 Mr. President, of course, beyond work from Moscow, so I simply would ask you for your reaction or your disappointment that there was no date or sunset or are you so hopeful that you can have one sometime this year? Well, of course, it was just a case of they said they wanted such a thing and agreed to it and to be held here in this country. But so far I have not set a date, so I'll remain hopeful and think that we can have it. I understand there was some progress made out of the talks on the intermediate range. Mr. President, do you think that the setback in Moscow helps a cooler period in U.S.-Soviet relations or you're very confident you can go on ahead and get the agreement? I have to believe that there is an effort being made on their part as well as ours to make the cold world a warmer and right way to save us a little less cold but also a little less warm. Mr. President, the seeking points would be SDI. I think we're better than they can attest and your position on it will achieve an agreement on this. No, I have said from the beginning that this world which has no defense against nuclear weapons, the only so-called defense from that policy that truly is mad, mutual assured destruction, and I have spoken with several parliaments throughout the world of legislatures and each one of them said that I don't believe that nuclear war can be won and it must not be fought. And recently, Foreign Minister Sheva Nazi here in this room repeated those words to me as being his own belief. I cannot make that a bargaining chip. We have the prospect of a defensive system that could practically make nuclear missiles obsolete and I have said over and over again that if and when we have such a system we wouldn't use that for our advantage offensively against any other nation. We would make such a system available to the world on the basis that we all then agree to eliminate totally nuclear weapons. You see, we know how everybody in the world knows how to make them. So to set out to try and rid the world of nuclear weapons knowing that someday some mad man might come along as we've had in the past and make some and try to blackmail the world but if it's a little bit like when we after World War I one outlawed the use of gas. We all kept our gas masks and this is what I think this is like but I have made it very evident that we would not use this to create some kind of first strike capability for ourselves. We would use it if anything to eliminate nuclear weapons. Mr. President, what is in SDI for Europe for the protection of Europe? What's that? What is in SDI for the protection of Europe? All right, along with all of this I have said also over and over again comes the negotiating balance on conventional weapons. I think we're all aware, well aware that the Soviet Union has a conventional weapon balance or superiority over NATO and we would never abandon NATO or our allies on this and so far nuclear weapons were supposed to balance that imbalance. Well, before we would ever rid ourselves of that it would also have to include a redressing of the imbalance in nuclear or in conventional weapons. Mr. President, don't you think that Mr. Gorbachev is trying to take advantage of the fact that you seem to be in trouble with the Congress about SDI and other things and that you need a summit politically? You're very perceptive. I have to say we have felt for a long time that the Soviet Union stays very well informed on our Congress and its doings and they're well aware that something here that could not take place in their country is the fact that we have a Congress of an opposite political philosophy from the executive branch and yes, I must say that some of the things that are being proposed in our own Congress sound as if they're sitting on the Soviet side of the negotiating table. Mr. President, how would you explain especially to European audience what has been happening and is happening at Wall Street this week? Well, they've had a few things happening in their own stock exchanges around in the world. I think partly it is a long overdue correction. Now what that means in the marketplace is that speculation in stocks and so forth has overpriced the market and there has to be a readjustment but I think the size of this was then augmented by some confusion about the fact that we seem to be unable to get together the Congress again and ourselves on our budget deficit which has been growing for a long time and this is why we... and there were some other things that contributed to it. There was a concern about the money supply while our Federal Reserve Board has immediately made the money supply more liquid and at the same time that had resulted in some increase in interest rates and our private banks immediately reduced their interest rates and that's why I think that suddenly the panic subsided and we've had some recovery and I have... the last I've heard it's about standing even today in the market. Well, that's better than what it was doing but I think the fact that the other day we had the biggest single increase in buying and in points in the market in all our history just as we had had the previous days the biggest single decrease in value but as I say I think this is... and one of the things that I think is going to keep it from coming apart is the fact that our economy is a sounder sounder than it has ever been. We have a higher percentage of our population employed than we have ever had in our history. We have brought inflation down from double digits to where it certainly is easily manageable interest rates down and our productivity rate is up. All the indices, the indexes that are used for determining whether you have prosperity or not all of them are up at a high level. The annual increase in productivity the increase in purchases by the people retail purchases, all of these things are at a high level and continuing to increase. So I think with that it would be hard to have this carry us into a depression. It's completely opposite than the great crash of 1929. Incidentally, let me add another thing too that concerns people and that is with the Congress right now talking a protectionist plan trade protectionist. Well, I can only tell you that if it comes down to me the way they're talking about it, I will veto it because in 1929 the Federal Reserve Board our government tightened the money supply after the crash, reduced it and at the same time then we adopted a very protectionist tariff plan called the Smoot-Hawley Tariff. Well those were all the wrong things. We've just gone the other way here and I say maybe they were nervous about those on the hill who think in terms of protectionist legislation but I think we can stop that. I would never support protectionist legislation. Mr. President, you seem to suggest before that you felt that perhaps Mr. Gorbachev was taking advantage of your position in Washington at the moment. Do you think in doing that he's a dangerous world piece? Well, I don't want to say anything that sounds that threatening. I have to recall that he and I both agreed in our first meeting in Geneva that we had a great, when I say we are two countries but he and I personally had a great responsibility as to whether there would be war or peace and I believe that they want peace as much as we do. I think they would like maybe to win some advantages without war but I think they know at first hand the high cost of modern war. Aren't you then a little bit disappointed in him personally that he did not come over with a date and tell your Secretary of State today that he will be willing to join you here this year? Well, yes, I'm disappointed. We had agreed in 1985 in Geneva that there would be two more summits and one would be in 1986 and he would come here and in 1987 we'd have one in Moscow and I would go there. Well, it never happened in 1986 and there were maybe reasons why it couldn't. He was having to really move into his own government. He had just taken office then in 1985 and I think that that could be excused but now it's getting near the end of 87 and he had agreed to come here and I hope that before the end of the year he'll do so. For instance, there are rumors of war in the Gulf. There are rumors of war in the Gulf, in the Persian Gulf. We all have our ships there, the Europeans and not only the United States. We are very concerned. Some of these decisions have been very controversial for example in my country. Aren't you concerned for what could happen in the Gulf? Well, we're always concerned in the Gulf even just the provocations that they've made so far shooting a missile at a ship and so forth, the laying of mines. But we've had naval forces in the Gulf since 1949. We, just as we have a fleet in the Mediterranean and a fleet in the Caribbean in all those passageways that are so essential to world commerce we believe that we all have a responsibility to make sure that international waters remain open to the commerce of the world. And one country around today seems bent on trying to stop that and we're not going to let them do it. Now I think there's a limit as to how far they can go the very fact that they are engaged in a war with another country. I don't think that they really want to go so far as to find themselves fighting on two fronts and certainly in a war with countries that are far superior to them in power and size and so forth and resources. So we felt that if we didn't retaliate they would strike again. We know the risk that if we retaliate well then they may feel they have to strike again. But what's the difference? Do you sit here and take it? And how many times do they strike before we decide to do something about it? So we just thought that it was time for a warning to them that any time they get out of line that way we're going to punish them. Mr. President, regarding Wall Street some people in Europe blame you and your government for the developments there. What's your reaction on such complaints from Europe about Wall Street? Oh and affecting the markets. Well I think it's an indication of how interrelated we all are now in regard to trade and currency stability and so forth. So that I don't think one can have such a thing happen without it having a world effect. Do you expect the need for a new summit of the seven big countries? Well not an extra one. They're usually held in May or June and I'm sure the next one will be right on schedule. As a matter of fact we've made great progress in the summit nations with regard to our agreements to negotiate freer trade between ourselves. We have as you know the Uruguay meetings on that and the Louvre agreement on money that is still in effect and has had a great I think great importance to the stability of exchange in currencies. What do you expect from Europe in the economic field today after Wall Street? What has Europe to do? Well it's my understanding that their markets have begun to stabilize just as ours has here. The government? The government's policy? The government's policy in Europe what has it? Well I don't know how much they interfere in the marketplace over there or engage in the marketplace over there but we haven't had any signs that the governments of our trading partners have panicked in any way and we are continuing to improve on as I say the matters of freer and open trade and the Louvre agreement on current exchange has resulted in a great stability between our countries. Mr. President Wall Street doesn't seem to have been very impressed by the fact that you are going to cut, trying to cut by 23 billion dollars a deficit. Don't you think it's necessary to go further to cut more on the deficit? Well the going further is a simple case of getting together. Perhaps you're aware maybe we're not in our system here. Only the Congress can spend money, appropriate the money that's to be spent on various government programs. The President has the right to veto in any disagreement and they have the right to if they can get the required votes to override the veto. But the deficit which has continued out of line we have done our best to in things that we can do at the executive branch and been very successful in this past year because we have reduced the 1986 deficit in 1987 by 73 billion dollars. That's about a 30% decrease. Well every year in our system the President has to send up a budget. What he recommends as the budget. Well ever since I've been here and having Congress and the other party it'll pay any attention to the budget I send up. They just go their own way. And that's true this time. But now we have a piece of legislation which I signed which they passed called the Graham Rudman Hollings. This is one that was supposed to set a pattern of annual decreases in deficit spending to where down the line we can pick a date and see that we have a balanced budget. We brought the government into a balanced budget. They themselves have retreated from that in what the targets are. They passed legislation as to what the targets of that Graham Rudman Hollings bill are. We feel that there is an element up there that thinks the only answer must be increased taxes. But I think this is probably true in your own countries as it is in ours. There is a limit beyond which you cannot go in taxing without becoming a drag on the economy. And when your economy decreases in size and wealth your revenues do. As a matter of fact I get everybody irritated when I cite a man of many hundreds of years ago as I understand it called Eben Kaldun. I don't know that there were economists in those days but Eben Kaldun said in the beginning of the empire the rates, the tax rates were small but the revenues for the empire were great. At the end of the empire the rates were great and the revenue was small. Well we've had that in our own country here we've seen it happen. And right now our revenues as a percentage of gross national product have remained stable. They're the same percentage every year but that means there's more money every year because our gross national product has been growing. Well if the percent of government revenues from taxes remains the same percentage now it's a percentage of a bigger amount. And at the same time what we've seen as the result of Congress's desire to spend the spending, government spending is a much higher percentage of gross national product so that it is increasing above what the revenues are increasing and our disagreement has been and why finally I think we're going to have to sit down together and face each other not the usual legislative process and try to point out that spending is the cause of our deficit and until we're willing to do something about spending it's never going to be corrected. Mr. President, if I may follow up what seems to create anxiety in the world and in this country is your permanent conflict with the Congress and neither you, neither the Congress seems to be in a position to win this conflict. Don't you think that there is a fear of paralysis and that something ought to be changed in the system? No, I think our system is right but there is something that well let me try to be very brief with this under our democratic system here every ten years because of the changes in population and you know we're a kind of a mobile society people move to various parts of the country our constitution provides that the legislatures of our states will every ten years reapportion the district lines for congressional districts so that they reflect the change in population growth and so forth. Well the other party's been in power for quite some time and the result has been that every ten years they have reordered those district lines in order to favor their ability to elect more congressmen than our party can and it's named for a man who first brought that about named Gary and we call it Gary Mandarin and this is so that they what has happened in our system I don't think a founding father anticipated was that a thing like this could happen to the place that the people see I'm the only one well I'm the vice president who are elected by all the people congressmen are elected by a district senators are elected by a state and here they've elected a number of times republican presidents where they're not dictated to by those districts at the same time they continue to send a majority of the other party so you have an executive branch with a legislature of another viewpoint another party. There is one thing however that I think has kept the system from too much harm and that is the presidential veto power as long as we have more than a third of the representatives in the congress that's all it takes to support a veto so I've had to do a number of occasions and will in the future had to veto use that power then the congress has to go back to work and usually with the executive branch and find a compromise settlement thank you oh I thought you had another question oh no no no you are going to receive a letter from Mr. Gorbachev soon do you have any sense what maybe in that letter are you feeling like writing a letter to him well I'm waiting to see I just have learned without any knowledge of what's in the letter I've just learned that he is sending me a letter so now on the other hand his wife very graciously sent flowers to my wife when she was in the hospital so we're not exactly snarling at each other thank you I didn't know I was standing they got me well this is thank you thank you