Mr. Speaker, Mr. Vice President, Members of the 94th Congress, and distinguished guests: Twenty-six years ago, a freshman Congressman, a young fellow with lots of idealism who was out to change the world, stood before Sam Rayburn in the well of the House and solemnly swore to the same oath that all of you took yesterday--an unforgettable experience, and I congratulate you all. Two days later, that same freshman stood at the back of this great Chamber-over there someplace--as President Truman, all charged up by his single-handed election victory, reported as the Constitution requires on the state of the Union. When the bipartisan applause stopped, President Truman said, "I am happy to report to this 81st Congress that the state of the Union is good. Our Nation is better able than ever before to meet the needs of the American people, and to give them their fair chance in the pursuit of happiness. [It] is foremost among the nations of the world in the search for peace." Today, that freshman Member from Michigan stands where Mr. Truman 
stood, and I must say to you that the state of the Union is not good: Millions of Americans are out of work. 
Recession and inflation are eroding the money of millions more. 
Prices are too high, and sales are too slow. This year's Federal deficit will be about $30 billion; next year's probably $45 billion. 
The national debt will rise to over $500 billion. 
Our plant capacity and productivity are not increasing fast enough. 
We depend on others for essential energy. Some people question their Government's ability to make hard decisions and stick with them; they expect Washington politics as usual. Yet, what President Truman said on January 5, 1949, is even more true in 1975. We are better able to meet our people's needs. All Americans do have a fairer chance to pursue happiness. Not only are we still the foremost nation in the pursuit of peace but today's prospects of attaining it are infinitely brighter. There were 59 million Americans employed at the start of 1949; now there are more than 85 million Americans who have jobs. In comparable dollars, the average income of the American family has doubled during the past 26 years. Now, I want to speak very bluntly. I've got bad news, and I don't expect much, if any, applause. The American people want action, and it will take both the Congress and the President to give them what they want. Progress and solutions can be achieved, and they will be achieved. My message today is not intended to address all of the complex needs of America. I will send separate messages making specific recommendations for domestic legislation, such as the extension of general revenue sharing and the Voting Rights Act. The moment has come to move in a new direction. We can do this by fashioning a new partnership between the Congress on the one hand, the White House on the other, and the people we both represent. Let us mobilize the most powerful and most creative industrial nation that ever existed on this Earth to put all our people to work. The emphasis on our economic efforts must now shift from inflation to jobs. To bolster business and industry and to create new jobs, I propose a 1-year tax reduction of $16 billion. Three-quarters would go to individuals and one-quarter to promote business investment. This cash rebate to individuals amounts to 12 percent of 1974 tax payments-a total cut of $12 billion, with a maximum of $1,000 per return. I call on the Congress to act by April 1. If you do--and I hope you will--the Treasury can send the first check for half of the rebate in May and the second by September. The other one-fourth of the cut, about $4 billion, will go to business, including farms, to promote expansion and to create more jobs. The 1-year reduction for businesses would be in the form of a liberalized investment tax credit increasing the rate to 12 percent for all businesses. This tax cut does not include the more fundamental reforms needed in our tax system. But it points us in the right direction--allowing taxpayers rather than the Government to spend their pay. Cutting taxes now is essential if we are to turn the economy around. A tax cut offers the best hope of creating more jobs. Unfortunately, it will increase the size of the budget deficit. Therefore, it is more important than ever that we take steps to control the growth of Federal expenditures. Part of our trouble is that we have been self-indulgent. For decades, we have been voting ever-increasing levels of Government benefits, and now the bill has come due. We have been adding so many new programs that the size and the growth of the Federal budget has taken on a life of its own. One characteristic of these programs is that their cost increases automatically every year because the number of people eligible for most of the benefits increases every year. When these programs are enacted, there is no dollar amount set. No one knows what they will cost. All we know is that whatever they cost last year, they will cost more next year. It is a question of simple arithmetic. Unless we check the excessive growth of Federal expenditures or impose on ourselves matching increases in taxes, we will continue to run huge inflationary deficits in the Federal budget. If we project the current built-in momentum of Federal spending through the next 15 years, State, Federal, and local government expenditures could easily comprise half of our gross national product. This compares with less than a third in 1975. I have just concluded the process of preparing the budget submissions for fiscal year 1976. In that budget, I will propose legislation to restrain the growth of a number of existing programs. I have also concluded that no new spending programs can be initiated this year, except for energy. Further, I will not hesitate to veto any new spending programs adopted by the Congress. As an additional step toward putting the Federal Government's house in order, I recommend a 5-percent limit on Federal pay increases in 1975. In all Government programs tied to the Consumer Price Index--including social security, civil service and military retirement pay, and food stamps--I also propose a 1-year maximum increase of 5 percent. None of these recommended ceiling limitations, over which Congress has final authority, are easy to propose, because in most cases they involve anticipated payments to many, many deserving people. Nonetheless, it must be done. I must emphasize that I am not asking to eliminate, to reduce, to freeze these payments. I am merely recommending that we slow down the rate at which these payments increase and these programs grow. Only a reduction in the growth of spending can keep Federal borrowing down and reduce the damage to the private sector from high interest rates. Only a reduction in spending can make it possible for the Federal Reserve System to avoid an inflationary growth in the money supply and thus restore balance to our economy. A major reduction in the growth of Federal spending can help dispel the uncertainty that so many feel about our economy and put us on the way to curing our economic ills. If we don't act to slow down the rate of increase in Federal spending, the United States Treasury will be legally obligated to spend more than $360 billion in fiscal year 1976, even if no new programs are enacted. These are not matters of conjecture or prediction, but again, a matter of simple arithmetic. The size of these numbers and their implications for our everyday life and the health of our economic system are shocking. I submitted to the last Congress a list of budget deferrals and rescissions. There will be more cuts recommended in the budget that I will submit. Even so, the level of outlays for fiscal year 1976 is still much, much too high. Not only is it too high for this year but the decisions we make now will inevitably have a major and growing impact on expenditure levels in future years. I think this is a very fundamental issue that we, the Congress and I, must jointly solve. Economic disruptions we and others are experiencing stem in part from the fact that the world price of petroleum has quadrupled in the last year. But in all honesty, we cannot put all of the blame on the oil-exporting nations. We, the United States, are not blameless. Our growing dependence upon foreign sources has been adding to our vulnerability for years and years, and we did nothing to prepare ourselves for such an event as the embargo of 1973. During the 1960's, this country had a surplus capacity of crude oil which we were able to make available to our trading partners whenever there was a disruption of supply. This surplus capacity enabled us to influence both supplies and prices of crude oil throughout the world. Our excess capacity neutralized any effort at establishing an effective cartel, and thus the rest of the world was assured of adequate supplies of oil at reasonable prices. By 1970, our surplus capacity had vanished, and as a consequence, the latent power of the oil cartel could emerge in full force. Europe and Japan, both heavily dependent on imported oil, now struggle to keep their economies in balance. Even the United States, our country, which is far more self-sufficient than most other industrial countries, has been .put under serious pressure. I am proposing a program which will begin to restore our country's surplus capacity in total energy. In this way, we will be able to assure ourselves reliable and adequate energy and help foster a new world energy stability for other major consuming nations. But this Nation and, in fact, the world must face the prospect of energy difficulties between now and 1985. This program will impose burdens on all of us with the aim of reducing our consumption of energy and increasing our production. Great attention has been paid to the considerations of fairness, and I can assure you that the burdens will not fall more harshly on those less able to bear them. I am recommending a plan to make us invulnerable to cutoffs of foreign oil. It will require sacrifices, but it--and this is most important--it will work. I have set the following national energy goals to assure that our future is as secure and as productive as our past: First, we must reduce oil imports by 1 million barrels per day by the end of this year and by 2 million barrels per day by the end of 1977. Second, we must end vulnerability to economic disruption by foreign suppliers by 1985. Third, we must develop our energy technology and resources so that the United States has the ability to supply a significant share of the energy needs of the free world by the end of this century. To attain these objectives, we need immediate action to cut imports. Unfortunately, in the short term there are only a limited number of actions which can increase domestic supply. I will press for all of them. I urge quick action on the necessary legislation to allow commercial production at the Elk Hills, California, Naval Petroleum Reserve. In order that we make greater use of domestic coal resources, I am submitting amendments to the Energy Supply and Environmental Coordination Act which will greatly increase the number of powerplants that can be promptly converted to coal. Obviously, voluntary conservation continues to be essential, but tougher programs are needed--and needed now. Therefore, I am using Presidential powers to raise the fee on all imported crude oil and petroleum products. The crude oil fee level will be increased $1 per barrel on February 1, by $2 per barrel on March 1, and by $3 per barrel on April 1. I will take actions to reduce undue hardships on any geographical region. The foregoing are interim administrative actions. They will be rescinded when the broader but necessary legislation is enacted. To that end, I am requesting the Congress to act within 90 days on a more comprehensive energy tax program. It includes: excise taxes and import fees totaling $2 per barrel on product imports and on all crude oil; deregulation of new natural gas and enactment of a natural gas excise tax. I plan to take Presidential initiative to decontrol the price of domestic crude oil on April 1. I urge the Congress to enact a windfall profits tax by that date to ensure that oil producers do not profit unduly. The sooner Congress acts, the more effective the oil conservation program will be and the quicker the Federal revenues can be returned to our people. I am prepared to use Presidential authority to limit imports, as necessary, to guarantee success. I want you to know that before deciding on my energy conservation program, I considered rationing and higher gasoline taxes as alternatives. In my judgment, neither would achieve the desired results and both would produce unacceptable inequities. A massive program must be initiated to increase energy supply, to cut demand, and provide new standby emergency programs to achieve the independence we want by 1985. The largest part of increased oil production must come from new frontier areas on the Outer Continental Shelf and from the Naval Petroleum Reserve No. 4 in Alaska. It is the intent of this Administration to move ahead with exploration, leasing, and production on those frontier areas of the Outer Continental Shelf where the environmental risks are acceptable. Use of our most abundant domestic resource--coal--is severely limited. We must strike a reasonable compromise on environmental concerns with coal. I am submitting Clean Air [Act] amendments which will allow greater coal use without sacrificing clean air goals. I vetoed the strip mining legislation passed by the last Congress.  With appropriate changes, I will sign a revised version when it comes to the White House. See 1974 volume, Item 326. I am proposing a number of actions to energize our nuclear power program. I will submit legislation to expedite nuclear leasing [licensing] and the rapid selection of sites. In recent months, utilities have cancelled or postponed over 60 percent of planned nuclear expansion and 30 percent of planned additions to non-nuclear capacity. Financing problems for that industry are worsening. I am therefore recommending that the 1-year investment tax credit of 12 percent be extended an additional 2 years to specifically speed the construction of powerplants that do not use natural gas or oil. I am also submitting proposals for selective reform of State utility commission regulations. To provide the critical stability for our domestic energy production in the face of world price uncertainty, I will request legislation to authorize and require tariffs, import quotas, or price floors to protect our energy prices at levels which will achieve energy independence. Increasing energy supplies is not enough. We must take additional steps to cut long-term consumption. I therefore propose to the Congress: legislation to make thermal efficiency standards mandatory for all new buildings in the United States; a new tax credit of up to $150 for those homeowners who install insulation equipment; the establishment of an energy conservation program to help low-income families purchase insulation supplies; legislation to modify and defer automotive pollution standards for 5 years, which will enable us to improve automobile gas mileage by 40 percent by 1980. These proposals and actions, cumulatively, can reduce our dependence on foreign energy supplies from 3 to 5 million barrels per day by 1985. To make the United States invulnerable to foreign disruption, I propose standby emergency legislation and a strategic storage program of 1 billion barrels of oil for domestic needs and 300 million barrels for national defense purposes. I will ask for the funds needed for energy research and development activities. I have established a goal of 1 million barrels of synthetic fuels and shale oil production per day by 1985 together with an incentive program to achieve it. I have a very deep belief in America's capabilities. Within the next 10 years, my program envisions: 200 major nuclear powerplants; 250 major new coal mines; 150 major coal-fired powerplants; 30 major new [oil] refineries; 20 major new synthetic fuel plants; the drilling of many thousands of new oil wells; the insulation of 18 million homes; and the manufacturing and the sale of millions of new automobiles, trucks, and buses that use much less fuel. I happen to believe that we can do it. In another crisis--the one in 1942 President Franklin D. Roosevelt said this country would build 60,000 [50,000] military aircraft. By 1943, production in that program had reached 125,000 aircraft annually. They did it then. We can do it now. If the Congress and the American people will work with me to attain these targets, they will be achieved and will be surpassed. From adversity, let us seize opportunity. Revenues of some $30 billion from higher energy taxes designed to encourage conservation must be refunded to the American people in a manner which corrects distortions in our tax system wrought by inflation. People have been pushed into higher tax brackets by inflation, with consequent reduction in their actual spending power. Business taxes are similarly distorted because inflation exaggerates reported profits, resulting in excessive taxes. Accordingly, I propose that future individual income taxes be reduced by $16.5 billion. This will be done by raising the low-income allowance and reducing tax rates. This continuing tax cut will primarily benefit lower- and middle-income taxpayers. For example, a typical family of four with a gross income of $5,600 now pays $185 in Federal income taxes. Under this tax cut plan, they would pay nothing. A family of four with a gross income of $12,500 now pays $1,260 in Federal taxes. My proposal reduces that total by $300. Families grossing $20,000 would receive a reduction of $210. Those with the very lowest incomes, who can least afford higher costs, must also be compensated. I propose a payment of $80 to every person 18 years of age and older in that very limited category. State and local governments will receive $2 billion in additional revenue sharing to offset their increased energy costs. To offset inflationary distortions and to generate more economic activity, the corporate tax rate will be reduced from 48 percent to 42 percent. Now let me turn, if I might, to the international dimension of the present crisis. At no time in our peacetime history has the state of the Nation depended more heavily on the state of the world. And seldom, if ever, has the state of the world depended more heavily on the state of our Nation. The economic distress is global. We will not solve it at home unless we help to remedy the profound economic dislocation abroad. World trade and monetary structure provides markets, energy, food, and vital raw materials--for all nations. This international system is now in jeopardy. This Nation can be proud of significant achievements in recent years in solving problems and crises. The Berlin agreement, the SALT agreements, our new relationship with China, the unprecedented efforts in the Middle East are immensely encouraging. But the world is not free from crisis. In a world of 150 nations, where nuclear technology is proliferating and regional conflicts continue, international security cannot be taken for granted. 
So, let there be no mistake about it: International cooperation is a vital factor of our lives today. This is not a moment for the American people to turn inward. More than ever before, our own well-being depends on America's determination and America's leadership in the whole wide world. We are a great Nation--spiritually, politically, militarily, diplomatically, and economically. America's commitment to international security has sustained the safety of allies and friends in many areas--in the Middle East, in Europe, and in Asia. Our turning away would unleash new instabilities, new dangers around the globe, which, in turn, would threaten our own security. At the end of World War II, we turned a similar challenge into an historic opportunity and, I might add, an historic achievement. An old order was in disarray; political and economic institutions were shattered. In that period, this Nation and its partners built new institutions, new mechanisms of mutual support and cooperation. Today, as then, we face an historic opportunity. If we act imaginatively and boldly, as we acted then, this period will in retrospect be seen as one of the great creative moments of our Nation's history. The whole world is watching to see how we respond. A resurgent American economy would do more to restore the confidence of the world in its own future than anything else we can do. The program that this Congress passes can demonstrate to the world that we have started to put our own house in order. If we can show that this Nation is able and willing to help other nations meet the common challenge, it can demonstrate that the United States will fulfill its responsibilities as a leader among nations. Quite frankly, at stake is the future of industrialized democracies, which have perceived their destiny in common and sustained it in common for 30 years. The developing nations are also at a turning point. The poorest nations see their hopes of feeding their hungry and developing their societies shattered by the economic crisis. The long-term economic future for the producers of raw materials also depends on cooperative solutions. Our relations with the Communist countries are a basic factor of the world environment. We must seek to build a long-term basis for coexistence. We will stand by our principles. We will stand by our interests. We will act firmly when challenged. The kind of a world we want depends on a broad policy of creating mutual incentives for restraint and for cooperation. As we move forward to meet our global challenges and opportunities, we must have the tools to do the job. Our military forces are strong and ready. This military strength deters aggression against our allies, stabilizes our relations with former adversaries, and protects our homeland. Fully adequate conventional and strategic forces cost many, many billions, but these dollars are sound insurance for our safety and for a more peaceful world. Military strength alone is not sufficient. Effective diplomacy is also essential in preventing conflict, in building world understanding. The Vladivostok negotiations with the Soviet Union represent a major step in moderating strategic arms competition. My recent discussions with the leaders of the Atlantic community, Japan, and South Korea have contributed to meeting the common challenge. But we have serious problems before us that require cooperation between the President and the Congress. By the Constitution and tradition, the execution of foreign policy is the responsibility of the President. In recent years, under the stress of the Vietnam war, legislative restrictions on the President's ability to execute foreign policy and military decisions have proliferated. As a Member of the Congress, I opposed some and I approved others. As President, I welcome the advice and cooperation of the House and the Senate. But if our foreign policy is to be successful, we cannot rigidly restrict in legislation the ability of the President to act. The conduct of negotiations is ill-suited to such limitations. Legislative restrictions, intended for the best motives and purposes, can have the opposite result, as we have seen most recently in our trade relations with the Soviet Union. For my part, I pledge this Administration will act in the closest consultation with the Congress as we face delicate situations and troubled times throughout the globe. When I became President only 5 months ago, I promised the last Congress a policy of communication, conciliation, compromise, and cooperation. I renew that pledge to the new Members of this Congress. Let me sum it up. America needs a new direction, which I have sought to chart here today--a change of course which will: put the unemployed back to work; increase real income and production; restrain the growth of Federal Government spending; achieve energy independence; and advance the cause of world understanding. We have the ability. We have the know-how. In partnership with the American people, we will achieve these objectives. As our 200th anniversary approaches, we owe it to ourselves and to posterity to rebuild our political and economic strength. Let us make America once again and for centuries more to come what it has so long been--a stronghold and a beacon-light of liberty for the whole world. 
Thank you.
Mr. Speaker, Mr. Vice President, Members of the 94th Congress, and distinguished guests: Twenty-six years ago, a freshman Congressman, a young fellow with lots of idealism who was out to change the world, stood before Sam Rayburn in the well of the House and solemnly swore to the same oath that all of you took yesterday--an unforgettable experience, and I congratulate you all. Two days later, that same freshman stood at the back of this great Chamber-over there someplace--as President Truman, all charged up by his single-handed election victory, reported as the Constitution requires on the state of the Union. When the bipartisan applause stopped, President Truman said, "I am happy to report to this 81st Congress that the state of the Union is good. Our Nation is better able than ever before to meet the needs of the American people, and to give them their fair chance in the pursuit of happiness. [It] is foremost among the nations of the world in the search for peace." Today, that freshman Member from Michigan stands where Mr. Truman stood, and I must say to you that the state of the Union is not good: Millions of Americans are out of work. Recession and inflation are eroding the money of millions more. Prices are too high, and sales are too slow. This year's Federal deficit will be about $30 billion; next year's probably $45 billion. The national debt will rise to over $500 billion. Our plant capacity and productivity are not increasing fast enough. We depend on others for essential energy. Some people question their Government's ability to make hard decisions and stick with them; they expect Washington politics as usual. Yet, what President Truman said on January 5, 1949, is even more true in 1975. We are better able to meet our people's needs. All Americans do have a fairer chance to pursue happiness. Not only are we still the foremost nation in the pursuit of peace but today's prospects of attaining it are infinitely brighter. There were 59 million Americans employed at the start of 1949; now there are more than 85 million Americans who have jobs. In comparable dollars, the average income of the American family has doubled during the past 26 years. Now, I want to speak very bluntly. I have got bad news, and I do not expect much, if any, applause. The American people want action, and it will take both the Congress and the President to give them what they want. Progress and solutions can be achieved, and they will be achieved. My message today is not intended to address all of the complex needs of America. I will send separate messages making specific recommendations for domestic legislation, such as the extension of general revenue sharing and the Voting Rights Act. The moment has come to move in a new direction. We can do this by fashioning a new partnership between the Congress on the one hand, the White House on the other, and the people we both represent. Let us mobilize the most powerful and most creative industrial nation that ever existed on this Earth to put all our people to work. The emphasis on our economic efforts must now shift from inflation to jobs. To bolster business and industry and to create new jobs, I propose a 1-year tax reduction of $16 billion. Three-quarters would go to individuals and one-quarter to promote business investment. This cash rebate to individuals amounts to 12 percent of 1974 tax payments-a total cut of $12 billion, with a maximum of $1,000 per return. I call on the Congress to act by April 1. If you do--and I hope you will--the Treasury can send the first check for half of the rebate in May and the second by September. The other one-fourth of the cut, about $4 billion, will go to business, including farms, to promote expansion and to create more jobs. The 1-year reduction for businesses would be in the form of a liberalized investment tax credit increasing the rate to 12 percent for all businesses. This tax cut does not include the more fundamental reforms needed in our tax system. But it points us in the right direction--allowing taxpayers rather than the Government to spend their pay. Cutting taxes now is essential if we are to turn the economy around. A tax cut offers the best hope of creating more jobs. Unfortunately, it will increase the size of the budget deficit. Therefore, it is more important than ever that we take steps to control the growth of Federal expenditures. Part of our trouble is that we have been self-indulgent. For decades, we have been voting ever-increasing levels of Government benefits, and now the bill has come due. We have been adding so many new programs that the size and the growth of the Federal budget has taken on a life of its own. One characteristic of these programs is that their cost increases automatically every year because the number of people eligible for most of the benefits increases every year. When these programs are enacted, there is no dollar amount set. No one knows what they will cost. All we know is that whatever they cost last year, they will cost more next year. It is a question of simple arithmetic. Unless we check the excessive growth of Federal expenditures or impose on ourselves matching increases in taxes, we will continue to run huge inflationary deficits in the Federal budget. If we project the current built-in momentum of Federal spending through the next 15 years, State, Federal, and local government expenditures could easily comprise half of our gross national product. This compares with less than a third in 1975. I have just concluded the process of preparing the budget submissions for fiscal year 1976. In that budget, I will propose legislation to restrain the growth of a number of existing programs. I have also concluded that no new spending programs can be initiated this year, except for energy. Further, I will not hesitate to veto any new spending programs adopted by the Congress. As an additional step toward putting the Federal Government's house in order, I recommend a 5-percent limit on Federal pay increases in 1975. In all Government programs tied to the Consumer Price Index--including social security, civil service and military retirement pay, and food stamps--I also propose a 1-year maximum increase of 5 percent. None of these recommended ceiling limitations, over which Congress has final authority, are easy to propose, because in most cases they involve anticipated payments to many, many deserving people. Nonetheless, it must be done. I must emphasize that I am not asking to eliminate, to reduce, to freeze these payments. I am merely recommending that we slow down the rate at which these payments increase and these programs grow. Only a reduction in the growth of spending can keep Federal borrowing down and reduce the damage to the private sector from high interest rates. Only a reduction in spending can make it possible for the Federal Reserve System to avoid an inflationary growth in the money supply and thus restore balance to our economy. A major reduction in the growth of Federal spending can help dispel the uncertainty that so many feel about our economy and put us on the way to curing our economic ills. If we do not act to slow down the rate of increase in Federal spending, the United States Treasury will be legally obligated to spend more than $360 billion in fiscal year 1976, even if no new programs are enacted. These are not matters of conjecture or prediction, but again, a matter of simple arithmetic. The size of these numbers and their implications for our everyday life and the health of our economic system are shocking. I submitted to the last Congress a list of budget deferrals and rescissions. There will be more cuts recommended in the budget that I will submit. Even so, the level of outlays for fiscal year 1976 is still much, much too high. Not only is it too high for this year but the decisions we make now will inevitably have a major and growing impact on expenditure levels in future years. I think this is a very fundamental issue that we, the Congress and I, must jointly solve. Economic disruptions we and others are experiencing stem in part from the fact that the world price of petroleum has quadrupled in the last year. But in all honesty, we cannot put all of the blame on the oil-exporting nations. We, the United States, are not blameless. Our growing dependence upon foreign sources has been adding to our vulnerability for years and years, and we did nothing to prepare ourselves for such an event as the embargo of 1973. During the 1960's, this country had a surplus capacity of crude oil which we were able to make available to our trading partners whenever there was a disruption of supply. This surplus capacity enabled us to influence both supplies and prices of crude oil throughout the world. Our excess capacity neutralized any effort at establishing an effective cartel, and thus the rest of the world was assured of adequate supplies of oil at reasonable prices. By 1970, our surplus capacity had vanished, and as a consequence, the latent power of the oil cartel could emerge in full force. Europe and Japan, both heavily dependent on imported oil, now struggle to keep their economies in balance. Even the United States, our country, which is far more self-sufficient than most other industrial countries, has been .put under serious pressure. I am proposing a program which will begin to restore our country's surplus capacity in total energy. In this way, we will be able to assure ourselves reliable and adequate energy and help foster a new world energy stability for other major consuming nations. But this Nation and, in fact, the world must face the prospect of energy difficulties between now and 1985. This program will impose burdens on all of us with the aim of reducing our consumption of energy and increasing our production. Great attention has been paid to the considerations of fairness, and I can assure you that the burdens will not fall more harshly on those less able to bear them. I am recommending a plan to make us invulnerable to cutoffs of foreign oil. It will require sacrifices, but it--and this is most important--it will work. I have set the following national energy goals to assure that our future is as secure and as productive as our past: First, we must reduce oil imports by 1 million barrels per day by the end of this year and by 2 million barrels per day by the end of 1977. Second, we must end vulnerability to economic disruption by foreign suppliers by 1985. Third, we must develop our energy technology and resources so that the United States has the ability to supply a significant share of the energy needs of the free world by the end of this century. To attain these objectives, we need immediate action to cut imports. Unfortunately, in the short term there are only a limited number of actions which can increase domestic supply. I will press for all of them. I urge quick action on the necessary legislation to allow commercial production at the Elk Hills, California, Naval Petroleum Reserve. In order that we make greater use of domestic coal resources, I am submitting amendments to the Energy Supply and Environmental Coordination Act which will greatly increase the number of powerplants that can be promptly converted to coal. Obviously, voluntary conservation continues to be essential, but tougher programs are needed--and needed now. Therefore, I am using Presidential powers to raise the fee on all imported crude oil and petroleum products. The crude oil fee level will be increased $1 per barrel on February 1, by $2 per barrel on March 1, and by $3 per barrel on April 1. I will take actions to reduce undue hardships on any geographical region. The foregoing are interim administrative actions. They will be rescinded when the broader but necessary legislation is enacted. To that end, I am requesting the Congress to act within 90 days on a more comprehensive energy tax program. It includes: excise taxes and import fees totaling $2 per barrel on product imports and on all crude oil; deregulation of new natural gas and enactment of a natural gas excise tax. I plan to take Presidential initiative to decontrol the price of domestic crude oil on April 1. I urge the Congress to enact a windfall profits tax by that date to ensure that oil producers do not profit unduly. The sooner Congress acts, the more effective the oil conservation program will be and the quicker the Federal revenues can be returned to our people. I am prepared to use Presidential authority to limit imports, as necessary, to guarantee success. I want you to know that before deciding on my energy conservation program, I considered rationing and higher gasoline taxes as alternatives. In my judgment, neither would achieve the desired results and both would produce unacceptable inequities. A massive program must be initiated to increase energy supply, to cut demand, and provide new standby emergency programs to achieve the independence we want by 1985. The largest part of increased oil production must come from new frontier areas on the Outer Continental Shelf and from the Naval Petroleum Reserve No. 4 in Alaska. It is the intent of this Administration to move ahead with exploration, leasing, and production on those frontier areas of the Outer Continental Shelf where the environmental risks are acceptable. Use of our most abundant domestic resource--coal--is severely limited. We must strike a reasonable compromise on environmental concerns with coal. I am submitting Clean Air [Act] amendments which will allow greater coal use without sacrificing clean air goals. I vetoed the strip mining legislation passed by the last Congress. With appropriate changes, I will sign a revised version when it comes to the White House. See 1974 volume, Item 326. I am proposing a number of actions to energize our nuclear power program. I will submit legislation to expedite nuclear leasing [licensing] and the rapid selection of sites. In recent months, utilities have cancelled or postponed over 60 percent of planned nuclear expansion and 30 percent of planned additions to non-nuclear capacity. Financing problems for that industry are worsening. I am therefore recommending that the 1-year investment tax credit of 12 percent be extended an additional 2 years to specifically speed the construction of powerplants that do not use natural gas or oil. I am also submitting proposals for selective reform of State utility commission regulations. To provide the critical stability for our domestic energy production in the face of world price uncertainty, I will request legislation to authorize and require tariffs, import quotas, or price floors to protect our energy prices at levels which will achieve energy independence. Increasing energy supplies is not enough. We must take additional steps to cut long-term consumption. I therefore propose to the Congress: legislation to make thermal efficiency standards mandatory for all new buildings in the United States; a new tax credit of up to $150 for those homeowners who install insulation equipment; the establishment of an energy conservation program to help low-income families purchase insulation supplies; legislation to modify and defer automotive pollution standards for 5 years, which will enable us to improve automobile gas mileage by 40 percent by 1980. These proposals and actions, cumulatively, can reduce our dependence on foreign energy supplies from 3 to 5 million barrels per day by 1985. To make the United States invulnerable to foreign disruption, I propose standby emergency legislation and a strategic storage program of 1 billion barrels of oil for domestic needs and 300 million barrels for national defense purposes. I will ask for the funds needed for energy research and development activities. I have established a goal of 1 million barrels of synthetic fuels and shale oil production per day by 1985 together with an incentive program to achieve it. I have a very deep belief in America's capabilities. Within the next 10 years, my program envisions: 200 major nuclear powerplants; 250 major new coal mines; 150 major coal-fired powerplants; 30 major new [oil] refineries; 20 major new synthetic fuel plants; the drilling of many thousands of new oil wells; the insulation of 18 million homes; and the manufacturing and the sale of millions of new automobiles, trucks, and buses that use much less fuel. I happen to believe that we can do it. In another crisis--the one in 1942 President Franklin D. Roosevelt said this country would build 60,000 [50,000] military aircraft. By 1943, production in that program had reached 125,000 aircraft annually. They did it then. We can do it now. If the Congress and the American people will work with me to attain these targets, they will be achieved and will be surpassed. From adversity, let us seize opportunity. Revenues of some $30 billion from higher energy taxes designed to encourage conservation must be refunded to the American people in a manner which corrects distortions in our tax system wrought by inflation. People have been pushed into higher tax brackets by inflation, with consequent reduction in their actual spending power. Business taxes are similarly distorted because inflation exaggerates reported profits, resulting in excessive taxes. Accordingly, I propose that future individual income taxes be reduced by $16.5 billion. This will be done by raising the low-income allowance and reducing tax rates. This continuing tax cut will primarily benefit lower- and middle-income taxpayers. For example, a typical family of four with a gross income of $5,600 now pays $185 in Federal income taxes. Under this tax cut plan, they would pay nothing. A family of four with a gross income of $12,500 now pays $1,260 in Federal taxes. My proposal reduces that total by $300. Families grossing $20,000 would receive a reduction of $210. Those with the very lowest incomes, who can least afford higher costs, must also be compensated. I propose a payment of $80 to every person 18 years of age and older in that very limited category. State and local governments will receive $2 billion in additional revenue sharing to offset their increased energy costs. To offset inflationary distortions and to generate more economic activity, the corporate tax rate will be reduced from 48 percent to 42 percent. Now let me turn, if I might, to the international dimension of the present crisis. At no time in our peacetime history has the state of the Nation depended more heavily on the state of the world. And seldom, if ever, has the state of the world depended more heavily on the state of our Nation. The economic distress is global. We will not solve it at home unless we help to remedy the profound economic dislocation abroad. World trade and monetary structure provides markets, energy, food, and vital raw materials--for all nations. This international system is now in jeopardy. This Nation can be proud of significant achievements in recent years in solving problems and crises. The Berlin agreement, the SALT agreements, our new relationship with China, the unprecedented efforts in the Middle East are immensely encouraging. But the world is not free from crisis. In a world of 150 nations, where nuclear technology is proliferating and regional conflicts continue, international security cannot be taken for granted. So, let there be no mistake about it: International cooperation is a vital factor of our lives today. This is not a moment for the American people to turn inward. More than ever before, our own well-being depends on America's determination and America's leadership in the whole wide world. We are a great Nation--spiritually, politically, militarily, diplomatically, and economically. America's commitment to international security has sustained the safety of allies and friends in many areas--in the Middle East, in Europe, and in Asia. Our turning away would unleash new instabilities, new dangers around the globe, which, in turn, would threaten our own security. At the end of World War II, we turned a similar challenge into an historic opportunity and, I might add, an historic achievement. An old order was in disarray; political and economic institutions were shattered. In that period, this Nation and its partners built new institutions, new mechanisms of mutual support and cooperation. Today, as then, we face an historic opportunity. If we act imaginatively and boldly, as we acted then, this period will in retrospect be seen as one of the great creative moments of our Nation's history. The whole world is watching to see how we respond. A resurgent American economy would do more to restore the confidence of the world in its own future than anything else we can do. The program that this Congress passes can demonstrate to the world that we have started to put our own house in order. If we can show that this Nation is able and willing to help other nations meet the common challenge, it can demonstrate that the United States will fulfill its responsibilities as a leader among nations. Quite frankly, at stake is the future of industrialized democracies, which have perceived their destiny in common and sustained it in common for 30 years. The developing nations are also at a turning point. The poorest nations see their hopes of feeding their hungry and developing their societies shattered by the economic crisis. The long-term economic future for the producers of raw materials also depends on cooperative solutions. Our relations with the Communist countries are a basic factor of the world environment. We must seek to build a long-term basis for coexistence. We will stand by our principles. We will stand by our interests. We will act firmly when challenged. The kind of a world we want depends on a broad policy of creating mutual incentives for restraint and for cooperation. As we move forward to meet our global challenges and opportunities, we must have the tools to do the job. Our military forces are strong and ready. This military strength deters aggression against our allies, stabilizes our relations with former adversaries, and protects our homeland. Fully adequate conventional and strategic forces cost many, many billions, but these dollars are sound insurance for our safety and for a more peaceful world. Military strength alone is not sufficient. Effective diplomacy is also essential in preventing conflict, in building world understanding. The Vladivostok negotiations with the Soviet Union represent a major step in moderating strategic arms competition. My recent discussions with the leaders of the Atlantic community, Japan, and South Korea have contributed to meeting the common challenge. But we have serious problems before us that require cooperation between the President and the Congress. By the Constitution and tradition, the execution of foreign policy is the responsibility of the President. In recent years, under the stress of the Vietnam war, legislative restrictions on the President's ability to execute foreign policy and military decisions have proliferated. As a Member of the Congress, I opposed some and I approved others. As President, I welcome the advice and cooperation of the House and the Senate. But if our foreign policy is to be successful, we cannot rigidly restrict in legislation the ability of the President to act. The conduct of negotiations is ill-suited to such limitations. Legislative restrictions, intended for the best motives and purposes, can have the opposite result, as we have seen most recently in our trade relations with the Soviet Union. For my part, I pledge this Administration will act in the closest consultation with the Congress as we face delicate situations and troubled times throughout the globe. When I became President only 5 months ago, I promised the last Congress a policy of communication, conciliation, compromise, and cooperation. I renew that pledge to the new Members of this Congress. Let me sum it up. America needs a new direction, which I have sought to chart here today--a change of course which will: put the unemployed back to work; increase real income and production; restrain the growth of Federal Government spending; achieve energy independence; and advance the because of world understanding. We have the ability. We have the know-how. In partnership with the American people, we will achieve these objectives. As our 200th anniversary approaches, we owe it to ourselves and to posterity to rebuild our political and economic strength. Let us make America once again and for centuries more to come what it has so long been--a stronghold and a beacon-light of liberty for the whole world. Thank you.
speaker vice president members of the 94th congress and distinguished guests years ago a freshman congressman a young fellow with lots of idealism who was out to change the world stood before sam rayburn in the well of the house and solemnly swore to the same oath that all of you took yesterday an unforgettable experience and i congratulate you all two days later that same freshman stood at the back of this great there someplace as president truman all charged up by his election victory reported as the constitution requires on the state of the union when the bipartisan applause stopped president truman said i am happy to report to this 81st congress that the state of the union is good our nation is better able than ever before to meet the needs of the american people and to give them their fair chance in the pursuit of happiness it is foremost among the nations of the world in the search for peace today that freshman member from michigan stands where truman stood and i must say to you that the state of the union is not good millions of americans are out of work recession and inflation are eroding the money of millions more prices are too high and sales are too slow this year federal deficit will be about 30 billion next year probably 45 billion the national debt will rise to over 500 billion our plant capacity and productivity are not increasing fast enough we depend on others for essential energy some people question their government ability to make hard decisions and stick with them they expect washington politics as usual yet what president truman said on january 5 1949 is even more true in 1975 we are better able to meet our people needs all americans do have a fairer chance to pursue happiness not only are we still the foremost nation in the pursuit of peace but today prospects of attaining it are infinitely brighter there were 59 million americans employed at the start of 1949 now there are more than 85 million americans who have jobs in comparable dollars the average income of the american family has doubled during the past 26 years now i want to speak very bluntly i have got bad news and i do not expect much if any applause the american people want action and it will take both the congress and the president to give them what they want progress and solutions can be achieved and they will be achieved my message today is not intended to address all of the complex needs of america i will send separate messages making specific recommendations for domestic legislation such as the extension of general revenue sharing and the voting rights act the moment has come to move in a new direction we can do this by fashioning a new partnership between the congress on the one hand the white house on the other and the people we both represent let us mobilize the most powerful and most creative industrial nation that ever existed on this earth to put all our people to work the emphasis on our economic efforts must now shift from inflation to jobs to bolster business and industry and to create new jobs i propose a tax reduction of 16 billion would go to individuals and to promote business investment this cash rebate to individuals amounts to 12 percent of 1974 tax total cut of 12 billion with a maximum of per return i call on the congress to act by april 1 if you do and i hope you will the treasury can send the first check for half of the rebate in may and the second by september the other of the cut about 4 billion will go to business including farms to promote expansion and to create more jobs the reduction for businesses would be in the form of a liberalized investment tax credit increasing the rate to 12 percent for all businesses this tax cut does not include the more fundamental reforms needed in our tax system but it points us in the right direction allowing taxpayers rather than the government to spend their pay cutting taxes now is essential if we are to turn the economy around a tax cut offers the best hope of creating more jobs unfortunately it will increase the size of the budget deficit therefore it is more important than ever that we take steps to control the growth of federal expenditures part of our trouble is that we have been for decades we have been voting levels of government benefits and now the bill has come due we have been adding so many new programs that the size and the growth of the federal budget has taken on a life of its own one characteristic of these programs is that their cost increases automatically every year because the number of people eligible for most of the benefits increases every year when these programs are enacted there is no dollar amount set no one knows what they will cost all we know is that whatever they cost last year they will cost more next year it is a question of simple arithmetic unless we check the excessive growth of federal expenditures or impose on ourselves matching increases in taxes we will continue to run huge inflationary deficits in the federal budget if we project the current momentum of federal spending through the next 15 years state federal and local government expenditures could easily comprise half of our gross national product this compares with less than a third in 1975 i have just concluded the process of preparing the budget submissions for fiscal year 1976 in that budget i will propose legislation to restrain the growth of a number of existing programs i have also concluded that no new spending programs can be initiated this year except for energy further i will not hesitate to veto any new spending programs adopted by the congress as an additional step toward putting the federal government house in order i recommend a limit on federal pay increases in 1975 in all government programs tied to the consumer price index including social security civil service and military retirement pay and food stamps i also propose a maximum increase of 5 percent none of these recommended ceiling limitations over which congress has final authority are easy to propose because in most cases they involve anticipated payments to many many deserving people nonetheless it must be done i must emphasize that i am not asking to eliminate to reduce to freeze these payments i am merely recommending that we slow down the rate at which these payments increase and these programs grow only a reduction in the growth of spending can keep federal borrowing down and reduce the damage to the private sector from high interest rates only a reduction in spending can make it possible for the federal reserve system to avoid an inflationary growth in the money supply and thus restore balance to our economy a major reduction in the growth of federal spending can help dispel the uncertainty that so many feel about our economy and put us on the way to curing our economic ills if we do not act to slow down the rate of increase in federal spending the united states treasury will be legally obligated to spend more than 360 billion in fiscal year 1976 even if no new programs are enacted these are not matters of conjecture or prediction but again a matter of simple arithmetic the size of these numbers and their implications for our everyday life and the health of our economic system are shocking i submitted to the last congress a list of budget deferrals and rescissions there will be more cuts recommended in the budget that i will submit even so the level of outlays for fiscal year 1976 is still much much too high not only is it too high for this year but the decisions we make now will inevitably have a major and growing impact on expenditure levels in future years i think this is a very fundamental issue that we the congress and i must jointly solve economic disruptions we and others are experiencing stem in part from the fact that the world price of petroleum has quadrupled in the last year but in all honesty we can not put all of the blame on the nations we the united states are not blameless our growing dependence upon foreign sources has been adding to our vulnerability for years and years and we did nothing to prepare ourselves for such an event as the embargo of 1973 during the 1960 this country had a surplus capacity of crude oil which we were able to make available to our trading partners whenever there was a disruption of supply this surplus capacity enabled us to influence both supplies and prices of crude oil throughout the world our excess capacity neutralized any effort at establishing an effective cartel and thus the rest of the world was assured of adequate supplies of oil at reasonable prices by 1970 our surplus capacity had vanished and as a consequence the latent power of the oil cartel could emerge in full force europe and japan both heavily dependent on imported oil now struggle to keep their economies in balance even the united states our country which is far more than most other industrial countries has been under serious pressure i am proposing a program which will begin to restore our country surplus capacity in total energy in this way we will be able to assure ourselves reliable and adequate energy and help foster a new world energy stability for other major consuming nations but this nation and in fact the world must face the prospect of energy difficulties between now and 1985 this program will impose burdens on all of us with the aim of reducing our consumption of energy and increasing our production great attention has been paid to the considerations of fairness and i can assure you that the burdens will not fall more harshly on those less able to bear them i am recommending a plan to make us invulnerable to cutoffs of foreign oil it will require sacrifices but it and this is most important it will work i have set the following national energy goals to assure that our future is as secure and as productive as our past first we must reduce oil imports by 1 million barrels per day by the end of this year and by 2 million barrels per day by the end of 1977 second we must end vulnerability to economic disruption by foreign suppliers by 1985 third we must develop our energy technology and resources so that the united states has the ability to supply a significant share of the energy needs of the free world by the end of this century to attain these objectives we need immediate action to cut imports unfortunately in the short term there are only a limited number of actions which can increase domestic supply i will press for all of them i urge quick action on the necessary legislation to allow commercial production at the elk hills california naval petroleum reserve in order that we make greater use of domestic coal resources i am submitting amendments to the energy supply and environmental coordination act which will greatly increase the number of powerplants that can be promptly converted to coal obviously voluntary conservation continues to be essential but tougher programs are needed and needed now therefore i am using presidential powers to raise the fee on all imported crude oil and petroleum products the crude oil fee level will be increased 1 per barrel on february 1 by 2 per barrel on march 1 and by 3 per barrel on april 1 i will take actions to reduce undue hardships on any geographical region the foregoing are interim administrative actions they will be rescinded when the broader but necessary legislation is enacted to that end i am requesting the congress to act within 90 days on a more comprehensive energy tax program it includes excise taxes and import fees totaling 2 per barrel on product imports and on all crude oil deregulation of new natural gas and enactment of a natural gas excise tax i plan to take presidential initiative to decontrol the price of domestic crude oil on april 1 i urge the congress to enact a windfall profits tax by that date to ensure that oil producers do not profit unduly the sooner congress acts the more effective the oil conservation program will be and the quicker the federal revenues can be returned to our people i am prepared to use presidential authority to limit imports as necessary to guarantee success i want you to know that before deciding on my energy conservation program i considered rationing and higher gasoline taxes as alternatives in my judgment neither would achieve the desired results and both would produce unacceptable inequities a massive program must be initiated to increase energy supply to cut demand and provide new standby emergency programs to achieve the independence we want by 1985 the largest part of increased oil production must come from new frontier areas on the outer continental shelf and from the naval petroleum reserve no 4 in alaska it is the intent of this administration to move ahead with exploration leasing and production on those frontier areas of the outer continental shelf where the environmental risks are acceptable use of our most abundant domestic resource coal is severely limited we must strike a reasonable compromise on environmental concerns with coal i am submitting clean air act amendments which will allow greater coal use without sacrificing clean air goals i vetoed the strip mining legislation passed by the last congress with appropriate changes i will sign a revised version when it comes to the white house see 1974 volume item 326 i am proposing a number of actions to energize our nuclear power program i will submit legislation to expedite nuclear leasing licensing and the rapid selection of sites in recent months utilities have cancelled or postponed over 60 percent of planned nuclear expansion and 30 percent of planned additions to capacity financing problems for that industry are worsening i am therefore recommending that the investment tax credit of 12 percent be extended an additional 2 years to specifically speed the construction of powerplants that do not use natural gas or oil i am also submitting proposals for selective reform of state utility commission regulations to provide the critical stability for our domestic energy production in the face of world price uncertainty i will request legislation to authorize and require tariffs import quotas or price floors to protect our energy prices at levels which will achieve energy independence increasing energy supplies is not enough we must take additional steps to cut consumption i therefore propose to the congress legislation to make thermal efficiency standards mandatory for all new buildings in the united states a new tax credit of up to 150 for those homeowners who install insulation equipment the establishment of an energy conservation program to help families purchase insulation supplies legislation to modify and defer automotive pollution standards for 5 years which will enable us to improve automobile gas mileage by 40 percent by 1980 these proposals and actions cumulatively can reduce our dependence on foreign energy supplies from 3 to 5 million barrels per day by 1985 to make the united states invulnerable to foreign disruption i propose standby emergency legislation and a strategic storage program of 1 billion barrels of oil for domestic needs and 300 million barrels for national defense purposes i will ask for the funds needed for energy research and development activities i have established a goal of 1 million barrels of synthetic fuels and shale oil production per day by 1985 together with an incentive program to achieve it i have a very deep belief in america capabilities within the next 10 years my program envisions 200 major nuclear powerplants 250 major new coal mines 150 major powerplants 30 major new oil refineries 20 major new synthetic fuel plants the drilling of many thousands of new oil wells the insulation of 18 million homes and the manufacturing and the sale of millions of new automobiles trucks and buses that use much less fuel i happen to believe that we can do it in another crisis the one in 1942 president franklin roosevelt said this country would build military aircraft by 1943 production in that program had reached aircraft annually they did it then we can do it now if the congress and the american people will work with me to attain these targets they will be achieved and will be surpassed from adversity let us seize opportunity revenues of some 30 billion from higher energy taxes designed to encourage conservation must be refunded to the american people in a manner which corrects distortions in our tax system wrought by inflation people have been pushed into higher tax brackets by inflation with consequent reduction in their actual spending power business taxes are similarly distorted because inflation exaggerates reported profits resulting in excessive taxes accordingly i propose that future individual income taxes be reduced by billion this will be done by raising the allowance and reducing tax rates this continuing tax cut will primarily benefit and taxpayers for example a typical family of four with a gross income of now pays 185 in federal income taxes under this tax cut plan they would pay nothing a family of four with a gross income of now pays in federal taxes my proposal reduces that total by 300 families grossing would receive a reduction of 210 those with the very lowest incomes who can least afford higher costs must also be compensated i propose a payment of 80 to every person 18 years of age and older in that very limited category state and local governments will receive 2 billion in additional revenue sharing to offset their increased energy costs to offset inflationary distortions and to generate more economic activity the corporate tax rate will be reduced from 48 percent to 42 percent now let me turn if i might to the international dimension of the present crisis at no time in our peacetime history has the state of the nation depended more heavily on the state of the world and seldom if ever has the state of the world depended more heavily on the state of our nation the economic distress is global we will not solve it at home unless we help to remedy the profound economic dislocation abroad world trade and monetary structure provides markets energy food and vital raw materials for all nations this international system is now in jeopardy this nation can be proud of significant achievements in recent years in solving problems and crises the berlin agreement the salt agreements our new relationship with china the unprecedented efforts in the middle east are immensely encouraging but the world is not free from crisis in a world of 150 nations where nuclear technology is proliferating and regional conflicts continue international security can not be taken for granted so let there be no mistake about it international cooperation is a vital factor of our lives today this is not a moment for the american people to turn inward more than ever before our own depends on america determination and america leadership in the whole wide world we are a great nation spiritually politically militarily diplomatically and economically america commitment to international security has sustained the safety of allies and friends in many areas in the middle east in europe and in asia our turning away would unleash new instabilities new dangers around the globe which in turn would threaten our own security at the end of world war ii we turned a similar challenge into an historic opportunity and i might add an historic achievement an old order was in disarray political and economic institutions were shattered in that period this nation and its partners built new institutions new mechanisms of mutual support and cooperation today as then we face an historic opportunity if we act imaginatively and boldly as we acted then this period will in retrospect be seen as one of the great creative moments of our nation history the whole world is watching to see how we respond a resurgent american economy would do more to restore the confidence of the world in its own future than anything else we can do the program that this congress passes can demonstrate to the world that we have started to put our own house in order if we can show that this nation is able and willing to help other nations meet the common challenge it can demonstrate that the united states will fulfill its responsibilities as a leader among nations quite frankly at stake is the future of industrialized democracies which have perceived their destiny in common and sustained it in common for 30 years the developing nations are also at a turning point the poorest nations see their hopes of feeding their hungry and developing their societies shattered by the economic crisis the economic future for the producers of raw materials also depends on cooperative solutions our relations with the communist countries are a basic factor of the world environment we must seek to build a basis for coexistence we will stand by our principles we will stand by our interests we will act firmly when challenged the kind of a world we want depends on a broad policy of creating mutual incentives for restraint and for cooperation as we move forward to meet our global challenges and opportunities we must have the tools to do the job our military forces are strong and ready this military strength deters aggression against our allies stabilizes our relations with former adversaries and protects our homeland fully adequate conventional and strategic forces cost many many billions but these dollars are sound insurance for our safety and for a more peaceful world military strength alone is not sufficient effective diplomacy is also essential in preventing conflict in building world understanding the vladivostok negotiations with the soviet union represent a major step in moderating strategic arms competition my recent discussions with the leaders of the atlantic community japan and south korea have contributed to meeting the common challenge but we have serious problems before us that require cooperation between the president and the congress by the constitution and tradition the execution of foreign policy is the responsibility of the president in recent years under the stress of the vietnam war legislative restrictions on the president ability to execute foreign policy and military decisions have proliferated as a member of the congress i opposed some and i approved others as president i welcome the advice and cooperation of the house and the senate but if our foreign policy is to be successful we can not rigidly restrict in legislation the ability of the president to act the conduct of negotiations is to such limitations legislative restrictions intended for the best motives and purposes can have the opposite result as we have seen most recently in our trade relations with the soviet union for my part i pledge this administration will act in the closest consultation with the congress as we face delicate situations and troubled times throughout the globe when i became president only 5 months ago i promised the last congress a policy of communication conciliation compromise and cooperation i renew that pledge to the new members of this congress let me sum it up america needs a new direction which i have sought to chart here today a change of course which will put the unemployed back to work increase real income and production restrain the growth of federal government spending achieve energy independence and advance the because of world understanding we have the ability we have the in partnership with the american people we will achieve these objectives as our 200th anniversary approaches we owe it to ourselves and to posterity to rebuild our political and economic strength let us make america once again and for centuries more to come what it has so long been a stronghold and a of liberty for the whole world thank you
speaker vice president members 94th congress distinguished guests years ago freshman congressman young fellow lots idealism change world stood sam rayburn well house solemnly swore oath took yesterday unforgettable experience congratulate two days later freshman stood back great someplace president truman charged election victory reported constitution requires state union bipartisan applause stopped president truman said happy report 81st congress state union good nation better able ever meet needs american people give fair chance pursuit happiness foremost among nations world search peace today freshman member michigan stands truman stood must say state union good millions americans work recession inflation eroding money millions prices high sales slow year federal deficit 30 billion next year probably 45 billion national debt rise 500 billion plant capacity productivity increasing fast enough depend others essential energy people question government ability make hard decisions stick expect washington politics usual yet president truman said january 5 1949 even true 1975 better able meet people needs americans fairer chance pursue happiness still foremost nation pursuit peace today prospects attaining infinitely brighter 59 million americans employed start 1949 85 million americans jobs comparable dollars average income american family doubled past 26 years want speak bluntly got bad news expect much applause american people want action take congress president give want progress solutions achieved achieved message today intended address complex needs america send separate messages making specific recommendations domestic legislation extension general revenue sharing voting rights act moment come move new direction fashioning new partnership congress one hand white house people represent let us mobilize powerful creative industrial nation ever existed earth put people work emphasis economic efforts must shift inflation jobs bolster business industry create new jobs propose tax reduction 16 billion would go individuals promote business investment cash rebate individuals amounts 12 percent 1974 tax total cut 12 billion maximum per return call congress act april 1 hope treasury send first check half rebate may second september cut 4 billion go business including farms promote expansion create jobs reduction businesses would form liberalized investment tax credit increasing rate 12 percent businesses tax cut include fundamental reforms needed tax system points us right direction allowing taxpayers rather government spend pay cutting taxes essential turn economy around tax cut offers best hope creating jobs unfortunately increase size budget deficit therefore important ever take steps control growth federal expenditures part trouble decades voting levels government benefits bill come due adding many new programs size growth federal budget taken life one characteristic programs cost increases automatically every year number people eligible benefits increases every year programs enacted dollar amount set one knows cost know whatever cost last year cost next year question simple arithmetic unless check excessive growth federal expenditures impose matching increases taxes continue run huge inflationary deficits federal budget project current momentum federal spending next 15 years state federal local government expenditures could easily comprise half gross national product compares less third 1975 concluded process preparing budget submissions fiscal year 1976 budget propose legislation restrain growth number existing programs also concluded new spending programs initiated year except energy hesitate veto new spending programs adopted congress additional step toward putting federal government house order recommend limit federal pay increases 1975 government programs tied consumer price index including social security civil service military retirement pay food stamps also propose maximum increase 5 percent none recommended ceiling limitations congress final authority easy propose cases involve anticipated payments many many deserving people nonetheless must done must emphasize asking eliminate reduce freeze payments merely recommending slow rate payments increase programs grow reduction growth spending keep federal borrowing reduce damage private sector high interest rates reduction spending make possible federal reserve system avoid inflationary growth money supply thus restore balance economy major reduction growth federal spending help dispel uncertainty many feel economy put us way curing economic ills act slow rate increase federal spending united states treasury legally obligated spend 360 billion fiscal year 1976 even new programs enacted matters conjecture prediction matter simple arithmetic size numbers implications everyday life health economic system shocking submitted last congress list budget deferrals rescissions cuts recommended budget submit even level outlays fiscal year 1976 still much much high high year decisions make inevitably major growing impact expenditure levels future years think fundamental issue congress must jointly solve economic disruptions others experiencing stem part fact world price petroleum quadrupled last year honesty put blame nations united states blameless growing dependence upon foreign sources adding vulnerability years years nothing prepare event embargo 1973 1960 country surplus capacity crude oil able make available trading partners whenever disruption supply surplus capacity enabled us influence supplies prices crude oil throughout world excess capacity neutralized effort establishing effective cartel thus rest world assured adequate supplies oil reasonable prices 1970 surplus capacity vanished consequence latent power oil cartel could emerge full force europe japan heavily dependent imported oil struggle keep economies balance even united states country far industrial countries serious pressure proposing program begin restore country surplus capacity total energy way able assure reliable adequate energy help foster new world energy stability major consuming nations nation fact world must face prospect energy difficulties 1985 program impose burdens us aim reducing consumption energy increasing production great attention paid considerations fairness assure burdens fall harshly less able bear recommending plan make us invulnerable cutoffs foreign oil require sacrifices important work set following national energy goals assure future secure productive past first must reduce oil imports 1 million barrels per day end year 2 million barrels per day end 1977 second must end vulnerability economic disruption foreign suppliers 1985 third must develop energy technology resources united states ability supply significant share energy needs free world end century attain objectives need immediate action cut imports unfortunately short term limited number actions increase domestic supply press urge quick action necessary legislation allow commercial production elk hills california naval petroleum reserve order make greater use domestic coal resources submitting amendments energy supply environmental coordination act greatly increase number powerplants promptly converted coal obviously voluntary conservation continues essential tougher programs needed needed therefore using presidential powers raise fee imported crude oil petroleum products crude oil fee level increased 1 per barrel february 1 2 per barrel march 1 3 per barrel april 1 take actions reduce undue hardships geographical region foregoing interim administrative actions rescinded broader necessary legislation enacted end requesting congress act within 90 days comprehensive energy tax program includes excise taxes import fees totaling 2 per barrel product imports crude oil deregulation new natural gas enactment natural gas excise tax plan take presidential initiative decontrol price domestic crude oil april 1 urge congress enact windfall profits tax date ensure oil producers profit unduly sooner congress acts effective oil conservation program quicker federal revenues returned people prepared use presidential authority limit imports necessary guarantee success want know deciding energy conservation program considered rationing higher gasoline taxes alternatives judgment neither would achieve desired results would produce unacceptable inequities massive program must initiated increase energy supply cut demand provide new standby emergency programs achieve independence want 1985 largest part increased oil production must come new frontier areas outer continental shelf naval petroleum reserve 4 alaska intent administration move ahead exploration leasing production frontier areas outer continental shelf environmental risks acceptable use abundant domestic resource coal severely limited must strike reasonable compromise environmental concerns coal submitting clean air act amendments allow greater coal use without sacrificing clean air goals vetoed strip mining legislation passed last congress appropriate changes sign revised version comes white house see 1974 volume item 326 proposing number actions energize nuclear power program submit legislation expedite nuclear leasing licensing rapid selection sites recent months utilities cancelled postponed 60 percent planned nuclear expansion 30 percent planned additions capacity financing problems industry worsening therefore recommending investment tax credit 12 percent extended additional 2 years specifically speed construction powerplants use natural gas oil also submitting proposals selective reform state utility commission regulations provide critical stability domestic energy production face world price uncertainty request legislation authorize require tariffs import quotas price floors protect energy prices levels achieve energy independence increasing energy supplies enough must take additional steps cut consumption therefore propose congress legislation make thermal efficiency standards mandatory new buildings united states new tax credit 150 homeowners install insulation equipment establishment energy conservation program help families purchase insulation supplies legislation modify defer automotive pollution standards 5 years enable us improve automobile gas mileage 40 percent 1980 proposals actions cumulatively reduce dependence foreign energy supplies 3 5 million barrels per day 1985 make united states invulnerable foreign disruption propose standby emergency legislation strategic storage program 1 billion barrels oil domestic needs 300 million barrels national defense purposes ask funds needed energy research development activities established goal 1 million barrels synthetic fuels shale oil production per day 1985 together incentive program achieve deep belief america capabilities within next 10 years program envisions 200 major nuclear powerplants 250 major new coal mines 150 major powerplants 30 major new oil refineries 20 major new synthetic fuel plants drilling many thousands new oil wells insulation 18 million homes manufacturing sale millions new automobiles trucks buses use much less fuel happen believe another crisis one 1942 president franklin roosevelt said country would build military aircraft 1943 production program reached aircraft annually congress american people work attain targets achieved surpassed adversity let us seize opportunity revenues 30 billion higher energy taxes designed encourage conservation must refunded american people manner corrects distortions tax system wrought inflation people pushed higher tax brackets inflation consequent reduction actual spending power business taxes similarly distorted inflation exaggerates reported profits resulting excessive taxes accordingly propose future individual income taxes reduced billion done raising allowance reducing tax rates continuing tax cut primarily benefit taxpayers example typical family four gross income pays 185 federal income taxes tax cut plan would pay nothing family four gross income pays federal taxes proposal reduces total 300 families grossing would receive reduction 210 lowest incomes least afford higher costs must also compensated propose payment 80 every person 18 years age older limited category state local governments receive 2 billion additional revenue sharing offset increased energy costs offset inflationary distortions generate economic activity corporate tax rate reduced 48 percent 42 percent let turn might international dimension present crisis time peacetime history state nation depended heavily state world seldom ever state world depended heavily state nation economic distress global solve home unless help remedy profound economic dislocation abroad world trade monetary structure provides markets energy food vital raw materials nations international system jeopardy nation proud significant achievements recent years solving problems crises berlin agreement salt agreements new relationship china unprecedented efforts middle east immensely encouraging world free crisis world 150 nations nuclear technology proliferating regional conflicts continue international security taken granted let mistake international cooperation vital factor lives today moment american people turn inward ever depends america determination america leadership whole wide world great nation spiritually politically militarily diplomatically economically america commitment international security sustained safety allies friends many areas middle east europe asia turning away would unleash new instabilities new dangers around globe turn would threaten security end world war ii turned similar challenge historic opportunity might add historic achievement old order disarray political economic institutions shattered period nation partners built new institutions new mechanisms mutual support cooperation today face historic opportunity act imaginatively boldly acted period retrospect seen one great creative moments nation history whole world watching see respond resurgent american economy would restore confidence world future anything else program congress passes demonstrate world started put house order show nation able willing help nations meet common challenge demonstrate united states fulfill responsibilities leader among nations quite frankly stake future industrialized democracies perceived destiny common sustained common 30 years developing nations also turning point poorest nations see hopes feeding hungry developing societies shattered economic crisis economic future producers raw materials also depends cooperative solutions relations communist countries basic factor world environment must seek build basis coexistence stand principles stand interests act firmly challenged kind world want depends broad policy creating mutual incentives restraint cooperation move forward meet global challenges opportunities must tools job military forces strong ready military strength deters aggression allies stabilizes relations former adversaries protects homeland fully adequate conventional strategic forces cost many many billions dollars sound insurance safety peaceful world military strength alone sufficient effective diplomacy also essential preventing conflict building world understanding vladivostok negotiations soviet union represent major step moderating strategic arms competition recent discussions leaders atlantic community japan south korea contributed meeting common challenge serious problems us require cooperation president congress constitution tradition execution foreign policy responsibility president recent years stress vietnam war legislative restrictions president ability execute foreign policy military decisions proliferated member congress opposed approved others president welcome advice cooperation house senate foreign policy successful rigidly restrict legislation ability president act conduct negotiations limitations legislative restrictions intended best motives purposes opposite result seen recently trade relations soviet union part pledge administration act closest consultation congress face delicate situations troubled times throughout globe became president 5 months ago promised last congress policy communication conciliation compromise cooperation renew pledge new members congress let sum america needs new direction sought chart today change course put unemployed back work increase real income production restrain growth federal government spending achieve energy independence advance world understanding ability partnership american people achieve objectives 200th anniversary approaches owe posterity rebuild political economic strength let us make america centuries come long stronghold liberty whole world thank
speaker vice president member 94th congress distinguish guest year ago freshman congressman young fellow lot idealism change world stand sam rayburn well house solemnly swear oath take yesterday unforgettable experience congratulate two day later freshman stand back great someplace president truman charge election victory report constitution require state union bipartisan applause stop president truman say happy report 81st congress state union good nation well able ever meet needs american people give fair chance pursuit happiness foremost among nation world search peace today freshman member michigan stand truman stood must say state union good million american work recession inflation erode money million price high sale slow year federal deficit 30 billion next year probably 45 billion national debt rise 500 billion plant capacity productivity increase fast enough depend others essential energy people question government ability make hard decision stick expect washington politics usual yet president truman say january 5 1949 even true 1975 well able meet people need american fairer chance pursue happiness still foremost nation pursuit peace today prospect attain infinitely brighter 59 million american employ start 1949 85 million american job comparable dollar average income american family double past 26 year want speak bluntly get bad news expect much applause american people want action take congress president give want progress solution achieve achieved message today intend address complex need america send separate message make specific recommendation domestic legislation extension general revenue share vote right act moment come move new direction fashion new partnership congress one hand white house people represent let u mobilize powerful creative industrial nation ever exist earth put people work emphasis economic effort must shift inflation job bolster business industry create new job propose tax reduction 16 billion would go individual promote business investment cash rebate individual amount 12 percent 1974 tax total cut 12 billion maximum per return call congress act april 1 hope treasury send first check half rebate may second september cut 4 billion go business include farm promote expansion create job reduction business would form liberalized investment tax credit increase rate 12 percent business tax cut include fundamental reform need tax system point u right direction allow taxpayer rather government spend pay cutting tax essential turn economy around tax cut offer best hope create job unfortunately increase size budget deficit therefore important ever take step control growth federal expenditure part trouble decade voting level government benefit bill come due add many new program size growth federal budget take life one characteristic program cost increase automatically every year number people eligible benefit increase every year program enact dollar amount set one know cost know whatever cost last year cost next year question simple arithmetic unless check excessive growth federal expenditure impose match increase tax continue run huge inflationary deficit federal budget project current momentum federal spending next 15 year state federal local government expenditure could easily comprise half gross national product compare less third 1975 conclude process prepare budget submission fiscal year 1976 budget propose legislation restrain growth number exist program also conclude new spending program initiate year except energy hesitate veto new spending program adopt congress additional step toward put federal government house order recommend limit federal pay increase 1975 government program tie consumer price index include social security civil service military retirement pay food stamp also propose maximum increase 5 percent none recommend ceiling limitation congress final authority easy propose case involve anticipated payment many many deserve people nonetheless must do must emphasize ask eliminate reduce freeze payment merely recommend slow rate payment increase program grow reduction growth spending keep federal borrowing reduce damage private sector high interest rate reduction spending make possible federal reserve system avoid inflationary growth money supply thus restore balance economy major reduction growth federal spending help dispel uncertainty many feel economy put u way cure economic ill act slow rate increase federal spending united state treasury legally obligate spend 360 billion fiscal year 1976 even new program enact matter conjecture prediction matter simple arithmetic size number implication everyday life health economic system shock submit last congress list budget deferral rescission cut recommend budget submit even level outlay fiscal year 1976 still much much high high year decision make inevitably major grow impact expenditure level future year think fundamental issue congress must jointly solve economic disruption others experience stem part fact world price petroleum quadruple last year honesty put blame nation united state blameless grow dependence upon foreign source add vulnerability year year nothing prepare event embargo 1973 1960 country surplus capacity crude oil able make available trading partner whenever disruption supply surplus capacity enable u influence supply price crude oil throughout world excess capacity neutralize effort establish effective cartel thus rest world assure adequate supply oil reasonable price 1970 surplus capacity vanish consequence latent power oil cartel could emerge full force europe japan heavily dependent import oil struggle keep economy balance even united state country far industrial country serious pressure propose program begin restore country surplus capacity total energy way able assure reliable adequate energy help foster new world energy stability major consume nation nation fact world must face prospect energy difficulty 1985 program impose burden u aim reduce consumption energy increase production great attention pay consideration fairness assure burden fall harshly less able bear recommend plan make u invulnerable cutoff foreign oil require sacrifice important work set following national energy goal assure future secure productive past first must reduce oil import 1 million barrel per day end year 2 million barrel per day end 1977 second must end vulnerability economic disruption foreign supplier 1985 third must develop energy technology resource united state ability supply significant share energy need free world end century attain objective need immediate action cut import unfortunately short term limit number action increase domestic supply press urge quick action necessary legislation allow commercial production elk hill california naval petroleum reserve order make great use domestic coal resource submit amendment energy supply environmental coordination act greatly increase number powerplants promptly convert coal obviously voluntary conservation continue essential tougher program need need therefore use presidential power raise fee import crude oil petroleum product crude oil fee level increase 1 per barrel february 1 2 per barrel march 1 3 per barrel april 1 take action reduce undue hardship geographical region forego interim administrative action rescind broad necessary legislation enact end request congress act within 90 day comprehensive energy tax program include excise tax import fee total 2 per barrel product import crude oil deregulation new natural gas enactment natural gas excise tax plan take presidential initiative decontrol price domestic crude oil april 1 urge congress enact windfall profit tax date ensure oil producer profit unduly sooner congress act effective oil conservation program quicker federal revenue return people prepared use presidential authority limit import necessary guarantee success want know decide energy conservation program consider ration high gasoline tax alternative judgment neither would achieve desire result would produce unacceptable inequity massive program must initiate increase energy supply cut demand provide new standby emergency program achieve independence want 1985 large part increase oil production must come new frontier area outer continental shelf naval petroleum reserve 4 alaska intent administration move ahead exploration lease production frontier area outer continental shelf environmental risk acceptable use abundant domestic resource coal severely limited must strike reasonable compromise environmental concern coal submit clean air act amendment allow great coal use without sacrifice clean air goal veto strip mining legislation pass last congress appropriate change sign revise version come white house see 1974 volume item 326 propose number action energize nuclear power program submit legislation expedite nuclear lease licensing rapid selection sit recent month utility cancel postpone 60 percent plan nuclear expansion 30 percent plan addition capacity financing problem industry worsen therefore recommend investment tax credit 12 percent extend additional 2 year specifically speed construction powerplants use natural gas oil also submit proposal selective reform state utility commission regulation provide critical stability domestic energy production face world price uncertainty request legislation authorize require tariff import quota price floor protect energy price level achieve energy independence increase energy supply enough must take additional step cut consumption therefore propose congress legislation make thermal efficiency standard mandatory new building unite state new tax credit 150 homeowner install insulation equipment establishment energy conservation program help family purchase insulation supply legislation modify defer automotive pollution standard 5 year enable u improve automobile gas mileage 40 percent 1980 proposal action cumulatively reduce dependence foreign energy supply 3 5 million barrel per day 1985 make united state invulnerable foreign disruption propose standby emergency legislation strategic storage program 1 billion barrel oil domestic need 300 million barrel national defense purpose ask fund need energy research development activity establish goal 1 million barrel synthetic fuel shale oil production per day 1985 together incentive program achieve deep belief america capability within next 10 year program envision 200 major nuclear powerplants 250 major new coal mine 150 major powerplants 30 major new oil refinery 20 major new synthetic fuel plant drill many thousand new oil well insulation 18 million home manufacture sale million new automobile truck bus use much less fuel happen believe another crisis one 1942 president franklin roosevelt say country would build military aircraft 1943 production program reach aircraft annually congress american people work attain target achieve surpassed adversity let u seize opportunity revenue 30 billion high energy tax design encourage conservation must refund american people manner corrects distortion tax system wrought inflation people push high tax bracket inflation consequent reduction actual spending power business tax similarly distort inflation exaggerates report profit result excessive tax accordingly propose future individual income tax reduce billion do raise allowance reduce tax rate continue tax cut primarily benefit taxpayer example typical family four gross income pay 185 federal income tax tax cut plan would pay nothing family four gross income pay federal tax proposal reduce total 300 family gross would receive reduction 210 low income least afford high cost must also compensate propose payment 80 every person 18 year age older limit category state local government receive 2 billion additional revenue share offset increase energy cost offset inflationary distortion generate economic activity corporate tax rate reduce 48 percent 42 percent let turn might international dimension present crisis time peacetime history state nation depend heavily state world seldom ever state world depend heavily state nation economic distress global solve home unless help remedy profound economic dislocation abroad world trade monetary structure provide market energy food vital raw material nation international system jeopardy nation proud significant achievement recent year solve problem crisis berlin agreement salt agreement new relationship china unprecedented effort middle east immensely encouraging world free crisis world 150 nation nuclear technology proliferate regional conflict continue international security take grant let mistake international cooperation vital factor life today moment american people turn inward ever depend america determination america leadership whole wide world great nation spiritually politically militarily diplomatically economically america commitment international security sustain safety ally friends many area middle east europe asia turn away would unleash new instability new danger around globe turn would threaten security end world war ii turn similar challenge historic opportunity might add historic achievement old order disarray political economic institution shatter period nation partner build new institution new mechanism mutual support cooperation today face historic opportunity act imaginatively boldly acted period retrospect see one great creative moment nation history whole world watch see respond resurgent american economy would restore confidence world future anything else program congress pass demonstrate world start put house order show nation able willing help nation meet common challenge demonstrate united state fulfill responsibility leader among nation quite frankly stake future industrialize democracy perceive destiny common sustain common 30 year develop nation also turn point poor nation see hop feed hungry develop society shatter economic crisis economic future producer raw material also depend cooperative solution relation communist country basic factor world environment must seek build basis coexistence stand principle stand interest act firmly challenge kind world want depend broad policy create mutual incentive restraint cooperation move forward meet global challenge opportunity must tool job military force strong ready military strength deters aggression ally stabilize relation former adversary protect homeland fully adequate conventional strategic force cost many many billion dollar sound insurance safety peaceful world military strength alone sufficient effective diplomacy also essential prevent conflict building world understand vladivostok negotiation soviet union represent major step moderate strategic arm competition recent discussion leader atlantic community japan south korea contribute meeting common challenge serious problem u require cooperation president congress constitution tradition execution foreign policy responsibility president recent year stress vietnam war legislative restriction president ability execute foreign policy military decision proliferate member congress oppose approve others president welcome advice cooperation house senate foreign policy successful rigidly restrict legislation ability president act conduct negotiation limitation legislative restriction intend best motif purpose opposite result see recently trade relation soviet union part pledge administration act close consultation congress face delicate situation trouble time throughout globe become president 5 month ago promise last congress policy communication conciliation compromise cooperation renew pledge new member congress let sum america need new direction seek chart today change course put unemployed back work increase real income production restrain growth federal government spending achieve energy independence advance world understand ability partnership american people achieve objectives 200th anniversary approach owe posterity rebuild political economic strength let u make america century come long stronghold liberty whole world thank