My attitude is that the United States can help provide Justice Department and information sharing-Justice Department collaboration with their respective people in government. In terms of narcotrafficking, the first thing the United States can do is convince our people to stop using drugs. If there is a demand, inevitably there will be a supply, so we have an obligation here at home to work to reduce drug usage. If people do not find a better market, if people do not find a healthy market, there will be less pressure to produce drugs. Secondly, we can enforce our borders and make it harder for drug dealers to be able to get their drugs to market. One way to better enforce our borders, besides stepping up presence on our border, is to pass a comprehensive immigration bill in the Congress, one that says that the person coming to do work that Americans are not doing does not have to sneak across the border, thereby enabling our Border Patrol to be able to focus on narcotrafficking. In other words, you can raise the cost of getting drugs into our country by making it harder for them to penetrate our borders. Thirdly, we can work internally with governments, and do. We do a lot of bilateral work. I do not want to jump to-I am not going to jump to the next country, but one perfect example is the cooperation and collaboration between Mexico and the United States on helping each other with information sharing. Fourthly, we have got Central American gangs in the United States, that as we find and arrest, we can share information we learn from them with the host government. The best way, however, to ultimately deal with crime, besides reducing the demand for their product, is to enhance prosperity. We would rather people try to make a living honestly. And therefore, there needs to be hope; there needs to be the possibility of that honest living to be able to be made so that youngsters do not turn- feel they have to turn to crime. And finally, a social program, social justice programs, like education; the United States spends a lot of money in Latin America on education programs, programs aimed at either training teachers to teach and/or direct aid to education programs throughout our hemisphere. An educated child is one that will have a hopeful future, and therefore, less likely to be recruited into a criminal gang. And my question goes in the same sense as my friend Eduardo.


Yes, as you know, President Calderon has positioned himself at the forefront in the war against drugs, and especially on violence that derives from drug trafficking. And would his efforts now motivate the U.S. to be more conscious in stopping illegal weapons crossing the border, north to south? Mexico is rightly concerned that there are traffickers taking contraband from our country into Mexico. Just like we are concerned that there are traffickers bringing humans and/or drugs from south to north, which means that we have got to commit ourselves to rational border policy that will work. I am a strong supporter of comprehensive immigration reform. I believe strongly that a comprehensive bill will make it easier to focus on drugs and guns if people do not feel like they have got to sneak into the United States. Secondly, such a bill will enable us to- it will help us dismantle an industry that has sprung up that uses human beings as product, as chattel. And that is unacceptable to this country. Now the incentive is for people who want to do work that Americans are not doing, is to pay money to be stuffed in the back of an 18-wheeler, for example, and driven across and ducked out in the desert, where they hope somebody will come and rescue them and take them to a motel or a house where they have to rent, and then they finally work their way toward work. The industry that has sprung up as a result of the current immigration law is inhumane, and it does not reflect the values of the United States. So to answer your question about drugs moving one way and guns moving the other, immigration reform will help. It will mean that the people and assets we have on the border can be focused on precisely that which you are concerned about. Now, as to President Calderon's next steps, that is up to him, and one purpose of my visit is to listen to his strategy. I have confidence that this man, elected by the people, will devise a strategy that is best for Mexico. And the role of the United States is not to devise a strategy but is to listen very carefully as to how we can help implement that strategy, and part of my visit is to be a listener and a partner. And I appreciate the strong stance that President Calderon has taken. He has shown courage because he is committing the stake to take on some very powerful, very rich, and very lethal people. And that takes courage, and I admire courage when it comes to leaders in public office.

Interview With Foreign Print Journalists


There is a perception that one of the objectives of your trip is to strengthen relations with the countries that are U.S. friends. So my question is, what do you think of the rise of this so-called alternative development model, championed by President Chavez, that calls for nationalization, greater government intervention? And what is Brazil's role in the region, taking that new development model into account? Each leader is going to have to adopt a governing style and an economic model that they believe yields to prosperity for their people. I strongly believe that government-run industry is inefficient and will lead to more poverty. I believe if the state tries to run the economy, it will enhance poverty and reduce opportunity. So the United States brings a message of open markets and open government to the region. My trip is to remind the people of Central and South America that we live in the same neighborhood and that the United States is committed to empowering individuals to realize their God-given potential. I would like to cite some statistics for you, just to help prove my case. Since I have been the President, the line item for traditional bilateral aid has doubled, from about $800 million a year to $1.6 billion for the region. And that is a total, when you total all up the money that is spent, because of the generosity of our taxpayers, that is $8.5 billion to programs that promote social justice, for example, promote education and health. The reason I bring that up, it is very important for me to remind our own people as to why it is important to continue to be generous in our neighborhood. If you are interested in peace, then you have got to be interested in prosperity and hope. Our programs are aimed at encouraging hope. Secondly, there is about-make sure I get this right, here-there is about $350 billion of direct foreign investment in the region. Now that is important because investment yields jobs. And wise economic policy recognizes that investment can help improve the lives of the worker or the person who is anxious to make a living. In my speech yesterday, I pointed out the fact that, by far, the vast majority of people in our neighborhood are really hard-working, decent, family-oriented people who just need a chance. And a direct foreign investment-that means somebody believing that the investment climate is worthy of investment-helps that working person, that hard-working person find employment.


And so our presence in the region is sometimes very quiet, but very effective. And one part of-main purpose of the trip is to tell people that we take the region and its problems very seriously and have got a good record. And we will let others make their case as to how best to proceed. We will let others come and explain why their point of view makes sense. All I can tell you is that I believe that the system of government and the system of economies that we promote is fair. Now, I fully recognize that until people actually feel progress in their pocketbook, that there is going to be frustrations with forms of government. But that does not mean you kind of revert to something that I do not believe will work. It does mean you have got to make sure that the aid and the progress that you are making actually helps. I am going to do a followup on that question-- For example, we, in Uruguay, we are seeing President Chavez's policy of financial agreements and commercial agreements on investments. And he is also going to Argentina on the same day that you are going to Uruguay, and he is even holding a street rally in Buenos Aires on that same day.  Look, I dare-I go a lot of places, and there are street rallies. And my attitude is, I love freedom and the right for people to express themselves. I bring a message of good will to Uruguay and to the region. My trip is one that says, let us find ways to work together for the common good. And the United States has got a strong record of helping people, and I am really proud of it. And it is very important for the American people to hear firsthand our concerns about our neighborhood in order for them to continue to support programs, such as the Millennium Challenge Account, which is an $855 million program, and encouraging good governance in the region or the education for the-we have got a new teacher initiative we have laid out, and we believe by, I think it is 2008, we will have trained 20,000 teachers. There are a lot of-you have got to understand that in a country where there are isolationist tendencies, where people sometimes say, It is not our problem, that the President has got to be constantly reminding people that poverty in our neighborhood is our problem. So the trip gives me an opportunity to highlight successes and to point out challenges so that the American people stay engaged.


One of the great assets in our country is the fact that there are compassionate people that are willing to go into parts of the world where there is desperation and poverty, you know, our faith-based programs, for example. I am not sure to the extent to which they have gone to Uruguay, but I know in Guatemala, there is an extensive program to help poor workers find market access so they can make a living. I am going to visit one such program. Our military-people think of the United States military as war fighters, and they are when the Commander in Chief puts them in such a situation, but our military is building health clinics throughout Central America, for example, in a very quiet way. And my trip will help herald some of the programs we are doing. One, we are trying to convince the American people it is worth it; and secondly, reminding our neighbors that we care. ENTITY, in Colombia, there are growing concerns about two initiatives that the U.S. Congress is now considering. One is the free trade agreement with Colombia, and the aid package for 2008. Democrats in Congress have already raised some objections about labor, ecological, and human rights issues concerning the FTA. In the case of the aid package, some people in your administration have said that Colombia should assume more costs of Plan Colombia in the future. Also, Democrats are already talking about reducing the aid. What will your administration do to increase the possibility for the approval of the FTA? And should Colombia expect to have a reduction in the aid it receives in the years to come? First, I will defend our budget strongly, that we have submitted to Congress, which, as I described earlier, does have a reduction, but only because we think Colombia is more capable of funding certain aspects of the program. And I look forward to telling President Uribe that he can count on the United States defending that which we sent up to Congress. That is what we believe is the right number, and we will vigorously defend the number. Free trade with Colombia and Peru are coming up for votes. And like all free trade agreements, we will battle for their passage. Now, obviously, to the extent that we could-and by the way, the President has been here working hard, been making phone calls. And the reason I mention these tough votes, again, is that people should not take access to the U.S. market for granted.


I mean, the CAFTA vote was a tough vote, and we worked hard, along with the leaders. And this will be a tough vote; I do not want to send any other signal but that. On the other hand, it is an important vote. And we want to-and I call upon Democrats to understand the consequences of this vote- and Republicans. Members of Congress have got to understand that when we negotiate in good faith a free trade agreement that the-they need to understand the consequences of not supporting it. And we look forward to working with the Government to get it passed. ENTITY, so far, what is your evaluation of the impact of the free trade with Central America? And what do you expect in the medium and long term to be delivered by the CAFTA? And how the countries of Central America and the United States can work together to improve or to make it better, the trade between countries? There are great expectations when trade agreements get signed that all of the sudden, there is going to be instant prosperity. And I fully understand that in parts of Central America, when people heard that U.S. markets were open and the CAFTA markets were open that there would be-people say, well, we have done this to increase prosperity. Part of my messaging in Central America will be that opening markets is the first step toward more prosperity. Now, I am going to go to a program, Labradores Mayas, that is a great example of what is possible for an indigenous farmer that was scratching out a living, ends up kind of establishing a co-op, goes and gets a loan, which, by the way, is an essential part of our program, and that is to provide microloans to people to be able to begin to realize dreams. It was what, a micro thing, but nevertheless, the co-op was able to then develop an irrigation system, which then made their production of high-specialty crops more efficient. I cannot wait to see this. It is a reminder that the United States approach to the region is not a political approach, but it is a human approach. It is one that emphasizes that human potential exists and that the best programs are those that elevate the potential. So I will try to help deal with expectations, Eduardo, about how markets evolve. And one way for me to do so is to remind people about the effects of NAFTA with our important neighbor to the south, Mexico.


When I grew up in Texas, the border, la frontera, was like a third world on both sides of the border. And then in the early nineties, NAFTA was passed. It took awhile for people to realize how the inevitable adjustments that will come when people start accessing market. And if you were to go down to the border today, you'd be stunned at the prosperity on both sides of the border because of trade. Now, when I was the Governor of Texas-I was elected- I was sworn-in in '95-we were beginning to see the benefits of the NAFTA trade on the border. I fully understand that. To answer your question, in the long run, what ends up happening is, again, I think the Mexican model is good to look at, because we are constantly dealing with trade disputes. Since I have been ENTITY, we have dealt with Mexico on a variety of fronts, like, I think tomatoes or corn, whatever-avocados, exactly, por cierto-cement. There is a constant need to evaluate the trade agreements and to deal with the natural tensions that grow up. It is not easy to have a trading relationship, but it is a lot more hopeful than not having a trading relationship, is my view. And that is why my discussions with President Lula on the Doha round are going to be very important. Brazil is a major player in the international community. And the Doha round, in my judgment, is a vital round that we would like to see progress, because I'd repeat to you that a system that trades fairly and a system with more open markets is one that allows people to more likely rise out of poverty. A successful round of Doha is by far the most effective poverty-alleviating program in the world. From your past experience in the energy sector, you know that Mexico and Canada are strategic partners for the U.S.- through the subject of energy. And what benefits do you think that Mexico will get, and also its neighbors, from a position of opening its energy sector to private investment? Jose was right that our biggest suppliers of energy are Canada and Mexico, and that is good. I'd much rather be getting energy from stable sources that are friendly than from sources that are unstable and not friendly.


And since we import about 60 percent of our crude oil from overseas, we are obviously dependent upon stability, one reason why, Jose, that it is important for us to work with countries to help develop a more robust ethanol and biofuels industry. However, having said that, we are still going to require oil. And to the extent that Mexico makes the decision internally to be able to attract enough capital to expand to keep up with world demand, that would be positive. But most of all, it would be positive for Mexico. Mexico has got a valuable asset in its energy sector. The demand for that energy is significant; however, the exploitation of that energy requires significant investment. It requires investment to keep their sector-the current sector modernized, and as you all know, that as Mexico continues to expand its production in deeper waters in the Gulf of Mexico, that requires even more capital investment. So to the extent that the Government feels comfortable being able to track sources of capital outside of the Government cashflow, to me that would be something that certainly ought to be considered by President Calderon. Can you come up with a unified question? What role can the countries of Latin America, like Brazil, like other partners in Latin America, can play in the Cuban transition to democracy? The message, in my judgment, to the world during a transition period, is freedom-that we ought to expect that the Cuban people have the right to express themselves openly without fear of reprisal, to be able to express themselves at the ballot box, and to be able to realize potential as a result of an open economy. What I hope happens is that we together insist that transition does not mean transition from one figure to another, but transition means from one type of government to a different type of government, based upon the will of the people. That will certainly be the position of the United States. We believe the Cuban people ought to make the decision for the future. We believe it ought to be up to the people, the long-suffering people of that island to decide their fate, not the fate-not to be decided because somebody is somebody's brother; the fate ought to be decided because that is what the people want. And I would hope those who have lived under the blessings of liberty have the same message. Vamos a ver, cuando-how long he stays on Earth, that is a decision that will be made by the Almighty.


As you know, head of U.N. inquiry, Serge Brammertz, will present his report to the Security Council in a few days. How should the international community respond if the report concluded that Syria did not fully cooperate with the inquiry, as previous efforts did? Our position is, is that we want to know the truth, and we expect all parties to be forthcoming with the truth. The truth is really important to help Lebanon meet a goal that we want for Lebanon, which is free of foreign interference, democratic and peaceful, so that people can realize dreams and so the great country of Lebanon can grow and prosper like I am confident it can. So the United States will constantly remind all parties that we seek the truth, and we expect parties, when asked about the truth, to be forthcoming with the truth. I am worried about people who stall and hope that the world turns a blind eye to a terrible death. And we are not going to turn a blind eye. We will keep focused on this important issue, because we believe in the future of Lebanon. From what you say, many in Lebanon fear that there might be a deal between Washington and Damascus. In other words, if Damascus complied with Washington demands regarding Iraq, regarding Hizballah and Hamas, would you let the inquiry not reach its ultimate? Part of our desires for Damascus is, of course, to shut down terrorist bases in their country, and is, of course, to stop cross-border infiltration into Iraq, is, of course, to stop allowing people to find safe haven to plot and plan attacks in the neighborhood. But part of our demands was to-was 1559, which is, completely out of Lebanon. We are people who believe that when we say something, we have got to keep our word. I think that the light of truth is very important toward establishing a peace that we all want in the region. I really do want young boys and girls in Lebanon to be able to grow up in a world free of violence. Lebanon is a fabulous country; Beirut is one of the great international cities of all time. And it is in the world's interest that this democracy survive, and not only survive but flourish and thrive. And so we do not -we really are not going to deal away Lebanon's future. Yes. and you have demanded repeatedly that Lebanon should implement this resolution. Will you give the Lebanese Government a chance to resolve this issue through national dialog, or you will exercise more pressure?

Interview With Diana Moukalled of Future Television of Lebanon


The truth of the matter is that peace in Lebanon is going to be achieved by Lebanese leaders, people in Lebanon who are dedicated to the future. The United States can-we can work; we can help; we can pressure Syria; or we can do things. But what we cannot do is to force people to be courageous in the name of peace. That is up to Lebanon's people themselves-the people of Lebanon themselves. The Lebanese must stand up and say, We demand a open and free and transparent society so we can live in peace. We will help, but courage comes from within people's souls. And we have been encouraged by courage being shown by those who believe in Lebanon's future. Are you following the national dialog that is happening now in Lebanon? Many believe that without international efforts, this dialog will not succeed, where other parties think that the American pressure is keeping Lebanese from reaching an agreement. I understand the talks have been suspended for a week, but they will be ongoing, and I think it is a very important part of the Lebanese folks putting aside past-the past and focusing on a bright future. And we will help, and we will encourage, but ultimately the decisions have to be made by the Lebanese citizens, that they want something better than violence and war and division. The two controversial items are the ousting of President Emile Lahud and the disarming of Hizballah. 1559, which we strongly support, says that armed militias should be disarmed. And secondly, we believe that the President ought to be independent, ought to be someone who will strongly represent the interests of the Lebanese people. And I think it is very important to understand that democracy-you cannot have a democracy if political parties have their own armed force. Our position is that the Lebanese forces ought to be in control of the security of Lebanon, for the good of the people. What is your position regarding ousting President Emile Lahud? I think the characteristics for the President ought to be somebody who is independent-minded, somebody who focuses on his- the future of the country, somebody who understands that foreign influences inside of a country can be very negative. ENTITY, as you know, the situation in Iraq is really deteriorating; the country is on the edge of a civil war. The support for U.S. policies among Arab public opinion is-it is minimal.


Many believe that you are focusing on Lebanon to divert attention from what is going on in Iraq, or it is a part of a whole scenario to control the region. Why did Lebanon get so much of your attention in the past year, whereas Syria controlled Lebanon for 30 years? Because I believe in democracy. I believe democracy yields peace. That is a historical-it is been proven throughout history that democracies yield the peace we all want. I want young boys and girls in Lebanon to grow up in peace. It is what I want. I am-I want the same thing for Iraq. I want Iraq to be a democracy-not a U.S. democracy but a democracy that takes into the-the traditions, the Iraqi traditions and the history of Iraq, just like the Lebanese democracy will reflect the history of Lebanon and the traditions of Lebanon. I believe there are such things as universal values, and I believe everybody desires to be free. And it is difficult in Iraq, no question about it. But I want-I want you to remember that the Iraqi people expressed their opinion last December about civil war. Eleven million people went to vote in difficult conditions saying, We want freedom, and we want democracy. And I am convinced, ultimately, the people's will will win out and defeat those who want to try to create a civil war. Our position in the Middle East and throughout the Muslim world is that we want to be a partner in peace; we want to help people realize their potential. And I hear the-I hear the language about the United States, that United States is anti-Islam. We view Islam as a religion of peace-or that the United States has got this design. But we will protect ourselves. But the best way to protect ourselves ultimately is to encourage good relations amongst Muslim people and to encourage democracy. That is what we want. We believe in societies where women have got a chance to realize their dreams. We want there to be good education and good health care, and to the extent that people want our help, we are willing to help. But so far, you are not winning the hearts and minds of Arab people. Well, it is -there is a lot of negative news on TV. There is a-the enemy to democracy has got one tool, and that is the capacity and willingness to kill innocent people. And that shocks people. People of good conscience grieve when they see innocent life being taken by car bombs or when they read about beheadings.


ENTITY, is there anything you can tell us on the record concerning the visit of your various power officials here today? They are members of a committee, I could not tell you the name of it, that has on it somebody from the Federal Trade Commission, somebody from T.V.A., somebody from Interior and one or two from the Power Commission. They have been working- I think the whole thing came out last spring-on a general survey of the power situation, and they are going to talk with me about that tonight. No, it is separate from that. It relates only to power. It is one of the inter-departmental committees to report on the general situation. Still on the record, does that visit here mean that you have in mind any new moves of a concrete nature in the immediate future in connection with what you were telling us the other day? This has nothing to do with the trip or T.V.A. or anything like that, except in so far as it relates to general power policy. . . . I feel I am doing a lot of talking here, but the other day you spoke of power and there are a lot of interpretations on it. Do you mind telling us what your ideas are regarding private power companies? All right, I shall give you something on that, but this has to be off the record because I do not want to be in the position of interpreting what I said. Two years ago, in this room, you were here, Fred . . . We spent an hour and a half. I think it was in January, 1933, and we had been down with Norris to see the Wilson Dam. And I had said up there publicly that we were going ahead with the development of Muscle Shoals. That is all I said at that time publicly. We came down here and we had this talk in which I outlined what developed into T.V.A. . . . Power is really a secondary matter. What we are doing there is taking a watershed with about three and a half million people in it, almost all of them rural, and we are trying to make a different type of citizen out of them from what they would be under their present conditions. Now, that applies not only to the mountaineers-we all know about them-but it applies to the people around Muscle Shoals. Do you remember that drive over to Wheeler Dam the other day?

Excerpts from the Press Conference in Warm Springs, Ga


You went through a county of Alabama where the standards of education are lower than almost any other county in the United States, and yet that is within twenty miles of the Muscle Shoals Dam. They have never had a chance. All you had to do was to look at the houses in which they lived. Heavens, this section around here is 1,000 percent compared with that section we went through. So T.V.A. is primarily intended to change and to improve the standards of living of the people of that valley. Of course it is an important one because, if you can get cheap power to those people, you hasten the process of raising the standard of living. The T.V.A. has been going ahead with power, yes, but it has been going ahead with probably a great many other things besides power and dam building. You talk about a yardstick of power. H. A. Morgan is running the fertilizer end of it and at Muscle Shoals he is turning out, not a nitrate-the plant was originally built for a nitrate plant-but he is turning out a phosphate. He is conducting a very fine experiment with phosphate of lime. They believe that for this whole area around here, and that would include this kind of soil around here, phosphate of lime is the best thing you can put on land in addition to being the cheapest. Now at once, the fertilizer companies, the National Fertilizer Association that gets out figures , say, Are you going into the fertilizer business? Therefore, they are going to take this year a thousand acres of Government land, worn-out land typical of the locality, and they are going to use this phosphate of lime on these thousand acres and show what can be done with the land. They are going to give a definite demonstration. They will compare it with the other fertilizers, putting them in parallel strips, and they will see which works out best and at the lowest cost. Having the large plant, they will be able to figure out what is a fair price for the best type of fertilizer. Having done that and having figured out the fair price, it becomes a process of education. If the farmers all through that area can be taught that that type of fertilizer at x number of dollars a ton is the best thing for them to use, then it is up to the National Fertilizer Association and its affiliated companies to meet that price.


Now, that is the real answer, and we hope that they will meet that price, adding to the cost of manufacture a reasonable profit. We shall know what the cost of manufacture is, and it is very easy to say what a reasonable profit is. Now, if those gentlemen fail to avail themselves of this magnificent opportunity to conduct a sound business and make a profit, well, it is just too bad. Then somebody will get up in Congress and say, These fellows are not meeting their opportunities and the farmers will have to have the fertilizer and of course we shall have to provide it. But I, for one, hope that that day will never come. Now, that is not holding a big stick over them at all. It is saying to them, Here is your opportunity. We go down on our knees to you, asking you to take it. In other words, what we are trying to do is something constructive to enable business . . . You take the example of Corinth we went through the other day. In Corinth, without Government assistance- they did it themselves-they had a county electric-power association and they used to buy their juice from the Mississippi Power Company. Because they were on a through line to Tupelo, the T.V.A. came along and stepped in as a middleman, and still bought the power from the Mississippi Power Company at a lower cost per kilowatt on the agreement with the Mississippi Power Company that it would take more juice. The result was that the Mississippi Power Company gets the same gross profit as it was getting before, but it is selling more power. Then the T.V.A., merely acting as middleman without any profit to itself, turns around and sells it to the county electric-power association. That part of it does not change the existing situation at all. The Mississippi Power Company merely gave a lower rate to the Alcorn County people, but it did it via the T.V.A., instead of direct. It does not cost the T.V.A. anything, and it does not receive anything. Now the Alcorn County people, that is the Alcorn County Electric Power Association, did a very interesting thing. There they had Corinth, which is a good-sized town, and they found they could distribute in Corinth-these are not accurate figures-they found they could distribute household power at about two cents a kilowatt hour.


But if they were to run an electric line out to a farm, they would have to charge three cents. In other words, the farmer would have had to pay more. What did the Corinth people do? They said, We can get cheaper power than the farmer, but we think he should have the same rates we are getting. Voluntarily they agreed to take and to pay for two-and-a-half-cent power which enabled the farmer to get two-and-a-half-cent power. Now, there was no reason in God's world why the Mississippi Power Company could not have gone to Corinth and said the same thing-no reason in the world. It just never thought of it. It could have done that same thing. But it was the T.V.A. that went down and sold the idea to the people in that county and said, Let us have a uniform power rate for the man next to the powerhouse and the same rate for the man who lives twenty-five miles up the Valley. We do not want to concentrate any more people in Corinth. We want to increase the rural population. The result of that operation is that they are increasing-they have more nearly doubled the consumption of power. Furthermore, they have gone ahead and formed another association, tied up with this county one, by which people can buy refrigerators and electric cookstoves and all the other gadgets at a figure which is somewhere around 60 or 70 percent of what they were paying before. A subsidiary of the Mississippi Power Company in the business of selling refrigerators, generally owned -I am just saying this as a mean aside- generally owned by a son of a president of a power company-there is a lot of that nepotism-would go around and say, We will sell you a refrigerator. You can pay for it over thirty months. The total cost to you at the end of thirty months will be three hundred dollars. In other words, it was a hundred dollars extra for instalment payments. It did not say that, but that is what it amounted to. In other words, it was selling them the thing at two hundred dollars, and it was making an average of 18 to 20 percent on that sale during this thirty months. That selling corporation, of course, made not only its 15 or 20 percent, but also made quite a lot on what it had paid for the machine.


It had probably paid a hundred and seventy-five dollars for the machine, so it made twenty-five dollars on the machine. Now, whom did it buy it from? It did not buy it from the General Electric or the Westinghouse. It bought it from the middleman, and he also made a twenty-five-dollar profit on it, and the General Electric Company got only a hundred and fifty dollars for the machine. Therefore, when the consumer paid three hundred dollars, it was just 100 percent more than the General Electric Company got for the machine. We went to the General Electric Company and said, Will you give us your wholesale rate on machines? And we went to all the other refrigerator manufacturers so as to have a complete line, and then we said to the householder, You can buy this for a hundred and fifty dollars plus a five-dollar handling charge, paying for it over thirty months at 5 percent interest instead of 18 percent. The net result is that instead of paying three hundred dollars, he pays a hundred and seventy-five or a hundred and eighty dollars. His instalment cost is at 5 percent instead of 18 percent. He gets it at the wholesale price, which the Mississippi Power Company could have done exactly as well as the T.V.A. In other words, we are teaching him something. Whom is Corinth getting its power from now? I do not quite understand the power company getting its same profit. Ruble, who runs a department store down there, told us that the building had its bill cut from sixty dollars a month to forty dollars and he doubled his consumption. That is the point; what does it do? Suppose it were selling-well, let us put it in algebra. Suppose it were selling x kilowatt hours times y cents per kilowatt hour. The total receipts of the company amounted to z. Now, we come in and tell these local people that if they will buy 2x kilowatts times 1/2 y-in other words, half the price-you will still have z. In other words, if they buy twice as much power at half the cost, the gross will be exactly the same at the end of the month. Now, that is what we have been trying to do.


I do not know the consumption back in Corinth, but in Tupelo we estimated it would take a year at a three-cent rate running down to one, instead of a rate starting at six cents and running down to three. We figured it would take a year for the consumption of power to double. Actually, it took only four months. The consumption of power in Tupelo has doubled in four months. The result is that the local company has an even bigger gross in the way of receipts than it had before, and yet the consumers of that power, whether shopkeepers or farmers or householders or anything else, are getting their electricity for less than half the price-about 45 percent-of what they were paying before. The only overhead is when you get an extension of rural lines. There you have a larger inspection force to watch the lines. Then we are doing a third thing along the same lines. The power companies did a silly thing when it came to rural electrification. They put out all kinds of specifications for rural lines that were out of the question. There was a certain rural line we wanted here in Warm Springs, and the specifications of the power company, as I remember them, called for thirty-five-foot poles, white oak, that had to come from North Georgia. They had to be hauled here by railroad. Then I think it charged eighty dollars for the transmission line into the farmhouse. The net result is that a line for five or six farmers would cost somewhere on the average of four or five hundred dollars. Then it said to him, along the same line as the refrigerator, You can pay that over a number of years with a small charge for interest. The interest ran from 18 to 20 percent. What we are trying to do is to build a rural line which will be substantial. We will put in transformers, actually at cost from the electric supply company, the General Electric Company or the Westinghouse, and then let the farmer pay for his power line at 5 percent instead of 18 or 20 percent. It means that on the average he can put in his power line for about 60 percent of what it costs the other way. Now, we come back to the old simile we used before. I hope that the proper power-company officials will accept this free education that the Government is giving them. If they come in and do it right with a reasonable profit on their actual cost, that is all we are asking.


In Atlanta the Georgia Power Company runs its auxiliary plant in Atlanta with gas. It buys gas from Mississippi, makes electricity from the gas-converts the gas into electricity- and sells it at a profit. It uses about twenty million cubic feet a day. Do you know, about gas-Ickes told me this on the train the other day- there is going to waste every year in the Texas oil fields $72,000,000 worth of gas. It is just escaping into the air. Now, if that gas were turned into electricity, think what it would mean to Texas. That is $6,000,000 worth of gas a month. They pipe the gas into Atlanta from Mississippi. If that much is going to waste in Texas, what is the gas wasted on Capitol Hill? That would run the District, anyway. It might cut the District tax rate. Now, coming back to the point, this statement shows a balance available for construction and retirement of 35 percent of the gross. If you were to analyze the financing of most of the private power companies, you will find that in the majority of cases they have been following the pernicious rule of the railroads. They get out a twenty- or thirty-year bond issue and they do not start a sinking fund. When the bonds mature they do not pay them off. For example, in the paper yesterday morning, there is one company that is seeking to refund an issue of bonds which were issued twenty years ago. That is what has hurt the railroads. The railroads never paid off a single' bond which had matured. They never set up a sinking fund. . . . The logical question that that raises is, can the average private utilities undergo the reorganization necessary to cut the rates and take advantage of the opportunity given them? Of course, we all know they do a lot of talking about widows and orphans. A certain friend of mine, who makes or perhaps saves two or three thousand dollars a year, started in about 1928 to put aside a savings fund, realizing that some day he would get old and could not work any more. Wanting a little more than 4 percent, he went to two banks in New York City, the most reputable, oldfashioned banks he could find. I was partly responsible and told him where to go. As a result, today he finds that the fifteen or twenty thousand dollars he put in is invested, about two-thirds, in bonds of utilities, not stocks but bonds.


Holding companies, all of them holding companies, none of them operating companies. He was advised to buy the bonds of these holding companies as the best form of investment he could get. They were 6 percent and 7 percent bonds and he bought them at 102, 103 and 104. He bought them above par. Today the average of those bonds is about 40. The result is that he has lost over half of the savings that he put into those bonds. Now, why are they selling at 40? For the simple reason that you have to find out what is behind them. That starts you back over a chain. Let us take Associated Gas & Electric, as an example, or Commonwealth & Southern, or any of the big holding companies. Those bonds have printed on them that behind them is so much stock. Let us call the first company the A Company, and its bonds state that it has so much stock of B Company, C Company, D Company, in the treasury of the A Company, as security for those bonds. Then you analyze and you ask, what is the common stock of B, C and D Companies? You will find that they are holding companies. And you will also find that they have outstanding certain bonds which are backed by the common stocks of E, F, G, H and I Companies. And then you will come down to those companies and perhaps they are operating companies or perhaps they are holding companies too. Sometimes you get the pyramid of the holding company principle up to the fourth dimension. The banker who does the merging gets a lot of common stock, and dumps it off on the market. Now what Charlie said was right. I do not like the expression squeezing the water out, but if the utility companies in this country could recapitalize on the basis of the money put into them, every one of them would be making a profit today and every one of them could reduce the rates. But a lot of people have taken their money and gotten out. And a lot of widows and orphans are holding the bag, having been persuaded by the best banks in New York City to buy that kind of bonds, which is not at all honest. The answer is that they hold the bag anyway, so that in reorganization it would not make any difference. In a reorganization it is just too bad about people badly advised. In other words, somebody is bound to get hurt. Suppose, for the sake of argument, you can save the consumers of power one hundred million dollars at the rate of two hundred dollars a year.


That would be five hundred thousand people who would benefit in a year. They would benefit from that kind of saving through cheaper power. You would hurt a lot of people. You might hurt twenty or thirty or forty thousand people in materially benefiting five hundred thousand. But, after all, that is one thing that Government cannot do, and that is to protect widows and orphans against bad advice they have had on investing. . . . To give you a thought, what we are after primarily is to improve the standard of living for the country as a whole. And power is merely one of the things? Do you think it is necessary to go ahead with the Tennessee Valley experiment on a national scale to bring about the plans you have outlined? Not the same kind of governmental power development if the other fellows will do it. They have every chance in the world to do it. Eight miles over here to the eastward is a place called the Cove where they make the best corn liquor in Georgia. Now, in the Cove the Georgia Power Company owns one of the most favorable power sites in the State. It can turn out at that power site something between forty and fifty thousand kilowatts at a cost of less than half a cent. It has owned it for fifteen years and it bought the whole power site for a total of fifteen thousand dollars. In other words, it bought it as a farm lot. It has sought in other years to carry it on its books for a million dollars. It is an undeveloped power site and I think the old Public Service Commission of this State allowed it to do it for a while. Farther up, where we are going to picnic, is a place where it can develop 30,000 kilowatts, and I think it paid fifteen or eighteen thousand dollars for all the land comprising that site. It has a grand chance to make cheap electricity for the whole region and we are just giving it the opportunity as well as showing it how. None of this, I take it, is on the record. No, it is just so that when you talk about it in the future you will know all about it. Cannot we write this as background? You had better keep it. If you write anything at all it will look like trying to explain something. . . . Cannot we use this, what you said this afternoon about Tennessee Valley and before-cannot we use that? Instead of using it right now, jot your notes down and let me give you a hint.


Listen, were you there in person? Last night we hosted a reception at the Embassy for many of the leaders of the Catholic Church at home, and they were very grateful that I came and Laura came and Dad came and President Clinton came and Condi came as well as others. And I told them, to a person, that it is such an honor to represent our country at a ceremony honoring a truly great man who is and will always be a great historical figure. I knew the ceremony today would be majestic, but I did not realize how moved I would be by the service, itself, by the beautiful music. I was struck as an aside struck by the fact that the sound was so clear in this huge facility. It was as if we were inside the cathedral listening, and the voices were so pure. We were given an English version, fortunately if you have not read it, maybe you have seen it? I was struck by the response of the crowd. And I think it is interesting to note the moments where the crowd responded. One in particular is when His Eminence spoke to His Holiness's relationship to the young of the world, and there was a great outpouring of enthusiasm for that line. And then I think the thing that struck all our delegation most intensely was the final scene of the plain-looking casket one of three, by the way, lead, wood, and wood being carried and held up for the seal to be seen, and then the sun pouring out. This will be one of the highlights of my Presidency, to have been at this great ceremony. So off we go to home now. Your predecessor suggested that the Pope would leave a mixed legacy, even though he was a great man. Since you differed with him on the war to such a great degree, do you also think it will be a mixed legacy? I think Pope John Paul II will have a clear legacy of peace, compassion, and a strong legacy of setting a clear moral tone. You are going to see Prime Minister Sharon soon. There is been some talk in Israel that maybe you are not going to raise this issue of this latest settlement expansion. Are you going to do that? I have raised the issue of settlement expansions publicly. I mean, it was upon the prompting of your question. What I say publicly, I say privately. And that is, the roadmap has clear obligations on settlements and that we expect the Prime Minister to adhere to those roadmap obligations.

Interview With Reporters Aboard Air Force One


And the roadmap has got obligations for the Palestinians. We have a great opportunity we, the world, has a great opportunity to help a democracy grow begin and grow, starting in the Gaza. The Prime Minister of Israel has decided to pull out of Gaza. As you know, I applauded that decision at the White House, with him standing by my side. And I think now is the time to focus the world's attention on what is possible. And we have already started that process of realizing the possible by having General Ward work with the Palestinians to streamline and coordinate Palestinian security forces so that, upon the withdrawal of Israeli forces from Gaza, there is a security presence that will protect people. We have got to do more. So you are going to try to talk him out of this latest settlement expansion he is talking about? My position is clear, and I will I stated, obviously, now the second time in a brief period of time, and I will say so privately as well. And that is there is more than just security in Gaza. We need to have institution-building, and there needs to be an international effort that encourages and fosters economic vitality so that a government which does emerge in Gaza will be able to better speak to the hopes of those who live in the Gaza. And success in the Gaza will make success on the West Bank easier. And so one of our I will be talking to the Prime Minister about the need to work with the Palestinian Government, President Abbas, to facilitate success, to enhance success. Let me make sure I go back to the first answer on His Holiness. I said I think my answer was, is that what did I say? I asked if you thought it was a mixed message, and you said, I think John Paul II will have a clear legacy of peace. A clear and excellent legacy, if you do not mind adding the word excellent. I wanted to make sure there was a proper adjective to the legacy I thought he left behind. It was more than just clear. Yes, you said strong legacy of setting a clear moral tone. But some in the region think that some of our allies there, particularly Saudi Arabia and Egypt, still are not doing enough to help foster democracy in their own countries.  We will continue to encourage democracy. One, our own road to democracy was a little bumpy; we have a Constitution and a Declaration of Independence but, nevertheless, had slavery for a long period of time, for example.


And secondly, that we should not expect others to adapt that which we think we should not try to impose our democracy on other nations. What we should say is, We will work with you to develop a democracy which adapts to your own cultures and your own religions and your own habits. But I think it is also our job to encourage those nations and, at the same time, recognize that all nations are not starting at the same spot in order to achieve democracy. I mean, Iraq, it is very important for us in Iraq to recognize that we we transferred sovereignty 10 months ago. Remember we all traveled to NATO to the NATO summit? And it may seem like an eternity to you all but 10 months in the greater scheme of things is a short period of time. And nevertheless, during that short period of time, the Iraqis have voted, and today they have announced their Prime Minister. The Government will be up and running, the Government Assembly there, to write a constitution. In other words, things are happening quite rapidly, which is positive. But nevertheless, there is a certain there is got to be a certain realism about how fast things can possibly happen, given where different nations have started from. Now, I will continue to press forward on encouraging democracy and reform in every nation, because I believe that is the ultimate strategy to defeat the terrorists. In the short run, we will continue to find them and work with nations to find them and share intelligence to find them, bring them to justice. In the long term, the spread of freedom and democracy democracies reflecting the nature of the people and the history of those countries will mean that generations will more likely grow up in peace. When you sat there surrounded by that incredibly array of world leaders and looked forward to the kind of spread of democracy you are talking about, is there something about just that assemblage there? Who did you talk to? Who did you see? And did it strike you that this was a remarkable ability to pull together such disparate people? I was most attentive to the ceremony, itself, and was amazed by the size of the crowd. We came walking out of the grand stairway, and it was a very inspiring sight. Of course, the cardinals you know, a handful of whom I know, have gotten to know quite well and admire greatly, by the way. When I first got there when Laura and I first got there, we shook hands with the folks around us.


Obviously, Jacques and Madam Chirac were right next door; I spent some time visiting with them. But what it represented, to have that many people I believe that is part of the power of Pope John Paul II. And he was such a believer in freedom. I saw Lech Walesa, for example. I was struck by the number of Polish flags that were in the crowd. You know, I really did not reflect that much on the politics of the moment during the ceremony. I was more I thought a lot about Pope John Paul II. I mean, here is a person who has shown that a single individual can make a big difference in history and that, in my judgment, he received his great power and strength from the Almighty.  It is hard to follow my Spanish is not very good nevertheless, it is decent enough to pick up sounds that then can help me follow the Italian. Had you ever been to a Latin mass before? I imagine you have been to an English mass. The other question was, we never had a chance to you talked about a lot about what struck you from this ceremony. We never got a chance to talk to you about, by contrast, how you were struck by the wake, if you will, when you went through the other night. How do the two ceremonies you know, different kinds of emotions in the two? I felt I mean, obviously, we were surrounded by a crowd at the wake, but I felt when I was kneeling there, I felt I am trying to think of the right word alone is not the right word, because I was aware of people, but felt much more in touch with a spirit. I was very much felt at peace there and was prayerful. And at the other ceremony, it was probably just because of all the sights and sounds and majesty and colors that, you know, I felt more like a spectator than a participant, but more of a spectator. You knew him personally, I mean, to kneel there and see his body after you have met with him so many times and had I mean, that must have been quite powerful and My relationship with Pope John Paul II was a very good relationship. He was such a gentle man, and at the end of his life he made his points to me with his eyes. Did he speak English? Some, but it was hard to really understand him because he was struggling.


That is why it is really interesting for people to note that there was a lot of testimony and in my remarks, I tried to witness that as well that his struggle at the end of his life and the dignity with which he struggled was a clear example of Christ's influence in his life. I was honored to see that firsthand. He is one of the great vigorous leaders mountain climber, educator, instructor who then had to struggle using the very tools that enabled him to be a vigorous teacher, outdoorsman, freedom fighter, and yet, nevertheless, he still could communicate clearly through eyes which were, you know, crystal clear. And I remember the Castel Gandolfo, when Laura and I went to visit him. And he took us out on the balcony. The Castel overlooks this fantastic lake; it is a spectacular lake. And he had a sparkle; he really wanted to show us this beautiful setting. I would define Pope John Paul II as a clear thinker who was like a rock. And tides of moral relativism kind of washed around him, but he stood strong as a rock. And that is why millions one of the reasons why millions came to admire and love him. I was asked by some of the leadership of the Church, was I surprised at the turnout? I said, Not at all, because millions from all religions, millions of Catholics and millions of others admired his strength and his purpose and his moral clarity. How did the Pope struggle with his health at the end of his life and his example throughout his life strengthen your own faith? Well, you know, it is as clear example of Christ's influence in a person's life that he maintained such a kind of hopeful, optimistic, clear point of view amidst struggles in his case, physical struggles. And that is a lot of Christians gain great strength and confidence from seeing His Holiness in the last stages of life. Do you think that will help you in the months and years ahead, in your own life? Well, I think all of us get touched in different ways if you are on a faith journey we are all affected differently. But yes, I think my relationship with and Pope John Paul II's example will serve will be a moment in my life that will strengthen my faith and my belief not just me, more significantly, millions of people whose life he touched. I think we might have witnessed I do not know perhaps the largest funeral in the history of mankind.


But there is a reason why the largest crowd ever to come and pay homage to a human happened, and it is because of the man's character, his views, his positions, his leadership capacity, his ability to relate to all people, his deep compassion, his love of peace. Again, I repeat, I was honored to be one of many there, and I know you all were as well. Besides the pomp and the majesty and the colors, there was a spirit that was an integral part of the ceremony. For me, the spirit was also at the wake, but more personal at the wake. If there was ever a moment where you ever had any doubts in your own faith, what out of the past public things would strengthen your resolve and firm up your relationship with your God? I think a walk in faith constantly confronts doubt, as faith becomes more mature. And you constantly confront, you know, questions. The Bible talks about, you have got to constantly stay in touch with the Word of God in order to help you on the walk. But the Lord works in mysterious ways, and during all our life's journeys, we are enabled to see the Lord at work if our eyes are open and our hearts are open. And today you can analyze, and you can look at the coffin being held, with the sun shining on it, anyway you want. I happen to feel it was a special moment that was part of a special ceremony for a special person. And it helped strengthen my faith. And you can have your faith strengthened on you can have your faith strengthened when you stand up at a faith-based initiative and see someone standing up and testify to what their love has done to help a child or how a child's life has been helped. My faith gets strengthened when I went to the school the other day and saw the mentoring relationship between a young professional woman and a young kid who is going to go to the SEED School where there is a 95-percent chance that kid is going to go to college. And that helps strengthen my faith. So there is , you know, ways whether the moment be majestical or whether the moment be a part of just an average your average moment in life, you can find ways to strengthen your faith. And it is necessary to do so, in my judgment.


It is a constant maturing of an understanding of a and today's ceremony, I bet you, for millions of people was a reaffirmation for many and a way to make sure doubts do not seep into your soul. Given that, how difficult do you think that it will be finding a successor to fill his shoes? And I think that, as Cardinal McCarrick said at the ceremony on Saturday, the day His Holiness died, asked for prayers as he began his journey as one of the electors, as a Cardinal. You know, I am not going to prejudge the selection process. Are there any qualities that you are specifically looking for? I am not a part of the selection process. I will be a ENTITY representing a great nation in dealing with a great institution with which we have diplomatic relations. Can you tell us a little bit about your dinner with Prime Minister Berlusconi? Did you talk, particularly, on Iraq? Did the subject come up, in terms of the intelligence officer who was killed by Americans? Yes, it did come up, and I expressed my regret once again and assured him that the investigation would be conducted in an aboveboard, transparent way. Did he say it had been a problem for him in keeping the support that there is in Italy for having troops in Iraq? No, he reaffirmed his commitment to which he has given in the past that we have got to make sure we complete the mission, that we help Iraqis to fight off the few. He knows what I know, that the sooner that gets done, the sooner our troops will be able to come home. But he is also aware that what we do not want to do is leave prematurely, so that we do not complete our job. And the new Government is just about to be stood up; we look forward to working with the new Government on a lot of things and a lot of fronts. But on the security front, it is to make sure we are in sync with our training schedules, make sure that the chain of command within the military and between the civilian government and the military are strong and capable and will endure. We have been waiting for this new Government so that we can then strategize.


And as soon as the Government is sworn in, the appropriate folks, we can get Zal confirmed quickly, get him out there of course, we have a good, strong Deputy Chief of Mission there now, upon swearing in of course, I will be in contact with the Prime Minister.  And General Casey, as well as the Charge I mean, the Deputy Chief of Mission will be in touch with; Condi will be touch with her counterpart; Secretary Rumsfeld will be in touch with his counterpart as we strategize as to how to move forward. As we strategize on tactics, on how to implement the strategy which is clear which is, we want to train you and make you as efficient as possible as quickly as possible, so that all of us can begin to, you know, as I say, bring our troops home with the honor they have earned. Italy is going to pull out 3,000 troops, I think, by the fall. Will you be able to absorb that? I do not know why you say that. I am not sure why you said what you just said. I thought that was the number of troops Italy had in Iraq, and I They have got 3,300 now, and you said they are going to pull 3,000 out by the fall? What I did hear was, is that the Prime Minister wants to work to make sure we complete the mission. But I am not sure where that came from. Do you think he will leave troops in if, in fact, enough have not been trained? I think we will work to complete the training mission of the Iraqis. And it is important we do it and get it right. The amazing thing is, is that if you really think about what is happened in the 10-month period, in spite of some very difficult days and in spite of some tragedy, loss of life, this country is there is a democracy emerging in this country. And it was really kicked off by the huge vote of over 8 million people. But no, we will work with all our coalition, continue to make sure we stay in touch with all our I had breakfast with Tony Blair this morning, speaking about coalition. You know, I stay in regular contact with the Prime Minister. Can I ask you about Tom DeLay, the statement he made in the wake of the Schiavo case, that judges were out of control and should be held accountable. What did you think about those? I believe in an independent judiciary.


I believe in proper checks and balances. And we will continue to put judges on the bench who strictly and faithfully interpret the Constitution. ENTITY, I know you are not you have said you have often said you are not consumed by polls, but a fair amount has been written lately about your approval ratings, which in some polls are at sort of a low point. Some of them were going up the other day. You can find them going up, and you can find them going down. You can pretty much find out what you want in polls, is my point. What about the theory that your Presidency is moving from one dominated by foreign policy to one of domestic policy? Ironically, now that some of things are settling down in Iraq and Afghanistan and you are facing tough issues like Social Security, it is a little tougher road to hoe. My thoughts are the ENTITY has always got to balance foreign policy and domestic policy, and I will I did so in the first term. As you might remember, we were confronted with a recession, and I felt we needed to reform schools, and at the same time, I had to fight the war on terror. We are continuing to fight the war on terror. The war on terror goes on, and that is the important thing for me to continue to remind our fellow citizens. By the way, we will work to defeat the enemy by, you know, making sure our troops are well framed up, prepared, ready to move quickly. It is part of the transformation process that the Secretary is leading. And to make sure our intelligence services mesh and work closely together, I am looking forward to getting John Negroponte confirmed as quickly as possible, so we can deal with this crucial aspect. I might remind you that at points during the tax debate, I can remember people had declared that tax relief was dead on arrival. Occasionally, somebody would say something that was not very positive about the process, and people would all of a sudden assume that nothing was going to get done. So I am accustomed to, you know, the process of getting a piece of legislation out. And I am very optimistic that when it is all said and done, the legislators will understand that the American people recognize there is a problem in Social Security and expect something to be done. And I look forward to being a part of that. I had laid out a timetable to make it clear to the American people my views about the problems inherent in Social Security. And I think we are making progress.


I think slowly but surely, the American people are coming to realize there is a serious problem with Social Security not if you have retired. And that is the other aspect of making sure we succeed in the Social Security debate, is to make sure seniors know they are going to get their checks. And we have got work to do on that. I certainly hope so, because now is the time to fix the problem. Every year we wait costs billions of dollars more. And I fully realize some people would rather me not be discussing this issue. The job of the ENTITY is to set an agenda that deals with problems. And sometimes sometimes the legislature does not want to deal with the problem. But I am going to continue to remind all of us in Government that when we see a problem, we have an obligation to do something about it, no matter what some may think are the short-term political consequences. I happen to believe that not dealing with the problem will create political consequences when the public realizes how serious the problem is. If you do not deal with the problem or you go home and say, I am not dealing with the problem, there will be a political consequence. I have learned that lesson, as a Governor and ENTITY, that the people expect and respect people for setting agenda items and staying focused on achieving a solution to the problem. And I have set an agenda. I set an agenda on energy. We need an energy bill. You know, we have been talking about energy for 4 years. Now, I fully realize an energy bill reflects a longer-term strategy. But we need to we need to do a lot of things. Eventually what we are going to have to do is change our habits, change the types of automobiles we drive. I believe we will have a zero-emission coal-fired electricity plant. I saw the when we went to Cleveland or Columbus, we saw the technology involved with that. But Congress needs to get me an energy bill. And it seems like to me, with the price of gasoline where it is, that ought to be enough this time to cause people to get moving on the bill. But I will continue to push it. We need to get a budget. We passed I put a pretty good budget, a real good budget. It helps cut the budget in half the deficit in half over a 5-year period of time. Now they need to get their differences worked out and get it to my desk. I will be a part of that process as well.


In other words, I have an obligation to set agenda items. And when I set one, I will continue to work it and remind people that we have a duty to deal with these problems. I like the debate, by the way, as an aside. I am enjoying this. Even if a lot of because I feel I got elected for a reason. My nature is such that, if I came to Washington and saw a problem and did not deal with it, I would not feel very good about myself. I want it to be said that George W. Bush got elected and did what he said he was going to do, for starters. You covered my campaigns. Every speech, I talked about Social Security. And I started talking about Social Security in the year 2000, because I recognized a problem coming down the road. You have no problem if you are receiving a Social Security check. I do not care and I am going to say it like you have heard me say it it does not matter what the propagandists say, people are going to get their checks. You might remember the ads that they ran against me when I was running for office that said, If George W. gets elected, you are not going to get your check. I am sure you guys analyzed those and realized that upon election, people got their checks, which might say something about those who ran the ads, right? Well, they are saying it again. They are trying to frighten seniors in order to stop people from coming together. Now, in 2001, something that has lost a little bit of the focus of those covering this issue, I called together the Moynihan Commission, and I think it might be wise for people who analyze this issue to refresh their memory about the Moynihan Commission, because the Moynihan Commission, made up of equally Democrats and Republicans, came up with some interesting ideas to solve this problem. How deeply have you had to draw down on that political credit that you felt you had? I think you get I think you earn capital, you know? Are you spending any? I am spending a lot every time I go out. But you earn capital by spending capital; that is what the people expect. We have got trips I will be keeping going out, reminding people that there is a problem.


And one of these days, we will be able to look back and say, You know, we were successful convincing the American people there was a problem, and we were successful reminding seniors that you are not going to have your check taken away from you. And then all of a sudden, it becomes a true generational issue, because the grandparents receiving the checks, they are going to start asking, Now that I am secure, what are you going to do for my grandkid, because the grandchildren are going to pay an enormous price. You heard those experts sit up there and say that if nothing happens it is likely younger workers are going to have to pay an 18-percent payroll tax. Now, I was born prior to 1950. But if I were my daughter hearing somebody predict that at some point in time she is paying an 18-percent payroll tax, I'd be suggesting to the old man me that I get something done. And that is what we are doing.  to make progress on this, because, you know I have heard Members say I am not going to tell you who they are nor what party they are from; I wish you had not have brought this up. We hear the talk out of Capitol Hill saying, Oh, darn, I wish the ENTITY had just focused only on the budget or maybe the energy bill. There are a lot of people who would rather not talk about this issue. I understand that. Again, I do not think that is part of my job description, avoid issues because it may be politically difficult. I think my job description is, if you see a problem, talk about it and work with members of both political parties to come up with a solution. But I am not the least bit surprised, because it is a tough issue for Members, for people who've got, you know, a relatively short-term horizon, 2-year horizon. They are worried about some of them are worried about elections. Some of them in both the House and the Senate from both parties, by the way are thinking longer term. And they are beginning to talk some ideas, and that is constructive. You know, I remember I was telling President Clinton, I remember watching one of his townhall meetings in Albuquerque, New Mexico, on this very subject. By the way, a lot of the language happens to be pretty close to some of the townhall meetings we have had. But, no, I am not surprised people want to avoid this issue.


What has it been like spending time with the former ENTITYs for 3 days? You know, we share war stories, you know, a lot of talking, a lot of interesting experiences about different world leaders that we may all have met or all three of us met, just different experiences that, you know, my dad might have had or President Clinton might have had. There is a lot of interest, obviously, with former ENTITYs about, you know, policy, so I had them sit in on our policy briefings this morning with Condi and Steve and the CIA fellow traveling with us not this morning, yesterday and the day before, on Air Force One. And then yesterday at the Embassy, I wanted to include them in. And you know, we had a these CIA briefings a lot of time prompt policy discussions, you know, how is this process going. Steve and Condi, now that she is here both of them were able to bring Dad and President Clinton up to date on our strategy in dealing with a particular issue. It is interesting to get their points of view about their experiences in particular countries. It was really a lot of fun. Are you worried about them spending so much time together, those two? Well, you heard my gridiron speech. Hope you enjoyed the experience as much as I did. By the way, I think when you discuss religion on doubt, there is no doubt in my mind there is a living God and no doubt in my mind that the Lord, Christ, was sent by the Almighty. When I am talking about doubts, I am talking about the doubts that an individual struggles with in his or her life. That is important for you to make sure you get that part of the dialog correct, if you do not mind. Like Stretch, I am on the injured reserve list from running, so I will be mountain biking. I think Cat McKinnon is going come up from Austin. I will be finishing my book, Peter the Great, by Robert K. Massie. Some of you old-timers have probably already read it. I am just now have you read it? Have you read it? I like when you said old-timer, and you looked at Steve . He probably had read it, and I was not going to look at Ann , of course, I am too polite. We will have briefings. Condi is coming to spend the night; Hadley will be spending a night there. We will start briefing the Sharon visit Sunday night.


I thought you might be tired of me, so I brought Susan along. ENTITY, can we ask you a couple of questions? Can you give us any indication of what kind of time frame you are operating on on this amnesty question? Would you think within the next week or so? Can you give us any feeling for your inclination at this point? We know that you have opposed this in the past. You said that you were going to look into it. Are you leaning one way or the other at this point? We are having a fair analysis made of the success of the program that I instituted in 1974,2 which showed about 21,000 out of 105,000, or thereabouts, took advantage of the program. But we have to take an overall look at the impact on military morale, public reaction, equity as far as those who participated and went through their process of earning their way to clear their records, and then see how it equates vis-a-vis the blanket order. I cannot give you any particulars as to what the decision will be at the present. ENTITY, I would like to get on to something else. I wonder if you have decided whether to give your former colleagues in Congress a pay raise? Well, we are looking at that and studying very carefully the figures. Are you going to have a recommendation before you go out of office? I will have to make a recommendation before I leave office or else leave it up to Mr. Carter. Do you plan to leave it up to Mr. Carter? We have not made a decision yet. ENTITY, would you have initiated the amnesty study but for your conversation with Mrs. Hart? She made the specific request. She is the window of a dear friend of mine, and at her request I thought that it would be appropriate to do so. We know that you are considering lifting Federal controls on gasoline prices. Some of your aides have said that if you were going to make a decision, you would probably have to make it by the 4th of January in order to allow Congress the 15-day period to approve or reject it. Have you given any thought to that yet? We have given it a lot of thought. We will make a recommendation. We have not decided on the details yet, but there will be a proposal to Congress, because I made a commitment at the time I signed the energy act in December of 1975 that we would eliminate controls as rapidly as possible, and we have. We have not finalized the details yet.

Exchange With Reporters in Vail, Colorado.


Let me be, ENTITY, the first Italian to welcome you in advance to my country. I want to thank you for giving us the opportunity to hear from you your points of view on the major issues that will be discussed at the Venice summit. I am Guiseppe Lugato, from RAI-TV One, Italy. Do you feel uncomfortable in going to Europe right now, considering that, in one hand, there are great challenges for the Western World-let us consider the winds-of-trade wars and the Persian Gulf situation-and on the other hand, all the seven leaders, they have problems, too; they look a little weak. And yourself have been damaged by the Iran-contra affair. I will tell you, we keep in touch to such an extent, the seven of us, the leaders of the seven countries represented here, and consult, and none of us go off on our own very much without keeping the others informed. I think we have problems that can better be handled as we discuss them there. I think that the subjects will deal with macroeconomics-the things that we decided on in Japan a year ago that we were going to do about trying to make trading more fair, remove some of the obstacles, market obstacles, to see if we could not stimulate more growth in all of our countries economically, things of that kind. And of course, the East-West situation will be discussed and also the matters that we launched again in Japan-and that is our handling of terrorism and so forth. So, I am looking forward to it. Sir, talking about the obstacles, are you ready, for example, to cut the budget deficit-that these are proof, they say, of so many problems, not only in the United States but also abroad? And do you think that maybe the American people have to tighten their belts? Well, as far as the Government's tightening its belt-long overdue. I have been trying to bring that about ever since I have been here in our governmental system. There has been resistance in the Congress and from the opposition party to making some of the cuts we want to make. If I had been given the budget I asked for in 1982, for that first budget of 1982, the cumulative deficits through 1986 would be $207 billion less than they are. So, we are continuing to do this.

Interview With Foreign Television Journalists Prior to the Venice Economic Summit


And now we have a congressional bill that was passed, signed into law, the Gramm-Rudman-Hollings bill, which has a definite plan for reducing the deficits annually, until down the road, in just a few years, we will have a balanced budget. At the same time, I am still seeking a constitutional change that will then require a balanced budget every year of our government. And I agree with all the others that our deficit spending, by a government, is one of the economic problems that has an effect on everything and all our trading partners. ENTITY, you will be meeting Mrs. Thatcher when you go to Venice. She may shortly be replaced as Prime Minister of Great Britain. Will you preserve the special relationship between America and Great Britain, whoever is in power in Britain? Oh, I think the relationship between our two countries has been an almost family relationship for many years-and many different governments of the United Kingdom in the past. I do not want to seem to, in any way, try to influence the election in England, but I have to tell you that I have great admiration for the manner in which Prime Minister Thatcher has handled not only the domestic affairs but the international affairs. And beyond that I cannot go, with an election coming up. that even if there was a government in the United Kingdom which embraces unilateral disarmament and seeks the removal of U.S. nuclear bases from Great Britain, you would still maintain your special relationship with such a government? I would try with all of my might to persuade that government not to make those grievous errors. And yet, as I say, we have had a friendly relationship that has survived Labor governments in the past as well as Conservative governments there. The Iranian Ambassador to the United Nations declared 2 days ago on the American TV that should his government decide to attack oil tankers in the Gulf it would do it whatever these ships are protected by the American flag. ENTITY, do not you consider this statement as a sort of anticipated declaration of war from Iran to the United States? I doubt that Iran would ever declare war on the United States, knowing what the inevitable consequence would be. And I can only respond to that statement that was made, I am quite sure, for domestic consumption. There are a number of flash points throughout the world in which the Western World-all of us, our countries here-have to take positions in the interest of world peace.


And I have said from the very beginning that wherever we have to put forces in those places to help maintain peace-anytime they are attacked they will retaliate, they will fire back in self-defense. And we are going to continue on in that regard. Why do not you call on French and British Governments to have in the Gulf a sort of Western task force just to assure there the freedom on navigation of the oil tankers? Well, I know that there are warships of the other nations, our allies, that are in the Arabian Sea and the Indian Ocean, and nearby. And I understand that that is been part of the conversation that Secretary of Defense Weinberger has been having with our NATO allies in Europe right now-about possible cooperation and a relationship between the military elements that we have stationed abroad. Well, ENTITY, about 1 month ago you said that you'd examine the new data on U.S.-Japanese semiconductor trade. What are your findings on Japanese compliance, and will you lift sanctions before the summit meeting? Well, while there seems to be some progress being made, we still have not reached what I think must be the answer, and that is a return to abiding by the agreement that both our countries had made in this regard. I hope that it'll be very soon that we will restore that agreement, and when they do, we shall immediately lift the sanctions that we have put on this. What is your global strategy to stabilize the dollar? You mean about international trade? Well, I know there is been a kind of volatile situation It is always referred to as the dollar being overvalued and then suddenly the dollar losing value. We have had a feeling that the currencies of some other countries have been undervalued and that everyone will be better off if those currencies have come up, so that maybe it is not all just our dollar-that they have come up. We think and believe that the dollar is at the place that it should remain. We do not look for any further serious drops in the value of the dollar. things that we started in Japan next year about review of the GATT treaty or agreement, and that we can have an opening of markets worldwide and an easier flow of trade that will benefit all of us. After all the discussions with the Soviets and the allies, how close are we to an INF agreement and another summit with Gorbachev this year?


And would you favor, after eliminating all the INF missiles in Europe, a so-called fire break that means no reductions of short-range nuclear weapons below the range of 300 miles? Well, we have been, again, in close consultation with the allies on this. There seems to be some pretty general agreement on the basic terms of what we are negotiating. It does begin with the long-range intermediate weapons. We are hopeful of getting rid of those in the world. Also, there is no thought on our side of totally denuclearizing Europe at the same time that this would leave the Soviet Union with a great superiority in conventional weapons. I would like to think that, ultimately, all nuclear weapons in the world could be done away with. They violate all the previous rules of warfare in that their principal targets would be the noncombatants, the civilians. And I do not think that the threat of total destruction, mutual destruction, is exactly a sensible defense program. That is why we are going forward with the SDI. We believe we are on the track of something that could maybe render such weapons obsolete. But before any of that can come about, then there must be a bringing together of the ratio of forces between the Soviet Union and ourselves. Now, as to the first part of your question, I am hopeful that this fall we will have the summit meeting. It is up to General Secretary Gorbachev now to set the date; the invitation is there. Now it is simply a case of when will that take place. And I am always a little superstitious about being optimistic in advance about things like the agreement on the reduction of arms, but I do believe that great progress has been made, more than in all the years since World War II, and that we have the best opportunity for beginning the reduction of nuclear weapons that we have ever had. In connection with the arms discussions, three recent polls in my country show that for a majority of Germans Gorbachev is more popular and credible than you are. Does it worry you that in the heart of Europe people have more faith in the Soviet leader than in the American President?


I mean no personal rebuke or derogation of Mr. Gorbachev, but I do believe that on the record of abiding by treaties, on the record of striving for peace, that the United States record is one that the people should have confidence in, more confidence than the Soviet Union, which has a wrong record of violating treaties and of using subversion in order to spread its influence throughout the rest of the world. Now, I am hopeful that Mr. Gorbachev, and the things he is proposed within his own country, is taking a different tack and really means to set a different course than has been set before. But I believe there is reason for us to-well, as I said to him in our last meeting, I used a Russian term, a proverb, Dovorey no provorey. President Reagan, the revolutionary government of Iran has caused a lot of pain for your administration over the last few years. And I just wonder if you are going into the Gulf looking, positively seeking, a chance to punch them in the nose, saying as you once did to terrorists, Go ahead, make my day. No, I have to say we are not just in there daring someone to do something. I think all of the nations that you represent have made it plain how important the Persian Gulf is. And I have said for several years, and I have had agreement with the leaders of your countries, that there is no way that we can sit back and let the Persian Gulf be closed to international trade. Now, it is far more important to Western Europe and Japan because of the percentage of oil that comes out of there for their total needs. We also get some from there, but it is a much smaller percentage from that particular area. But what we have said is those are international waters. And can you imagine the precedent that would be set ff we all stepped back and said, Well, this barbaric country has a right to close down these international waters and bring down the economic havoc that it would on so many countries ? We are seeking nothing except the right of commercial trade between the nations of the gulf, those that are not embroiled in the Iran-Iraq war, and we are going to do that. Can I ask you about another emerging strategic ocean, and that is the Arctic Ocean, where Soviet subs, as you know, are very busy these days.


Is the United States ready to recognize the Canadian claim to sovereignty up there in its own interest-that is, so that the Canadians can perhaps use subs to intercept and keep track of the Soviets? We honestly want to find an answer to that. Now, on one side-that sort of holds back completely accepting the Canadian position -is the international precedent that, again, would be set if something that by definition is international water could be closed by the nearby countries. There are other chokepoints on the trade routes in the world where that could easily be invoked if the pattern was set. On the other hand, from the Canadian viewpoint, I have to say that that is unique, that area. When you look at the Canadian islands and the extent to which they dominate those waters, and know that a great many of those islands year round are connected by a solid ice cover upon which there are many people who live above those waters on that ice, that this is a little different than the other situations in the world. And we sincerely and honestly are trying to find a way that can recognize Canada's claim and yet, at the same time, cannot set that dangerous precedent that I mentioned. ENTITY, answering the question of my French colleague, Jacques Abouchar, you said that in the case the Iranians will attack your ships you will respond. How far will you go in your response? I mean, are you ready even to hit the Iranian territory if something really huge happens? I do not think that is a question that I should even attempt to ask. First of all, our actions will be defensive. We will defend ourselves. Now, it is true that the Iranians have placed missiles on shore that can reach targets at sea. That has to be considered with regard to more than just shooting at another vessel or shooting at an airplane. But the reason why I do not think I should go farther is I think it is far better if the Iranians go to bed every night wondering what we might do than us telling them in advance. So, you have said repeatedly that you are anxious that the truth should come out in the Iran-contra affair. But is not it the truth, now, that it is coming out that is actually causing so much damage? I wonder if you feel that your credibility has been damaged, perhaps as it is seen in some parts of the world, almost beyond repair now?


I know the damage that is been done to my credibility, but it has not been by anything that has been proven-quite the contrary. It has been the image that has been created by our own, particularly, Washington press corps in describing what took place. That linkage is the thing that the press would have had no word of it had I not gone to them and told them what we had discovered. We had agreed to meet with some Iranian individuals who wanted to discuss possible better relations with their country in the event of a new government there, that eventually, of course, there will be a different government. And they were the ones that brought up the idea that to help them-because they were risking their lives, literally, to make such a proposal to us-and to also establish our serious purpose, that we violate our decision to not do business with a country that supports terrorism-and Iran is one. And they asked for a kind of a token shipment of weapons to be sold to them. We agreed to this, but we have put a condition. We said we have this agreement about not supporting terrorist nations, and there is a group of terrorists called the Hizballah that at least has some kind of a philosophical arrangement with Iran. We said to these same people, If you will use your influence to try and free our hostages in return for us doing this thing with the weapons. Now, it was not until the leak through that Beirut paper that brought all of the press of the world into the knowledge of this covert operation we had. We had to be covert to try and save the lives of the people we were dealing with. We did get a couple of hostages back; more were scheduled to come out when the news broke and that ended everything. Well, this is when we discovered that I had not been kept completely informed in what our own representatives had been doing, that the whole arrangement had really kind of degenerated into hostage dealing rather than the thing that they had proposed first about how could we form a better national relationship. And in our digging into this, we discovered that there evidently was more money paid for our weapons than we had asked and than we received, and that that money had gone somehow into some Swiss bank accounts, and then one of those accounts was apparently one used for furnishing money to the contras in Nicaragua. Immediately, the day we learned this, the very next morning, I went before our leadership in Congress and subsequently before the press and told them what we had discovered.


Now, I am still waiting to find out who charged Iran that extra money. We got our $12 million for the arms. How was that extra money put there, who got it, where did it go? And I know no more than what I have just told you, and we were the first to bring this to the attention of the press. Now, with regard to contra aid and our ongoing struggle with our Congress-which has appropriated money for aid to the freedom fighters in Nicaragua against that totalitarian Communist government, then the Congress changes its mind and cuts off aid to them-I, from the very first, have said the only hope we have for preventing the establishment of another Soviet base on the mainland of America is by way of the freedom fighters and then negotiating to have a democratic government there. I made it plain, went to the public trying to arouse public opinion in this country in support of our position so that they would influence their representatives in Congress to continue providing the aid. I did that openly. I knew that there were individuals and groups in America which on their own, privately, were contributing. And I never asked how they did it. And at the same time, I had expressed a belief that other democratic nations in the world-it might be to their best interest also to lend support to the freedom fighters. But again, I never solicited any country and asked it to do that, and I never knew who was or who was not , until the head of state of one of those countries told me that they were contributing and were going to increase their contribution. I am being portrayed as having, behind the scenes, violated the law and done all sorts of shady things to try and violate the Congress' restriction on aid to the freedom fighters. Now, I hope this will be carried word for word in each of your countries, and maybe my reputation will be restored. You have repeatedly condemned protectionism, but Europeans are not so convinced-not to mention agriculture. I'd like to give you just an example of the European plane, Airbus. Our feeling is the American side plans nothing less than to kill the project. What we think is going to happen-we have already had discussions and this, too, started in our meeting in Japan, our last summit meeting.


So just lay out the vision the president expects to deliver to the nation tomorrow. Well, I think he is going to talk about how our founding principles and values can still guide us in today's modern and changing world. We do look at this and the State of the Union as a package, so I think in the inaugural, he is going to lay out his vision for a second term. The detailed blueprint and ideas will be in the State of the Union, so I do think you have to view these as a package. He is going to say that our political system does not require us to resolve all of our differences or settle all of our disputes, but it is absolutely imperative that our leaders try and seek common ground when it can and should exist. That is going to be a very important part of the speech. You have been with the president all through this journey, and I was struck by something that his biographer, David Maraniss, wrote about, the changes he is noticed and others have noticed in President Obama over the four years. David Maraniss said that, in the second term, his will to survive is less likely to contradict his will to do good. He is going to act with more assurance, and he is going to show who he really is in his second term. Is that what you see? Well, I think one of his great strengths is his authenticity, so he is -- he is always been the same person. But I do think that, you know, it is clear, there is a huge consensus in the country about how we ought to approach the deficit, economy, issues like immigration and gun safety, and I do not think he is going to -- he is going to be very frustrated if Washington is completely divorced from the reality in the country. So he is going to seek common ground. He is going to find every way he can to compromise. But he is going to be pretty clear, and we are also going to bring the American people more into the debate than we did in the first term. What is the biggest difference between the President Obama who took the oath four years ago and the one who will take the oath tomorrow? We obviously had an economy that was collapsing all around us, and he was a first-term president, so at that time, he is still putting together his team, his cabinet, his agenda.

'This Week' Transcript: Obama Senior Adviser David Plouffe