Reagan Pushes for Contras Aid, Cites Talks Failure

The collapse of the Contadora peace talks in Central America and last month’s incursion by Nicaraguan troops into neighboring Honduras prove that Managua’s Sandinista government will not negotiate a regional peace and will respond only to force, President Reagan declared Wednesday.

Reagan used a nationally televised news conference to urge the House to reverse last month’s vote and approve his proposed $100 million in military and humanitarian aid to the rebels, called contras , who are fighting the Marxist-led Sandinistas.

The House, which rejected the aid by a 222-210 vote on March 20, is scheduled to vote again on the proposal next Tuesday. The Senate voted on March 27 to approve Reagan’s aid package by a 53 to 47 margin.

Two days after the House vote, Nicaraguan troops crossed the Honduran border in pursuit of contra forces who maintain bases and training camps there.

The Contadora talks, involving Nicaragua and 12 other Latin countries, collapsed Monday as the Central American participants wrangled over a pledge that would have committed them to signing a peace treaty by June 6. Nicaraguan Foreign Minister Miguel D’Escoto refused to sign any kind of accord unless it contained a clear condemnation of U.S. aid to the contras.

The President charged that the Sandinista government “torpedoed” the negotiations. Critics of the President’s policy have charged that it is his aid to the contras, whom Reagan decribes as “freedom fighters,” that caused the breakdown in the peace talks.

Opening Statement

Reagan declared in an opening statement that the end of the talks and the Honduras invasion “demonstrate that the Nicaraguan Communists will never make peace with their neighbors or with their own people unless the pressure on them increases. The Communists must realize that they cannot crush their opponents, and our assistance can ensure that the freedom fighters are not crushed.”

The President said his aid proposal, if enacted, “will give Nicaraguans a choice, and it will give diplomacy a chance.”

The press conference, the first since Feb. 11 and the third this year, was dominated by questions about U.S. plans to meet the threat of Libyan terrorism. But Reagan also:

--Warned, without recommending any specific U.S. response, that major oil-producing nations may be forcing down world oil prices to drive competitors out of business and establish a monopoly that would enable them to send prices rocketing up again.

--Conceded that a second summit with Soviet leader Mikhail S. Gorbachev is unlikely before July, and said he would postpone their meeting until after the November congressional elections if the two leaders cannot agree to get together by July. June was the date preferred by the Administration.

--Vowed to continue to observe the unratified second strategic arms limitation treaty if the Soviets do, and withheld judgment on whether Soviets violations have been substantial enough to warrant a U.S. response.

--Said it would be “foolhardy” for Congress to make further cuts from his defense budget and urged deeper cuts in domestic spending.

--Denied that the White House pressured the National Aeronautics and Space Administration to launch the Challenger shuttle, which exploded in mid-air 73 seconds after its launch on Jan. 28.

Oil Price Gambit

The President, asked about falling oil prices, said the United States must be alert to the possibility that oil-producing countries might drive oil prices down to discourage exploration by competitors in a ploy to gain a monoply and raise prices later.

Although Reagan said he believes that the free market should determine prices, he noted that some oil producers are governments and that “you can not ignore the possibility” that prices would be driven down deliberately to stifle future competition.

“When I say free market, and I really mean that, I at the same time think that we must keep our eyes open to see that no one starts playing tricks for some kind of illicit future gain,” Reagan said.

He declined to say what action he might take to stabilize prices in such a situation. “This is really hypothetical,” Reagan said. “This is something you say, ‘Well, this could happen so we mustn’t just go blindly and pretend a thing like that could never take place.’ Then, we would have to see what our options were.”

Defends Bush’s Comments

Reagan defended Vice President George Bush’s recent statements complaining that the oil-price collapse was out-of-hand and stability was needed. The President said he reviewed Bush’s public statements and believes that they represent the White House position that the United States must be aware that national security could be endangered if a collapse in prices leads to a future dependence on imports.

“We’re saying the same thing,” Reagan said.

When asked if he believes that a summit meeting with Gorbachev still could take place this summer, as originally planned, Reagan said that it was “getting pretty certain from our own standpoint that June is just about out” but that July “still could be possible.”

Otherwise, he said, the summit would have to wait until after the congressional elections in November.

‘Fall Months’ Are Out

“I have made one thing plain” to the Soviets, Reagan said. “The fall months of our election (campaigns) are not going to be the months that I will agree to a summit, and I will stick to that.”

Again stressing that he wants “to keep things going” in negotiations with the Soviets at the planned summit, Reagan made light of recent public attacks on U.S. policies by Gorbachev, who has been complaining about last month’s move to cut the size of the Soviet U.N. mission by more than 100 delegates and regularly has accused Reagan of waging a new Cold War.

If Gorbachev said all those things, Reagan quipped, “he must be reading Pravda and Tass too much. I’m going to send him some American newspapers.”

He went on to emphasize that exchanges with the Soviet leader through private channels have been far less confrontational. “His communication directly to me has certainly been in the spirit of Geneva,” Reagan said, “and my responses to him have been. So maybe he was speaking to a different audience at that time.”

No Decision on Poseidons

Reagan said there still has been no Administration decision on whether to dismantle two Poseidon submarines next month to remain in compliance with terms of the SALT II strategic arms treaty.

As things now stand, the United States will surpass the agreement’s limit on multiple warhead missiles when a new, larger Trident submarine begins sea trials on May 20. There have been reports that Administration officials are divided over whether to dismantle two of the older subs or merely put them into dry dock as a gesture toward compliance.

Although the 1979 pact was never ratified, the Administration repeatedly said that it intended to observe the agreement’s terms as long as the Soviets do the same.

On the domestic front, Reagan called it “foolhardy” for Congress to insist that the only place for savings is defense spending.

“I’m a little annoyed by the fact that not long ago the Congress of the United States agreed and we agreed to a compromise for a sizable cut that would leave us with zero growth and then 3% and 3% for the next two years,” he said.

Hits Lawmakers on Budget

Pointing a finger at congressional resistance to eliminate most of the 44 programs that the Administration has recommended eliminating, Reagan chided lawmakers for focusing their budget-cutting efforts on defense spending instead of looking at the problem of overall government spending.

The President said he had not decided whether to ask Congress for funds to build a new space shuttle vehicle to replace the Challenger and strongly denied reports that there might have been White House pressure to launch the craft on Jan. 28 so that Reagan could refer to it during his State of the Union message, scheduled for that night. The Challenger’s seven crew members died in the explosion.

“No such thing has ever taken place; we don’t know enough about that kind of thing to know whether we should advise them to take off or not,” he said.

Reagan, saying he “would hope that we can continue” the program, declared: “This was the request from every one of the families of those people who lost their lives on Challenger, that we continue this program.”

Congressional Democrats call for an accounting of funds for the contras. Page 22.