Section 8 and public housing, maintaining these programs at the level

provided by Congress in Fiscal 1981.

While we have made progress in the past four years, in the future there

are reasons for concern. Home price inflation and high interest rates

threaten to put homeownership out of reach for first-time homebuyers.

Lower income households, the elderly and those dependent upon rental

housing face rising rents, low levels of rental housing construction by

historic standards, and the threat of displacement due to conversion to

condominiums and other factors. Housing will face strong competition for

investment capital from the industrial sector generally and the energy

industries, in particular.

To address these issues, I appointed a Presidential Task Force and

Advisory Group last October. While this effort will not proceed due to

the election result, I hope the incoming Administration will proceed

with a similar venture.

The most important action government can take to meet America’s housing

needs is to restore stability to the economy and bring down the rate of

inflation. Inflation has driven up home prices, operating costs and

interest rates. Market uncertainty about inflation has contributed to

the instability in interest rates, which has been an added burden to

homebuilders and homebuyers alike. By making a long-term commitment to

provide a framework for greater investment, sustained economic growth,

and price stability, my Administration has begun the work of creating a

healthy environment for housing.

TRANSPORTATION

With the passage of the Airline Deregulation Act of 1978, the Motor

Carrier Act of 1980, and the Harley O. Staggers Rail Act of 1980, my

Administration, working with the Congress, has initiated a new era of

reduced regulation of transportation industries. Deregulation will lead

to increased productivity and operating efficiencies in the industries

involved, and stimulate price and service competition, to the benefit of

consumers generally. I urge the new Administration to continue our

efforts on behalf of deregulation legislation for the intercity

passenger bus industry as well.

In the coming decade, the most significant challenge facing the nation

in transportation services will be to improve a deteriorating physical

infrastructure of roadways, railroads, waterways and mass transit

systems, in order to conserve costly energy supplies while promoting

effective transportation services.

HIGHWAYS

Our vast network of highways, which account for 90 percent of travel and

80 percent by value of freight traffic goods movement, is deteriorating.

If current trends continue, a major proportion of the Interstate

pavement will have deteriorated by the end of the 1980’s.

Arresting the deterioration of the nation’s system of highways is a high

priority objective for the 1980’s. We must reorient the Federal mission

from major new construction projects to the stewardship of the existing

Interstate Highway System. Interstate gaps should be judged on the

connections they make and on their compatibility with community needs.

During this decade, highway investments will be needed to increase

productivity, particularly in the elimination of bottlenecks, provide

more efficient connections to ports and seek low-cost solutions to

traffic demand.

My Administration has therefore recommended redefining completion of the

Interstate system, consolidating over 27 categorical assistance programs

into nine, and initiating a major repair and rehabilitation program for

segments of the Interstate system. This effort should help maintain the

condition and performance of the Nation’s highways, particularly the

Interstate and primary system; provide a realistic means to complete the

Interstate system by 1990; ensure better program delivery through

consolidation, and assist urban revitalization. In addition, the

Congress must address the urgent funding problems of the highway trust

fund, and the need to generate greater revenues.

MASS TRANSIT

In the past decade the nation’s public transit systems’ ridership

increased at an annual average of 1.1% each year in the 1970’s (6.9% in

1979). Continued increases in the cost of fuel are expected to make

transit a growing part of the nation’s transportation system.

As a result, my Administration projected a ten year, $43 billion program

to increase mass transit capacity by 50 percent, and promote more energy

efficient vehicle uses in the next decade. The first part of this

proposal was the five year, $24.7 billion Urban Mass Transportation

Administration reauthorization legislation I sent to the Congress in

March, 1980. I urge the 97th Congress to quickly enact this or similar

legislation in 1981.

My Administration was also the first to have proposed and signed into

law a non-urban formula grant program to assist rural areas and small

communities with public transportation programs to end their dependence

on the automobile, promote energy conservation and efficiency, and

provide transportation services to impoverished rural communities.

A principal need of the 1980’s will be maintaining mobility for all

segments of the population in the face of severely increasing

transportation costs and uncertainty of fuel supplies. We must improve

the flexibility of our transportation system and offer greater choice

and diversity in transportation services. While the private automobile

will continue to be the principal means of transportation for many

Americans, public transportation can become an increasingly attractive

alternative. We, therefore, want to explore a variety of paratransit

modes, various types of buses, modern rapid transit, regional rail

systems and light rail systems.

Highway planning and transit planning must be integrated and related to

State, regional, district and neighborhood planning efforts now in place

or emerging. Low density development and land use threaten the fiscal

capacity of many communities to support needed services and

infrastructure.

ELDERLY AND HANDICAPPED TRANSPORTATION

Transportation policies in the 1980’s must pay increasing attention to

the needs of the elderly and handicapped. By 1990, the number of people

over 65 will have grown from today’s 19 million to 27 million. During

the same period, the number of handicapped--people who have difficulty

using transit as well as autos, including the elderly--is expected to

increase from 9 to 11 million, making up 4.5 percent of the population.

We must not retreat from a policy that affords a significant and growing

portion of our population accessible public transportation while

recognizing that the handicapped are a diverse group and will need

flexible, door-to-door service where regular public transportation will

not do the job.

RAILROADS

In addition, the Federal government must reassess the appropriate

Federal role of support for passenger and freight rail services such as

Amtrak and Conrail. Our goal through federal assistance should be to

maintain and enhance adequate rail service, where it is not otherwise

available to needy communities. But Federal subsidies must be closely

scrutinized to be sure they are a stimulus to, and not a replacement

for, private investment and initiative. Federal assistance cannot mean

permanent subsidies for unprofitable operations.

WATERWAYS AND RURAL TRANSPORTATION

There is a growing need in rural and small communities for improved

transportation services. Rail freight service to many communities has

declined as railroads abandon unproductive branch lines. At the same

time, rural roads are often inadequate to handle large, heavily-loaded

trucks. The increased demand for “harvest to harbor” service has also

placed an increased burden on rural transportation systems, while

bottlenecks along the Mississippi River delay grain shipments to the

Gulf of Mexico.

We have made some progress:

--To further develop the nation’s waterways, my Administration began

construction of a new 1,200 foot lock at the site of Lock and Dam 26 on

the Mississippi River. When opened in 1987, the new lock will have a

capacity of 86 million tons per year, an 18 percent increase over the

present system. The U.S. Army Corps of Engineers has also undertaken

studies to assess the feasibility of expanding the Bonneville Locks.

Rehabilitation of John Day Lock was begun in 1980 and should be

completed in 1982. My Administration also supports the completion of the

Upper Mississippi River Master Plan to determine the feasibility of

constructing a second lock at Alton, Illinois. These efforts will help

alleviate delays in transporting corn, soybeans and other goods along

the Mississippi River to the Gulf of Mexico.

--The Department of Transportation’s new Small Community and Rural

Transportation Policy will target federal assistance for passenger

transportation, roads and highways, truck service, and railroad freight

service to rural areas. This policy implements and expands upon the

earlier White House Initiative, “Improving Transportation in Rural

America,” announced in June, 1979, and the President’s “Small Community

and Rural Development Policy” announced in December, 1979. The Congress

should seek ways to balance rail branch line abandonment with the

service needs of rural and farm communities, provide financial

assistance to rail branch line rehabilitation where appropriate, assist

shippers to adjust to rail branch line abandonment where it takes place,

and help make it possible for trucking firms to serve light density

markets with dependable and efficient trucking services.

MARITIME POLICY

During my Administration I have sought to ensure that the U.S. maritime

industry will not have to function at an unfair competitive disadvantage

in the international market. As I indicated in my maritime policy

statement to the Congress in July, 1979, the American merchant marine is

vital to our Nation’s welfare, and Federal actions should promote rather

than harm it. In pursuit of this objective, I signed into law the

Controlled Carrier Act of 1978, authorizing the Federal Maritime

Commission to regulate certain rate cutting practices of some

state-controlled carriers, and recently signed a bilateral maritime

agreement with the People’s Republic of China that will expand the

access of American ships to 20 specified Chinese ports, and set aside

for American-flag ships a substantial share (at least one-third) of the

cargo between our countries. This agreement should officially foster

expanded U.S. and Chinese shipping services linking the two countries,

and will provide further momentum to the growth of Sino-American trade.

There is also a need to modernize and expand the dry bulk segment of our

fleet. Our heavy dependence on foreign carriage of U.S.-bulk cargoes

deprives the U.S. economy of seafaring and shipbuilding jobs, adds to

the balance-of-payments deficit, deprives the Government of substantial

tax revenues, and leaves the United States dependent on foreign-flag

shipping for a continued supply of raw materials to support the civil

economy and war production in time of war.

I therefore sent to the Congress proposed legislation to strengthen this

woefully weak segment of the U.S.-flag fleet by removing certain

disincentives to U.S. construction of dry bulkers and their operation

under U.S. registry. Enactment of this proposed legislation would

establish the basis for accelerating the rebuilding of the U.S.-flag dry

bulk fleet toward a level commensurate with the position of the United

States as the world’s leading bulk trading country.

During the past year the Administration has stated its support for

legislation that would provide specific Federal assistance for the

installation of fuel-efficient engines in existing American ships, and

would strengthen this country’s shipbuilding mobilization base.

Strengthening the fleet is important, but we must also maintain our

shipbuilding base for future ship construction.

Provisions in existing laws calling for substantial or exclusive use of

American-flag vessels to carry cargoes generated by the Government must

be vigorously pursued.

I have therefore supported requirements that 50 percent of oil purchased

for the strategic petroleum reserve be transported in U.S.-flag vessels,

that the Cargo Preference Act be applied to materials furnished for the

U.S. assisted construction of air bases in Israel, and to cargoes

transported pursuant to the Chrysler Corporation Loan Guarantee Act. In

addition, the deep Seabed Hard Mineral Resources Act requires that at

least one ore carrier per mine site be a U.S.-flag vessel.

Much has been done, and much remains to be done. The FY 1982 budget

includes a $107 million authorization for Construction Differential

Subsidy (“CDS”) funds which, added to the unobligated CDS balance of

$100 million from 1980, and the recently enacted $135 million 1981

authorization, will provide an average of $171 million in CDS funds in

1981 and 1982.

COAL EXPORT POLICY

While significant growth in foreign demand for U.S. steam coal is

foreseen, congestion at major U.S. coal exporting ports such as Hampton

Roads, Virginia, and Baltimore, Maryland, could delay and impede

exports.

My Administration has worked through the Interagency Coal Task Force

Study, which I created, to promote cooperation and coordination of

resources between shippers, railroads, vessel broker/ operators and port

operators, and to determine the most appropriate Federal role in

expanding and modernizing coal export facilities, including dredging

deeper channels at selected ports.

Some progress has already been made. In addition to action taken by

transshippers to reduce the number of coal classifications used whenever

possible, by the Norfolk and Western Railroad to upgrade its computer

capability to quickly inventory its coal cars in its yards, and by the

Chessie Railroad which is reactivating Pier 15 in Newport News and has

established a berth near its Curtis Bay Pier in Baltimore to decrease

delays in vessel berthing, public activities will include:

--A $26.5 million plan developed by the State of Pennsylvania and

Conrail to increase Conrail’s coal handling capacity at Philadelphia;

--A proposal by the State of Virginia to construct a steam coal port on

the Craney Island Disposal area in Portsmouth harbor;

--Plans by Mobile, Alabama, which operates the only publicly owned coal

terminal in the U.S. to enlarge its capacity at McDuffie Island to 10

million tons ground storage and 100 car unit train unloading capability;

--Development at New Orleans of steam coal facilities that are expected

to add over 20 million tons of annual capacity by 1983; and

--The Corps of Engineers, working with other interested Federal

agencies, will determine which ports should be dredged, to what depth

and on what schedule, in order to accommodate larger coal carrying

vessels.

Private industry will, of course, play a major role in developing the

United States’ coal export facilities. The new Administration should

continue to work to eliminate transportation bottlenecks that impede our

access to foreign markets.

Special Needs

WOMEN

The past four years have been years of rapid advancement for women. Our

focus has been two-fold: to provide American women with a full range of

opportunities and to make them a part of the mainstream of every aspect

of our national life and leadership.

I have appointed a record number of women to judgeships and to top

government posts. Fully 22 percent of all my appointees are women, and I

nominated 41 of the 46 women who sit on the Federal bench today. For the

first time in our history, women occupy policymaking positions at the

highest level of every Federal agency and department and have

demonstrated their ability to serve our citizens well.

We have strengthened the rights of employed women by consolidating and

strengthening enforcement of sex discrimination laws under the EEOC, by

expanding employment rights of pregnant women through the Pregnancy

Disability Bill, and by increasing federal employment opportunities for

women through civil service reform, and flexi-time and part-time

employment.

By executive order, I created the first national program to provide

women businessowners with technical assistance, grants, loans, and

improved access to federal contracts.

We have been sensitive to the needs of women who are homemakers. I

established an Office of Families within HHS and sponsored the White

House Conference on Families. We initiated a program targeting CETA

funds to help displaced homemakers. The Social Security system was

amended to eliminate the widow’s penalty and a comprehensive study of

discriminatory provisions and possible changes was presented to

Congress. Legislation was passed to give divorced spouses of foreign

service officers rights to share in pension benefits.

We created an office on domestic violence within HHS to coordinate the

12 agencies that now have domestic violence relief programs, and to

distribute information on the problem and the services available to

victims.

Despite a stringent budget for FY 1981, the Administration consistently

supported the Women’s Educational Equity Act and family planning

activities, as well as other programs that affect women, such as food

stamps, WIC, and social security.

We have been concerned not only about the American woman’s

opportunities, but ensuring equality for women around the world. In

November, 1980, I sent to the Senate the Convention on the Elimination

of All Forms of Discrimination Against Women. This United Nations

document is the most comprehensive and detailed international agreement

which seeks the advancement of women.

On women’s issues, I have sought the counsel of men and women in and out

of government and from all regions of our country. I established two

panels-- the President’s Advisory Committee for Women and the

Interdepartmental Task Force on Women--to advise me on these issues. The

mandate for both groups expired on December 31, but they have left

behind a comprehensive review of the status of women in our society

today. That review provides excellent guidance for the work remaining in

our battle against sex discrimination.

Even though we have made progress, much remains on the agenda for women.

I remain committed to the Equal Rights Amendment and will continue to

work for its passage. It is essential to the goal of bringing America’s

women fully into the mainstream of American life that the ERA be

ratified.

The efforts begun for women in employment, business and education should

be continued and strengthened. Money should be available to states to

establish programs to help the victims of domestic violence. Congress

should pass a national health care plan and a welfare reform program,

and these measures should reflect the needs of women.

The talents of women should continue to be used to the fullest inside

and outside of government, and efforts should continue to see that they

have the widest range of opportunities and options.

HANDICAPPED

I hope that my Administration will be remembered in this area for

leading the way toward full civil rights for handicapped Americans. When

I took office, no federal agency had yet issued 504 regulations. As I

leave office, this first step by every major agency and department in

the federal government is almost complete. But it is only a first step.

The years ahead will require steadfast dedication by the President to

protect and promote these precious rights in the classroom, in the

workplace, and in all public facilities so that handicapped individuals

may join the American mainstream and contribute to the fullest their

resources and talents to our economic and social life.

Just as we supported, in an unprecedented way, the civil rights of

disabled persons in schools and in the workplace, other initiatives in

health prevention, such as our immunization and nutrition programs for

young children and new intense efforts to reverse spinal cord injury,

must continue so that the incidence of disability continues to decline.

This year is the U.N.-declared International Year of Disabled Persons.

We are organizing activities to celebrate and promote this important

commemorative year within the government as well as in cooperation with

private sector efforts in this country and around the world. The

International Year will give our country the opportunity to recognize

the talents and capabilities of our fellow citizens with disabilities.

We can also share our rehabilitation and treatment skills with other

countries and learn from them as well. I am proud that the United States

leads the world in mainstreaming and treating disabled people. However,

we have a long way to go before all psychological and physical barriers

to disabled people are torn down and they can be full participants in

our American way of life. We must pledge our full commitment to this

goal during the International Year.

FAMILIES

Because of my concern for American families, my Administration convened

last year the first White House Conference on Families which involved

seven national hearings, over 506 state and local events, three White

House Conferences, and the direct participation of more than 125,000

citizens. The Conference reaffirmed the centrality of families in our

lives and nation but documented problems American families face as well.

We also established the Office of Families within the Department of

Health and Human Services to review government policies and programs

that affect families.

I expect the departments and agencies within the executive branch of the

Federal government as well as Members of Congress, corporate and

business leaders, and State and local officials across the country, to

study closely the recommendations of the White House Conference and

implement them appropriately. As public policy is developed and

implemented by the Federal government, cognizance of the work of the

Conference should be taken as a pragmatic and essential step.

The Conference has done a good job of establishing an agenda for action

to assure that the policies of the Federal government are more sensitive

in their impact on families. I hope the Congress will review and

seriously consider the Conference’s recommendations.

OLDER AMERICANS

My Administration has taken great strides toward solving the difficult

problems faced by older Americans. Early in my term we worked

successfully with the Congress to assure adequate revenues for the

Social Security Trust Funds. And last year the strength of the Social

Security System was strengthened by legislation I proposed to permit

borrowing among the separate trust funds. I have also signed into law

legislation prohibiting employers from requiring retirement prior to age

70, and removing mandatory retirement for most Federal employees. In

addition, my Administration worked very closely with Congress to amend

the Older Americans Act in a way that has already improved

administration of its housing, social services, food delivery, and

employment programs.

This year, I will be submitting to Congress a budget which again

demonstrates my commitment to programs for the elderly. It will include,

as my previous budgets have, increased funding for nutrition, senior

centers and home health care, and will focus added resources on the

needs of older Americans.

With the 1981 White House Conference on Aging approaching, I hope the

new Administration will make every effort to assure an effective and

useful conference. This Conference should enable older Americans to

voice their concerns and give us guidance in our continued efforts to

ensure the quality of life so richly deserved by our senior citizens.

REFUGEES

We cannot hope to build a just and humane society at home if we ignore

the humanitarian claims of refugees, their lives at stake, who have

nowhere else to turn. Our country can be proud that hundreds of

thousands of people around the world would risk everything they

have--including their own lives--to come to our country.

This Administration initiated and implemented the first comprehensive

reform of our refugee and immigration policies in over 25 years. We also

established the first refugee coordination office in the Department of

State under the leadership of a special ambassador and coordinator for

refugee affairs and programs. The new legislation and the coordinator’s

office will bring common sense and consolidation to our Nation’s

previously fragmented, inconsistent, and in many ways, outdated, refugee

and immigration policies.

With the unexpected arrival of thousands of Cubans and Haitians who

sought refuge in our country last year, outside of our regular

immigration and refugee admissions process, our country and its

government were tested in being compassionate and responsive to a major

human emergency. Because we had taken steps to reorganize our refugee

programs, we met that test successfully. I am proud that the American

people responded to this crisis with their traditional good will and

hospitality. Also, we would never have been able to handle this

unprecedented emergency without the efforts of the private resettlement

agencies who have always been there to help refugees in crises.

Immigrants to this country always contribute more toward making our

country stronger than they ever take from the system. I am confident

that the newest arrivals to our country will carry on this tradition.

While we must remain committed to aiding and assisting those who come to

our shores, at the same time we must uphold our immigration and refugee

policies and provide adequate enforcement resources. As a result of our

enforcement policy, the illegal flow from Cuba has been halted and an

orderly process has been initiated to make certain that our refugee and

immigration laws are honored.

This year the Select Commission on Immigration and Refugee Policy will

complete its work and forward its advice and recommendations. I hope

that the recommendations will be carefully considered by the new

Administration and the Congress, for it is clear that we must take

additional action to keep our immigration policy responsive to

emergencies and ever changing times.

VETERANS

This country and its leadership has a continuing and unique obligation

to the men and women who served their nation in the armed forces and

help maintain or restore peace in the world.

My commitment to veterans, as evidenced by my record, is characterized

by a conscientious and consistent emphasis in these general areas:

First, we have worked to honor the Vietnam veteran. During my

Administration, and under the leadership of VA Administrator Max

Cleland, I was proud to lead our country in an overdue acknowledgement

of our Nation’s gratitude to the men and women who served their country

during the bitter war in Southeast Asia. Their homecoming was deferred

and seemed doomed to be ignored. Our country has matured in the last

four years and at long last we were able to separate the war from the

warrior and honor these veterans. But with our acknowledgement of their

service goes an understanding that some Vietnam veterans have unique

needs and problems.

My Administration was able to launch a long sought after psychological

readjustment and outreach program, unprecedented in its popularity,

sensitivity and success. This program must be continued. The

Administration has also grappled with the difficult questions posed by

some veterans who served in Southeast Asia and were exposed to

potentially harmful substances, including the herbicide known as Agent

Orange. We have launched scientific inquiries that should answer many

veterans’ questions about their health and should provide the basis for

establishing sound compensation policy. We cannot rest until their

concerns are dealt with in a sensitive, expeditious and compassionate

fashion.

Second, we have focused the VA health care system in the needs of the

service-connected disabled veteran. We initiated and are implementing

the first reform of the VA vocational rehabilitation system since its

inception in 1943. Also, my Administration was the first to seek a

cost-of-living increase for the recipients of VA compensation every

year. My last budget also makes such a request. The Administration also

launched the Disabled Veterans Outreach Program in the Department of

Labor which has successfully placed disabled veterans in jobs. Services

provided by the VA health care system will be further targeted to the

special needs of disabled veterans during the coming year.

Third, the VA health care system, the largest in the free world, has

maintained its independence and high quality during my Administration.

We have made the system more efficient and have therefore treated more

veterans than ever before by concentrating on out-patient care and

through modern management improvements. As the median age of the

American veteran population increases, we must concentrate on further

changes within the VA system to keep it independent and to serve as a

model to the nation and to the world as a center for research, treatment

and rehabilitation.

Government Assistance

GENERAL AID TO STATE AND LOCAL GOVERNMENTS

Since taking office, I have been strongly committed to strengthening the

fiscal and economic condition of our Nation’s State and local

governments. I have accomplished this goal by encouraging economic

development of local communities, and by supporting the General Revenue

Sharing and other essential grant-in-aid programs.

GRANTS-IN-AID TO STATES AND LOCALITIES

During my Administration, total grants-in-aid to State and local

governments have increased by more than 40 percent, from $68 billion in

Fiscal Year 1977 to $96 billion in Fiscal Year 1981. This significant

increase in aid has allowed States and localities to maintain services

that are essential to their citizens without imposing onerous tax

burdens. It also has allowed us to establish an unprecedented

partnership between the leaders of the Federal government and State and

local government elected officials.

GENERAL REVENUE SHARING

Last year Congress enacted legislation that extends the General Revenue

Sharing program for three more years. This program is the cornerstone of

our efforts to maintain the fiscal health of our Nation’s local

government. It will provide $4.6 billion in each of the next three years

to cities, counties and towns. This program is essential to the

continued ability of our local governments to provide essential police,

fire and sanitation services.

This legislation renewing GRS will be the cornerstone of

Federal-State-local government relations in the 1980’s. This policy will

emphasize the need for all levels of government to cooperate in order to

meet the needs of the most fiscally strained cities and counties, and

also will emphasize the important role that GRS can play in forging this

partnership. I am grateful that Congress moved quickly to assure that

our Nation’s localities can begin the 1980’s in sound fiscal condition.

COUNTER-CYCLICAL ASSISTANCE

Last year, I proposed that Congress enact a $1 billion counter-cyclical

fiscal assistance program to protect States and localities from

unexpected changes in the national economy. This program unfortunately

was not enacted by the [full] Congress. I, therefore, have not included

funding for counter-cyclical aid in my Fiscal Year 1982 budget.

Nevertheless, I urge Congress to enact a permanent stand-by

counter-cyclical program, so that States and cities can be protected

during the next economic downturn.

URBAN POLICY

Three years ago, I proposed the Nation’s first comprehensive urban

policy. That policy involved more than one hundred improvements in

existing Federal programs, four new Executive Orders and nineteen pieces

of urban-oriented legislation. With Congress’ cooperation, sixteen of

these bills have now been signed into law.

ECONOMIC DEVELOPMENT

One of the principal goals of my domestic policy has been to strengthen

the private sector economic base of our Nation’s economically troubled

urban and rural areas. With Congress’ cooperation, we have substantially

expanded the Federal government’s economic development programs and

provided new tax incentives for private investment in urban and rural

communities. These programs have helped many communities to attract new

private sector jobs and investments and to retain the jobs and

investments that already are in place.

When I took office, the Federal government was spending less than $300

million annually on economic development programs, and only $60 million

of those funds in our Nation’s urban areas. Since that time, we have

created the Urban Development Action Grant (UDAG) program and

substantially expanded the economic development programs in the Commerce

Department. My FY 1982 budget requests more than $1.5 billion for

economic development grants, loans and interest subsidies and almost

$1.5 billion for loan guarantees. Approximately 60 percent of these

funds will be spent in our Nation’s urban areas. In addition, we have

extended the 10 percent investment credit to include rehabilitation of

existing industrial facilities as well as new construction.

I continue to believe that the development of private sector investment

and jobs is the key to revitalizing our Nation’s economically depressed

urban and rural areas. To ensure that the necessary economic development

goes forward, the Congress must continue to provide strong support for

the UDAG program and the programs for the Economic Development

Administration. Those programs provide a foundation for the economic

development of our Nation in the 1980’s.

COMMUNITY DEVELOPMENT

The partnership among Federal, State and local governments to revitalize

our Nation’s communities has been a high priority of my Administration.

When I took office, I proposed a substantial expansion of the Community

Development Block Grant (CDBG) program and the enactment of a new $400

million Urban Development Action Grant (UDAG) program. Both of these

programs have provided essential community and economic development

assistance to our Nation’s cities and counties.

Last year, Congress reauthorized both the CDBG and UDAG programs. The

CDBG program was reauthorized for three more years with annual funding

increases of $150 million, and the UDAG program was extended for three

years at the current funding level of $675 million annually. My 1982

budget requests full funding for both of these programs. These actions

should help our Nation’s cities and counties to continue the progress

they have made in the last three years.

NEIGHBORHOODS

During my Administration we have taken numerous positive steps to

achieve a full partnership of neighborhood organizations and government

at all levels. We have successfully fought against red lining and

housing discrimination. We created innovative Self Help funding and

technical resource transfer mechanisms. We have created unique methods

of access for neighborhood organizations to have a participating role in

Federal and State government decision-making. Neighborhood based

organizations are the threshold of the American community.

The Federal government will need to develop more innovative and

practical ways for neighborhood based organizations to successfully

participate in the identification and solution of local and neighborhood

concerns. Full partnership will only be achieved with the knowing

participation of leaders of government, business, education and unions.

Neither state nor Federal solutions imposed from on high will suffice.

Neighborhoods are the fabric and soul of this great land. Neighborhoods

define the weave that has been used to create a permanent fabric. The

Federal government must take every opportunity to provide access and

influence to the individuals and organizations affected at the

neighborhood level.

Rural Policy

Since the beginning of my Administration, I have been committed to

improving the effectiveness with which the Federal government deals with

the problems and needs of a rapidly changing rural America. The rapid

growth of some rural areas has placed a heavy strain on communities and

their resources. There are also persistent problems of poverty and

economic stagnation in other parts of rural America. Some rural areas

continue to lose population, as they have for the past several decades.

In December, 1979, I announced the Small Community and Rural Development

Policy. It was the culmination of several years’ work and was designed

to address the varying needs of our rural population. In 1980, my

Administration worked with the Congress to pass the Rural Development

Policy Act of 1980, which when fully implemented will allow us to meet

the needs of rural people and their communities more effectively and

more efficiently.

As a result of the policy and the accompanying legislation, we have:

--Created the position of Under Secretary of Agriculture for Small

Community and Rural Development to provide overall leadership.

--Established a White House Working Group to assist in the

implementation of the policy.

--Worked with more than 40 governors to form State rural development

councils to work in partnership with the White House Working Group, and

the Federal agencies, to better deliver State and Federal programs to

rural areas.

--Directed the White House Working Group to annually review existing and

proposed policies, programs, and budget levels to determine their

adequacy in meeting rural needs and the fulfilling of the policy’s

objectives and principles.

This effort on the part of my Administration and the Congress has

resulted in a landmark policy. For the first time, rural affairs has

received the prominence it has always deserved. It is a policy that can

truly help alleviate the diverse and differing problems rural America

will face in the 1980’s.

With the help and dedication of a great many people around the country

who are concerned with rural affairs, we have constructed a mechanism

for dealing effectively with rural problems. There is now a great

opportunity to successfully combine Federal efforts with the efforts of

rural community leaders and residents. It is my hope this spirit of

cooperation and record of accomplishment will be continued in the coming

years.

CONSUMERS

In September, 1979, I signed an Executive Order designed to strengthen

and coordinate Federal consumer programs and to establish procedures to

improve and facilitate consumer participation in government

decision-making. Forty Federal agencies have adopted programs to comply

with the requirements of the Order. These programs will improve

complaint handling, provide better information to consumers, enhance

opportunities for public participation in government proceedings, and

assure that the consumer point of view is considered in all programs,

policies, and regulations.

While substantial progress has been made in assuring a consumer presence

in Federal agencies, work must continue to meet fully the goals of the

Executive Order. Close monitoring of agency compliance with the

requirements of the Order is necessary. Continued evaluation to assure

that the programs are effective and making maximum use of available

resources is also essential. As a complement to these initiatives,

efforts to provide financial assistance in regulatory proceedings to

citizen groups, small businesses, and others whose participation is

limited by their economic circumstances must continue to be pursued.

It is essential that consumer representatives in government pay

particular attention to the needs and interests of low-income consumers

and minorities. The Office of Consumer Affairs’ publication, “People

Power: What Communities Are Doing to Counter Inflation,” catalogues some

of the ways that government and the private sector can assist the less

powerful in our society to help themselves. New ways should be found to

help foster this new people’s movement which is founded on the principle

of self-reliance.

Science and Technology

Science and technology contribute immeasurably to the lives of all

Americans. Our high standard of living is largely the product of the

technology that surrounds us in the home or factory. Our good health is

due in large part to our ever increasing scientific understanding. Our

national security is assured by the application pate science and

technology will bring.

The Federal government has a special role to play in science and

technology. Although the fruits of scientific achievements surround us,

it is often difficult to predict the benefits that will arise from a

given scientific venture. And these benefits, even if predictable, do

not usually lead to ownership rights. Accordingly, the Government has a

special obligation to support science as an investment in our future.

My Administration has sought to reverse a decade-long decline in

funding. Despite the need for fiscal restraint, real support of basic

research has grown nearly 11% during my term in office. And, my

Administration has sought to increase the support of long-term research

in the variety of mission agencies. In this way, we can harness the

American genius for innovation to meet the economic, energy, health, and

security challenges that confront our nation.

--International Relations and National Security. Science and technology

are becoming increasingly important elements of our national security

and foreign policies. This is especially so in the current age of

sophisticated defense systems and of growing dependence among all

countries on modern technology for all aspects of their economic

strength. For these reasons, scientific and technological considerations

have been integral elements of the Administration’s decision-making on

such national security and foreign policy issues as the modernization of

our strategic weaponry, arms control, technology transfer, the growing

bilateral relationship with China, and our relations with the developing

world.

Four themes have shaped U.S. policy in international scientific and

technological cooperation: pursuit of new international initiatives to

advance our own research and development objectives; development and

strengthening of scientific exchange to bridge politically ideological,

and cultural divisions between this country and other countries;

formulation of programs and institutional relations to help developing

countries use science and technology beneficially; and cooperation with

other nations to manage technologies with local impact. At my direction,

my Science and Technology Adviser has actively pursued international

programs in support of these four themes. We have given special

attention to scientific and technical relations with China, to new forms

of scientific and technical cooperation with Japan, to cooperation with

Mexico, other Latin American and Caribbean countries and several states

in Black America, and to the proposed Institute for Scientific and

Technological Cooperation.

In particular our cooperation with developing countries reflects the

importance that each of them has placed on the relationship between

economic growth and scientific and technological capability. It also

reflects their view that the great strength of the U.S. in science and

technology makes close relations with the U.S. technical community an

especially productive means of enhancing this capability. Scientific and

technological assistance is a key linkage between the U.S. and the

developing world, a linkage that has been under-utilized in the past and

one which we must continue to work to strengthen.

--Space Policy. The Administration has established a framework for a

strong and evolving space program for the 1980’s.

The Administration’s space policy reaffirmed the separation of military

space systems and the open civil space program, and at the same time,

provided new guidance on technology transfer between the civil and

military programs. The civil space program centers on three basic

tenets: First, our space policy will reflect a balanced strategy of

applications, science, and technology development. Second, activities

will be pursued when they can be uniquely or more efficiently

accomplished in space. Third, a premature commitment to a high

challenge, space-engineering initiative of the complexity of Apollo is

inappropriate. As the Shuttle development phases down, however, there

will be added flexibility to consider new space applications, space

science and new space exploration activities.

--Technology Development. The Shuttle dominates our technology

development effort and correctly so. It represents one of the most

sophisticated technological challenges ever undertaken, and as a result,

has encountered technical problems. Nonetheless, the first manned

orbital flight is now scheduled for March, 1981. I have been pleased to

support strongly the necessary funds for the Shuttle throughout my

Administration.

--Space Applications. Since 1972, the U.S. has conducted experimental

civil remote sensing through Landsat satellites, thereby realizing many

successful applications. Recognizing this fact, I directed the

implementation of an operational civil land satellite remote sensing

system, with the operational management responsibility in Commerce’s

National Oceanic and Atmospheric Administration. In addition, because

ocean observations from space can meet common civil and military data

requirements, a National Oceanic Satellite System has been proposed as a

major FY 1981 new start.

--Space Science Exploration. The goals of this Administration’s policy

in space science have been to: (1) continue a vigorous program of

planetary exploration to understand the origin and evolution of the

solar system; (2) utilize the space telescope and free-flying satellites

to usher in a new era of astronomy; (3) develop a better understanding

of the sun and its interaction with the terrestrial environment; and (4)

utilize the Shuttle and Spacelab to conduct basic research that

complements earth-based life science investigations.

DISTRICT OF COLUMBIA

Washington, D.C., is home to both the Federal Government and to more

than half a million American citizens. I have worked to improve the

relationship between the Federal establishment and the Government of the

District of Columbia in order to further the goals and spirit of home

rule. The City controls more of its own destiny than was the case four

years ago. Yet, despite the close cooperation between my Administration

and that of Mayor Barry, we have not yet seen the necessary number of

states ratify the Constitutional Amendment granting full voting

representation in the Congress to the citizens of this city. It is my

hope that this inequity will be rectified. The country and the people

who inhabit Washington deserve no less.

THE ARTS

The arts are a precious national resource.

Federal support for the arts has been enhanced during my Administration

by expanding government funding and services to arts institutions,

individual artists, scholars, and teachers through the National

Endowment for the Arts. We have broadened its scope and reach to a more

diverse population. We have also reactivated the Federal Council on the

Arts and Humanities.

It is my hope that during the coming years the new Administration and

the Congress will:

--Continue support of institutions promoting development and

understanding of the arts;

--Encourage business participants in a comprehensive effort to achieve a

truly mixed economy of support for the arts;

--Explore a variety of mechanisms to nurture the creative talent of our

citizens and build audiences for their work;

--Support strong, active National Endowments for the Arts;

--Seek greater recognition for the rich cultural tradition of the

nation’s minorities;

--Provide grants for the arts in low-income neighborhoods.

THE HUMANITIES

In recently reauthorizing Federal appropriations for the National

Endowment for the Humanities, the Congress has once again reaffirmed

that “the encouragement and support of national progress and scholarship

in the humanities . . . while primarily a matter for private and local

initiative, is also an appropriate matter of concern to the Federal

Government” and that “a high civilization must not limit its efforts to

science and technology alone but must give full value and support to the

other great branches of man’s scholarly and cultural activity in order

to achieve a better understanding of the past, a better analysis of the

present, and a better view of the future.”

I believe we are in agreement that the humanities illuminate the values

underlying important personal, social, and national questions raised in

our society by its multiple links to and increasing dependence on

technology, and by the diverse heritage of our many regions and ethnic

groups. The humanities cast light on the broad issue of the role in a

society of men and women of imagination and energy--those individuals

who through their own example define “the spirit of the age,” and in so

doing move nations. Our Government’s support for the humanities, within

the framework laid down by the Congress, is a recognition of their

essential nourishment of the life of the mind and vital enrichment of

our national life.

I will be proposing an increase in funding this year sufficient to

enable the Endowment to maintain the same level of support offered our

citizens in Fiscal Year 1981.

In the allocation of this funding, special emphasis will be given to:

--Humanities education in the nation’s schools, in response to the great

needs that have arisen in this area;

--Scholarly research designed to increase our understanding of the

cultures, traditions, and historical forces at work in other nations and

in our own;

--Drawing attention to the physical disintegration of the raw material

of our cultural heritage--books, manuscripts, periodicals, and other

documents--and to the development of techniques to prevent the

destruction and to preserve those materials; and

--The dissemination of quality programming in the humanities to

increasingly large American audiences through the use of radio and

television.

The dominant effort in the Endowment’s expenditures will be a commitment

to strengthen and promulgate scholarly excellence and achievement in

work in the humanities in our schools, colleges, universities,

libraries, museums and other cultural institutions, as well as in the

work of individual scholars or collaborative groups engaged in advanced

research in the humanities.

In making its grants the Endowment will increase its emphasis on

techniques which stimulate support for the humanities from non-Federal

sources, in order to reinforce our tradition of private philanthropy in

this field, and to insure and expand the financial viability of our

cultural institutions and life.

INSULAR AREAS

I have been firmly committed to self-determination for Puerto Rico, the

Virgin Islands, Guam, American Samoa and the Northern Mariana Islands,

and have vigorously supported the realization of whatever political

status aspirations are democratically chosen by their peoples. This

principle was the keystone of the comprehensive territorial policy I

sent the Congress last year. I am pleased that most of the legislative

elements of that policy were endorsed by the 96th Congress.

The unique cultures, fragile economies, and locations of our Caribbean

and Pacific Islands are distinct assets to the United States which

require the sensitive application of policy. The United States

Government should pursue initiatives begun by my Administration and the

Congress to stimulate insular economic development; enhance treatment

under Federal programs eliminating current inequities; provide vitally

needed special assistance and coordinate and rationalize policies. These

measures will result in greater self-sufficiency and balanced growth. In

particular, I hope that the new Congress will support funding for fiscal

management, comprehensive planning and other technical assistance for

the territories, as well as create the commission I have proposed to

review the applicability of all Federal laws to the insular areas and

make recommendations for appropriate modification.

IV. REMOVING GOVERNMENTAL WASTE AND INEFFICIENCY

One of my major commitments has been to restore public faith in our

Federal government by cutting out waste and inefficiency. In the past

four years, we have made dramatic advances toward this goal, many of

them previously considered impossible to achieve. Where government rules

and operations were unnecessary, they have been eliminated, as with

airline, rail, trucking and financial deregulation. Where government

functions are needed, they have been streamlined, through such landmark

measures as the Civil Service Reform Act of 1978. I hope that the new

administration and the Congress will keep up the momentum we have

established for effective and responsible change in this area of crucial

public concern.

CIVIL SERVICE REFORM

In March 1978, I submitted the Civil Service Reform Act to Congress. I

called it the centerpiece of my efforts to reform and reorganize the

government. With bipartisan support from Congress, the bill passed, and

I am pleased to say that implementation is running well ahead of the

statutory schedule. Throughout the service, we are putting into place

the means to assure that reward and retention are based on performance

and not simply on length of time on the job. In the first real test of

the Reform Act, 98 percent of the eligible top-level managers joined the

Senior Executive Service, choosing to relinquish job protections for the

challenge and potential reward of this new corps of top executives.

Though the Act does not require several of its key elements to be in

operation for another year, some Federal agencies already have

established merit pay systems for GS-13-15 managers, and most agencies

are well on their way to establishing new performance standards for all

their employees. All have paid out, or are now in the process of paying

out, performance bonuses earned by outstanding members of the Senior

Executive Service. Dismissals have increased by 10 percent, and

dismissals specifically for inadequate job performance have risen 1500

percent, since the Act was adopted. Finally, we have established a fully

independent Merit Systems Protection Board and Special Counsel to

protect the rights of whistle-blowers and other Federal employees faced

with threats to their rights.

In 1981, civil service reform faces critical challenges, all agencies

must have fully functioning performance appraisal systems for all

employees, and merit pay systems for compensating the government’s

130,000 GS-13-15 managers. Performance bonuses for members of the Senior

Executive Service will surely receive scrutiny. If this attention is

balanced and constructive, it can only enhance the chances for ultimate

success of our bipartisan commitment to the revolutionary and crucial

“pay for performance” concept.

REGULATORY REFORM

During the past four years we have made tremendous progress in

regulatory reform. We have discarded old economic regulations that

prevented competition and raised consumer costs, and we have imposed

strong management principles on the regulatory programs the country

needs, cutting paperwork and other wasteful burdens. The challenge for

the future is to continue the progress in both areas without crippling

vital health and safety programs.

Our economic deregulation program has achieved major successes in five

areas:

Airlines: The Airline Deregulation Act is generating healthy

competition, saving billions in fares, and making the airlines more

efficient. The Act provides that in 1985 the CAB itself will go out of

existence.

Trucking: The trucking deregulation bill opens the industry to

competition and allows truckers wide latitude on the routes they drive

and the goods they haul. The bill also phases out most of the old law’s

immunity for setting rates. The Congressional Budget Office estimates

these reforms will save as much as $8 billion per year and cut as much

as half a percentage point from the inflation rate.

Railroads: Overregulation has stifled railroad management initiative,

service, and competitive pricing. The new legislation gives the

railroads the freedom they need to rebuild a strong, efficient railroad

industry.

Financial Institutions: With the help of the Congress, over the past

four years we have achieved two major pieces of financial reform

legislation, legislation which has provided the basis for the most

far-reaching changes in the financial services industry since the

1930’s. The International Banking Act of 1978 was designed to reduce the

advantages that foreign banks operating in the United States possessed

in comparison to domestic banks. The Depository Institutions

Deregulation and Monetary Control Act, adopted last March, provides for

the phased elimination of a variety of anti-competitive barriers to

financial institutions and freedom to offer services to and attract the

savings of consumers, especially small savers.

Recently, I submitted to the Congress my Administration’s

recommendations for the phased liberalization of restrictions on

geographic expansion by commercial banks. Last year the Administration

and financial regulatory agencies proposed legislation to permit the

interstate acquisition of failing depository institutions. In view of

the difficult outlook for some depository institutions I strongly urge

the Congress to take prompt favorable action on the failing bank

legislation.

Telecommunications: While Congress did not pass legislation in this

area, the Federal Communications Commission has taken dramatic action to

open all aspects of communications to competition and to eliminate

regulations in the areas where competition made them obsolete. The

public is benefitting from an explosion of competition and new services.

While these initiatives represent dramatic progress in economic

deregulation, continued work is needed. I urge Congress to act on

communications legislation and to consider other proposed deregulation

measures, such as legislation on the bus industry. In addition, the

regulatory commissions must maintain their commitment to competition as

the best regulator of all.

The other part of my reform program covers the regulations that are

needed to protect the health, safety, and welfare of our citizens. For

these regulations, my Administration has created a management program to

cut costs without sacrificing goals. Under my Executive Order 12044, we

required agencies to analyze the costs of their major new rules and

consider alternative approaches, such as performance standards and

voluntary codes, that may make rules less costly and more flexible. We

created the Regulatory Analysis Review Group in the White House to

analyze the most costly proposed new rules and find ways to improve

them. The Regulatory Council was established to provide the first

Government-wide listing of upcoming rules and eliminate overlapping and

conflicting regulations. Agencies have launched “sunset” programs to

weed out outmoded old regulations. We have acted to encourage public

participation in regulatory decision-making.

These steps have already saved billions of dollars in regulatory costs

and slashed thousands of outmoded regulations. We are moving steadily

toward a regulatory system that provides needed protections fairly,

predictably, and at minimum cost.

I urge Congress to continue on this steady path and resist the

simplistic solutions that have been proposed as alternatives. Proposals

like legislative veto and increased judicial review will add another

layer to the regulatory process, making it more cumbersome and

inefficient. The right approach to reform is to improve the individual

statutes, where they need change, and to ensure that the regulatory

agencies implement those statutes sensibly.

PAPERWORK REDUCTION

The Federal Government imposes a huge paperwork burden on business,

local government, and the private sector. Many of these forms are needed

for vital government functions, but others are duplicative, overly

complex or obsolete.

During my Administration we cut the paperwork burden by 15 percent, and

we created procedures to continue this progress. The new Paperwork

Reduction Act centralizes, in OMB, oversight of all agencies’

information requirements and strengthens OMB’s authority to eliminate

needless forms. The “paperwork budget” process, which I established by

executive order, applies the discipline of the budget process to the

hours of reporting time imposed on the public, forcing agencies to

scrutinize all their forms each year. With effective implementation,

these steps should allow further, substantial paperwork cuts in the

years ahead.

TIGHTENING STANDARDS FOR GOVERNMENTAL EFFICIENCY AND INTEGRITY

To develop a foundation to carry out energy policy, we consolidated

scattered energy programs and launched the Synthetic Fuels Corporation;

to give education the priority it deserves and at the same time reduce

HHS to more manageable size, I gave education a seat at the Cabinet

table, to create a stronger system for attacking waste and fraud, I

reorganized audit and investigative functions by putting an Inspector

General in major agencies. Since I took office, we have submitted 14

reorganization initiatives and had them all approved by Congress. We

have saved hundreds of millions of dollars through the adoption of

businesslike cash management principles and set strict standards for

personal financial disclosure and conflict of interest avoidance by high

Federal officials.

To streamline the structure of the government, we have secured approval

of 14 reorganization initiatives, improving the efficiency of the most

important sectors of the government, including energy, education, and

civil rights enforcement. We have eliminated more than 300 advisory

committees as well as other agencies, boards and commissions which were

obsolete or ineffective. Independent Inspectors General have been

appointed in major agencies to attack fraud and waste. More than a

billion dollars of questionable transactions have been identified

through their audit activities.

The adoption of business-like cash management and debt collection

initiatives will save over $1 billion, by streamlining the processing of

receipts, by controlling disbursements more carefully, and by reducing

idle cash balances. Finally this Administration has set strict standards

for personal financial disclosure and conflict of interest avoidance by

high Federal officials, to elevate the level of public trust in the

government.

V. PROTECTING BASIC RIGHTS AND LIBERTIES

I am extremely proud of the advances we have made in ensuring equality

and protecting the basic freedoms of all Americans.

--The Equal Employment Opportunity Commission (EEOC) and the Office of

Federal Contract Compliance (OFCCP) have been reorganized and

strengthened and a permanent civil rights unit has been established in

OMB.

--To avoid fragmented, inconsistent and duplicative enforcement of civil

rights laws, three agencies have been given coordinative and

standard-setting responsibilities in discrete areas: EEOC for all

employment-related activities, HUD for all those relating to housing,

and the Department of Justice for all other areas.

--With the enactment of the Right to Financial Privacy Act and a bill

limiting police search of newsrooms, we have begun to establish a sound,

comprehensive, privacy program.

Ratification of the Equal Rights Amendment must be aggressively pursued.

Only one year remains in which to obtain ratification by three

additional states.

The Congress must give early attention to a number of important bills

which remain. These bills would:

--strengthen the laws against discrimination in housing. Until it is

enacted, the 1968 Civil Rights Act’s promise of equal access to housing

will remain unfulfilled;

--establish a charter for the FBI and the intelligence agencies. The

failure to define in law the duties and responsibilities of these

agencies has made possible some of the abuses which have occurred in

recent years;

--establish privacy safeguards for medical research, bank, insurance,

and credit records; and provide special protection for election fund

transfer systems.

EQUAL RIGHTS AMENDMENT

I remain committed as strongly as possible to the ratification of the

Equal Rights Amendment.

As a result of our efforts in 1978, the Equal Rights Amendment’s

deadline for ratification was extended for three years. We have now one

year and three States left. We cannot afford any delay in marshalling

our resources and efforts to obtain the ratification of those three

additional States.

Although the Congress has no official role in the ratification process

at this point, you do have the ability to affect public opinion and the

support of State Legislators for the Amendment. I urge Members from

States which have not yet ratified the Equal Rights Amendment to use

their influence to secure ratification. I will continue my own efforts

to help ensure ratification of the Equal Rights Amendment.

MARTIN LUTHER KING, JR.

Dr. Martin Luther King, Jr. led this Nation’s effort to provide all its

citizens with civil rights and equal opportunities. His commitment to

human rights, peace and non-violence stands as a monument to his

humanity and courage. As one of our Nation’s most outstanding leaders,

it is appropriate that his birthday be commemorated as a national

holiday. I hope the Congress will enact legislation this year that will

achieve this goal.

FAIR HOUSING

The Fair Housing Act Amendments of 1980 passed the House of

Representatives by an overwhelming bipartisan majority only to die in

the Senate at the close of the 96th Congress. The leaders of both

parties have pledged to make the enactment of fair housing legislation a

top priority of the incoming Congress. The need is pressing and a

strengthened federal enforcement effort must be the primary method of

resolution.

CRIMINAL CODE

The Federal criminal laws are often archaic, frequently contradictory

and imprecise, and clearly in need of revision and codification. The new

Administration should continue the work which has been begun to develop

a Federal criminal code which simplifies and clarifies our criminal

laws, while maintaining our basic civil liberties and protections.

PRIVACY

As our public and private institutions collect more and more information

and as communications and computer technologies advance, we must act to

protect the personal privacy of our citizens.

In the past four years we acted on the report of the Privacy Commission

and established a national privacy policy. We worked with Congress to

pass legislation restricting wiretaps and law enforcement access to bank

records and to reporters’ files. We reduced the number of personal files

held by the government and restricted the transfer of personal

information among Federal agencies. We also worked with the Organization

for Economic Cooperation and Development to establish international

guidelines to protect the privacy of personal information that is

transferred across borders.

VI. PROTECTING AND DEVELOPING OUR NATURAL RESOURCES

Two of our Nation’s most precious natural resources are our environment

and our vast agricultural capacity. From the beginning of my

Administration, I have worked with the Congress to enhance and protect,

as well as develop our natural resources. In the environmental areas, I

have been especially concerned about the importance of balancing the

need for resource development with preserving a clean environment, and

have taken numerous actions to foster this goal. In the agricultural

area, I have taken the steps needed to improve farm incomes and to

increase our agricultural production to record levels. That progress

must be continued in the 1980’s.

ENVIRONMENT

Preserving the quality of our environment has been among the most

important objectives of my Administration and of the Congress. As a

result of these shared commitments and the dedicated efforts of many

members of the Congress and my Administration, we have achieved several

historic accomplishments.

PROTECTION OF ALASKA LANDS

Passage of the Alaska National Interest Lands Conservation Act was one

of the most important conservation actions of this century. At stake was

the fate of millions of acres of beautiful land, outstanding and unique

wildlife populations, native cultures, and the opportunity to ensure

that future generations of Americans would be able to enjoy the benefits

of these nationally significant resources. As a result of the

leadership, commitment, and persistence of my Administration and the

Congressional leadership, the Alaska Lands Bill was signed into law last

December.

The Act adds 97 million acres of new parks and refuges, more than

doubling the size of our National Park and National Wildlife Refuge

Systems. The bill triples the size of our national wilderness system,

increasing its size by 56 million acres. And by adding 25 free-flowing

river segments to the Wild and Scenic River System, the bill almost

doubles the river mileage in that system. The Alaska Lands Act reaffirms

our commitment to the environment and strikes a balance between

protecting areas of great beauty and allowing development of Alaska’s

oil, gas, mineral, and timber resources.

PROTECTION OF NATURAL RESOURCES

In addition to the Alaska Lands Act, over the past four years we have

been able to expand significantly the national wilderness and parks

systems. In 1978, the Congress passed the historical Omnibus Parks Act,

which made 12 additions to the National Park System. The Act also

established the first two national trails since the National Trails

System Act was passed in 1968. Then, in 1980, as a result of my 1979

Environmental Message, the Federal land management agencies have

established almost 300 new National Recreational Trails. With the

completion of the RARE II process, which eliminated the uncertainty

surrounding the status of millions of acres of land, we called for over

15 million acres of new wilderness in the nation’s National Forest, in

1980 the Congress established about 4.5 million acres of wilderness in

the lower 48 states. In addition, the Administration recommended

legislation to protect Lake Tahoe, and through an Executive Order has

already established a mechanism to help ensure the Lake’s protection.

Finally, in 1980 the Administration established the Channel Islands

Marine Sanctuary.

Administration actions over the past four years stressed the importance

of providing Federal support only for water resource projects that are

economically and environmentally sound. This policy should have a major

and lasting influence on the federal government’s role in water resource

development and management. The Administration’s actions to recommend to

the Congress only economically and environmentally sound water resource

projects for funding resulted not only in our opposing uneconomic

projects but also, in 1979, in the first Administration proposal of new

project starts in 4 years.

One of the most significant water policy actions of the past four years

was the Administration’s June 6, 1978 Water Policy Reform Message to the

Congress. This Message established a new national water resources policy

with the following objectives:

--to give priority emphasis to water conservation;

--to consider environmental requirements and values more fully and along

with economic factors in the planning and management of water projects

and programs;

--to enhance cooperation between state and federal agencies in water

resources planning and management.

In addition, the Executive Office of the President established 11 policy

decision criteria to evaluate the proposed federal water projects, the

Water Resources Council developed and adopted a new set of Principles

and Standards for water projects which is binding on all federal

construction agencies, and improved regulations were developed to

implement the National Historic Preservation Act and the Fish and

Wildlife Coordination Act. As a result, water resource projects must be

determined to be economically sound before the Administration will

recommend authorization or appropriation. Over the years ahead, this

policy will help to reduce wasteful federal spending by targeting

federal funds to the highest priority water resource projects.

In the pursuit of this policy, however, we cannot lose projects. In the

part that sound water resource projects play in providing irrigation,

power, and flood control. We must also recognize the special needs of

particular regions of the country in evaluating the need for additional

projects.

ADDRESSING GLOBAL RESOURCE AND ENVIRONMENTAL PROBLEMS

The Global 2000 Report to the President, prepared in response to my 1977

Environment Message, is the first of its kind. Never before has our

government, or any government, taken such a comprehensive, long-range

look at the interrelated global issues of resources, population, and

environment.

The Report’s conclusions are important. They point to a rapid increase

in population and human needs through the year 2000 while at the same

time a decline in the earth’s capacity to meet those needs, unless

nations of the world act decisively to alter current trends.

The United States has contributed actively to a series of U.N.

conferences on the environment, population, and resources, and is

preparing for the 1981 Conference on New and Renewable Sources of

Energy. Following my 1977 Environmental Message, the Administration

development assistance programs have added emphasis to natural resource

management and environmental protection. My 1979 Environmental Message

called attention to the alarming loss of world forests, particularly in

the tropics. An interagency task force on tropical forests has developed

a U.S. government program to encourage conservation and wise management

of tropical forests. The Administration is encouraging action by other

nations and world organizations to the same purpose. The United States

is a world leader in wildlife conservation and the assessment of

environmental effects of government actions. The January 5, 1979,

Executive Order directing U.S. government agencies to consider the

effects of their major actions abroad, is another example of this

leadership.

COMMITMENT TO CONTROL OF POLLUTION AND HAZARDOUS CHEMICALS

Over the past four years, there has been steady progress towards cleaner

air and water, sustained by the commitment of Congress and the

Administration to these important national objectives. In addition, the

Administration has developed several new pollution compliance approaches

such as alternative and innovative waste water treatment projects, the

“bubble” concept, the “offset” policy, and permit consolidation, all of

which are designed to reduce regulatory burdens on the private sector.

One of the most pressing problems to come to light in the past four

years has been improper hazardous waste disposal. The Administration has

moved on three fronts. First, we proposed the Oil Hazardous Substances

and Hazardous Waste Response, Liability and Compensation Act (the

Superfund bill) to provide comprehensive authority and $1.6 billion in

funds to clean up abandoned hazardous waste disposal sites. In November

1980 the Congress passed a Superfund bill which I signed into law.

Second, the administration established a hazardous waste enforcement

strike force to ensure that when available, responsible parties are

required to clean up sites posing dangers to public health and to the

environment. To date, 50 lawsuits have been brought by the strike force.

Third, regulations implementing subtitle C of the Resource Conservation

and Recovery Act were issued. The regulations establish comprehensive

controls for hazardous waste and, together with vigorous enforcement,

will help to ensure that Love Canal will not be repeated.

THE FUTURE

For the future, we cannot, and we must not, forget that we are charged

with the stewardship of an irreplaceable environment and natural

heritage. Our children, and our children’s children, are dependent upon

our maintaining our commitment to preserving and enhancing the quality

of our environment. It is my hope that when our descendants look back on

the 1980’s they will be able to affirm:

--that we kept our commitment to the restoration of environmental

quality;

--that we protected the public health from the continuing dangers of

toxic chemicals, from pollution, from hazardous and radioactive waste,

and that we made our communities safer, healthier and better places to

live;

--that we preserved America’s wilderness areas and particularly its last

great frontier, Alaska, for the benefit of all Americans in perpetuity;

--that we put this nation on a path to a sustainable energy future, one

based increasingly on renewable resources and on energy conservation;

--that we moved to protect America’s countryside and coastland from

mismanagement and irresponsibility;

--that we redirected the management of the nation’s water resources

toward water conservation, sound development and environmental

protection;

--that we faced squarely such worldwide problems as the destruction of

forests, acid rain, carbon dioxide build-up and nuclear proliferation;

and

--that we protected the habitat and the existence of our own species on

this earth.

AGRICULTURE THE FARM ECONOMY

The farm economy is sound and its future is bright. Agriculture remains

a major bulwark of the nation’s economy and an even more important

factor in the world food system. The demand for America’s agricultural

abundance, here and abroad, continues to grow. In the near-term, the

strength of this demand is expected to press hard against supplies,

resulting in continued price strength.

The health and vitality of current-day agriculture represents a

significant departure from the situation that existed when I came to

office four years ago. In January 1977, the farm economy was in serious

trouble. Farm prices and farm income were falling rapidly. Grain prices

were at their lowest levels in years and steadily falling. Livestock

producers, in their fourth straight year of record losses, were

liquidating breeding herds at an unparalleled rate. Dairy farmers were

losing money on every hundredweight of milk they produced. Sugar prices

were in a nosedive.

Through a combination of improvements in old, established programs and

the adoption of new approaches where innovation and change were needed,

my Administration turned this situation around. Commodity prices have

steadily risen. Farm income turned upward. U.S. farm exports set new

records each year, increasing over 80 percent for the four year period.

Livestock producers began rebuilding their herds. Dairy farmers began to

earn a profit again.

RECENT POLICY INITIATIVES

Several major agricultural policy initiatives have been undertaken over

the past year. Some are the culmination of policy proposals made earlier

in this Administration; others are measures taken to help farmers offset

the impact of rapid inflation in production costs. In combination, they

represent a significant strengthening of our nation’s food and

agricultural policy. These initiatives include:

FOOD SECURITY RESERVE

The Congress authorized formation of a 4 million ton food grain reserve

for use in international food assistance. This reserve makes it possible

for the United States to stand behind its food aid commitment to food

deficit nations, even during periods of short supplies and high prices.

This corrects a serious fault in our past food assistance policy.

COMPREHENSIVE CROP INSURANCE

The Congress also authorized a significant new crop insurance program

during 1980. This measure provides farmers with an important new program

tool for sharing the economic risks that are inherent to agriculture.

When fully operational, it will replace a hodgepodge of disaster

programs that suffered from numerous shortcomings.

SPECIAL LOAN RATES

Another legislative measure passed late in the 2nd session of the 96th

Congress authorizes the Secretary of Agriculture to provide higher loan

rates to farmers who enter their grain in the farmer-owned grain

reserve. This additional incentive to participate will further

strengthen the reserve.

INCREASED LOAN PRICES

In July 1980, I administratively raised loan prices for wheat,

feedgrains, and soybeans to help offset the effects of a serious

cost-price squeeze. At the same time, the release and call prices for

the grain reserve were adjusted upward.

HIGHER TARGET PRICES

The Agricultural Adjustment Act of 1980 raised the target prices for

1980-crop wheat and feed grain crops. This change corrected for

shortcomings in the adjustment formula contained in the Food and

Agriculture Act of 1977.

FUTURE AGENDA

The food and agricultural policies adopted by this Administration over

the past four years, including those described above, will provide a

firm foundation for future governmental actions in this field.

Expiration of the Food and Agriculture Act of 1977 later this year will

require early attention by the Congress. With relatively minor changes,

most of the authorities contained in the 1977 Act should be extended in

their present form. The farmer-owned grain reserve has proven to be a

particularly effective means of stabilizing grain markets and should be

preserved in essentially its present form.

Beyond this, it will be important for the Congress to keep a close eye

on price-cost developments in the farm sector. As noted above, some of

the actions I took last year were for the purpose of providing relief

from the cost-price squeeze facing farmers. Should these pressures

continue, further actions might be required.

My Administration has devoted particular attention to the issues of

world hunger, agricultural land use, and the future structure of

American agriculture. I encourage the Congress and the next

Administration to review the results of these landmark enquiries and,

where deemed appropriate, to act on their recommendations.

Following a careful review of the situation, I recently extended the

suspension of grain sales to the Soviet Union. I am satisfied that this

action has served its purpose effectively and fairly. However, as long

as this suspension must remain in effect, it will be important for the

next Administration and the Congress to take whatever actions are

necessary to ensure that the burden does not fall unfairly on our

Nation’s farmers. This has been a key feature of my Administration’s

policy, and it should be maintained.

VII. FOREIGN POLICY

From the time I assumed office four years ago this month, I have

stressed the need for this country to assert a leading role in a world

undergoing the most extensive and intensive change in human history.

My policies have been directed in particular at three areas of change:

--the steady growth and increased projection abroad of Soviet military

power, power that has grown faster than our own over the past two

decades.

--the overwhelming dependence of Western nations, which now increasingly

includes the United States, on vital oil supplies from the Middle East.

--the pressures of change in many nations of the developing world, in

Iran and uncertainty about the future stability of many developing

countries.

As a result of those fundamental facts, we face some of the most serious

challenges in the history of this nation. The Soviet invasion of

Afghanistan is a threat to global peace, to East-West relations, and to

regional stable flow of oil. As the unprecedented relations, an and

overwhelming vote in the General Assembly demonstrated, countries across

the world, and particularly the nonaligned, regard the Soviet invasion

as a threat to their independence and security. Turmoil within the

region adjacent to the Persian Gulf poses risks for the security and

prosperity of every oil importing nation and thus for the entire global

economy. The continuing holding of American hostages in Iran is both an

affront to civilized people everywhere, and a serious impediment to

meeting the self-evident threat to widely-shared common interests,

including those of Iran.

But as we focus our most urgent efforts on pressing problems, we will

continue to pursue the benefits that only change can bring. For it

always has been the essence of America that we want to move on, we

understand that prosperity, progress and most of all peace cannot be had

by standing still. A world of nations striving to preserve their

independence, and of peoples aspiring for economic development and

political freedom, is not a world hostile to the ideals and interests of

the United States. We face powerful adversaries, but we have strong

friends and dependable allies. We have common interests with the vast

majority of the world’s nations and peoples.

There have been encouraging developments in recent years, as well as

matters requiring continued vigilance and concern:

--Our alliances with the world’s most advanced and democratic states

from Western Europe through Japan are stronger than ever.

--We have helped to bring about a dramatic improvement in relations

between Egypt and Israel and an historic step towards a comprehensive

Arab-Israeli settlement.

--Our relations with China are growing closer, providing a major new

dimension in our policy in Asia and the world.

--Across southern Africa from Rhodesia to Namibia we are helping with

the peaceful transition to majority rule in a context of respect for

minority as well as majority rights.

--We have worked domestically and with our allies to respond to an

uncertain energy situation by conservation and diversification of energy

supplies based on internationally agreed targets.

--We have unambiguously demonstrated our commitment to defend Western

interests in Southwest Asia, and we have significantly increased our

ability to do so.

--And over the past four years the U.S. has developed an energy program

which is comprehensive and ambitious. New institutions have been

established such as the Synthetic Fuels Corporation and Solar Bank.

Price decontrol for oil and gas is proceeding. American consumers have

risen to the challenge, and we have experienced real improvements in

consumption patterns.

The central challenge for us today is to our steadfastedness of purpose.

We are no longer tempted by isolationism. But we must also learn to deal

effectively with the contradictions of the world, the need to cooperate

with potential adversaries without euphoria, without undermining our

determination to compete with such adversaries and if necessary confront

the threats they may pose to our security.

We face a broad range of threats and opportunities. We have and should

continue to pursue a broad range of defense, diplomatic and economic

capabilities and objectives.

I see six basic goals for America in the world over the 1980’s:

--First, we will continue, as we have over the past four years, to build

America’s military strength and that of our allies and friends. Neither

the Soviet Union nor any other nation will have reason to question our

will to sustain the strongest and most flexible defense forces.

--Second, we will pursue an active diplomacy in the world, working,

together with our friends and allies, to resolve disputes through

peaceful means and to make any aggressor pay a heavy price.

--Third, we will strive to resolve pressing international economic

problems, particularly energy and inflation, and continue to pursue our

still larger objective of global economic growth through expanded trade

and development assistance and through the preservation of an open

multilateral trading system.

--Fourth, we will continue vigorously to support the process of building

democratic institutions and improving human rights protection around the

world. We are deeply convinced that the future lies not with

dictatorship but democracy.

--Fifth, we remain deeply committed to the process of mutual and

verifiable arms control, particularly to the effort to prevent the

spread and further development of nuclear weapons. Our decision to

defer, but not abandon our efforts to secure ratification of the SALT II

Treaty reflects our firm conviction that the United States has a

profound national security interest in the constraints on Soviet nuclear

forces which only that treaty can provide.

--Sixth, we must continue to look ahead in order to evaluate and respond

to resource, environment and population challenges through the end of

this century.

One very immediate and pressing objective that is uppermost on our minds

and those of the American people is the release of our hostages in Iran.

We have no basic quarrel with the nation, the revolution or the people

of Iran. The threat to them comes not from American policy but from

Soviet actions in the region. We are prepared to work with the

government of Iran to develop a new and mutually beneficial

relationship.

But that will not be possible so long as Iran continues to hold

Americans hostages, in defiance of the world community and civilized

behavior. They must be released unharmed. We have thus far pursued a

measured program of peaceful diplomatic and economic steps in an attempt

to resolve this issue without resorting to other remedies available to

us under international law. This reflects the deep respect of our nation

for the rule of law and for the safety of our people being held, and our

belief that a great power bears a responsibility to use its strength in

a measured and judicious manner. But our patience is not unlimited and

our concern for the well-being of our fellow citizens grows each day.

ENHANCING NATIONAL SECURITY, AMERICAN MILITARY STRENGTH

The maintenance of national security is my first concern, as it has been

for every president before me.

We must have both the military power and the political will to deter our

adversaries and to support our friends and allies.

We must pay whatever price is required to remain the strongest nation in

the world. That price has increased as the military power of our major

adversary has grown and its readiness to use that power been made all

too evident in Afghanistan. The real increases in defense spending,

therefore probably will be higher than previously projected; protecting

our security may require a larger share of our national wealth in the

future.

THE U.S.-SOVIET RELATIONSHIP

We are demonstrating to the Soviet Union across a broad front that it

will pay a heavy price for its aggression in terms of our relationship.

Throughout the last decades U.S.-Soviet relations have been a mixture of

cooperation and competition. The Soviet invasion of Afghanistan and the

imposition of a puppet government have highlighted in the starkest terms

the darker side of their policies, going well beyond competition and the

legitimate pursuit of national interest, and violating all norms of

international law and practice.

This attempt to subjugate an independent, non-aligned Islamic people is

a callous violation of international law and the United Nations Charter,

two fundamentals of international order. Hence, it is also a dangerous

threat to world peace. For the first time since the communization of

Eastern Europe after World War II, the Soviets have sent combat forces

into an area that was not previously under their control, into a

non-aligned and sovereign state.

The destruction of the independence of the Afghanistan government and

the occupation by the Soviet Union have altered the strategic situation

in that part of the world in a very ominous fashion. It has

significantly shortened the striking distance to the Indian Ocean and

the Persian Gulf for the Soviet Union.

It has also eliminated a buffer between the Soviet Union and Pakistan

and presented a new threat to Iran. These two countries are now far more

vulnerable to Soviet political intimidation. If that intimidation were

to prove effective, the Soviet Union could control an area of vital

strategic and economic significance to the survival of Western Europe,

the Far East, and ultimately the United States.

It has now been over a year since the Soviet invasion of Afghanistan

dealt a major blow to U.S.-Soviet relations and the entire international

system. The U.S. response has proven to be serious and far-reaching. It

has been increasingly effective, imposing real and sustained costs on

the U.S.S.R.’s economy and international image.

Meanwhile, we have encouraged and supported efforts to reach a political

settlement in Afghanistan which would lead to a withdrawal of Soviet

forces from that country and meet the interests of all concerned. It is

Soviet intransigence that has kept those efforts from bearing fruit.

Meanwhile, an overwhelming November resolution of the United Nations

General Assembly on Afghanistan has again made clear that the world has

not and will not forget Afghanistan. And our response continues to make

it clear that Soviet use of force in pursuit of its international

objectives is incompatible with the notion of business-as-usual.

BILATERAL COMMUNICATION

U.S.-Soviet relations remain strained by the continued Soviet presence

in Afghanistan, by growing Soviet military capabilities, and by the

Soviets’ apparent willingness to use those capabilities without respect

for the most basic norms of international behavior.

But the U.S.-Soviet relationship remains the single most important

element in determining whether there will be war or peace. And so,

despite serious strains in our relations, we have maintained a dialogue

with the Soviet Union over the past year. Through this dialogue, we have

ensured against bilateral misunderstandings and miscalculations which

might escalate out of control, and have managed to avoid the injection

of superpower rivalries into areas of tension like the Iran-Iraq

conflict.

POLAND

Now, as was the case a year ago, the prospect of Soviet use of force

threatens the international order. The Soviet Union has completed

preparations for a possible military intervention against Poland.

Although the situation in Poland has shown signs of stabilizing

recently, Soviet forces remain in a high state of readiness and they

could move into Poland on short notice. We continue to believe that the

Polish people should be allowed to work out their internal problems

themselves, without outside interference, and we have made clear to the

Soviet leadership that any intervention in Poland would have severe and

prolonged consequences for East-West detente, and U.S.-Soviet relations

in particular.

DEFENSE BUDGET

For many years the Soviets have steadily increased their real defense

spending, expanded their strategic forces, strengthened their forces in

Europe and Asia, and enhanced their capability for projecting military

force around the world directly or through the use of proxies.

Afghanistan dramatizes the vastly increased military power of the Soviet

Union.

The Soviet Union has built a war machine far beyond any reasonable

requirements for their own defense and security. In contrast, our own

defense spending declined in real terms every year from 1968 through

1976.

We have reversed this decline in our own effort. Every year since 1976

there has been a real increase in our defense spending, and our lead has

encouraged increases by our allies. With the support of the Congress, we

must and will make an even greater effort in the years ahead.

The Fiscal Year 1982 budget would increase funding authority for defense

to more than $196 billion. This amount, together with a supplemental

request for FY 1981 of about $6 billion, will more than meet my

Administration’s pledge for a sustained growth of 3 percent in real

expenditures, and provides for 5 percent in program growth in FY 1982

and beyond.

The trends we mean to correct cannot be remedied overnight; we must be

willing to see this program through. To ensure that we do so I am

setting a growth rate for defense that we can sustain over the long

haul.

The defense program I have proposed for the next five years will require

some sacrifice, but sacrifice we can well afford.

The defense program emphasizes four areas:

1. It ensures that our strategic nuclear forces will be equivalent to

those of the Soviet Union and that deterrence against nuclear war will

be maintained; 2. It upgrades our forces so that the military balance

between NATO and the Warsaw Pact will continue to deter the outbreak of

war, conventional or nuclear, in Europe; 3. It provides us the ability

to come quickly to the aid of friends and allies around the globe; 4.

And it ensures that our Navy will continue to be the most powerful on

the seas.

STRATEGIC FORCES

We are strengthening each of the three legs of our strategic forces. The

cruise missile production which will begin next year will modernize our

strategic air deterrent. B-52 capabilities will also be improved. These

steps will maintain and enhance the B-52 fleet by improving its ability

to deliver weapons against increasingly heavily defended targets.

We are also modernizing our strategic submarine force. Four more

POSEIDON submarines backfitted with new, 4,000 mile TRIDENT I missiles

began deployments in 1980. Nine TRIDENT submarines have been authorized

through 1981, and we propose one more each year.

The new M-X missile program to enhance our land-based intercontinental

ballistic missile force continues to make progress. Technical

refinements in the basing design over the last year will result in

operational benefits, lower costs, and reduced environmental impact. The

M-X program continues to be an essential ingredient in our strategic

posture, providing survivability, endurance, secure command and control

and the capability to threaten targets the Soviets hold dear.

Our new systems will enable U.S. strategic forces to maintain

equivalence in the face of the mounting Soviet challenge. We would

however need an even greater investment in strategic systems to meet the

likely Soviet buildup without SALT.

STRATEGIC DOCTRINE

This Administration’s systematic contributions to the necessary

evolution of strategic doctrine began in 1977 when I commissioned a

comprehensive net assessment. From that base a number of thorough

investigations of specific topics continued. I should emphasize that the

need for an evolutionary doctrine is driven not by any change in our

basic objective, which remains peace and freedom for all mankind.

Rather, the need for change is driven by the inexorable buildup of

Soviet military power and the increasing propensity of Soviet leaders to

use this power in coercion and outright aggression to impose their will

on others.

I have codified our evolving strategic doctrine in a number of

interrelated and mutually supporting Presidential Directives. Their

overarching theme is to provide a doctrinal basis, and the specific

program to implement it, that tells the world that no potential

adversary of the United States could ever conclude that the fruits of

his aggression would be significant or worth the enormous costs of our

retaliation.

The Presidential Directives include:

PD-18: An overview of our strategic objectives PD-37: Basic space policy

PD-41: Civil Defense PD-53: Survivability and endurance for

telecommunications PD-57: Mobilization planning PD-58: Continuity of

Government PD-59: Countervailing Strategy for General War.

These policies have been devised to deter, first and foremost, Soviet

aggression. As such they confront not only Soviet military forces but

also Soviet military doctrine. By definition deterrence requires that we

shape Soviet assessments about the risks of war, assessments they will

make using their doctrine, not ours.

But at the same time we in no way seek to emulate their doctrine. In

particular, nothing in our policy contemplates that nuclear warfare

could ever be a deliberate instrument for achieving our own goals of

peace and freedom. Moreover, our policies are carefully devised to

provide the greatest possible incentives and opportunities for future

progress in arms control.

Finally, our doctrinal evolution has been undertaken with appropriate

consultation with our NATO Allies and others. We are fully consistent

with NATO’s strategy of flexible response.

FORCES FOR NATO

We are greatly accelerating our ability to reinforce Western Europe with

massive ground and air forces in a crisis. We are undertaking a major

modernization program for the Army’s weapons and equipment, adding

armor, firepower, and tactical mobility.

We are prepositioning more heavy equipment in Europe to help us cope

with attacks with little warning, and greatly strengthening our airlift

and sealift capabilities.

We are also improving our tactical air forces, buying about 1700 new

fighter and attack aircraft over the next five years, and increasing the

number of Air Force fighter wings by over 10 percent.

We are working closely with our European allies to secure the Host

Nation Support necessary to enable us to deploy more quickly a greater

ratio of combat forces to the European theater at a lower cost to the

United States.

SECURITY ASSISTANCE

As we move to enhance U.S. defense capabilities, we must not lose sight

of the need to assist others in maintaining their own security and

independence. Events since World War II, most recently in Southwest

Asia, have amply demonstrated that U.S. security cannot exist in a

vacuum, and that our own prospects for peace are closely tied to those

of our friends. The security assistance programs which I am proposing

for the coming fiscal year thus directly promote vital U.S. foreign

policy and national security aims, and are integral parts of our efforts

to improve and upgrade our own military forces.

More specifically, these programs, which are part of our overall foreign

aid request, promote U.S. security in two principal ways. First, they

assist friendly and allied nations to develop the capability to defend

themselves and maintain their own independence. An example during this

past year was the timely support provided Thailand to help bolster that

country’s defenses against the large numbers of Soviet-backed Vietnamese

troops ranged along its eastern frontier. In addition, over the years

these programs have been important to the continued independence of

other friends and allies such as Israel, Greece, Turkey and Korea.

Second, security assistance constitutes an essential element in the

broad cooperative relationships we have established with many nations

which permit either U.S. bases on their territory or access by U.S.

forces to their facilities. These programs have been particularly

important with regard to the recently-concluded access agreements with

various countries in the Persian Gulf and Indian Ocean regions and have

been crucial to the protection of our interests throughout Southwest

Asia.

RAPID DEPLOYMENT FORCES

We are systematically enhancing our ability to respond rapidly to

non-NATO contingencies wherever required by our commitments or when our

vital interests are threatened.

The rapid deployment forces we are assembling will be extraordinarily

flexible: They could range in size from a few ships or air squadrons to

formations as large as 100,000 men, together with their support. Our

forces will be prepared for rapid deployment to any region of strategic

significance.

Among the specific initiatives we are taking to help us respond to

crises outside of Europe are:

The development of a new fleet of large cargo aircraft with

intercontinental range; the design and procurement of a force of

Maritime Prepositioning Ships that will carry heavy equipment and

supplies for three Marine Corps brigades; the procurement of fast

sealift ships to move large quantities of men and material quickly from

the U.S. to overseas areas of deployment; increasing training and

exercise activities to ensure that our forces will be well prepared to

deploy and operate in distant areas.

In addition, our European allies have agreed on the importance of

providing support to U.S. deployments to Southwest Asia.

NAVAL FORCES

Seapower is indispensable to our global position, in peace and also in

war. Our shipbuilding program will sustain a 550-ship Navy in the 1990’s

and we will continue to build the most capable ships afloat.

The program I have proposed will assure the ability of our Navy to

operate in high threat areas, to maintain control of the seas and

protect vital lines of communication, both military and economic and to

provide the strong maritime component of our rapid deployment forces.

This is essential for operations in remote areas of the world, where we

cannot predict far in advance the precise location of trouble, or

preposition equipment on land.

MILITARY PERSONNEL

No matter how capable or advanced our weapons systems, our military

security depends on the abilities, the training and the dedication of

the people who serve in our armed forces. I am determined to recruit and

to retain under any foreseeable circumstances an ample level of such

skilled and experienced military personnel. This Administration has

supported for FY 1981 the largest peacetime increase ever in military

pay and allowances.

We have enhanced our readiness and combat endurance by improving the

Reserve Components. All reservists are assigned to units structured to

complement and provide needed depth to our active forces. Some reserve

personnel have also now been equipped with new equipment.

MOBILIZATION PLANNING

We have completed our first phase of mobilization planning, the first

such Presidentially-directed effort since World War II. The

government-wide exercise of our mobilization plans at the end of 1980

showed, first, that planning pays off and, second, that much more needs

to be done.

OUR INTELLIGENCE POSTURE

Our national interests are critically dependent on a strong and

effective intelligence capability. We will maintain and strengthen the

intelligence capabilities needed to assure our national security.

Maintenance of and continued improvements in our multi-faceted

intelligence effort are essential if we are to cope successfully with

the turbulence and uncertainties of today’s world.

The intelligence budget I have submitted to the Congress responds to our

needs in a responsible way, providing for significant growth over the

Fiscal Year 1981 budget. This growth will enable us to develop new

technical means of intelligence collection while also assuring that the

more traditional methods of intelligence work are also given proper

stress. We must continue to integrate both modes of collection in our

analyses.

REGIONAL POLICIES

Every President for over three decades has recognized that America’s

interests are global and that we must pursue a global foreign policy.

Two world wars have made clear our stake in Western Europe and the North

Atlantic area. We are also inextricably linked with the Far East,

politically, economically, and militarily. In both of these, the United

States has a permanent presence and security commitments which would be

automatically triggered. We have become increasingly conscious of our

growing interests in a third area, the Middle East and the Persian Gulf

area.

We have vital stakes in other major regions of the world as well. We

have long recognized that in an era of interdependence, our own security

and prosperity depend upon a larger common effort with friends and

allies throughout the world.

THE ATLANTIC ALLIANCE

In recognition of the threat which the Soviet invasion of Afghanistan

posed to Western interests in both Europe and Southwest Asia, NATO

foreign and defense ministers have expressed full support for U.S.

efforts to develop a capability to respond to a contingency in Southwest

Asia and have approved an extensive program to help fill the gap which

could be created by the diversion of U.S. forces to that region.

The U.S. has not been alone in seeking to maintain stability in the

Southwest Asia area and insure access to the needed resources there. The

European nations with the capability to do so are improving their own

forces in the region and providing greater economic and political

support to the residents of the area. In the face of the potential

danger posed by the Iran-Iraq conflict, we have developed coordination

among the Western forces in the area of the Persian Gulf in order to be

able to safeguard passage in that essential waterway.

Concerning developments in and around Poland the allies have achieved

the highest level of cohesion and unity of purpose in making clear the

effects on future East-West relations of a precipitous Soviet act there.

The alliance has continued to build on the progress of the past three

years in improving its conventional forces through the Long-Term Defense

Program. Though economic conditions throughout Europe today are making

its achievement difficult, the yearly real increase of 3 percent in

defense spending remains a goal actively sought by the alliance.

The NATO alliance also has moved forward during the past year with the

implementation of its historic December 1979 decision to modernize its

Theater Nuclear Force capabilities through deployment of improved

Pershing ballistic missiles and ground-launched cruise missiles in

Europe. Our allies continue to cooperate actively with us in this

important joint endeavor, whose purpose is to demonstrate convincingly

to the Soviet Union the potential costs of a nuclear conflict in Europe.

At the same time, we offered convincing evidence of our commitment to

arms control in Europe by initiating preliminary consultations with the

Soviet Union in Geneva on the subject of negotiated limits on long-range

theater nuclear forces. Also, during 1980 we initiated and carried out a

withdrawal from our nuclear weapons stockpile in Europe of 1,000 nuclear

warheads. This successful drawdown in our nuclear stockpile was a

further tangible demonstration of our commitment to the updating of our

existing theater nuclear forces in Europe.

In the NATO area, we continued to work closely with other countries in

providing resources to help Turkey regain economic health. We regretted

that massive political and internal security problems led the Turkish

military to take over the government on September 12. The new Turkish

authorities are making some progress in resolving those problems, and

they have pledged an early return to civilian government. The tradition

of the Turkish military gives us cause to take that pledge seriously. We

welcomed the reestablishment of Greece’s links to the integrated

military command structure of the Atlantic Alliance--a move which we had

strongly encouraged--as a major step toward strengthening NATO’s vital

southern flank at a time of international crisis and tension in adjacent

areas. Greek reintegration exemplifies the importance which the allies

place on cooperating in the common defense and shows that the allies can

make the difficult decisions necessary to insure their continued

security. We also welcomed the resumption of the intercommunal talks on

Cyprus.

THE U.S. AND THE PACIFIC NATIONS

The United States is a Pacific nation, as much as it is an Atlantic

nation. Our interests in Asia are as important to us as our interests in

Europe. Our trade with Asia is as great as our trade with Europe. During

the past four years we have regained a strong, dynamic and flexible

posture for the United States in this vital region.