THE PRESIDENT: Good afternoon. I have a preliminary statement.
I have sent to the Congress today a special message on legislative measures affecting our Nation's youth, stressing in particular the Administration's bill to promote youth employment opportunities. This measure, which I hope will be among the first to be considered by both Houses, is urgently needed. A number of young people in the potential labor market age group will increase in this decade nearly 15 times as fast as it did in the 1950's. 7-1/2 million students are expected to drop out of school during the Sixties, without a high school education, entering the labor market unprepared for anything much other than unskilled labor, and there are fewer of these jobs all the time. Young men and women no longer in school constitute already 18 per cent of our total unemployment, although they comprise only 7 per cent of the labor force. These figures reflect a serious national problem. Idle youth on our city streets create a host of problems.
The youth employment opportunities act will give many thousands of currently unemployed young people a chance to find employment, to be paid for their services, and to acquire skills and work experience. It will give them a solid start in their work in life.
QUESTION: Mr. President, when you submitted your tax plan in the 1964 budget with its 11.9 deficit, you anticipated a certain amount of resistance to it, and Walter Heller, however, says that sane of this opposition comes from what he calls the basic puritan ethic of the American people. Do you think the time has come to abandon or at least update this puritan ethic he speaks of?
THE PRESIDENT: No, I think that people are concerned about the size of the debt, and I am, and I think they are concerned about the deficit, and I am. But what I am most concerned about is the prospect of another recession.
Now, a recession is what would give us a massive deficit. I have already pointed out that in 1958 President Eisenhower thought he was going to have a half-billion dollar surplus. At the end of the 1958 recession he had a $12-1/2 billion deficit, the largest peacetime deficit in the history of this country.
We had another recession in 1960, which also increased our deficit. We have had an increase since the winter of 1961 in our economy. I am anxious, however, not to see a slide into another recession. In 1956, a recession, in 1960, a recession; the large deficit will come if we move into another recession.
In my judgment, the best argument and the one which was most effective as far as I was concerned was that the reduction in taxes was an effort to stimulate investment so that any downturn in business would be lessened in its impact and could be possibly postponed.
Now, if we don't have the tax cut, it substantially, in my opinion, increases the chance of a recession, which will increase unemployment, which will increase the size of our deficit. So that is what it comes down to. And I think that with the record we have had in the last five years of over five per cent unemployment, two recessions, I think the important thing for us to do is prevent another one. Therefore, I think the tax cut should be looked at not as a method of making life easier, because if that were the only issue I think we would all be willing to pay our taxes to keep our economy going. But the tax cut argument rests with the desire to stimulate the economy and prevent a recession, which will cost us the most domestically, internationally, on our budget and our balance of payments.
QUESTION: Mr. President, in connection with the review of U.S. Policy toward Europe, I wonder if you are even thinking about cutting down on the number of troops in Europe or adopting any measures of economic or political reprisal against President de Gaulle?
THE PRESIDENT: No. In answer to your second question, definitely not.
In answer to the first question, as you know, we have withdrawn over a period of some months some logistic forces, but we have kept our combat troops constant and in addition, their equipment has been improved, and we still have our six divisions and plan to maintain them until there is a desire on the part or the Europeans that they be withdrawn and we have had no indications from any country in Europe that there is such a desire. If there was, of course, we would respond to it. They are there to help defend Europe and the West, and not because we desire to keep them there for any purpose immediately of our own.
QUESTION: Mr. President, back on taxes, I realize it is too quick to make a precise reading on the fate of your tax reform and tax cut bill in the Congress, but there seems to be unusual resistance, not only to the tax reform, but several Senators and Congressmen are telling reporters that their constituents show resistance to tax cuts. And then today, the Administration received another set-back in the defeat of the attempt to increase the size of the Senate Finance Committee.
Taking all of these things together, could you give an assessment of how you think it's going to-- the bill is going to do and, secondly, could you say whether you think it may be necessary for you to carry the problem to the people directly in a series of speeches or something of that kind?
THE PRESIDENT: Well, I think it is a hard fight. The tax reform cuts across some of the most dearly held rights of any of our citizens. So many of them have been written into law, partly as a balance to rather high tax rates-- in fact, very high tax rates. It is hard to get them changed.
Tax reform is, of course, a wonderful principle, but when you begin to write it in detail, it becomes less attractive. But we are talking about a $13.5 billion tax cut, with about three billion, two or three hundred million, which would be recouped by the reform. In addition, we would find ourselves with a better balanced tax system and one which would be more effective for the economy. If we are not able to get the tax reform which we had suggested, there probably would he adjustments made in the overall reductions.
But I must say I recommend this because I think it is in the best interests of the economy of the country. In 1954 there was a tax reduction. Within a year the economy had been sufficiently stimulated that there were higher revenues at the lower tax rates than there had been the year before.
We have a tax system that was written in a sense during wartime to restrain growth. Now if you continue it, this country will inevitably move into a downturn and I would think our experience of '58 and '60 indicates that something has to be done. In my opinion, the most effective thing that can be done at this time is our tax program.
Now, those who are opposed to the tax program should consider what the alternative is. I think it is a restricted economic growth, higher unemployment-- if we fail to do something about unemployment and begin to move into a downturn, higher unemployment, there will be increased pressures for 35 hour week as a method of increasing employment, and I think it would be far more costly in the long run to the Government and to the economy to defeat our bill. I think it ought to be approached that way.
What alternative does anyone have for increasing and maintaining economic growth in view of the large deficit of 1955 and in view of two recessions in 1958 and 1960? Our plan to prevent a recession this year and in the years to come is our tax bill, and I think the Congress, I hope the Congress will adopt it, and I think the country, those who oppose it, should consider very carefully what they will have as far as economic growth for this country if it is defeated. We can take it to the people, as I am today, and on other occasions.
QUESTION: Mr. President, a number of Republicans have questioned the qualifications of Franklin D. Roosevelt, Jr., to be Under Secretary of Commerce. Would you like to answer them?
THE PRESIDENT: Yes. They questioned the qualifications of his father to be President, and I think that Mr. Roosevelt, I am hopeful, will be confirmed. I wouldn't have sent him up there unless I felt that he would be a good Under Secretary. I served with him in the Congress, and I am for him strongly. I hope the Senate confirms him.
QUESTION: Mr. President, there has been a great deal of talk between Europe and here about interdependence and about partnership. Is this Government at the stage of making the decision in fact to share command and control of nuclear forces with our European allies?
THE PRESIDENT: We are, as you know, putting forward and have suggested a multilateral force, as well as a multi-national force, which will, I think, substantially increase the influence that the Europeans have in the atomic field. It is a very difficult area because the weapons have to be fired in five minutes, and who is going to be delegated on behalf of Europe to make this judgment? If the word comes to Europe or comes anyplace that we are about to experience an attack, you might have to make an instantaneous judgment. Someone has to be delegated with that authority. If it isn't the President of the United States in the case or the strategic force, it will have to be the President of France or the Prime Minister of Great Britain, or someone else.
There is an enormous responsibility. The United States has carried that responsibility for a good many years, because we have placed a major effort in developing a strategic force. I said in my State of the Union Address that we put as much money into our strategic force as all of Europe does for all of its weapons.
Now, it is quite natural that Western Europe would want a greater voice. We are trying to provide that greater voice through a multilateral force. But it is a very complicated negotiation because, as I say, in the final analysis, someone has to be delegated who will carry the responsibility for the Alliance. We hope, through the multilateral system, through the multi-national system, that we can provide Europe with a more authoritative position, a greater reassurance that these weapons will be used with care for the defense of Europe. I am hopeful that the negotiations which will be carried out by Mr. Merchant will have that effect, but I think we deal, because of the time problem which I just mentioned, we deal with a very difficult problem.
QUESTION: If I may just follow up, would you expect to have the U.S. position clarified and nailed down before the NATO Ministers' meeting in Ottawa in the spring?
THE PRESIDENT: Yes, that is right. Mr. Merchant will be going ahead in about 10 days and begin discussions in Europe of a more detailed kind.
I just want to point out that because of the enormity of the weapon and because or the circumstances under which it might be fired, there is no answer which will provide reassurance under the most extreme conditions for everyone. We feel that, however, with what we now have and what we are ready to propose, carrying out the Nassau proposal, that additional assurances can be given which we believe-- which we hope will satisfy the Europeans.
Now, if it doesn't, then we will be prepared to consider any other proposals that might be put forward. But in the case, for example, of France, we are not talking in that case of a European nuclear force. We are talking about a French nuclear force. So to make it a European force would require substantial political developments in Europe. That time might come and if it does, we would be glad to consider joining with them or cooperating with them in any system which they might wish to develop.
QUESTION: Mr. President, there are reports from London that the United States and the Soviet Union are about to resume discussions on a Berlin settlement. What could you tell us about that?
THE PRESIDENT: No, no conclusion has been reached on that, as to that. As you know, we have had a series of talks over the last two years, which have not been promising enough to lead to negotiations, and we have had no decision which has yet been reached by the Alliance as to whether exploratory talks will be resumed, or whether the conditions would be such that they would have some hope of advancing the common interest. So in answer to your question, this matter has not been determined.
QUESTION: Mr. President, what do you consider the major problems and their priorities right now within the Atlantic Alliance, in view of General de Gaulle's veto?
THE PRESIDENT: Well, there is the military problem which we have just discussed, and also the economic problem. Those are the two, and they are both important and I would not rate a priority. Economic problems, maintaining trade, maintaining a cohesive economy between the Western Europeans and ourselves, providing for development of orderly markets, and perhaps most important, providing some better opportunity for the underdeveloped countries which supply the raw materials, who have seen their commodity prices drop in the last three years, and the cost of the goods they buy go up. So I would say those are the problems I would say that are immediately before the Community.
QUESTION: Mr. President, sir, on the NATO matter, I wonder if you could comment on General Norstad's suggestion that an Executive Committee be established within the NATO Council, which would have the power to decide perhaps by a majority vote, rather than a unanimous one, on the use of nuclear weapons?
THE PRESIDENT: Yes. I think that we ought to consider that. As you know, General de Gaulle has not been prepared to discuss a multi-national force. If he was, we would be prepared to discuss General Norstad's proposal. General Norstad's proposal, however, might not reach the needs of those countries which are not nuclear powers. But if the European countries choose to delegate their authority to General de Gaulle or to Prime Minister Macmillan, we would certainly be prepared to discuss General Norstad's proposal.
But we are talking about-- when we talk about Europe, we have to realize that there are a good many countries of Europe, some of which are nuclear and some of which are non-nuclear. The question always is whether the arrangements between the nuclear powers will meet the genuine needs of the non-nuclear powers, or whether they are going to have to go the national deterrent route, which we believe will be both expensive and dangerous.
QUESTION: Mr. President, the Special Security Committee of the Organization of American States has reported that the present military situation in Cuba now constitutes a much more serious threat to the peace and security of the American Republics than it did when this committee was authorized at Punta del Este last January, a year ago. In view of that, I wonder if there is anything you have in mind that these American Republics could and should be doing at this time to meet that threat in a collective way?
THE PRESIDENT: I think the part of the report which is most significant is the emphasis they put on subversion in the Continent, the movement of men and perhaps money against the constituted governments. That is a matter which the United States Government is giving its greatest attention to this winter, the question of the lessening not only of the subversion that may come from Cuba but from other parts of the hemisphere. I consider that our primary mission for the hemisphere this winter.
QUESTION: Mr. President, sir, before the Cuban shipping orders were issued, there was quite a discussion about our pleas to our allies to have their shipping companies not let themselves be used as vessels to carry goods from Soviet Russia to Cuba. When your shipping orders came out, there was no mention of penalty or policy on that. Will you tell us why?
THE PRESIDENT: There has been a substantial reduction. I think the number of free world ships going into Cuba in January was about 12. So our order has just gone out. There has been about a 90 per cent drop in free world trade in the last two years to Cuba. Free world trade to Cuba, that is Latin America, Western Europe and ourselves, was 800 million two years ago. It is down to about 90 million. I think it is going to be reduced further. Our proposals have just gone into effect and there has been a substantial reduction in free world shipping to Cuba in the month of January, as I said. It amounted to only 12, and is steadily declining.
QUESTION: Mr. President, last weekend, the Republican leadership turned upon the Administration an argument that you have effectively used in the 1960 campaign that the prestige of the United States abroad had fallen. You were able to substantiate those charges by citing polls taken by the Eisenhower Administration. What do you think of these charges and are polls now being taken?
THE PRESIDENT: USIA takes surveys on the standing of what they think of the United States or what they may think of the President or what they may think of us technically and all the rest in different groups.
One of the reasons I was able to speak with some confidence on the reduction in Castro's standing was that other governments in the hemisphere have taken studies, surveys, and have made them available to us. I think that we have difficulties because, of course, as Winston Churchill said, "the history of any alliance is the history of mutual recrimination among the various people." So there are bound to be difficulties. But I think that the United States is known to be a defender of freedom and is know to carry major burdens around the world.
Now, we have to wait and see both what our prestige is abroad and at home, when we get clearer ideas in the next two years.
QUESTION: Governor Rockefeller has been attacking you more and more vehemently, giving rise to the suspicion that he wants to be the Republican candidate next year. Is he the man that you think you will be running against?
THE PRESIDENT: No, but I do think I have felt the same suspicion. But whether he will be successful or not, I think only time will tell. That is a judgment that the Republicans have to make. I think that all of these discussions of our policies and criticisms can be very useful, but I feel that we should put forward some alternative proposals. That is No. 1, and No. 2, whenever the United States has a disagreement with a foreign country, it is a mistake always to assume that the United States is wrong, and that by being disagreeable to the United States, it is always possible to compel the United States to succumb. One of the results of that has been that the United States is paying the major bill all around the world for a good many activities that serve the interests of others besides ourselves. So that I think that we have to realize that we are going to have disagreements. They go to the heart of the Alliance and the purposes of the Alliance. They all involve the security of the United States, and those questions which involve disagreements on the atom, which were mentioned earlier, are very important questions, and there are bound to be differences of opinion. And there should be, because as I say, they involve life and death. So that we are not involved in an empty argument about nothing.
Now, in addition, these arguments come more frequently when the danger, outside danger decreases. There isn't as much of an overt Soviet military threat to Berlin now as there was some months ago. Whatever success we may have had in reducing that threat of course we pay for it by increased problems within the Alliance. But if the threat comes again, the Alliance will join together. But I think we just have to make up our minds that we have paid an enormous bill in the last 15 years, amounting to billions of dollars, and we pay today, the United States, six divisions in western Germany, and the other countries have one or two or three. We pay a large share of foreign assistance. Other countries pay much less. Our bases overseas, about which there has been some argument, they are there to serve to protect Western Europe. We don't mind paying for them, but we would like to at least have it recognized that the primary beneficiary may be those who are closest to the Soviets. So I expect there are going to be these disagreements. But that is because we are moving into different periods, and it is partly because some of the outside military dangers which so threatened us just a short while ago have become lessened. They may come up again, but for the period now we are enjoying the luxury of internal dissention.
QUESTION: Mr. President, most of the Cuban dialogue has been confined to military personnel and military operations. Does the Government have any information on the nationals of the Soviet bloc who may be in Cuba to train the Cubans in sabotage and subversion and political penetration of the Latin American countries?
THE PRESIDENT: I am sure that among the technicians or military people there, or para-military, there are those who are participating in that kind of training. That is why we are anxious to stop the flow in and out of those who may be the beneficiaries of those studies.
QUESTION: Do we have any ideas of the number or any idea how we can stop them?
THE PRESIDENT: Well, the problem is to get the cooperation of other Latin American countries in limiting the flow in and out, at schools, colleges, which also includes political indoctrination. I think there were 1,200 students from Latin America that went into Cuba last year. I am sure a good many of them were politically indoctrinated; some of them obviously were given training in more direct forms of political action.
I don't think we should regard, however, the Communist threat as primarily based on Cuba, the Communist threat to the hemisphere. There is a good deal-- there is local communist action unrelated to Cuba which continues and which feeds on the hardships of the people there, northeast Brazil and other places. So that Cuba is important, but even if we are able to stop this kind of traffic, we will still deal with the native communist movement.
QUESTION: Mr. President, could you elaborate a little on an earlier statement you made in connection with the control of the multi-national nuclear force? You seemed to stress the time element of five minutes, perhaps, to make a decision. Isn't this force essentially to be a submarine or seaborne force, and isn't one of the beauties of this kind of a force that you don't have to come to a quick decision?
THE PRESIDENT: Yes, but there is still the need for relatively quick time, so that I think, you are still dealing-- you may not be dealing in every case with five minutes, but you are dealing with-- very difficult to hold a vote on all the members of NATO, take a majority vote, on firing these missiles. What we hope to do is to indicate guidelines for any action which a commander might take which will give assurance to the Western Europeans. Our feeling is very strong that they have that assurance now. The presence of 400,000 American troops and their families in Western Europe, people who we would not permit to be overrun, I think is a testament to our determination to honor our commitments. In addition, the very obvious fact that Western Europe is essentially the security of the United States, the loss of Western Europe would be destructive to the interests of the United States. So we feel that there is no question that these weapons would be used to protect the security of Western Europe. General de Gaulle has said that monopoly always serves those who benefit from it. I don't think that we alone benefit from it. I think Western Europe benefits from the enormous efforts which Americans have made. However, if these two factors, the presence of our troops and our security guarantees, are not good enough, we hope to be able to work out devices which will give a stronger participation to the Europeans and, therefore, strengthen their sense of participation and their common sense of allegiance to the NATO cause which we share.
I must say in looking at the dangers we face, I put dangers in other areas to be higher than the prospect of a military attack on Western Europe. But Western Europe is the one that lives under the gun, and we are going to do everything we can to work out devices which will increase their sense of security.
QUESTION: Mr. President, you were speaking a few moments ago about paying bills. I wonder if there is anything that you believe we could or should do to stop paying for farm aid to Cuba and the publication of pro-Communist propaganda through the United Nations, as we have recently learned we may be doing?
THE PRESIDENT: Well, we are not going to put any money into the program in Cuba. There are not any United States dollars that will go into that program. On the book, as I understand the book was published a year ago. There was a book written by an American group and it was balanced off by a book written by a Communist. The Soviet Union are members of the United Nations. It is difficult to prevent their participation in some of these programs unless you broke the United Nations and the bloc withdrew.
So you are going to have some cases of the kind described. We try to minimize them, but quite obviously, they are members and they pay and they receive. But I don't think that the book, which I understand came out a year ago, it doesn't seem to me that-- I think we are going to survive the book.
QUESTION: To get back to our problems of our allies, it would seem like in a way that President de Gaulle's intention to develop France's own nuclear capability and his recent pact with Chancellor Adenauer would meet in perhaps a rather perverse way, and not certainly as you envisaged it, our desire to begin withdrawing from Europe and having Western Europe assume more of its own defense.
I would like you to comment on that, and, also, I understand that the Department of Defense is studying a new proposal whereby servicemen will go overseas for one year without their families, both to Europe and all over the world. Would you comment on that, too, please?
THE PRESIDENT: Yes. I don't think that certainly the speeches in the German Parliament last week, or speeches subsequent to the Franco-German treaty, indicated that the Germans felt that their security could be guaranteed without the presence of the United States. If they felt that, then our purpose in being in Europe would be ended, and, of course, we would want to withdraw our forces. But as long as Western Europe does not feel that their security can be guaranteed without the presence of the United States, the United States will stay, and we hope that we will be able to work in cooperation on other matters. We will have to wait and see. We are attempting to develop means of cutting our dollar losses. As I said, a year ago they were $3 billion a year, our balance of payments losses, because of our security commitments overseas. We are trying to cut them. But we will announce it if we are going to go into a plan such as you suggested.
QUESTION: Mr. President, can you tell us, on taxes, again, are you satisfied with the support that you have gotten from the business community on the tax bill, so far?
THE PRESIDENT: Well, as you know, the Chamber of Commerce wants a tax cut, but they want it in the higher income areas, and, in addition, they are opposed to the reforms we suggested, because some of them remove loopholes which means, of course, others have to pay. But I think at least they do support a tax cut. I think out of the Committee on Ways and Means, we are going to get a bill for a tax reduction which will provide a consensus. It won't be perhaps the bill we sent up, but I think it will be a good bill. I think the more people look at the alternative, I think the more general support we will get.
QUESTION: Mr. President, back on the subject of American troops in Europe, the Pentagon on Monday and Tuesday knocked down stories that there were plans to withdraw some American troops from Europe. On Wednesday, it announced that 15,000 had already been pulled out. What I would like to know, sir, is why was this withdrawal done secretly, and also if you could expand some on your plans with respect to the shape of the American forces in Europe.
THE PRESIDENT: Well, to the best of my-- I am not familiar with the events you described. It was not intended to be secret. It has been going on for some months. It is a lessening of the number of logistic forces there, particularly those that were built up during the summer of 1951, subsequent to the Vienna meeting. But we have not at all lessened the number of our combat troops. As I said, the United States has six divisions with the best supporting equipment of any of the divisions on the Western Front, according to the NATO studies. Our forces are more equipped to fight, can fight quicker with better equipment for a longer period, than any other forces on the Western Front. They will continue to be-- that will continue to be true. Some countries-- France has only a division and a half in Western Germany, and it is quite close to the French border. Ours are further ahead, and ours can fight for quite a number of days. So we are keeping our strength in Western Europe. The fact is we are stronger than we were a year ago. It was not intended to be in any way a private withdrawal, which is impossible.
QUESTION: Mr. President, you spoke of dangers in other areas. Do you consider dangers developing in Southeast Asia as a result of the proposed formation of Malaysia? This is Britain relinquishing her colonial ties.
THE PRESIDENT: That is correct. We have supported the Malaya Federation, confederation, and it is still under pressure from several areas. But I am hopeful it will sustain itself, because it is the best hope of security for that very vital part of the world.
(Merriman Smith, UPI): Thank you, Mr. President.