REAGAN, HAILING RECORD, SEES U.S. AS 'ON MEND'

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00552R000505370096-8
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: December 22, 2016
• Document Release Date: September 13, 2010
• Sequence Number: 96
• Publication Date: January 21, 1983
• Content Type: OPEN SOURCE

A14
Approved For Release 2010/09/13 : CIA-RDP90-00552 R000505370096-8
THE NEW YOR$ TIMEFRiDAY, JANUARY 21, 1983
Reagan, HailIng Record,
Sees '
Continued From Page 1
cent cut made in his tax reduction plan
would have no major effect on his eco-
nomic recovery plan.
Back then, Mr. Reagan himself had
hailed the enacted program as proof
that "more cooks were better than
one." lie told Congressional supporters,
"We've got to prove that what we said
about it is true it'll work."
The two-year summary issued today,
subtitled 'A Review of Accomplish.
ments," said President Reagan had
succeeded with "the driving force of his
vision for America."
"Acting forcefully and fairly," the
President's review declared, 'Presi-
dent Reagan has averted the calamity-
in-the-making which greeted him when
he took office. By significantly reducing
record inflation, taxation, interest
rates, excessive spending and regula-
tion, Ronald Reagan kept important
promises to the American people.
In his self-assessment at the Whi
House, the President contended that tile
persistent recession marking much of
his tenure was inherited, in effect, be-
cause the nation's troubles turned out td
be "even worse" than those he de-
scribed in seeking the office.
"My biggest regret is that because
the accumulated damages piled up so
high for so long, putting America's
house in order has been a tough and
painful task," Mr. Reagan said at a
brief televised news conference de-
signed to focus on his claim of success.
Satisfaction With Course
In fielding reporters' questions,
President Reagan was asked whether,
in retrospect, he would have done any-
thing differently in the last two years,
considering the economy's resistance to
the recovery that he has tong been pro-
claiming.
"We tried very hard," he replied. "I
think in a compromise, all in all, we did
get a goodly share of what we asked.
But I can not think of any place where
we would have changed courses."
In a separate answer, however, he
complained that "we never did get in-
tact what we thought was a well
thought-out economic plan." He said
the Administration "hail to give way"
to Congress in its hopes for reducing the
rise in social spending and cutting
taxes.
While Mr. Reagan's original budget
successes in 1981 in reducing spending
and enacting tax cuts were widely
hailed by politicians and the news
media as akin to a "revolution," the
President made no such claim in look-
ing back.
' Critical View on Economy
"We did not get the tax incentive pro-
gram intact," he said, implying that the
expected impact on the economy had
accordingly suffered* In analyzing the
recession, he aLso, stressed that the A
ministration "had no control" over
maintaining high interest rates that
"were responsible for the step off ,t11
cliff."
"I can not say that this recession did
not begin in July of '81," Mr. Reagan
conceded. "This recession hat been
'coming on for several years, and gradu-
ally growing worse, as we were able to
talk about in the campaign."
As a candidate, Mr. Reagan had
promised that the Federal bedget
would be in balance by 1984. )3ut earlier,
this week, as he prepared a 1984 budget
and dealt with record high deficit in the
$200 billion range, Mr. Reagan sPeke of
a balanced budget as a "personal
dream." In contrast to the earlier
promise, he now is focusing on trying to
contain further deficit increases pro-
jected into the future. .
The President's two-year summary
acknowledged that "grave problems of
unemployment remained and a deep re-
cession had driven up Federal budget
deficits to levels that demanded fresh
attack." Part of the President's re-
vamped budget plan reportedly will be
"contingency" tax increases to reduce
future deficits. .
'When You're Having Fun'
In his own verbal reassessment, Mr.
Reagan laced his comments with good
cheer, beginning his review with the ob-
servation, "How time flies when you're
having fun."
At the rally of party loyalists who
took time off from their Government
jobs, Interior Secretary James G. Watt
warmed the crowd up with an exhorta-
tion that instantly brought them to their
feet, cheering, applauding and offering
rebel Yells.
"Let Reagan be Reagan!" Mr. Watt's
cry rang through the hall, in obvious
reference to conservative complaints
that Mr. Reagan was being guided dan-
gerously by moderate advisers.
The Presiant, who seemed visibly
excited when a giant American flag un-
ferled from the ceiling, called for per-
sistence from his workers. He quoted
the verse of Robert Service:
"So don't be a piker old card!
Just draw on your grit; it's so easy to
quit:
It'd the keeping-your-chin-up that's
hard."
?
President Reagan and members of the Cabinet applauding the Marine Corps
band at a rally celebrating the middle of his term in office yesterday in Con-
stitution Hall. With the President were, from left, Samuel R. Pierce Jr.?
. The New York Times /Teresa Zabela
Homing and Urban Devel?pment; Raymond J. Donovan, Labor John R. -.-
Block, Agriculture; William French Smith, Attorney General; Donald t'
Regan, Treasury; Vice President Bush, and George P. Schultz, State Dept.
, - 1,-4 If
Reagan Said to Seek Contingent Tax Rise if Needed to Trim Deficitil
Continued From Page 1
the President to send to Congress on
Jan. 31. ?
Separately, President Reagan said
today that he wad considering a majdr
restructuring of the incoMe tax system
with the aim of broadening and sirnplf-
fying it Aides said his proposals might
A
Attack on Legal Services Cite
Special to The New York Times
the agency. He did not criticize the
President directly, reserving hid re-
marks for Mr. Meese. Mr. Dana did not
specify what Mr. Meese's "sneak at-
tack" was.
Anson Franklin, a White, House
spokesman, said today that Mr. Dana's
remarks were "inappropriate,?:' but
that Mr. Meese would have no ether
comment. ,
Mr. Reagan appointed Mr. Dane to an
interim post on the 11-Member board in
December 1981- and later nominated
him to a full term* The President with-
drew Mr. Dana's nomination late last
year after , White House aides corn-
pIained that Mr. Dana and other direc-
tors had been too sympathetic. to legal
aid lawyers.
WASHINGTON, Jan. 20 ? A former
director of the Legal Services Corpora-
tion whose nomination to the agency
was later withdrawn by President Rea-
gan today denounced the Administra-
tion's efforts to abolish the agency.
The former director, Howard H.
Dana Jr., who described himself in a
speech delivered t US members of
Greater Boston Legal Services as "a
conservative, Ronald Reagan Republi-
can," assailed the President's counse-
lor, Edwin Meese 3d, for his "sneak at-
tack" on the corporation, which distrib-
utes Federal money to provide legal eid
to poor people in civil cases.
Mr. Dana, a lawyer from Portland,
Maine, expressed dismay with the Ad-
ministration's attempts to dismantle
Include a flat income tax, replacing the
present graduated income tax.
A flat tax would lower the tax rate for
individuals ? possibly to less than 20
percent from the current rates, which
range up to 50 percent. But a flat tax
also would eliminate most of the deduc-
tions that taxpayers now use. Another
possible approach being considered by
the President, his aides said, is an in-
ceme tax based on what people spend
rather than on what they earn.
Complaining that the current tax sys-
tem is too complicated, the President
said at an impromptu news conference
that it was a top priority "to have a tax
system that the people can under-
stand."
The President's remarks, made in
the White House briefing room, were
his first acknowledgement that such tax
reform is under consideration. But both
White House and Treasury officials
have said that proposing such a restruc-
turing would be a key theme in the
President's State of the Union Message
next week.
Officials said that the centingency tax
plan intended to raise abbut $135 billion
from 1986 through 1988 would include in-
'creases in energy taxes, prebably
through a fee charged on imported oil,
and a surcharge on income taxes. But
the fhial decision ori details, one key of
-
Octal said, has not been made.
Qn official said the President plans
to contend that strong economic growth
between now and the, fiscal year 1986
could mean there would be no need for
the tax increases. But the official said
the budget projections do not assume
that the deficit will get down to about
$100 billion in the fiscal year 1986, so the
taxes would be triggered into effect.
The $135 billion in added revenues ,
which the Administration will ask Con-
gress to approve this year with the trig-
ger mechanism,, "is the key" to demon-
strating that future deficits will decline,
the official said.
The President's top economic advis-
ers have argued that it is necessary to
shim deficits declining sharply to as-
sure the financial markets that a con-
tinued decline in interest rates will not
be prevented by ballooning deficits.
Low interest rates are considered es-
sential to economic recovery.
Officials said the President had al-
ready put together a package of spend-
ing reductions for the fiscal year 1984 of
about $45 billion to $50 billion. That
would bring that year's budget deficit to
about $185 billion, according to the Ad.
ministration projection. ,
Among thei
key items n the package
were $25 billion to 0 billion of domes-
tic cuts in propos outlays fer such do-
mestic rograms as housing, Medicaid
and r? stamps, $8 billion of reductions
in projected outlays for military spend-
?
ing and $10 billion to $12 billion of saw a
ings on Social Sectirity, including a six.-
month delay in the cost-of-living in-
creases now scheduled fo,r next July 1. a
There are also proposals for a freeze on
civilian and military pay increases, a
now scheduled for Oct. 1, 1984, and con-
sideration of a six-month delay in auto-- a
matic cost-of-living increases for vart re;
ous Federal retirement programs. a
At his impromptu news conference,
the President declined to comment on.. e
his decisions on the budget for the fiscal
year, 1984. But he said, "I, can tell you a
that our budget will be fair and realistie
and will pave the way for a strong, sin-
tamed recovery."
The proposal for tax restructuring is
one of the three separate tax decisions
under consideration in the 1984 budget r
a
process. a
The tax restructuring would be sorne."-;
thing for the future and would not figure a
in any of the budget projections this
year, officials said. Assumption of ap- -;
proval of tax restructuring, with a flate,
rate tax, a consumption or spending tax
or a combination of both would allow
the Administration to broaden the tax
base. and raise more, revenues while
lowering tax rate
Martin S. Feldstein, chairmano the
President's Council of EconomicAdvis,ek:
ers, suggested in a speech Weariesday-,.
night that he favors the dpeneling.-t
approach on taxing of personal in
?Ttaoso? pt of rt esic ontI s...'News Confer
Following it a transcript of President Reagan's news, conference cn Wash-
ington yesterday, as recorded by The New York Times through the facilities of
Cabte News Network:
OPENING STATEMENT
Well, as some of you may know,
today marks the second anniversary
of this Administration. How time flies
when you're having fun.
A lot can happen in two years. Just
looking around this room, I can see
the signs of change everywhere. Judg-
ing from this group, I seem to have
given more gray hairs than I got dun'
mg the last two years. I guess you can
chalk that up to the luck oi the Irish.
At any rate, here we are at midpoint
in the first term so I thought a little,
personal perspective might be apprp-
priate.
Looking back, I guess my greatest
satisfaction is the conviction that a
country that was skidding danger-
ously in the wrong direction, losing
the respect of friends and foes alike in
the world and, even worse, losing faith
in its own future has been set on the n,
right course.
We've begun to undo ilia damage
that the overtaxing, overspending,
overregulating binge of the 60's and
741'/ inflicted on the American way of
life.
And we've made America respected
in the world again. ,
My biggest regret it that because
the accumulated damage has piled up
so high for so long, putting America's
house in order has been a tough anal,
painful task. 4t,
I remember John Kennedy saying
that when he came into office the
thing that surprised him most was to
find that things were just as bad as,
he'd been saying they were.
in my case, the biggestsurprise was
finding out that they were even worse.
And it'a a real huinin-tragedy that
so many of our people today are still
suffering for the political mistakes of
the past, that we ye finally, started to
correct.
And now, let's look ahead for a mo-
ment as we enter our third year. I see
an American economy and an Amer.
'lea on the mend. Nearly every eco-
nomic indicat6r shows us heading into
recovery. The same economists who
were arguing a few months ago about
how much worSe the economy would
get are now arguing how strong the
recovery is going to be. And I think
that's a step in the right direction.
We've reached a bipartisan comPro-
mise to save the Social Security sys-
tem and our efforts to strengthen our
security and build a more peaceful
world through arms reduction negoti-
ations with the Soviet Union and
through helping the peace process in
the Middle East and other world trou-
ble spots are in full swing.
Right now, I'm in the process of
making final budget decisions. I'm riot
here to leak any details, but I can tell
you that our budget will be fair, realise
tic and ,vill pave the way for a strong,
sustained recovery. And so I say that
for all out troubles, midterm finds this
Administration and this country en-
tering a sgason of hope, '
Now, unless someone's going to
bring out a cake with two candles on
it, well, first, I just want to show you
when this is going to be distributed.
This is a record. All of the legitimate
leaks are combined in here. It's a two-
year review that will be distributed to
all of you of what has taken place and
what has been accomplished in the
Government in these twe years.
And now I think it's time for ques-
tions. But, again, I'd like to suggest
that we get started on whatever the
first question is and get started on that
subject. That may be a little more or-
derly if we said, well, O.K., anyone
with further questions on that subject.
Gary.
QUESTIONS AND ANSWERS
Problems in Office
Q. Mr. President, you pointed Out
the high points of your first two years.
What are the low points? Does the fail-
ure, economically, of the budget not to
grab hold, the high deficits, the high
unemployment, are you taking re-
sponsibilty for those as well?
A. Well, I would think some of the
disappointments have been that in the
give and take and the compromise
that has to take place in the legislative
process. We never did get, intact,
what we thought was a well thought.
out economic plan. We had to give
way with regard to a limit on spending
in many areas. We've never gotten as
much as we asked for there. We did
not get the tax incentive program In-
tact and with the impact that we
thought it would have on the economy.
As from 30 percent, for example, in
that one phase of the income tax to be
put in retroactively beginning in Janu-
ary of '81 to have not, get only half of
that installment and get it down th
line in October and so forth. -
The things of this kind, I think the;
somethin over which we have no Co
interest rates for so lens when they
trol wouldbe maintaining of the high
pulled down from the :great Money u
surge of the 80's, which perpetuated
the interest rates to the point that 1 ;-
think they were responsible for the
step off the cliff.
I can't say this recession did not
begin in Say of '81. This recession has
been coming on for several years and
gradually growing worse, as we were
able to talk about in thecampaign.
Hindsight on Performance
Q. Mr. President, knowing what you
do now, this is really a [inaudible]
question. Is there anything that you
yourself as President, would have ,
done differently in those two Years,
nce on Foreign and Domestic Matters
the 10 principles ? guiding principles
of Communism. And they're all there.
That promises are like pie crusts,
made to be broken. And he went right
on down the line, that you, that the
Soviet Union considered the, and I
used this, I quoted this two years ago.
He said that the Soviet Union believed
that the only morality was that which
furthered the cause of world Social-
ism. That they recognized no other
Now, then, I said I'd recognize
Leslie.
Q. Could I have a followup on that?
A. Yeah.
Q. Because I asked that question,
and the question, roughly, was, `Mr.
President, do you think the Soviets
really want a true detente or are they
after world domination? What do you
think their goal is?
A. I thought there was something in
there about trust.
with the knowledge of the ecorimornY-?! Q. Two years later, sir, what is your
that you're now expecting? - assessment now? What would you say
A. Well, I could ye demanded a rett today to that question?
count. But, no, we tried very hard and A. We're going to continue because
think that the, I think in a cowry- f: we believe that the Soviet Union has
mise, all in all, we did get a goodly, some problems of their own that have
share of what we asked, but I can to be resolved. And in these negotia-
think of anyplace where we would've, dons that are going on, we think that it
changed courses drastically, would be in their interest as well as
, . ours, That's why we are so hopeful
Approach to Russians r and optimistic that something can be
gained here, that they cannot go on
Q. Mr, President, do you wish now, down the road they're going in a per-
m hindsight, that you hadn't started , petual arms race. And so, we have,
out With such a very tough rhetorical/1 this is one of the things that are in con-
line about the Russians. In the last tWQ; nection with their own arms race. It
years, I think, many observers think gives us a leverage that has brought
that you've been in a push-pull situa-1 them to the table in the first place.
non. One day in London talking about" Now, we know that the thing they
a crusade for freedom, the next day as: don't want, above all, is the placement
in Bonn, talking about accomniocla: - of a deterrent to their SS-20 missiles in
tion with the Soviet Union. And just', Europe. And we claim that the, to con.
this morning, the Soviets are saying tinue to stand there with them having
that they will break off the arms tie- r enough warheads to literally wipe out
gotiations if we go ahead with our mis.!;1 every population center in Western
sile deployment in Europe. Where do Europe with no deterrent on our side,
v.re stand re with the Soviets? I and the NATO allies recognize this,
first press confer that wewill provide a deterrent. But /
A. Well, Sam, let me jog your merii--:1 and we have said, at their request,
ores a bit. In that
ence across the street, the question, t we have said it'd make a lot more
that was asked of me was with tegardi, sense if we simply, rather than two
to my personal trust in theSeviet4 sides facing each other jhere with
Union. Did I trust andbelieve thek, these missiles poised at eaeh other, if
Soviet Union? And I did not render as we simply went to a zero option. Now
an opinion of mine the things that LI they've agreed halfway with that,
said about them. ; They want us to remain at zero and
. My reply, if you want to go back and they're willing to trim a few of their
look it up, was that this is, what they, warheads if we will. Leslie.
said of themselves. That they re.':
their ways, to be dish000 Arms Negotiations
ise, to change
served these rights to break a prom.
est and so forth, if it furthered, the!, Q. 1 have two questions. One is --
cause of Socialism. Now, just the:, you seem to be saying that you do not
other day, one among you somewhere', trust the Russians at the negotiating
has written and commented on that table. I mean, are you saying that you
and has quoted the 10 commandments,' A. No,
no, At a negotiating table,
of Nikolai Lenin, that he'd printed art.: they've got to make proposals which
4
we can then counter and we keep on
negotiating. This is a little bit like hag-
gling over the price.
Q. The pie crust. A. What?
Q. The pie crust. You're saying . .
A. Well, ...
Q. . .. they make promises that you,
can't. . .
A. An, but now, this is why the most
important part in arms negotiations,
from our side, must be verifiable. We
must both agree to the right of each
side to verify that the other is doing
what is said.
Zero-Zero Proposal
Q. My second, so You, there is some
trust that you can build into this. Is
there any flexibility in your zero-zero
proposal?
A. The trouble is if I answer that,
then I'm getting into what I said I
wouldn't talk about the other day. You
can't talk openly about strategy or
tactics. We have said, and we stick to,
we have said that we believe the best
solution for both of us- is zero-zero,
both sides, but we have said we also,
we will listen to and negotiate any fair
proposals that are made.
Q. This is beyond negotiating at the
table. It's become a public relations
propaganda campaign that the Rus-
sians are waging in Europe. Do you
not want to jump in and get in the
propaganda thing and answer the
, Soviets to the public?
' A. Yes, the answer to that is not
propaganda. It's public relaitions.
There is no question. Their goal is that
whatever they do, they do not want us
to implement the plan of placing even
one of those missiles in European soil.
And we are just as determined that we
are going to stay on schedule with
that. And, when I say it's public rela-
tions on our part, it requires us to re-
mind those people that are hearing
this propaganda both here and in Eu-
rope that what the Soviet Union is de-
mending is the right to maintain,
enough intermediate-range nuclear
warheads to literally, as I say, hit
every population center in Europe.
But they don't want a single weapon of
a deterrent nature to be there on the
other side. And when the people real-
ize that I think the people living in
those population centers are going to
have something to say.
Making Taxes Equitable
Q. Mr. President, I know you have
been trying to make taxes more equi-
table. Are you going to push for the
flat taxes so that the taxes will be
more equitable, that those in the high
brackets don't have to pay, for every-
body else continuously as is now the
Approved For Release 2010/09/13: CIA-RDP90-00552R000505370096-8
case, while some in the lower brackets
are not paying their share? #
A. Thank you for framing the ques-
tion that way. Most of the people out r
here have been commenting on that a _
different way, as if we are making it -
possible for those in the upper brack-
ets to do better. We are, that is a thing
that is, we've agreed to look at, to
study, in connection with what we
think is the top priority in taxes in this , t
country, is to have a tax system that
the people can understand. Our in-
come tax has become so complicated tr,
that virtually no one can handle their
own tax affairs. And in looking at that 2, t
we're going to look at that. We're look-
ing at all kinds of other things. We've
made no decisions as yet. Helen?
Report on Missile Talks
Q. Mr. President, were you confirm-
ing the reports that the Soviets have
threatened to pull out of Start if we de-
ploy the missiles and I'd like to know,
if they do, what are you going to do
about it?
A. We have only heard that as a
rumor. We have no report that that is
an official demand of their negotiaV.,
ing. I've got to get back into this rodm
a little.
Indexing Income Taxes
Q. Mr. President, question on taxes.
If the Congress tries te repeal the in-
dexation of income taxes, one of your
favorite plans. Will you veto such a re-
peal?
A. I am determined that the two re-
maining tax cuts of our program will
be put hi place. That is the 10 percent
cut in July and then the further index-
ing to stop Government from making
a profit on inflation because when
Government does that it becomes too
tempting to Government to do the
things that create inflation. _
Q. Thank you, Mr. President, unlets
you want to go on.
Becoming a Moderate
Q. Have you really gotten to be too
much of a moderate?
A. We're going to do this more often.
There'll be another chance. I'll tell
you, the next time I promise you
start at the back of the room and an-
swer the questions coming down this
way instead of the other way around.
But his question was am I concerned
about being identified as looking too
much like a moderate. I have to say
you must be doing something right
when you're getting rocks thrown at
you from both sides.
Q. Thank you.