September 25, 1981

Reporter. Why do you think the market is dropping?

The President. I don't know, but it started down yesterday. It rose six points yesterday morning, then before the end of the day, it started down, and I guess it is continuing on down. I don't know what the reason is, but I'm sure not going to take the blame.

Q. Why not?

The President. Because I'm going to go by the phone calls and the telegrams and so forth that have been coming in since last night's speech, and they are running three and four to one and better in our favor on the speech, in support of what we advocated.

Q. What can you do to be sure that no one who is needy suffers if the cuts are made?

The President. We're going to do everything we can. And what we're aiming at mostly is what we have found by experience is true, and that is that there are programs that are being abused by people, who through technicalities and loopholes in the structure of the program are getting benefits they are not entitled to. In the school lunch program, we're simply trying to direct toward those who are in need, and not provide it to families with more affluence that don't really need it. And this is true of all of the other programs.

Q. Would you accept more defense cuts if Congress decides to change your program as long as they give you $13 billion in cuts?

The President. I am going to depend on Secretary Weinberger, because my own experience with him as my finance director in California -- I know that if there is any place he can find, he would propose it, if it would be one that would not hurt the program of building that we are going forward with. And I want to point out to you that long before this, he found several billion dollars that reduced the amount of increase that we would have to have, that he translated from fat to muscle. So, he was busy at getting at that angle in the Defense Department long before we came to this point of additional cuts.

Q. Would you go along with it if Congress finds some space for more defense cuts?

The President. I would rather take my judgments from Secretary Weinberger because of the absolute necessity of redressing the imbalance in our defensive standpoint.

Q. Are you negotiating a compromise on the AWACS sale in order to get it through? And is it possible to get it through?

The President. I don't know whether it is possible. I don't really think that we have been to bat yet on this. I'm surprised at the attitude of a number of the Senators about this program, because I think if they reverse this decision to sell, they are literally doing away with our ability to continue to try to bring peace to the Middle East. This is what we're trying to do, and I believe that Saudi Arabia is essential to that process.

Q. Could we have an American in the airplane? Could Saudi Arabia agree to that, sir?

The President. We have Americans now that are maintaining it. We're talking about planes that won't be delivered for 4 1/2 years. In that 4 1/2 years, having kept faith with them, I believe that they can be persuaded as they were in the Lebanon crisis. There would have been no ceasefire had they not heeded our plea and injected themselves into a temporary cessation.

Q. Are you negotiating a compromise?

The President. We are going to find out if there is anything that can persuade these people up there without in any way presuming upon the good will of the Saudi Arabians, anything that can persuade some of these people to see common sense in this.

Q. Thank you.

Note: The exchange began at 3:30 p.m. on the South Lawn of the White House as the President was departing for Camp David. As printed above, the transcript follows the text of the White House press release.