 Mr. President, I'm going to see you here, sir. I'm going to see you here for a second. Hi. I'm going to see you here for a second. How are you doing? That's terrific. You're still working out every day? Yep. I don't think I was as sick as they made me out to be. In fact, I wasn't sick at all. As I told some of your colleagues yesterday, all I had to do was get over the incision. Are you working with the Nautilus machine still? Yeah, back to the same routine, even the same weights that I was doing before. I reduced those to start with. I didn't want to burst any stitches. But now it's all back to normal. Well, since we have so little time, perhaps we should go ahead and start if you don't mind, sir. Fine. We'll go far away. Mr. President, you've been briefed by Secretary Schulz on his trip to Moscow. Are you disturbed by the way the summit is shaping up as a result of that briefing? No, not at all, because obviously that trip wasn't to do any negotiating. It was to explore, well, to give to them what the ideas were that we thought should be discussed, that were of interest to us in the summit, and to find out from them what it was they wanted to discuss. And to that end, I think the meeting served a useful purpose. I think also, though, that what George was trying to do was to... There's been too much of a tendency to try to build a euphoria in advance. And none of us are euphoric about this. We realize that we've got very real differences that have to be discussed. So he was trying to portray that meeting as not anything that should hold out these euphoric hopes. The reports indicated that Mr. Gorbachev felt that one of the dominant influences on American foreign policy and its formulation were the military industrial complex and anti-Soviet extremists. How would you try and convince Mr. Gorbachev that his advisors are mistaken? I think that would be very easy to do. Because the way he presented this, that this could have such an influence, you only have to look at what is the percentage of money being spent on these weapons systems. What percentage is that of gross national product? And you see that that's a very minor element in our whole economy. It could not possibly influence national policy. And once he understands that, and I think this is the way to point it out to him, I think he'd understand that then. One of the other things that seemed to be unclear on his part was his limited understanding of the reasoning behind which... How would you somehow rather get him to understand the reasoning behind which he advanced that policy to a national goal? Well, the whole thing started right in our cabinet room, and I started it quite some time ago. That was when, meeting with the Joint Chiefs of Staff, I brought up the question that all these years of the development of nuclear weapons, this was the first weapon in the history of man that had not led to the creation of a defensive system against it. And I wanted to know their own thinking about, was it worthwhile looking into this? Is it possible to come up with a defense? And they were all agreed it was. And right there was given birth to the program to go forward and see if such a system can be perfected. Now, I think when he understands that what I've been talking about here is that we're going to go forward with that. We're not going to halt research into something that could be so important to all mankind, just on the hope that they might agree to a certain number of weapons done away with on both sides in our nuclear arsenals. But that if and when the research would reveal that such a weapon is practical, it could intercept missiles on their way to the target, then I believe that system should be used to bring an end to the threat of nuclear war. And I really mean it when I say that I would like to propose then with all the powers that have nuclear weapons, we sit down and work out an arrangement if possible where they will all agree to eliminate the weapons in return for which we would make this defensive system available to all the world. And if they wouldn't do that, that did not mean that we would forgo deploying that weapon or that system. And so there was a mistake in interpretation several days ago about whether I was giving them. I think I resolved that with two words the other day. You mentioned research. What about testing and development as a different category for SDI activities as distinct from research? Are you committed to going ahead with testing and development as well, or is this something you would be prepared to negotiate? We believe that all of that comes within the ABM Treaty. There have been protests from the Soviet Union that that isn't true. Well, we claim they've made some violations of the treaty, but we're not talking about violating the treaty. We don't think that that point comes up until you get to deployment. And then before deployment we would seek this kind of an agreement that I mentioned. So it's happening short of deployment that you feel is permissible under the treaty? We believe that research in this process is covered by the, or is well within the bounds of the treaty. One of the other things that was indicated was that Mr. Gorbachev apparently was fairly combative and since ideologically combative at the sessions with the Secretary of State and his party, how would you propose to deal with him in the sense of a negotiating technique under those circumstances? Well, I think that is understandable. No man would be in the position he's in unless he adhered to the Soviet policy of communist philosophy and so forth. But I don't think that that's necessary to try and disabuse him of his beliefs. We have to live in the world together and I think the idea is to point out to them that we're not out to destroy their system or change it and we're not going to allow them to change ours. But if we recognize that it is an advantage to both of us to have continued peace and go forward with the systems under which we presently exist, but to eliminate the distrust between us, if they believe that we represent a threat to them in some way, I think all the evidence is on our side that we don't by going back to the years following World War II when we were the only major nation in the world that had not had its industry pounded or rubble by bombings, our military strength was at its very height. Even though we had grievous losses in the war, we had not been in it that long that we could match the other participants in that regard. And we had the ultimate weapon, a monopoly on that weapon. And it seems to me that to point out that in all those years we not only did not take advantage of that strength when we could have dictated to the world, but we at that time when we had the monopoly to try to introduce measures that would place nuclear power of that kind in international hands so that there wouldn't be any country with a monopoly on it. And the contrast is their vast military buildup which is basically offensive, not a defensive buildup as ours is, and their aggression, their policy that has taken them into Afghanistan and Ethiopia and South Yemen here in our own hemisphere. And that if there's anyone that has a right to believe they're threatened, it is the West to believe it is threatened by the Soviet Union. Do you think you might be able to persuade Secretary Gorbachev to agree to a set of principles in terms of helping accelerate the development of an arms control agreement that might guide the negotiations? Let me put it this way if I can, and I don't mean to talk too much about negotiating tactics in advance, then those tactics become useless. But if we can convince them, well I summed it up the other day in a line that I wish I could quote the individual, it was published and I read this one line and I think it describes exactly what our purpose should be and that is that nations do not distrust each other because they are armed. They are armed because they distrust each other. So our negotiation should be aimed at eliminating the distrust and this would require not just words between us but deeds, actions that we both could take that would help convince the other that we meant no first strike or no harm. Mr. President, do you believe as some authorities do that you are going to Geneva in an unusually strong bargaining position? Well I think compared to previous years, yes we do have a strength that we haven't had in times before this, both military and economic and therefore we certainly don't go ahead in hand and I believe it will aid us, not in imposing our will on someone we don't intend to do that but it will aid us in convincing them that there is an advantage to both of us in arriving at a better understanding than we have now. And by what standards would you feel that you had come away from a successful summit? By what standards should we judge? Well for one thing if we had set a plan for continued negotiations I don't think you solved all the problems at once that we were going to go on seeing each other and working on these various problems if we could eliminate enough distrust that both sides recognize that the problem of arms control should now be turned over to our negotiators in Geneva to see it because they have said what we've said. Remember they are on public record of claiming that they would like to see the elimination of nuclear weapons and certainly a reduction that might eventually lead to that. Well if we both are agreed on that then we certainly ought to be willing to find a way to get at it. Could I extrapolate from that question Mr. President? Do I understand from what you're saying that you might expect yet from Geneva some kind of formal commitment from you Mr. Gorbachev that would then be turned over to your negotiators to flesh out? Yeah I can't believe that we will deal with specifics and numbers. The difference is between us now because it's apparent that we've agreed to some of the terms that they submitted in their proposal. Well this to me is the first time I believe that I've seen that any beginning of real negotiations having been engaged in negotiations in the labor management field on labor side for about 20 odd years. I've always believed you go in with your proposal, there's a counter proposal and you keep on going until someplace between those two you arrive at something you think is mutually satisfactory. Well now this has happened to us here with their return proposal. Ours now reflect some of our thinking in our original proposal but acceptance of some of their terms. Now if they're ready to continue with that process that's where it belongs and I think we'd be somewhat wasting our time if we tried to fight down to the wire on individual weapons or things of that kind in Geneva. I think the base that to me discussed there is much broader than that. It isn't really just a thing of arms control to be settled there. What is to be settled there is the thing that would make arms control a natural follow up. Could I turn back to SDI for a moment Mr. President? Many experts seem to believe that if we pursue SDI the Soviets will massively increase their deployment of ICBM. Now isn't there a difference there for if increasing their first strike capability against us faster than you could increase defenses? Except for one thing, while we're going forward with this SDI they're going to have to understand that there's no way that we will let them achieve a great superiority in arms that puts us at risk. Now if they're prepared to face that, that we're determined that such an edge will not be given then I think they'll see the wisdom of discussing what we're going to do. So you'd like to see them hold offensive weapons in place while the exploration continues as to whether they're about to reach anything? Well or what has been proposed by both sides. Both of us have expressed the desire to reduce the number of weapons and I just have to believe that when they understand that we really mean that we're not trying to develop a defensive weapon in order to obtain a first strike advantage but in other words we'll sit and talk with them before we take advantage of that weapon if once it is proven practical. Right about my follow-up on that sir. The Soviets are arguing publicly that as a condition for reducing offensive weapons the United States must agree to some sort of limitations on testing and development of our defensive weapons. Are you prepared to negotiate testing and development? No I think that's a part of research and the other point that has been brought up here but that we might as well face. The Soviet Union is far ahead of us in this same kind of research. They started it years ago. They've been engaged in it in a whole defensive pattern and I think maybe one of their concerns is just that they're afraid we might get it before they do. So in fact you're saying that research as you've defined it is non-negotiable that the offensive question ought to be discussed separately. We are going to seek to find out if there isn't a defensive weapon to match this offensive weapon. Mr. President could I follow up on that? Is your SDI non-nuclear? I think you've said that in the past. That's right, yes. But we seem to be continuing underground testing of nuclear versions of SDI. Well, you must remember that we are still playing catch-up with them on nuclear weapons. They are several systems, new systems ahead of us in their modernization program. And so our testing is routine because down the line we have several projects on the drawing board that if need be, they obviously would probably be eliminated if we achieved an agreement on reduction of weapons. You don't rule out a ban on testing such as the Soviets have started. Mr. President, is a possibility, is it, a total ban on nuclear testing? I think their proposal of that was unfair in that as I say they are ahead of us and we're playing catch-up. And sure it would be a great advantage if they could say a moratorium on testing and they would then have a built-in superiority and we would be prevented from trying to overcome that. Mr. President, one of the contentious issues has always been verification of any kind of nuclear arms control agreement. In the recent interviews which we had and so they indicated that they were prepared to accept additional technical means and onsite inspections both from America and from international bodies. Do you think this offers hope for a substantive agreement on the issue of verification? We hope so. That recognition of the need for that. Because that has been one of the failing points in all the previous arms negotiations. Reluctance to allow any real verification. Indeed we have charged them and they know with encryption on some of their testing and that is actually by treaty ruled out that our technical instruments that can track one of their tests and know the power of it and all of that they have taken actions that are really forbidden by treaty to prevent our from being able to get that information. Mr. President, I want to move on to the question of past Soviet violations. As you know the Defense Department is now in the final stages of preparing its report and expected to show that there have been Soviet violations of SALT II. If Mr. Gorbachev does not give you sufficient assurances in Geneva that he will comply with SALT II will you continue to honor the terms of SALT II and expires at the end of this year? I thought I made that plane when we said that we would continue the restraint that both had pledged to follow under SALT II but it would be dependent on the Soviets practice their restraint also. Obviously we're not going to sit here and stand by if we're the only ones that are practicing the restraint. So will you be asking in Geneva for assurances on that point? I think that that will probably be discussed yes. Sir, in the past you have also described the Soviet Union as an evil empire that reserved the right to lie to each field. After all your preparations for Geneva, do you still hold that view? Well it really wasn't my view that happened in the first press conference I ever held as president and I was asked a question about whether we could believe them and what I cited and quoted were statements by their own leaders over the years that summed up in one sentence are that there is no immorality in anything that furthers the progress of the world's socialist revolution. So we seem to be the only ones that in our philosophy are bound by morality. But you haven't changed your views of the Soviet Union as a result of all the preparations you've been doing here in the last few weeks? I'm hopeful that as we've just been discussing a lot of verification that they are now going to agree to something in which we won't have to just take each other on good faith. We'll be able to prove what's going on. Mr. President, would you like to have annual summits for the Soviet leadership? Is that something that you'll be asking for? Both of us, both sides have talked about the possibility of additional meetings and so forth and I don't know whether we would set this to a final schedule and so forth but I would like to see us because as I say, I don't think everything's going to be settled all at once. I would be willing and will probably propose if they don't that we again have future meetings and in exchange of them in our own countries instead of going to a neutral country. On an annual basis? I hadn't thought particularly about setting the actual time but I think it would automatically follow that yes, we'd be talking next year and the year after. If we could change the venue from Geneva back home to Washington and some of the domestic problems. Your proposal for tax reform seems to be flying in part in the House Ways and Deans Committee. Can you sketch out your strategy for the rescuing? Well, we're trying and I know that Chairman Rostankowski is also but it is true that there are many special interests that are trying to promote changes here and there which I think would water down the whole idea of fairness and simplicity in that. We of course have registered our disagreement with a number of those things and I think that there's also some of that is being brought about by members of the Congress who don't want tax reform, who like the system the way it is. In the past you have made it pretty clear that some elements of this package are you're my non-negotiable I bring up state and local taxes for instance or maybe the top personal rate of 35%. If Congress sends you legislation that is significantly different than what you sent to them would you accept it, would you veto it, would you put it in your polls? Well I can't make that decision until I see what they come down with. What the tax reform must be is first of all revenue neutral. It must not be a concealed tax increase which most people in this country have cynically and with justification come to expect that in the past when they've heard somebody talk tax reform that usually winds up as a tax increase, that it must be fair and it must be simple. One of the main things I think the American people are more fed up with the present tax system because of its complexity than they are because of the amount of tax. Let me just follow. Just one more thing. You mentioned water in there. Could you be specific on which elements of the package are watered down? I don't know because it's still going on up there and I haven't wanted to make Chairman Ross Nkowsky's task any more difficult but I think what it deals with is constant coming back in with putting back loopholes that we think should be eliminated. And I think part of this is you can look at any of those loopholes that were put in for a legitimate reason but they were put in when tax rates were extremely high and I don't think that some of their arguments have looked at the fact that you can take away a loophole and the reduction of rates that it's proposed will make you getting a tax cut rather than a tax increase even with the loss of that loophole. I know that in my own state of California the tax franchise board which is not exactly given to wanting to reduce revenues, they did a study and they said that the people even with the non-deduction of state and local taxes would be better off with this tax program at the new rates because those are pretty sizable reductions in rates. I don't know whether offhand I can remember one example of the figures accurately so please caution or heed that caution on it but there's something, there were some figures of study recently that showed where just a few years ago only 3% of the taxpayers in this country were in a 28% marginal tax rate and I think you'll find now that over 40% of the taxpayers are in a marginal 28% tax rate. Now this doesn't mean that more than 40% have now increased their revenues that much. They've increased the number of dollars but in this inflationary age we've been through the number of dollars does not reflect increased purchasing power. As a matter of fact the average wage today is about, well it's more than 100 dollars above what it was in 1977. $189.77 is $299 now but the $299 in 1977 is only worth $171. So the people have taken a cut. What about the deficit Mr. President? You've backed the Graham Rudman idea but some of your advisors are getting cold feet about it because they think it will lead to cuts in defense or a tax increase. Where do you stand on that now? Well I'm concerned there as I am with I think the same thing is happening now as they debate this as it's happening with the tax reform that the original proposal of a five-year plan of continued decreases aimed at and succeeding in getting a balanced budget is now their method of arriving at these reductions is being debated and discussed and proposals are being introduced that I think would make that good sound policy of Graham Rudman's hollings as unacceptable in the basis of what it would do. And one of the targets is defense. There are factions in there. The same group of people in the Congress that passed 033. Now I bought that. That resulted to get zero as you know as no increase other than inflation for 86 and 3% increase and 3% increase for the next two years. That to achieve that brought about a sizable reduction of the defense budget. But we accepted that now without even allowing it to go into effect. The same Congress is up there introducing amendments and so forth that would eliminate that and would further make big cuts in the defense spending and cuts that I don't believe we can afford. And certainly I wouldn't want to go to Geneva with those cuts in my hip pocket. So the last version of Graham Rudman is unacceptable. What they're talking about is unacceptable. And you from the line in the sand you're going to insist about 3% increase as you've agreed on that. And I don't think that Congress who passed it and agreed to it should now in a kind of a sneaky manner attempt to throw it out. We asked you about the Supreme Court sir jumping to another issue. As you know the Supreme General Meese has said that the Supreme Court has not been following the original intentions of the founding fathers and ruling on such issues as a prayer of criminal rights. Some members of the court as you know have spoken up publicly to this agreement saying that the law has evolved over time and we must pick into account by the factors. Could you tell us your views on that? Yes, I think that over recent years we have had courts that tended to legislate rather than interpret the Constitution. Now the idea of prayer is kind of strange in a body that it opens with prayer and that has over its doorway in God we trust that amendment with regard to religious rights and not only prohibited a state religion, a state imposed religion but it also prohibits the state from interfering with the practice of religion. And I don't believe the right of an individual. I am opposed to the idea of a formal prayer in school and a dictated prayer by officialdom or school authorities or anything else. But what I am in favor of is eliminating a decision or a rule that sends through all the generation of young people coming up through our schools prayer is unacceptable in certain public areas. Congress of the United States opens with prayer. And so I think that the Supreme Court went beyond its province there. I think at the same time with regard to some of the other things that the Attorney General has been criticized for. I believed in affirmative action and civil rights before there were anything called affirmative action and civil rights. I was raised in a household in which the only way you could really get in trouble with your mother and father was if you showed any evidence of prejudice against anyone and were instituted by faculties in schools or universities. Hospitals had them to prevent them from having to accept people of a certain religion so forth there. And I think that any place that we see now that affirmative action is being distorted to mean the re-implementation of quotas that isn't what the Civil Rights Bill was all about. And anyone who wants to argue in that favor just look at Hubert Humphrey's own words about it in which he said this was civil rights was not put into effect to militate against anyone. You intended to sign an executive order that effect. Yes. Mr. President, you're known as a lucky man. Last question. Last question. Almost a blessed one as a politician. And during your presidency you've survived an assassination attempt and come through a serious operation. We're very pleased to hear that you're back up to your best weight on the Nautilus. But right now you're on the verge of what could be a turning point in your tenure. And we wonder if you ever wonder late at night where that luck comes from and will it hold? Well, luck. Sometimes I think you make your own, but I've always thought that maybe what some people are calling luck is just answers to prayers. Incidentally, I've got to take something back here. I realize I did something out of line when I said I would sign an executive order. I just realized that this is the point at issue. And I guess what was in my mind is that I would be willing to support such a thing to ensure that there would not be quotas. But I don't think I have a right to say that I would sign what is at issue now until I have let everybody have their say at me. And here they are. Thank you very much. Thank you very much. It's a pleasure. Enjoy. Thank you, sir. Thank you. Good luck. Yes. The doctor shut down the Soviet Union. And then somehow they got around to other talks. And so when Charlie asked him about the divorce rate, he said it's going up very steeply. And Charlie said all of them. And what he said, now that the fellows have to go home sober, they should go home sober. They stopped serving breakfast until two o'clock in the afternoon. That was the regulation of the past. And now when you go to a restaurant, they only start lunch until two o'clock in the afternoon. Thank you very much.