The President. Thank you, Dr. Fink. Modesty may not be his long suit, but I like the introduction. [Laughter] And very candidly, I like the pride he takes in his institution, and he gave me a good lecture up here as to how I should be supportive of these smaller and independent colleges. And it struck home to me, I'll tell you.
And Governor Deukmejian, I'm glad to be with you, sir. And our Commonwealth Club president, Joe Perrelli, thank you for your hospitality. And let me just single out our former Secretary of State, George Shultz. I'm honored to see him here and be with him.
I'm going to get in real trouble here, but another San Franciscan who served his country at a very high level is now giving of his time to work with me on the prestigious Science Advisory Committee, and I'm talking about your own and my friend, David Packard. I'm delighted he's here.
And just two more. I'm pleased to see the mayor of San Francisco here -- Mayor Agnos -- delighted to see him. And of course, another who I read in the paper had re-retired, or was about to re-retire, and I'm talking to the former head of the World Bank, Tom Clausen, an old friend who I'm delighted to see him here.
So, I feel encompassed by friends and delighted to be back for, I think it is, my seventh -- Joe, seventh? -- seventh appearance before this prestigious group. A few minutes ago, I asked a 49er fan what he thought was the turning point in the Super Bowl. [Laughter] He said, the national anthem. [Laughter]
Of course not all the recent memories -- as Art knows -- in the Bay area have been pleasant ones. I'm sure you remember the last time I was here, after this city suffered tragedy. And I'm talking about a clutter of car wrecks and a flattened freeway and a terrible black cloud rising from the Marina district. And I know that some damage remains, and certainly some heartache and some hardship. But today I've sensed and felt something else: renewal. The people of the Bay area have stood up and dusted themselves off and are rebuilding because you came together. And San Francisco will be as beautiful and vital as ever. So, I think it's fair to say, from having been here for about 45 minutes, San Francisco is back, and we can understand that. [Laughter]
But I've come here today to California for another reason: to give you a no-nonsense -- you hardnosed business men and women that you are -- a straightforward and hopeful message about the national security of our country. Yesterday at Fort Irwin, I also thanked our men and women in uniform -- not just because they keep America safe and free, but I came to thank them because they help to make possible the wonderful changes that are sweeping the world. I wish every man and woman here could have been with me as I talked to the young troops out there in the desert. It's very clear why every one of our Joint Chiefs keep telling me our services all have the finest, most dedicated young men and women to ever serve in the uniform of the United States.
And as the threats to our security change, so, too, must our defense strategy. In 1986 defense expenditures consumed 6.3 percent of our gross national product. As you know, I just submitted my 1991 budget to Congress, which holds down defense spending for the fifth year in a row, down to just above 5 percent of gross national product. I'm submitting this budget at a time when the postwar world that we have known, the world that began in 1945, is changing before our very eyes. So, to understand then where we're going, let me first review where we've been and where I think we are today.
The free world's first generation of postwar leaders had the cautionary example of their predecessors. They remembered that the Great War, the war to end all wars, was followed by chaos and conflict. They remembered that visionary statesmen after the First World War had tried to limit large navies, even outlawed war itself. But soon these great hopes faded in the face of unchecked aggression, and no pact could prevent World War II.
So, by 1945 our leaders had acquired a realism, a realism born of bloody experience, a pragmatism born of a sober appraisal of the world as it was. And from Harry Truman to Ronald Reagan, our strength became the world's shield; our ideals of freedom and democracy, the world's hope. We paid dearly for the defense of liberty with our national wealth and with many of our youngest and bravest.
And so, over the past 40 years, our leaders continued to provide for war even as they sought peace. It was during the Truman administration, in this very city, that men and women of great vision and high ideals came from around the world to create an assembly of nations. And so it was, in San Francisco, 45 years ago, that the United Nations was born. Then, as now, the United States strove to balance its role as peacekeeper with that of peacemaker. We helped create the United Nations and NATO. And we encouraged Soviet change even as we thwarted Soviet expansion.
Those who crafted this new policy had a name for it. They called it containment and predicted that if we blocked the easy path of expansion, the Soviet Union would one day have to confront the contradictions of its inhumane, illogical system. The purpose of containment was not to defeat or humiliate the Soviets. The purpose was to preserve and extend liberty. The hope was someday to see, as George Kennan put it in 1947, ``the gradual mellowing of Soviet power.'' It took nearly a half a century to vindicate this strategy, but we can now see the results: today the cold war is in retreat. That is good news, for no sane man or woman is nostalgic for the cold war.
We're inspired by this Revolution of 1989 -- heartened, for example, to see a man of letters and conscience in Prague move from prison to the Presidential palace. We are heartened to see the Berlin Wall fall, setting off a shockwave that upended a tyrant in Romania. And we're grateful for something more. Now, because of our strength and that of our allies -- now, thanks to the march of freedom and democracy in Eastern Europe and even in the Soviet Union itself -- now the prospects for an enduring peace are greater than ever before. We can now envision a new destiny for the nations of the Continent -- that of a Europe truly whole and free.
We are taking the first steps across a bridge begun by others long ago. And it's a bridge that can lead us from seemingly endless conflict to the promise of a lasting peace. But no matter how great the promise, we must be certain that the bridge is secure. As President, every morning I receive an intelligence briefing, and I receive the best information available to any world leader today. Yet the morning news is often overtaken by the news that very same evening. And the world is moving too fast to forecast with absolute certainty what will happen next. Our challenge is to manage this period of transition from the world of today to the world of tomorrow and safeguard the security of America in the process. When it comes to the security of this country, I would rather be called cautious than I would be called reckless. Our pursuit of this promising future must start with an understanding of today's realities.
Take, for example, our most recent proposal, warmly received by our allies and President Gorbachev. I proposed reducing the troop levels on both sides in Central and Eastern Europe to 195,000 troops. That balance, that balance encourages the less threatening future we envision, and it holds great promise. But right now, right now, the Soviets still have more than 560,000 men under arms in Central Europe.
On the issue of strategic weapons, we've made progress in the START negotiations. And again, I'd like to salute George Shultz for his very important part in this. And we now hope to slash dramatically the number of strategic weapons on both sides. It is these important reductions that Secretary Baker is seeking this very day in Moscow. That's the future we envision, and it, too, holds great promise. But let us not forget that right now the Soviets still have more than 10,000 strategic weapons. They are modernizing them, they have developed two new mobile ICBM's, and their spending on strategic defense is comparable to their spending on strategic offensive forces.
The President of the United States is the Commander in Chief, bound by the Constitution to defend and protect the United States of America. Now, some would have me predicate the defense of our people on promising but as yet unfulfilled hopes for the future. I will not do that. I am determined to seek with the Soviets the collateral to implement a new peace. In international terms, collateral means soldiers discharged, tanks dismantled, nuclear missiles demolished, and chemical weapons banned from the face of the Earth. Some see our measured approach as endangering the process of change. I see our approach as essential to change, essential to the security of this nation, and as the only way to a lasting peace. We have shown that American resolve can help further Soviet reform. And we've shown that American strength is the catalyst for arms control. And we've shown that the idea called America can inspire change. And now we must not let impatience, born of euphoria, jeopardize all that we hope to achieve in the future.
First, as Americans have always believed, our foremost goal is to prevent another world war. To do so, we will still need to remain fully engaged. European security, stability, and freedom, so tied to our own, requires an American presence. Western Europeans all want us to stay there -- every single country -- want us to avoid pulling back into an uninvolved isolation. I have the feeling that when the dust settles, the new democracies of Eastern Europe will feel exactly the same way. We must remain in Europe as long as we are needed and wanted. And the prospect of global peace, therefore, depends on an American forward presence.
Second, we will, of course, continue to reduce the likelihood of nuclear war. And that's why I will vigorously pursue the START talks with the Soviet Union. But arms control and strategic modernization are not competing strategies. Rather, they can work together to make the world a safer place. Just this morning, I went out and visited Lawrence Livermore Labs and met those visionary men and women who strive to make a nuclear strike on our country, whether from a nuclear superpower or some renegade nation or terrorist group, even more unlikely than it is today. And if the technology I have seen today proves feasible -- and it looks very promising -- no aggressor could be confident of the success of a ballistic missile attack. And that's what deterrence is all about.
And let's be clear: This purely defensive concept doesn't threaten a single person anywhere in the world -- the life of a single person anywhere in the world. God forbid, if it ever had to be used, it would be used against missiles, not against people. When some complain of the cost of developing such technologies, they should first consider the cost of not doing all we can to deter conflict and protect the cities and the citizens of America. And that's why I will seek to persuade the Soviets, through our defense-in-space talks, that, in fact, greater reliance on strategic defenses will contribute to a safer world.
Now let me now tell you something about the strategy behind our 1991 defense budget. First, new threats are emerging beyond the traditional East-West antagonism of the last 45 years. These contingencies must loom larger in our defense planning. Remember the threats of Libyan and Iranian terrorism. And remember the liberation of Grenada and Panama. And remember the dedication of our American servicemen on duty in the Persian Gulf 2 years ago, safeguarding not only the flow of oil -- safeguarding the flow of oil to the industrial democracies -- but an action also welcomed by many small nations over there who were afraid that the Iran-Iraq war would adversely affect their own freedom.
And remember, too, that there are more than 15 countries in the world that will have developed ballistic missiles by the end of the decade -- 15 countries, many with chemical and biological capabilities. Nuclear weapons capabilities are proliferating, much to my regret and the regret of everybody here. And inevitably, high-tech weapons will fall into the hands of those whose hatred of America and contempt for civilized norms is well-known. We will continue to work hard to prevent this dangerous proliferation. But one thing is certain: We must be ready for its consequences. And we will be ready.
Then there are the narco-gangsters that concern us all, already a threat to our national health and spirit. Now they are taking on the pretensions of a geopolitical force -- whole new force to effect change -- and they must be dealt with as such by our military: in the air, on the land, and on the seas.
Clearly, in the future, we will need to be able to thwart aggression -- repel a missile or protect a sealane or stop a drug lord. We will need forces adaptable to conditions everywhere. And we will need agility, readiness, sustainability. We will need speed and stealth. And we will need leadership.
In short, we must continue to deter both a global war and limited conflicts in new conditions. And for this reason, we doubly need to continue the modernization of our forces. I pray that it will not be my sad duty to commit American fighting men again into combat. But if I do, on my watch, the lives of American fighting men will not be shortchanged.
As I mentioned, just yesterday I visited the National Training Center at Fort Irwin, near Barstow, where our fighting forces prepare for action. It was at this very base that we trained many of our troops who fought with such distinction in Panama. And they were courageous. But being prepared is also the best way to ensure that wars are prevented. And after seeing our men and women again and talking with them, they are indeed up to the challenges of the future.
You know, I once read that Khrushchev once spoke to the Commonwealth Club for 3 hours. [Laughter] Perhaps he began this speech with these words: ``Let me make just a few brief observations before taking your questions.'' [Laughter]
So, I will get to my final concern: how all this change in our defense budget affects us at home. Many speak of the peace dividend. Few discuss the short-term cost of peace. There will be costs as we cross the bridge to a better future -- for dislocated industries and workers, for communities -- painful personal adjustments to be made. But America has always been willing to pay the price of peace. I know that some of the bases that have been proposed for cutbacks are in this area, just as many of them are in my home State of Texas. But let me state right here and now: There have been no politics in these proposals. Some talk about bases in Democratic districts here. Well, they're also in the same State as a great Republican Governor over here. I ask Congress to join me in a spirit of fairness. Longstanding critics of defense spending should not turn around and block the closing of a base in their home district. There's something just a little bit ironic about certain Members of Congress whose philosophy seems to be, make deep cuts, but be sure to cut in somebody else's State or somebody else's district. And we can't have that anymore. This is too important. I can't accept that. The taxpayers deserve better, and so do those affected by our decisions.
So let me assure you: If a base closes, it doesn't close Federal concern and commitment. You know, civilians who are laid off will receive top priority for placement in other DOD positions. The Homeowners Assistance Program will protect military and civilian personnel from falling real estate prices. And the Office of Economic Adjustment will work with communities to develop powerful new economic assets, new ways to use old bases. The Bible speaks of beating swords into plowshares. We're transforming military runways into municipal airports, and military bases into industrial parks and community colleges, and missile hangars into factories. I don't know how the pruning hook business is going out there, but we may go back into that too, cast them into pruning hooks.
You know, I know the American people will support these measures for a continued strong defense. My travels around this country tell me that. But to have the means to negotiate reductions and ensure peace, I will need the support, the cooperation, and consultation of Congress. We can now envision a time when the world is more secure than ever, when all the competitive instincts of modern man will be diverted to commerce -- even to football.
You know, I started joking about the 49ers winning the Super Bowl during the national anthem. But it's not how many passes Joe Montana completed, it's that he knew better than to rest on his laurels at the beginning of the fourth quarter. So, so should we. I will work with Congress to build a bridge to a more secure world. And if we work together, then peace itself will be the greatest dividend of all.
Thank you for inviting me to San Francisco. And God bless you all.
Strategic Defense Initiative
Q. Having reviewed SDI at Livermore Lab today, do you support moving ahead with the project?
The President. Yes, I do. And our budget calls for that. And again, I would remind the critics that it is defensive; that the science and technology from it will benefit not just this concept of a reasonably priced way of intercepting somebody else's missile, whether it's from a major power or from some renegade hand, but that the science will benefit, I believe, the environment. I believe it has enormous potential for other uses. I feel more strongly about that than when I went to Livermore.
Defense Spending
Q. Will the expected troop reductions bring about a savings that can be used to offset the increased cost in strategic arms?
The President. Yes, and I hope that there will not be a greatly increased cost in strategic arms. The Soviets have modernized. They've modernized their systems, and we have not yet. But I would hope that the resulting reductions in the strategic arms, which I am pledged to and which I will work for, will have beneficial effect on and will result in savings.
You see, I am convinced that if politics of international change are handled correctly and if things go more forward, we will eventually have far lower levels of spending. But I've spelled out for you here why I think that should be approached in a very prudent manner.
Trade and Competitiveness
Q. With the recent events in Eastern Europe, do you think we should now again prepare for a world economic struggle rather than be preparing unnecessarily for a military struggle?
The President. Well, I wouldn't necessarily shift priorities. I've told you the priority I place on defense. But when it comes to competitiveness of the United States, we should be struggling with that on the front burner right now -- and I think we are. And that's one of the reasons I increased dramatically R D spending in our budget. It's one of the inevitable byproducts of a better education system. It's why we're putting more emphasis on math and science. It's why I'm imposing on great scientists like David Packard and others to give us the advice on how we can become more competitive. It's why my trade negotiator, Carla Hills, and our Secretary of Commerce are doing their level best to convince people that if we are going to have free trade, that has to be fair trade.
And so, this competition on the economic front is big. It's going to get even bigger, in my view. And we've got an enormous job to do -- not just the Federal Government. We can't do this. Many businesses have already moved into much more -- in the sense of quality product -- moved much more into the sense of automation and modernization. So, it is a national goal that we be more competitive, but it can't wait until we get our defense program in line. It's right now. It's urgent.
And let me just throw in one, Joe, on the success of the Uruguay trade round, for those who are a little more technically oriented than some. The success of this Uruguay trade round is very, very important to our ability to enhance the rest of the world and ourselves by free trade. But we've got some big barriers out there. We've got some problems we have to overcome.
Budget Deficit
Q. Can you pledge that a certain amount of dollars from armament reduction be transferred as a reduction in the debt?
The President. No, I can't pledge that, but I am pledged to get the deficit down in accordance with the Gramm-Rudman targets. We will have that if we get our way with Congress, which doesn't exactly do things the way I want, I've found out. [Laughter] But if we get that done, I stated in my State of the Union Message that that should be an objective and to move right into it, the minute we are in balance, which would be in 3 years. Now, I expect there will be a lot of pressure on. You hear pressure today on what is referred to alluringly as a peace dividend. And it appeals to me. There are things that I'd love to be able to say -- we can put a little more in this research, or we can help this homeless person a little more, or whatever it is. The pressures will be on, but I think that it would be a very good thing to do because as a grandparent of 12 I must confess, like a lot of people here, you feel that we are burdening the generations to come with a debt that does nothing but click off at the beginning of each year an enormously high and even higher rate of interest that we're pledged -- interest account that we're pledged to pay on the national debt. So, yes, as I said in the State of the Union, that's what I want to do.
Defense Policy
Q. If the Soviet Union and others in the Warsaw Pact substantially scale back their military commitment, doesn't the U.S. run the risk of moving in the opposite direction of the world? Are we prepared to stand alone?
The President. No, because I think as I mentioned to you earlier -- and this is the truth -- our allies want us involved. They don't want to see us decouple or delink from Europe. They see the changes and welcome them. All the allied leaders -- and I talk to the leaders of NATO on a fairly regular basis -- they see and welcome the change, but they do not want to see the United States pull back into what would be perceived worldwide as some kind of a neo-isolationist decoupling.
And I am not suggesting that we can't save money; indeed, we will. If our proposal -- the proposal that I put forward -- is accepted by the Soviets and we negotiate out all the details and get a CFE, conventional force agreement, as we are proposing, I think we will see substantial savings that are made by the -- what do you call it? -- suddenly gone blank -- in terms of when you bring a guy back and he no longer is in the army. [Laughter] But it's not just transferring: it's a question of having fewer troops on both sides. And that will inevitably result in some savings.
So, we're aware that there's a chance to save, but it is not that we are going to be swimming against the tide with our European allies. And as I said in the speech -- and I recognize his question didn't indicate the guy that asked the question was asleep. He probably wrote the question before the speech, I hope. [Laughter] But what I also said is that I hope and believe that many of the new fledgling democracies in Eastern Europe are going to welcome a stabilizing presence on the part of the United States. Now, some will say that's sacrificing. And I say, no, it is in our interest because we provide a certain stability that wouldn't be there if we, the United States, weren't there.
Environmental Protection
Q. Do you see the freedom of the Communist country as a threat to the globe? That is, if they all want the comforts we have, will we use up the resources of our Earth at an even greater rate?
The President. No. I think there's an environmental awareness in the world today that is encouraging. I will readily concede there are some in what is known as the Third World -- I'm not thinking so much as the evolution of Eastern Europe into the arms of democracy -- but I think there's a feeling in some Third World countries: Don't you big guys from the United States who have raped, pillaged, and plundered the environment now come and tell us what we can't do. We understand that, but we've got to work with them and share our tremendously advanced technology, existing technology, as we work to find even greater technological breakthroughs to protect the environment.
But I don't think you're going to necessarily see that is because of the evolution of Iron Curtain countries into, hopefully, growing democracies. I think there's an awareness now in Europe about the need to have sound international environmental practice based on science -- not on myth but on science.
German Reunification
Q. As Eastern Europe and the U.S.S.R. progress toward democracy, do you foresee any potential military alliances being formed that could threaten the free world, such as a united Germany and Japan?
The President. No, I don't. And I think everybody that's interested in foreign affairs, I'm sure, has an opinion one way or another as to what happens on the reunification of Germany, but I think that can be -- well, let me recite, just as background, the U.S. position, which is self-determination -- and this is the NATO position -- self-determination. And then when it comes to borders, I believe Helsinki says no alteration in borders without agreement of the parties. So, that gives you a rather stable framework.
Now, you can read every day about the rapidity of change and what might happen in terms of German reunification. But I think it can be managed in such a way that it will not be a threat to Western Europe or to what was termed in the question, I think, the free world. And when I hear both West German Foreign Minister Mr. Genscher and West German Chancellor Kohl talking about a Germany that remains tied into NATO in some way -- maybe not a NATO in exactly the same form it is -- but that's encouraging. That's encouraging.
Soviet Role in the Middle East
Q. In the past, smaller countries used to play the U.S. versus the U.S.S.R. to get military and economic aid. Now that relations have improved with the U.S.S.R., and if we can anticipate continued improvement, what are the chances of the U.S. and the U.S.S.R. working together to solve some of the world's problems, such as the Middle East?
The President. Better, far better. And I think there's certain things that the Soviet Union could do that would facilitate their role as a catalyst for peace in the Middle East. One of them would be to assist more, through transportation -- direct flights -- for Soviet Jews wishing to leave the Soviet Union to go to Israel. I think that would send a sign that their interest in the Middle East is not just on the side of -- what heretofore has been the side of the more radical states in the area. So, they can do something like that. I'd like to see them normalize diplomatic relations with the State of Israel. I think that would be helpful. But I would think that as the Soviet Union evolves in a more democratic fashion that some of the concerns we've had in the past will be lessened.
So, I wouldn't say that at some point they wouldn't have a useful role. I've cited two areas where I think they can have a useful role in building credibility not just with the State of Israel but with other states as well. So, let's hope that they can do something.
Soviet Reforms
Q. How can we help Mr. Gorbachev in his quest for a unification of his country -- in demonstration of his country?
The President. I think we can avoid doing dumb things. [Laughter] And that's my cautious approach. You know, he's facing some enormously difficult internal problems. And you may have noted that I have been -- hopefully on behalf of most the people in our country -- supporting perestroika. When for a few months into our Presidency -- mine -- why, people wondered: What does he really care? Does he understand these changes? Does he really mean it when he says, I support perestroika? I do -- and glasnost, the openness concept, as well.
But in the last press conference or so -- a couple of them, maybe -- I referred to support for Gorbachev. And I have felt that he has handled some extraordinarily complicated internal problems, problems inside the Soviet Union, with a certain restraint and finesse that I think demonstrates a real commitment to peaceful change. The last thing I think any United States citizen needs to do when you have the Central Committee meeting is to try to fine-tune it from San Francisco or Washington as to how they ought to conduct themselves. [Laughter] So, I want to be very careful about picking winners and losers or saying how they ought to do things.
But I do think that, generally speaking, it is in our interest to support perestroika. And I will say again: I think Mr. Gorbachev has shown a considerable restraint. And frankly, the dealings that I've had with him here, and then on the sidelines when George [George Shultz, former Secretary of State] and President Reagan were dealing with him, is that he's a man who you can talk to; he's quite open in his negotiations. He damn sure will tell you if he doesn't agree with you. [Laughter] I mean, you're not under any doubt about that. [Laughter] But it's a new approach. I mean, it's very different than dealing with some of the previous Soviet leaders.
So, I'm not here to anoint or try to shape the deliberations of the Central Committee proceedings in the Soviet Union this very day -- or that will commence again tomorrow, maybe. But I do think that there's an awful lot to be hopeful about there because I find we can talk quite openly. And I'm looking forward to a summit meeting. I don't know why all meetings have to be called summits. [Laughter] We tried to call the Malta meetings something else, and it lasted for about 2 days. [Laughter] And I mean it, because I think summit projects the idea that you have to have some massive breakthrough, or else you disappoint the rest of the world. And I've changed my thinking on this. I think maybe communications where you don't have to do that is better. And that's why I was on the phone with him the other day on a couple of matters. So, I'm optimistic about our dealings with him, but I cannot predict and nor can any of you, with any degree of accuracy, exactly what's going to happen inside the Soviet Union.
Soviet Chairman Gorbachev
Q. Please comment on Mikhail Gorbachev's nomination for the Nobel Peace Prize.
The President. I'd hate to say I wasn't aware of it, but I wasn't aware of it. [Laughter] And I don't follow those proceedings too closely. [Laughter] But I've told you I would salute the man for his adherence to peaceful change in Eastern Europe. I mean, that, I think, is dramatic and, I think, worthy of a positive note. But far be it for me to try to influence the gurus that decide who wins a Nobel Prize. [Laughter]
War on Drugs
Q. As far as the issue of drug trafficking goes and the world drug problem, could you please address the issue of whether or not military forces will be used in a more direct way in the enforcement of international drug traffic?
The President. No, not in a more direct way. Military forces have been used over the years. The arrest power rests with the Coast Guard. The coastguardsmen can be aboard naval vessels. But we have an interdiction network that is manned and operated by our military. But what the question implies to me at least, of a quantum leap forward in terms of this -- I don't know.
One of the things I have felt is that sometimes the military says, well, we can't undertake this mission or that because of readiness. It is my view that sometimes an exercise that results in the interdiction of aircraft coming into this country on an illegal mission is a good mission and should not be detracted from the readiness. So, I think that we're always looking at the mis