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The original documents are located in Box 30, folder "State of the Union Address, 1976 -
Drafts (2)" of the John Marsh 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States of America his copyrights in all of his unpublished writings in National Archives collections.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.
(HARTMANN)
FIRST DRAFT
#
1/12/76
STATE OF THE UNION ADDRESS
OF
PRESIDENT GERALD FORD
TO A JOINT SESSION OF THE CONGRESS
Mr. Speaker, Mr. Vice President, Members of the 94th
Congress, and distinguished guests:
I have come to report, as the Constitution requires,
on the State of the Union. The plain truth is that 1976 is
going to be a very tough year.
But 1776 was also a very tough year. There have been
even tougher years during our 200 years of national independ-
Once. As Jefferson wrote Lafayette, we could not "expect to
be translated from despotism to liberty in a feather bed".
A great history teacher, Professor Preston Slosson, was
alrèady a legend at Michigan when I was an undergraduate.
Now emeritus, Prof Slosson recently looked back and concluded:
"Our country, our civilization, and our
world are all tougher than you think.
There are many perils facing us in the
future, but we have survived as many in
the past. This is a better country now
than the one I was born in 83 years ago --
and even then the United States was
luckier than most nations."
BERALD R. FORD LIBRARY
Digitized from Box 30 of the John Marsh Files at the Gerald R. Ford Presidential Library
-2-
My former teacher, who calls himself, "a little left
of center" in politics, said he could wish for many reforms
but quickly added: "I am in a hurry, but God is more patient."
Prof. Slosson speaks for the new realism that has infected
both liberals and conservatives in American politics.
Let us not begin our Bicentennial year by retreating
into the past, but by going forward into the future with a
combination of patience, realistic hope, courage and common
sense.
These are not times that try men's very souls, as Tom
Paine's were. But these are times that try men's common
sense -- and 'women's, too.
Tonight, I will spare you and the American people either
a
Bicentennial Address or an election speech. Nor will I give
the customary State of the Union rhetoric which proclaims the
great national goals everybody knows and the bold new Federal
programs that are supposed to get us there.
FORD & LIBRARY 078839
(MORE)
-3-
I want to talk a little common sense about this country
and our most serious problems, and what we can realistically
do about them in the coming year or the next five years -- the
time span we actually can plan and legislate in.
We must not only sort out national problems on the common
sense basis of doing first things first, but also decide what
instrumentality is most effective. Is it the Federal govern-
ment, State or local authorities, private organizations or
associations, or some combination of these?
The trouble with the Federal government is that it is
trying to do more than its resources permit, to do many things
that it cannot do very well, to do some things that it should
never do at all, and to do all these things at the same time.
That just does not make common sense.
GERALD FORD
The people I have listened to around the country since
I became President, have convinced me that Americans are losing
confidence in the Federal government, because it simply isn't
working efficiently or fairly. It is too big and too bumbling.
-4-
It takes too much of the individual's money but doesn't give
people their money's worth.
In short, as a political Union, the State of our Union
is unclear. It is indecisive and overcomplicated. The Union
promises too much and accomplishes too little. It fails to
solve problems and becomes part of the problem. It reorganizes
and reforms itself and gets worse instead of better! It still
is of the people and by the people but too many people don't
think it is for the people.
When President U. S. Grant gave his State of the Union
address 100 years ago, he referred to the great expansion of
population and the development of transcontinental railroads,
the steamship, the telegraph, rapid printing presses, and other
innovations. Today, we are less interested in bigness and new
gadgets than in the quality of individual life and the inner
growth of the human being.
GERALL FORD LIBRAPA
We seek lives that make sense -- and government that
makes sense. We are in a new era in which government must be
-5-
more responsive to --- and honest with -- the individual.
In this century, America has ridden the pendulum from
left to right, and from right to left. But the solutions to
our problems were not found at the extremes. The American
people know that. The worn-out labels, liberal and conservative,
no longer make sense.
Many in my own generation did not face reality. Many
became engulfed in well-meaning causes, motivated by good in-
tentions and idealistic fantasies. The result was national
policy based upon romantic illusions about America ... about
America's role in the world, about poverty, about education,
about energy, about the environment, and about the unlimited
capacities of the government.
We tried to do everything for everyone. As a result,
very few still believe in the grandiose pretensions of big
government.
BERALD FORD LIBRARY
I see real hope in the millions of Americans who are
showing new self-respect and new independence by saying,
-6-
"don't con me." They are demanding to know America's real
possibilities --- and our real limitations.
They suspect that neither the ultra-liberal approach
of the past nor the ultra-conservative approach of the past
is the answer to today's problems. The common sense answer
of 1976 is a new realism.
In January, 1975, I spoke of the need for a new direction
for America. We must now complete our search for the goals
that give us our special character as a nation. But we should
nut be surprised if the goals we set forth are in some respects
the same ones we pursued through our 200 years of existence.
The questions are the old: What kind of nation do we
want to be? What kind of people do we want to be?
When we challenge ourselves to answer these broad
questions, we realize that we will not reach the heart of
FORD is 078870 LIBRARY
America's aspirations by limiting ourselves to dollars and
cents. The economic situation is today of primary importance.
Jobs, unemployment, high prices, high taxes, and government
-7-
spending -- all deserve to be at the forefront of our attention.
And they are. More jobs and job security, reduced inflation,
lower taxes, reduced government spending --- these are significant
goals.
But we also know that there are other goals dearer to
our national heart. I mean such things as
--- continuing and strengthening our national in-
dependence;
strengthening our commitment to the constitu-
tional rights of freedom, to equality of rights and
opportunity, and to justice for all -- which means,
among other things, protection of potential victims
from the cruel injustice of violent crime;
--- intensifying our efforts to strengthen our de-
fense, avoid war, reduce international tension, and
BERALD FORD LIBRARY
improve the chances for peace and order in the world;
-- provide the opportunity for economic improve-
ments for workers, businessmen, and investors, not only
-8-
to create more jobs and income and goods for Americans,
but because so much of the rest of the world's economy
depends on our production of food and goods;
-- respond to those humane responsibilities a decent
community imposes on itself to care for those who can-
not provide for themselves;
-- and, finally, strive to be a nation of proud and
purposeful citizens who have reason to bei confident of
themselves and their leaders because the purposes of
their nation are understandable and noble.
Those are the goals to which I have pledged myself as
President. We must move as fast as we realistically can toward
each of them. Today our first objective is full economic recovery
with stable prices and good jobs for all who want to work.
Twelve months ago, the onrushing recession and jobless-
ness, compounded by skyrocketing energy costs dominated our
GERALD R. FORD
concern for the State of the Union. I stood here and said the
State of the Union was not good enough.
-9-
Last January, most things were rapidly getting worse.
This January most things are slowly getting better. The re-
cessionary trend was turned around, starting about April. The
best news of the past year is that we have cut the inflation rate
almost in half. The worst is that total unemployment remains
unacceptably high.
My objective is productive, permanent jobs in the private
sector. Although high unemployment to some extent has been
alleviated by temporary public service jobs and extended unemploy-
ment compensation benefits, we all realize that an expanding
economy that creates new private jobs is the only satisfactory
solution.
The 85,500,000 Americans at work last month means there
are one million more jobs today than a year ago, and nearly
two million (1.7 million) more than at the peak of unemployment
in March. We have recovered two-thirds of the jobs lost in the
recession. People are now being hired faster than they are
:
FORD
GERALD
being laid off. But the process remains too slow. I intend
-10-
to speed it up.
Five out of every six jobs in this country are in private
business and industry. In times of recession, these businesses
do not risk their uncertain future earnings by long-term invest-
ments for expansion and modernization. But expansion and moderni-
zation are precisely what we need to create more jobs, greater
productivity and lower prices.
It 1s in everybody' interest to encourage business
expansion and modernization through new plant construction.
The need to get these projects underway in areas of high unemploy-
ment is urgent.
I will ask the Congress for changes in the tax laws to
allow accelerated depreciation write-offs for such construction
and equipment in metropolitan areas and communities where un-
employment now stands above 7 percent. If promptly enacted, it
is estimated this tax change would create
new jobs
over the next five years.
BERALD R FORD LIBRARY
(MORE)
-11-
To ensure continued expansion, jobs, and productivity
throughout the country we must set aside more capital for sustained
growth in the future. The amount of capital required is enormous.
It can be obtained only from the savings and investments of
millions of Americans. As an additional but longer term incentive
for job creation, I will propose another tax reform to broaden
stock ownership by employees and other individuals with adjusted
gross incomes of $35,000 or less. Under my plan, you could invest
up to. $1, 000 year and your employer could make matching con-
tributions of half that much in common stock. Both would be
deductible from taxable income if they remain invested at least
seven years. This could produce as much as $
in
new capital formation over the next five years -- the estimated
equivalent of
new jobs.
I will ask the Congress for changes in the estate tax
laws to specifically encourage expansion and increased capital
investment in family businesses and family farms. While the
GERALD FORD
primary purpose of this reform is to ensure the survival of
-12-
smaller farms and businesses for future generations, it will
have a healthy stimulative effect to their current operations
and the economy as a whole.
The cost of all three of these proposed tax reforms will
be a short term loss of $
in estimated revenues, about
the same as a proposed Federal make-work project to temporarily
employ
persons.
Although many other programs have had to be cut in the
budget I. will submit to you Wednesday for the new fiscal year,
there will be proposals for continued funding to job training
programs, small business and minority enterprise loans and other
proven Federal programs that increase the job opportunities in
the private sector.
We may not solve the unemployment problem in 1976. But
I am confident that we will do substantially better than in
1975 -- if the job-creating proposals I will submit are speedily
enacted. I hope that we will fully recover the losses from
recession layoffs and climb upward towards normal employment
FORD & LIBRARY 07V139
levels in the coming year.
13
A year ago I devoted a large part of my State of the
Union Message to a comprehensive 10-year crash program to make
the United States independent of uncertain foreign oil at
arbitrary high prices. Ample energy is essential to our economic
recovery and growth. Our whole standard of living depends on
energy instead of human muscle and sweat.
In this area we have made a little progress, but not
As the Congress and the American people debated the
energy issue all through 1975, our domestic production of oil
and natural gas continued to decline. We are now producing
one million barrels per day less oil than we were at the time
of the Arab oil embargo just two years ago. In just the last
12 months we paid foreign oil producers over $25 billion
for GERAL FORD LIBRARY
their oil -- that's over $100 for every American.
Natural gas production declined by more than two trillion
cubic feet in the last two years and the trend will continue.
At the same time, coal production has increased only slightly
and nuclear power plants continue to be delayed or cancelled.
We cannot let this continue.
To speed Congressional action last year I took every
administrative step I could to encourage conservation and
encourage production. Finally, last month I signed into law
a national energy bill I hope it will end the long debate and
permit a fresh start on achieving the rest of my energy program.
While the pricing provisions of the new energy bill are
not all I desired, it enacts much of my energy program, including
a national strategic petroleum reserve; standby authorities
for quick action in the event of another embargo; conservation
measures to improve automobile and appliance efficiency and
implement conservation programs in states; extends our ability
to convert powerplants and industrial facilities to coal; and
will phase out oil price controls over 40 months.
On energy conservation, the nation made significant
GERALA FORD LIBRARY
progress in the past year. Energy consumption is below 1973
levels and higher prices have stimulated production of more
efficient cars and led to conservation measures in industry
and homes. In the current model year alone, automobiles are
percent more efficient than they were in 1973. Maybe
that's why the American people, using common sense, are buying
more.
But, voluntary conservation and one energy bill are not
enough. We need much more. I urge the Congress to act imme-
diately on my. remaining proposals, including natural gas de-
regulation, Naval Petroleum Reserves production, building
efficiency standards, nuclear licensing and fuel assurance;
the $100 billion Energy: Independence Authority, and responsible FORD
environmental changes.
GERALD
Address
In addition, I will soon send to the Congress important
legislative recommendations for expediting delivery of Alaskan
natural gas to the lower 48 states and to authorize a compre-
hensive energy development impact assistance program for areas
significantly affected by new energy resource development. I
also have directed the Energy Resources Council to assure that
needed imported liquefied natural gas is available, but subject
each project to stringent national security review to assure no
undue dependence, and to set a new 10 year goal to reduce energy
use in Federal facilities by
, in addition to the
reduction already achieved. I have further ordered a major ex-
pansion of our efforts on nuclear waste management, reactor safety,
and fuel reprocessing.
I envision an energy future for the United States free
of the disruptive effects of embargoes and arbitrary price
increases by foreign governments I envision a major expansion
in the production and use of coal, a strong commitment to nuclear
power, significant breakthroughs in harnessing the unlimited
potential of solar energy, and continued conservation in our
use of energy.
Throughout the long debate on energy policy I have taken
every opportunity to visit first-hand major new energy projects.
I have seen America harnessing new energy in the frozen snows
FORD is 07/83 LIBRA
of Alaska, in California and the great northwest, and in the
Gulf of Mexico. I am convinced we have the capacity for energy
independence and with common sense we can still achieve it.
FORD & LIBRARY 070839
18
There is some good economic news. Although prices
remain too high, the rate of inflation has been cut almost in
half. We now have figures showing that the recent Christmas
selling season was 15% higher in volume than the previous
Christmas. The sales of automobiles and other items have gone
up.
America must hold a steady. course in 1976 We must not
reform EOT governmen spend policies that will aet off another
inflationary cycle followed by recession. Nor should we adopt
a no-growth policy
These are the reasons why I asked the Congress to balance
the necessary $28 billion cut in income tax with a $28 billion
cut in spending.
FORD I LIBRARY
In the last six months, the Gross National Product was
again rising at an annual rate of about 8 percent. 1975 began
with a massive inventory of unsold goods. The year ended with
a retail boom and the largest balance of trade surplus in history.
19
Important as recovery from the economic recession is
in 1975 and 1976, there are other concerns of a more permanent
character which urgently call for our attention.
Without minimizing the Federal government's obligation
to provide leadership and common sense policies for the protection
of people's jobs, people's savings, people's earnings and what
the dollar will buy, perhaps the most fundamental duty of all
government is the protection of the lives and personal safety
of its citizens in their homes or wherever they lawfully want
to go.
The constitution: wisely divides: this duty; protecting
the country as à whole is clearly a Federal job, though States
and private institutions have a vital supporting role in
national security. I will get to this part later.
Protecting the life, limb and property of the citizen
is properly and primarily the job of local and State law
enforcement authorities; eight generations of Americans have
FORD s GERALD LIBRARY
of
20
found the very thought of a Federal police force repugnant and
intolerable, and so do I. Yet there are limited and legal ways
in which we can help to ensure domestic tranquility as the Con-
situation charges us.
A
My common sense conclusions on how to control violent
crime were given to the Congress last
and to the
California legislature in Sacramento last
.
The way
to keep a criminal from committing more crimes is to lock him
up at the very least, he won t hurt anyone while he's in
jail,
The way to cut down violent crimes committed. with guns
is not to take guns away from everybody but to toughen the
penalties for crimes in which guns are used, to make it harder
to obtain cheap guns for criminal purposes, and to concentrate
gun control enforcement in high crime areas.
The biggest single cause of the increase of crime today is
the sale of hard drugs. This is not only a major domestic
FORD j LIBRARY GERALD
problem but an international issue. Here the - Federal authority is
plain.
I have directed all agencies of the Federal Government
to step up the war against the big drug traffickers and dealers
who sell hard drugs and attract young people to them.
As President I have talked personally with the Presidents
of Mexico, Columbia and Turkey to urge greater efforts by their
governments to control the production of hard drugs, and we shall
concinue to work with these and other nations to curb production
of and trafficking in hard drugs.
Another:major threat to every American's person and and
property is the criminal carrying a handgun I have proposed
legislation to remove the "Saturday night special" used by
criminals from the market place, and I ask Congress for 500
additional Federal agents in the 11 largest metropolitan high
crime areas to stop criminals from selling and using handguns.
If you want to know what I mean by common sense government
DERALD FORD LIBRARY
22
and putting first things first, I discovered that the Federal
Bureau of Alcohol, Tobacco and Firearms has
fulltime
trained agents out hunting for makers of moonshine whiskey. I
told them to switch 60 of them to tracking down illegal gun dealers.
To make justice more swift and certain for those arrested
for crimes, I am proposing a 9 percent increase this year in the
number of U. S. Atrorneys prosecuting Federal crimes and a 5
percent reinforcement in the number of U. S. marshals assisting
the eleral courts.
To be honest about it, some judges are too soft.
I
recommended months ago that Congress enact mandatory, certain sen
tences for persons committing Federal crimes of violence or
selling hard drugs. I have also asked for additional Federal
judges, and I now call upon Congress to enact this legislation
GERAL FORD Classer
promptly.
To tell the truth, some judges won't send convicted criminals
to jail because of poor prison conditiions. I put money in my
new budget build four new Federal facilities in Detroit, Phoenix,
23
Alabama and New York, open and operate three that are almost
ready in Texas, Tennessee and North Carolina and rehabilitate
a number of other Federal prisons.
As State and local governments still have primary
responsibility to prevent crimes of violence, we must continue
to help State and local governments as much as we can. I
shall propose in the new budget that Congress authorize $6.7..
billion over the next five years in assisting State and local
governments to protect the safety of American citizens and their
property
FORDO s LIBRARY 038ALD
24
Next to protection of life itself, every American is
concerned about the protection of a healthy environment and
the protection of his and her own health. The health of our
loved ones is as important as our own. And the health of our
neighbors is important to our own.
While individual health is first of all an individual
responsibility, and community health and sanitation primarily
that of the State and local governments and while the medical
profession and private health insurance organizations play a
major role in this area, no real consensus has developed as to
the proper Federal role.
Clearly, a healthy population is a major national asset.
Clearly, a healthy environment involves Federal standards where
air and water pollution or occupational hazards affect numerous
States. Clearly, there are common sense benefits from national
medical and health research facilities. I have no intention
:
FOR
of crippling these valuable contributions but neither will I
GERALD
25
allow them to cripple our economic recovery or expand into a
nationalized medical and health bureaucracy with literally
life-and-death powers over our people.
The new realism that I recommend we apply to all our
problems compels me to these tentative conclusions.
One, full national health insurance for all 215 million
Americans is something we cannot afford, at this time of eco-
nomic stress, because it is simply too expensive a drain on
existing resources
Two, private health bills are also too expensive for a
growing number of families, and the burden of a catastrophic
medical calamity is more than all but the most prosperous of
our people can survive. Partly this is due to miraculous but
very costly techniques for treating previously fatal illnesses.
Although the protection of insurance is applicable to these
risks, as in the Medicare and Medicaid programs, the Federal
government is committed to help certain of our citizens in
BERALD FORD
obtaining such coverage. These include all senior citizens
26
and those to whom the Federal government owes a special obli-
gation, such as veterans, as well as the disabled and the truly
needy.
Following the principle of putting first things first, I
have decided that we must give a better break to those Americans
in real danger of being wiped out by soaring health costs -- older
people and the poor.
I propose that no American after his or her 60th birthday
ever have to pay more than $500 for a Medicare-covered stay
in a hospital. Nor will she or he ever pay more than $250 per
year for all doctor bills, however much they add up to in a
catastrophic illness or complex treatment.
I propose to consolidate 16 existing Federal health
programs, including Medicaid, into one $10 billion bloc grant
to better provide medical care for the poor. This will be
FORD i LIBRARY 07V839
divided among the States by a new formula based on the number
of low-income persons they have and not, as now, by how much
they put up in matching funds, so that the wealthier States get
29
most of the Federal money.
For all of us, rising costs of medical care have driven
up the cost of living over the past 10 years. Hospital costs
have quadrupled and physicians' fees have nearly doubled. The
Medicare trust funds are in danger of running out of money at
the present rate, and I will submit legislation limiting the
amounts Medicare will pay to cover such inflationary increases,
as well as cost-sharing adjustments designed to discourage un-
necessary use of hospital and medical services for short term
illnesses. This will save the taxpayers nearly $1 billion next
year and will strengthen the trust funds while providing older
patients with new catastrophic protection.
A major Federal responsibility in the health field is
the Veterans Administration system which serves millions of
veterans. I will ask for funds to complete the VA "Quality of
Care" survey recommendations begun last year and, at the same
BERALD FORD
time, legislation requiring private health insurers to reimburse
the VA for care of non-service-connected disabilities. This
common sense change would save taxpayers over $130 a year
at no cost to the covered veterans, who are also taxpayers.
I
will also recommend a
% increase In Federal health
research funds over last year, to a total of $
billion in
1977
and $
in 1978. The kind of research that may find a
cure for cancer or otherwise save millions of lives must not be
shortchanged even when budgets are tight.
Probably the most controversial items on our national
agenda is welfare -- how we should deal compassionately and
constructively with those of our neighbors who simply cannot
take care of themselves. This question is compounded when times
are difficult not only for the poor and helpless but also for
those whose labors are taxed to help them.
What was once a religious, community and at most a State
LIBRARY GERNED ? FORD
responsibility has in recent years been deeply invaded by a
host of Federal programs that reflect our goodness and generosity
as a people. But there is no longer much doubt that they are
badly designed, badly abused, and waste enormous resources
without reaching many of the deserving and truly needy.
The whole Federal welfare involvement needs most a massive
injection of common sense. It cannot be reformed over night
because it is apparent that no real what
should be done.
My policy is directed towards giving more help to those
who really need it and nothing to those who don't really need
I renew my recommendations of last year for long overdue
reform of the Food Stamp program which is becoming a national
scandal. I: will ask similar legislation to reduce fraud and
inequities in the other income assistance programs without now
trying to restructure all of them at once. Briefly, I am asking
Congress for authority to modify eligibility requirements and
other administrative rules over the next five years, subject
to Congressional disapproval as in the case of reorganization
plans.
LIDGERY GERALD ? FORD
(MORE)
Though both programs are intended to assure that all
Americans may live in dignity and have at least the necessities
of life; there is a fundamental difference between welfare and
Social Security.
Our Federal Social Security system which provides retire-
ment, disability and survivor benefits to people who have worked
hard and contributed their own earnings to them is the largest
social insurance program in the world. It is a vital part of
OUT rican way of life and its value is no konger debatable.
What is debatable now concerns both the retired recipient
who depends upon Social Security for living expenses and the
---
younger worker who watches his deductions rise and wonders if
he will live long enough to get a fraction of them back. The
question is how we can ensure the long-range integrity of the
Social Security system in a way that is both fair and financially
sound.
I cannot overstate the importance of taking corrective
action soon, before a crisis is upon us. If present trends
FORD is LIBRARY 038870
continue and there are no changes in the law, the trust fund
will have used up its resources by the early 1980s.
We are not going to lét that happen, of tourse But to
prevent it, nothing but tough choices present themselves.
I have made some of them, but Congressional concurrence
is required. The problem is so complex it must await a later
message. However, I can say that no cap or ceiling on Social
Security cost-of-living increases is contemplated this year.
In future years; we will have to uncouple the duplication in
benefit formulas that results 10 benefits rising faster than the
inflation rate. I will also ask a modest increase in the social
security tax rate of 3/10th of 1 percent each on employer and
employee.
This extra contribution to the trust fund will maintain
its integrity for the short-term and cannot exceed $47 a year
for any employee. If the Congress approves my additional income
tax reduction for July 1 and thereafter, coupled with equivalent
cuts in overall spending, it will more than make up any
GERALD LIBRARY
32
takehome pay for most Americans.
The best thing the Federal government can do for all Social
Security participants, 9 out of 10 jobholders in the country,
as well as others on other public or private pensions, is to get
a firm grip on inflationary forces that are shrinking all fixed
incomes day by day.
I must make the same point to representatives of manage-
ment and labor as they move toward contract negotiations this
year. If such settlements are inflationary they will not in
fact protect the future security of working men and women and
will endanger- the permanence: of our present recovery
The desire of all Americans to "catch up" with inflationary
setbacks is understandable, but it must be slow and steady and
matched by real production increases. I commend both organized
workers and employers for the restraint and responsibility they
have shown during the difficult months of 1975 and urge a similar
cooperative spirit in the year ahead.
FORD i LIBRAN GERALD
(MORE)
Winning the long-term battle against destructive inflation
and climbing costs is as important to the upcoming generation
of Americans as it is to those nearing retirement age;
The best thing the Federal government can do for young
Americans is also to get inflation under control, to leave them
a country that is not going broke.
Jobs for newcomers in the working force are high on my
list of priorities. It is hard enough for young people to get
a
good job in good times and doubly difficult with so many ex
spersenced and skilled workers to compète with. My programs will
emphasize job training and placement assistance for young
Americans, continue summer job programs, stress direct aid to
needy students instead of to institutions of higher learning,
providing one million basic educational opportunity grants
to one million students.
Education, like law enforcement, is primarily and properly
a State and local responsibility. Quality education is best pro-
vided close to home, and a national school system would be just
FORD is LIBRARY
as noxious as a national police force.
I propose that we help State and community efforts to
provide quality education for all American children a.t the
elementary and secondary school level by consolidating 24 Federal
education grant programs into a single bloc grant that exceeds
1976 outlays by $100 million. This will permit the flexibility
needed by local school systems to meet their most urgent needs,
and reduce the red tape and strings that spell Federal inter-
forence and control to concerned parents and thoughtful teachers.
I have also approved slight increases or continued levels
of Federal funding for the new National Institute of Education,
for educational research projects, and for the National Endow-
ments for the Arts and the Humanities. It is my conviction
that we should proceed very cautiously, even when budget con-
siderations ease, before sticking the Federal camel's nose any
further into the tent of public and private education and cul-
tural subsidy.
(MORE)
FORD d LIBRARY 938839
35
All of the dictatorial governments I have ever seen or
heard of start first by taking over the schools and constrict-
ing the creative arts. Freedom makes its home in the human
mind, and I would like to leave it there.
FORD & 038830 LIBRARY
1
A major strength of America's economic system has been
its free and unrestricted marketplace. Federal regulatory
activities were designed to protect that strength. But many
regulatory policies are now outdated and do more harm than good.
The transportation industry is one area which suffers
from outmoded regulation. In the airline, railroad, and truck-
ing industries current regulatory practices cause higher prices,
declining service, reduced competition, and, in some cases,
complete economic collapse of industries I have proposed
legislation to reform the regulation of the air, truck, and
rail industries.
I have also sought major reform in other regulatory
areas. In December, I signed a bill to repeal Federal laws which
permit State fair trade laws. This will increase competition
and lower prices.
Efforts to modernize our regulatory systems will be
continued with attention next focusing on financial institutions
and the cable television industry.
FORD : LIBRARY
(MORE)
We must develop a realistic approach to regulation,
balancing economic interests with legitimate concerns for con-
sumers, workers, and public protection.
Small businesses and farms traditionally have been
strengths of the American economy.
Currently 9.4 million small businesses provide 55 per-
cent of the private sector non-agricultural employment, 48
percent of the Gross Business Product, and 43 percent of the
Gross National Product. Yet small businessmen and farmers are
bèing strangled by over-regulation and bureaucratfc red tape.
America's bountiful resources are greater today than
at any time in our history. America's capacities, energies
and talents are unlimited. Americans yearn for a renewed sense
of progress and community.
Yet Americans have become cynical about their govern-
ment and their public officials. Confidence in government,
especially big government, is the chief casualty of the many
FORD is LIBRARY 938860
promises made and broken.
In spite of the views of some, public discontent with
big government does not legitimize the negative counsel that
we must stop trying to improve the quality of life for all
Americans.
Most Americans live lives of quiet honor. The bureau-
cratization of America has offended their honor and stifled
their progress.
The Debureaucratization of America is what community
renewal is all about.
A common sense policy of community renewal sorts out
the different funçtions of Federal, State and local governments
and those of our citizen institutions.
It begins with a renewed dedication to revenue sharing.
It recognizes that the focus of government policy thus far in
the late sixties and early seventies has been an inward one.
There has been a proper but by no means comprehensive concentra-
tion on putting government's own house in order.
FORD & GERALT LIBRAR
(MORE)
39
Moving toward program consolidation and bloc-grant
mechanisms, we have tried to decentralize the Federal Govern-
ment and redistribute the powers and responsibilities accumulated
in Washington back to the States and localities
To that end, the Federal Government has provided more
than $20 billion to the 50 States and some 38,000 local com-
munities since the General Revenue Sharing program was enacted
1972 have proposed extending this program through EX 1982
with an annual expenditure rate of more than $6.5 billion
am also asking the Congress to strengthen this program by including
citizen participation in decisions on use of these funds.
I am also proposing further consolidation of a signifi-
cant number (
) of the more than 1,000 categorical
grant programs into bloc grants in the areas of health, education,
social services and child nutrition. In the Community Develop-
ment program, I am asking for an increase of $466 million in
the bloc grant to a total of $3.2 billion in support of local
community development and planning activities.
DERAZO FORD LIBRARY
(MORE)
40
(Insert other examples of getting government's house
in order: reduction in White House and Federal Government per-
sonnel; evaluation process of OMB; consumer representation plans
and hearings; etc.)
Americans are increasingly alienated from all big insti-
tutions. They are losing confidence not just in government but
in business, labor, school, community and even church.
America's policies must help people move from alienation
to involvement.
Both our political institutions and our free economy
are threatened by forces that some believe are uncontrollable.
Bureaucraty is alien to the tradition that made America
great. Our drift in the last 40 years to a view that government
is the primary problem-solver is responsible for many of our
contemporary problems. People are facing the reality that they
is
FORD
are not the beneficiaries but the victims of bureaucracy.
GERALD
A public policy which focuses on government alone as
problem-solver, fails to mobilize the abilities of people and
institutions outside government. Revenue sharing will not
transfer power from the Federal Government if the transfer ex-
tends only from big governmental bureaucracies to smaller ones.
Public policy and problem solving must transcend govern-
ment. Government must reach out to the people for the answers,
enlisting -- rather than restricting -- the private sector in
national affairs.
As once I proposed a marriage between Congress and the
Executive and that there be compromise, conciliation, communica.
tion and cooperation between the branches of government, so do
I now propose the same between the basic institutions of American
society, governmental and non-governmental.
For I am talking about a partnership not only between
Federal, State and local governments but something even
greater -- a partnership between government institutions and
citizen institutions. Through this kind of a process, the
government's proper function of governing can be emphasized
while the creative resources of our society are unleashed.
BERRED FORD LIBRARY
I began a systematic effort to meet with national,
State and local leaders from the governmental and the private
sector almost from the first day I assumed office. I learned
much by meeting in the White House and in Town Hall meetings
around the country with thousands of citizen leaders from labor,
business, farm, education, the churches and the professions,
from neighborhood associations, ethnic and minority groups,
from associations of women, youth and the elderly, from civic
groups. and service clubs and voluntary associations.
This unprecedented process sought to open up the Federal
Government to citizens from all walks of life to make the
Federal Government more responsive to the needs of the people
and to make it more accessible.
I believe the office of the Presidency should be used
to enhance the ability of our private and governmental insti-
tutions to address, understand and resolve our common problems.
If we choose not to listen to the people and only to the
politicians and bureaucrats, the government which now takes in
GERALD LIBRARY
43
taxes from the Amercian people one-third of what they earn
every year, will by the end of this century be taking fully
half. When that happens, government's ability to control its
free citizens already powerful will subtly shift to
the government's ability to command its subjects.
We will then have been translated back from liberty
to despotism in a feather bed --- and who will be our Jefferson
awr Lafayette, or our Lincoln?
It was.Lincoln who; in the darkest days of our Union
called upon his countrymen to dedicate themselves to a new
birth of freedom. He treasured, as we do, the shining words
and deeds of 1776, which his own grandparents had witnessed.
But he kept his eye on the future, with its brighter promise
of a more perfect Union, with liberty and justice the birthright
of all Americans.
FORD & LIBRARI GERALD
Now let me turn to the international field, the State
of the world in which we live. Over all, the United States
is in a far stronger position today than it was one year ago.
Peace has made visible progress.
The past year saw the end of an era in Indochina.
(Continued)
FORD s LIBRARY GERALD
There have been serious repercussions, particularly in Asia. There
were grave and genuine fears that this tragedy indicated
or
would precipitate -- America 's abandonment of its responsibilities
for global peace. But we did not allow these fears to be realized.
Within months, American leadership continued to show its
resilience and its strength.
An attempt by a small country in May to kidnap an
American merchant ship, the Mayaguez, on the:high seas
in violation of international law was thwarted by firm action,
demonstrating that this country will never submit to blackmail.
-- A summit meeting of all the NATO nations at the end of
May reaffirmed Atlantic solidarity, and indeed displayed
greater cohesion on political, security and economic issues
than at any time in recent decades.
FORD is LIBRARY CERALD
-- In the Middle East, in August and September, the
mediating effort of the United States helped produce an
interim agreement between Egypt and Israel. This was
the first agreement between Israel and an Arab state that
was not just the aftermath of hostilities. It was an unpre-
cedented step towards a settlement of basic issues; it was
the essential basis for further steps which will be taken
resolutely by the United States and the parties towards a
just and comprehensive peace in accordance with Resolutions
242 and 338.
-- In Cyprus, once the U.S. embargo was partially lifted,
Greece and Turkey and the parties on Cyprus began to move
closer to a negotiated solution. With our encouragement, the
intercommunal talks have begun again, with an opening to
BERALD B. FORD LIBRARY
discuss all the issues comprehensively and cooperatively.
At the United Nations General Assembly Special Session in
September, and again at the consumer-producer conference
in Paris last month, the United States assumed a role of
initiative and leadership on the fundamental issue of the relations
between the industrialized world and the developing nations.
This will be one of the central concerns of our foreign policy
over the next generation. And our policy of pr actical proposals
and two-way cooperation, coupled with our undoubted economic
leadership, can help determine the kind of world environment
our children will inhabit.
-- In November, an Economic Summit of the leaders of this
FORD s LIBRARY 978870
country, Britain, France, West Germany, Italy, and Japan
displayed and advanced the coordination with our closest partners
the great industrial democracies, on basic economic questions.
These issues -- energy policy, monetary policy, coordination
of our recovery measures -- affect the lives of every
American. And so our major alliances, which were forged
a generation mainly for security concerns have proved
to be a fundamental partnership in a new era on a significant
positive dimension of other concerns as well.
-- On this basis, we have continued to pursue what every
American seeks a stable world peace, We live in an age of
continuing ideological conflict. But we also live in an age of
thermonuclear weapons -- and also of new genuine opportunities
for resolution of specific problems. It is the inescapable
duty of any Administration to seize these opportunities for
peace.
Therefore, we continued this year to pursue an equitable
strategic arms limitation agreement with the Soviet Union.
BERALD R FORD
47
Ninety percent of this work is completed, and I intend to
continue this effort.
And I attended in July a 35-nation summit of the Confer-
on Security and Cooperation in Europe at Helsinki
to
confirm the stability and security in Europe that have been
American objectives for thirty years. I also ma de clear that
deeds, not words, will maintain this security. The document
we signed made human rights and the freer movernent of
people and ideas a basic component of detente in Europe
And on that same trip I visited Yugoslavia, Romania and
Poland, to demonstrate that the benefits of relaxation of tensions
now apply to Eastern, as well as Western Europe.
In October, we and the Soviet Union concluded a five-year
agreement on grain purchases, by which the Soviet Union has
committed to purchase $1 billion of grain annually. This
FORD is LIBR 97V839
agreement stimulates the American economy, provides jobs
for American transportation workers and seamen, and
minimizes the inflationary impact for American consumers.
This is a good two-way agreement. It is an example of the
positive possibilities of relations between the world's two
most powerful countries.
And just last month I visited China, It was the first
Presidential meeting with Chinese leaders in nearly four years.
We have some differences of view, but we also clarified and
broadened the very significant areas of our agreement.
We share opposition to any form of hegemony in Asia or
in any other part of the world. Our new relationship with
China is now a durable feature on the world scene.
-- I also visited Indonesia and the Philippines, and I enunciated
FORD is LIBRARY GERALD
in Hawaii the doctrine that even after Indochina, the United
States remains a strong power in Asia, that will not abandon
its friends, its principles, or its responsibilities for peace.
And so America today is at peace. Our foreign policy
has restored us to a position of international respect and
leadership. Just as 30 years ago, the United States responded
with the Marshall Plan and our peacetime alliances and helped
keep the peace of a generation, so today the world looks to us
again for inspiration and courage.
In the coming year I intend to continue the American role
of leadership. I will fulfill my Constitutional responsibility.
There can be no moratorium on a responsible foreign policy.
BERALD R FORD LIBRARY
In the coming year:
-- We will continue to strengthen our alliances and
friendships that are the cornerstone of our foreign policy.
Western Europe, Canada, Japan, out friends in free Asia,
in Africa, and Latin America, and the Middle East and
South Asia are of highest importance to us.
-- We will continue to work with dedication and determination
to promote solutions to political problems in the Middle
East in Cyprus, and in South Asia. In the Middle East, in
particular, we will continue to urge both sides to show the
-
kind of realism and positive spirit that we have seen in the
last two dramatic years. And we will not accept stagnation.
-- In East-West relations, we hope to see the good atmos-
phere of the Helsinki conference reflected in serious
FORD & LIBRARY DERALD
movement forward in the negotiations on reduction of
armaments and armed forces in Central Europe. If
this succeeds, we will have taken major steps toward a
period of peace that has not been seen in Europe for over
100 years.
-- We will continue to seek a reliable SALT agreement,
to implement the balanced, mutually advantageous terms
of the Vladivostok accord. There can be no artificial
deadline. - But equally, I do not accept the proposition that
the Nation cannot conduct its national security business in
its own interest in one year out of every four.
FORD is LIBRARY 078830
A great responsibility now rests with the Congress.
There is no question any more that Congress now shares
fully the responsibility for fundamental decisions about our
foreign policy. Now, both branches of government are accountable
for their actions; both branches of government are accountable
for the consequences of their decisions.
The past year saw some disturbing developments:
-- We saw serious cuts in the defense budgets, which
weaken our ability to maintain h national defense second to
none
(continued)
FORD is 018470 LIBRARY
-- We endured investigations into our intelligence services
which, with information and cooperation which we supplied,
catalogued some abuses. But they also went further, and
harassed and demoralized our intelligence services and
leaked sensitive information damaging to countries that have
worked most closely and cooperatively with us.
-- In Indochina and Angola, the Congress made impossible
any action by the United States to aid friends who were trying
to resist domination with Soviet weapons. The consequences of
these actions have yet to be fully felt.
We should have learned by now that if we do not act to
protect our own interests, our own friends, and our own capabilities,
no diplomatic skill or high ideals are going to preserve the peace.
Those who purport to express concern about Soviet
actions ought to do their part to help maintain our capability to do
what is necessary.
FORD :- LIBRARY
If we maintain our defense and our intelligence activities,
and act firmly. to defend our interests, then the genuine oppor-
tunity exists to forge more constructive relations with
adversaries on a secure basis. This has been our policy.
But we cannot unilaterally dismantle or let down our side of the
balance of power.
I am talking about our national defense,
A critical measure of our world position is whether we have
the national will to sustain a long-term commitment to a national
defense that will enable us to deter attacks, and the threat of
attack, to fight effectively if we must, and to support allies.
After 25 years in Congress there can be no doubt about where I
stand on this issue.
I want to assure you now: Every economy that can be
achieved will be approved; every savings that can be found will
FORD + LIBRARY 07088 j
be adopted. But the economies of this year, or next, cannot
be gained at the expense of our defense posture five or ten years
from now. The share of our national resources committed to
defense has declined, while that of our opponents has increased.
We face the corrosive effect of inflation on our ability to purchase
the modern weapons and maintain the forces that we consider vital.
Our military power is today second to none.
The United States and its NATO allies have more than
3 million men under arms;
-- We have in the Alliance more than 7, 000 tactical aircraft, over
400 fighting ships and more than 200 attack submarines.
-- The United States strategic forces are solidly based
on the most modern types of intercontinental missiles,
highly sophisticated submarines capable of delivering
a devastating retaliation and a large, proficient strategic
air command.
FORD i LIBRARY SERALD
The United States Army is embarking on a new program to
maximize its combat effectiveness without major increases in
manpower. Within the next three years the Army will add three
new divisions. The United States Navy will embark on a new
program of shipbuilding to reverse the downward trend of the past
several years. Our Air Force has entered into a new era of
modernization to deploy the most effective fighters, interceptors and
bombers in the world. Our missile forces will expand at the end of
this decade with the advent of the Trident submatine.
these are programs and commitments that we will stand
behind. They are reflected in the budget I will submit. Our military
power will remain unchallenged only if the Congress supports me in
meeting our responsibility.
We do not build defense forces in isolation; they must be geared
to the threats that we perceive to our vital interests and those of our
BERALD in. FORD LIBRARY
59
allies. To guarantee that we know what we are about, and know our
adversaries, we must have an intelligence establishment composed of
the most talented and dedicated Americans. The revelations of abuses
are disturbing. I am determined that the abuses of the past will
never be repeated.
But the time has come to rebuild the confidence of the United
States in its first lines of defense -- the CIA, the FBI, the National
Security Agency, the military intelligence for without them we
stand blind. The time has come to end the assault on our own institutions.
We have a new CIA director -- a man of integrity and ability.
And he is a man of wide experience in both foreign policy and in the
workings of our free democratic system. The CIA will be responsive
to public concern but I am determined to defend it and its work
in the national interest.
FORD & LIBRARY GERALD
The American people will not forgive anyone in or out of
public office who undercuts a strong America and a strong policy
to maintain the peace. Of that I am totally convinced.
These past years have been turbulent times in America and
abroad. In this anniversary year it is appropriate to reflect
on the fact that 200 years ago this Republic was a small country,
challenging the world's greatest: power. We did not get here by
timidity.
Thirty years ago we accepted another new challenge and have
led the frèe world for a generation. We kept the peace and
achieved unparalleled prosperity. Our foreign=policy is a: source
of pride for every American. I will not accept that this gen-
eration is one to abandon its responsibility.
The Founding Fathers were sophisticated men. They understood
the realities of power, the requirements of diplomacy. Above
all, they were men of foresight and courage. Let us live up to
their example.
(CONCLUSION TO COME)
FORD & LIBRARY GERALD