proud of your teachers who obviously are ready to double in brass and do whatever has to be done in order to keep this school going.

But I think we'll be much better off with a dialog instead of a continued monolog from me. So, I know that you have some questions, and I know there are microphones for that -- and let's begin.

U.K.-Argentine Conflict

Q. Mr. President, my name is Todd Johnson. My question is, what actions is the U.S. Government planning to take in the war between Argentina and Great Britain, and why did you choose sides for Great Britain?

The President. I don't know whether it's the speaker or not -- I think the loudspeakers point that way. I had trouble hearing you.

Mr. Adams. The question is why did the United States side with Great Britain? That's your question?

Q. I'll ask the question over. What are the plans of the United States -- what is the U.S. Government planning to -- plan in the war between Great Britain and Argentina?

The President. Oh, what of our plans, ah. Well, from the very first -- this is the Falkland dispute down there -- and the thing that is going over that little island with about 2,000 people on it or less has been there for so many years, and the dispute goes clear back hundreds of years to when once it was claimed by Spain and then it was claimed by Great Britain. And when the Argentines had a revolution and freed themselves from Spain, then about 150 years ago they started saying, ``Well, that should have included that -- those islands.''

What we've been trying to do from even before the Argentines invaded the island, I was on the phone for quite a long time with President Galtieri of Argentina, begging him to turn that task force around that was headed for the islands and let us try to settle this issue peacefully. Well, they did land in the islands. And now we have something we cannot ignore in the world today, and that is someone, by aggression, by armed force, taking over a territory that claimed or belonged to someone else. That must not be allowed to succeed. At the same time, there is some legitimacy on the part of their claims as well as Great Britain. So, we have been trying to be a broker and arrange a peace between them.

So far, we have not been able to do that, and now blood has been shed on both sides. We're hoping there won't be any more of that. And the principal issue is the rights of the 2,000 -- the people that live on the island. And, so far, one country in the dispute has been willing to take into consideration what they want. Argentina has not yet given in to that, and the issue of difference now is will Argentina withdraw and then let the peacekeeping force from the United Nations or even from our own country -- we volunteered -- anyone to go down while they, then, continue to negotiate a settlement of whose flag should fly over those islands.

And we're continuing that, and we're still in those negotiations and still involved. And we now have the help of the President of Peru, who has also joined in. And that's what we're hoping will take place.

Q. Thank you.

Unemployment

Q. Mr. President, my name is Shonda Parks. Mr. President, you've been President for a year and a half now, and since that time inflation has come under control, but unemployment is up greatly, approximately 9.4 percent nationally and double that among blacks. So, Mr. President, what can you do, what can Congress do, what can businesses do, what can citizens do to alleviate the problem of unemployment?

The President. I wish I had a simple and an easy answer for that or, let me say, a quick answer.

There's no question about that being the greatest tragedy of what we call a recession. It is true we have brought inflation down from 12.4 percent. That means that every year your dollar was worth 12.4 percent less than it was at the beginning of the year. We've brought that down to where, for the last 6 months, it has been averaging about 3.2 percent. And, last month, inflation actually went below zero to the point that, instead of it just being a reduction in the inflation rate, prices actually went down. Now, I don't know that we can hold that that steady, but we do have it under control.

The biggest thing that is causing unemployment today -- well, there are three factors involved, but the two principal ones out of the recession are -- or the one, high interest rates. High interest rates have -- people who normally buy automobiles buy them on time, but they can't pay the high interest rate today to buy them on time. People who build a house, they build it by taking a mortgage. They borrow money to build a house, and they pay it back every month, plus interest for, say, 20, 30 years. Well, they, again, can't afford 20 or 30 years of interest rates that -- while they have come down -- they were 21\1/2\ percent when we started -- they're down around 16 or 17 percent. That's still too high. We've got to get them down farther.

Now, what puts interests rates up, for one thing, is inflation. If a lender has money to lend and it's in an inflation time so that every year the money is getting worth less and less, he has to charge enough interest rate to not only get some earnings on the money he lends but to also compensate for that loss of value. He cannot afford 20 years later to be paid back in dollars that are worth less than half of the dollars that he loaned. So, this has added to the height of the interest rates.

But today, with interest down, the only thing that is keeping the interest rates up is a lack of confidence out there in the money markets and in business that we're going to keep it down. We've had seven recessions before this one since World War II, and in every recession up until now the government has come in with what I call a quick fix. The government has come in with artificial stimulating of the economy, spending more money than we have, deficit spending and so forth, increasing the money supply. And for a little while, it's like taking a pill for a fever. The fever seems to go down, but then, when the pill wears off, the fever is right back. And we're not doing that this time. We put in place a program to reduce the increasing cost of government. And we have succeeded, so far, in cutting the increase in cost of government in half or better. We have brought inflation down and interest rates somewhat.

I believe the quickest way to get the unemployed back to work and to get our economy moving again is for the Congress to pass the budget which we have proposed, because I think this will send the signal to the money market that they can have confidence and lower the interest rates.

We've seen some of this happening from some bankers here and there. In Indiana, in Ohio, groups of bankers recently got together and decided to help particularly the automobile dealers. So, they took millions of dollars of bank money, and they lowered the interest rate on it if it was for loans to buy cars. And the result was almost an immediate upsurge in automobile buying once those interest rates are down. Now, we're trying to spread the word of that, too, and I'll be talking to some bankers myself next week. No, it's this week already. I'll be talking to them later this week to see if we can't convince them that our program shows the signs of working and will work and get them back to work.

In the meantime, we do have a job-training program that we have more confidence in -- that we have proposed in the budget -- than the past ones. We've had, in the Great Society programs, a lot of job-training programs that spent billions of dollars, and yet, unemployment kept growing worse. This unemployment didn't just start now. It's been coming on for several years.

A few years ago, before the Great Society, poverty was being reduced in this country, and the very figure that you mentioned, black unemployment, was decreasing faster than white unemployment. And then came the Great Society programs, and, strangely enough, with all that government spending, the poverty stopped being eliminated, in fact, started going up. And so did the unemployment rate and, particularly, in the minority communities.

We think that our program and this budget that we've introduced is the quickest answer to turning that around. The difference between our job-training program this time is that all of the money is going to be spent on job training. Those other Great Society programs, the biggest share of the money was spent hiring bureaucrats to manage the programs. I vetoed one such program when I was Governor. It was going to put 17 people to work helping keep the parks clean in a little rural county in California. But over half the budget was going for 11 administrators to see that the 17 got to work on time. And I thought that was a little out of balance, so I vetoed the program.

Education Loans

Q. Mr. President, my name is Michelle Stubblefield. Recently government-backed loans have been cut out for students who plan to enter into the field of nursing. My goal was to become a nurse, and without the help of a government-backed loan this is going to be very difficult.

First, why was the field of nursing selected? Second, will medical care suffer? And, third, does this mean that in the future nursing will be limited to the wealthy?

The President. Bless you, and I'm glad you asked that question about the college loans and so forth and the educational help. Much has been made of this, and it's been badly distorted in the reporting.

In our budget, there is provision for 7 million grants and loans. The changes that we've made are actually aimed at making them more available to people who have greater need.

We have found, for example, that many of these loans and much of this help was going to people whose family income was higher than it should have been. They really should not have been eligible for this help. And we're redirecting it to families of lower income, where it is needed.

It is true that one set of grants called the Pell Grants, we did reduce in order to spread them farther from $1,720 a grant to 1,600 a grant. But, as I say, this was to try and spread and make the help available to more people.

But with only 11 million full-time college students in the United States, 7 million loans and grants indicates that the Federal Government's not getting out of that business. So, we have not cut back. And this is true of a great many of the other programs that they've suggested that they be cut.

The Department of Health and Human Services, which handles the programs to help the needy, to help the disabled, to help the poor, their program will be 8 percent higher, their budget in '83, than it is in '82, and that's $20 billion more money being spent. And yet you don't hear that. That's been a well-kept secret. We haven't been able to get people aware that the only cuts we've made are really cuts in the increase in spending.

So, I can assure you that that help will be there, those of you who'll want to call on it.

Q. Thank you.

The President. You bet.

Policy Initiatives

Q. Mr. President, my name is Sherry Weatherly, and I would like to know if you could tell us about the last major political decision made by you that didn't get the results that you expected.

The President. The last major decision made by me, and did it have the result -- --

Q. That didn't -- --

The President. You weren't asking for any particular -- --

Q. Just the last one that didn't get the results you expected.

The President. Well, the -- [laughter] -- I think there are a number of decisions we've made. For example, I've -- and I know you won't find this out of the ordinary -- I have announced that I'm going to ask Congress to reinstitute prayer in schools. I don't think God should ever have been expelled from the classroom. But that has to be passed by Congress yet. I've asked also for an amendment to balance the budget.

I'm trying to think of programs -- well, the major program would be the economic program, the reform program that we passed, which did come in the budget sense of reducing the increase in cost and the tax cuts, to provide incentive to provide more work.

The last time anyone in this government ever tried that kind of a tax cut to help the economy was John F. Kennedy. And the same people mainly that are criticizing me for wanting tax cuts criticized him. And he wouldn't listen, and he went forward with his tax cuts. And the result was an immediate broadening of the base of the economy, an increase in employment, a decrease in unemployment, and business was just fine. And I think the same thing is going to happen.

So far, we only went into effect with a 5-percent cut last October. July 1st will be the first real cut, and that will be the 10-percent cut in the income tax, and then another one in 1983. I think we're going to see more improvement. Right now, farm prices, in spite of inflation going down, have gone up, and our farmers are getting a better price than they have been getting.

The inflation is the biggest single factor. That's the biggest difference. When we took office, the doomcriers were telling us that it'd take at least 10 years to cure inflation. Well, it's been a year and a half, and last month it was zero or less.

I think our program is working. And I think that those economists who have watched the scene for a long time are the ones that tell us that it is the proper program to have in place. So, I didn't know whether you were asking about some specific decision or just what I say about decisions.

Q. I was asking you to tell us about the last decision you made that didn't get the results you expected.

The President. Oh, wait a minute. I have a beaut that I'd like to tell you about -- [laughter] -- yes.

I was under the impression -- and maybe I was wrong -- I didn't know there were any court cases pending -- but I was under the impression that the problem of segregated schools had been settled, that we have desegregation. But I was getting complaints -- and even before I got here as President, I was getting complaints that some of the Internal Revenue agents, the tax collectors that collect the income tax, were harassing some schools, even though they were desegregated -- but harassing them and threatening them with taking away their tax exemption -- which educational institutions have -- if they didn't oh, set up scholarship programs or go out actively recruiting and take steps to try and increase their efforts at desegregation. And I didn't think that this was the place of Treasury agents to be doing this. So, I told the Secretary at Treasury that I didn't think that. I think as individuals we get harassed enough by the Internal Revenue collectors. And I didn't know that there were a couple of legal cases pending.

And all I wanted was that these tax collectors stop threatening schools that were obeying the law. And as it developed, this turned out that it was turned around and said that I was trying to provide tax exemptions for schools that still practiced segregation. Well, I didn't know there were any -- and that maybe I should have, but I didn't. And it was a total turnaround of what I had intended with what I said to the Secretary of the Treasury.

So, I said, well, if that's the case, let's get some legislation up there and let the Congress pass it that makes sure that there are no desegregated schools -- or any segregated schools, I mean.

And, yes, that one went wrong and this is the first time anyone's ever publicly asked me to try and explain what I was doing. I'm happy for the chance.

Providence-St. Mel High School

Q. Mr. President, my name is Leavy Craig, and I would like to know -- just a minute -- --

The President. And say, that mike is pretty directional. Tilt that mike up a little bit so you're right into it.

Q. Of all the high schools in the United States, why exactly have you chosen Providence-St. Mel to visit?

The President. Why did I choose this one to visit? I only heard about it a week or two ago, and I read about it, and I saw some stories about it on television. And I said, this I have to see.

We have appointed a private initiatives task force. This is a group nationwide to try and find where we can get volunteer help for worthwhile efforts, for things that are going on that the people are doing for themselves, not just waiting for government to do it. And I just wanted to see this. And I also wanted to come here, very frankly, and meet your principal, because if ever there's an instance of what one person can bring into being and cause to happen, he's made it happen here.

You must be aware that there are millions and millions of parents all over this country terribly dissatisfied with the education their children are getting in schools -- the lack of discipline and everything else. And with that deterioration in so much of education you are such a shining light that, as I said in the beginning, I want to spread the word. This is the way it should be done. You're doing it.

Q. Thank you.

Nuclear Weapons

Q. Mr. President, my name is Corlis Phillips, and I would like to know why does the United States have to have nuclear weapons instead of just relying on conventional weapons?

The President. This question's being asked, I know, a lot, and this is why yesterday I made my speech about a reduction -- because nuclear weapons do exist and because the Soviet Union has built up such an arsenal of nuclear weapons.

Up until now, the only deterrent that you have -- because there is no defense against that weapon -- so the only defense is that you have to be able to threaten them that it can happen to them if they try to make it happen to someone else. And, as a matter of fact, we've been kind of the umbrella of protection for our allies in Europe, for Japan, for other countries in having this arsenal.

Now, the Soviet Union has gone beyond us. It's reached the point that there's just no reason in it, and it is too dangerous to have these things pointed at the world. In Europe, for example, the Russians had a missile called the SS - 20, a nuclear missile. It was called an intermediate range, because it couldn't come across the ocean and hit us, but it was targeted on all the cities of Europe. And Europe had nothing to counter it. So, our NATO allies asked us if a weapon that we have designed, called the Pershing missile, could be made and installed in Europe to counter this threat of the SS - 20 so the Russians would know if they tried to use those, the Europeans had something to use back.

And I challenged, in November, the Russians to join us in a total elimination of those weapons. And right now we have a team in Geneva, Switzerland, negotiating with the Russians, and we have put on the table a treaty calling for a total elimination of their SS - 20's and no implanting of our Pershing missiles in all of Europe. And, so far, the Russians -- their first offer was back, they suggested that we freeze the weapons the way they were. Well now, you can figure out what that means. They wanted to freeze the weapons with 900 nuclear warheads aimed at Europe, and Europe has none aimed at them. I don't think that's a very fair freeze. So, we're trying to get those eliminated.

Now we want to go into negotiations on all of them, but it has to be -- we can't do it unilaterally. Can you imagine what would happen in the world if you left the Soviet Union, with its pattern of aggression, with the fact that what it's doing in Afghanistan, how it's shown that it wants to interfere in other countries -- if we did away with ours and left them with those thousands and thousands of missiles, that in 28 minutes from the time someone pushes the button could be hitting the targets in our country? So, we have said to them, ``All right. Let's both of us start reducing those weapons down, keeping -- and being equal, and get them down to where they don't constitute the threat. And of course the ultimate goal that we could all dream of is the same one that's in Geneva now, getting rid of them forever.

And believe it or not, you can be proud of your country. Under President Eisenhower, a number of years ago, this country, we had the weapon then, and the Soviet Union was just beginning to try and build them. But we had them, and President Eisenhower offered to the Soviets and to the world to turn all such weapons over to an international body like the United Nations and take all of them away as a threat between nations. And the Soviet Union refused. So, we're going to try again.

Q. Thank you.

Gun Control

Q. My name is Toni Duffy -- --

The President. Oh, could I just finish with the three that are there, then?

All right. He tells me my time is up. We'll take these three then. I'm sorry.

Q. -- -- and I would like to ask you what are your feelings concerning gun control?

The President. What?

Q. What are your feelings concerning gun control?

The President. Oh, feelings concerning gun control. I would like to tell you something we did in California that I think's the only answer. I don't believe that taking guns away from honest people is going to keep the criminals from getting them.

There probably are no stricter gun controls in the world than those in Washington, D.C. There are over 20,000 gun-control laws in the United States today. But the fellow that decided to use me for target practice a year ago last March, there he was on the street at 2 o'clock in the afternoon in spite of all those laws against it, and he had a gun.

What we did in California is what I recommend is the answer. We passed a law when I was Governor that said that anyone who commits a crime, if he had in his possession a gun at the time he committed the crime, whether he used the gun or not, add 5 to 15 years to the prison sentence -- and no probation, he had to go to prison. And I think that might take some of the guns out of the pockets of the criminals.

Foreign Relations

Q. Mr. President, my name is Matthew Hicks, and my question is if the United States is a democracy, why do we support and are allied to countries such as Argentina and South Africa which are dictatorships?

The President. What we're trying to do, we've had in the past abandoning those countries, saying we won't do any business or have any relations with them. And it didn't accomplish anything. And in many instances -- not those two particular countries -- but a number of other countries in the world, emerging countries, wound up with even more authoritarian governments than the dictatorships you name. They ended up under the totalitarianism of Soviet-inspired communism -- Angola, policed by Cuban troops that the Soviet has put there; South Yemen; Ethiopia; countries of that kind.

My belief is that we can do better with what I have called quiet diplomacy, that, no, we don't approve of the practices in some of those countries, but let us befriend them and then let us quietly and behind the scenes try to persuade them that there is a better way to live. In other words, our democracy.

Once to a political leader that you say out in the paper and make a big charge and say, ``You've got to do away with this'' or ``you've got to change this,'' you've made it almost impossible for him to do that. Being a politician, he can't in the eyes of his own people, give in to the demand of someone in another country. But if you go to them and say, ``Hey, look, we'd like to do business with you and we'd like to have trade with you and so forth, but it's kind of difficult. There are some political problems in our own country, in our democracy, because of things that you're doing that aren't democratic.'' But you say it to him quietly.

Now, let me give you an example of the President a few years ago who did that with the Soviet Union and the emigration of Jewish people. They were not allowing them to leave the Soviet Union to move to Israel. But I happen to know the President who went to Mr. Brezhnev and told him of some of our political problems here in this country and how they interfered with our trying to get along better with them. And about a year later you woke up and realized that about 35- or 40,000 Jewish people a year were leaving Russia and going to Israel. And this is what we're practicing.

We're not just putting a blessing on those countries. We're trying what we think is a more practical way to get the job done.

Q. Thank you.

Federal Budget

Q. My name is Kenneth Brian Hawkins, Mr. President, and I'd like to ask you, how do you plan to eliminate unnecessary government spending and reduce the Federal deficit?

The President. The budget that we've submitted is just a classic example of that that I've already talked about. You see, when a budget is passed -- and I know we use the term ``budget cuts.'' We haven't cut any budget. If cutting a budget would mean that we've asked for a budget next year that's smaller than this year's -- we haven't. The budget next year is going to be considerably larger than this year's, as this year's is larger than last year's.

The difference is when a budget is established and the Congress builds in some program that they say, ``Okay. These are ongoing programs and they're automatic,'' the ones they call uncontrollable, meaning that every year, automatically, without Congress doing anything, the spending for these budget items goes up. And the result was that the 1980 budget to 1981 that we inherited was a built-in increase of 17 percent a year. Well, your tax revenues don't increase 17 percent a year, and that's why you have deficits. And we've been having them for 40 years now.

So, what we have done is trim that expected increase and say it doesn't have to go up that high, to get Congress to agree to set some controls on the so-called uncontrollables. And the result has been that next year's budget, if it is passed as we submitted it, will be bigger by 6.9 percent. But that's a lot different than 17 percent. And the projected deficits for the next 3 years, if we don't do anything, are $182 billion for 1983; 233 billion for 1984, and a figure higher than that -- I forget the exact figure -- for 1985. Well, this means deficits getting bigger and bigger, and already a hundred billion dollars of our annual budget is just for interest on the debt.

Now, if our budget is adopted, next year's budget won't be -- or deficit won't be 182; it will be 106 billion. The next year's budget won't be 233; it'll only be 69. And the third year's budget won't be more than 233; it will be 39. In other words, the deficits will be coming down. And you can see at that rate where a year or two beyond that, they will be balanced. And then we can begin whittling that debt and lowering that hundred billion dollars a year in interest payments.

So, this is what -- this is the way, the only way to get at it. Now, our opponents, who are opposing us on this, have said, no, the only answer is to raise taxes to eliminate the deficit. But we raised taxes between 1976 and 1981 by $300 billion. And we had $318 billion in deficits in those same 5 years. So, we think that taxes can't keep up with deficits. You have to lower that increase in the government rate of spending.

Now, I just want to say one thing to you, because I can't take any more questions -- to all of you.

I've had to answer some of your questions with some figures of what I claim are facts. Don't let me get away with it. Check me out. Make sure that what I told you checks out and is true. But do that to everyone else who also comes before you and sings a song and tries to tell you something. Don't be the sucker generation. Take a look at it and say, ``It sounds good. I'll find out for myself if it's true.''

Now, that doesn't just mean finding someone of the opposite viewpoint who says, ``Everything he told you is wrong.'' No, really check it out. Find out if our budget is going to reduce those deficits the way we said it would. And I know that all that information is available.

Could I just -- because I'm in the presence of a man that -- a hero of mine. Could I -- I know that young people don't like to hear about war or anything, but could I tell a little story that I kind of like?

Mr. Adams. Yes, sir, Mr. President. [Laughter]

The President. You know that reminds me of when I was first in this job and some of those men in uniform would salute me as the Commander in Chief. Having been in the service, I knew that you don't salute when you're not in uniform. And it was bothering me. I'd try to nod to them, but they'd just stand there with that salute. And, finally, one day I said to the Commandant of the Marine Corps, I said, ``You know, there ought to be a regulation that if the President is the Commander in Chief, that he ought to be able to return those salutes.'' And the general said, ``Well, Mr. President, I think if you did it, no one would say anything about it.'' [Laughter] So, I now return the salute.

But the story that I want to tell you -- and I hope you'll appreciate -- it was in the Vietnamese war and a captain with a platoon of men and a typical American army platoon -- black, brown, white -- within a warehouse stored with ammunition. And they were unloading a new shipment of ammunition. And one man dropped from way up on the top of a -- stacks of ammunition, a crate of hand grenades. And the crate smashed, and they rolled all over the floor.

Now, only one of those in that whole warehouse was going to go up, and the captain ordered everyone out. And they got out, and they waited, and nothing happened. And then the captain said to the platoon, ``Wait here.'' And he went back in, and he picked up a grenade and -- he'd taken some adhesive tape with him -- and he taped the pin down so that it couldn't go off and detonate. And it worked. And he then went outside and told his men what he had done and got them all tape, and he said, ``Now we'll go in and pick up the grenades.'' And he showed them how to tape them.

I would say that in the traditions of an officer, the man in command who has to make sometimes some unhappy decisions, he had exemplified the highest standards of being an officer, in that he went in and he took the risk and did not endanger his men until he had proved that it would work. And I just thought that you might like to know that that captain was black.

And I think it exemplifies what so many of us dream today, that what lingering separations there are, what lingering divisions between our people -- and, sure, there are rednecks and bigots, and there are people that are prejudiced on all sides and for whatever reason, religion and everything else. But I think there was an example of what real America can be and what I think the overwhelming majority of us, regardless of our religion, our race, or our ethnic background, want America to be. And we must keep in mind at all times that all those other people are out there wanting the same thing, and we continue to work for that.

Thank you very much.

Mr. Adams. Thank you, Mr. President.

Note: The President spoke at 2:44 p.m. in the school auditorium. Prior to his appearance before the students, the President met privately with Mr. Adams.

Following his visit to the school, the President returned to Washington, D.C.