Mr. Brandon. Well, you have spent, perhaps, more time than any previous American President with our Queen, and I was wondering what interested you most about her.

The President. Oh, well, there was no surprise, first of all. Nancy had, as you know, been in her presence a great deal. She was there for the wedding. And then her gracious invitation to us at Windsor, our ride together and all there, so it wasn't any surprise that -- it was only just reinforced and strengthened as to what a truly fine and gracious lady she is. But I think so unlike what most people would have of a concept of royalty. But she's a delightful person.

U.S.-Soviet Relations

Mr. Brandon. If I may switch to a different subject -- your Orlando speech. In your Orlando speech you talked about the confrontation of the United States and the Soviet Union as a confrontation of good and evil, and darkness and light. And that gave the impression, at least, that there is really no logical conclusion except war and that reconciliation would be very difficult between the two powers. And I'm just wondering how you reconcile that outlook with your aims for peace.

The President. Well, Henry, I don't think that those who were there and heard the entire speech would take it that way. I think it is somehow lifting that out of context -- of this line and this description as the focus of evil and so forth. Certainly their entire beliefs, beginning with the disbelief in God -- their entire beliefs are so contrary to what we accept as morality. Witness a Kampuchea and an Afghanistan and so forth.

But no, what I was pointing out there, and I still believe is time-tested and proven, is not the inevitability of war, but a recognition and a willingness to face up to what these differences are in our views and between us, to be realistic about it.

But let me just point out a couple of things. We've seen, under the guise of diplomacy and detente and so forth in the past, efforts to kind of sweep the differences under the rug and pretend they don't exist. I have stated, very frankly, what I believe the differences are, but at the same time, I have expressed my determination and my belief that peace is achievable. I'm very concerned with those people who somehow seem to think -- without their realizing they're thinking them -- that they're building in their mind a kind of ``war is inevitable''. I can't subscribe to that at all.

But look at the proof the START negotiations. They have already come down to a lower figure for weapons than was supposed to be the great triumph in SALT II -- several hundred, they've agreed to, less than the SALT II treaty. In the INF, they came immediately to the table, no objecting, no protesting, to negotiate, and while their offer was not acceptable because of some other terms, from some 350-odd SS-20 missiles they made a proposal that brought them down to 162.

So, I think that this just proves that maybe being willing, frankly, to recognize the differences between us and what our view is has proven that it's successful.

Strategic Arms Reduction

Mr. Brandon. Talking about missiles, a number of European leaders, from Mrs. Thatcher to Chancellor Kohl, have been trying to persuade you to put forward a new initiative of an interim solution -- still with the zero option as the ultimate goal -- but to come forward with an interim solution. I gather that you are very seriously considering such a move.

The President. Well, let me say that, Henry, this is a difficult thing to answer. And I'm sure they know this also. Because we do stay in constant consultation, and we aren't going to do anything without continuing consultation with them. And I must say they have all expressed great appreciation for the fact that unlike some previous times when we acted unilaterally, that we do recognize our responsibility as allies.

The difficulty in answering is, when you're at a negotiating table -- and off and on I spent about 25 years in labor-management relations at a negotiating table -- you can't talk openly about your strategy or what you're going to do. But I can only point to this fact, that from the very beginning when I announced the total elimination, the zero option, I said at the same time we will negotiate in good faith any legitimate or reasonable proposal, and that remains true today. But to get into a discussion of where you're going or what you're going to do, that just is bad negotiating strategy.

Mr. Brandon. Yeah, but haven't these European leaders already, more or less, laid their cards on the table?

The President. Except that all of them are still openly supportive of our deployment of missiles, our own missiles there, as was originally decided in 1979. So, that's a little different than advocating a position and wanting an open agreement. If you ever did such a thing, that, then, becomes the beginning point for negotiation. Our beginning point for negotiation is total elimination.

Mr. Brandon. Well, I understand that there are two views, more or less, two views in the administration -- one that feels that you should wait until the missiles are beginning to be put in place in Europe, because then the Soviet Union will be under pressure to make concessions, or that you should come forward with your own initiatives -- take the lead and come forward with something that proposes equality but is something less than zero-zero option.

The President. Well, again, as I say I mean, Henry, I don't think that there are any divisions in the sense that splits here, and one faction against another faction on this. Obviously, in discussing all the ramifications, there are going to be people with different ideas than others and a variety of viewpoints as to timing or numbers or things of that kind. There is one thing in which we're in total agreement on, and that is that the ultimate goal should continue to be the zero base, the elimination of that whole class of weapons, for the sake of the world if nothing else. We're also in agreement on the fact that there must be no change in our plan to begin deployment on schedule.

Mr. Brandon. But can you tell me in which direction you lean, for instance, because the Dutch Foreign Minister -- [inaudible] -- the Dutch Prime Minister, who saw you the other day, and made some -- after he had left you, indicated that you are going to come forward with a new initiative.

The President. Well, no, what I said then, and what I have just said here, is we have announced our ultimate goal and we will, as I said from the very first -- we're ready to negotiate in good faith any reasonable proposal or suggestion on the way to the ultimate goal.

U.S.-Argentine Relations

Mr. Brandon. I understand that you're beginning to come under pressure to -- I'm now talking about U.S.-Argentine relations -- to give the kind of certification that would be necessary for the United States to sell arms to the Argentine again.

The President. No proposal or no discussion has been held with me at all on any such subject. We're watching, of course, very closely. From the very first, as we've always hoped, we'd hoped that there will be a peaceful resolution of that problem.

Mr. Brandon. What would you advise now in terms of the next step? [Laughter]

The President. Well, I think that would be a little presumptuous. I think this is -- as a result of the action taken there, this is something to be determined between the United Kingdom and Argentina.

Mr. Brandon. But you're not planning to play the role of the mediator as you did during the war?

The President. Only to the extent that someone would ask our help -- if we could be helpful. We'd be pleased to, anytime, if we might lend aid to bring about peace.

The Middle East

Mr. Brandon. You've now had talks with King Hussein, with the Foreign Ministers of Israel and Lebanon. I wonder, how do you forsee, now, the situation developing? Do you forsee that negotiations of your own plan will perhaps begin soon?

The President. Well, I'm very hopeful. I think that we have made some progress toward the first step that we believe is absolutely necessary, in getting into that, and that is the withdrawal of all the foreign forces,the PLO, the Syrians, and the Israelis from Lebanon and give the new Government of Lebanon a chance to establish its own sovereignty and heal the wounds that have been open there for so long -- the factionalism and so forth. I think that's absolutely vital, and we want to cooperate in any way we can to help bring that about. As I say, Foreign Minister Shamir has been here, and then the Foreign Minister of Lebanon, Salem, and the really senior statesman, elder statesman there, Salaam, the former Prime Minister. And we continue -- Phil Habib [The President's Special Representative for the Middle East] is going back now again -- we continue to try and help them work toward an elimination of the differences. And the differences have grown less. So, as I say, we're optimistic. And then I believe that once that's accomplished, that Hussein will offer himself as the negotiator to then continue the peace negotiations involving all the other Middle East problems.

Mr. Brandon. After the Lebanese situation has been resolved?

The President. Yes.

Mr. Brandon. You know there are a lot of Middle Eastern experts, or so called, who believe that unless you put certain pressures on Israel, there will be no moratorium on the building of settlements in the West Bank. How do you feel about that?

The President. Well, the West Bank -- there certainly is no illegality to the building -- that based on the Camp David agreement and the period of discussion that was supposed to then take place, with no one having a claim for or against doing such things. This, of course, would be where the negotiations then would begin toward the real peace negotiations with, presumably, King Hussein involved in those negotiations. And I think, as I've said before, that what really has to be resolved is the -- an arrangement involving, on one side, land -- territory -- and on the other, the need for security. And this is what has to be worked out. That one can find the Israel -- have the security -- that they don't have to remain an armed camp at the great expense that it has been to their economy. And this is going to take compromise with regard to territory -- on the other side -- and resolution of the Palestinian problem which -- you've got a great many human beings there that you just can't pretend they don't exist.

Mr. Brandon. I mean, do you think that, in spite of what Prime Minister Begin has said in public, that, as you say, a compromise is possible without your exerting sufficient pressure?

The President. [Inaudible] -- that's the reason for the negotiations. And again, just as I was talking about our own negotiations, with regard to arms, negotiations sometimes in labor-management may describe it. They've been presented as one side asks for the moon and the other side offers green cheese. And they then talk their way to a point between those two extremes and settle it.

Administration Objectives

Mr. Brandon. Mr. President, I know you're not talking about your future plans, but if you decided to run for another term, what would be your objectives -- that you feel you haven't been able to achieve in the first 4 years -- for the next round?

The President. Oh, I think we have a long way to go in two major departments. One of them, the restoration of our ability to be secure nationally, field a national defense and so forth, and the other, however, is the economic situation. Now, so far, we haven't begun to get all that we asked for in our plan. But I think that now, after all of the criticism and all of the sniping and all of the sneering at what they called Reaganomics, there is so much evidence that the plan, even partially employed, was successful, that I'm beginning to wonder if they won't decide to look for another name, rather than Reaganomics, now that it's going to be a successful plan and not a failure -- but that the economy is looking ahead for the balance of this decade to get back to a balanced budget. And I would still like to see that then affirmed in the Constitution, so that we can never again go down that road that we have in these last few decades. That we can begin paying back on the national debt, reducing that -- when you stop to think that the interest alone on our national debt is greater than the total cost of the United States Government not too many years ago. To do that, and to recognize that there is a certain level as to the percentage of gross national product that government takes for itself and takes from the people in taxes, that if you go beyond that level, you then do disrupt the economy and cause the kind of problems that we've had.

To eliminate totally inflation -- the world has been going through the longest sustained period of inflation in the history of mankind. And this recession is worldwide, and that is a great danger. This country can actually affect the economy worldwide. And I think our conquering, so far -- not completely conquered, let us say our winning over inflation so far -- to take it down from double digits, from 12.4, sometimes reaching as high as 13 - 14, to where for the last 6 months it's only been running 1.4 percent. But the job isn't going to be finished for awhile.

As you look at the projections out through the years, there is a lot yet to be done. But we have embarked on a different course. I can remember when the people on our side, the Republicans -- and you realize I'm talking the party not personal -- over these years what needs to be done, the Republican Party and the Democratic Party, the debate they engaged in was kind of a rearguard action on the part of the Republicans against the ever-increasing desire of government to spend, to intervene in the marketplace, to become even more powerful, and thus eventually oppressive on the people -- much of what you've seen happen in your own country. The debate today in government is not that debate anymore -- of the trying to hold back on that increase. The debate is both sides agreeing to reduced spending and reduced government, and the argument is only about how much to reduce it. And I think that's quite a triumph.

International Economy

Mr. Brandon. I wondered, because of the decline in the oil price that would be little will benefit to the majority of countries in the world, but it will be to the detriment of two or three countries, like Mexico, Nigeria. I wonder whether you've at all considered the possibility of taking the advantages that the majority of the countries have accrued to them -- could be used to sustain and help the countries that are suffering from the decline of the oil price.

The President. Well, we have been of help, and we have been with our contributions to the international banks, those funding agencies, but also in direct help. For example, as I told our friends and allies in the summit meeting at Versailles -- the discussion of the Third World and our view is that you help them develop their own economies, not constantly be mendicants with their hands out waiting for someone to give them something. We, every year, buy more of the production of those countries than all the rest of the world put together. And we think that this is the way to go. We think, also, that if we are able to alter the economic situation, that some of those same countries have the highest rates of inflation in the world, and thus even though it's going to be -- there's going to be a temporary readjustment with those reduced revenues. But if on the other hand, for the whole world economic picture -- they see their own costs going down, this will serve to make that adjustment for them, and they too will wind up better off. But, no, we're not going to retreat from the help that we've been able to give, and as we resolve some of our own problems we're able to help more.

Mr. Brandon. Do you think there is a need for reviewing the possibility of a new international monetary system?

The President. I can't say that I have a hard and fast view on that. I think it is something for all of us to look at. Maybe that'll be one of the subjects of discussion in the Williamsburg summit this spring.

Mr. Brandon. But do you think that the world situation makes such a revival of some new system desirable?

The President. I can't go that far. I can only say that I think we need to look at it. I don't believe that the monetary system has been the disruptive factor in bringing on this economic recession we've been in. I think inflation is what led to the high interest rates. The lender has to get back -- when the loan is repaid -- he has to have gotten back, in interest, all the depreciated value of the money that he loaned that is going to be repaid -- paid back in inflation in money of lesser value than when he had loaned it. And so, up go the interest rates. I think right now they're higher than they need to be -- the real interest rates. I think what we're seeing, because of our own rate of inflation -- they should be much lower -- but I think what we're seeing is timidity. They're not quite sure yet that we're going to stay the course and that this is going to continue. They've been through, well, in our own country, seven recessions -- I guess this one's number eight -- since World War II, and every one of them, as they came out, resulted in higher inflation and each time higher than the last, so that we've been on an ever increasing scale that way.

I think that there is beginning to be this confidence that this time the recovery, that we're bringing about, is based on sound economic policies and not artificial stimulants. When they're aware of that, I think we'll see further reductions in the interest rates and, as a result of that, we'll see further prosperity.

Views on the Presidency

Mr. Brandon. You, after 3\1/2\ years in office, you look younger than perhaps when you entered. And I was wondering, what is the secret of your pacing yourself?

The President. Well, for one thing I recognize that it would be awfully easy -- I've always been an outdoorsman, to use that expression, always, living in California, been able to get to our ranch, ride a lot, and so forth. But it would be very easy here to sit at that desk, and you go home in an elevator -- [laughing] -- at the end of the day, and come back to work in an elevator. It's very difficult to get outside at all. It would be very easy to let that become your lifestyle, but fortunately we resisted. And we have a little gymnasium upstairs there, and I have a daily routine that we work out at the end of every day. And, frankly, I have to say physically I think I feel better than I did a couple of decades ago.

Mr. Brandon. Marvelous. Do you feel, I mean as you've described it a little now, do you feel a bit insulated here in the White House?

The President. Not as much as people think. You're insulated in the sense that if you decide to leave the grounds you're a group -- [laughing] -- quite a group. You can't just go out and walk down the street and drop in at a drugstore for a bottle of aspirin or something. But on the other hand, you have much more contact with people than anyone is inclined to believe.

First of all, you're surrounded not just by senior staff but by an awful lot of people who work in here in different capacities, and you get to know about their families and their problems and so forth. But also the effort that I make to get out, when you go out on, say, a speaking engagement or something like the Orlando trip that you mentioned, you have a contact with people. I stay in touch with all the people that I knew, and having a ranch is another way, because there's a whole circle of acquaintances and people and workmen and so forth that -- --

Mr. Brandon. How many telephone calls do you take a day?

The President. Well, I'm available. Maybe I make more than I take. And that is another thing: People that I've known back over the years and former schoolmates and so forth, I stay in touch with both by correspondence and the other. And then I've done something that I did when I was Governor. I realize I can't read all my mail -- several hundred thousand letters a month. But I instructed there, and I've instructed here -- a very wonderful lady there in charge of that mail department does a good job of knowing the kind of mail that I want to see -- and not just the friendly letters; the ones that've got a challenge in them and so forth, letters from young people and so forth -- and constantly sends me a representative sampling of the mail. And not only for me to read, but usually the letters she's picked, I answer myself. So, I don't feel out of touch.

U.S.-Soviet Summit

Mr. Brandon. Do you foresee a meeting with Mr. Andropov sometime this year?

The President. Yes. I can see that. I think what I would resist is a kind of get-acquainted meeting just to have a meeting because, I think, such a meeting raises people's expectations so high that then we'd just be able to say, ``Well, we got acquainted and said `hello''' and not have any result.

But we are in touch constantly, we're not out of touch with the Soviet Government, and we are seeking areas where we can put together a meeting in which could be beneficial to both sides.

Mr. Brandon. But you're not making any preconditions; what you want, really, is just preparation, isn't it.

The President. That's right. No, you never have such a meeting with a precondition on what's going to result. You can have -- determine in advance the subjects that you think should be discussed between you.

Mr. Brandon. Do you think it will be in the fall?

The President. I can't honestly say whether it be this year or next. I know that there are no plans immediately or in the near future for one. But I would expect that there would be such a meeting before the first term is out.

Mr. Brandon. Mr. President, I don't know whether my time is up.

The President. I think we're getting signals that it is. [Laughter]

Mr. Brandon. But I very much appreciate it -- your finding the time for me.

The President. Well, listen, I'm pleased to do it.

Mr. Brandon. And I wish you the best of luck, much success, for the rest of your term.

The President. Thank you very much.

Mr. Brandon. I hope you'll decide to stay on. [Laughter]

The President. I can't answer that. [Laughter]

Mr. Brandon. I know, you don't.

The President. Well, it's good to see you.

Mr. Brandon. Thank you very much. Bye, bye.

Note: The interview was conducted in the Oval Office at the White House.

The transcript of the interview was released by the Office of the Press Secretary on March 21.