# ----------------------------------------------------------------------------------- # STATE OF THE UNION ADDRESS ARCHIVE (1790-2006) # Compiled by Someya Yasumasa, May 5, 2007 # Retrieved from # ----------------------------------------------------------------------------------- # List of US Presidents included in this file covering 1970-2006: # Total No. of Word Tokens: 213,377 # Total No. of word Types: 11,345 # Richard Nixon (1969-1974) # Gerald Ford (1975-1977) # Jimmy Carter (1977-1981) # Ronald Reagan (1981-1988) # George H.W. Bush (1989-1992) # William J. Clinton (1993-2000) # George W. Bush (2001-2006) # ----------------------------------------------------------------------------------- # State of the Union Address # Richard Nixon # January 22, 1970 Mr. Speaker, Mr. President, my colleagues in the Congress, our distinguished guests and my fellow Americans: To address a joint session of the Congress in this great Chamber in which I was once privileged to serve is an honor for which I am deeply grateful. The State of the Union Address is traditionally an occasion for a lengthy and detailed account by the President of what he has accomplished in the past, what he wants the Congress to do in the future, and, in an election year, to lay the basis for the political issues which might be decisive in the fall. Occasionally there comes a time when profound and far-reaching events command a break with tradition. This is such a time. I say this not only because 1970 marks the beginning of a new decade in which America will celebrate its 200th birthday. I say it because new knowledge and hard experience argue persuasively that both our programs and our institutions in America need to be reformed. The moment has arrived to harness the vast energies and abundance of this land to the creation of a new American experience, an experience richer and deeper and more truly a reflection of the goodness and grace of the human spirit. The seventies will be a time of new beginnings, a time of exploring both on the earth and in the heavens, a time of discovery. But the time has also come for emphasis on developing better ways of managing what we have and of completing what man's genius has begun but left unfinished. Our land, this land that is ours together, is a great and a good land. It is also an unfinished land, and the challenge of perfecting it is the summons of the seventies. It is in that spirit that I address myself to those great issues facing our Nation which are above partisanship. When we speak of America's priorities the first priority must always be peace for America and the world. The major immediate goal of our foreign policy is to bring an end to the war in Vietnam in a way that our generation will be remembered not so much as the generation that suffered in war, but more for the fact that we had the courage and character to win the kind of a just peace that the next generation was able to keep. We are making progress toward that goal. The prospects for peace are far greater today than they were a year ago. A major part of the credit for this development goes to the Members of this Congress who, despite their differences on the conduct of the war, have overwhelmingly indicated their support of a just peace. By this action, you have completely demolished the enemy's hopes that they can gain in Washington the victory our fighting men have denied them in Vietnam. No goal could be greater than to make the next generation the first in this century in which America was at peace with every nation in the world. I shall discuss in detail the new concepts and programs designed to achieve this goal in a separate report on foreign policy, which I shall submit to the Congress at a later date. Today, let me describe the directions of our new policies. We have based our policies on an evaluation of the world as it is, not as it was 25 years ago at the conclusion of World War II. Many of the policies which were necessary and right then are obsolete today. Then, because of America's overwhelming military and economic strength, because of the weakness of other major free world powers and the inability of scores of newly independent nations to defend, or even govern, themselves, America had to assume the major burden for the defense of freedom in the world. In two wars, first in Korea and now in Vietnam, we furnished most of the money, most of the arms, most of the men to help other nations defend their freedom. Today the great industrial nations of Europe, as well as Japan, have regained their economic strength; and the nations of Latin America -- and many of the nations who acquired their freedom from colonialism after World War II in Asia and Africa -- have a new sense of pride and dignity and a determination to assume the responsibility for their own defense. That is the basis of the doctrine I announced at Guam. Neither the defense nor the development of other nations can be exclusively or primarily an American undertaking. The nations of each part of the world should assume the primary responsibility for their own well-being; and they themselves should determine the terms of that well-being. We shall be faithful to our treaty commitments, but we shall reduce our involvement and our presence in other nations' affairs. To insist that other nations play a role is not a retreat from responsibility; it is a sharing of responsibility. The result of this new policy has been not to weaken our alliances, but to give them new life, new strength, a new sense of common purpose. Relations with our European allies are once again strong and healthy, based on mutual consultation and mutual responsibility. We have initiated a new approach to Latin America in which we deal with those nations as partners rather than patrons. The new partnership concept has been welcomed in Asia. We have developed an historic new basis for Japanese-American friendship and cooperation, which is the linchpin for peace in the Pacific. If we are to have peace in the last third of the century, a major factor will be the development of a new relationship between the United States and the Soviet Union. I would not underestimate our differences, but we are moving with precision and purpose from an era of confrontation to an era of negotiation. Our negotiations on strategic arms limitations and in other areas will have far greater chance for success if both sides enter them motivated by mutual self-interest rather than naive sentimentality. It is with this same spirit that we have resumed discussions with Communist China in our talks at Warsaw. Our concern in our relations with both these nations is to avoid a catastrophic collision and to build a solid basis for peaceful settlement of our differences. I would be the last to suggest that the road to peace is not difficult and dangerous, but I believe our new policies have contributed to the prospect that America may have the best chance since World War II to enjoy a generation of uninterrupted peace. And that chance will be enormously increased if we continue to have a relationship between Congress and the Executive in which, despite differences in detail, where the security of America and the peace of mankind are concerned, we act not as Republicans, not as Democrats, but as Americans. As we move into the decade of the seventies, we have the greatest opportunity for progress at home of any people in world history. Our gross national product will increase by $500 billion in the next 10 years. This increase alone is greater than the entire growth of the American economy from 1790 to 1950. The critical question is not whether we will grow, but how we will use that growth. The decade of the sixties was also a period of great growth economically. But in that same 10-year period we witnessed the greatest growth of crime, the greatest increase in inflation, the greatest social unrest in America in 100 years. Never has a nation seemed to have had more and enjoyed it less. At heart, the issue is the effectiveness of government. Ours has become -- as it continues to be, and should remain -- a society of large expectations. Government helped to generate these expectations. It undertook to meet them. Yet, increasingly, it proved unable to do so. As a people, we had too many visions -- and too little vision. Now, as we enter the seventies, we should enter also a great age of reform of the institutions of American government. Our purpose in this period should not be simply better management of the programs of the past. The time has come for a new quest -- a quest not for a greater quantity of what we have, but for a new quality of life in America. A major part of the substance for an unprecedented advance in this Nation's approach to its problems and opportunities is contained in more than two score legislative proposals which I sent to the Congress last year and which still await enactment. I will offer at least a dozen more major programs in the course of this session. At this point I do not intend to go through a detailed listing of what I have proposed or will propose, but I would like to mention three areas in which urgent priorities demand that we move and move now: First, we cannot delay longer in accomplishing a total reform of our welfare system. When a system penalizes work, breaks up homes, robs recipients of dignity, there is no alternative to abolishing that system and adopting in its place the program of income support, job training, and work incentives which I recommended to the Congress last year. Second, the time has come to assess and reform all of our institutions of government at the Federal, State, and local level. It is time for a New Federalism, in which, after 190 years of power flowing from the people and local and State governments to Washington, D.C., it will begin to flow from Washington back to the States and to the people of the United States. Third, we must adopt reforms which will expand the range of opportunities for all Americans. We can fulfill the American dream only when each person has a fair chance to fulfill his own dreams. This means equal voting rights, equal employment opportunity, and new opportunities for expanded ownership. Because in order to be secure in their human rights, people need access to property rights. I could give similar examples of the need for reform in our programs for health, education, housing, transportation, as well as other critical areas which directly affect the well-being of millions of Americans. The people of the United States should wait no longer for these reforms that would so deeply enhance the quality of their life. When I speak of actions which would be beneficial to the American people, I can think of none more important than for the Congress to join this administration in the battle to stop the rise in the cost of living. Now, I realize it is tempting to blame someone else for inflation. Some blame business for raising prices. Some blame unions for asking for more wages. But a review of the stark fiscal facts of the 1960's clearly demonstrates where the primary blame for rising prices must be placed. In the decade of the sixties the Federal Government spent $57 billion more than it took in in taxes. In that same decade the American people paid the bill for that deficit in price increases which raised the cost of living for the average family of four by $200 per month in America. Now millions of Americans are forced to go into debt today because the Federal Government decided to go into debt yesterday. We must balance our Federal budget so that American families will have a better chance to balance their family budgets. Only with the cooperation of the Congress can we meet this highest priority objective of responsible government. We are on the right track. We had a balanced budget in 1969. This administration cut more than $7 billion out of spending plans in order to produce a surplus in 1970, and in spite of the fact that Congress reduced revenues by $3 billion, I shall recommend a balanced budget for 1971. But I can assure you that not only to present, but to stay within, a balanced budget requires some very hard decisions. It means rejecting spending programs which would benefit some of the people when their net effect would result in price increases for all the people. It is time to quit putting good money into bad programs. Otherwise, we will end up with bad money and bad programs. I recognize the political popularity of spending programs, and particularly in an election year. But unless we stop the rise in prices, the cost of living for millions of American families will become unbearable and government's ability to plan programs for progress for the future will become impossible. In referring to budget cuts, there is one area where I have ordered an increase rather than a cut -- and that is the requests of those agencies with the responsibilities for law enforcement. We have heard a great deal of overblown rhetoric during the sixties in which the word "war" has perhaps too often been used -- the war on poverty, the war on misery, the war on disease, the war on hunger. But if there is one area where the word "war" is appropriate it is in the fight against crime. We must declare and win the war against the criminal elements which increasingly threaten our cities, our homes, and our lives. We have a tragic example of this problem in the Nation's Capital, for whose safety the Congress and the Executive have the primary responsibility. I doubt if many Members of this Congress who live more than a few blocks from here would dare leave their cars in the Capitol garage and walk home alone tonight. Last year this administration sent to the Congress 13 separate pieces of legislation dealing with organized crime, pornography, street crime, narcotics, crime in the District of Columbia. None of these bills has reached my desk for signature. I am confident that the Congress will act now to adopt the legislation I placed before you last year. We in the Executive have done everything we can under existing law, but new and stronger weapons are needed in that fight. While it is true that State and local law enforcement agencies are the cutting edge in the effort to eliminate street crime, burglaries, murder, my proposals to you have embodied my belief that the Federal Government should play a greater role in working in partnership with these agencies. That is why 1971 Federal spending for local law enforcement will double that budgeted for 1970. The primary responsibility for crimes that affect individuals is with local and State rather than with Federal Government. But in the field of organized crime, narcotics, pornography, the Federal Government has a special responsibility it should fulfill. And we should make Washington, D.C., where we have the primary responsibility, an example to the Nation and the world of respect for law rather than lawlessness. I now turn to a subject which, next to our desire for peace, may well become the major concern of the American people in the decade of the seventies. In the next 10 years we shall increase our wealth by 50 percent. The profound question is: Does this mean we will be 50 percent richer in a real sense, 50 percent better off, 50 percent happier? Or does it mean that in the year 1980 the President standing in this place will look back on a decade in which 70 percent of our people lived in metropolitan areas choked by traffic, suffocated by smog, poisoned by water, deafened by noise, and terrorized by crime? These are not the great questions that concern world leaders at summit conferences. But people do not live at the summit. They live in the foothills of everyday experience, and it is time for all of us to concern ourselves with the way real people live in real life. The great question of the seventies is, shall we surrender to our surroundings, or shall we make our peace with nature and begin to make reparations for the damage we have done to our air, to our land, and to our water? Restoring nature to its natural state is a cause beyond party and beyond factions. It has become a common cause of all the people of this country. It is a cause of particular concern to young Americans, because they more than we will reap the grim consequences of our failure to act on programs which are needed now if we are to prevent disaster later. Clean air, clean water, open spaces -- these should once again be the birthright of every American. If we act now, they can be. We still think of air as free. But clean air is not free, and neither is clean water. The price tag on pollution control is high. Through our years of past carelessness we incurred a debt to nature, and now that debt is being called. The program I shall propose to Congress will be the most comprehensive and costly program in this field in America's history. It is not a program for just one year. A year's plan in this field is no plan at all. This is a time to look ahead not a year, but 5 years or 10 years -- whatever time is required to do the job. I shall propose to this Congress a $10 billion nationwide clean waters program to put modern municipal waste treatment plants in every place in America where they are needed to make our waters clean again, and do it now. We have the industrial capacity, if we begin now, to build them all within 5 years. This program will get them built within 5 years. As our cities and suburbs relentlessly expand, those priceless open spaces needed for recreation areas accessible to their people are swallowed up -- often forever. Unless we preserve these spaces while they are still available, we will have none to preserve. Therefore, I shall propose new financing methods for purchasing open space and parklands now, before they are lost to us. The automobile is our worst polluter of the air. Adequate control requires further advances in engine design and fuel composition. We shall intensify our research, set increasingly strict standards, and strengthen enforcement procedures -- and we shall do it now. We can no longer afford to consider air and water common property, free to be abused by anyone without regard to the consequences. Instead, we should begin now to treat them as scarce resources, which we are no more free to contaminate than we are free to throw garbage into our neighbor's yard. This requires comprehensive new regulations. It also requires that, to the extent possible, the price of goods should be made to include the costs of producing and disposing of them without damage to the environment. Now, I realize that the argument is often made that there is a fundamental contradiction between economic growth and the quality of life, so that to have one we must forsake the other. The answer is not to abandon growth, but to redirect it. For example, we should turn toward ending congestion and eliminating smog the same reservoir of inventive genius that created them in the first place. Continued vigorous economic growth provides us with the means to enrich life itself and to enhance our planet as a place hospitable to man. Each individual must enlist in this fight if it is to be won. It has been said that no matter how many national parks and historical monuments we buy and develop, the truly significant environment for each of us is that in which we spend 80 percent of our time -- in our homes, in our places of work, the streets over which we travel. Street litter, rundown parking strips and yards, dilapidated fences, broken windows, smoking automobiles, dingy working places, all should be the object of our fresh view. We have been too tolerant of our surroundings and too willing to leave it to others to clean up our environment. It is time for those who make massive demands on society to make some minimal demands on themselves. Each of us must resolve that each day he will leave his home, his property, the public places of the city or town a little cleaner, a little better, a little more pleasant for himself and those around him. With the help of people we can do anything, and without their help, we can do nothing. In this spirit, together, we can reclaim our land for ours and generations to come. Between now and the year 2000, over 100 million children will be born in the United States. Where they grow up -- and how -- will, more than any one thing, measure the quality of American life in these years ahead. This should be a warning to us. For the past 30 years our population has also been growing and shifting. The result is exemplified in the vast areas of rural America emptying out of people and of promise -- a third of our counties lost population in the sixties. The violent and decayed central cities of our great metropolitan complexes are the most conspicuous area of failure in American life today. I propose that before these problems become insoluble, the Nation develop a national growth policy. In the future, government decisions as to where to build highways, locate airports, acquire land, or sell land should be made with a clear objective of aiding a balanced growth for America. In particular, the Federal Government must be in a position to assist in the building of new cities and the rebuilding of old ones. At the same time, we will carry our concern with the quality of life in America to the farm as well as the suburb, to the village as well as to the city. What rural America needs most is a new kind of assistance. It needs to be dealt with, not as a separate nation, but as part of an overall growth policy for America. We must create a new rural environment which will not only stem the migration to urban centers, but reverse it. If we seize our growth as a challenge, we can make the 1970's an historic period when by conscious choice we transformed our land into what we want it to become. America, which has pioneered in the new abundance, and in the new technology, is called upon today to pioneer in meeting the concerns which have followed in their wake -- in turning the wonders of science to the service of man. In the majesty of this great Chamber we hear the echoes of America's history, of debates that rocked the Union and those that repaired it, of the summons to war and the search for peace, of the uniting of the people, the building of a nation. Those echoes of history remind us of our roots and our strengths. They remind us also of that special genius of American democracy, which at one critical turning point after another has led us to spot the new road to the future and given us the wisdom and the courage to take it. As I look down that new road which I have tried to map out today, I see a new America as we celebrate our 200th anniversary 6 years from now. I see an America in which we have abolished hunger, provided the means for every family in the Nation to obtain a minimum income, made enormous progress in providing better housing, faster transportation, improved health, and superior education. I see an America in which we have checked inflation, and waged a winning war against crime. I see an America in which we have made great strides in stopping the pollution of our air, cleaning up our water, opening up our parks, continuing to explore in space. Most important, I see an America at peace with all the nations of the world. This is not an impossible dream. These goals are all within our reach. In times past, our forefathers had the vision but not the means to achieve such goals. Let it not be recorded that we were the first American generation that had the means but not the vision to make this dream come true. But let us, above all, recognize a fundamental truth. We can be the best clothed, best fed, best housed people in the world, enjoying clean air, clean water, beautiful parks, but we could still be the unhappiest people in the world without an indefinable spirit -- the lift of a driving dream which has made America, from its beginning, the hope of the world. Two hundred years ago this was a new nation of 3 million people, weak militarily, poor economically. But America meant something to the world then which could not be measured in dollars, something far more important than military might. Listen to President Thomas Jefferson in 1802: We act not "for ourselves alone, but for the whole human race." We had a spiritual quality then which caught the imagination of millions of people in the world. Today, when we are the richest and strongest nation in the world, let it not be recorded that we lack the moral and spiritual idealism which made us the hope of the world at the time of our birth. The demands of us in 1976 are even greater than in 1776. It is no longer enough to live and let live. Now we must live and help live. We need a fresh climate in America, one in which a person can breathe freely and breathe in freedom. Our recognition of the truth that wealth and happiness are not the same thing requires us to measure success or failure by new criteria. Even more than the programs I have described today, what this Nation needs is an example from its elected leaders in providing the spiritual and moral leadership which no programs for material progress can satisfy. Above all, let us inspire young Americans with a sense of excitement, a sense of destiny, a sense of involvement, in meeting the challenges we face in this great period of our history. Only then are they going to have any sense of satisfaction in their lives. The greatest privilege an individual can have is to serve in a cause bigger than himself. We have such a cause. How we seize the opportunities I have described today will determine not only our future, but the future of peace and freedom in this world in the last third of the century. May God give us the wisdom, the strength and, above all, the idealism to be worthy of that challenge, so that America can fulfill its destiny of being the world's best hope for liberty, for opportunity, for progress and peace for all peoples. # State of the Union Address # Richard Nixon # January 22, 1971 Mr. Speaker, Mr. President, my colleagues in the Congress, our distinguished guests, my fellow Americans: As this 92d Congress begins its session, America has lost a great Senator, and all of us who had the privilege to know him have lost a loyal friend. I had the privilege of visiting Senator Russell in the hospital just a few days before he died. He never spoke about himself. He only spoke eloquently about the need for a strong national defense. In tribute to one of the most magnificent Americans of all time, I respectfully ask that all those here will rise in silent prayer for Senator Russell. Thank you. Mr. Speaker, before I begin my formal address, I want to use this opportunity to congratulate all of those who were winners in the rather spirited contest for leadership positions in the House and the Senate and, also, to express my condolences to the losers. I know how both of you feel. And I particularly want to join with all of the Members of the House and the Senate as well in congratulating the new Speaker of the United States Congress. To those new Members of this House who may have some doubts about the possibilities for advancement in the years ahead, I would remind you that the Speaker and I met just 24 years ago in this Chamber as freshmen Members of the 80th Congress. As you see, we both have come up in the world a bit since then. Mr. Speaker, this 92d Congress has a chance to be recorded as the greatest Congress in America's history. In these troubled years just past, America has been going through a long nightmare of war and division, of crime and inflation. Even more deeply, we have gone through a long, dark night of the American spirit. But now that night is ending. Now we must let our spirits soar again. Now we are ready for the lift of a driving dream. The people of this Nation are eager to get on with the quest for new greatness. They see challenges, and they are prepared to meet those challenges. It is for us here to open the doors that will set free again the real greatness of this Nation -- the genius of the American people. How shall we meet this challenge?How can we truly open the doors, and set free the full genius of our people? The way in which the 92d Congress answers these questions will determine its place in history. More importantly, it can determine this Nation's place in history as we enter the third century of our independence. Tonight I shall present to the Congress six great goals. I shall ask not simply for more new programs in the old framework. I shall ask to change the framework of government itself -- -to reform the entire structure of American government so we can make it again fully responsive to the needs and the wishes of the American people. If we act boldly -- if we seize this moment and achieve these goals -- we can close the gap between promise and performance in American government. We can bring together the resources of this Nation and the spirit of the American people. In discussing these great goals, I shall deal tonight only with matters on the domestic side of the Nation's agenda. I shall make a separate report to the Congress and the Nation next month on developments in foreign policy. The first of these great goals is already before the Congress. I urge that the unfinished business of the 91st Congress be made the first priority business of the 92d Congress. Over the next 2 weeks, I will call upon Congress to take action on more than 35 pieces of proposed legislation on which action was not completed last year. The most important is welfare reform. The present welfare system has become a monstrous, consuming outrage -- an outrage against the community, against the taxpayer, and particularly against the children it is supposed to help. We may honestly disagree, as we do, on what to do about it. But we can all agree that we must meet the challenge, not by pouring more money into a bad program, but by abolishing the present welfare system and adopting a new one. So let us place a floor under the income of every family with children in America -- and without those demeaning, soul-stifling affronts to human dignity that so blight the lives of welfare children today. But let us also establish an effective work incentive and an effective work requirement. Let us provide the means by which more can help themselves. This shall be our goal. Let us generously help those who are not able to help themselves. But let us stop helping those who are able to help themselves but refuse to do so. The second great goal is to achieve what Americans have not enjoyed since 1957 -- full prosperity in peacetime. The tide of inflation has turned. The rise in the cost of living, which had been gathering dangerous momentum in the late sixties, was reduced last year. Inflation will be further reduced this year. But as we have moved from runaway inflation toward reasonable price stability and at the same time as we have been moving from a wartime economy to a peacetime economy, we have paid a price in increased unemployment. We should take no comfort from the fact that the level of unemployment in this transition from a wartime to a peacetime economy is lower than in any peacetime year of the sixties. This is not good enough for the man who is unemployed in the seventies. We must do better for workers in peacetime and we will do better. To achieve this, I will submit an expansionary budget this year -- one that will help stimulate the economy and thereby open up new job opportunities for millions of Americans. It will be a full employment budget, a budget designed to be in balance if the economy were operating at its peak potential. By spending as if we were at full employment, we will help to bring about full employment. I ask the Congress to accept these expansionary policies -- to accept the concept of a full employment budget. At the same time, I ask the Congress to cooperate in resisting expenditures that go beyond the limits of the full employment budget. For as we wage a campaign to bring about a widely shared prosperity, we must not reignite the fires of inflation and so undermine that prosperity. With the stimulus and the discipline of a full employment budget, with the commitment of the independent Federal Reserve System to provide fully for the monetary needs of a growing economy, and with a much greater effort on the part of labor and management to make their wage and price decisions in the light of the national interest and their own self-interest -- then for the worker, the farmer, the consumer, for Americans everywhere we shall gain the goal of a new prosperity: more jobs, more income, more profits, without inflation and without war. This is a great goal, and one that we can achieve together. The third great goal is to continue the effort so dramatically begun last year: to restore and enhance our natural environment. Building on the foundation laid in the 37-point program that I submitted to Congress last year, I will propose a strong new set of initiatives to clean up our air and water, to combat noise, and to preserve and restore our surroundings. I will propose programs to make better use of our land, to encourage a balanced national growth -- growth that will revitalize our rural heartland and enhance the quality of life in America. And not only to meet today's needs but to anticipate those of tomorrow, I will put forward the most extensive program ever proposed by a President of the United States to expand the Nation's parks, recreation areas, open spaces, in a way that truly brings parks to the people where the people are. For only if we leave a legacy of parks will the next generation have parks to enjoy. As a fourth great goal, I will offer a far-reaching set of proposals for improving America's health care and making it available more fairly to more people. I will propose: -- A program to insure that no American family will be prevented from obtaining basic medical care by inability to pay. -- I will propose a major increase in and redirection of aid to medical schools, to greatly increase the number of doctors and other health personnel. -- Incentives to improve the delivery of health services, to get more medical care resources into those areas that have not been adequately served, to make greater use of medical assistants, and to slow the alarming rise in the costs of medical care. -- New programs to encourage better preventive medicine, by attacking the causes of disease and injury, and by providing incentives to doctors to keep people well rather than just to treat them when they are sick. I will also ask for an appropriation of an extra $100 million to launch an intensive campaign to find a cure for cancer, and I will ask later for whatever additional funds can effectively be used. The time has come in America when the same kind of concentrated effort that split the atom and took man to the moon should be turned toward conquering this dread disease. Let us make a total national commitment to achieve this goal. America has long been the wealthiest nation in the world. Now it is time we became the healthiest nation in the world. The fifth great goal is to strengthen and to renew our State and local governments. As we approach our 200th anniversary in 1976, we remember that this Nation launched itself as a loose confederation of separate States, without a workable central government. At that time, the mark of its leaders' vision was that they quickly saw the need to balance the separate powers of the States with a government of central powers. And so they gave us a constitution of balanced powers, of unity with diversity -- and so clear was their vision that it survives today as the oldest written constitution still in force in the world. For almost two centuries since -- and dramatically in the 1930's -- at those great turning points when the question has been between the States and the Federal Government, that question has been resolved in favor of a stronger central Federal Government. During this time the Nation grew and the Nation prospered. But one thing history tells us is that no great movement goes in the same direction forever. Nations change, they adapt, or they slowly die. The time has now come in America to reverse the flow of power and resources from the States and communities to Washington, and start power and resources flowing back from Washington to the States and communities and, more important, to the people all across America. The time has come for a new partnership between the Federal Government and the States and localities -- a partnership in which we entrust the States and localities with a larger share of the Nation's responsibilities, and in which we share our Federal revenues with them so that they can meet those responsibilities. To achieve this goal, I propose to the Congress tonight that we enact a plan of revenue sharing historic in scope and bold in concept. All across America today, States and cities are confronted with a financial crisis. Some have already been cutting back on essential services -- -for example, just recently San Diego and Cleveland cut back on trash collections. Most are caught between the prospects of bankruptcy on the one hand and adding to an already crushing tax burden on the other. As one indication of the rising costs of local government, I discovered the other day that my home town of Whittier, California -- which has a population of 67,000 -- has a larger budget for 1971 than the entire Federal budget was in 1791. Now the time has come to take a new direction, and once again to introduce a new and more creative balance to our approach to government. So let us put the money where the needs are. And let us put the power to spend it where the people are. I propose that the Congress make a $16 billion investment in renewing State and local government. Five billion dollars of this will be in new and unrestricted funds to be used as the States and localities see fit. The other $11 billion will be provided by allocating $1 billion of new funds and converting one-third of the money going to the present narrow-purpose aid programs into Federal revenue sharing funds for six broad purposes -- for urban development, rural development, education, transportation, job training, and law enforcement -- but with the States and localities making their own decisions on how it should be spent within each category. For the next fiscal year, this would increase total Federal aid to the States and localities more than 25 percent over the present level. The revenue sharing proposals I send to the Congress will include the safeguards against discrimination that accompany all other Federal funds allocated to the States. Neither the President nor the Congress nor the conscience of this Nation can permit money which comes from all the people to be used in a way which discriminates against some of the people. The Federal Government will still have a large and vital role to play in achieving our national progress. Established functions that are clearly and essentially Federal in nature will still be performed by the Federal Government. New functions that need to be sponsored or performed by the Federal Government -- such as those I have urged tonight in welfare and health -- will be added to the Federal agenda. Whenever it makes the best sense for us to act as a whole nation, the Federal Government should and will lead the way. But where States or local governments can better do what needs to be done, let us see that they have the resources to do it there. Under this plan, the Federal Government will provide the States and localities with more money and less interference -- and by cutting down the interference the same amount of money will go a lot further. Let us share our resources. Let us share them to rescue the States and localities from the brink of financial crisis. Let us share them to give homeowners and wage earners a chance to escape from ever-higher property taxes and sales taxes. Let us share our resources for two other reasons as well. The first of these reasons has to do with government itself, and the second has to do with each of us, with the individual. Let's face it. Most Americans today are simply fed up with government at all levels. They will not -- and they should not -- continue to tolerate the gap between promise and performance in government. The fact is that we have made the Federal Government so strong it grows muscle-bound and the States and localities so weak they approach impotence. If we put more power in more places, we can make government more creative in more places. That way we multiply the number of people with the ability to make things happen -- and we can open the way to a new burst of creative energy throughout America. The final reason I urge this historic shift is much more personal, for each and for every one of us. As everything seems to have grown bigger and more complex in America, as the forces that shape our lives seem to have grown more distant and more impersonal, a great feeling of frustration has crept across this land. Whether it is the workingman who feels neglected, the black man who feels oppressed, or the mother concerned about her children, there has been a growing feeling that "Things are in the saddle, and ride mankind." Millions of frustrated young Americans today are crying out -- asking not what will government do for me, but what can I do, how can I contribute, how can I matter? And so let us answer them. Let us say to them and let us say to all Americans, "We hear you. We will give you a chance. We are going to give you a new chance to have more to say about the decisions that affect your future -- a chance to participate in government -- because we are going to provide more centers of power where what you do can make a difference that you can see and feel in your own life and the life of your whole community." The further away government is from people, the stronger government becomes and the weaker people become. And a nation with a strong government and a weak people is an empty shell. I reject the patronizing idea that government in Washington, D.C., is inevitably more wise, more honest, and more efficient than government at the local or State level. The honesty and efficiency of government depends on people. Government at all levels has good people and bad people. And the way to get more good people into government is to give them more opportunity to do good things. The idea that a bureaucratic elite in Washington knows best what is best for people everywhere and that you cannot trust local governments is really a contention that you cannot trust people to govern themselves. This notion is completely foreign to the American experience. Local government is the government closest to the people, it is most responsive to the individual person. It is people's government in a far more intimate way than the Government in Washington can ever be. People came to America because they wanted to determine their own future rather than to live in a country where others determined their future for them. What this change means is that once again in America we are placing our trust in people. I have faith in people. I trust the judgment of people. Let us give the people of America a chance, a bigger voice in deciding for themselves those questions that so greatly affect their lives. The sixth great goal is a complete reform of the Federal Government itself. Based on a long and intensive study with the aid of the best advice obtainable, I have concluded that a sweeping reorganization of the executive branch is needed if the Government is to keep up with the times and with the needs of the people. I propose, therefore, that we reduce the present 12 Cabinet Departments to eight. I propose that the Departments of State, Treasury, Defense, and Justice remain, but that all the other departments be consolidated into four: Human Resources, Community Development, Natural Resources, and Economic Development. Let us look at what these would be: -- First, a department dealing with the concerns of people -- as individuals, as members of a family -- a department focused on human needs. -- Second, a department concerned with the community -- rural communities and urban communities -- and with all that it takes to make a community function as a community. -- Third, a department concerned with our physical environment, with the preservation and balanced use of those great natural resources on which our Nation depends. -- And fourth, a department concerned with our prosperity -- with our jobs, our businesses, and those many activities that keep our economy running smoothly and well. Under this plan, rather than dividing up our departments by narrow subjects, we would organize them around the great purposes of government. Rather than scattering responsibility by adding new levels of bureaucracy, we would focus and concentrate the responsibility for getting problems solved. With these four departments, when we have a problem we will know where to go -- and the department will have the authority and the resources to do something about it. Over the years we have added departments and created agencies at the Federal level, each to serve a new constituency, to handle a particular task -- and these have grown and multiplied in what has become a hopeless confusion of form and function. The time has come to match our structure to our purposes -- -to look with a fresh eye, to organize the Government by conscious, comprehensive design to meet the new needs of a new era. One hundred years ago, Abraham Lincoln stood on a battlefield and spoke of a "government of the people, by the people, for the people." Too often since then, we have become a nation of the Government, by the Government, for the Government. By enacting these reforms, we can renew that principle that Lincoln stated so simply and so well. By giving everyone's voice a chance to be heard, we will have government that truly is of the people. By creating more centers of meaningful power, more places where decisions that really count can be made, by giving more people a chance to do something, we can have government that truly is by the people. And by setting up a completely modern, functional system of government at the national level, we in Washington will at last be able to provide government that is truly for the people. I realize that what I am asking is that not only the executive branch in Washington but that even this Congress will have to change by giving up some of its power. Change is hard. But without change there can be no progress. And for each of us the question then becomes, not "Will change cause me inconvenience-" but "Will change bring progress for America-" Giving up power is hard. But I would urge all of you, as leaders of this country, to remember that the truly revered leaders in world history are those who gave power to people, and not those who took it away. As we consider these reforms we will be acting, not for the next 2 years or for the next 10 years, but for the next 100 years. So let us approach these six great goals with a sense not only of this moment in history but also of history itself. Let us act with the willingness to work together and the vision and the boldness and the courage of those great Americans who met in Philadelphia almost 190 years ago to write a constitution. Let us leave a heritage as they did -- not just for our children but for millions yet unborn -- of a nation where every American will have a chance not only to live in peace and to enjoy prosperity and opportunity but to participate in a system of government where he knows not only his votes but his ideas count -- a system of government which will provide the means for America to reach heights of achievement undreamed of before. Those men who met at Philadelphia left a great heritage because they had a vision -- not only of what the Nation was but of what it could become. As I think of that vision, I recall that America was founded as the land of the open door -- as a haven for the oppressed, a land of opportunity, a place of refuge, of hope. When the first settlers opened the door of America three and a half centuries ago, they came to escape persecution and to find opportunity -- and they left wide the door of welcome for others to follow. When the Thirteen Colonies declared their independence almost two centuries ago, they opened the door to a new vision of liberty and of human fulfillment -- not just for an elite but for all. To the generations that followed, America's was the open door that beckoned millions from the old world to the new in search of a better life, a freer life, a fuller life, and in which, by their own decisions, they could shape their own destinies. For the black American, the Indian, the Mexican-American, and for those others in our land who have not had an equal chance, the Nation at last has begun to confront the need to press open the door of full and equal opportunity, and of human dignity. For all Americans, with these changes I have proposed tonight we can open the door to a new era of opportunity. We can open the door to full and effective participation in the decisions that affect their lives. We can open the door to a new partnership among governments at all levels, between those governments and the people themselves. And by so doing, we can open wide the doors of human fulfillment for millions of people here in America now and in the years to come. In the next few weeks I will spell out in greater detail the way I propose that we achieve these six great goals. I ask this Congress to be responsive. If it is, then the 92d Congress, your Congress, our Congress, at the end of its term, will be able to look back on a record more splendid than any in our history. This can be the Congress that helped us end the longest war in the Nation's history, and end it in a way that will give us at last a genuine chance to enjoy what we have not had in this century: a full generation of peace. This can be the Congress that helped achieve an expanding economy, with full employment and without inflation -- and without the deadly stimulus of war. This can be the Congress that reformed a welfare system that has robbed recipients of their dignity and robbed States and cities of their resources. This can be the Congress that pressed forward the rescue of our environment, and established for the next generation an enduring legacy of parks for the people. This can be the Congress that launched a new era in American medicine, in which the quality of medical care was enhanced while the costs were made less burdensome. But above all, what this Congress can be remembered for is opening the way to a new American revolution -- a peaceful revolution in which power was turned back to the people -- in which government at all levels was refreshed and renewed and made truly responsive. This can be a revolution as profound, as far-reaching, as exciting as that first revolution almost 200 years ago -- and it can mean that just 5 years from now America will enter its third century as a young nation new in spirit, with all the vigor and the freshness with which it began its first century. My colleagues in the Congress, these are great goals. They can make the sessions of this Congress a great moment for America. So let us pledge together to go forward together -- by achieving these goals to give America the foundation today for a new greatness tomorrow and in all the years to come, and in so doing to make this the greatest Congress in the history of this great and good country. # State of the Union Address # Richard Nixon # January 20, 1972 Mr. Speaker, Mr. President, my colleagues in the Congress, our distinguished guests, my fellow Americans: Twenty-five years ago I sat here as a freshman Congressman -- along with Speaker Albert -- and listened for the first time to the President address the State of the Union. I shall never forget that moment. The Senate, the diplomatic corps, the Supreme Court, the Cabinet entered the Chamber, and then the President of the United States. As all of you are aware, I had some differences with President Truman. He had some with me. But I remember that on that day -- the day he addressed that joint session of the newly elected Republican 80th Congress, he spoke not as a partisan, but as President of all the people -- calling upon the Congress to put aside partisan considerations in the national interest. The Greek-Turkish aid program, the Marshall Plan, the great foreign policy initiatives which have been responsible for avoiding a world war for over 25 years were approved by the 80th Congress, by a bipartisan majority of which I was proud to be a part. Nineteen hundred seventy-two is now before us. It holds precious time in which to accomplish good for the Nation. We must not waste it. I know the political pressures in this session of the Congress will be great. There are more candidates for the Presidency in this Chamber today than there probably have been at any one time in the whole history of the Republic. And there is an honest difference of opinion, not only between the parties, but within each party, on some foreign policy issues and on some domestic policy issues. However, there are great national problems that are so vital that they transcend partisanship. So let us have our debates. Let us have our honest differences. But let us join in keeping the national interest first. Let us join in making sure that legislation the Nation needs does not become hostage to the political interests of any party or any person. There is ample precedent, in this election year, for me to present you with a huge list of new proposals, knowing full well that there would not be any possibility of your passing them if you worked night and day. I shall not do that. I have presented to the leaders of the Congress today a message of 15,000 words discussing in some detail where the Nation stands and setting forth specific legislative items on which I have asked the Congress to act. Much of this is legislation which I proposed in 1969, in 1970, and also in the first session of this 92d Congress and on which I feel it is essential that action be completed this year. I am not presenting proposals which have attractive labels but no hope of passage. I am presenting only vital programs which are within the capacity of this Congress to enact, within the capacity of the budget to finance, and which I believe should be above partisanship -- programs which deal with urgent priorities for the Nation, which should and must be the subject of bipartisan action by this Congress in the interests of the country in 1972. When I took the oath of office on the steps of this building just 3 years ago today, the Nation was ending one of the most tortured decades in its history. The 1960's were a time of great progress in many areas. But as we all know, they were also times of great agony -- the agonies of war, of inflation, of rapidly rising crime, of deteriorating titles, of hopes raised and disappointed, and of anger and frustration that led finally to violence and to the worst civil disorder in a century. I recall these troubles not to point any fingers of blame. The Nation was so torn in those final years of the sixties that many in both parties questioned whether America could be governed at all. The Nation has made significant progress in these first years of the seventies: Our cities are no longer engulfed by civil disorders. Our colleges and universities have again become places of learning instead of battlegrounds. A beginning has been made in preserving and protecting our environment. The rate of increase in crime has been slowed -- and here in the District of Columbia, the one city where the Federal Government has direct jurisdiction, serious crime in 1971 was actually reduced by 13 percent from the year before. Most important, because of the beginnings that have been made, we can say today that this year 1972 can be the year in which America may make the greatest progress in 25 years toward achieving our goal of being at peace with all the nations of the world. As our involvement in the war in Vietnam comes to an end, we must now go on to build a generation of peace. To achieve that goal, we must first face realistically the need to maintain our defense. In the past 3 years, we have reduced the burden of arms. For the first time in 20 years, spending on defense has been brought below spending on human resources. As we look to the future, we find encouraging progress in our negotiations with the Soviet Union on limitation of strategic arms. And looking further into the future, we hope there can eventually be agreement on the mutual reduction of arms. But until there is such a mutual agreement, we must maintain the strength necessary to deter war. And that is why, because of rising research and development costs, because of increases in military and civilian pay, because of the need to proceed with new weapons systems, my budget for the coming fiscal year will provide for an increase in defense spending. Strong military defenses are not the enemy of peace; they are the guardians of peace. There could be no more misguided set of priorities than one which would tempt others by weakening America, and thereby endanger the peace of the world. In our foreign policy, we have entered a new era. The world has changed greatly in the 11 years since President John Kennedy said in his Inaugural Address, "... we shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe to assure the survival and the success of liberty." Our policy has been carefully and deliberately adjusted to meet the new realities of the new world we live in. We make today only those commitments we are able and prepared to meet. Our commitment to freedom remains strong and unshakable. But others must bear their share of the burden of defending freedom around the world. And so this, then, is our policy: -- We will maintain a nuclear deterrent adequate to meet any threat to the security of the United States or of our allies. -- We will help other nations develop the capability of defending themselves. -- We will faithfully honor all of our treaty commitments. -- We will act to defend our interests, whenever and wherever they are threatened anyplace in the world. -- But where our interests or our treaty commitments are not involved, our role will be limited. -- We will not intervene militarily. -- But we will use our influence to prevent war. -- If war comes, we will use our influence to stop it. -- Once it is over, we will do our share in helping to bind up the wounds of those who have participated in it. As you know, I will soon be visiting the People's Republic of China and the Soviet Union. I go there with no illusions. We have great differences with both powers. We shall continue to have great differences. But peace depends on the ability of great powers to live together on the same planet despite their differences. We would not be true to our obligation to generations yet unborn if we failed to seize this moment to do everything in our power to insure that we will be able to talk about those differences, rather than to fight about them, in the future. As we look back over this century, let us, in the highest spirit of bipartisanship, recognize that we can be proud of our Nation's record in foreign affairs. America has given more generously of itself toward maintaining freedom, preserving peace, alleviating human suffering around the globe, than any nation has ever done in the history of man. We have fought four wars in this century, but our power has never been used to break the peace, only to keep it; never been used to destroy freedom, only to defend it. We now have within our reach the goal of insuring that the next generation can be the first generation in this century to be spared the scourges of war. Turning to our problems at home, we are making progress toward our goal of a new prosperity without war. Industrial production, consumer spending, retail sales, personal income all have been rising. Total employment, real income are the highest in history. New home building starts this past year reached the highest level ever. Business and consumer confidence have both been rising. Interest rates are down. The rate of inflation is down. We can look with confidence to 1972 as the year when the back of inflation will be broken. Now, this a good record, but it is not good enough -- not when we still have an unemployment rate of 6 percent. It is not enough to point out that this was the rate of the early peacetime years of the sixties, or that if the more than 2 million men released from the Armed Forces and defense-related industries were still in their wartime jobs, unemployment would be far lower. Our goal in this country is full employment in peacetime. We intend to meet that goal, and we can. The Congress has helped to meet that goal by passing our job-creating tax program last month. The historic monetary agreements, agreements that we have reached with the major European nations, Canada, and Japan, will help meet it by providing new markets for American products, new jobs for American workers. Our budget will help meet it by being expansionary without being inflationary -- a job-producing budget that will help take up the gap as the economy expands to full employment. Our program to raise farm income will help meet it by helping to revitalize rural America, by giving to America's farmers their fair share of America's increasing productivity. We also will help meet our goal of full employment in peacetime with a set of major initiatives to stimulate more imaginative use of America's great capacity for technological advance, and to direct it toward improving the quality of life for every American. In reaching the moon, we demonstrated what miracles American technology is capable of achieving. Now the time has come to move more deliberately toward making full use of that technology here on earth, of harnessing the wonders of science to the service of man. I shall soon send to the Congress a special message proposing a new program of Federal partnership in technological research and development -- with Federal incentives to increase private research, federally supported research on projects designed to improve our everyday lives in ways that will range from improving mass transit to developing new systems of emergency health care that could save thousands of lives annually. Historically, our superior technology and high productivity have made it possible for American workers to be the highest paid in the world by far, and yet for our goods still to compete in world markets. Now we face a new situation. As other nations move rapidly forward in technology, the answer to the new competition is not to build a wall around America, but rather to remain competitive by improving our own technology still further and by increasing productivity in American industry. Our new monetary and trade agreements will make it possible for American goods to compete fairly in the world's markets -- but they still must compete. The new technology program will put to use the skills of many highly trained Americans, skills that might otherwise be wasted. It will also meet the growing technological challenge from abroad, and it will thus help to create new industries, as well as creating more jobs for America's workers in producing for the world's markets. This second session of the 92d Congress already has before it more than 90 major Administration proposals which still await action. I have discussed these in the extensive written message that I have presented to the Congress today. They include, among others, our programs to improve life for the aging; to combat crime and drug abuse; to improve health services and to ensure that no one will be denied needed health care because of inability to pay; to protect workers' pension rights; to promote equal opportunity for members of minorities, and others who have been left behind; to expand consumer protection; to improve the environment; to revitalize rural America; to help the cities; to launch new initiatives in education; to improve transportation, and to put an end to costly labor tie-ups in transportation. The west coast dock strike is a case in point. This Nation cannot and will not tolerate that kind of irresponsible labor tie-up in the future. The messages also include basic reforms which are essential if our structure of government is to be adequate in the decades ahead. They include reform of our wasteful and outmoded welfare system -- substitution of a new system that provides work requirements and work incentives for those who can help themselves, income support for those who cannot help themselves, and fairness to the working poor. They include a $17 billion program of Federal revenue sharing with the States and localities as an investment in their renewal, an investment also of faith in the American people. They also include a sweeping reorganization of the executive branch of the Federal Government so that it will be more efficient, more responsive, and able to meet the challenges of the decades ahead. One year ago, standing in this place, I laid before the opening session of this Congress six great goals. One of these was welfare reform. That proposal has been before the Congress now for nearly 2 1/2 years. My proposals on revenue sharing, government reorganization, health care, and the environment have now been before the Congress for nearly a year. Many of the other major proposals that I have referred to have been here that long or longer. Now, 1971, we can say, was a year of consideration of these measures. Now let us join in making 1972 a year of action on them, action by the Congress, for the Nation and for the people of America. Now, in addition, there is one pressing need which I have not previously covered, but which must be placed on the national agenda. We long have looked in this Nation to the local property tax as the main source of financing for public primary and secondary education. As a result, soaring school costs, soaring property tax rates now threaten both our communities and our schools. They threaten communities because property taxes, which more than doubled in the 10 years from 1960 to '70, have become one of the most oppressive and discriminatory of all taxes, hitting most cruelly at the elderly and the retired; and they threaten schools, as hard-pressed voters understandably reject new bond issues at the polls. The problem has been given even greater urgency by four recent court decisions, which have held that the conventional method of financing schools through local property taxes is discriminatory and unconstitutional. Nearly 2 years ago, I named a special Presidential commission to study the problems of school finance, and I also directed the Federal departments to look into the same problems. We are developing comprehensive proposals to meet these problems. This issue involves two complex and interrelated sets of problems: support of the schools and the basic relationships of Federal, State, and local governments in any tax reforms. Under the leadership of the Secretary of the Treasury, we are carefully reviewing all of the tax aspects, and I have this week enlisted the Advisory Commission on Intergovernmental Relations in addressing the intergovernmental relations aspects. I have asked this bipartisan Commission to review our proposals for Federal action to cope with the gathering crisis of school finance and property taxes. Later in the year, when both Commissions have completed their studies, I shall make my final recommendations for relieving the burden of property taxes and providing both fair and adequate financing for our children's education. These recommendations will be revolutionary. But all these recommendations, however, will be rooted in one fundamental principle with which there can be no compromise: Local school boards must have control over local schools. As we look ahead over the coming decades, vast new growth and change are not only certainties, they will be the dominant reality of this world, and particularly of our life in America. Surveying the certainty of rapid change, we can be like a fallen rider caught in the stirrups -- or we can sit high in the saddle, the masters of change, directing it on a course we choose. The secret of mastering change in today's world is to reach back to old and proven principles, and to adapt them with imagination and intelligence to the new realities of a new age. That is what we have done in the proposals that I have laid before the Congress. They are rooted in basic principles that are as enduring as human nature, as robust as the American experience; and they are responsive to new conditions. Thus they represent a spirit of change that is truly renewal. As we look back at those old principles, we find them as timely as they are timeless. We believe in independence, and self-reliance, and the creative value of the competitive spirit. We believe in full and equal opportunity for all Americans and in the protection of individual rights and liberties. We believe in the family as the keystone of the community, and in the community as the keystone of the Nation. We believe in compassion toward those in need. We believe in a system of law, justice, and order as the basis of a genuinely free society. We believe that a person should get what he works for -- and that those who can, should work for what they get. We believe in the capacity of people to make their own decisions in their own lives, in their own communities -- and we believe in their right to make those decisions. In applying these principles, we have done so with the full understanding that what we seek in the seventies, what our quest is, is not merely for more, but for better for a better quality of life for all Americans. Thus, for example, we are giving a new measure of attention to cleaning up our air and water, making our surroundings more attractive. We are providing broader support for the arts, helping stimulate a deeper appreciation of what they can contribute to the Nation's activities and to our individual lives. But nothing really matters more to the quality of our lives than the way we treat one another, than our capacity to live respectfully together as a unified society, with a full, generous regard for the rights of others and also for the feelings of others. As we recover from the turmoil and violence of recent years, as we learn once again to speak with one another instead of shouting at one another, we are regaining that capacity. As is customary here, on this occasion, I have been talking about programs. Programs are important. But even more important than programs is what we are as a Nation -- what we mean as a Nation, to ourselves and to the world. In New York Harbor stands one of the most famous statues in the world -- the Statue of Liberty, the gift in 1886 of the people of France to the people of the United States. This statue is more than a landmark; it is a symbol -- a symbol of what America has meant to the world. It reminds us that what America has meant is not its wealth, and not its power, but its spirit and purpose -- a land that enshrines liberty and opportunity, and that has held out a hand of welcome to millions in search of a better and a fuller and, above all, a freer life. The world's hopes poured into America, along with its people. And those hopes, those dreams, that have been brought here from every corner of the world, have become a part of the hope that we now hold out to the world. Four years from now, America will celebrate the 200th anniversary of its founding as a Nation. There are those who say that the old Spirit of '76 is dead -- that we no longer have the strength of character, the idealism, the faith in our founding purposes that that spirit represents. Those who say this do not know America. We have been undergoing self-doubts and self-criticism. But these are only the other side of our growing sensitivity to the persistence of want in the midst of plenty, of our impatience with the slowness with which age-old ills are being overcome. If we were indifferent to the shortcomings of our society, or complacent about our institutions, or blind to the lingering inequities -- then we would have lost our way. But the fact that we have those concerns is evidence that our ideals, deep down, are still strong. Indeed, they remind us that what is really best about America is its compassion. They remind us that in the final analysis, America is great not because it is strong, not because it is rich, but because this is a good country. Let us reject the narrow visions of those who would tell us that we are evil because we are not yet perfect, that we are corrupt because we are not yet pure, that all the sweat and toil and sacrifice that have gone into the building of America were for naught because the building is not yet done. Let us see that the path we are traveling is wide, with room in it for all of us, and that its direction is toward a better Nation and a more peaceful world. Never has it mattered more that we go forward together. Look at this Chamber. The leadership of America is here today -- the Supreme Court, the Cabinet, the Senate, the House of Representatives. Together, we hold the future of the Nation, and the conscience of the Nation in our hands. Because this year is an election year, it will be a time of great pressure. If we yield to that pressure and fail to deal seriously with the historic challenges that we face, we will have failed the trust of millions of Americans and shaken the confidence they have a right to place in us, in their Government. Never has a Congress had a greater opportunity to leave a legacy of a profound and constructive reform for the Nation than this Congress. If we succeed in these tasks, there will be credit enough for all -- not only for doing what is right, but doing it in the right way, by rising above partisan interest to serve the national interest. And if we fail, more than any one of us, America will be the loser. That is why my call upon the Congress today is for a high statesmanship, so that in the years to come Americans will look back and say because it withstood the intense pressures of a political year, and achieved such great good for the American people and for the future of this Nation, this was truly a great Congress. # State of the Union Address # Richard Nixon # February 2, 1973 To the Congress of the United States: The traditional form of the President's annual report giving "to the Congress Information of the State of the Union" is a single message or address. As the affairs and concerns of our Union have multiplied over the years, however, so too have the subjects that require discussion in State of the Union Messages. This year in particular, with so many changes in Government programs under consideration -- and with our very philosophy about the relationship between the individual and the State at an historic crossroads -- a single, all-embracing State of the Union Message would not appear to be adequate. I have therefore decided to present my 1973 State of the Union report in the form of a series of messages during these early weeks of the 93rd Congress. The purpose of this first message in the series is to give a concise overview of where we stand as a people today, and to outline some of the general goals that I believe we should pursue over the next year and beyond. In coming weeks, I will send to the Congress further State of the Union reports on specific areas of policy including economic affairs, natural resources, human resources, community development and foreign and defense policy. The new course these messages will outline represents a fresh approach to Government: an approach that addresses the realities of the 1970s, not those of the 1930s or of the 1960s. The role of the Federal Government as we approach our third century of independence should not be to dominate any facet of American life, but rather to aid and encourage people, communities and institutions to deal with as many of the difficulties and challenges facing them as possible, and to help see to it that every American has a full and equal opportunity to realize his or her potential. If we were to continue to expand the Federal Government at the rate of the past several decades, it soon would consume us entirely. The time has come when we must make clear choices -- choices between old programs that set worthy goals but failed to reach them and new programs that provide a better way to realize those goals; and choices, too, between competing programs -- all of which may be desirable in themselves but only some of which we can afford with the finite resources at our command. Because our resources are not infinite, we also face a critical choice in 1973 between holding the line in Government spending and adopting expensive programs which will surely force up taxes and refuel inflation. Finally, it is vital at this time that we restore a greater sense of responsibility at the State and local level, and among individual Americans. WHERE WE STAND The basic state of our Union today is sound, and full of promise. We enter 1973 economically strong, militarily secure and, most important of all, at peace after a long and trying war. America continues to provide a better and more abundant life for more of its people than any other nation in the world. We have passed through one of the most difficult periods in our history without surrendering to despair and without dishonoring our ideals as a people. Looking back, there is a lesson in all this for all of us. The lesson is one that we sometimes had to learn the hard way over the past few years. But we did learn it. That lesson is that even potentially destructive forces can be converted into positive forces when we know how to channel them, and when we use common sense and common decency to create a climate of mutual respect and goodwill. By working together and harnessing the forces of nature, Americans have unlocked some of the great mysteries of the universe. Men have walked the surface of the moon and soared to new heights of discovery. This same spirit of discovery is helping us to conquer disease and suffering that have plagued our own planet since the dawn of time. By working together with the leaders of other nations, we have been able to build a new hope for lasting peace -- for a structure of world order in which common interest outweighs old animosities, and in which a new generation of the human family can grow up at peace in a changing world. At home, we have learned that by working together we can create prosperity without fanning inflation; we can restore order without weakening freedom. THE CHALLENGES WE FACE These first years of the 1970s have been good years for America. Our job -- all of us together -- is to make 1973 and the years to come even better ones. I believe that we can. I believe that we can make the years leading to our Bicentennial the best four years in American history. But we must never forget that nothing worthwhile can be achieved without the will to succeed and the strength to sacrifice. Hard decisions must be made, and we must stick by them. In the field of foreign policy, we must remember that a strong America -- an America whose word is believed and whose strength is respected -- is essential to continued peace and understanding in the world. The peace with honor we have achieved in Vietnam has strengthened this basic American credibility. We must act in such a way in coming years that this credibility will remain intact, and with it, the world stability of which it is so indispensable a part. At home, we must reject the mistaken notion -- a notion that has dominated too much of the public dialogue for too long -- that ever bigger Government is the answer to every problem. We have learned only too well that heavy taxation and excessive Government spending are not a cure-all. In too many cases, instead of solving the problems they were aimed at, they have merely placed an ever heavier burden on the shoulders of the American taxpayer, in the form of higher taxes and a higher cost of living. At the same time they have deceived our people because many of the intended beneficiaries received far less than was promised, thus undermining public faith in the effectiveness of Government as a whole. The time has come for us to draw the line. The time has come for the responsible leaders of both political parties to take a stand against overgrown Government and for the American taxpayer. We are not spending the Federal Government's money, we are spending the taxpayer's money, and it must be spent in a way which guarantees his money's worth and yields the fullest possible benefit to the people being helped. The answer to many of the domestic problems we face is not higher taxes and more spending. It is less waste, more results and greater freedom for the individual American to earn a rightful place in his own community -- and for States and localities to address their own needs in their own ways, in the light of their own priorities. By giving the people and their locally elected leaders a greater voice through changes such as revenue sharing, and by saying "no" to excessive Federal spending and higher taxes, we can help achieve this goal. COMING MESSAGES The policies which I will outline to the Congress in the weeks ahead represent a reaffirmation, not an abdication, of Federal responsibility. They represent a pragmatic rededication to social compassion and national excellence, in place of the combination of good intentions and fuzzy follow-through which too often in the past was thought sufficient. In the field of economic affairs, our objectives will be to hold down taxes, to continue controlling inflation, to promote economic growth, to increase productivity, to encourage foreign trade, to keep farm income high, to bolster small business, and to promote better labor-management relations. In the area of natural resources, my recommendations will include programs to preserve and enhance the environment, to advance science and technology, and to assure balanced use of our irreplaceable natural resources. In developing human resources, I will have recommendations to advance the Nation's health and education, to improve conditions of people in need, to carry forward our increasingly successful attacks on crime, drug abuse and injustice, and to deal with such important areas of special concern as consumer affairs. We will continue and improve our Nation's efforts to assist those who have served in the Armed Services in Vietnam through better job and training opportunities. We must do a better job in community development -- in creating more livable communities, in which all of our children can grow up with fuller access to opportunity and greater immunity to the social evils and blights which now plague so many of our towns and cities. I shall have proposals to help us achieve this. I shall also deal with our defense and foreign policies, and with our new approaches to the role and structure of Government itself. Considered as a whole, this series of messages will be a blueprint for modernizing the concept and the functions of American Government to meet the needs of our people. Converting it into reality will require a spirit of cooperation and shared commitment on the part of all branches of the Government, for the goals we seek are not those of any single party or faction, they are goals for the betterment of all Americans. As President, I recognize that I cannot do this job alone. The Congress must help, and I pledge to do my part to achieve a constructive working relationship with the Congress. My sincere hope is that the executive and legislative branches can work together in this great undertaking in a positive spirit of mutual respect and cooperation. Working together -- the Congress, the President and the people -- I am confident that we can translate these proposals into an action program that can reform and revitalize American Government and, even more important, build a better life for all Americans. # State of the Union Address # Richard Nixon # January 30, 1974 Mr. Speaker, Mr. President, my colleagues in the Congress, our distinguished guests, my fellow Americans: We meet here tonight at a time of great challenge and great opportunities for America. We meet at a time when we face great problems at home and abroad that will test the strength of our fiber as a nation. But we also meet at a time when that fiber has been tested, and it has proved strong. America is a great and good land, and we are a great and good land because we are a strong, free, creative people and because America is the single greatest force for peace anywhere in the world. Today, as always in our history, we can base our confidence in what the American people will achieve in the future on the record of what the American people have achieved in the past. Tonight, for the first time in 12 years, a President of the United States can report to the Congress on the state of a Union at peace with every nation of the world. Because of this, in the 22,000-word message on the state of the Union that I have just handed to the Speaker of the House and the President of the Senate, I have been able to deal primarily with the problems of peace with what we can do here at home in America for the American people -- rather than with the problems of war. The measures I have outlined in this message set an agenda for truly significant progress for this Nation and the world in 1974. Before we chart where we are going, let us see how far we have come. It was 5 years ago on the steps of this Capitol that I took the oath of office as your President. In those 5 years, because of the initiatives undertaken by this Administration, the world has changed. America has changed. As a result of those changes, America is safer today, more prosperous today, with greater opportunity for more of its people than ever before in our history. Five years ago, America was at war in Southeast Asia. We were locked in confrontation with the Soviet Union. We were in hostile isolation from a quarter of the world's people who lived in Mainland China. Five years ago, our cities were burning and besieged. Five years ago, our college campuses were a battleground. Five years ago, crime was increasing at a rate that struck fear across the Nation. Five years ago, the spiraling rise in drug addiction was threatening human and social tragedy of massive proportion, and there was no program to deal with it. Five years ago -- as young Americans had done for a generation before that -- America's youth still lived under the shadow of the military draft. Five years ago, there was no national program to preserve our environment. Day by day, our air was getting dirtier, our water was getting more foul. And 5 years ago, American agriculture was practically a depressed industry with 100,000 farm families abandoning the farm every year. As we look at America today, we find ourselves challenged by new problems. But we also find a record of progress to confound the professional criers of doom and prophets of despair. We met the challenges we faced 5 years ago, and we will be equally confident of meeting those that we face today. Let us see for a moment how we have met them. After more than 10 years of military involvement, all of our troops have returned from Southeast Asia, and they have returned with honor. And we can be proud of the fact that our courageous prisoners of war, for whom a dinner was held in Washington tonight, that they came home with their heads high, on their feet and not on their knees. In our relations with the Soviet Union, we have turned away from a policy of confrontation to one of negotiation. For the first time since World War II, the world's two strongest powers are working together toward peace in the world. With the People's Republic of China after a generation of hostile isolation, we have begun a period of peaceful exchange and expanding trade. Peace has returned to our cities, to our campuses. The 17-year rise in crime has been stopped. We can confidently say today that we are finally beginning to win the war against crime. Right here in this Nation's Capital -- which a few years ago was threatening to become the crime capital of the world -- the rate in crime has been cut in half. A massive campaign against drug abuse has been organized. And the rate of new heroin addiction, the most vicious threat of all, is decreasing rather than increasing. For the first time in a generation, no young Americans are being drafted into the armed services of the United States. And for the first time ever, we have organized a massive national effort to protect the environment. Our air is getting cleaner, our water is getting purer, and our agriculture, which was depressed, is prospering. Farm income is up 70 percent, farm production is setting all-time records, and the billions of dollars the taxpayers were paying in subsidies has been cut to nearly zero. Overall, Americans are living more abundantly than ever before, today. More than 2 1/2 million new jobs were created in the past year alone. That is the biggest percentage increase in nearly 20 years. People are earning more. What they earn buys more, more than ever before in history. In the past 5 years, the average American's real spendable income -- that is, what you really can buy with your income, even after allowing for taxes and inflation -- has increased by 16 percent. Despite this record of achievement, as we turn to the year ahead we hear once again the familiar voice of the perennial prophets of gloom telling us now that because of the need to fight inflation, because of the energy shortage, America may be headed for a recession. Let me speak to that issue head on. There will be no recession in the United States of America. Primarily due to our energy crisis, our economy is passing through a difficult period. But I pledge to you tonight that the full powers of this Government will be used to keep America's economy producing and to protect the jobs of America's workers. We are engaged in a long and hard fight against inflation. There have been, and there will be in the future, ups and downs in that fight. But if this Congress cooperates in our efforts to hold down the cost of Government, we shall win our fight to hold down the cost of living for the American people. As we look back over our history, the years that stand out as the ones of signal achievement are those in which the Administration and the Congress, whether one party or the other, working together, had the wisdom and the foresight to select those particular initiatives for which the Nation was ready and the moment was right -- and in which they seized the moment and acted. Looking at the year 1974 which lies before us, there are 10 key areas in which landmark accomplishments are possible this year in America. If we make these our national agenda, this is what we will achieve in 1974: We will break the back of the energy crisis; we will lay the foundation for our future capacity to meet America's energy needs from America's own resources. And we will take another giant stride toward lasting peace in the world -- not only by continuing our policy of negotiation rather than confrontation where the great powers are concerned but also by helping toward the achievement of a just and lasting settlement in the Middle East. We will check the rise in prices without administering the harsh medicine of recession, and we will move the economy into a steady period of growth at a sustainable level. We will establish a new system that makes high-quality health care available to every American in a dignified manner and at a price he can afford. We will make our States and localities more responsive to the needs of their own citizens. We will make a crucial breakthrough toward better transportation in our towns and in our cities across America. We will reform our system of Federal aid to education, to provide it when it is needed, where it is needed, so that it will do the most for those who need it the most. We will make an historic beginning on the task of defining and protecting the right of personal privacy for every American. And we will start on a new road toward reform of a welfare system that bleeds the taxpayer, corrodes the community, and demeans those it is intended to assist. And together with the other nations of the world, we will establish the economic framework within which Americans will share more fully in an expanding worldwide trade and prosperity in the years ahead, with more open access to both markets and supplies. In all of the 186 State of the Union messages delivered from this place, in our history this is the first in which the one priority, the first priority, is energy. Let me begin by reporting a new development which I know will be welcome news to every American. As you know, we have committed ourselves to an active role in helping to achieve a just and durable peace in the Middle East, on the basis of full implementation of Security Council Resolutions 242 and 338. The first step in the process is the disengagement of Egyptian and Israeli forces which is now taking place. Because of this hopeful development, I can announce tonight that I have been assured, through my personal contacts with friendly leaders in the Middle Eastern area, that an urgent meeting will be called in the immediate future to discuss the lifting of the oil embargo. This is an encouraging sign. However, it should be clearly understood by our friends in the Middle East that the United States will not be coerced on this issue. Regardless of the outcome of this meeting, the cooperation of the American people in our energy conservation program has already gone a long way towards achieving a goal to which I am deeply dedicated. Let us do everything we can to avoid gasoline rationing in the United States of America. Last week, I sent to the Congress a comprehensive special message setting forth our energy situation, recommending the legislative measures which are necessary to a program for meeting our needs. If the embargo is lifted, this will ease the crisis, but it will not mean an end to the energy shortage in America. Voluntary conservation will continue to be necessary. And let me take this occasion to pay tribute once again to the splendid spirit of cooperation the American people have shown which has made possible our success in meeting this emergency up to this time. The new legislation I have requested will also remain necessary. Therefore, I urge again that the energy measures that I have proposed be made the first priority of this session of the Congress. These measures will require the oil companies and other energy producers to provide the public with the necessary information on their supplies. They will prevent the injustice of windfall profits for a few as a result of the sacrifices of the millions of Americans. And they will give us the organization, the incentives, the authorities needed to deal with the short-term emergency and to move toward meeting our long-term needs. Just as 1970 was the year in which we began a full-scale effort to protect the environment, 1974 must be the year in which we organize a full-scale effort to provide for our energy needs, not only in this decade but through the 21st century. As we move toward the celebration 2 years from now of the 200th anniversary of this Nation's independence, let us press vigorously on toward the goal I announced last November for Project Independence. Let this be our national goal: At the end of this decade, in the year 1980, the United States will not be dependent on any other country for the energy we need to provide our jobs, to heat our homes, and to keep our transportation moving. To indicate the size of the Government commitment, to spur energy research and development, we plan to spend $10 billion in Federal funds over the next 5 years. That is an enormous amount. But during the same 5 years, private enterprise will be investing as much as $200 billion -- and in 10 years, $500 billion -- to develop the new resources, the new technology, the new capacity America will require for its energy needs in the 1980's. That is just a measure of the magnitude of the project we are undertaking. But America performs best when called to its biggest tasks. It can truly be said that only in America could a task so tremendous be achieved so quickly, and achieved not by regimentation, but through the effort and ingenuity of a free people, working in a free system. Turning now to the rest of the agenda for 1974, the time is at hand this year to bring comprehensive, high quality health care within the reach of every American. I shall propose a sweeping new program that will assure comprehensive health insurance protection to millions of Americans who cannot now obtain it or afford it, with vastly improved protection against catastrophic illnesses. This will be a plan that maintains the high standards of quality in America's health care. And it will not require additional taxes. Now, I recognize that other plans have been put forward that would cost $80 billion or even $100 billion and that would put our whole health care system under the heavy hand of the Federal Government. This is the wrong approach. This has been tried abroad, and it has failed. It is not the way we do things here in America. This kind of plan would threaten the quality of care provided by our whole health care system. The right way is one that builds on the strengths of the present system and one that does not destroy those strengths, one based on partnership, not paternalism. Most important of all, let us keep this as the guiding principle of our health programs. Government has a great role to play, but we must always make sure that our doctors will be working for their patients and not for the Federal Government. Many of you will recall that in my State of the Union Address 3 years ago, I commented that "Most Americans today are simply fed up with government at all levels," and I recommended a sweeping set of proposals to revitalize State and local governments, to make them more responsive to the people they serve. I can report to you today that as a result of revenue sharing passed by the Congress, and other measures, we have made progress toward that goal. After 40 years of moving power from the States and the communities to Washington, D.C., we have begun moving power back from Washington to the States and communities and, most important, to the people of America. In this session of the Congress, I believe we are near the breakthrough point on efforts which I have suggested, proposals to let people themselves make their own decisions for their own communities and, in particular, on those to provide broad new flexibility in Federal aid for community development, for economic development, for education. And I look forward to working with the Congress, with members of both parties in resolving whatever remaining differences we have in this legislation so that we can make available nearly $5 1/2 billion to our States and localities to use not for what a Federal bureaucrat may want, but for what their own people in those communities want. The decision should be theirs. I think all of us recognize that the energy crisis has given new urgency to the need to improve public transportation, not only in our cities but in rural areas as well. The program I have proposed this year will give communities not only more money but also more freedom to balance their own transportation needs. It will mark the strongest Federal commitment ever to the improvement of mass transit as an essential element of the improvement of life in our towns and cities. One goal on which all Americans agree is that our children should have the very best education this great Nation can provide. In a special message last week, I recommended a number of important new measures that can make 1974 a year of truly significant advances for our schools and for the children they serve. If the Congress will act on these proposals, more flexible funding will enable each Federal dollar to meet better the particular need of each particular school district. Advance funding will give school authorities a chance to make each year's plans, knowing ahead of time what Federal funds they are going to receive. Special targeting will give special help to the truly disadvantaged among our people. College students faced with rising costs for their education will be able to draw on an expanded program of loans and grants. These advances are a needed investment in America's most precious resource, our next generation. And I urge the Congress to act on this legislation in 1974. One measure of a truly free society is the vigor with which it protects the liberties of its individual citizens. As technology has advanced in America, it has increasingly encroached on one of those liberties -- what I term the right of personal privacy. Modern information systems, data banks, credit records, mailing list abuses, electronic snooping, the collection of personal data for one purpose that may be used for another -- all these have left millions of Americans deeply concerned by the privacy they cherish. And the time has come, therefore, for a major initiative to define the nature and extent of the basic rights of privacy and to erect new safeguards to ensure that those rights are respected. I shall launch such an effort this year at the highest levels of the Administration, and I look forward again to working with this Congress in establishing a new set of standards that respect the legitimate needs of society, but that also recognize personal privacy as a cardinal principle of American liberty. Many of those in this Chamber tonight will recall that it was 3 years ago that I termed the Nation's welfare system "a monstrous, consuming outrage -- an outrage against the community, against the taxpayer, and particularly against the children that it is supposed to help." That system is still an outrage. By improving its administration, we have been able to reduce some of the abuses. As a result, last year, for the first time in 18 years, there has been a halt in the growth of the welfare caseload. But as a system, our welfare program still needs reform as urgently today as it did when I first proposed in 1969 that we completely replace it with a different system. In these final 3 years of my Administration, I urge the Congress to join me in mounting a major new effort to replace the discredited present welfare system with one that works, one that is fair to those who need help or cannot help themselves, fair to the community, and fair to the taxpayer. And let us have as our goal that there will be no Government program which makes it more profitable to go on welfare than to go to work. I recognize that from the debates that have taken place within the Congress over the past 3 years on this program that we cannot expect enactment overnight of a new reform. But I do propose that the Congress and the Administration together make this the year in which we discuss, debate, and shape such a reform so that it can be enacted as quickly as possible. America's own prosperity in the years ahead depends on our sharing fully and equitably in an expanding world prosperity. Historic negotiations will take place this year that will enable us to ensure fair treatment in international markets for American workers, American farmers, American investors, and American consumers. It is vital that the authorities contained in the trade bill I submitted to the Congress be enacted so that the United States can negotiate flexibly and vigorously on behalf of American interests. These negotiations can usher in a new era of international trade that not only increases the prosperity of all nations but also strengthens the peace among all nations. In the past 5 years, we have made more progress toward a lasting structure of peace in the world than in any comparable time in the Nation's history. We could not have made that progress if we had not maintained the military strength of America. Thomas Jefferson once observed that the price of liberty is eternal vigilance. By the same token, and for the same reason, in today's world the price of peace is a strong defense as far as the United States is concerned. In the past 5 years, we have steadily reduced the burden of national defense as a share of the budget, bringing it down from 44 percent in 1969 to 29 percent in the current year. We have cut our military manpower over the past 5 years by more than a third, from 3.5 million to 2.2 million. In the coming year, however, increased expenditures will be needed. They will be needed to assure the continued readiness of our military forces, to preserve present force levels in the face of rising costs, and to give us the military strength we must have if our security is to be maintained and if our initiatives for peace are to succeed. The question is not whether we can afford to maintain the necessary strength of our defense, the question is whether we can afford not to maintain it, and the answer to that question is no. We must never allow America to become the second strongest nation in the world. I do not say this with any sense of belligerence, because I recognize the fact that is recognized around the world. America's military strength has always been maintained to keep the peace, never to break it. It has always been used to defend freedom, never to destroy it. The world's peace, as well as our own, depends on our remaining as strong as we need to be as long as we need to be. In this year 1974, we will be negotiating with the Soviet Union to place further limits on strategic nuclear arms. Together with our allies, we will be negotiating with the nations of the Warsaw Pact on mutual and balanced reduction of forces in Europe. And we will continue our efforts to promote peaceful economic development in Latin America, in Africa, in Asia. We will press for full compliance with the peace accords that brought an end to American fighting in Indochina, including particularly a provision that promised the fullest possible accounting for those Americans who are missing in action. And having in mind the energy crisis to which I have referred to earlier, we will be working with the other nations of the world toward agreement on means by which oil supplies can be assured at reasonable prices on a stable basis in a fair way to the consuming and producing nations alike. All of these are steps toward a future in which the world's peace and prosperity, and ours as well as a result, are made more secure. Throughout the 5 years that I have served as your President, I have had one overriding aim, and that was to establish a new structure of peace in the world that can free future generations of the scourge of war. I can understand that others may have different priorities. This has been and this will remain my first priority and the chief legacy I hope to leave from the 8 years of my Presidency. This does not mean that we shall not have other priorities, because as we strengthen the peace, we must also continue each year a steady strengthening of our society here at home. Our conscience requires it, our interests require it, and we must insist upon it. As we create more jobs, as we build a better health care system, as we improve our education, as we develop new sources of energy, as we provide more abundantly for the elderly and the poor, as we strengthen the system of private enterprise that produces our prosperity -- as we do all of this and even more, we solidify those essential bonds that hold us together as a nation. Even more importantly, we advance what in the final analysis government in America is all about. What it is all about is more freedom, more security, a better life for each one of the 211 million people that live in this land. We cannot afford to neglect progress at home while pursuing peace abroad. But neither can we afford to neglect peace abroad while pursuing progress at home. With a stable peace, all is possible, but without peace, nothing is possible. In the written message that I have just delivered to the Speaker and to the President of the Senate, I commented that one of the continuing challenges facing us in the legislative process is that of the timing and pacing of our initiatives, selecting each year among many worthy projects those that are ripe for action at that time. What is true in terms of our domestic initiatives is true also in the world. This period we now are in, in the world -- and I say this as one who has seen so much of the world, not only in these past 5 years but going back over many years -- we are in a period which presents a juncture of historic forces unique in this century. They provide an opportunity we may never have again to create a structure of peace solid enough to last a lifetime and more, not just peace in our time but peace in our children's time as well. It is on the way we respond to this opportunity, more than anything else, that history will judge whether we in America have met our responsibility. And I am confident we will meet that great historic responsibility which is ours today. It was 27 years ago that John F. Kennedy and I sat in this Chamber, as freshmen Congressmen, hearing our first State of the Union address delivered by Harry Truman. I know from my talks with him, as members of the Labor Committee on which we both served, that neither of us then even dreamed that either one or both might eventually be standing in this place that I now stand in now and that he once stood in, before me. It may well be that one of the freshmen Members of the 93d Congress, one of you out there, will deliver his own State of the Union message 27 years from now, in the year 2001. Well, whichever one it is, I want you to be able to look back with pride and to say that your first years here were great years and recall that you were here in this 93d Congress when America ended its longest war and began its longest peace. Mr. Speaker, and Mr. President, and my distinguished colleagues and our guests: I would like to add a personal word with regard to an issue that has been of great concern to all Americans over the past year. I refer, of course, to the investigations of the so-called Watergate affair. As you know, I have provided to the Special Prosecutor voluntarily a great deal of material. I believe that I have provided all the material that he needs to conclude his investigations and to proceed to prosecute the guilty and to clear the innocent. I believe the time has come to bring that investigation and the other investigations of this matter to an end. One year of Watergate is enough. And the time has come, my colleagues, for not only the Executive, the President, but the Members of Congress, for all of us to join together in devoting our full energies to these great issues that I have discussed tonight which involve the welfare of all of the American people in so many different ways, as well as the peace of the world. I recognize that the House Judiciary Committee has a special responsibility in this area, and I want to indicate on this occasion that I will cooperate with the Judiciary Committee in its investigation. I will cooperate so that it can conclude its investigation, make its decision, and I will cooperate in any way that I consider consistent with my responsibilities to the Office of the Presidency of the United States. There is only one limitation. I will follow the precedent that has been followed by and defended by every President from George Washington to Lyndon B. Johnson of never doing anything that weakens the Office of the President of the United States or impairs the ability of the Presidents of the future to make the great decisions that are so essential to this Nation and the world. Another point I should like to make very briefly: Like every Member of the House and Senate assembled here tonight, I was elected to the office that I hold. And like every Member of the House and Senate, when I was elected to that office, I knew that I was elected for the purpose of doing a job and doing it as well as I possibly can. And I want you to know that I have no intention whatever of ever walking away from the job that the people elected me to do for the people of the United States. Now, needless to say, it would be understatement if I were not to admit that the year 1973 was not a very easy year for me personally or for my family. And as I have already indicated, the year 1974 presents very great and serious problems, as very great and serious opportunities are also presented. But my colleagues, this I believe: With the help of God, who has blessed this land so richly, with the cooperation of the Congress, and with the support of the American people, we can and we will make the year 1974 a year of unprecedented progress toward our goal of building a structure of lasting peace in the world and a new prosperity without war in the United States of America. # State of the Union Address # Gerald R. Ford # January 15, 1975 Mr. Speaker, Mr. Vice President, Members of the 94th Congress, and distinguished guests: Twenty-six years ago, a freshman Congressman, a young fellow with lots of idealism who was out to change the world, stood before Sam Rayburn in the well of the House and solemnly swore to the same oath that all of you took yesterday -- an unforgettable experience, and I congratulate you all. Two days later, that same freshman stood at the back of this great Chamber -- over there someplace -- as President Truman, all charged up by his single-handed election victory, reported as the Constitution requires on the state of the Union. When the bipartisan applause stopped, President Truman said, "I am happy to report to this 81st Congress that the state of the Union is good. Our Nation is better able than ever before to meet the needs of the American people, and to give them their fair chance in the pursuit of happiness. [It] is foremost among the nations of the world in the search for peace." Today, that freshman Member from Michigan stands where Mr. Truman stood, and I must say to you that the state of the Union is not good: Millions of Americans are out of work. Recession and inflation are eroding the money of millions more. Prices are too high, and sales are too slow. This year's Federal deficit will be about $30 billion; next year's probably $45 billion. The national debt will rise to over $500 billion. Our plant capacity and productivity are not increasing fast enough. We depend on others for essential energy. Some people question their Government's ability to make hard decisions and stick with them; they expect Washington politics as usual. Yet, what President Truman said on January 5, 1949, is even more true in 1975. We are better able to meet our people's needs. All Americans do have a fairer chance to pursue happiness. Not only are we still the foremost nation in the pursuit of peace but today's prospects of attaining it are infinitely brighter. There were 59 million Americans employed at the start of 1949; now there are more than 85 million Americans who have jobs. In comparable dollars, the average income of the American family has doubled during the past 26 years. Now, I want to speak very bluntly. I've got bad news, and I don't expect much, if any, applause. The American people want action, and it will take both the Congress and the President to give them what they want. Progress and solutions can be achieved, and they will be achieved. My message today is not intended to address all of the complex needs of America. I will send separate messages making specific recommendations for domestic legislation, such as the extension of general revenue sharing and the Voting Rights Act. The moment has come to move in a new direction. We can do this by fashioning a new partnership between the Congress on the one hand, the White House on the other, and the people we both represent. Let us mobilize the most powerful and most creative industrial nation that ever existed on this Earth to put all our people to work. The emphasis on our economic efforts must now shift from inflation to jobs. To bolster business and industry and to create new jobs, I propose a 1-year tax reduction of $16 billion. Three-quarters would go to individuals and one-quarter to promote business investment. This cash rebate to individuals amounts to 12 percent of 1974 tax payments -- a total cut of $12 billion, with a maximum of $1,000 per return. I call on the Congress to act by April 1. If you do -- and I hope you will -- the Treasury can send the first check for half of the rebate in May and the second by September. The other one-fourth of the cut, about $4 billion, will go to business, including farms, to promote expansion and to create more jobs. The 1-year reduction for businesses would be in the form of a liberalized investment tax credit increasing the rate to 12 percent for all businesses. This tax cut does not include the more fundamental reforms needed in our tax system. But it points us in the right direction -- allowing taxpayers rather than the Government to spend their pay. Cutting taxes now is essential if we are to turn the economy around. A tax cut offers the best hope of creating more jobs. Unfortunately, it will increase the size of the budget deficit. Therefore, it is more important than ever that we take steps to control the growth of Federal expenditures. Part of our trouble is that we have been self-indulgent. For decades, we have been voting ever-increasing levels of Government benefits, and now the bill has come due. We have been adding so many new programs that the size and the growth of the Federal budget has taken on a life of its own. One characteristic of these programs is that their cost increases automatically every year because the number of people eligible for most of the benefits increases every year. When these programs are enacted, there is no dollar amount set. No one knows what they will cost. All we know is that whatever they cost last year, they will cost more next year. It is a question of simple arithmetic. Unless we check the excessive growth of Federal expenditures or impose on ourselves matching increases in taxes, we will continue to run huge inflationary deficits in the Federal budget. If we project the current built-in momentum of Federal spending through the next 15 years, State, Federal, and local government expenditures could easily comprise half of our gross national product. This compares with less than a third in 1975. I have just concluded the process of preparing the budget submissions for fiscal year 1976. In that budget, I will propose legislation to restrain the growth of a number of existing programs. I have also concluded that no new spending programs can be initiated this year, except for energy. Further, I will not hesitate to veto any new spending programs adopted by the Congress. As an additional step toward putting the Federal Government's house in order, I recommend a 5-percent limit on Federal pay increases in 1975. In all Government programs tied to the Consumer Price Index -- including social security, civil service and military retirement pay, and food stamps -- I also propose a 1-year maximum increase of 5 percent. None of these recommended ceiling limitations, over which Congress has final authority, are easy to propose, because in most cases they involve anticipated payments to many, many deserving people. Nonetheless, it must be done. I must emphasize that I am not asking to eliminate, to reduce, to freeze these payments. I am merely recommending that we slow down the rate at which these payments increase and these programs grow. Only a reduction in the growth of spending can keep Federal borrowing down and reduce the damage to the private sector from high interest rates. Only a reduction in spending can make it possible for the Federal Reserve System to avoid an inflationary growth in the money supply and thus restore balance to our economy. A major reduction in the growth of Federal spending can help dispel the uncertainty that so many feel about our economy and put us on the way to curing our economic ills. If we don't act to slow down the rate of increase in Federal spending, the United States Treasury will be legally obligated to spend more than $360 billion in fiscal year 1976, even if no new programs are enacted. These are not matters of conjecture or prediction, but again, a matter of simple arithmetic. The size of these numbers and their implications for our everyday life and the health of our economic system are shocking. I submitted to the last Congress a list of budget deferrals and rescissions. There will be more cuts recommended in the budget that I will submit. Even so, the level of outlays for fiscal year 1976 is still much, much too high. Not only is it too high for this year but the decisions we make now will inevitably have a major and growing impact on expenditure levels in future years. I think this is a very fundamental issue that we, the Congress and I, must jointly solve. Economic disruptions we and others are experiencing stem in part from the fact that the world price of petroleum has quadrupled in the last year. But in all honesty, we cannot put all of the blame on the oil-exporting nations. We, the United States, are not blameless. Our growing dependence upon foreign sources has been adding to our vulnerability for years and years, and we did nothing to prepare ourselves for such an event as the embargo of 1973. During the 1960's, this country had a surplus capacity of crude oil which we were able to make available to our trading partners whenever there was a disruption of supply. This surplus capacity enabled us to influence both supplies and prices of crude oil throughout the world. Our excess capacity neutralized any effort at establishing an effective cartel, and thus the rest of the world was assured of adequate supplies of oil at reasonable prices. By 1970, our surplus capacity had vanished, and as a consequence, the latent power of the oil cartel could emerge in full force. Europe and Japan, both heavily dependent on imported oil, now struggle to keep their economies in balance. Even the United States, our country, which is far more self-sufficient than most other industrial countries, has been .put under serious pressure. I am proposing a program which will begin to restore our country's surplus capacity in total energy. In this way, we will be able to assure ourselves reliable and adequate energy and help foster a new world energy stability for other major consuming nations. But this Nation and, in fact, the world must face the prospect of energy difficulties between now and 1985. This program will impose burdens on all of us with the aim of reducing our consumption of energy and increasing our production. Great attention has been paid to the considerations of fairness, and I can assure you that the burdens will not fall more harshly on those less able to bear them. I am recommending a plan to make us invulnerable to cutoffs of foreign oil. It will require sacrifices, but it -- and this is most important -- it will work. I have set the following national energy goals to assure that our future is as secure and as productive as our past: First, we must reduce oil imports by 1 million barrels per day by the end of this year and by 2 million barrels per day by the end of 1977. Second, we must end vulnerability to economic disruption by foreign suppliers by 1985. Third, we must develop our energy technology and resources so that the United States has the ability to supply a significant share of the energy needs of the free world by the end of this century. To attain these objectives, we need immediate action to cut imports. Unfortunately, in the short term there are only a limited number of actions which can increase domestic supply. I will press for all of them. I urge quick action on the necessary legislation to allow commercial production at the Elk Hills, California, Naval Petroleum Reserve. In order that we make greater use of domestic coal resources, I am submitting amendments to the Energy Supply and Environmental Coordination Act which will greatly increase the number of powerplants that can be promptly converted to coal. Obviously, voluntary conservation continues to be essential, but tougher programs are needed -- and needed now. Therefore, I am using Presidential powers to raise the fee on all imported crude oil and petroleum products. The crude oil fee level will be increased $1 per barrel on February 1, by $2 per barrel on March 1, and by $3 per barrel on April 1. I will take actions to reduce undue hardships on any geographical region. The foregoing are interim administrative actions. They will be rescinded when the broader but necessary legislation is enacted. To that end, I am requesting the Congress to act within 90 days on a more comprehensive energy tax program. It includes: excise taxes and import fees totaling $2 per barrel on product imports and on all crude oil; deregulation of new natural gas and enactment of a natural gas excise tax. I plan to take Presidential initiative to decontrol the price of domestic crude oil on April 1. I urge the Congress to enact a windfall profits tax by that date to ensure that oil producers do not profit unduly. The sooner Congress acts, the more effective the oil conservation program will be and the quicker the Federal revenues can be returned to our people. I am prepared to use Presidential authority to limit imports, as necessary, to guarantee success. I want you to know that before deciding on my energy conservation program, I considered rationing and higher gasoline taxes as alternatives. In my judgment, neither would achieve the desired results and both would produce unacceptable inequities. A massive program must be initiated to increase energy supply, to cut demand, and provide new standby emergency programs to achieve the independence we want by 1985. The largest part of increased oil production must come from new frontier areas on the Outer Continental Shelf and from the Naval Petroleum Reserve No. 4 in Alaska. It is the intent of this Administration to move ahead with exploration, leasing, and production on those frontier areas of the Outer Continental Shelf where the environmental risks are acceptable. Use of our most abundant domestic resource -- coal -- is severely limited. We must strike a reasonable compromise on environmental concerns with coal. I am submitting Clean Air amendments which will allow greater coal use without sacrificing clean air goals. I vetoed the strip mining legislation passed by the last Congress. With appropriate changes, I will sign a revised version when it comes to the White House. I am proposing a number of actions to energize our nuclear power program. I will submit legislation to expedite nuclear leasing and the rapid selection of sites. In recent months, utilities have cancelled or postponed over 60 percent of planned nuclear expansion and 30 percent of planned additions to non-nuclear capacity. Financing problems for that industry are worsening. I am therefore recommending that the 1-year investment tax credit of 12 percent be extended an additional 2 years to specifically speed the construction of powerplants that do not use natural gas or oil. I am also submitting proposals for selective reform of State utility commission regulations. To provide the critical stability for our domestic energy production in the face of world price uncertainty, I will request legislation to authorize and require tariffs, import quotas, or price floors to protect our energy prices at levels which will achieve energy independence. Increasing energy supplies is not enough. We must take additional steps to cut long-term consumption. I therefore propose to the Congress: legislation to make thermal efficiency standards mandatory for all new buildings in the United States; a new tax credit of up to $150 for those homeowners who install insulation equipment; the establishment of an energy conservation program to help low-income families purchase insulation supplies; legislation to modify and defer automotive pollution standards for 5 years, which will enable us to improve automobile gas mileage by 40 percent by 1980. These proposals and actions, cumulatively, can reduce our dependence on foreign energy supplies from 3 to 5 million barrels per day by 1985. To make the United States invulnerable to foreign disruption, I propose standby emergency legislation and a strategic storage program of 1 billion barrels of oil for domestic needs and 300 million barrels for national defense purposes. I will ask for the funds needed for energy research and development activities. I have established a goal of 1 million barrels of synthetic fuels and shale oil production per day by 1985 together with an incentive program to achieve it. I have a very deep belief in America's capabilities. Within the next 10 years, my program envisions: 200 major nuclear powerplants; 250 major new coal mines; 150 major coal-fired powerplants; 30 major new refineries; 20 major new synthetic fuel plants; the drilling of many thousands of new oil wells; the insulation of 18 million homes; and the manufacturing and the sale of millions of new automobiles, trucks, and buses that use much less fuel. I happen to believe that we can do it. In another crisis -- the one in 1942 President Franklin D. Roosevelt said this country would build 60,000 military aircraft. By 1943, production in that program had reached 125,000 aircraft annually. They did it then. We can do it now. If the Congress and the American people will work with me to attain these targets, they will be achieved and will be surpassed. From adversity, let us seize opportunity. Revenues of some $30 billion from higher energy taxes designed to encourage conservation must be refunded to the American people in a manner which corrects distortions in our tax system wrought by inflation. People have been pushed into higher tax brackets by inflation, with consequent reduction in their actual spending power. Business taxes are similarly distorted because inflation exaggerates reported profits, resulting in excessive taxes. Accordingly, I propose that future individual income taxes be reduced by $16.5 billion. This will be done by raising the low-income allowance and reducing tax rates. This continuing tax cut will primarily benefit lower?and middle-income taxpayers. For example, a typical family of four with a gross income of $5,600 now pays $185 in Federal income taxes. Under this tax cut plan, they would pay nothing. A family of four with a gross income of $12,500 now pays $1,260 in Federal taxes. My proposal reduces that total by $300. Families grossing $20,000 would receive a reduction of $210. Those with the very lowest incomes, who can least afford higher costs, must also be compensated. I propose a payment of $80 to every person 18 years of age and older in that very limited category. State and local governments will receive $2 billion in additional revenue sharing to offset their increased energy costs. To offset inflationary distortions and to generate more economic activity, the corporate tax rate will be reduced from 48 percent to 42 percent. Now let me turn, if I might, to the international dimension of the present crisis. At no time in our peacetime history has the state of the Nation depended more heavily on the state of the world. And seldom, if ever, has the state of the world depended more heavily on the state of our Nation. The economic distress is global. We will not solve it at home unless we help to remedy the profound economic dislocation abroad. World trade and monetary structure provides markets, energy, food, and vital raw materials -- for all nations. This international system is now in jeopardy. This Nation can be proud of significant achievements in recent years in solving problems and crises. The Berlin agreement, the SALT agreements, our new relationship with China, the unprecedented efforts in the Middle East are immensely encouraging. But the world is not free from crisis. In a world of 150 nations, where nuclear technology is proliferating and regional conflicts continue, international security cannot be taken for granted. So, let there be no mistake about it: International cooperation is a vital factor of our lives today. This is not a moment for the American people to turn inward. More than ever before, our own well-being depends on America's determination and America's leadership in the whole wide world. We are a great Nation -- spiritually, politically, militarily, diplomatically, and economically. America's commitment to international security has sustained the safety of allies and friends in many areas -- in the Middle East, in Europe, and in Asia. Our turning away would unleash new instabilities, new dangers around the globe, which, in turn, would threaten our own security. At the end of World War II, we turned a similar challenge into an historic opportunity and, I might add, an historic achievement. An old order was in disarray; political and economic institutions were shattered. In that period, this Nation and its partners built new institutions, new mechanisms of mutual support and cooperation. Today, as then, we face an historic opportunity. If we act imaginatively and boldly, as we acted then, this period will in retrospect be seen as one of the great creative moments of our Nation's history. The whole world is watching to see how we respond. A resurgent American economy would do more to restore the confidence of the world in its own future than anything else we can do. The program that this Congress passes can demonstrate to the world that we have started to put our own house in order. If we can show that this Nation is able and willing to help other nations meet the common challenge, it can demonstrate that the United States will fulfill its responsibilities as a leader among nations. Quite frankly, at stake is the future of industrialized democracies, which have perceived their destiny in common and sustained it in common for 30 years. The developing nations are also at a turning point. The poorest nations see their hopes of feeding their hungry and developing their societies shattered by the economic crisis. The long-term economic future for the producers of raw materials also depends on cooperative solutions. Our relations with the Communist countries are a basic factor of the world environment. We must seek to build a long-term basis for coexistence. We will stand by our principles. We will stand by our interests. We will act firmly when challenged. The kind of a world we want depends on a broad policy of creating mutual incentives for restraint and for cooperation. As we move forward to meet our global challenges and opportunities, we must have the tools to do the job. Our military forces are strong and ready. This military strength deters aggression against our allies, stabilizes our relations with former adversaries, and protects our homeland. Fully adequate conventional and strategic forces cost many, many billions, but these dollars are sound insurance for our safety and for a more peaceful world. Military strength alone is not sufficient. Effective diplomacy is also essential in preventing conflict, in building world understanding. The Vladivostok negotiations with the Soviet Union represent a major step in moderating strategic arms competition. My recent discussions with the leaders of the Atlantic community, Japan, and South Korea have contributed to meeting the common challenge. But we have serious problems before us that require cooperation between the President and the Congress. By the Constitution and tradition, the execution of foreign policy is the responsibility of the President. In recent years, under the stress of the Vietnam war, legislative restrictions on the President's ability to execute foreign policy and military decisions have proliferated. As a Member of the Congress, I opposed some and I approved others. As President, I welcome the advice and cooperation of the House and the Senate. But if our foreign policy is to be successful, we cannot rigidly restrict in legislation the ability of the President to act. The conduct of negotiations is ill-suited to such limitations. Legislative restrictions, intended for the best motives and purposes, can have the opposite result, as we have seen most recently in our trade relations with the Soviet Union. For my part, I pledge this Administration will act in the closest consultation with the Congress as we face delicate situations and troubled times throughout the globe. When I became President only 5 months ago, I promised the last Congress a policy of communication, conciliation, compromise, and cooperation. I renew that pledge to the new Members of this Congress. Let me sum it up. America needs a new direction, which I have sought to chart here today -- a change of course which will: put the unemployed back to work; increase real income and production; restrain the growth of Federal Government spending; achieve energy independence; and advance the cause of world understanding. We have the ability. We have the know-how. In partnership with the American people, we will achieve these objectives. As our 200th anniversary approaches, we owe it to ourselves and to posterity to rebuild our political and economic strength. Let us make America once again and for centuries more to come what it has so long been -- a stronghold and a beacon-light of liberty for the whole world. Thank you. # State of the Union Address # Gerald R. Ford # January 19, 1976 Mr. Speaker, Mr. Vice President, Members of the 94th Congress, and distinguished guests: As we begin our Bicentennial, America is still one of the youngest nations in recorded history. Long before our forefathers came to these shores, men and women had been struggling on this planet to forge a better life for themselves and their families. In man's long, upward march from savagery and slavery -- throughout the nearly 2,000 years of the Christian calendar, the nearly 6,000 years of Jewish reckoning -- there have been many deep, terrifying valleys, but also many bright and towering peaks. One peak stands highest in the ranges of human history. One example shines forth of a people uniting to produce abundance and to share the good life fairly and with freedom. One union holds out the promise of justice and opportunity for every citizen: That union is the United States of America. We have not remade paradise on Earth. We know perfection will not be found here. But think for a minute how far we have come in 200 years. We came from many roots, and we have many branches. Yet all Americans across the eight generations that separate us from the stirring deeds of 1776, those who know no other homeland and those who just found refuge among our shores, say in unison: I am proud of America, and I am proud to be an American. Life will be a little better here for my children than for me. I believe this not because I am told to believe it, but because life has been better for me than it was for my father and my mother. I know it will be better for my children because my hands, my brains, my voice, and my vote can help make it happen. It has happened here in America. It has happened to you and to me. Government exists to create and preserve conditions in which people can translate their ideas into practical reality. In the best of times, much is lost in translation. But we try. Sometimes we have tried and failed. Always we have had the best of intentions. But in the recent past, we sometimes forgot the sound principles that guided us through most of our history. We wanted to accomplish great things and solve age-old problems. And we became overconfident of our abilities. We tried to be a policeman abroad and the indulgent parent here at home. We thought we could transform the country through massive national programs, but often the programs did not work. Too often they only made things worse. In our rush to accomplish great deeds quickly, we trampled on sound principles of restraint and endangered the rights of individuals. We unbalanced our economic system by the huge and unprecedented growth of Federal expenditures and borrowing. And we were not totally honest with ourselves about how much these programs would cost and how we would pay for them. Finally, we shifted our emphasis from defense to domestic problems while our adversaries continued a massive buildup of arms. The time has now come for a fundamentally different approach for a new realism that is true to the great principles upon which this Nation was founded. We must introduce a new balance to our economy -- a balance that favors not only sound, active government but also a much more vigorous, healthy economy that can create new jobs and hold down prices. We must introduce a new balance in the relationship between the individual and the government -- a balance that favors greater individual freedom and self-reliance. We must strike a new balance in our system of federalism -- a balance that favors greater responsibility and freedom for the leaders of our State and local governments. We must introduce a new balance between the spending on domestic programs and spending on defense -- a balance that ensures we will fully meet our obligation to the needy while also protecting our security in a world that is still hostile to freedom. And in all that we do, we must be more honest with the American people, promising them no more than we can deliver and delivering all that we promise. The genius of America has been its incredible ability to improve the lives of its citizens through a unique combination of governmental and free citizen activity. History and experience tells us that moral progress cannot come in comfortable and in complacent times, but out of trial and out of confusion. Tom Paine aroused the troubled Americans of 1776 to stand up to the times that try men's souls because the harder the conflict, the more glorious the triumph. Just a year ago I reported that the state of the Union was not good. Tonight, I report that the state of our Union is better -- in many ways a lot better -- but still not good enough. To paraphrase Tom Paine, 1975 was not a year for summer soldiers and sunshine patriots. It was a year of fears and alarms and of dire forecasts -- most of which never happened and won't happen. As you recall, the year 1975 opened with rancor and with bitterness. Political misdeeds of the past had neither been forgotten nor forgiven. The longest, most divisive war in our history was winding toward an unhappy conclusion. Many feared that the end of that foreign war of men and machines meant the beginning of a domestic war of recrimination and reprisal. Friends and adversaries abroad were asking whether America had lost its nerve. Finally, our economy was ravaged by inflation -- inflation that was plunging us into the worst recession in four decades. At the same time, Americans became increasingly alienated from big institutions. They were steadily losing confidence, not just in big government but in big business, big labor, and big education, among others. Ours was a troubled land. And so, 1975 was a year of hard decisions, difficult compromises, and a new realism that taught us something important about America. It brought back a needed measure of common sense, steadfastness, and self-discipline. Americans did not panic or demand instant but useless cures. In all sectors, people met their difficult problems with the restraint and with responsibility worthy of their great heritage. Add up the separate pieces of progress in 1975, subtract the setbacks, and the sum total shows that we are not only headed in a new direction, a direction which I proposed 12 months ago, but it turned out to be the right direction. It is the right direction because it follows the truly revolutionary American concept of 1776, which holds that in a free society the making of public policy and successful problem-solving involves much more than government. It involves a full partnership among all branches and all levels of government, private institutions, and individual citizens. Common sense tells me to stick to that steady course. Take the state of our economy. Last January, most things were rapidly getting worse. This January, most things are slowly but surely getting better. The worst recession since World War II turned around in April. The best cost-of-living news of the past year is that double-digit inflation of 12 percent or higher was cut almost in half. The worst -- unemployment remains far too high. Today, nearly 1,700,000 more Americans are working than at the bottom of the recession. At year's end, people were again being hired much faster than they were being laid off. Yet, let's be honest. Many Americans have not yet felt these changes in their daily lives. They still see prices going up far too fast, and they still know the fear of unemployment. We are also a growing nation. We need more and more jobs every year. Today's economy has produced over 85 million jobs for Americans, but we need a lot more jobs, especially for the young. My first objective is to have sound economic growth without inflation. We all know from recent experience what runaway inflation does to ruin every other worthy purpose. We are slowing it. We must stop it cold. For many Americans, the way to a healthy, noninflationary economy has become increasingly apparent. The Government must stop spending so much and stop borrowing so much of our money. More money must remain in private hands where it will do the most good. To hold down the cost of living, we must hold down the cost of government. In the past decade, the Federal budget has been growing at an average rate of over 10 percent a year. The budget I am submitting Wednesday cuts this rate of growth in half. I have kept my promise to submit a budget for the next fiscal year of $395 billion. In fact, it is $394.2 billion. By holding down the growth of Federal spending, we can afford additional tax cuts and return to the people who pay taxes more decisionmaking power over their own lives. Last month I signed legislation to extend the 1975 tax reductions for the first 6 months of this year. I now propose that effective July 1, 1976, we give our taxpayers a tax cut of approximately $10 billion more than Congress agreed to in December. My broader tax reduction would mean that for a family of four making $15,000 a year, there will be $227 more in take-home pay annually. Hardworking Americans caught in the middle can really use that kind of extra cash. My recommendations for a firm restraint on the growth of Federal spending and for greater tax reduction are simple and straightforward. For every dollar saved in cutting the growth in the Federal budget, we can have an added dollar of Federal tax reduction. We can achieve a balanced budget by 1979 if we have the courage and the wisdom to continue to reduce the growth of Federal spending. One test of a healthy economy is a job for every American who wants to work. Government -- our kind of government -- cannot create that many jobs. But the Federal Government can create conditions and incentives for private business and industry to make more and more jobs. Five out of six jobs in this country are in private business and in industry. Common sense tells us this is the place to look for more jobs and to find them faster. I mean real, rewarding, permanent jobs. To achieve this we must offer the American people greater incentives to invest in the future. My tax proposals are a major step in that direction. To supplement these proposals, I ask that Congress enact changes in Federal tax laws that will speed up plant expansion and the purchase of new equipment. My recommendations will concentrate this job-creation tax incentive in areas where the unemployment rate now runs over 7 percent. Legislation to get this started must be approved at the earliest possible date. Within the strict budget total that I will recommend for the coming year, I will ask for additional housing assistance for 500,000 families. These programs will expand housing opportunities, spur construction, and help to house moderate?and low-income families. We had a disappointing year in the housing industry in 1975. But with lower interest rates and available mortgage money, we can have a healthy recovery in 1976. A necessary condition of a healthy economy is freedom from the petty tyranny of massive government regulation. We are wasting literally millions of working hours costing billions of taxpayers' and consumers' dollars because of bureaucratic redtape. The American farmer, who now feeds 215 million Americans, but also millions worldwide, has shown how much more he can produce without the shackles of government control. Now, we badly need reforms in other key areas in our economy: the airlines, trucking, railroads, and financial institutions. I have submitted concrete plans in each of these areas, not to help this or that industry, but to foster competition and to bring prices down for the consumer. This administration, in addition, will strictly enforce the Federal antitrust laws for the very same purposes. Taking a longer look at America's future, there can be neither sustained growth nor more jobs unless we continue to have an assured supply of energy to run our economy. Domestic production of oil and gas is still declining. Our dependence on foreign oil at high prices is still too great, draining jobs and dollars away from our own economy at the rate of $125 per year for every American. Last month, I signed a compromise national energy bill which enacts a part of my comprehensive energy independence program. This legislation was late, not the complete answer to energy independence, but still a start in the right direction. I again urge the Congress to move ahead immediately on the remainder of my energy proposals to make America invulnerable to the foreign oil cartel. My proposals, as all of you know, would reduce domestic natural gas shortages; allow production from Federal petroleum reserves; stimulate effective conservation, including revitalization of our railroads and the expansion of our urban transportation systems; develop more and cleaner energy from our vast coal resources; expedite clean and safe nuclear power production; create a new national energy independence authority to stimulate vital energy investment; and accelerate development of technology to capture energy from the Sun and the Earth for this and future generations. Also, I ask, for the sake of future generations, that we preserve the family farm and family-owned small business. Both strengthen America and give stability to our economy. I will propose estate tax changes so that family businesses and family farms can be handed down from generation to generation without having to be sold to pay taxes. I propose tax changes to encourage people to invest in America's future, and their own, through a plan that gives moderate-income families income tax benefits if they make long-term investments in common stock in American companies. The Federal Government must and will respond to clear-cut national needs -- for this and future generations. Hospital and medical services in America are among the best in the world, but the cost of a serious and extended illness can quickly wipe out a family's lifetime savings. Increasing health costs are of deep concern to all and a powerful force pushing up the cost of living. The burden of catastrophic illness can be borne by very few in our society. We must eliminate this fear from every family. I propose catastrophic health insurance for everybody covered by Medicare. To finance this added protection, fees for short-term care will go up somewhat, but nobody after reaching age 65 will have to pay more than $500 a year for covered hospital or nursing home care, nor more than $250 for 1 year's doctor bills. We cannot realistically afford federally dictated national health insurance providing full coverage for all 215 million Americans. The experience of other countries raises questions about the quality as well as the cost of such plans. But I do envision the day when we may use the private health insurance system to offer more middle-income families high quality health services at prices they can afford and shield them also from their catastrophic illnesses. Using resources now available, I propose improving the Medicare and other Federal health programs to help those who really need protection -- older people and the poor. To help States and local governments give better health care to the poor, I propose that we combine 16 existing Federal programs, including Medicaid, into a single $10 billion Federal grant. Funds would be divided among States under a new formula which provides a larger share of Federal money to those States that have a larger share of low-income families. I will take further steps to improve the quality of medical and hospital care for those who have served in our Armed Forces. Now let me speak about social security. Our Federal social security system for people who have worked and contributed to it for all their lives is a vital part of our economic system. Its value is no longer debatable. In my budget for fiscal year 1977, I am recommending that the full cost-of-living increases in the social security benefits be paid during the coming year. But I am concerned about the integrity of our Social Security Trust Fund that enables people -- those retired and those still working who will retire -- to count on this source of retirement income. Younger workers watch their deductions rise and wonder if they will be adequately protected in the future. We must meet this challenge head on. Simple arithmetic warns all of us that the Social Security Trust Fund is headed for trouble. Unless we act soon to make sure the fund takes in as much as it pays out, there will be no security for old or for young. I must, therefore, recommend a three-tenths of 1 percent increase in both employer and employee social security taxes effective January 1, 1977. This will cost each covered employee less than 1 extra dollar a week and will ensure the integrity of the trust fund. As we rebuild our economy, we have a continuing responsibility to provide a temporary cushion to the unemployed. At my request, the Congress enacted two extensions and two expansions in unemployment insurance which helped those who were jobless during 1975. These programs will continue in 1976. In my fiscal year 1977 budget, I am also requesting funds to continue proven job training and employment opportunity programs for millions of other Americans. Compassion and a sense of community -- two of America's greatest strengths throughout our history -- tell us we must take care of our neighbors who cannot take care of themselves. The host of Federal programs in this field reflect our generosity as a people. But everyone realizes that when it comes to welfare, government at all levels is not doing the job well. Too many of our welfare programs are inequitable and invite abuse. Too many of our welfare programs have problems from beginning to end. Worse, we are wasting badly needed resources without reaching many of the truly needy. Complex welfare programs cannot be reformed overnight. Surely we cannot simply dump welfare into the laps of the 50 States, their local taxpayers, or their private charities, and just walk away from it. Nor is it the right time for massive and sweeping changes while we are still recovering from the recession. Nevertheless, there are still plenty of improvements that we can make. I will ask Congress for Presidential authority to tighten up the rules for eligibility and benefits. Last year I twice sought long overdue reform of the scandal-riddled food stamp program. This year I say again: Let's give food stamps to those most in need. Let's not give any to those who don't need them. Protecting the life and property of the citizen at home is the responsibility of all public officials, but is primarily the job of local and State law enforcement authorities. Americans have always found the very thought of a Federal police force repugnant, and so do I. But there are proper ways in which we can help to insure domestic tranquility as the Constitution charges us. My recommendations on how to control violent crime were submitted to the Congress last June with strong emphasis on protecting the innocent victims of crime. To keep a convicted criminal from committing more crimes, we must put him in prison so he cannot harm more law-abiding citizens. To be effective, this punishment must be swift and it must be certain. Too often, criminals are not sent to prison after conviction but are allowed to return to the streets. Some judges are reluctant to send convicted criminals to prison because of inadequate facilities. To alleviate this problem at the Federal level, my new budget proposes the construction of four new Federal facilities. To speed Federal justice, I propose an increase this year in the United States attorneys prosecuting Federal crimes and the reinforcement of the number of United States marshals. Additional Federal judges are needed, as recommended by me and the Judicial Conference. Another major threat to every American's person and property is the criminal carrying a handgun. The way to cut down on the criminal use of guns is not to take guns away from the law-abiding citizen, but to impose mandatory sentences for crimes in which a gun is used, make it harder to obtain cheap guns for criminal purposes, and concentrate gun control enforcement in highcrime areas. My budget recommends 500 additional Federal agents in the 11 largest metropolitan high-crime areas to help local authorities stop criminals from selling and using handguns. The sale of hard drugs is tragically on the increase again. I have directed all agencies of the Federal Government to step up law enforcement efforts against those who deal in drugs. In 1975, I am glad to report, Federal agents seized substantially more heroin coming into our country than in 1974. As President, I have talked personally with the leaders of Mexico, Colombia, and Turkey to urge greater efforts by their Governments to control effectively the production and shipment of hard drugs. I recommended months ago that the Congress enact mandatory fixed sentences for persons convicted of Federal crimes involving the sale of hard drugs. Hard drugs, we all know, degrade the spirit as they destroy the body of their users. It is unrealistic and misleading to hold out the hope that the Federal Government can move into every neighborhood and clean up crime. Under the Constitution, the greatest responsibility for curbing crime lies with State and local authorities. They are the frontline fighters in the war against crime. There are definite ways in which the Federal Government can help them. I will propose in the new budget that Congress authorize almost $7 billion over the next 5 years to assist State and local governments to protect the safety and property of all their citizens. As President, I pledge the strict enforcement of Federal laws and -- by example, support, and leadership -- to help State and local authorities enforce their laws. Together, we must protect the victims of crime and ensure domestic tranquility. Last year I strongly recommended a 5-year extension of the existing revenue sharing legislation, which thus far has provided $23 1/2 billion to help State and local units of government solve problems at home. This program has been effective with decisionmaking transferred from the Federal Government to locally elected officials. Congress must act this year, or State and local units of government will have to drop programs or raise local taxes. Including my health care program reforms, I propose to consolidate some 59 separate Federal programs and provide flexible Federal dollar grants to help States, cities, and local agencies in such important areas as education, child nutrition, and social services. This flexible system will do the job better and do it closer to home. The protection of the lives and property of Americans from foreign enemies is one of my primary responsibilities as President. In a world of instant communications and intercontinental ballistic missiles, in a world economy that is global and interdependent, our relations with other nations become more, not less, important to the lives of Americans. America has had a unique role in the world since the day of our independence 200 years ago. And ever since the end of World War II, we have borne -- successfully -- a heavy responsibility for ensuring a stable world order and hope for human progress. Today, the state of our foreign policy is sound and strong. We are at peace, and I will do all in my power to keep it that way. Our military forces are capable and ready. Our military power is without equal, and I intend to keep it that way. Our principal alliances with the industrial democracies of the Atlantic community and Japan have never been more solid. A further agreement to limit the strategic arms race may be achieved. We have an improving relationship with China, the world's most populous nation. The key elements for peace among the nations of the Middle East now exist. Our traditional friendships in Latin America, Africa, and Asia continue. We have taken the role of leadership in launching a serious and hopeful dialog between the industrial world and the developing world. We have helped to achieve significant reform of the international monetary system. We should be proud of what America, what our country, has accomplished in these areas, and I believe the American people are. The American people have heard too much about how terrible our mistakes, how evil our deeds, and how misguided our purposes. The American people know better. The truth is we are the world's greatest democracy. We remain the symbol of man's aspiration for liberty and well-being. We are the embodiment of hope for progress. I say it is time we quit downgrading ourselves as a nation. Of course, it is our responsibility to learn the right lesson from past mistakes. It is our duty to see that they never happen again. But our greater duty is to look to the future. The world's troubles will not go away. The American people want strong and effective international and defense policies. In our constitutional system, these policies should reflect consultation and accommodation between the President and the Congress. But in the final analysis, as the framers of our Constitution knew from hard experience, the foreign relations of the United States can be conducted effectively only if there is strong central direction that allows flexibility of action. That responsibility clearly rests with the President. I pledge to the American people policies which seek a secure, just, and peaceful world. I pledge to the Congress to work with you to that end. We must not face a future in which we can no longer help our friends, such as Angola, even in limited and carefully controlled ways. We must not lose all capacity to respond short of military intervention. Some hasty actions of the Congress during the past year -- most recently in respect to Angola -- were, in my view, very shortsighted. Unfortunately, they are still very much on the minds of our allies and our adversaries. A strong defense posture gives weight to our values and our views in international negotiations. It assures the vigor of our alliances. And it sustains our efforts to promote settlements of international conflicts. Only from a position of strength can we negotiate a balanced agreement to limit the growth of nuclear arms. Only a balanced agreement will serve our interests and minimize the threat of nuclear confrontation. The defense budget I will submit to the Congress for fiscal year 1977 will show an essential increase over the current year. It provides for real growth in purchasing power over this year's defense budget, which includes the cost of the all-volunteer force. We are continuing to make economies to enhance the efficiency of our military forces. But the budget I will submit represents the necessity of American strength for the real world in which we live. As conflict and rivalry persist in the world, our United States intelligence capabilities must be the best in the world. The crippling of our foreign intelligence services increases the danger of American involvement in direct armed conflict. Our adversaries are encouraged to attempt new adventures while our own ability to monitor events and to influence events short of military action is undermined. Without effective intelligence capability, the United States stands blindfolded and hobbled. In the near future, I will take actions to reform and strengthen our intelligence community. I ask for your positive cooperation. It is time to go beyond sensationalism and ensure an effective, responsible, and responsive intelligence capability. Tonight I have spoken about our problems at home and abroad. I have recommended policies that will meet the challenge of our third century. I have no doubt that our Union will endure, better, stronger, and with more individual freedom. We can see forward only dimly -- 1 year, 5 years, a generation perhaps. Like our forefathers, we know that if we meet the challenges of our own time with a common sense of purpose and conviction, if we remain true to our Constitution and to our ideals, then we can know that the future will be better than the past. I see America today crossing a threshold, not just because it is our Bicentennial but because we have been tested in adversity. We have taken a new look at what we want to be and what we want our Nation to become. I see America resurgent, certain once again that life will be better for our children than it is for us, seeking strength that cannot be counted in megatons and riches that cannot be eroded by inflation. I see these United States of America moving forward as before toward a more perfect Union where the government serves and the people rule. We will not make this happen simply by making speeches, good or bad, yours or mine, but by hard work and hard decisions made with courage and with common sense. I have heard many inspiring Presidential speeches, but the words I remember best were spoken by Dwight D. Eisenhower. "America is not good because it is great," the President said. "America is great because it is good." President Eisenhower was raised in a poor but religious home in the heart of America. His simple words echoed President Lincoln's eloquent testament that "right makes might." And Lincoln in turn evoked the silent image of George Washington kneeling in prayer at Valley Forge. So, all these magic memories which link eight generations of Americans are summed up in the inscription just above me. How many times have we seen it?"In God We Trust." Let us engrave it now in each of our hearts as we begin our Bicentennial. # State of the Union Address # Gerald R. Ford # January 12, 1977 Mr. Speaker, Mr. Vice President, Members of the 95th Congress, and distinguished guests: In accordance with the Constitution, I come before you once again to report on the state of the Union. This report will be my last -- maybe -- [laughter] -- but for the Union it is only the first of such reports in our third century of independence, the close of which none of us will ever see. We can be confident, however, that 100 years from now a freely elected President will come before a freely elected Congress chosen to renew our great Republic's pledge to the Government of the people, by the people, and for the people. For my part I pray the third century we are beginning will bring to all Americans, our children and their children's children, a greater measure of individual equality, opportunity, and justice, a greater abundance of spiritual and material blessings, and a higher quality of life, liberty, and the pursuit of happiness. The state of the Union is a measurement of the many elements of which it is composed -- a political union of diverse States, an economic union of varying interests, an intellectual union of common convictions, and a moral union of immutable ideals. Taken in sum, I can report that the state of the Union is good. There is room for improvement, as always, but today we have a more perfect Union than when my stewardship began. As a people we discovered that our Bicentennial was much more than a celebration of the past; it became a joyous reaffirmation of all that it means to be Americans, a confirmation before all the world of the vitality and durability of our free institutions. I am proud to have been privileged to preside over the affairs of our Federal Government during these eventful years when we proved, as I said in my first words upon assuming office, that "our Constitution works; our great Republic is a Government of laws and not of men. Here the people rule." The people have spoken; they have chosen a new President and a new Congress to work their will. I congratulate you -- particularly the new Members -- as sincerely as I did President-elect Carter. In a few days it will be his duty to outline for you his priorities and legislative recommendations. Tonight I will not infringe on that responsibility, but rather wish him the very best in all that is good for our country. During the period of my own service in this Capitol and in the White House, I can recall many orderly transitions of governmental responsibility -- of problems as well as of position, of burdens as well as of power. The genius of the American system is that we do this so naturally and so normally. There are no soldiers marching in the street except in the Inaugural Parade; no public demonstrations except for some of the dancers at the Inaugural Ball; the opposition party doesn't go underground, but goes on functioning vigorously in the Congress and in the country; and our vigilant press goes right on probing and publishing our faults and our follies, confirming the wisdom of the framers of the first amendment. Because of the transfer of authority in our form of government affects the state of the Union and of the world, I am happy to report to you that the current transition is proceeding very well. I was determined that it should; I wanted the new President to get off on an easier start than I had. When I became President on August 9, 1974, our Nation was deeply divided and tormented. In rapid succession the Vice President and the President had resigned in disgrace. We were still struggling with the after-effects of a long, unpopular, and bloody war in Southeast Asia. The economy was unstable and racing toward the worst recession in 40 years. People were losing jobs. The cost of living was soaring. The Congress and the Chief Executive were at loggerheads. The integrity of our constitutional process and other institutions was being questioned. For more than 15 years domestic spending had soared as Federal programs multiplied, and the expense escalated annually. During the same period our national security needs were steadily shortchanged. In the grave situation which prevailed in August 1974, our will to maintain our international leadership was in doubt. I asked for your prayers and went to work. In January 1975 I reported to the Congress that the state of the Union was not good. I proposed urgent action to improve the economy and to achieve energy independence in 10 years. I reassured America's allies and sought to reduce the danger of confrontation with potential adversaries. I pledged a new direction for America. 1975 was a year of difficult decisions, but Americans responded with realism, common sense, and self-discipline. By January 1976 we were headed in a new direction, which I hold to be the right direction for a free society. It was guided by the belief that successful problem-solving requires more than Federal action alone, that it involves a full partnership among all branches and all levels of government and public policies which nurture and promote the creative energies of private enterprises, institutions, and individual citizens. A year ago I reported that the state of the Union was better -- in many ways a lot better -- but still not good enough. Common sense told me to stick to the steady course we were on, to continue to restrain the inflationary growth of government, to reduce taxes as well as spending, to return local decisions to local officials, to provide for long-range sufficiency in energy and national security needs. I resisted the immense pressures of an election year to open the floodgates of Federal money and the temptation to promise more than I could deliver. I told it as it was to the American people and demonstrated to the world that in our spirited political competition, as in this chamber, Americans can disagree without being disagreeable. Now, after 30 months as your President, I can say that while we still have a way to go, I am proud of the long way we have come together. I am proud of the part I have had in rebuilding confidence in the Presidency, confidence in our free system, and confidence in our future. Once again, Americans believe in themselves, in their leaders, and in the promise that tomorrow holds for their children. I am proud that today America is at peace. None of our sons are fighting and dying in battle anywhere in the world. And the chance for peace among all nations is improved by our determination to honor our vital commitments in defense of peace and freedom. I am proud that the United States has strong defenses, strong alliances, and a sound and courageous foreign policy. Our alliances with major partners, the great industrial democracies of Western Europe, Japan, and Canada, have never been more solid. Consultations on mutual security, defense, and East-West relations have grown closer. Collaboration has branched out into new fields such as energy, economic policy, and relations with the Third World. We have used many avenues for cooperation, including summit meetings held among major allied countries. The friendship of the democracies is deeper, warmer, and more effective than at any time in 30 years. We are maintaining stability in the strategic nuclear balance and pushing back the specter of nuclear war. A decisive step forward was taken in the Vladivostok Accord which I negotiated with General Secretary Brezhnev -- joint recognition that an equal ceiling should be placed on the number of strategic weapons on each side. With resolve and wisdom on the part of both nations, a good agreement is well within reach this year. The framework for peace in the Middle East has been built. Hopes for future progress in the Middle East were stirred by the historic agreements we reached and the trust and confidence that we formed. Thanks to American leadership, the prospects for peace in the Middle East are brighter than they have been in three decades. The Arab states and Israel continue to look to us to lead them from confrontation and war to a new era of accommodation and peace. We have no alternative but to persevere, and I am sure we will. The opportunities for a final settlement are great, and the price of failure is a return to the bloodshed and hatred that for too long have brought tragedy to all of the peoples of this area and repeatedly edged the world to the brink of war. Our relationship with the People's Republic of China is proving its importance and its durability. We are finding more and more common ground between our two countries on basic questions of international affairs. In my two trips to Asia as President, we have reaffirmed America's continuing vital interest in the peace and security of Asia and the Pacific Basin, established a new partnership with Japan, confirmed our dedication to the security of Korea, and reinforced our ties with the free nations of Southeast Asia. An historic dialog has begun between industrial nations and developing nations. Most proposals on the table are the initiatives of the United States, including those on food, energy, technology, trade, investment, and commodities. We are well launched on this process of shaping positive and reliable economic relations between rich nations and poor nations over the long term. We have made progress in trade negotiations and avoided protectionism during recession. We strengthened the international monetary system. During the past 2 years the free world's most important economic powers have already brought about important changes that serve both developed and developing economies. The momentum already achieved must be nurtured and strengthened, for the prosperity of the rich and poor depends upon it. In Latin America, our relations have taken on a new maturity and a sense of common enterprise. In Africa the quest for peace, racial justice, and economic progress is at a crucial point. The United States, in close cooperation with the United Kingdom, is actively engaged in this historic process. Will change come about by warfare and chaos and foreign intervention?Or will it come about by negotiated and fair solutions, ensuring majority rule, minority rights, and economic advance?America is committed to the side of peace and justice and to the principle that Africa should shape its own future, free of outside intervention. American leadership has helped to stimulate new international efforts to stem the proliferation of nuclear weapons and to shape a comprehensive treaty governing the use of oceans. I am gratified by these accomplishments. They constitute a record of broad success for America and for the peace and prosperity of all mankind. This administration leaves to its successor a world in better condition than we found. We leave, as well, a solid foundation for progress on a range of issues that are vital to the well-being of America. What has been achieved in the field of foreign affairs and what can be accomplished by the new administration demonstrate the genius of Americans working together for the common good. It is this, our remarkable ability to work together, that has made us a unique nation. It is Congress, the President, and the people striving for a better world. I know all patriotic Americans want this Nation's foreign policy to succeed. I urge members of my party in this Congress to give the new President loyal support in this area. I express the hope that this new Congress will reexamine its constitutional role in international affairs. The exclusive right to declare war, the duty to advise and consent on the part of the Senate, the power of the purse on the part of the House are ample authority for the legislative branch and should be jealously guarded. But because we may have been too careless of these powers in the past does not justify congressional intrusion into, or obstruction of, the proper exercise of Presidential responsibilities now or in the future. There can be only one Commander in Chief. In these times crises cannot be managed and wars cannot be waged by committee, nor can peace be pursued solely by parliamentary debate. To the ears of the world, the President speaks for the Nation. While he is, of course, ultimately accountable to the Congress, the courts, and the people, he and his emissaries must not be handicapped in advance in their relations with foreign governments as has sometimes happened in the past. At home I am encouraged by the Nation's recovery from the recession and our steady return to sound economic growth. It is now continuing after the recent period of uncertainty, which is part of the price we pay for free elections. Our most pressing need today and the future is more jobs -- productive, permanent jobs created by a thriving economy. We must revise our tax system both to ease the burden of heavy taxation and to encourage the investment necessary for the creation of productive jobs for all Americans who want to work. Earlier this month I proposed a permanent income tax reduction of $10 billion below current levels, including raising the personal exemption from $750 to $1,000. I also recommended a series of measures to stimulate investment, such as accelerated depreciation for new plants and equipment in areas of high unemployment, a reduction in the corporate tax rate from 48 to 46 percent, and eliminating the present double taxation of dividends. I strongly urge the Congress to pass these measures to help create the productive, permanent jobs in the private economy that are so essential for our future. All the basic trends are good; we are not on the brink of another recession or economic disaster. If we follow prudent policies that encourage productive investment and discourage destructive inflation, we will come out on top, and I am sure we will. We have successfully cut inflation by more than half. When I took office, the Consumer Price Index was rising at 12.2 percent a year. During 1976 the rate of inflation was 5 percent. We have created more jobs -- over 4 million more jobs today than in the spring of 1975. Throughout this Nation today we have over 88 million people in useful, productive jobs -- more than at any other time in our Nation's history. But there are still too many Americans unemployed. This is the greatest regret that I have as I leave office. We brought about with the Congress, after much delay, the renewal of the general revenue sharing. We expanded community development and Federal manpower programs. We began a significant urban mass transit program. Federal programs today provide more funds for our States and local governments than ever before -- $70 billion for the current fiscal year. Through these programs and others that provide aid directly to individuals, we have kept faith with our tradition of compassionate help for those who need it. As we begin our third century we can be proud of the progress that we have made in meeting human needs for all of our citizens. We have cut the growth of crime by nearly 90 percent. Two years ago crime was increasing at the rate of 18 percent annually. In the first three quarters of 1976, that growth rate had been cut to 2 percent. But crime, and the fear of crime, remains one of the most serious problems facing our citizens. We have had some successes, and there have been some disappointments. Bluntly, I must remind you that we have not made satisfactory progress toward achieving energy independence. Energy is absolutely vital to the defense of our country, to the strength of our economy, and to the quality of our lives. Two years ago I proposed to the Congress the first comprehensive national energy program -- a specific and coordinated set of measures that would end our vulnerability to embargo, blockade, or arbitrary price increases and would mobilize U.S. technology and resources to supply a significant share of the free world's energy after 1985. Of the major energy proposals I submitted 2 years ago, only half, belatedly, became law. In 1973 we were dependent upon foreign oil imports for 36 percent of our needs. Today, we are 40-percent dependent, and we'll pay out $34 billion for foreign oil this year. Such vulnerability at present or in the future is intolerable and must be ended. The answer to where we stand on our national energy effort today reminds me of the old argument about whether the tank is half full or half empty. The pessimist will say we have half failed to achieve our 10-year energy goals; the optimist will say that we have half succeeded. I am always an optimist, but we must make up for lost time. We have laid a solid foundation for completing the enormous task which confronts us. I have signed into law five major energy bills which contain significant measures for conservation, resource development, stockpiling, and standby authorities. We have moved forward to develop the naval petroleum reserves; to build a 500-million barrel strategic petroleum stockpile; to phase out unnecessary Government allocation and price controls; to develop a lasting relationship with other oil consuming nations; to improve the efficiency of energy use through conservation in automobiles, buildings, and industry; and to expand research on new technology and renewable resources such as wind power, geothermal and solar energy. All these actions, significant as they are for the long term, are only the beginning. I recently submitted to the Congress my proposals to reorganize the Federal energy structure and the hard choices which remain if we are serious about reducing our dependence upon foreign energy. These include programs to reverse our declining production of natural gas and increase incentives for domestic crude oil production. I proposed to minimize environmental uncertainties affecting coal development, expand nuclear power generation, and create an energy independence authority to provide government financial assistance for vital energy programs where private capital is not available. We must explore every reasonable prospect for meeting our energy needs when our current domestic reserves of oil and natural gas begin to dwindle in the next decade. I urgently ask Congress and the new administration to move quickly on these issues. This Nation has the resources and the capability to achieve our energy goals if its Government has the will to proceed, and I think we do. I have been disappointed by inability to complete many of the meaningful organizational reforms which I contemplated for the Federal Government, although a start has been made. For example, the Federal judicial system has long served as a model for other courts. But today it is threatened by a shortage of qualified Federal judges and an explosion of litigation claiming Federal jurisdiction. I commend to the new administration and the Congress the recent report and recommendations of the Department of Justice, undertaken at my request, on "the needs of the Federal Courts." I especially endorse its proposals for a new commission on the judicial appointment process. While the judicial branch of our Government may require reinforcement, the budgets and payrolls of the other branches remain staggering. I cannot help but observe that while the White House staff and the Executive Office of the President have been reduced and the total number of civilians in the executive branch contained during the 1970's, the legislative branch has increased substantially although the membership of the Congress remains at 535. Congress now costs the taxpayers more than a million dollars per Member; the whole legislative budget has passed the billion dollar mark. We have made some progress in cutting back the expansion of government and its intrusion into individual lives, but believe me, there is much more to be done -- and you and I know it. It can only be done by tough and temporarily painful surgery by a Congress as prepared as the President to face up to this very real political problem. Again, I wish my successor, working with a substantial majority of his own party, the best of success in reforming the costly and cumbersome machinery of the Federal Government. The task of self-government is never finished. The problems are great; the opportunities are greater. America's first goal is and always will be peace with honor. America must remain first in keeping peace in the world. We can remain first in peace only if we are never second in defense. In presenting the state of the Union to the Congress and to the American people, I have a special obligation as Commander in Chief to report on our national defense. Our survival as a free and independent people requires, above all, strong military forces that are well equipped and highly trained to perform their assigned mission. I am particularly gratified to report that over the past 2 1/2 years, we have been able to reverse the dangerous decline of the previous decade in real resources this country was devoting to national defense. This was an immediate problem I faced in 1974. The evidence was unmistakable that the Soviet Union had been steadily increasing the resources it applied to building its military strength. During this same period the United States real defense spending declined. In my three budgets we not only arrested that dangerous decline, but we have established the positive trend which is essential to our ability to contribute to peace and stability in the world. The Vietnam war, both materially and psychologically, affected our overall defense posture. The dangerous anti-military sentiment discouraged defense spending and unfairly disparaged the men and women who serve in our Armed Forces. The challenge that now confronts this country is whether we have the national will and determination to continue this essential defense effort over the long term, as it must be continued. We can no longer afford to oscillate from year to year in so vital a matter; indeed, we have a duty to look beyond the immediate question of budgets and to examine the nature of the problem we will face over the next generation. I am the first recent President able to address long-term, basic issues without the burden of Vietnam. The war in Indochina consumed enormous resources at the very time that the overwhelming strategic superiority we once enjoyed was disappearing. In past years, as a result of decisions by the United States, our strategic forces leveled off, yet the Soviet Union continued a steady, constant buildup of its own forces, committing a high percentage of its national economic effort to defense. The United States can never tolerate a shift in strategic balance against us or even a situation where the American people or our allies believe the balance is shifting against us. The United States would risk the most serious political consequences if the world came to believe that our adversaries have a decisive margin of superiority. To maintain a strategic balance we must look ahead to the 1980's and beyond. The sophistication of modern weapons requires that we make decisions now if we are to ensure our security 10 years from now. Therefore, I have consistently advocated and strongly urged that we pursue three critical strategic programs: the Trident missile launching submarine; the B-1 bomber, with its superior capability to penetrate modern air defenses; and a more advanced intercontinental ballistic missile that will be better able to survive nuclear attack and deliver a devastating retaliatory strike. In an era where the strategic nuclear forces are in rough equilibrium, the risks of conflict below the nuclear threshold may grow more perilous. A major, long-term objective, therefore, is to maintain capabilities to deal with, and thereby deter, conventional challenges and crises, particularly in Europe. We cannot rely solely on strategic forces to guarantee our security or to deter all types of aggression. We must have superior naval and marine forces to maintain freedom of the seas, strong multipurpose tactical air forces, and mobile, modern ground forces. Accordingly, I have directed a long-term effort to improve our worldwide capabilities to deal with regional crises. I have submitted a 5-year naval building program indispensable to the Nation's maritime strategy. Because the security of Europe and the integrity of NATO remain the cornerstone of American defense policy, I have initiated a special, long-term program to ensure the capacity of the Alliance to deter or defeat aggression in Europe. As I leave office I can report that our national defense is effectively deterring conflict today. Our Armed Forces are capable of carrying out the variety of missions assigned to them. Programs are underway which will assure we can deter war in the years ahead. But I also must warn that it will require a sustained effort over a period of years to maintain these capabilities. We must have the wisdom, the stamina, and the courage to prepare today for the perils of tomorrow, and I believe we will. As I look to the future -- and I assure you I intend to go on doing that for a good many years -- I can say with confidence that the state of the Union is good, but we must go on making it better and better. This gathering symbolizes the constitutional foundation which makes continued progress possible, synchronizing the skills of three independent branches of Government, reserving fundamental sovereignty to the people of this great land. It is only as the temporary representatives and servants of the people that we meet here, we bring no hereditary status or gift of infallibility, and none follows us from this place. Like President Washington, like the more fortunate of his successors, I look forward to the status of private citizen with gladness and gratitude. To me, being a citizen of the United States of America is the greatest honor and privilege in this world. From the opportunities which fate and my fellow citizens have given me, as a Member of the House, as Vice President and President of the Senate, and as President of all the people, I have come to understand and place the highest value on the checks and balances which our founders imposed on government through the separation of powers among co-equal legislative, executive, and judicial branches. This often results in difficulty and delay, as I well know, but it also places supreme authority under God, beyond any one person, any one branch, any majority great or small, or any one party. The Constitution is the bedrock of all our freedoms. Guard and cherish it, keep honor and order in your own house, and the Republic will endure. It is not easy to end these remarks. In this Chamber, along with some of you, I have experienced many, many of the highlights of my life. It was here that I stood 28 years ago with my freshman colleagues, as Speaker Sam Rayburn administered the oath. I see some of you now -- Charlie Bennett, Dick Bolling, Carl Perkins, Pete Rodino, Harley Staggers, Tom Steed, Sid Yates, Clem Zablocki-and I remember those who have gone to their rest. It was here we waged many, many a lively battle -- won some, lost some, but always remaining friends. It was here, surrounded by such friends, that the distinguished Chief Justice swore me in as Vice President on December 6, 1973. It was here I returned 8 months later as your President to ask not for a honeymoon, but for a good marriage. I will always treasure those memories and your many, many kindnesses. I thank you for them all. My fellow Americans, I once asked you for your prayers, and now I give you mine: May God guide this wonderful country, its people, and those they have chosen to lead them. May our third century be illuminated by liberty and blessed with brotherhood, so that we and all who come after us may be the humble servants of thy peace. Amen. Good night. God bless you. # State of the Union Address # Jimmy Carter # January 19, 1978 Two years ago today we had the first caucus in Iowa, and one year ago tomorrow, I walked from here to the White House to take up the duties of President of the United States. I didn't know it then when I walked, but I've been trying to save energy ever since. I return tonight to fulfill one of those duties of the Constitution: to give to the Congress, and to the Nation, information on the state of the Union. Militarily, politically, economically, and in spirit, the state of our Union is sound. We are a great country, a strong country, a vital and dynamic country, and so we will remain. We are a confident people and a hardworking people, a decent and a compassionate people, and so we will remain. I want to speak to you tonight about where we are and where we must go, about what we have done and what we must do. And I want to pledge to you my best efforts and ask you to pledge yours. Each generation of Americans has to face circumstances not of its own choosing, but by which its character is measured and its spirit is tested. There are times of emergency, when a nation and its leaders must bring their energies to bear on a single urgent task. That was the duty Abraham Lincoln faced when our land was torn apart by conflict in the War Between the States. That was the duty faced by Franklin Roosevelt when he led America out of an economic depression and again when he led America to victory in war. There are other times when there is no single overwhelming crisis, yet profound national interests are at stake. At such times the risk of inaction can be equally great. It becomes the task of leaders to call forth the vast and restless energies of our people to build for the future. That is what Harry Truman did in the years after the Second World War, when we helped Europe and Japan rebuild themselves and secured an international order that has protected freedom from aggression. We live in such times now, and we face such duties. We've come through a long period of turmoil and doubt, but we've once again found our moral course, and with a new spirit, we are striving to express our best instincts to the rest of the world. There is all across our land a growing sense of peace and a sense of common purpose. This sense of unity cannot be expressed in programs or in legislation or in dollars. It's an achievement that belongs to every individual American. This unity ties together, and it towers over all our efforts here in Washington, and it serves as an inspiring beacon for all of us who are elected to serve. This new atmosphere demands a new spirit, a partnership between those of us who lead and those who elect. The foundations of this partnership are truth, the courage to face hard decisions, concern for one another and the common good over special interests, and a basic faith and trust in the wisdom and strength and judgment of the American people. For the first time in a generation, we are not haunted by a major international crisis or by domestic turmoil, and we now have a rare and a priceless opportunity to address persistent problems and burdens which come to us as a nation, quietly and steadily getting worse over the years. As President, I've had to ask you, the Members of Congress, and you, the American people, to come to grips with some of the most difficult and hard questions facing our society. We must make a maximum effort, because if we do not aim for the best, we are very likely to achieve little. I see no benefit to the country if we delay, because the problems will only get worse. We need patience and good will, but we really need to realize that there is a limit to the role and the function of government. Government cannot solve our problems, it can't set our goals, it cannot define our vision. Government cannot eliminate poverty or provide a bountiful economy or reduce inflation or save our cities or cure illiteracy or provide energy. And government cannot mandate goodness. Only a true partnership between government and the people can ever hope to reach these goals. Those of us who govern can sometimes inspire, and we can identify needs and marshal resources, but we simply cannot be the managers of everything and everybody. We here in Washington must move away from crisis management, and we must establish clear goals for the future, immediate and the distant future, which will let us work together and not in conflict. Never again should we neglect a growing crisis like the shortage of energy, where further delay will only lead to more harsh and painful solutions. Every day we spend more than $120 million for foreign oil. This slows our economic growth, it lowers the value of the dollar overseas, and it aggravates unemployment and inflation here at home. Now we know what we must do, increase production. We must cut down on waste. And we must use more of those fuels which are plentiful and more permanent. We must be fair to people, and we must not disrupt our Nation's economy and our budget. Now, that sounds simple. But I recognize the difficulties involved. I know that it is not easy for the Congress to act. But the fact remains that on the energy legislation, we have failed the American people. Almost 5 years after the oil embargo dramatized the problem for us all, we still do not have a national energy program. Not much longer can we tolerate this stalemate. It undermines our national interest both at home and abroad. We must succeed, and I believe we will. Our main task at home this year, with energy a central element, is the Nation's economy. We must continue the recovery and further cut unemployment and inflation. Last year was a good one for the United States. We reached all of our major economic goals for 1977. Four million new jobs were created, an alltime record, and the number of unemployed dropped by more than a million. Unemployment right now is the lowest it has been since 1974, and not since World War II has such a high percentage of American people been employed. The rate of inflation went down. There was a good growth in business profits and investments, the source of more jobs for our workers, and a higher standard of living for all our people. After taxes and inflation, there was a healthy increase in workers' wages. And this year, our country will have the first $2 trillion economy in the history of the world. Now, we are proud of this progress the first year, but we must do even better in the future. We still have serious problems on which all of us must work together. Our trade deficit is too large. Inflation is still too high, and too many Americans still do not have a job. Now, I didn't have any simple answers for all these problems. But we have developed an economic policy that is working, because it's simple, balanced, and fair. It's based on four principles: First, the economy must keep on expanding to produce new jobs and better income, which our people need. The fruits of growth must be widely shared. More jobs must be made available to those who have been bypassed until now. And the tax system must be made fairer and simpler. Secondly, private business and not the Government must lead the expansion in the future. Third, we must lower the rate of inflation and keep it down. Inflation slows down economic growth, and it's the most cruel to the poor and also to the elderly and others who live on fixed incomes. And fourth, we must contribute to the strength of the world economy. I will announce detailed proposals for improving our tax system later this week. We can make our tax laws fairer, we can make them simpler and easier to understand, and at the same time, we can, and we will, reduce the tax burden on American citizens by $25 billion. The tax reforms and the tax reductions go together. Only with the long overdue reforms will the full tax cut be advisable. Almost $17 billion in income tax cuts will go to individuals. Ninety-six percent of all American taxpayers will see their taxes go down. For a typical family of four, this means an annual saving of more than $250 a year, or a tax reduction of about 20 percent. A further $2 billion cut in excise taxes will give more relief and also contribute directly to lowering the rate of inflation. And we will also provide strong additional incentives for business investment and growth through substantial cuts in the corporate tax rates and improvement in the investment tax credit. Now, these tax proposals will increase opportunity everywhere in the Nation. But additional jobs for the disadvantaged deserve special attention. We've already passed laws to assure equal access to the voting booth and to restaurants and to schools, to housing, and laws to permit access to jobs. But job opportunity, the chance to earn a decent living, is also a basic human right, which we cannot and will not ignore. A major priority for our Nation is the final elimination of the barriers that restrict the opportunities available to women and also to black people and Hispanics and other minorities. We've come a long way toward that goal. But there is still much to do. What we inherited from the past must not be permitted to shackle us in the future. I'll be asking you for a substantial increase in funds for public jobs for our young people, and I also am recommending that the Congress continue the public service employment programs at more than twice the level of a year ago. When welfare reform is completed, we will have more than a million additional jobs so that those on welfare who are able to work can work. However, again, we know that in our free society, private business is still the best source of new jobs. Therefore, I will propose a new program to encourage businesses to hire young and disadvantaged Americans. These young people only need skills and a chance in order to take their place in our economic system. Let's give them the chance they need. A major step in the right direction would be the early passage of a greatly improved Humphrey-Hawkins bill. My budget for 1979 addresses these national needs, but it is lean and tight. I have cut waste wherever possible. I am proposing an increase of less than 2 percent after adjusting for inflation, the smallest increase in the Federal budget in 4 years. Lately, Federal spending has taken a steadily increasing portion of what Americans produce. Our new budget reverses that trend, and later I hope to bring the Government's toll down even further. And with your help, we'll do that. In time of high employment and a strong economy, deficit spending should not be a feature of our budget. As the economy continues to gain strength and as our unemployment rates continue to fall, revenues will grow. With careful planning, efficient management, and proper restraint on spending, we can move rapidly toward a balanced budget, and we will. Next year the budget deficit will be only slightly less than this year. But one-third of the deficit is due to the necessary tax cuts that I've proposed. This year the right choice is to reduce the burden on taxpayers and provide more jobs for our people. The third element in our program is a renewed attack on inflation. We've learned the hard way that high unemployment will not prevent or cure inflation. Government can help us by stimulating private investment and by maintaining a responsible economic policy. Through a new top-level review process, we will do a better job of reducing Government regulation that drives up costs and drives up prices. But again, Government alone cannot bring down the rate of inflation. When a level of high inflation is expected to continue, then companies raise prices to protect their profit margins against prospective increases in wages and other costs, while workers demand higher wages as protection against expected price increases. It's like an escalation in the arms race, and understandably, no one wants to disarm alone. Now, no one firm or a group of workers can halt this process. It's an effort that we must all make together. I'm therefore asking government, business, labor, and other groups to join in a voluntary program to moderate inflation by holding wage and price increases in each sector of the economy during 1978 below the average increases of the last 2 years. I do not believe in wage and price controls. A sincere commitment to voluntary constraint provides a way, perhaps the only way, to fight inflation without Government interference. As I came into the Capitol tonight, I saw the farmers, my fellow farmers, standing out in the snow. I'm familiar with their problem, and I know from Congress' action that you are too. When I was running Carters Warehouse, we had spread on our own farms 5-10-15 fertilizer for about $40 a ton. The last time I was home, the price was about $100 a ton. The cost of nitrogen has gone up 150 percent, and the price of products that farmers sell has either stayed the same or gone down a little. Now, this past year in 1977, you, the Congress, and I together passed a new agricultural act. It went into effect October 1. It'll have its first impact on the 1978 crops. It will help a great deal. It'll add $6 1/2 billion or more to help the farmers with their price supports and target prices. Last year we had the highest level of exports of farm products in the history of our country, $24 billion. We expect to have more this year. We'll be working together. But I think it's incumbent on us to monitor very carefully the farm situation and continue to work harmoniously with the farmers of our country. What's best for the farmers, the farm families, in the long run is also best for the consumers of our country. Economic success at home is also the key to success in our international economic policy. An effective energy program, strong investment and productivity, and controlled inflation will provide [improve] our trade balance and balance it, and it will help to protect the integrity of the dollar overseas. By working closely with our friends abroad, we can promote the economic health of the whole world, with fair and balanced agreements lowering the barriers to trade. Despite the inevitable pressures that build up when the world economy suffers from high unemployment, we must firmly resist the demands for self-defeating protectionism. But free trade must also be fair trade. And I am determined to protect American industry and American workers against foreign trade practices which are unfair or illegal. In a separate written message to Congress, I've outlined other domestic initiatives, such as welfare reform, consumer protection, basic education skills, urban policy, reform of our labor laws, and national health care later on this year. I will not repeat these tonight. But there are several other points that I would like to make directly to you. During these past years, Americans have seen our Government grow far from us. For some citizens, the Government has almost become like a foreign country, so strange and distant that we've often had to deal with it through trained ambassadors who have sometimes become too powerful and too influential, lawyers, accountants, and lobbyists. This cannot go on. We must have what Abraham Lincoln wanted, a government for the people. We've made progress toward that kind of government. You've given me the authority I requested to reorganize the Federal bureaucracy. And I am using that authority. We've already begun a series of reorganization plans which will be completed over a period of 3 years. We have also proposed abolishing almost 500 Federal advisory and other commissions and boards. But I know that the American people are still sick and tired of Federal paperwork and redtape. Bit by bit we are chopping down the thicket of unnecessary Federal regulations by which Government too often interferes in our personal lives and our personal business. We've cut the public's Federal paperwork load by more than 12 percent in less than a year. And we are not through cutting. We've made a good start on turning the gobbledygook of Federal regulations into plain English that people can understand. But we know that we still have a long way to go. We've brought together parts of 11 Government agencies to create a new Department of Energy. And now it's time to take another major step by creating a separate Department of Education. But even the best organized Government will only be as effective as the people who carry out its policies. For this reason, I consider civil service reform to be absolutely vital. Worked out with the civil servants themselves, this reorganization plan will restore the merit principle to a system which has grown into a bureaucratic maze. It will provide greater management flexibility and better rewards for better performance without compromising job security. Then and only then can we have a government that is efficient, open, and truly worthy of our people's understanding and respect. I have promised that we will have such a government, and I intend to keep that promise. In our foreign policy, the separation of people from government has been in the past a source of weakness and error. In a democratic system like ours, foreign policy decisions must be able to stand the test of public examination and public debate. If we make a mistake in this administration, it will be on the side of frankness and openness with the American people. In our modern world, when the deaths of literally millions of people can result from a few terrifying seconds of destruction, the path of national strength and security is identical to the path of peace. Tonight, I am happy to report that because we are strong, our Nation is at peace with the world. We are a confident nation. We've restored a moral basis for our foreign policy. The very heart of our identity as a nation is our firm commitment to human rights. We stand for human rights because we believe that government has as a purpose to promote the well-being of its citizens. This is true in our domestic policy; it's also true in our foreign policy. The world must know that in support of human rights, the United States will stand firm. We expect no quick or easy results, but there has been significant movement toward greater freedom and humanity in several parts of the world. Thousands of political prisoners have been freed. The leaders of the world, even our ideological adversaries, now see that their attitude toward fundamental human rights affects their standing in the international community, and it affects their relations with the United States. To serve the interests of every American, our foreign policy has three major goals. The first and prime concern is and will remain the security of our country. Security is based on our national will, and security is based on the strength of our Armed Forces. We have the will, and militarily we are very strong. Security also comes through the strength of our alliances. We have reconfirmed our commitment to the defense of Europe, and this year we will demonstrate that commitment by further modernizing and strengthening our military capabilities there. Security can also be enhanced by agreements with potential adversaries which reduce the threat of nuclear disaster while maintaining our own relative strategic capability. In areas of peaceful competition with the Soviet Union, we will continue to more than hold our own. At the same time, we are negotiating with quiet confidence, without haste, with careful determination, to ease the tensions between us and to ensure greater stability and security. The strategic arms limitation talks have been long and difficult. We want a mutual limit on both the quality and the quantity of the giant nuclear arsenals of both nations, and then we want actual reductions in strategic arms as a major step toward the ultimate elimination of nuclear weapons from the face of the Earth. If these talks result in an agreement this year, and I trust they will, I pledge to you that the agreement will maintain and enhance the stability of the world's strategic balance and the security of the United States. For 30 years, concerted but unsuccessful efforts have been made to ban the testing of atomic explosives, both military weapons and peaceful nuclear devices. We are hard at work with Great Britain and the Soviet Union on an agreement which will stop testing and will protect our national security and provide for adequate verification of compliance. We are now making, I believe, good progress toward this comprehensive ban on nuclear explosions. We are also working vigorously to halt the proliferation of nuclear weapons among the nations of the world which do not now have them and to reduce the deadly global traffic in conventional arms sales. Our stand for peace is suspect if we are also the principal arms merchant of the world. So, we've decided to cut down our arms transfers abroad on a year-by-year basis and to work with other major arms exporters to encourage their similar constraint. Every American has a stake in our second major goal, a world at peace. In a nuclear age, each of us is threatened when peace is not secured everywhere. We are trying to promote harmony in those parts of the world where major differences exist among other nations and threaten international peace. In the Middle East, we are contributing our good offices to maintain the momentum of the current negotiations and to keep open the lines of communication among the Middle Eastern leaders. The whole world has a great stake in the success of these efforts. This is a precious opportunity for a historic settlement of a longstanding conflict, an opportunity which may never come again in our lifetime. Our role has been difficult and sometimes thankless and controversial. But it has been constructive and it has been necessary, and it will continue. Our third major foreign policy goal is one that touches the life of every American citizen every day, world economic growth and stability. This requires strong economic performance by the industrialized democracies like ourselves and progress in resolving the global energy crisis. Last fall, with the help of others, we succeeded in our vigorous efforts to maintain the stability of the price of oil. But as many foreign leaders have emphasized to me personally and, I am sure, to you, the greatest future contribution that America can make to the world economy would be an effective energy conservation program here at home. We will not hesitate to take the actions needed to protect the integrity of the American dollar. We are trying to develop a more just international system. And in this spirit, we are supporting the struggle for human development in Africa, in Asia, and in Latin America. Finally, the world is watching to see how we act on one of our most important and controversial items of business, approval of the Panama Canal treaties. The treaties now before the Senate are the result of the work of four administrations, two Democratic, two Republican. They guarantee that the canal will be open always for unrestricted use by the ships of the world. Our ships have the right to go to the head of the line for priority of passage in times of emergency or need. We retain the permanent right to defend the canal with our own military forces, if necessary, to guarantee its openness and its neutrality. The treaties are to the clear advantage of ourselves, the Panamanians, and the other users of the canal. Ratifying the Panama Canal treaties will demonstrate our good faith to the world, discourage the spread of hostile ideologies in this hemisphere, and directly contribute to the economic well-being and the security of the United States. I have to say that that's very welcome applause. There were two moments on my recent journey which, for me, confirmed the final aims of our foreign policy and what it always must be. One was in a little village in India, where I met a people as passionately attached to their rights and liberties as we are, but whose children have a far smaller chance for good health or food or education or human fulfillment than a child born in this country. The other moment was in Warsaw, capital of a nation twice devastated by war in this century. There, people have rebuilt the city which war's destruction took from them. But what was new only emphasized clearly what was lost. What I saw in those two places crystalized for me the purposes of our own Nation's policy: to ensure economic justice, to advance human rights, to resolve conflicts without violence, and to proclaim in our great democracy our constant faith in the liberty and dignity of human beings everywhere. We Americans have a great deal of work to do together. In the end, how well we do that work will depend on the spirit in which we approach it. We must seek fresh answers, unhindered by the stale prescriptions of the past. It has been said that our best years are behind us. But I say again that America's best is still ahead. We have emerged from bitter experiences chastened but proud, confident once again, ready to face challenges once again, and united once again. We come together tonight at a solemn time. Last week the Senate lost a good and honest man, Lee Metcalf of Montana. And today, the flag of the United States flew at half-mast from this Capitol and from American installations and ships all over the world, in mourning for Senator Hubert Humphrey. Because he exemplified so well the joy and the zest of living, his death reminds us not so much of our own mortality, but of the possibilities offered to us by life. He always looked to the future with a special American kind of confidence, of hope and enthusiasm. And the best way that we can honor him is by following his example. Our task, to use the words of Senator Humphrey, is "reconciliation, rebuilding, and rebirth." Reconciliation of private needs and interests into a higher purpose. Rebuilding the old dreams of justice and liberty, and country and community. Rebirth of our faith in the common good. Each of us here tonight, and all who are listening in your homes, must rededicate ourselves to serving the common good. We are a community, a beloved community, all of us. Our individual fates are linked, our futures intertwined. And if we act in that knowledge and in that spirit, together, as the Bible says, we can move mountains. Thank you very much. # State of the Union Address # Jimmy Carter # January 25, 1979 Tonight I want to examine in a broad sense the state of our American Union -- how we are building a new foundation for a peaceful and a prosperous world. Our children who will be born this year will come of age in the 21st century. What kind of society, what kind of world are we building for them?Will we ourselves be at peace?Will our children enjoy a better quality of life?Will a strong and united America still be a force for freedom and prosperity around the world? Tonight, there is every sign that the state of our Union is sound. Our economy offers greater prosperity for more of our people than ever before. Real per capita income and real business profits have risen substantially in the last 2 years. Farm exports are setting an all-time record each year, and farm income last year, net farm income, was up more than 25 percent. Our liberties are secure. Our military defenses are strong and growing stronger. And more importantly, tonight, America -- our beloved country -- is at peace. Our earliest national commitments, modified and reshaped by succeeding generations, have served us well. But the problems that we face today are different from those that confronted earlier generations of Americans. They are more subtle, more complex, and more interrelated. At home, we are recognizing ever more clearly that government alone cannot solve these problems. And abroad, few of them can be solved by the United States alone. But Americans as a united people, working with our allies and friends, have never been afraid to face problems and to solve problems, either here or abroad. The challenge to us is to build a new and firmer foundation for the future -- for a sound economy, for a more effective government, for more political trust, and for a stable peace -- so that the America our children inherit will be even stronger and even better than it is today. We cannot resort to simplistic or extreme solutions which substitute myths for common sense. In our economy, it is a myth that we must choose endlessly between inflation and recession. Together, we build the foundation for a strong economy, with lower inflation, without contriving either a recession with its high unemployment or unworkable, mandatory government controls. In our government, it is a myth that we must choose between compassion and competence. Together, we build the foundation for a government that works, and works for people. In our relations with our potential adversaries, it is a myth that we must choose between confrontation and capitulation. Together, we build the foundation for a stable world of both diversity and peace. Together, we've already begun to build the foundation for confidence in our economic system. During the last 2 years, in bringing our economy out of the deepest recession since the 1930's, we've created 7,100,000 new jobs. The unemployment rate has gone down 25 percent. And now we must redouble our fight against the persistent inflation that has wracked our country for more than a decade. That's our important domestic issue, and we must do it together. We know that inflation is a burden for all Americans, but it's a disaster for the poor, the sick, and the old. No American family should be forced to choose among food, warmth, health care, or decent housing because the cost of any of these basic necessities has climbed out of reach. Three months ago, I outlined to the Nation a balanced anti-inflation program that couples responsible government restraint with responsible wage and price restraint. It's based upon my knowledge that there is a more powerful force than government compulsion -- the force created by the cooperative efforts of millions of Americans working toward a common goal. Business and labor have been increasingly supportive. It's imperative that we in government do our part. We must stop excessive government growth, and we must control government spending habits. I've sent to this Congress a stringent but a fair budget, one that, since I ran for President in 1976, will have cut the Federal deficit in half. And as a percentage of our gross national product, the deficit will have dropped by almost 75 percent. This Congress had a good record last year, and I now ask the 96th Congress to continue this partnership in holding the line on excess Federal spending. It will not be easy. But we must be strong, and we must be persistent. This budget is a clear message that, with the help of you and the American people, I am determined, as President, to bring inflation under control. The 1980 budget provides enough spending restraint to begin unwinding inflation, but enough support for our country to keep American workers productive and to encourage the investments that provide new jobs. We will continue to mobilize our Nation's resources to reduce our trade deficit substantially this year and to maintain the strength of the American dollar. We've demonstrated in this restrained budget that we can build on the gains of the past 2 years to provide additional support to educate disadvantaged children, to care for the elderly, to provide nutrition and legal services for the poor, and to strengthen the economic base of our urban communities and, also, our rural areas. This year, we will take our first steps to develop a national health plan. We must never accept a permanent group of unemployed Americans, with no hope and no stake in building our society. For those left out of the economy because of discrimination, a lack of skills, or poverty, we must maintain high levels of training, and we must continue to provide jobs. A responsible budget is not our only weapon to control inflation. We must act now to protect all Americans from health care costs that are rising $1 million per hour, 24 hours a day, doubling every 5 years. We must take control of the largest contributor to that inflation: skyrocketing hospital costs. There will be no clearer test of the commitment of this Congress to the anti-inflation fight than the legislation that I will submit again this year to hold down inflation in hospital care. Over the next 5 years, my proposals will save Americans a total of $60 billion, of which $25 billion will be savings to the American taxpayer in the Federal budget itself. The American people have waited long enough. This year we must act on hospital cost containment. We must also fight inflation by improvements and better enforcement of our antitrust laws and by reducing government obstacles to competition in the private sector. We must begin to scrutinize the overall effect of regulation in our economy. Through deregulation of the airline industry we've increased profits, cut prices for all Americans, and begun -- for one of the few times in the history of our Nation -- to actually dismantle a major Federal bureaucracy. This year, we must begin the effort to reform our regulatory processes for the railroad, bus, and the trucking industries. America has the greatest economic system in the world. Let's reduce government interference and give it a chance to work. I call on Congress to take other anti-inflation action -- to expand our exports to protect American jobs threatened by unfair trade, to conserve energy, to increase production and to speed development of solar power, and to reassess our Nation's technological superiority. American workers who enlist in the fight against inflation deserve not just our gratitude, but they deserve the protection of the real wage insurance proposal that I have already made to the Congress. To be successful, we must change our attitudes as well as our policies. We cannot afford to live beyond our means. We cannot afford to create programs that we can neither manage nor finance, or to waste our natural resources, and we cannot tolerate mismanagement and fraud. Above all, we must meet the challenges of inflation as a united people. With the support of the American people, government in recent decades has helped to dismantle racial barriers, has provided assistance for the jobless and the retired, has fed the hungry, has protected the safety, health, and bargaining rights of American workers, and has helped to preserve our natural heritage. But it's not enough to have created a lot of government programs. Now we must make the good programs more effective and improve or weed out those which are wasteful or unnecessary. With the support of the Congress, we've begun to reorganize and to get control of the bureaucracy. We are reforming the civil service system, so that we can recognize and reward those who do a good job and correct or remove those who do not. This year, we must extend major reorganization efforts to education, to economic development, and to the management of our natural resources. We need to enact a sunshine [sunset] law that when government programs have outlived their value, they will automatically be terminated. There's no such thing as an effective and a noncontroversial reorganization and reform. But we know that honest, effective government is essential to restore public faith in our public action. None of us can be satisfied when two-thirds of the American citizens chose not to vote last year in a national election. Too many Americans feel powerless against the influence of private lobbying groups and the unbelievable flood of private campaign money which threatens our electoral process. This year, we must regain the public's faith by requiring limited financial funds from public funds for congressional election campaigns. House bill 1 provides for this public financing of campaigns. And I look forward with a great deal of anticipation to signing it at an early date. A strong economy and an effective government will restore confidence in America. But the path of the future must be charted in peace. We must continue to build a new and a firm foundation for a stable world community. We are building that new foundation from a position of national strength -- the strength of our own defenses, the strength of our friendships with other nations, and of our oldest American ideals. America's military power is a major force for security and stability in the world. We must maintain our strategic capability and continue the progress of the last 2 years with our NATO Allies, with whom we have increased our readiness, modernized our equipment, and strengthened our defense forces in Europe. I urge you to support the strong defense budget which I have proposed to the Congress. But our national security in this complicated age requires more than just military might. In less than a lifetime, world population has more than doubled, colonial empires have disappeared, and a hundred new nations have been born, and migration to the world's cities have all awakened new yearnings for economic justice and human rights among people everywhere. This demand for justice and human rights is a wave of the future. In such a world, the choice is not which super power will dominate the world. None can and none will. The choice instead is between a world of anarchy and destruction, or a world of cooperation and peace. In such a world, we seek not to stifle inevitable change, but to influence its course in helpful and constructive ways that enhance our values, our national interests, and the cause of peace. Towering over this volatile, changing world, like a thundercloud on a summer day, looms the awesome power of nuclear weapons. We will continue to help shape the forces of change, to anticipate emerging problems of nuclear proliferation and conventional arms sales, and to use our great strength parts of the world before they erupt and spread. We have no desire to be the world's policeman. But America does want to be the world's peacemaker. We are building the foundation for truly global cooperation, not only with Western and industrialized nations but with the developing countries as well. Our ties with Japan and our European allies are stronger than ever, and so are our friendly relations with the people of Latin America, Africa, and the Western Pacific and Asia. We've won new respect in this hemisphere with the Panama Canal treaties. We've gained new trust with the developing world through our opposition to racism, our commitment to human rights, and our support for majority rule in Africa. The multilateral trade negotiations are now reaching a successful conclusion, and congressional approval is essential to the economic well-being of our own country and of the world. This will be one of our top priorities in 1979. We are entering a hopeful era in our relations with one-fourth of the world's people who live in China. The presence of Vice Premier Deng Xiaoping next week will help to inaugurate that new era. And with prompt congressional action on authorizing legislation, we will continue our commitment to a prosperous, peaceful, and secure life for the people of Taiwan. I'm grateful that in the past year, as in the year before, no American has died in combat anywhere in the world. And in Iran, Nicaragua, Cyprus, Namibia, and Rhodesia, our country is working for peaceful solutions to dangerous conflicts. In the Middle East, under the most difficult circumstances, we have sought to help ancient enemies lay aside deep-seated differences that have produced four bitter wars in our lifetime. Our firm commitment to Israel's survival and security is rooted in our deepest convictions and in our knowledge of the strategic importance to our own Nation of a stable Middle East. To promote peace and reconciliation in the region, we must retain the trust and the confidence both of Israel and also of the Arab nations that are sincerely searching for peace. I am determined, as President, to use the full, beneficial influence of our country so that the precious opportunity for lasting peace between Israel and Egypt will not be lost. The new foundation of international cooperation that we seek excludes no nation. Cooperation with the Soviet Union serves the cause of peace, for in this nuclear age, world peace must include peace between the super powers -- and it must mean the control of nuclear arms. Ten years ago, the United States and the Soviet Union made the historic decision to open the strategic arms limitations talks, or SALT. The purpose of SALT, then as now, is not to gain a unilateral advantage for either nation, but to protect the security of both nations, to reverse the costly and dangerous momentum of the nuclear arms race, to preserve a stable balance of nuclear forces, and to demonstrate to a concerned world that we are determined to help preserve the peace. The first SALT agreement was concluded in 1972. And since then, during 6 years of negotiation by both Republican and Democratic leaders, nearly all issues of SALT II have been resolved. If the Soviet Union continues to negotiate in good faith, a responsible SALT agreement will be reached. It's important that the American people understand the nature of the SALT process. SALT II is not based on sentiment; it's based on self-interest -- of the United States and of the Soviet Union. Both nations share a powerful common interest in reducing the threat of a nuclear war. I will sign no agreement which does not enhance our national security. SALT II does not rely on trust; it will be verifiable. We have very sophisticated, proven means, including our satellites, to determine for ourselves whether or not the Soviet Union is meeting its treaty obligations. I will sign no agreement which cannot be verified. The American nuclear deterrent will remain strong after SALT II. For example, just one of our relatively invulnerable Poseidon submarines -- comprising less than 2 percent of our total nuclear force of submarines, aircraft, and land-based missiles -- carries enough warheads to destroy every large?and medium-sized city in the Soviet Union. Our deterrent is overwhelming, and I will sign no agreement unless our deterrent force will remain overwhelming. A SALT agreement, of course, cannot substitute for wise diplomacy or a strong defense, nor will it end the danger of nuclear war. But it will certainly reduce that danger. It will strengthen our efforts to ban nuclear tests and to stop the spread of atomic weapons to other nations. And it can begin the process of negotiating new agreements which will further limit nuclear arms. The path of arms control, backed by a strong defense, the path our Nation and every President has walked for 30 years, can lead to a world of law and of international negotiation and consultation in which all peoples might live in peace. In this year 1979, nothing is more important than that the Congress and the people of the United States resolve to continue with me on that path of nuclear arms control and world peace. This is paramount. I've outlined some of the changes that have transformed the world and which are continuing as we meet here tonight. But we in America need not fear change. The values on which our Nation was founded: individual liberty, self-determination, the potential for human fulfillment in freedom, all of these endure. We find these democratic principles praised, even in books smuggled out of totalitarian nations and on wallposters in lands which we thought were closed to our influence. Our country has regained its special place of leadership in the worldwide struggle for human rights. And that is a commitment that we must keep at home, as well as abroad. The civil rights revolution freed all Americans, black and white, but its full promise still remains unrealized. I will continue to work with all my strength for equal opportunity for all Americans -- and for affirmative action for those who carry the extra burden of past denial of equal opportunity. We remain committed to improving our labor laws to better protect the rights of American workers. And our Nation must make it clear that the legal rights of women as citizens are guaranteed under the laws of our land by ratifying the equal rights amendment. As long as I'm President, at home and around the world America's examples and America's influence will be marshaled to advance the cause of human rights. To establish those values, two centuries ago a bold generation of Americans risked their property, their position, and life itself. We are their heirs, and they are sending us a message across the centuries. The words they made so vivid are now growing faintly indistinct, because they are not heard often enough. They are words like "justice," "equality," "unity," "truth," "sacrifice," "liberty," "faith," and "love." These words remind us that the duty of our generation of Americans is to renew our Nation's faith, not focused just against foreign threats but against the threats of selfishness, cynicism, and apathy. The new foundation I've discussed tonight can help us build a nation and a world where every child is nurtured and can look to the future with hope, where the resources now wasted on war can be turned towards meeting human needs, where all people have enough to eat, a decent home, and protection against disease. It can help us build a nation and a world where all people are free to seek the truth and to add to human understanding, so that all of us may live our lives in peace. Tonight, I ask you, the Members of the Congress, to join me in building that new foundation, a better foundation, for our beloved country and our world. Thank you very much. # State of the Union Address # Jimmy Carter # January 21, 1980 This last few months has not been an easy time for any of us. As we meet tonight, it has never been more clear that the state of our Union depends on the state of the world. And tonight, as throughout our own generation, freedom and peace in the world depend on the state of our Union. The 1980's have been born in turmoil, strife, and change. This is a time of challenge to our interests and our values and it's a time that tests our wisdom and our skills. At this time in Iran, 50 Americans are still held captive, innocent victims of terrorism and anarchy. Also at this moment, massive Soviet troops are attempting to subjugate the fiercely independent and deeply religious people of Afghanistan. These two acts -- one of international terrorism and one of military aggression -- present a serious challenge to the United States of America and indeed to all the nations of the world. Together, we will meet these threats to peace. I'm determined that the United States will remain the strongest of all nations, but our power will never be used to initiate a threat to the security of any nation or to the rights of any human being. We seek to be and to remain secure -- a nation at peace in a stable world. But to be secure we must face the world as it is. Three basic developments have helped to shape our challenges: the steady growth and increased projection of Soviet military power beyond its own borders; the overwhelming dependence of the Western democracies on oil supplies from the Middle East; and the press of social and religious and economic and political change in the many nations of the developing world, exemplified by the revolution in Iran. Each of these factors is important in its own right. Each interacts with the others. All must be faced together, squarely and courageously. We will face these challenges, and we will meet them with the best that is in us. And we will not fail. In response to the abhorrent act in Iran, our Nation has never been aroused and unified so greatly in peacetime. Our position is clear. The United States will not yield to blackmail. We continue to pursue these specific goals: first, to protect the present and long-range interests of the United States; secondly, to preserve the lives of the American hostages and to secure, as quickly as possible, their safe release, if possible, to avoid bloodshed which might further endanger the lives of our fellow citizens; to enlist the help of other nations in condemning this act of violence, which is shocking and violates the moral and the legal standards of a civilized world; and also to convince and to persuade the Iranian leaders that the real danger to their nation lies in the north, in the Soviet Union and from the Soviet troops now in Afghanistan, and that the unwarranted Iranian quarrel with the United States hampers their response to this far greater danger to them. If the American hostages are harmed, a severe price will be paid. We will never rest until every one of the American hostages are released. But now we face a broader and more fundamental challenge in this region because of the recent military action of the Soviet Union. Now, as during the last 3 1/2 decades, the relationship between our country, the United States of America, and the Soviet Union is the most critical factor in determining whether the world will live at peace or be engulfed in global conflict. Since the end of the Second World War, America has led other nations in meeting the challenge of mounting Soviet power. This has not been a simple or a static relationship. Between us there has been cooperation, there has been competition, and at times there has been confrontation. In the 1940's we took the lead in creating the Atlantic Alliance in response to the Soviet Union's suppression and then consolidation of its East European empire and the resulting threat of the Warsaw Pact to Western Europe. In the 1950's we helped to contain further Soviet challenges in Korea and in the Middle East, and we rearmed to assure the continuation of that containment. In the 1960's we met the Soviet challenges in Berlin, and we faced the Cuban missile crisis. And we sought to engage the Soviet Union in the important task of moving beyond the cold war and away from confrontation. And in the 1970's three American Presidents negotiated with the Soviet leaders in attempts to halt the growth of the nuclear arms race. We sought to establish rules of behavior that would reduce the risks of conflict, and we searched for areas of cooperation that could make our relations reciprocal and productive, not only for the sake of our two nations but for the security and peace of the entire world. In all these actions, we have maintained two commitments: to be ready to meet any challenge by Soviet military power, and to develop ways to resolve disputes and to keep the peace. Preventing nuclear war is the foremost responsibility of the two superpowers. That's why we've negotiated the strategic arms limitation treaties -- SALT I and SALT II. Especially now, in a time of great tension, observing the mutual constraints imposed by the terms of these treaties will be in the best interest of both countries and will help to preserve world peace. I will consult very closely with the Congress on this matter as we strive to control nuclear weapons. That effort to control nuclear weapons will not be abandoned. We superpowers also have the responsibility to exercise restraint in the use of our great military force. The integrity and the independence of weaker nations must not be threatened. They must know that in our presence they are secure. But now the Soviet Union has taken a radical and an aggressive new step. It's using its great military power against a relatively defenseless nation. The implications of the Soviet invasion of Afghanistan could pose the most serious threat to the peace since the Second World War. The vast majority of nations on Earth have condemned this latest Soviet attempt to extend its colonial domination of others and have demanded the immediate withdrawal of Soviet troops. The Moslem world is especially and justifiably outraged by this aggression against an Islamic people. No action of a world power has ever been so quickly and so overwhelmingly condemned. But verbal condemnation is not enough. The Soviet Union must pay a concrete price for their aggression. While this invasion continues, we and the other nations of the world cannot conduct business as usual with the Soviet Union. That's why the United States has imposed stiff economic penalties on the Soviet Union. I will not issue any permits for Soviet ships to fish in the coastal waters of the United States. I've cut Soviet access to high-technology equipment and to agricultural products. I've limited other commerce with the Soviet Union, and I've asked our allies and friends to join with us in restraining their own trade with the Soviets and not to replace our own embargoed items. And I have notified the Olympic Committee that with Soviet invading forces in Afghanistan, neither the American people nor I will support sending an Olympic team to Moscow. The Soviet Union is going to have to answer some basic questions: Will it help promote a more stable international environment in which its own legitimate, peaceful concerns can be pursued?Or will it continue to expand its military power far beyond its genuine security needs, and use that power for colonial conquest?The Soviet Union must realize that its decision to use military force in Afghanistan will be costly to every political and economic relationship it values. The region which is now threatened by Soviet troops in Afghanistan is of great strategic importance: It contains more than two-thirds of the world's exportable oil. The Soviet effort to dominate Afghanistan has brought Soviet military forces to within 300 miles of the Indian Ocean and close to the Straits of Hormuz, a waterway through which most of the world's oil must flow. The Soviet Union is now attempting to consolidate a strategic position, therefore, that poses a grave threat to the free movement of Middle East oil. This situation demands careful thought, steady nerves, and resolute action, not only for this year but for many years to come. It demands collective efforts to meet this new threat to security in the Persian Gulf and in Southwest Asia. It demands the participation of all those who rely on oil from the Middle East and who are concerned with global peace and stability. And it demands consultation and close cooperation with countries in the area which might be threatened. Meeting this challenge will take national will, diplomatic and political wisdom, economic sacrifice, and, of course, military capability. We must call on the best that is in us to preserve the security of this crucial region. Let our position be absolutely clear: An attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America, and such an assault will be repelled by any means necessary, including military force. During the past 3 years, you have joined with me to improve our own security and the prospects for peace, not only in the vital oil-producing area of the Persian Gulf region but around the world. We've increased annually our real commitment for defense, and we will sustain this increase of effort throughout the Five Year Defense Program. It's imperative that Congress approve this strong defense budget for 1981, encompassing a 5-percent real growth in authorizations, without any reduction. We are also improving our capability to deploy U.S. military forces rapidly to distant areas. We've helped to strengthen NATO and our other alliances, and recently we and other NATO members have decided to develop and to deploy modernized, intermediate-range nuclear forces to meet an unwarranted and increased threat from the nuclear weapons of the Soviet Union. We are working with our allies to prevent conflict in the Middle East. The peace treaty between Egypt and Israel is a notable achievement which represents a strategic asset for America and which also enhances prospects for regional and world peace. We are now engaged in further negotiations to provide full autonomy for the people of the West Bank and Gaza, to resolve the Palestinian issue in all its aspects, and to preserve the peace and security of Israel. Let no one doubt our commitment to the security of Israel. In a few days we will observe an historic event when Israel makes another major withdrawal from the Sinai and when Ambassadors will be exchanged between Israel and Egypt. We've also expanded our own sphere of friendship. Our deep commitment to human rights and to meeting human needs has improved our relationship with much of the Third World. Our decision to normalize relations with the People's Republic of China will help to preserve peace and stability in Asia and in the Western Pacific. We've increased and strengthened our naval presence in the Indian Ocean, and we are now making arrangements for key naval and air facilities to be used by our forces in the region of northeast Africa and the Persian Gulf. We've reconfirmed our 1959 agreement to help Pakistan preserve its independence and its integrity. The United States will take action consistent with our own laws to assist Pakistan in resisting any outside aggression. And I'm asking the Congress specifically to reaffirm this agreement. I'm also working, along with the leaders of other nations, to provide additional military and economic aid for Pakistan. That request will come to you in just a few days. Finally, we are prepared to work with other countries in the region to share a cooperative security framework that respects differing values and political beliefs, yet which enhances the independence, security, and prosperity of all. All these efforts combined emphasize our dedication to defend and preserve the vital interests of the region and of the nation which we represent and those of our allies -- in Europe and the Pacific, and also in the parts of the world which have such great strategic importance to us, stretching especially through the Middle East and Southwest Asia. With your help, I will pursue these efforts with vigor and with determination. You and I will act as necessary to protect and to preserve our Nation's security. The men and women of America's Armed Forces are on duty tonight in many parts of the world. I'm proud of the job they are doing, and I know you share that pride. I believe that our volunteer forces are adequate for current defense needs, and I hope that it will not become necessary to impose a draft. However, we must be prepared for that possibility. For this reason, I have determined that the Selective Service System must now be revitalized. I will send legislation and budget proposals to the Congress next month so that we can begin registration and then meet future mobilization needs rapidly if they arise. We also need clear and quick passage of a new charter to define the legal authority and accountability of our intelligence agencies. We will guarantee that abuses do not recur, but we must tighten our controls on sensitive intelligence information, and we need to remove unwarranted restraints on America's ability to collect intelligence. The decade ahead will be a time of rapid change, as nations everywhere seek to deal with new problems and age-old tensions. But America need have no fear. We can thrive in a world of change if we remain true to our values and actively engaged in promoting world peace. We will continue to work as we have for peace in the Middle East and southern Africa. We will continue to build our ties with developing nations, respecting and helping to strengthen their national independence which they have struggled so hard to achieve. And we will continue to support the growth of democracy and the protection of human rights. In repressive regimes, popular frustrations often have no outlet except through violence. But when peoples and their governments can approach their problems together through open, democratic methods, the basis for stability and peace is far more solid and far more enduring. That is why our support for human rights in other countries is in our own national interest as well as part of our own national character. Peace -- a peace that preserves freedom -- remains America's first goal. In the coming years, as a mighty nation we will continue to pursue peace. But to be strong abroad we must be strong at home. And in order to be strong, we must continue to face up to the difficult issues that confront us as a nation today. The crises in Iran and Afghanistan have dramatized a very important lesson: Our excessive dependence on foreign oil is a clear and present danger to our Nation's security. The need has never been more urgent. At long last, we must have a clear, comprehensive energy policy for the United States. As you well know, I have been working with the Congress in a concentrated and persistent way over the past 3 years to meet this need. We have made progress together. But Congress must act promptly now to complete final action on this vital energy legislation. Our Nation will then have a major conservation effort, important initiatives to develop solar power, realistic pricing based on the true value of oil, strong incentives for the production of coal and other fossil fuels in the United States, and our Nation's most massive peacetime investment in the development of synthetic fuels. The American people are making progress in energy conservation. Last year we reduced overall petroleum consumption by 8 percent and gasoline consumption by 5 percent below what it was the year before. Now we must do more. After consultation with the Governors, we will set gasoline conservation goals for each of the 50 States, and I will make them mandatory if these goals are not met. I've established an import ceiling for 1980 of 8.2 million barrels a day -- well below the level of foreign oil purchases in 1977. I expect our imports to be much lower than this, but the ceiling will be enforced by an oil import fee if necessary. I'm prepared to lower these imports still further if the other oil-consuming countries will join us in a fair and mutual reduction. If we have a serious shortage, I will not hesitate to impose mandatory gasoline rationing immediately. The single biggest factor in the inflation rate last year, the increase in the inflation rate last year, was from one cause: the skyrocketing prices of OPEC oil. We must take whatever actions are necessary to reduce our dependence on foreign oil -- and at the same time reduce inflation. As individuals and as families, few of us can produce energy by ourselves. But all of us can conserve energy -- every one of us, every day of our lives. Tonight I call on you -- in fact, all the people of America -- to help our Nation. Conserve energy. Eliminate waste. Make 1980 indeed a year of energy conservation. Of course, we must take other actions to strengthen our Nation's economy. First, we will continue to reduce the deficit and then to balance the Federal budget. Second, as we continue to work with business to hold down prices, we'll build also on the historic national accord with organized labor to restrain pay increases in a fair fight against inflation. Third, we will continue our successful efforts to cut paperwork and to dismantle unnecessary Government regulation. Fourth, we will continue our progress in providing jobs for America, concentrating on a major new program to provide training and work for our young people, especially minority youth. It has been said that "a mind is a terrible thing to waste." We will give our young people new hope for jobs and a better life in the 1980's. And fifth, we must use the decade of the 1980's to attack the basic structural weaknesses and problems in our economy through measures to increase productivity, savings, and investment. With these energy and economic policies, we will make America even stronger at home in this decade -- just as our foreign and defense policies will make us stronger and safer throughout the world. We will never abandon our struggle for a just and a decent society here at home. That's the heart of America -- and it's the source of our ability to inspire other people to defend their own rights abroad. Our material resources, great as they are, are limited. Our problems are too complex for simple slogans or for quick solutions. We cannot solve them without effort and sacrifice. Walter Lippmann once reminded us, "You took the good things for granted. Now you must earn them again. For every right that you cherish, you have a duty which you must fulfill. For every good which you wish to preserve, you will have to sacrifice your comfort and your ease. There is nothing for nothing any longer." Our challenges are formidable. But there's a new spirit of unity and resolve in our country. We move into the 1980's with confidence and hope and a bright vision of the America we want: an America strong and free, an America at peace, an America with equal rights for all citizens -- and for women, guaranteed in the United States Constitution -- an America with jobs and good health and good education for every citizen, an America with a clean and bountiful life in our cities and on our farms, an America that helps to feed the world, an America secure in filling its own energy needs, an America of justice, tolerance, and compassion. For this vision to come true, we must sacrifice, but this national commitment will be an exciting enterprise that will unify our people. Together as one people, let us work to build our strength at home, and together as one indivisible union, let us seek peace and security throughout the world. Together let us make of this time of challenge and danger a decade of national resolve and of brave achievement. Thank you very much. # State of the Union Address # Jimmy Carter # January 16, 1981 To the Congress of the United States: The State of the Union is sound. Our economy is recovering from a recession. A national energy plan is in place and our dependence on foreign oil is decreasing. We have been at peace for four uninterrupted years. But, our Nation has serious problems. Inflation and unemployment are unacceptably high. The world oil market is increasingly tight. There are trouble spots throughout the world, and 52 American hostages are being held in Iran against international law and against every precept of human affairs. However, I firmly believe that, as a result of the progress made in so many domestic and international areas over the past four years, our Nation is stronger, wealthier, more compassionate and freer than it was four years ago. I am proud of that fact. And I believe the Congress should be proud as well, for so much of what has been accomplished over the past four years has been due to the hard work, insights and cooperation of Congress. I applaud the Congress for its efforts and its achievements. In this State of the Union Message I want to recount the achievements and progress of the last four years and to offer recommendations to the Congress for this year. While my term as President will end before the 97th Congress begins its work in earnest, I hope that my recommendations will serve as a guide for the direction this country should take so we build on the record of the past four years. RECORD OF PROGRESS When I took office, our Nation faced a number of serious domestic and international problems: -- no national energy policy existed, and our dependence on foreign oil was rapidly increasing; -- public trust in the integrity and openness of the government was low; -- the Federal government was operating inefficiently in administering essential programs and policies; -- major social problems were being ignored or poorly addressed by the Federal government; -- our defense posture was declining as a result of a defense budget which was continuously shrinking in real terms; -- the strength of the NATO Alliance needed to be bolstered; -- tensions between Israel and Egypt threatened another Middle East war; and -- America's resolve to oppose human rights violations was under serious question. Over the past 48 months, clear progress has been made in solving the challenges we found in January of 1977: -- almost all of our comprehensive energy program have been enacted, and the Department of Energy has been established to administer the program; confidence in the government's integrity has been restored, and respect for the government's openness and fairness has been renewed; -- the government has been made more effective and efficient: the Civil Service system was completely reformed for the first time this century; -- 14 reorganization initiatives have been proposed to the Congress, approved, and implemented; -- two new Cabinet departments have been created to consolidate and streamline the government's handling of energy and education problems; -- inspectors general have been placed in each Cabinet department to combat fraud, waste and other abuses; -- the regulatory process has been reformed through creation of the Regulatory Council, implementation of Executive Order 12044 and its requirement for cost-impact analyses, elimination of unnecessary regulation, and passage of the Regulatory Flexibility Act; -- procedures have been established to assure citizen participation in government; -- and the airline, trucking, rail and communications industries are being deregulated; -- critical social problems, many long ignored by the Federal government, have been addressed directly; -- an urban policy was developed and implemented to reverse the decline in our urban areas; -- the Social Security System was refinanced to put it on a sound financial basis; -- the Humphrey-Hawkins Full Employment Act was enacted; -- Federal assistance for education was expanded by more than 75 percent; -- the minimum wage was increased to levels needed to ease the effects of inflation; -- affirmative action has been pursued aggressively; more blacks, Hispanics and women have been appointed to senior government positions and to judgeships than at any other time in our history; -- the ERA ratification deadline was extended to aid the ratification effort; -- and minority business procurement by the Federal government has more than doubled; -- the Nation's first sectoral policies were put in place, for the auto and steel industries, with my Administration demonstrating the value of cooperation between the government, business and labor; -- reversing previous trends, real defense spending has increased every year since 1977; -- the real increase in FY 1980 defense spending is well above 3 percent and I expect FY 1981 defense spending to be even higher; -- looking ahead, the defense program I am proposing is premised on a real increase in defense spending over the next five years of 20 percent or more; -- the NATO Alliance has proven its unity in responding to the situations in Eastern Europe and Southwest Asia and in agreeing on the issues to be addressed in the review of the Helsinki Final Act currently underway in Madrid; -- the peace process in the Middle East established at Camp David and by the Peace Treaty between Egypt and Israel is being buttressed on two fronts: steady progress in the normalization of Egyptian-Israeli relations in many fields, and the commitment of both Egypt and Israel, with United States'assistance, to see through to successful conclusion the autonomy negotiations for the West Bank and Gaza; -- the Panama Canal Treaties have been put into effect, which has helped to improve relations with Latin America; -- we have continued this Nation's strong commitment to the pursuit of human rights throughout the world, evenhandedly and objectively; -- our commitment to a worldwide human rights policy has remained firm; -- and many other countries have given high priority to it; -- our resolve to oppose aggression, such as the illegal invasion of the Soviet Union into Afghanistan, has been supported by tough action. I. ENSURING ECONOMIC STRENGTH ECONOMY During the last decade our Nation has withstood a series of economic shocks unprecedented in peacetime. The most dramatic of these has been the explosive increases of OPEC oil prices. But we have also faced world commodity shortages, natural disasters, agricultural shortages and major challenges to world peace and security. Our ability to deal with these shocks has been impaired because of a decrease in the growth of productivity and the persistence of underlying inflationary forces built up over the past 15 years. Nevertheless, the economy has proved to be remarkably resilient. Real output has grown at an average rate of 3 percent per year since I took office, and employment has grown by 10 percent. We have added about 8 million productive private sector jobs to the economy. However, unacceptably high inflation -- the most difficult economic problem I have faced -- persists. This inflation -- which threatens the growth, productivity, and stability of our economy -- requires that we restrain the growth of the budget to the maximum extent consistent with national security and human compassion. I have done so in my earlier budgets, and in my FY '82 budget. However, while restraint is essential to any appropriate economic policy, high inflation cannot be attributed solely to government spending. The growth in budget outlays has been more the result of economic factors than the cause of them. We are now in the early stages of economic recovery following a short recession. Typically, a post-recessionary period has been marked by vigorous economic growth aided by anti-recessionary policy measures such as large tax cuts or big, stimulation spending programs. I have declined to recommend such actions to stimulate economic activity, because the persistent inflationary pressures that beset our economy today dictate a restrained fiscal policy. Accordingly, I am asking the Congress to postpone until January 1, 1982, the personal tax reductions I had earlier proposed to take effect on January 1 of this year. However, my 1982 budget proposes significant tax changes to increase the sources of financing for business investment. While emphasizing the need for continued fiscal restraint, this budget takes the first major step in a long-term tax reduction program designed to increase capital formation. The failure of our Nation's capital stock to grow at a rate that keeps pace with its labor force has clearly been one cause of our productivity slowdown. Higher investment rates are also critically needed to meet our Nation's energy needs, and to replace energy-inefficient plants and equipment with new energy-saving physical plants. The level of investment that is called for will not occur in the absence of policies to encourage it. Therefore, my budget proposes a major liberalization of tax allowances for depreciation, as well as simplified depreciation accounting, increasing the allowable rates by about 40 percent. I am also proposing improvements in the investment tax credit, making it refundable, to meet the investment needs of firms with no current earnings. These two proposals, along with carefully-phased tax reductions for individuals, will improve both economic efficiency and tax equity. I urge the Congress to enact legislation along the lines and timetable I have proposed. THE 1982 BUDGET The FY 1982 budget I have sent to the Congress continues our four-year policy of prudence and restraint. While the budget deficits during my term are higher than I would have liked, their size is determined for the most part by economic conditions. And in spite of these conditions, the relative size of the deficit continues to decline. In 1976, before I took office, the budget deficit equalled 4 percent of gross national product. It had been cut to 2.3 percent in the 1980 fiscal year just ended. My 1982 budget contains a deficit estimated to be less than 1 percent of our gross national product. The rate of growth in Federal spending has been held to a minimum. Nevertheless, outlays are still rising more rapidly than many had anticipated, the result of many powerful forces in our society: We face a threat to our security, as events in Afghanistan, the Middle East, and Eastern Europe make clear. We have a steadily aging population and, as a result, the biggest single increase in the Federal budget is the rising cost of retirement programs, particularly social security. We face other important domestic needs: to continue responsibility for the disadvantaged; to provide the capital needed by our cities and our transportation systems; to protect our environment; to revitalize American industry; and to increase the export of American goods and services so essential to the creation of jobs and a trade surplus. Yet the Federal Government itself may not always be the proper source of such assistance. For example, it must not usurp functions if they can be more appropriately decided upon, managed, and financed by the private sector or by State and local governments. My Administration has always sought to consider the proper focus of responsibility for the most efficient resolution of problems. We have also recognized the need to simplify the system of grants to State and local governments. I have again proposed several grant consolidations in the 1982 budget, including a new proposal that would consolidate several highway programs. The pressures for growth in Federal use of national resources are great. My Administration has initiated many new approaches to cope with these pressures. We started a multi-year budget system, and we began a system for controlling Federal credit programs. Yet in spite of increasing needs to limit spending growth, we have consistently adhered to these strong budget principles: Our Nation's armed forces must always stand sufficiently strong to deter aggression and to assure our security. An effective national energy plan is essential to increase domestic production of oil and gas, to encourage conservation of our scarce energy resources, to stimulate conversion to more abundant fuels, and to reduce our trade deficit. The essential human needs for our citizens must be given the highest priority. The Federal Government must lead the way in investment in the Nation's technological future. The Federal Government has an obligation to nurture and protect our environment -- the common resource, birthright, and sustenance of the American people. My 1982 budget continues to support these principles. It also proposes responsible tax reductions to encourage a more productive economy, and adequate funding of our highest priority programs within an overall policy of constraint. Fiscal restraint must be continued in the years ahead. Budgets must be tight enough to convince those who set wages and prices that the Federal Government is serious about fighting inflation but not so tight as to choke off all growth. Careful budget policy should be supplemented by other measures designed to reduce inflation at lower cost in lost output and employment. These other steps include measures to increase investment -- such as the tax proposals included in my 1982 budget -- and measures to increase competition and productivity in our economy. Voluntary incomes policies can also directly influence wages and prices in the direction of moderation and thereby bring inflation down faster and at lower cost to the economy. Through a tax-based incomes policy (TIP) we could provide tax incentives for firms and workers to moderate their wage and price increases. In the coming years, control of Federal expenditures can make possible periodic tax reductions. The Congress should therefore begin now to evaluate the potentialities of a TIP program so that when the next round of tax reductions is appropriate a TIP program will be seriously considered. EMPLOYMENT During the last four years we have given top priority to meeting the needs of workers and providing additional job opportunities to those who seek work. Since the end of 1976: Almost 9 million new jobs have been added to the nation's economy total employment has reached 97 million. More jobs than ever before are held by women, minorities and young people. Employment over the past four years has increased by: 17% for adult women 11% for blacks, and 30% for Hispanics employment of black teenagers increased by more than 5%, reversing the decline that occurred in the previous eight years. Major initiatives launched by this Administration helped bring about these accomplishments and have provided a solid foundation for employment and training policy in the 1980's. In 1977, as part of the comprehensive economic stimulus program: 425,000 public service jobs were created A $1 billion youth employment initiative funded 200,000 jobs the doubling of the Job Corps to 44,000 slots began and 1 million summer youth jobs were approved -- a 25 percent increase. In 1978: The Humphrey-Hawkins Full Employment Act became law the $400 million Private Sector Initiatives Program was begun a targeted jobs tax credit for disadvantaged youth and others with special employment barriers was enacted the Comprehensive Employment and Training Act was reauthorized for four years. In 1979: A $6 billion welfare reform proposal was introduced with funding for 400,000 public service jobs welfare reform demonstration projects were launched in communities around the country the Vice President initiated a nationwide review of youth unemployment in this country. In 1980: The findings of the Vice President's Task Force revealed the major education and employment deficits that exist for poor and minority youngsters. As a result a $2 billion youth education and jobs initiative was introduced to provide unemployed youth with the basic education and work experience they need to compete in the labor market of the 1980's. As part of the economic revitalization program several steps were proposed to aid workers in high unemployment communities: An additional 13 weeks of unemployment benefits for the long term unemployed. $600 million to train the disadvantaged and unemployed for new private sector jobs. Positive adjustment demonstrations to aid workers in declining industries. The important Title VII Private Sector Initiatives Program was reauthorized for an additional two years. In addition to making significant progress in helping the disadvantaged and unemployed, important gains were realized for all workers: An historic national accord with organized labor made it possible for the views of working men and women to be heard as the nation's economic and domestic policies were formulated; the Mine Safety and Health Act brought about improved working conditions for the nation's 500,000 miners. substantial reforms of Occupational Safety and Health Administration were accomplished to help reduce unnecessary burdens on business and to focus on major health and safety problems; the minimum wage was increased over a four year period from $2.30 to $3.35 an hour; the Black Lung Benefit Reform Act was signed into law; attempts to weaken Davis-Bacon Act were defeated. While substantial gains have been made in the last four years, continued efforts are required to ensure that this progress is continued: Government must continue to make labor a full partner in the policy decisions that affect the interests of working men and women; a broad, bipartisan effort to combat youth unemployment must be sustained compassionate reform of the nation's welfare system should be continued with employment opportunities provided for those able to work; workers in declining industries should be provided new skills and help in finding employment. TRADE Over the past year, the U.S. trade picture improved as a result of solid export gains in both manufactured and agricultural products. Agricultural exports reached a new record of over $40 billion, while manufactured exports have grown by 24 percent to a record $144 billion. In these areas the United States recorded significant surpluses of $24 billion and $19 billion respectively. While our oil imports remained a major drain on our foreign exchange earnings, that drain was somewhat moderated by a 19 percent decline in the volume of oil imports. U.S. trade negotiators made significant progress over the past year in assuring effective implementation of the agreements negotiated during the Tokyo Round of Multilateral Trade Negotiations. Agreements reached with the Japanese government, for example, will assure that the United States will be able to expand its exports to the Japanese market in such key areas as telecommunications equipment, tobacco, and lumber. Efforts by U.S. trade negotiators also helped to persuade a number of key developing countries to accept many of the non-tariff codes negotiated during the Multilateral Trade Negotiations. This will assure that these countries will increasingly assume obligations under the international trading system. A difficult world economic environment posed a challenge for the management of trade relations. U.S. trade negotiators were called upon to manage serious sectoral problems in such areas as steel, and helped to assure that U.S. chemical exports will have continued access to the European market. Close consultations with the private sector in the United States have enabled U.S. trade negotiators to pinpoint obstacles to U.S. trade in services, and to build a basis for future negotiations. Services have been an increasingly important source of export earnings for the United States, and the United States must assure continued and increased access to foreign markets. The trade position of the United States has improved. But vigorous efforts are needed in a number of areas to assure continued market access for U.S. exports, particularly agricultural and high technology products, in which the United States continues to have a strong competitive edge. Continued efforts are also needed to remove many domestic disincentives, which now hamper U.S. export growth. And we must ensure that countries do not manipulate investment, or impose investment performance requirements which distort trade and cost us jobs in this country. In short, we must continue to seek free -- but fair -- trade. That is the policy my Administration has pursued from the beginning, even in areas where foreign competition has clearly affected our domestic industry. In the steel industry, for instance, we have put Trigger Price Mechanism into place to help prevent the dumping of steel. That action has strengthened the domestic steel industry. In the automobile industry, we have worked -- without resort to import quotas -- to strengthen the industry's ability to modernize and compete effectively. SMALL BUSINESS I have often said that there is nothing small about small business in America. These firms account for nearly one-half our gross national product; over half of new technology; and much more than half of the jobs created by industry. Because this sector of the economy is the very lifeblood of our National economy, we have done much together to improve the competitive climate for smaller firms. These concerted efforts have been an integral part of my program to revitalize the economy. They include my campaign to shrink substantially the cash and time consuming red tape burden imposed on business. They include my personally-directed policy of ambitiously increasing the Federal contracting dollars going to small firms, especially those owned by women and minorities. And they include my proposals to reinvigorate existing small businesses and assist the creation of new ones through tax reform; financing assistance; market expansion; and support of product innovation. Many of my initiatives to facilitate the creation and growth of small businesses were made in response to the White House Conference on Small Business, which I convened. My Administration began the implementation of most of the ideas produced last year by that citizen's advisory body; others need to be addressed. I have proposed the reconvening of the Conference next year to review progress; reassess priorities; and set new goals. In the interim I hope that the incoming Administration and the new Congress will work with the committee I have established to keep these business development ideas alive and help implement Conference recommendations. MINORITY BUSINESS One of the most successful developments of my Administration has been the growth and strengthening of minority business. This is the first Administration to put the issue on the policy agenda as a matter of major importance. To implement the results of our early efforts in this field I submitted legislation to Congress designed to further the development of minority business. We have reorganized the Office of Minority Business into the Minority Business Development Administration in the Department of Commerce. MBDA has already proven to be a major factor in assisting minority businesses to achieve equitable competitive positions in the marketplace. The Federal government's procurement from minority-owned firms has nearly tripled since I took office. Federal deposits in minority-owned banks have more than doubled and minority ownership of radio and television stations has nearly doubled. The SBA administered 8(a) Pilot Program for procurement with the Army proved to be successful and I recently expanded the number of agencies involved to include NASA and the Departments of Energy and Transportation. I firmly believe the critical path to full freedom and equality for America's minorities rests with the ability of minority communities to participate competitively in the free enterprise system. I believe the government has a fundamental responsibility to assist in the development of minority business and I hope the progress made in the last four years will continue. II. CREATING ENERGY SECURITY Since I took office, my highest legislative priorities have involved the reorientation and redirection of U.S. energy activities and for the first time, to establish a coordinated national energy policy. The struggle to achieve that policy has been long and difficult, but the accomplishments of the past four years make clear that our country is finally serious about the problems caused by our overdependence on foreign oil. Our progress should not be lost. We must rely on and encourage multiple forms of energy production -- coal, crude oil, natural gas, solar, nuclear, synthetics -- and energy conservation. The framework put in place over the last four years will enable us to do this. NATIONAL ENERGY POLICY As a result of actions my Administration and the Congress have taken over the past four years, our country finally has a national energy policy: Under my program of phased decontrol, domestic crude oil price controls will end September 30, 1981. As a result exploratory drilling activities have reached an all-time high; Prices for new natural gas are being decontrolled under the Natural Gas Policy Act -- and natural gas production is now at an all time high; the supply shortages of several years ago have been eliminated; The windfall profits tax on crude oil has been enacted providing $227 billion over ten years for assistance to low-income households, increased mass transit funding, and a massive investment in the production and development of alternative energy sources; The Synthetic Fuels Corporation has been established to help private companies build the facilities to produce energy from synthetic fuels; Solar energy funding has been quadrupled, solar energy tax credits enacted, and a Solar Energy and Energy Conservation Bank has been established; A route has been chosen to bring natural gas from the North Slope of Alaska to the lower 48 states; Coal production and consumption incentives have been increased, and coal production is now at its highest level in history; A gasoline rationing plan has been approved by Congress for possible use in the event of a severe energy supply shortage or interruption; Gasohol production has been dramatically increased, with a program being put in place to produce 500 million gallons of alcohol fuel by the end of this year -- an amount that could enable gasohol to meet the demand for 10 percent of all unleaded gasoline; New energy conservation incentives have been provided for individuals, businesses and communities and conservation has increased dramatically. The U.S. has reduced oil imports by 25 percent -- or 2 million barrels per day -- over the past four years. INCREASED DEVELOPMENT OF DOMESTIC ENERGY SOURCES Although it is essential that the Nation reduce its dependence on imported fossil fuels and complete the transition to reliance on domestic renewable sources of energy, it is also important that this transition be accomplished in an orderly, economic, and environmentally sound manner. To this end, the Administration has launched several initiatives. Leasing of oil and natural gas on federal lands, particularly the outer continental shelf, has been accelerated at the same time as the Administration has reformed leasing procedures through the 1978 amendments to the Outer Continental Shelf Lands Act. In 1979 the Interior Department held six OCS lease sales, the greatest number ever, which resulted in federal receipts of $6.5 billion, another record. The five-year OCS Leasing schedule was completed, requiring 36 sales over the next five years. Since 1971 no general federal coal lease sales were suspended. Over the past four years the Administration has completely revised the federal coal leasing program to bring it into compliance with the requirements of 1976 Federal Land Planning and Management Act and other statutory provisions. The program is designed to balance the competing interests that affect resource development on public lands and to ensure that adequate supplies of coal will be available to meet national needs. As a result, the first general competitive federal coal lease sale in ten years will be held this month. In July 1980, I signed into law the Energy Security Act of 1980 which established the Synthetic Fuels Corporation. The Corporation is designed to spur the development of commercial technologies for production of synthetic fuels, such as liquid and gaseous fuels from coal and the production of oil from oil shale. The Act provides the Corporation with an initial $22 billion to accomplish these objectives. The principal purpose of the legislation is to ensure that the nation will have available in the late 1980's the option to undertake commercial development of synthetic fuels if that becomes necessary. The Energy Security Act also provides significant incentives for the development of gasohol and biomass fuels, thereby enhancing the nation's supply of alternative energy sources. COMMITMENT TO A SUSTAINABLE ENERGY FUTURE The Administration's 1977 National Energy Plan marked an historic departure from the policies of previous Administrations. The plan stressed the importance of both energy production and conservation to achieving our ultimate national goal of relying primarily on secure sources of energy. The National Energy Plan made energy conservation a cornerstone of our national energy policy. In 1978, I initiated the Administration's Solar Domestic Policy Review. This represented the first step towards widespread introduction of renewable energy sources into the Nation's economy. As a result of the Review, I issued the 1979 Solar Message to Congress, the first such message in the Nation's history. The Message outlined the Administration's solar program and established an ambitious national goal for the year 2000 of obtaining 20 percent of this Nation's energy from solar and renewable sources. The thrust of the federal solar program is to help industry develop solar energy sources by emphasizing basic research and development of solar technologies which are not currently economic, such as photovoltaics, which generate energy directly from the sun. At the same time, through tax incentives, education, and the Solar Energy and Energy Conservation Bank, the solar program seeks to encourage state and local governments, industry, and our citizens to expand their use of solar and renewable resource technologies currently available. As a result of these policies and programs, the energy efficiency of the American economy has improved markedly and investments in renewable energy sources have grown significantly. It now takes 3 1/2 percent less energy to produce a constant dollar of GNP than it did in January 1977. This increase in efficiency represents a savings of over 1.3 million barrels per day of oil equivalent, about the level of total oil production now occurring in Alaska. Over the same period, Federal support for conservation and solar energy has increased by more than 3000 percent, to $3.3 billion in FY 1981, including the tax credits for solar energy and energy conservation investments -- these credits are expected to amount to $1.2 billion in FY 1981 and $1.5 billion in FY 1982. COMMITMENT TO NUCLEAR SAFETY AND SECURITY Since January 1977, significant progress has been achieved in resolving three critical problems resulting from the use of nuclear energy: radioactive waste management, nuclear safety and weapons proliferation. In 1977, the Administration announced its nuclear nonproliferation policy and initiated the International Fuel Cycle Evaluation. In 1978, Congress passed the Nuclear Nonproliferation Act, an historic piece of legislation. In February 1980, the Administration transmitted its nuclear waste management policy to the Congress. This policy was a major advance over all previous efforts. The principal aspects of that policy are: acknowledging the seriousness of the problem and the numerous technical and institutional issues; adopting a technically and environmentally conservative approach to the first permanent repository; and providing the states with significant involvement in nuclear waste disposal decisions by creating the State Planning Council. While much of the plan can be and is being implemented administratively, some new authorities are needed. The Congress should give early priority to enacting provisions for away-from-reactor storage and the State Planning Council. The accident at Three Mile Island made the nation acutely aware of the safety risks posed by nuclear power plants. In response, the President established the Kemeny Commission to review the accident and make recommendations. Virtually all of the Commission's substantive recommendations were adopted by the Administration and are now being implemented by the Nuclear Regulatory Commission. The Congress adopted the President's proposed plan for the Nuclear Regulatory Commission and the Nuclear Safety Oversight Committee was established to ensure that the Administration's decisions were implemented. Nuclear safety will remain a vital concern in the years ahead. We must continue to press ahead for the safe, secure disposal of radioactive wastes, and prevention of nuclear proliferation. While significant growth in foreign demand for U.S. steam coal is foreseen, congestion must be removed at major U.S. coal exporting ports such as Hampton Roads, Virginia, and Baltimore, Maryland. My Administration has worked through the Interagency Coal Task Force Study to promote cooperation and coordination of resources between shippers, railroads, vessel broker/ operators and port operators, and to determine the most appropriate Federal role in expanding and modernizing coal export facilities, including dredging deeper channels at selected ports. As a result of the Task Force's efforts, administrative steps have been taken by the Corps of Engineers to reduce significantly the amount of time required for planning and economic review of port dredging proposals. The Administration has also recommended that the Congress enact legislation to give the President generic authority to recommend appropriations for channel dredging activities. Private industry will, of course, play the major role in developing the United States' coal export facilities, but the government must continue to work to facilitate transportation to foreign markets. III. ENHANCING BASIC HUMAN AND SOCIAL NEEDS For too long prior to my Administration, many of our Nation's basic human and social needs were being ignored or handled insensitively by the Federal government. Over the last four years, we have significantly increased funding for many of the vital programs in these areas; developed new programs where needs were unaddressed; targeted Federal support to those individuals and areas most in need of our assistance; and removed barriers that have unnecessarily kept many disadvantaged citizens from obtaining aid for their most basic needs. Our record has produced clear progress in the effort to solve some of the country's fundamental human and social problems. My Administration and the Congress, working together, have demonstrated that government must and can meet our citizens' basic human and social needs in a responsible and compassionate way. But there is an unfinished agenda still before the Congress. If we are to meet our obligations to help all Americans realize the dreams of sound health care, decent housing, effective social services, a good education, and a meaningful job, important legislation still must be enacted. National Health Insurance, Welfare Reform, Child Health Assessment Program, are before the Congress and I urge their passage. HEALTH NATIONAL HEALTH PLAN During my Administration, I proposed to Congress a National Health Plan which will enable the country to reach the goal of comprehensive, universal health care coverage. The legislation I submitted lays the foundation for this comprehensive plan and addresses the most serious problems of health financing and delivery. It is realistic and enactable. It does not overpromise or overspend, and, as a result, can be the solution to the thirty years of Congressional battles on national health insurance. My Plan includes the following key features: Nearly 15 million additional poor would receive fully-subsidized comprehensive coverage; pre-natal and delivery services are provided for all pregnant women and coverage is provided for all acute care for infants in their first year of life; the elderly and disabled would have a limit of $1,250 placed on annual out-of-pocket medical expenses and would no longer face limits on hospital coverage; all full-time employees and their families would receive insurance against at least major medical expenses under mandated employer coverage; Medicare and Medicaid would be combined and expanded into an umbrella Federal program, Healthcare, for increased program efficiency, accountability and uniformity; and strong cost controls and health system reforms would be implemented, including greater incentives for Health Maintenance Organizations. I urge the new Congress to compare my Plan with the alternatives -- programs which either do too little to improve the health care needs of Americans most in need or programs which would impose substantial financial burdens on the American taxpayers. I hope the Congress will see the need for and the benefits of my Plan and work toward prompt enactment. We cannot afford further delay in this vital area. HEALTH CARE COST CONTROL Inflation in health care costs remains unacceptably high. Throughout my Administration, legislation to reduce health care cost inflation was one of my highest priorities, but was not passed by the Congress. Therefore, my FY 1982 budget proposes sharing the responsibility for health care cost control with the private sector, through voluntary hospital cost guidelines and intensified monitoring. In the longer term, the health care reimbursement system must be reformed. We must move away from inflationary cost-based reimbursement and fee-for-service, and toward a system of prospective reimbursement, under which health care providers would operate within predetermined budgets. This reimbursement reform is essential to ultimately control inflation in health care costs, and will be a significant challenge to the new Congress. HEALTH PROMOTION AND DISEASE PREVENTION During my Administration, the Surgeon General released "Healthy People," a landmark report on health promotion and disease prevention. The report signals the growing consensus that the Nation's health strategy must be refocused in the 1980's to emphasize the prevention of disease. Specifically, the report lays out measurable and achieveable goals in the reduction of mortality which can be reached by 1990. I urge the new Congress to endorse the principles of "Healthy People," and to adopt the recommendations to achieve its goals. This will necessitate adoption of a broader concept of health care, to include such areas as environmental health, workplace health and safety, commercial product safety, traffic safety, and health education, promotion and information. MATERNAL AND CHILD HEALTH Ensuring a healthy start in life for children remains not only a high priority of my Administration, but also one of the most cost effective forms of health care. When I took office, immunization levels for preventable childhood diseases had fallen to 70%. As a result of a concerted nationwide effort during my Administration, I am pleased to report that now at least 90% of children under 15, and virtually all school-age children are immunized. In addition, reported cases of measles and mumps are at their lowest levels ever. Under the National Health Plan I have proposed, there would be no cost-sharing for prenatal and delivery services for all pregnant women and for acute care provided to infants in their first year of life. These preventive services have extremely high returns in terms of improved newborn and long-term child health. Under the Child Health Assurance Program (CHAP) legislation which I submitted to the Congress, and which passed the House, an additional two million low-income children under 18 would become eligible for Medicaid benefits, which would include special health assessments. CHAP would also improve the continuity of care for the nearly 14 million children now eligible for Medicaid. An additional 100,000 low-income pregnant women would become eligible for prenatal care under the proposal. I strongly urge the new Congress to enact CHAP and thereby provide millions of needy children with essential health services. The legislation has had strong bipartisan support, which should continue as the details of the bill are completed. I also urge the new Congress to provide strong support for two highly successful ongoing programs: the special supplemental food program for women, infants and children (WIC) and Family Planning. The food supplements under WIC have been shown to effectively prevent ill health and thereby reduce later medical costs. The Family Planning program has been effective at reducing unwanted pregnancies among low-income women and adolescents. EXPANSION OF SERVICES TO THE POOR AND UNDERSERVED During my Administration, health services to the poor and underserved have been dramatically increased. The number of National Health Service Corps (NHSC) assignees providing services in medically underserved communities has grown from 500 in 1977 to nearly 3,000 in 1981. The population served by the NHSC has more than tripled since 1977. The number of Community Health Centers providing services in high priority underserved areas has doubled during my Administration, and will serve an estimated six million people in 1981. I strongly urge the new Congress to support these highly successful programs. MENTAL HEALTH One of the most significant health achievements during my Administration was the recent passage of the Mental Health Systems Act, which grew out of recommendations of my Commission on Mental Health. I join many others in my gratitude to the First Lady for her tireless and effective contribution to the passage of this important legislation. The Act is designed to inaugurate a new era of Federal and State partnership in the planning and provision of mental health services. In addition, the Act specifically provides for prevention and support services to the chronically mentally ill to prevent unnecessary institutionalization and for the development of community-based mental health services. I urge the new Congress to provide adequate support for the full and timely implementation of this Act. HEALTH PROTECTION With my active support, the Congress recently passed "Medigap" legislation, which provides for voluntary certification of health insurance policies supplemental to Medicare, to curb widespread abuses in this area. In the area of toxic agent control, legislation which I submitted to the Congress recently passed. This will provide for a "super-fund" to cover hazardous waste cleanup costs. In the area of accidental injury control, we have established automobile safety standards and increased enforcement activities with respect to the 55 MPH speed limit. By the end of the decade these actions are expected to save over 13,000 lives and 100,000 serious injuries each year. I urge the new Congress to continue strong support for all these activities. FOOD AND NUTRITION Building on the comprehensive reform of the Food Stamp Program that I proposed and Congress passed in 1977, my Administration and the Congress worked together in 1979 and 1980 to enact several other important changes in the Program. These changes will further simplify administration and reduce fraud and error, will make the program more responsive to the needs of the elderly and disabled, and will increase the cap on allowable program expenditures. The Food Stamp Act will expire at the end of fiscal 1981. It is essential that the new Administration and the Congress continue this program to ensure complete eradication of the debilitating malnutrition witnessed and documented among thousands of children in the 1960's. DRUG ABUSE PREVENTION At the beginning of my Administration there were over a half million heroin addicts in the United States. Our continued emphasis on reducing the supply of heroin, as well as providing treatment and rehabilitation to its victims, has reduced the heroin addict population, reduced the number of heroin overdose deaths by 80%, and reduced the number of heroin related injuries by 50%. We have also seen and encouraged a national movement of parents and citizens committed to reversing the very serious and disturbing trends of adolescent drug abuse. Drug abuse in many forms will continue to detract, however, from the quality of life of many Americans. To prevent that, I see four great challenges in the years ahead. First, we must deal aggressively with the supplies of illegal drugs at their source, through joint crop destruction programs with foreign nations and increased law enforcement and border interdiction. Second, we must look to citizens and parents across the country to help educate the increasing numbers of American youth who are experimenting with drugs to the dangers of drug abuse. Education is a key factor in reducing drug abuse. Third, we must focus our efforts on drug and alcohol abuse in the workplace for not only does this abuse contribute to low productivity but it also destroys the satisfaction and sense of purpose all Americans can gain from the work experience. Fourth, we need a change in attitude, from an attitude which condones the casual use of drugs to one that recognizes the appropriate use of drugs for medical purposes and condemns the inappropriate and harmful abuse of drugs. I hope the Congress and the new Administration will take action to meet each of these challenges. EDUCATION The American people have always recognized that education is one of the soundest investments they can make. The dividends are reflected in every dimension of our national life -- from the strength of our economy and national security to the vitality of our music, art, and literature. Among the accomplishments that have given me the most satisfaction over the last four years are the contributions that my Administration has been able to make to the well-being of students and educators throughout the country. This Administration has collaborated successfully with the Congress on landmark education legislation. Working with the Congressional leadership, my Administration spotlighted the importance of education by creating a new Department of Education. The Department has given education a stronger voice at the Federal level, while at the same time reserving the actual control and operation of education to states, localities, and private institutions. The Department has successfully combined nearly 150 Federal education programs into a cohesive, streamlined organization that is more responsive to the needs of educators and students. The Department has made strides to cut red tape and paperwork and thereby to make the flow of Federal dollars to school districts and institutions of higher education more efficient. It is crucial that the Department be kept intact and strengthened. Our collaboration with the Congress has resulted in numerous other important legislative accomplishments for education. A little over two years ago, I signed into law on the same day two major bills -- one benefiting elementary and secondary education and the other, postsecondary education. The Education Amendments of 1978 embodied nearly all of my Administration's proposals for improvements in the Elementary and Secondary Education Act, including important new programs to improve students' achievement in the basic skills and to aid school districts with exceptionally high concentrations of children from low-income families. The Middle Income Student Assistance Act, legislation jointly sponsored by this Administration and the Congressional leadership, expanded eligibility for need-based Basic Educational Opportunity Grants to approximately one-third of the students enrolled in post-secondary education and made many more students eligible for the first time for other types of grants, work-study, and loans. Just three and a half months ago, my Administration and the Congress successfully concluded over two years of work on a major reauthorization bill that further expands benefits to postsecondary education. Reflected in the Education Amendments of 1980 are major Administration recommendations for improvements in the Higher Education Act -- including proposals for better loan access for students; a new parent loan program; simplified application procedures for student financial aid; a strengthened Federal commitment to developing colleges, particularly the historically Black institutions; a new authorization for equipment and facilities modernization funding for the nation's major research universities; and revitalized international education programs. Supplementing these legislative accomplishments have been important administrative actions aimed at reducing paperwork and simplifying regulations associated with Federal education programs. We also launched major initiatives to reduce the backlog of defaulted student loans and otherwise to curb fraud, abuse, and waste in education programs. To insure that the education enterprise is ready to meet the scientific and technological changes of the future, we undertook a major study of the status of science and engineering education throughout the nation. I hope that the findings from this report will serve as a springboard for needed reforms at all levels of education. I am proud that this Administration has been able to provide the financial means to realize many of our legislative and administrative goals. Compared to the previous administration's last budget, I have requested the largest overall increase in Federal funding for education in our nation's history. My budget requests have been particularly sensitive to the needs of special populations like minorities, women, the educationally and economically disadvantaged, the handicapped, and students with limited English-speaking ability. At the same time, I have requested significant increases for many programs designed to enhance the quality of American education, including programs relating to important areas as diverse as international education, research libraries, museums, and teacher centers. Last year, I proposed to the Congress a major legislative initiative that would direct $2 billion into education and job training programs designed to alleviate youth unemployment through improved linkages between the schools and the work place. This legislation generated bipartisan support; but unfortunately, action on it was not completed in the final, rushed days of the 96th Congress. I urge the new Congress -- as it undertakes broad efforts to strengthen the economy as well as more specific tasks like reauthorizing the Vocational Education Act -- to make the needs of our nation's unemployed youth a top priority for action. Only by combining a basic skills education program together with work training and employment incentives can we make substantial progress in eliminating one of the most severe social problems in our nation -- youth unemployment, particularly among minorities. I am proud of the progress already made through passage of the Youth Employment and Demonstration Project Act of 1977 and the substantial increase in our investment in youth employment programs. The new legislation would cap these efforts. INCOME SECURITY SOCIAL SECURITY One of the highest priorities of my Administration has been to continue the tradition of effectiveness and efficiency widely associated with the social security program, and to assure present and future beneficiaries that they will receive their benefits as expected. The earned benefits that are paid monthly to retired and disabled American workers and their families provide a significant measure of economic protection to millions of people who might otherwise face retirement or possible disability with fear. I have enacted changes to improve the benefits of many social security beneficiaries during my years as President. The last four years have presented a special set of concerns over the financial stability of the social security system. Shortly after taking office I proposed and Congress enacted legislation to protect the stability of the old age and survivors trust fund and prevent the imminent exhaustion of the disability insurance trust fund, and to correct a flaw in the benefit formula that was threatening the long run health of the entire social security system. The actions taken by the Congress at my request helped stabilize the system. That legislation was later complemented by the Disability Insurance Amendments of 1980 which further bolstered the disability insurance program, and reduced certain inequities among beneficiaries. My commitment to the essential retirement and disability protection provided to 35 million people each month has been demonstrated by the fact that without interruption those beneficiaries have continued to receive their social security benefits, including annual cost of living increases. Changing and unpredictable economic circumstances require that we continue to monitor the financial stability of the social security system. To correct anticipated short-term strains on the system, I proposed last year that the three funds be allowed to borrow from one another, and I urge the Congress again this year to adopt such interfund borrowing. To further strengthen the social security system and provide a greater degree of assurance to beneficiaries, given projected future economic uncertainties, additional action should be taken. Among the additional financing options available are borrowing from the general fund, financing half of the hospital insurance fund with general revenues, and increasing the payroll tax rate. The latter option is particularly unpalatable given the significant increase in the tax rate already mandated in law. This Administration continues to oppose cuts in basic social security benefits and taxing social security benefits. The Administration continues to support annual indexing of social security benefits. WELFARE REFORM In 1979 I proposed a welfare reform package which offers solutions to some of the most urgent problems in our welfare system. This proposal is embodied in two bills, The Work and Training Opportunities Act and The Social Welfare Reform Amendments Act. The House passed the second of these two proposals. Within the framework of our present welfare system, my reform proposals offer achievable means to increase self-sufficiency through work rather than welfare, more adequate assistance to people unable to work, the removal of inequities in coverage under current programs, and fiscal relief needed by States and localities. Our current welfare system is long overdue for serious reform; the system is wasteful and not fully effective. The legislation I have proposed will help eliminate inequities by establishing a national minimum benefit, and by directly relating benefit levels to the poverty threshold. It will reduce program complexity, which leads to inefficiency and waste, by simplifying and coordinating administration among different programs. I urge the Congress to take action in this area along the lines I have recommended. CHILD WELFARE My Administration has worked closely with the Congress on legislation which is designed to improve greatly the child welfare services and foster care programs and to create a Federal system of adoption assistance. These improvements will be achieved with the recent enactment of H.R. 3434, the Adoption Assistance and Child Welfare Act of 1980. The well-being of children in need of homes and their permanent placement have been a primary concern of my Administration. This legislation will ensure that children are not lost in the foster care system, but instead will be returned to their families where possible or placed in permanent adoptive homes. LOW-INCOME ENERGY ASSISTANCE In 1979 I proposed a program to provide an annual total of $1.6 billion to low-income households which are hardest hit by rising energy bills. With the cooperation of Congress, we were able to move quickly to provide assistance to eligible households in time to meet their winter heating bills. In response to the extreme heat conditions affecting many parts of the country during 1980, I directed the Community Services Administration to make available over $27 million to assist low-income individuals, especially the elderly, facing life threatening circumstances due to extreme heat. Congress amended and reauthorized the low-income energy assistance program for fiscal year 1981, and provided $1.85 billion to meet anticipated increasing need. The need for a program to help low-income households with rising energy expenses will not abate in the near future. The low-income energy assistance program should be reauthorized to meet those needs. HOUSING For the past 14 months, high interest rates have had a severe impact on the nation's housing market. Yet the current pressures and uncertainties should not obscure the achievements of the past four years. Working with the Congress, the regulatory agencies, and the financial community, my Administration has brought about an expanded and steadier flow of funds into home mortgages. Deregulation of the interest rates payable by depository institutions, the evolution of variable and renegotiated rate mortgages, development of high yielding savings certificates, and expansion of the secondary mortgage market have all increased housing's ability to attract capital and have assured that mortgage money would not be cut off when interest rates rose. These actions will diminish the cyclicality of the housing industry. Further, we have secured legislation updating the Federal Government's emergency authority to provide support for the housing industry through the Brooke-Cranston program, and creating a new Section 235 housing stimulus program. These tools will enable the Federal Government to deal quickly and effectively with serious distress in this critical industry. We have also worked to expand homeownership opportunities for Americans. By using innovative financing mechanisms, such as the graduated payment mortgage, we have increased the access of middle income families to housing credit. By revitalizing the Section 235 program, we have enabled nearly 100,000 moderate income households to purchase new homes. By reducing paperwork and regulation in Federal programs, and by working with State and local governments to ease the regulatory burden, we have helped to hold down housing costs and produce affordable housing. As a result of these governmentwide efforts, 5 1/2 million more American families bought homes in the past four years than in any equivalent period in history. And more than 7 million homes have begun construction during my Administration, 1 million more than in the previous four years. We have devoted particular effort to meeting the housing needs of low and moderate income families. In the past four years, more than 1 million subsidized units have been made available for occupancy by lower income Americans and more than 600,000 assisted units have gone into construction. In addition, we have undertaken a series of measures to revitalize and preserve the nation's 2 million units of public and assisted housing. For Fiscal Year 1982, I am proposing to continue our commitment to lower income housing. I am requesting funds to support 260,000 units of Section 8 and public housing, maintaining these programs at the level provided by Congress in Fiscal 1981. While we have made progress in the past four years, in the future there are reasons for concern. Home price inflation and high interest rates threaten to put homeownership out of reach for first-time homebuyers. Lower income households, the elderly and those dependent upon rental housing face rising rents, low levels of rental housing construction by historic standards, and the threat of displacement due to conversion to condominiums and other factors. Housing will face strong competition for investment capital from the industrial sector generally and the energy industries, in particular. To address these issues, I appointed a Presidential Task Force and Advisory Group last October. While this effort will not proceed due to the election result, I hope the incoming Administration will proceed with a similar venture. The most important action government can take to meet America's housing needs is to restore stability to the economy and bring down the rate of inflation. Inflation has driven up home prices, operating costs and interest rates. Market uncertainty about inflation has contributed to the instability in interest rates, which has been an added burden to homebuilders and homebuyers alike. By making a long-term commitment to provide a framework for greater investment, sustained economic growth, and price stability, my Administration has begun the work of creating a healthy environment for housing. TRANSPORTATION With the passage of the Airline Deregulation Act of 1978, the Motor Carrier Act of 1980, and the Harley O. Staggers Rail Act of 1980, my Administration, working with the Congress, has initiated a new era of reduced regulation of transportation industries. Deregulation will lead to increased productivity and operating efficiencies in the industries involved, and stimulate price and service competition, to the benefit of consumers generally. I urge the new Administration to continue our efforts on behalf of deregulation legislation for the intercity passenger bus industry as well. In the coming decade, the most significant challenge facing the nation in transportation services will be to improve a deteriorating physical infrastructure of roadways, railroads, waterways and mass transit systems, in order to conserve costly energy supplies while promoting effective transportation services. HIGHWAYS Our vast network of highways, which account for 90 percent of travel and 80 percent by value of freight traffic goods movement, is deteriorating. If current trends continue, a major proportion of the Interstate pavement will have deteriorated by the end of the 1980's. Arresting the deterioration of the nation's system of highways is a high priority objective for the 1980's. We must reorient the Federal mission from major new construction projects to the stewardship of the existing Interstate Highway System. Interstate gaps should be judged on the connections they make and on their compatibility with community needs. During this decade, highway investments will be needed to increase productivity, particularly in the elimination of bottlenecks, provide more efficient connections to ports and seek low-cost solutions to traffic demand. My Administration has therefore recommended redefining completion of the Interstate system, consolidating over 27 categorical assistance programs into nine, and initiating a major repair and rehabilitation program for segments of the Interstate system. This effort should help maintain the condition and performance of the Nation's highways, particularly the Interstate and primary system; provide a realistic means to complete the Interstate system by 1990; ensure better program delivery through consolidation, and assist urban revitalization. In addition, the Congress must address the urgent funding problems of the highway trust fund, and the need to generate greater revenues. MASS TRANSIT In the past decade the nation's public transit systems' ridership increased at an annual average of 1.1% each year in the 1970's (6.9% in 1979). Continued increases in the cost of fuel are expected to make transit a growing part of the nation's transportation system. As a result, my Administration projected a ten year, $43 billion program to increase mass transit capacity by 50 percent, and promote more energy efficient vehicle uses in the next decade. The first part of this proposal was the five year, $24.7 billion Urban Mass Transportation Administration reauthorization legislation I sent to the Congress in March, 1980. I urge the 97th Congress to quickly enact this or similar legislation in 1981. My Administration was also the first to have proposed and signed into law a non-urban formula grant program to assist rural areas and small communities with public transportation programs to end their dependence on the automobile, promote energy conservation and efficiency, and provide transportation services to impoverished rural communities. A principal need of the 1980's will be maintaining mobility for all segments of the population in the face of severely increasing transportation costs and uncertainty of fuel supplies. We must improve the flexibility of our transportation system and offer greater choice and diversity in transportation services. While the private automobile will continue to be the principal means of transportation for many Americans, public transportation can become an increasingly attractive alternative. We, therefore, want to explore a variety of paratransit modes, various types of buses, modern rapid transit, regional rail systems and light rail systems. Highway planning and transit planning must be integrated and related to State, regional, district and neighborhood planning efforts now in place or emerging. Low density development and land use threaten the fiscal capacity of many communities to support needed services and infrastructure. ELDERLY AND HANDICAPPED TRANSPORTATION Transportation policies in the 1980's must pay increasing attention to the needs of the elderly and handicapped. By 1990, the number of people over 65 will have grown from today's 19 million to 27 million. During the same period, the number of handicapped -- people who have difficulty using transit as well as autos, including the elderly -- is expected to increase from 9 to 11 million, making up 4.5 percent of the population. We must not retreat from a policy that affords a significant and growing portion of our population accessible public transportation while recognizing that the handicapped are a diverse group and will need flexible, door-to-door service where regular public transportation will not do the job. RAILROADS In addition, the Federal government must reassess the appropriate Federal role of support for passenger and freight rail services such as Amtrak and Conrail. Our goal through federal assistance should be to maintain and enhance adequate rail service, where it is not otherwise available to needy communities. But Federal subsidies must be closely scrutinized to be sure they are a stimulus to, and not a replacement for, private investment and initiative. Federal assistance cannot mean permanent subsidies for unprofitable operations. WATERWAYS AND RURAL TRANSPORTATION There is a growing need in rural and small communities for improved transportation services. Rail freight service to many communities has declined as railroads abandon unproductive branch lines. At the same time, rural roads are often inadequate to handle large, heavily-loaded trucks. The increased demand for "harvest to harbor" service has also placed an increased burden on rural transportation systems, while bottlenecks along the Mississippi River delay grain shipments to the Gulf of Mexico. We have made some progress: -- To further develop the nation's waterways, my Administration began construction of a new 1,200 foot lock at the site of Lock and Dam 26 on the Mississippi River. When opened in 1987, the new lock will have a capacity of 86 million tons per year, an 18 percent increase over the present system. The U.S. Army Corps of Engineers has also undertaken studies to assess the feasibility of expanding the Bonneville Locks. Rehabilitation of John Day Lock was begun in 1980 and should be completed in 1982. My Administration also supports the completion of the Upper Mississippi River Master Plan to determine the feasibility of constructing a second lock at Alton, Illinois. These efforts will help alleviate delays in transporting corn, soybeans and other goods along the Mississippi River to the Gulf of Mexico. -- The Department of Transportation's new Small Community and Rural Transportation Policy will target federal assistance for passenger transportation, roads and highways, truck service, and railroad freight service to rural areas. This policy implements and expands upon the earlier White House Initiative, "Improving Transportation in Rural America," announced in June, 1979, and the President's "Small Community and Rural Development Policy" announced in December, 1979. The Congress should seek ways to balance rail branch line abandonment with the service needs of rural and farm communities, provide financial assistance to rail branch line rehabilitation where appropriate, assist shippers to adjust to rail branch line abandonment where it takes place, and help make it possible for trucking firms to serve light density markets with dependable and efficient trucking services. MARITIME POLICY During my Administration I have sought to ensure that the U.S. maritime industry will not have to function at an unfair competitive disadvantage in the international market. As I indicated in my maritime policy statement to the Congress in July, 1979, the American merchant marine is vital to our Nation's welfare, and Federal actions should promote rather than harm it. In pursuit of this objective, I signed into law the Controlled Carrier Act of 1978, authorizing the Federal Maritime Commission to regulate certain rate cutting practices of some state-controlled carriers, and recently signed a bilateral maritime agreement with the People's Republic of China that will expand the access of American ships to 20 specified Chinese ports, and set aside for American-flag ships a substantial share (at least one-third) of the cargo between our countries. This agreement should officially foster expanded U.S. and Chinese shipping services linking the two countries, and will provide further momentum to the growth of Sino-American trade. There is also a need to modernize and expand the dry bulk segment of our fleet. Our heavy dependence on foreign carriage of U.S.-bulk cargoes deprives the U.S. economy of seafaring and shipbuilding jobs, adds to the balance-of-payments deficit, deprives the Government of substantial tax revenues, and leaves the United States dependent on foreign-flag shipping for a continued supply of raw materials to support the civil economy and war production in time of war. I therefore sent to the Congress proposed legislation to strengthen this woefully weak segment of the U.S.-flag fleet by removing certain disincentives to U.S. construction of dry bulkers and their operation under U.S. registry. Enactment of this proposed legislation would establish the basis for accelerating the rebuilding of the U.S.-flag dry bulk fleet toward a level commensurate with the position of the United States as the world's leading bulk trading country. During the past year the Administration has stated its support for legislation that would provide specific Federal assistance for the installation of fuel-efficient engines in existing American ships, and would strengthen this country's shipbuilding mobilization base. Strengthening the fleet is important, but we must also maintain our shipbuilding base for future ship construction. Provisions in existing laws calling for substantial or exclusive use of American-flag vessels to carry cargoes generated by the Government must be vigorously pursued. I have therefore supported requirements that 50 percent of oil purchased for the strategic petroleum reserve be transported in U.S.-flag vessels, that the Cargo Preference Act be applied to materials furnished for the U.S. assisted construction of air bases in Israel, and to cargoes transported pursuant to the Chrysler Corporation Loan Guarantee Act. In addition, the deep Seabed Hard Mineral Resources Act requires that at least one ore carrier per mine site be a U.S.-flag vessel. Much has been done, and much remains to be done. The FY 1982 budget includes a $107 million authorization for Construction Differential Subsidy ("CDS") funds which, added to the unobligated CDS balance of $100 million from 1980, and the recently enacted $135 million 1981 authorization, will provide an average of $171 million in CDS funds in 1981 and 1982. COAL EXPORT POLICY While significant growth in foreign demand for U.S. steam coal is foreseen, congestion at major U.S. coal exporting ports such as Hampton Roads, Virginia, and Baltimore, Maryland, could delay and impede exports. My Administration has worked through the Interagency Coal Task Force Study, which I created, to promote cooperation and coordination of resources between shippers, railroads, vessel broker/ operators and port operators, and to determine the most appropriate Federal role in expanding and modernizing coal export facilities, including dredging deeper channels at selected ports. Some progress has already been made. In addition to action taken by transshippers to reduce the number of coal classifications used whenever possible, by the Norfolk and Western Railroad to upgrade its computer capability to quickly inventory its coal cars in its yards, and by the Chessie Railroad which is reactivating Pier 15 in Newport News and has established a berth near its Curtis Bay Pier in Baltimore to decrease delays in vessel berthing, public activities will include: -- A $26.5 million plan developed by the State of Pennsylvania and Conrail to increase Conrail's coal handling capacity at Philadelphia; -- A proposal by the State of Virginia to construct a steam coal port on the Craney Island Disposal area in Portsmouth harbor; -- Plans by Mobile, Alabama, which operates the only publicly owned coal terminal in the U.S. to enlarge its capacity at McDuffie Island to 10 million tons ground storage and 100 car unit train unloading capability; -- Development at New Orleans of steam coal facilities that are expected to add over 20 million tons of annual capacity by 1983; and -- The Corps of Engineers, working with other interested Federal agencies, will determine which ports should be dredged, to what depth and on what schedule, in order to accommodate larger coal carrying vessels. Private industry will, of course, play a major role in developing the United States' coal export facilities. The new Administration should continue to work to eliminate transportation bottlenecks that impede our access to foreign markets. Special Needs WOMEN The past four years have been years of rapid advancement for women. Our focus has been two-fold: to provide American women with a full range of opportunities and to make them a part of the mainstream of every aspect of our national life and leadership. I have appointed a record number of women to judgeships and to top government posts. Fully 22 percent of all my appointees are women, and I nominated 41 of the 46 women who sit on the Federal bench today. For the first time in our history, women occupy policymaking positions at the highest level of every Federal agency and department and have demonstrated their ability to serve our citizens well. We have strengthened the rights of employed women by consolidating and strengthening enforcement of sex discrimination laws under the EEOC, by expanding employment rights of pregnant women through the Pregnancy Disability Bill, and by increasing federal employment opportunities for women through civil service reform, and flexi-time and part-time employment. By executive order, I created the first national program to provide women businessowners with technical assistance, grants, loans, and improved access to federal contracts. We have been sensitive to the needs of women who are homemakers. I established an Office of Families within HHS and sponsored the White House Conference on Families. We initiated a program targeting CETA funds to help displaced homemakers. The Social Security system was amended to eliminate the widow's penalty and a comprehensive study of discriminatory provisions and possible changes was presented to Congress. Legislation was passed to give divorced spouses of foreign service officers rights to share in pension benefits. We created an office on domestic violence within HHS to coordinate the 12 agencies that now have domestic violence relief programs, and to distribute information on the problem and the services available to victims. Despite a stringent budget for FY 1981, the Administration consistently supported the Women's Educational Equity Act and family planning activities, as well as other programs that affect women, such as food stamps, WIC, and social security. We have been concerned not only about the American woman's opportunities, but ensuring equality for women around the world. In November, 1980, I sent to the Senate the Convention on the Elimination of All Forms of Discrimination Against Women. This United Nations document is the most comprehensive and detailed international agreement which seeks the advancement of women. On women's issues, I have sought the counsel of men and women in and out of government and from all regions of our country. I established two panels -- the President's Advisory Committee for Women and the Interdepartmental Task Force on Women -- to advise me on these issues. The mandate for both groups expired on December 31, but they have left behind a comprehensive review of the status of women in our society today. That review provides excellent guidance for the work remaining in our battle against sex discrimination. Even though we have made progress, much remains on the agenda for women. I remain committed to the Equal Rights Amendment and will continue to work for its passage. It is essential to the goal of bringing America's women fully into the mainstream of American life that the ERA be ratified. The efforts begun for women in employment, business and education should be continued and strengthened. Money should be available to states to establish programs to help the victims of domestic violence. Congress should pass a national health care plan and a welfare reform program, and these measures should reflect the needs of women. The talents of women should continue to be used to the fullest inside and outside of government, and efforts should continue to see that they have the widest range of opportunities and options. HANDICAPPED I hope that my Administration will be remembered in this area for leading the way toward full civil rights for handicapped Americans. When I took office, no federal agency had yet issued 504 regulations. As I leave office, this first step by every major agency and department in the federal government is almost complete. But it is only a first step. The years ahead will require steadfast dedication by the President to protect and promote these precious rights in the classroom, in the workplace, and in all public facilities so that handicapped individuals may join the American mainstream and contribute to the fullest their resources and talents to our economic and social life. Just as we supported, in an unprecedented way, the civil rights of disabled persons in schools and in the workplace, other initiatives in health prevention, such as our immunization and nutrition programs for young children and new intense efforts to reverse spinal cord injury, must continue so that the incidence of disability continues to decline. This year is the U.N.-declared International Year of Disabled Persons. We are organizing activities to celebrate and promote this important commemorative year within the government as well as in cooperation with private sector efforts in this country and around the world. The International Year will give our country the opportunity to recognize the talents and capabilities of our fellow citizens with disabilities. We can also share our rehabilitation and treatment skills with other countries and learn from them as well. I am proud that the United States leads the world in mainstreaming and treating disabled people. However, we have a long way to go before all psychological and physical barriers to disabled people are torn down and they can be full participants in our American way of life. We must pledge our full commitment to this goal during the International Year. FAMILIES Because of my concern for American families, my Administration convened last year the first White House Conference on Families which involved seven national hearings, over 506 state and local events, three White House Conferences, and the direct participation of more than 125,000 citizens. The Conference reaffirmed the centrality of families in our lives and nation but documented problems American families face as well. We also established the Office of Families within the Department of Health and Human Services to review government policies and programs that affect families. I expect the departments and agencies within the executive branch of the Federal government as well as Members of Congress, corporate and business leaders, and State and local officials across the country, to study closely the recommendations of the White House Conference and implement them appropriately. As public policy is developed and implemented by the Federal government, cognizance of the work of the Conference should be taken as a pragmatic and essential step. The Conference has done a good job of establishing an agenda for action to assure that the policies of the Federal government are more sensitive in their impact on families. I hope the Congress will review and seriously consider the Conference's recommendations. OLDER AMERICANS My Administration has taken great strides toward solving the difficult problems faced by older Americans. Early in my term we worked successfully with the Congress to assure adequate revenues for the Social Security Trust Funds. And last year the strength of the Social Security System was strengthened by legislation I proposed to permit borrowing among the separate trust funds. I have also signed into law legislation prohibiting employers from requiring retirement prior to age 70, and removing mandatory retirement for most Federal employees. In addition, my Administration worked very closely with Congress to amend the Older Americans Act in a way that has already improved administration of its housing, social services, food delivery, and employment programs. This year, I will be submitting to Congress a budget which again demonstrates my commitment to programs for the elderly. It will include, as my previous budgets have, increased funding for nutrition, senior centers and home health care, and will focus added resources on the needs of older Americans. With the 1981 White House Conference on Aging approaching, I hope the new Administration will make every effort to assure an effective and useful conference. This Conference should enable older Americans to voice their concerns and give us guidance in our continued efforts to ensure the quality of life so richly deserved by our senior citizens. REFUGEES We cannot hope to build a just and humane society at home if we ignore the humanitarian claims of refugees, their lives at stake, who have nowhere else to turn. Our country can be proud that hundreds of thousands of people around the world would risk everything they have -- including their own lives -- to come to our country. This Administration initiated and implemented the first comprehensive reform of our refugee and immigration policies in over 25 years. We also established the first refugee coordination office in the Department of State under the leadership of a special ambassador and coordinator for refugee affairs and programs. The new legislation and the coordinator's office will bring common sense and consolidation to our Nation's previously fragmented, inconsistent, and in many ways, outdated, refugee and immigration policies. With the unexpected arrival of thousands of Cubans and Haitians who sought refuge in our country last year, outside of our regular immigration and refugee admissions process, our country and its government were tested in being compassionate and responsive to a major human emergency. Because we had taken steps to reorganize our refugee programs, we met that test successfully. I am proud that the American people responded to this crisis with their traditional good will and hospitality. Also, we would never have been able to handle this unprecedented emergency without the efforts of the private resettlement agencies who have always been there to help refugees in crises. Immigrants to this country always contribute more toward making our country stronger than they ever take from the system. I am confident that the newest arrivals to our country will carry on this tradition. While we must remain committed to aiding and assisting those who come to our shores, at the same time we must uphold our immigration and refugee policies and provide adequate enforcement resources. As a result of our enforcement policy, the illegal flow from Cuba has been halted and an orderly process has been initiated to make certain that our refugee and immigration laws are honored. This year the Select Commission on Immigration and Refugee Policy will complete its work and forward its advice and recommendations. I hope that the recommendations will be carefully considered by the new Administration and the Congress, for it is clear that we must take additional action to keep our immigration policy responsive to emergencies and ever changing times. VETERANS This country and its leadership has a continuing and unique obligation to the men and women who served their nation in the armed forces and help maintain or restore peace in the world. My commitment to veterans, as evidenced by my record, is characterized by a conscientious and consistent emphasis in these general areas: First, we have worked to honor the Vietnam veteran. During my Administration, and under the leadership of VA Administrator Max Cleland, I was proud to lead our country in an overdue acknowledgement of our Nation's gratitude to the men and women who served their country during the bitter war in Southeast Asia. Their homecoming was deferred and seemed doomed to be ignored. Our country has matured in the last four years and at long last we were able to separate the war from the warrior and honor these veterans. But with our acknowledgement of their service goes an understanding that some Vietnam veterans have unique needs and problems. My Administration was able to launch a long sought after psychological readjustment and outreach program, unprecedented in its popularity, sensitivity and success. This program must be continued. The Administration has also grappled with the difficult questions posed by some veterans who served in Southeast Asia and were exposed to potentially harmful substances, including the herbicide known as Agent Orange. We have launched scientific inquiries that should answer many veterans' questions about their health and should provide the basis for establishing sound compensation policy. We cannot rest until their concerns are dealt with in a sensitive, expeditious and compassionate fashion. Second, we have focused the VA health care system in the needs of the service-connected disabled veteran. We initiated and are implementing the first reform of the VA vocational rehabilitation system since its inception in 1943. Also, my Administration was the first to seek a cost-of-living increase for the recipients of VA compensation every year. My last budget also makes such a request. The Administration also launched the Disabled Veterans Outreach Program in the Department of Labor which has successfully placed disabled veterans in jobs. Services provided by the VA health care system will be further targeted to the special needs of disabled veterans during the coming year. Third, the VA health care system, the largest in the free world, has maintained its independence and high quality during my Administration. We have made the system more efficient and have therefore treated more veterans than ever before by concentrating on out-patient care and through modern management improvements. As the median age of the American veteran population increases, we must concentrate on further changes within the VA system to keep it independent and to serve as a model to the nation and to the world as a center for research, treatment and rehabilitation. Government Assistance GENERAL AID TO STATE AND LOCAL GOVERNMENTS Since taking office, I have been strongly committed to strengthening the fiscal and economic condition of our Nation's State and local governments. I have accomplished this goal by encouraging economic development of local communities, and by supporting the General Revenue Sharing and other essential grant-in-aid programs. GRANTS-IN-AID TO STATES AND LOCALITIES During my Administration, total grants-in-aid to State and local governments have increased by more than 40 percent, from $68 billion in Fiscal Year 1977 to $96 billion in Fiscal Year 1981. This significant increase in aid has allowed States and localities to maintain services that are essential to their citizens without imposing onerous tax burdens. It also has allowed us to establish an unprecedented partnership between the leaders of the Federal government and State and local government elected officials. GENERAL REVENUE SHARING Last year Congress enacted legislation that extends the General Revenue Sharing program for three more years. This program is the cornerstone of our efforts to maintain the fiscal health of our Nation's local government. It will provide $4.6 billion in each of the next three years to cities, counties and towns. This program is essential to the continued ability of our local governments to provide essential police, fire and sanitation services. This legislation renewing GRS will be the cornerstone of Federal-State-local government relations in the 1980's. This policy will emphasize the need for all levels of government to cooperate in order to meet the needs of the most fiscally strained cities and counties, and also will emphasize the important role that GRS can play in forging this partnership. I am grateful that Congress moved quickly to assure that our Nation's localities can begin the 1980's in sound fiscal condition. COUNTER-CYCLICAL ASSISTANCE Last year, I proposed that Congress enact a $1 billion counter-cyclical fiscal assistance program to protect States and localities from unexpected changes in the national economy. This program unfortunately was not enacted by the [full] Congress. I, therefore, have not included funding for counter-cyclical aid in my Fiscal Year 1982 budget. Nevertheless, I urge Congress to enact a permanent stand-by counter-cyclical program, so that States and cities can be protected during the next economic downturn. URBAN POLICY Three years ago, I proposed the Nation's first comprehensive urban policy. That policy involved more than one hundred improvements in existing Federal programs, four new Executive Orders and nineteen pieces of urban-oriented legislation. With Congress' cooperation, sixteen of these bills have now been signed into law. ECONOMIC DEVELOPMENT One of the principal goals of my domestic policy has been to strengthen the private sector economic base of our Nation's economically troubled urban and rural areas. With Congress' cooperation, we have substantially expanded the Federal government's economic development programs and provided new tax incentives for private investment in urban and rural communities. These programs have helped many communities to attract new private sector jobs and investments and to retain the jobs and investments that already are in place. When I took office, the Federal government was spending less than $300 million annually on economic development programs, and only $60 million of those funds in our Nation's urban areas. Since that time, we have created the Urban Development Action Grant (UDAG) program and substantially expanded the economic development programs in the Commerce Department. My FY 1982 budget requests more than $1.5 billion for economic development grants, loans and interest subsidies and almost $1.5 billion for loan guarantees. Approximately 60 percent of these funds will be spent in our Nation's urban areas. In addition, we have extended the 10 percent investment credit to include rehabilitation of existing industrial facilities as well as new construction. I continue to believe that the development of private sector investment and jobs is the key to revitalizing our Nation's economically depressed urban and rural areas. To ensure that the necessary economic development goes forward, the Congress must continue to provide strong support for the UDAG program and the programs for the Economic Development Administration. Those programs provide a foundation for the economic development of our Nation in the 1980's. COMMUNITY DEVELOPMENT The partnership among Federal, State and local governments to revitalize our Nation's communities has been a high priority of my Administration. When I took office, I proposed a substantial expansion of the Community Development Block Grant (CDBG) program and the enactment of a new $400 million Urban Development Action Grant (UDAG) program. Both of these programs have provided essential community and economic development assistance to our Nation's cities and counties. Last year, Congress reauthorized both the CDBG and UDAG programs. The CDBG program was reauthorized for three more years with annual funding increases of $150 million, and the UDAG program was extended for three years at the current funding level of $675 million annually. My 1982 budget requests full funding for both of these programs. These actions should help our Nation's cities and counties to continue the progress they have made in the last three years. NEIGHBORHOODS During my Administration we have taken numerous positive steps to achieve a full partnership of neighborhood organizations and government at all levels. We have successfully fought against red lining and housing discrimination. We created innovative Self Help funding and technical resource transfer mechanisms. We have created unique methods of access for neighborhood organizations to have a participating role in Federal and State government decision-making. Neighborhood based organizations are the threshold of the American community. The Federal government will need to develop more innovative and practical ways for neighborhood based organizations to successfully participate in the identification and solution of local and neighborhood concerns. Full partnership will only be achieved with the knowing participation of leaders of government, business, education and unions. Neither state nor Federal solutions imposed from on high will suffice. Neighborhoods are the fabric and soul of this great land. Neighborhoods define the weave that has been used to create a permanent fabric. The Federal government must take every opportunity to provide access and influence to the individuals and organizations affected at the neighborhood level. Rural Policy Since the beginning of my Administration, I have been committed to improving the effectiveness with which the Federal government deals with the problems and needs of a rapidly changing rural America. The rapid growth of some rural areas has placed a heavy strain on communities and their resources. There are also persistent problems of poverty and economic stagnation in other parts of rural America. Some rural areas continue to lose population, as they have for the past several decades. In December, 1979, I announced the Small Community and Rural Development Policy. It was the culmination of several years' work and was designed to address the varying needs of our rural population. In 1980, my Administration worked with the Congress to pass the Rural Development Policy Act of 1980, which when fully implemented will allow us to meet the needs of rural people and their communities more effectively and more efficiently. As a result of the policy and the accompanying legislation, we have: -- Created the position of Under Secretary of Agriculture for Small Community and Rural Development to provide overall leadership. -- Established a White House Working Group to assist in the implementation of the policy. -- Worked with more than 40 governors to form State rural development councils to work in partnership with the White House Working Group, and the Federal agencies, to better deliver State and Federal programs to rural areas. -- Directed the White House Working Group to annually review existing and proposed policies, programs, and budget levels to determine their adequacy in meeting rural needs and the fulfilling of the policy's objectives and principles. This effort on the part of my Administration and the Congress has resulted in a landmark policy. For the first time, rural affairs has received the prominence it has always deserved. It is a policy that can truly help alleviate the diverse and differing problems rural America will face in the 1980's. With the help and dedication of a great many people around the country who are concerned with rural affairs, we have constructed a mechanism for dealing effectively with rural problems. There is now a great opportunity to successfully combine Federal efforts with the efforts of rural community leaders and residents. It is my hope this spirit of cooperation and record of accomplishment will be continued in the coming years. CONSUMERS In September, 1979, I signed an Executive Order designed to strengthen and coordinate Federal consumer programs and to establish procedures to improve and facilitate consumer participation in government decision-making. Forty Federal agencies have adopted programs to comply with the requirements of the Order. These programs will improve complaint handling, provide better information to consumers, enhance opportunities for public participation in government proceedings, and assure that the consumer point of view is considered in all programs, policies, and regulations. While substantial progress has been made in assuring a consumer presence in Federal agencies, work must continue to meet fully the goals of the Executive Order. Close monitoring of agency compliance with the requirements of the Order is necessary. Continued evaluation to assure that the programs are effective and making maximum use of available resources is also essential. As a complement to these initiatives, efforts to provide financial assistance in regulatory proceedings to citizen groups, small businesses, and others whose participation is limited by their economic circumstances must continue to be pursued. It is essential that consumer representatives in government pay particular attention to the needs and interests of low-income consumers and minorities. The Office of Consumer Affairs' publication, "People Power: What Communities Are Doing to Counter Inflation," catalogues some of the ways that government and the private sector can assist the less powerful in our society to help themselves. New ways should be found to help foster this new people's movement which is founded on the principle of self-reliance. Science and Technology Science and technology contribute immeasurably to the lives of all Americans. Our high standard of living is largely the product of the technology that surrounds us in the home or factory. Our good health is due in large part to our ever increasing scientific understanding. Our national security is assured by the application pate science and technology will bring. The Federal government has a special role to play in science and technology. Although the fruits of scientific achievements surround us, it is often difficult to predict the benefits that will arise from a given scientific venture. And these benefits, even if predictable, do not usually lead to ownership rights. Accordingly, the Government has a special obligation to support science as an investment in our future. My Administration has sought to reverse a decade-long decline in funding. Despite the need for fiscal restraint, real support of basic research has grown nearly 11% during my term in office. And, my Administration has sought to increase the support of long-term research in the variety of mission agencies. In this way, we can harness the American genius for innovation to meet the economic, energy, health, and security challenges that confront our nation. -- International Relations and National Security. Science and technology are becoming increasingly important elements of our national security and foreign policies. This is especially so in the current age of sophisticated defense systems and of growing dependence among all countries on modern technology for all aspects of their economic strength. For these reasons, scientific and technological considerations have been integral elements of the Administration's decision-making on such national security and foreign policy issues as the modernization of our strategic weaponry, arms control, technology transfer, the growing bilateral relationship with China, and our relations with the developing world. Four themes have shaped U.S. policy in international scientific and technological cooperation: pursuit of new international initiatives to advance our own research and development objectives; development and strengthening of scientific exchange to bridge politically ideological, and cultural divisions between this country and other countries; formulation of programs and institutional relations to help developing countries use science and technology beneficially; and cooperation with other nations to manage technologies with local impact. At my direction, my Science and Technology Adviser has actively pursued international programs in support of these four themes. We have given special attention to scientific and technical relations with China, to new forms of scientific and technical cooperation with Japan, to cooperation with Mexico, other Latin American and Caribbean countries and several states in Black America, and to the proposed Institute for Scientific and Technological Cooperation. In particular our cooperation with developing countries reflects the importance that each of them has placed on the relationship between economic growth and scientific and technological capability. It also reflects their view that the great strength of the U.S. in science and technology makes close relations with the U.S. technical community an especially productive means of enhancing this capability. Scientific and technological assistance is a key linkage between the U.S. and the developing world, a linkage that has been under-utilized in the past and one which we must continue to work to strengthen. -- Space Policy. The Administration has established a framework for a strong and evolving space program for the 1980's. The Administration's space policy reaffirmed the separation of military space systems and the open civil space program, and at the same time, provided new guidance on technology transfer between the civil and military programs. The civil space program centers on three basic tenets: First, our space policy will reflect a balanced strategy of applications, science, and technology development. Second, activities will be pursued when they can be uniquely or more efficiently accomplished in space. Third, a premature commitment to a high challenge, space-engineering initiative of the complexity of Apollo is inappropriate. As the Shuttle development phases down, however, there will be added flexibility to consider new space applications, space science and new space exploration activities. -- Technology Development. The Shuttle dominates our technology development effort and correctly so. It represents one of the most sophisticated technological challenges ever undertaken, and as a result, has encountered technical problems. Nonetheless, the first manned orbital flight is now scheduled for March, 1981. I have been pleased to support strongly the necessary funds for the Shuttle throughout my Administration. -- Space Applications. Since 1972, the U.S. has conducted experimental civil remote sensing through Landsat satellites, thereby realizing many successful applications. Recognizing this fact, I directed the implementation of an operational civil land satellite remote sensing system, with the operational management responsibility in Commerce's National Oceanic and Atmospheric Administration. In addition, because ocean observations from space can meet common civil and military data requirements, a National Oceanic Satellite System has been proposed as a major FY 1981 new start. -- Space Science Exploration. The goals of this Administration's policy in space science have been to: (1) continue a vigorous program of planetary exploration to understand the origin and evolution of the solar system; (2) utilize the space telescope and free-flying satellites to usher in a new era of astronomy; (3) develop a better understanding of the sun and its interaction with the terrestrial environment; and (4) utilize the Shuttle and Spacelab to conduct basic research that complements earth-based life science investigations. DISTRICT OF COLUMBIA Washington, D.C., is home to both the Federal Government and to more than half a million American citizens. I have worked to improve the relationship between the Federal establishment and the Government of the District of Columbia in order to further the goals and spirit of home rule. The City controls more of its own destiny than was the case four years ago. Yet, despite the close cooperation between my Administration and that of Mayor Barry, we have not yet seen the necessary number of states ratify the Constitutional Amendment granting full voting representation in the Congress to the citizens of this city. It is my hope that this inequity will be rectified. The country and the people who inhabit Washington deserve no less. THE ARTS The arts are a precious national resource. Federal support for the arts has been enhanced during my Administration by expanding government funding and services to arts institutions, individual artists, scholars, and teachers through the National Endowment for the Arts. We have broadened its scope and reach to a more diverse population. We have also reactivated the Federal Council on the Arts and Humanities. It is my hope that during the coming years the new Administration and the Congress will: -- Continue support of institutions promoting development and understanding of the arts; -- Encourage business participants in a comprehensive effort to achieve a truly mixed economy of support for the arts; -- Explore a variety of mechanisms to nurture the creative talent of our citizens and build audiences for their work; -- Support strong, active National Endowments for the Arts; -- Seek greater recognition for the rich cultural tradition of the nation's minorities; -- Provide grants for the arts in low-income neighborhoods. THE HUMANITIES In recently reauthorizing Federal appropriations for the National Endowment for the Humanities, the Congress has once again reaffirmed that "the encouragement and support of national progress and scholarship in the humanities . . . while primarily a matter for private and local initiative, is also an appropriate matter of concern to the Federal Government" and that "a high civilization must not limit its efforts to science and technology alone but must give full value and support to the other great branches of man's scholarly and cultural activity in order to achieve a better understanding of the past, a better analysis of the present, and a better view of the future." I believe we are in agreement that the humanities illuminate the values underlying important personal, social, and national questions raised in our society by its multiple links to and increasing dependence on technology, and by the diverse heritage of our many regions and ethnic groups. The humanities cast light on the broad issue of the role in a society of men and women of imagination and energy -- those individuals who through their own example define "the spirit of the age," and in so doing move nations. Our Government's support for the humanities, within the framework laid down by the Congress, is a recognition of their essential nourishment of the life of the mind and vital enrichment of our national life. I will be proposing an increase in funding this year sufficient to enable the Endowment to maintain the same level of support offered our citizens in Fiscal Year 1981. In the allocation of this funding, special emphasis will be given to: -- Humanities education in the nation's schools, in response to the great needs that have arisen in this area; -- Scholarly research designed to increase our understanding of the cultures, traditions, and historical forces at work in other nations and in our own; -- Drawing attention to the physical disintegration of the raw material of our cultural heritage -- books, manuscripts, periodicals, and other documents -- and to the development of techniques to prevent the destruction and to preserve those materials; and -- The dissemination of quality programming in the humanities to increasingly large American audiences through the use of radio and television. The dominant effort in the Endowment's expenditures will be a commitment to strengthen and promulgate scholarly excellence and achievement in work in the humanities in our schools, colleges, universities, libraries, museums and other cultural institutions, as well as in the work of individual scholars or collaborative groups engaged in advanced research in the humanities. In making its grants the Endowment will increase its emphasis on techniques which stimulate support for the humanities from non-Federal sources, in order to reinforce our tradition of private philanthropy in this field, and to insure and expand the financial viability of our cultural institutions and life. INSULAR AREAS I have been firmly committed to self-determination for Puerto Rico, the Virgin Islands, Guam, American Samoa and the Northern Mariana Islands, and have vigorously supported the realization of whatever political status aspirations are democratically chosen by their peoples. This principle was the keystone of the comprehensive territorial policy I sent the Congress last year. I am pleased that most of the legislative elements of that policy were endorsed by the 96th Congress. The unique cultures, fragile economies, and locations of our Caribbean and Pacific Islands are distinct assets to the United States which require the sensitive application of policy. The United States Government should pursue initiatives begun by my Administration and the Congress to stimulate insular economic development; enhance treatment under Federal programs eliminating current inequities; provide vitally needed special assistance and coordinate and rationalize policies. These measures will result in greater self-sufficiency and balanced growth. In particular, I hope that the new Congress will support funding for fiscal management, comprehensive planning and other technical assistance for the territories, as well as create the commission I have proposed to review the applicability of all Federal laws to the insular areas and make recommendations for appropriate modification. IV. REMOVING GOVERNMENTAL WASTE AND INEFFICIENCY One of my major commitments has been to restore public faith in our Federal government by cutting out waste and inefficiency. In the past four years, we have made dramatic advances toward this goal, many of them previously considered impossible to achieve. Where government rules and operations were unnecessary, they have been eliminated, as with airline, rail, trucking and financial deregulation. Where government functions are needed, they have been streamlined, through such landmark measures as the Civil Service Reform Act of 1978. I hope that the new administration and the Congress will keep up the momentum we have established for effective and responsible change in this area of crucial public concern. CIVIL SERVICE REFORM In March 1978, I submitted the Civil Service Reform Act to Congress. I called it the centerpiece of my efforts to reform and reorganize the government. With bipartisan support from Congress, the bill passed, and I am pleased to say that implementation is running well ahead of the statutory schedule. Throughout the service, we are putting into place the means to assure that reward and retention are based on performance and not simply on length of time on the job. In the first real test of the Reform Act, 98 percent of the eligible top-level managers joined the Senior Executive Service, choosing to relinquish job protections for the challenge and potential reward of this new corps of top executives. Though the Act does not require several of its key elements to be in operation for another year, some Federal agencies already have established merit pay systems for GS-13-15 managers, and most agencies are well on their way to establishing new performance standards for all their employees. All have paid out, or are now in the process of paying out, performance bonuses earned by outstanding members of the Senior Executive Service. Dismissals have increased by 10 percent, and dismissals specifically for inadequate job performance have risen 1500 percent, since the Act was adopted. Finally, we have established a fully independent Merit Systems Protection Board and Special Counsel to protect the rights of whistle-blowers and other Federal employees faced with threats to their rights. In 1981, civil service reform faces critical challenges, all agencies must have fully functioning performance appraisal systems for all employees, and merit pay systems for compensating the government's 130,000 GS-13-15 managers. Performance bonuses for members of the Senior Executive Service will surely receive scrutiny. If this attention is balanced and constructive, it can only enhance the chances for ultimate success of our bipartisan commitment to the revolutionary and crucial "pay for performance" concept. REGULATORY REFORM During the past four years we have made tremendous progress in regulatory reform. We have discarded old economic regulations that prevented competition and raised consumer costs, and we have imposed strong management principles on the regulatory programs the country needs, cutting paperwork and other wasteful burdens. The challenge for the future is to continue the progress in both areas without crippling vital health and safety programs. Our economic deregulation program has achieved major successes in five areas: Airlines: The Airline Deregulation Act is generating healthy competition, saving billions in fares, and making the airlines more efficient. The Act provides that in 1985 the CAB itself will go out of existence. Trucking: The trucking deregulation bill opens the industry to competition and allows truckers wide latitude on the routes they drive and the goods they haul. The bill also phases out most of the old law's immunity for setting rates. The Congressional Budget Office estimates these reforms will save as much as $8 billion per year and cut as much as half a percentage point from the inflation rate. Railroads: Overregulation has stifled railroad management initiative, service, and competitive pricing. The new legislation gives the railroads the freedom they need to rebuild a strong, efficient railroad industry. Financial Institutions: With the help of the Congress, over the past four years we have achieved two major pieces of financial reform legislation, legislation which has provided the basis for the most far-reaching changes in the financial services industry since the 1930's. The International Banking Act of 1978 was designed to reduce the advantages that foreign banks operating in the United States possessed in comparison to domestic banks. The Depository Institutions Deregulation and Monetary Control Act, adopted last March, provides for the phased elimination of a variety of anti-competitive barriers to financial institutions and freedom to offer services to and attract the savings of consumers, especially small savers. Recently, I submitted to the Congress my Administration's recommendations for the phased liberalization of restrictions on geographic expansion by commercial banks. Last year the Administration and financial regulatory agencies proposed legislation to permit the interstate acquisition of failing depository institutions. In view of the difficult outlook for some depository institutions I strongly urge the Congress to take prompt favorable action on the failing bank legislation. Telecommunications: While Congress did not pass legislation in this area, the Federal Communications Commission has taken dramatic action to open all aspects of communications to competition and to eliminate regulations in the areas where competition made them obsolete. The public is benefitting from an explosion of competition and new services. While these initiatives represent dramatic progress in economic deregulation, continued work is needed. I urge Congress to act on communications legislation and to consider other proposed deregulation measures, such as legislation on the bus industry. In addition, the regulatory commissions must maintain their commitment to competition as the best regulator of all. The other part of my reform program covers the regulations that are needed to protect the health, safety, and welfare of our citizens. For these regulations, my Administration has created a management program to cut costs without sacrificing goals. Under my Executive Order 12044, we required agencies to analyze the costs of their major new rules and consider alternative approaches, such as performance standards and voluntary codes, that may make rules less costly and more flexible. We created the Regulatory Analysis Review Group in the White House to analyze the most costly proposed new rules and find ways to improve them. The Regulatory Council was established to provide the first Government-wide listing of upcoming rules and eliminate overlapping and conflicting regulations. Agencies have launched "sunset" programs to weed out outmoded old regulations. We have acted to encourage public participation in regulatory decision-making. These steps have already saved billions of dollars in regulatory costs and slashed thousands of outmoded regulations. We are moving steadily toward a regulatory system that provides needed protections fairly, predictably, and at minimum cost. I urge Congress to continue on this steady path and resist the simplistic solutions that have been proposed as alternatives. Proposals like legislative veto and increased judicial review will add another layer to the regulatory process, making it more cumbersome and inefficient. The right approach to reform is to improve the individual statutes, where they need change, and to ensure that the regulatory agencies implement those statutes sensibly. PAPERWORK REDUCTION The Federal Government imposes a huge paperwork burden on business, local government, and the private sector. Many of these forms are needed for vital government functions, but others are duplicative, overly complex or obsolete. During my Administration we cut the paperwork burden by 15 percent, and we created procedures to continue this progress. The new Paperwork Reduction Act centralizes, in OMB, oversight of all agencies' information requirements and strengthens OMB's authority to eliminate needless forms. The "paperwork budget" process, which I established by executive order, applies the discipline of the budget process to the hours of reporting time imposed on the public, forcing agencies to scrutinize all their forms each year. With effective implementation, these steps should allow further, substantial paperwork cuts in the years ahead. TIGHTENING STANDARDS FOR GOVERNMENTAL EFFICIENCY AND INTEGRITY To develop a foundation to carry out energy policy, we consolidated scattered energy programs and launched the Synthetic Fuels Corporation; to give education the priority it deserves and at the same time reduce HHS to more manageable size, I gave education a seat at the Cabinet table, to create a stronger system for attacking waste and fraud, I reorganized audit and investigative functions by putting an Inspector General in major agencies. Since I took office, we have submitted 14 reorganization initiatives and had them all approved by Congress. We have saved hundreds of millions of dollars through the adoption of businesslike cash management principles and set strict standards for personal financial disclosure and conflict of interest avoidance by high Federal officials. To streamline the structure of the government, we have secured approval of 14 reorganization initiatives, improving the efficiency of the most important sectors of the government, including energy, education, and civil rights enforcement. We have eliminated more than 300 advisory committees as well as other agencies, boards and commissions which were obsolete or ineffective. Independent Inspectors General have been appointed in major agencies to attack fraud and waste. More than a billion dollars of questionable transactions have been identified through their audit activities. The adoption of business-like cash management and debt collection initiatives will save over $1 billion, by streamlining the processing of receipts, by controlling disbursements more carefully, and by reducing idle cash balances. Finally this Administration has set strict standards for personal financial disclosure and conflict of interest avoidance by high Federal officials, to elevate the level of public trust in the government. V. PROTECTING BASIC RIGHTS AND LIBERTIES I am extremely proud of the advances we have made in ensuring equality and protecting the basic freedoms of all Americans. -- The Equal Employment Opportunity Commission (EEOC) and the Office of Federal Contract Compliance (OFCCP) have been reorganized and strengthened and a permanent civil rights unit has been established in OMB. -- To avoid fragmented, inconsistent and duplicative enforcement of civil rights laws, three agencies have been given coordinative and standard-setting responsibilities in discrete areas: EEOC for all employment-related activities, HUD for all those relating to housing, and the Department of Justice for all other areas. -- With the enactment of the Right to Financial Privacy Act and a bill limiting police search of newsrooms, we have begun to establish a sound, comprehensive, privacy program. Ratification of the Equal Rights Amendment must be aggressively pursued. Only one year remains in which to obtain ratification by three additional states. The Congress must give early attention to a number of important bills which remain. These bills would: -- strengthen the laws against discrimination in housing. Until it is enacted, the 1968 Civil Rights Act's promise of equal access to housing will remain unfulfilled; -- establish a charter for the FBI and the intelligence agencies. The failure to define in law the duties and responsibilities of these agencies has made possible some of the abuses which have occurred in recent years; -- establish privacy safeguards for medical research, bank, insurance, and credit records; and provide special protection for election fund transfer systems. EQUAL RIGHTS AMENDMENT I remain committed as strongly as possible to the ratification of the Equal Rights Amendment. As a result of our efforts in 1978, the Equal Rights Amendment's deadline for ratification was extended for three years. We have now one year and three States left. We cannot afford any delay in marshalling our resources and efforts to obtain the ratification of those three additional States. Although the Congress has no official role in the ratification process at this point, you do have the ability to affect public opinion and the support of State Legislators for the Amendment. I urge Members from States which have not yet ratified the Equal Rights Amendment to use their influence to secure ratification. I will continue my own efforts to help ensure ratification of the Equal Rights Amendment. MARTIN LUTHER KING, JR. Dr. Martin Luther King, Jr. led this Nation's effort to provide all its citizens with civil rights and equal opportunities. His commitment to human rights, peace and non-violence stands as a monument to his humanity and courage. As one of our Nation's most outstanding leaders, it is appropriate that his birthday be commemorated as a national holiday. I hope the Congress will enact legislation this year that will achieve this goal. FAIR HOUSING The Fair Housing Act Amendments of 1980 passed the House of Representatives by an overwhelming bipartisan majority only to die in the Senate at the close of the 96th Congress. The leaders of both parties have pledged to make the enactment of fair housing legislation a top priority of the incoming Congress. The need is pressing and a strengthened federal enforcement effort must be the primary method of resolution. CRIMINAL CODE The Federal criminal laws are often archaic, frequently contradictory and imprecise, and clearly in need of revision and codification. The new Administration should continue the work which has been begun to develop a Federal criminal code which simplifies and clarifies our criminal laws, while maintaining our basic civil liberties and protections. PRIVACY As our public and private institutions collect more and more information and as communications and computer technologies advance, we must act to protect the personal privacy of our citizens. In the past four years we acted on the report of the Privacy Commission and established a national privacy policy. We worked with Congress to pass legislation restricting wiretaps and law enforcement access to bank records and to reporters'files. We reduced the number of personal files held by the government and restricted the transfer of personal information among Federal agencies. We also worked with the Organization for Economic Cooperation and Development to establish international guidelines to protect the privacy of personal information that is transferred across borders. VI. PROTECTING AND DEVELOPING OUR NATURAL RESOURCES Two of our Nation's most precious natural resources are our environment and our vast agricultural capacity. From the beginning of my Administration, I have worked with the Congress to enhance and protect, as well as develop our natural resources. In the environmental areas, I have been especially concerned about the importance of balancing the need for resource development with preserving a clean environment, and have taken numerous actions to foster this goal. In the agricultural area, I have taken the steps needed to improve farm incomes and to increase our agricultural production to record levels. That progress must be continued in the 1980's. ENVIRONMENT Preserving the quality of our environment has been among the most important objectives of my Administration and of the Congress. As a result of these shared commitments and the dedicated efforts of many members of the Congress and my Administration, we have achieved several historic accomplishments. PROTECTION OF ALASKA LANDS Passage of the Alaska National Interest Lands Conservation Act was one of the most important conservation actions of this century. At stake was the fate of millions of acres of beautiful land, outstanding and unique wildlife populations, native cultures, and the opportunity to ensure that future generations of Americans would be able to enjoy the benefits of these nationally significant resources. As a result of the leadership, commitment, and persistence of my Administration and the Congressional leadership, the Alaska Lands Bill was signed into law last December. The Act adds 97 million acres of new parks and refuges, more than doubling the size of our National Park and National Wildlife Refuge Systems. The bill triples the size of our national wilderness system, increasing its size by 56 million acres. And by adding 25 free-flowing river segments to the Wild and Scenic River System, the bill almost doubles the river mileage in that system. The Alaska Lands Act reaffirms our commitment to the environment and strikes a balance between protecting areas of great beauty and allowing development of Alaska's oil, gas, mineral, and timber resources. PROTECTION OF NATURAL RESOURCES In addition to the Alaska Lands Act, over the past four years we have been able to expand significantly the national wilderness and parks systems. In 1978, the Congress passed the historical Omnibus Parks Act, which made 12 additions to the National Park System. The Act also established the first two national trails since the National Trails System Act was passed in 1968. Then, in 1980, as a result of my 1979 Environmental Message, the Federal land management agencies have established almost 300 new National Recreational Trails. With the completion of the RARE II process, which eliminated the uncertainty surrounding the status of millions of acres of land, we called for over 15 million acres of new wilderness in the nation's National Forest, in 1980 the Congress established about 4.5 million acres of wilderness in the lower 48 states. In addition, the Administration recommended legislation to protect Lake Tahoe, and through an Executive Order has already established a mechanism to help ensure the Lake's protection. Finally, in 1980 the Administration established the Channel Islands Marine Sanctuary. Administration actions over the past four years stressed the importance of providing Federal support only for water resource projects that are economically and environmentally sound. This policy should have a major and lasting influence on the federal government's role in water resource development and management. The Administration's actions to recommend to the Congress only economically and environmentally sound water resource projects for funding resulted not only in our opposing uneconomic projects but also, in 1979, in the first Administration proposal of new project starts in 4 years. One of the most significant water policy actions of the past four years was the Administration's June 6, 1978 Water Policy Reform Message to the Congress. This Message established a new national water resources policy with the following objectives: -- to give priority emphasis to water conservation; -- to consider environmental requirements and values more fully and along with economic factors in the planning and management of water projects and programs; -- to enhance cooperation between state and federal agencies in water resources planning and management. In addition, the Executive Office of the President established 11 policy decision criteria to evaluate the proposed federal water projects, the Water Resources Council developed and adopted a new set of Principles and Standards for water projects which is binding on all federal construction agencies, and improved regulations were developed to implement the National Historic Preservation Act and the Fish and Wildlife Coordination Act. As a result, water resource projects must be determined to be economically sound before the Administration will recommend authorization or appropriation. Over the years ahead, this policy will help to reduce wasteful federal spending by targeting federal funds to the highest priority water resource projects. In the pursuit of this policy, however, we cannot lose projects. In the part that sound water resource projects play in providing irrigation, power, and flood control. We must also recognize the special needs of particular regions of the country in evaluating the need for additional projects. ADDRESSING GLOBAL RESOURCE AND ENVIRONMENTAL PROBLEMS The Global 2000 Report to the President, prepared in response to my 1977 Environment Message, is the first of its kind. Never before has our government, or any government, taken such a comprehensive, long-range look at the interrelated global issues of resources, population, and environment. The Report's conclusions are important. They point to a rapid increase in population and human needs through the year 2000 while at the same time a decline in the earth's capacity to meet those needs, unless nations of the world act decisively to alter current trends. The United States has contributed actively to a series of U.N. conferences on the environment, population, and resources, and is preparing for the 1981 Conference on New and Renewable Sources of Energy. Following my 1977 Environmental Message, the Administration development assistance programs have added emphasis to natural resource management and environmental protection. My 1979 Environmental Message called attention to the alarming loss of world forests, particularly in the tropics. An interagency task force on tropical forests has developed a U.S. government program to encourage conservation and wise management of tropical forests. The Administration is encouraging action by other nations and world organizations to the same purpose. The United States is a world leader in wildlife conservation and the assessment of environmental effects of government actions. The January 5, 1979, Executive Order directing U.S. government agencies to consider the effects of their major actions abroad, is another example of this leadership. COMMITMENT TO CONTROL OF POLLUTION AND HAZARDOUS CHEMICALS Over the past four years, there has been steady progress towards cleaner air and water, sustained by the commitment of Congress and the Administration to these important national objectives. In addition, the Administration has developed several new pollution compliance approaches such as alternative and innovative waste water treatment projects, the "bubble" concept, the "offset" policy, and permit consolidation, all of which are designed to reduce regulatory burdens on the private sector. One of the most pressing problems to come to light in the past four years has been improper hazardous waste disposal. The Administration has moved on three fronts. First, we proposed the Oil Hazardous Substances and Hazardous Waste Response, Liability and Compensation Act (the Superfund bill) to provide comprehensive authority and $1.6 billion in funds to clean up abandoned hazardous waste disposal sites. In November 1980 the Congress passed a Superfund bill which I signed into law. Second, the administration established a hazardous waste enforcement strike force to ensure that when available, responsible parties are required to clean up sites posing dangers to public health and to the environment. To date, 50 lawsuits have been brought by the strike force. Third, regulations implementing subtitle C of the Resource Conservation and Recovery Act were issued. The regulations establish comprehensive controls for hazardous waste and, together with vigorous enforcement, will help to ensure that Love Canal will not be repeated. THE FUTURE For the future, we cannot, and we must not, forget that we are charged with the stewardship of an irreplaceable environment and natural heritage. Our children, and our children's children, are dependent upon our maintaining our commitment to preserving and enhancing the quality of our environment. It is my hope that when our descendants look back on the 1980's they will be able to affirm: -- that we kept our commitment to the restoration of environmental quality; -- that we protected the public health from the continuing dangers of toxic chemicals, from pollution, from hazardous and radioactive waste, and that we made our communities safer, healthier and better places to live; -- that we preserved America's wilderness areas and particularly its last great frontier, Alaska, for the benefit of all Americans in perpetuity; -- that we put this nation on a path to a sustainable energy future, one based increasingly on renewable resources and on energy conservation; -- that we moved to protect America's countryside and coastland from mismanagement and irresponsibility; -- that we redirected the management of the nation's water resources toward water conservation, sound development and environmental protection; -- that we faced squarely such worldwide problems as the destruction of forests, acid rain, carbon dioxide build-up and nuclear proliferation; and -- that we protected the habitat and the existence of our own species on this earth. AGRICULTURE THE FARM ECONOMY The farm economy is sound and its future is bright. Agriculture remains a major bulwark of the nation's economy and an even more important factor in the world food system. The demand for America's agricultural abundance, here and abroad, continues to grow. In the near-term, the strength of this demand is expected to press hard against supplies, resulting in continued price strength. The health and vitality of current-day agriculture represents a significant departure from the situation that existed when I came to office four years ago. In January 1977, the farm economy was in serious trouble. Farm prices and farm income were falling rapidly. Grain prices were at their lowest levels in years and steadily falling. Livestock producers, in their fourth straight year of record losses, were liquidating breeding herds at an unparalleled rate. Dairy farmers were losing money on every hundredweight of milk they produced. Sugar prices were in a nosedive. Through a combination of improvements in old, established programs and the adoption of new approaches where innovation and change were needed, my Administration turned this situation around. Commodity prices have steadily risen. Farm income turned upward. U.S. farm exports set new records each year, increasing over 80 percent for the four year period. Livestock producers began rebuilding their herds. Dairy farmers began to earn a profit again. RECENT POLICY INITIATIVES Several major agricultural policy initiatives have been undertaken over the past year. Some are the culmination of policy proposals made earlier in this Administration; others are measures taken to help farmers offset the impact of rapid inflation in production costs. In combination, they represent a significant strengthening of our nation's food and agricultural policy. These initiatives include: FOOD SECURITY RESERVE The Congress authorized formation of a 4 million ton food grain reserve for use in international food assistance. This reserve makes it possible for the United States to stand behind its food aid commitment to food deficit nations, even during periods of short supplies and high prices. This corrects a serious fault in our past food assistance policy. COMPREHENSIVE CROP INSURANCE The Congress also authorized a significant new crop insurance program during 1980. This measure provides farmers with an important new program tool for sharing the economic risks that are inherent to agriculture. When fully operational, it will replace a hodgepodge of disaster programs that suffered from numerous shortcomings. SPECIAL LOAN RATES Another legislative measure passed late in the 2nd session of the 96th Congress authorizes the Secretary of Agriculture to provide higher loan rates to farmers who enter their grain in the farmer-owned grain reserve. This additional incentive to participate will further strengthen the reserve. INCREASED LOAN PRICES In July 1980, I administratively raised loan prices for wheat, feedgrains, and soybeans to help offset the effects of a serious cost-price squeeze. At the same time, the release and call prices for the grain reserve were adjusted upward. HIGHER TARGET PRICES The Agricultural Adjustment Act of 1980 raised the target prices for 1980-crop wheat and feed grain crops. This change corrected for shortcomings in the adjustment formula contained in the Food and Agriculture Act of 1977. FUTURE AGENDA The food and agricultural policies adopted by this Administration over the past four years, including those described above, will provide a firm foundation for future governmental actions in this field. Expiration of the Food and Agriculture Act of 1977 later this year will require early attention by the Congress. With relatively minor changes, most of the authorities contained in the 1977 Act should be extended in their present form. The farmer-owned grain reserve has proven to be a particularly effective means of stabilizing grain markets and should be preserved in essentially its present form. Beyond this, it will be important for the Congress to keep a close eye on price-cost developments in the farm sector. As noted above, some of the actions I took last year were for the purpose of providing relief from the cost-price squeeze facing farmers. Should these pressures continue, further actions might be required. My Administration has devoted particular attention to the issues of world hunger, agricultural land use, and the future structure of American agriculture. I encourage the Congress and the next Administration to review the results of these landmark enquiries and, where deemed appropriate, to act on their recommendations. Following a careful review of the situation, I recently extended the suspension of grain sales to the Soviet Union. I am satisfied that this action has served its purpose effectively and fairly. However, as long as this suspension must remain in effect, it will be important for the next Administration and the Congress to take whatever actions are necessary to ensure that the burden does not fall unfairly on our Nation's farmers. This has been a key feature of my Administration's policy, and it should be maintained. VII. FOREIGN POLICY From the time I assumed office four years ago this month, I have stressed the need for this country to assert a leading role in a world undergoing the most extensive and intensive change in human history. My policies have been directed in particular at three areas of change: -- the steady growth and increased projection abroad of Soviet military power, power that has grown faster than our own over the past two decades. -- the overwhelming dependence of Western nations, which now increasingly includes the United States, on vital oil supplies from the Middle East. -- the pressures of change in many nations of the developing world, in Iran and uncertainty about the future stability of many developing countries. As a result of those fundamental facts, we face some of the most serious challenges in the history of this nation. The Soviet invasion of Afghanistan is a threat to global peace, to East-West relations, and to regional stable flow of oil. As the unprecedented relations, an and overwhelming vote in the General Assembly demonstrated, countries across the world, and particularly the nonaligned, regard the Soviet invasion as a threat to their independence and security. Turmoil within the region adjacent to the Persian Gulf poses risks for the security and prosperity of every oil importing nation and thus for the entire global economy. The continuing holding of American hostages in Iran is both an affront to civilized people everywhere, and a serious impediment to meeting the self-evident threat to widely-shared common interests, including those of Iran. But as we focus our most urgent efforts on pressing problems, we will continue to pursue the benefits that only change can bring. For it always has been the essence of America that we want to move on, we understand that prosperity, progress and most of all peace cannot be had by standing still. A world of nations striving to preserve their independence, and of peoples aspiring for economic development and political freedom, is not a world hostile to the ideals and interests of the United States. We face powerful adversaries, but we have strong friends and dependable allies. We have common interests with the vast majority of the world's nations and peoples. There have been encouraging developments in recent years, as well as matters requiring continued vigilance and concern: -- Our alliances with the world's most advanced and democratic states from Western Europe through Japan are stronger than ever. -- We have helped to bring about a dramatic improvement in relations between Egypt and Israel and an historic step towards a comprehensive Arab-Israeli settlement. -- Our relations with China are growing closer, providing a major new dimension in our policy in Asia and the world. -- Across southern Africa from Rhodesia to Namibia we are helping with the peaceful transition to majority rule in a context of respect for minority as well as majority rights. -- We have worked domestically and with our allies to respond to an uncertain energy situation by conservation and diversification of energy supplies based on internationally agreed targets. -- We have unambiguously demonstrated our commitment to defend Western interests in Southwest Asia, and we have significantly increased our ability to do so. -- And over the past four years the U.S. has developed an energy program which is comprehensive and ambitious. New institutions have been established such as the Synthetic Fuels Corporation and Solar Bank. Price decontrol for oil and gas is proceeding. American consumers have risen to the challenge, and we have experienced real improvements in consumption patterns. The central challenge for us today is to our steadfastedness of purpose. We are no longer tempted by isolationism. But we must also learn to deal effectively with the contradictions of the world, the need to cooperate with potential adversaries without euphoria, without undermining our determination to compete with such adversaries and if necessary confront the threats they may pose to our security. We face a broad range of threats and opportunities. We have and should continue to pursue a broad range of defense, diplomatic and economic capabilities and objectives. I see six basic goals for America in the world over the 1980's: -- First, we will continue, as we have over the past four years, to build America's military strength and that of our allies and friends. Neither the Soviet Union nor any other nation will have reason to question our will to sustain the strongest and most flexible defense forces. -- Second, we will pursue an active diplomacy in the world, working, together with our friends and allies, to resolve disputes through peaceful means and to make any aggressor pay a heavy price. -- Third, we will strive to resolve pressing international economic problems, particularly energy and inflation, and continue to pursue our still larger objective of global economic growth through expanded trade and development assistance and through the preservation of an open multilateral trading system. -- Fourth, we will continue vigorously to support the process of building democratic institutions and improving human rights protection around the world. We are deeply convinced that the future lies not with dictatorship but democracy. -- Fifth, we remain deeply committed to the process of mutual and verifiable arms control, particularly to the effort to prevent the spread and further development of nuclear weapons. Our decision to defer, but not abandon our efforts to secure ratification of the SALT II Treaty reflects our firm conviction that the United States has a profound national security interest in the constraints on Soviet nuclear forces which only that treaty can provide. -- Sixth, we must continue to look ahead in order to evaluate and respond to resource, environment and population challenges through the end of this century. One very immediate and pressing objective that is uppermost on our minds and those of the American people is the release of our hostages in Iran. We have no basic quarrel with the nation, the revolution or the people of Iran. The threat to them comes not from American policy but from Soviet actions in the region. We are prepared to work with the government of Iran to develop a new and mutually beneficial relationship. But that will not be possible so long as Iran continues to hold Americans hostages, in defiance of the world community and civilized behavior. They must be released unharmed. We have thus far pursued a measured program of peaceful diplomatic and economic steps in an attempt to resolve this issue without resorting to other remedies available to us under international law. This reflects the deep respect of our nation for the rule of law and for the safety of our people being held, and our belief that a great power bears a responsibility to use its strength in a measured and judicious manner. But our patience is not unlimited and our concern for the well-being of our fellow citizens grows each day. ENHANCING NATIONAL SECURITY, AMERICAN MILITARY STRENGTH The maintenance of national security is my first concern, as it has been for every president before me. We must have both the military power and the political will to deter our adversaries and to support our friends and allies. We must pay whatever price is required to remain the strongest nation in the world. That price has increased as the military power of our major adversary has grown and its readiness to use that power been made all too evident in Afghanistan. The real increases in defense spending, therefore probably will be higher than previously projected; protecting our security may require a larger share of our national wealth in the future. THE U.S.-SOVIET RELATIONSHIP We are demonstrating to the Soviet Union across a broad front that it will pay a heavy price for its aggression in terms of our relationship. Throughout the last decades U.S.-Soviet relations have been a mixture of cooperation and competition. The Soviet invasion of Afghanistan and the imposition of a puppet government have highlighted in the starkest terms the darker side of their policies, going well beyond competition and the legitimate pursuit of national interest, and violating all norms of international law and practice. This attempt to subjugate an independent, non-aligned Islamic people is a callous violation of international law and the United Nations Charter, two fundamentals of international order. Hence, it is also a dangerous threat to world peace. For the first time since the communization of Eastern Europe after World War II, the Soviets have sent combat forces into an area that was not previously under their control, into a non-aligned and sovereign state. The destruction of the independence of the Afghanistan government and the occupation by the Soviet Union have altered the strategic situation in that part of the world in a very ominous fashion. It has significantly shortened the striking distance to the Indian Ocean and the Persian Gulf for the Soviet Union. It has also eliminated a buffer between the Soviet Union and Pakistan and presented a new threat to Iran. These two countries are now far more vulnerable to Soviet political intimidation. If that intimidation were to prove effective, the Soviet Union could control an area of vital strategic and economic significance to the survival of Western Europe, the Far East, and ultimately the United States. It has now been over a year since the Soviet invasion of Afghanistan dealt a major blow to U.S.-Soviet relations and the entire international system. The U.S. response has proven to be serious and far-reaching. It has been increasingly effective, imposing real and sustained costs on the U.S.S.R.'s economy and international image. Meanwhile, we have encouraged and supported efforts to reach a political settlement in Afghanistan which would lead to a withdrawal of Soviet forces from that country and meet the interests of all concerned. It is Soviet intransigence that has kept those efforts from bearing fruit. Meanwhile, an overwhelming November resolution of the United Nations General Assembly on Afghanistan has again made clear that the world has not and will not forget Afghanistan. And our response continues to make it clear that Soviet use of force in pursuit of its international objectives is incompatible with the notion of business-as-usual. BILATERAL COMMUNICATION U.S.-Soviet relations remain strained by the continued Soviet presence in Afghanistan, by growing Soviet military capabilities, and by the Soviets' apparent willingness to use those capabilities without respect for the most basic norms of international behavior. But the U.S.-Soviet relationship remains the single most important element in determining whether there will be war or peace. And so, despite serious strains in our relations, we have maintained a dialogue with the Soviet Union over the past year. Through this dialogue, we have ensured against bilateral misunderstandings and miscalculations which might escalate out of control, and have managed to avoid the injection of superpower rivalries into areas of tension like the Iran-Iraq conflict. POLAND Now, as was the case a year ago, the prospect of Soviet use of force threatens the international order. The Soviet Union has completed preparations for a possible military intervention against Poland. Although the situation in Poland has shown signs of stabilizing recently, Soviet forces remain in a high state of readiness and they could move into Poland on short notice. We continue to believe that the Polish people should be allowed to work out their internal problems themselves, without outside interference, and we have made clear to the Soviet leadership that any intervention in Poland would have severe and prolonged consequences for East-West detente, and U.S.-Soviet relations in particular. DEFENSE BUDGET For many years the Soviets have steadily increased their real defense spending, expanded their strategic forces, strengthened their forces in Europe and Asia, and enhanced their capability for projecting military force around the world directly or through the use of proxies. Afghanistan dramatizes the vastly increased military power of the Soviet Union. The Soviet Union has built a war machine far beyond any reasonable requirements for their own defense and security. In contrast, our own defense spending declined in real terms every year from 1968 through 1976. We have reversed this decline in our own effort. Every year since 1976 there has been a real increase in our defense spending, and our lead has encouraged increases by our allies. With the support of the Congress, we must and will make an even greater effort in the years ahead. The Fiscal Year 1982 budget would increase funding authority for defense to more than $196 billion. This amount, together with a supplemental request for FY 1981 of about $6 billion, will more than meet my Administration's pledge for a sustained growth of 3 percent in real expenditures, and provides for 5 percent in program growth in FY 1982 and beyond. The trends we mean to correct cannot be remedied overnight; we must be willing to see this program through. To ensure that we do so I am setting a growth rate for defense that we can sustain over the long haul. The defense program I have proposed for the next five years will require some sacrifice, but sacrifice we can well afford. The defense program emphasizes four areas: 1. It ensures that our strategic nuclear forces will be equivalent to those of the Soviet Union and that deterrence against nuclear war will be maintained; 2. It upgrades our forces so that the military balance between NATO and the Warsaw Pact will continue to deter the outbreak of war, conventional or nuclear, in Europe; 3. It provides us the ability to come quickly to the aid of friends and allies around the globe; 4. And it ensures that our Navy will continue to be the most powerful on the seas. STRATEGIC FORCES We are strengthening each of the three legs of our strategic forces. The cruise missile production which will begin next year will modernize our strategic air deterrent. B-52 capabilities will also be improved. These steps will maintain and enhance the B-52 fleet by improving its ability to deliver weapons against increasingly heavily defended targets. We are also modernizing our strategic submarine force. Four more POSEIDON submarines backfitted with new, 4,000 mile TRIDENT I missiles began deployments in 1980. Nine TRIDENT submarines have been authorized through 1981, and we propose one more each year. The new M-X missile program to enhance our land-based intercontinental ballistic missile force continues to make progress. Technical refinements in the basing design over the last year will result in operational benefits, lower costs, and reduced environmental impact. The M-X program continues to be an essential ingredient in our strategic posture, providing survivability, endurance, secure command and control and the capability to threaten targets the Soviets hold dear. Our new systems will enable U.S. strategic forces to maintain equivalence in the face of the mounting Soviet challenge. We would however need an even greater investment in strategic systems to meet the likely Soviet buildup without SALT. STRATEGIC DOCTRINE This Administration's systematic contributions to the necessary evolution of strategic doctrine began in 1977 when I commissioned a comprehensive net assessment. From that base a number of thorough investigations of specific topics continued. I should emphasize that the need for an evolutionary doctrine is driven not by any change in our basic objective, which remains peace and freedom for all mankind. Rather, the need for change is driven by the inexorable buildup of Soviet military power and the increasing propensity of Soviet leaders to use this power in coercion and outright aggression to impose their will on others. I have codified our evolving strategic doctrine in a number of interrelated and mutually supporting Presidential Directives. Their overarching theme is to provide a doctrinal basis, and the specific program to implement it, that tells the world that no potential adversary of the United States could ever conclude that the fruits of his aggression would be significant or worth the enormous costs of our retaliation. The Presidential Directives include: PD-18: An overview of our strategic objectives PD-37: Basic space policy PD-41: Civil Defense PD-53: Survivability and endurance for telecommunications PD-57: Mobilization planning PD-58: Continuity of Government PD-59: Countervailing Strategy for General War. These policies have been devised to deter, first and foremost, Soviet aggression. As such they confront not only Soviet military forces but also Soviet military doctrine. By definition deterrence requires that we shape Soviet assessments about the risks of war, assessments they will make using their doctrine, not ours. But at the same time we in no way seek to emulate their doctrine. In particular, nothing in our policy contemplates that nuclear warfare could ever be a deliberate instrument for achieving our own goals of peace and freedom. Moreover, our policies are carefully devised to provide the greatest possible incentives and opportunities for future progress in arms control. Finally, our doctrinal evolution has been undertaken with appropriate consultation with our NATO Allies and others. We are fully consistent with NATO's strategy of flexible response. FORCES FOR NATO We are greatly accelerating our ability to reinforce Western Europe with massive ground and air forces in a crisis. We are undertaking a major modernization program for the Army's weapons and equipment, adding armor, firepower, and tactical mobility. We are prepositioning more heavy equipment in Europe to help us cope with attacks with little warning, and greatly strengthening our airlift and sealift capabilities. We are also improving our tactical air forces, buying about 1700 new fighter and attack aircraft over the next five years, and increasing the number of Air Force fighter wings by over 10 percent. We are working closely with our European allies to secure the Host Nation Support necessary to enable us to deploy more quickly a greater ratio of combat forces to the European theater at a lower cost to the United States. SECURITY ASSISTANCE As we move to enhance U.S. defense capabilities, we must not lose sight of the need to assist others in maintaining their own security and independence. Events since World War II, most recently in Southwest Asia, have amply demonstrated that U.S. security cannot exist in a vacuum, and that our own prospects for peace are closely tied to those of our friends. The security assistance programs which I am proposing for the coming fiscal year thus directly promote vital U.S. foreign policy and national security aims, and are integral parts of our efforts to improve and upgrade our own military forces. More specifically, these programs, which are part of our overall foreign aid request, promote U.S. security in two principal ways. First, they assist friendly and allied nations to develop the capability to defend themselves and maintain their own independence. An example during this past year was the timely support provided Thailand to help bolster that country's defenses against the large numbers of Soviet-backed Vietnamese troops ranged along its eastern frontier. In addition, over the years these programs have been important to the continued independence of other friends and allies such as Israel, Greece, Turkey and Korea. Second, security assistance constitutes an essential element in the broad cooperative relationships we have established with many nations which permit either U.S. bases on their territory or access by U.S. forces to their facilities. These programs have been particularly important with regard to the recently-concluded access agreements with various countries in the Persian Gulf and Indian Ocean regions and have been crucial to the protection of our interests throughout Southwest Asia. RAPID DEPLOYMENT FORCES We are systematically enhancing our ability to respond rapidly to non-NATO contingencies wherever required by our commitments or when our vital interests are threatened. The rapid deployment forces we are assembling will be extraordinarily flexible: They could range in size from a few ships or air squadrons to formations as large as 100,000 men, together with their support. Our forces will be prepared for rapid deployment to any region of strategic significance. Among the specific initiatives we are taking to help us respond to crises outside of Europe are: The development of a new fleet of large cargo aircraft with intercontinental range; the design and procurement of a force of Maritime Prepositioning Ships that will carry heavy equipment and supplies for three Marine Corps brigades; the procurement of fast sealift ships to move large quantities of men and material quickly from the U.S. to overseas areas of deployment; increasing training and exercise activities to ensure that our forces will be well prepared to deploy and operate in distant areas. In addition, our European allies have agreed on the importance of providing support to U.S. deployments to Southwest Asia. NAVAL FORCES Seapower is indispensable to our global position, in peace and also in war. Our shipbuilding program will sustain a 550-ship Navy in the 1990's and we will continue to build the most capable ships afloat. The program I have proposed will assure the ability of our Navy to operate in high threat areas, to maintain control of the seas and protect vital lines of communication, both military and economic and to provide the strong maritime component of our rapid deployment forces. This is essential for operations in remote areas of the world, where we cannot predict far in advance the precise location of trouble, or preposition equipment on land. MILITARY PERSONNEL No matter how capable or advanced our weapons systems, our military security depends on the abilities, the training and the dedication of the people who serve in our armed forces. I am determined to recruit and to retain under any foreseeable circumstances an ample level of such skilled and experienced military personnel. This Administration has supported for FY 1981 the largest peacetime increase ever in military pay and allowances. We have enhanced our readiness and combat endurance by improving the Reserve Components. All reservists are assigned to units structured to complement and provide needed depth to our active forces. Some reserve personnel have also now been equipped with new equipment. MOBILIZATION PLANNING We have completed our first phase of mobilization planning, the first such Presidentially-directed effort since World War II. The government-wide exercise of our mobilization plans at the end of 1980 showed, first, that planning pays off and, second, that much more needs to be done. OUR INTELLIGENCE POSTURE Our national interests are critically dependent on a strong and effective intelligence capability. We will maintain and strengthen the intelligence capabilities needed to assure our national security. Maintenance of and continued improvements in our multi-faceted intelligence effort are essential if we are to cope successfully with the turbulence and uncertainties of today's world. The intelligence budget I have submitted to the Congress responds to our needs in a responsible way, providing for significant growth over the Fiscal Year 1981 budget. This growth will enable us to develop new technical means of intelligence collection while also assuring that the more traditional methods of intelligence work are also given proper stress. We must continue to integrate both modes of collection in our analyses. REGIONAL POLICIES Every President for over three decades has recognized that America's interests are global and that we must pursue a global foreign policy. Two world wars have made clear our stake in Western Europe and the North Atlantic area. We are also inextricably linked with the Far East, politically, economically, and militarily. In both of these, the United States has a permanent presence and security commitments which would be automatically triggered. We have become increasingly conscious of our growing interests in a third area, the Middle East and the Persian Gulf area. We have vital stakes in other major regions of the world as well. We have long recognized that in an era of interdependence, our own security and prosperity depend upon a larger common effort with friends and allies throughout the world. THE ATLANTIC ALLIANCE In recognition of the threat which the Soviet invasion of Afghanistan posed to Western interests in both Europe and Southwest Asia, NATO foreign and defense ministers have expressed full support for U.S. efforts to develop a capability to respond to a contingency in Southwest Asia and have approved an extensive program to help fill the gap which could be created by the diversion of U.S. forces to that region. The U.S. has not been alone in seeking to maintain stability in the Southwest Asia area and insure access to the needed resources there. The European nations with the capability to do so are improving their own forces in the region and providing greater economic and political support to the residents of the area. In the face of the potential danger posed by the Iran-Iraq conflict, we have developed coordination among the Western forces in the area of the Persian Gulf in order to be able to safeguard passage in that essential waterway. Concerning developments in and around Poland the allies have achieved the highest level of cohesion and unity of purpose in making clear the effects on future East-West relations of a precipitous Soviet act there. The alliance has continued to build on the progress of the past three years in improving its conventional forces through the Long-Term Defense Program. Though economic conditions throughout Europe today are making its achievement difficult, the yearly real increase of 3 percent in defense spending remains a goal actively sought by the alliance. The NATO alliance also has moved forward during the past year with the implementation of its historic December 1979 decision to modernize its Theater Nuclear Force capabilities through deployment of improved Pershing ballistic missiles and ground-launched cruise missiles in Europe. Our allies continue to cooperate actively with us in this important joint endeavor, whose purpose is to demonstrate convincingly to the Soviet Union the potential costs of a nuclear conflict in Europe. At the same time, we offered convincing evidence of our commitment to arms control in Europe by initiating preliminary consultations with the Soviet Union in Geneva on the subject of negotiated limits on long-range theater nuclear forces. Also, during 1980 we initiated and carried out a withdrawal from our nuclear weapons stockpile in Europe of 1,000 nuclear warheads. This successful drawdown in our nuclear stockpile was a further tangible demonstration of our commitment to the updating of our existing theater nuclear forces in Europe. In the NATO area, we continued to work closely with other countries in providing resources to help Turkey regain economic health. We regretted that massive political and internal security problems led the Turkish military to take over the government on September 12. The new Turkish authorities are making some progress in resolving those problems, and they have pledged an early return to civilian government. The tradition of the Turkish military gives us cause to take that pledge seriously. We welcomed the reestablishment of Greece's links to the integrated military command structure of the Atlantic Alliance -- a move which we had strongly encouraged -- as a major step toward strengthening NATO's vital southern flank at a time of international crisis and tension in adjacent areas. Greek reintegration exemplifies the importance which the allies place on cooperating in the common defense and shows that the allies can make the difficult decisions necessary to insure their continued security. We also welcomed the resumption of the intercommunal talks on Cyprus. THE U.S. AND THE PACIFIC NATIONS The United States is a Pacific nation, as much as it is an Atlantic nation. Our interests in Asia are as important to us as our interests in Europe. Our trade with Asia is as great as our trade with Europe. During the past four years we have regained a strong, dynamic and flexible posture for the United States in this vital region. Our major alliances with Japan, Australia and New Zealand are now stronger than they ever have been, and together with the nations of western Europe, we have begun to form the basic political structure for dealing with international crises that affect us all. Japan, Australia and New Zealand have given us strong support in developing a strategy for responding to instability in the Persian Gulf. Normalization of U.S. relations with China has facilitated China's full entry into the international community and encouraged a constructive Chinese role in the Asia-Pacific region. Our relations with China have been rapidly consolidated over the past year through the conclusion of a series of bilateral agreements. We have established a pattern of frequent and frank consultations between our two governments, exemplified by a series of high-level visits and by regular exchanges at the working level, through which we have been able to identify increasingly broad areas of common interest on which we can cooperate. United States relations with the Association of Southeast Asian Nations (ASEAN) have also expanded dramatically in the past four years. ASEAN is now the focus for U.S. policy in Southeast Asia, and its cohesion and strength are essential to stability in this critical area and beyond. Soviet-supported Vietnamese aggression in Indo-china has posed a major challenge to regional stability. In response, we have reiterated our security commitment to Thailand and have provided emergency security assistance for Thai forces facing a Vietnamese military threat along the Thai-Cambodian border. We have worked closely with ASEAN and the U.N. to press for withdrawal of Vietnamese forces from Cambodia and to encourage a political settlement in Cambodia which permits that nation to be governed by leaders of its own choice. We still look forward to the day when Cambodia peacefully can begin the process of rebuilding its social, economic and political institutions, after years of devastation and occupation. And, on humanitarian grounds and in support of our friends in the region, we have worked vigorously with international organizations to arrange relief and resettlement for the exodus of Indo-chinese refugees which threatened to overwhelm these nations. We have maintained our alliance with Korea and helped assure Korea's security during a difficult period of political transition. We have amended our military base agreement with the Philippines, ensuring stable access to these bases through 1991. The importance of our Philippine bases to the strategic flexibility of U.S. forces and our access to the Indian Ocean is self-evident. Finally, we are in the process of concluding a long negotiation establishing Micronesia's status as a freely associated state. We enter the 1980's with a firm strategic footing in East Asia and the Pacific, based on stable and productive U.S. relations with the majority of countries of the region. We have established a stable level of U.S. involvement in the region, appropriate to our own interests and to the interests of our friends and allies there. THE MIDDLE EAST AND SOUTHWEST ASIA The continuing Soviet occupation of Afghanistan and the dislocations caused by the Iraq-Iran war serve as constant reminders of the critical importance for us, and our allies, of a third strategic zone stretching across the Middle East, the Persian Gulf, and much of the Indian subcontinent. This Southwest Asian region has served as a key strategic and commercial link between East and West over the centuries. Today it produces two-thirds of the world's oil exports, providing most of the energy needs of our European allies and Japan. It has experienced almost continuous conflict between nations, internal instabilities in many countries, and regional rivalries, combined with very rapid economic and social change. And now the Soviet Union remains in occupation of one of these nations, ignoring world opinion which has called on it to get out. We have taken several measures to meet these challenges. MIDDLE EAST In the Middle East, our determination to consolidate what has already been achieved in the peace process -- and to buttress that accomplishment with further progress toward a comprehensive peace settlement -- must remain a central goal of our foreign policy. Pursuant to their peace treaty, Egypt and Israel have made steady progress in the normalization of their relations in a variety of fields, bringing the benefits of peace directly to their people. The new relationship between Egypt and Israel stands as an example of peaceful cooperation in an increasingly fragmented and turbulent region. Both President Sadat and Prime Minister Begin remain committed to the current negotiations to provide full autonomy to the inhabitants of the West Bank and Gaza. These negotiations have been complex and difficult, but they have already made significant progress, and it is vital that the two sides, with our assistance, see the process through to a successful conclusion. We also recognize the need to broaden the peace process to include other parties to the conflict and believe that a successful autonomy agreement is an essential first step toward this objective. We have also taken a number of steps to strengthen our bilateral relations with both Israel and Egypt. We share important strategic interests with both of these countries. We remain committed to Israel's security and are prepared to take concrete steps to support Israel whenever that security is threatened. PERSIAN GULF The Persian Gulf has been a vital crossroads for trade between Europe and Asia at many key moments in history. It has become essential in recent years for its supply of oil to the United States, our allies, and our friends. We have taken effective measures to control our own consumption of imported fuel, working in cooperation with the other key industrial / nations of the world. However, there is little doubt that the healthy growth of our American and world economies will depend for many years on continued safe access to the Persian Gulf's oil production. The denial of these oil supplies would threaten not only our own but world security. The potent new threat from an advancing Soviet Union, against the background of regional instability of which it can take advantage, requires that we reinforce our ability to defend our regional friends and to protect the flow of oil. We are continuing to build on the strong political, economic, social and humanitarian ties which bind this government and the American people to friendly governments and peoples of the Persian Gulf. We have also embarked on a course to reinforce the trust and confidence our regional friends have in our ability to come to their assistance rapidly with American military force if needed. We have increased our naval presence in the Indian Ocean. We have created a Rapid Deployment Force which can move quickly to the Gulf -- or indeed any other area of the world where outside aggression threatens. We have concluded several agreements with countries which are prepared to let us use their airports and naval facilities in an emergency. We have met requests for reasonable amounts of American weaponry from regional countries which are anxious to defend themselves. And we are discussing with a number of our area friends further ways we can help to improve their security and ours, both for the short and the longer term. SOUTH ASIA We seek a South Asia comprising sovereign and stable states, free of outside interference, which can strengthen their political institutions according to their own national genius and can develop their economies for the betterment of their people. The Soviet invasion of Afghanistan has posed a new challenge to this region, and particularly to neighboring Pakistan. We are engaged in a continuing dialogue with the Pakistan government concerning its development and security requirements and the economic burden imposed by Afghan refugees who have fled to Pakistan. We are participating with other aid consortium members in debt rescheduling and will continue to cooperate through the UNHCR in providing refugee assistance. We remain committed to Pakistan's territorial integrity and independence. Developments in the broad South/Southwest Asian region have also lent a new importance to our relations with India, the largest and strongest power in the area. We share India's interest in a more constructive relationship. Indian policies and perceptions at times differ from our own, and we have established a candid dialogue with this sister democracy which seeks to avoid the misunderstandings which have sometimes complicated our ties. We attach major importance to strong economic assistance programs to the countries in the area, which include a majority of the poor of the non-Communist world. We believe that these programs will help achieve stability in the area, an objective we share with the countries in the region. Great progress has been achieved by these countries in increasing food production; international cooperation in harnessing the great river resources of South Asia would contribute further to this goal and help to increase energy production. We continue to give high priority to our non-proliferation goals in the area in the context of our broad global and regional priorities. The decision to continue supply of nuclear fuel to the Indian Tarapur reactors was sensitive to this effort. AFRICA The United States has achieved a new level of trust and cooperation with Africa. Our efforts, together with our allies, to achieve peace in southern Africa, our increased efforts to help the poorest countries in Africa to combat poverty, and our expanded efforts to promote trade and investment have led to growing respect for the U.S. and to cooperation in areas of vital interest to the United States. Africa is a continent of poor nations for the most part. It also contains many of the mineral resources vital for our economy. We have worked with Africa in a spirit of mutual cooperation to help the African nations solve their problems of poverty and to develop stronger ties between our private sector and African economies. Our assistance to Africa has more than doubled in the last four years. Equally important, we set in motion new mechanisms for private investment and trade. Nigeria is the largest country in Black Africa and the second largest oil supplier to the United States. During this Administration we have greatly expanded and improved our relationship with Nigeria and other West African states whose aspirations for a constitutional democratic order we share and support. This interest was manifested both symbolically and practically by the visit of Vice President Mondale to West Africa in July (1980) and the successful visit to Washington of the President of Nigeria in October. During Vice President Mondale's visit, a Joint Agricultural Consultative Committee was established, with the U.S. represented entirely by the private sector. This could herald a new role for the American private sector in helping solve the world's serious food shortages. I am pleased to say that our relations with Nigeria are at an all-time high, providing the foundation for an even stronger relationship in the years ahead. Another tenet of this Administration's approach to African problems has been encouragement and support for regional solutions to Africa's problems. We have supported initiatives by the Organization of African Unity to solve the protracted conflict in the western Sahara, Chad, and the Horn. In Chad, the world is watching with dismay as a country torn by a devastating civil war has become a fertile field for Libya's exploitation, thus demonstrating that threats to peace can come from forces within as well as without Africa. In southern Africa the United States continues to pursue a policy of encouraging peaceful development toward majority rule. In 1980, Southern Rhodesia became independent as Zimbabwe, a multiracial nation under a system of majority rule. Zimbabwean independence last April was the culmination of a long struggle within the country and diplomatic efforts involving Great Britain, African states neighboring Zimbabwe, and the United States. The focus of our efforts in pursuit of majority rule in southern Africa has now turned to Namibia. Negotiations are proceeding among concerned parties under the leadership of U.N. Secretary General Waldheim. This should lead to implementation of the U.N. plan for self-determination and independence for Namibia during 1981. If these negotiations are successfully concluded, sixty-five years of uncertainty over the status of the territory, including a seven-year-long war, will be ended. In response to our active concern with issues of importance to Africans, African states have cooperated with us on issues of importance to our national interests. African states voted overwhelmingly in favor of the U.N. Resolution calling for release of the hostages, and for the U.N. Resolution condemning the Soviet invasion of Afghanistan. Two countries of Africa have signed access agreements with the U.S. allowing us use of naval and air facilities in the Indian Ocean. Africans have become increasingly vocal on human rights. African leaders have spoken out on the issue of political prisoners, and the OAU is drafting its own Charter on Human Rights. Three countries in Africa -- Nigeria, Ghana, and Uganda -- have returned to civilian rule during the past year. U.S. cooperation with Africa on all these matters represents a strong base on which we can build in future years. Liberia is a country of long-standing ties with the U.S. and the site of considerable U.S. investment and facilities. This past April a coup replaced the government and a period of political and economic uncertainty ensued. The U.S. acted swiftly to meet this situation. We, together with African leaders, urged the release of political prisoners, and many have been released; we provided emergency economic assistance to help avoid economic collapse, and helped to involve the IMF and the banking community to bring about economic stability; and we have worked closely with the new leaders to maintain Liberia's strong ties with the West and to protect America's vital interests. NORTH AFRICA In early 1979, following a Libyan-inspired commando attack on a Tunisian provincial city, the U.S. responded promptly to Tunisia's urgent request for assistance, both by airlifting needed military equipment and by making clear our longstanding interest in the security and integrity of this friendly country. The U.S. remains determined to oppose other irresponsible Libyan aspirations. Despairing of a productive dialogue with the Libyan authorities, the U.S. closed down its embassy in Libya and later expelled six Libyan diplomats in Washington in order to deter an intimidation campaign against Libyan citizens in the U.S. U.S. relations with Algeria have improved, and Algeria has played an indispensable and effective role as intermediary between Iran and the U.S. over the hostage issue. The strengthening of our arms supply relationship with Morocco has helped to deal with attacks inside its internationally recognized frontiers and to strengthen its confidence in seeking a political settlement of the Western Sahara conflict. While not assuming a mediatory role, the U.S. encouraged all interested parties to turn their energies to a peaceful and sensible compromise resolution of the war in the Sahara and supported efforts by the Organization of African Unity toward that end. As the year drew to a close, the U.S. was encouraged by evolution in the attitudes of all sides, and is hopeful that their differences will be peacefully resolved in the year ahead so that the vast economic potential of North Africa can be developed for the well-being of the people living there. LATIN AMERICA AND THE CARIBBEAN The principles of our policies in this hemisphere have been clear and constant over the last four years. We support democracy and respect for human rights. We have struggled with many to help free the region of both repression and terrorism. We have respected ideological diversity and opposed outside intervention in purely internal affairs. We will act, though, in response to a request for assistance by a country threatened by external aggression. We support social and economic development within a democratic framework. We support the peaceful settlement of disputes. We strongly encourage regional cooperation and shared responsibilities within the hemisphere to all these ends, and we have eagerly and regularly sought the advice of the leaders of the region on a wide range of issues. Last November, I spoke to the General Assembly of the Organization of American States of a cause that has been closest to my heart -- human rights. It is an issue that has found its time in the hemisphere. The cause is not mine alone, but an historic movement that will endure. At Riobamba, Ecuador, last September four Andean Pact countries, Costa Rica, and Panama broke new ground by adopting a "Code of Conduct," that joint action in defense of human rights does not violate the principles of nonintervention in the internal affairs of states in this hemisphere. The Organization of American States has twice condemned the coup that overturned the democratic process in Bolivia and the widespread abuse of human rights by the regime which seized power. The Inter-American Commission on Human Rights has gained world acclaim for its dispassionate reports. It completed two major country studies this year in addition to its annual report. In a resolution adopted without opposition, the OAS General Assembly in November strongly supported the work of the Commission. The American Convention on Human Rights is in force and an Inter-American Court has been created to judge human rights violations. This convention has been pending before the Senate for two years; I hope the United States this year will join the other nations of the hemisphere in ratifying a convention which embodies principles that are our tradition. The trend in favor of democracy has continued. During this past year, Peru inaugurated a democratically elected government. Brazil continues its process of liberalization. In Central America, Hondurans voted in record numbers in their first national elections in over eight years. In the Caribbean seven elections have returned governments firmly committed to the democratic traditions of the Commonwealth. Another major contribution to peace in the hemisphere is Latin America's own Treaty for the Prohibition of Nuclear Weapons. On behalf of the United States, I signed Protocol I of this Treaty in May of 1977 and sent it to the Senate for ratification. I urge that it be acted upon promptly by the Senate in order that it be brought into the widest possible effect in the Latin American region. Regional cooperation for development is gaining from Central America to the Andes, and throughout the Caribbean. The Caribbean Group for Cooperation in Economic Development, which we established with 29 other nations in 1977, has helped channel $750 million in external support for growth in the Caribbean. The recent meeting of the Chiefs of State of the Eastern Caribbean set a new precedent for cooperation in that region. Mexico and Venezuela jointly and Trinidad and Tobago separately have established oil facilities that will provide substantial assistance to their oil importing neighbors. The peace treaty between El Salvador and Honduras will hopefully stimulate Central America to move forward again toward economic integration. Formation of Caribbean/ Central American Action, a private sector organization, has given a major impetus to improving people-to-people bonds and strengthening the role of private enterprise in the development of democratic societies. The Panama treaties have been in force for over a year. A new partnership has been created with Panama; it is a model for large and small nations. A longstanding issue that divided us from our neighbors has been resolved. The security of the canal has been enhanced. The canal is operating as well as ever, with traffic through it reaching record levels this year. Canal employees, American and Panamanian alike, have remained on the job and have found their living and working conditions virtually unchanged. In 1980, relations with Mexico continued to improve due in large measure to the effectiveness of the Coordinator for Mexican Affairs and the expanded use of the U.S.-Mexico Consultative Mechanism. By holding periodic meetings of its various working groups, we have been able to prevent mutual concerns from becoming political issues. The Secretary of State visited Mexico City in November, and, along with the Mexican Secretary of Foreign Relations, reviewed the performance of the Consultative Mechanism. The office of the Coordinator has ensured the implementation of my directive to all agencies to accord high priority to Mexican concerns. Trade with Mexico rose by almost 60 percent to nearly $30 billion, making that country our third largest trading partner. These are all encouraging developments. Other problems remain, however. The impact of large-scale migration is affecting many countries in the hemisphere. The most serious manifestation was the massive, illegal exodus from Cuba last summer. The Cuban government unilaterally encouraged the disorderly and even deadly migration of 125,000 of its citizens in complete disregard for international law or the immigration laws of its neighbors. Migrations of this nature clearly require concerted action, and we have asked the OAS to explore means of dealing with similar situations which may occur in the future. We have a long-standing treaty with Colombia on Quita Sueno, Roncador, and Serrano which remains to be ratified by the Senate. In Central America, the future of Nicaragua is unclear. Recent tensions, the restrictions on the press and political activity, an inordinate Cuban presence in the country and the tragic killing by the security forces of a businessman well known for his democratic orientation, cause us considerable concern. These are not encouraging developments. But those who seek a free society remain in the contest for their nation's destiny. They have asked us to help rebuild their country, and by our assistance, to demonstrate that the democratic nations do not intend to abandon Nicaragua to the Cubans. As long as those who intend to pursue their pluralistic goals play important roles in Nicaragua, it deserves our continuing support. In El Salvador, we have supported the efforts of the Junta to change the fundamental basis of an inequitable system and to give a stake in a new nation to those millions of people, who for so long, lived without hope or dignity. As the government struggles against those who would restore an old tyranny or impose a new one, the United States will continue to stand behind them. We have increased our aid to the Caribbean, an area vital to our national security, and we should continue to build close relations based on mutual respect and understanding, and common interests. As the nations of this hemisphere prepare to move further into the 1980's, I am struck by the depth of underlying commitment that there is to our common principles: non-intervention, peaceful settlement of disputes, cooperation for development, democracy and defense of basic human rights. I leave office satisfied that the political, economic, social and organizational basis for further progress with respect to all these principles have been substantially strengthened in the past four years. I am particularly reassured by the leadership by other nations of the hemisphere in advancing these principles. The success of our common task of improving the circumstances of all peoples and nations in the hemisphere can only be assured by the sharing of responsibility. I look forward to a hemisphere that at the end of this decade has proven itself anew as a leader in the promotion of both national and human dignity. THE INTERNATIONAL ECONOMY A growing defense effort and a vigorous foreign policy rest upon a strong economy here in the United States. And the strength of our own economy depends upon our ability to lead and compete in the international marketplace. ENERGY Last year, the war between Iraq and Iran led to the loss of nearly 4 million barrels of oil to world markets, the third major oil market disruption in the past seven years. This crisis has vividly demonstrated once again both the value of lessened dependence on oil imports and the continuing instability of the Persian Gulf area. Under the leadership of the United States, the 21 members of the International Energy Agency took collective action to ensure that the oil shortfall stemming from the Iran-Iraq war would not be aggravated by competition for scarce spot market supplies. We are also working together to see that those nations most seriously affected by the oil disruption -- including our key NATO allies Turkey and Portugal -- can get the oil they need. At the most recent IEA Ministerial meeting we joined the other members in pledging to take those policy measures necessary to slice our joint oil imports in the first quarter of 1981 by 2.2 million barrels. Our international cooperation efforts in the energy field are not limited to crisis management. At the Economic Summit meetings in Tokyo and Venice, the heads of government of the seven major industrial democracies agreed to a series of tough energy conservation and production goals. We are working together with all our allies and friends in this effort. Construction has begun on a commercial scale coal liquefaction plant in West Virginia co-financed by the United States, Japan and West Germany. An interagency task force has just reported to me on a series of measures we need to take to increase coal production and exports. This report builds on the work of the International Energy Agency's Coal Industry Advisory Board. With the assurances of a reliable United States steam coal supply at reasonable prices, many of the electric power plants to be built in the 1980's and 1990's can be coal-fired rather than oil-burning. We are working cooperatively with other nations to increase energy security in other areas as well. Joint research and development with our allies is underway in solar energy, nuclear power, industrial conservation and other areas. In addition, we are assisting rapidly industrializing nations to carefully assess their basic energy policy choices, and our development assistance program helps the developing countries to increase indigenous energy production to meet the energy needs of their poorest citizens. We support the proposal for a new World Bank energy affiliate to these same ends, whose fulfillment will contribute to a better global balance between energy supply and demand. INTERNATIONAL MONETARY POLICY Despite the rapid increase in oil costs, the policy measures we have taken to improve domestic economic performance have had a continued powerful effect on our external accounts and on the strength of the dollar. A strong dollar helps in the fight against inflation. There has also been considerable forward movement in efforts to improve the functioning of the international monetary system. The stability of the international system of payments and trade is important to the stability and good health of our own economy. We have given strong support to the innovative steps being taken by the International Monetary Fund and World Bank to help promote early adjustment to the difficult international economic problems. Recent agreement to increase quotas by fifty percent will ensure the IMF has sufficient resources to perform its central role in promoting adjustment and financing payments imbalances. The World Bank's new structural adjustment lending program will also make an important contribution to international efforts to help countries achieve a sustainable level of growth and development. SUGAR In 1980, Congress passed U.S. implementing legislation for the International Sugar Agreement, thus fulfilling a major commitment of this Administration. The agreement is an important element in our international commodity policy with far-reaching implications for our relations with developing countries, particularly sugar producers in Latin America. Producers and consumers alike will benefit from a more stable market for this essential commodity. COFFEE At year's end, Congress approved implementing legislation permitting the U.S. to carry out fully its commitments under International Coffee Agreement Specifically, the legislation enables us to meet our part of an understanding negotiated last fall among members of the Agreement, which defends, by use of export quotas, a price range well below coffee prices of previous years and which commits major coffee producers to eliminate cartel arrangements that manipulated future markets to raise prices. The way is now open to a fully-functioning International Coffee Agreement which can help to stabilize this major world commodity market. The results will be positive for both consumers -- who will be less likely to suffer from sharp increases in coffee prices -- and producers -- who can undertake future investment with assurance of greater protection against disruptive price fluctuations in their exports. NATURAL RUBBER In 1980, the International Natural Rubber Agreement entered into force provisionally. U.S. membership in this new body was approved overwhelmingly by the Senate last year. The natural rubber agreement is a model of its kind and should make a substantial contribution to a stable world market in this key industrial commodity. It is thus an excellent example of constructive steps to improve the operation of the world economy in ways which can benefit the developing and industrialized countries alike. In particular, the agreement has improved important U.S. relationships with the major natural rubber-producing countries of Southeast Asia. COMMON FUND The United States joined members of the United Nations Conference on Trade and Development, both developed and developing nations, in concluding Articles of Agreement in 1980 for a Common Fund to help international commodity agreements stabilize the prices of raw materials. ECONOMIC COOPERATION WITH DEVELOPING NATIONS Our relations with the developing nations are of major importance to the United States. The fabric of our relations with these countries has strong economic and political dimensions. They constitute the most rapidly growing markets for our exports, and are important sources of fuel and raw materials. Their political views are increasingly important, as demonstrated in their overwhelming condemnation of the Soviet invasion of Afghanistan. Our ability to work together with developing nations toward goals we have in common (their political independence, the resolution of regional tensions, and our growing ties of trade for example) require us to maintain the policy of active involvement with the developing world that we have pursued over the past four years. The actions we have taken in such areas as energy, trade, commodities, and international financial institutions are all important to the welfare of the developing countries. Another important way the United States can directly assist these countries and demonstrate our concern for their future is through our multilateral and bilateral foreign assistance program. The legislation which I will be submitting to you for FY 82 provides the authority and the funds to carry on this activity. Prompt Congressional action on this legislation is essential in order to attack such high priority global problems as food and energy, meet our treaty and base rights agreements, continue our peace efforts in the Middle East, provide economic and development support to countries in need, promote progress on North-South issues, protect Western interests, and counter Soviet influence. Our proposed FY 1982 bilateral development aid program is directly responsive to the agreement reached at the 1980 Venice Economic Summit that the major industrial nations should increase their aid for food and energy production and for family planning. We understand that other Summit countries plan similar responses. It is also important to honor our international agreements for multilateral assistance by authorizing and appropriating funds for the International Financial Institutions. These multilateral programs enhance the efficiency of U.S. contributions by combining them with those of many other donor countries to promote development; the proposed new World Bank affiliate to increase energy output in developing countries offers particular promise. All these types of aid benefit our long-run economic and political interests. Progress was made on a number of economic issues in negotiations throughout the U.N. system. However, in spite of lengthy efforts in the United Nations, agreement has not been reached on how to launch a process of Global Negotiations in which nations might collectively work to solve such important issues as energy, food, protectionism, and population pressures. The United States continues to believe that progress can best be made when nations focus on such specific problems, rather than on procedural and institutional questions. It will continue to work to move the North-South dialogue into a more constructive phase. FOOD -- THE WAR ON HUNGER The War on Hunger must be a continuous urgent priority. Major portions of the world's population continue to be threatened by the specter of hunger and malnutrition. During the past year, some 150 million people in 36 African countries were faced with near disaster as the result of serious drought, induced food shortages. Our government, working in concert with the U.N.'s Food and Agricultural Organization (FAO), helped to respond to that need. But the problems of hunger cannot be solved by short-term measures. We must continue to support those activities, bilateral and multilateral, which aim at improving food production especially in developing countries and assuring global food security. These measures are necessary to the maintenance of a stable and healthy world economy. I am pleased that negotiation of a new Food Aid Convention, which guarantees a minimum annual level of food assistance, was successfully concluded in March. The establishment of the International Emergency Wheat Reserve will enable the U.S. to meet its commitment under the new Convention to feed hungry people, even in times of short supply. Of immediate concern is the prospect of millions of Africans threatened by famine because of drought and civil disturbances. The U.S. plea for increased food aid resulted in the organization of an international pledging conference and we are hopeful that widespread starvation will be avoided. Good progress has been made since the Venice Economic Summit called for increased effort on this front. We and other donor countries have begun to assist poor countries develop long-term strategies to improve their food production. The World Bank will invest up to $4 billion in the next few years in improving the grain storage and food-handling capacity of countries prone to food shortages. Good progress has been made since the Tokyo Economic Summit called for increased effort on this front. The World Bank is giving this problem top priority, as are some other donor countries. The resources of the consultative Group on International Agricultural Research will be doubled over a five-year period. The work of our own Institute of Scientific and Technological Cooperation will further strengthen the search for relevant new agricultural technologies. The goal of freeing the world from hunger by the year 2000 should command the full support of all countries. The Human Dimension of Foreign Policy HUMAN RIGHTS The human rights policy of the United States has been an integral part of our overall foreign policy for the past several years. This policy serves the national interest of the United States in several important ways: by encouraging respect by governments for the basic rights of human beings, it promotes peaceful, constructive change, reduces the likelihood of internal pressures for violent change and for the exploitation of these by our adversaries, and thus directly serves our long-term interest in peace and stability; by matching espousal of fundamental American principles of freedom with specific foreign policy actions, we stand out in vivid contrast to our ideological adversaries; by our efforts to expand freedom elsewhere, we render our own freedom, and our own nation, more secure. Countries that respect human rights make stronger allies and better friends. Rather than attempt to dictate what system of government or institutions other countries should have, the U.S. supports, throughout the world, the internationally recognized human rights which all members of the United Nations have pledged themselves to respect. There is more than one model that can satisfy the continuing human reach for freedom and justice: 1980 has been a year of some disappointments, but has also seen some positive developments in the ongoing struggle for fulfillment of human rights throughout the world. In the year we have seen: -- Free elections were held and democratic governments installed in Peru, Dominica, and Jamaica. Honduras held a free election for installation of a constituent assembly. An interim government was subsequently named pointing toward national presidential elections in 1981. Brazil continues on its course of political liberalization. -- The "Charter of Conduct" signed in Riobamba, Ecuador, by Ecuador, Colombia, Venezuela, Peru, Costa Rica, Panama and Spain, affirms the importance of democracy and human rights for the Andean countries. -- The Organization of American States, in its annual General Assembly, approved a resolution in support of the Inter-American Human Rights Commission's work. The resolution took note of the Commission's annual report, which described the status of human rights in Chile, El Salvador, Paraguay and Uruguay; and the special reports on Argentina and Haiti, which described human rights conditions as investigated during on-site inspections to these countries. -- The awarding of the Nobel Prize for Peace to Adolfo Perez Esquivel of Argentina for his non-violent advocacy of human rights. -- The United States was able to rejoin the International Labor Organization after an absence of two years, as that U.N. body reformed its procedures to return to its original purpose of strengthening employer-employee-government relations to insure human rights for the working people of the world. The United States, of course, cannot take credit for all these various developments. But we can take satisfaction in knowing that our policies encourage and perhaps influence them. Those who see a contradiction between our security and our humanitarian interests forget that the basis for a secure and stable society is the bond of trust between a government and its people. I profoundly believe that the future of our world is not to be found in authoritarianism: that wears the mask of order, or totalitarianism that wears the mask of justice. Instead, let us find our future in the human face of democracy, the human voice of individual liberty, the human hand of economic development. HUMANITARIAN AID The United States has continued to play its traditional role of safehaven for those who flee or are forced to flee their homes because of persecution or war. During 1980, the United States provided resettlement opportunities for 216,000 refugees from countries around the globe. In addition, the United States joined with other nations to provide relief to refugees in country of first asylum in Africa, the Middle East, and Asia. The great majority of refugee admissions continued to be from Indo-china. During 1980, 168,000 Indo-chinese were resettled in the United States. Although refugee populations persist in camps in Southeast Asia, and refugees continue to flee Vietnam, Laos and Kampuchea, the flow is not as great as in the past. One factor in reducing the flow from Vietnam has been the successful negotiation and commencement of an Orderly Departure Program which permits us to process Vietnamese for resettlement in the United States with direct departure from Ho Chi Minh Ville in an orderly fashion. The first group of 250 departed Vietnam for the United States in December, 1980. In addition to the refugees admitted last year, the United States accepted for entry into the United States 125,000 Cubans who were expelled by Fidel Castro. Federal and state authorities, as well as private voluntary agencies, responded with unprecedented vigor to coping with the unexpected influx of Cubans. Major relief efforts to aid refugees in countries of first asylum continued in several areas of the world. In December, 1980, thirty-two nations, meeting in New York City, agreed to contribute $65 million to the continuing famine relief program in Kampuchea. Due in great part to the generosity of the American people and the leadership exercised in the international arena by the United States, we have played the pivotal role in ameliorating massive suffering in Kampuchea. The United States has taken the lead among a group of donor countries who are providing relief to some two million refugees in the Horn of Africa who have been displaced by fighting in Ethiopia. U.S. assistance, primarily to Somalia, consists of $35 million worth of food and $18 million in cash and kind. Here again, United States efforts can in large part be credited with keeping hundreds of thousands of people alive. Another major international relief effort has been mounted in Pakistan. The United States is one of 25 countries plus the European Economic Community who have been helping the Government of Pakistan to cope with the problem of feeding and sheltering the more than one million refugees that have been generated by the Soviet invasion of Afghanistan. In April, 1980, the Congress passed the Refugee Act of 1980 which brought together, for the first time, in one piece of legislation the various threads of U.S. policy towards refugees. The law laid down a new, broader definition of the term refugee, established mechanisms for arriving at a level of refugee admissions through consultation with Congress, and established the Office of the United States Coordinator for Refugees. It cannot be ignored that the destructive and aggressive policies of the Soviet Union have added immeasurably to the suffering in these three tragic situations. The Control of Nuclear Weapons Together with our friends and allies, we are striving to build a world in which peoples with diverse interests can live freely and prosper. But all that humankind has achieved to date, all that we are seeking to accomplish, and human existence itself can be undone in an instant -- in the catastrophe of a nuclear war. Thus one of the central objectives of my Administration has been to control the proliferation of nuclear weapons to those nations which do not have them, and their further development by the existing nuclear powers -- notably the Soviet Union and the United States. NON-PROLIFERATION My Administration has been committed to stemming the spread of nuclear weapons. Nuclear proliferation would raise the spectre of the use of nuclear explosives in crucial, unstable regions of the world endangering not only our security and that of our Allies, but that of the whole world. Non-proliferation is not and can not be a unilateral U.S. policy, nor should it be an issue of contention between the industrialized and developing states. The international non-proliferation effort requires the support of suppliers as well as importers of nuclear technology and materials. We have been proceeding on a number of fronts: -- First, we have been seeking to encourage nations to accede to the Non-Proliferation Treaty. The U.S. is also actively encouraging other nations to accept full-scope safeguards on all of their nuclear activities and is asking other nuclear suppliers to adopt a full-scope safeguards requirement as a condition for future supply. -- Second, the International Nuclear Fuel Cycle Evaluation (INFCE), which was completed in 1980, demonstrated that suppliers and recipients can work together on these technically complex and sensitive issues. While differences remain, the INFCE effort provides a broader international basis for national decisions which must balance energy needs with non-proliferation concerns. -- Finally, we are working to encourage regional cooperation and restraint. Protocol I of the Treaty of Tlatelolco which will contribute to the lessening of nuclear dangers for our Latin American neighbors ought now to be ratified by the United States Senate. LIMITATIONS ON STRATEGIC ARMS I remain convinced that the SALT II Treaty is in our Nation's security interest and that it would add significantly to the control of nuclear weapons. I strongly support continuation of the SALT process and the negotiation of more far-reaching mutual restraints on nuclear weaponry. CONCLUSION We have new support in the world for our purposes of national independence and individual human dignity. We have a new will at home to do what is required to keep us the strongest nation on earth. We must move together into this decade with the strength which comes from realization of the dangers before us and from the confidence that together we can overcome them. The White House, January 16, 1981. # State of the Union Address # Ronald Reagan # January 26, 1982 Thank you. Mr. Speaker thank you. Thank you very much. Mr. Speaker, Mr. President, Distinguished Members of the Congress, honored guests and fellow citizens: Today marks my first State of the Union address to you, a constitutional duty as old as our republic itself. President Washington began this tradition in 1790 after reminding the nation that the destiny of self-government and the "preservation of the sacred fire of liberty" is "finally staked on the experiment entrusted to the hands of the American people." For our friends in the press, who place a high premium on accuracy, let me say: l did not actually hear George Washington say that, but it is a matter of historic record. But from this podium, Winston Churchill asked the free world to stand together against the onslaught of aggression. Franklin Delano Roosevelt spoke of a day of infamy and summoned a nation to arms. And Douglas MacArthur made an unforgettable farewell to a country he had loved and served so well. Dwight Eisenhower reminded us that peace was purchased only at the price of strength and John F. Kennedy spoke of the burden and glory that is freedom. When I visited this chamber last year as a newcomer to Washington, critical of past policies which I believe had failed, I proposed a new spirit of partnership between this Congress and this Administration and between Washington and our state and local governments. In forging this new partnership for America we could achieve the oldest hopes of our republic prosperity for our nation, peace for the world, and the blessings of individual liberty for our children and, someday, for all of humanity. It's my duty to report to you tonight on the progress that we have made in our relations with other nations, on the foundation we've carefully laid for our economic recovery and, finally, on a bold and spirited initiative that I believe can change the face of American government and make it again the servant of the people. Seldom have the stakes been higher for America. What we do and say here will make all the difference to auto workers in Detroit, lumberjacks in the Northwest, steelworkers in Steubenville who are in the unemployment lines, to black teen-agers in Newark and Chicago; to hard-pressed farmers and small businessmen and to millions of everyday Americans who harbor the simple wish of a safe and financially secure future for their children. To understand the State of the Union, we must look not only at where we are and where we're going but where we've been. The situation at this time last year was truly ominous. The last decade has seen a series of recessions. There was a recession in 1970, in 1974, and again in the spring of 1980. Each time, unemployment increased and inflation soon turned up again. We coined the word "stagflation" to describe this. Government's response to these recessions was to pump up the money supply and increase spending. In the last six months of 1980, as an example, the money supply increased at the fastest rate in postwar history 13 percent. Inflation remained in double digits and Government spending increased at an annual rate of 17 percent. Interest rates reached a staggering 21 1/2 percent. There were eight million unemployed. Late in 1981, we sank into the present recession largely because continued high interest rates hurt the auto industry and construction. And there was a drop in productivity and the already high unemployment increased. This time, however, things are different. We have an economic program in place completely different from the artificial quick-fixes of the past. It calls for a reduction of the rate of increase in Government spending, and already that rate has been cut n early in half. But reduced spending alone isn't enough. We've just implemented the first and smallest phase of a three-year tax-rate reduction designed to stimulate the economy and create jobs. Already interest rates are down to 15 3/4 percent, but they must still go lower. Inflation is down from 12.4 percent to 8.9, and for the month of December it was running at an annualized rate of 5.2 percent. If we had not acted as we did, things would be far worse for all Americans than they are today. Inflation, taxes and interest rates would all be higher. A year ago, Americans' faith in their governmental process was steadily declining. Six out of ten Americans were saying they were pessimistic about their future. A new kind of defeatism was heard. Some said our domestic problems were uncontrollable that we had to learn to live with the-seemingly endless cycle of high inflation and high unemployment. There were also pessimistic predictions about the relationship between our Administration and this Congress. It was said we could never work together. Well, those predictions were wrong. The record is clear, and I believe that history will remember this as an era of American renewal, remember this Administration as an Administration of change and remember this Congress as a Congress of destiny. Together, we not only cut the increase in Government spending nearly in half, we brought about the largest tax reductions and the most sweeping changes in our tax structure since the beginning of this century. And because we indexed future taxes to the r ate of inflation, we took away Government's built-in profit on inflation and its hidden incentive to grow larger at the expense of American workers. Together, after 50 years of taking power away from the hands of the people in their states and local communities we have started returning power and resources to them. Together, we have cut the growth of new Federal regulations nearly in half. In 1981, there were 23,000 fewer pages in the Federal Register, which lists new regulations, than there were in 1980. By deregulating oil, we've come closer to achieving energy independence and help bring down the costs of gasoline and heating fuel. Together, we have created an effective Federal strike force to combat waste and fraud in Government. In just six months it has saved the taxpayers more than $2 billion, and it's only getting started. Together, we've begun to mobilize the private sector not to duplicate wasteful and discredited Government programs but to bring thousands of Americans into a volunteer effort to help solve many of America's social problems. Together, we've begun to restore that margin of military safety that insures peace. Our country's uniform is being worn once again with pride. Together we have made a new beginning, but we have only begun. No one pretends that the way ahead will be easy. In my inaugural address last year, I warned that the "ills we suffer have come upon us over several decades. They will not go away in days, weeks or months, but they will go away . . . because we as Americans have the capacity now, as we've had it in the past, to do whatever needs to be done to preserve this last and greatest bastion of freedom." The economy will face difficult moments in the months ahead. But, the program for economic recovery that is in place will pull the economy out of its slump and put us on the road to prosperity and stable growth by the latter half of this year. That is why I can report to you tonight that in the near future the State of the Union and the economy will be better much better if we summon the strength to continue on the course that we've charted. And so the question: If the fundamentals are in place, what now? Two things. First, we must understand what's happening at the moment to the economy. Our current problems are not the product of the recovery program that's only just now getting under way, as some would have you believe; they are the inheritance of decades of tax and tax, and spend and Second, because our economic problems are deeply rooted and will not respond to quick political fixes, we must stick to our carefully integrated plan for recovery. And that plan is based on four common-sense fundamentals: continued reduction of the growth in Federal spending, preserving the individual and business tax deductions that will stimulate saving and investment, removing unnecessary Federal regulations to spark productivity and maintaining a healthy dollar and a stable monetary policy the latter a responsibility of the Federal Reserve System. The only alternative being offered to this economic program is a return to the policies that gave us a trillion-dollar debt, runaway inflation, runaway interest rates and unemployment. The doubters would have us turn back the clock with tax increases that would offset the personal tax-rate reductions already passed by this Congress. Raise present taxes to cut future deficits, they tell us. Well, I don't believe we should buy that argument. There are too many imponderables for anyone to predict deficits or surpluses several years ahead with any degree of accuracy. The budget in place when I took office had been projected as balanced. It turned out to have one of the biggest deficits in history. Another example of the imponderables that can make deficit projections highly questionable: A change of only one percentage point in unemployment can alter a deficit up or down by some $25 billion. As it now stands, our forecasts, which we're required by law to make, will show major deficits, starting at less than $100 billion and declining, but still too high. More important, we are making progress with the three keys to reducing deficits: economic growth, lower interest rates and spending control. The policies we have in place will reduce the deficit steadily, surely and, in time, completely. Higher taxes would not mean lower deficits. If they did, how would we explain tax revenues more than doubled just since 1976, yet in that same six-year period we ran the largest series of deficits in our history. In 1980 tax revenues increased by $54 billion, and in 1980 we had one of our all-time biggest deficits. Raising taxes won't balance the budget. It will encourage more Government spending and less private investment. Raising taxes will slow economic growth, reduce production and destroy future jobs, making it more difficult for those without jobs to find them and more likely that those who now have jobs could lose them. So I will not ask you to try to balance the budget on the backs of the American taxpayers. I will seek no tax increases this year and I have no intention of retreating from our basic program of tax relief. I promised the American people to bring their tax rates down and keep them down to provide them incentives to rebuild our economy, to save, to invest in America's future. I will stand by my word. Tonight I'm urging the American people: Seize these new opportunities to produce, to save, to invest, and together we'll make this economy a mighty engine of freedom, hope and prosperity again. Now the budget deficit this year will exceed our earlier expectations. The recession did that. It lowered revenues and increased costs. To some extent, we're also victims of our own success. We've brought inflation down faster than we thought we could and in doing this we've deprived Government of those hidden revenues that occur when inflation pushes people into higher income tax brackets. And the continued high interest rates last year cost the Government about $5 billion more than anticipated. We must cut out more nonessential Government spending and root out more waste, and we will continue our efforts to reduce the number of employees in the Federal work force by 75,000. Starting in fiscal 1984, the Federal Government will assume full responsibility for the cost of the rapidly growing Medicaid program to go along with its existing responsibility for Medicare. As part of a financially equal swap, the states will simultaneously take full responsibility for Aid to Families With Dependent Children and food stamps. This will make welfare less costly and more responsive to genuine need because it will be designed and administered closer to the grass roots and the people it serves. In 1984, the Federal Government will apply the full proceeds from certain excise taxes to a grass roots trust fund that will belong, in fair shares, to the 50 states. The total amount flowing into this fund will be $28 billion a year. Over the next four years, the states can use this money in either of two ways. If they want to continue receiving Federal grants in such areas as transportation, education and social services, they can use their trust fund money to pay for the grants or, to the extent they choose to forgo the Federal grant programs, they can use their trust fund money on their own, for those or other purposes. There will be a mandatory pass-through of part of these funds to local governments. By 1988, the states will be in complete control of over 40 Federal grant programs. The trust fund will start to phase out, eventually to disappear, and the excise taxes will be turned over to the states. They can then preserve, lower or raise taxes on their own and fund and manage these programs as they see fit. In a single stroke, we will be accomplishing a real realignment that will end cumbersome administration and spiraling costs at the Federal level while we insure these programs will be more responsive to both the people they're meant to help and the people who pay for them. Hand in hand with this program to strengthen the discretion and flexibility of state and local governments, we're proposing legislation for an experimental effort to improve and develop our depressed urban areas in the 1980's and 1990's. This legislation will permit states and localities to apply to the Federal Government for designation as urban enterprise zones. A broad range of special economic incentives in the zones will help attract new business, new jobs, new opportunity to America's inner cities and rural towns. Some will say our mission is to save free enterprise. Well, I say we must free enterprise so that, together, we can save America. Some will also say our states and local communities are not up to the challenge of a new and creative partnership. Well, that might have been true 20 years ago before reforms like reapportionment and the Voting Rights Act, the 10-year extension of which I strongly support. It's no longer true today. This Administration has faith in state and local governments and the constitutional balance envisioned by the Founding Fathers. We also believe in the integrity, decency and sound good sense of grass roots Americans. Our faith in the American people is reflected in another major endeavor. Our private sector initiatives task force is seeking out successful community models of school, church, business, union, foundation and civic programs that help community needs. Such groups are almost invariably far more efficient than government in running social programs. We're not asking them to replace discarded and often discredited Government programs dollar for dollar, service for service. We just want to help them perform the good works they choose, and help others to profit by their example. Three hundred eighty-five thousand corporations and private organizations are already working on social programs ranging from drug rehabilitation to job training, and thousands more Americans have written us asking how they can help. The volunteer spirit is still alive and well in America. Our nation's long journey towards civil rights for all our citizens once a source of discord, now a source of pride must continue with no back sliding or slowing down. We must and shall see that those basic laws that guarantee equal rights are preserved and, when necessary, strengthened. Our concern for equal rights for women is firm and unshakable. We launched a new Task Force on Legal Equity for Women, and a 50-states project that will examine state laws for discriminatory language. And for the first time in our history a woman sits on the highest court in the land. So, too, the problem of crime one as real and deadly serious as any in America today it demands that we seek transformation of our legal system, which overly protects the rights of criminals while it leaves society and the innocent victims of crime without justice. We look forward to the enactment of a responsible Clean Air Act to increase jobs while continuing to improve the quality of our air. We are encouraged by the bipartisan initiative of the House and are hopeful of further progress as the Senate continues its deliberations. So far I have concentrated largely now on domestic matters. To view the State of the Union in perspective, we must not ignore the rest of the world. There isn't time tonight for a lengthy treatment of social or of foreign policy, I should say a subject I intend to address in detail in the near future. A few words, however, are in order on the progress we've made over the past year re-establishing respect for our nation around the globe and some of the challenges and goals that we will approach in the year ahead. At Ottawa and Cancun, I met with leaders of the major industrial powers and developing nations. Now some of those I met with were a little surprised I didn't apologize for America's wealth. Instead I spoke of the strength of the free marketplace system and how that system could help them realize their aspirations for economic development and political freedom. I believe lasting friendships were made and the foundation was laid for future cooperation. In the vital region of the Caribbean Basin, we're developing a program of aid, trade and investment incentives to promote self-sustaining growth and a better, more secure life for our neighbors to the south. Toward those who would export terrorism and subversion in the Caribbean and elsewhere, especially Cuba and Libya, we will act with firmness. Our foreign policy is a policy of strength, fairness and balance. By restoring America's military credibility, by pursuing peace at the negotiating table wherever both sides are willing to sit down in good faith, and by regaining the respect of America's allies and adversaries alike, we have strengthened our country's position as a force for peace and progress in the world. When action is called for, we're taking it. Our sanctions against the military dictatorship that has attempted to crush human rights in Poland and against the Soviet regime behind the military dictatorship clearly demonstrated to the world that America will not conduct "business as usual" with the forces of oppression. If the events in Poland continue to deteriorate, further measures will follow. The budget plan I submit to you on Feb. 8 will realize major savings by dismantling the Departments of Energy and Education, and by eliminating ineffective subsidies for business. We will continue to redirect our resources to our two highest budget priorities: a strong national defense to keep America free and at peace and a reliable safety net of social programs for those who have contributed and those who are in need. Contrary to some of the wild charges you may have heard, this Administration has not and will not turn its back on America's elderly or America's poor. Under the new budget, funding for social insurance programs will be more than double the amount spent only six years ago. But it would be foolish to pretend that these or any programs cannot be made more efficient and economical. The entitlement programs that make up our safety net for the truly needy have worthy goals and many deserving recipients. We will protect them. But there's only one way to see to it that these programs really help those whom they were designed to help, and that is to bring their spiraling costs under control. Today we face the absurd situation of a Federal budget with three-quarters of its expenditures routinely referred to as "uncontrollable," and a large part of this goes to entitlement programs. Committee after committee of this Congress has heard witness after witness describe many of these programs as poorly administered and rife with waste and fraud. Virtually every American who shops in a local supermarket is aware of the daily abuses that take place in the food stamp program, which has grown by 16,000 percent in the last 15 years. Another example is Medicare and Medicaid, programs with worthy goals but whose costs have increased from 11.2 billion to almost 60 billion, more than five times as much, in just 10 years. Waste and fraud are serious problems. Back in 1980, Federal investigators testified before one of your committees that "corruption has permeated virtually every area of the Medicare and Medicaid health care industry." One official said many of the people who are cheating the system were "very confident that nothing was going to happen to them." Well, something is going to happen. Not only the taxpayers are defrauded the people with real dependency on these programs are deprived of what they need because available resources are going not to the needy but to the greedy. The time has come to control the uncontrollable. In August we made a start. I signed a bill to reduce the growth of these programs by $44 billion over the next three years, while at the same time preserving essential services for the truly needy. Shortly you will receive from me a message on further re forms we intend to install some new, but others long recommended by our own Congressional committees. I ask you to help make these savings for the American taxpayer. The savings we propose in entitlement programs will total some $63 billion over four years and will, without affecting Social Security, go a long way toward bringing Federal spending under control. But don't be fooled by those who proclaim that spending cuts will deprive the elderly, the needy and the helpless. The Federal Government will still subsidize 95 million meals every day. That's one out of seven of all the meals served in America. Head St art, senior nutrition programs, and child welfare programs will not be cut from the levels we proposed last year. More than one-half billion dollars has been proposed for minority business assistance. And research at the National Institutes of Health will be increased by over $100 million. While meeting all these needs, we intend to plug unwarranted tax loopholes and strengthen the law which requires all large corporations to pay a minimum tax. I am confident the economic program we've put into operation will protect the needy while it triggers a recovery that will benefit all Americans. It will stimulate the economy, result in increased savings and provide capital for expansion, mortgages for home building and jobs for the unemployed. Now that the essentials of that program are in place, our next major undertaking must be a program just as bold, just as innovative to make government again accountable to the people, to make our system of federalism work again. Our citizens feel they've lost control of even the most basic decisions made about the essential services of Government, such as schools, welfare, roads and even garbage collection. And they're right. A maze of interlocking jurisdictions and levels of Government confronts average citizens in trying to solve even the simplest of problems. They don't know where to turn for answers, who to hold accountable, who to praise, who to blame, who to vote for or against. The main reason for this is the overpowering growth of Federal grants-in-aid programs during the past few decades. In 1960, the Federal Government had 132 categorical grant programs, costing $7 billion. When I took office, there were approximately 500, costing nearly $100 billion 13 programs for energy, 36 for pollution control, 66 for social services, 90 for education. And here in the Congress, it takes at least 166 committees just to try to keep track of them. You know and I know that neither the President nor the Congress can properly oversee this jungle of grants-in-aid; indeed, the growth of these grants had led to the distortion in the vital functions of Government. As one Democratic Governor put it recently: "The national Government should be worrying about "arms control not potholes." The growth the growth in these Federal programs has in the words of one intergovernmental commission made the Federal Government "more pervasive, more intrusive, more unmanageable, more ineffective and costly, and above all more accountable." Well, let's solve this problem with a single, bold stroke the return of some $47 billion in Federal programs to state and local government, together with the means to finance them and a transition period of nearly 10 years to avoid unnecessary disruption. I will shortly send this Congress a message describing this program. I want to emphasize, however, that its full details will have been worked out only after close consultation with Congressional, state and local officials. Now let me also note that private American groups have taken the lead in making Jan. 30 a day of solidarity with the people of Poland so, too, the European Parliament has called for March 21 to be an international day of support for Afghanistan. Well, I urge all peace-loving peoples to join together on those days, to raise their voices, to speak and pray for freedom. Meanwhile, we're working for reduction of arms and military activities. As I announced in my address to the nation last Nov. 18, we have proposed to the Soviet Union a far-reaching agenda for mutual reduction of military forces and have already initiated negotiations with them in Geneva on intermediate-range nuclear forces. In those talks it is essential that we negotiate from a position of strength. There must be a real incentive for the Soviets to take these talks seriously. This requires that we rebuild our defenses. In the last decade, while we sought the moderation of Soviet power through a process of restraint and accommodation, the Soviets engaged in an unrelenting buildup of their military forces. The protection of our national security has required that we undertake a substantial program to enhance our military forces. We have not neglected to strengthen our traditional alliances in Europe and Asia, or to develop key relationships with our partners in the Middle East and other countries. Building a more peaceful world requires a sound strategy and the national resolve to back it up. When radical forces threaten our friends, when economic misfortune creates conditions of instability, when strategically vital parts of the world fall under the shadow of Soviet power, our response can make the difference between peaceful change or disorder and violence. That's why we've laid such stress not only on our own defense, but on our vital foreign assistance program. Your recent passage of the foreign assistance act sent a signal to the world that America will not shrink from making the investments necessary for both peace and security. Our foreign policy must be rooted in realism, not naivete or self-delusion. A recognition of what the Soviet empire is about is the starting point. Winston Churchill, in negotiating with the Soviets, observed that they respect only strength and resolve in their dealings with other nations. That's why we've moved to reconstruct our national defenses. We intend to keep the peace we will also keep our freedom. We we have made pledges of a new frankness in our public statements and worldwide broadcasts. In the face of a climate of falsehood and misinformation, we've promised the world a season of truth the truth of our great civilized ideas: individual liberty, representative government, the rule of law under God. We've never needed walls, or mine fields or barbwire to keep our people in. Nor do we declare martial law to keep our people from voting for the kind of Government they want. Yes, we have our problems; yes, we're in a time of recession. And it's true, there's no quick fix, as I said, to instantly end the tragic pain of unemployment. But we will end it the process has already begun and we'll see its effect as the year goes on. We speak with pride and admiration of that little band of Americans who overcame insuperable odds to set this nation on course 200 years ago. But our glory didn't end with them Americans ever since have emulated their deeds. We don't have to turn to our history books for heroes. They're all around us. One who sits among you here tonight epitomized that heroism at the end of the longest imprisonment ever inflicted on men of our armed forces. Who will ever forget that night when we waited for television to bring us the scene of that first plane landing at Clark Field in the Philippines bringing our P.O.W.s home. The plane door opened and Jeremiah Denton came slowly down the ramp. He caught sight of our flag, saluted it, said, "God bless America," and then thanked us for bringing him home. Just two weeks ago, in the midst of a terrible tragedy on the Potomac, we saw again the spirit of American heroism at its finest the heroism of dedicated rescue workers saving crash victims from icy waters. And we saw the heroism of one of our young Government employees, Lenny Skutnik, who, when he saw a woman lose her grip on the helicopter line, dived into the water and dragged her to safety. And then there are countless quiet, everyday heroes of American life parents who sacrifice long and hard so their children will know a better life than they've known; church and civic volunteers who help to feed, clothe, nurse and teach the needy; millions who've made our nation, and our nation's destiny, so very special unsung heroes who may not have realized their own dreams themselves but then who reinvest those dreams in their children. Don't let anyone tell that America's best days are behind her that the American spirit has been vanquished. We've seen it triumph too often in our lives to stop believing in it now. A hundred and one hundred and twenty years ago the greatest of all our Presidents delivered his second State of the Union Message in this chamber. "We cannot escape history," Abraham Lincoln warned. "We of this Congress and this Administration will be remembered in spite of ourselves." The "trial through which we pass will light us down in honor or dishonor to the latest generation." Well, that President and that Congress did not fail the American people. Together, they weathered the storm and preserved the union. Let it be said of us that we, too did not fail; that we, too, worked together to bring America through difficult times. Let us so conduct ourselves that two centuries from now, another Congress and another President, meeting in this chamber as we're meeting, will speak of us with pride, saying that we met the test and preserved for them in their day the sacred flame of liberty this last, best hope of man on Earth. # State of the Union Address # Ronald Reagan # January 25, 1983 # NOTE: The President spoke at 9:03 p.m. in the House Chamber of the Capitol. He was introduced by Thomas P. O'Neill, Jr., Speaker of the House of Representatives. The address was broadcast live on nationwide radio and television. Mr. Speaker, Mr. President, distinguished Members of the Congress, honored guests, and fellow citizens: This solemn occasion marks the 196th time that a President of the United States has reported on the State of the Union since George Washington first did so in 1790. That's a lot of reports, but there's no shortage of new things to say about the State of the Union. The very key to our success has been our ability, foremost among nations, to preserve our lasting values by making change work for us rather than against us. I would like to talk with you this evening about what we can do together -- not as Republicans and Democrats, but as Americans -- to make tomorrow's America happy and prosperous at home, strong and respected abroad, and at peace in the world. As we gather here tonight, the state of our Union is strong, but our economy is troubled. For too many of our fellow citizens -- farmers, steel and auto workers, lumbermen, black teenagers, working mothers -- this is a painful period. We must all do everything in our power to bring their ordeal to an end. It has fallen to us, in our time, to undo damage that was a long time in the making, and to begin the hard but necessary task of building a better future for ourselves and our children. We have a long way to go, but thanks to the courage, patience, and strength of our people, America is on the mend. But let me give you just one important reason why I believe this -- it involves many members of this body. Just 10 days ago, after months of debate and deadlock, the bipartisan Commission on Social Security accomplished the seemingly impossible. Social security, as some of us had warned for so long, faced disaster. I, myself, have been talking about this problem for almost 30 years. As 1983 began, the system stood on the brink of bankruptcy, a double victim of our economic ills. First, a decade of rampant inflation drained its reserves as we tried to protect beneficiaries from the spiraling cost of living. Then the recession and the sudden end of inflation withered the expanding wage base and increasing revenues the system needs to support the 36 million Americans who depend on it. When the Speaker of the House, the Senate majority leader, and I performed the bipartisan -- or formed the bipartisan Commission on Social Security, pundits and experts predicted that party divisions and conflicting interests would prevent the Commission from agreeing on a plan to save social security. Well, sometimes, even here in Washington, the cynics are wrong. Through compromise and cooperation, the members of the Commission overcame their differences and achieved a fair, workable plan. They proved that, when it comes to the national welfare, Americans can still pull together for the common good. Tonight, I'm especially pleased to join with the Speaker and the Senate majority leader in urging the Congress to enact this plan by Easter. There are elements in it, of course, that none of us prefers, but taken together it performs a package that all of us can support. It asks for some sacrifice by all -- the self-employed, beneficiaries, workers, government employees, and the better-off among the retired -- but it imposes an undue burden on none. And, in supporting it, we keep an important pledge to the American people: The integrity of the social security system will be preserved, and no one's payments will be reduced. The Commission's plan will do the job; indeed, it must do the job. We owe it to today's older Americans and today's younger workers. So, before we go any further, I ask you to join with me in saluting the members of the Commission who are here tonight and Senate Majority Leader Howard Baker and Speaker Tip O'Neill for a job well done. I hope and pray the bipartisan spirit that guided you in this endeavor will inspire all of us as we face the challenges of the year ahead. Nearly half a century ago, in this Chamber, another American President, Franklin Delano Roosevelt, in his second State of the Union message, urged America to look to the future, to meet the challenge of change and the need for leadership that looks forward, not backward. "Throughout the world," he said, "change is the order of the day. In every nation economic problems long in the making have brought crises to (of) many kinds for which the masters of old practice and theory were unprepared." He also reminded us that "the future lies with those wise political leaders who realize that the great public is interested more in Government than in politics." So, let us, in these next 2 years -- men and women of both parties, every political shade -- concentrate on the long-range, bipartisan responsibilities of government, not the short-range or short-term temptations of partisan politics. The problems we inherited were far worse than most inside and out of government had expected; the recession was deeper than most inside and out of government had predicted. Curing those problems has taken more time and a higher toll than any of us wanted. Unemployment is far too high. Projected Federal spending -- if government refuses to tighten its own belt -- will also be far too high and could weaken and shorten the economic recovery now underway. This recovery will bring with it a revival of economic confidence and spending for consumer items and capital goods -- the stimulu