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Text of an Address by the President to Be Delivered to a Joint Session of Congress [Ford Speech or Statement]
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Text of an Address by the President to Be Delivered to a Joint Session of Congress [Ford Speech or Statement]
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Digitized from Box 3 of the White House Press Releases at the Gerald R. Ford Presidential Library
TOTALLY EMBARGOED
OCTOBER 8, 1974
UNTIL 4 p.m. EDT
Office of the White House Press Secretary
THE WHITE HOUSE
TEXT OF AN ADDRESS BY THE PRESIDENT
TO BE DELIVERED TO A
JOINT SESSION OF THE CONGRESS
Mr. Speaker, Mr. President, distinguished guests and my very dear friends:
In his first inaugural address, President Franklin D. Roosevelt said: "The
people of the United States have not failed
They want direct, vigorous action
They have asked for discipline and direction under leadership."
Today, though our economic difficulties do not approach the emergency of 1933, the
message from the American people is the same. I trust you are getting the
same message: Our constituents want leadership and action.
All of us have heard much talk on this very floor about Congress recovering its
rightful share of national leadership. I now intend to offer you that chance.
The 73rd Congress responded to FDR's appeal in five days.
I am deeply grateful for the cooperation of the 93rd Congress in the Conference
on Inflation which ended 10 days ago. Mr. Speaker, many -- but not all -- of your
recommendations on behalf of your party's Caucus are reflected in some of my
proposals. The distinguished Majority Leader of the Senate offered a nine-point
program. I seriously studied all and adopted some of his suggestions.
I might add I have also listened hard to my many other former colleagues
in both bodies and of both the majority and minority, and have been both
persuaded and dissuaded. But in the end I had to decide, as each of
you do when the roll is called.
I will not take your time today with a discussion of the origins of
inflation and its bad effect on the United States. I know where we want
to be in 1976 -- on the 200th Birthday of a United States of America that
has not lost its way, nor its will, nor its sense of national purpose.
During the meetings on inflation, I listened carefully to the many valuable
proposals offered. Since the summit, I have evaluated hundreds of ideas, day
and night.
(MORE)
- 2 -
My conclusions are simply stated. There is only one point on which all advisere
agree: We must whip inflation now.
None of the remedies proposed - great or small, compulsory or voluntary --
stands a chance umless they are combined in a considered package, in a
concerted effort, in a grand design.
I have reviewed the past and present effort of our Federal Government to help
the economy. They are simply not good enough, nor sufficiently broad, nor
do they pack the punch that will turn on America's economy.
A stable American economy cannot be sustained if the world's economy is in
chaos. International cooperation is essential. But while we seek agreement
with other nations, let us put our own economic house in order.
Today, I have identified 10 areas for our joint action.
NUMBER ONE: FOOD
America is the world's champion producer of food. Food prices and petroleum
prices in the United States are primary inflationary factors. America today
partially depends on foreign sources for petroleum. But we can grow more
than enough food for ourselves.
To halt higher food prices, we must produce more food. I call upon every
farmer to produce to full capacity. This Government will do all in its power
to assure him he can sell his entire yield at reasonable prices. Accordingly,
I ask the Congress to remove all remaining acreage limitations on rice,
peanuts and cotton.
I also assure America's farmers here and now that I will allocate all the fuel
and ask authority to allocate all fertilizer they need to do the job.
Agricultural marketing orders and other Federal regulations are being
reviewed to eliminate or modify those responsible for inflated prices.
I have directed our new Council on Wage and Price stability to find and expose
all restrictive practices, public or private, which raise food prices.
The Administration will also monitor food production, margins, pricing and
exports. We can and shall have adequate supplies at home, and through
cooperation, meet the needs of our trading partners abroad. Over this past
weekend, we initiated a voluntary program to monitor grain exports. The
Economic Policy Board will be responsible for determining the policy under
this program. In addition, in order to better allocate our supplies for export,
I ask that a provision be added to Public Law 480, under which we ship food
to needy and friendly countries. I need authority to waive certain of the
restrictions on shipments based on national interest or humanitarian grounds.
(MORE)
- 3
NUMBER TWO: ENERGY.
America's future depends heavily on oil, gas, coal, electricity, and other
resources called energy. Make no mistake -- we have a real energy problem.
One-third of our oil 17 percent of America's total energy now comes
from foreign sources we cannot control -- at high cartel prices costing you
and me $16 billion more than just a year ago.
The primary solution has to be at home. If you've forgotten the shortages of
last winter, I have not.
I have ordered today the reorganization of our national energy effort and the
creation of a National Energy Board. It will be charged with developing a
single national energy policy and program.
You will ge glad to know that our former colleague, Rog Morton, Secretary of
the Interior, will be the overall boss of our national energy program. His
marching orders are to reduce imports of foreign oil by one million barrels
per day by the end of 1975, whether by savings here at home or by increasing
our own sources.
Secretary Morton also is charged with increasing our domestic energy supply
by promptly utilizing coal resources and expanding recovery of domestic oil
still in the ground in old wells.
New legislation will be sought after your recess to require use of cleaner
coal processes and nuclear fuel in new electric plants and the quick conversion
of existing oil plants. I propose that we together set a target date of 1980 for
eliminating oil-fired plants from the Nation's base-loaded electrical capacity.
I will use the existing Defense Production Act to allocate scarce materials for
energy development and I will ask you for whatever amendments prove necessary.
I will meet with top management of the automobile industry to assure - either
by agreement or by law a firm program aimed at achieving a 40 percent
increase in gasoline mileage within a four year devel opment deadline.
Priority legislative action to increase energy supply requires:
(1) long sought deregulation of natural gas supplies,
(2) responsible use of our Naval petroleum reserves in California and Alaska,
(3) amendments to the Clean Air Act, and
(4) passage of surface mining legislation to ensure adequate supply with
common sense environmental protection.
(MORE)
-4-
If all these steps fail to meet our current energy-saving goals, I will not
hesitate to ask for tougher measures.
For the long-range, we must work harder on coal gasification. We must push
with renewed vigor and talent research in the use of non-fossil fuels.
The power of the atom, the heat of the sun and steam stored deep in the earth,
the force of winds and water must be main sources of energy for our grand-
children.
NUMBER THREE: RESTRICTIVE PRACTICES.
To increase productivity and contain prices, we must end restrictive practices
whether instituted by Government, industry, labor or others.
I am determined to return to the vigorous enforcement of anti-trust laws.
My Administration will zero in on more effective enforcement of laws against
price-fixing and bid-rigging. For instance, non-competitive professional fee
schedules and real estate settlement fees must be eliminated. Such violations
will be prosecuted by the Department of Justice to the full extent of the law.
I ask the Congress for prompt authority to increase maximum penalties for
anti-trust violations from $50,000 to $1 million for corporations and from
$50, 000 to $100, 000 for individual violators.
At the Congerence on Inflation, we found broad agreement that the Federal
Government imposes too many hidden and inflationary costs on our economy.
As a result, I propose a four-point purging process:
1. I have ordered my Council on Wage and Price Stability to be
the watchdog over inflationary costs of all governmental actions.
2. I ask the Congress to establish a National Commission on
Regulatory Reform to undertake a long-overdue total
re-examination of the independent regulatory agencies. It
will be a joint effort by the Congress, the Executive Branch
and the private sector to identify and eliminate existing
Federal rules and regulations that increase costs to the
consumer, without good reason, in today's economic climate.
3. Hereafter, I will require that all major legislative proposals,
regulations, and rules emanating from the Executive Branch
include an Inflation Impact Statement that certifies we have
carefully weighed their effect on inflation. I respectfully
request that Congress require similar advance Inflation Impact
Statements for its own legislative initiatives.
4. Finally, I ,urge State and local governments to undertake similar
programs to reduce inflationary effects of their regulatory activites.
I thank the Congress for recently revitalizing the National Council on
Productivity. It will initially concentrate on problems of productivity in
government Federal, State and local. Outside of government, it will
develop meaningful blueprints for labor-mangement cooperation at the plant
level. It should look particularly at the construction and health service
industries.
The Council on Wage and Price Stability will of course monitor wage and price
practices in the private sector. Monitoring will include public hearings to
justify either price or wage increases.
(MORE)
- 5 -
I emphasize this is not a compulsory wage and price control agency.
I know many Americans see Federal controls as the answer. But controls
never really stop inflation -- not the last time -- not even during and
immediately after World War II when, as I remember, prices rose despite
severe and enforceable wartime rationing.
Peacetime controls actually create shortages, hamper production, stifle
growth and limit jobs. I do not ask for such powers, however tempting
politically, as such a program could cause the fixer and the black marketeer
to flourish while decent citizens face empty shelves and stand in long waiting
lines.
NUMBER FOUR: WE NEED MORE CAPITAL
We cannot "eat up our seed corn." Our free enterprise system depends on
orderly capital markets through which the savings of our people become
productively used. Today our capital markets are in disarray. We must
restore their vitality. Prudent monetary restraint is essential.
You and the American people should know, however, that I have personally
been assured by the Chairman of the independent Federal Reserve Board that
the supply of money and credit will expand sufficiently to meet the needs of our
economy, and that, in no event, will a credit crunch occur.
The prime lending rate is going down.
To help industry to buy more machines and create more jobs, I am
recommending a liberalized ten percent investment tax credit. This credit
should be especially helpful to capital-intensive industries, such as primary
metals and public utilities where capacity shortages have developed.
I am asking Congress to enact tax legislation to provide that all dividends on
preferred stocks, issued for cash be fully deductible by the issuing company.
This should bring in more capital -- especially for energy-producing utilities.
It will also help other industries shift from debt to equity, providing sounder
capital structure.
Capital gains taxation must be liberalized as proposed by the tax reform bill
currently before the Committee on Ways and Means. I endorse this approach
and hope you will pass it promptly.
NUMBER FIVE: HELPING THE CASUALTIES
The Conference on Inflation made everybody even more aware of who is
suffering most from inflation. Foremost are those who are jobless through
no fault of their own. Three weeks ago, I released funds which, with
earlier actions, provide public service employment for 170,000 who need
work. I now propose to the Congress a two-step program to augment this
action.
First, 13 weeks of special unemployment insurance benefits would be provided
to those who have exhausted their regular and extended unemployment insurance
benefits and 26 weeks of special unemployment insurance benefits to those
who qualify but are not now covered by a regular unemployment insurance
program. Funding would come from the general treasury, not from taxes on
employers as is the case with the established programs.
(MORE)
- 6 -
Second, I ask the Congress to create a brand-new Community
Improvement Corps to provide work for the unemployed through
short-term useful work projects to improve, beautify and enhance the
environment of our cities, towns, and countryside. This standby
program would come alive whenever unemployment exceeds six percent
nationally. It would be stopped when unemployment drops below six
percent.
Local labor markets would each qualify for grants whenever their
unemployment rate exceeded 6. percent.
State and local government contractors would supervise these projects
and could hire only those who had exhausted their unemployment insurance
benefits. The goal of this new program is to provide more constructive
work for Americans--young or old--who cannot find a job.
Short-term problems require short-term remedies. I therefore request
that these programs be for one year.
I know that low and middle-income Americans have been hardest hit by
inflation. Their budgets are most vulnerable because a larger part of
their income goes for the highly-inflated costs of food, fuel, and medical
care. The tax reform bill now in the House Committee on Ways and Means,
which I favor, already provides approximately $1.6 billion of tax relief to
these groups. Compensating new revenues are provided in this prospective
legislation by a windfall profits tax on oil producers and by closing other
loopholes. If enacted, this will be a major contribution by the Congress in
our common effort to make our tax system fairer to all.
NUMBER SIX: STIMULATING HOUSING
Without question, credit is the lifeblood of housing.
The United States is suffering the longest and most severe housing re-
cession since the end of World War II. Unemployment in the construction
trades is twice the national average.
One of my first acts as President was to sign the Housing and Community
Development Act of 1974. I have since concluded that still more help is
needed--help that can be delivered quickly and with minimum inflationary
impact.
I urge the Congress to enact, before your recess, additional legislation
to make most home mortgages eligible for purchase by an agency of the
Federal Government. As the law now stands, only FHA or VA home
mortgages, one fifth of the total, are covered. I am glad that the Senate,
thanks to the leadership of Senator Brooke and Senator Cranston, has
already made substantial progress on this legislation. As soon as it comes
to me, I will make at least 3 billion dollars immediately available for
mortgage purchases, enough to finance about 100, homes.
NUMBER SEVEN: THRIFT INSTITUTIONS
Savings and loan and similar institutions are hard hit by inflation and high
interest rates. They no longer attract adequate deposits. The Executive
Branch must join with the Congress in giving critically needed attention to
the structure and operation of our thrift institutions which now find them-
selves for the third time in eight years in another period of serious
mortgage credit scarcity.
- MORE -
- 7 -
Passage of the pending Financial Institution Bill will help. But no single
measure has yet appeared to solve feast or famine in mortgage credit. However,
I promise to work with you to develop additional specific programs in the
future.
NUMBER EIGHT: INTERNATIONAL INTERDEPENDENCY
The United States has a responsibility not only to maintain a healthy economy
at home but also to seek policies which complement, rather than disrupt,
the constructive efforts of others.
Essential to U.S. initiatives is the early passage of an acceptable Trade
Reform Bill. My Special Representative for Trade Negotiations departed
earlier this afternoon to Canada, Europe and Japan to brief foreign friends on
my proposals. We live in an interdependent world and therefore must work
together to resolve common economic problems.
NUMBER NINE: FEDERAL TAXES AND SPENDING
To support programs to increase production and share inflation-produced
hardships, we need additional tax revenues. I am aware that any proposal for
new taxes just four weeks before a national election is -- to put it mildly -
considered politically unwise. I have been earnestly advised to wait and talk
about taxes anytime after November 5th.
But I will not play politics with America's future.
O ur present inflation to a considerable degree comes from many years of
enacting expensive programs without raising enough new reveneus to pay for
them. Nineteen out of the 25 years I served in this Chamber ended up with
federal deficits.
By now almost everybody else has stated my position on Federal gasoline
taxes. This time I'll do it myself. I am not asking you for any increase in
gas taxes.
I am asking you to approve a one-year temporary tax surcharge of five percent
on corporate and upper-level individual incomes. This would generally
exclude from the surcharge those families with gross incomes below $15,000
a year. The estimated $5 billion in extra revenue to be raised by this Inflation
Fighting tax should pay for all the new programs I have recommended in this
message. This is the acid test of our joint determination to whip inflation.
I would not ask this if major loopholes were not being closed by the Ways and
Means Tax Reform Bill.
I urge you to join me before your recess by voting to set a target spending
limit of $300 billion for the Federal fiscal .975 budget. When Congress agrees t
this spending target, I will submit a package of budget deferrals and recissions
to meet this goal. I will do the tough job of designating for Congressional
action, on your return, those areas which I believe can and must be reduced.
These will be hard choices but no federal agency, including the Defense
Department, will be untouchable.
Fiscal discipline is a necessary weapon in any fight against inflation. While
this spending target is a small step, it is a start in the right direction. And
we need to get on that course without further delay.
We cannot ask the American people to tighten their belts if Uncle Sam is
unwilling to first tighten his.
And now, if I might, I would like to say a few words directly to your
constituents and to mine.
(MORE)
- 8 -
My Fellow Americans:
Ten days ago I asked you to get things started by making a list of 10 ways to
fight inflation and save energy, to exchange your list with neighbors and to send
me a copy. I have personally read scores of the thousands of letters received
at the White House.
And I have made my economic experts read them, too. We all benefitted --
at least I did. I thank each and every one of you.
Some of the good ideas from your home to mine have been cranked into the
recommendations I have just made to the Congress and the steps I am taking
as President to whip inflation now. There were also firm warnings on what
government must not do.
Your best suggestions for voluntary restraint and self-discipline showed me that
a great degree of patriotic determination and unanimity already exists in this
country.
I have asked Congress for urgent specific actions it alone can take.
I have advised Congress of the initial steps I am taking as President.
Here's what only you can do. Unless every able American pitches in,
Congress and I cannot do the job.
Winning our fight against inflation and waste involves total mobilization of
America's greatest resources -- the brains, the skills and willpower of the
American people.
Here is what we must do what each and everyone of you can do.
To help increase food and lower prices, GROW MORE, WASTE LESS.
To help save scarce fuel in the energy crisis, DRIVE LESS, HEAT LESS.
Every housewife knows almost exactly how much she spent for food last week.
If you can't spare a penny from your food budget, surely you can cut the food
you waste by 5%.
Every American motorist knows almost exactly how many miles he or she
drives to work or school every day and about how much mileage she or he runs
up each year. If we all drive at least 5% fewer miles we can save 250 to 300
thousand barrels of foreign oil per day. By the end of 1975, most of us can do
much better than 5% by car pooling, taking the bus, riding bikes or just plain
walking. We can have saved enough gas by self-discipline to meet our 1
million barrel per day goal.
(MORE)
-9-
There is one final thing that all Americans can do, rich or poor, and that is
Share With Others.
We can share burdens as well as blessings. Sharing is not as easy to measure
as mileage and family budgets, but I'm sure that 5% more is not nearly enough
to ask. So I ask you to share everything you can -- and a little bit more and
it will strengthen our spirits as well as our economy.
Today I will not take more of the time of this busy Congress for I remember
well the rush before every recess- and the clock is already running on my
specific and urgent requests for legislative action. I also remember how much
Congress can get done when it wants to.
One week from tonight I have a long-standing invitation to Kansas City to
address the Future Farmers of America, a fine organization of young people
whose help, with millions of others, is vital in this battle. I will elaborate then
on how volunteer Inflation Fighters and Energy Savers can further mobilize their
total efforts.
Since asking Miss Sylvia Porter, the well-known financial writer, to help me
organize an all-out nationwide volunteer mobilization, I have named a White
House Coordinator and have enlisted the enthusiastic support and services of
some 17 other distinguished Americans to help plan for citizen and private
group participation. There will be no big new Federal bureaucracy set up for
this crash program.
Through the courtesy of such volunteers from the communications and media
fields a simple enlistment form will appear in many of tomorrow's newspapers
along with the symbol of this new mobilization, which I am wearing on my lapel.
It bears the single word "WIN. " That tells it all. I will call upon every American
to join this massive mobilization and to stick with it until we win. For win we
will.
I stand on a spot hallowed by history. Many Presidents have come here many
times to solicit, to scold, to flatter and to exhort the Congress to support them
in their leadership. Once in a great while, Presidents have stood here and
truly inspired this most skeptical and sophisticated audience of their co-equal
partners in government. Perhaps once or twice in a generation is there such
a joint session. I do not expect this to be one.
Only two of my predecessors have come in person to call upon the Congress for
a declaration of war. I shall not do that. But I say to you with all sincerity
that inflation, our present public enemy will -- unless it is whipped -- destroy
our country, our homes, our liberties, our property, and finally our national
pride as surely as any well-armed wartime enemy.
There will be no sudden Pearl Harbor to shock us into unity and sacrifice.
But we have had enough early warnings. The time to intercept is almost gone.
My friends and former colleagues, will you enlist now? My friends and fellow
Americans, will you enlist now?
Together, with discipline and determination, we will win. Under the Constitution,
only the President can provide the essential leadership for great national under-
takings. I accept it. With your help and God's, we will win.
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