To the Congress of the United States: Today, in this third section of my 1973 State of the Union Message, I wish to report on the state of our economy and to urge the Congress to join with me in building the foundations for a new era of prosperity in the United States. The state of our Union depends fundamentally on the state of our economy. I am pleased to report that our economic prospects are very bright. For the first time in nearly 20 years, we can look forward to a period of genuine prosperity in a time of peace. We can, in fact, achieve the most bountiful prosperity that this Nation has ever known. That goal can only be attained, however, if we discipline ourselves and unite on certain basic policies: --We must be restrained in Federal spending. --We must show reasonableness in labor-management relations. --We must comply fully with the new Phase III requirements of our economic stabilization program. --We must continue our battle to hold down the price of food. --And we must vigorously meet the challenge of foreign trading competition. It is clear to me that the American people stand firmly together in support of these policies. Their President stands with them. And as Members of the 93rd Congress consider the alternatives before us this year, I am confident that they, too, will join in this great endeavor. IMPACT OF THE ECONOMY ON PEOPLE'S LIVES This message will present my basic economic recommendations and priorities and will indicate some areas in which further detailed plans will be submitted later. But I also want to discuss our economic situation in less formal terms: how do statistical measurements, comparisons and projections affect the daily lives of individual Americans and their families? We build our economy, after all, not to create cold, impersonal statistics for the record books but to better the lives of our people. Basically, the economy affects people in three ways. First, it affects their jobs--how plentiful they are, how secure they are, how good they are. Second, it affects what people are paid on their jobs--and how much they can buy with that income. Finally, it affects how much people have to pay back to the Government in taxes. JOB PICTURE ENCOURAGING To begin with, the job picture today is very encouraging. The number of people at work in this country rose by 2.3 million during 1972-the largest increase in 25 years. Unemployment fell from the 6 percent level in 1971 to 5 percent last month. The reason jobs have grown so rapidly is that the economy grew in real terms by 6 1/2 percent last year, one of the best performances in the past quarter century,. Our economic advisers expect a growth rate of nearly 7 percent in 1973. That would bring unemployment down to around the 4 1/2 percent level by the end of the year. Five percent unemployment is too high. Nevertheless, it is instructive to examine that 5 percent figure more closely. For example: --Only 40 percent of those now counted as unemployed are in that status because they lost their last job. The rate of layoffs at the end of last year was lower than it has been since the Korean War. --The other 60 percent either left their last job voluntarily, are seeking jobs for the first time or are re-entering the labor force after being out of it for a period of time. --About 45 percent of the unemployed have been unemployed for less than five weeks. ---As compared with earlier periods when the overall unemployment rate was about what it is now, the unemployment rate is significantly lower for adult males, household heads and married men. Among married men it is only 2.4 percent. Unemployment among these groups should decline even further during 1973. This employment gain is even more remarkable since so many more people have been seeking jobs than usual. For example, nearly three million Americans have been released from defense-related jobs since 1969--including over one million veterans. The unemployment rate for veterans of the Vietnam War now stands at 5.9 percent, above the general rate of unemployment but slightly below the rate for other males in the 20-to-29-year-old age bracket. While much better than the 8.5 percent of a year ago, this 5.9 percent rate is still too high. The employment problems of veterans, who have given so much for their country, will remain high on my list of concerns for the coming year. Women and young people have also been seeking work in record numbers. Yet, as in the case of veterans, jobs for these groups have been increasing even faster. Unemployment among women and young people has thus declined--but it is also much too high and constitutes a great waste for our Nation. As we move into a new era of peacetime prosperity, our economic system is going to have room--indeed, is going to have need--for nearly every available hand. The role of women in our economy thus is bound to grow. And it should--not only because the expansion of opportunities for women is right, but also because America will not be able to achieve its full economic potential unless every woman who wants to work can find a job that provides fair compensation and equal opportunity for advancement. This Administration is committed to the promotion of this goal. We support the Equal Rights Amendment. We have opened the doors of employment to qualified women in the Federal service. We have called for similar efforts in businesses and institutions which receive Federal contracts or assistance. Just last year, we established the Advisory Committee on the Economic Role of Women. This Committee will provide leadership in helping to identify economic problems facing women and helping to change the attitudes which create unjust and illogical barriers to their employment. PAY AND PURCHASING POWER The second great question is what people are paid on their jobs and how much it will buy for them. Here the news is also good. Not only are more people working, but they are getting more for their work. Average per capita income rose by 7.7 percent during 1972, well above the average gain during the previous ten years. The most important thing, however, is that these gains were not wiped out by rising prices--as they often were in the 1960's. The Federal Government spent too much, too fast in that period and the result was runaway inflation. While wages may have climbed very rapidly during those years, purchasing power did not. Instead, purchasing power stalled, or even moved backward. Inflation created an economic treadmill that sometimes required a person to achieve a 6 percent salary increase every year just to stay even. Now that has changed. The inflation rate last year was cut nearly in half from what it was four years ago. The purchasing power of the average worker's takehome pay rose more last year than in any year since 1955; it went up by 4.3 percent--the equivalent of two extra weekly paychecks. We expect inflation to be reduced even further in 1973--for several reasons. A fundamental reason is the Nation's growing opposition to runaway Federal spending. The public increasingly perceives what such spending does to prices and taxes. As a result, we have a good chance now, the best in years, to curb the growth of the Federal budget. That will do more than anything else to protect the family budget. Other forces are working for us too. Productivity increased sharply last year--which means the average worker is producing more and can therefore earn more without driving prices higher. In addition, the fact that real spendable earnings rose so substantially last year will encourage reasonable wage demands this year. Workers will not have to catch up from an earlier slump in earnings. Finally, we now have a new system of wage and price controls--one that is the right kind of system for 1973. FIRM CONTROLS IN FORCE; FOOD PRICES FOUGHT Any idea that controls have virtually been ended is totally wrong. We still have firm controls. We are still enforcing them firmly. All that has changed is our method of enforcing them. The old system depended on a Washington bureaucracy to approve major wage and price increases in advance. Although it was effective while it lasted, this system was beginning to produce inequities and to get tangled in red tape. The new system will avoid these dangers. Like most of our laws, it relies largely on self-administration, on the voluntary cooperation of the American people. But if some people should fail to cooperate, we still have the will and the means to crack down on them. To any economic interests which might feel that the new system will permit them, openly or covertly, to achieve gains beyond the safety limits we shall prescribe, let me deliver this message in clear and unmistakable terms: We will regard any flouting of our anti-inflationary rules and standards as nothing less than attempted economic arson threatening our national economic stability-and we shall act accordingly. We would like Phase III to be as voluntary as possible. But we will make it as mandatory as necessary. Our new system of controls has broad support from business and labor--the keystone for any successful program. It will prepare us for the day when we no longer need controls. It will allow us to concentrate on those areas where inflation has been most troublesome---construction, health care and especially food prices. We are focusing particular attention and action on the tough problem of food prices. These prices have risen sharply at the wholesale level in recent months, so that figures for retail prices in January and February will inevitably show sharp increases. In fact, we will probably see increases in food prices for some months to come. The underlying cause of this problem is that food supplies have not risen fast enough to keep up with the rapidly rising demand. But we must not accept rising food prices as a permanent feature of American life. We must halt this inflationary spiral by attacking the causes of rising food prices on all fronts. Our first priority must be to increase supplies of food to meet the increasing demand. We are moving vigorously to expand our food supplies: --We are encouraging farmers to put more acreage into production of both crops and livestock. --We are allowing more meat and dried milk to come in from abroad. --We have ended subsidies for agricultural exports. --And we are reducing the Government's agricultural stockpiles and encouraging farmers to sell the stock they own. Measures such as these will stop the rise of wholesale food prices and will slow the rise of retail food prices. Unfortunately, nothing we can do will have a decisive effect in the next few months. But the steps I have taken will have a powerful effect in the second half of the year. These steps will also help our farmers to improve their incomes by producing more without corresponding price increases. We anticipate that farm prices will be no higher at the end of this year than they were at the beginning. For all of these reasons, we have a good chance to reduce the overall inflation rate to 2 1/2 percent by the end of 1973. HOLDING THE LINE ON TAXES The third important economic question concerns how much money people pay out in taxes and how much they have left to control themselves. Here, too, the picture is promising. Since 1950, the share of the average family's income taken for taxes in the United States has nearly doubled--to more than 20 percent. The average person worked less than one hour out of each eight-hour day to pay his taxes in 1950; today he works nearly two hours each day for the tax collector. In fact, if tax cut proposals had not been adopted during our first term, the average worker's pay increase last year would have been wiped out completely by increased taxes and the taxpayers would have to pay out an additional $25 billion in personal income taxes this year. The only way to hold the line on taxes is to hold the line on Federal spending. This is why we are cutting back, eliminating or reforming Federal programs that waste the taxpayers' money. My Administration has now had four years of experience with all of our Federal programs. We have conducted detailed studies comparing their costs and results. On the basis of that experience I am convinced that the cost of many Federal programs can no longer be justified. Among them are: --housing programs that benefit the well-to-do but short-change the poor; --health programs that build more hospitals when hospital beds are now in surplus; --educational fellowships designed to attract more people into teaching when tens of thousands of teachers already cannot find teaching jobs; --programs that subsidize education for the children of Federal employees who already pay enough local taxes to support their local schools; --programs that blindly continue welfare payments to those who are ineligible or overpaid. Such programs may have appealing names; they may sound like good causes. But behind a fancy label can lie a dismal failure. And unless we cut back now on the programs that have failed, we will soon run out of money for the programs that succeed. It has been charged that our budget cuts show a lack of compassion for the disadvantaged. The best answer to this charge is to look at the facts. We are budgeting 66 percent more to help the poor next year than was the case four years ago; 67 percent more to help the sick; 71 percent more to help older Americans and 242 percent more to help the hungry and malnourished. Altogether, our human resources budget is a record $125 billion--nearly double that of four years ago when I came into office. We have already shifted our spending priorities from defense programs to human resource programs. Now we must also switch our spending priorities from programs which give us a bad return on the dollar to programs that pay off. That is how to show we truly care about the needy. The question is not whether we help but how we help. By eliminating programs that are wasteful, we can concentrate on programs that work. Our recent round of budget cuts can save $i i billion in this fiscal year, $19 billion next fiscal year, and $24 billion the year after. That means an average saving of $700 over the next three years for each of America's 75 million taxpayers. Without the savings I have achieved through program reductions and reforms, those spending totals respectively would be $261 billion, $288 billion and $312 billion-figures which would spell either higher taxes, a new surge of crippling inflation, or both. To hold the line on Federal spending, it is absolutely vital that we have the full cooperation of the Congress. I urge the Congress, as one of its most pressing responsibilities, to adopt an overall spending ceiling for each fiscal year. I also ask that it establish a regular procedure for ensuring that the ceiling is maintained. THE INTERNATIONAL CHALLENGE In recent years, the attention of Americans has increasingly turned to the serious questions confronting us in international trade and in the monetary arena. This is no longer the era in which the United States, preeminent in science, marketing and services, can dominate world markets with the advanced products of our technology and our advanced means of production. This is no longer the era in which the United States can automatically sell more abroad than we purchase from foreign countries. We face new challenges in international competition and are thus in a period of substantial adjustment in our relations with our trading partners. One consequence of these developments was the step we took last week to change the relative value of the dollar in trading abroad. We took this step because of a serious trade imbalance which could threaten the mounting prosperity of our people. America has been buying more from other countries than they have been buying from us. And just as a family or a company cannot go on indefinitely buying more than it sells, neither can a country. Changing the exchange rates will help us change this picture. It means our exports will be priced more competitively in the international marketplace and should therefore sell better. Our imports, on the other hand, will not grow as fast. But this step must now be followed by reforms which are more basic. First, we need a more flexible international monetary system, one that will lead to balance without crisis. The United States set forth fundamental proposals for such a system last September. It is time for other nations to join us in getting action on these proposals. Secondly, American products must get a fairer shake in a more open world trading system--so that we can extend American markets and expand American jobs. If other countries make it harder for our products to be sold abroad, then our trade imbalance can only grow worse. RESPONSIBILITY OF THE CONGRESS America is assuredly on the road to a new era of prosperity. The road signs are clear, and we are gathering more momentum with each passing month. But we can easily lose our way unless the Congress is on board, helping to steer the course. As we face 1973, in fact, we may be sure that the state of our economy in the future will very much depend upon the decisions made this year on Capitol Hill. Over the course of the next few months, I will urge prompt Congressional action on a variety of economic proposals. Together, these proposals will constitute one of the most important packages of economic initiatives ever considered by any Congress in our history. I hope--as do all of our people--that the Congress will act with both discipline and dispatch. Among the items included in my 1973 economic package are: --Extension of the Economic Stabilization Program. Present authority will soon expire, and I have asked the Congress to extend the law for one year to April 30, 1974. I hope this will be done without adding general mandatory standards or prescribing rigid advance decisions-steps that would only hamper sound administration of the program. A highly complex economy simply cannot be regulated effectively for extended periods in that way. --Tax Program. I shall recommend a tax program that builds further reforms on those we achieved in 1969 and 1971. --Property Tax Relief. I shall also submit recommendations for alleviating the crushing burdens which property taxes now create for older Americans. --Tax Credit for Nonpublic Schools. I shall propose legislation which would provide for income tax credit for tuition paid to nonpublic elementary and secondary schools. These institutions are a valuable national resource, relieving the public school system of enrollment pressures, injecting a welcome variety into our educational process, and expanding the options of millions of parents. --Trade Legislation. Another item high on our agenda will be new trade proposals which I will soon send to the Congress. They would make it easier for us not only to lower our trade barriers when other countries lower theirs but also to raise our barriers when that is necessary to keep things fair. --Other Reforms. To modernize and make them more equitable and beneficial, I shall also later submit recommendations for improving the performance of our private pension system, our unemployment compensation program, our minimum wage laws and the manner in which we deal with our transportation systems. ---Spending Limits. Finally, but most importantly, I ask the Congress to act this year to impose strict limits on Federal spending. The cuts I have suggested in this year's budget did not come easily. Thus I can well understand that it may not be easy for the Congress to sustain them, as every special interest group lobbies with its own special Congressional committees for its own special legislation. But the Congress should serve more than the special interest; its first allegiance must always be to the public interest. We must also recognize that no one in the Congress is now charged with adding all of our Federal expenditures together-and considering their total impact on. taxes and prices. It is as if each member of a family went shopping on his own, without knowing how much money was available in the overall family budget or how much other members of the family were spending or charging on various credit accounts. To overcome these problems, I urge prompt adoption by the Congress of an overall spending ceiling for each fiscal year. This action would allow the Congress to work jointly with me in holding spending to $250 billion in the current fiscal year, $269 billion next year, and $288 billion in fiscal year 1975. Beyond the adoption of an annual ceiling, I also recommend that the Congress consider internal reforms which would establish a regular mechanism for deciding how to maintain the ceiling. I have no economic recommendation to make to the Congress which is more important to the economic well-being of our people. I believe that most members of the House and Senate want to hold down spending. Most Congressmen voted for a spending ceiling in principle when the Senate and House approved a ceiling last fall. Unfortunately the two bodies could not get together on a final version. I believe they must get together soon--so that the Congress can proceed this year with a firm sense of budget discipline. The stakes are high. If we do not restrain spending and if my recommended cuts are reversed, it would take a 15 percent increase in income taxes to pay for the additional expenditures. The separation of powers between the President and the Congress has become a favorite topic of discussion in recent weeks. We should never, of course, lose our sharp concern for maintaining Constitutional balances. But we should never overlook the fact we have joint responsibilities as well as separate powers. There are many areas in which the President and the Congress should and must work together in behalf of all the people--and the level of spending, since it directly affects the pocketbooks of every family in the land, is one of the most critical. I have fulfilled my pledge that I would not recommend any programs that would require a general tax increase or would create inflationary pressures. Now it is up to the Congress to match these efforts with a spending ceiling of its own. MAKING A CHOICE We stand on the threshold of a new era of prolonged and growing prosperity for the United States. Unlike past booms, this new prosperity will not depend on the stimulus of war. It will not be eaten away by the blight of inflation. It will be solid; it will be steady; and it will be sustainable. If we act responsibly, this new prosperity can be ours for many years to come. If we don't, then, as Franklin Roosevelt once warned, we could be "wrecked on (the) rocks of loose fiscal policy." The choice is ours. Let us choose responsible prosperity. RICHARD NIXON 
The White House, February 22, 1973.
To the Congress of the United States: Today, in this third section of my 1973 State of the Union Message, I wish to report on the state of our economy and to urge the Congress to join with me in building the foundations for a new era of prosperity in the United States. The state of our Union depends fundamentally on the state of our economy. I am pleased to report that our economic prospects are very bright. For the first time in nearly 20 years, we can look forward to a period of genuine prosperity in a time of peace. We can, in fact, achieve the most bountiful prosperity that this Nation has ever known. That goal can only be attained, however, if we discipline ourselves and unite on certain basic policies: --We must be restrained in Federal spending. --We must show reasonableness in labor-management relations. --We must comply fully with the new Phase III requirements of our economic stabilization program. --We must continue our battle to hold down the price of food. --And we must vigorously meet the challenge of foreign trading competition. It is clear to me that the American people stand firmly together in support of these policies. Their President stands with them. And as Members of the 93rd Congress consider the alternatives before us this year, I am confident that they, too, will join in this great endeavor. IMPACT OF THE ECONOMY ON PEOPLE'S LIVES This message will present my basic economic recommendations and priorities and will indicate some areas in which further detailed plans will be submitted later. But I also want to discuss our economic situation in less formal terms: how do statistical measurements, comparisons and projections affect the daily lives of individual Americans and their families? We build our economy, after all, not to create cold, impersonal statistics for the record books but to better the lives of our people. Basically, the economy affects people in three ways. First, it affects their jobs--how plentiful they are, how secure they are, how good they are. Second, it affects what people are paid on their jobs--and how much they can buy with that income. Finally, it affects how much people have to pay back to the Government in taxes. JOB PICTURE ENCOURAGING To begin with, the job picture today is very encouraging. The number of people at work in this country rose by 2.3 million during 1972-the largest increase in 25 years. Unemployment fell from the 6 percent level in 1971 to 5 percent last month. The reason jobs have grown so rapidly is that the economy grew in real terms by 6 1/2 percent last year, one of the best performances in the past quarter century,. Our economic advisers expect a growth rate of nearly 7 percent in 1973. That would bring unemployment down to around the 4 1/2 percent level by the end of the year. Five percent unemployment is too high. Nevertheless, it is instructive to examine that 5 percent figure more closely. For example: --Only 40 percent of those now counted as unemployed are in that status because they lost their last job. The rate of layoffs at the end of last year was lower than it has been since the Korean War. --The other 60 percent either left their last job voluntarily, are seeking jobs for the first time or are re-entering the labor force after being out of it for a period of time. --About 45 percent of the unemployed have been unemployed for less than five weeks. ---As compared with earlier periods when the overall unemployment rate was about what it is now, the unemployment rate is significantly lower for adult males, household heads and married men. Among married men it is only 2.4 percent. Unemployment among these groups should decline even further during 1973. This employment gain is even more remarkable since so many more people have been seeking jobs than usual. For example, nearly three million Americans have been released from defense-related jobs since 1969--including over one million veterans. The unemployment rate for veterans of the Vietnam War now stands at 5.9 percent, above the general rate of unemployment but slightly below the rate for other males in the 20-to-29-year-old age bracket. While much better than the 8.5 percent of a year ago, this 5.9 percent rate is still too high. The employment problems of veterans, who have given so much for their country, will remain high on my list of concerns for the coming year. Women and young people have also been seeking work in record numbers. Yet, as in the case of veterans, jobs for these groups have been increasing even faster. Unemployment among women and young people has thus declined--but it is also much too high and constitutes a great waste for our Nation. As we move into a new era of peacetime prosperity, our economic system is going to have room--indeed, is going to have need--for nearly every available hand. The role of women in our economy thus is bound to grow. And it should--not only because the expansion of opportunities for women is right, but also because America will not be able to achieve its full economic potential unless every woman who wants to work can find a job that provides fair compensation and equal opportunity for advancement. This Administration is committed to the promotion of this goal. We support the Equal Rights Amendment. We have opened the doors of employment to qualified women in the Federal service. We have called for similar efforts in businesses and institutions which receive Federal contracts or assistance. Just last year, we established the Advisory Committee on the Economic Role of Women. This Committee will provide leadership in helping to identify economic problems facing women and helping to change the attitudes which create unjust and illogical barriers to their employment. PAY AND PURCHASING POWER The second great question is what people are paid on their jobs and how much it will buy for them. Here the news is also good. Not only are more people working, but they are getting more for their work. Average per capita income rose by 7.7 percent during 1972, well above the average gain during the previous ten years. The most important thing, however, is that these gains were not wiped out by rising prices--as they often were in the 1960's. The Federal Government spent too much, too fast in that period and the result was runaway inflation. While wages may have climbed very rapidly during those years, purchasing power did not. Instead, purchasing power stalled, or even moved backward. Inflation created an economic treadmill that sometimes required a person to achieve a 6 percent salary increase every year just to stay even. Now that has changed. The inflation rate last year was cut nearly in half from what it was four years ago. The purchasing power of the average worker's takehome pay rose more last year than in any year since 1955; it went up by 4.3 percent--the equivalent of two extra weekly paychecks. We expect inflation to be reduced even further in 1973--for several reasons. A fundamental reason is the Nation's growing opposition to runaway Federal spending. The public increasingly perceives what such spending does to prices and taxes. As a result, we have a good chance now, the best in years, to curb the growth of the Federal budget. That will do more than anything else to protect the family budget. Other forces are working for us too. Productivity increased sharply last year--which means the average worker is producing more and can therefore earn more without driving prices higher. In addition, the fact that real spendable earnings rose so substantially last year will encourage reasonable wage demands this year. Workers will not have to catch up from an earlier slump in earnings. Finally, we now have a new system of wage and price controls--one that is the right kind of system for 1973. FIRM CONTROLS IN FORCE; FOOD PRICES FOUGHT Any idea that controls have virtually been ended is totally wrong. We still have firm controls. We are still enforcing them firmly. All that has changed is our method of enforcing them. The old system depended on a Washington bureaucracy to approve major wage and price increases in advance. Although it was effective while it lasted, this system was beginning to produce inequities and to get tangled in red tape. The new system will avoid these dangers. Like most of our laws, it relies largely on self-administration, on the voluntary cooperation of the American people. But if some people should fail to cooperate, we still have the will and the means to crack down on them. To any economic interests which might feel that the new system will permit them, openly or covertly, to achieve gains beyond the safety limits we shall prescribe, let me deliver this message in clear and unmistakable terms: We will regard any flouting of our anti-inflationary rules and standards as nothing less than attempted economic arson threatening our national economic stability-and we shall act accordingly. We would like Phase III to be as voluntary as possible. But we will make it as mandatory as necessary. Our new system of controls has broad support from business and labor--the keystone for any successful program. It will prepare us for the day when we no longer need controls. It will allow us to concentrate on those areas where inflation has been most troublesome---construction, health care and especially food prices. We are focusing particular attention and action on the tough problem of food prices. These prices have risen sharply at the wholesale level in recent months, so that figures for retail prices in January and February will inevitably show sharp increases. In fact, we will probably see increases in food prices for some months to come. The underlying because of this problem is that food supplies have not risen fast enough to keep up with the rapidly rising demand. But we must not accept rising food prices as a permanent feature of American life. We must halt this inflationary spiral by attacking the causes of rising food prices on all fronts. Our first priority must be to increase supplies of food to meet the increasing demand. We are moving vigorously to expand our food supplies: --We are encouraging farmers to put more acreage into production of both crops and livestock. --We are allowing more meat and dried milk to come in from abroad. --We have ended subsidies for agricultural exports. --And we are reducing the Government's agricultural stockpiles and encouraging farmers to sell the stock they own. Measures such as these will stop the rise of wholesale food prices and will slow the rise of retail food prices. Unfortunately, nothing we can do will have a decisive effect in the next few months. But the steps I have taken will have a powerful effect in the second half of the year. These steps will also help our farmers to improve their incomes by producing more without corresponding price increases. We anticipate that farm prices will be no higher at the end of this year than they were at the beginning. For all of these reasons, we have a good chance to reduce the overall inflation rate to 2 1/2 percent by the end of 1973. HOLDING THE LINE ON TAXES The third important economic question concerns how much money people pay out in taxes and how much they have left to control themselves. Here, too, the picture is promising. Since 1950, the share of the average family's income taken for taxes in the United States has nearly doubled--to more than 20 percent. The average person worked less than one hour out of each eight-hour day to pay his taxes in 1950; today he works nearly two hours each day for the tax collector. In fact, if tax cut proposals had not been adopted during our first term, the average worker's pay increase last year would have been wiped out completely by increased taxes and the taxpayers would have to pay out an additional $25 billion in personal income taxes this year. The only way to hold the line on taxes is to hold the line on Federal spending. This is why we are cutting back, eliminating or reforming Federal programs that waste the taxpayers' money. My Administration has now had four years of experience with all of our Federal programs. We have conducted detailed studies comparing their costs and results. On the basis of that experience I am convinced that the cost of many Federal programs can no longer be justified. Among them are: --housing programs that benefit the well-to-do but short-change the poor; --health programs that build more hospitals when hospital beds are now in surplus; --educational fellowships designed to attract more people into teaching when tens of thousands of teachers already cannot find teaching jobs; --programs that subsidize education for the children of Federal employees who already pay enough local taxes to support their local schools; --programs that blindly continue welfare payments to those who are ineligible or overpaid. Such programs may have appealing names; they may sound like good causes. But behind a fancy label can lie a dismal failure. And unless we cut back now on the programs that have failed, we will soon run out of money for the programs that succeed. It has been charged that our budget cuts show a lack of compassion for the disadvantaged. The best answer to this charge is to look at the facts. We are budgeting 66 percent more to help the poor next year than was the case four years ago; 67 percent more to help the sick; 71 percent more to help older Americans and 242 percent more to help the hungry and malnourished. Altogether, our human resources budget is a record $125 billion--nearly double that of four years ago when I came into office. We have already shifted our spending priorities from defense programs to human resource programs. Now we must also switch our spending priorities from programs which give us a bad return on the dollar to programs that pay off. That is how to show we truly care about the needy. The question is not whether we help but how we help. By eliminating programs that are wasteful, we can concentrate on programs that work. Our recent round of budget cuts can save $i i billion in this fiscal year, $19 billion next fiscal year, and $24 billion the year after. That means an average saving of $700 over the next three years for each of America's 75 million taxpayers. Without the savings I have achieved through program reductions and reforms, those spending totals respectively would be $261 billion, $288 billion and $312 billion-figures which would spell either higher taxes, a new surge of crippling inflation, or both. To hold the line on Federal spending, it is absolutely vital that we have the full cooperation of the Congress. I urge the Congress, as one of its most pressing responsibilities, to adopt an overall spending ceiling for each fiscal year. I also ask that it establish a regular procedure for ensuring that the ceiling is maintained. THE INTERNATIONAL CHALLENGE In recent years, the attention of Americans has increasingly turned to the serious questions confronting us in international trade and in the monetary arena. This is no longer the era in which the United States, preeminent in science, marketing and services, can dominate world markets with the advanced products of our technology and our advanced means of production. This is no longer the era in which the United States can automatically sell more abroad than we purchase from foreign countries. We face new challenges in international competition and are thus in a period of substantial adjustment in our relations with our trading partners. One consequence of these developments was the step we took last week to change the relative value of the dollar in trading abroad. We took this step because of a serious trade imbalance which could threaten the mounting prosperity of our people. America has been buying more from other countries than they have been buying from us. And just as a family or a company cannot go on indefinitely buying more than it sells, neither can a country. Changing the exchange rates will help us change this picture. It means our exports will be priced more competitively in the international marketplace and should therefore sell better. Our imports, on the other hand, will not grow as fast. But this step must now be followed by reforms which are more basic. First, we need a more flexible international monetary system, one that will lead to balance without crisis. The United States set forth fundamental proposals for such a system last September. It is time for other nations to join us in getting action on these proposals. Secondly, American products must get a fairer shake in a more open world trading system--so that we can extend American markets and expand American jobs. If other countries make it harder for our products to be sold abroad, then our trade imbalance can only grow worse. RESPONSIBILITY OF THE CONGRESS America is assuredly on the road to a new era of prosperity. The road signs are clear, and we are gathering more momentum with each passing month. But we can easily lose our way unless the Congress is on board, helping to steer the course. As we face 1973, in fact, we may be sure that the state of our economy in the future will very much depend upon the decisions made this year on Capitol Hill. Over the course of the next few months, I will urge prompt Congressional action on a variety of economic proposals. Together, these proposals will constitute one of the most important packages of economic initiatives ever considered by any Congress in our history. I hope--as do all of our people--that the Congress will act with both discipline and dispatch. Among the items included in my 1973 economic package are: --Extension of the Economic Stabilization Program. Present authority will soon expire, and I have asked the Congress to extend the law for one year to April 30, 1974. I hope this will be done without adding general mandatory standards or prescribing rigid advance decisions-steps that would only hamper sound administration of the program. A highly complex economy simply cannot be regulated effectively for extended periods in that way. --Tax Program. I shall recommend a tax program that builds further reforms on those we achieved in 1969 and 1971. --Property Tax Relief. I shall also submit recommendations for alleviating the crushing burdens which property taxes now create for older Americans. --Tax Credit for Nonpublic Schools. I shall propose legislation which would provide for income tax credit for tuition paid to nonpublic elementary and secondary schools. These institutions are a valuable national resource, relieving the public school system of enrollment pressures, injecting a welcome variety into our educational process, and expanding the options of millions of parents. --Trade Legislation. Another item high on our agenda will be new trade proposals which I will soon send to the Congress. They would make it easier for us not only to lower our trade barriers when other countries lower theirs but also to raise our barriers when that is necessary to keep things fair. --Other Reforms. To modernize and make them more equitable and beneficial, I shall also later submit recommendations for improving the performance of our private pension system, our unemployment compensation program, our minimum wage laws and the manner in which we deal with our transportation systems. ---Spending Limits. Finally, but most importantly, I ask the Congress to act this year to impose strict limits on Federal spending. The cuts I have suggested in this year's budget did not come easily. Thus I can well understand that it may not be easy for the Congress to sustain them, as every special interest group lobbies with its own special Congressional committees for its own special legislation. But the Congress should serve more than the special interest; its first allegiance must always be to the public interest. We must also recognize that no one in the Congress is now charged with adding all of our Federal expenditures together-and considering their total impact on. taxes and prices. It is as if each member of a family went shopping on his own, without knowing how much money was available in the overall family budget or how much other members of the family were spending or charging on various credit accounts. To overcome these problems, I urge prompt adoption by the Congress of an overall spending ceiling for each fiscal year. This action would allow the Congress to work jointly with me in holding spending to $250 billion in the current fiscal year, $269 billion next year, and $288 billion in fiscal year 1975. Beyond the adoption of an annual ceiling, I also recommend that the Congress consider internal reforms which would establish a regular mechanism for deciding how to maintain the ceiling. I have no economic recommendation to make to the Congress which is more important to the economic well-being of our people. I believe that most members of the House and Senate want to hold down spending. Most Congressmen voted for a spending ceiling in principle when the Senate and House approved a ceiling last fall. Unfortunately the two bodies could not get together on a final version. I believe they must get together soon--so that the Congress can proceed this year with a firm sense of budget discipline. The stakes are high. If we do not restrain spending and if my recommended cuts are reversed, it would take a 15 percent increase in income taxes to pay for the additional expenditures. The separation of powers between the President and the Congress has become a favorite topic of discussion in recent weeks. We should never, of course, lose our sharp concern for maintaining Constitutional balances. But we should never overlook the fact we have joint responsibilities as well as separate powers. There are many areas in which the President and the Congress should and must work together in behalf of all the people--and the level of spending, since it directly affects the pocketbooks of every family in the land, is one of the most critical. I have fulfilled my pledge that I would not recommend any programs that would require a general tax increase or would create inflationary pressures. Now it is up to the Congress to match these efforts with a spending ceiling of its own. MAKING A CHOICE We stand on the threshold of a new era of prolonged and growing prosperity for the United States. Unlike past booms, this new prosperity will not depend on the stimulus of war. It will not be eaten away by the blight of inflation. It will be solid; it will be steady; and it will be sustainable. If we act responsibly, this new prosperity can be ours for many years to come. If we do not, then, as Franklin Roosevelt once warned, we could be "wrecked on (the) rocks of loose fiscal policy." The choice is ours. Let us choose responsible prosperity. RICHARD NIXON The White House, February 22, 1973.
to the congress of the united states today in this third section of my 1973 state of the union message i wish to report on the state of our economy and to urge the congress to join with me in building the foundations for a new era of prosperity in the united states the state of our union depends fundamentally on the state of our economy i am pleased to report that our economic prospects are very bright for the first time in nearly 20 years we can look forward to a period of genuine prosperity in a time of peace we can in fact achieve the most bountiful prosperity that this nation has ever known that goal can only be attained however if we discipline ourselves and unite on certain basic policies we must be restrained in federal spending we must show reasonableness in relations we must comply fully with the new phase iii requirements of our economic stabilization program we must continue our battle to hold down the price of food and we must vigorously meet the challenge of foreign trading competition it is clear to me that the american people stand firmly together in support of these policies their president stands with them and as members of the 93rd congress consider the alternatives before us this year i am confident that they too will join in this great endeavor impact of the economy on people lives this message will present my basic economic recommendations and priorities and will indicate some areas in which further detailed plans will be submitted later but i also want to discuss our economic situation in less formal terms how do statistical measurements comparisons and projections affect the daily lives of individual americans and their families we build our economy after all not to create cold impersonal statistics for the record books but to better the lives of our people basically the economy affects people in three ways first it affects their jobs how plentiful they are how secure they are how good they are second it affects what people are paid on their jobs and how much they can buy with that income finally it affects how much people have to pay back to the government in taxes job picture encouraging to begin with the job picture today is very encouraging the number of people at work in this country rose by million during largest increase in 25 years unemployment fell from the 6 percent level in 1971 to 5 percent last month the reason jobs have grown so rapidly is that the economy grew in real terms by 6 percent last year one of the best performances in the past quarter century our economic advisers expect a growth rate of nearly 7 percent in 1973 that would bring unemployment down to around the 4 percent level by the end of the year five percent unemployment is too high nevertheless it is instructive to examine that 5 percent figure more closely for example only 40 percent of those now counted as unemployed are in that status because they lost their last job the rate of layoffs at the end of last year was lower than it has been since the korean war the other 60 percent either left their last job voluntarily are seeking jobs for the first time or are the labor force after being out of it for a period of time about 45 percent of the unemployed have been unemployed for less than five weeks compared with earlier periods when the overall unemployment rate was about what it is now the unemployment rate is significantly lower for adult males household heads and married men among married men it is only percent unemployment among these groups should decline even further during 1973 this employment gain is even more remarkable since so many more people have been seeking jobs than usual for example nearly three million americans have been released from jobs since 1969 including over one million veterans the unemployment rate for veterans of the vietnam war now stands at percent above the general rate of unemployment but slightly below the rate for other males in the age bracket while much better than the percent of a year ago this percent rate is still too high the employment problems of veterans who have given so much for their country will remain high on my list of concerns for the coming year women and young people have also been seeking work in record numbers yet as in the case of veterans jobs for these groups have been increasing even faster unemployment among women and young people has thus declined but it is also much too high and constitutes a great waste for our nation as we move into a new era of peacetime prosperity our economic system is going to have room indeed is going to have need for nearly every available hand the role of women in our economy thus is bound to grow and it should not only because the expansion of opportunities for women is right but also because america will not be able to achieve its full economic potential unless every woman who wants to work can find a job that provides fair compensation and equal opportunity for advancement this administration is committed to the promotion of this goal we support the equal rights amendment we have opened the doors of employment to qualified women in the federal service we have called for similar efforts in businesses and institutions which receive federal contracts or assistance just last year we established the advisory committee on the economic role of women this committee will provide leadership in helping to identify economic problems facing women and helping to change the attitudes which create unjust and illogical barriers to their employment pay and purchasing power the second great question is what people are paid on their jobs and how much it will buy for them here the news is also good not only are more people working but they are getting more for their work average per capita income rose by percent during 1972 well above the average gain during the previous ten years the most important thing however is that these gains were not wiped out by rising prices as they often were in the 1960 the federal government spent too much too fast in that period and the result was runaway inflation while wages may have climbed very rapidly during those years purchasing power did not instead purchasing power stalled or even moved backward inflation created an economic treadmill that sometimes required a person to achieve a 6 percent salary increase every year just to stay even now that has changed the inflation rate last year was cut nearly in half from what it was four years ago the purchasing power of the average worker takehome pay rose more last year than in any year since 1955 it went up by percent the equivalent of two extra weekly paychecks we expect inflation to be reduced even further in 1973 for several reasons a fundamental reason is the nation growing opposition to runaway federal spending the public increasingly perceives what such spending does to prices and taxes as a result we have a good chance now the best in years to curb the growth of the federal budget that will do more than anything else to protect the family budget other forces are working for us too productivity increased sharply last year which means the average worker is producing more and can therefore earn more without driving prices higher in addition the fact that real spendable earnings rose so substantially last year will encourage reasonable wage demands this year workers will not have to catch up from an earlier slump in earnings finally we now have a new system of wage and price controls one that is the right kind of system for 1973 firm controls in force food prices fought any idea that controls have virtually been ended is totally wrong we still have firm controls we are still enforcing them firmly all that has changed is our method of enforcing them the old system depended on a washington bureaucracy to approve major wage and price increases in advance although it was effective while it lasted this system was beginning to produce inequities and to get tangled in red tape the new system will avoid these dangers like most of our laws it relies largely on on the voluntary cooperation of the american people but if some people should fail to cooperate we still have the will and the means to crack down on them to any economic interests which might feel that the new system will permit them openly or covertly to achieve gains beyond the safety limits we shall prescribe let me deliver this message in clear and unmistakable terms we will regard any flouting of our rules and standards as nothing less than attempted economic arson threatening our national economic we shall act accordingly we would like phase iii to be as voluntary as possible but we will make it as mandatory as necessary our new system of controls has broad support from business and labor the keystone for any successful program it will prepare us for the day when we no longer need controls it will allow us to concentrate on those areas where inflation has been most troublesome health care and especially food prices we are focusing particular attention and action on the tough problem of food prices these prices have risen sharply at the wholesale level in recent months so that figures for retail prices in january and february will inevitably show sharp increases in fact we will probably see increases in food prices for some months to come the underlying because of this problem is that food supplies have not risen fast enough to keep up with the rapidly rising demand but we must not accept rising food prices as a permanent feature of american life we must halt this inflationary spiral by attacking the causes of rising food prices on all fronts our first priority must be to increase supplies of food to meet the increasing demand we are moving vigorously to expand our food supplies we are encouraging farmers to put more acreage into production of both crops and livestock we are allowing more meat and dried milk to come in from abroad we have ended subsidies for agricultural exports and we are reducing the government agricultural stockpiles and encouraging farmers to sell the stock they own measures such as these will stop the rise of wholesale food prices and will slow the rise of retail food prices unfortunately nothing we can do will have a decisive effect in the next few months but the steps i have taken will have a powerful effect in the second half of the year these steps will also help our farmers to improve their incomes by producing more without corresponding price increases we anticipate that farm prices will be no higher at the end of this year than they were at the beginning for all of these reasons we have a good chance to reduce the overall inflation rate to 2 percent by the end of 1973 holding the line on taxes the third important economic question concerns how much money people pay out in taxes and how much they have left to control themselves here too the picture is promising since 1950 the share of the average family income taken for taxes in the united states has nearly doubled to more than 20 percent the average person worked less than one hour out of each day to pay his taxes in 1950 today he works nearly two hours each day for the tax collector in fact if tax cut proposals had not been adopted during our first term the average worker pay increase last year would have been wiped out completely by increased taxes and the taxpayers would have to pay out an additional 25 billion in personal income taxes this year the only way to hold the line on taxes is to hold the line on federal spending this is why we are cutting back eliminating or reforming federal programs that waste the taxpayers money my administration has now had four years of experience with all of our federal programs we have conducted detailed studies comparing their costs and results on the basis of that experience i am convinced that the cost of many federal programs can no longer be justified among them are housing programs that benefit the but the poor health programs that build more hospitals when hospital beds are now in surplus educational fellowships designed to attract more people into teaching when tens of thousands of teachers already can not find teaching jobs programs that subsidize education for the children of federal employees who already pay enough local taxes to support their local schools programs that blindly continue welfare payments to those who are ineligible or overpaid such programs may have appealing names they may sound like good causes but behind a fancy label can lie a dismal failure and unless we cut back now on the programs that have failed we will soon run out of money for the programs that succeed it has been charged that our budget cuts show a lack of compassion for the disadvantaged the best answer to this charge is to look at the facts we are budgeting 66 percent more to help the poor next year than was the case four years ago 67 percent more to help the sick 71 percent more to help older americans and 242 percent more to help the hungry and malnourished altogether our human resources budget is a record 125 billion nearly double that of four years ago when i came into office we have already shifted our spending priorities from defense programs to human resource programs now we must also switch our spending priorities from programs which give us a bad return on the dollar to programs that pay off that is how to show we truly care about the needy the question is not whether we help but how we help by eliminating programs that are wasteful we can concentrate on programs that work our recent round of budget cuts can save i i billion in this fiscal year 19 billion next fiscal year and 24 billion the year after that means an average saving of 700 over the next three years for each of america 75 million taxpayers without the savings i have achieved through program reductions and reforms those spending totals respectively would be 261 billion 288 billion and 312 which would spell either higher taxes a new surge of crippling inflation or both to hold the line on federal spending it is absolutely vital that we have the full cooperation of the congress i urge the congress as one of its most pressing responsibilities to adopt an overall spending ceiling for each fiscal year i also ask that it establish a regular procedure for ensuring that the ceiling is maintained the international challenge in recent years the attention of americans has increasingly turned to the serious questions confronting us in international trade and in the monetary arena this is no longer the era in which the united states preeminent in science marketing and services can dominate world markets with the advanced products of our technology and our advanced means of production this is no longer the era in which the united states can automatically sell more abroad than we purchase from foreign countries we face new challenges in international competition and are thus in a period of substantial adjustment in our relations with our trading partners one consequence of these developments was the step we took last week to change the relative value of the dollar in trading abroad we took this step because of a serious trade imbalance which could threaten the mounting prosperity of our people america has been buying more from other countries than they have been buying from us and just as a family or a company can not go on indefinitely buying more than it sells neither can a country changing the exchange rates will help us change this picture it means our exports will be priced more competitively in the international marketplace and should therefore sell better our imports on the other hand will not grow as fast but this step must now be followed by reforms which are more basic first we need a more flexible international monetary system one that will lead to balance without crisis the united states set forth fundamental proposals for such a system last september it is time for other nations to join us in getting action on these proposals secondly american products must get a fairer shake in a more open world trading system so that we can extend american markets and expand american jobs if other countries make it harder for our products to be sold abroad then our trade imbalance can only grow worse responsibility of the congress america is assuredly on the road to a new era of prosperity the road signs are clear and we are gathering more momentum with each passing month but we can easily lose our way unless the congress is on board helping to steer the course as we face 1973 in fact we may be sure that the state of our economy in the future will very much depend upon the decisions made this year on capitol hill over the course of the next few months i will urge prompt congressional action on a variety of economic proposals together these proposals will constitute one of the most important packages of economic initiatives ever considered by any congress in our history i hope as do all of our people that the congress will act with both discipline and dispatch among the items included in my 1973 economic package are extension of the economic stabilization program present authority will soon expire and i have asked the congress to extend the law for one year to april 30 1974 i hope this will be done without adding general mandatory standards or prescribing rigid advance that would only hamper sound administration of the program a highly complex economy simply can not be regulated effectively for extended periods in that way tax program i shall recommend a tax program that builds further reforms on those we achieved in 1969 and 1971 property tax relief i shall also submit recommendations for alleviating the crushing burdens which property taxes now create for older americans tax credit for nonpublic schools i shall propose legislation which would provide for income tax credit for tuition paid to nonpublic elementary and secondary schools these institutions are a valuable national resource relieving the public school system of enrollment pressures injecting a welcome variety into our educational process and expanding the options of millions of parents trade legislation another item high on our agenda will be new trade proposals which i will soon send to the congress they would make it easier for us not only to lower our trade barriers when other countries lower theirs but also to raise our barriers when that is necessary to keep things fair other reforms to modernize and make them more equitable and beneficial i shall also later submit recommendations for improving the performance of our private pension system our unemployment compensation program our minimum wage laws and the manner in which we deal with our transportation systems limits finally but most importantly i ask the congress to act this year to impose strict limits on federal spending the cuts i have suggested in this year budget did not come easily thus i can well understand that it may not be easy for the congress to sustain them as every special interest group lobbies with its own special congressional committees for its own special legislation but the congress should serve more than the special interest its first allegiance must always be to the public interest we must also recognize that no one in the congress is now charged with adding all of our federal expenditures considering their total impact on taxes and prices it is as if each member of a family went shopping on his own without knowing how much money was available in the overall family budget or how much other members of the family were spending or charging on various credit accounts to overcome these problems i urge prompt adoption by the congress of an overall spending ceiling for each fiscal year this action would allow the congress to work jointly with me in holding spending to 250 billion in the current fiscal year 269 billion next year and 288 billion in fiscal year 1975 beyond the adoption of an annual ceiling i also recommend that the congress consider internal reforms which would establish a regular mechanism for deciding how to maintain the ceiling i have no economic recommendation to make to the congress which is more important to the economic of our people i believe that most members of the house and senate want to hold down spending most congressmen voted for a spending ceiling in principle when the senate and house approved a ceiling last fall unfortunately the two bodies could not get together on a final version i believe they must get together soon so that the congress can proceed this year with a firm sense of budget discipline the stakes are high if we do not restrain spending and if my recommended cuts are reversed it would take a 15 percent increase in income taxes to pay for the additional expenditures the separation of powers between the president and the congress has become a favorite topic of discussion in recent weeks we should never of course lose our sharp concern for maintaining constitutional balances but we should never overlook the fact we have joint responsibilities as well as separate powers there are many areas in which the president and the congress should and must work together in behalf of all the people and the level of spending since it directly affects the pocketbooks of every family in the land is one of the most critical i have fulfilled my pledge that i would not recommend any programs that would require a general tax increase or would create inflationary pressures now it is up to the congress to match these efforts with a spending ceiling of its own making a choice we stand on the threshold of a new era of prolonged and growing prosperity for the united states unlike past booms this new prosperity will not depend on the stimulus of war it will not be eaten away by the blight of inflation it will be solid it will be steady and it will be sustainable if we act responsibly this new prosperity can be ours for many years to come if we do not then as franklin roosevelt once warned we could be wrecked on the rocks of loose fiscal policy the choice is ours let us choose responsible prosperity richard nixon the white house february 22 1973
congress united states today third section 1973 state union message wish report state economy urge congress join building foundations new era prosperity united states state union depends fundamentally state economy pleased report economic prospects bright first time nearly 20 years look forward period genuine prosperity time peace fact achieve bountiful prosperity nation ever known goal attained however discipline unite certain basic policies must restrained federal spending must show reasonableness relations must comply fully new phase iii requirements economic stabilization program must continue battle hold price food must vigorously meet challenge foreign trading competition clear american people stand firmly together support policies president stands members 93rd congress consider alternatives us year confident join great endeavor impact economy people lives message present basic economic recommendations priorities indicate areas detailed plans submitted later also want discuss economic situation less formal terms statistical measurements comparisons projections affect daily lives individual americans families build economy create cold impersonal statistics record books better lives people basically economy affects people three ways first affects jobs plentiful secure good second affects people paid jobs much buy income finally affects much people pay back government taxes job picture encouraging begin job picture today encouraging number people work country rose million largest increase 25 years unemployment fell 6 percent level 1971 5 percent last month reason jobs grown rapidly economy grew real terms 6 percent last year one best performances past quarter century economic advisers expect growth rate nearly 7 percent 1973 would bring unemployment around 4 percent level end year five percent unemployment high nevertheless instructive examine 5 percent figure closely example 40 percent counted unemployed status lost last job rate layoffs end last year lower since korean war 60 percent either left last job voluntarily seeking jobs first time labor force period time 45 percent unemployed unemployed less five weeks compared earlier periods overall unemployment rate unemployment rate significantly lower adult males household heads married men among married men percent unemployment among groups decline even 1973 employment gain even remarkable since many people seeking jobs usual example nearly three million americans released jobs since 1969 including one million veterans unemployment rate veterans vietnam war stands percent general rate unemployment slightly rate males age bracket much better percent year ago percent rate still high employment problems veterans given much country remain high list concerns coming year women young people also seeking work record numbers yet case veterans jobs groups increasing even faster unemployment among women young people thus declined also much high constitutes great waste nation move new era peacetime prosperity economic system going room indeed going need nearly every available hand role women economy thus bound grow expansion opportunities women right also america able achieve full economic potential unless every woman wants work find job provides fair compensation equal opportunity advancement administration committed promotion goal support equal rights amendment opened doors employment qualified women federal service called similar efforts businesses institutions receive federal contracts assistance last year established advisory committee economic role women committee provide leadership helping identify economic problems facing women helping change attitudes create unjust illogical barriers employment pay purchasing power second great question people paid jobs much buy news also good people working getting work average per capita income rose percent 1972 well average gain previous ten years important thing however gains wiped rising prices often 1960 federal government spent much fast period result runaway inflation wages may climbed rapidly years purchasing power instead purchasing power stalled even moved backward inflation created economic treadmill sometimes required person achieve 6 percent salary increase every year stay even changed inflation rate last year cut nearly half four years ago purchasing power average worker takehome pay rose last year year since 1955 went percent equivalent two extra weekly paychecks expect inflation reduced even 1973 several reasons fundamental reason nation growing opposition runaway federal spending public increasingly perceives spending prices taxes result good chance best years curb growth federal budget anything else protect family budget forces working us productivity increased sharply last year means average worker producing therefore earn without driving prices higher addition fact real spendable earnings rose substantially last year encourage reasonable wage demands year workers catch earlier slump earnings finally new system wage price controls one right kind system 1973 firm controls force food prices fought idea controls virtually ended totally wrong still firm controls still enforcing firmly changed method enforcing old system depended washington bureaucracy approve major wage price increases advance although effective lasted system beginning produce inequities get tangled red tape new system avoid dangers like laws relies largely voluntary cooperation american people people fail cooperate still means crack economic interests might feel new system permit openly covertly achieve gains beyond safety limits shall prescribe let deliver message clear unmistakable terms regard flouting rules standards nothing less attempted economic arson threatening national economic shall act accordingly would like phase iii voluntary possible make mandatory necessary new system controls broad support business labor keystone successful program prepare us day longer need controls allow us concentrate areas inflation troublesome health care especially food prices focusing particular attention action tough problem food prices prices risen sharply wholesale level recent months figures retail prices january february inevitably show sharp increases fact probably see increases food prices months come underlying problem food supplies risen fast enough keep rapidly rising demand must accept rising food prices permanent feature american life must halt inflationary spiral attacking causes rising food prices fronts first priority must increase supplies food meet increasing demand moving vigorously expand food supplies encouraging farmers put acreage production crops livestock allowing meat dried milk come abroad ended subsidies agricultural exports reducing government agricultural stockpiles encouraging farmers sell stock measures stop rise wholesale food prices slow rise retail food prices unfortunately nothing decisive effect next months steps taken powerful effect second half year steps also help farmers improve incomes producing without corresponding price increases anticipate farm prices higher end year beginning reasons good chance reduce overall inflation rate 2 percent end 1973 holding line taxes third important economic question concerns much money people pay taxes much left control picture promising since 1950 share average family income taken taxes united states nearly doubled 20 percent average person worked less one hour day pay taxes 1950 today works nearly two hours day tax collector fact tax cut proposals adopted first term average worker pay increase last year would wiped completely increased taxes taxpayers would pay additional 25 billion personal income taxes year way hold line taxes hold line federal spending cutting back eliminating reforming federal programs waste taxpayers money administration four years experience federal programs conducted detailed studies comparing costs results basis experience convinced cost many federal programs longer justified among housing programs benefit poor health programs build hospitals hospital beds surplus educational fellowships designed attract people teaching tens thousands teachers already find teaching jobs programs subsidize education children federal employees already pay enough local taxes support local schools programs blindly continue welfare payments ineligible overpaid programs may appealing names may sound like good causes behind fancy label lie dismal failure unless cut back programs failed soon run money programs succeed charged budget cuts show lack compassion disadvantaged best answer charge look facts budgeting 66 percent help poor next year case four years ago 67 percent help sick 71 percent help older americans 242 percent help hungry malnourished altogether human resources budget record 125 billion nearly double four years ago came office already shifted spending priorities defense programs human resource programs must also switch spending priorities programs give us bad return dollar programs pay show truly care needy question whether help help eliminating programs wasteful concentrate programs work recent round budget cuts save billion fiscal year 19 billion next fiscal year 24 billion year means average saving 700 next three years america 75 million taxpayers without savings achieved program reductions reforms spending totals respectively would 261 billion 288 billion 312 would spell either higher taxes new surge crippling inflation hold line federal spending absolutely vital full cooperation congress urge congress one pressing responsibilities adopt overall spending ceiling fiscal year also ask establish regular procedure ensuring ceiling maintained international challenge recent years attention americans increasingly turned serious questions confronting us international trade monetary arena longer era united states preeminent science marketing services dominate world markets advanced products technology advanced means production longer era united states automatically sell abroad purchase foreign countries face new challenges international competition thus period substantial adjustment relations trading partners one consequence developments step took last week change relative value dollar trading abroad took step serious trade imbalance could threaten mounting prosperity people america buying countries buying us family company go indefinitely buying sells neither country changing exchange rates help us change picture means exports priced competitively international marketplace therefore sell better imports hand grow fast step must followed reforms basic first need flexible international monetary system one lead balance without crisis united states set forth fundamental proposals system last september time nations join us getting action proposals secondly american products must get fairer shake open world trading system extend american markets expand american jobs countries make harder products sold abroad trade imbalance grow worse responsibility congress america assuredly road new era prosperity road signs clear gathering momentum passing month easily lose way unless congress board helping steer course face 1973 fact may sure state economy future much depend upon decisions made year capitol hill course next months urge prompt congressional action variety economic proposals together proposals constitute one important packages economic initiatives ever considered congress history hope people congress act discipline dispatch among items included 1973 economic package extension economic stabilization program present authority soon expire asked congress extend law one year april 30 1974 hope done without adding general mandatory standards prescribing rigid advance would hamper sound administration program highly complex economy simply regulated effectively extended periods way tax program shall recommend tax program builds reforms achieved 1969 1971 property tax relief shall also submit recommendations alleviating crushing burdens property taxes create older americans tax credit nonpublic schools shall propose legislation would provide income tax credit tuition paid nonpublic elementary secondary schools institutions valuable national resource relieving public school system enrollment pressures injecting welcome variety educational process expanding options millions parents trade legislation another item high agenda new trade proposals soon send congress would make easier us lower trade barriers countries lower also raise barriers necessary keep things fair reforms modernize make equitable beneficial shall also later submit recommendations improving performance private pension system unemployment compensation program minimum wage laws manner deal transportation systems limits finally importantly ask congress act year impose strict limits federal spending cuts suggested year budget come easily thus well understand may easy congress sustain every special interest group lobbies special congressional committees special legislation congress serve special interest first allegiance must always public interest must also recognize one congress charged adding federal expenditures considering total impact taxes prices member family went shopping without knowing much money available overall family budget much members family spending charging various credit accounts overcome problems urge prompt adoption congress overall spending ceiling fiscal year action would allow congress work jointly holding spending 250 billion current fiscal year 269 billion next year 288 billion fiscal year 1975 beyond adoption annual ceiling also recommend congress consider internal reforms would establish regular mechanism deciding maintain ceiling economic recommendation make congress important economic people believe members house senate want hold spending congressmen voted spending ceiling principle senate house approved ceiling last fall unfortunately two bodies could get together final version believe must get together soon congress proceed year firm sense budget discipline stakes high restrain spending recommended cuts reversed would take 15 percent increase income taxes pay additional expenditures separation powers president congress become favorite topic discussion recent weeks never course lose sharp concern maintaining constitutional balances never overlook fact joint responsibilities well separate powers many areas president congress must work together behalf people level spending since directly affects pocketbooks every family land one critical fulfilled pledge would recommend programs would require general tax increase would create inflationary pressures congress match efforts spending ceiling making choice stand threshold new era prolonged growing prosperity united states unlike past booms new prosperity depend stimulus war eaten away blight inflation solid steady sustainable act responsibly new prosperity many years come franklin roosevelt warned could wrecked rocks loose fiscal policy choice let us choose responsible prosperity richard nixon white house february 22 1973
congress unite state today third section 1973 state union message wish report state economy urge congress join build foundation new era prosperity united state state union depend fundamentally state economy please report economic prospect bright first time nearly 20 year look forward period genuine prosperity time peace fact achieve bountiful prosperity nation ever know goal attain however discipline unite certain basic policy must restrain federal spending must show reasonableness relation must comply fully new phase iii requirement economic stabilization program must continue battle hold price food must vigorously meet challenge foreign trading competition clear american people stand firmly together support policy president stand member 93rd congress consider alternative u year confident join great endeavor impact economy people live message present basic economic recommendation priority indicate area detail plan submit later also want discuss economic situation less formal term statistical measurement comparison projection affect daily life individual american family build economy create cold impersonal statistic record book well live people basically economy affect people three way first affect job plentiful secure good second affect people pay job much buy income finally affect much people pay back government tax job picture encourage begin job picture today encouraging number people work country rise million large increase 25 year unemployment fell 6 percent level 1971 5 percent last month reason job grow rapidly economy grow real term 6 percent last year one best performance past quarter century economic adviser expect growth rate nearly 7 percent 1973 would bring unemployment around 4 percent level end year five percent unemployment high nevertheless instructive examine 5 percent figure closely example 40 percent count unemployed status lose last job rate layoff end last year lower since korean war 60 percent either leave last job voluntarily seek job first time labor force period time 45 percent unemployed unemployed less five week compare early period overall unemployment rate unemployment rate significantly low adult male household head marry men among married men percent unemployment among group decline even 1973 employment gain even remarkable since many people seek job usual example nearly three million american release job since 1969 include one million veteran unemployment rate veteran vietnam war stand percent general rate unemployment slightly rate male age bracket much well percent year ago percent rate still high employment problem veteran give much country remain high list concern come year woman young people also seek work record number yet case veteran job group increase even faster unemployment among woman young people thus decline also much high constitutes great waste nation move new era peacetime prosperity economic system go room indeed go need nearly every available hand role woman economy thus bound grow expansion opportunity woman right also america able achieve full economic potential unless every woman want work find job provide fair compensation equal opportunity advancement administration commit promotion goal support equal right amendment open door employment qualify woman federal service call similar effort business institution receive federal contract assistance last year establish advisory committee economic role woman committee provide leadership help identify economic problem face woman help change attitude create unjust illogical barrier employment pay purchase power second great question people pay job much buy news also good people work get work average per capita income rise percent 1972 well average gain previous ten year important thing however gain wipe rise price often 1960 federal government spend much fast period result runaway inflation wage may climb rapidly year purchase power instead purchase power stall even move backward inflation create economic treadmill sometimes required person achieve 6 percent salary increase every year stay even change inflation rate last year cut nearly half four year ago purchase power average worker takehome pay rise last year year since 1955 go percent equivalent two extra weekly paycheck expect inflation reduce even 1973 several reason fundamental reason nation grow opposition runaway federal spending public increasingly perceive spend price tax result good chance best year curb growth federal budget anything else protect family budget force work u productivity increase sharply last year mean average worker produce therefore earn without drive price high addition fact real spendable earnings rise substantially last year encourage reasonable wage demand year worker catch early slump earnings finally new system wage price control one right kind system 1973 firm control force food price fight idea control virtually end totally wrong still firm control still enforce firmly change method enforce old system depend washington bureaucracy approve major wage price increase advance although effective lasted system begin produce inequity get tangle red tape new system avoid danger like law relies largely voluntary cooperation american people people fail cooperate still mean crack economic interest might feel new system permit openly covertly achieve gain beyond safety limit shall prescribe let deliver message clear unmistakable term regard flout rule standard nothing less attempted economic arson threaten national economic shall act accordingly would like phase iii voluntary possible make mandatory necessary new system control broad support business labor keystone successful program prepare u day long need control allow u concentrate area inflation troublesome health care especially food price focus particular attention action tough problem food price price rise sharply wholesale level recent month figure retail price january february inevitably show sharp increase fact probably see increase food price month come underlie problem food supply rise fast enough keep rapidly rise demand must accept rise food price permanent feature american life must halt inflationary spiral attack cause rise food price front first priority must increase supply food meet increase demand move vigorously expand food supply encourage farmer put acreage production crop livestock allow meat dry milk come abroad end subsidy agricultural export reduce government agricultural stockpile encourage farmer sell stock measure stop rise wholesale food price slow rise retail food price unfortunately nothing decisive effect next month step take powerful effect second half year step also help farmer improve income produce without correspond price increase anticipate farm price higher end year begin reason good chance reduce overall inflation rate 2 percent end 1973 hold line tax third important economic question concern much money people pay tax much leave control picture promise since 1950 share average family income take tax united state nearly double 20 percent average person work less one hour day pay tax 1950 today work nearly two hour day tax collector fact tax cut proposal adopt first term average worker pay increase last year would wipe completely increased tax taxpayer would pay additional 25 billion personal income tax year way hold line tax hold line federal spending cut back eliminate reform federal program waste taxpayer money administration four year experience federal program conduct detailed study compare cost result basis experience convince cost many federal program longer justified among housing program benefit poor health program build hospital hospital bed surplus educational fellowship design attract people teach ten thousand teacher already find teach job program subsidize education child federal employee already pay enough local tax support local school program blindly continue welfare payment ineligible overpaid program may appeal name may sound like good cause behind fancy label lie dismal failure unless cut back program fail soon run money program succeed charge budget cut show lack compassion disadvantage best answer charge look facts budget 66 percent help poor next year case four year ago 67 percent help sick 71 percent help older american 242 percent help hungry malnourish altogether human resource budget record 125 billion nearly double four year ago come office already shift spending priority defense program human resource program must also switch spending priority program give u bad return dollar program pay show truly care needy question whether help help eliminate program wasteful concentrate program work recent round budget cut save billion fiscal year 19 billion next fiscal year 24 billion year mean average save 700 next three year america 75 million taxpayer without saving achieve program reduction reform spend total respectively would 261 billion 288 billion 312 would spell either high tax new surge cripple inflation hold line federal spending absolutely vital full cooperation congress urge congress one pressing responsibility adopt overall spending ceiling fiscal year also ask establish regular procedure ensure ceiling maintain international challenge recent year attention americans increasingly turn serious question confront u international trade monetary arena longer era united state preeminent science marketing service dominate world market advanced product technology advance mean production longer era united state automatically sell abroad purchase foreign country face new challenge international competition thus period substantial adjustment relation trade partner one consequence development step take last week change relative value dollar trading abroad take step serious trade imbalance could threaten mount prosperity people america buy country buy u family company go indefinitely buy sell neither country change exchange rate help u change picture mean export price competitively international marketplace therefore sell good import hand grow fast step must follow reform basic first need flexible international monetary system one lead balance without crisis united state set forth fundamental proposal system last september time nation join u get action proposal secondly american product must get fair shake open world trading system extend american market expand american job country make harder product sell abroad trade imbalance grow bad responsibility congress america assuredly road new era prosperity road sign clear gather momentum pass month easily lose way unless congress board help steer course face 1973 fact may sure state economy future much depend upon decision make year capitol hill course next month urge prompt congressional action variety economic proposal together proposal constitute one important package economic initiative ever consider congress history hope people congress act discipline dispatch among item include 1973 economic package extension economic stabilization program present authority soon expire ask congress extend law one year april 30 1974 hope do without add general mandatory standard prescribe rigid advance would hamper sound administration program highly complex economy simply regulate effectively extend period way tax program shall recommend tax program build reform achieve 1969 1971 property tax relief shall also submit recommendation alleviate crush burden property tax create old american tax credit nonpublic school shall propose legislation would provide income tax credit tuition pay nonpublic elementary secondary school institution valuable national resource relieve public school system enrollment pressure inject welcome variety educational process expand option million parent trade legislation another item high agenda new trade proposal soon send congress would make easy u low trade barrier country low also raise barrier necessary keep thing fair reform modernize make equitable beneficial shall also later submit recommendation improve performance private pension system unemployment compensation program minimum wage law manner deal transportation system limit finally importantly ask congress act year impose strict limit federal spending cut suggest year budget come easily thus well understand may easy congress sustain every special interest group lobby special congressional committee special legislation congress serve special interest first allegiance must always public interest must also recognize one congress charge add federal expenditure consider total impact tax price member family go shop without know much money available overall family budget much member family spend charge various credit account overcome problem urge prompt adoption congress overall spending ceiling fiscal year action would allow congress work jointly hold spend 250 billion current fiscal year 269 billion next year 288 billion fiscal year 1975 beyond adoption annual ceiling also recommend congress consider internal reform would establish regular mechanism decide maintain ceiling economic recommendation make congress important economic people believe member house senate want hold spending congressman vote spend ceiling principle senate house approve ceiling last fall unfortunately two body could get together final version believe must get together soon congress proceed year firm sense budget discipline stake high restrain spending recommend cut reverse would take 15 percent increase income tax pay additional expenditure separation power president congress become favorite topic discussion recent week never course lose sharp concern maintain constitutional balance never overlook fact joint responsibility well separate power many area president congress must work together behalf people level spend since directly affect pocketbook every family land one critical fulfil pledge would recommend program would require general tax increase would create inflationary pressure congress match effort spend ceiling make choice stand threshold new era prolong grow prosperity united state unlike past boom new prosperity depend stimulus war eat away blight inflation solid steady sustainable act responsibly new prosperity many year come franklin roosevelt warn could wreck rock loose fiscal policy choice let u choose responsible prosperity richard nixon white house february 22 1973