We’ve already passed laws to assure equal access to the voting booth and

to restaurants and to schools, to housing, and laws to permit access to

jobs. But job opportunity, the chance to earn a decent living, is also a

basic human right, which we cannot and will not ignore.

A major priority for our Nation is the final elimination of the barriers

that restrict the opportunities available to women and also to black

people and Hispanics and other minorities. We’ve come a long way toward

that goal. But there is still much to do. What we inherited from the

past must not be permitted to shackle us in the future.

I’ll be asking you for a substantial increase in funds for public jobs

for our young people, and I also am recommending that the Congress

continue the public service employment programs at more than twice the

level of a year ago. When welfare reform is completed, we will have more

than a million additional jobs so that those on welfare who are able to

work can work.

However, again, we know that in our free society, private business is

still the best source of new jobs. Therefore, I will propose a new

program to encourage businesses to hire young and disadvantaged

Americans. These young people only need skills and a chance in order to

take their place in our economic system. Let’s give them the chance they

need. A major step in the right direction would be the early passage of

a greatly improved Humphrey-Hawkins bill.

My budget for 1979 addresses these national needs, but it is lean and

tight. I have cut waste wherever possible.

I am proposing an increase of less than 2 percent after adjusting for

inflation, the smallest increase in the Federal budget in 4 years.

Lately, Federal spending has taken a steadily increasing portion of what

Americans produce. Our new budget reverses that trend, and later I hope

to bring the Government’s toll down even further. And with your help,

we’ll do that.

In time of high employment and a strong economy, deficit spending should

not be a feature of our budget. As the economy continues to gain

strength and as our unemployment rates continue to fall, revenues will

grow. With careful planning, efficient management, and proper restraint

on spending, we can move rapidly toward a balanced budget, and we will.

Next year the budget deficit will be only slightly less than this year.

But one-third of the deficit is due to the necessary tax cuts that I’ve

proposed. This year the right choice is to reduce the burden on

taxpayers and provide more jobs for our people.

The third element in our program is a renewed attack on inflation. We’ve

learned the hard way that high unemployment will not prevent or cure

inflation. Government can help us by stimulating private investment and

by maintaining a responsible economic policy. Through a new top-level

review process, we will do a better job of reducing Government

regulation that drives up costs and drives up prices.

But again, Government alone cannot bring down the rate of inflation.

When a level of high inflation is expected to continue, then companies

raise prices to protect their profit margins against prospective

increases in wages and other costs, while workers demand higher wages as

protection against expected price increases. It’s like an escalation in

the arms race, and understandably, no one wants to disarm alone.

Now, no one firm or a group of workers can halt this process. It’s an

effort that we must all make together. I’m therefore asking government,

business, labor, and other groups to join in a voluntary program to

moderate inflation by holding wage and price increases in each sector of

the economy during 1978 below the average increases of the last 2 years.

I do not believe in wage and price controls. A sincere commitment to

voluntary constraint provides a way, perhaps the only way, to fight

inflation without Government interference.

As I came into the Capitol tonight, I saw the farmers, my fellow

farmers, standing out in the snow. I’m familiar with their problem, and

I know from Congress’ action that you are too. When I was running

Carters Warehouse, we had spread on our own farms 5-10-15 fertilizer for

about $40 a ton. The last time I was home, the price was about $100 a

ton. The cost of nitrogen has gone up 150 percent, and the price of

products that farmers sell has either stayed the same or gone down a

little.

Now, this past year in 1977, you, the Congress, and I together passed a

new agricultural act. It went into effect October 1. It’ll have its

first impact on the 1978 crops. It will help a great deal. It’ll add $6

1/2 billion or more to help the farmers with their price supports and

target prices.

Last year we had the highest level of exports of farm products in the

history of our country, $24 billion. We expect to have more this year.

We’ll be working together. But I think it’s incumbent on us to monitor

very carefully the farm situation and continue to work harmoniously with

the farmers of our country. What’s best for the farmers, the farm

families, in the long run is also best for the consumers of our country.

Economic success at home is also the key to success in our international

economic policy. An effective energy program, strong investment and

productivity, and controlled inflation will provide [improve] our trade

balance and balance it, and it will help to protect the integrity of the

dollar overseas.

By working closely with our friends abroad, we can promote the economic

health of the whole world, with fair and balanced agreements lowering

the barriers to trade.

Despite the inevitable pressures that build up when the world economy

suffers from high unemployment, we must firmly resist the demands for

self-defeating protectionism. But free trade must also be fair trade.

And I am determined to protect American industry and American workers

against foreign trade practices which are unfair or illegal.

In a separate written message to Congress, I’ve outlined other domestic

initiatives, such as welfare reform, consumer protection, basic

education skills, urban policy, reform of our labor laws, and national

health care later on this year. I will not repeat these tonight. But

there are several other points that I would like to make directly to

you.

During these past years, Americans have seen our Government grow far

from us.

For some citizens, the Government has almost become like a foreign

country, so strange and distant that we’ve often had to deal with it

through trained ambassadors who have sometimes become too powerful and

too influential, lawyers, accountants, and lobbyists. This cannot go on.

We must have what Abraham Lincoln wanted, a government for the people.

We’ve made progress toward that kind of government. You’ve given me the

authority I requested to reorganize the Federal bureaucracy. And I am

using that authority.

We’ve already begun a series of reorganization plans which will be

completed over a period of 3 years. We have also proposed abolishing

almost 500 Federal advisory and other commissions and boards. But I know

that the American people are still sick and tired of Federal paperwork

and redtape. Bit by bit we are chopping down the thicket of unnecessary

Federal regulations by which Government too often interferes in our

personal lives and our personal business. We’ve cut the public’s Federal

paperwork load by more than 12 percent in less than a year. And we are

not through cutting.

We’ve made a good start on turning the gobbledygook of Federal

regulations into plain English that people can understand. But we know

that we still have a long way to go.

We’ve brought together parts of 11 Government agencies to create a new

Department of Energy. And now it’s time to take another major step by

creating a separate Department of Education.

But even the best organized Government will only be as effective as the

people who carry out its policies. For this reason, I consider civil

service reform to be absolutely vital. Worked out with the civil

servants themselves, this reorganization plan will restore the merit

principle to a system which has grown into a bureaucratic maze. It will

provide greater management flexibility and better rewards for better

performance without compromising job security.

Then and only then can we have a government that is efficient, open, and

truly worthy of our people’s understanding and respect. I have promised

that we will have such a government, and I intend to keep that promise.

In our foreign policy, the separation of people from government has been

in the past a source of weakness and error. In a democratic system like

ours, foreign policy decisions must be able to stand the test of public

examination and public debate. If we make a mistake in this

administration, it will be on the side of frankness and openness with

the American people.

In our modern world, when the deaths of literally millions of people can

result from a few terrifying seconds of destruction, the path of

national strength and security is identical to the path of peace.

Tonight, I am happy to report that because we are strong, our Nation is

at peace with the world.

We are a confident nation. We’ve restored a moral basis for our foreign

policy. The very heart of our identity as a nation is our firm

commitment to human rights.

We stand for human rights because we believe that government has as a

purpose to promote the well-being of its citizens. This is true in our

domestic policy; it’s also true in our foreign policy. The world must

know that in support of human rights, the United States will stand firm.

We expect no quick or easy results, but there has been significant

movement toward greater freedom and humanity in several parts of the

world.

Thousands of political prisoners have been freed. The leaders of the

world, even our ideological adversaries, now see that their attitude

toward fundamental human rights affects their standing in the

international community, and it affects their relations with the United

States.

To serve the interests of every American, our foreign policy has three

major goals.

The first and prime concern is and will remain the security of our

country.

Security is based on our national will, and security is based on the

strength of our Armed Forces. We have the will, and militarily we are

very strong.

Security also comes through the strength of our alliances. We have

reconfirmed our commitment to the defense of Europe, and this year we

will demonstrate that commitment by further modernizing and

strengthening our military capabilities there.

Security can also be enhanced by agreements with potential adversaries

which reduce the threat of nuclear disaster while maintaining our own

relative strategic capability.

In areas of peaceful competition with the Soviet Union, we will continue

to more than hold our own.

At the same time, we are negotiating with quiet confidence, without

haste, with careful determination, to ease the tensions between us and

to ensure greater stability and security.

The strategic arms limitation talks have been long and difficult. We

want a mutual limit on both the quality and the quantity of the giant

nuclear arsenals of both nations, and then we want actual reductions in

strategic arms as a major step toward the ultimate elimination of

nuclear weapons from the face of the Earth.

If these talks result in an agreement this year, and I trust they will,

I pledge to you that the agreement will maintain and enhance the

stability of the world’s strategic balance and the security of the

United States.

For 30 years, concerted but unsuccessful efforts have been made to ban

the testing of atomic explosives, both military weapons and peaceful

nuclear devices.

We are hard at work with Great Britain and the Soviet Union on an

agreement which will stop testing and will protect our national security

and provide for adequate verification of compliance. We are now making,

I believe, good progress toward this comprehensive ban on nuclear

explosions.

We are also working vigorously to halt the proliferation of nuclear

weapons among the nations of the world which do not now have them and to

reduce the deadly global traffic in conventional arms sales. Our stand

for peace is suspect if we are also the principal arms merchant of the

world. So, we’ve decided to cut down our arms transfers abroad on a

year-by-year basis and to work with other major arms exporters to

encourage their similar constraint.

Every American has a stake in our second major goal, a world at peace.

In a nuclear age, each of us is threatened when peace is not secured

everywhere. We are trying to promote harmony in those parts of the world

where major differences exist among other nations and threaten

international peace.

In the Middle East, we are contributing our good offices to maintain the

momentum of the current negotiations and to keep open the lines of

communication among the Middle Eastern leaders. The whole world has a

great stake in the success of these efforts. This is a precious

opportunity for a historic settlement of a longstanding conflict, an

opportunity which may never come again in our lifetime.

Our role has been difficult and sometimes thankless and controversial.

But it has been constructive and it has been necessary, and it will

continue.

Our third major foreign policy goal is one that touches the life of

every American citizen every day, world economic growth and stability.

This requires strong economic performance by the industrialized

democracies like ourselves and progress in resolving the global energy

crisis. Last fall, with the help of others, we succeeded in our vigorous

efforts to maintain the stability of the price of oil. But as many

foreign leaders have emphasized to me personally and, I am sure, to you,

the greatest future contribution that America can make to the world

economy would be an effective energy conservation program here at home.

We will not hesitate to take the actions needed to protect the integrity

of the American dollar.

We are trying to develop a more just international system. And in this

spirit, we are supporting the struggle for human development in Africa,

in Asia, and in Latin America.

Finally, the world is watching to see how we act on one of our most

important and controversial items of business, approval of the Panama

Canal treaties. The treaties now before the Senate are the result of the

work of four administrations, two Democratic, two Republican.

They guarantee that the canal will be open always for unrestricted use

by the ships of the world. Our ships have the right to go to the head of

the line for priority of passage in times of emergency or need. We

retain the permanent right to defend the canal with our own military

forces, if necessary, to guarantee its openness and its neutrality.

The treaties are to the clear advantage of ourselves, the Panamanians,

and the other users of the canal. Ratifying the Panama Canal treaties

will demonstrate our good faith to the world, discourage the spread of

hostile ideologies in this hemisphere, and directly contribute to the

economic well-being and the security of the United States.

I have to say that that’s very welcome applause.

There were two moments on my recent journey which, for me, confirmed the

final aims of our foreign policy and what it always must be.

One was in a little village in India, where I met a people as

passionately attached to their rights and liberties as we are, but whose

children have a far smaller chance for good health or food or education

or human fulfillment than a child born in this country.

The other moment was in Warsaw, capital of a nation twice devastated by

war in this century. There, people have rebuilt the city which war’s

destruction took from them. But what was new only emphasized clearly

what was lost.

What I saw in those two places crystalized for me the purposes of our

own Nation’s policy: to ensure economic justice, to advance human

rights, to resolve conflicts without violence, and to proclaim in our

great democracy our constant faith in the liberty and dignity of human

beings everywhere.

We Americans have a great deal of work to do together. In the end, how

well we do that work will depend on the spirit in which we approach it.

We must seek fresh answers, unhindered by the stale prescriptions of the

past.

It has been said that our best years are behind us. But I say again that

America’s best is still ahead. We have emerged from bitter experiences

chastened but proud, confident once again, ready to face challenges once

again, and united once again.

We come together tonight at a solemn time. Last week the Senate lost a

good and honest man, Lee Metcalf of Montana.

And today, the flag of the United States flew at half-mast from this

Capitol and from American installations and ships all over the world, in

mourning for Senator Hubert Humphrey.

Because he exemplified so well the joy and the zest of living, his death

reminds us not so much of our own mortality, but of the possibilities

offered to us by life. He always looked to the future with a special

American kind of confidence, of hope and enthusiasm. And the best way

that we can honor him is by following his example.

Our task, to use the words of Senator Humphrey, is “reconciliation,

rebuilding, and rebirth.”

Reconciliation of private needs and interests into a higher purpose.

Rebuilding the old dreams of justice and liberty, and country and

community.

Rebirth of our faith in the common good.

Each of us here tonight, and all who are listening in your homes, must

rededicate ourselves to serving the common good. We are a community, a

beloved community, all of us. Our individual fates are linked, our

futures intertwined. And if we act in that knowledge and in that spirit,

together, as the Bible says, we can move mountains.

Thank you very much.

***

State of the Union Address

Jimmy Carter

January 25, 1979

Tonight I want to examine in a broad sense the state of our American

Union--how we are building a new foundation for a peaceful and a

prosperous world.

Our children who will be born this year will come of age in the 21st

century. What kind of society, what kind of world are we building for

them? Will we ourselves be at peace? Will our children enjoy a better

quality of life? Will a strong and united America still be a force for

freedom and prosperity around the world?

Tonight, there is every sign that the state of our Union is sound.

Our economy offers greater prosperity for more of our people than ever

before. Real per capita income and real business profits have risen

substantially in the last 2 years. Farm exports are setting an all-time

record each year, and farm income last year, net farm income, was up

more than 25 percent.

Our liberties are secure. Our military defenses are strong and growing

stronger. And more importantly, tonight, America--our beloved

country--is at peace.

Our earliest national commitments, modified and reshaped by succeeding

generations, have served us well. But the problems that we face today

are different from those that confronted earlier generations of

Americans. They are more subtle, more complex, and more interrelated. At

home, we are recognizing ever more clearly that government alone cannot

solve these problems. And abroad, few of them can be solved by the

United States alone. But Americans as a united people, working with our

allies and friends, have never been afraid to face problems and to solve

problems, either here or abroad.

The challenge to us is to build a new and firmer foundation for the

future--for a sound economy, for a more effective government, for more

political trust, and for a stable peace--so that the America our

children inherit will be even stronger and even better than it is today.

We cannot resort to simplistic or extreme solutions which substitute

myths for common sense.

In our economy, it is a myth that we must choose endlessly between

inflation and recession. Together, we build the foundation for a strong

economy, with lower inflation, without contriving either a recession

with its high unemployment or unworkable, mandatory government controls.

In our government, it is a myth that we must choose between compassion

and competence. Together, we build the foundation for a government that

works, and works for people.

In our relations with our potential adversaries, it is a myth that we

must choose between confrontation and capitulation. Together, we build

the foundation for a stable world of both diversity and peace.

Together, we’ve already begun to build the foundation for confidence in

our economic system. During the last 2 years, in bringing our economy

out of the deepest recession since the 1930’s, we’ve created 7,100,000

new jobs. The unemployment rate has gone down 25 percent. And now we

must redouble our fight against the persistent inflation that has

wracked our country for more than a decade. That’s our important

domestic issue, and we must do it together.

We know that inflation is a burden for all Americans, but it’s a

disaster for the poor, the sick, and the old. No American family should

be forced to choose among food, warmth, health care, or decent housing

because the cost of any of these basic necessities has climbed out of

reach.

Three months ago, I outlined to the Nation a balanced anti-inflation

program that couples responsible government restraint with responsible

wage and price restraint. It’s based upon my knowledge that there is a

more powerful force than government compulsion--the force created by the

cooperative efforts of millions of Americans working toward a common

goal.

Business and labor have been increasingly supportive. It’s imperative

that we in government do our part. We must stop excessive government

growth, and we must control government spending habits.

I’ve sent to this Congress a stringent but a fair budget, one that,

since I ran for President in 1976, will have cut the Federal deficit in

half. And as a percentage of our gross national product, the deficit

will have dropped by almost 75 percent.

This Congress had a good record last year, and I now ask the 96th

Congress to continue this partnership in holding the line on excess

Federal spending. It will not be easy. But we must be strong, and we

must be persistent.

This budget is a clear message that, with the help of you and the

American people, I am determined, as President, to bring inflation under

control.

The 1980 budget provides enough spending restraint to begin unwinding

inflation, but enough support for our country to keep American workers

productive and to encourage the investments that provide new jobs. We

will continue to mobilize our Nation’s resources to reduce our trade

deficit substantially this year and to maintain the strength of the

American dollar.

We’ve demonstrated in this restrained budget that we can build on the

gains of the past 2 years to provide additional support to educate

disadvantaged children, to care for the elderly, to provide nutrition

and legal services for the poor, and to strengthen the economic base of

our urban communities and, also, our rural areas.

This year, we will take our first steps to develop a national health

plan.

We must never accept a permanent group of unemployed Americans, with no

hope and no stake in building our society. For those left out of the

economy because of discrimination, a lack of skills, or poverty, we must

maintain high levels of training, and we must continue to provide jobs.

A responsible budget is not our only weapon to control inflation. We

must act now to protect all Americans from health care costs that are

rising $1 million per hour, 24 hours a day, doubling every 5 years. We

must take control of the largest contributor to that inflation:

skyrocketing hospital costs.

There will be no clearer test of the commitment of this Congress to the

anti-inflation fight than the legislation that I will submit again this

year to hold down inflation in hospital care.

Over the next 5 years, my proposals will save Americans a total of $60

billion, of which $25 billion will be savings to the American taxpayer

in the Federal budget itself. The American people have waited long

enough. This year we must act on hospital cost containment.

We must also fight inflation by improvements and better enforcement of

our antitrust laws and by reducing government obstacles to competition

in the private sector.

We must begin to scrutinize the overall effect of regulation in our

economy. Through deregulation of the airline industry we’ve increased

profits, cut prices for all Americans, and begun--for one of the few

times in the history of our Nation--to actually dismantle a major

Federal bureaucracy. This year, we must begin the effort to reform our

regulatory processes for the railroad, bus, and the trucking industries.

America has the greatest economic system in the world. Let’s reduce

government interference and give it a chance to work.

I call on Congress to take other anti-inflation action--to expand our

exports to protect American jobs threatened by unfair trade, to conserve

energy, to increase production and to speed development of solar power,

and to reassess our Nation’s technological superiority. American workers

who enlist in the fight against inflation deserve not just our

gratitude, but they deserve the protection of the real wage insurance

proposal that I have already made to the Congress.

To be successful, we must change our attitudes as well as our policies.

We cannot afford to live beyond our means. We cannot afford to create

programs that we can neither manage nor finance, or to waste our natural

resources, and we cannot tolerate mismanagement and fraud. Above all, we

must meet the challenges of inflation as a united people.

With the support of the American people, government in recent decades

has helped to dismantle racial barriers, has provided assistance for the

jobless and the retired, has fed the hungry, has protected the safety,

health, and bargaining rights of American workers, and has helped to

preserve our natural heritage.

But it’s not enough to have created a lot of government programs. Now we

must make the good programs more effective and improve or weed out those

which are wasteful or unnecessary.

With the support of the Congress, we’ve begun to reorganize and to get

control of the bureaucracy. We are reforming the civil service system,

so that we can recognize and reward those who do a good job and correct

or remove those who do not.

This year, we must extend major reorganization efforts to education, to

economic development, and to the management of our natural resources. We

need to enact a sunshine [sunset] law that when government programs have

outlived their value, they will automatically be terminated.

There’s no such thing as an effective and a noncontroversial

reorganization and reform. But we know that honest, effective government

is essential to restore public faith in our public action.

None of us can be satisfied when two-thirds of the American citizens

chose not to vote last year in a national election. Too many Americans

feel powerless against the influence of private lobbying groups and the

unbelievable flood of private campaign money which threatens our

electoral process.

This year, we must regain the public’s faith by requiring limited

financial funds from public funds for congressional election campaigns.

House bill 1 provides for this public financing of campaigns. And I look

forward with a great deal of anticipation to signing it at an early

date.

A strong economy and an effective government will restore confidence in

America. But the path of the future must be charted in peace. We must

continue to build a new and a firm foundation for a stable world

community.

We are building that new foundation from a position of national

strength--the strength of our own defenses, the strength of our

friendships with other nations, and of our oldest American ideals.

America’s military power is a major force for security and stability in

the world. We must maintain our strategic capability and continue the

progress of the last 2 years with our NATO Allies, with whom we have

increased our readiness, modernized our equipment, and strengthened our

defense forces in Europe. I urge you to support the strong defense

budget which I have proposed to the Congress.

But our national security in this complicated age requires more than

just military might. In less than a lifetime, world population has more

than doubled, colonial empires have disappeared, and a hundred new

nations have been born, and migration to the world’s cities have all

awakened new yearnings for economic justice and human rights among

people everywhere.

This demand for justice and human rights is a wave of the future. In

such a world, the choice is not which super power will dominate the

world. None can and none will. The choice instead is between a world of

anarchy and destruction, or a world of cooperation and peace.

In such a world, we seek not to stifle inevitable change, but to

influence its course in helpful and constructive ways that enhance our

values, our national interests, and the cause of peace.

Towering over this volatile, changing world, like a thundercloud on a

summer day, looms the awesome power of nuclear weapons.

We will continue to help shape the forces of change, to anticipate

emerging problems of nuclear proliferation and conventional arms sales,

and to use our great strength parts of the world before they erupt and

spread.

We have no desire to be the world’s policeman. But America does want to

be the world’s peacemaker.

We are building the foundation for truly global cooperation, not only

with Western and industrialized nations but with the developing

countries as well. Our ties with Japan and our European allies are

stronger than ever, and so are our friendly relations with the people of

Latin America, Africa, and the Western Pacific and Asia.

We’ve won new respect in this hemisphere with the Panama Canal treaties.

We’ve gained new trust with the developing world through our opposition

to racism, our commitment to human rights, and our support for majority

rule in Africa.

The multilateral trade negotiations are now reaching a successful

conclusion, and congressional approval is essential to the economic

well-being of our own country and of the world. This will be one of our

top priorities in 1979.

We are entering a hopeful era in our relations with one-fourth of the

world’s people who live in China. The presence of Vice Premier Deng

Xiaoping next week will help to inaugurate that new era. And with prompt

congressional action on authorizing legislation, we will continue our

commitment to a prosperous, peaceful, and secure life for the people of

Taiwan.

I’m grateful that in the past year, as in the year before, no American

has died in combat anywhere in the world. And in Iran, Nicaragua,

Cyprus, Namibia, and Rhodesia, our country is working for peaceful

solutions to dangerous conflicts.

In the Middle East, under the most difficult circumstances, we have

sought to help ancient enemies lay aside deep-seated differences that

have produced four bitter wars in our lifetime.

Our firm commitment to Israel’s survival and security is rooted in our

deepest convictions and in our knowledge of the strategic importance to

our own Nation of a stable Middle East. To promote peace and

reconciliation in the region, we must retain the trust and the

confidence both of Israel and also of the Arab nations that are

sincerely searching for peace.

I am determined, as President, to use the full, beneficial influence of

our country so that the precious opportunity for lasting peace between

Israel and Egypt will not be lost.

The new foundation of international cooperation that we seek excludes no

nation. Cooperation with the Soviet Union serves the cause of peace, for

in this nuclear age, world peace must include peace between the super

powers--and it must mean the control of nuclear arms.

Ten years ago, the United States and the Soviet Union made the historic

decision to open the strategic arms limitations talks, or SALT. The

purpose of SALT, then as now, is not to gain a unilateral advantage for

either nation, but to protect the security of both nations, to reverse

the costly and dangerous momentum of the nuclear arms race, to preserve

a stable balance of nuclear forces, and to demonstrate to a concerned

world that we are determined to help preserve the peace.

The first SALT agreement was concluded in 1972. And since then, during 6

years of negotiation by both Republican and Democratic leaders, nearly

all issues of SALT II have been resolved. If the Soviet Union continues

to negotiate in good faith, a responsible SALT agreement will be

reached.

It’s important that the American people understand the nature of the

SALT process.

SALT II is not based on sentiment; it’s based on self-interest--of the

United States and of the Soviet Union. Both nations share a powerful

common interest in reducing the threat of a nuclear war. I will sign no

agreement which does not enhance our national security.

SALT II does not rely on trust; it will be verifiable. We have very

sophisticated, proven means, including our satellites, to determine for

ourselves whether or not the Soviet Union is meeting its treaty

obligations. I will sign no agreement which cannot be verified.

The American nuclear deterrent will remain strong after SALT II. For

example, just one of our relatively invulnerable Poseidon

submarines--comprising less than 2 percent of our total nuclear force of

submarines, aircraft, and land-based missiles--carries enough warheads

to destroy every large- and medium-sized city in the Soviet Union. Our

deterrent is overwhelming, and I will sign no agreement unless our

deterrent force will remain overwhelming.

A SALT agreement, of course, cannot substitute for wise diplomacy or a

strong defense, nor will it end the danger of nuclear war. But it will

certainly reduce that danger. It will strengthen our efforts to ban

nuclear tests and to stop the spread of atomic weapons to other nations.

And it can begin the process of negotiating new agreements which will

further limit nuclear arms.

The path of arms control, backed by a strong defense, the path our

Nation and every President has walked for 30 years, can lead to a world

of law and of international negotiation and consultation in which all

peoples might live in peace. In this year 1979, nothing is more

important than that the Congress and the people of the United States

resolve to continue with me on that path of nuclear arms control and

world peace. This is paramount.

I’ve outlined some of the changes that have transformed the world and

which are continuing as we meet here tonight. But we in America need not

fear change. The values on which our Nation was founded: individual

liberty, self-determination, the potential for human fulfillment in

freedom, all of these endure. We find these democratic principles

praised, even in books smuggled out of totalitarian nations and on

wallposters in lands which we thought were closed to our influence. Our

country has regained its special place of leadership in the worldwide

struggle for human rights. And that is a commitment that we must keep at

home, as well as abroad.

The civil rights revolution freed all Americans, black and white, but

its full promise still remains unrealized. I will continue to work with

all my strength for equal opportunity for all Americans--and for

affirmative action for those who carry the extra burden of past denial

of equal opportunity.

We remain committed to improving our labor laws to better protect the

rights of American workers. And our Nation must make it clear that the

legal rights of women as citizens are guaranteed under the laws of our

land by ratifying the equal rights amendment.

As long as I’m President, at home and around the world America’s

examples and America’s influence will be marshaled to advance the cause

of human rights.

To establish those values, two centuries ago a bold generation of

Americans risked their property, their position, and life itself. We are

their heirs, and they are sending us a message across the centuries. The

words they made so vivid are now growing faintly indistinct, because

they are not heard often enough. They are words like “justice,”

“equality,” “unity,” “truth,” “sacrifice,” “liberty,” “faith,” and

“love.”

These words remind us that the duty of our generation of Americans is to

renew our Nation’s faith, not focused just against foreign threats but

against the threats of selfishness, cynicism, and apathy.

The new foundation I’ve discussed tonight can help us build a nation and

a world where every child is nurtured and can look to the future with

hope, where the resources now wasted on war can be turned towards

meeting human needs, where all people have enough to eat, a decent home,

and protection against disease.

It can help us build a nation and a world where all people are free to

seek the truth and to add to human understanding, so that all of us may

live our lives in peace.

Tonight, I ask you, the Members of the Congress, to join me in building

that new foundation, a better foundation, for our beloved country and

our world.

Thank you very much.

***

State of the Union Address

Jimmy Carter

January 21, 1980

This last few months has not been an easy time for any of us. As we meet

tonight, it has never been more clear that the state of our Union

depends on the state of the world. And tonight, as throughout our own

generation, freedom and peace in the world depend on the state of our

Union.

The 1980’s have been born in turmoil, strife, and change. This is a time

of challenge to our interests and our values and it’s a time that tests

our wisdom and our skills.

At this time in Iran, 50 Americans are still held captive, innocent

victims of terrorism and anarchy. Also at this moment, massive Soviet

troops are attempting to subjugate the fiercely independent and deeply

religious people of Afghanistan. These two acts--one of international

terrorism and one of military aggression--present a serious challenge to

the United States of America and indeed to all the nations of the world.

Together, we will meet these threats to peace.

I’m determined that the United States will remain the strongest of all

nations, but our power will never be used to initiate a threat to the

security of any nation or to the rights of any human being. We seek to

be and to remain secure--a nation at peace in a stable world. But to be

secure we must face the world as it is.

Three basic developments have helped to shape our challenges: the steady

growth and increased projection of Soviet military power beyond its own

borders; the overwhelming dependence of the Western democracies on oil

supplies from the Middle East; and the press of social and religious and

economic and political change in the many nations of the developing

world, exemplified by the revolution in Iran.

Each of these factors is important in its own right. Each interacts with

the others. All must be faced together, squarely and courageously. We

will face these challenges, and we will meet them with the best that is

in us. And we will not fail.

In response to the abhorrent act in Iran, our Nation has never been

aroused and unified so greatly in peacetime. Our position is clear. The

United States will not yield to blackmail.

We continue to pursue these specific goals: first, to protect the

present and long-range interests of the United States; secondly, to

preserve the lives of the American hostages and to secure, as quickly as

possible, their safe release, if possible, to avoid bloodshed which

might further endanger the lives of our fellow citizens; to enlist the

help of other nations in condemning this act of violence, which is

shocking and violates the moral and the legal standards of a civilized

world; and also to convince and to persuade the Iranian leaders that the

real danger to their nation lies in the north, in the Soviet Union and

from the Soviet troops now in Afghanistan, and that the unwarranted

Iranian quarrel with the United States hampers their response to this

far greater danger to them.

If the American hostages are harmed, a severe price will be paid. We

will never rest until every one of the American hostages are released.

But now we face a broader and more fundamental challenge in this region

because of the recent military action of the Soviet Union.

Now, as during the last 3 1/2 decades, the relationship between our

country, the United States of America, and the Soviet Union is the most

critical factor in determining whether the world will live at peace or

be engulfed in global conflict.

Since the end of the Second World War, America has led other nations in

meeting the challenge of mounting Soviet power. This has not been a

simple or a static relationship. Between us there has been cooperation,

there has been competition, and at times there has been confrontation.

In the 1940’s we took the lead in creating the Atlantic Alliance in

response to the Soviet Union’s suppression and then consolidation of its

East European empire and the resulting threat of the Warsaw Pact to

Western Europe.

In the 1950’s we helped to contain further Soviet challenges in Korea

and in the Middle East, and we rearmed to assure the continuation of

that containment.

In the 1960’s we met the Soviet challenges in Berlin, and we faced the

Cuban missile crisis. And we sought to engage the Soviet Union in the

important task of moving beyond the cold war and away from

confrontation.

And in the 1970’s three American Presidents negotiated with the Soviet

leaders in attempts to halt the growth of the nuclear arms race. We

sought to establish rules of behavior that would reduce the risks of

conflict, and we searched for areas of cooperation that could make our

relations reciprocal and productive, not only for the sake of our two

nations but for the security and peace of the entire world.

In all these actions, we have maintained two commitments: to be ready to

meet any challenge by Soviet military power, and to develop ways to

resolve disputes and to keep the peace.

Preventing nuclear war is the foremost responsibility of the two

superpowers. That’s why we’ve negotiated the strategic arms limitation

treaties--SALT I and SALT II. Especially now, in a time of great

tension, observing the mutual constraints imposed by the terms of these

treaties will be in the best interest of both countries and will help to

preserve world peace. I will consult very closely with the Congress on

this matter as we strive to control nuclear weapons. That effort to

control nuclear weapons will not be abandoned.

We superpowers also have the responsibility to exercise restraint in the

use of our great military force. The integrity and the independence of

weaker nations must not be threatened. They must know that in our

presence they are secure.

But now the Soviet Union has taken a radical and an aggressive new step.

It’s using its great military power against a relatively defenseless

nation. The implications of the Soviet invasion of Afghanistan could

pose the most serious threat to the peace since the Second World War.

The vast majority of nations on Earth have condemned this latest Soviet

attempt to extend its colonial domination of others and have demanded

the immediate withdrawal of Soviet troops. The Moslem world is

especially and justifiably outraged by this aggression against an

Islamic people. No action of a world power has ever been so quickly and

so overwhelmingly condemned. But verbal condemnation is not enough. The

Soviet Union must pay a concrete price for their aggression.

While this invasion continues, we and the other nations of the world

cannot conduct business as usual with the Soviet Union. That’s why the

United States has imposed stiff economic penalties on the Soviet Union.

I will not issue any permits for Soviet ships to fish in the coastal

waters of the United States. I’ve cut Soviet access to high-technology

equipment and to agricultural products. I’ve limited other commerce with

the Soviet Union, and I’ve asked our allies and friends to join with us

in restraining their own trade with the Soviets and not to replace our

own embargoed items. And I have notified the Olympic Committee that with

Soviet invading forces in Afghanistan, neither the American people nor I

will support sending an Olympic team to Moscow.

The Soviet Union is going to have to answer some basic questions: Will

it help promote a more stable international environment in which its own

legitimate, peaceful concerns can be pursued? Or will it continue to

expand its military power far beyond its genuine security needs, and use

that power for colonial conquest? The Soviet Union must realize that its

decision to use military force in Afghanistan will be costly to every

political and economic relationship it values.

The region which is now threatened by Soviet troops in Afghanistan is of

great strategic importance: It contains more than two-thirds of the

world’s exportable oil. The Soviet effort to dominate Afghanistan has

brought Soviet military forces to within 300 miles of the Indian Ocean

and close to the Straits of Hormuz, a waterway through which most of the

world’s oil must flow. The Soviet Union is now attempting to consolidate

a strategic position, therefore, that poses a grave threat to the free

movement of Middle East oil.

This situation demands careful thought, steady nerves, and resolute

action, not only for this year but for many years to come. It demands

collective efforts to meet this new threat to security in the Persian

Gulf and in Southwest Asia. It demands the participation of all those

who rely on oil from the Middle East and who are concerned with global

peace and stability. And it demands consultation and close cooperation

with countries in the area which might be threatened.

Meeting this challenge will take national will, diplomatic and political

wisdom, economic sacrifice, and, of course, military capability. We must

call on the best that is in us to preserve the security of this crucial

region.

Let our position be absolutely clear: An attempt by any outside force to

gain control of the Persian Gulf region will be regarded as an assault

on the vital interests of the United States of America, and such an

assault will be repelled by any means necessary, including military

force.

During the past 3 years, you have joined with me to improve our own

security and the prospects for peace, not only in the vital

oil-producing area of the Persian Gulf region but around the world.

We’ve increased annually our real commitment for defense, and we will

sustain this increase of effort throughout the Five Year Defense

Program. It’s imperative that Congress approve this strong defense

budget for 1981, encompassing a 5-percent real growth in authorizations,

without any reduction.

We are also improving our capability to deploy U.S. military forces

rapidly to distant areas. We’ve helped to strengthen NATO and our other

alliances, and recently we and other NATO members have decided to

develop and to deploy modernized, intermediate-range nuclear forces to

meet an unwarranted and increased threat from the nuclear weapons of the

Soviet Union.

We are working with our allies to prevent conflict in the Middle East.

The peace treaty between Egypt and Israel is a notable achievement which

represents a strategic asset for America and which also enhances

prospects for regional and world peace. We are now engaged in further

negotiations to provide full autonomy for the people of the West Bank

and Gaza, to resolve the Palestinian issue in all its aspects, and to

preserve the peace and security of Israel. Let no one doubt our

commitment to the security of Israel. In a few days we will observe an

historic event when Israel makes another major withdrawal from the Sinai

and when Ambassadors will be exchanged between Israel and Egypt.

We’ve also expanded our own sphere of friendship. Our deep commitment to

human rights and to meeting human needs has improved our relationship

with much of the Third World. Our decision to normalize relations with

the People’s Republic of China will help to preserve peace and stability

in Asia and in the Western Pacific.

We’ve increased and strengthened our naval presence in the Indian Ocean,

and we are now making arrangements for key naval and air facilities to

be used by our forces in the region of northeast Africa and the Persian

Gulf.

We’ve reconfirmed our 1959 agreement to help Pakistan preserve its

independence and its integrity. The United States will take action

consistent with our own laws to assist Pakistan in resisting any outside

aggression. And I’m asking the Congress specifically to reaffirm this

agreement. I’m also working, along with the leaders of other nations, to

provide additional military and economic aid for Pakistan. That request

will come to you in just a few days.

Finally, we are prepared to work with other countries in the region to

share a cooperative security framework that respects differing values

and political beliefs, yet which enhances the independence, security,

and prosperity of all.

All these efforts combined emphasize our dedication to defend and

preserve the vital interests of the region and of the nation which we

represent and those of our allies--in Europe and the Pacific, and also

in the parts of the world which have such great strategic importance to

us, stretching especially through the Middle East and Southwest Asia.

With your help, I will pursue these efforts with vigor and with

determination. You and I will act as necessary to protect and to

preserve our Nation’s security.

The men and women of America’s Armed Forces are on duty tonight in many

parts of the world. I’m proud of the job they are doing, and I know you

share that pride. I believe that our volunteer forces are adequate for

current defense needs, and I hope that it will not become necessary to

impose a draft. However, we must be prepared for that possibility. For

this reason, I have determined that the Selective Service System must

now be revitalized. I will send legislation and budget proposals to the

Congress next month so that we can begin registration and then meet

future mobilization needs rapidly if they arise.

We also need clear and quick passage of a new charter to define the

legal authority and accountability of our intelligence agencies. We will

guarantee that abuses do not recur, but we must tighten our controls on

sensitive intelligence information, and we need to remove unwarranted

restraints on America’s ability to collect intelligence.

The decade ahead will be a time of rapid change, as nations everywhere

seek to deal with new problems and age-old tensions. But America need

have no fear. We can thrive in a world of change if we remain true to

our values and actively engaged in promoting world peace. We will

continue to work as we have for peace in the Middle East and southern

Africa. We will continue to build our ties with developing nations,

respecting and helping to strengthen their national independence which

they have struggled so hard to achieve. And we will continue to support

the growth of democracy and the protection of human rights.

In repressive regimes, popular frustrations often have no outlet except

through violence. But when peoples and their governments can approach

their problems together through open, democratic methods, the basis for

stability and peace is far more solid and far more enduring. That is why

our support for human rights in other countries is in our own national

interest as well as part of our own national character.

Peace--a peace that preserves freedom--remains America’s first goal. In

the coming years, as a mighty nation we will continue to pursue peace.

But to be strong abroad we must be strong at home. And in order to be

strong, we must continue to face up to the difficult issues that

confront us as a nation today.

The crises in Iran and Afghanistan have dramatized a very important

lesson: Our excessive dependence on foreign oil is a clear and present

danger to our Nation’s security. The need has never been more urgent. At

long last, we must have a clear, comprehensive energy policy for the

United States.

As you well know, I have been working with the Congress in a

concentrated and persistent way over the past 3 years to meet this need.

We have made progress together. But Congress must act promptly now to

complete final action on this vital energy legislation. Our Nation will

then have a major conservation effort, important initiatives to develop

solar power, realistic pricing based on the true value of oil, strong

incentives for the production of coal and other fossil fuels in the

United States, and our Nation’s most massive peacetime investment in the

development of synthetic fuels.

The American people are making progress in energy conservation. Last

year we reduced overall petroleum consumption by 8 percent and gasoline

consumption by 5 percent below what it was the year before. Now we must

do more.

After consultation with the Governors, we will set gasoline conservation

goals for each of the 50 States, and I will make them mandatory if these

goals are not met.

I’ve established an import ceiling for 1980 of 8.2 million barrels a

day--well below the level of foreign oil purchases in 1977. I expect our

imports to be much lower than this, but the ceiling will be enforced by

an oil import fee if necessary. I’m prepared to lower these imports

still further if the other oil-consuming countries will join us in a

fair and mutual reduction. If we have a serious shortage, I will not

hesitate to impose mandatory gasoline rationing immediately.

The single biggest factor in the inflation rate last year, the increase

in the inflation rate last year, was from one cause: the skyrocketing

prices of OPEC oil. We must take whatever actions are necessary to

reduce our dependence on foreign oil--and at the same time reduce

inflation.

As individuals and as families, few of us can produce energy by

ourselves. But all of us can conserve energy--every one of us, every day

of our lives. Tonight I call on you--in fact, all the people of

America--to help our Nation. Conserve energy. Eliminate waste. Make 1980

indeed a year of energy conservation.

Of course, we must take other actions to strengthen our Nation’s

economy.

First, we will continue to reduce the deficit and then to balance the

Federal budget.

Second, as we continue to work with business to hold down prices, we’ll

build also on the historic national accord with organized labor to

restrain pay increases in a fair fight against inflation.

Third, we will continue our successful efforts to cut paperwork and to

dismantle unnecessary Government regulation.

Fourth, we will continue our progress in providing jobs for America,

concentrating on a major new program to provide training and work for

our young people, especially minority youth. It has been said that “a

mind is a terrible thing to waste.” We will give our young people new

hope for jobs and a better life in the 1980’s.

And fifth, we must use the decade of the 1980’s to attack the basic

structural weaknesses and problems in our economy through measures to

increase productivity, savings, and investment.

With these energy and economic policies, we will make America even

stronger at home in this decade--just as our foreign and defense

policies will make us stronger and safer throughout the world. We will

never abandon our struggle for a just and a decent society here at home.

That’s the heart of America--and it’s the source of our ability to

inspire other people to defend their own rights abroad.

Our material resources, great as they are, are limited. Our problems are

too complex for simple slogans or for quick solutions. We cannot solve

them without effort and sacrifice. Walter Lippmann once reminded us,

“You took the good things for granted. Now you must earn them again. For

every right that you cherish, you have a duty which you must fulfill.

For every good which you wish to preserve, you will have to sacrifice

your comfort and your ease. There is nothing for nothing any longer.”

Our challenges are formidable. But there’s a new spirit of unity and

resolve in our country. We move into the 1980’s with confidence and hope

and a bright vision of the America we want: an America strong and free,

an America at peace, an America with equal rights for all citizens--and

for women, guaranteed in the United States Constitution--an America with

jobs and good health and good education for every citizen, an America

with a clean and bountiful life in our cities and on our farms, an

America that helps to feed the world, an America secure in filling its

own energy needs, an America of justice, tolerance, and compassion. For

this vision to come true, we must sacrifice, but this national

commitment will be an exciting enterprise that will unify our people.

Together as one people, let us work to build our strength at home, and

together as one indivisible union, let us seek peace and security

throughout the world.

Together let us make of this time of challenge and danger a decade of

national resolve and of brave achievement.

Thank you very much.

***

State of the Union Address

Jimmy Carter

January 16, 1981

To the Congress of the United States:

The State of the Union is sound. Our economy is recovering from a

recession. A national energy plan is in place and our dependence on

foreign oil is decreasing. We have been at peace for four uninterrupted

years.

But, our Nation has serious problems. Inflation and unemployment are

unacceptably high. The world oil market is increasingly tight. There are

trouble spots throughout the world, and 52 American hostages are being

held in Iran against international law and against every precept of

human affairs.

However, I firmly believe that, as a result of the progress made in so

many domestic and international areas over the past four years, our

Nation is stronger, wealthier, more compassionate and freer than it was

four years ago. I am proud of that fact. And I believe the Congress

should be proud as well, for so much of what has been accomplished over

the past four years has been due to the hard work, insights and

cooperation of Congress. I applaud the Congress for its efforts and its

achievements.

In this State of the Union Message I want to recount the achievements

and progress of the last four years and to offer recommendations to the

Congress for this year. While my term as President will end before the

97th Congress begins its work in earnest, I hope that my recommendations

will serve as a guide for the direction this country should take so we

build on the record of the past four years.

RECORD OF PROGRESS

When I took office, our Nation faced a number of serious domestic and

international problems:

--no national energy policy existed, and our dependence on foreign oil

was rapidly increasing;

--public trust in the integrity and openness of the government was low;

--the Federal government was operating inefficiently in administering

essential programs and policies;

--major social problems were being ignored or poorly addressed by the

Federal government;

--our defense posture was declining as a result of a defense budget

which was continuously shrinking in real terms;

--the strength of the NATO Alliance needed to be bolstered;

--tensions between Israel and Egypt threatened another Middle East war;

and

--America’s resolve to oppose human rights violations was under serious

question.

Over the past 48 months, clear progress has been made in solving the

challenges we found in January of 1977:

--almost all of our comprehensive energy program have been enacted, and

the Department of Energy has been established to administer the program;

confidence in the government’s integrity has been restored, and respect

for the government’s openness and fairness has been renewed;

--the government has been made more effective and efficient: the Civil

Service system was completely reformed for the first time this century;

--14 reorganization initiatives have been proposed to the Congress,

approved, and implemented;

--two new Cabinet departments have been created to consolidate and

streamline the government’s handling of energy and education problems;

--inspectors general have been placed in each Cabinet department to

combat fraud, waste and other abuses;

--the regulatory process has been reformed through creation of the

Regulatory Council, implementation of Executive Order 12044 and its

requirement for cost-impact analyses, elimination of unnecessary

regulation, and passage of the Regulatory Flexibility Act;

--procedures have been established to assure citizen participation in

government;

--and the airline, trucking, rail and communications industries are

being deregulated;

--critical social problems, many long ignored by the Federal government,

have been addressed directly;

--an urban policy was developed and implemented to reverse the decline

in our urban areas;

--the Social Security System was refinanced to put it on a sound

financial basis;

--the Humphrey-Hawkins Full Employment Act was enacted;

--Federal assistance for education was expanded by more than 75 percent;

--the minimum wage was increased to levels needed to ease the effects of

inflation;

--affirmative action has been pursued aggressively; more blacks,

Hispanics and women have been appointed to senior government positions

and to judgeships than at any other time in our history;

--the ERA ratification deadline was extended to aid the ratification

effort;

--and minority business procurement by the Federal government has more

than doubled;

--the Nation’s first sectoral policies were put in place, for the auto

and steel industries, with my Administration demonstrating the value of

cooperation between the government, business and labor;

--reversing previous trends, real defense spending has increased every

year since 1977;

--the real increase in FY 1980 defense spending is well above 3 percent

and I expect FY 1981 defense spending to be even higher;

--looking ahead, the defense program I am proposing is premised on a

real increase in defense spending over the next five years of 20 percent

or more;

--the NATO Alliance has proven its unity in responding to the situations

in Eastern Europe and Southwest Asia and in agreeing on the issues to be

addressed in the review of the Helsinki Final Act currently underway in

Madrid;

--the peace process in the Middle East established at Camp David and by

the Peace Treaty between Egypt and Israel is being buttressed on two

fronts: steady progress in the normalization of Egyptian-Israeli

relations in many fields, and the commitment of both Egypt and Israel,

with United States’ assistance, to see through to successful conclusion

the autonomy negotiations for the West Bank and Gaza;

--the Panama Canal Treaties have been put into effect, which has helped

to improve relations with Latin America;

--we have continued this Nation’s strong commitment to the pursuit of

human rights throughout the world, evenhandedly and objectively;

--our commitment to a worldwide human rights policy has remained firm;

--and many other countries have given high priority to it;

--our resolve to oppose aggression, such as the illegal invasion of the

Soviet Union into Afghanistan, has been supported by tough action.

I. ENSURING ECONOMIC STRENGTH ECONOMY

During the last decade our Nation has withstood a series of economic

shocks unprecedented in peacetime. The most dramatic of these has been

the explosive increases of OPEC oil prices. But we have also faced world

commodity shortages, natural disasters, agricultural shortages and major

challenges to world peace and security. Our ability to deal with these

shocks has been impaired because of a decrease in the growth of

productivity and the persistence of underlying inflationary forces built

up over the past 15 years.

Nevertheless, the economy has proved to be remarkably resilient. Real

output has grown at an average rate of 3 percent per year since I took

office, and employment has grown by 10 percent. We have added about 8

million productive private sector jobs to the economy. However,

unacceptably high inflation--the most difficult economic problem I have

faced--persists.

This inflation--which threatens the growth, productivity, and stability

of our economy--requires that we restrain the growth of the budget to

the maximum extent consistent with national security and human

compassion. I have done so in my earlier budgets, and in my FY ’82

budget. However, while restraint is essential to any appropriate

economic policy, high inflation cannot be attributed solely to

government spending. The growth in budget outlays has been more the

result of economic factors than the cause of them.

We are now in the early stages of economic recovery following a short

recession. Typically, a post-recessionary period has been marked by

vigorous economic growth aided by anti-recessionary policy measures such

as large tax cuts or big, stimulation spending programs. I have declined

to recommend such actions to stimulate economic activity, because the

persistent inflationary pressures that beset our economy today dictate a

restrained fiscal policy.

Accordingly, I am asking the Congress to postpone until January 1, 1982,

the personal tax reductions I had earlier proposed to take effect on

January 1 of this year.

However, my 1982 budget proposes significant tax changes to increase the

sources of financing for business investment. While emphasizing the need

for continued fiscal restraint, this budget takes the first major step

in a long-term tax reduction program designed to increase capital

formation. The failure of our Nation’s capital stock to grow at a rate

that keeps pace with its labor force has clearly been one cause of our

productivity slowdown. Higher investment rates are also critically

needed to meet our Nation’s energy needs, and to replace

energy-inefficient plants and equipment with new energy-saving physical

plants. The level of investment that is called for will not occur in the

absence of policies to encourage it.

Therefore, my budget proposes a major liberalization of tax allowances

for depreciation, as well as simplified depreciation accounting,

increasing the allowable rates by about 40 percent. I am also proposing

improvements in the investment tax credit, making it refundable, to meet

the investment needs of firms with no current earnings.

These two proposals, along with carefully-phased tax reductions for

individuals, will improve both economic efficiency and tax equity. I

urge the Congress to enact legislation along the lines and timetable I

have proposed.

THE 1982 BUDGET

The FY 1982 budget I have sent to the Congress continues our four-year

policy of prudence and restraint. While the budget deficits during my

term are higher than I would have liked, their size is determined for

the most part by economic conditions. And in spite of these conditions,

the relative size of the deficit continues to decline. In 1976, before I

took office, the budget deficit equalled 4 percent of gross national

product. It had been cut to 2.3 percent in the 1980 fiscal year just

ended. My 1982 budget contains a deficit estimated to be less than 1

percent of our gross national product.

The rate of growth in Federal spending has been held to a minimum.

Nevertheless, outlays are still rising more rapidly than many had

anticipated, the result of many powerful forces in our society:

We face a threat to our security, as events in Afghanistan, the Middle

East, and Eastern Europe make clear. We have a steadily aging population

and, as a result, the biggest single increase in the Federal budget is

the rising cost of retirement programs, particularly social security. We

face other important domestic needs: to continue responsibility for the

disadvantaged; to provide the capital needed by our cities and our

transportation systems; to protect our environment; to revitalize

American industry; and to increase the export of American goods and

services so essential to the creation of jobs and a trade surplus.

Yet the Federal Government itself may not always be the proper source of

such assistance. For example, it must not usurp functions if they can be

more appropriately decided upon, managed, and financed by the private

sector or by State and local governments. My Administration has always

sought to consider the proper focus of responsibility for the most

efficient resolution of problems.

We have also recognized the need to simplify the system of grants to

State and local governments. I have again proposed several grant

consolidations in the 1982 budget, including a new proposal that would

consolidate several highway programs.

The pressures for growth in Federal use of national resources are great.

My Administration has initiated many new approaches to cope with these

pressures. We started a multi-year budget system, and we began a system

for controlling Federal credit programs. Yet in spite of increasing

needs to limit spending growth, we have consistently adhered to these

strong budget principles:

Our Nation’s armed forces must always stand sufficiently strong to deter

aggression and to assure our security. An effective national energy plan

is essential to increase domestic production of oil and gas, to

encourage conservation of our scarce energy resources, to stimulate

conversion to more abundant fuels, and to reduce our trade deficit. The

essential human needs for our citizens must be given the highest

priority. The Federal Government must lead the way in investment in the

Nation’s technological future. The Federal Government has an obligation

to nurture and protect our environment--the common resource, birthright,

and sustenance of the American people.

My 1982 budget continues to support these principles. It also proposes

responsible tax reductions to encourage a more productive economy, and

adequate funding of our highest priority programs within an overall

policy of constraint.

Fiscal restraint must be continued in the years ahead. Budgets must be

tight enough to convince those who set wages and prices that the Federal

Government is serious about fighting inflation but not so tight as to

choke off all growth.

Careful budget policy should be supplemented by other measures designed

to reduce inflation at lower cost in lost output and employment. These

other steps include measures to increase investment--such as the tax

proposals included in my 1982 budget--and measures to increase

competition and productivity in our economy. Voluntary incomes policies

can also directly influence wages and prices in the direction of

moderation and thereby bring inflation down faster and at lower cost to

the economy. Through a tax-based incomes policy (TIP) we could provide

tax incentives for firms and workers to moderate their wage and price

increases. In the coming years, control of Federal expenditures can make

possible periodic tax reductions. The Congress should therefore begin

now to evaluate the potentialities of a TIP program so that when the

next round of tax reductions is appropriate a TIP program will be

seriously considered.

EMPLOYMENT

During the last four years we have given top priority to meeting the

needs of workers and providing additional job opportunities to those who

seek work. Since the end of 1976:

Almost 9 million new jobs have been added to the nation’s economy total

employment has reached 97 million. More jobs than ever before are held

by women, minorities and young people. Employment over the past four

years has increased by: 17% for adult women 11% for blacks, and 30% for

Hispanics employment of black teenagers increased by more than 5%,

reversing the decline that occurred in the previous eight years.

Major initiatives launched by this Administration helped bring about

these accomplishments and have provided a solid foundation for

employment and training policy in the 1980’s. In 1977, as part of the

comprehensive economic stimulus program:

425,000 public service jobs were created A $1 billion youth employment

initiative funded 200,000 jobs the doubling of the Job Corps to 44,000

slots began and 1 million summer youth jobs were approved--a 25 percent

increase.

In 1978:

The Humphrey-Hawkins Full Employment Act became law the $400 million

Private Sector Initiatives Program was begun a targeted jobs tax credit

for disadvantaged youth and others with special employment barriers was

enacted the Comprehensive Employment and Training Act was reauthorized

for four years.

In 1979:

A $6 billion welfare reform proposal was introduced with funding for

400,000 public service jobs welfare reform demonstration projects were

launched in communities around the country the Vice President initiated

a nationwide review of youth unemployment in this country.

In 1980:

The findings of the Vice President’s Task Force revealed the major

education and employment deficits that exist for poor and minority

youngsters. As a result a $2 billion youth education and jobs initiative

was introduced to provide unemployed youth with the basic education and

work experience they need to compete in the labor market of the 1980’s.

As part of the economic revitalization program several steps were

proposed to aid workers in high unemployment communities:

An additional 13 weeks of unemployment benefits for the long term

unemployed. $600 million to train the disadvantaged and unemployed for

new private sector jobs. Positive adjustment demonstrations to aid

workers in declining industries. The important Title VII Private Sector

Initiatives Program was reauthorized for an additional two years.

In addition to making significant progress in helping the disadvantaged

and unemployed, important gains were realized for all workers:

An historic national accord with organized labor made it possible for

the views of working men and women to be heard as the nation’s economic

and domestic policies were formulated; the Mine Safety and Health Act

brought about improved working conditions for the nation’s 500,000

miners. substantial reforms of Occupational Safety and Health

Administration were accomplished to help reduce unnecessary burdens on

business and to focus on major health and safety problems; the minimum

wage was increased over a four year period from $2.30 to $3.35 an hour;

the Black Lung Benefit Reform Act was signed into law; attempts to

weaken Davis-Bacon Act were defeated.

While substantial gains have been made in the last four years, continued

efforts are required to ensure that this progress is continued:

Government must continue to make labor a full partner in the policy

decisions that affect the interests of working men and women; a broad,

bipartisan effort to combat youth unemployment must be sustained

compassionate reform of the nation’s welfare system should be continued

with employment opportunities provided for those able to work; workers

in declining industries should be provided new skills and help in

finding employment.

TRADE

Over the past year, the U.S. trade picture improved as a result of solid

export gains in both manufactured and agricultural products.

Agricultural exports reached a new record of over $40 billion, while

manufactured exports have grown by 24 percent to a record $144 billion.

In these areas the United States recorded significant surpluses of $24

billion and $19 billion respectively. While our oil imports remained a

major drain on our foreign exchange earnings, that drain was somewhat

moderated by a 19 percent decline in the volume of oil imports.

U.S. trade negotiators made significant progress over the past year in

assuring effective implementation of the agreements negotiated during

the Tokyo Round of Multilateral Trade Negotiations. Agreements reached

with the Japanese government, for example, will assure that the United

States will be able to expand its exports to the Japanese market in such

key areas as telecommunications equipment, tobacco, and lumber. Efforts

by U.S. trade negotiators also helped to persuade a number of key

developing countries to accept many of the non-tariff codes negotiated

during the Multilateral Trade Negotiations. This will assure that these

countries will increasingly assume obligations under the international

trading system.

A difficult world economic environment posed a challenge for the

management of trade relations. U.S. trade negotiators were called upon

to manage serious sectoral problems in such areas as steel, and helped

to assure that U.S. chemical exports will have continued access to the

European market.

Close consultations with the private sector in the United States have

enabled U.S. trade negotiators to pinpoint obstacles to U.S. trade in

services, and to build a basis for future negotiations. Services have

been an increasingly important source of export earnings for the United

States, and the United States must assure continued and increased access

to foreign markets.

The trade position of the United States has improved. But vigorous

efforts are needed in a number of areas to assure continued market

access for U.S. exports, particularly agricultural and high technology

products, in which the United States continues to have a strong

competitive edge. Continued efforts are also needed to remove many

domestic disincentives, which now hamper U.S. export growth. And we must

ensure that countries do not manipulate investment, or impose investment

performance requirements which distort trade and cost us jobs in this

country.

In short, we must continue to seek free--but fair--trade. That is the

policy my Administration has pursued from the beginning, even in areas

where foreign competition has clearly affected our domestic industry. In

the steel industry, for instance, we have put Trigger Price Mechanism

into place to help prevent the dumping of steel. That action has

strengthened the domestic steel industry. In the automobile industry, we

have worked-- without resort to import quotas--to strengthen the

industry’s ability to modernize and compete effectively.

SMALL BUSINESS

I have often said that there is nothing small about small business in

America. These firms account for nearly one-half our gross national

product; over half of new technology; and much more than half of the

jobs created by industry.

Because this sector of the economy is the very lifeblood of our National

economy, we have done much together to improve the competitive climate

for smaller firms. These concerted efforts have been an integral part of

my program to revitalize the economy.

They include my campaign to shrink substantially the cash and time

consuming red tape burden imposed on business. They include my

personally-directed policy of ambitiously increasing the Federal

contracting dollars going to small firms, especially those owned by

women and minorities. And they include my proposals to reinvigorate

existing small businesses and assist the creation of new ones through

tax reform; financing assistance; market expansion; and support of

product innovation.

Many of my initiatives to facilitate the creation and growth of small

businesses were made in response to the White House Conference on Small

Business, which I convened. My Administration began the implementation

of most of the ideas produced last year by that citizen’s advisory body;

others need to be addressed. I have proposed the reconvening of the

Conference next year to review progress; reassess priorities; and set

new goals. In the interim I hope that the incoming Administration and

the new Congress will work with the committee I have established to keep

these business development ideas alive and help implement Conference

recommendations.

MINORITY BUSINESS

One of the most successful developments of my Administration has been

the growth and strengthening of minority business. This is the first

Administration to put the issue on the policy agenda as a matter of

major importance. To implement the results of our early efforts in this

field I submitted legislation to Congress designed to further the

development of minority business.

We have reorganized the Office of Minority Business into the Minority

Business Development Administration in the Department of Commerce. MBDA

has already proven to be a major factor in assisting minority businesses

to achieve equitable competitive positions in the marketplace.

The Federal government’s procurement from minority-owned firms has

nearly tripled since I took office. Federal deposits in minority-owned

banks have more than doubled and minority ownership of radio and

television stations has nearly doubled. The SBA administered 8(a) Pilot

Program for procurement with the Army proved to be successful and I

recently expanded the number of agencies involved to include NASA and

the Departments of Energy and Transportation.

I firmly believe the critical path to full freedom and equality for

America’s minorities rests with the ability of minority communities to

participate competitively in the free enterprise system. I believe the

government has a fundamental responsibility to assist in the development

of minority business and I hope the progress made in the last four years

will continue.

II. CREATING ENERGY SECURITY

Since I took office, my highest legislative priorities have involved the

reorientation and redirection of U.S. energy activities and for the

first time, to establish a coordinated national energy policy. The

struggle to achieve that policy has been long and difficult, but the

accomplishments of the past four years make clear that our country is

finally serious about the problems caused by our overdependence on

foreign oil. Our progress should not be lost. We must rely on and

encourage multiple forms of energy production--coal, crude oil, natural

gas, solar, nuclear, synthetics--and energy conservation. The framework

put in place over the last four years will enable us to do this.

NATIONAL ENERGY POLICY

As a result of actions my Administration and the Congress have taken

over the past four years, our country finally has a national energy

policy:

Under my program of phased decontrol, domestic crude oil price controls

will end September 30, 1981. As a result exploratory drilling activities

have reached an all-time high; Prices for new natural gas are being

decontrolled under the Natural Gas Policy Act--and natural gas

production is now at an all time high; the supply shortages of several

years ago have been eliminated; The windfall profits tax on crude oil

has been enacted providing $227 billion over ten years for assistance to

low-income households, increased mass transit funding, and a massive

investment in the production and development of alternative energy

sources; The Synthetic Fuels Corporation has been established to help

private companies build the facilities to produce energy from synthetic

fuels; Solar energy funding has been quadrupled, solar energy tax

credits enacted, and a Solar Energy and Energy Conservation Bank has

been established; A route has been chosen to bring natural gas from the

North Slope of Alaska to the lower 48 states; Coal production and

consumption incentives have been increased, and coal production is now

at its highest level in history; A gasoline rationing plan has been

approved by Congress for possible use in the event of a severe energy

supply shortage or interruption; Gasohol production has been

dramatically increased, with a program being put in place to produce 500

million gallons of alcohol fuel by the end of this year--an amount that

could enable gasohol to meet the demand for 10 percent of all unleaded

gasoline; New energy conservation incentives have been provided for

individuals, businesses and communities and conservation has increased

dramatically. The U.S. has reduced oil imports by 25 percent--or 2

million barrels per day--over the past four years.

INCREASED DEVELOPMENT OF DOMESTIC ENERGY SOURCES

Although it is essential that the Nation reduce its dependence on

imported fossil fuels and complete the transition to reliance on

domestic renewable sources of energy, it is also important that this

transition be accomplished in an orderly, economic, and environmentally

sound manner. To this end, the Administration has launched several

initiatives.

Leasing of oil and natural gas on federal lands, particularly the outer

continental shelf, has been accelerated at the same time as the

Administration has reformed leasing procedures through the 1978

amendments to the Outer Continental Shelf Lands Act. In 1979 the

Interior Department held six OCS lease sales, the greatest number ever,

which resulted in federal receipts of $6.5 billion, another record. The

five-year OCS Leasing schedule was completed, requiring 36 sales over

the next five years.

Since 1971 no general federal coal lease sales were suspended. Over the

past four years the Administration has completely revised the federal

coal leasing program to bring it into compliance with the requirements

of 1976 Federal Land Planning and Management Act and other statutory

provisions. The program is designed to balance the competing interests

that affect resource development on public lands and to ensure that

adequate supplies of coal will be available to meet national needs. As a

result, the first general competitive federal coal lease sale in ten

years will be held this month.

In July 1980, I signed into law the Energy Security Act of 1980 which

established the Synthetic Fuels Corporation. The Corporation is designed

to spur the development of commercial technologies for production of

synthetic fuels, such as liquid and gaseous fuels from coal and the

production of oil from oil shale. The Act provides the Corporation with

an initial $22 billion to accomplish these objectives. The principal

purpose of the legislation is to ensure that the nation will have

available in the late 1980’s the option to undertake commercial

development of synthetic fuels if that becomes necessary. The Energy

Security Act also provides significant incentives for the development of

gasohol and biomass fuels, thereby enhancing the nation’s supply of

alternative energy sources.

COMMITMENT TO A SUSTAINABLE ENERGY FUTURE

The Administration’s 1977 National Energy Plan marked an historic

departure from the policies of previous Administrations. The plan

stressed the importance of both energy production and conservation to

achieving our ultimate national goal of relying primarily on secure

sources of energy. The National Energy Plan made energy conservation a

cornerstone of our national energy policy.

In 1978, I initiated the Administration’s Solar Domestic Policy Review.

This represented the first step towards widespread introduction of

renewable energy sources into the Nation’s economy. As a result of the

Review, I issued the 1979 Solar Message to Congress, the first such

message in the Nation’s history. The Message outlined the

Administration’s solar program and established an ambitious national

goal for the year 2000 of obtaining 20 percent of this Nation’s energy

from solar and renewable sources. The thrust of the federal solar

program is to help industry develop solar energy sources by emphasizing

basic research and development of solar technologies which are not

currently economic, such as photovoltaics, which generate energy

directly from the sun. At the same time, through tax incentives,

education, and the Solar Energy and Energy Conservation Bank, the solar

program seeks to encourage state and local governments, industry, and

our citizens to expand their use of solar and renewable resource

technologies currently available.

As a result of these policies and programs, the energy efficiency of the

American economy has improved markedly and investments in renewable

energy sources have grown significantly. It now takes 3 1/2 percent less

energy to produce a constant dollar of GNP than it did in January 1977.

This increase in efficiency represents a savings of over 1.3 million

barrels per day of oil equivalent, about the level of total oil

production now occurring in Alaska. Over the same period, Federal

support for conservation and solar energy has increased by more than

3000 percent, to $3.3 billion in FY 1981, including the tax credits for

solar energy and energy conservation investments--these credits are

expected to amount to $1.2 billion in FY 1981 and $1.5 billion in FY

1982.

COMMITMENT TO NUCLEAR SAFETY AND SECURITY

Since January 1977, significant progress has been achieved in resolving

three critical problems resulting from the use of nuclear energy:

radioactive waste management, nuclear safety and weapons proliferation.

In 1977, the Administration announced its nuclear nonproliferation

policy and initiated the International Fuel Cycle Evaluation. In 1978,

Congress passed the Nuclear Nonproliferation Act, an historic piece of

legislation.

In February 1980, the Administration transmitted its nuclear waste

management policy to the Congress. This policy was a major advance over

all previous efforts. The principal aspects of that policy are:

acknowledging the seriousness of the problem and the numerous technical

and institutional issues; adopting a technically and environmentally

conservative approach to the first permanent repository; and providing

the states with significant involvement in nuclear waste disposal

decisions by creating the State Planning Council. While much of the plan

can be and is being implemented administratively, some new authorities

are needed. The Congress should give early priority to enacting

provisions for away-from-reactor storage and the State Planning Council.

The accident at Three Mile Island made the nation acutely aware of the

safety risks posed by nuclear power plants. In response, the President

established the Kemeny Commission to review the accident and make

recommendations. Virtually all of the Commission’s substantive

recommendations were adopted by the Administration and are now being

implemented by the Nuclear Regulatory Commission. The Congress adopted

the President’s proposed plan for the Nuclear Regulatory Commission and

the Nuclear Safety Oversight Committee was established to ensure that

the Administration’s decisions were implemented.

Nuclear safety will remain a vital concern in the years ahead. We must

continue to press ahead for the safe, secure disposal of radioactive

wastes, and prevention of nuclear proliferation.

While significant growth in foreign demand for U.S. steam coal is

foreseen, congestion must be removed at major U.S. coal exporting ports

such as Hampton Roads, Virginia, and Baltimore, Maryland. My

Administration has worked through the Interagency Coal Task Force Study

to promote cooperation and coordination of resources between shippers,

railroads, vessel broker/ operators and port operators, and to determine

the most appropriate Federal role in expanding and modernizing coal

export facilities, including dredging deeper channels at selected ports.

As a result of the Task Force’s efforts, administrative steps have been

taken by the Corps of Engineers to reduce significantly the amount of

time required for planning and economic review of port dredging

proposals. The Administration has also recommended that the Congress

enact legislation to give the President generic authority to recommend

appropriations for channel dredging activities. Private industry will,

of course, play the major role in developing the United States’ coal

export facilities, but the government must continue to work to

facilitate transportation to foreign markets.

III. ENHANCING BASIC HUMAN AND SOCIAL NEEDS

For too long prior to my Administration, many of our Nation’s basic

human and social needs were being ignored or handled insensitively by

the Federal government. Over the last four years, we have significantly

increased funding for many of the vital programs in these areas;

developed new programs where needs were unaddressed; targeted Federal

support to those individuals and areas most in need of our assistance;

and removed barriers that have unnecessarily kept many disadvantaged

citizens from obtaining aid for their most basic needs.

Our record has produced clear progress in the effort to solve some of

the country’s fundamental human and social problems. My Administration

and the Congress, working together, have demonstrated that government

must and can meet our citizens’ basic human and social needs in a

responsible and compassionate way.

But there is an unfinished agenda still before the Congress. If we are

to meet our obligations to help all Americans realize the dreams of

sound health care, decent housing, effective social services, a good

education, and a meaningful job, important legislation still must be

enacted. National Health Insurance, Welfare Reform, Child Health

Assessment Program, are before the Congress and I urge their passage.

HEALTH NATIONAL HEALTH PLAN

During my Administration, I proposed to Congress a National Health Plan

which will enable the country to reach the goal of comprehensive,

universal health care coverage. The legislation I submitted lays the

foundation for this comprehensive plan and addresses the most serious

problems of health financing and delivery. It is realistic and

enactable. It does not overpromise or overspend, and, as a result, can

be the solution to the thirty years of Congressional battles on national

health insurance. My Plan includes the following key features:

Nearly 15 million additional poor would receive fully-subsidized

comprehensive coverage; pre-natal and delivery services are provided for

all pregnant women and coverage is provided for all acute care for

infants in their first year of life; the elderly and disabled would have

a limit of $1,250 placed on annual out-of-pocket medical expenses and

would no longer face limits on hospital coverage; all full-time

employees and their families would receive insurance against at least

major medical expenses under mandated employer coverage; Medicare and

Medicaid would be combined and expanded into an umbrella Federal

program, Healthcare, for increased program efficiency, accountability

and uniformity; and strong cost controls and health system reforms would

be implemented, including greater incentives for Health Maintenance

Organizations.

I urge the new Congress to compare my Plan with the

alternatives--programs which either do too little to improve the health

care needs of Americans most in need or programs which would impose

substantial financial burdens on the American taxpayers. I hope the

Congress will see the need for and the benefits of my Plan and work

toward prompt enactment. We cannot afford further delay in this vital

area.

HEALTH CARE COST CONTROL

Inflation in health care costs remains unacceptably high. Throughout my

Administration, legislation to reduce health care cost inflation was one

of my highest priorities, but was not passed by the Congress. Therefore,

my FY 1982 budget proposes sharing the responsibility for health care

cost control with the private sector, through voluntary hospital cost

guidelines and intensified monitoring. In the longer term, the health

care reimbursement system must be reformed. We must move away from

inflationary cost-based reimbursement and fee-for-service, and toward a

system of prospective reimbursement, under which health care providers

would operate within predetermined budgets. This reimbursement reform is

essential to ultimately control inflation in health care costs, and will

be a significant challenge to the new Congress.

HEALTH PROMOTION AND DISEASE PREVENTION

During my Administration, the Surgeon General released “Healthy People,”

a landmark report on health promotion and disease prevention. The report

signals the growing consensus that the Nation’s health strategy must be

refocused in the 1980’s to emphasize the prevention of disease.

Specifically, the report lays out measurable and achieveable goals in

the reduction of mortality which can be reached by 1990.

I urge the new Congress to endorse the principles of “Healthy People,”

and to adopt the recommendations to achieve its goals. This will

necessitate adoption of a broader concept of health care, to include

such areas as environmental health, workplace health and safety,

commercial product safety, traffic safety, and health education,

promotion and information.

MATERNAL AND CHILD HEALTH

Ensuring a healthy start in life for children remains not only a high

priority of my Administration, but also one of the most cost effective

forms of health care.

When I took office, immunization levels for preventable childhood

diseases had fallen to 70%. As a result of a concerted nationwide effort

during my Administration, I am pleased to report that now at least 90%

of children under 15, and virtually all school-age children are

immunized. In addition, reported cases of measles and mumps are at their

lowest levels ever.

Under the National Health Plan I have proposed, there would be no

cost-sharing for prenatal and delivery services for all pregnant women

and for acute care provided to infants in their first year of life.

These preventive services have extremely high returns in terms of

improved newborn and long-term child health.

Under the Child Health Assurance Program (CHAP) legislation which I

submitted to the Congress, and which passed the House, an additional two

million low-income children under 18 would become eligible for Medicaid

benefits, which would include special health assessments. CHAP would

also improve the continuity of care for the nearly 14 million children

now eligible for Medicaid. An additional 100,000 low-income pregnant

women would become eligible for prenatal care under the proposal. I

strongly urge the new Congress to enact CHAP and thereby provide

millions of needy children with essential health services. The

legislation has had strong bipartisan support, which should continue as

the details of the bill are completed.

I also urge the new Congress to provide strong support for two highly

successful ongoing programs: the special supplemental food program for

women, infants and children (WIC) and Family Planning. The food

supplements under WIC have been shown to effectively prevent ill health

and thereby reduce later medical costs. The Family Planning program has

been effective at reducing unwanted pregnancies among low-income women

and adolescents.

EXPANSION OF SERVICES TO THE POOR AND UNDERSERVED

During my Administration, health services to the poor and underserved

have been dramatically increased. The number of National Health Service

Corps (NHSC) assignees providing services in medically underserved

communities has grown from 500 in 1977 to nearly 3,000 in 1981. The

population served by the NHSC has more than tripled since 1977. The

number of Community Health Centers providing services in high priority

underserved areas has doubled during my Administration, and will serve

an estimated six million people in 1981. I strongly urge the new

Congress to support these highly successful programs.

MENTAL HEALTH

One of the most significant health achievements during my Administration

was the recent passage of the Mental Health Systems Act, which grew out

of recommendations of my Commission on Mental Health. I join many others

in my gratitude to the First Lady for her tireless and effective

contribution to the passage of this important legislation.

The Act is designed to inaugurate a new era of Federal and State

partnership in the planning and provision of mental health services. In

addition, the Act specifically provides for prevention and support

services to the chronically mentally ill to prevent unnecessary

institutionalization and for the development of community-based mental

health services. I urge the new Congress to provide adequate support for

the full and timely implementation of this Act.

HEALTH PROTECTION

With my active support, the Congress recently passed “Medigap”

legislation, which provides for voluntary certification of health

insurance policies supplemental to Medicare, to curb widespread abuses

in this area.

In the area of toxic agent control, legislation which I submitted to the

Congress recently passed. This will provide for a “super-fund” to cover

hazardous waste cleanup costs.

In the area of accidental injury control, we have established automobile

safety standards and increased enforcement activities with respect to

the 55 MPH speed limit. By the end of the decade these actions are

expected to save over 13,000 lives and 100,000 serious injuries each

year.

I urge the new Congress to continue strong support for all these

activities.

FOOD AND NUTRITION

Building on the comprehensive reform of the Food Stamp Program that I

proposed and Congress passed in 1977, my Administration and the Congress

worked together in 1979 and 1980 to enact several other important

changes in the Program. These changes will further simplify

administration and reduce fraud and error, will make the program more

responsive to the needs of the elderly and disabled, and will increase

the cap on allowable program expenditures. The Food Stamp Act will

expire at the end of fiscal 1981. It is essential that the new

Administration and the Congress continue this program to ensure complete

eradication of the debilitating malnutrition witnessed and documented

among thousands of children in the 1960’s.

DRUG ABUSE PREVENTION

At the beginning of my Administration there were over a half million

heroin addicts in the United States. Our continued emphasis on reducing

the supply of heroin, as well as providing treatment and rehabilitation

to its victims, has reduced the heroin addict population, reduced the

number of heroin overdose deaths by 80%, and reduced the number of

heroin related injuries by 50%. We have also seen and encouraged a

national movement of parents and citizens committed to reversing the

very serious and disturbing trends of adolescent drug abuse.

Drug abuse in many forms will continue to detract, however, from the

quality of life of many Americans. To prevent that, I see four great

challenges in the years ahead. First, we must deal aggressively with the

supplies of illegal drugs at their source, through joint crop

destruction programs with foreign nations and increased law enforcement

and border interdiction. Second, we must look to citizens and parents

across the country to help educate the increasing numbers of American

youth who are experimenting with drugs to the dangers of drug abuse.

Education is a key factor in reducing drug abuse. Third, we must focus

our efforts on drug and alcohol abuse in the workplace for not only does

this abuse contribute to low productivity but it also destroys the

satisfaction and sense of purpose all Americans can gain from the work

experience. Fourth, we need a change in attitude, from an attitude which

condones the casual use of drugs to one that recognizes the appropriate

use of drugs for medical purposes and condemns the inappropriate and

harmful abuse of drugs. I hope the Congress and the new Administration

will take action to meet each of these challenges.

EDUCATION

The American people have always recognized that education is one of the

soundest investments they can make. The dividends are reflected in every

dimension of our national life--from the strength of our economy and

national security to the vitality of our music, art, and literature.

Among the accomplishments that have given me the most satisfaction over

the last four years are the contributions that my Administration has

been able to make to the well-being of students and educators throughout

the country.

This Administration has collaborated successfully with the Congress on

landmark education legislation. Working with the Congressional

leadership, my Administration spotlighted the importance of education by

creating a new Department of Education. The Department has given

education a stronger voice at the Federal level, while at the same time

reserving the actual control and operation of education to states,

localities, and private institutions. The Department has successfully

combined nearly 150 Federal education programs into a cohesive,

streamlined organization that is more responsive to the needs of

educators and students. The Department has made strides to cut red tape

and paperwork and thereby to make the flow of Federal dollars to school

districts and institutions of higher education more efficient. It is

crucial that the Department be kept intact and strengthened.

Our collaboration with the Congress has resulted in numerous other

important legislative accomplishments for education. A little over two

years ago, I signed into law on the same day two major bills--one

benefiting elementary and secondary education and the other,

postsecondary education. The Education Amendments of 1978 embodied

nearly all of my Administration’s proposals for improvements in the

Elementary and Secondary Education Act, including important new programs

to improve students’ achievement in the basic skills and to aid school

districts with exceptionally high concentrations of children from

low-income families. The Middle Income Student Assistance Act,

legislation jointly sponsored by this Administration and the

Congressional leadership, expanded eligibility for need-based Basic

Educational Opportunity Grants to approximately one-third of the

students enrolled in post-secondary education and made many more

students eligible for the first time for other types of grants,

work-study, and loans.

Just three and a half months ago, my Administration and the Congress

successfully concluded over two years of work on a major reauthorization

bill that further expands benefits to postsecondary education. Reflected

in the Education Amendments of 1980 are major Administration

recommendations for improvements in the Higher Education Act--including

proposals for better loan access for students; a new parent loan

program; simplified application procedures for student financial aid; a

strengthened Federal commitment to developing colleges, particularly the

historically Black institutions; a new authorization for equipment and

facilities modernization funding for the nation’s major research

universities; and revitalized international education programs.

Supplementing these legislative accomplishments have been important

administrative actions aimed at reducing paperwork and simplifying

regulations associated with Federal education programs. We also launched

major initiatives to reduce the backlog of defaulted student loans and

otherwise to curb fraud, abuse, and waste in education programs.

To insure that the education enterprise is ready to meet the scientific

and technological changes of the future, we undertook a major study of

the status of science and engineering education throughout the nation. I

hope that the findings from this report will serve as a springboard for

needed reforms at all levels of education.

I am proud that this Administration has been able to provide the

financial means to realize many of our legislative and administrative

goals. Compared to the previous administration’s last budget, I have

requested the largest overall increase in Federal funding for education

in our nation’s history. My budget requests have been particularly

sensitive to the needs of special populations like minorities, women,

the educationally and economically disadvantaged, the handicapped, and

students with limited English-speaking ability. At the same time, I have

requested significant increases for many programs designed to enhance

the quality of American education, including programs relating to

important areas as diverse as international education, research

libraries, museums, and teacher centers.

Last year, I proposed to the Congress a major legislative initiative

that would direct $2 billion into education and job training programs

designed to alleviate youth unemployment through improved linkages

between the schools and the work place. This legislation generated

bipartisan support; but unfortunately, action on it was not completed in

the final, rushed days of the 96th Congress. I urge the new Congress--as

it undertakes broad efforts to strengthen the economy as well as more

specific tasks like reauthorizing the Vocational Education Act--to make

the needs of our nation’s unemployed youth a top priority for action.

Only by combining a basic skills education program together with work

training and employment incentives can we make substantial progress in

eliminating one of the most severe social problems in our nation--youth

unemployment, particularly among minorities. I am proud of the progress

already made through passage of the Youth Employment and Demonstration

Project Act of 1977 and the substantial increase in our investment in

youth employment programs. The new legislation would cap these efforts.

INCOME SECURITY SOCIAL SECURITY

One of the highest priorities of my Administration has been to continue

the tradition of effectiveness and efficiency widely associated with the

social security program, and to assure present and future beneficiaries

that they will receive their benefits as expected. The earned benefits

that are paid monthly to retired and disabled American workers and their

families provide a significant measure of economic protection to

millions of people who might otherwise face retirement or possible

disability with fear. I have enacted changes to improve the benefits of

many social security beneficiaries during my years as President.

The last four years have presented a special set of concerns over the

financial stability of the social security system. Shortly after taking

office I proposed and Congress enacted legislation to protect the

stability of the old age and survivors trust fund and prevent the

imminent exhaustion of the disability insurance trust fund, and to

correct a flaw in the benefit formula that was threatening the long run

health of the entire social security system. The actions taken by the

Congress at my request helped stabilize the system. That legislation was

later complemented by the Disability Insurance Amendments of 1980 which

further bolstered the disability insurance program, and reduced certain

inequities among beneficiaries.

My commitment to the essential retirement and disability protection

provided to 35 million people each month has been demonstrated by the

fact that without interruption those beneficiaries have continued to

receive their social security benefits, including annual cost of living

increases. Changing and unpredictable economic circumstances require

that we continue to monitor the financial stability of the social

security system. To correct anticipated short-term strains on the

system, I proposed last year that the three funds be allowed to borrow

from one another, and I urge the Congress again this year to adopt such

interfund borrowing. To further strengthen the social security system

and provide a greater degree of assurance to beneficiaries, given

projected future economic uncertainties, additional action should be

taken. Among the additional financing options available are borrowing

from the general fund, financing half of the hospital insurance fund

with general revenues, and increasing the payroll tax rate. The latter

option is particularly unpalatable given the significant increase in the

tax rate already mandated in law.

This Administration continues to oppose cuts in basic social security

benefits and taxing social security benefits. The Administration

continues to support annual indexing of social security benefits.

WELFARE REFORM

In 1979 I proposed a welfare reform package which offers solutions to

some of the most urgent problems in our welfare system. This proposal is

embodied in two bills, The Work and Training Opportunities Act and The

Social Welfare Reform Amendments Act. The House passed the second of

these two proposals. Within the framework of our present welfare system,

my reform proposals offer achievable means to increase self-sufficiency

through work rather than welfare, more adequate assistance to people

unable to work, the removal of inequities in coverage under current

programs, and fiscal relief needed by States and localities.

Our current welfare system is long overdue for serious reform; the

system is wasteful and not fully effective. The legislation I have

proposed will help eliminate inequities by establishing a national

minimum benefit, and by directly relating benefit levels to the poverty

threshold. It will reduce program complexity, which leads to

inefficiency and waste, by simplifying and coordinating administration

among different programs.

I urge the Congress to take action in this area along the lines I have

recommended.

CHILD WELFARE

My Administration has worked closely with the Congress on legislation

which is designed to improve greatly the child welfare services and

foster care programs and to create a Federal system of adoption

assistance. These improvements will be achieved with the recent

enactment of H.R. 3434, the Adoption Assistance and Child Welfare Act of

1980. The well-being of children in need of homes and their permanent

placement have been a primary concern of my Administration. This

legislation will ensure that children are not lost in the foster care

system, but instead will be returned to their families where possible or

placed in permanent adoptive homes.

LOW-INCOME ENERGY ASSISTANCE

In 1979 I proposed a program to provide an annual total of $1.6 billion

to low-income households which are hardest hit by rising energy bills.

With the cooperation of Congress, we were able to move quickly to

provide assistance to eligible households in time to meet their winter

heating bills.

In response to the extreme heat conditions affecting many parts of the

country during 1980, I directed the Community Services Administration to

make available over $27 million to assist low-income individuals,

especially the elderly, facing life threatening circumstances due to

extreme heat.

Congress amended and reauthorized the low-income energy assistance

program for fiscal year 1981, and provided $1.85 billion to meet

anticipated increasing need. The need for a program to help low-income

households with rising energy expenses will not abate in the near

future. The low-income energy assistance program should be reauthorized

to meet those needs.

HOUSING

For the past 14 months, high interest rates have had a severe impact on

the nation’s housing market. Yet the current pressures and uncertainties

should not obscure the achievements of the past four years.

Working with the Congress, the regulatory agencies, and the financial

community, my Administration has brought about an expanded and steadier

flow of funds into home mortgages. Deregulation of the interest rates

payable by depository institutions, the evolution of variable and

renegotiated rate mortgages, development of high yielding savings

certificates, and expansion of the secondary mortgage market have all

increased housing’s ability to attract capital and have assured that

mortgage money would not be cut off when interest rates rose. These

actions will diminish the cyclicality of the housing industry. Further,

we have secured legislation updating the Federal Government’s emergency

authority to provide support for the housing industry through the

Brooke-Cranston program, and creating a new Section 235 housing stimulus

program. These tools will enable the Federal Government to deal quickly

and effectively with serious distress in this critical industry.

We have also worked to expand homeownership opportunities for Americans.

By using innovative financing mechanisms, such as the graduated payment

mortgage, we have increased the access of middle income families to

housing credit. By revitalizing the Section 235 program, we have enabled

nearly 100,000 moderate income households to purchase new homes. By

reducing paperwork and regulation in Federal programs, and by working

with State and local governments to ease the regulatory burden, we have

helped to hold down housing costs and produce affordable housing.

As a result of these governmentwide efforts, 5 1/2 million more American

families bought homes in the past four years than in any equivalent

period in history. And more than 7 million homes have begun construction

during my Administration, 1 million more than in the previous four

years.

We have devoted particular effort to meeting the housing needs of low

and moderate income families. In the past four years, more than 1

million subsidized units have been made available for occupancy by lower

income Americans and more than 600,000 assisted units have gone into

construction. In addition, we have undertaken a series of measures to

revitalize and preserve the nation’s 2 million units of public and

assisted housing.

For Fiscal Year 1982, I am proposing to continue our commitment to lower

income housing. I am requesting funds to support 260,000 units of

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