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1/19/76 - State of the Union
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1/19/76 - State of the Union
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Sheila R. Weidenfeld Files (Ford Administration)
Sheila Weidenfeld's Daily Events Files
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President (1974-1977 : Ford). Office of the First Lady. 1974-1977
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The original documents are located in Box 8, folder "1/19/76 - State of the Union" of
the Sheila Weidenfeld Files at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald R. Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Some items in this folder were not digitized because it contains copyrighted
materials. Please contact the Gerald R. Ford Presidential Library for access to
these materials.
Digitized from Box 8 of the Sheila Weidenfeld Files at the Gerald R. Ford Presidential Library
FROM THE DESK OF
Sally Quenneville
Mrs. Ford will be wearing Beige Double Knit by
Esteves suit with a cowled collar
GENERAL H. FORD LIBRARY
Form PP-138© The Drawing Board, Inc., Box 505, Dallas, Texas
FROM THE DESK OF
Sally Quenneville
S.O.T.U.
Front Row : to the right:
Mrs. Ford
Mrs. Coleman
Jack
Mrs. Mathews
Amb. Bush
Mrs. Lynn
Mrs. Simon
Mr. Rod Hills
Mrs. Rumsfeld
Mrs. Marsh
Mrs. Levy
Mrs. Buchen
Mrs. Kleppe
Mrs. Dent
Front Row to the Left:
Amb. Richardson
Mrs. Butz
Max Friedersdorf
Mrs. Rockefeller
Behind:
Mrs. Aders
CERTIFICATE GERAL FORD LIBRARY
Form PP-138@ The Drawing Board, Inc., Box 505, Dallas, Texas
Don't here good news/.
THE WHITE HOUSE
WASHINGTON
Her husband has
always told it like
if is & I'm
optomishi a Sent
The year aheed.
FORD is GERALD LIBRARY
FROM THE DESK OF
Sally Quenneville
S.O.T.U.
Front Row to the right:
to the BAck!
Mrs. Ford
Mrs. Coleman
Jack
Mrs. Mathews HEW
Amb. Bush
Mrs. Lynn
Mrs. Simon
Mr. Rod Hills
Mrs. Rumsfeld
Mrs. Marsh
Mrs. Levy
Mrs. Buchen
Mrs. 50m Kleppe interest
Mrs. Dent
Front Row to the Left:
Amb. Richardson
Mrs. Butz
Max Friedersforf
Mrs. Rockefeller
Behind:
Mrs. Aders
FORD & GERALD LIBRARY
Form PP-138© The Drawing Board, Inc., Box 505, Dallas, Taxes
Beige Unit (double) Esteves
- cowed collar -
S.O.T.V.
2 price -
FORD in LIBRARY
sheila
1/15/76
PROPOSED SCHEDULE
5:05 pm
PRESIDENTIAL VISIT TO THE CAPITOL FOR THE
STATE OF THE UNION ADDRESS
U.S. Capitol
Monday, January 19, 1976
8:25 pm
The Vice President arrives at the Capitol.
The Vice President proceeds to the Senate
Chamber to convene the Senate.
8:39 pm
The Vice President and the Senate depart
the Senate Chamber and proceed to the
House Chamber.
8:40 pm
The President and Mrs. Ford board motorcade on
the South Grounds.
MOTORCADE DEPARTS South Grounds en route
U.S. Capitol.
[Driving time: 10 minutes]
8:42 pm
The Vice President and the Senate enter the
House Chamber.
8:47 pm
Diplomatic Corps proceeds to House Chamber
Floor.
8:50 pm
MOTORCADE ARRIVES South Door of the Capitol
(House Wing).
The President & Mrs. Ford will be met by:
Ken R. Harding, House Sergeant-at-Arms
Mr. George White, Architect of the Capitol
OFFICIAL PHOTO COVERAGE
The President, escorted by Mr. Harding, proceeds
inside the South Door entrance en route the Holding GERAL
FORD
Room (H-210).
LIBRARY
- 2 -
8:50 pm
Mrs. Ford will be escorted to her seat
in the Executive Gallery by Mr. Jim Rohan.
8:53 pm
Supreme Court Justices proceed to House
Chamber.
8:55 pm
The Cabinet proceeds from H-210 to the
House Chamber Floor.
8:55 pm
The President arrives Holding Room (H-210).
8:56 pm
Mrs. Ford arrives her seat in the
Executive Gallery.
8:57 pm
The Escort Committee arrives outside the
Holding Room. Escort Committee is as
follows:
8:58 pm
The President departs Holding Room en route
House Chamber, escorted by Mr. Ken Harding and
Mr. Nordy Hoffman, Senate Sergeant-at-Arms,
and the Escort Committee.
8:59 pm
The President arrives center door of the House
Chamber.
9:00 pm
Announcement by Jim Molloy, the
Doorkeeper.
9:01 pm
The President proceeds down center aisle, escorted
by Jim Molloy and the Escort Committee, to the
Clerk's Desk (middle level).
GERALD FORD LIBRARY
LIVE NATIONWIDE TELEVISION
- 3 -
9:02 pm
The President arrives Clerk's Desk and remains
standing.
NOTE: On arrival, the President
will present a copy of the State of
the Union Address to the Speaker
of the House and the President of
the Senate.
9:02 pm
The Speaker calls the Joint Session to order
and formally presents the President.
9:03 pm
Presidential State of the Union Address.
LIVE NATIONWIDE TELEVISION
9:45 pm
Address concludes.
The President departs House Chamber via the
entrance route, escorted by the two Sergeants-at- Arms
and the Escort Committee, and proceeds to motorcade
for boarding.
9:46 pm
Mrs. Ford departs her seat in the
Executive Gallery en route motorcade.
9:47 pm
The Vice President leads the Senate back
to the Senate Chamber,
9:49 pm
The President is joined by Mrs. Ford in the hallway
and proceeds outside South Entrance to board motorcade
950 pm
MOTORCADE DEPARTS The Capitol en route
South Grounds.
[Driving time: 10 minutes]
10:00 pm
MOTORCADE ARRIVES South Grounds.
R. FORD
THE WHITE HOUSE
WASHINGTON
STATE OF THE UNION ADDRESS
U.S. CAPITOL
Monday - January 19, 1976
Departure: 8:40 P.M.
From:
Terry O'Donnell
TOD
SEQUENCE:
8:40 P.M.
You, Mrs. Ford, and Jack board motorcade on
South Grounds and depart en route U.S. Capitol.
8:50 P.M.
Arrive South Door of the Capitol (House Wing)
where you will be met by Ken R. Harding,
House Sergeant-at-Arms, and Mr. George
White, Architect of the Capitol.
OFFICIAL PHOTO COVERAGE
Escorted by Mr. Harding, you proceed inside
the South Door entrance en route the Holding
Room (H-210). Mrs. Ford and Jack will be
escorted to their seats in the Executive Gallery
by Mr. Jim Rohan.
8:55 P.M.
Arrive Holding Room (H-210).
NOTE:
The Cabinet will be departing
H-210 for the Chamber floor
as you arrive.
8:56 p.m.
Mrs. Ford and Jack arrive at their
seats in the Executive Gallery.
2.
8:57 P. M.
The Escort Committee, consisting of
the following Members, arrives outside
the Holding Room.
Senator James O. Eastland (D-Miss)
Senator Mike Mansfield (D-Mont)
Senator Hugh Scott (R-Pa.)
Senator Robert Byrd (D-W. Va.)
Senator Robert P. Griffin (R-Mich.)
Congressman Thomas O. 'Neill, Jr. (D-Mass)
Congressman John Rhodes (R-Ariz)
Congressman John McFall (D-Ca)
Congressman Bob Michel (R-Ill.)
8:58 P.M.
Escorted by Mr. Ken Harding and Mr. Nordy
Hoffman, Senate Sergeant-ar-Arms, and the
Escort Committee, you depart Holding Room
en route House Chamber.
8:59 P.M.
You arrive center door of the House Chamber.
9:00 P.M.
Announcement by Jim Molloy, the
Doorkeeper.
9:01 P.M.
Escorted by Mr. Molloy and the Escort
Committee, proceed down the center aisle
then to your left to step up onto the middle
level where you will proceed to the Clerk's
Desk to present copies of the State of the
Union Address to the Speaker of the House
and the President of the Senate, then remain
standing.
LIVE NATIONWIDE TELEVISION
9:02 P.M.
The Speaker calls the Joint Session to
order and formally presents you.
9:03 P.M.
PRESIDENTIAL STATE OF THE UNION
ADDRESS.
LIVE NATIONWIDE TELEVISION
3.
9:45 P.M.
Address concludes.
You depart the House Chamber via the entrance
route, escorted by the two Sergeants- at - Arms
and the Escort Committee, and proceed to
motorcade for boarding.
9:46 P.M.
Mrs. Ford and Jack depart their
seats in the Executive Gallery to
board motorcade.
9:49 P.M.
You are joined by Mrs. Ford and Jack in the
hallway and proceed outside South Entrance
to board motorcade.
9:50 P. M.
Motorcade departs the Capitol en route South
Grounds.
10:00 P.M.
Arrive South Grounds of the White House.
#####
Presidency: Comment
C-3
Succor For The Right
(Ernest Furgurson, Baltimore Sun)
President Ford's prime-time State of the Union address was a
political opportunity that comes only to incumbents in the White
House, and he made the most of it. There was something in it for
everyone but Ronald Reagan.
A classic election-year speech, it covered the world in broad,
optimistic terms, slipping quickly past trouble areas that he can
worry about later when fewer voters are watching. Mr. Reagan will
never command so many viewers unless he himself gets elected
President, and Mr. Ford knew that.
He weighted his message toward orthodox Republican conservatism,
further acknowledging that his first political problem is to win
renomination against the right-wing challenge from Mr. Reagan ---
whom he did not mention, of course.
In both rhetoric and substance, the document was designed to
withstand critical analysis from the right while sticking to the
basic outlines of Mr. Ford's own earlier programs and making modest
new proposals in taxes, health insurance and housing. The nearest
he came to meeting his chief contender head-on was when he said,
"Complex welfare reforms cannot be reformed overnight. Surely we
cannot simply dump welfare into the laps of the 50 states, their
local taxpayers or private charities, and just walk away from it
"
There clearly was an effort to give the speech some solid
content, though this meant anticipating the essentials of the budget
message scheduled for tomorrow. And that was used by Ford advisers
as a point of contrast with Mr. Reagan's campaign oratory. One of
the specifics that was responsive to the Reagan challenge was the
President's proposal that in combining 16 existing federal health
programs into a single $10 billion federal grant, more of that
money would go to states with more low-income families. That means
the South, which is where the Reagan candidacy is strongest.
Also, for those admirers of George Wallace who may have been
listening, he declared that he was "proud of America and to be an
American," as if most Americans were not. -- (1/20/76)
Mr. President, Mr. Candidate
(Editorial, excerpted, Baltimore Sun)
For those who like their history neat, the 1976 presidential
campaign can be said to have started Monday evening. At the very
moment President Ford appeared before the Congress for his State
of the Union address, Iowa Democrats were meeting in 2,530 precinct
caucuses to record their first-in-the-nation choices for the party
nomination.
Presidency: Comment
C-4
Judged in that light, Mr. Ford's speech to an audience only
a President can command was as much a challenge to Ronald Reagan
as to the gaggle of Democrats competing in Iowa. Mr. Ford was
determined to make it clear he is as patriotic, as fiscally austere,
as wary of burgeoning government, as dedicated to free enterprise,
as stalwart for law and order and as protective of American power
as his opponent for the GOP nomination. The President took
surprisingly direct issue with the Californian's controversial
proposal to transfer the responsibility for operating and financing
billions in federal domestic programs to the states.
While Mr. Ford probed Mr. Reagan's most vulnerable issue, he
prepared for months of warfare with the Democratic Congress. While
Democrats will charge that the administration's spending hold-downs
may hinder the economic recovery, deny jobs to the unemployed and
reduce social services for the neediest citizens, Mr. Ford believes
his tax and spending cut combination will serve him well on the
hustings.
Though his popularity has declined appreciably, Mr. Ford was
able to tell the nation that the State of the Union is better than
it was when he addressed Congress during the bad news recession
plunge a year ago. Fairly or not, any President is going to be
judged by the economic situation that coincides with his incumbency.
Therefore, Mr. Ford's ability to offer a modestly upbeat assessment
of the recovery should have been warning enough to his opponents
that they will underestimate him at their peril. -- (1/20/76)
Super Jerry
(Jerome Cahill, NY Daily News)
Make room for Jerry Ford, the "take-charge" guy, calm, cool
and collected, the master of the infinite complexities of the
federal bureaucracy, a common sense President ready with common sense
solutions to the nation's ills. That was the between-the-lines
scenario of the State of the Union message and it will be repeated
when Ford personally briefs the press tomorrow on the new budget.
Not since Harry Truman has a president held a Q and A session on
the budget, and Harry was a tough operator who wasn't afraid of
taking heat in the kitchen.
Comparisons to Truman will be gratefully welcomed by Ford's
political agents in the White House, it goes without saying. And
it would be so much the better if the presidential performance also
was contrasted with Ronald Reagan's proposal to shift $90 billion in
federal programs to the states and localities -- to Reagan's dis-
advantage. That was a blunder the White House intends to exploit
to the hilt. --- (1/20/76)
Foreign Policy: News
N-6
"We've heard that there are American mercenaries there
we've heard that there are American pilots there we've heard
that we're training foreign mercenaries. We'd like to know the
truth. We'd like to know the answers."
Clark said he had no evidence that the accusations by Sen.
John Tunney (D-Calif) that Americans supplies were being flown
into Angola was true.
Asked whether he thinks the war is being escalated because
two Soviet ships are heading toward Angola, he replied. "There
have been some 28 ships from the USSR that have landed near
Luanda so it is not something new. They're not carrying any
equipment that they haven't delivered previously in Angola.'
The US vital interests are not involved in Angola and we
should not be there Clark said. Our foreign policy should not
be determined simply from Soviet action. -- NBC Today Show (1/7/76)
Presidency: News
Ford Budget Below Original Ceiling
President Ford will send Congress a federal budget below
his $495 billion ceiling figure, and Budget Director James Lynn
predicts it will cause "screams" by special interest groups, Ron
Nessen said Wednesday.
Ford told the first cabinet meeting of 1976 that an "almost
impossible job" had been done in not only holding the fiscal 1977
budget to $395 billion but in going below it, according to Nessen.
-- AP; UPI; NBC; CBS (1/7/76)
"Real" Ford Isn't Clumsy
The real Gerald Ford is a good natured guy who has the
capacity to laugh at himself, Jack Anderson said Wednesday.
Although there are many jokes about the clumsiness of the President
he "still has the moves of the all-American football player"
Anderson said and "no one without brains could make it through
Yale Law School as Gerald Ford did."
"In the inner sanctum of the White House on the walls are
some of the cartoons poking fun at President Ford. The President
thinks they're funny too. Nor is Ford a drunk which some critics
have whispered. But he's a locker room President who likes
a
couple of belts with the boys after the action is over," Anderson
commented.
EMBARGOED FOR RELEASE
JANUARY 19, 1976
UNTIL 9:01 E.S.T.
Office of the White House Press Secretary
THE WHITE HOUSE
TO THE CONGRESS OF THE UNITED STATES:
As we begin our Bicentennial, America is still one
of the youngest Nations in recorded history. Long before
our forefathers came to these shores, men and women had
been struggling on this planet to forge a better life for
themselves and their families.
In man's Long upward march from savagery and slavery --
throughout the nearly 2000 years. of the Christian calendar,
the nearly 6000 years of Jewish reckoning -- there have
been many deep, terrifying valleys, but also many bright
and towering peaks.
One peak stands highest in the ranges of human history.
One example shines forth of a people uniting to produce
abundance and to share the good life fairly and in freedom.
One Union holds out the promise of justice and opportunity
for every citizen.
That Union is the United States of America.
We have not remade paradise on earth. We know perfection
will not be found here. But think for a minute how far we
have come in 200 years.
Me came from many roots and have many branches. Yet all
Americans across the eight generations that separate us from
the stirring deeds of 1776, those who know no other homeland
and those who just found refuge on our shores, say in unison:
I am proud of America and proud to be an American Life
will be better here for my children than for me.
I believe this not because I am told to believe it, but
because life has been better for me than it was for my father
and my mother.
I know it will be better for my children because my hands,
my brain, my voice and my vote, can help make it happen.
And it has happened here in America.
It happened to you and to me.
Government exists to create and preserve conditions
in which people can translate their ideals into practical
reality. In the best of times, much is lost in translation.
But we try.
Sometimes we have tried and failed.
Always we have had the best of intentions. But in the
recent past we sometimes forgot the sound principles that had
guided us through most of our history. We wanted to accomplish
great things and solve age-old problems. And we became over-
confident of our own abilities. We tried to be a policeman
abroad and an indulgent parent here at home. We thought
we could transform the country through massive national
programs;
more
GERALD R. Fexo
2
-- But often the programs did not work; too often,
they only made things worse.
-- In our rush to accomplish great deeds quickly, we
trampled on sound principles of restraint, and endangered
the rights of individuals.
-- We unbalanced our economic system by the huge and
unprecedented growth of Federal expenditures and borrowing.
And we were not totally honest with ourselves about how much
these programs would cost and how we would pay for them.
-- Finally, we shifted our emphasis from defense to
domestic problems while our adversaries continued a massive
buildup of arms.
The time has now come for a fundamentally different
approach -- for a new realism that is true to the great
principles upon which this nation was founded.
We must introduce a new balance to our economy -- a balance
that favors not only sound, active government but also a much
more vigorous, healthier economy that can create new jobs and
hold down prices.
We must introduce a new balance in the relationship
between the individual and the Government --- a balance
that favors greater individual freedom and self-reliance.
We must strike a new balance in our system of
Federalism -- a balance that favors greater responsibility
and freedom for the leaders of our State and local govern-
ments.
We must introduce a new balance between spending on
domestic programs and spending on defense -- a balance that
ensures we fully meet our obligations to the needy while
also protecting our security in a world that is still
hostile to freedom.
And in all that we do, we must be more honest with
the American people, promising them no more than we can
deliver, and delivering all that we promise.
The genius of America has been its incredible ability
to improve the lives of its citizens through a unique com-
bination of governmental and free citizen activity.
History and experience tell us that moral progress
comes not in comfortable and complacent times, but out of
trial and confusion. Tom Paine aroused the troubled Americans
of 1776 to stand up to the times that try men's souls, be-
cause the harder the conflict the more glorious the triumph.
Just a year ago I reported that the State of the Union
was not good.
Tonight I report that the State of our Union is
better -- in many ways a lot better -- but still not good
enough.
To paraphrase Tom Paine, 1975 was not a year for
summer soldiers and sunshine patriots. It was a year of
fears and alarms and of dire forecasts -- most of which
never happened and won't happen.
more
3
As you recall, the year 1975 opened with rancor and
bitterness. Political misdeeds of the past had neither been
forgotten nor forgiven.
The longest, most divisive war in our history was
winding toward an unhappy conclusion. Many feared that the
end of that foreign war of men and machines meant the beginning
of a domestic war of recrimination and reprisal.
Friends and adversaries abroad were asking whether
America had lost its nerve.
Finally, our economy was ravaged by inflation -- inflation
that was plunging us into the worst recession in four decades.
At the same time, Americans became increasingly alienated
from all big institutions. They were steadily losing confidence
not just in big government, but in big business, big labor and
big education, among others.
Ours was a troubled land.
And so, 1975 was a year of hard decisions, difficult
compromises, and a new realism that taught us something
important about America.
It brought back a needed measure of common sense,
steadfastness and self-discipline. Americans did not panic
or demand instant but useless cures. In all sectors people
met their difficult problems with restraint and responsibility
worthy of their great heritage.
Add up the separate pieces of progress in 1975, subtract
the setbacks, and the sum total shows that we are not only headed
in the new direction I proposed 12 months ago, but that it
turned out to be the right direction.
It is the right direction because it follows the
truly revolutionary American concept of 1776 which holds
that in a free society, the making of public policy and
successful problem.solving involves much more than government.
It involves a full partnership among all branches and levels
of government, private institutions and individual citizens.
at
Common sense tells me to stick to that steady course
Take the state of our economy.
Last January most things were rapidly getting worse.
This January most things are slowly but surely getting
better.
The worst recession since World War II turned around in
April. The best cost of Iiving news of the past year is that
double digit inflation of 12% or higher was cut almost in
half. The worst -- unemployment remains too high.
Today nearly 1.7 million more Americans are working than
at the bottom of the recession. At year's end people were
again being hired much faster than they were being laid off.
Yet let us be honest: many Americans have not yet felt
these changes in their daily lives. They still see prices
going up too fast, and they still know the fear of unemployment.
more
4
And we are a growing Nation. We need more and more Jobs
every year. Today's economy has produced over 85 million
jobs for Americans, but we need a lot more jobs, especially
for the young.
My first objective is to have sound economic growth
without inflation.
We all know from recent experience what runaway inflation
does to ruin every other worthy purpose. We are slowing 1t;
we must stop it cold.
For many Americans the way to a healthy non-inflationary
economy has become increasingly apparent; the government
must stop spending so much and borrowing so much of our
money more money must remain in private hands where it
will do the most good. To hold down the cost of living, we
must hold down the cost of government.
In the past decade, the Federal budget has been growing
at an average rate of over 10 percent every year. The budget
I am submitting Wednesday cuts this rate of growth in half.
I have kept my promise to submit a budget for the next fis-
cal year of $395 billion. In fact, it is $394.2 billion.
By holding down the growth in Federal spending, we
can afford additional tax cuts and return to the people
who pay taxes more decision-making power over their own
lives.
Last month I signed legislation to extend the 1975
tax reductions for the first six months of this year. I
now propose that effective July 1, 1976, we give our tax-
payers a tax cut of approximately $10 billion more than
Congress agreed to in December.
My broader tax reduction would mean that for a family
of four making $15,000 a year there will be $227 more in
take home pay annually. Hard-working Americans caught in
the middle can really use that kind of extra cash.
My recommendations for a firm restraint on the growth
of Federal spending and for greater tax reduction are simple
and straightforward: For every dollar saved in cutting
the growth in the Federal budget we can have an added
dollar of Federal tax reduction.
We can achieve a balanced budget by 1979 if we have
the courage and wisdom to continue to reduce the growth
of Federal spending.
One test of a healthy economy is a job for every
American who wants to work.
Government - our kind of government -- cannot create
that many jobs. But the Federal Government can create con-
ditions and incentives for private business and industry to
make more and more jobs.
Five out of six jobs in this country are in private
business and industry. Common sense tells us this is the
place to look for more jobs and to find them faster.
I mean real, rewarding, permanent jobs.
more
FORD is. 03 LIBRARY
5
To achieve this we must offer the American people greater
incentives to invest in the future. My tax proposals are a
major step in that direction.
-- To supplement these proposals, I ask that Congress
enact changes in Federal tax laws that will speed up plant
expansion and the purchase of new equipment. My recommenda-
tion will concentrate this job-creation tax incentive in areas
where the unemployment rate now runs over 7 percent. Legislation
to get this started must be approved at the earliest possible
date.
Within the strict budget total I will recommend for the
coming year, I will ask for additional housing assistance for
500,000 families. These programs will expand housing oppor-
tunities, spur construction and help to house moderate and
low income families.
We had a disappointing year in the housing industry in
1975 but it is improving. With lower interest rates and
available mortgage money, we can have a healthy recovery in
1976.
A necessary condition of a healthy economy is freedom
from the petty tyranny of massive government regulation.
We are wasting literally millions of working hours costing
billions of consumers' dollars because of bureaucratic
red tape. The American farmer, who not only feeds 215 million
Americans but also millions worldwide, has shown how much
more he can produce without the shackles of government
control.
Now, we need reforms in other key areas in our economy -
the airlines, trucking, railroads, and financial institutions.
I have concrete plans in each of these areas, not to
help this or that industry, but to foster competition and to
bring prices down for the consumer.
This Administration will strictly enforce the Federal
antitrust laws for the same purpose.
Taking a longer look at America's future there can be
neither sustained growth nor more jobs unless we continue
to have an assured supply of energy to run our economy.
Domestic production of oil and gas is still declining. Our
dependence on foreign oil at high prices is still too great,
draining jobs and dollars away from our own economy at the
rate of $125 per year for every American.
Last month I signed a compromise national energy bill
which enacts a part of my comprehensive energy independence
program. This legislation was late in coming, not the
complete answer to energy independence, but still a start
in the right direction.
I again urge the Congress to move ahead immediately on
the remainder of my energy proposals to make America invul-
nerable to the foreign oil cartel. My proposals would:
Reduce domestic natural gas shortages;
Allow production from national petroleum reserves;
more
6
Stimulate effective conservation, including re-
vitalization of our railroads and the expansion of our
urban transportation systems;
Develop more and cleaner energy from our vast coal
resources;
Expedite clean and safe nuclear power production;
Create a new national Energy Independence Authority
to stimulate vital energy investment;
And accelerate development of technology to capture
energy from the sun and the earth for this and future
generations.
Also for the sake of future generations we must
preserve the family farm and family-owned small businesses.
Both strengthen America and give stability to our economy.
I will propose estate tax changes so that family
businesses and family farms can be handed down from genera-
tion to generation without having to be sold to pay taxes,
F.
I propose tax changes to encourage people to invest
in America's future, and their own, through a plan that
gives moderate income families income tax benefits if they
make long-term investments in common stock in American
companies
The Federal Government must and will respond to clear-
cut national needs - for this and future generations.
Hospital and medical services in America are among
the world's best but the cost of a serious and extended
illness can quickly wipe out a family's lifetime savings.
Increasing health costs are of deep concern to all and a
powerful force pushing up the cost of living.
The burden of a catastrophic illness can be borne by
very few in our society. We must eliminate this fear from
every family.
I propose catastrophic health insurance for everybody
covered by Medicare To finance this added protection,
fees for short-term care will go up somewhat, but nobody
after reaching age 65 will have to pay more than $500
a year for covered hospital or nursing home care nor more
than $250 for one year's doctors' bills.
We cannot realistically afford Federally dictated
national health insurance providing full coverage for all
215 million Americans. The experience of other countries
raises questions about the quality as well as the cost
of such plans. But I do envision the day when we may-use
the private health insurance system to offer more middle
income families high quality health services at prices
they can afford and shield them also from catastrophic
illnesses.
Using the resources now available, I propose improving
the Medicare and other Federal health programs to help those
who really need more protection: older people and the poor.
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To help States and local governments give better health care
to the poor I propose that we combine 16 existing Federal
programs including Medicaid into a single $10 billion Federal
grant.
Funds would be divided among the States under a new
formula which provides a larger share of Federal money to
those states that have a larger share of low income families.
I will take further steps to improve the quality of
medical and hospital care for those who have served in our
armed forces.
Now let me speak about Social Security.
Our Federal Social Security system for people who
have worked hard and contributed to it all their lives is.
a vital part of our economic system. Its value is no
longer debatable. In my budget for fiscal year 1977 I am
recommending that the full cost of living increase in
Social Security benefits be paid during the coming year
But I am concerned about the integrity of our Social
Security Trust Fund that enables people -- those retired
and those still working who will retire -- to count on
this source of retirement income. Younger workers watch
their deductions rise and wonder if they will be adequately
protected in the future.
We must meet this challenge head-on.
Simple arithmetic warns all of us that the Social
Security Trust Fund is headed for trouble. Unless we act
soon to make sure the fund takes in as much as it pays out,
there will be no security for old or young.
I must therefore recommend a 3/10 of one percent
increase in both employer and employee Social Security
taxes effective January 1, 1977. This will cost each
covered employee less than one extra dollar a week and will
ensure the integrity of the trust fund.
As we rebuild our economy, we have a continuing
responsibility to provide a temporary cushion to the unemployed.
At my request the Congress enacted two extensions and expan-
sions in unemployment insurance which helped those who were
jobless during 1975. These programs will continue in 1976.
In my fiscal 1977 budget, I am also requesting funds
to continue proven job training and employment opportunity
programs for millions of other Americans.
Compassion and a sense of community -- two of America's
greatest strengths throughout our history -- tell us we must
take care of our neighbors who cannot take care of themselves.
The host of Federal programs in this field reflect our
generosity as a people.
But everyone realizes that when it comes to welfare,
government at all levels is not doing the job well. Too many
of our welfare programs are inequitable and invite abuse.
Worse, we are wasting badly needed resources without reaching
many of the truly needy.
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Complex welfare programs cannot be reformed overnight.
Surely we cannot simply dump welfare into the laps of the 50
States, their local taxpayers or private charities, and just
walk away from it. Nor is it the right time for massive and
sweeping changes while we are still recovering from a recession.
Nevertheless, there are still plenty of improvements we
can make. I will ask Congress for Presidential authority to
tighten up rules for eligibility and benefits.
Last year I twice sought long overdue reform of the
scandal riddled Food Stamp program. This year I say again:
Let's give Food Stamps to those most in need. Let's not give
any to those who don't need them. Ar
Protecting the life and property of the citizen at home
is the responsibility of all public officials but is primarily
the job of local and State law enforcement authorities.
Americans have always found the very thought of a Federal
police force repugnant and so do I. But there are proper ways
in which we can help to ensure domestic tranquility as the
Constitution charges us.
My recommendations on how to control violent crime were
submitted to the Congress last June with strong emphasis on
protecting the innocent victims of crime.
To keep a convicted criminal from committing more
crimes we must put him in prison so he cannot harm more
law-abiding citizens AP To be effective, this punishment
must be swift and certain.
Too often criminals are not sent to prison after
conviction but are allowed to return to the streets.
Some judges are reluctant to send convicted criminals
to prison because of inadequate facilities. To
alleviate this problem at the Federal level, my new
budget proposes the construction of four new Federal facilities.
To speed Federal justice, I propose an increase this
year in U.S. Attorneys prosecuting Federal crimes and rein-
forcement of the number of U.S. Marshals.
Additional Federal judges are needed, as recommended
by me and the Judicial Conference.
Another major threat to every American's person and
property is the criminal carrying a handgun. The way to
cut down on the criminal use of guns is not to take guns
away from the law-abiding citizen, but to impose mandatory
sentences for crimes in which a gun is used, make it harder
to obtain cheap guns for criminal purposes, and concentrate
gun control enforcement in high crime areas.
My budget recommends 500 additional Federal agents in
the 11 largest metropolitan high crime areas to help local
authorities stop criminals from selling and using handguns.
The sale of hard drugs is on the increase again. I
have directed all agencies of the Federal Government to
step up enforcement efforts against those who deal in drugs.
In 1975, Federal agents seized substantially more heroin
coming into our country than in 1974.
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As President, I have talked personally with the leaders
of Mexico, Colombia and Turkey to urge greater efforts by
their Governments to control effectively the production and
shipment of hard drugs.
I recommended months ago that the Congress enact mandatory
fixed sentences for persons convicted of Federal crimes in-
volving the sale of hard drugs. Hard drugs degrade the spirit
as they destroy the body of their users.
It is unrealistic and misleading to hold out the hope
that the Federal Government can move in to every neighborhood
and clean up crime. Under the Constitution, the greatest
responsibility for curbing crime lies with State and local
authorities. They are the frontline fighters in the war
against crime.
There are definite ways in which the Federal Government
can help them. I will propose in the new budget that the
Congress authorize almost $7 billion over the next five years
to assist State and local governments to protect the safety
and property of all citizens.
As President I pledge the strict enforcement of Federal
laws and -- by example, support, and leadership -- to help
State and local authorities enforce their laws. Together we
must protect the victims of crime and ensure domestic
tranquility.
Last year I strongly recommended a five-year extension
of the existing revenue sharing legislation which thus
far has provided $19 billion to help State and local units
of government solve problems at home. This program has
been effective with decisionmaking transferred from the
Federal Government to locally elected officials. Congress
must act this year or State and local units of government
will have to drop programs or raise local taxes.
Including my health care reforms, I propose to
consolidate some 59 separate Federal programs and provide
flexible Federal dollar grants to help States, cities and
local agencies in such important areas as education, child
nutrition, and social services. This flexible system will
do the job better and do it closer to home
The protection of the lives and property of Americans
from foreign enemies is one of my primary responsibilities
as President.
In a world of instant communications and intercontinental
missiles, in a world economy that is global and interdependent,
our relations with other nations become more, not less,
important to the lives of Americans.
America has had a unique role in the world since the
day of our independence 200 years ago. And ever since the end
of World War II, we have borne -- successfully -- a heavy
responsibility for ensuring a stable world order and hope
for human progress.
Today, the state of our foreign policy is sound and strong.
-- We are at peace -- and I will do all in my power to
keep it that way. AVR.
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-- Our military forces are capable and ready; our military
power is without equal. And I intend to keep it that way. AV
Our principal alliances, with the industrial democracies
of the Atlantic Community and Japan, have never been more solid.
-- A further agreement to limit the strategic arms race
may be achieved.
-- We have an improving relationship with China, the
world's most populous nation.
-- The key elements for peace among the nations of the
Middle East now exist.
-- Our traditional friendships in Latin America, Africa,
and Asia, continue.
-- We have taken the role of leadership in launching
a serious and hopeful dialogue between the industrial world
and the developing world.
-- We have achieved significant reform of the international
monetary system.
We should, be proud of what the United States has
accomplished. AV
The American people have heard too much about how terrible
our mistakes, how evil our deeds, and how misguided our pur-
poses. The American people know better. Ar
The truth is we are the world's greatest democracy. We
remain the symbol of man's aspirations for liberty and well-
being. We are the embodiment of hope for progress.
I say it is time we quit downgrading ourselves as a nation.
Ap
of course it is our responsibility to learn the right lessons
from past mistakes. It is our duty to see that they never
happen again. But our greater duty is to look to the future.
The world's troubles will not go away.
The American people want strong and effective international
and defense policies.
In our Constitutional system, these policies should reflect
consultation and accommodation between the President and Congress.
But in the final analysis, as the framers of our Constitution
knew from hard experience, the foreign relations of the
United States can be conducted effectively only if there is
strong central direction that allows flexibility of action.
That responsibility clearly rests with the President.
I pledge to the American people policies which seek
a secure, just, and peaceful world. I pledge to the Congress
to work with you to that end.
We must not face a future in which we can no longer
help our friends, such as in Angola -- even in limited and
carefully controlled ways. We must not lose all capacity
to respond short of military intervention. Some hasty
actions of the Congress during the past year -- most recently
in respect to Angola -- were in my view very short-sighted.
Unfortunately, they are still very much on the minds of our
allies and our adversaries.
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A strong defense posture gives weight to our values
and our views in international negotiations; it assures the
vigor of our alliances; and it sustains our efforts to pro-
mote settlements of international conflicts. Only from a
position of strength can we negotiate a balanced agreement
to limit the growth of nuclear arms. Only a balanced agree-
ment will serve our interest and minimize the threat of
nuclear confrontation.
The Defense Budget I will submit to the Congress for
fiscal 1977 will show an essential increase over last year.
It provides for a real growth in purchasing power over last
year's Defense Budget, which includes the costs of our
All-Volunteer Force.
We are continuing to make economies to enhance the
efficiency of our military forces. But the budget I will
submit represents the necessity of American strength for
the real world in which we live.
As conflict and rivalries persist in the world, our
United States intelligence capabilities must be the best
in the world. An
The crippling of our foreign intelligence services
increases the danger of American involvement in direct
armed conflict. Our adversaries are encouraged to attempt
new adventures, while our own ability to monitor events,
and to influence events short of military action -- is
undermined.
Without effective intelligence capability, the
United States stands blindfolded and hobbled.
In the near future, I will take actions to reform
and strengthen our intelligence community. I ask for
your positive cooperation. It is time to go beyond
sensationalism and ensure an effective, responsible, and
responsive intelligence capability. AV
Tonight I have spoken of our problems at home and
abroad. I have recommended policies that will meet the
challenge of our third century.
I have no doubt that our Union will endure -- better,
stronger and with more individual freedom.
We can see forward only dimly -- one year, five years,
a generation perhaps. Like our forefathers, we know that
if we meet the challenges of our own time with a common
sense of purpose and conviction - if we remain true to
our Constitution and our ideals - then we can know that
the future will be better than the past.
I see America today crossing a threshhold, not just
because it is our Bicentennial, but because we have been
tested in adversity. We have taken a new look at what
we want to be and what we want our nation to become.
I see America resurgent, certain once again that
life will be better for our children than it is for us,
seeking strength that cannot be counted in megatons and
riches that cannot be eroded by inflation.
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I see these United States of America moving forward
as before toward a more perfect Union where the government
serves and the people rule.
We will not make this happen simply by making
speeches, good or bad, yours, or mine, but by hard work
and hard decisions made with courage and common sense.
I have heard many inspiring Presidential speeches,
but the words I remember best were spoken by Dwight D.
Eisenhower.
"America is not good because it is great," the
President said. "America is great because it is good.
A
President Eisenhower was raised in a poor but religious
home in the heart of America. His simple words echoed
President Lincoln's eloquent testament that "right makes
might." And Lincoln in turn evoked the silent image of
George Washington kneeling in prayer at Valley Forge.
So all these magic memories, which link eight
generations of Americans are summed up in the inscription
just above me.
How many times have we seen it? -- "In God We Trust."
Let us engrave it now in each of our hearts as we
begin our Bicentennial.
GERALD R. FORD
THE WHITE HOUSE,
January 19, 1976.
####
EMBARGOED FOR RELEASE
JANUARY 19, 1976
UNTIL 9:01 P.M., EST
Office of the White House Press Secretary
THE WHITE HOUSE
FACT SHEET
THE PRESIDENT'S STATE OF THE UNION MESSAGE
MAJOR ELEMENTS
PAGE
I.
ECONOMIC PROGRAM AND PROSPECTS
1
A.
Sustained Economic Growth without Inflation
1
1. Spending Restraint and a Balanced
1
Federal Budget by 1979
2. Tax Cuts
1
B.
Job Creation and Employment
4
1. Tax Cuts
4
2. Accelerated Depreciation for
4
Construction of Plants and Equip-
ment in High Unemployment Areas
3. Broadening Stock Ownership
6
4. Estate Tax Proposal for Family
6
Farms and Businesses
II.
HOUSING ASSISTANCE
8
III.
REGULATORY REFORM
9
A.
Principal Objectives of the
9
Administration's Program
B.
The Administration's Program
9
1. Expanded Antitrust, Activity
9
2. Independent Regulatory Commissions
10
3. Executive Branch Agencies
10
4. Commission of Federal Paperwork
10
5. Transportation Regulatory Reform
10
6. Financial Institutions Act
10
7. Energy
10
8. Fair Trade Laws
10
9. Securities
10
IV.
ENERGY
11
A.
Pending Legislation
12
B.
Current Energy Situation
12
C.
Future Energy Outlook
13
1. Near-Term (1976-1978)
13
2. Mid-Term (1976-1985)
13
3. Long-Term (beyond 1985)
13
ii
MAJOR ELEMENTS
PAGE
V.
HEALTH
14
A.
Medicare Improvements of 1976
14
1. Catastrophic Cost Protection
14
for Health Care
2.
Cost Sharing Modifications
14
3. Reimbursement Limits
15
B.
Financial Assistance for Health Care
15
C.
Veterans Administration Medical Care
17
VI.
INCOME SECURITY
18
A.
Social Security
18
B.
Aid to the Unemployed
18
VII.
INCOME ASSISTANCE
20
A.
Income Assistance Simplification Act
20
B.
Food Stamp Reform
20
VIII. CONTROLLING CRIME
22
A.
Mandatory Minimum Sentences
22
B.
Increased Federal Criminal Justice
Manpower and Resources
22
C.
Controlling Handgun Abuse
23
D.
Drug Abuse
23
E.
Assistance to State and Local Government
24
IX.
GENERAL REVENUE SHARING
25
X.
PROGRAM CONSOLIDATION
27
A.
Financial Assistance for Elementary
27
and Secondary Education
B.
Child Nutrition Reform
28
C.
Financial Assistance for Community Services
28
1
I.
ECONOMIC PROGRAM AND PROSPECTS
The President's economic policies outlined in his State
of the Union Message are designed to keep the economy on
an upward path toward two central long-term objectives:
--
Sustained economic growth without inflation,
--
Jobs for all who seek work.
A.
SUSTAINED ECONOMIC GROWTH WITHOUT INFLATION
BACKGROUND
At the beginning of 1976, the American economy is well
on the way to recovery from the deepest recession since
the 1930's. One year ago most economic indicators includ-
ing unemployment, inflation and production were deteriorating.
The most significant economic feature of 1975 was that the
economy turned around and steadily grew healthier during
the last half of the year. The double digit inflation of
over 12 percent in 1974 was reduced in 1975 to an estimated
6.9 percent. Further progress is expected in 1976 when a
rate of 5.9 percent is forecast. The further reduction in
the anticipated rate of inflation is expected to coincide with
a continuation of the recent healthy recovery in the standard
of living. Real gross national product is expected to
grow by 6.2 percent in 1976 and 5.7 percent in 1977.
DESCRIPTION OF PROGRAM
1. Spending Restraint and a Balanced Federal
Budget by 1979
The President's budget recommends $394.2 billion
in Federal outlays for FY 1977, a reduction of
nearly $29 billion in the projected growth of
Federal Government spending. As a result of
this spending restraint, the Federal deficit
would be reduced from an estimated $76 billion
in FY 1976 to $43 billion in FY 1977. By con-
tinuing to check the growth in Federal spending,
the budget can be balanced in FY 1979. Significant
spending restraint coupled with tax cuts will
foster sustained economic growth without
inflation.
2.
Tax Cuts
The President will seek further permanent tax
cuts for the American people, effective July 1,
1976. In keeping with his budget to contain
the growth of Federal spending, the President
reaffirmed his proposal for a $28 billion
permanent tax reduction. The President's
proposed permanent tax reduction is $10 billion
more than the temporary tax reduction (annualized)
enacted in December.
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2
a. Calendar Year 1977 and Beyond
The President's permanent program has the following
major features:
an increase in the personal exemption from
$750 to $1,000
substitution of a single standard deduction
$2,500 for married couples filing jointly and
$1,800 for single taxpayers for the existing
low income allowance and percentage standard
deduction;
a reduction in individual income tax rates
(see Annexes A and B);
a permanent 10 percent investment tax credit;
a reduction in the maximum corporate income
tax rate from 48 percent to 46 percent and
making permanent the current temporary tax cuts
on the first $50,000 of corporate income
-- a program to stimulate construction of new
electric utility facilities to insure that
long-run economic growth is not limited by
capacity shortages in the production of
electricity (see Annex C).
b. Calendar Year 1976
Since taxpayers compute their taxes on a calendar
year basis, the President is proposing tax liability
changes for calendar year 1976 that mesh his per-
manent proposal with the Revenue Adjustment Act of
1975 and approximate the effect of applying in 1976
the current temporary tax cuts for six months and
the President's permanent tax cuts for six months.
The President's full proposed tax liability changes
will apply for 1977 and subsequent years.
The President's proposals would result in lower
withholding tax rates (and higher take home pay)
effective July 1, 1976. The lower withholding
tax rates would reflect the full impact of the
tax cuts proposed by the President last October
and would remain constant in 1977.
The specific tax liability provisions that will
apply in calendar year 1976 are:
Tax Cuts (Compared
to 1974 law)
For individuals:
a personal exemption of $875
$ 5.4 billion
---- a per capita exemption credit of
$17.50, with alternative taxable
income credit equal to 1 percent
of the first $9,000 of taxable income
(i.e., maximum credit equals $90); $ 4.6 billion
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-- standard deduction changes
$ 4.1 billion
a low income allowance of $2,300
for joint returns and $1,750 for
singles;
a percentage standard deduction
of 16 percent of Adjusted Gross
Income with a maximum of $2,650 for
joint returns and $2,100 for singles;
-- an average of the rate structures
under present law and the President's
permanent tax cut program (see
Annexes A & B);
$ 3.6 billion
-- an earned income credit equal to 5
percent of earned income with a
maximum of $200, phasing out at
$8,000 of earned income or adjusted
gross income, whichever is
greater.
$ 0.7 billion
TOTAL INDIVIDUAL CUTS
$18.5 billion
For business:
-- a reduction in corporate rates
$ 3.2 billion
the rates will be 20 percent
for the first $25,000 of taxable
income, 22 percent for the second
$25,000 of taxable income, and
47 percent for taxable income above
$50,000.
-- the program to stimulate construc-
tion of electric facilities,
effective July 1, 1976.
$ 0.6 billion
TOTAL INDIVIDUAL AND BUSINESS
TAX CUTS
$22.2 billion
C. Comparative Tax Tables
The tables in Annex D illustrate the effect of the
President's tax cut proposal when it is fully
effective in 1977 on different individual taxpayers
compared to 1) tax liabilities under 1972-74 law;
2) 1975 tax liabilities, 3) 1976 tax liabilities
under the Revenue Adjustment Act, and 4) the
President's transitional proposal for 1976.
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4
B. JOB CREATION AND EMPLOYMENT
BACKGROUND
Considerable progress has been achieved during the past year.
There were 35.5 million Americans at work in December,
1.7 million more than at the low point in March 1975.
The President's approach to the unemployment problem has em-
braced three sets of policies:
1.
Alleviating the economic hardship for those who
are unemployed through temporarily extending un-
employment insurance coverage to 12 million
additional workers and temporarily extending the
period of time individuals may receive unemploy-
ment insurance benefits from 39 to 65 weeks.
2.
Providing increased funds for established and
proven Federal programs including Comprehensive
Employment Training Act (CETA), summer youth em-
ployment and public service employment.
3.
Stimulating economic activity in the private
sector through a reduction in individual and
corporate income taxes and encouraging increased
investment in America's economic future through
a series of tax incentives.
To encourage investment, the President has already proposed
a phased integration of the corporate and individual income
tax which will eventually eliminate the double tax burden
now imposed on corporate dividends. In addition, he has
proposed a six-point plan to stimulate construction of new
electric utility facilities to insure that long-run economic
growth is not limited by capacity shortages in the production
of electricity.
DESCRIPTION OF PROGRAM
The President has proposed four new programs to promote
additional investment and create new jobs:
1.
Tax Cuts
The President proposed permanent reductions in
individual and corporate income taxes and a
permanent increase in the investment tax credit.
Details of these proposals are outlined above.
2.
Accelerated Depreciation for Construction of
Plants and Equipment in High Unemployment
Areas
To speed up plant expansion and the purchase of
new equipment in high unemployment areas, the
President proposed permitting very rapid depre-
ciation for businesses constructing new plants,
purchasing equipment, or expanding existing
facilities in areas experiencing unemployment
in excess of 7 percent. Construction of such
facilities must begin within one year of today
to be eligible.
The program would accelerate the construction of
new industrial and commercial facilities in
areas of high unemployment where new jobs are
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5
most needed. It would immediately benefit the
construction industry -- one of the most depressed
industries in the economy -- and would create
productive, permanent, well-paying jobs in the
private sector.
The incentives provided by this proposal are
substantial. For example, in the case of a build-
ing with a 30-year useful life, the taxpayer would
be able to write off one-third of the cost in the
first 5 years as compared with 23 percent under the
most accelerated method of depreciation now avail-
able. For equipment, the entire cost of equipment
with a 12-year useful life could be written off in
5 years compared to 60 percent under the double
declining balance method now available.
The program has the following provisions:
Qualifying Location: Any Labor Market Area (LMA)
which had an average unemployment rate of 7 percent
or more for calendar year 1975. If the unemploy-
ment rate for such year in any state, exclusive of
the LMAs in such state, was 7 percent or more, all
areas of such state outside the LMAs would also
qualify. A list of potentially qualified Labor
Market Areas is at Annex E.
Qualifying Real Estate: Any commercial or industrial
facility located in a qualifying area, the con-
struction of which is commenced on or after
January 19, 1976, and before January 20, 1977,
which is completed within 36 months. Commercial
and industrial facilities include factories, ware-
houses, shopping centers and office buildings, but
do not include residential real estate of any kind.
Distinct additions to existing facilities will also
qualify for these benefits.
Qualifying Equipment: Production equipment which
is ordered during the year commencing January 19,
1976, and placed into service in a qualified
facility or addition within 36 months thereafter.
Equipment for existing facilities or equipment
such as over-the-road equipment and rolling stock
does not qualify.
Amortization of Qualified Real Estate: Amortiza-
tion will be allowed over a period equal to one-half
the shortest life which a taxpayer may now claim
under any provision of the Internal Revenue Code
and Regulations. The definition of real estate,
as distinguished from equipment, for this purpose
will be the same as is used in the investment credit
code provisions.
Amortization of Equipment: Equipment can be
amortized over sixty months by the straight-line
method from the date the equipment is placed in
service.
Investment Credit for Equipment: The full invest-
ment tax credit would still be allowed if the
useful life of such equipment, under present tests,
is 7 years or more. This is a most significant
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6
benefit which will make the election to amortize
much more attractive than if the taxpayer were
limited to two-thirds of the investment credit as
is the case under current law with respect to
property depreciated over a five-year period.
Application to Electric Utilities: This proposal
would not apply to electric utilities if the
Administration's program relating to the taxation
of such utilities is implemented.
3.
Broadening Stock Ownership
The President proposed tax incentives to encourage
broadened stock ownership by low and middle income
working Americans by allowing deferral of taxes on
certain funds invested in common stocks. Widespread
stock ownership will promote more stable financial
markets; strengthen economic, social and political
support for the free market system; and help
employees build a reasonable estate. Details of
the program will be worked out with the Congress.
The proposal has the following general features:
-- A Broadened Stock Ownershin Plan (BSOP) could
be established by individuals or by employers for
the voluntary participation of their employees.
-- Contributions to BSOP would be deductible from
taxable income.
-- Participation would be restricted to individuals
in the middle and low income ranges through a limit
on the maximum amount of the annual contribution
eligible for exclusion from income tax, with partic-
ipation phased out at higher income levels.
-- Funds in a BSOP would have to be invested in
common stocks, which could take the form of an
interest in a mutual fund.
-- Funds in a BSOP would have to remain invested for
at least 7 years and are subject to tax at the time
of withdrawal.
-- Income earned by the BSOP would be exempt from
tax until withdrawn from the plan.
-- The plan would go into effect July 1, 1976, and
the full deduction would be allowed for calendar
year 1976.
4.
Estate Tax Proposal for Family Farms and Businesses
The President proposed a change in the Federal estate
tax laws to make it easier to continue the family
ownership of a small farm or business. The proposed
changes would stretch out the estate tax payment
period so that Federal estate taxes can be paid
out of the income of the farm or business. No
payment will be required for five years and 20 years
will be allowed for full payment of estate taxes at
a 4 percent interest rate. This reform will help
ensure the survival of smaller farms and businesses
for future generations and allow them to expand their
current operations.
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The proposed change would liberalize the present
rules under section 6166 of the Internal Revenue
Code which permit the payment in 10 annual install-
ments of estate taxes attributable to a family farm
or other closely-held business constituting a sub-
stantial part of an estate (35 percent of the
total estate or 50 percent of the taxable estate).
Currently, interest on deferred estate tax payments
is charged at the normal rate on overdue tax payments
(currently 9 percent, but 7 percent effective
February 1, 1976).
The proposal has the following features:
-- At the estate's option, a five-year moratorium
will apply to payment of that portion of the tax
liability attributable to an ownership interest
in a family farm or other closely-held business
qualifying for ten-year installment payments under
present section 6166 of the Internal Revenue Code.
No interest will accrue during the five year
moratorium period and no principal or interest
payments will be required during that period.
--- At the end of the five year period, the
deferred tax will, at the estate's option, be
payable in equal annual installments over the
next 20 years.
-- Interest on the installments will be reduced
to 4 percent per annum from the 7 percent rate
generally applicable to deferred tax payments.
-- The five-year moratorium and twenty-year
extended payment provisions will apply only to
the estate tax liability attributable to the
first $300,000 in value of the family farm or
business. Between $300,000 and $600,000 there
will be a dollar for dollar reduction in the
value of the farm or business qualifying for
the moratorium and extended payment provisions.
That portion of the tax not qualifying will
continue to be subject to ten-year installment
payments with the 7 percent interest rate.
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8
II. HOUSING ASSISTANCE
The President announced additional housing assistance for
500,000 families.
BACKGROUND
Federal housing programs administered by HUD play a significant
role in increasing the Nation's supply of housing. Two programs,
Section 8 and Section 235, will help spur the construction of
new housing units and will provide housing assistance for low
and moderate income families.
DESCRIPTION OF PROGRAM
Subsidies will be provided for up to an additional 400,000 low
income families under a rental housing program in fiscal year
1977. This includes 125,000 units of new construction or
substantial rehabilitation. This program (commonly referred
to as the "Section 8" program) pays the difference between a
percentage of family income and the rent charged by the
landlord.
During FY 1977, mortgage subsidies will be approved for an
additional 100,000 families with moderate incomes to help them
buy newly constructed or substantially rehabilitated homes,
under the revised Section 235 homeownership assistance program.
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III. REGULATORY REFORM
The President reemphasized his concern that government
regulation be modernized to provide a rational and efficient
regulatory system serving today's needs.
BACKGROUND
President Ford has adopted the reform of government regula-
tion as a principal goal of his Administration. He has ordered
a critical review of all Federal regulatory activities to
eliminate regulations which are obsolete and inefíicient in
today's economic environment. Regulatory reform is an
essential part of the President's effort to make government
more responsive to current economic and social realities.
A.
PRINCIPAL OBJECTIVES OF THE ADMINISTRATION'S PROGRAM
1.
Benefit consumers by encouraging increased competition.
Competition fosters innovation, encourages new businesses,
creates new jobs, ensures a wide choice of goods and
services, and helps to keep prices at reasonable levels.
By eliminating arbitrary barriers to entry and by
increasing pricing flexibility, the Administration hopes
to restore competition in the regulated sectors of the
economy.
2.
Increase understanding of the costs of regulation. Often
the real costs of regulatory activities are hidden from
public view. Inefficient and outdated regulation costs
consumers billions of dollars every year in unnecessarily
high prices. The Administration believes that these
costs should be subject to the same critical attention
devoted to the Federal budget.
3.
Improve methods of achieving the objectives of regulation.
In many instances, regulation is necessary, particularly
in the health, environment and safety areas. However,
regulation can impose a considerable cost burden on the
consuming public and on the economy. The Administration
is concerned that public protection be achieved in the
most efficient manner.
4.
Substitute increased antitrust enforcement for adminis-
trative regulation. In the past, regulation has often
been a substitute for competition. The Administration
is seeking to reverse this pattern and believes that
antitrust enforcement has an important role in keeping
costs and prices down.
B.
DESCRIPTION OF PROGRAM
In October, 1974, the President initiated the reform program
by asking Congress to sponsor jointly a National Commission on
Regulatory Reform to study the problems of Government regula-
tion, but so far, Congress has taken no action. Accordingly,
initiatives: the Administration is pursuing the following specific reform
1.
Expanded Antitrust Activity. In addition to providing
for increased antitrust enforcement resources, the
Administration is questioning antitrust immunity now
granted to numerous industries. Many of the Adminis-
tration's legislative proposals will eliminate unnecessary
antitrust exemptions which restrain competition.
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2.
Independent Regulatory Commissions. The President
has met with the Commissioners of the 10 independent
Regulatory Agencies to emphasize the importance of
regulatory reform. He has asked the Commissioners
to: analyze the economic costs and benefits of
their actions; reduce regulatory delays; better
represent consumer interests; and eliminate outdated
regulation.
3.
Executive Branch Agencies. Departments and Agencies
are now required to analyze the inflationary impact
of major new legislative proposals, rules and regu-
lations. This requirement is designed to measure
the economic costs of Government regulation.
4.
Commission of Federal Paperwork. The Commission has
been established to study the impact of Government
reporting requirements on businesses and individuals.
To assure action in the short-run, the Administration
is working now to eliminate unnecessary Government
paperwork requirements.
5.
Transportation Regulatory Reform. The Administration
has developed specific legislative proposals to reform
transportation economic regulation.
The Railroad Revitalization Act, introduced in
May, 1975, seeks to rebuild a healthy, efficient
rail system by eliminating outdated regulatory
restrictions. It will enable the railroads to
compete more effectively with other forms of
transportation.
The Aviation Act of 1975, submitted in October,
1975, will improve the airline regulatory en-
vironment by fostering price competition and by
allowing existing airlines to serve new markets
and new carriers to enter the industry.
The Motor Carrier Reform Act, introduced in
November, 1975, will increase competition in the
motor carrier industry and provide shippers and
consumers with a wider range of services and
prices.
6.
Financial Institutions Act. The Administration sub-
mitted last March the Financial Institutions Act
which will enable small savers to earn higher interest
on savings accounts and provide more diversified
financial services to all customers.
7.
Energy. To help assure adequate supplies of energy,
the Administration has proposed legislation to de-
regulate the price of new natural gas.
The following Administration legislative initiatives have been
passed by the Congress and signed by the President:
8.
Fair Trade Laws. The repeal of these laws, which
allowed manufacturers to dictate the retail price
for their products, can save consumers an estimated
$2 billion per year.
9.
Securities. President Ford signed the Securities
Act Amendments of 1975 last June, to promote com-
petition among stockbrokers and to establish a
national stock market system.
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IV. ENERGY
The President's State of the Union Message reviewed the
Nation's current energy situation and reiterated major
policy objectives. With the legislative accomplishments
to date and administrative actions taken by the President,
the Nation will achieve more than 80 percent of the
President's near-term goal for reducing vulnerability to
another embargo.
BACKGROUND
In last year's State of the Union Message, the President
announced a set of policy goals:
:
In the near-term, 1975-1977, halt our growing
import dependence by reducing oil imports by
2 million barrels per day (MMB/D) before the
end of 1977.
--
In the mid-term, 1975-1985, attain energy
independence by achieving invulnerability to
oil import disruption; this means a 1985
import range of 3-5 MMB/D, replaceable by
stored supply and emergency measures.
--
In the long-term, beyond 1985, mobilize U.S.
technology and resources to supply a signifi-
cant share of the Free World's energy needs.
In January, 1975, he also submitted to the Congress the
Energy Independence Act. This Act contained a comprehensive
set of measures to conserve energy, increase domestic energy
production, and provide for strategic reserves and standby
authorities in the event of another embargo. The President
also took administrative action imposing an import fee on
crude oil to reduce our dependency and submitted several
additional legislative proposals to the Congress during
last year.
In December, the President signed the Energy Policy and
Conservation Act of 1975, which contains several of his
proposals, including:
:
A national strategic petroleum reserve to provide
a stockpile for future embargoes.
--
Standby allocation, rationing, and other authori-
ties for use in the event of another embargo.
---
An oil pricing formula that provides for decontrol.
--
Conservation measures to improve energy
efficiency by affixing energy labels on
appliances and automobiles.
--
Extension of the Federal Government's ability to
mandate utility and industrial conversions to coal
from oil and gas.
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A.
PENDING LEGISLATION
Other Administration proposals now before the Congress
include:
New natural gas price deregulation and emergency
measures have passed the Senate and will soon come
up in the House.
Authorization for production of the Naval Petroleum
Reserves is in Conference Committee.
National thermal efficiency standards for new
buildings have passed the House and will soon be
considered by the full Senate.
Weatherization assistance to help low income and
elderly consumers save energy has passed the
House and will soon be considered by the full
Senate.
Clean Air Act Amendments.
Assurances for private competitive uranium enrich-
ment industry.
Improved nuclear licensing procedures.
Energy Independence Authority, including commerciali-
zation of synthetic fuels.
Tax credit for insulation.
Electric utility regulatory reform.
New energy facility siting authorities.
B.
CURRENT ENERGY SITUATION
Domestic oil production continues to decline.
Production in 1975 averaged about 8.4 MMB/D a
decline of about 0.7 MMB/D from the time of the
embargo and about 13 percent from peak production
in 1970.
The United States paid about 27 billion dollars for
foreign oil last year -- over $125 for every American.
Imports averaged about 6 MMB/D in 1975, about the
same as 1974.
Natural gas production declined for the second
straight year. About 20.1 trillion cubic feet (Tcf)
were produced in 1975, as compared to 21.6 Tcf in
1974 and 22.6 Tcf in 1973.
Coal production was about 640 million tons in 1975,
an increase of about 6 percent from 1974.
The contribution of nuclear power to the generation
of electricity increased from 6 percent in 1974 to
about 8.5 percent in 1975 and will continue to rise.
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13
C.
FUTURE ENERGY OUTLOOK
1.
Near-Term (1976-1978) In the next 2-3 years, imports
will increase unless rapid action is taken on some conserva-
tion measures, Naval Petroleum Reserve legislation, Clean
Air Act amendments, and domestic production incentives
allowed under current price controls. Without legislative
and administrative action, imports would have been about
8 MMB/D in 1978, with action imports can be held to less
than 6.5 MMB/D and vulnerability to an embargo can be
reduced by an additional 1.3 MMB/D.
2.
Mid-Term (1976-1985) : There is considerable flexibility to
improve our energy situation in the next ten years. Under
assumptions of continued high imported oil prices, the Nation's
vulnerability to an embargo could be reduced to zero if the
President's programs are enacted. Imports would rise to
about 10-15 MMB/D if none of his proposals were enacted. Under
the program already enacted and administrative actions being
taken, about two-thirds of our potential vulnerability
reductions will be achieved. Further, the role of coal and
nuclear power will be significantly expanded in the next ten
years.
3.
Long-Term (beyond 1985) The results of the U.S. energy
research and development program will have an important effect
on our long-term supply and demand situation. Advanced
technology is being developed for energy conservation and
for using solar, fossil, nuclear, and geothermal energy
sources. The President is asking the Congress to increase
funding substantially in these areas.
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14
V.
HEALTH
A.
MEDICARE IMPROVEMENTS OF 1976
The President is proposing significant modifications in the
Federal Medicare program to provide catastrophic health cost
protection to Medicare beneficiaries, changes in cost sharing
requirements, and limits on the annual cost increases which
will be reimbursed by Medicare.
BACKGROUND
The Nation's health care system continues to be one of the
most inflationary sectors of the economy. Hospital costs
have risen by more than 200 percent since 1965 (from
$40/day to $128/day), and physicians' fees have risen
more than 85% in the same period. Both rates of increase
are significantly higher than the corresponding increases
in the consumer price index.
Medicare is a major component of Federal health spending.
It provides protection to more than 24 million aged and
disabled Americans, and is expected to pay out more than
$17 billion for health care in 1976. However, Medicare
has several failings --- it does not provide protection
against the catastrophic financial burden of extended
illness; and it contributes to health cost inflation
by its failure to discourage patients from seeking health
care indiscriminately.
For hospital care, Medicare currently pays nothing for the
first day, 100% of costs from the 2nd through the 60th
day, a reduced percentage through the 150th day, and
nothing at all after that. This pattern serves to
lengthen short-term hospital stays, but can lead to financial
ruin for persons suffering serious, extended illness.
Medicare also requires a $60 deductible and co-payments of
20% for physicians' services. Since there is no annual
maximum, this provision contributes to the financial burden
of catastrophic health costs.
An additional problem with Medicare is that it contains
inadequate mechanisms to control health inflation. Like
most health insurance plans, it reimburses largely on the
basis of actual costs or customary charges giving providers
insufficient cause to seek to limit cost increases.
DESCRIPTION OF PROGRAM
The proposed "Medicare Improvements of 1976" are the
following:
1.
Catastrophic Cost Protection for Health Care
For the first time, Medicare beneficiaries would be
provided protection against catastrophic health
costs by limiting the amounts an individual must
pay annually to $500 for covered hospital care
and $250 for covered physicians' services.
2.
Cost Sharing Modifications
--
Hospital Costs. Under this proposal, bene-
ficiaries would be required to pay a deductible
for the first day of a hospital stay (as under
current law), and 10% of additional charges up
to an annual maximum of $500.
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15
Physicians' Services. This proposal would increase
the current annual deductible of $60 to $77 and
maintain the existing co-payment of 20% for physicians'
services. However, it would institute an annual
maximum of $250. The deductible would increase with
Social Security benefit increases.
3.
Reimbursement Limits
Annual Medicare reimbursement increases would be limited
to 7% for hospital costs and 4% for physicians' service
charges in 1977 and 1978.
B.
FINANCIAL ASSISTANCE FOR HEALTH CARE
The President proposed to improve the efficiency and equity
of health services to the poor by consolidating 16 Federal
health programs, including Medicaid, into one $10 billion
block grant to States. No State will receive less in
FY 1977 than its share of these program funds in FY 1976.
BACKGROUND
The existing array of Federal categorical health programs
include varying eligibility requirements. This results in
gaps in coverage for those who are needy but categorically
ineligible, such as two-parent families, childless couples
and single individuals. To receive Medicaid funds, States
are currently required to provide matching funds. Under
the existing structure of health programs, some of the
States with the highest per capita income receive more than
four times as much Federal money per low income recipient
as do States with low per capita income. Also, the current
system involves programs administered at the Federal level
by six different HEW agencies. Under this proposal, one HEW
health agency would be responsible.
DESCRIPTION OF PROGRAM
The "Financial Assistance for Health Care Act" is designed
to improve access to quality health care at reasonable costs,
to increase State and local control over health spending, to
restrain the growth of Federal spending and the Federal
bureaucracy, and to achieve a more equitable distribution
of Federal health dollars among States. The President's
proposal would consolidate 16 Federal health programs into
one $10 billion block grant to States. The programs
include:
-- Medicaid
--
Community Mental Health Centers
Alcohol Project and State Formula Grants
--
Venereal Disease
--
Immunization
--
Rat Control
--
Lead Paint Poisoning Prevention
--
Developmental Disability
Health Planning
Medical Facilities Construction
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16
Community Health Centers
State Health Grants
Maternal and Child Health
Family Planning
Migrant Health
Emergency Medical Services
Funds will be distributed according to a formula based on
the size of the States' low income population, per capita
income and fiscal effort. No State match is required for
the block grant. A phase-in of the distribution formula
will avoid any reduction in FY 1977 below the amounts
States are estimated to receive in FY 1976.
A State health care plan must be developed annually as a
condition of receiving Federal funds. An open and public
planning process is required in which broad input from
health planning organizations, providers and consumers
is assured. The plan must be available for public review
and comment.
The State Health Care Plan should be directed, at a minimum,
toward achieving the following goals:
Assuring all citizens of the State, and par-
ticularly populations covered under the
Financial Assistance for Health Care Act
access to needed health services of
acceptable quality.
Development and utilization of preventive
health services.
Prevention or reduction of inappropriate
institutional care.
Encouraging the use of ambulatory care in
lieu of in-patient services.
Provision of primary care services especially
for those located in rural or medically under--
served areas.
Assurance of the most appropriate, effective,
and efficient utilization of existing health
care facilities and services.
Promotion of community health.
States will define the specific health services to be pro-
vided. At least 90 percent of the Federal funds must be
used for personal health care, at least 5 percent must be
used for community and environmental health activities,
and a maximum of 5 percent may be used for other activities
including planning, rate regulation, and resource develop-
ment. Eligibility criteria, including income and other
standards, will be determined by the States in accordance
with the public planning process.
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C.
VETERANS ADMINISTRATION IEDICAL CARE
The President's State of the Union Message discussed the
importance of assuring the quality of the medical care
which our Nation's veterans receive.
BACKGROUND
In 1974, at the request of the Administration, the Veterans
Administration conducted a thorough review of quality of
care throughout its hospital system. The Quality of Care
Survey resulted in the recommendation that employees should
be added to the VA medical care staff and that funds were
needed to correct fire and safety hazards and do other
needed construction work.
The Administration has been implementing the Report's
recommendations and is taking other steps to improve the
quality of VA medical care.
DESCRIPTION OF PROGRAM
The VA medical care system includes:
--
172 hospitals
229 out-patient clinics
89
nursing
homes
--
18 domiciliary facilities
The hospitals serve 1.3 million veterans. 82,500 veterans
are served by the nursing homes and domiciliary facilities.
The out-patient clinics provide for 15.7 million visits a
year.
The 1977 budget provides funds for all of the Quality Care
medical staff not already hired -- an increase of over
1,700 full-time staff.
The 1977 budget includes over $200 million for high priority
construction projects, some of which are Quality Care pro-
jects which were not started in 1975 or 1976 when money for
most of the recommended Quality Care construction work was
appropriated.
On a space available basis, VA facilities are used to treat
veterans with non-service connected disabilities. Many of
these non-service connected veterans have health insurance
coverage. The Administration proposes to require health
insurers to reimburse the VA for the care provided to
non-service connected veterans. At present, these insurance
companies benefit when. a veteran decides to seek care at
a VA facility and they do not have to reimburse for A
expenditures for which they would otherwise be legally
obligated.
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VI. INCOME SECURITY
A.
SOCIAL SECURITY
To assist in protecting the financial integrity of the Social
Security System, the President has proposed a slight increase
in the payroll tax effective in January, 1977.
BACKGROUND
The Old Age, Survivors and Disability Insurance trust funds
are paying out more in benefits than their current payroll
tax receipts. This is largely due to increased benefits
in the past few years and payroll tax receipts which have
lagged because of unemployment and slowed wage growth.
Unless action is taken to balance the income and outgo
of Social Security, the trust funds will be exhausted
in the early 1980's.
To prevent the rapid decline of the Social Security trust
funds over the next few years, the choices are either to
restrain increases in retirement and disability benefits
or to increase revenues.
DESCRIPTION OF PROGRAM
The President has included a full cost of living increase
in Social Security benefits in his FY 1977 budget. To
assure the future financial stability of the Social Security
system, the President proposed, effective January 1, 1977,
a payroll tax increase of .3 percent each for employees
and employers of covered wages.
The current Social Security tax rate is 5.85% for each
employee and employer of covered wages Under this
proposal, in 1977 the tax rate would be 6.15% on a
maximum wage base of $16,500. This increase will cost
workers with the maximum taxable income less than $1 a
week and will help stabilize the trust funds so that current
and future recipients can be assured of the benefits that
they have earned.
B.
AID
TO
THE
UNEMPLOYED
In the State of the Union Address the President spoke of to
the importance of efforts to aid the unemployed. He
referred to two measures previously enacted by the Congress
in response to his request and to the Administration's
continued commitment to support programs which help the
unemployed and which provide training and employment
opportunities.
BACKGROUND
A temporary extension of unemloyment insurance benefits from
a maximum of 39 weeks to a maximum of 52 weeks was enacted in
December, 1974. This measure also created a special unemploy-
ment assistance program for workers not covered under the
regular program to provide them a total of up to 26 weeks
of benefits.
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The maximum for those in the regular program was subsequently
extended to 65 weeks while benefits for those not covered by
the regular program were extended to 39 weeks.
DESCRIPTION OF PROGRAM
The President has also proposed more permanent changes to
the unemployment insurance system. In July, 1975, a bill was
transmitted to the Congress which would:
Expand coverage under the regular unemployment
insurance (UI) program to include agricultural
workers, domestic workers, State and local
hospital employees and elementary and secondary
school employees.
Set a Federal minimum standard for benefit levels.
Strengthen the financing of the UI system.
Increase the responsiveness of the system to
changes in the economy.
Establish a National Commission on Unemployment
Compensation to undertake a thorough examination
of the unemployment compensation system.
In FY 1977, it is estimated that $14.8 billion in unemploy-
ment insurance will be paid to approximately 8.9 million
beneficiaries under the regular UI program, the temporary
extension to 65 weeks and the proposed legislation
The Federal Government also supports programs which provide
employment and training opportunities for millions of
Americans. These programs fall under the general headings of:
--
On-the-job training.
Institutional training.
Public service employment.
Work support/exnerience.
Vocational rehabilitation.
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VII. INCOME ASSISTANCE
A.
Income Assistance Simplification Act
The President announced that he would submit later this year
legislation granting him authority to adjust various income
assistance programs to make these programs more consistent,
equitable and efficient. All changes proposed under this
authority would be subject to review and disapproval by the
Congress.
BACKGROUND
The current collection of income assistance programs con-
stitute a complex, disjointed "system" of Federal, State,
and local responsibilities. The programs which comprise
the "system" are inefficient and costly to administer and
confusing to both recipients and taxpayers. Under the
existing system, some needy persons receive insufficient
help, while others receive more assistance than they should
have. In some situations the programs can have the un-
desirable effect of discouraging work and promoting a
breakdown of the family unit.
Federal expenditures for means-tested income support
programs have grown to more than $26 billion annually.
There is widespread agreement that these programs require
administrative simplification, consistency among program
requirements, greater equity among recipients, preserved
and strengthened work incentives, and targeting on those
with greatest need.
The President's proposal would provide authority to modify
existing laws to make needed program and procedural changes
with the consent of the Congress.
DESCRIPTION OF PROGRAM
The proposed Income Assistance Simplification Act will
include the following major provisions:
--
Program Coverage. Authority will be sought only
for modifications to Federal and Federally assisted
means-tested programs which provide benefits to
individuals in cash or "in kind", e.g. Food Stamps,
AFDC, and SSI.
Scope of Authority. The Act would give the President
authority to modify administrative procedures,
eligibility requirements, benefit levels, and program
administration authority.
Congressional Control. The Act would preserve
Congressional authority over all proposed modifica-
tions since the Congress would have an opportunity
for review and disapproval.
-- Duration of Authority. Five years.
B.
Food Stamp Reform
The President indicated his intention to renew the efforts
he initiated last year to reform the Food Stamp Program.
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21
BACKGROUND
The President submitted to Congress on October 20, 1975,
the National Food Stamp Reform Act of 1975 to correct
serious problems in the current Food Stamp program. The
program had become overly complex, expensive to administer
and had been marred by abuses. This proposal would reduce
program costs by approximately $1.2 billion.
From total Federal outlays of $30 million in fiscal year
1964 and 360,000 participants the Food Stamp Program grew
to currently estimated costs of nearly $6 billion and
19 million participants. Through an array of deductions,
some families with incomes in excess of $12,000 are currently
receiving benefits.
DESCRIPTION OF PROGRAM
The key elements of the President's National Food Stamp
Reform Act are:
Limit eligibility for food stamps to those
whose net income is below the poverty level.
The current poverty level is $5050 for a
Kamily of four.
All families would receive a $100 monthly
deduction from gross income when computing
net income. This would simplify the current
system of itemized deductions and give
additional aid to many low income families.
Families with one or more members over 60
would receive an additional $25 monthly
deduction, making their standard deduction
$125 a month.
All households eligible for food stamps
would pay the same proportion of their
net monthly income --- 30% --- when pur-
chasing their food stamps.
College students who are considered
dependents by their families will only
be eligible for food stamps if their
families are eligible for food stamps.
Measure actual income over the preceding
90 days for purposes of eligibility.
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VIII. CONTROLLING CRIME
The President reaffirmed his commitment to reducing crime,
eliminating the traffic in hard drugs and stopping criminals
from selling and using handguns.
BACKGROUND
On June 19, 1975, in a special message to the Congress on
crime, President Ford set forth his program for dealing
with this issue at the Federal level. While acknowledging
that the Federal role in the fight against crime is a limited
one, the President identified three important responsibilities
of the Federal Government in this critical area:
Providing leadership to State and local governments
by improving the quality of Federal laws and the
criminal justice system.
Enacting and vigorously enforcing laws covering
criminal conduct that cannot be adequately
regulated at the State or local level.
Providing financial and technical assistance to
State and local governments and law enforcement
agencies, and thereby enhancing their ability to
enforce the law.
DESCRIPTION OF PROGRAM
To enable the Federal Government to carry out these responsi-
bilities more effectively the President has made, and submitted
legislation to implement the following recommendations:
A.
Mandatory Minimum Sentences. The President has recommended
that the Congress enact a comprehensive Federal criminal
code and, more specifically, has recommended that the code
provide for the imposition of mandatory minimum sentences
of incarceration for:
Persons committing offenses under Federal jurisdiction
involving the use of a dangerous weapon.
Persons committing such exceptionally serious crimes
as trafficking in hard drugs kidnapping and aircraft
hijacking.
Repeat offenders committing Federal crimes --- with
or without a weapon which cause or have a potential
to cause personal injury.
B.
Increased Federal Criminal Justice Manpower and Resources.
Mindful that his recommendations for mandatory incarcera-
tion will require an improved response by the Federal
criminal justice establishment, the President has:
Provided in his FY 1977 budget recommendations for
a 9% increase in the number of Federal prosecutors,
to enable U.S. Attorneys' offices to keep up with
expanding caseloads.
Called for the enactment of legislation creating
51 additional Federal District Court judgeships,
as has been recommended by the Federal Judicial
Conference.
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Provided in his FY 1977 budget recommendations
$46 million for the construction of four new
Federal correctional institutions to relieve
existing overcrowding and provide humane places
of incarceration for Federal offenders.
C.
Controlling Handgun Abuse. To help control criminal
use of handguns, the President has recommended a four-
part program consisting of
Legislation requiring the imposition of a mandatory
minimum term of imprisonment for any person con-
victed of using or carrying a handgun in the
commission of a Federal offense.
Legislation banning the importation, domestic
manufacture and sale of cheap, highly concealable
handguns known as Saturday Night Specials
which have no apparent use other than against
human beings.
Legislation strengthening current law to strike
at the illegal commerce in handguns and to
emphasize the responsibility of gun dealers to
adhere to the law.
Expansion, by the Bureau of Alcohol, Tobacco and
Firearms, of its enforcement efforts in the Nation's
eleven largest metropolitan areas (Boston, Chicago,
Detroit, Dallas-Fort Worth, Los Angeles, New York,
Philadelphia, Pittsburgh, St. Louis, San Francisco
and Washington, D.C.) through the employment of an
additional 500 firearms investigators.
D.
Drug Abuse. Last spring the President directed the
Domestic Council to review the entire Federal effort
in drug law enforcement, treatment and prevention, and
international control. The Domestic Council's Drug
Abuse Task Force completed its review and reported to
the President in October, 1975. That report, the
White Paper on Drug Abuse. called for more selectivity
and targeting of resources, better intra- and inter-
agency management and coordination, recognition of the
vital but limited role the Federal Government can play,
and more visible Presidential leadership. President Ford
has endorsed the White Paper and has provided funds in
his FY 1977 budget recommendations to implement the
recommendations. For example. the budget requests funds
for:
---
Additional intelligence analysis to help target
law enforcement resources on high level drug
traffickers.
7,000 new community treatment slots to ensure
adequate treatment capacity for those in need.
Strengthened regulatory and compliance activities
to better control the diversion of dangerous
drugs from legal production into the illicit
market.
A joint HEW/Labor program to increase employment
opportunities for ex-addicts.
In addition to directing implementation of the recom--
mendations contained in the White Paper, the President
has spoken personally to Presidents Echeverria of Mexico
more
(OVER)
24
and Lopez of Colombia and to Prime Minister Demirel of
Turkey in an effort to strengthen cooperation among all
nations involved in the fight against illicit drug
traffic. He recently directed Secretary of State
Kissinger to express again to the Mexican Government
his continuing personal concern about the amount of
Mexican heroin entering the United States. Finally,
he has directed the Domestic Council Drug Abuse Task
Force to reconvene and make recommendations for im-
proving our ability to control drug trafficking along
the Southwest border.
E.
Assistance to State and Local Government. To enable
the Federal Government to continue to help State and
local governments carry out their law enforcement
responsibilities, the President has submitted to the
Congress a bill continuing the Law Enforcement Assistance
Administration through 1981 and authorizing $6.8 billion
for LEAA to continue its work during this period. Under
the provision of the President's bill, special emphasis
is placed on programs aimed at reducing crime in heavily
populated urban areas and on improving the operation of
State and local court systems.
more
10
to
20
10
to
25
IX. GENERAL REVENUE SHARING
The President again called for the continuation of the
program for sharing Federal revenues with State and local
governments.
BACKGROUND
The General Revenue Sharing program has been a highly success-
ful and effective means for providing Federal assistance
to State and local governments. General Revenue Sharing
which was enacted in October, 1972, has to date made
over $22 billion available to the 50 States and over
38,000 local communities throughout the Nation.
Revenue sharing funds have been used by State and local
governments as they determined necessary for a wide range
of essential public purposes. In view of the current fiscal
squeeze that State and local governments are now experiencing,
further delay or the reduction and possible termination of
revenue sharing payments could have a severe impact on State
and local governments.
DESCRIPTION OF PROGRAM
The President has proposed legislation to extend the General
Revenue Sharing program until September, 1932, a period of
5-3/4 more years during which $39.85 billion will be returned
to State and local governments. The renewal legislation
proposed by the President in a Special Message to Congress
on April 25, 1975, would maintain the basic features of the
existing revenue sharing program while proposing several
improvements. The principal elements of the President's
proposal are:
--
The basic revenue sharing formula is retained,
including the present 1/3 - 2/3 split of these
funds between State and local governments.
--
Funds will be authorized for five and three-
quarters years. The effect of this provision
is to conform the time period to the new
Federal fiscal year.
The current method of funding with annual
increases of $150 million will be retained to
compensate, in part, for the impact of inflation.
The proposal aids certain jurisdictions by in-
creasing the amount of funds that may be received
by local governments with unusually high tax
effort or low per capita income or both. The
original Act limits a local government to an
amount which may not exceed on a per capita basis
145% of the average per capita amount for all
local governments in a State. By gradually
raising the 145% constraint to an upper limit
of 175%, the bill will allow governments now
constrained to receive all or a greater part of
the shared revenues otherwise allocated to them
by the formula.
more
(OVER)
26
The civil rights provisions of the existing
statute would be strengthened by authorizing
the Secretary of the Treasury to invoke several
remedies to enforce the nondiscrimination
provisions of the Act. The Secretary will
have authority to withhold all or a portion of
entitlement funds due a State or unit of local
government, to terminate one or more payments
of entitlement funds, and to require repayment
of entitlement funds previously expended in a
program or activity found to have been discrimi
natory. This change will further enhance the
Secretary 's ability to ensure that none of our
citizens is denied on grounds of race color,
Isoolsex or national origin the benefits of any
program funded in whole or in part through
revenue sharing.
to
To strengthen public participation in determining
the use of shared revenues 2 the proposed legisla
tion requires that recipient governments must
provide a procedure for citizen participation
in the allocation of revenue sharing monies.
The Administration proposal would also make
to
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varying needs from community to community
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(REVE)
27
X.
PROGRAM CONSOLIDATION
A.
Financial Assistance for Elementary and Secondary
Education
The President will propose the Financial Assistance for
Elementary and Secondary Education Act to consolidate
Federal programs and to minimize Federal regulation while
continuing Federal support for education. Federal funds
will continue to be targeted on populations having special
needs.
BACKGROUND
By law and tradition, State and local governments have the
responsibility for providing free and universal public
education. Over time, the Federal Government has furnished
increasing assistance to the State and local governments to
support elementary and secondary education. The Federal
effort helps assure that children are provided equal educa-
tional opportunity.
The increasing Federal effort, channeled into categorical
programs, has been accompanied by a growing number of Federal
rules and regulations. Although Federal, State and local
efforts overlap, the rules often earmark Federal funds for
specified purposes. As a result, the test becomes not whether
children are helped but whether the State meets the rules.
DESCRIPTION OF PROGRAM
The Act will consolidate 27 distinct programs into one block
grant to the States. These programs fall under four main
headings:
-- Elementary and Secondary Baucation
-- Education for the Handicapped
-- Occupational, Vocational and Adult Education
-- Library Resources
The budget authority requested for the block grant will be
$3.3 billion. Funds will be allocated to States on a formula
basis. Three-quarters of the Federal funds will have to be
used to serve the disadvantaged and the handicapped. The
remaining quarter may be spent on any program consistent
with the purposes of the programs consolidated in the block
grant.
Three-quarters of the Federal funds will pass through to
Local Education Agencies (LEAS).
The Act will require State plans to be developed with full
public participation. Each State will have to certify that
funds have been used for purposes required by the law and
consistent with the State plan. Actual use of funds will be
verified by an independent audit to be conducted by the
State.
The Act will also require that to receive funds the State
may not discriminate against a participant on the basis of
race, sex, national origin or handicapping conditions. In
addition, non-public school children will continue to be
served on an equitable basis as under the programs to be
consolidated.
more
(OVER)
28
B.
Child Nutrition Reform
The President announced that he will submit a Child Nutrition
Reform Act to consolidate child nutrition programs into a
single comprehensive grant to provide States with increased
flexibility to feed needy children.
BACKGROUND
The Federal Government now supports 15 child nutrition
programs and provides subsidies for nearly 40 different
mechanisms for delivering meals. In 1975 Federal out-
lays for child nutrition programs were $2.2 billion.
1976 outlays are estimated to be $2.8 billion. Under
the existing programs, outlays next year are projected
to be $3.3 billion a reflection of the fact that the
size and number of child nutrition and school lunch
programs continue to grow.
Children from all families, regardless of income, are now
eligible to receive Federal subsidies for school lunches.
There are, however, an estimated 700, children from
poor families receiving no benefits whatsoever.
Due to changes in the programs made by the Congress last
fall, the Federal Government will shortly be spending more
money on non-needy children than needy children unless
these programs are reformed.
DESCRIPTION OF PROGRAM
The President proposed the Child Nutrition Reform Act to
enable the States to feed needy children.
The main objectives of this program are:
To consolidate the school lunch, school
breakfast, special milk, and several other
programs.
To help feed more low-income children.
To eliminate the existing Federal food
subsidies to non- needy children.
To eliminate the existing administratively
complicated programs to give States more
flexibility and responsibility in meeting
the needs of its poor children.
By eliminating assistance to non-needy children, this
proposal is expected to save almost $900 million.
C.
Financial Assistance for Community Services
The President announced that he will submit the Financial
Assistance for Community Services Act which will replace
Title XX of the Social Security Act and will provide States
with greater flexibility in delivering social services to
low income families and individuals.
more
B
no
29
BACKGROUND
The present social services program, Title XX of the Social
Security Act, provides grants to the States on the basis
of population for the delivery of a wide range of social
services to individuals and families including day care,
family planning, foster care and homemaker services.
Funds are provided on a Federal/State matching basis
(75% Federal/25% State). Since its passage and imple-
mentation, Title XX has begun to increase latitude to
States to use this program to meet their greatest service
needs. Yet Federal administrative and reporting require-
ments have continued to be extensive.
DESCRIPTION OF PROGRAM
The President is proposing new legislation for Financial
Assistance for Community Services to enhance further the
States' discretion in the provision of services, and
eliminate undue Federal regulation and restrictions on
providers. The main features of Financial Assistance
for Community Services are:
---
Elimination of the requirement of State
matching funds.
---
Distribution of $2.5 billion as a block
grant to the States based on population.
--
Elimination of most Federal requirements
and prohibitions on the use of Federal
funds.
--
Emphasis on providing services to low-
income Americans; concentration of
Federal funds on those whose incomes
fall below the poverty income guidelines.
-
Public review and comment on State planning,
evaluation, and reporting processes.
The Federal Government would retain the role of evaluating
the overall operation of this program and of providing a
clearinghouse for the dissemination and exchange of
information among the States on effective services.
# # # # # #
UP-045
(FORD)
(BY RICHARD LERNER)
WASHINGTON (UPI) -- PRESIDENT FORD WILL GIVE CONGRESS AND AMERICAN
VOTERS TONIGHT AN UPBEAT ASSESSMENT OF THE STATE OF THE UNION IN ITS
BICENTENNIAL YEAR. HE WILL CALL FOR FEDERAL GOVERNMENT RESTRAINT WITH
A THEME OF THE REVOLUTIONARY WAR PAMPHLET, "COMMON SENSE."
IN ADVANCE OF FORD'S NATIONALLY TELEVISED APPEARANCE BEFORE A
JOINT SESSION OF THE HOUSE AND SENATE, AIDES SAID HE WOULD COUPLE
PREDICTIONS OF CONTINUED ECONOMIC GROWTH AND A DIP IN UNEMPLOYMENT
WITH RECOMMENDATIONS FOR A SOCIAL SECURITY TAX INCREASE AND A CUT IN
FEDERAL SPENDING TO SLOW INFLATION.
BUT THE OFFICIALS SAID FORD'S 4,500-WORD SPEECH, SCHEDULED FOR 9
P.M. EST, WOULD BE SHORT ON NEW ELECTION-YEAR PROPOSALS.
FORD, THEY SAID, WOULD TRACE GREAT U.S. ACHIEVEMENTS IN THE
NATION'S FIRST 200 YEARS BUT URGE AMERICANS TO BREAK A TREND TOWARD
DEPENDENCY ON WASHINGTON JUST AS THE 13 ORIGINAL COLONIES REBELLED
AGAINST BRITAIN IN A STRUGGLE THAT BEGAN SOON AFTER PUBLICATION OF
TOM PAINE'S TRACT, "COMMON SENSE."
THE SPEECH WAS BILLED BY SOME AIDES AS A BASIC BLUEPRINT FOR
FORD'S UPCOMING PRESIDENTIAL CAMPAIGN AND THEY SAID HE WOULD STICK TO
THE CONSERVATIVE POST URE AND GO INTO MORE DETAIL WEDNESDAY WHEN HE
SENDS CONGRESS A PROPOSED FEDERAL BUDGET TOTALING ABOUT $394 BILLION
FOR THE 1977 FISCAL YEAR. THEY SAID THE BUDGET WOULD BE BASED ON AN
ANTICIPATED $43 BILLION DEFICIT.
UPI 01-19 11:30 AES
MITORO DERALD LIBRARY
Highlights of Ford's Address
Major new proposals in President Ford's State of the Union message
include:
WASH.
A $10 billion federal tax cut, effective July 1, that would result in a
$2.7 annual savings to a family of four with a $15,000 annual income.
Three-tenths of 1 per cent in additional Social Security taxes, ef-
Post
tective next Jan. 1, that would increase the maximum annual tax per
person by about $50.
Catastrophic health insurance" for the elderly.
Consolidation of 59 federal grant programs, including the lumping
1-20-76
of
16 health programs into a single $10 billion health grant program.
Easing of estate taxes on family farms and businesses.
Income tax incentives for moderate-income families that pur-
chase corporate common stocks.
United Press International
First Lady Betty Ford and son Jack applaud President Ford before address.
FORD 07WH3D LIBRARY
N104
RW
MRS. FORD-SPEECH
WASHINGTON (AP) -- BETTY FORD HAD A GENTLE CRITICISM OF THE
PRESIDENT'S STATE OF THE UNION ADDRESS -- SHE SAID IT WAS TOO LONG, AND
WAS SORRY HE DIDN'T VOICE SUPPORT FOR THE EQUAL RIGHTS AMENDMENT.
THOUGH SHE SAID SHE SYMPATHIZED WITH THE PRESIDENT'S PROBLEM OF
HAVING SO MUCH HE WANTED TO SAY, SHE SAID THE SPEECH SHOULD HAVE BEEN
ABOUT 35 MINUTES. IT RAN 48.
EVEN THOUGH IT RAN AS LONG AS IT DID, MRS. FORD SAID SHE WAS UNABLE
TO GET THE PRESIDENT TO PUT IN A PITCH FOR PASSAGE OF THE EQUAL
RIGHTS AMENDMENT.
01-20-76 18:35EST
OIKIFNCBGEDAL COMMITTEE.
MRS. FORD HAD ONE OF HER BREASTS REMOVED IN SEPTEMBER, 1974, BECAUSE
OF CANCER.
-0-
WASHINGTON (UPI) -- BETTY FORL AND SON JACK, 23, INVITED SEVERAL
GUESTS TO JOIN THEM IN THE EXECUTIVE BOX IN THE HOUSE GALLERY TO HEAR
PRESIDENT FORD DELIVER THE STATE OF THE UNION ADDRESS.
MDC. FORD'S GUESTS INCLUDED AMBASSADOR ELLIOT RICHARDSON, WHO HAS
BEEN NOMINATED SECRETARY OF COMMERCE, MRS. NELSON ROCKEFELLER, WIFE
OF THE VICE PRESIDENT AND A NUMBER OF CABINET WIVES.
THE OTHER FORD CHILDREN WERE OUT OF TOWN.
UPI 01-19 05:17 PES
FORD 2. GERALD LIBRARY
The Washington Star
The Big Show-Not Necessarily the Speech
By Diana McLellan
Schlesinger may be asked to put his pipe
There's a vague suspicion hanging in
matron "And the wires in girdles an
Portfolio
Washington Star Staff Writer
out.
the air that things may be more exciting
"Nobody II come," grunts an Ameri-
than the 12-page speech, already releas-
"It's a good show, the veteran news-
can colleague. "Senators"] send their
ed to the press, indicates. More Capitol
THE UNLUCKY ones who make th
man is saying, puffing another blast of
aides. Hell if people won't roll over in
cops than anybody remembers seeing
detecting arches whistle submit ti
smoke into the already thick air of the
bed to watch a man land on the moon,
throng the grounds and the halls.
having a frying-pan shaped devici
House press office, just before easing
who's going to roll out for this?'
Upstairs, at the entrances to the visi.
waved about them to discern whether th
Amusements
into the gallery to watch the President's
State of the Union message.
tors galleries, where wives of cabinet
offending metal is in a conventional spot
BUT OU SIDE, the limousines purr up
members and special guests are to sit,
Features
Comics
And everywhere, filling the Moorish
You never know what will happen
under the marble vaulted entrances to
strange whistling sounds fill the echoing
tiled corridors of power, the mating cry
here. A dog may come in and run wild,
the Capitol ike an endless school of sleek
corridors.
of the Public Figure is heard interspers
SECTION D
TUESDAY, JANUARY 20, 1976
like at Rockefeller's swearing-in. An
black fish nosing through submarine tun-
"Metal detectors,' explains a guard.
ed with the gun-search whistles: Nice
ambassador may spend the entire speech
nels, disc arging sober-suited digni-
"Everything makes em go off Glasses,
attending to his nose. Somebody like
taries and their well-coiffed wives.
cameras.' Whispers an embarrassed
See SCENE, D-1
SERALD
R.
SHOULD
LIBRARY