 In a world wracked by hatred and economic crisis and political tension, I think America remains man's best hope. In the Middle East, our Marines are part of a multinational peacekeeping effort to provide stability until the government of Lebanon can regain control over its own borders and its own land. The fragile ceasefire, barely a week old, represents an important step toward peace. And now that the guns are relatively quiet, the different sides can hear each other talk, and the peace process can go forward. In our search for peace, we have a comprehensive agenda of arms control negotiations underway with the Soviet Union. And for the first time, we're actually talking about reductions, not just ceilings on weapons. We insist on balanced agreements that protect our security, that provide greater stability and that are truly verifiable. And these requirements are the essence of fairness. They would provide greater security for all nations. I'll be the first to admit that we've only begun to do what's necessary. But a new mode of optimism is spreading across our country. People are feeling more confident, I believe, and believe that we'll continue and go forward. America will be exploring deeper in space, crossing new frontiers of high technology, making new medical breakthroughs, and we'll be doing it for the benefit of mankind. We've made a new beginning, a dramatic and a far-reaching step toward a much better future. And I've talked too long in a monologue and understand that we've got a few minutes left. We can have a dialogue. Yes, I don't think they are at all. I think they're more realistic than they've been in a great many years. The Soviets, you don't deal with them on their moods and whether they're upset about something or other. They're not that kind of people. And I think since that great tragedy, more of the world understands what they are and what we're dealing with. And I think that they have a greater understanding today of where we're coming from. They don't have any doubts about where we are. And they realize that they have to talk with us. They have to deal. I don't think they're there at the table for arms negotiations because of any great desire to reduce their weaponry. They're there because they know that common sense dictates they'd better be there. I think it was all explained in a cartoon when Brezhnev was still alive that many of your papers ran, a cartoon where Brezhnev was talking to a Russian general. And he said, I like the arms race better when we were the only ones in it. Now, I don't mean that we want to be in an arms race, but I think they know now that we are determined to provide for ourselves in the free world and with our allies, the free world, the defensive strength that is necessary to deter a war. And I think they also know that if put to a real test, they could not keep pace with the free Western world if it came to that. So the best answer for them is to sit down with us and work out a fair and equitable arrangement before they find themselves outproduced and can't do anything about it. So my belief is that one way or the other, they can have peace with us, and it's up to them. The arms race decided that way or decided in a common sense, stabilization and reduction of these weapons. No, I've maintained a contact with them. We have an ongoing contact, and their outbursts and their words, they haven't said anything they haven't said before. Well, I don't believe that the deficit automatically, there's been any evidence that that automatically must be followed by high interest rates. We inherited 21 and 1 half percent prime rate. It's down to 11. I think we're going to see the interest rates very shortly coming down further. No question about the need to eliminate the deficits. The deficit right now is about 55% structural. It is built in to our government programs and spending. And about 45% of it is cyclical. It is due to the recession that we're in. As you know, their way of figuring this is that every percentage point of unemployment above 6 and 1 half percent means about $30 billion added to the deficit. Well, that means that our 9% or our 3% above that means that $90 billion of that deficit is unemployment. The other, the structural is the thing that I've been trying to get at with the Congress. Had we been given by the Congress all the spending reductions that we asked for, the deficit would be $40 billion less right now than it is. Now, we did get substantial portions of the cuts we asked for. We need more. And we're going to keep on that. The deficit situation has been brought about by government policies that never have made any pretense of approximating outgo to income. Let me point out to you that one party has controlled both houses of the legislature for all but four years. Well, no, now these last three, all but seven years. For 43 years of the last 50, back to 1933, three years now we've had one house, but in only two previous periods, two years under the Truman regime and two years under Eisenhower. Was there for each of those brief periods a Republican majority in both houses? Their economic policies, let me jog your memories back a few years. They said that we didn't have to worry about the national debt, that we owed it to ourselves. And they said that deficit spending and a little inflation, deliberate planned inflation, was necessary to maintain prosperity. The name for it a decade or so ago was, it was the new economics. Well, I was out of the mashed potato circuit long before I ever thought I would be in public life. And I was speaking at the time that a little inflation is like a little radio activity. It's cumulative. And you can't control it. And eventually, it gets out of control as it did. So I assure you that we take the deficit seriously. But I believe the best answer to the deficits is to continue the program of trying to restore the economy. Economic recovery, not the easy fix of a tax increase. We had one proposal in the Congress already for increasing our taxes, about $72 billion. And this was put out on the basis of the deficit. But if you looked at the budget that accompanied it, they had already asked for new programs that would have spent more than the $72 billion. So I don't happen to believe the taxes are the reason for the deficits. I think it's government spending. And we've got to get it back under control. I've never had it asked that way before. Let me just say that that's a decision that I don't feel. If I make that, when I make the decision, it should be the latest possible moment, one way or the other. One way you're a lame duck, and the other way you're a candidate, and everything you try to do is viewed as political. I have always said, I think the people let you know whether you should run again. And I'll make my judgment based on what the people think. Now, the only thing we're trying to do is ensure that the things are not done, things are not spoken and written of, that can directly affect very sensitive areas with regard to foreign policy with what we're trying to accomplish. For example, one book that was written, Taking Advantage of the Freedom of Information Act, has resulted in the death of some of our intelligence agents throughout the world. When someone writes a book and the avowed purpose is to identify our intelligence agents wherever they are in the world, this is like imposing a death sentence on each one of them. By the same token, I have to say that some of the things and some of the things that appear in the press and probably with the best of intentions have not been sensitive to the embarrassment that it can cause us in our relations with other countries, because they get everything that's in our press and then they say, well, they haven't. What's this? And we're in the lame position of saying, wait a minute, that isn't accurate and that isn't the way we feel and so forth. I don't think there's any one of us. I'd be the last one coming from the business I was in to want censorship and we don't want that. We don't want to impinge on the people's right to know, except that I think the American people would be the first to say, if you can't tell us without telling people that shouldn't know the enemy, the potential adversary, then we shouldn't know either. Maybe I shouldn't go any farther, but I'd like just to explain one right now. The media hastily, as late as 24 hours ago, said that I was canceling the Asian trip that had been planned for November because of the lack of, or the fear of a lack of security in the Philippines. This had nothing to do with it. In fact, we sent someone who was still out there to each country to explain that we weren't ducking anyone. We were postponing a portion of the trip after we learned that the Congress was not going to be in recess. But immediately, those heads of state that had been planning for a visit and we had to say, please let us postpone it, not cancel, postpone it. Those heads of state now must be saying, well, wait a minute, have they been affronted? And if so, then this would be a serious problem with our relations with those other countries. So I think it's just a case of we have to have more responsibility. Incidentally, since you open up the matter of defense, could I just say one thing that I think you more than anyone else should know? These many horror stories that are out now about $900 for a plastic cap and $110 for a four cent gizmo for defense repairs and everything. Not very many have pointed out those are our figures. We're the ones who found those things out. We've already had 650 convictions for that kind of shenanigans and hundreds of out-of-court settlements in which no action was brought. But the impression the people, a mistake was made, he recognizes that too. And what he was trying to say was not based on any malice, any prejudice of any kind. He was in fact trying in answer to a question to point out that that commission that had been required by Congress was typical of our whole society and that it crossed racial and religious lines and so forth. If there was any bigotry or malice in the man, prejudice of any kind, he wouldn't be a part of the administration. But I have to weigh the record of what he's done and the record of what he's done in that office is not that has been portrayed by some elements of environmental groups. He has done a fine job for this country. I don't think the national parks have ever been in better shape than they are today. Now, yes, it was a stupid remark. He recognizes that. But Jim Wright, the majority leader of the Democrats in the House, I think put it succinctly and correctly. He said, yes, it was a grievous error, but he didn't think it was an impeachable offense. And I don't either. You sure I couldn't take this one over here, Larry? Yes? Prospects for peace in the Middle East. This, no one can be a prophet about that when one looks back at the thousands of years of history of the area. We have made some progress. Our original plan a year ago was for peace in the overall area. It was not that Lebanon itself was just the sole problem. Lebanon was a problem that had to be solved because since 1974, when it had deteriorated, there was virtually no government in force there and there were rival, I call them warlords, each of whom had his own militia and they were fighting each other as well as everyone else. The Israelis had crossed the border because the PLO was using, were shelling and killing innocent people in the villages and towns along that border. The Syrians had come in from the other side. I proposed a peace plan that called for the withdrawal of all forces from Lebanon and then the going forward between all the Arab states and Israel with peace, in other words, to try and find more Egypt's. Just as Egypt, which was the principal enemy of Israel, they came together and have a peace treaty was signed. We've been working with the moderate Arab states. We've made great progress there and that one time hard and fast position that they did not recognize Israel's right to exist as a nation. That, I think, is virtually erased and they are in a position where they can sit down and negotiate. But in the meantime, the problem grew worse there in Lebanon, that idea of getting them. We sent in part of a multinational force, our allies, England, Italy, and France, to hopefully, as a government was established in Lebanon and the PLO had been driven out, although many have infiltrated back in, that as that government then created its own military and we've been helping train the Lebanese military and it is a good military body now as a result of that training, that as they then moved out to take control of their own borders, restore their sovereignty over their own land and territory, that the multinational force would provide behind those troops a kind of a stability. This is still the purpose and the goal. Finally, we have achieved that ceasefire. It's very uneasy and I know that there is great ingrained hatred between many of the factions that are involved and I can only hope and pray and at the same time, let me point out, hasn't been getting much attention. We have had diplomats of our own there shuttling back and forth between Damascus and Beirut and Tel Aviv and Saudi Arabia working literally round the clock and they have had a great hand as has the representatives of Saudi Arabia at our request in bringing about this ceasefire. I am still hopeful that we can end the bloodshed there. People ask, what is our stake there? Why should we be there? Can anyone stand by and believe that the United States and the Western world don't have a stake in the Middle East? Western Europe and Japan's industry would grind to a halt if the Middle East came under Soviet domination. So it is vital to our own welfare and security. It isn't us just interfering in someone else's affair or altruism on our part. It is very vital to our security. We're going to stay there as long as there's any hope of bringing a peace. And I know I shouldn't conclude with telling you this but sometimes I remember a story that's been told about the Middle East. Of the scorpion that came to a stream, asked the frog to ferry him over because he couldn't swim. Frog says, you'd sting me and I'd die and the scorpion said, don't be silly. Why would I sting you if I'm in the middle of the stream and I can't swim? Then I would die too. Well, that sounded logical. So the frog said, get on. In the middle of the stream, the scorpion stung him. And as the frog was dying, he said, why? Why did you do that? Now we both die. Scorpion says, it's the Middle East. Well, I know I have to go now. Thank you all for being here. I should have talked less at the first and take another question.