Q. Are you disappointed about Syria? Do you think they're going to come around?

The President. Well, I'm going to continue to hope that they will. We're still working on that.

Q. What about the budget?

The President. What about the budget? Well, I hope that both Houses of the Congress will take a look at the economic news and finally admit that something we've been doing is right. Today, the news on productivity: The factories or the industries have been producing more than they have in 8 years. And at the same time, the Wholesale Price Index did not just be a reduction in inflation, it was actually deflation, and wholesale prices went down. And, as I say, I hope that instead of this digging in their heels and resisting on some of the things that we've asked -- --

Q. They say you're digging in your heels. Is it true, sir, you'd rather have no budget resolution than some with taxes?

The President. Well, the budget resolution is meaningless to them. They've never abided by it. It isn't binding on them. But I would rather see them show and demonstrate to the business and industrial and financial communities that they are willing to be responsible, and can proceed with the cutting of government spending, and recognize that the tax cuts so far have been the incentive that has brought about this economic recovery.

Q. Are you willing to compromise on the budget?

The President. I have compromised for 2 years now. If they had given us the cuts we asked for up until now, the deficit would be $41 billion less than it is.

Q. You don't sound like you're ready to compromise anymore.

The President. I am prepared to be reasonable.

Q. What about taxes?

The President. As I say, I don't think at this stage of a recovery that increasing taxes can do anything except hinder the recovery.

Q. But what if they send you some appropriations bills or some revenue bills that, in fact, increase taxes?

The President. Well, then, as I say, I sleep with a pen under my pillow, prepared to veto.

Q. How is Mrs. Reagan?

Q. Thank you, Mr. President.

Note: The exchange began at 3:35 p.m. on the South Lawn of the White House as the President was departing for a weekend stay at Camp David, Md.