Well, I think that President Sadat, in his private communications with me and even in his public statements, has said that he is trying as best he can to represent the Arab position concerning Israeli withdrawal from occupied territories and also the resolution of the Palestinian question. Obviously, the leaders in Syria, even Jordan, certainly the PLO, have not recognized that Egypt is speaking for them adequately. I think, though, that in his speech to the Knesset, in his followup speech to the People's Assembly in Egypt, President Sadat has evoked very clearly the basic Arab position that I have understood in my private conversations with President Asad from Syria and with the King of Jordan, Hussein. So, I believe that this is an exploratory effort that does accurately represent the basic differences between Israel and all their neighbors. And the fact that Jordan and Syria have not been willing to participate, I don't think has dampened President Sadat's commitment or enthusiasm at all. It is constructive, and I think what he discovers in his already completed discussions with Prime Minister Begin and those that might be taking place in Egypt in the middle of next month will certainly be conducive to pursuing the Arab cause. I think it's constructive, because for the first time, the Arab position on those controversial issues has been spelled out very clearly for worldwide understanding. And I think the differences that have been faced by us and others for long years are now much more clearly understood by the public. The differences are still sharp; the resolution of those differences is going to be very difficult. I think that to the best of his ability, President Sadat is speaking for the Arab world.

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During the hostage crisis we sent a number of secret delegations into Iran, which was fairly easy to do because the Iranian leaders wanted to maintain as normal an environment as possible and relished all the favorable publicity that resulted from visits by foreign news media. Even the Ayatollah Khomeini gave personal interviews to American journalists. On one occasion we had a few CIA agents in Tehran who were traveling with false German passports, since many Iranian leaders had been educated in Germany. As our people were leaving, one of them had his credentials checked and was waved past by the customs officials. He was called back, however, and the official said, “Something is wrong with your passport. I’ve been here more than twenty years and this is the first time I’ve seen a German document that used a middle initial instead of a full name. Your name is given as Josef H. Schmidt and I don’t understand it.” The quick-thinking agent said, “Well, when I was born my given middle name was Hitler, and I have received special permission not to use it.” The official smiled, nodded, and approved his departure.

This year we are faced with a deficit that's about $15 or $20 billion higher than it would have been because we're trying to give a tax break, tax reduction, to the American people. In every instance, you have to make a judgment on that. One of the reasons that we are giving the tax reduction is because the taxes are too high; another one is that it would result in a stimulated economy, a million more people at work and paying taxes rather than on the Federal dole. And so you have to make a judgment. We have expectations, with some fairly accurate projections, that the budget deficit next year, fiscal year 1980, will be considerably below 1979. And if the economy continues to progress, then I have good hopes that in 1981 we will reach my goal. Obviously, I don't have complete control over the economy. But I've not given up in trying to carry out the principles that Adam Smith espoused in your quote.

I was very proud that Pete Flahetty came to work as a Deputy Attorney General. That was an an arrangement that was made really without my prior knowledge between the Attorney General and Pete Flaherty. Secondly, I did not know ahead of time that Pete was going to resign and go back to Pennsylvania. It was not a result of a dispute or an argument or an incompatibility between him and the Attorney General. It was an action taken by Pete on his own initiative. He did a very good job during the time that he was here. He was basically in charge of reorganization of the Department, doing some long-range studies for management reasons. I think he and the Attorney General were completely compatible. And the only, comments that the Attorney General has made to me were in praise of Flaherty. I have not talked to Pete. I got a written letter saying that he intended to resign, and I've written a letter back to him accepting his resignation and expressing my regret that he was leaving and my good wishes for the future. But he's not discussed with me any involvement in the campaign. My policy has been and will be not to involve myself in any sort of Democratic primary campaign. But I have habitually supported Democratic nominees, after they, were chosen, in a general election.

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The battle for human rights — at home and abroad — is far from over. We should never be surprised nor discouraged because the impact of our efforts has had, and will always have, varied results. Rather, we should take pride that the ideals which gave birth to our nation still inspire the hopes of oppressed people around the world. We have no cause for self-righteousness or complacency. But we have every reason to persevere, both within our own country and beyond our borders. If we are to serve as a beacon for human rights, we must continue to perfect here at home the rights and values which we espouse around the world: A decent education for our children, adequate medical care for all Americans, an end to discrimination against minorities and women, a job for all those able to work, and freedom from injustice and religious intolerance.

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First of all, on the energy special funds for those that have their power cut off or their heat cut off, as you know, last year, quite late in the freezing winter, we came forward with $200 million under Graciela Olivarez, who runs the Community Services Agency [Administration]. This money was distributed to the local and State governments very efficiently, very effectively, in a hurry, too late. I've already had Senator Muskie and Senator Kennedy come to see me this week saying, "What about this coming winter?" And I can promise you that we're not going to be too late this coming winter. On the bilingual approach to many problems, not just in education--of course, this is something we are pursuing. I promised this during the campaign and will continue with it. And you mentioned that HUD hasn't cared where people lived or what kind of houses they lived in. This may have been the case in the past, that there have been housing funds frozen and impounded in the past. That won't ever happen as long as I'm in the White House because I know you'll be watching me too closely. I don't think we could have a better Secretary of Housing and Urban Development than Pat Harris, that we've got now. She's there with you, she cares about you, and you can depend on her and me not to let this happen again.

Yes, I was upset. As I said I think it's an obstacle to peace. And I let Mr. Begin know very clearly that our Government policy, before I became President and now, is that these settlements are illegal and contravene the Geneva conference terms. Mr. Begin disagrees with this. But we've spelled this out very clearly on several occasions in the United Nations and other places that these settlements are illegal. I think that it's accurate to say that the Israeli Government has never maintained that they are permanent but, that on a temporary basis, maybe extending quite a while in the future in their view, that they are legalized, but not as a permanent settlement. Israel has never claimed hegemony over the West Bank territory, as you know. And I think that it would be a mistake, as I said in my press conference yesterday, to condemn Mr. Begin about this action because this was a campaign commitment he made. I think what he did was in consonance with the desires of the Israeli people. But I don't want anybody to misunderstand our feelings about it. We think it's wrong to establish these settlements, it's wrong to insinuate that they are legal, it's certainly wrong to ever claim that they are permanent. And to establish new settlements would be even more unsettling to their Arab neighbors, as we try to go to Geneva in a good spirit of compromise and cooperation, than the allocation of legality by the Government to those already in existence.

This morning I concluded my own talks with the Prime Minister of France, and this is a final meeting with him. He'll now, this afternoon, meet with economic advisers, the Secretary of State, Secretary of Defense, Secretary of Energy, and others so that we, in shaping our own policies for the future, will know the special problems of France, and vice versa. These discussions which I have had with many foreign leaders have been very helpful to me. As you know, I've never served in Washington before January. I've got a lot to learn about the processes, and I've gone out of my way this year to expand my own circle of knowledge outside just domestic issues. Last week, I met with, I think, 19 heads of state of the Latin American countries. And I think we have a new relationship with them, brought about primarily by the prospect of the ratification of the Panama C. anal Treaty. We are continuing our negotiations with the Soviets on the SALT question; also, on a comprehensive test ban of nuclear weapons. And as you know, the Soviet Union in addition is a cochairman, along with us, of the Mideast talks that we hope will take place before the end of this year. This coming week, I'll have the first of a series of foreign ministers who will come and meet with me from the Middle Eastern region--Foreign Minister Dayan from Israel. And during the following weeks, I'll meet with all the others. These meetings that come to me directly are preceded, of course, by long discussions with the Secretary of State and others. We have, in addition, many other defense matters that have come to my desk. Quite often, we have foreign matters that don't relate to the prospect of war or the issue of peace. A recent one, concluded last week, was with the Canadians, on a means by which we might bring natural gas down to our country. And this is the biggest construction project ever undertaken in the history of the world, and I think we arrived at a common purpose there. We have already implemented the construction of a new Department of Energy. I approved it this week. Dr. Schlesinger has been working on this ever since I've been in office. We have finished in the House, I think, substantial legislation to set up an energy policy that might guide the new Department in its functions. We are running into additional problems in the Senate. The political pressures are enormous from the oil companies and others on the subject of energy. I think the House took very courageous action in this respect, and my hope and expectation is that the Senate will do the same. Welfare reform has been presented to the House and to the Senate this week in its final, legally drafted version of legislation. And before the Congress adjourns this year, hopefully in October, I will present to them my tax reform package as well. This will take a great deal of debate and study, along with welfare. And that, obviously, can't be concluded during this calendar year. We have, I think, been fairly successful so far. We've been learning, and I think that we put together a good organization here.

Just a few minutes ago, I signed a proclamation of emergency in Indiana so that we can provide help. And last night, I did one for Ohio. This will permit the legal use of military forces, National Guard, and others, to alleviate the traffic conditions and to reach stranded motorists and others. Well, we're trying to approach the energy question on a comprehensive basis, and it's a very complicated and difficult and politically divisive issue. The first natural gas deregulation bill that was vetoed, I think, was by Harry Truman, 27, 28 years ago, so that this is not something new. But I think for the first time the Congress has made tremendous progress in trying to resolve these major differences. I just finished having lunch with Senator Talmadge, who's on the Finance Committee of the Senate, who's also chairman of the Agriculture Committee, and we discussed farms and energy primarily. I think that we're flexible enough in the executive branch to deal with almost any reasonable solution that the House and Senate conferees can evolve. There are only three prerequisites as far as I'm concerned. One is to have an increase in conservation, an increase in production, be fair to consumers and, at the same time, not break the Federal budget. So, within those bounds, which are quite general, I'm flexible. There are some deeply felt opinions on both sides of this issue, based on 20 or 30 years of voting record, and it's hard to get people to accommodate those differences. They've never been able to in the past. So, I think we have a good chance to have a comprehensive energy bill this year that will at least let the American people know where we are going. I think the uncertainty is one of the crucial problems that we have.