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President - State of the Union Address, 1976 (1)
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President - State of the Union Address, 1976 (1)
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Philip W. Buchen Files
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State of the union messages
Administration goals and achievements
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The original documents are located in Box 54, folder "President - State of the Union
Address, 1976 (1)" of the Philip Buchen 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States of America his copyrights in all of his unpublished writings in National Archives collections.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.
Digitized from Box 54 of the Philip Buchen Files at the Gerald R. Ford Presidential Library
GENERAL THEMES
Q: Do you think 1975 was a good year for the United States?
A: It was another year of testing for the country, and I
think we can take pride in how well we have come through it.
Personally, I'm very encouraged as we enter our third century
as a nation. I'm certainly not satisfied with conditions as
they are today, but all of us have growing reason to be
hopeful and confident about the future.
We should recognize just how far we've come in 1975 in
three critical areas: the economy, foreign affairs, and
restoration of public confidence in the government.
Economy: Early in the year, the economic outlook was
bleak:
-- We were still experiencing the worst inflation
in our peactime history;
-- At the same time, we were sliding into the
worst recession in more than a generation;
------------------------- Unemployment reached 9.2 percent in the spring.
-- There were widespread fears of another great
depression.
- 2 -
Then before mid-year, the economy reversed course. By
recent historical standards, the recovery is off to a healthy,
solid start and promises to continue until at least 1977.
We have already made a good deal of progress:
-- Inflation has been cut almost in half since the
beginning of the year.
-- 1.4 million jobs have been created since
,
and we have shaved almost a full point off the peak unemploy-
ment rate.
-- Personal income has risen
percent on
an annualized basis since the recovery began.
Instead of fearing a depression now, we can look forward
to 1976 as a year of economic growth, a year of lower inflation,
and a year of lower unemployment. This doesn't mean that we
will eliminate all personal hardships in 1976; we won't.
The deterioration in our economy has taken place over so
many years of mismanagement that we can't restore our economic
strength overnight. But we are moving in the right direction
now; we are building a firm foundation for the future. And
that's what counts.
*****
- 3 -
International: On the foreign front, this was also a
year of severe testing for the United States. Both our
friends and our adversaries were asking: Has the United
States lost its nerve? Can we still count on the U.S. as a
world leader in the struggle for peace and social justice?
-- As an end of an era came in Indochina, there
were grave and genuine fears that America would abandon its
responsibilities for peace in the Pacific.
-- Our European and Japanese friends were anxious
about their relations with us.
-- The nations of the Middle East seemed to be
drifting toward another outbreak of war.
-- The developing nations were reeling from the
economic impact of higher energy prices and a deepening
world recession.
-- And we could not be certain of the Soviets'
intentions.
Again, as one surveys the horizon today, I think there
is evidence of substantial progress:
- 4 -
-- While none of us would want to relive the final
agony of Indochina, all of the nations of the Pacific know
that the United States remains a firm and reliable partner
in that part of the world. We are not shamelessly retreating
from our responsibilities.
-- We have held extensive diplomatic and economic
summit meetings with our Atlantic and Japanese allies, and
we now enjoy greater cohesion on major issues than at any
time since I've been in Washington.
-- In the Middle East during August and September, the
mediating efforts of the U.S. helped to produce a major
interim peace accord between Egypt and Israel, advancing us
toward a just and comprehensive peace for the entire region.
-- In Cyprus, with our encouragement after the embargo
was lifted, the parties began to move closer to a negotiated
solution.
-- We have set forth very generous proposals regarding
the developing world and have definitely improved our relations
with many of those countries.
-- We have also strengthened and reaffirmed our ties
with the People's Republic of China and are moving toward
the normalization of relations.
- 5 -
-- With regard to the Soviet Union, we have made
considerable headway toward resolving the key issues in the
Salt Talks, we have signed a major 5-year agreement on grain
purchases in which the Soviets agree to purchase $1 billion
of grain annually, and in Helsinki this July, at the 35-
nation summit conference, we signed an agreement that we
feel enhances the prospects for both greater stability and
for expanded human freedoms. These are important milestones
in the process of easing the strains between the U.S. and
the USSR. At the same time, of course, we are extremely
wary of the Soviets' growing military strength and we have
made it clear that outside aid to the combatants in Angola
endangers the spirit of cooperation that exists between our
countries. Detente is a two-way street; we will not permit
the other side to have it both ways.
With the exception of Angola, however, I believe that
the international community is more stable today than it was
a year ago. The major nations of the world are at peace,
and there is renewed recognition that the United States
remains the single greatest force for peace anywhere in the
world.
Crisis in National Leadership: Finally, we have to
recognize that at the beginning of 1975 the United States
was still adjusting to a change in this office. The crisis
- 6 -
in leadership that had already affected so many of our other
institutions --- business, the church, the prof
etc. --now embraced the Presidency itself. I
unelected President in our history; in addition
/
the second President in more than a hundred yea
?
into office with the Congress dominated by the
"nonelected"
Naturally, there was great uncertainty about tl
Matherthan
the country.
"unelected"
Looking back, I think it is safe to say that we have
now weathered the worst of the storm. Public confidence
and trust in the Presidency, which has been slipping for
several years, is clearly rising again. Since restoration
of public faith in all of our institutions as well as in the
democratic process itself is essential for the future of our
country, I view this as one of the major accomplishments of
my Presidency.
So in these three areas -- in our search for new
prosperity, in our quest for peace, and in our efforts to
shore up public confidence -- 1975 has been an encouraging
year. We are building solid foundations for our third
century together as a nation, and all of us should take
pride in our progress.
LIBRARY GERALD : FORD
- 6 -
in leadership that had already affected SO many of our other
institutions -- business, the church, the professions,
etc. --now embraced the Presidency itself. I was the first
unelected President in our history; in addition, I was only
the second President in more than a hundred years who came
into office with the Congress dominated by the other party.
Naturally, there was great uncertainty about the future of
the country.
Looking back, I think it is safe to say that we have
now weathered the worst of the storm. Public confidence
and trust in the Presidency, which has been slipping for
several years, is clearly rising again. Since restoration
of public faith in all of our institutions as well as in the
democratic process itself is essential for the future of our
country, I view this as one of the major accomplishments of
my Presidency.
So in these three areas -- in our search for new
prosperity, in our quest for peace, and in our efforts to
shore up public confidence -- 1975 has been an encouraging
year. We are building solid foundations for our third
century together as a nation, and all of us should take
pride in our progress.
GREATEST DISAPPOINTMENTS OF 1975
Q: What has been your greatest disappointment this year?
A. Probably my greatest disappointment has been the insistence
by the Congress in limiting the powers of the Executive
Branch in foreign affairs. The President of the United
States cannot conduct a totally effective foreign policy
with one hand tied behind his back.
Having served for a quarter of a century in the Congress,
I am well aware of the dangers of an "imperial Presidency",
but the pendulum swung too far in the other direction in
1975.
Three instances in particular come to mind:
(1) The refusal of the Congress to provide emergency
aid to South Vietnam in the closing days of the war, which
only enlarged the tragedy that occurred there.
(2) The embargo on aid to Turkey, which -- as we
argued at the time -- made it more difficult to reach a
negotiated settlement on Cyprus, weakened our ties with
Turkey, and threatened the eatern flank of NATO.
(3) Senate vote to cut off aid to Angola. The question
in Angola never has been whether American troops would be
- 2 -
introduced there -- they won't be -- but whether the U.S.
would acquiesce in Communist expansionism thousands of miles
away from the Soviet borders. It is very important that the
Senate vote to reverse its position when it returns from
recess.
STALEMATE IN WASHINGTON
Q. Many have characterized 1975 as a year of stalemate in
Washington where neither the President nor the Congress
could exercise its will. Some also argue that -
Congress and a President of the same party in C
the country moving again. What do you think?
"monslected"
A. In view of the extraordinary situation in W which
rather
ourselves -- an unelected President facing a Co
they
by the other party --- I think that we achieved
"unelected"
legislative progress in 1975 than people first
(1) Holding Down Deficits -- Many observers thought
the Congress would push through a program that would give us
a deficit of more than $100 billion for FY 1976. I think we
managed to rally the country against such an irresponsible
program and we managed to hold the deficit to about $30
billion less than that. The deficit is still too high for
our own good, but it is certainly better than what was
widely expected.
(2) Energy -- Although the pricing provisions of the
energy bill leave much to be desired, the compromise package
enacted late in the year achieved about half of the mid-term
energy goals that I set out in January and put us on the
road to energy independence.
R.
GERALD
FORD
LIBRARY
STALEMATE IN WASHINGTON
Q. Many have characterized 1975 as a year of stalemate in
Washington where neither the President nor the Congress
could exercise its will. Some also argue that we need a
Congress and a President of the same party in order to get
the country moving again. What do you think?
A. In view of the extraordinary situation in which we found
ourselves an unelected President facing a Congress dominated
by the other party -- I think that we achieved far more
legislative progress in 1975 than people first anticipated:
(1) Holding Down Deficits -- Many observers thought
the Congress would push through a program that would give us
a deficit of more than $100 billion for FY 1976. I think we
managed to rally the country against such an irresponsible
program and we managed to hold the deficit to about $30
billion less than that. The deficit is still too high for
our own good, but it is certainly better than what was
widely expected.
(2) Energy -- Although the pricing provisions of the
energy bill leave much to be desired, the compromise package
enacted late in the year achieved about half of the mid-term
energy goals that I set out in January and put us on the
road to energy independence.
- 2 -
(3) Tax Cuts/Spending Cuts -- Again the bill finally
enacted fell far short of what I wanted, but it did provide
an extension of tax relief and for the first time in our
history, the Congress has now pledged to tie the size of the
budget to the size of future tax cuts. That is a major
breakthrough.
(4) New York City Aid -- By standing tough early in
this crisis, I think we provided a catalyst for New York to
take primary responsibility for solving its own problems and
we were able to devise much better Federal legislation. In
a very real sense, as I have said before, New York City
bailed itself out.
(5) Housing Legislation -- (Domestic Council: Please
fill in.)
When you look over the record, then, it is inaccurate
to say that we have had a legislative stalemate in 1975.
But let me add this thought: if the American voters
would return a Republican Congress to me in 1977, I can
guarantee we would make far more progress toward reducing
inflation and creating new jobs than anything we have seen
in 1975. As far as our advances toward peace and prosperity,
it would be like replacing the tortoise with the hare.
USE OF VETO POWER
Q. Some has asserted that your extensive use of the veto
has given your Presidency an essentially negative character
in 1975. How do you respond to that?
A. Let's look at it this way: suppose about 5 or 10 years
ago I had been elected Mayor of New York City and I was
asked to approve measures that would raise the salaries of
municipal workers far above other cities, that would give pension
benefits to municipal workers enjoyed in no other city, and
that would ensure the city was headed toward bankruptcy.
If, as mayor, I had vetoed those measures, I am certain
that many would have said I was being very negative, that I
lacked social compassion, etc. But with the hindsight
provided by current history, we could see today that those
vetoes would have been very positive acts -- acts to preserve
the financial integrity of the city and prevent many of the
personal hardships that are being experienced in New York
City today.
In many ways, what I am trying to do today parallels
what really should have been done in New York City several
years ago. I want to save the economic integrity of the
United States itself. And in retrospect, my vetoes of big
spending bills will ultimately be seen as the positive act
they represent. I sincerely believe that every veto of my
- 2 -
Presidency can be totally justified on the basis of the
best, long-run interests of the country.
*****
Two other points can be made about the vetoes:
(1) So far, bills vetoed in the 94th Congress have
saved the taxpayers $7.6 billion in outlays and bills vetoed
during the 93rd Congress have saved them $1.6 billion --- a
total of $100 for every man, woman and child in the country.
(2) Frequently, use of the veto power has compelled
the Congress to come up with better legislation. Best
example: the tax cut/spending cut veto which led to inclusion
in the measure of good-faith pledge by Congress to tie
future tax cuts to spending cuts of the same size. Other
examples: (Domestic Council: Please provide.)
PRESIDENT AS PARTY LEADER
Q. Some have speculated that your decline in the polls
during the latter part of 1975 is a result of your travels
on behalf of the GOP. Do you now think those trips were a
mistake?
A. I realized at the time that my trips would not be
politically popular, but I had two goals in mind that made
them worthwhile:
-- First, I wanted to preserve the vitality of the
Republican Party in our national life. By making these
trips, I collected not a dime for my own campaign but I
helped to raise some $ million for the Republican Party
state organizations, helping to erase many of their deficits.
I am a strong believer in the two party system; I think it's
healthy for our democracy, and to the extent that my trips
helped to preserve that system, I think they were well worth
the cost to me in the polls.
-- Second, I recognized that my Presidency was unique.
By virtue of circumstance, I became the head of my party
without a formal nomination or election. In those circum-
stances, I thought I owed it to the people who are the back-
bone of that party to meet with as many of them as I could
and to talk together about our hopes for the future of the
- 2 -
country. The trips were very worthwhile from this
perspective, too.
So, to answer the question, I regret that the trips
did have a negative impact upon the polls, but I am still
convinced they were necessary and worthwhile.
MOOD OF THE COUNTRY
Q. How would you characterize the mood of the American
people during 1975?
A. Troubled, uncertain, but still very hopeful about the
future.
The people of this country have been buffeted by some
very strong storms in the last few years -- urban riots,
Vietnam, Watergate, record inflation, and a deep recession.
Personal values are in flux, many of our social institutions
have fallen from favor, and modern technology has transformed
the world into a very complicated place to live. It is only
natural that the public is troubled and uncertain.
But what is remarkable is how well we have come through
these ordeals and how hopeful and optimistic people remain
in their daily lives. I think that is a great tribute to
the American spirit and will serve us well during our third
century as a people.
I feel the same sense of confidence about the future as
William Faulkner when he received the Nobel Prize for Literature
and observed that "man has not only survived but endured".
WHAT'S RIGHT WITH AMERICA
Q. Why are you so optimistic about the country's future?
A. Because this country has enormous assets that have never
been matched anywhere before:
-- Of some 150 nations in the world today, only two
dozen can still be counted as democracies today. Human
freedom is shrinking in many parts of the world, but here in
the U.S., we remain committed to the democratic process and
to the preservation of our basic liberties. I worry a great
deal about the threat posed by government to those liberties,
but the tide is clearly turning against Big Government in
the U.S.
-- For all its flaws, our economy remains the most
dynamic in history, helping us to achieve the highest standard
of living in the world. With some 6 percent of the world's
population and 7 percent of the world's land mass, we produce
more than a third of the world's goods and services.
-- Our farmers are also the most productive ever known
and are doing more to prevent starvation and hunger in other
lands than anyone in the world. An average American farmer
now feeds 50 other people with a nutritious diet.
- 2 -
-- In the last 15 years, poverty in this nation has
been cut in half.
-- Our abundance and generosity have joined in providing
the most extensive program of economic and humanitarian aid
to other countries in history -- over $100 billion since
World War II.
-- Life expectancy in the U.S. has been dramatically
increased.
-- And today we have twice as many students going to
college as in the 1950s, and I sense that their values are,
if anything, more soundly based than those of my own generation.
So there is much to be optimistic about when it comes
to the future of America. Certainly our society has its
troubles and its flaws. And we must work to correct them.
But in so doing, I would hope that we would recognize the
many things that are right about America and build upon
them.
is
FOND
GOALS FOR OUR THIRD CENTURY
Q. What goals would you set for America as it begins its
third century?
A. To me, the American Dream will become a reality when we
can meet essentially three goals:
-- A nation at peace with its neighbors and with itself;
-- A nation where the fruits of happiness and prosperity
are equally available to every man and women, regardless of
race, creed, sex or national orgin;
--- And, a nation where personal liberty remains precious.
untrammelled by Big Business, Big Labor, and most importantly,
Big Government.
That's my personal vision of the America I want for my
children, and that is the America to which I am dedicating
my Presidency.
NEW YEAR'S RESOLUTION
Q. Have you made a New Year's resolution for 1976?
A. (Please fill in.)
Governmental Reform Theme
for the
State of the Union Address
Some years ago President Eisenhower eloquently warned
Americans of the potential dangers inherent in the
growth of the military industrial complex. Today I
would warn of a different and more significant threat--
the degree to which government has come to interfere in
our lives and reduce our individual freedom. Just as
in the troubled times of our Nation's birth, our
freedom is again being actively and seriously threatened.
Today, however, the threat to individual liberty is much
more complex than it was in 1776. It is being endangered
by a swollen Federal government whose concerns are often
remote from those of the average American. For the
last year and a half, my Administration has been working
to wage a new revolution against the tyranny of an
entrenched and distant bureaucracy.
Starting even before 1776, the American way was to rely
on individual initiative and freedom as a way of providing
for our economic needs. Over the last several decades,
however, we have departed from this trust in individual
initiative and consumer choice. For good reasons and bad,
we have expanded government's role and the scope and
detail of government controls. We have creaced a
2
governmental system which is more and more rigid and less
able to respond to changing conditions. In an increasingly
complex society, government's role should be to assist
in the search for solutions to our problems. But
government as we now know it has gone too far. Useless
government activities have expanded geometrically at all
levels. The privacy of individuals and organizations is
invaded by a host of new government inquisitions and
questionnaires. Incursions on our civil liberties by
excessive government snooping have reached an all-time
high. Our economy staggers under a variety of senseless
and outmoded rules and restraints imposed by government.
This government expansíonism began in the Depression era.
In those crisis times, we as a people lost faith in the
individual--turning instead to "Uncle Sam" to provide
the answers. As a result, vast impersonal bureaucracies
were created to resolve a myriad of economic and social
problems. New government agencies were created to help
reduce unemployment. New laws helped stabilize
financial markets. New regulations helped protect
failing businesses. At the time, these were practical
solutions to very critical and immediate problems. Over
time, some of these programs disappeared as the need for
3
their existance waned. However, many others are still
on the books. But more important than these individual
policies and programs, this era produced a philosophy of
government activism which persists today.
In our compassion to solve urgent human problems, we have
designed over the years a governmental structure which
has undermined individual choice and initiative. The
creative and innovative talents of the American people--
long the hallmarks of our free society--have been ensnarled
in a web of government programs and controls which no
longer achieve their intended social and economic goals.
We have set up complex and highly administered systems
designed not merely to complement or supplement individual
choice and initiative but to supplant it.
Government is omnipresent--regulating, subsidizing, allo-
cating. It is highly susceptible to manipulation by
highly organized interest groups seeking to use govern-
ment for their own ends. In order to stop the growth
of government by special interest, individual citizens must
understand their system of government, and must know its
costs as well as its benefits.
4
The time has come for all of us to insist on the develop-
ment of a responsible system of government to ensure that
decisions are made in the public interest. But fundamental
change is a slow and difficult process. Once certain groups
learn how to manipulate the system and benefit from it, they
will resist
any attempts at reform. Their cries vehemently resist
any change, drowning the protest of individual Americans
whose taxes pay for those benefits. Benefits that would
result from reform of this system are so diffused through
the population that it is hard for any identifiable group
to achieve needed reforms. All too often individual
taxpayers are generally aware of the problem, but they
hope that their neighbor will make the effort to do
something about it.
Even the most visibly wasteful and inequitable public
programs survive as a result of a powerful allegiance
formed by the congressional committees that authorized
and fund a program or agency, the bureaucrat who
administers it, and the interest groups who are its
beneficiaries.
Considering the resources that are usually mobilized in
opposition to specific reforms, it is little wonder that
progress is so slow. The opposition forces are generally
5
small in number, extremely well organized, and able to
bring pressure
to bear on decisionmakers in a
forceful manner.
* * *
Faced with the challenge of bringing about
fundamental change, my Administration has established
a wide-ranging program to reduce the size of government
and its intervention in every aspect of our daily lives.
First, I have announced my intention to reduce the level
of Federal expenditures. Federal, State and local
spending in the past decade has raged largely out of
control. It was only 12 years ago that President Johnson
was engaged in a struggle to hold Federal spending below
the $100 billion level. Today, my Administration is
attempting to keep spending below $400 billion.
I have set in motion a fundamental examination and
reform of our system of government regulation. The basic
objective of this program is to eliminate
govern-
ment regulation which is anticompetitive, antisocial or
contrary to the public interest. The beneficiaries of
this program will be the economy and the society as a
whole. To accomplish this, I have already submitted a
number of legisla' Ive proposals.
6
In the energy field, I have proposed legislation to
deregulate the price of natural gas to provide incentive
for more abundant supplies.
I have also forwarded bills to the Congress seeking major
changes in the regulatory system governing our railroad,
airline and trucking industries. These bills will
promote greater competition in these industries, and
result in lower fares and a wider variety of services.
In the banking and financial fields, I have proposed
legislation to ensure that competitive interest rates
are paid to small depositors or investors and more
diversified services are provided to all customers.
Recently, I signed into law a bill which repeals State
Fair Trade laws so that consumers can take advantage of
discount pricing on "brand name" merchandise. The
cooperation between the Congress and the Administration
on this bill should serve as an example for all regulatory
reform legislation.
In addition, I have proposed legislation to sharpen the
legal tools and resources of the antitrust activities
of the Justice Department. This will serve to protect
the public from that small minority of the business
community that might attempt to profit from
deregulation by on ading in illegalbusiness practices
at the expense of the consumer.
7
I have also signed legislation that establishes a commission
to reduce the extraordinary burden of Federal paperwork.
Finally, I have directed the Executive Branch agencies
to conduct inflation impact analysis of major activities
and legislative proposals they support.
(OTHER EXAMPLES OF ADMINISTRATION ACTIONS
TO REDUCE GOVERNMENTe. 9., changes in
housing policy, Federal personnel reductions
etc.)
These measures constitute important first steps. They
represent some fundamental changes in the roles of
government and private enterprise. I intend to work
closely with the Congress to see that this legislation
is passed and I will continue to hold a public dialogue
on additional areas needing reform. I also intend to
develop reform proposals for other areas of government
regulation is inappropriate or excessive.
In many cases, there will be strong resistance to these
initiatives by special interests who argue that regulatory reform
is good
in other industries but that change in their industry
will be disruptive. We must overcome this reaction and
continue to advocate changes which will have a
positive impact on the Nation as a whole.
8
While I intend to exert every effort to modify anti-
competitive economic regulation, I also believe that we
must begin to review the vast apparatus of Federal
social regulations that has been set up in the last
two decades in pursuit of the purest of motives.
I intend, therefore, to review Federal safety and
health regulations in order to assess their effectiveness
in accomplishing their goals without imposing excessive
costs on consumers. It is my belief that there are often
more. efficient, less expensive ways to accomplish these
objectives.
My Administration will make appropriate administrative
changes and propose new legislation to reduce the size
of the Federal government and the emphasis on enforcement
of mandatory standards.
9
*
*
Our overall goal must be the restoration of individual
choice and individual initiative as the guiding principles
of our Federal system.
We must reexamine our government to discover
why we have allowed our individual freedoms to
become
restricted. We must ask the fundamental
questions - Why have we permitted a remote Federal bureau-
cracy largely to determine not only what our social and
economic objectives will be but also
specific, detailed means by which they will be achieved?
achieved. To what extent can we counter this trend
toward bureaucratic domination with increased competition,
more information to consumers and increased individual
participation in policy decisions?
We must also look more critically at the way we are
attempting to fulfill certain necessary and desirable
social gaols- improved quality of the environment and
the health and safety of workers and consumers. It is
my belief that there are often more efficient, less
expensive ways of accomplishing these objectives. By
creating a new coalition of informed consumers,
10
responsible businessmen,
public-minded Congressmen and
a concerned Administration, I believe we can reduce the
Nation's dependence upon ponderous, expensive, and often
ineffective government.
THE WHITE HOUSE
WASHINGTON
MEMORANDUM FOR THE ECONOMIC POLICY BOARD
FROM:
ED SCHMULTS
PAUL MacAVOY
SUBJECT:
The State of the Union Address
This year the State of the Union Address is more important
than in recent years. It represents the most public oppor-
tunity for the President to state in a clear and comprehen-
sive way what he sees as the goals for the United States
through the end of his full four-year term.
While parts of the Address must properly deal with current
issues such as national security and energy policy, we
believe that a major theme must be the sustained threat to
individual opportunity and freedom posed by the growth of
massive and uncontrollable government. Today the threat
to individual liberty is enhanced by a swollen Federal
bureaucracy controlled by organized interest groups whose
concerns are remote from those of the average American.
The President has attacked the problem of massive govern-
ment in a variety of ways. First, by proposing the tax
reduction tied to a spending ceiling, he has tried to
assure that the proportion of GNP spent by the Federal
establishment will decrease rather than increase over the
next period of years.
The President has also launched a major campaign to free
our economy from costly, inefficient, and outmoded govern-
ment regulation. He has submitted to the Congress a com-
prehensive legislative program designed to produce a
competitive and efficient transportation system free from
unnecessary government regulation. He has also proposed
elimination of Federal rate regulation of natural gas in
order to stimulate extensive exploration for new gas supplies.
In the future he will be looking at Federal health and safety
regulation in order to propose elimination of excess govern-
ment standard setting and surveillance.
-2--
Many newly elected officeholders such as Governors Brown
of California, Dukakis of Massachusetts, Boren of Oklahoma,
and former Governor Ronald Reagan have achieved significant
popularity by attacking the evils of bloated and inefficient
government. The President's record certainly exceeds their
rhetoric and he ought to take credit for his performance in
his State of the Union Address. He should explain as well
that the President cannot succeed in this fight alone.
Powerful and highly organized pressure groups are already
arrayed against him. These pressure groups control large
elements of the regulatory commissions and agencies.
While others talk during campaign '76, the President must
lead. He must also clearly identify the opposition and
attack it.
Attached are two items setting forth some proposed draft
language for the President's Address. One contains "general
theme" and regulatory reform language; the other only regu-
latory reform paragraphs. We emphasize that the drafts are
"committee products" and so suffer somewhat from a lack of
consistency and redundant themes. We would appreciate your
views on the tone and the direction of the drafts.
EPB
DISCUSSION OF FISCAL POLICY
IN THE STATE OF THE UNION
One year ago in my first State of the Union Message I stood
before you and acknowledged that "the State of the Union is not good. "
I went on to recount the state of the economy characterized by millions
of Americans out of work, inflation eroding the incomes and the savings
of millions more, prices too high and sales too low. The year we had
just ended was characterized by double-digit inflation and skyrocketing
unemployment. Production, sales and employment were declining
precipitously as the economy was midway through the deepest recession
since World War II.
Change is often so incremental that it clouds our remembrance
of the state of events even a year past. One year ago I declared that
the time had come to move in a new direction. I am pleased to report
today that much progress has been made. A brief review illustrates
the substantial gains that have been achieved. The double-digit inflation
of over 12 percent in 1974 was reduced during 1975 to about 7 percent.
During the spring of 1975 the unemployment rate peaked at 9.2 percent.
Since that time the economy has begun to recover. The size of the total
labor force has grown by 1.5 million people, and the unemployment rate
is 8.3 percent and falling. The Gross National Product is again rising
at an annual rate of growth of about 8 percent during the last two
2
quarters of 1975. We began 1975 with the greatest burden of excessive
inventories in our history and ended the year with inventories at
approximately normal levels.
Now that the recovery is underway, it is even more important
to focus upon the problems which we will confront in the coming year
and beyond. Unless we proceed carefully we may exacerbate these
problems and greatly increase the chances of setting off another inflation-
recession cycle. We must not allow the seeds of future inflation to be
planted by fiscal and monetary excesses in 1976.
Past Administrations and past Congresses have failed to
resolve the recovery-inflation dilemma. This has made consumers and
businessmen wary, watchful and mindful of the risks of the policy alter-
natives we now face. Past experience indicates that it is easy to
continue expansive policies but that it is very difficult to curb budget
deficits and hold monetary expansion to rates consistent with high-
employment price stability. This is especially true in an election year.
Past mistakes have created a situation in which the recovery itself is
dependent upon confidence that policy will become significantly less
expansive when and as circumstances require.
The budget deficit must be closed as the recovery proceeds.
Unless we are able to curb the rapid rise in Federal spending, this
3
cannot be done. We cannot delay this task until after the election.
Unless this Administration and this Congress acts in 1976 we will have
waited too long.
This section would continue with a discussion of the President's
budget and tax programs and why they are consistent with the objective
of restoring sustained economic growth without inflation and advancing
individual freedom and opportunity.
EPB
OVERALL THEME FOR THE STATE OF THE UNION
The State of the Union Message provides the President a
unique opportunity to outline his vision for America during
the coming five years and for the remainder of the Twentieth
Century. The unifying theme of his speech might appropriately
be the need to maintain and advance individual freedom and op-
portunity. Our heritage of ordered freedom is a precious leg-
acy in an age when it has become increasingly apparent that
genuine freedom is a hard won and fragile achievement. In our
increasingly complex society it is difficult for individuals to
meaningfully participate in the decisions that affect their lives
and not to feel swallowed up by the bigness of the institutions
around them.
Moreover, the speech can emphasize that individual freedom
and opportunity can be enhanced within a context of sustained
economic growth, improvement in the quality of life in our land,
and maintenance of a stable world order.
The achievement of these goals will not be easy. Ours and
other representative governments face a series of serious chal-
lenges. Can we resist the political temptation to always re-
spond to the demands of the present at the expense of the future?
Can our government discipline itself sufficiently to restore
stable high-employment prosperity without inflation? Will tax-
ation and inflation together dry up the savings necessary for
adequate investment? Can government control the pressures to
2
favor consumption at the expense of capital?
In answering these questions we should remember the foun-
dations of our governmental system and of our economic great-
ness. Our nation was built through incentives not guarantees,
through opportunity not welfare. The most serious threat to
individual freedom and opportunity is that posed by the growth
of massive government.
The address can outline the ways that the President has
and proposes to continue his attack on the problem of massive
government. His proposal for a tax reduction coupled with a
spending ceiling is designed to prevent the proportion of the
Gross National Product spent by the Federal Government from
increasing in the next five years. He has launched a major
campaign to free the economy from costly and anti-competitive
government regulation. He has attempted to contain the growth
of income transfer programs by requiring more stringent but
equitable standards for the operation of these programs.
We must marshall the discipline to counter the bias in
public policy in favor of consumption at the expense of savings;
the bias in favor of the spendthrift present at the expense of
the future. Capital starvation is the economic peril of Western
capitalism generally and an immediate challenge to the strength
and breadth of the current economic recovery. Restraint of gov-
ernment expenditures and limiting the size of the budget defi-
cit are critical if adequate capital formation is to occur.
Philosophical Theme for the State of the Union Message
Some talking points for meeting on December 16.
1. The Stat e of the Union Message must have a historical perspec-
tive. It also must have a style and rhetorical tone that sets it
apart from the President's other speeches. The speech must
articulate ideas that will excite the opinion makers since much
of its impact will be determined by what the opinion makers say
and write about it. Thus, we recommend that a group of historians
and political thinkers be brought together to work on the Stat e of
the Union. A particularly valuable and accessible resource would be
Daniel Boorstin.
2. Historical perspective
(a) Difference between the country two hundred years ago and
today: very rapid change; agricultural to industrial society;
predominance of city and suburban living.
(b) Depression economics operated on the theory that the
infusion of massive sums of money could cure the-ills. This
is no longer a viable economic approach.
(c) Historical watershed in recognition of Rambouillet that
domestic economic policies affect other nations; increasing
economic interdependence.
3. Equality at the starting gate
What government should do: Government should create the conditions
which enable people to accomplish their goals by individual effort;
government should bring its citizens to a fair point on the starting
line. At the same time, we must be cognizant of the fact that the
starting line can and does shift with changing conditions. Two
examples: (1) unionization and the civil rights ethic have made
profound changes in how we define equality at the starting gate;
and (2) employment is not always within an individual's control and
thus a starting gate principle of government as the employer of
last resort is a concept that must be responded to.
-2-
Belief in equality at the starting gate would be inconsistent with
utilization of the tax base as a mechanism for redistributing the
wealth, a philosophy espoused by a number of the Democratic
Presidential candidates.
4. Personal values and dignity, participation, community
(a) Must recognize that the blue-collar worker is performing
work of equal dignity and value with that of the white-collar
worker.
(b) As we have shifted from a society of farmers and small
business owners to a society in which employment by large
entities is prevalent, we must do something to restore the
sense of personal worth which we have lost. Suggestion:
Encourage the participation of employees in the equity and
management of the businesses in which they are employed.
Such participation can be encouraged through tax legislation.
(c) We must seek the restoration of decency and Christian
charity between individuals, among governments, etc. The
community spirit must be rekindled in our Bicentennial.
5. Quality of life
If we talk in terms of the quality of life rather than conspicuous
consumption, there are new economic frontiers. A concentration
on quality of life is consistent with the views of individualism,
personal values, and the community.
What relations are important to the responsibilities
of the President?
- relation between freedom and the pursuit of
happiness;
- relation of social, bodily and spiritual
well-being to freedom;
- relations between people upon which the social,
bodily, spiritual well being of each depends;
- the effect of our government on those dependent
relations among our citizens and between our
citizens and the people of other countries.
Note that the basic relation is between freedom
and pursuit of happiness.
"Life, liberty, and the pursuit of happiness"
are three inalienable rights which were held by the
Framers of our Declaration of Independence to be self-
evident.
But they are not separable rights, because liberty
depends on life and the pursuit of happiness depends on
liberty. Life and liberty are not ends in themselves.
They are important only as they contribute to the success-
ful pursuit of individual happiness.
- 2 -
Although there is no common understanding of happiness,
and what constitutes the achievement of happiness, we all
realize that self-fulfillment in numerous possible ways makes
for personal happiness. We also know that without liberty or
freedom, self-fulfillment is an impossible goal. Beyond that
we have no very precise ideas about self-fulfillment or
happiness and certainly none that would be generally applic-
able and definitive. For the very reason that happiness is
a highly personalized condition and not generally definable,
it is more important that the common concern should be with
achieving and preserving liberty rather than prescribing
individual happiness, even though it is personal happiness
which is the ultimate goal. Thus, the other relations which
are
the
of the
most important to my responsibilities President
all have to do directly or indirectly with freedom.
Freedom of people as a means to their happiness and
therefore a prevailing injunction upon government is the
idea that is basic to Western philosophy and at the heart
of every political system which rejects authoritarian
government. In two hundred years of history as a nation
committed to freedom for its people -- and for people the
world over -- this nation of ours should have come to
know a good deal about freedom. We ought to know very
is
FORD
well the essential conditions of freedom and how they
0700
can be preserved and enhanced. Yet, our understanding
- 3 -
of freedom seems less clear and decisive than in the past
and our appreciation of its importance has declined. The
reason is that we have lost the ability to look upon other
desirable conditions as related to freedom and not as ends
or goals in themselves.
In Uncearly histor of can bo looked.
Material well-being can be looked
upon as 2 result of behieved., at thodogroe
on which persuis at happiness
mloins of the Preedoment economic
choices which tho people of the
United States may exercise in pursuit
ot happiness. Thus,
One major confusion is whether
the material well-being of Americans
is the result of Freedom of economichoices
or whether failures of government
to assure such woll-being threatens
individual freedom.
GERALD R.FORD LIBRARY
Presidentsawen Presiden
August
FRAMEWORK FOR DOMESTIC COUNCIL REVIEW
The following set of themes and principles represents a
conceptual framework for the Domestic Council Domestic
Policy Review. It is intended that this framework would
permit the consistent analysis of major issues and guide
alternative decisions on the various proposals.
The themes and principles are consistent with the President's
policy preferences. Although they are not totally inter-
dependent, they are intended as a coherent set.
Theme 1: FORGING A NEW PHILOSOPHIC CONSENSUS
Associated Principle
A stable domestic policy philosophy should be
developed which bridges the stalemate between
the social-activist policies of the early '60s
and the anti-centrist improved governmental
management policies of the early '70s.
Theme 2: ASSURING CONTINUED AMERICAN INDEPENDENCE
Associated Principle
To assure an adequate supply of resources
essential to the continued vitality of the
American economy, the United States must
either produce them domestically (or produce
economically and environmentally acceptable
substitutes); or, through foreign policy,
we must assure that such supplies are
available on a stable and economically
acceptable basis.
Condo - bost by building on strengths of
America IN prof.
FORD
- 2 -
Theme 3: BUILDING ON AMERICA'S PROVEN STRENGTHS
Associated Principles
a) Governmental policy should be consistently
guided by an appreciation of the essential
value of work.
b) Governmental policy should be consistently
guided by an appreciation of the essential
value of incentives for enterprise, initiative
and innovation.
c) Governmental policy should be consistently
guided by an appreciation of the essential
value of respect for the individual ---
individual choice, individual dignity, and
individual privacy.
d) Governmental policy should be consistently
guided by an appreciation of the essential
value of the widespread distribution of
power.
Theme 4: FOSTERING SUSTAINABLE ECONOMIC GROWTH
Associated Principles
a) Government policy must be concerned about
BOTH inflation and unemployment.
b) Governmental policy must weigh the secondary
costs of apparently beneficial intervention -
and consider the net relationship of benefits
to TOTAL costs in setting policy.
c) Efficient infra-structure must be viewed as
essential to the economic health of an
increasingly complex society.
Theme 5: MAKING BEST USE OF LIMITED RESOURCES
Associated Principles
a) When intended benefits can be more efficiently
provided without large bureaucracies and large
administrative costs, limited resources
not be spent to support these costs.
LIS8ARY GERALD 94
- 3 -
b) The limited resources perspective must be
system-wide.
c) Limited public resources spent for the
provision of services or direct benefits,
in the social program area, ought to be
focused on the problems of the most needy --
the poor and those unable to help themselves.
d) Limited resources ought not to be spent on
full-scale programs where the effectiveness
of the basic program technology has not first
been satisfactorily tested on a meaningful
"pilot" scale.
Theme 6: INCREASING GOVERNMENTAL RESPONSIVENESS AND
ACCOUNTABILITY
Associated Principles
a) Government ought not to try to do on full
scale what it cannot satisfactorily do on
a pilot basis.
b) Governmental roles and responsibilities
ought to be allocated among levels of
government in a way that places the burden
of justification on those who would centralize
functions (and thereby tend to render govern-
ment less responsive to local preferences).
c) The burden of justification must be placed
on those who would "complexify" government --
the simpler it is, the easier it is to
comprehend, to administer and to hold
accountable.
d) Administrative procedures must be devised
and applied to prevent fraud and to ensure
quality control.
e) Executive functions -- whether delegated or
not -- ought to be within the control and
direct responsibility of identifiable elected
officials.
FORD a. 07V830 LIBRARY
- 4 -
Theme 7: RESTORING A SENSE OF FAIRNESS
Associated Principles
a) Those situated similarly in need ought to
be treated similarly.
b) Among those expected to work -- as also
among those who (by virtue of age or health
status) are not expected to work -- those
who earn more ought not, by governmental
action, be placed in a position of net dis-
advantage relative to those who earn less.
c) Those who are needy and unable satisfactorily
to help themselves ought to receive some
minimal set of benefits as a matter of humane
concern.
d) To the extent that a prior history of un-
fairness has left a group disadvantaged,
governmental intervention may be justified
to restore a sense of fairness.
To: Phil Buchen
DECISION
FRom: Bobbie Kilberg THE
WHITE HOUSE
FYI d/or
wASHINGTON
Comments
December 5, 1975
MEMORANDUM FOR:
JAMES M. CANNON
FROM:
JUDITH RICHARDS HOPE
SUBJECT:
Women's Rights -- State of the Union Message
Patricia Lindh, Bobbie Kilberg and I recommend that the State
of the Union Message contain a reaffirmation of the President's
commitment to equality for women. We propose:
1. A reiteration of the President's Support for the
Equal Rights Amendment.
2. A proposal for legislation to prohibit discrimination
on the basis of sex or marital status in any program or
activity receiving Federal financial assistance.
3. A direction to the Justice Department to examine all
Federal statutes for the purpose of bringing our laws into
conformity with the principles of the Equal Rights Amend-
ment and to recommend new legislation where necessary.
Proposed drafts of a memorandum from you to the Senior Staff
and from you to the President are attached for your consideration.
Attachments
THE WHITE HOUSE
WASHINGTON
December 5, 1975
MEMORANDUM FOR:
RICHARD CHENEY
JACK MARSH
MAX FRIEDERSDORF
ROBERT HARTMANN
JIM LYNN
PHIL BUCHEN
JIM CONNOR
JERRY JONES
BILL BAROODY
FROM:
JAMES CANNON
SUBJECT:
State of the Union Message: Inclusion of
Statements and Proposals on Women's Rights
Patricia Lindh, Special Assistant for Women, Bobbie Kilberg,
Associate Counsel, and Judy Hope, Associate Director of the
Domestic Council, have recommended to me that the State of the
Union Message contain a reaffirmation of the President's com-
mitment to equality for women. They propose:
1. A reiteration of the President's Support for the Equal
Rights Amendment.
2. A proposal for legislation to prohibit discrimination
on the basis of sex or marital status in any program or
activity receiving Federal financial assistance.
3. A direction to the Justice Department to examine all
federal statutes for the purpose of bringing our laws into
conformity with the principles of the Equal Rights Amend-
ment and to recommend new legislation where necessary.
A draft of the proposed language is attached. May I have your
comments and recommendations by December 11, 1975?
Attachment
DECISION
THE WHITE HOUSE
WASHINGTON
December 5, 1975
MEMORANDUM FOR:
THE PRESIDENT
FROM:
JAMES M. CANNON
SUBJECT:
State of the Union Message: Inclusion of
Statements and Proposals on Women's Rights
The Domestic Council, the Counsel's Office, and your Special
Assistant for Women recommend that you include in your State
of the Union Message reaffirmation of your commitment to
equality for women. We propose:
1. A reiteration of your support for the Equal Rights
Amendment.
2. A proposal for legislation to prohibit discrimination
on the basis of sex or marital status in any program or
activity receiving Federal financial assistance.
3. A direction to the Justice Department to examine all
Federal statutes for the purpose of bringing our laws into
conformity with the principles of the Equal Rights Amend-
ment and to recommend new legislation where necessary.
DRAFT
STATE OF THE UNION MESSAGE
PRESIDENTIAL COMMITMENT TO WOMEN"S RIGHTS
"Women, like men, must not only have 'fair play' in the world
of work and self-support, but, like men, must be eligible to all the
honors and emoluments of society and government. And the only
possible way to accomplish this great change is to accord to women
equal power in the making, shaping, and controlling of the circum-
stances of life. " (Susan B. Anthony) [Note to speechwriters:
Would prefer a quote closer to date of ratification of the U.S.
Constitution. ]
For the dignity of all individuals and for the realization of the
principles ennunciated in the Declaration of Independence and the
Constitution, women must be considered equal partners in our
society. As this can best be resolved by the passage of the Equal
Rights Amendment, I urge the states to complete the ratification
of that Amendment in this our Bicentennial Year.
A year ago, I appointed a National Commission on the Observance
of International Women's Year, whose life I have extended for six
additional months into our Bicentennial Year. In March of last
year, I directed the Heads of all Departments and Agencies to
ensure equal opportunity through strong affirmative action in every
aspect of Federal employment. This commitment was reaffirmed
-2-
in August, in proclaiming Women's Equality Day, and again in
October, when the Office of Management and Budget conducted a
critical review of the involvement of women at all stages and
levels of Federal programs. In November, I again stressed the
requirement of equality of job opportunity in overseas assignments
for our Government.
Now, as we celebrate our 200th Birthday, I have directed
the Department of Justice to prepare legislation which I will
submit to the Congress which will prohibit discrimination on the
basis of sex or marital status in any program or activity receiving
Federal financial assistance.
I have also directed the Justice Department to examine all
Federal statutes for the purpose of bringing our laws into conformity
with the principles of the Equal Rights Amendment and to recommend
new legislation where necessary.
THE WHITE HOUSE
state Uning
WASHINGTON
December 5, 1975
MEMORANDUM FOR:
PHIL BUCHEN
ED SCHMULTS
Bobbi
FROM:
BOBBIE GREENE KILBERG
SUBJECT:
State of the Union Message
I have had some discussions yesterday and today with individuals
on the Domestic Council and Vice President's staffs about the
State of the Union Message. That Message obviously will be one
of the most important, if not the most important, statement which
the President makes in 1976. It is my understanding that, to date,
the Counsel's Office has not been involved in the development of
the Message. I would like to involve us now rather than simply
have us react to the final product. Much of the work has already
been done, but there still is time for our input.
I met yesterday with Judy Hope, a new Associate Director on the
Domestic Council, Dick Parsons and Pat Lindh to put together a
paragraph section on women's rights for the Message. I would
like to participate in the preparation of the entire Message and
think that the Counsel's Office could and should have an active
role.
As the timing is very tight, please let me know today, if possible,
what you think.
THE WHITE HOUSE
WASHINGTON
December 5, 1975
MEMORANDUM FOR:
PHIL BUCHEN
ED SCHMULTS
Bobbi
FROM:
BOBBIE GREENE KILBERG
SUBJECT:
State of the Union Message
I have had some discussions yesterday and today with individuals
on the Domestic Council and Vice President's staffs about the
State of the Union Message. That Message obviously will be one
of the most important, if not the most important, statement which
the President makes in 1976. It is my understanding that, to date,
the Counsel's Office has not been involved in the development of
the Message. I would like to involve us now rather than simply
have us react to the final product. Much of the work has already
been done, but there still is time for our input.
I met yesterday with Judy Hope, a new Associate Director on the
Domestic Council, Dick Parsons and Pat Lindh to put together a
paragraph section on women's rights for the Message. I would
like to participate in the preparation of the entire Message and
think that the Counsel's Office could and should have an active
role.
As the timing is very tight, please let me know today, if possible,
what you think.
12/12/75
State of the Union - Regulatory Reform
Draft (2) (Revised)
I have addressed the dangers of the headlong growth of big government
in our society on many occasions.
Well intentioned, dedicated government employees make decisions
daily that have a profound and often adverse impact on your
economic well being. Their actions are the product of outdated
legislation that gives government agencies the power to make
critical economic and social decisions which vitally affect the
lives of all our citizens. The thrust of domestic legislation in the
last forty years has been to set up government agencies as judges
empowered to regulate economic and social functions in the public
interest. But this mandate very often became diluted to that of
service to special interest or to maintaining the status quo.
Rather than supplementing competitive markets, the regulators
supplanted competition with controls.
The scope of government regulation of our collective existence
is vast, encompassing energy and raw materials, transportation,
employment, financial matters, trade, communications, health,
insurance, etc. My Administration has established a program
to rev i ew and reform federal intrusions in these areas -- to
eliminate those government regulations that are anti-competitive
or redundant. The beneficiary of this program will not be the
businessman, as some critics have alleged. The regulated
industrialist is most likely satisfied with the protection that the
government currently provides him. The real beneficiary of
my program will be the consumer. I want to ensure that the
greatest variety of goods and services are available at the lowest
prices possible. To accomplish this, I have already submitted
several legislative proposals.
In the energy fields, I have proposed legislation to deregulate
the price of natural gas to provide incentive for more abundant
supplies.
I have also forwarded bills to the Congress to de-regulate the
railroad, airline and trucking industries. If enacted, these would
promote greater competition in these industries, resulting in
lower fares and a greater variety of service.
In the financial field, I have proposed legislation to ensure that
competitive interest rates are paid to small depositors or investors
and more diversified services are provided to all customers.
FORD
-2-
Recently, I signed into law a bill which repeals State Fair Trade
laws so that consumers could benefit from discount pricing on
"brand name" merchandise. The cooperation between the Congress
and the Administration on this bill should serve as an example
for all regulatory reform legislation.
Concomitant with these substantive measures, I have proposed
legislation to sharpen the legal tools and resources of the antitrust
activities of the Justice Department. This will serve to protect
the public from that small minority of the business community
that might attempt to take advantage of de-regulation to engage in
illegal business practices at the expense of the consumer. To
remove redundancy, I have also signed legislation that establishes
a commission to reduce the extraordinary burden of Federal paper-
work. Finally, I have directed the Executive Branch agencies
to conduct inflation impact analysis of major activities and
legislative proposals they support.
I do not propose to rest on these first steps. I will work to see
that my legislation is passed by the Congress and I will continue
to hold a dialogue with the other branches of government on
de-regulation. I also intend to develop reform proposals for
others areas of government overregulation.
In many cases, business will resist these initiatives on grounds
that regulatory reform is good in other industries but that change
in my industry will be disruptive. We must resist this reaction,
and will do so by proposing changes in terms of the positive effect
on the economy as a whole.
While I intend to exert every effort to modify anti-competitive
economic regulation, I also believe that we must also begin to
review the vast apparatus of federal social regulations that have
been set up in the last two decades. Once again, these government
controls were established with the purest of motives.
I intend, therefore, to review Federal safety and health regulations
in order to assess their effectiveness in accomplishing their goals
and the costs they impose on the economy. It is my belief that there
FORD
-3- -
are often more efficient, less expensive ways of accomplishing
these objectives. My Administration will make appropriate
administrative changes and propose new legislation to reduce
the size of the bureaucracy and the emphasis here on enforcement
of mandatory standards. We have to reduce expenditures on
regulation, and the size of the bureaucracy; but even more
important we have to reduce the costs of regulation, both to
businessmen and consumers.
I believe that regulatory reform is essential to the future well
being of our economy. If we are unsuccessful in accomplishing
it, we face the ironic specter of seeing our vital abundant
economy collapsing before a melange of good intentions and
bureaucratic encrustation. We must restore the fruits of
competition to our society.
THE WHITE HOUSE
WASHINGTON
December 13, 1975
MEMORANDUM FOR THE ECONOMIC POLICY BOARD
FROM:
ED SCHMULTS
PAUL MacAVOY
SUBJECT:
The State of the Union Address
This year the State of the Union Address is more important
than in recent years. It represents the most public oppor-
tunity for the President to state in a clear and comprehen-
sive way what he sees as the goals for the United States
through the end of his full four-year term.
While parts of the Address must properly deal with current
issues such as national security and energy policy, we
believe that a major theme must be the sustained threat to
individual opportunity and freedom posed by the growth of
massive and uncontrollable government. Today the threat
to individual liberty is enhanced by a swollen Federal
bureaucracy controlled by organized interest groups whose
concerns are remote from those of the average American.
The President has attacked the problem of massive govern-
ment in a variety of ways. First, by proposing the tax
reduction tied to a spending ceiling, he has tried to
assure that the proportion of GNP spent by the Federal
establishment will decrease rather than increase over the
next period of years.
The President has also launched a major campaign to free
our economy from costly, inefficient, and outmoded govern-
ment regulation. He has submitted to the Congress a com-
prehensive legislative program designed to produce a
competitive and efficient transportation system free from
unnecessary government regulation. He has also proposed
elimination of Federal rate regulation of natural gas in
order to stimulate extensive exploration for new gas supplies.
In the future he will be looking at Federal health and safety
regulation in order to propose elimination of excess govern-
ment standard setting and surveillance.
FORD is 07VU31 LIBRAR
-2-
Many newly elected officeholders such as Governors Brown
of California, Dukakis of Massachusetts, Boren of Oklahoma,
and former Governor Ronald Reagan have achieved significant
popularity by attacking the evils of bloated and inefficient
government. The President's record certainly exceeds their
rhetoric and he ought to take credit for his performance in
his State of the Union Address. He should explain as well
that the President cannot succeed in this fight alone.
Powerful and highly organized pressure groups are already
arrayed against him. These pressure groups control large
elements of the regulatory commissions and agencies.
While others talk during campaign '76, the President must
lead. He must also clearly identify the opposition and
attack it.
Attached are two items setting forth some proposed draft
language for the President's Address. One contains "general
theme" and regulatory reform language; the other only regu-
latory reform paragraphs. We emphasize that the drafts are
"committee products" and so suffer somewhat from a lack of
consistency and redundant themes. We would appreciate your
views on the tone and the direction of the drafts.
THE WHITE HOUSE
WASHINGTON
DATE: 12/15/75
TO:
Ed Schmults
FROM:
LYNN
Comments:
Attached are some comments I gave to
Jim Cannon re: State of the Union
Message.
THE WHITE HOUSE
WASHINGTON
December 15, 1975
MEMORANDUM FOR JIM CANNON
FROM:
LYNN MAY for 2
SUBJECT:
State of the Union Outline
I recommend a slight alteration of the current working
outline for the State of the Union. I suggest that a heading
entitled "The Revision of the Federal Governments Role vis-
a-vis the Economy and Society" be inserted as topic II with
the current topic II-V as subtopics (see outline). This
would concentrate the philosophical context expressed in
topic I as a cohesive program, i.e., removing inefficient,
costly government programs and/or regulations and the
implementation of new, more realistic programs (like EIA).
The rationale is as follows: big government in the form of
imposed price controls has impeded the growth of new energy
supplies. Big government overspending has hurt the capital
markets of job producing industry. Big government has over-
regulated the transportation industry adding extra costs to
consumers. Big government has spent billions on inefficient
social programs with little or nothing to show for it.
By tying all our initiatives in energy, economic and social
fields to reform of the current Federal government structure
(i.e., elimination of price controls, government spending,
inefficient regulation and wasteful social programs) you
provide the domestic side State of the Union with a cogent
and cohesive thrust consistent with the President's philosophy.
New ideas like EIA can be highlighted as new and bold
innovations that move away from government controls.
This theme could be given a Bicentennial twist by comparing
it with the Jeffersonian ideal (see attached letter to Wall
Street Journal).
Attachments
FORD
bcc: Paul MacAvoy
Ed Schmults
GERALD
LIBRARY
I.
THE OVERRIDING CHALLENGE
II.
REVISION OF THE FEDERAL GOVERNMENTS ROLE
VIS-A-VIS THE ECONOMY AND SOCIETY
A.
Achieving
B.
Increasing
Energy
Employment
Independence
and
Productivity
C.
Ensuring
D.
Revitalization
Responsible
of our
Social
System
Policy
of
Government
III. Building a structure of International Peace and Security
THE WALL STREET JOURNAL,
Monday, December 15, 1975
13
A Real Service
Editor, The Wall Street Journal:
The Journal's editorial of "Three Men
in a Tub" (Dec. 2) did a real service in in-
stalling the idea of Jeffersonianism as the
dominant political theme for 1976.
It has been over 40 years since a nation-
ally prominent politician - Franklin D.
Roosevelt-consciously adopted an explic.
itly Jeffersonian posture. In Mr. Roose-
velt's case, of course, the rhetoric was
abandoned early into the New Deal when it
became obvious that Mr. Roosevelt's poli-
cies were heading rapidly in the diametric
opposite direction from Jeffersonianism.
Governor Reagan has now become the
first political leader of the post World War
II era to adopt Jeffersonianism as his cam-
paign theme. In his important address in
Chicago on September 26, Governor Rea-
gan began by quoting Jefferson with ap-
proval. He then, went on to base his pro-
posal for drastically reducing the role, in-
fluence and expense of the federal govern-
ment; on Jefferson's quotation, "What has
destroyed liberty and the rights of man in
every government that has ever existed
under the sun? The generalizing and con-
centrating all cares and powers into one
body!"
The Jeffersonian precepts-decentral-
ized governmental power, limited govern-
ment, strict construction, effective educa-
tion for all, preservation of individual lib-
erty, a widespread ownership of productive
private property, honor and excellence in
public service - are precepts America
seems to yearn for, after four decades of
relentless centralization and socialization.
I, for one, wish Governor Reagan well in
his attempts to restore them.
JOHN MCCLAUGHRY
Concord, Vt.
FORD
GERALD
LIBRAR
THE WHITE HOUSE
WASHINGTON
December 15, 1975
MEMORANDUM FOR:
DICK CHENEY
ROBERT T. HARTMANN
BILL SEIDMAN
FRANK ZARB
JAMES LYNN
PAUL O'NEILL
BRENT SCOWCROFT
ALAN GREENSPAN
PAUL MacAVOY
JACK MARSH
MAX FRIEDERSDORF
PHIL BUCHEN
ED SCHMULTS
ART QUERN
FROM:
JIM CANNON
SUBJECT:
State of the Union Discussions
The purpose of these meetings is to provide for brief
discussion of the elements of the State of the Union
and to enable submission in writing of comments and
suggestions on these elements. This is aimed at:
1. Ensuring a prompt compilation of possible themes
and principles.
2. Identifying various specific programmatic decisions
which have been, are being, or need to be made.
-Where decisions have been made, the purpose is
to determine how best to treat them in the State
of the Union.
Where decisions are in the process of being
presented to the President, the purpose is to
accelerate the process.
Where decisions that need to be made are identified,
the purpose is to determine the most expeditious
means of bringing the issue to a decision.
2
3. The documents produced on each "challenge" will
be compiled and given to the President.
- Challenges I and V by the 19th.
Challenges IV and VI by the 20th.
Challenges II and III by the 21st.
<
Revised 12/15/75
3
Schedule for Meetings
MONDAY, December 15
11 a.m.
Brief group on process
Sit Rm.
--lay out themes and Six Basic Challenges
TUESDAY, December 16
11 a.m.
I. : Continuing America's Growth While Ensuring
Cannon's
Fiscal Responsibility
Office
(Comments and papers due 12/18/75)
5 p.m.
V. Revitalizing Our Federal System
Cannon's
(Comments and papers due 12/18/75)
Office
WEDNESDAY, December 17
11 a.m.
IV. Ensuring Responsible Social Policies
Sit Rm.
(Comments and papers due 12/19/75)
5 p.m.
VI. International Peace and Security (Scowcroft)
Sit Rm.
(Comments and papers due 12/19/75)
THURSDAY, December 18
11 a.m.
III. Increasing Employment and Productivity
Sit Rm.
(Comments and papers due 12/20/75)
5 p.m.
II. Achieving Energy Independence
Sit Rm.
(Comments and papers due 12/20/75)
12/15/75
4
Deadline for Decision Papers to the President
FRIDAY, December 19
2 p.m.
Completion and Submission of Paper to
President on Challenges I and V.
SATURDAY, December 20
2 p.m.
Completion and Submission of Paper to
President on Challenges IV and VI.
SUNDAY, December 21
2 p.m.
Completion and Submission of Paper to
President on Challenges III and II.
WEDNESDAY, December 31
6 p.m.
All issues resolved and all papers to
Hartmann.