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The original documents are located in Box 4, folder "1/13/75 - T.V. Address, Preview of the
State of the Union Message (Includes drafts) (1)" of the President's Speeches and
Statements: Reading Copies at the Gerald R. Ford Presidential Library.
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FINAL
/
Good evening.
Without wasting words, I want to talk with you tonight
about putting our domestic house in order.
We must turn America in a new direction.
reduce unemployment
We must reverse the current recession and create more
1
jobs
We must restore the confidence of consumers and
investors alike.
cust
We must continue an effective plan to lick inflation.
We must, without delay, take firm control of our
progress as a free people.
Together we can and will do this job. Our national
character is strong on self-discipline and the will-to-win.
Americans are at their very best when the going is rough.
Digitized from Box 4 of President's Speeches and Statements: Reading Copies at the Gerald R. Ford Presidential Library
2
Right now the going is rough and it may bet rougher.
If we do what must be done we get will well on our way to better
On Wednesday I will report to the new Congress on the State
have Ad histome
days We
of the Union and ask for its help to quickly improve it. But
neither Congress nor the President can pass laws or issue
orders to assure economic improvement and instant prosperity.
The governmen t can help by equalizing unfair burdens, by
setting an example of sound economic actions, and by exerting
leadership through a clear and coordinated national recovery
program
plan.
Tonight, I want to talk to you about what must be done.
After all, you are the people most affected by it.
Since becoming your President five months ago, economic
problems have been my foremost concern. Two elements
of our problem are long-range---inflation and energy. Both
are affected not only by our actions, but also by international
3
forces beyond our direct control. The new and disturbing
element in the economic picture is our worsening recession and the
unemployment that goes with it.
We have made some progress in slowing the upward
spiral of inflation and getting interest rates started down. But,
we have suffered sudden and serious setbacks in sales and
unemployment.
Therefore, we must shift our emphasis from inflation
to recession.
But, in doing so, we must not lose sight of the very real and deadly
dangers of rising prices and declining domestic energy
supplies. Americans are no longer in full control of their
own national destiny when that destiny depends on uncertain
foreign fuel at high prices fixed by others. Higher energy
costs compound both inflation and recession. And, Dependence
4
on others for future energy supplies is intolerable to our
national security.
To meet this Triple challenge
Therefore, we must wage a simultaneous three-front
campaign against recession, inflation and energy dependence.
any one of these inemes could desting the country we Look.
We have not choice.
We need, within 90 days, the strongest and most far reaching
energy conservation program we have ever had. Yes, gasoline
and oil will cost even more than they do now. But this program
will achieve two important objectives: It will discourage the
unnecessary use of petroleum products, and it will encourage
the development and substitution of other fuels and newer
sources of energy.
To get started immediately on an urgent national energy
plans, I will use the Presidential emergency powers to
reduce our dependence on foreign oil by raising import fees
on each barrel of foreign crude oil from one dollar to three
5
dollars over the next three month. A more comprehensive
program of energy conservation taxes on oil and natural gas,
to reduce consumption substantially must be enacted by the
Congress.
The e revenues derived from such taxes will
be returned to the economy. In addition, my energy conser-
allocation authority
vation program contains provisions to avoid undue hardships
in any one geographic area, such as
New England -- or in any specific industries or areas of human need,
where oil is essential. The plan prevents windfall profits by producers.
a cordmated
There must also be volunteer efforts to cut gasoline and other energy
use. My national energy conservation plan will urge Congress to grant
a five-year delay on higher automobile pollution standards in order to
achieve a 40 percent improvement in miles per gallon. Stronger measures
to speed the development of other domestic energy resources, such as
coal, geothermal, solar and nuclear power are also essential.
This plan requires personal sacrifice. But if we all pitch in, we
will meet our goal of reducing foreign oil imports by 1 million barrels
a day by the end of this year and by 2 million barrels before the end of
1977.
The energy conservation measures I have outlined tonight will be
supplemented by use of Presidential authority power to limit oil imports as
7
necessary to fully achieve these goals.
By 1985 -- 10 years from now -- the United States will be
invulnerable to foreign energy disruptions or oil embargoes such
as we experienced last year. Of course, our dome stic needs come
can spart semilar
first, But our gains in energy independence will be fully coordinated
with our friends abroad. Our Morts will prompt similar action
free india by our allies.
If Congress speedily enacts this national energy program, there
will be no need for compulsory rationing or long waiting lines at the
service station.
Gasoline prices will go up, though not as much as
with a 20¢ -a-gallon gas tax. Furthermore, the burden of the
conservation taxes on oil will be shared by all petroleum uses
users, not just motorists.
Now, let me talk about the problem of unemployment.
This country needs an immediate Federal income tax
cut of $16 billion. Twelve billion dollars or three-fourths of
the total of this cut should go to individual taxpayers in the form
2
of a cash rebate amounting to percent of their 1974 tax
#1000
payments, -- up to $500. If Congress acts by April 1st, you
in may
one
by lept 1st
will get your first check by June and two more installm
for half the relate by May & the vist by sept
the
remainder
of
The other one-fourth of the cut -- about $4 billion will
go to business taxpayers--including farmers to promote
plan expansion and create more jobs.
This will be in the
form of an increase in the investment tax credit to 12 percent
for one year. There will be special provision to assist
essential public utilities to step up their energy capacity.
This will encourage capital spending and productivity,
the key to recovery and growth.
As soon as the new revenues from energy conservation
taxes are received, we will be able to return 30 billion dollars
to the eonomy in the form of additional payments and credits
to individuals, business and State and local governments.
Cash payments from this total also will be available
to those who pay no income taxes because of low earnings,
they are the hardest hit by inflation and higher energy costs.
This combines program adds up to 46 billion dollars-
30 billion dollars in returned energy tax revenues to compen-
sate for higher fuel costs--and 16 billion dollars in 1974 tax
cuts to help provide more jobs.
10
And, the energy conservation tax revenues, will continue to
be put back into the economy as long as the emergency lasts.
PI
This economic program is different in emphasis from the proposals
I put forward last October. The reason is that the situation has changed.
You know it and I know it. What we need most urgently today is more
spending money in your pockets rather than in the Treasury in Washington.
Let's face it -- this will mean a bigger Federal deficit temporarily.
And deficits are something I fought against all my public life. But unless
our economy revives rapidly, Federal taxes will shrink so much that
future deficits will be even larger. As a realist, I have concluded that a
larger deficit now is better than future economic and fiscal calamity.
But I have not abandoned my lifelong belief in Federal restraint.
In the long run, there is no other real remedy.
While wrestling with the budgets for this year and next, I found
that at least three-fourths of all Federal expenditures are required by
laws already on the books. The President cannot by law cut spending
91
in an ever-growing list of programs which provide mandatory formulas
for payments to State and local governments and to families and
individuals.
Unless these laws are changed, I can tell you there are only two
ways to go -- still higher Federal taxes or the more ruinous hidden tax of
inflation. Unchecked, Federal programs -- - mandated by law -- will be the
prime contributors to Federal deficits of 30 to 50 billion dollars this year
and next. Deficits of this magnitude are wrong - - except on a temporary
basis in the most extenuating circumstances. Reform of these costly
mandated federal spending programs will take time. Meanwhile, in order
to keep the budget deficit as low as possible, I have decided to take interim
steps.
In my State of the Union and subsequent messages, I will not propose
any new Federal spending programs, except for energy. And the Congress --
your representatives in Washington -- - - share an equal responsibility to see
that no new spending programs are enacted. I will not hesitate to veto any
new spending programs that Congress sends to me.
13
Many proposed Federal spending programs are desirable and
have had my support in the past. But they cost money -- your tax dollars!
Plainly it is time to declare a one-year moratorium on new Federal spending
programs. I need your support in this. It is vital that your Representatives
in Congress know that you share this concern about inflation.
I believe the Federal Government ought to show all Americans it
practices what it preaches about sacrifice and self-restraint.
Therefore I will insist on a 5 percent limit on any Federal pay
increases in 1975 and I will ask Congress to put the same temporary
5 percent ceiling on automatic cost-of-living increases in government and
military retirement pay, and Social Security.
Government alone cannot bring the cost of living down. But until
it does start down, government can except for conservation purposes,
refrain from pushing it up. For only when the cost of living comes down,
can everybody get full value from a pension or paycheck. I want to hasten
that day.
14
Tonight I have summarized the highlights of my energy and my
economic programs. They must go hand in hand -- as I see it.
On Wednesday, I will spell out these proposals to the Congress.
There will be other recommendations, both short-term and long-range, to
make our program as fair to all as possible. I will press for prompt action
and responsible legislation. The danger of doing nothing is great; the danger
of doing too much is just as great. We cannot afford to throw monkey
wrenches into our complex economic machine, just because it isn't running
at full speed.
We are in trouble, but we are not on the brink of another Great
Depression. Our political and economic system today is many times
stronger than it was in the 1930's. We have income safeguards and
unemployment cushions built into our economy. I have taken and will continue
to take whatever steps are needed to prevent massive dislocations and personal
/
AT
hardships -- and in particular, the tragedy of rising unemployment.
But sound solutions to our economic difficulties depend primarily
on the strong support of each one of you. Self-restraint must be exercised
by big and small business, by organized and unorganized labor, by
State and local governments as well as by the Federal Government.
No one will be allowed to prosper from the temporary hardships most of
us willingly bear. Nor can we permit any special interests to gain from
our common distress.
To improve the economic outlook we must rekindle faith in ourselves.
Nobody is going to pull us out of our troubles but ourselves -- and by our
own bootstraps.
In 200 years as a nation, we have triumphed over external
enemies and internal conflicts -- and each time, we have emerged stronger
than before.
/
This has called for determined leaders and dedicated people
and this call has never gone unheeded. In every crisis, the American
people have closed ranks, rolled up their sleeves and rallied
to do whatever had to be done.
I ask you and those who represent you in the Congress to work to
turn our economy around, declare our energy independence, and resolve to
make our free society again the wonder of the world.
The beginning of our Bicentennial celebration is a good time to
reaffirm our pride and purpose as Americans who help themselves and
help their neighbors no matter how tough the task.
For my part, I will do what I believe is right for all our people --
to do my best for America as long as I occupy this historic house. Thank
you for joining me tonight. We know what must be done. If delay is
preferable to error, as Jefferson said, so action is now preferable to
perfection.
19
The time to act is now. We have our Nation to preserve --
and our future to protect. Let us join together, and may God bless our
endeavors.
Thank you and Good Night.
####
THE PRESIDENT HAS SEEN of
TV ADDRESS, PREVIEW OF THE STATE OF THE UNION MESSAGE
JANUARY 13, 1975
- 1 -
GOOD EVENING.
WITHOUT WASTING WORDS, I WANT TO TALK WITH YOU
TONIGHT ABOUT PUTTING OUR DOMESTIC HOUSE IN ORDER.
WE MUST REVERSE THE CURRENT RECESSION.
WE MUST HALT UNEMPLOYMENT AND CREATE MORE JOBS.
WE MUST RESTORE CONFIDENCE AMONG CONSUMERS AND
INVESTORS ALIKE.
WE MUST CONTINUE AN EFFECTIVE PLAN TO LICK INFLATION.
WE MUST, WITHOUT DELAY, TAKE FIRM CONTROL OF
OUR FUTURE PROGRESS AS A FREE PEOPLE.
- 2 -
TOGETHER WE CAN AND WILL DO THIS JOB.
OUR NATIONAL
CHARACTER IS STRONG ON SELF-DISCIPLINE AND THE WILL TO WIN.
AMERICANS ARE AT THEIR VERY BEST WHEN THE GOING IS ROUGH.
RIGHT NOW THE GOING IS ROUGH AND IT MAY GET ROUGHER.
ON WEDNESDAY I WILL REPORT TO THE NEW CONGRESS
ON THE STATE OF THE UNION AND ASK FOR ITS HELP TO QUICKLY IMPROVE
IT.
BUT NEITHER CONGRESS NOR THE PRESIDENT CAN PASS LAWS
OR ISSUE ORDERS TO GUARANTEE ECONOMIC IMPROVEMENT AND
INSTANT PROSPERITY.
- 3 -
BUT GOVERNMENT CAN HELP BY EQUALIZING UNFAIR BURDENS,
BY SETTING AN EXAMPLE OF SOUND ECONOMIC ACTIONS, AND BY
EXERTING LEADERSHIP THROUGH A CLEAR AND COORDINATED NATIONAL
RECOVERY PLAN.
TONIGHT, LET ME GIVE YOU A PREVIEW OF MY PLAN.
AFTER ALL, YOU ARE THE PEOPLE MOST AFFECTED BY IT.
- 4 -
SINCE BECOMING YOUR PRESIDENT, ECONOMIC PROBLEMS
HAVE BEEN MY FIRST AND FOREMOST CONCERN.
TWO ELEMENTS
OF OUR TOTAL PROBLEM ARE LONG-RANGE -- INFLATION AND ENERGY.
BOTH ARE AFFECTED NOT ONLY BY OUR OWN ACTIONS BUT ALSO
BY INTERNATIONAL FORCES BEYOND OUR DIRECT CONTROL.
THE NEW
AND DISTURBING ELEMENT IN THE ECONOMIC PICTURE IS OUR
WORSENING RECESSION AND THE UNEMPLOYMENT THAT GOES WITH IT.
- 5 -
OVER THE PAST THREE MONTHS, SINCE MY FIRST ECONOMIC
PROGRAM WAS PUT TOGETHER, WE HAVE MADE PROGRESS IN SLOWING
THE UPWARD SPIRAL OF INFLATION AND GETTING INTEREST RATES
STARTED DOWN. BUT, FRANKLY, WE HAVE SUFFERED SUDDEN AND
SERIOUS SETBACKS IN SALES AND EMPLOYMENT.
THEREFORE, WE MUST SHIFT OUR NUMBER ONE TARGET
FROM RUNAWAY INFLATION TO RECESSION.
- 6 -
IN DOING so, WE MUST NOT LOSE SIGHT OF THE VERY REAL
AND DEADLY DANGERS OF RISING PRICES AND DECLINING DOMESTIC
ENERGY SUPPLIES.
AMERICANS ARE NO LONGER IN CONTROL
OF THEIR OWN NATIONAL DESTINY WHEN THAT DESTINY DEPENDS ON
UNCERTAIN FOREIGN FUEL AT HIGH PRICES FIXED BY OTHERS.
HIGHER
ENERGY COSTS COMPOUND BOTH INFLATION AND RECESSION.
DEPENDENCE ON OTHERS FOR FUTURE ENERGY SUPPLIES IS INTOLERABLE
TO OUR NATIONAL SECURITY.
- 7 -
THEREFORE, WE MUST WAGE A SIMULTANEOUS THREE-FRONT
CAMPAIGN AGAINST RECESSION, INFLATION AND ENERGY DEPENDENCE.
ANY ONE OF THESE ENEMIES COULD DESTROY THE COUNTRY WE LOVE.
I WILL ASK THE NEW CONGRESS TO ENACT ON A CRASH BASIS --
WITHIN NINETY DAYS OR LESS -- THE STRONGEST AND MOST FAR-REACHING
yes
ENERGY CONSERVATION PROGRAM WE HAVE EVER HAD.
IT IS COMPLEX
AND CONTROVERSIAL -- AND IT WILL MAKE GASOLINE AND OIL COST EVEN
MORE THAN THEY DO NOW.
BUT IT WILL ACHIEVE TWO ALL IMPORTANT
OBJECTIVES: IT WILL DISCOURAGE THE UNNECESSARY USE OF PETROLEUM
PRODUCTS, AND IT WILL ENCOURAGE THE DEVELOPMENT AND SUBSTITUTION
OF OTHER FUELS AND NEWER ENERGY SOURCES.
- 8 -
HERE IS MY ENERGY PLAN:
TO GET STARTED IMMEDIATELY, I WILL USE LIMITED PRESIDENTIAL
EMERGENCY POWERS TO REDUCE OUR DEPENDENCE ON FOREIGN SOURCES
BY ESCALATING IMPORT FEES ON EACH BARREL OF FOREIGN OIL PRODUCTS
BEGINNING FEBRUARY FIRST -- ONE DOLLAR THE FIRST MONTH,
TWO DOLLARS THE SECOND AND THREE DOLLARS THE THIRD MONTH AND
THEREAFTER.
I WILL ALSO PROPOSE A MORE COMPREHENSIVE PROGRAM
OF ENERGY CONSERVATION TAXES ON GAS AND OIL TO REDUCE CONSUMPTION.
- 9 -
WE WILL USE THE REVENUES DERIVED FROM SUCH TAXES TO HELP STIMULATE
THE WHOLE ECONOMY.
IN ADDITION, MY ENERGY CONSERVATION
PROGRAM CONTAINS PROVISIONS TO AVOID UNDUE HARDSHIPS IN ANY
GEOGRAPHICAL AREA, SUCH AS NEW ENGLAND -- OR IN ANY SPECIFIC
INDUSTRIES OR AREAS OF HUMAN NEED WHERE OIL IS ESSENTIAL.
- 10 -
THE PLAN TAKES AWAY WINDFALL PROFITS BY PRODUCERS.
I EMPHASIZE
THERE MUST ALSO BE A WELL-COORDINATED VOLUNTEER CAMPAIGN TO CUT
GASOLINE AND OTHER ENERGY USE.
MY NATIONAL ENERGY CONSERVATION
PLAN WILL URGE CONGRESS TO GRANT A FIVE-YEAR DELAY ON HIGHER
AUTOMOBILE EMISSION STANDARDS IN ORDER TO ACHIEVE A FORTY PERCENT
SAVING IN GASOLINE CONSUMPTION.
I WILL RECOMMEND STRONGER
MEASURES TO SPEED THE DEVELOPMENT OF OTHER DOMESTIC ENERGY
RESOURCES, SUCH AS COAL, GEOTHERMAL, SOLAR AND NUCLEAR POWER.
- 11 -
THIS PLAN REQUIRES PERSONAL SACRIFICES.
BUT IF WE ALL
PITCH IN, WE WILL MEET MY GOAL OF REDUC ING FOREIGN OIL IMPORTS
BY ONE MILLION BARRELS A DAY* THIS YEAR AND BY TWO MILLION BEFORE
THE END OF NINETEEN SEVENTY-SEVEN.
BY NINETEEN EIGHTY-FIVE --
TEN YEARS FROM NOW -- THE UNITED STATES WILL BE FULLY INVULNERABLE
TO FOREIGN ENERGY DISRUPTIONS.
OF COURSE, OUR DOMESTIC NEEDS
COME FIRST.
BUT OUR GAINS IN ENERGY INDEPENDENCE WILL BE
FULLY COORDINATED WITH OUR FRIENDS ABROAD.
- 12 -
IF CONGRESS SPEEDILY ENACTS THIS ENERGY PROGRAM,
THERE WILL BE NO NEED FOR COMPULSORY GASOLINE RATIONING OR
LONG WAITING LINES AT THE SERVICE STATION.
I WON'T MISLEAD YOU.
GASOLINE PRICES WILL GO UP,
THOUGH NOT AS MUCH AS THEY WOULD WITH THE TWENTY CENTS A GALLON
GAS TAX.
FURTHERMORE, THE CONSERVATION TAXES ON OIL WILL BE
SHARED BY ALL PETROLEUM USERS, NOT JUST MOTORISTS.
- 13 -
NOW, HERE IS MY PLAN TO FIGHT RECESSION:
I WILL ASK CONGRESS TO ENACT PROMPTLY A ONE-TIME
FEDERAL INCOME TAX CUT OF SIXTEEN BILLION DOLLARS.
TWELVE BILLION
DOLLARS OR THREE-FOURTHS OF THE TOTAL OF THIS CUT WILL GO TO
INDIVIDUAL TAXPAYERS IN THE FORM OF A CASH REBATE AMOUNTING TO
TEN PERCENT OF THEIR NINETEEN SEVENTY-FOUR TAX PAYMENTS, BUT
NOT MORE THAN FIVE HUNDRED DOLLARS.
IF CONGRESS ACTS BY
APRIL FIRST, YOU WILL GET YOUR FIRST CHECK BY JUNE AND TWO MORE
INSTALLMENTS DURING THE REMAINDER OF THIS YEAR.
- 14 -
THE OTHER ONE-FOURTH OF THE CUT -- ABOUT FOUR BILLION
DOLLARS, WILL GO TO BUSINESS TAXPAYERS TO PROMOTE PLANT EXPANSION
AND CREATE MORE JOBS. Throwill be in The from
1 an encrease in the emothment the exact for t ,2%
my you.
TO REVERSE THE DISTURBING DECLINE IN CAPITAL SPENDING
AND PRODUCTIVITY, WHICH IS THE REAL KEY TO LASTING RECOVERY AND
GROWTH, If WANT CONGRESS TO RAISE THE INVESTMENT TAX CREDIT TO
TWELVE PERCENT FOR ONE YEAR.
THIS WILL APPLY TO ALL BUSINESSES,
INCLUDING AGRICULTURE.
THERE WILL BE SPECIAL PROVISIONS TO
ASSIST ESSENTIAL PUBLIC UTILITIES TO STEP UP THEIR ENERGY CAPACITY.
- 15 -
the
AS SOON AS CONGRESS PROVIDES NEW REVENUES FROM ENERGY
we will be to 27
to
CONSERVATION TAXES, ANOTHER THIRTY BILLION DOLLARS WILL BE PUT BACK
INTO THE ECONOMY IN THE FORMOF ADDITIONAL PAYMENTS AND CREDITS
TO INDIVIDUALS, BUSINESS AND STATE AND LOCAL GOVERNMENTS.
CASH PAYMENTS ALCO WILL BE AVAILABLE TO THOSE WHO PAY
from these total
1
alos
NO INCOME TAXES BECAUSE OF LOW EARNINGS BUT WHO ARE THE HARDEST
HIT BY INFLATION AND HIGHER ENERGY COSTS.
- 16 -
27
ALTOGETHER THIS COMBINED PROGRAM, THIRTY BILLION DOLLARS
IN RETURNED ENERGY TAX REVENUES AND SIXTEEN BILLION DOLLARS IN
1
NINETEEN SEVENTY-FOUR TAX CUTS ADDS UP TO A FORTY-SIX BILLION DOLLAR
STIMULANT TO FIGHT RECESSION AND UNEMPLOYMENT THIS YEAR.
THE ENERGY CONSERVATION TAX REVENUES, HOWEVER, WILL
CONTINUE TO BE PUMPED BACK INTO THE ECONOMY AS LONG AS THE
EMERGENCY LASTS.
- 17 -
I KNOW THIS SOUNDS LIKE I AM REVERSING MYSELF SINCE
LAST OCTOBER WHEN I SUGGESTED HIGHER TAXES FOR UPPER-INCOME
?
AND CORPORATE TAXPAYERS AS A BUDGET-BALANCING AND
ANTI-INFLATIONARY MEASURE.
BUT THE SITUATION HAS CHANGED.
YOU KNOW IT AND I KNOW IT.
WHAT WE NEED MOST URGENTLY TODAY
IS MORE SPENDING MONEY IN YOUR POCKETS RATHER THAN IN THE
TREASURY IN WASHINGTON.
- 18 - -
this
LET'S FACE IT -- THESE TWO STIMULATIVE TAX REFUNDS AND
3
REBATES TOTALLING FORTY SIX BILLION DOLLARS WILL MEAN A BIGGER
FEDERAL DEFICIT TEMPORARILY. DEFICITS ARE SOMETHING I HAVE
pulle
FOUGHT AGAINST ALL MY POLITICAL LIFE.
BUT UNLESS OUR ECONOMY
REVIVES RAPIDLY, FEDERAL TAX REVENUES WILL SHRINK so MUCH
THAT FUTURE DEFICITS WILL BE ENORMOUS.
AS A REALIST, I HAD
TO CONCLUDE THAT A LARGER DEFICIT NOW IS BETTER THAN FUTURE
ECONOMIC AND FISCAL CALAMITY.
- 19 -
BUT I HAVE NOT ABANDONED MY LIFELONG BELIEF IN FEDERAL
FISCAL RESTRAINT.
IN THE LONG RUN, THERE IS NO OTHER REAL
REMEDY FOR OUR ECONOMIC TROUBLES.
WHILE WRESTLING WITH THE BUDGETS FOR THIS YEAR AND NEXT,
I HAVE FOUND THAT AT LEAST THREE-FOURTHS OF ALL FEDERAL EXPENDITURES
ARE REQUIRED BY LAWS ALREADY ON THE BOOKS.
YOUR PRESIDENT
IS POWERLESS TO CUT SPENDING IN AN EVER-GROWING LIST OF PROGRAMS
WHICH PROVIDE MANDATORY FORMULAS FOR PAYMENTS TO STATE AND
LOCAL GOVERNMENTS AND TO FAMILIES AND INDIVIDUALS.
- 20 -
UNLESS WE CHECK THIS TREND, I CAN TELL YOU THERE ARE ONLY
TWO WAYS TO GO -- STILL HIGHER FEDERAL TAXES OR THE MORE RUINOUS
HIDDEN TAX OF INFLATION.
UNCHECKED, FEDERAL PROGRAMS --
MANDATED BY LAW -- WILL BE THE PRIME CONTRIBUTORS TO FEDERAL
DEFICITS OF THIRTY TO FIFTY BILLION DOLLARS THIS YEAR AND NEXT.
DEFICITS OF THIS MAGNITUDE ARE WRONG -- EXCEPT ON A TEMPORARY
BASIS IN THE MOST EXTENUATING CIRCUMSTANCES.
- 21 -
THEREFORE, IN MY STATE OF THE UNION AND SUBSEQUENT
MESSAGES, EXCEPT FOR ENERGY, I WILL NOT PROPOSE ANY NEW FEDERAL
SPENDING PROGRAMS.
I WILL NOT HESITATE TO VETO ANY NEW
SPENDING PROGRAMS THAT CONGRESS SENDS TO ME.
MANY PROPOSED FEDERAL SPENDING PROGRAMS ARE DESIRABLE
AND HAVE HAD MY SUPPORT IN THE PAST.
BUT THEY COST MONEY --
YOUR TAX DOLLARS!
PLAINLY IT IS TIME FOR A ONE-YEAR MORATORIUM
ON NEW FEDERAL SPENDING PROGRAMS.
I NEED YOUR SUPPORT IN THIS,
AND CONGRESS NEEDS TO KNOW OF YOUR SUPPORT.
- 22 -
I VERY DEEPLY BELIEVE THE FEDERAL GOVERNMENT OUGHT TO
SHOW ALL AMERICANS IT PRACTICES WHAT IT PREACHES ABOUT SACRIFICE
AND SELF-RESTRAINT.
THEREFORE I WILL INSIST UPON A FIVE PERCENT LIMIT ON ANY
FEDERAL PAY INCREASES IN NINETEEN SEVENTY-FIVE AND WILL ASK CONGRESS
TO PUT THE SAME TEMPORARY FIVE PERCENT CEILING ON AUTOMATIC
COST-OF-LIVING INCREASES IN GOVERNMENT AND MILITARY RETIREMENT
PAY, AND SOCIAL SECURITY.
- 23 -
GOVERNMENT ALONE CANNOT BRING THE COST OF LIVING INDEX
DOWN.
BUT UNTIL IT DOES START DOWN, GOVERNMENT CAN REFRAIN
FROM HELPING TO PUSH IT UP.
FOR ONLY WHEN THE COST OF LIVING
COMES DOWN, CAN EVERYBODY GET FULL VALUE FROM A PENSION OR
PAYCHECK.
I WANT TO HASTEN THAT DAY.
TONIGHT I HAVE SUMMARIZED ONLY THE HIGHLIGHTS OF MY
NATIONAL ENERGY PROGRAM AND MY ECONOMIC RECOVERY PLAN.
THEY MUST GO HAND IN HAND -- ONE MAKES NO ECONOMIC SENSE
WITHOUT THE OTHER.
- 24 -
ON WEDNESDAY, I WILL SPELL OUT THESE PROPOSALS TO THE
CONGRESS.
THERE WILL BE OTHER RECOMMENDATIONS, BOTH SHORT
AND LONG-RANGE, TO MAKE OUR NATIONAL RECOVERY PLAN AS FAIR AND
PRACTICAL AS POSSIBLE.
I WILL PRESS FOR PROMPT ACTION AND
RESPONSIBLE LEGISLATION.
THE DANGER OF DOING NOTHING IS GREAT;
THE DANGER OF DOING TOO MUCH IS JUST AS GREAT.
WE CANNOT AFFORD
TO THROW MONKEY WRENCHES INTO OUR COMPLEX ECONOMIC MACHINE,
JUST BECAUSE IT ISN'T RUNNING AT FULL SPEED.
- 25 -
WE ARE IN TROUBLE, BUT WE ARE NOT ON THE BRINK OF
ANOTHER GREAT DEPRESSION.
OUR POLITICAL AND ECONOMIC SYSTEM
TODAY IS MANY TIMES STRONGER THAN IT WAS IN THE NINETEEN THIRTIES.
WE HAVE INCOME SAFEGUARDS AND UNEMPLOYMENT CUSHIONS BUILT
INTO OUR ECONOMY.
WE HAVE TAKEN AND WILL CONTINUE TO TAKE
WHATEVER STEPS ARE NEEDED TO PREVENT MASSIVE DISLOCATIONS AND
PERSONAL HARDSHIPS -- AND IN PARTICULAR, THE TRAGEDY OF
RISING UNEMPLOYMENT.
- 26 -
REALISTIC AND SOUND SOLUTIONS TO OUR ECONOMIC DIFFICULTIES
WILL DEPEND PRIMARILY ON THE STRONG SUPPORT OF EACH ONE OF YOU.
SELF-RESTRAINT MUST BE EXERCISED BY BIG AND SMALL BUSINESSES,
BY ORGANIZED AND UNORGANIZED LABOR, BY STATE AND LOCAL GOVERN-
MENTS AS WELL AS BY THE FEDERAL GOVERNMENT.
OPPORTUNISTS
AND MANIPULATORS WILL NOT BE ALLOWED TO PROSPER FROM THE
TEMPORARY HARDSHIPS MOST OF US WILLINGLY BEAR.
NOR CAN WE
PERMIT SPECIAL INTERESTS TO GAIN FROM OUR COMMON DISTRESS.
- 27 -
TO IMPROVE THE ECONOMIC OUTLOOK WE MUST ALL REKINDLE
AND OPENLY EXPRESS OUR FAITH IN OURSELVES.
NOBODY IS GOING
TO PULL US OUT OF OUR TROUBLE BUT OURSELVES -- AND BY OUR OWN
BOOTSTRAPS.
IN TWO HUNDRED YEARS AS A NATION, WE HAVE TRIUMPHED
OVER NATURAL OBSTACLES, EXTERNAL ENEMIES, AND INTERNAL CONFLICTS --
AND EACH TIME WE HAVE EMERGED STRONGER THAN BEFORE.
- 28 -
THIS HAS CALLED FOR DETERMINED LEADERS AND DEDICATED
CITIZENS -- AND THIS CALL HAS NEVER GONE UNHEEDED.
IN EVERY
CRISIS, THE AMERICAN PEOPLE HAVE CLOSED RANKS, ROLLED UP THEIR
SLEEVES AND RALLIED BEHIND THEIR PRESIDENT TO DO WHATEVER HAD TO
BE DONE.
THAT IS WHY I AM ASKING YOU, AS WELL AS THE CONGRESS,
TO WORK WITH ME TO TURN THE GLOOMY ECONOMIC GRAPHS AROUND,
DECLARE OUR ENERGY INDEPENDENCE, AND MAKE OUR FREE SOCIETY
AND TREMENDOUS PRODUCTIVITY AGAIN THE WONDER OF THE WORLD.
- 29 -
THE BEGINNING OF OUR BICENTENNIAL CELEBRATION IS A GOOD
TIME TO REAFFIRM OUR PRIDE AND PURPOSE AS AMERICANS WHO HELP
THEMSELVES AND HELP THEIR NEIGHBORS NO MATTER HOW TOUGH THE TASK
MAY BE.
FOR MY PART, I WILL CONTINUE TO DO WHAT I BELIEVE IS RIGHT
FOR ALL OUR PEOPLE -- TO DO MY BEST FOR AMERICA AS LONG AS
I OCCUPY THIS HISTORIC HOUSE.
THANK YOU FOR JOINING ME HERE
TONIGHT. WE KNOW WHAT MUST BE DONE. IF DELAY IS PREFERABLE
TO ERROR, AS JEFFERSON SAID, so ACTION IS NOW PREFERABLE TO
PERFECTION.
- 30 -
THE TIME TO ACT IS NOW -- FOR WE HAVE OUR PRESENT
TO PRESERVE -- AND OUR CHILDREN'S FUTURE TO SECURE.
LET US
JOIN TOGETHER.
I KNOW WE WILL SUCCEED TOGETHER!
AND MAY GOD
BLESS OUR ENDEAVORS.
THANK YOU AND GOOD NIGHT.
END OF TEXT
THE PRESIDENT HAS SEEN
Good evening.
Without wasting words, I want to talk with you tonight about
putting our domestic house in order.
We must reverse the current recession.
We must halt unemployment and create more jobs.
We must restore confidence among consumers and investors
alike.
We must continue an effective plan to lick inflation.
We must, without delay, take firm control of our future
progress as a free people.
Together we can and will do this job. Our national character
is strong on self-discipline and the will to win. Americans are at
their very best when the going is rough.
Right now the going is rough and it may get rougher.
On Wednesday I will report to the new Congress on the State
of the Union and ask for its help to quickly improve it. But neither
- 2 -
Congress nor the President can pass laws or issue orders to assure
economic improvement and instant prosperity.
But government can help by equalizing unfair burdens, by
setting an example of sound economic actions, and by exerting leader-
ship through a clear and coordinated national recovery plan.
Tonight, let me give you a preview of my plan. After all, you
are the people most affected by it.
Since becoming your President, economic problems have been
my first and foremost concern. Two elements of our total problem
are long-range -- inflation and energy. Both are affected not only by
our own actions but also by international forces beyond our direct
control. The new and disturbing element in the economic picture is
our worsening recession and the unemployment that goes with it.
Over the past three months, since my first economic program
was put together, we have made progress in slowing the upward spiral of
- 3 -
inflation and getting interest rates started down. But, frankly, we
have suffered sudden and serious setbacks in sales and employment.
Therefore, we must shift our Number One target from run-
away inflation to recession.
In doing so, we must not lose sight of the very real and deadly
dangers of rising prices and declining domestic energy supplies.
Americans are no longer in control of their own national destiny when
that destiny depends on uncertain foreign fuel at high prices fixed by
others. Higher energy costs compound both inflation and recession.
Dependence on others for future energy supplies is intolerable to our
national security.
Therefore, we must wage a simultaneous three-front campaign
against recession, inflation and energy dependence. Any one of these
enemies could destroy the country we love.
I will ask the new Congress to enact on a crash basis -- within
- 4 -
90 days or less -- the strongest and most far-reaching energy conservation
program we have ever had. Yes, it will make gasoline and oil cost even
more than they do now. But it will achieve two all important objectives:
It will discourage the unnecessary use of petroleum products, and it will
encourage the development and substitution of other fuels and newer
sources of energy.
Here is my energy plan:
To get started immediately, I will use my Presidential emergency
powers to reduce our dependence on foreign sources by escalating import
fees on each barrel of foreign oil products beginning February 1st --
one dollar the first month, two dollars the second and three dollars the
third month and thereafter. I will also propose a more comprehensive
program of energy conservation taxes on gas and oil to reduce consumption.
The revenues derived from such taxes will be used to help stimulate the
whole economy. In addition, my energy conservation program contains
provisions to avoid undue hardships in any geographical area, such as
- 5 -
New England -- or in any specific industries or areas of human need, where
oil is essential. The plan takes away windfall profits by producers. I empha-
size there must also be a well-coordinated volunteer campaign to cut gasoline
and other energy use. My national energy conservation plan will urge Congress
to grant a five year delay on higher automobile pollution standards in order to
achieve a 40 percent increase in miles per gallon of gasoline used by motorists.
I will recommend stronger measures to speed the development of other
domestic energy resources, such as coal, geothermal, solar and nuclear power.
This plan requires personal sacrifice. But if we all pitch in, we will
meet our goal of reducing foreign oil imports by 1 million barrels a day this
year and by 2 million before the end of 1977. 1 By 1985 -- 10 years from now --
the United States will be fully invulnerable to foreign energy disruptions. Of
course, our domestic needs come first. But our gains in energy independence
will be fully coordinated with our friends abroad.
If Congress speedily enacts this energy program, there will be no need
for compulsory gasoline rationing or long waiting lines at the service station.
- 6 -
Let's be frank. Gasoline prices will go up, though not as much
as with a 20¢ a gallon gas tax. Furthermore, the burden of conservation
taxes on oil will be shared by all petroleum users, not just motorists.
Now, here is my plan to fight recession:
I will ask Congress to enact promptly a one-time Federal income
tax cut of $16 billion. Twelve billion dollars or three-fourths of the
total of this cut will go to individual taxpayers in the form of a cash rebate
amounting to 10 percent of their 1974 tax payments, but not more than
$500. If Congress acts by April 1st, you will get your first check by June
and two more installments during the remainder of this year.
The other one-fourth of the cut -- about $4 billion, will go to
business taxpayers to promote plant expansion and create more jobs.
This will be in the form of an increase in the investment tax credit to
12 percent for one year.
This will reverse the disturbing decline in capital spending and
productivity, which is the real key to lasting recovery and growth.
- 7 -
This will apply to all businesses, including agriculture. There will
be special provisions to assist essential public utilities to step up
their energy capacity.
As soon as the new revenues from energy conservation taxes
are received, we will be able to return 27 billion dollars to the economy
in the form of additional payments and credits to individuals, business
and State and local governments.
Cash payments from this total will also be available to those who
pay no income taxes because of low earnings but who are the hardest hit
by inflation and higher energy costs.
This combined program adds up to 43 billion dollars -- 27 billion
dollars in returned energy tax revenues to compensate for higher fuel costs --
and 16 billion dollars in 1974 tax cuts to help fight unemployment this year.
The energy conservation tax revenues, however, will continue
to be pumped back into the economy as long as the emergency lasts.
- 8 -
I know this sounds like I am reversing myself since last October
when I suggested higher taxes for upper-income and corporate taxpayers
as a budget-balancing and anti-inflationary measure. But the situation
has changed. You know it and I know it. What we need most urgently
today is more spending money in your pockets rather than in the Treasury
in Washington.
Let's face it -- this will mean a bigger Federal deficit temporarily.
And deficits are something I fought against all my public life. But unless
our economy revives rapidly, Federal tax revenues will shrink so much
that future deficits will be enormous. As a realist, I had to conclude
that a larger deficit now is better than future economic and fiscal calamity.
But I have not abandoned my lifelong belief in Federal restraint.
In the long run, there is no other real remedy for our economic troubles.
While wrestling with the budgets for this year and next, I found
that at least three-fourths of all Federal expenditures are required by
laws already on the books. Your President is powerless to cut spending
- 9 -
in an ever-growing list of programs which provide mandatory formulas
for payments to State and local governments and to families and
individuals.
Unless we check this trend, I can tell you there are only two ways
to go -- still higher Federal taxes or the more ruinous hidden tax of
inflation. Unchecked, Federal programs -- mandated by law -- will be
the prime contributors to Federal deficits of 30 to 50 billion dollars
this year and next. Deficits of this magnitude are wrong -- except on
a temporary basis in the most extenuating circumstances.
Therefore, in my State of the Union and subsequent messages,
except for energy, I will not propose any new Federal spending programs.
I will not hesitate to veto any new spending programs that Congress
sends to me.
Many proposed Federal spending programs are desirable and
have had my support in the past. But they cost money -- your tax dollars!
- 10 -
Plainly it is time for a one-year moratorium on new Federal spending
programs. I need your support in this, and your Representatives in
Congress need to know of your support.
I very deeply believe the Federal Government ought to show
all Americans it practices what it preaches about sacrifice and
self-restraint.
Therefore I will insist upon a 5 percent limit on any Federal pay
increases in 1975 and will ask Congress to put the same temporary
5 percent ceiling on automatic cost-of-living increases in government
and military retirement pay, and Social Security.
Government alone cannot bring the cost of living index down.
But until it does start down, government can refrain from helping to
push it up. For only when the cost of living comes down, can everybody
get full value from a pension or paycheck. I want to hasten that day.
Tonight I have summarized only the highlights of my national
energy program and my economic recovery plan. They must go hand
in hand -- one makes no economic sense without the other.
- 11 -
On Wednesday, I will spell out these proposals to the Congress.
There will be other recommendations, both short and long-range, to
make our national recovery plan as fair and practical as possible.
I will press for prompt action and responsible legislation. The danger
of doing nothing is great; the danger of doing too much is just as great.
We cannot afford to throw monkey wrenches into our complex economic
machine, just because it isn't running at full speed.
We are in trouble, but we are not on the brink of another Great
Depression. Our political and economic system today is many times
stronger than it was in the 1930's. We have income safeguards and
unemployment cushions built into our economy. We have taken and will
continue to take whatever steps are needed to prevent massive dislocations
and personal hardships -- and in particular, the tragedy of rising
unemployment.
But realistic and sound solutions to our economic difficulties will
depend primarily on the strong support of each one of you. Self-restraint
- 12 -
must be exercised by big and small business, by organized and
unorganized labor, by State and local governments as well as by the
Federal Government. Opportunists and manipulators will not be allowed
to prosper from the temporary hardships most of us willingly bear.
Nor can we permit special interests to gain from our common distress.
To improve the economic outlook we must all rekindle and openly
express our faith in ourselves. Nobody is going to pull us out of our
troubles but ourselves -- and by our own bootstraps.
In 200 years as a nation, we have triumphed over external
enemies and internal conflicts -- and each time, we have emerged
stronger than before.
This has called for determined leaders and dedicated citizens --
and this call has never gone unheeded. In every crisis, the American
people have closed ranks, rolled up their sleeves and rallied behind
their President to do whatever had to be done.
- 13 -
That is why I am asking you, as well as the Congress, to work
with me to turn the gloomy economic graphs around, declare our energy
independence, and make our free society and tremendous productivity
again the wonder of the world.
The beginning of our Bicentennial celebration is a good time to
reaffirm our pride and purpose as Americans who help themselves and
help their neighbors no matter how tough the task may be.
For my part, I will continue to do what I believe is right for all
our people - -- to do my best for Ámerica as long as I occupy this historic
house. Thank you for joining me here tonight. We know what must be done.
If delay is preferable to error, as Jefferson said, so action is now
preferable to perfection.
The time to act is now -- for we have our Nation to preserve --
and our future to protect. Let us join together, and with God's blessing,
we will succeed together !
Thank you and Good Night.
# # #
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"ocrText": "The original documents are located in Box 4, folder \"1/13/75 - T.V. Address, Preview of the\nState of the Union Message (Includes drafts) (1)\" of the President's Speeches and\nStatements: Reading Copies at the Gerald R. Ford Presidential Library.\nCopyright Notice\nThe copyright law of the United States (Title 17, United States Code) governs the making of\nphotocopies or other reproductions of copyrighted material. Gerald Ford donated to the United\nStates of America his copyrights in all of his unpublished writings in National Archives collections.\nWorks prepared by U.S. Government employees as part of their official duties are in the public\ndomain. The copyrights to materials written by other individuals or organizations are presumed to\nremain with them. If you think any of the information displayed in the PDF is subject to a valid\ncopyright claim, please contact the Gerald R. Ford Presidential Library.\nFINAL\n/\nGood evening.\nWithout wasting words, I want to talk with you tonight\nabout putting our domestic house in order.\nWe must turn America in a new direction.\nreduce unemployment\nWe must reverse the current recession and create more\n1\njobs\nWe must restore the confidence of consumers and\ninvestors alike.\ncust\nWe must continue an effective plan to lick inflation.\nWe must, without delay, take firm control of our\nprogress as a free people.\nTogether we can and will do this job. Our national\ncharacter is strong on self-discipline and the will-to-win.\nAmericans are at their very best when the going is rough.\nDigitized from Box 4 of President's Speeches and Statements: Reading Copies at the Gerald R. Ford Presidential Library\n2\nRight now the going is rough and it may bet rougher.\nIf we do what must be done we get will well on our way to better\nOn Wednesday I will report to the new Congress on the State\nhave Ad histome\ndays We\nof the Union and ask for its help to quickly improve it. But\nneither Congress nor the President can pass laws or issue\norders to assure economic improvement and instant prosperity.\nThe governmen t can help by equalizing unfair burdens, by\nsetting an example of sound economic actions, and by exerting\nleadership through a clear and coordinated national recovery\nprogram\nplan.\nTonight, I want to talk to you about what must be done.\nAfter all, you are the people most affected by it.\nSince becoming your President five months ago, economic\nproblems have been my foremost concern. Two elements\nof our problem are long-range---inflation and energy. Both\nare affected not only by our actions, but also by international\n3\nforces beyond our direct control. The new and disturbing\nelement in the economic picture is our worsening recession and the\nunemployment that goes with it.\nWe have made some progress in slowing the upward\nspiral of inflation and getting interest rates started down. But,\nwe have suffered sudden and serious setbacks in sales and\nunemployment.\nTherefore, we must shift our emphasis from inflation\nto recession.\nBut, in doing so, we must not lose sight of the very real and deadly\ndangers of rising prices and declining domestic energy\nsupplies. Americans are no longer in full control of their\nown national destiny when that destiny depends on uncertain\nforeign fuel at high prices fixed by others. Higher energy\ncosts compound both inflation and recession. And, Dependence\n4\non others for future energy supplies is intolerable to our\nnational security.\nTo meet this Triple challenge\nTherefore, we must wage a simultaneous three-front\ncampaign against recession, inflation and energy dependence.\nany one of these inemes could desting the country we Look.\nWe have not choice.\nWe need, within 90 days, the strongest and most far reaching\nenergy conservation program we have ever had. Yes, gasoline\nand oil will cost even more than they do now. But this program\nwill achieve two important objectives: It will discourage the\nunnecessary use of petroleum products, and it will encourage\nthe development and substitution of other fuels and newer\nsources of energy.\nTo get started immediately on an urgent national energy\nplans, I will use the Presidential emergency powers to\nreduce our dependence on foreign oil by raising import fees\non each barrel of foreign crude oil from one dollar to three\n5\ndollars over the next three month. A more comprehensive\nprogram of energy conservation taxes on oil and natural gas,\nto reduce consumption substantially must be enacted by the\nCongress.\nThe e revenues derived from such taxes will\nbe returned to the economy. In addition, my energy conser-\nallocation authority\nvation program contains provisions to avoid undue hardships\nin any one geographic area, such as\nNew England -- or in any specific industries or areas of human need,\nwhere oil is essential. The plan prevents windfall profits by producers.\na cordmated\nThere must also be volunteer efforts to cut gasoline and other energy\nuse. My national energy conservation plan will urge Congress to grant\na five-year delay on higher automobile pollution standards in order to\nachieve a 40 percent improvement in miles per gallon. Stronger measures\nto speed the development of other domestic energy resources, such as\ncoal, geothermal, solar and nuclear power are also essential.\nThis plan requires personal sacrifice. But if we all pitch in, we\nwill meet our goal of reducing foreign oil imports by 1 million barrels\na day by the end of this year and by 2 million barrels before the end of\n1977.\nThe energy conservation measures I have outlined tonight will be\nsupplemented by use of Presidential authority power to limit oil imports as\n7\nnecessary to fully achieve these goals.\nBy 1985 -- 10 years from now -- the United States will be\ninvulnerable to foreign energy disruptions or oil embargoes such\nas we experienced last year. Of course, our dome stic needs come\ncan spart semilar\nfirst, But our gains in energy independence will be fully coordinated\nwith our friends abroad. Our Morts will prompt similar action\nfree india by our allies.\nIf Congress speedily enacts this national energy program, there\nwill be no need for compulsory rationing or long waiting lines at the\nservice station.\nGasoline prices will go up, though not as much as\nwith a 20¢ -a-gallon gas tax. Furthermore, the burden of the\nconservation taxes on oil will be shared by all petroleum uses\nusers, not just motorists.\nNow, let me talk about the problem of unemployment.\nThis country needs an immediate Federal income tax\ncut of $16 billion. Twelve billion dollars or three-fourths of\nthe total of this cut should go to individual taxpayers in the form\n2\nof a cash rebate amounting to percent of their 1974 tax\n#1000\npayments, -- up to $500. If Congress acts by April 1st, you\nin may\none\nby lept 1st\nwill get your first check by June and two more installm\nfor half the relate by May & the vist by sept\nthe\nremainder\nof\nThe other one-fourth of the cut -- about $4 billion will\ngo to business taxpayers--including farmers to promote\nplan expansion and create more jobs.\nThis will be in the\nform of an increase in the investment tax credit to 12 percent\nfor one year. There will be special provision to assist\nessential public utilities to step up their energy capacity.\nThis will encourage capital spending and productivity,\nthe key to recovery and growth.\nAs soon as the new revenues from energy conservation\ntaxes are received, we will be able to return 30 billion dollars\nto the eonomy in the form of additional payments and credits\nto individuals, business and State and local governments.\nCash payments from this total also will be available\nto those who pay no income taxes because of low earnings,\nthey are the hardest hit by inflation and higher energy costs.\nThis combines program adds up to 46 billion dollars-\n30 billion dollars in returned energy tax revenues to compen-\nsate for higher fuel costs--and 16 billion dollars in 1974 tax\ncuts to help provide more jobs.\n10\nAnd, the energy conservation tax revenues, will continue to\nbe put back into the economy as long as the emergency lasts.\nPI\nThis economic program is different in emphasis from the proposals\nI put forward last October. The reason is that the situation has changed.\nYou know it and I know it. What we need most urgently today is more\nspending money in your pockets rather than in the Treasury in Washington.\nLet's face it -- this will mean a bigger Federal deficit temporarily.\nAnd deficits are something I fought against all my public life. But unless\nour economy revives rapidly, Federal taxes will shrink so much that\nfuture deficits will be even larger. As a realist, I have concluded that a\nlarger deficit now is better than future economic and fiscal calamity.\nBut I have not abandoned my lifelong belief in Federal restraint.\nIn the long run, there is no other real remedy.\nWhile wrestling with the budgets for this year and next, I found\nthat at least three-fourths of all Federal expenditures are required by\nlaws already on the books. The President cannot by law cut spending\n91\nin an ever-growing list of programs which provide mandatory formulas\nfor payments to State and local governments and to families and\nindividuals.\nUnless these laws are changed, I can tell you there are only two\nways to go -- still higher Federal taxes or the more ruinous hidden tax of\ninflation. Unchecked, Federal programs -- - mandated by law -- will be the\nprime contributors to Federal deficits of 30 to 50 billion dollars this year\nand next. Deficits of this magnitude are wrong - - except on a temporary\nbasis in the most extenuating circumstances. Reform of these costly\nmandated federal spending programs will take time. Meanwhile, in order\nto keep the budget deficit as low as possible, I have decided to take interim\nsteps.\nIn my State of the Union and subsequent messages, I will not propose\nany new Federal spending programs, except for energy. And the Congress --\nyour representatives in Washington -- - - share an equal responsibility to see\nthat no new spending programs are enacted. I will not hesitate to veto any\nnew spending programs that Congress sends to me.\n13\nMany proposed Federal spending programs are desirable and\nhave had my support in the past. But they cost money -- your tax dollars!\nPlainly it is time to declare a one-year moratorium on new Federal spending\nprograms. I need your support in this. It is vital that your Representatives\nin Congress know that you share this concern about inflation.\nI believe the Federal Government ought to show all Americans it\npractices what it preaches about sacrifice and self-restraint.\nTherefore I will insist on a 5 percent limit on any Federal pay\nincreases in 1975 and I will ask Congress to put the same temporary\n5 percent ceiling on automatic cost-of-living increases in government and\nmilitary retirement pay, and Social Security.\nGovernment alone cannot bring the cost of living down. But until\nit does start down, government can except for conservation purposes,\nrefrain from pushing it up. For only when the cost of living comes down,\ncan everybody get full value from a pension or paycheck. I want to hasten\nthat day.\n14\nTonight I have summarized the highlights of my energy and my\neconomic programs. They must go hand in hand -- as I see it.\nOn Wednesday, I will spell out these proposals to the Congress.\nThere will be other recommendations, both short-term and long-range, to\nmake our program as fair to all as possible. I will press for prompt action\nand responsible legislation. The danger of doing nothing is great; the danger\nof doing too much is just as great. We cannot afford to throw monkey\nwrenches into our complex economic machine, just because it isn't running\nat full speed.\nWe are in trouble, but we are not on the brink of another Great\nDepression. Our political and economic system today is many times\nstronger than it was in the 1930's. We have income safeguards and\nunemployment cushions built into our economy. I have taken and will continue\nto take whatever steps are needed to prevent massive dislocations and personal\n/\nAT\nhardships -- and in particular, the tragedy of rising unemployment.\nBut sound solutions to our economic difficulties depend primarily\non the strong support of each one of you. Self-restraint must be exercised\nby big and small business, by organized and unorganized labor, by\nState and local governments as well as by the Federal Government.\nNo one will be allowed to prosper from the temporary hardships most of\nus willingly bear. Nor can we permit any special interests to gain from\nour common distress.\nTo improve the economic outlook we must rekindle faith in ourselves.\nNobody is going to pull us out of our troubles but ourselves -- and by our\nown bootstraps.\nIn 200 years as a nation, we have triumphed over external\nenemies and internal conflicts -- and each time, we have emerged stronger\nthan before.\n/\nThis has called for determined leaders and dedicated people\nand this call has never gone unheeded. In every crisis, the American\npeople have closed ranks, rolled up their sleeves and rallied\nto do whatever had to be done.\nI ask you and those who represent you in the Congress to work to\nturn our economy around, declare our energy independence, and resolve to\nmake our free society again the wonder of the world.\nThe beginning of our Bicentennial celebration is a good time to\nreaffirm our pride and purpose as Americans who help themselves and\nhelp their neighbors no matter how tough the task.\nFor my part, I will do what I believe is right for all our people --\nto do my best for America as long as I occupy this historic house. Thank\nyou for joining me tonight. We know what must be done. If delay is\npreferable to error, as Jefferson said, so action is now preferable to\nperfection.\n19\nThe time to act is now. We have our Nation to preserve --\nand our future to protect. Let us join together, and may God bless our\nendeavors.\nThank you and Good Night.\n####\nTHE PRESIDENT HAS SEEN of\nTV ADDRESS, PREVIEW OF THE STATE OF THE UNION MESSAGE\nJANUARY 13, 1975\n- 1 -\nGOOD EVENING.\nWITHOUT WASTING WORDS, I WANT TO TALK WITH YOU\nTONIGHT ABOUT PUTTING OUR DOMESTIC HOUSE IN ORDER.\nWE MUST REVERSE THE CURRENT RECESSION.\nWE MUST HALT UNEMPLOYMENT AND CREATE MORE JOBS.\nWE MUST RESTORE CONFIDENCE AMONG CONSUMERS AND\nINVESTORS ALIKE.\nWE MUST CONTINUE AN EFFECTIVE PLAN TO LICK INFLATION.\nWE MUST, WITHOUT DELAY, TAKE FIRM CONTROL OF\nOUR FUTURE PROGRESS AS A FREE PEOPLE.\n- 2 -\nTOGETHER WE CAN AND WILL DO THIS JOB.\nOUR NATIONAL\nCHARACTER IS STRONG ON SELF-DISCIPLINE AND THE WILL TO WIN.\nAMERICANS ARE AT THEIR VERY BEST WHEN THE GOING IS ROUGH.\nRIGHT NOW THE GOING IS ROUGH AND IT MAY GET ROUGHER.\nON WEDNESDAY I WILL REPORT TO THE NEW CONGRESS\nON THE STATE OF THE UNION AND ASK FOR ITS HELP TO QUICKLY IMPROVE\nIT.\nBUT NEITHER CONGRESS NOR THE PRESIDENT CAN PASS LAWS\nOR ISSUE ORDERS TO GUARANTEE ECONOMIC IMPROVEMENT AND\nINSTANT PROSPERITY.\n- 3 -\nBUT GOVERNMENT CAN HELP BY EQUALIZING UNFAIR BURDENS,\nBY SETTING AN EXAMPLE OF SOUND ECONOMIC ACTIONS, AND BY\nEXERTING LEADERSHIP THROUGH A CLEAR AND COORDINATED NATIONAL\nRECOVERY PLAN.\nTONIGHT, LET ME GIVE YOU A PREVIEW OF MY PLAN.\nAFTER ALL, YOU ARE THE PEOPLE MOST AFFECTED BY IT.\n- 4 -\nSINCE BECOMING YOUR PRESIDENT, ECONOMIC PROBLEMS\nHAVE BEEN MY FIRST AND FOREMOST CONCERN.\nTWO ELEMENTS\nOF OUR TOTAL PROBLEM ARE LONG-RANGE -- INFLATION AND ENERGY.\nBOTH ARE AFFECTED NOT ONLY BY OUR OWN ACTIONS BUT ALSO\nBY INTERNATIONAL FORCES BEYOND OUR DIRECT CONTROL.\nTHE NEW\nAND DISTURBING ELEMENT IN THE ECONOMIC PICTURE IS OUR\nWORSENING RECESSION AND THE UNEMPLOYMENT THAT GOES WITH IT.\n- 5 -\nOVER THE PAST THREE MONTHS, SINCE MY FIRST ECONOMIC\nPROGRAM WAS PUT TOGETHER, WE HAVE MADE PROGRESS IN SLOWING\nTHE UPWARD SPIRAL OF INFLATION AND GETTING INTEREST RATES\nSTARTED DOWN. BUT, FRANKLY, WE HAVE SUFFERED SUDDEN AND\nSERIOUS SETBACKS IN SALES AND EMPLOYMENT.\nTHEREFORE, WE MUST SHIFT OUR NUMBER ONE TARGET\nFROM RUNAWAY INFLATION TO RECESSION.\n- 6 -\nIN DOING so, WE MUST NOT LOSE SIGHT OF THE VERY REAL\nAND DEADLY DANGERS OF RISING PRICES AND DECLINING DOMESTIC\nENERGY SUPPLIES.\nAMERICANS ARE NO LONGER IN CONTROL\nOF THEIR OWN NATIONAL DESTINY WHEN THAT DESTINY DEPENDS ON\nUNCERTAIN FOREIGN FUEL AT HIGH PRICES FIXED BY OTHERS.\nHIGHER\nENERGY COSTS COMPOUND BOTH INFLATION AND RECESSION.\nDEPENDENCE ON OTHERS FOR FUTURE ENERGY SUPPLIES IS INTOLERABLE\nTO OUR NATIONAL SECURITY.\n- 7 -\nTHEREFORE, WE MUST WAGE A SIMULTANEOUS THREE-FRONT\nCAMPAIGN AGAINST RECESSION, INFLATION AND ENERGY DEPENDENCE.\nANY ONE OF THESE ENEMIES COULD DESTROY THE COUNTRY WE LOVE.\nI WILL ASK THE NEW CONGRESS TO ENACT ON A CRASH BASIS --\nWITHIN NINETY DAYS OR LESS -- THE STRONGEST AND MOST FAR-REACHING\nyes\nENERGY CONSERVATION PROGRAM WE HAVE EVER HAD.\nIT IS COMPLEX\nAND CONTROVERSIAL -- AND IT WILL MAKE GASOLINE AND OIL COST EVEN\nMORE THAN THEY DO NOW.\nBUT IT WILL ACHIEVE TWO ALL IMPORTANT\nOBJECTIVES: IT WILL DISCOURAGE THE UNNECESSARY USE OF PETROLEUM\nPRODUCTS, AND IT WILL ENCOURAGE THE DEVELOPMENT AND SUBSTITUTION\nOF OTHER FUELS AND NEWER ENERGY SOURCES.\n- 8 -\nHERE IS MY ENERGY PLAN:\nTO GET STARTED IMMEDIATELY, I WILL USE LIMITED PRESIDENTIAL\nEMERGENCY POWERS TO REDUCE OUR DEPENDENCE ON FOREIGN SOURCES\nBY ESCALATING IMPORT FEES ON EACH BARREL OF FOREIGN OIL PRODUCTS\nBEGINNING FEBRUARY FIRST -- ONE DOLLAR THE FIRST MONTH,\nTWO DOLLARS THE SECOND AND THREE DOLLARS THE THIRD MONTH AND\nTHEREAFTER.\nI WILL ALSO PROPOSE A MORE COMPREHENSIVE PROGRAM\nOF ENERGY CONSERVATION TAXES ON GAS AND OIL TO REDUCE CONSUMPTION.\n- 9 -\nWE WILL USE THE REVENUES DERIVED FROM SUCH TAXES TO HELP STIMULATE\nTHE WHOLE ECONOMY.\nIN ADDITION, MY ENERGY CONSERVATION\nPROGRAM CONTAINS PROVISIONS TO AVOID UNDUE HARDSHIPS IN ANY\nGEOGRAPHICAL AREA, SUCH AS NEW ENGLAND -- OR IN ANY SPECIFIC\nINDUSTRIES OR AREAS OF HUMAN NEED WHERE OIL IS ESSENTIAL.\n- 10 -\nTHE PLAN TAKES AWAY WINDFALL PROFITS BY PRODUCERS.\nI EMPHASIZE\nTHERE MUST ALSO BE A WELL-COORDINATED VOLUNTEER CAMPAIGN TO CUT\nGASOLINE AND OTHER ENERGY USE.\nMY NATIONAL ENERGY CONSERVATION\nPLAN WILL URGE CONGRESS TO GRANT A FIVE-YEAR DELAY ON HIGHER\nAUTOMOBILE EMISSION STANDARDS IN ORDER TO ACHIEVE A FORTY PERCENT\nSAVING IN GASOLINE CONSUMPTION.\nI WILL RECOMMEND STRONGER\nMEASURES TO SPEED THE DEVELOPMENT OF OTHER DOMESTIC ENERGY\nRESOURCES, SUCH AS COAL, GEOTHERMAL, SOLAR AND NUCLEAR POWER.\n- 11 -\nTHIS PLAN REQUIRES PERSONAL SACRIFICES.\nBUT IF WE ALL\nPITCH IN, WE WILL MEET MY GOAL OF REDUC ING FOREIGN OIL IMPORTS\nBY ONE MILLION BARRELS A DAY* THIS YEAR AND BY TWO MILLION BEFORE\nTHE END OF NINETEEN SEVENTY-SEVEN.\nBY NINETEEN EIGHTY-FIVE --\nTEN YEARS FROM NOW -- THE UNITED STATES WILL BE FULLY INVULNERABLE\nTO FOREIGN ENERGY DISRUPTIONS.\nOF COURSE, OUR DOMESTIC NEEDS\nCOME FIRST.\nBUT OUR GAINS IN ENERGY INDEPENDENCE WILL BE\nFULLY COORDINATED WITH OUR FRIENDS ABROAD.\n- 12 -\nIF CONGRESS SPEEDILY ENACTS THIS ENERGY PROGRAM,\nTHERE WILL BE NO NEED FOR COMPULSORY GASOLINE RATIONING OR\nLONG WAITING LINES AT THE SERVICE STATION.\nI WON'T MISLEAD YOU.\nGASOLINE PRICES WILL GO UP,\nTHOUGH NOT AS MUCH AS THEY WOULD WITH THE TWENTY CENTS A GALLON\nGAS TAX.\nFURTHERMORE, THE CONSERVATION TAXES ON OIL WILL BE\nSHARED BY ALL PETROLEUM USERS, NOT JUST MOTORISTS.\n- 13 -\nNOW, HERE IS MY PLAN TO FIGHT RECESSION:\nI WILL ASK CONGRESS TO ENACT PROMPTLY A ONE-TIME\nFEDERAL INCOME TAX CUT OF SIXTEEN BILLION DOLLARS.\nTWELVE BILLION\nDOLLARS OR THREE-FOURTHS OF THE TOTAL OF THIS CUT WILL GO TO\nINDIVIDUAL TAXPAYERS IN THE FORM OF A CASH REBATE AMOUNTING TO\nTEN PERCENT OF THEIR NINETEEN SEVENTY-FOUR TAX PAYMENTS, BUT\nNOT MORE THAN FIVE HUNDRED DOLLARS.\nIF CONGRESS ACTS BY\nAPRIL FIRST, YOU WILL GET YOUR FIRST CHECK BY JUNE AND TWO MORE\nINSTALLMENTS DURING THE REMAINDER OF THIS YEAR.\n- 14 -\nTHE OTHER ONE-FOURTH OF THE CUT -- ABOUT FOUR BILLION\nDOLLARS, WILL GO TO BUSINESS TAXPAYERS TO PROMOTE PLANT EXPANSION\nAND CREATE MORE JOBS. Throwill be in The from\n1 an encrease in the emothment the exact for t ,2%\nmy you.\nTO REVERSE THE DISTURBING DECLINE IN CAPITAL SPENDING\nAND PRODUCTIVITY, WHICH IS THE REAL KEY TO LASTING RECOVERY AND\nGROWTH, If WANT CONGRESS TO RAISE THE INVESTMENT TAX CREDIT TO\nTWELVE PERCENT FOR ONE YEAR.\nTHIS WILL APPLY TO ALL BUSINESSES,\nINCLUDING AGRICULTURE.\nTHERE WILL BE SPECIAL PROVISIONS TO\nASSIST ESSENTIAL PUBLIC UTILITIES TO STEP UP THEIR ENERGY CAPACITY.\n- 15 -\nthe\nAS SOON AS CONGRESS PROVIDES NEW REVENUES FROM ENERGY\nwe will be to 27\nto\nCONSERVATION TAXES, ANOTHER THIRTY BILLION DOLLARS WILL BE PUT BACK\nINTO THE ECONOMY IN THE FORMOF ADDITIONAL PAYMENTS AND CREDITS\nTO INDIVIDUALS, BUSINESS AND STATE AND LOCAL GOVERNMENTS.\nCASH PAYMENTS ALCO WILL BE AVAILABLE TO THOSE WHO PAY\nfrom these total\n1\nalos\nNO INCOME TAXES BECAUSE OF LOW EARNINGS BUT WHO ARE THE HARDEST\nHIT BY INFLATION AND HIGHER ENERGY COSTS.\n- 16 -\n27\nALTOGETHER THIS COMBINED PROGRAM, THIRTY BILLION DOLLARS\nIN RETURNED ENERGY TAX REVENUES AND SIXTEEN BILLION DOLLARS IN\n1\nNINETEEN SEVENTY-FOUR TAX CUTS ADDS UP TO A FORTY-SIX BILLION DOLLAR\nSTIMULANT TO FIGHT RECESSION AND UNEMPLOYMENT THIS YEAR.\nTHE ENERGY CONSERVATION TAX REVENUES, HOWEVER, WILL\nCONTINUE TO BE PUMPED BACK INTO THE ECONOMY AS LONG AS THE\nEMERGENCY LASTS.\n- 17 -\nI KNOW THIS SOUNDS LIKE I AM REVERSING MYSELF SINCE\nLAST OCTOBER WHEN I SUGGESTED HIGHER TAXES FOR UPPER-INCOME\n?\nAND CORPORATE TAXPAYERS AS A BUDGET-BALANCING AND\nANTI-INFLATIONARY MEASURE.\nBUT THE SITUATION HAS CHANGED.\nYOU KNOW IT AND I KNOW IT.\nWHAT WE NEED MOST URGENTLY TODAY\nIS MORE SPENDING MONEY IN YOUR POCKETS RATHER THAN IN THE\nTREASURY IN WASHINGTON.\n- 18 - -\nthis\nLET'S FACE IT -- THESE TWO STIMULATIVE TAX REFUNDS AND\n3\nREBATES TOTALLING FORTY SIX BILLION DOLLARS WILL MEAN A BIGGER\nFEDERAL DEFICIT TEMPORARILY. DEFICITS ARE SOMETHING I HAVE\npulle\nFOUGHT AGAINST ALL MY POLITICAL LIFE.\nBUT UNLESS OUR ECONOMY\nREVIVES RAPIDLY, FEDERAL TAX REVENUES WILL SHRINK so MUCH\nTHAT FUTURE DEFICITS WILL BE ENORMOUS.\nAS A REALIST, I HAD\nTO CONCLUDE THAT A LARGER DEFICIT NOW IS BETTER THAN FUTURE\nECONOMIC AND FISCAL CALAMITY.\n- 19 -\nBUT I HAVE NOT ABANDONED MY LIFELONG BELIEF IN FEDERAL\nFISCAL RESTRAINT.\nIN THE LONG RUN, THERE IS NO OTHER REAL\nREMEDY FOR OUR ECONOMIC TROUBLES.\nWHILE WRESTLING WITH THE BUDGETS FOR THIS YEAR AND NEXT,\nI HAVE FOUND THAT AT LEAST THREE-FOURTHS OF ALL FEDERAL EXPENDITURES\nARE REQUIRED BY LAWS ALREADY ON THE BOOKS.\nYOUR PRESIDENT\nIS POWERLESS TO CUT SPENDING IN AN EVER-GROWING LIST OF PROGRAMS\nWHICH PROVIDE MANDATORY FORMULAS FOR PAYMENTS TO STATE AND\nLOCAL GOVERNMENTS AND TO FAMILIES AND INDIVIDUALS.\n- 20 -\nUNLESS WE CHECK THIS TREND, I CAN TELL YOU THERE ARE ONLY\nTWO WAYS TO GO -- STILL HIGHER FEDERAL TAXES OR THE MORE RUINOUS\nHIDDEN TAX OF INFLATION.\nUNCHECKED, FEDERAL PROGRAMS --\nMANDATED BY LAW -- WILL BE THE PRIME CONTRIBUTORS TO FEDERAL\nDEFICITS OF THIRTY TO FIFTY BILLION DOLLARS THIS YEAR AND NEXT.\nDEFICITS OF THIS MAGNITUDE ARE WRONG -- EXCEPT ON A TEMPORARY\nBASIS IN THE MOST EXTENUATING CIRCUMSTANCES.\n- 21 -\nTHEREFORE, IN MY STATE OF THE UNION AND SUBSEQUENT\nMESSAGES, EXCEPT FOR ENERGY, I WILL NOT PROPOSE ANY NEW FEDERAL\nSPENDING PROGRAMS.\nI WILL NOT HESITATE TO VETO ANY NEW\nSPENDING PROGRAMS THAT CONGRESS SENDS TO ME.\nMANY PROPOSED FEDERAL SPENDING PROGRAMS ARE DESIRABLE\nAND HAVE HAD MY SUPPORT IN THE PAST.\nBUT THEY COST MONEY --\nYOUR TAX DOLLARS!\nPLAINLY IT IS TIME FOR A ONE-YEAR MORATORIUM\nON NEW FEDERAL SPENDING PROGRAMS.\nI NEED YOUR SUPPORT IN THIS,\nAND CONGRESS NEEDS TO KNOW OF YOUR SUPPORT.\n- 22 -\nI VERY DEEPLY BELIEVE THE FEDERAL GOVERNMENT OUGHT TO\nSHOW ALL AMERICANS IT PRACTICES WHAT IT PREACHES ABOUT SACRIFICE\nAND SELF-RESTRAINT.\nTHEREFORE I WILL INSIST UPON A FIVE PERCENT LIMIT ON ANY\nFEDERAL PAY INCREASES IN NINETEEN SEVENTY-FIVE AND WILL ASK CONGRESS\nTO PUT THE SAME TEMPORARY FIVE PERCENT CEILING ON AUTOMATIC\nCOST-OF-LIVING INCREASES IN GOVERNMENT AND MILITARY RETIREMENT\nPAY, AND SOCIAL SECURITY.\n- 23 -\nGOVERNMENT ALONE CANNOT BRING THE COST OF LIVING INDEX\nDOWN.\nBUT UNTIL IT DOES START DOWN, GOVERNMENT CAN REFRAIN\nFROM HELPING TO PUSH IT UP.\nFOR ONLY WHEN THE COST OF LIVING\nCOMES DOWN, CAN EVERYBODY GET FULL VALUE FROM A PENSION OR\nPAYCHECK.\nI WANT TO HASTEN THAT DAY.\nTONIGHT I HAVE SUMMARIZED ONLY THE HIGHLIGHTS OF MY\nNATIONAL ENERGY PROGRAM AND MY ECONOMIC RECOVERY PLAN.\nTHEY MUST GO HAND IN HAND -- ONE MAKES NO ECONOMIC SENSE\nWITHOUT THE OTHER.\n- 24 -\nON WEDNESDAY, I WILL SPELL OUT THESE PROPOSALS TO THE\nCONGRESS.\nTHERE WILL BE OTHER RECOMMENDATIONS, BOTH SHORT\nAND LONG-RANGE, TO MAKE OUR NATIONAL RECOVERY PLAN AS FAIR AND\nPRACTICAL AS POSSIBLE.\nI WILL PRESS FOR PROMPT ACTION AND\nRESPONSIBLE LEGISLATION.\nTHE DANGER OF DOING NOTHING IS GREAT;\nTHE DANGER OF DOING TOO MUCH IS JUST AS GREAT.\nWE CANNOT AFFORD\nTO THROW MONKEY WRENCHES INTO OUR COMPLEX ECONOMIC MACHINE,\nJUST BECAUSE IT ISN'T RUNNING AT FULL SPEED.\n- 25 -\nWE ARE IN TROUBLE, BUT WE ARE NOT ON THE BRINK OF\nANOTHER GREAT DEPRESSION.\nOUR POLITICAL AND ECONOMIC SYSTEM\nTODAY IS MANY TIMES STRONGER THAN IT WAS IN THE NINETEEN THIRTIES.\nWE HAVE INCOME SAFEGUARDS AND UNEMPLOYMENT CUSHIONS BUILT\nINTO OUR ECONOMY.\nWE HAVE TAKEN AND WILL CONTINUE TO TAKE\nWHATEVER STEPS ARE NEEDED TO PREVENT MASSIVE DISLOCATIONS AND\nPERSONAL HARDSHIPS -- AND IN PARTICULAR, THE TRAGEDY OF\nRISING UNEMPLOYMENT.\n- 26 -\nREALISTIC AND SOUND SOLUTIONS TO OUR ECONOMIC DIFFICULTIES\nWILL DEPEND PRIMARILY ON THE STRONG SUPPORT OF EACH ONE OF YOU.\nSELF-RESTRAINT MUST BE EXERCISED BY BIG AND SMALL BUSINESSES,\nBY ORGANIZED AND UNORGANIZED LABOR, BY STATE AND LOCAL GOVERN-\nMENTS AS WELL AS BY THE FEDERAL GOVERNMENT.\nOPPORTUNISTS\nAND MANIPULATORS WILL NOT BE ALLOWED TO PROSPER FROM THE\nTEMPORARY HARDSHIPS MOST OF US WILLINGLY BEAR.\nNOR CAN WE\nPERMIT SPECIAL INTERESTS TO GAIN FROM OUR COMMON DISTRESS.\n- 27 -\nTO IMPROVE THE ECONOMIC OUTLOOK WE MUST ALL REKINDLE\nAND OPENLY EXPRESS OUR FAITH IN OURSELVES.\nNOBODY IS GOING\nTO PULL US OUT OF OUR TROUBLE BUT OURSELVES -- AND BY OUR OWN\nBOOTSTRAPS.\nIN TWO HUNDRED YEARS AS A NATION, WE HAVE TRIUMPHED\nOVER NATURAL OBSTACLES, EXTERNAL ENEMIES, AND INTERNAL CONFLICTS --\nAND EACH TIME WE HAVE EMERGED STRONGER THAN BEFORE.\n- 28 -\nTHIS HAS CALLED FOR DETERMINED LEADERS AND DEDICATED\nCITIZENS -- AND THIS CALL HAS NEVER GONE UNHEEDED.\nIN EVERY\nCRISIS, THE AMERICAN PEOPLE HAVE CLOSED RANKS, ROLLED UP THEIR\nSLEEVES AND RALLIED BEHIND THEIR PRESIDENT TO DO WHATEVER HAD TO\nBE DONE.\nTHAT IS WHY I AM ASKING YOU, AS WELL AS THE CONGRESS,\nTO WORK WITH ME TO TURN THE GLOOMY ECONOMIC GRAPHS AROUND,\nDECLARE OUR ENERGY INDEPENDENCE, AND MAKE OUR FREE SOCIETY\nAND TREMENDOUS PRODUCTIVITY AGAIN THE WONDER OF THE WORLD.\n- 29 -\nTHE BEGINNING OF OUR BICENTENNIAL CELEBRATION IS A GOOD\nTIME TO REAFFIRM OUR PRIDE AND PURPOSE AS AMERICANS WHO HELP\nTHEMSELVES AND HELP THEIR NEIGHBORS NO MATTER HOW TOUGH THE TASK\nMAY BE.\nFOR MY PART, I WILL CONTINUE TO DO WHAT I BELIEVE IS RIGHT\nFOR ALL OUR PEOPLE -- TO DO MY BEST FOR AMERICA AS LONG AS\nI OCCUPY THIS HISTORIC HOUSE.\nTHANK YOU FOR JOINING ME HERE\nTONIGHT. WE KNOW WHAT MUST BE DONE. IF DELAY IS PREFERABLE\nTO ERROR, AS JEFFERSON SAID, so ACTION IS NOW PREFERABLE TO\nPERFECTION.\n- 30 -\nTHE TIME TO ACT IS NOW -- FOR WE HAVE OUR PRESENT\nTO PRESERVE -- AND OUR CHILDREN'S FUTURE TO SECURE.\nLET US\nJOIN TOGETHER.\nI KNOW WE WILL SUCCEED TOGETHER!\nAND MAY GOD\nBLESS OUR ENDEAVORS.\nTHANK YOU AND GOOD NIGHT.\nEND OF TEXT\nTHE PRESIDENT HAS SEEN\nGood evening.\nWithout wasting words, I want to talk with you tonight about\nputting our domestic house in order.\nWe must reverse the current recession.\nWe must halt unemployment and create more jobs.\nWe must restore confidence among consumers and investors\nalike.\nWe must continue an effective plan to lick inflation.\nWe must, without delay, take firm control of our future\nprogress as a free people.\nTogether we can and will do this job. Our national character\nis strong on self-discipline and the will to win. Americans are at\ntheir very best when the going is rough.\nRight now the going is rough and it may get rougher.\nOn Wednesday I will report to the new Congress on the State\nof the Union and ask for its help to quickly improve it. But neither\n- 2 -\nCongress nor the President can pass laws or issue orders to assure\neconomic improvement and instant prosperity.\nBut government can help by equalizing unfair burdens, by\nsetting an example of sound economic actions, and by exerting leader-\nship through a clear and coordinated national recovery plan.\nTonight, let me give you a preview of my plan. After all, you\nare the people most affected by it.\nSince becoming your President, economic problems have been\nmy first and foremost concern. Two elements of our total problem\nare long-range -- inflation and energy. Both are affected not only by\nour own actions but also by international forces beyond our direct\ncontrol. The new and disturbing element in the economic picture is\nour worsening recession and the unemployment that goes with it.\nOver the past three months, since my first economic program\nwas put together, we have made progress in slowing the upward spiral of\n- 3 -\ninflation and getting interest rates started down. But, frankly, we\nhave suffered sudden and serious setbacks in sales and employment.\nTherefore, we must shift our Number One target from run-\naway inflation to recession.\nIn doing so, we must not lose sight of the very real and deadly\ndangers of rising prices and declining domestic energy supplies.\nAmericans are no longer in control of their own national destiny when\nthat destiny depends on uncertain foreign fuel at high prices fixed by\nothers. Higher energy costs compound both inflation and recession.\nDependence on others for future energy supplies is intolerable to our\nnational security.\nTherefore, we must wage a simultaneous three-front campaign\nagainst recession, inflation and energy dependence. Any one of these\nenemies could destroy the country we love.\nI will ask the new Congress to enact on a crash basis -- within\n- 4 -\n90 days or less -- the strongest and most far-reaching energy conservation\nprogram we have ever had. Yes, it will make gasoline and oil cost even\nmore than they do now. But it will achieve two all important objectives:\nIt will discourage the unnecessary use of petroleum products, and it will\nencourage the development and substitution of other fuels and newer\nsources of energy.\nHere is my energy plan:\nTo get started immediately, I will use my Presidential emergency\npowers to reduce our dependence on foreign sources by escalating import\nfees on each barrel of foreign oil products beginning February 1st --\none dollar the first month, two dollars the second and three dollars the\nthird month and thereafter. I will also propose a more comprehensive\nprogram of energy conservation taxes on gas and oil to reduce consumption.\nThe revenues derived from such taxes will be used to help stimulate the\nwhole economy. In addition, my energy conservation program contains\nprovisions to avoid undue hardships in any geographical area, such as\n- 5 -\nNew England -- or in any specific industries or areas of human need, where\noil is essential. The plan takes away windfall profits by producers. I empha-\nsize there must also be a well-coordinated volunteer campaign to cut gasoline\nand other energy use. My national energy conservation plan will urge Congress\nto grant a five year delay on higher automobile pollution standards in order to\nachieve a 40 percent increase in miles per gallon of gasoline used by motorists.\nI will recommend stronger measures to speed the development of other\ndomestic energy resources, such as coal, geothermal, solar and nuclear power.\nThis plan requires personal sacrifice. But if we all pitch in, we will\nmeet our goal of reducing foreign oil imports by 1 million barrels a day this\nyear and by 2 million before the end of 1977. 1 By 1985 -- 10 years from now --\nthe United States will be fully invulnerable to foreign energy disruptions. Of\ncourse, our domestic needs come first. But our gains in energy independence\nwill be fully coordinated with our friends abroad.\nIf Congress speedily enacts this energy program, there will be no need\nfor compulsory gasoline rationing or long waiting lines at the service station.\n- 6 -\nLet's be frank. Gasoline prices will go up, though not as much\nas with a 20¢ a gallon gas tax. Furthermore, the burden of conservation\ntaxes on oil will be shared by all petroleum users, not just motorists.\nNow, here is my plan to fight recession:\nI will ask Congress to enact promptly a one-time Federal income\ntax cut of $16 billion. Twelve billion dollars or three-fourths of the\ntotal of this cut will go to individual taxpayers in the form of a cash rebate\namounting to 10 percent of their 1974 tax payments, but not more than\n$500. If Congress acts by April 1st, you will get your first check by June\nand two more installments during the remainder of this year.\nThe other one-fourth of the cut -- about $4 billion, will go to\nbusiness taxpayers to promote plant expansion and create more jobs.\nThis will be in the form of an increase in the investment tax credit to\n12 percent for one year.\nThis will reverse the disturbing decline in capital spending and\nproductivity, which is the real key to lasting recovery and growth.\n- 7 -\nThis will apply to all businesses, including agriculture. There will\nbe special provisions to assist essential public utilities to step up\ntheir energy capacity.\nAs soon as the new revenues from energy conservation taxes\nare received, we will be able to return 27 billion dollars to the economy\nin the form of additional payments and credits to individuals, business\nand State and local governments.\nCash payments from this total will also be available to those who\npay no income taxes because of low earnings but who are the hardest hit\nby inflation and higher energy costs.\nThis combined program adds up to 43 billion dollars -- 27 billion\ndollars in returned energy tax revenues to compensate for higher fuel costs --\nand 16 billion dollars in 1974 tax cuts to help fight unemployment this year.\nThe energy conservation tax revenues, however, will continue\nto be pumped back into the economy as long as the emergency lasts.\n- 8 -\nI know this sounds like I am reversing myself since last October\nwhen I suggested higher taxes for upper-income and corporate taxpayers\nas a budget-balancing and anti-inflationary measure. But the situation\nhas changed. You know it and I know it. What we need most urgently\ntoday is more spending money in your pockets rather than in the Treasury\nin Washington.\nLet's face it -- this will mean a bigger Federal deficit temporarily.\nAnd deficits are something I fought against all my public life. But unless\nour economy revives rapidly, Federal tax revenues will shrink so much\nthat future deficits will be enormous. As a realist, I had to conclude\nthat a larger deficit now is better than future economic and fiscal calamity.\nBut I have not abandoned my lifelong belief in Federal restraint.\nIn the long run, there is no other real remedy for our economic troubles.\nWhile wrestling with the budgets for this year and next, I found\nthat at least three-fourths of all Federal expenditures are required by\nlaws already on the books. Your President is powerless to cut spending\n- 9 -\nin an ever-growing list of programs which provide mandatory formulas\nfor payments to State and local governments and to families and\nindividuals.\nUnless we check this trend, I can tell you there are only two ways\nto go -- still higher Federal taxes or the more ruinous hidden tax of\ninflation. Unchecked, Federal programs -- mandated by law -- will be\nthe prime contributors to Federal deficits of 30 to 50 billion dollars\nthis year and next. Deficits of this magnitude are wrong -- except on\na temporary basis in the most extenuating circumstances.\nTherefore, in my State of the Union and subsequent messages,\nexcept for energy, I will not propose any new Federal spending programs.\nI will not hesitate to veto any new spending programs that Congress\nsends to me.\nMany proposed Federal spending programs are desirable and\nhave had my support in the past. But they cost money -- your tax dollars!\n- 10 -\nPlainly it is time for a one-year moratorium on new Federal spending\nprograms. I need your support in this, and your Representatives in\nCongress need to know of your support.\nI very deeply believe the Federal Government ought to show\nall Americans it practices what it preaches about sacrifice and\nself-restraint.\nTherefore I will insist upon a 5 percent limit on any Federal pay\nincreases in 1975 and will ask Congress to put the same temporary\n5 percent ceiling on automatic cost-of-living increases in government\nand military retirement pay, and Social Security.\nGovernment alone cannot bring the cost of living index down.\nBut until it does start down, government can refrain from helping to\npush it up. For only when the cost of living comes down, can everybody\nget full value from a pension or paycheck. I want to hasten that day.\nTonight I have summarized only the highlights of my national\nenergy program and my economic recovery plan. They must go hand\nin hand -- one makes no economic sense without the other.\n- 11 -\nOn Wednesday, I will spell out these proposals to the Congress.\nThere will be other recommendations, both short and long-range, to\nmake our national recovery plan as fair and practical as possible.\nI will press for prompt action and responsible legislation. The danger\nof doing nothing is great; the danger of doing too much is just as great.\nWe cannot afford to throw monkey wrenches into our complex economic\nmachine, just because it isn't running at full speed.\nWe are in trouble, but we are not on the brink of another Great\nDepression. Our political and economic system today is many times\nstronger than it was in the 1930's. We have income safeguards and\nunemployment cushions built into our economy. We have taken and will\ncontinue to take whatever steps are needed to prevent massive dislocations\nand personal hardships -- and in particular, the tragedy of rising\nunemployment.\nBut realistic and sound solutions to our economic difficulties will\ndepend primarily on the strong support of each one of you. Self-restraint\n- 12 -\nmust be exercised by big and small business, by organized and\nunorganized labor, by State and local governments as well as by the\nFederal Government. Opportunists and manipulators will not be allowed\nto prosper from the temporary hardships most of us willingly bear.\nNor can we permit special interests to gain from our common distress.\nTo improve the economic outlook we must all rekindle and openly\nexpress our faith in ourselves. Nobody is going to pull us out of our\ntroubles but ourselves -- and by our own bootstraps.\nIn 200 years as a nation, we have triumphed over external\nenemies and internal conflicts -- and each time, we have emerged\nstronger than before.\nThis has called for determined leaders and dedicated citizens --\nand this call has never gone unheeded. In every crisis, the American\npeople have closed ranks, rolled up their sleeves and rallied behind\ntheir President to do whatever had to be done.\n- 13 -\nThat is why I am asking you, as well as the Congress, to work\nwith me to turn the gloomy economic graphs around, declare our energy\nindependence, and make our free society and tremendous productivity\nagain the wonder of the world.\nThe beginning of our Bicentennial celebration is a good time to\nreaffirm our pride and purpose as Americans who help themselves and\nhelp their neighbors no matter how tough the task may be.\nFor my part, I will continue to do what I believe is right for all\nour people - -- to do my best for Ámerica as long as I occupy this historic\nhouse. Thank you for joining me here tonight. We know what must be done.\nIf delay is preferable to error, as Jefferson said, so action is now\npreferable to perfection.\nThe time to act is now -- for we have our Nation to preserve --\nand our future to protect. Let us join together, and with God's blessing,\nwe will succeed together !\nThank you and Good Night.\n# # #"
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