Q. Looking back over the past year, what do you think you did wrong, and what would you have done differently?

The President. Well, I think there are always things that you'll think you did wrong. But I think, basically, we have continued on the path that we set in 1981. The progress that we've made economically is apparent. It is the first time in many years that we've had a recovery from a recession in which not only is industrial -- well, let's say just productivity -- increasing, personal earnings increasing, inflation and unemployment both going down -- all of these things happening at the same time. This hasn't happened in a recovery for many, many years, which makes me believe we are on a firm footing and have laid a foundation for a solid recovery. That part is won.

There are things -- if you say what should we have done differently? -- well, there are things. In trying to negotiate bipartisan agreements on some of these, you look back and think, well, maybe if we'd worked harder in one direction or another we might have gotten more cooperation in our need to reduce government spending.

On the international scene, I think that our continued buildup of our strength has changed international relations a great deal. I don't think without that we would have had the beginning negotiations that we've had with regard to reduction of nuclear weapons, both the INF and the START talks. I think it is due to that.

I think we've got a finer relationship than we've had for a long time with our own friends and allies. This is particularly true in the efforts that we've made in Asia, as well as our longtime friends in Europe.

So, all in all, I think that there has been progress. But it is a foundation laid for more progress.

Q. If I could just -- but surely -- was there anything you went back at the end of the day and said, ``Oh, darn, I really'' -- you know -- ``that didn't work right, we should have done it.'' Is there any one thing that you can pick out?

The President. Oh, well, I probably could get incensed about -- but this was before 1983, earlier than that -- going for the tax bill on the assumption that we'd been promised about $3 in reductions in spending for every dollar of tax revenue, and we have never seen the $3 in reduced spending.

The Middle East

Q. Mr. President, do you think the new rapprochement between Arafat and Mubarak now opens the way as a breakthrough for the possibility of your peace plan getting moving and Hussein taking part?

The President. Well, Helen, I'm always a little leery about saying a breakthrough, but I do think this: We are optimistic about this because if you look at the relationship there and the two countries -- or the two peoples that were involved, Mubarak is the head of state of the one country in the Arab world that has gone forward and has a peace treaty with Israel. We're hopeful that the peace process will bring about more Arab nations making their peace with Israel.

Obviously, a part of that process depends on a fair and just settlement of the Palestinian question. And Arafat has, in the past, has been one who has refused to recognize Israel's right to exist as a nation. But the fact that earlier, and before this split in the PLO ranks, he had begun to discuss with King Hussein negotiations and participating in those negotiations on behalf of the Palestinians -- then that broke down with the split in the Palestinian movement.

Now I think that what President Mubarak is doing is talking to him about returning to where he was earlier, making contact with King Hussein, and getting those peace negotiations, our peace proposal, underway again.

Q. Do you think there's a good chance?

The President. Yes, I do. I really do, because we had believed that a settlement in Lebanon had to precede going further with that. I don't think that's necessarily true now. I think enough progress has been made there that we can go forward with the peace movement.

Q. May I follow up, Mr. President? Israel has denounced the talks between Arafat and President Mubarak, saying it was a pure violation of the Camp David agreements. Would you respond to that?

The President. Well, I don't think it was a violation. I can understand their feelings in view of the recent tragedy in Jerusalem, and the group taking credit for that claimed to be a PLO group and all. But at the same time, I think as they look at this a little more clearly, they will see that Mubarak, based on the experience of Egypt and its willingness to go forward for peace, is simply trying to persuade others to change their thinking.

There was one point not too long before the peace treaty with Egypt, in which Egypt was as violent in its hostility as perhaps today the elements of the PLO are. So, who is better able to try and bring in another person into the peace process than someone who has made the change that Egypt has made?

Q. Do you think Mr. Arafat is still a popular leader among the Palestinians themselves?

The President. Well, this is what we need to find out. I can't believe that that radical group that, under the influence of the Syrians, created all this tragedy around Tripoli and the innocent people that were killed because of the violence of that battle -- I can't believe that the millions of Palestinians are going to choose that leadership.

The Soviet Union and Arms Negotiations

Q. Mr. President, on a slightly different subject, you mentioned that due to our arms buildup, that brought the Soviets to the negotiating table. And now we've had a breakdown in the arms talks, and there seems to be an increased level of tension. Do you think we are at a confrontation state with the Soviets?

The President. No.

Q. And what do you see as the chance of an arms accord in 1984?

The President. Well, we're going to keep on with that. And, actually, the Soviets have not said no. They said they wouldn't set a date yet for the resumption of these talks.

Q. On INF they just walked out.

The President. What?

Q. On the INF talks they just walked out.

The President. Yes, but since then there have been statements to the fact that they just are not ready and that they're unwilling at this point to set a date. I believe they will be back, and I believe we're further from a confrontation possibility because of the deterrent capability of the United States and our allies at this point. I think there was a far more unstable condition when we had let our own strength deteriorate to the point that there was a window of vulnerability.

And I would like to call your attention to one thing. There have been 19 -- prior to this, to our talks -- there have been 19 efforts since World War II to engage the Soviet Union in talks about arms reduction. There has never been any progress made in those. The SALT talks, actually, were not arms reductions; they were supposed to be setting a ceiling on how many more weapons would be built. And that has not been ratified, the SALT II treaty.

But in these negotiations, even though the Soviets were not as forthcoming as we would like to have had them be, they still did make a couple of offers to reduce the number of their weapons. Now, that is the first time they have ever done that in any negotiations, in all these previous 19 attempts. And I think that now that they see that we are determined to maintain our own ability to defend ourselves, and our allies with us are included in that, I think that they have to see that these negotiations are in their interest as well as ours.

Q. Do you have any signals that they are actually planning to come back? Or are you just looking at it from your -- what you see as common sense?

The President. No. I think the things that we have heard. I think that this is, you might say, almost a part of the negotiating process. Their whole principal move over this last year or so has been an effort to stop the deployment of the intermediate-range weapons that were asked for by NATO. And the fact that we're going ahead, this, maybe, could be tied to that as still, you might say, an element of negotiating. But we are going to proceed with the installation of those weapons.

Q. And you don't think it's 3 minutes to 12, the doomsday clock? The scientists seem to think so.

The President. Well -- --

Q. And they think it's a more dangerous world now.

The President. Well, maybe the scientists know more about science. And from the standpoint of the power of the weapons, yes, they are more powerful; they are more destructive on both sides than they were before. And maybe looking at it from a scientist's viewpoint, that moves up their doomsday clock. But they're not involved in the diplomatic and political end of this as we are.

Q. But, sir, you only have 3 -- really, 3 minutes now to make a decision on war and peace according to the nuclear scientists. There would be 3 minutes on each side.

The President. Well, now, Helen, in the Bible weren't we told that a long period of time was only a moment or even a second to God? I don't know what their 3 minutes refers to. I know it doesn't refer to 3 minutes -- --

Q. You think it would be a lot longer for you to decide?

The President. Well, I'm wondering. On their doomsday clock, each minute on that clock -- is that weeks? Is that months? Is that years? They've never said what it is. But, no, I believe that actually -- and I can understand their feeling -- all that they hear and, forgive me, but a lot of the editorial content is that, ``Oh, there are great tensions.'' There has been, let's say, more heat in rhetoric. There has not been more heat in the actual relationship. At the time that the rhetoric was being used from both sides, our negotiators were sitting there at the table negotiating.

Q. Mr. President, can I come back on the prospects of these talks, these arms talks? There's a lot of concern, especially in Europe, that with the lack of dialog between West and the East, especially as the U.S. is entering an election year -- if you run for reelection -- that the Soviets are not likely to help you. How do you see the prospects for some kind of an agreement before the elections?

The President. Well, I would hope that the Soviet Union would remember their failure in trying to influence the German election and decide not to go down that road again. But as far as I am concerned, whoever our candidate may be, I don't think any decisions on a subject of this kind should be made on our part, on our side, on the basis of -- as I said the other night -- political considerations.

We are going to continue to do everything we can to resume and achieve arms reductions, as sizable as we can make them, and ultimately I would hope total elimination of nuclear weapons. They have no real place in a civilized world. The goal is peace. And I've been a little disturbed by the tendency of so many in this country who seem to feel that somehow we're at fault, when they are the ones who left the table without setting a date for return.

Q. So, you're not going to make any proposal before -- --

The President. Oh, we're in communication. We haven't broken off communications. We're not, as we've been portrayed, that the two superpowers are here separated with no contact at all. No, we're in communication with them. And we want to continue these policies that would lead toward reduction of arms and that would lead toward peace.

I am prepared to say if the Soviet Government wants peace, there will be no war, because I know for a fact that no other country wants war with the Soviet Union. The ball is really in their court. If they want peace, they can have it.

Q. And isn't that, though, what's kept the peace, this mutual terror?

The President. I think the deterrent capability, yes. See, we have a weapon here in the world today, the nuclear weapon, that for the first time in the history of all man's weapons has never resulted in a defensive weapon being created against it. The only thing we have is deterrence. The only thing we have is the knowledge that on both sides the punishment would be more than any nation could afford. If they started it, they would have to be prepared to accept virtually as much punishment as they were administering. And this has kept the peace.

I've had some meetings with young people who brought this very subject up, and they're greatly concerned. And I've asked them a question, and I must say they come up with a pretty sound answer. I've said, ``We're the only ones that have ever used a nuclear weapon -- in Japan in World War II. Would we have used that weapon if we knew they also had that weapon and could use it back against us?'' And without fail, every group I've ever said this to has decided that, no, we would never have used the weapon.

Q. So, that's the real deterrent to war.

The President. Yes, yes.

Central America

Q. Mr. President, in Central America recently there have been some apparently conciliatory gestures from Nicaragua. Do you think these are sincere moves, or are they propaganda ploys, and do you intend any response to them?

The President. I think that there is more they can do than they've done. I think the situation with them right now is covered by the words of Demosthenes in the Athenian marketplace 2,000 years ago when he said, ``What man would let another man's words, rather then his deeds, tell him who is at peace and who is at war with him?''

Q. So, you don't think too much of these gestures then?

The President. No, we've made it plain. There, again, there's been contact. And Ambassador Stone has made it plain to them that all they have to do is reinstitute the principles of their own revolution -- the things that they promised the people they were going to bring about if their revolution succeeded. And they have not done that. They betrayed their own revolution and created a totalitarian state.

Q. Well, if you turn Demosthenes around, might the people in Managua not say, ``We want to see some deeds from the United States.''

The President. Well, what hostile deeds have they seen?

Q. Well, they think of Grenada, for one. Maybe we think -- maybe you think it was a very benign -- --

The President. Well, I think -- --

Q. Rebel forces preparing to invade -- --

The President. But those rebel forces are part of their own original revolution -- the people that, once they succeeded, were ousted because they wanted to institute the democratic policies.

Q. But they're being armed by us.

The President. Well, we set out after the revolution succeeded -- and prior to my administration, the previous administration immediately started to come to the financial aid, economic aid, to the Sandinista government until it found out that the Sandinista government was not keeping the promise of its revolution. And the aid was withdrawn.

Now, to invoke Grenada, here again I think the words of the Grenadian people themselves, the Governor General, the people of Grenada, our own people who were there and were rescued have revealed this was not an invasion. This was something in the nature of a commando operation, and it was a rescue mission. And the people of Grenada have made it very plain that they feel they, too, were rescued. And the fact that we have withdrawn our combat troops so precipitously, that some of the Grenadians are a little alarmed -- that they don't think we should have left yet.

Pentagon Report on U.S. Marines' Security in Lebanon

Q. Mr. President, have you seen the Pentagon report yet, or do you know anything about it? It's so critical of -- --

The President. It has finally been delivered over here. It hasn't reached me as yet.

Q. Right. You have not been briefed -- --

The President. No.

Q. -- -- at all on it?

The President. No.

Q. It sounds devastating.

The President. Well, I'm not going to comment until I see it.

Q. Do you have any -- you don't really have any idea what's in it?

The President. No more than I read in the papers.

Q. Do you think that a lot of people are going to suffer from it?

The President. I just -- Helen, I just can't comment until I see it.

Q. We've all heard that it in some way criticizes everyone in the chain of command. Do you philosophically, or in any way, feel that that chain of command is -- you're at the top of it in this case -- and you bear some of that responsibility?

The President. Well, there's no way to discount responsibility. As Commander in Chief, the operation could not have gone forward without my approval. And so, in that sense, I think the investigation was being very thorough. Yes, there would have been no mission without my decision to go forward with it.

The Middle East

Q. Mr. President, in Lebanon, President Pertini of Italy today called for a withdrawal of the Italian contingent of the multinational force. Apparently there have been 15 countries who were asked to join that force and who have refused. Are you not concerned that the United States, by siding with Israel, is going to end up alone in Lebanon?

The President. No. I think that there was a not completely thorough statement of our meeting with Prime Minister Shamir. It was portrayed, and many people saw it, as somehow arriving at some new coalition with them, and even the word ``conspiracy'' was used by some in there. But, no, there was a reaffirmation by us of what our relationship with Israel has been since 1948. And we discussed this not from any standpoint of Israel and its relationship with Arab countries, in the sense of taking their part in anything of that kind. We're dedicated to the idea of trying, if we can, to act as a friend to both the Arab States and Israel in settling those longtime disputes and bringing about the kind of peace that we find between Egypt and Israel now.

Q. Do you think a U.N. force would be better in there?

The President. I would have wished from the very first for a U.N. force. But what has prevented it? The Soviet Union veto. If you look at the UNIFIL [United Nations Interim Force in Lebanon] force that is presently in the south of Lebanon, it is so bound by restrictions that were imposed in order to get the Soviet Union vote that it literally is helpless to do anything. It isn't that these people are ineffective or that they aren't capable, they are restricted.

Q. So then they couldn't possibly be replaced?

The President. Well, I could still hope that the Soviet Union now would recognize the value of having a U.N. force in there. And as I say, we would have preferred this from the very first, but it was something that couldn't be obtained.

Where was I on -- --

Q. I was asking, aren't you concerned of the growing reluctance of your allies to assume part of the burden in Lebanon?

The President. Well, we have been in communication. And I think that they understand better now, because we were just as forthright in talking to Prime Minister Shamir about our intentions in our dealings with the Arab States and the things that we were going to do in linkage with them. All of this aimed at being able -- if a mediator can be of use in that peace process that we proposed -- to ensure a fair solution to the problems. We have no plan that we're going to impose. That would be wrong of us to go in and say, ``Here is the peace plan.'' It must be negotiated out. On one side there is territory, on the other side there could be assurances of security. And someplace there has to be a balance in there in which one is traded for the other.

But that is up to them to negotiate. And I think our meeting with the Foreign Minister of Egypt, my own personal communication with President Mubarak, other communications that we have made straightening out what the situation was and what our relationship with Israel is and what we want in a relationship with them. And I don't think -- I think there was some discomfort at first; I don't think so any more.

Mr. Gergen. [David R. Gergen, Assistant to the President for Communications] Excuse me. You have a 3 o'clock meeting. Make this the last question.

Q. But is there any concern that 15 other allied nations are asked to join this force and have backed out, or -- --

The President. Ah, but you're going back. Remember when -- I think this was back when we were putting it together, we were trying to get forces that would join in it. Well, now, there could be a number of reasons why a nation wouldn't. There could be the very fact of cost to some nations. And remember, this recession has been worldwide.

So, whatever their reasons were -- but this was back when we were trying to put the multinational force together. And I think the very fact that the United Kingdom, that Italy, France, and the United States were able to provide what we thought was an adequate force for the purpose we had in mind -- --

Ambassador Jeane J. Kirkpatrick

Q. We've got four true-and-false questions. Is Jeane Kirkpatrick leaving? [Laughter] Yes or no?

The President. No. Jeane came in as she has every year.

Possibility of U.S.-Soviet Summit

Q. Will you go for a summit?

The President. What?

Q. Will you go for a summit if the Soviets propose it?

The President. Well, I've always been willing to go if there is a possibility of accomplishing something.

Goals for 1984

Q. And what do you want to happen next year?

The President. I want the recovery to continue. I want us to achieve more control over spending. And therefore, I would hope that the press would reveal to the people of this country how valuable line-item -- --

Q. Veto. [Laughter]

The President. -- -- line-item veto could be in the helping to get control over extravagance.

Q. We'll tell them.

The President. And -- --

Q. It will be in your budget proposal then?

The President. And I would hope that we would be far more advanced toward peace and toward a reduction of nuclear weapons.

Q. And a new tax?

The President. What?

Q. A new tax?

The President. I would hope that that wouldn't be necessary.

Q. Thank you.

Note: The interview began at 2:37 p.m. in the Oval Office at the White House. It was conducted by Helen Thomas, United Press International; James R. Gerstenzang, Associated Press; Michael Gelb, Reuters; and Pierre Rousselin, Agence France-Presse.

The transcript of the interview was released by the Office of the Press Secretary on December 24.