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.