THE PRESIDENT. Good afternoon. I have two statements on two bills now before the Congress.
     [ 1.] I want to express my very strong support for the foreign aid bill which the House leadership now expects to bring to the House of Representatives next week. Our foreign aid programs have made great demands on our people, and still do, but they are vital to our security and are carefully designed to respond to the national interests of the United States, as well as the maintenance of the peace and security of the free world.
     Three facts should be kept in mind. Almost half of the money authorized in the foreign aid bill is for military assistance, or supporting funds for the defense of countries directly threatened by aggression or subversion. More than 80 percent of the money committed to economic assistance is in the form of loans, not grants, and these loans will have to meet our aid criteria and be repaid in dollars.
     More than 80 percent of the money appropriated for the foreign aid program will be spent here in the United States on goods and services supplied by American businesses and American workers, under new and tighter procedures which are being developed. Most importantly we simply cannot stand aside in the face of the needs of developing countries. In Latin America, for example, it is more urgent than ever that the Alliance for Progress should go forward. Here is an area with an income per capita one-eighth of our own. In some of these countries they are overwhelmingly dependent on a single export commodity, and they have to sell at wholesale and buy at retail. It is estimated that Latin America has 50 million underprivileged adults, and 11 million children of school age who are not in school. The stirrings of revolution can be felt in this hemisphere. It will either be peaceful or violent. We want it to be peaceful. But we have to do our part with our sister republics in assuring that. This is a bipartisan bill, supported by my predecessors since 1945, and I hope we can get favorable action this year-
     [ 2.] The second matter is to urge strong support for the Senate effort which is now going forward under the leadership of Senator Anderson to pass a medical care for the aged bill, under Social Security. The bill which is now coming before the Senate is a strong bill. It meets the problems of those who have not been covered by Social Security. It provides participation by the Blue Cross, by private insurance companies. It is an effective bill, and I think could mean a good deal to our older citizens and their children who must sustain them. I hope the Senate will act and then the House.
     [ 3.] Q. Mr. President, there seems to be growing sentiment in various sectors, both labor and business, for a tax cut this year. Have your discussions with Secretary Dillon this week opened the door at all to such action in 1962?
     THE PRESIDENT. No. We are continuing to watch the economy. We have, as you know, planned a tax cut and tax reform to come next year. We, of course, would prefer to maintain that schedule. We are continuing, however, to watch the basic indicators of the economy, and if we feel that the situation in the economy warrants a tax cut, then, of course, we would recommend it. At the present time we are maintaining our previous schedule. But I think the recommendations of the Chamber of Commerce, which is, of course, intimately in touch with the business community, and also the recommendations of the AFL-CIO, in regard to the need for tax cuts, should be very seriously considered by the Executive, as it is by me, and by the Congress, because representing as they do business and labor, giving their recommendations in favor of a tax cut, we have to take that judgment into very careful balance, which we are.
     [ 4.] Q.  Mr. President, regarding your proposal for a declaration of interdependence and a concrete Atlantic alliance, can you give us any particulars on how these goals can be achieved? I am thinking in terms of how long a period of time may be involved and whether eventually this would be based on alliances or some form of political union.
     THE PRESIDENT. As I said yesterday,¹ the first task is for Europe, in its own way and according to its own decisions, to complete its organization. When a decision is reached in regard to Great Britain's joining, which we hope this summer, then, of course, this work will move ahead at a more accelerated pace. What I was attempting to suggest yesterday was that any view in Europe or any stories which might appear that we regard this strong and increasingly united Europe as a rival, were not true. We regard it as a partner. We regard it as a source of strength.
     It is true that when this united Europe develops, that, of course, its relationship with us will be different than it has been in the past. The NATO alliance of a series of independent countries placed special responsibilities upon the United States which we were glad to assume, but which - of course, the relationship would be different between a single powerful Europe or - a union of powerful European states and the United States. We would have to work together on economic matters.
     As you know, we have been carrying great burdens in many parts of the world, the dollar has - military, economic, political - and I am hopeful that when Europe has completed its work, that Europe and the United States can then attempt to complete and harmonize its relationship in a way that will benefit not merely the United States and Europe but also, as I said yesterday, would look outward. We do not want this to be a rich man's club while the rest of the world gets poorer. We want the benefits of this kind of union to be shared. The first task is Europe's and then it will be the United States'.
     [ 5.] Q. Mr. President, today you named a new Soviet Ambassador. No doubt you have talked in general terms or will talk in those terms with him about his mission. I wondered if you could discuss briefly in a general way your feelings about the relations with the Soviet Union since you have taken office and what you expect in the months ahead.
     THE PRESIDENT. Well, in the case of our new Ambassador, Mr. Kohler, I have worked very intimately with him for the last year and a half, because he has been the head of the so-called task force on Berlin and has participated in all the ambassadorial meetings. So that he goes to the Soviet Union with complete knowledge of the Government's policy and also my complete confidence.
     We've continued to attempt to work for an adjustment of those major tensions which disturb the relationship between the United States and the Soviet Union and between the free world and the Communist world. We have not always been as successful as we had hoped, but we are continuing. We're continuing the discussions over Berlin. We are now in conference in Geneva on Laos, where we are hopeful that a satisfactory treaty can be reached. We are going to be back in conference on July 16 on disarmament with the Soviet Union, so that we are continuing to see if it is possible to reach an accommodation for the peaceful use of space.  In a whole variety of ways we are attempting to lessen the chance of conflict with the Soviet Union and maintain our own security and the peace of the free world. That is the object of our policy.
     It cannot be accomplished quickly. It will require, I think, some time to come. But that is the object of our policy and we are going to attempt to continue to live in peace with all countries, and particularly those countries whose military potential is such that any great conflict would involve the future of both of our countries, and of the race. And Ambassador Kohler will attempt to carry out this policy which I have stated, necessarily, in a most general way.
     [ 6.] Q. Mr. President, you say that the Atlantic partnership would be an advance on what we now have. How would it better achieve those things you claimed for it yesterday in Philadelphia? That is, a greater deterrent to aggression; a banishment of war and coercion; and some of the other things?
     THE PRESIDENT. Well, this will represent an extremely powerful body of people and productive power - the North Atlantic, North America, and Europe having nearly four or five hundred million people, having a productive power which is enormous, and steadily increasing. This represents a very vital source of strength.
     My concern is that the relationship between Europe, using it in the single sense, and the United States, be intimate. We have been dealing, as I have said, with a great many countries which are smaller than the United States. Now we are going to have not one country but one great organization, if the effort is successful in Europe. And, I'm hopeful that we can reach accommodations on I the economic relations, of trade, and also the problem of currencies and all of the rest; on the problem of military policy; and then that we can emphasize, which I suggested yesterday, that we look outward.
     We do not want a Europe, as I have said, and a United States to be a core of an increasingly disintegrating world. And therefore we're concerned with the admission of the raw materials of Latin America to Europe; we're concerned about the Pacific community - the Philippines, Japan, and the others - and we are concerned that Europe and the United States play their proper role in assisting the underdeveloped world.
     These are statements of general policy. They must wait, therefore, for precise implementation while Europe completes its work. But I wanted to indicate yesterday how much we favored this, and we do regard it as a source of strength and satisfaction and not as a rival. Europe does not want to be dependent upon the United States and we do not want that relationship, and I think we meet as equals when this work is completed.
     [ 7.]  Q. Mr. President, two questions based on the passage of the sugar act and the foreign lobbying attending it. First, what do you think about the exercise by the House Agriculture Committee of what is essentially the power to make foreign policy by allocating quotas? And, secondly, on the lobbying itself, do you believe there is involved the kind of double standard here? The Executive is controlled by very strict rules on conflict of interest. Do you think something similar to this should be expected of Congressmen?
     THE PRESIDENT. Well, as you know, the bill that we sent up to the Congress did not provide for this allocation of quotas. The final bill which was passed by the Congress, which I have not yet signed, plus the amendments made today - in the legislation before the Senate today - I think provide for an improvement over the situation as it was in the original House bill. Now, the second - though it is not everything that the administration wished for.
     The second question is this matter of lobbying. I don't think it's a double standard. These men are all private people, they're not Government people, so that I wouldn't say it's a double standard. But I think it is an unfortunate situation when men are paid large fees by foreign governments to secure quotas and where, in some cases, there are contingency fees. For every ton of sugar they get allocated to their country, they secure a payment of so much. Well, now, that is not satisfactory.
     I understand that appropriate committees of the Congress may look into the matter. And I think the fact that so much publicity has been given to this may serve as a deterrent. As you know, the bill which has passed the House and Senate, combined with today's bill, provides for a gradual phasing down of these quotas and we will have less of it. And I think we ought to have less of it.
     [ 8.] Q. Mr. President, I think Mr. Shoemaker's question included a question about whether this Atlantic partnership would be a political unit. Could you elaborate on that?
     THE PRESIDENT. No, I would think that in a sense we have a political union - it depends on how you define "political." We have in NATO alliance the obligations to accept it under the NATO alliance. The North Atlantic Council, OECD, DAG, and all the other organizations which have been set up represent political commitments. And of course these political commitments will, perhaps, take a different form as Europe changes its form, and I hope a more intimate one. But as I've said, the first task is Europe's, and it will not be accomplished overnight any more than, of course, the length of time which elapsed between the Declaration and our own Constitution.
     [ 9.]  Q. Mr. President, what do you think of the propriety of the Reverend Martin Luther King intervening privately with the Chairman of the Home Loan Bank Board in a controversial case pending before that agency?
     THE PRESIDENT. Yes. I understood that this is a matter which you brought to the attention of the White House and it's now being looked at to see whether there were any - what the actions were. As far as I know, so far, there is no illegal action. But our examination of the matter is not completed.
     [ 10.] Q. Mr. President, without regard to your statement in Mexico, do you consider that progress has been made in enlisting the cooperation of the Latin American countries in handling the Cuban situation? And with specific regard to Mexico, do you feel that anything that occurred there has weakened your position, or ours, or the Organization's in any way?
     THE PRESIDENT. Well, the answer to the last part, I would say no. In answer to the former part, as you know, the action taken at Punta del Este indicated, I think, a general recognition that Marxist-Leninism was incompatible with this hemispheric system.
      [ 11.] Q. Mr. President, the Armed Services Committee has not scheduled any hearings on your request for $460 million for a big fallout shelter program, and apparently it has had no prodding from you. My question is, do you expect to renew your appeal for this program?
     THE PRESIDENT. No, I have talked to the responsible officials involved. I hope the hearings are held. I hope they can be held this month. I hope we'll secure the money we requested. As you know, within the last 10 days I've sent up a supplemental appropriation request for around $35 million for the distribution of food throughout the country, which would be available in case of an attack. These matters have some rhythm. When the skies are clear, no one is interested. Suddenly, then, when the clouds come - after all, we have no insurance that they will not come - then everyone wants to find out why more hasn't been done about it. I think we ought to take the action recommended by the administration. It may be that there does not seem to appear to be a need as of today, but that does not mean that there may not be need for it at a later date. Then everyone will wonder why wasn't more done. I think the time to do it is now.
     Under the program which we started some months ago, nearly 60 million shelters have been identified. We want to have food in them and other necessities, and I'm hopeful that the Congress will implement the program we have sent up.
     [ 12.]  Q. Mr. President, the United States has reportedly invited Japan and other industrialized countries to invest in the building of plants in this country. Would you explain the thinking behind that, sir, and does it imply also that we are discouraging U.S. investment overseas in plants ?
     THE PRESIDENT. As you know, United States investment overseas has been very heavy. In fact, it has been one of the matters which of course affects our balance of payments. Over the long run it does not; over the immediate run it does. We are anxious to have others invest in the United States, and particularly to invest in those areas where there may be higher unemployment. So this program is being operated through the Department of Commerce.
     We've also attempted to speed up the number of tourists who come here. We want investment to come here. All of these will affect our balance of payments and affect our employment. We don't want our capital merely to be invested outside of the United States. We want foreign capital matching to come here. And that's the purpose of this program.
     [ 13.]  Q. Mr. President, there are proposals to suspend the equal time requirements to permit major candidates for House and Senate and Governor to debate this year. Do you favor this?
     THE PRESIDENT. Yes, I'd like to see the legislation, but I think the purpose as you've described it - I would favor it, yes.
     [ 14.]  Q. Mr. President, this morning Governor Welsh of Indiana visited you about the conflict between the Port and the Lake Michigan-Lake Shore area. He has referred us to you about your comments on that. Did you give him any encouragement on it?
     THE PRESIDENT. No. He explained the concern of Indiana - the effect on the jobs. As you know, there is an opposition to this proposal based on the effect it will have on the national park there. The Budget Bureau is having an analysis made tomorrow, which I think Governor Welsh and the representatives will attend. There also will be a White House representative there to hear that discussion, and then we'll make a report or recommendation to the Congress, shortly.
     [ 15.] Q. Sir, the Democrats of Michigan are hoping to invite you to a $1,000 a plate brunch for a select group of businessmen, with the understanding, which is rather interesting, that if the list is complete, of about 40 men, the list will then be sent to the White House. Whereupon you are to write them invitations for a meeting to discuss the Government's relations with business. Would you care to comment on that idea, and whether this is something that might - or what this might do to the idea that the Democrats are not the party of business?
     THE PRESIDENT. Well, I think, let me say I haven't heard of this brunch - [laughter] - so we have no plan. We are having luncheons to which businessmen and others will be invited. That doesn't cost any amount of money. I would think the problem of political parties raising funds is a difficult one. I'm not familiar with this one. I don't think that I'll be able to participate in it. But I'm very concerned about the problem which both parties have, of the difficulty of raising funds to carry on campaigns.
     Now, the last part, I agree that the Democratic Party is not the party of business. There are an awful lot of businessmen who have supported the Democratic Party. I think its base is very broad traditionally. It includes wide spectrums of the American public and does not confine itself to merely one section.
     [ 16.] Q. Mr. President, I believe you've been in office about 17 months and still haven't signed that order against racial segregation in federally financed housing. Could you tell us when you do plan to sign that?
     THE PRESIDENT. I will announce it when we think it would be a useful and appropriate time.
     Q. You will sign it before the end of your term?
     THE PRESIDENT. I have said already I will meet any commitments of that kind that I've made. I will point out that we have carried on a great many activities in the field of civil rights, Executive actions, including actions by the Department of Justice and others, and I will take action as it appears that they will accomplish the result which we want to accomplish, which is providing equal opportunities.
     [ 17.] Q. Mr. President, you indicated that one of your prime interests is the lessening of tensions with the Soviet Union. I believe Mr. Khrushchev and Radio Moscow indicated in the last few days that they think Mr. McNamara's Ann Arbor speech enunciating a counterforce doctrine was an aggressive policy. Do you see any conflict between the two?
     THE PRESIDENT. I think Mr. McNamara's speech was an attempt to explain why the United States opposed the idea of expanding national deterrents. He was devoting himself to that. That was his purpose, to try to explain and put theory behind the practice of American policy which is to discourage the expansion of national deterrents as inimical to the cause of peace. So that I regarded it in that sense as constructive and, if read from that point of view, I would hope that others would regard it so.
     [ 18.] Q. Mr. President, the name of Robert Weaver has frequently been mentioned as a possible successor to Secretary Ribicoff, who has announced he will resign in a week or so as Secretary of Health, Education, and Welfare. Can you tell us what your plans are to fill that post?
     THE PRESIDENT. No, not until the Secretary resigns.
     [ 19.] Q. Mr. President, two related questions on the economy. Could you spell out a little bit the formula that you will use to make the decision, whether you will ask a tax cut this year or not? And secondly, did Mr. Heller's observations in Europe as to the remarkable status of their prosperity draw you in any way further toward being convinced that deficit spending is a good idea in terms of our own problem?
     THE PRESIDENT. No, well, I think I explained in a previous address at New Haven about my view that the budget should be - of course, at times when there is a strong inflationary pressure in the economy, we should pursue a different budgetary policy than we do at a time when the economy is sluggish, because if the economy remains sluggish you have a deficit anyway. Witness the '58 deficit of $12 billion because of a drop in earning power and a drop therefore in tax revenues. In addition, as the International Bank at Basel pointed out, there will be times when you'll want to run a deficit budget policy and a higher interest rate policy in order to protect your gold. So that these fine judgments have to be made.
     Now as to the first part of your question, we will look at the indicators, the basic indicators which have had some sort of historical significance in previous years as indicating a prognosis for the economy. In addition, we are going to come out next week with the tax depreciation schedule, which is now at the printers. We are hopeful we will get action on our tax credit bill. We are hopeful we will get action on the public works bill, and some of the other programs which we have talked about, tax power - set-aside tax power. All these could affect our judgment as to whether we should go to Congress this year. But the basic question will be to try to make an analysis as to the health of the economy over the next months, and whether '63 is the appropriate time, or now.
     [ 20.] Q. Mr. President, Premier Khrushchev said yesterday that in his view there had been some progress in settling the Berlin problem, and in a speech later on in the day he said the time for decision seemed to be at hand. Do you agree?
     THE PRESIDENT. Well, I think we should continue to examine whether we can reach an accord on a matter in which we have powerful interests, and on which we do not see alike. So it is a very difficult negotiation. Mr. Dobrynin and the Secretary spoke just before the Secretary's visit. I am sure they will be meeting shortly again.
     [ 21.] Q. Mr. President, in line with your communique in Mexico, I wonder if you think there will be a solution soon to the Chamizal Zone in El Paso? And if you think this will mean a dividing up of the property between the two countries? Or what are your personal views about it?
     THE PRESIDENT. As you know, there have been long negotiations about the Chamizal. This territory was awarded to Mexico in the arbitration award of 1911, but the United States did not accept it. Since then, as a result of the United States failure to accept the arbitration, Mexico has been unwilling to take any other matter into arbitration, which has, of course, therefore - lessened the harmony between the two countries. We are anxious to see if this matter could be disposed of. The difficulty is that since 1911 there have been schools, a lot of people have moved in there, and you have a different situation in the area involved than you did in 1911 because of the interests which have built up there. That's what's made it so difficult to solve. But what we indicated was our strong desire to reach an accord on this matter, which we're going to attempt to do, taking into account the problem which is now there in El Paso and the interests of the people involved, and the interests of the Mexican Government. But it is a matter that we cannot afford to continue to treat with some indifference, because the United States failed after agreeing to arbitration, then backed down and did not accept the award.
     [ 22.] Q. Sir, this is somewhat related to an earlier question. The other day General Eisenhower described the Republican Party as the party of business. Now do you consider this fair or accurate as to the Republican Party or the business community?
     THE PRESIDENT. Well, I think that - as I say, I dislike disagreeing with President Eisenhower, and so I won't in this case. [Laughter]
     [ 23.] Q. Mr. President, last week I believe you indicated that you'd like to have a somewhat better Congress, and you hinted that you would campaign this fall for that purpose. Does that mean, perchance, that you might campaign only for those Democrats who have supported the major part of your programs, or will you campaign for all Democrats who want you?
     THE PRESIDENT. Well, I suppose you have answered the question. Those who want me to campaign for them are people who have generally supported the major part of the programs. So I don't think we are going to have a problem.
     [ 24.] Q. Mr. President, concerning the medicare bill, would you elaborate on why you don't favor inclusion of doctors' fees? Is it a matter of legislative strategy or of philosophy?
     THE PRESIDENT. I think that the doctors are very strong against being included. They feel that this would involve the Government in the doctor-patient relationship. Therefore we have concentrated our efforts in attempting to assist people to pay their bills, hospital bills, and, quite obviously, if they find that eased, they will be in a better position to work out their relationship with their doctors. It is because we have not included doctors that I have found it very difficult to understand why the American Medical Association has found this legislation so unsatisfactory. It does not involve them directly. It involves the payment of hospital bills. And in view of the fact that the Federal Government participates in the construction of hospitals through the Hill-Burton Act, from which doctors benefit in their practice, I found the AMA's extreme hostility to this bill somewhat incomprehensible.
     [ 25.] Q. There have been a great many dope stories on the matter of a NATO or European nuclear force and America's attitude towards it, so much so that some of us, at least, are a little hazy as to what the real situation is. Can you give us an up-to-the-minute statement on America's attitude towards the building of such a force, and how far we would go to help them build it, including also whether we favor a truly independent European nuclear force, that is, one not subject to United States veto?
     THE PRESIDENT. Well, the United States Government feels that the present arrangement under NATO gives full and sufficient guarantees for the integrity of Europe. It places special responsibilities upon the United States, but I think the United States in the last 17 years has indicated its determination to meet its commitments, and to implement its responsibilities. But of course, as time passes, Europeans become increasingly concerned, particularly as the Soviet Union has developed not only atomic power but also missiles, which puts Europe directly under the gun, as well as the United States.
     Therefore, stronger pressures have arisen in Europe for a European nuclear force not as dependent upon the United States as the present one. What we have suggested is that this is a matter that Europe should consider carefully, that we would, of course, be responsive to any alternate arrangement they wish to make. We would examine it. We recognize their problem. But we think it's a matter in which Europe should come forward with some suggestions, and not for the United States to attempt to impose its views, particularly as we regard the present arrangement as a secure one for Europe. But if Europe does not agree with that, and she may not - particularly as she develops this additional union - then we'd be prepared to discuss an alternate arrangement. But so far no such proposal has come forward.
     [ 26.]  Q. Mr. President, Governor Brown is coming here to see you this afternoon. I wonder if you have any advice for him in the contest with Mr. Nixon and what your overall view might be of the campaign in California, with eight new seats, and all?
     THE PRESIDENT. No, I saw Mrs. Brown here. I don't know whether this has helped give her any advice. I would not advise Governor Brown. I think this is a mater for the people of California. He seems to be doing very well. He was running far behind in the beginning, in polls. And now he is leading in the polls by substantially more than I led at the end of the election. So I will be glad to - I want to see Governor Brown on matters which involve the interest of California. But on how he should conduct the campaign and all the rest, he's a much better judge of that than I am. I think he carried California by a million votes the last time he ran, or very close to it. So I think he knows more about California and how to run than I do.
     Q. Mr. President, if you will support Democratic candidates who ask for your help, does that include the primaries as well as the election? And what is your view of the man you are going to finally end up supporting in Massachusetts?
     THE PRESIDENT. No, I am not planning to get involved in any more primaries any place.
     Reporter. Thank you, Mr. President.
 

NOTE: President Kennedy's thirty-eighth news conference was held in the State Department Auditorium at 4 o'clock on Thursday afternoon, July 5, 1962.