Q. Mr. President, many students fear that we will become involved in a war outside our borders. Although you cannot tell us under what specific circumstances we would have a military intervention in Nicaragua, what can you say to address the students' fears?

The President. I would like to address those fears by telling them that we certainly have no plans whatsoever for ever landing military forces in Latin America. As a matter of fact, all our friends down there have told us, and repeatedly, they don't want our forces there to help them, although they want our help in training, in providing the weapons they need and do not have at the present for themselves. But the memories of the big Colossus of the North and that early gunboat diplomacy era are still so much in their minds that just politically they don't want it, and we agree with them.

Q. Would this continue to be our policy even if there is a Soviet or Cuban threat?

The President. Well, now, you could get into hypothetical cases in which -- suppose this entire hemisphere were endangered by an all-out invasion -- literally we'd be talking about a world war. Now that, I think, would be a much different picture, and we'd probably all find ourselves allied. But that's such a hypothetical, and I don't think I should even be talking about it because we're doing everything we can to see that there won't be that kind of world conflict.

Tax Reform

Q. Mr. President, your tax reform drive has important implications for all of our futures, particularly young people. You've attacked special interests that are fighting to maintain the tax breaks they currently receive in the tax code, but some of your critics have accused your administration of bowing to certain special interests before the plan was submitted to Congress. They note that between the time of the release of the first Treasury tax plan and the unveiling of your plan that larger breaks were reinstated for oil and gas interests, for capital gains, and for the restaurant industry's three-martini lunch. Is there a conflict between these changes and the image you've nurtured as the defender and protector of the little guy during the tax reform debate?

The President. No, not really, and the plan as it came from the Treasury Department contained a number of things which they themselves frankly knew were options. The idea of being able to reduce the rates sizably has to be based on the elimination of many deductions that have -- the so-called loopholes -- that have grown into situations where, without doing anything illegal, individuals and even corporations have been able to avoid their fair share of taxes through these so-called tax shelters. And, no, the things that we looked at and some of those options had to do with things that could have been inimical to our own economic recovery. We're a country that still has to, for example, import a large share of our oil -- fuel our industry and our transportation and all. And, so, we looked at some of those things and found that the supposed gains from them would not be enough to justify the setback we might be giving to businesses and to industries that were essential to our own welfare.

Now, listening to some of the talk shows on the weekend, on Sunday, I was a little upset to see some or hear some demagoguery from some individuals about how we were -- our tax program, they admitted, benefited the people at the lower end of the bracket, but in the middle bracket, we were penalizing those people to benefit the so-called rich, the people of the upper end. The truth of the matter is we're tying to cut from 14 tax brackets down to 3 -- a 15 percent, a 25 percent, and a 35 percent. In order to do that, we eliminate many of these cuts. We have found that the average tax cut in the lower bracket will be somewhere in the neighborhood of around 13 percent. The average cut for the middle class will be 7-plus percent. The lowest cut will be in the upper bracket. So, they were misstating -- they just plain didn't know what they were talking about on the air with some of those people that were talking about what we're trying to do. We want a program that'll be revenue neutral.

Incidentally, with regard to capital gains, every time we have reduced the capital gains tax we have found that the Government's revenues from capital gains increases, that more people are then induced into using the capital gains or making investments and so forth. And the result is there's more activity and more tax even though the rate is lower. You have to recognize that a number of our trading partners in the world don't even have a capital gains tax. That's a kind of peculiarly American institution.

Q. Does the use of the capital gains tax and also the oil and gas tax break to produce domestic exploration conflict with the goal that you'd set, that the tax system should not be used to promote other social or economic purposes, that it should be a level playing field for all?

The President. I don't think that we violated that, except that when you talk about charitable deductions. Of course, that's something that I think all of us want to keep in our country. We're rather unique in the world in the amount of good that is done by private, voluntary contributions and voluntarism in various social affairs. But like, for example, the oil and gas thing, we did away with one great tax inducement that has existed for a long time. And that began originally to inspire the finding of oil and gas here in our own country. But the thing that we did retain, the break we did retain is for the smaller, the independent wildcatter and so forth out there. And we need that because most of our exploration is done by those independents.

Liberal Arts Education

Q. Mr. President, I'd like to know what you see as the value of a liberal arts education in today's fast-moving, increasingly high-tech society.

The President. Well, I have one myself, and I've been trying to figure how it set me back. No, I'll tell you, I believe very much in it. I think it is the basis, and I deplore the tendency in some places, in some institutions, to go directly toward training for a trade or profession or something and ignoring the liberal arts. I think it is the foundation of education -- a good, round liberal arts training. And I think you'll find that in many great companies and corporations and institutions that many of them say that, rather than having someone that has tried to train themselves specifically for that line, whatever line of work they're hiring him to do, they believe in the broad, liberal arts education. Many employers will tell you that they believe they can do the training in their particular line of work or company themselves that needs to be done, but they would like to have a well-rounded, educated individual.

Q. I'm happy to hear you say that because that's the degree I'm pursuing. So, thank you.

The President. Well, I majored in economics and sociology and then found that my careers in the bulk of my adult life came from my extracurricular activities. I always was -- you know, all the class plays and belonged to the drama club and loved that sort of thing. And my other love was football, mainly, but athletics in general. And I played football for 8 years in high school and college. So, the first two careers that I had were as a sports announcer and then as an actor. And finally I got around to a job, when I was talked into running for Governor, where I could use, maybe, the economics and sociology.

U.S.-Soviet Relations

Q. Mr. President, White House officials have requested equal time for you to speak to the Russian people. If you were granted 2 minutes on live TV, what would you tell the Soviet citizens?

The President. Well, I don't know whether you can bring it down to 2 minutes or not. I remember a speaker, once, who was to be hired, and they asked his fee. And he said, ``A thousand dollars.'' And the people who were asking him said, ``Oh, but we only want a 5-minute speech.'' He said, ``That'll be $5,000. It's that much harder to do a 5-minute speech than a lengthy one.''

No, I think the thing is -- I've always believed that a lot of troubles would go away if people would talk to each other instead of about each other. And there's no question but that the people in the Soviet Union hear mainly what their government wants them to hear. And they have little impact on that government, unlike our own country and our people here. I think I would try the best I could to disabuse them from the idea that not only our own country but others of the capitalist world here in the Western World have designs on them and feel an enmity toward the people of Russia, but that their government policies, their expansionism, has led us to fear them. And I would appeal for all of us to be able to get together and know each other and find out that we're the only two countries in the world, I think, that can start a world war. We're also the only two countries -- the Soviet Union and the United States -- that can preserve the peace.

Q. Do you feel that you would realistically be able to accomplish that, noting, like, the different Soviet press papers that speak of your administration differently? Would that be a realistic accomplishment?

The President. Well, you couldn't do it all at once, no. But maybe you might spark some doubt in their own minds as to what they were being fed by way of their journalism.

U.S. Foreign Policy

Q. Mr. President, the presiding bishop of the Episcopal Church, John Morey Allen, said in a speech on September 7th that America in the 1980's in his view has come to be seen as ``a bully preoccupied with profits and self-protection and military power.'' How would you respond to this view, and how can the United States possibly improve its image for the future among allies and among developing nations particularly?

The President. Well, again, and I have to take issue with the reverend on a statement of that kind. First of all, if we were a bully, if we had aggressive intent, when World War II was over, and we were the only major nation in the world whose industry had not been destroyed by bombings and so forth, and we were the only ones who had the ultimate weapon -- the nuclear weapon -- if we were a bully, that would've been our time. We could have dominated the world, and there wasn't anyone who could've stopped us. We didn't. What we did instead was a thing called the Marshall plan, in which we set out to not only rebuild our allies and reinstate them but our enemies as well. And today two of our staunchest allies, West Germany and Japan -- well, we could make it three, Italy -- are, as I say, our staunchest allies now, these erstwhile enemies.

But, also, in the whole world of helping the lesser developed countries, in opening ourselves up to trade to stimulate business and industry on their part so they can have an economy, we do as much as the rest of the world put together. In the feeding of the starving in Africa, again, we are the giver that equals or tops everything else that anyone is doing.

Now, that's not only from government. Again, as I say about the voluntarism in our own country, I had an interesting experience here at a dinner one night in the White House. I won't name the country, but an Ambassador's wife was one of my dinner partners. And I was talking about something and the voluntarism and what our people were doing here on their own in this country. And God bless her, she spoke up, this Ambassador's wife from another country. And she said, ``Yes, but you must understand, that is unique with the United States.'' And I said, ``What do you mean?'' She said, ``You're the only country, really, that does that to the extent that you do.'' She said, ``In all our other countries,'' she said, ``all the rest of us, we look to government for doing things of that kind.'' But she said, ``You,'' and then I thought back to de Tocqueville, 130-odd years ago, who said that in America, if there's a problem, somebody goes across the street, talks to a neighbor. Pretty soon a committee is formed, and the next thing you know the problem is solved and the bureaucracy never had anything to do with it.

So, I think to refer to us in that way -- who have we bullied? We're still playing catch-up with the Soviet Union. All the talk about nuclear weapons and all -- they still top us by great percentages. Fifty percent more nuclear missile submarines, about 35 percent more land-based missiles -- the warheads, I should say. Talk about -- that's where the money is -- warheads. But -- and we're not trying to become superior to them -- we want a deterrent. One of our military bases out on the west coast has a sign over the entrance gate to the post. This is a military base of ours. And the sign says, ``Peace is our business.''

Job Training

Q. Sir, what specific plans does the administration have to aid the blue-collar worker in this transition to a high-tech era?

The President. Specific plan to aid the blue-collar worker. It is true that since 1979 about 1,600,000 factory jobs have been lost in America, lost mainly because of improvement in technology to where robotics and improved machinery does what men used to, and women used to, do by hand before. Also there are industries that become obsolete as new things come along, such as our Silicon Valleys and so forth. So, we have a program in which we help fund the retraining of people who are in those industries or who lose their jobs because a machine has taken their place. We also have in that fund provision for relocating these people to areas, then, where the new jobs they're being trained for are available. It must be fairly successful because where we've lost, since 1979, 1,600,000 jobs in factories, we have in service industries and in transportation, we have added 9,000,000 new jobs. And today we have the highest percentage of the employment pool that has ever been employed in our country is employed today.

What is called the labor pool -- they aren't really all looking for jobs -- but it is everyone from 16 to 65, male and female in America, is known as the total potential labor pool. And ,as I say, the highest percentage of that pool that has ever been employed is employed. We have the greatest number of people employed today, and in the last 33 months we have created almost 8,000,000 new jobs. Last month alone -- when I hear some of the protectionist talk I think of this -- last month, the month of August, we put 332,000 more people to work in this country. So, we are making every effort to replace those who, through no fault of their own, find themselves unemployed.

U.S.-Soviet Relations

Q. Mr. President, we realize that we have to maintain a tough bargaining stance with the Soviet Union, but the picture that has been painted by your administration seems pretty bleak. What are your realistic and specific goals for the summit meeting?

The President. Well, it's a little bit like your question about what would I say if I had a few minutes on their television. I believe that, again, the thing that I said about the two countries, the two superpowers, that hold so much of the fate of the world in their hands -- that we've got to recognize that. Now, if the Soviet Union, in all of its talk that we represent a threat to them, that we're the aggressor and so forth -- if there is any element of real belief in that, if that isn't just propaganda, and they really believe that, then I would like, as I did here a moment ago, I would like to talk a little bit, well, or give them facts to try and show them by deed, not word, that we're not an aggressor.

On the other hand, at the same time, I would like to reveal to them why we believe that they represent a threat to us and to the Western World. There is their expansionism in Africa, Ethiopia, the Cubans' troops that the Soviet Union is maintaining, and they really are, in Angola, but -- Afghanistan. But, also, go back as far as you want to go, all the way to Lenin, and every Russian leader at some time or other -- the present one hasn't had time yet -- but every one of them has, over and over again, restated their goal of a one-world Socialist revolution, a one-world Communist state. And invariably, they have declared that the United States is the final enemy.

Lenin made an eloquent statement. He said, ``We must take Eastern Europe.'' And they certainly have now; there it is behind the Iron Curtain. He said, ``We will organize the hordes of Asia.'' Well, they tried in China. They haven't done too well there, but look at Cambodia and Vietnam, North Korea. And then they said, ``We will move into Latin America.'' And they said, ``Then we will not have to take the last bastion of capitalism, the United States. It will fall into our outstretched hand like overripe fruit.'' But since then, Brezhnev made a statement; he said that the Soviets had gained enough through detente that by the middle-eighties they would be able to have their way wherever in the world they wanted to. Well, in the last few years, with our buildup and our determination to not let that happen, they can't have their way wherever they want to.

And, so, I know that we have differences. We're not going to like their system. They're not going to like ours, but we're not out to change their system. If that's what they want, let them go forward with their foolishness -- but to convince them that it is in their best interest also to have peace. Right now, to maintain their armaments, they have reduced the standard of living for their people to a point that -- well, Mr. Gorbachev was talking great reforms to try and do something about reinstating their commerce, the consumer items that the people can't buy. Do you know that in Russia today, the average time spent by a Russian in line waiting to buy things is greater than the time they spend in working at their job?

So, I -- the only thing -- I think, for example, arms control and arms limitation, I don't think about that so much as a thing to take up in the summit as to eliminate the things that are preventing arms control.

Q. Is it realistic, though, to try to prevent them from thinking that we are not aggressive, when they, in fact, their main goal is expansionism? Isn't it kind of difficult to change their view on that?

The President. Well, the only thing that I think that I'd like to try is to prove to them that, or show them that, as I said earlier here, when we had an opportunity to be successfully aggressive, we weren't, but that they have created suspicion in all our minds. Now, if they really mean what they've said about -- be the last ones to start a war, that they don't want a war, maybe they don't. Maybe they'd like to win what they want by threatening war, and then they could only do that if they were so far superior to us in armaments. Well, we're not going to let them have that superiority. But I'm hopeful that they'll just see -- if we can show them that -- well, the cartoon told it all. When we started building up our -- refurbishing our arms and our military -- when there was a cartoon of two Russian generals, and one of them was saying to the other, ``I liked the arms race better when we were the only ones in it.'' I don't know whether we can or not. I don't know whether they are so indoctrinated with their policy of expansionism that they won't listen, but at least they will know where we're coming from and how we view things and what our determination is.

Administration Goals

Q. Mr. President, what specific goal would you most like to accomplish during the remainder of your administration but realize that you will be unable to?

The President. I'm an optimist. I don't know that I'm admitting anything will be impossible. The things that I would like to see done are the continuation of what we've started already.

First of all, with the arms talks -- maybe it might be impossible; I don't know, but I would like to see the end of nuclear weapons. I would like to envision the Soviet Union and the United States agreeing, and then verifiably eliminating those weapons, and then being able to turn to lesser nations, or other nations that maybe have some, and saying, ``Look, we've done this now. Come on, get in line. You do it, too. Let's rid the world of this nightmare and this threat.'' But that'll be something we'll continue to try to do.

But in these next 3 years, I would like to see us continue to where the Federal Government is finally back in the harness where it should be; that authority and autonomy that has been over the years seized by the Federal Government from States and local communities, that it is returned to them; that we return to them also the tax sources that have been preempted by the Federal Government. And I would like to see a start made -- this couldn't be accomplished -- but I would like to see us come to, with all of this, the elimination of the deficit, a balanced budget. Then an amendment down the road at the proper date that there will be no more deficit spending, and see this country embark, however modestly, on a program to start paying off the national debt. I don't think it's very much of a heritage for us to pass on to all of you.

Q. You mentioned that specific sequence. Do you believe, then, that a balanced budget amendment would have to come after the budget was in balance -- --

The President. Yes, yes.

Q. -- -- Rather than trying, imposing it right now?

The President. Well, no, you could do it in advance. Picture this: There's no way that you could balance the budget in 1 year. It is too far out of -- [inaudible]. And, remember, this unbalanced budget goes back a half a century. And there were many of us, over the years, who were complaining and saying this is wrong and someday it's going to get out of hand.

Well, first of all, in the sixties we had the great War on Poverty passed. And you saw immediately a great increase -- 1965 there was a $1.6 billion deficit. The whole budget was $118 billion. No, it wasn't 1.6, it was 1.16 -- was $118 billion. Fifteen years later, in 1980, the budget was almost five times as great as it had been in '65, but the deficit was 38 times as big as the deficit had been then. Now, in 1974 the Congress got together and passed a thing that was called the Budget and the Impoundment Act that supposedly was to give more control over the budget and handle things. Well, since 1974 til now is when the great deficit simply got uncontrollable.

Now, the plan that has been proposed, and even the compromise that we approved, will show that as we increase in our growth, our estimates are that next year the deficit would be 4 percent of gross national product. The following year it would be 3 percent, maybe a fraction of a point above either one of those -- 3 percent. By 1988 it would be 2 percent. Now, if you envision that line of decline in the deficit, by 1990 it would be even. So, suppose you embarked on a plan right now that said 5 years to balance the budget and in 5 years the balance the budget amendment goes into effect -- and work toward that end.

Ms. Mathis. We only have time for one last question.

The President. Oh, dear, did you have more than -- I've talked too long, I know, but -- [laughter] -- I don't very often get a chance like this.

Education

Q. Okay, I guess I'd like to close with the fact that it seems that a few of my fellow students are choosing to enter the teaching profession these days while many professional teachers are leaving. What changes should be made so that the teaching profession can compete with private enterprise for the biggest and best, brightest students?

The President. Well, for one thing, I'd like to see a lot of things changed. And some of them are being changed now, after we appointed, a few years ago, our Commission on Excellence in Education. And the States have jumped in with both feet and taken up many of the recommendations that commission made, and there is being an improvement all along the line. But I would like to see for teachers, merit pay. I would like to see where there is recognition of a good teacher or someone not so good -- that they could achieve and they could look and see where there was a possibility for increase instead of seeing a fixed income and that was that forevermore, like being on a pension early. I think that that would be one thing that could be done.

Q. Who do you see putting this into effect? It'd come from the State government, Federal Government, any government at all?

The President. Yes, well, basically, education is run at the local end. And, in cooperation with the States, and -- either they're -- one or the other, but between them is where it should be done. The thing that we have turned around, and I'm very proud of this, is that Federal aid to education never amounted to more than 8 percent of the cost of education. But for that 8 percent, the Federal Government was usurping much of the authority that belonged back at the local and State level where it always has been in our educational system. And I wanted to get Uncle Sam out from the business of -- the redtape and pulling the strings and running things in return for its 8 percent, and much of that has been done.

See, having been a Governor, I know what it's like out at that end to get those supposedly government aid programs, but complete with all the rules and regulations. I know that in one change we made here in our administration, having to do with such programs, such grants, we found that we had reduced 805 pages of regulations imposed on the local levels of government by [to] only 30 pages of regulations. Even that maybe is too much, but I think it was quite an improvement. So, yes, that's -- --

Q. I'm curious. Don't you see it as the -- that the Federal Government is the means of ensuring that a poor child in Mississippi -- whatever, a poor section of Mississippi is going to get the same opportunity for an education as someone from, say, Shaker Heights, Ohio?

The President. Through all the many social programs that we have, that is taken care of. For example, starting school with a breakfast or a school lunch and so forth, aid to students, as we talked about earlier here, some $9 billion that we're spending now to aid, for secondary education.

No, there are some things, of course, the Federal Government under the Constitution has to see to certain equalities for all our citizens. But the actual running of schools -- when you get a bureaucracy back at the national level that tries to make rules that fit all of this country, that ignores the great diversity in this country, that our States aren't all alike. You can't set a figure, for example, that would be adequate for, let's say, the great metropolitan centers where costs are much higher and, at the same time then, have it be right for some States, more rural States where prices and cost-of-living standards and so forth are much lower. So, the best thing is to give this back -- the actual running back to those elements that are close at hand, and in a community where parents can be involved, and they know what they want for the education of their children.

We have done a lot of talking here, and your generation is subject to more information than any generation in history. It is coming at you through the airwaves. They have even fixed it so you can jog and hear it, and you get speakers on your campuses and in the schools and literature of all kinds. And I have been talking to you a lot, and I have been citing a lot of things that I have claimed are facts and figures and so forth. Let me just suggest one thing. Don't let me get away with it. Check me out, but check everybody else out. Don't just take it for granted because you read it someplace or because someone stood up in a lecture course and told you from a lecture platform. Check it out. Don't be the sucker generation. You are the brightest and the best, and make sure that you are hearing the facts, not just somebody's opinions. And as I say, that goes for me, too. Check me out.

Q. Thank you very much, Mr. President.

Note: The interview began at 4:31 p.m. in the Roosevelt Room at the White House. Susan K. Mathis was Deputy Director of Media Relations.