 United States Good morning Airplane flights. Did you good you looking bright and shipper? Well, some of you may know Today marks the second anniversary of this administration Now time flies when you're having fun A lot can happen in two years just looking around this room. I can see the change of change everywhere Judging from this group. I seem to have given more gray hairs than I got during the last two years. I Guess you can chalk that up to the luck of the Irish At any rate here we are at midpoint in the first term, so I thought a little personal perspective might be appropriate Looking back, I guess my greatest satisfaction is the conviction that a country that was skidding dangerously in the wrong direction Losing the respect of friends and foes alike in the world and even worse losing faith in its own future has been set on the right course We've begun to undo the damage that the overtaxing overspending over regulating binge of the 60s and 70s inflicted on the American way of life and We've made America respected in the world again My biggest regret is that because the accumulated damage is piled up so high for so long Putting America's house in order has been a tough and painful task. I Remember John Kennedy saying that when he came into office the thing that surprised him most Was to find that things were just as bad as he'd been saying they were In my case the biggest surprise was finding out they were even worse and It's a real human tragedy that so many of our people today are still suffering for the political mistakes of the past That we've finally started to correct But now let's look ahead for a moment As we enter our third year See I see an American economy and an America on the mend Nearly every economic indicator shows us heading into recovery The same economists who were arguing a few months ago about how much worse the economy would get are now arguing How strong the recovery is going to be and that's a step in the right direction We've reached a bipartisan compromise to save the social security system and Our efforts to strengthen our security and build a more peaceful world through arms reduction Negotiations with the Soviet Union and through helping the peace process in the Middle East and other world trouble spots are in full swing Right now. I'm in the process of making final budget decisions I'm not here to leak any details, but I can tell you that our budget will be fair Realistic and will pave the way for a strong sustained recovery So I'd say that For all our troubles midterm finds this administration and this country Entering a season of hope Now unless someone's going to bring out a cake with two candles on it Well, first I just want to show you when this is going to be distributed This is a record All of the legitimate leaks are combined in here It's a two-year review that will be distributed to all of you of What has taken place and what has been accomplished in the government in these two years and now I think it's time for questions But again, I'd like to suggest that we get started on whatever the first question is and get started in that subject That maybe it'd be a little more orderly if we said well, okay, anyone with further questions on that subject Where Gary Are you taking responsibility for those as well? well, I Would think some of the disappointments have been that in the give-and-take and the compromise that has to take place in the legislative process We never did get Intact what we thought was a well-thought-out economic plan. We had to give way with regard to Limits on spending in many areas. We've never gotten as much as we asked for that we Did not get the tax incentive program intact and with the impact that we thought it would have On the economy As from 30% for example in that one phase of the income tax to be put in retroactively beginning in January of 81 to have not Get only half of that installment and get it down the line in October and so forth The things of this kind I think the something over which we had no control was the Maintaining of the high interest rates for so long when they pulled down from the great money upsurge of the 80s Which perpetuated the interest rates to the point that I think they were responsible for the? Step off the cliff. I can't say this recession did not begin in July of 81 this This recession has been coming on for several years and gradually growing worse As we were able to talk about in the in the campaign President knowing what you do now. This is really a follow-up there's question Is there anything that you yourself as as president would have done done differently in those two years? With the with the economic knowledge of the economy that you're now Well, I could have demanded a recount But No, we tried very hard and I think that the I think in the compromise on and all we We did get a goodly share of what we asked, but I Can't think of any place where we would have changed courses drastically Mr. President do you wish now in hindsight that you hadn't started out with such a very tough Rhetorical line about the Russians in the last two years I think many observers think that you've been in a push-pull situation one day as In London talking about a crusade for freedom the next day as in Vaughan talking about accommodation of the Soviet Union And just this morning the Soviets are saying that they will break off the arms Negotiations if we go ahead with our missile deployment in Europe. Where do we stand there with the Soviets? Well Sam let me let me jog your memories a bit in that first press conference across the street The question that was asked of me was with regard to My personal trust in the Soviet Union that did I trust and believe in the Soviet Union and I did not Render as an opinion of mine The things that I said about them My reply if you want to go back and look it up was that this is what they said of themselves that they reserve these rights to Break a promise to change their ways to Be dishonest and so forth if it furthered the cause of socialism now just the other day one among you somewhere has written and Commented on on that and has quoted the ten commandments of Nikolai Lennon that he He printed as the ten principles guiding principles of communism and they're all there That Promises are like pie crust made to be broken and he went right on down the line that You that the Soviet Union considered the and I use this I quoted this two years ago He said that the Soviet Union Believed that the only morality was that which furthered the cause of world Socialism that they recognized nor their immorality no and I said I'd recognized Leslie in the dog. It what could I have a follow-up on that? Yeah, because I asked that question and the question roughly was mr. President Do you think the Soviets really want a true detente or they act after world domination? What do you think they're going? I thought there was something in there about trust two years later, sir What is your assessment now? We're going to continue because we believe that the Soviet Union has some problems of their own that have to be resolved and In these negotiations that are going on we think that it would be in their interest as well as ours That's why we are so hopeful and optimistic that something can be gained here that they Cannot go on down the road. They're going in a perpetual arms race and so We have this is This is one of the things in connection with our own arms race It gives us a leverage that has brought them to the table in the first place now We know that the thing they don't want above all is the placement of a deterrent to their SS 20 missiles in Europe and We claim that the to Continue to stand there with them having enough warheads to literally wipe out every population center in Western Europe With no deterrent on our side and the NATO allies recognize this and we have said With their at their request that we will provide a deterrent But we have said it would make a lot more sense if we simply Rather than two sides facing each other there with these missiles poised at each other if we simply went to a zero option Now they've agreed halfway with that. They want us to remain at zero And they're willing to trim a few of their warheads if we will I have two questions. One is you seem to be saying that you do not trust the Russians at the negotiating table Are you saying that you? No, no a negotiating table. They've got to make proposals which we can then counter and we keep on Negotiating this is a little bit like haggling over the price What the pie crust you're saying well they make promises that you can't ah, but now this Is why the most important part in arms negotiations from our side must be verifiable We must both agree To the right of each side to verify that the other is doing what it said So you there is some trust that you can build into this. Is there any? flexibility in your zero zero proposal I think if I the trouble is if I answer that then I'm getting into what I said I wouldn't talk about the other day you can't you can't talk openly about Strategy or tactics we have said and we stick to we have said that we believe the best solution for both of us is Zero zero both sides, but we have said we also we will listen to and negotiate Any fair proposals that are made this is beyond negotiating at the table. It's become a public relations propaganda Campaign that the Russians are waging in Europe Do you not want to jump in and get in the propaganda thing and an answer? Well, it's to the public. Yes, the answer to the to that is not propaganda's public relations There is no question their goal is that whatever they do they do not want us to implement the plan of placing even one of those missiles in European soil and We are just as determined that We are going to stay on schedule with that and when I say it's public relations in our part It requires us to remind those people that are hearing this propaganda both here and in Europe That what the Soviet Union is demanding is the right to maintain enough intermediate range nuclear warheads To literally as I say hit every population center in Europe, but they don't want A single weapon of a deterrent nature to be there on the other side And when the people realize that I think the people living in those population centers are going to have something to say Mr. President, I know you have been trying to make taxes more equitable Are you going to push for the flat taxes so that the taxes will be more equitable that those in the high brackets Don't have to pay for everybody else continuously as is now the case while some in the lower brackets are not paying their share Thank you framing the question that way most of the people out here have been commenting on that a different way as if we are We're making it possible for those in the upper brackets to do better We are that is a thing that is we've agreed to look at to study In connection with what we think is the top priority in taxes in this country Is to have a tax system That the people can understand our income tax has become so complicated That virtually no one can handle their own tax affairs And in looking at that we're going to look at that we're looking at all Kinds of other things we've made no decisions yet Were you confirming the reports that the soviets have threatened to pull out of start If we deploy the missiles and I'd like to know if they do what are you going to do about it? We have only heard that as a rumor We have no report that that is an official demand of their negotiating. I've got to get back into the room a little Will you beat those such a revealer I am determined that the Two remaining Tax cuts of our program Will be put in place that is the 10 cut in july and then the further indexing to stop government from Making a profit on inflation because when government does that it becomes too tempting to government to do the things that create inflation I'm sorry I don't know They tell me we're gonna do this more often so there'll be another chance I'll tell you the next time the next time I promise you I'll start at the back of the room and ask questions coming down this way instead of the other way around But the this question was am I concerned about being identified as looking at them looking too much like a moderate I have to say you must be doing something right When you're getting rock-strow nature from both sides The man from the mansion What's the grade you'd give yourself