The President emphasized on several occasions how important it is to enact a budget that not only encourages economic recovery but also meets the Nation's basic security needs.

With regard to defense spending, the President said that it might be possible to find additional savings as a result of lower inflation and lower fuel costs. He also said he expects to receive a report from the Scrowcroft commission in the next few days and that there may be additional savings to be found as a result of its recommendations. The total savings that might thus be obtained on defense was not specifically discussed.

After the President spoke, all of the members of the committee who were present, as well as Senator Baker, had an opportunity to express their views. Secretaries Weinberger and Shultz also spoke.

At the conclusion of the meeting, Senator Domenici informed the President that he did not think he then had the votes to pass the President's full defense request, but said he wanted to continue consultations with all parties.

Tomorrow morning, the President will meet with Senators Domenici and Lawton Chiles, ranking minority member, of the Senate Budget Committee prior to the President's departure for Pittsburgh. The budget committee plans to begin its markup later in the day.