 You don't trust it, so I don't do it. Two, three on each couch. Here's your own machines or anything. Don't get it. We can do it. How you doing? We transcript them. Record them. Where did David sound? Yes. Experienced. Yes. Good to see you looking too awesome. I too, good. Terrible. You got a good script yesterday? Yes. Yes. That's quite a miracle. This is your first meeting? It's not going to be more than that. I met him twice in the Vatican. I met him once early morning in Alaska when our planes were literally coming in and coming out refueling at the same time. Most recently was at the Vatican this year in June in the Economic Summit. And then here. Mr. President, we do want to thank you. We appreciate your time. We know your schedule is limited, so we'd like to jump right in if we can. Mike Kramer just wrote a cover story on the good Mr. Bork. I think he has it. First question. Mr. President, Senator Biden has been criticized for having prejudged Bork before the hearings even begin. Do you think he and the Democrats have something of a hanging jury? Well, it's hard for me to believe in their sincerity, particularly when you read Senator Biden's statement about Bork when he was supporting him for his appointment to the second highest court in the land, the Court of Appeals here in the District of Columbia. He not only went out of his way to endorse him and speak that he was the best qualified for the job, but he took on those people who were opposing that appointment at the time on the basis of his political ideology or whatever and declared that they were really out of bounds. Now, I don't know what's changed to him other than maybe the fact that being a candidate does things to you. And that he wants to sit here. That he wants to sit here. But I found this hard to go on. When you look at who all is endorsing him based on the record, here's a man who had at least a hundred of his decisions forwarded on to the Supreme Court from the Circuit Court of Appeals, all of them sustained by the Supreme Court. I think he has every qualification for the job. You said when announcing your nomination of him that he agreed with you on a number of important social issues. One of those is abortion. It'll come up again probably in this coming term. Do you expect Bork to overturn the road decision? I don't know. And I don't know that he would even answer such a thing until he's faced with a case and what all it is. My feeling about that issue is, well, for one thing, I have a personal feeling of my own having had to face that as a governor, that particular issue, that we are indeed taking a human life. I think all medical evidence, without any controversy, agrees with that, that the unborn child is a living entity, the very fact of extremely premature births that then go on and live and grow up successfully is evidence of that. But aside from that, I believe that this was another of the court decisions that altered the relationship between state and federal governments. I believe very strongly that we are a federation of sovereign states. And that was an issue that, just as murder is a state issue, this should be returned to the state authorities. We can be disappointed if Bork didn't vote to overturn the road. Oh, I'm not going to make an answer to a question like that. But you would like to see it overturned. You think it should be overturned? Yes, because I think it should be turned back to the states where it belongs. In other areas, you know we have a program of trying to restore the federalism. I'm not the first one to try to do that. Back in 1932, Franklin Delano Roosevelt announced as part of his campaign that he would like to see the federal government restore to the states and local communities authority and autonomy that had been unjustly seized by the federal government. His record in office indicated a slight change in that view. I don't know whether he changed his view or whether bureaucracy with all the emergency acts was created that began to go its own way. Mr. President, we seem to be on the verge of an INF agreement with the Soviet Union and we've just apparently come to an agreement on a more minor issue, which is a hotline issue. Where do you see the next area of U.S.-Soviet arms control negotiations proving out to be successful in the strategic arms or the conventional arms? Well, strategic arms. Right now, we're seeking in addition to the INF agreement, not linked to it in any way, but what we have called the START agreement, the strategic. And they themselves have expressed, well, they did at Reykjavik a desire to cut to 50% of the strategic intercontinental ballistic missiles. And I would like to see that step taken very definitely. Those are the missiles that I believe are the most destabilizing to the people. That thought that somebody can push a button and a half an hour later, large areas blow up. And I think they're less afraid of conventional weapons. They've known warfare with those. I believe that when we get to conventional weapons, that should be when we finally turn to look at the battlefield nuclear weapons. Because if you suddenly wiped those out, you would have automatically, given the Soviet Union, a vast advantage. At the moment, they're kind of equalizers, but they, in conventional weapons, have a great supremacy over us. And so I think that they would have to be negotiated at the same time you started to change the balance in battlefield nuclear. Do you think you can establish some kind of understanding with the Soviet Union on regional conflicts and the dangers of regional conflicts, such as in Afghanistan or Cambodia or Southern Africa, even Nicaragua? That has been one of our subjects in all meetings and dealings with them from the very beginning. The regional aspect of this, they're supporting the Sandinistas in Nicaragua as they are, and in fact, literally creating a Soviet base there. That and human rights have been also very definitely one of the things that we think if we're to really improve relations, those have to be taken care of. But you don't see these as necessarily linked to the start talks, that they might be a part of the atmosphere of the negotiations, but not a specific linkage. That's right. I came here having declared and I still believe that the treaties all before that have gone on with limiting how many you can make or regulating how high you will go in them, that is not what we need. We need reduction of weapons, and primarily we need reduction of the first weapons that have ever come along that can simply wipe out the world. If anyone would stop and picture a world war of the kind we've had twice now, another world war, but with nuclear weapons and intercontinental ballistic missiles and so forth, you have to say how could there be a victory for anyone in that? You may have to look at Chernobyl and remember that that whole disaster was less than what one warhead would do, far less. But you could see that there'd be no victory. It would be total defeat because where would the people live that were left? The very Earth itself would be poisoned. You have expressed some concern over the past about the trustworthiness of the Soviets with respect to their treaty obligations. We've now had several Americans visiting their radar facility at Krasnoyarsk, and there seems to be a fairly definite conclusion that that, in fact, is in violation of the treaty. Do you believe they should dismantle the Krasnoyarsk radar facility? It certainly is a violation of the ABM Treaty. And at the same time, I have to believe that all the evidence indicates that they have been seeking what we're seeking in SDI. They've been seeking that for a longer period of time than we have in spending more money at that. As a matter of fact, I'm just suspicious enough to think that some of their efforts to get us to give up on SDI are because they don't want us to have it before they have theirs. Does that mean that you do feel they should dismantle the Krasnoyarsk thing as being in violation of the ABM Treaty? Yes, they could do that. They have denied that it is. They've said that it is for a different purpose and all, but then that's what they would do in violating it. But it is a violation, and I think we should look realistically and see if the ABM Treaty, which has been violated, is no longer of any importance. You have had a sort of a phrase that you've used about America in its relations with the world. You've used a phrase standing tall. Now, America in the 1990s is going to have to deal with the world in the context of, by almost any standards, including this morning's news of the $16 billion trade deficit for the preceding month, with an international debt that will probably be in the range of a trillion dollars, and a huge national debt that will put tremendous pressure on the domestic resources. How do we stand tall in foreign policy when we can't afford the necessary defense expenditures at home and have to be dependent on other countries when you have such a huge foreign debt? Well, first place, I divide the two debts. There can be no comparison in the imbalance of trade with the domestic debt, and that has been going on now for more than half a century. As a matter of fact, out on the mashed potato circuit for many years, after dinner speaker, and always did my own speeches, I was attacking this, and at that time, the people in the Congress, the opposite party were bringing it about, because for 46 or 50 years, they had a majority in both houses of the Congress, and virtually every year there was additional deficit. Their answer was, well, it doesn't mean anything, we owe it to ourselves. Well, we don't owe it to ourselves anymore, and even that was not a legitimate answer. We must come to a balanced budget. We must do it by reducing government spending and the other, the trade deficit. Of course, we want to change, and we have been making great progress with our trading partners in the Economic Summit who finally have agreed that we will review all of the GATT situation, the subsidies, the tariffs. We believe that we can compete if we've got a level playing field, but we're striving for is not protectionism. That's no answer. It wasn't an answer with the smooth holy tariff in the Great Depression. It will be spread the depression around the world. But if we can come together, and we've made progress in this, some progress already, of eliminating the barriers to trade outside. But again, it's hard for me to see the same kind of destruction in even the present imbalance of trade than we see in just the national debt. I can't help but point out that for more than 70 years, at a time when this nation was growing into the great economic power it has become, every one of those years we had an imbalance of trade. As a young nation, we had to buy from the rest of the world. We didn't have what it did. But the money we borrowed from abroad was invested in productive facilities in this country, whereas today the money that we borrowed abroad is being used in consumption. As long as you have a deficit in this country where we're consuming more than we're producing, and it's not going into productive investment facilities, which might ultimately repay it, almost every investment banker or economist that I deal with in my business career feels that this domestic deficit is also in that sense reflecting more consumption and production the root cause of our foreign deficit. And yet we are not addressing it. Well, now wait a minute. There are some things, you know what Disraeli said about statistics. That there are lies, damned lies and statistics. Now some of the things in our balance of trade, we do not include money for services. Now a great part of our whole industry is service industry. And all we're counting in those other two, in the balance of trade, we're counting things that they buy from us and things we buy from them. But even in things, in 1980 there was a manufacturing trade balance with the world of $17 billion in surplus. In 1986 there was a manufacturing trade deficit of $139 billion for a swing of $150 billion in seven years. I mean we are not looking at it at something that has the promise of a turnaround in terms of manufactured goods. How do we seek that and realize that balance and still sustain ourselves as a world power in the 1990? Well, again as I say we are doing everything we can in working to level the playing field to open markets. Great progress with even some of the more recalcitrant like Japan. And we recognize that and we want to have a better balance of trade and have it not the imbalance based on the denial to us of markets and so forth. The unusual subsidies on the other side. But again I come back that the emergency situation in this country is our national deficit, our continuing to spend more on government. Do you favor then, for example, what the bill that contained the principle that was passed in the Republican Senate in 1985 of freezing the COLA on social security expenditures as one way of getting very rapidly growing part of our budget expenditures under control? No, because the truth of the matter is figuring social security into the whole deficit situation is a job of bookkeeping and very frankly it's a little dishonest. The very fact that social security is self-sustaining and has a trust fund that cannot be used for anything else. You can't pay any of the other bills of government with the money that is paid in social security. But it is included in all of the bookkeeping because it actually reduces on paper the real amount of the deficit. It is a program that is not running a deficit. But the very fact of the presence of that fund there, if you include that in, makes our situation look better on paper. It's a bookkeeping trick. And I am one who says that it should no longer be considered. If the deficit is an emergency situation why not this domestic summit that people talk about? Why not get together and try to settle it before you leave office once and for all? We've been trying to settle it. If the Congress had given me the budget I presented in 1981 for 1982 the cumulative deficit between 1982 and 1986 would be $207 billion less than it turned out to be. I have never been given a budget that I submitted. I have always been given a reception on the Hill that says it's dead on arrival. Then what do they do? They turn around and there's one place where they're willing to cut. That's when you get to national security, national defense. Every year they're willing to cut that and have cut it. But every year they add to the social programs. For example, they can point to $125 billion in cuts in defense spending that they have made the Congress. But in the same period they added $250 billion to the social spending. Now I've been trying for a long time and this was why I'm supportive of the program that was put into effect by the Congress and it has made no difference to the Congress. But in other words, a plan, there's no way you can balance the budget in one year. You set yourself on a track to balance it at a certain point. And then, please God, maybe we have a balanced budget amendment that will keep us from going back to the old ways. But no domestic summit here ruling that out. Well, it's been... I have told them right now in the last statement I made that I will sit down and negotiate with them on every item if they will do some sensible things like approve a balanced budget amendment. Why shouldn't the President have what 43 governors have, the line item budget? Mr. President, getting back to the trade deficit, do you think that the dollar has fallen far enough? I would not like to see us go completely into much more of a plunge than we have taken place. But I think that it has been helpful. I think it was... I don't think it was a case so much of the dollar was overpriced. As again, in the maneuvering, some of our trading partners were underpricing their own currency. You think that the Fed needs to do more to raise interest rates? Well, I'd rather wait and see what happens with this step that's just been taken. The figures that were released this morning show that what has been an increase recently has leveled off. Mr. President, can I return just for a second to the ABM Treaty? You said in view of the violations by the Soviets that you think it's time to reconsider that treaty. You think it's time to let that treaty expire or scrap that treaty? Well, no, I wouldn't favor that right now and, as a matter of fact, for a practical reason. I think that they are much more prepared to take advantage of such a thing than we are. In other words, they could suddenly expand their military might to a far greater degree than we could if that treaty didn't exist. I know that our chiefs of staff don't want to walk away with the treaty and maybe I was careless in what I said earlier. But there is no question of their violation and hasn't the history of some 50-odd treaties since World War II been one of consistent violations of those treaties, including the one in which the eastern block of nations was supposed to be independent and free to govern themselves. Sir, I'd like to just switch a little bit to the other part of the world. Did the Pope yesterday agree with you that the Contras should be supported if the Central American Peace Treaty is not in place? Well, I have always felt that it was not my place properly to quote the Pope on anything that was discussed. But we did have a discussion and I gave him some information that we have as to the situation and our analysis of the treaty and so forth. I did not ask for a reply from him. One of the things you must have spoken to him about or your analysis of the treaty that shows the Central American Peace Treaty is that even if it is put in place, the Sandinistas will be permitted to get Soviet and Cuban aid. Is that a fatal defect? I discussed. He had also talked with the President Arias, but I told him that our criticism was that there are loopholes there in that treaty that we are positive the Sandinistas would take advantage of. Does the continuation of Soviet block assistance constitute a fatal flaw in your life? What happens afterwards? Let's say that a treaty is put in place. They sign it down there. It's easy for the Sandinistas to adhere to and then they violate it. What besides more money for the Contras? The Contras have been disbanded at that point, supposedly. How are we going to get back into that? This is one of the reasons why we say that the Contras have to be sustained until there is evidence that an agreement has been put in place that does result in complete democratization of the country, which they promised during their revolution when they were a part of the revolution, only a part, against Samosa. And there's no question, but that there must be a way by which we can know that they have not just gone through some make-believe democratization. And until that is evident, that is why the Contra Force, which they are the freedom fighters representing the people of Nicaragua who were entitled to the democracy that was promised them, this, until that is done, and we're guaranteed of that, that it won't be just their word for it. When you met with the Contra leaders in Los Angeles, they proposed that the lethal component be put in escrow. I think Marlon said that you were considering that. Yes, this is certainly something for consideration. It isn't a case of needing to spend now. It's a case that they must not clear the board of any opposition at the same time that then, as you've pointed out, with their military aid they're getting by way of Cuba, mainly from the Soviet Union, that they can still be in charge as they want to be. That must not happen. Does this mean that you would like to have actually hold elections before you disband the Contras? We ought to keep the Contras in place until we actually have elections. Either that or the elections be announced. And we know that the framework is there that they will be legitimate. They claim that they are the duly elected government of Nicaragua, the Sandinistas. But look back at that election. For heaven's sakes, candidates had no access, were not allowed access to the media. They couldn't go on radio and tell their story. They couldn't go in the press and campaign. They were restricted even as to the meetings that they could hold. Their meetings, in fact, were broken up most of the time. The whole thing was a frame-up. And obviously so. Well, we must not have that happen again. It must be evident. And it must be evident to their neighbors and all. There must be an international, just as they've made a proposal now to which Mr. Ortega has agreed that he will go forward with. We must have the ability to see that it is definitely carried out. But to take you to another part of the world, the Persian Gulf. One of the reasons for our naval presence there is to blunt expanded Soviet influence and expansion in that region, that very strategically important region. Yet since we have had our warships in the region, the Soviets have signed a series of Islamic agreements with Iran, have received several diplomatic delegations from various countries including Kuwait. And I wonder whether in that sense we aren't succeeding. That Soviet influence in the region is in fact expanding rather than contracting. Well, that, of course, has to do with the government that is presently in Iran and that is such a reversal of what had been before and a bad reversal. But what we're doing actually, you might point a tactic as being different or something, we have had a military force there since 1949. We have recognized that whole Middle East and the whole energy source that it has as a place that we must have a presence there. Just as we're still trying to bring about a peace between the Arab states and Israel. But how do we reduce Soviet influence in that region? It does seem to be growing. And as you suggest, that is a very important strategic region. Just as, what about Afghanistan? They're very open and over with what they're doing there. And it is, yes, there is an effort to move toward the Middle East and toward the Gulf because they know the importance of it also. But that was not what inspired us to do what we're doing. We are the Gulf states along the border of the Persian Gulf there. All of them are very vulnerable to Iran. Iran is the biggest force in the Middle East. And now it's refusal to join in a peace movement to end the war with Iraq and so forth. I don't think we have any choice. But to those who are so upset and concerned and seem to think that we were going it alone, look at what is happening nation after nation and now expanding their own naval forces. And a number of ships are on the way and a number have been added. Whether it's the Netherlands, Italy, England, France, the forces are growing there and they're growing in order really basically to support one thing that is legitimate for all of us, the freedom of the seas. If you've said about the Iran-Iraq war that it should end with no victor and no vanquished, if it ended that way, would you sit down with the Ayatollah Khomeini across a table to talk about a new relationship between the United States and Iran? I think you better ask him that question. Would you sit down with me? You know, I'm the great Satan and you might be disappointed that I didn't show horns when I got there. But I'm willing to talk with anyone and things of that kind. We're legitimate and between governments. Incidentally, may I point out a correction to something out of all the months of investigation that some of the misconceptions that still exist? We were not doing business with the Ayatollah in that covert operation that subsequently was exposed. We were doing business with individuals who wanted to discuss a relationship with the government that might follow the Ayatollah because at that time there were such reports of his health that almost every other day we were hearing the word that he wouldn't live out the week and so forth. I don't know what has happened to those people that we were talking to, but they were obviously... we had to have a covert operation or their lives would have been in danger. But we had the assurance of the intelligence forces, very capable forces of another nation. Some package of excise taxes in combination with spending reductions as a way of reducing the budget deficit to stabilize these markets and prevent the economy from going into a tailspin. There's only one way that I believe we should ever look at a tax increase for this problem. That is if and when with the cooperation of the Congress we have reduced government spending down to where we can look at it and honestly all of us agree it cannot be reduced any further. We've reached that point. And then if there is still not enough revenue then would be a time to consider a change in the tax. But right now I have to stay stubbornly opposed to any increase in taxes because there has been no real effort to meet the spending problem of government. Now I'm not alone in this. John F. Kennedy and his tax program which was very similar to our tax reduction and he fought for it and got it. And his statements sound very much the same as mine about why we had to have that but also the result was the same of our tax cuts. There was more revenue at the lower rates than we were getting at the higher rates. And as a matter of fact I quote a man I don't know that they called him economist back in his day but many many centuries and centuries but certainly decades and I believe a few centuries ago a man named Eben Kowdoon said in the beginning of the empire the rates were low and the revenues were great. He said at the end of the empire the rates were great and the revenue was low. Right now with our tax cuts we are getting a major increase in revenues from the income tax more than we were getting at the higher rates because suddenly there's an incentive for people to earn more. And as president he should be an economist. Yes. I always thought that was art laughter. Since I've had another interview already this morning I can't remember now whether I told you something or told the other. Have I told you about the war on poverty and the figures between 1960 and 1985? Good. Let me just tell you the previous. And then we'll go. I'll go. Here is proof of what I've said about the government and the responsibility is spending for our deficits. And for these jokers that are now taking out ads to say I'm responsible for the deficits the president can't spend a penny without the permission of the Congress. In nineteen we know Lyndon Johnson in his term brought about the war on poverty which poverty won. He brought that about and from the middle sixties to 1980 a fifteen-year period with that great social program in place the budgets of our government increased roughly to five times what they were in 1960 in 1965 to what they were in 1980 they were five times greater. The deficit was thirty-eight times greater in just those fifteen years. It is structural. It is built in to the structure of our government and you're not going to change it just by adding more revenues to government and letting us go on with what increases constantly we have to make those structural changes. And then as I say if and when that has happened and we still then are not taking a high enough percentage from the people in taxes then is when you should look to tax as a solution to revenue. But right now we've increased the revenues tremendously and we have made many reductions but not enough to account in simply the improvement in the management of government. That's one thing the Congress couldn't interfere with but the changes that we have made to business like procedures in government have amounted to billions and billions of dollars. I think we'll reach that point where we've tried everything we can at about sort of January 1989. That's what I'm working very hard to do but at the same time I'll be working very hard to see that whoever follows me in here has the same idea. Good to see you looking so well and your friends say that you're going to be on the radio when you're late. Sure. As I won't be done that's a matter of thing I've already admitted that I'm going to seek something I could not see but that is I would like to get the Constitution changed and restore the democratic right of the people of this country to vote for whoever they wanted to vote for the president and as many times they wanted to vote for him. Do you want to do your old radio show again? I'm going to do a few times about that. You fellows are in that business you know that's kind of a monkey on your back. Thank you very much. Well thank you very much. Thank you so much Thank you sir. Thanks. Thank you. Good to see you. Good to see you. Good to see you. Whether you're here or this way. No problem.