Gerald Ford: "They Will See Something Is Being Done"

President Ford looked trim and rested, his face surprisingly unlined, as he met with members of TIME'S editorial staff" in the Oval Office last week. He sat easily in an armchair, cupping an unlit pipe in his left hand, and answered questions on energy and economic policy, foreign affairs and the demands of presidential leadership. In several areas, he was clearly still in the process of formulating his State of the Union program. The questions were asked by Managing Editor Henry Grunwald, Chief of Correspondents Murray Gart, Washington Bureau Chief Hugh Sidey and White House Correspondents Bonnie Angela and Dean Fischer. Excerpts from the exchange:

Q. What went wrong with your earlier economic program that makes you feel you need a new program?

A. We went through a long, I think, constructive process of economic summit, culminating in a program which we felt at that time would meet the primary threat of the problem of inflation. I thought it was well tuned to meet that headon, with some consideration given to the problem of economic stability.

But all of the economists that I have talked to, including the ones here and some from Western Europe, have indicated to me that they did not foresee the precipitous drop, particularly in the automotive field. Of course, that has been told to me very directly by the automotive manufacturers. There was a rapidly developing and certainly unforeseen massive loss of public confidence. When you combined all of those, the plan we had wasn't adequate and it wasn't properly balanced.

We have had to restudy conditions as we see them now and as we foresee them, and the new plan is aimed at the current circumstances rather than what the circumstances were in August and September. It is just an updating for the current conditions, conditions which were unforeseen and are far, far more serious.

Q. What is the shape of your energy proposals?

A. We have had the benefit of massive, year-long study. The energy program is the pulling together of the various recommendations that generated out of that study. In addition, we find that the voluntary program has not been as successful as it should be. Although for the first nine or ten months of this year we were using energy--either energy as a whole or imports--at a rate of about 5.4% less than '73, in the last several months it has gone about 5% ahead of a year ago. A year ago we were importing about 6 million barrels per day. Now we are importing about 7 million barrels per day. This proves to me that a voluntary program isn't sufficient.

Q. Is this failure of voluntary effort a disappointment?

A. It is a disappointment, but I think understandable. Everybody had ample gasoline, or even in some selected areas price wars, which certainly is not an indication of any lack of supply. What I am saying is,that the American people don't respond unless they see firsthand a crisis. Now, that may come. If we get some of these natural-gas shortages, which are inevitable up in New Jersey and New England, particularly if we have a hard winter, then again that crisis will be thrown at the American people and maybe a voluntary program will be regenerated.

Q. Can you foresee rationing under any circumstances ?

A. Not unless we have an oil embargo. I don't see rationing unless something of that magnitude takes place.

Q. Can you foresee wage and price controls?

A. I certainly see no wage and price controls in the offing, period. We have found that the wage settlements have been fairly moderate, so I just don't foresee controls as any proper remedy under any circumstances that we can see.

Q. Would you sacrifice some of the environmental controls for the sake of energy policy?

A. There has to be responsible reconsideration of some of the extreme standards that were set. Let me give you an illustration.

On auto emissions, the Secretary of Transportation can extend for one year the present standards. But that means that those other standards [a 40% increase in efficiency of gas per mile] have to be met, I think, in three or four years. The automotive people tell us that they can't achieve those standards [unless] they get some relief on emission standards.

I think the [new] emissions standards that will be agreed upon are thoroughly defendable, but they will be somewhat less than the standards that were set in the law four or five years ago. So there will be a reconsideration based on better data and hopefully it will be a better balance between the environment and energy.

Q. Regarding the problems of leadership with a heavily Democratic Congress, would you think in terms of some kind of coalition approach to solving problems?

A. Obviously the Congress and the White House have to work together. I obviously have to work with Republicans most of the time, but there is a floating coalition up there.

This is the way I worked when I was in the minority leadership post: on some issues we would have a sizable group of Republicans and we would go to Segment A of the Democratic Party. On foreign aid, for example, until recently I could work with the more liberal and more internationally oriented members of the Democratic Party.

On another issue, fiscal affairs, I would work with another element of the Democratic Party. On defense, it would be with even a third or a mixture.

So I think there is a coalition that has to be put together, but it might not be identical in every issue. That has to be a very fluid, floating coalition.

Q. Could this be more formalized in the issues of the economy and energy?

A. I hope there will be a very broad consensus. I think it has to be, primarily because speed is essential in both cases.

Q. How about a coalition Cabinet?

A. Well, Levi is an independent and I guess he has been an identifiable Democrat,* if not an active one, most of his life, and we are certainly going to stand firm on his nomination. I wouldn't rule out another Democrat in the Cabinet, but we are moving slowly.

Q. Back to the economy. Have you come to a set of decisions on what kind of stimulation is required?

A. Yes, we have. There has to be a sufficiently large tax reduction to really have an impact on public confidence. People and business have to feel that there is something meaningful.

You have seen all of the speculation. Some people want $20 billion, some $15 billion and some $10 billion. It is our judgment that something roughly in the middle is the right figure.

The next question is, how do you get it back to them, because if you just say you are going to do it and they see nothing in hand, it doesn't do much for public confidence.

So, there are a number of ways of deciding how you get it back, whether it is a credit on their April 15 [returns]; whether you actually turn around and send them a check predicated on their income tax for 1974; whether it is all in one lump; or whether it is two, three or four specific checks.

On that issue we feel we have something in hand pretty concrete, particularly for people. Business is more sophisticated. I think they can understand it a little better, and I don't think it is very wise to send a great big check back to Texaco or U.S. Steel when somebody else gets a relatively minor check.

But anyhow, business would be treated differently. And yet, you have to have some fair division between--you take the figure of, say, $15 billion for illustrative purposes--how do you divide it? Is it 50-50 or 75-25?

Then, of course, in the business field, what is the technique? You have the investment tax credit as a possibility. You have the reduction in rates and then you have the problem--is this a one-year tax cut or is it two years or maybe longer? For psychological reasons, you probably would do more to give it in one year. Two years with a lesser amount per year doesn't give the same immediate psychological impact.

Q. What are the reasons for a credit on 1974 taxes?

A. Well, here is a problem that you have to look at. Supposing you increase the person's personal deduction in 1975. The guy who is not working doesn't get any income except unemployment. He doesn't get a shot in the arm. He may have had a job in 1974. So, if you just do it by the increase of the personal exemption on his income in 1975, he doesn't get any restoration of confidence. We want simplicity and promptness. Those are the two criteria that we are aiming for in the stimulative attack.

Q. Would you propose tax reform as well as tax reduction?

A. I don't think you can mix them if you want prompt action.

Q. Moving to foreign policy, can you tell us more about the idea of using force in the Middle East and under what circumstances ?

A. I stand by the view that Henry Kissinger expressed in the Business Week [interview]. Now, the word strangulation is the key word. If you read his answer to a very hypothetical question, he didn't say that force would be used to bring a price change. His language said he wouldn't rule force out if the free world or the industrialized world would be strangled. I would reaffirm my support of that position as he answered that hypothetical question.

Q. What would your definition of strangle be?

A. Strangulation, if you translate it into the terms of a human being, means that you are just about on your back.

Q. Are you optimistic about an extension of detente to the Middle East? Is the Soviet Union playing a constructive I role in the Middle East now?

A. The Soviet Union wants to throw all of these issues into Geneva. [The Soviet proposal is to renew Middle East peace negotiations in Geneva under the chairmanship of the U.S. and the U.S.S.R.] We don't rule out Geneva at a point, but we do feel that in the interim before we go to Geneva, or they do reconvene Geneva on an active basis, we ought to try and make some other additional progress on a step-by-step basis.

Q. What of the arms buildup?

A. Well, they have generously supplied Syria. They have, of course, been negotiating with Egypt. I think it would be good if everybody had less arms in the Middle East, but that is not the way the world is out there.

Q. What are the prospects for war in the Middle East?

A. They are very, very serious. They get more serious every day that we don't get some action for further progress in the settlement of some of those disputes. Every day that passes becomes more dangerous.

Q. There has been a suggestion that the United States might formally guarantee Israel. Is that a possibility?

A. We have given everything except that. We have often made commitments that we consider Israel a necessary state in the Middle East, both as to integrity of territory and its existence. I wouldn't rule out [a guarantee] under some circumstances, but there has to be, in my judgment, some real progress there before that step would be taken.

Q. Are there any concrete limits on our commitment to Israel?

A. It so happens that there is a substantial relationship at the present time between our national security interests and those of Israel. But in the final analysis, we have to judge what is in our national interest above any and all other considerations.

Q. Turning to the trade bill and Jewish emigration from Russia. Many groups if not all citizens in the Soviet Union are, by our definition, unfree. Why is it right for the United States to make such an extraordinary effort for Soviet Jewish citizens?

A. There are a number of ethnic groups in this country who come from various parts of the Soviet Union who seriously ask that same question--Latvians, Estonians and others. Quite frankly, I think there is a stronger pressure group [in the U.S.] on behalf of Jewish emigration. Now, I am told, and I think the sources are accurate, that the Jewish population within Russia has always had serious problems, regardless of geographical or other considerations. So that may be a factor.

We have worked very hard in trying to get conditions that would increase the availability of applications for emigration, non-harassment and relatively free emigration. The great publicity that has been given by some, perhaps going beyond the facts, may well have hurt rather than helped Jewish emigration.

I saw a figure the other day for the calendar year 1974,1 think. Total Jewish emigration from the Soviet Union for that last year was 18,000. In 1973, it had gotten up to 35,000 or 36,000. [The President's recollected figures were slightly off--see THE WORLD.] We would certainly hope that it could go beyond 1974 and the higher, the better. But we really don't control that. And probably never will.

Q. Why does the recent Harris poll find 86% of the people give a negative response on your ability to deal with the economic problems?

A. I think the public generally doesn't realize the change that took place that I described earlier in the economic conditions--the loss of public confidence with a substantially increased unemployment.

During the economic summits last fall, we had a whole range of economists--not one of them forecast, as I recall, the precipitous drop in auto sales and the increase in unemployment.

Q. The public won't hold it against the experts for having been wrong?

A. No, they'll just hold it against me.

It is a natural tendency of Americans to say, "The President should have stopped all of this." Well, I think all of us recognize that a President can't turn a switch and everything changes.

Now, it is my judgment that with the plan and program we are going to submit next week, that there will be a realization we have a plan. It will give me an opportunity to provide leadership and hopefully get a response from the Congress and the American people. If that takes place, I believe there will be a change in the polls. That will not be overnight, as they have to have more than a plan, but at least they will see that something is being done.

Q. What is your greatest frustration in leadership terms?

A. The inability to be able to say this has to be done and expect it to accomplish overnight success. That isn't the way it works, either in foreign policy or domestic policy. It is a slow, constructive, hard-working process.

You have to get the cooperation in foreign policy of your allies on the one hand and your adversaries on the other, and those things don't happen overnight. In the domestic scene there are a multitude of factors--pure economics plus public confidence. Those things don't change overnight just because the President says so.

Q. On one occasion you spoke of your concern of the self-destructive impulse that you feared might be at work in American society. What do you think can be done about it?

A. Well, as I look back, certainly there was this self-destruct attitude toward Mr. Johnson and it carried on into Mr. Nixon. I am not saying it is aimed at me, but I think there is a tendency as we look over the recent history that Presidents become very visible and very live targets. Now that is fine and it doesn't hurt individuals, but it certainly could hurt the presidency.

What can be done about it? I wish I had the answer, and I don't want to say the press is at fault or the press can overnight change it. I am not sure that that is true.

Q. Could you conceive of appointing Mr. Nixon to any overseas post or any kind of a post? His daughter brought that up again yesterday.

A. Frankly, I hadn't thought of it.

* Edward Levi, president of the University of Chicago, has been proposed as Attorney General. The selection is under fire from Senator James Eastland, chairman of the Senate Judiciary Committee, who considers him too liberal. Levi has not revealed whether he is indeed a Democrat.

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