Remarks and a Question-and-Answer Session With Editors of Gannett Newspapers on Domestic and Foreign Policy Issues

December 14, 1983

The President. Well, it's a pleasure for me to speak directly to you -- the editors, publishers, and news directors in 35 cities from Utica to Tucson. Gannett represents one of the most creative forces in American journalism today. And under your able leadership, Al Neuharth, Gannett has 85 daily newspapers, 13 radio stations, 6 TV stations, and a successful new venture that's reshaping the print media, your nationwide newspaper, called U.S.A. Today.

Now, I am going to take your questions, but I can't let an opportunity like this go by to say a few words about our economy and foreign policy with the hope that you'll share a few of those words with your listeners, viewers, and readers.

We've reduced the growth of government spending. We've pruned needless regulations and reduced personal income tax rates. We passed an historic tax reform called tax indexing that means that government can never again profit by creating inflation. And today, just over 2 years since these policies were put in place, we're seeing a vigorous recovery.

The prime rate is only a little bit more than half what it was when we took office. Inflation has plummeted to 2.9 percent during the past year. Factory orders, retail sales, and productivity are all up from a year ago. And during the past 16 months, the stock market has risen sharply, boosting investment in productive sectors of the economy and raising the value of pension funds that so many millions of our people depend on.

Unemployment is still too high, but last month it showed how fast it was dropping when it went down by nearly half a percentage point. Federal deficits pose a challenge, and some in the Congress are saying the answer is a tax increase. But it was tax cuts that gave birth to the recovery, and this recovery's boosting government revenues. Deficits are caused by government spending too large a percentage of the gross national product. The solution is for government spending to be reduced to a point that it neither causes a deficit nor interferes with the ability of the economy to grow.

So, I hope the Congress will help us reduce deficits by cutting spending, not by putting a bigger burden on the backs of the American taxpayers.

Just as we're turning the economy around, I think we're bringing a new sense of purpose and direction to foreign policy. In Grenada we set a nation free. In Central America we're giving firm support to democratic leadership. And I believe that, thanks in large measure to the American example of what a free people can do, there's a rising freedom tide in the world today from Poland to Argentina and Venezuela.

In Lebanon the peace process is arduous and painful, but there has been some progress in spite of the continued horror tales that we are subjected to. Talks have begun to broaden the government's base and to satisfy legitimate grievances. And the goal must be internal stability and the withdrawal of all foreign forces.

In Europe the NATO alliance has held firm, despite months of Soviet bluster. Sooner or later, the Soviets are going to realize that arms reductions are in their best interest. When they do, we'll be at the table waiting for them, ready to go on negotiating from strength and in good faith.

As we pray for peace on Earth in this holiday season, the American people should know that, because we've strengthened our defenses and shown the world our willingness to negotiate, the prospects for peace are better than they've been in many years. I'm convinced that historians will look back on this as the time that we started down a new and far better road for America.

And, Al, could I just say, again, one other thing? I sure do like a press policy that is based on hope, legitimate hope, and not just undue optimism. I think the things that we've seen throughout the depths of this recession prove the quality of the American people -- that in the very depths of it, more money was given to charity and to worthy causes than has ever been given before in our nation's history.

Today the partnerships with schools -- we call attention at the national level to the problem in education, and suddenly business groups, communities, organizations are forming partnerships with schools throughout the country to help in whatever way they can. Name it, and the people, themselves, are finding an answer for it.

And I think you're right, that I think when you look at a TV news program sometime and the national news -- and they have to announce that unemployment went down by hundreds of thousands of people in just the 1-month period. And then they immediately switch to showing some derelicts sleeping on heating grates, and so forth, to take the taste out of our mouth of that good news that they'd just given is the only excuse I can find for doing that. But you must have some questions.

I think he defers to you. [Laughter]

1984 Presidential Campaign

Q. Mr. President, this -- I'm Al Neuharth with Gannett. This group met this morning with George Steinbrenner, the owner of the New York Yankees, and he disappointed us by refusing to discuss his career plans for Billy Martin in 1984. Would you wipe out some of that disappointment by talking with us about your 1984 career plans? [Laughter]

The President. Well, I'll tell you, I'll be a little late with the answer. On January 29th you shall know all. I will make a statement regarding my plans. And I don't know, maybe what Mr. Steinbrenner is going by is the old baseball superstition that, you know, if you're pitching a no-hitter, don't say anything about it. That was one of the hardest jobs for me as a baseball announcer, when I was a sports announcer. The pitcher -- you're going into the seventh inning, and he hasn't allowed a hit. And I wouldn't say it; I wouldn't mention it because it's supposed to jinx him.

Mr. Steinbrenner. I'm waiting for your decision the 29th because if you're not going to stay here, I want you. [Laughter]

The President. Thank you very much. It's nice to have an ace in the hole. [Laughter]

Reporters in Grenada

Q. Mr. President, I'm John Quinn of U.S.A. Today. Mr. Secretary just said he went around the barn on this question.\1\ (FOOTNOTE) I'd like to ask you, sir, your own views after the fact on the decision not to have pool press at the Grenada action, and if that happened again, do you think that would be the policy to follow again?

(FOOTNOTE) \1\Prior to the President's arrival, Secretary of State George P. Shultz addressed the editors and answered questions.

The President. Not to have what?

Q. A pool press representative.

The President. Well, I don't know how far George went around the barn, but there was no conscious decision by anyone in his department over there or in the White House that said, ``Now, we must zero in and not let the press go.'' We only had 48 hours to plan that operation. We knew the Cubans were a lot closer than we were. The primary concern, as voiced by the Chiefs of Staff, was: minimize casualties.

So, in that limited time, they planned what turned out to be a most successful and brilliant operation aimed at immediately getting to the locale of the some 800 students that were there and offering them protection, and so forth. And I was responsible for only one part of that. I said that this is going to be a military operation in which civilians are not going to sit back here in the White House or in the Government and look over the shoulders of the field commanders who were there on the scene, and they were going to run the operation. Now, it was only when some of you started squealing that I discovered that part of one of their decisions had been that they would go in without press.

I have to ask your understanding of this. The preparations that would have been needed, the word that would have had to go out, just offered too much of a possibility of a leak. I have found out that the White House -- I don't know how it holds the rain out. [Laughter] Sometimes I read memos in the paper that I haven't gotten yet. [Laughter] But we felt that it was absolutely imperative that we have the ultimate in security. We knew that a half dozen other governments knew because they had requested us.

I am going around the barn now, George. I have to tell you this, that even there while we had to have some contact with them, we did not actually even declare to them that we were going in, that we were going to do it or what our plans were. And it worked.

Now, I won't do -- in any operation of the same kind, I won't do what someone suggested, and that is that, yes, sir, we guarantee the press go along, and we put them right in the front row of the landing barges, so they'll be the first off. [Laughter] I won't do that.

Yes?

Federal Budget

Q. Mr. President, I am Charles Overby from Jackson, Mississippi. And I've covered your campaign since 1968, and I've heard you give some stemwinder speeches on tax deficits -- budget deficits. What you said to us just a while ago, does that mean you're rejecting Secretary Regan's contingency tax increase? And do you have in your own mind how much of a budget deficit might be too much?

The President. I think any deficit is too much. I've been preaching for the last quarter of a century or more that government -- well, we should have had the rule that Jefferson advocated back in his day when he said that the one thing lacking in the Constitution was a rule that the Federal Government could not borrow a penny. Now, you might have an emergency like war where you'd do that.

But deficits, deficits are the result of a disease. And to look alway and focus on the deficit and ignore what brought them about -- when you have deficits, the government is spending, taking too big a share from the private sector. And when it does that and over and above its revenues, you can go one of two ways: You can either borrow, or you can raise taxes. But in either case, you are taking more money out of the private sector when that's already what the trouble is.

So, I think that the answer to deficits must be control of government spending and getting this government back to a certain percentage. I can't tell you what that exact percentage is, but I know that we're taking too much now.

There ought to be a point that we can figure out is the optimum point at which if you go beyond that percentage point in government taking from the private sector, you are interfering with prosperity and with a sound economy. And once decided on that point, we do that. So, whichever way, borrowing or raising taxes, is just further going to harm the economy.

We need to zero in -- we've only gotten about 40 percent of what we asked for from 1981 on in spending cuts. If we had gotten all that we asked for, the deficit today would be $50 billion less than it is.

So, this is -- now, on taxes, yes, it could possibly be that in our organization -- it's hard to tell with a recession whether the tax structure that we have in place is sufficient to match what we think should be the spending outlay. Once, as recovery comes on and we're sure that it is definite and we can do some measuring, we can look and see, did we overdo? Is there room there for some tax increases?

So, what Don Regan was talking about was a contingency tax that says to the Congress, ``If you will make the cuts that are necessary and the cuts that we're going to ask for, and then that isn't enough, yes, we will have in mind, as a contingency, a tax increase, then, to flesh this out and go after the rest of the deficit.'' So, I feel that way.

I will make one promise. I would resist and would veto any attempt at a tax cut that is passed for 1984. As a matter of fact, I believe the economy's got a better chance to continue recovering if there isn't one in '85. The original contingency tax we suggested would be one that would go into effect in '86 if the Congress had done what we said and had made all the cuts that needed to be made.

Q. You said ``tax cut.'' Did you mean ``tax increase?''

The President. Or tax increase. I'm sorry. Tax increase.

Incidentally, let me just warn you about something that most people have forgotten. 1977, under the previous administration, they passed some social security reforms, and those called for years of increases in the social security tax, and those go all the way through the rest of this decade. Those increases alone are going to match the tax cuts that we have made already. All we did was head off further tax increases as to what they're taking out of your pockets.

By the end of the decade, the tax rate is going up for social security to 7.65 percent from the employee and the employer. So, that's more than 15 percent. And at the same time, every year virtually, they're increasing the amount of income against which that tax is assessed. So, you're going to be having some tax increases, and they're not saying anything about those. I think what they want is, with people's tendency to forget, they want, are looking forward to the day when they can say, they're my tax increases. I didn't pass them, and I don't want them.

Minimum Wage; Unemployment

Q. Christy Bulkeley, editor and publisher of Danville, Illinois. The first Federal pay grade is about 25 percent higher than the minimum wage. Have you looked at that and considered reestablishing the minimum wage as the least pay level for jobs just as we have to live with it?

The President. The minimum wage -- I take it, if I understand correctly, the minimum wage is -- --

Q. The lowest Federal pay grade is 25 percent higher than the minimum wage is. We all have to live with the minimum wage as our lowest pay grade for the least jobs. I've wondered if you've considered reducing that pay grade to the same level we live with, the minimum wage, as the lowest point?

The President. No, I can't recall anyone has proposed any such thing or that we've even discussed that, but I would have to tell you that I believe a lot of our ills are due to the minimum wage. I think we have priced a number of people and jobs out of existence by making the price for them too high. And if you go back, figures will bear out that every time the minimum wage increases, there is an increase, particularly in young people who have no job skill to bring to the market.

The very least that we should do -- and we haven't been able to get any response from Congress to this -- the least that we should do is have two stages and have a lower minimum wage today for young people who are entering the job market for the first time and have no skill to bring to -- they're the ones that are sitting on the sidelines because no one can afford to hire them.

Q. That's precisely my point. Your lowest paying job in the Federal Government pays even 25 percent -- --

The President. Yeah.

Q. -- -- more than the minimum wage. And I guess I'm not sure that the least job in government is worth 25 percent more than the minimum wage.

The President. Oh. [Laughter] Well, you'd get a lot of bureaucratic answer to that. But no, I think the minimum wage was really designed for the most menial of jobs, the jobs requiring no particular job skill, the entry jobs and so forth. And I think it's been overdone. And, as I say, it's caused some of our problems.

Incidentally, when you hear the -- oops, well, just let me say just one more thing. And then I'll -- she's going to tell me, ``One more question,'' aren't you?

Ms. Small. [Karna Small Stringer, Deputy Assistant to the President and Director of Media Relations and Planning.] Yes.

The President. All right. [Laughter]

Let me say that the biggest percentage of unemployment that's keeping our percentage level so high is for teenagers, young people. And I sometimes think that this isn't a fair measurement of unemployment, because would it interest you to know that almost 48 percent of those who are listed as unemployed teenagers are presently going to school? They're looking for after-school jobs or weekend jobs. We all did. I did when I was in school myself. But to tie that, as a measure of the Nation's unemployment and -- is, kind of, taking our attention away from the real problem, which is the wage-earner with a family to support, the person that is out there with a job skill and no job to which he can apply it.

But I think we should ask some questions about unemployment. I asked one question of the Labor Department, and we've got a new answer already. I found out that they weren't counting our military as employed. [Laughter] And, now that they do, the unemployment rate is lower. [Laughter]

Yes, sir.

Defense Spending

Q. Mr. President, I'm Bob Brenner from Olympia, Washington. Do you, currently, have any contingency plans that might include reducing military spending as a way to decrease the deficit?

The President. On military spending -- I ran on the idea that we had been starving our military for so long that there really was a window of vulnerability. I think we've closed, largely, that window of vulnerability. We haven't closed it completely. We haven't caught totally up. But we've made a great difference.

Now, with malice aforethought, I asked Cap Weinberger to take that job. He was my finance director, for a time, when I was Governor, and he didn't earn the name ``Cap the Knife'' for nothing. [Laughter] But what everyone, particularly in the Congress, seems unwilling to admit is that they have been, themselves -- over there, under his direction, reducing the budgets as they find ways to save and ways to improve.

All these horror stories recently about the high price of spare parts -- those are our figures. We're the ones who found those high prices, and we're the ones who are doing something about it. And we've already had a number of indictments; we have had refunds; we've had dismissals of personnel -- we're getting at that. We sent some inspectors out that were mean as junkyard dogs, and they found that this was going on.

But the way I feel that we have to look at defense is this: You look at defense not as how much do we want to spend. What is necessary to assure our national security? What weapon systems? What numbers of personnel and all? And once you've decided on that, then you figure out -- and figuring just as sharply as you can with a sharp pencil -- what does it cost to provide that kind of national security? And if you've gotten it down to where all the waste is out -- and we've taken advantage of our reduction of inflation below what our anticipation was. I can tell that right now the defense budget that is presently being talked about has been cut by the Secretary of Defense $16 billion, before he came in with it.

Now, to go to the Congress with this and then have them say, ``Oh, no, we only want to spend x number of dollars,'' then you have to say to the Congress, ``All right, then what is it that you want to do without? What weapon system do you want to do away with? Or do you want to cut the pay for the military?''

I can tell you that when I started here, everyone said that we would have to reinstitute the draft, that the volunteer military would never work. Would you be interested to know that it not only has worked -- I get a lump in my throat when I see those young people out there, those young men and young women in uniform; their esprit de corps, their pride -- and would it interest you to know that we have the highest percentage of high school graduates in the military that we have ever had in our history, even back in wartime when we were drafting so many millions.

We have the highest percentage above average -- the average intelligence level in the military. We have a waiting line of people who want to enlist in the service. We have the highest retention now of noncommissioned officers. When we came here the first year, if we had gone to a draft, we didn't have enough noncommissioned officers to train the draftees, and that's all changed.

And I tell you, when I get a letter from a hundred marines stationed over in Europe, and those marines write me, as they did about a year ago in the budget talk, and say, ``If giving us a pay cut will help our country, cut our pay.'' I wouldn't cut their pay if I bled to death. The response from them, all of them, is just so remarkable.

Their pride, their -- I've made a lot of telephone calls lately, tragic calls to families of those who've lost their lives. And I hang up the phone in worse shape than they were on the phone. I've never heard such pride; I've never heard such willingness to accept that this was necessary. And I've learned that the hardest thing that a President will ever have to do, as far as I'm concerned, is issue an order that some of our uniformed personnel have to go into an area where there is a possibility of harm to them. That's the one -- that's the only problem that ever causes me to lose sleep.

But now I think that the military budget, the defense budget -- incidentally, when we set out over a 5-year period, we had expected to increase over the Carter projections for the next 5 years, that $116 billion. We have already, ourselves, cut $79 billion out of that $116 billion increase, and still we have a military that is further up to readiness -- well, you saw the result in Grenada.

And I wish you could all have been on the South Lawn when about 400 of those students from Grenada came there at our invitation, and we had 40 of the military back from Grenada from all four branches. And to see them, all the same age, roughly, the medical students and the military, and to see those students -- they couldn't keep their hands off those young men in uniform. Everyone wanted to tell them personally that they had saved their lives.

I had some come up to me and tell me that when they were escorted to the helicopters and there'd been gunfire all around, that our men in uniform placed themselves in a position that if there was firing on them, they would be hit, not the students. They shielded the students with their bodies. And it was a wonderful thing to see.

I've got a great deal of hope and optimism about the future of this country now, having weathered all the riots on the campus when I was a Governor, to now see the quality of these young people and their dedication.

I didn't mean to make a speech, but I can't help it. I'm all wound up on that particular subject.

Ms. Small. Thank you, Mr. President.

The President. Thank you all very much.

Q. Are you going to propose a minimum wage this year?

The President. We've tried in Congress several times. We can't get any interest on the -- this is on the minimum wage. Yes, I'm going to keep trying. You bet.

Note: The President spoke at 1:05 p.m. in Room 450 of the Old Executive Office Building.