TO THE CONGRESS OF THE UNITED STATES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00552R000101020066-7
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 75
• Document Creation Date: December 22, 2016
• Document Release Date: June 28, 2010
• Sequence Number: 66
• Publication Date: January 21, 1980
• Content Type: OPEN SOURCE

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ET"SPRr--OED FOR RELEASE U 1TIL January 21, 198
AFTER BRIEFING, NOONDAY, January 21, 1980
THE WHITE HOUSE
*0 THE CONGRESS OF THE UNITED STATES:
My State of the Union Address will be devoted to a
discussion of the most important challenges facing our country
as we enter the 1980's.
Over the coming year,. those challenges will receive
my highest priority and greatest efforts. However, there
will also be many other significant areas which will receive
my personal commitment, as well as that of my Administration,
during the 2nd Session of the 96th Congress.
It is important that Congress, along with the public,
be aware of these other vital areas of concern as they listen
to my State of the Union Address. In that way, the context
of the Address, and my Administration's full message for 1980,
can best be understood.
For that reason, 1 am sending this State of the Union
Message to the Congress today, several days before my State
of the Union Address.
During the. last three years, my Administration has
developed a very cooperative and productive record with
Congress. Landmark legislation has been enacted; major
domestic and international problems have been addressed directly
and resolved; and a spirit of mutual trust and respect has
been restored to Executive-Legislative relations. Indeed,
in no other three-year period in our recent past has there
been a comparable record of progress and achievement for the
American people.
- But much more remains to be done. We cannot afford to
rest on our record. We cannot fail to complete the agenda
begun in the 1970's; we cannot ignore the new challenges of
the 1980's.
By continuing to work together, my Administration and
the Congress can meet these goals. Our cooperative efforts
can help to ensure stable prices and economic growth; a return
to energy security; an efficient, responsive government; a
strong, unsurpassed defense capability; and world peace.
The program that I have placed before the Congress since
1977, combined with the few new initiatives I will be placing
before the Congress this year, will enable us to reach these
goals. Our task in this Session is to complete the work on
that program. I have no doubt that we can do it. There is
no time to waste.
STAT
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RECORD OF PROGRESS
When I took office in 1977, our Nation faced a number
of serious domestic and international problems:
o the economy had still not recovered from the most
serious recession since World War II;
o unemployment was near 8%, and almost 8 million
American workers were unemployed;
o no national energy policy existed, and our dependence
on foreign oil was rapidly increasing;
o public trust in the integrity and openness of the
government was extremely low;
o the Federal. government was operating inefficiently
in administering essential programs and policies;
o major social. problems were being ignored or poorly
addressed by the Federal government;
o our defense posture. was declining as a result of
a continuously shrinking defense budget;
o the strength of the NATO Alliance was at a post-World
War II low;
o tensions between Israel and Egypt threatened another
Middle East war; and
o America's resolve to oppose international
aggression . and. human rights violations was under
serious question.
Over the past 36 months, clear progress has been made
in solving the challenges we found. in January of 1977:
o the unemployment rate at the end of last year-of
5.9%, representing a.25% decrease in three years;
9 million jobs have been created, and more Americans,
98 million, are at work than at any time in our
history;
o major parts of a comprehensive energy program have
been enacted; a Department of Energy has been
established to administer the program; and Congress
is on the verge of enacting the remaining major
parts of the energy program;
o confidence in the government's integrity has been
restored, and respect for the government's openness
and fairness has been renewed;
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3
o the government has been made more effective and
efficient: the Civil Service system was completely
reformed for the first time this century; 13 reor-.
ganization initiatives have been proposed to the
Congress, approved, and implemented, two new Cabinet
departments have been created to consolidate and
streamline the government's handling of energy and
education problems; inspectors general have been
placed in each Cabinet. department to combat fraud,
waste and other abuses; zero-based budgeting practices
have been instituted throughout the Federal government.;
cash management reforms have saved hundreds of millions
of dollars; the process of issuing regulations has
been reformed to eliminate unneeded and incompre-
hensible regulations; procedures have been estab-
lished to assure citizen participation in government;
and the airline industry has been deregulated, at
enormous savings to the consumer.
o critical social problems, many-long ignored by the
Federal government, have been addressed directly
and boldly: an urban policy was developed and
implemented, reversing the decline in our urban
areas; the Food Stamp program has been expanded
and the purchase requirement eliminated; the Social
Security System was refinanced to put it on a sound
financial basis; the Humphrey-Hawkins Full Employment
Act was enacted; Federal assistance for education
was expanded by 75%; the minimum wage was increased
to levels needed to ease the effects of inflation;
affirmative action has been pursued aggressively --
more blacks, Hispanics and women have been appointed
to senior government-positions and to judgeships
than at any other time in our history; the ERA
ratification deadline was extended to aid the
ratification effort; and minority business procure-
ment by the Federal government has more than doubled;
o the decline in defense spending has been reversed;
defense spending has increased at a real rate of
over 3% in 1979, and I am proposing a real increase
in the defense spending level of more than 20% over
the next 5 years;
o the NATO Alliance has been revitalized and strengthened
through substantially increased resources, new
deterrent weapons, and improved coordination; increased
emphasis has also been given to conventional force
capabilities to most crises in other areas of the world;
o Egypt and Israel have ended more than 30 years of
war through a Peace Treaty that also established
a framework for comprehensive peace in the Middle
East;
o the commitment of our Nation to pursue human rights
throughout the world, in nations which are friendly
and those which are not, has been made clear to
all;
o our resolve to oppose aggression, such as the illegal
invasion of the Soviet Union into Afghanistan, has
been supported by tough action.
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4
LEGISLATIVE PRIORITIES
In the coming legislative session, the last in this
Presidential term, I am deeply committed to finishing the
agenda that I have placed before the Congress. That agenda
has been comprehensive and demanding, but it has also been
absolutely essential for our Nation's well-being.
I do not plan to add significantly to the agenda this
year. Because of the importance of enacting the proposals
already before the Congress, and the relatively short Congres-
sional session facing us, I will be limiting my major new
proposals to a critical few:
o Youth Employment;
o General Revenue Sharing;
o Utility Oil Use Reduction;
o Nuclear Waste Management and Nuclear Regulatory
Commission Reorganization;
o Standby Gasoline Rationing Plan; and
o Initiatives implementing my response to the Soviet
invasion. of Afghanistan.
t am convinced that these new initiatives, along with
the major proposals I previously made to the Congress, can
be enacted this year, if we have a dedicated, all-out effort
on the part of the Administration and the Congress. I pledge
such an effort on my part, and that of my Administration.
As in the previous three years, I will be working with
you toward the basic goals of:
o Ensuring our economic strength;
o Creating energy security for our nation;
o Enhancing basic human and social needs;
o Making our government more efficient and
effective;
o Protecting and enhancing our rights and liberties;
o Preserving and developing our natural resources;
o Building America's military strength;
o Working to resolve international disputes through
peaceful means;
o Striving to resolve pressing international economic
problems;
o Continuing to support the building of democratic
institutions and protecting human rights; and
o Preventing the spread and further development of
nuclear weapons.
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My highest legislative priorities in each of these areas
this year will be:
Ensuring Economic Strength
o The FT 1981 Budget - This is a responsible, restrained
budget, Whose enactment will help control Federal spending,
significantly reduce the Federal deficit, and aid in our fight
against inflation.
o Hospital Cost Containment - This long overdue legis-
lation is a major weapon in our right against inflation; it
will save consumers more billions of dollars and. is the single
most important anti-inflation bill before the Congress.
o ?out Education; Trainin and Em e t Pro ram -
This new initiative, which is designed to ucate and train
youth to secure and hold meaningful jobs, will provide
enhanced opportunities for disadvantaged youth as well as
improve the productivity of our work force.
Creating Energy Security for Our Nation
o Windfall Profits Tax - The size of this important
energy and tax measure has been agreed to by the conferees,
but it is imperative that final agreement on a tax reflecting
sound energy policy occur at the outset of this session and
that Congress act promptly on that agreement.
o Energy Mobilization Board - It is also essential
that this vital measure in the effort to eliminate unnecessary
red tape in the construction of needed energy facilities be
agreed to promptly by the conferees and the Congress, without
substantive waivers of law.
o Energy Security Corvoration - The conferees and the
Congress also need to act expecitiously on this legislation.
This bill is critical to our Nation's beginning a serious,
massive program to develop alternative energy fuels so that
our dependence on foreign oil can be severely reduced. It
is necessary to remove. this critical national effort from
the constraints which can bind government agencies.
This legislation contains, as well, vital energy conser-
vation and gasohol provisions. They are needed if we are
to move forward in our national efforts in these areas.
o Utility Oil Use Reduction - This new initiative will
aid in the effort to reduce our reliance on oil by requiring
our Nation's utilities to substantially convert from oil to
coal-burning or other energy facilities by our Nation's
utilities over a defined timetable. This bill is a key tool
in our effort to increase the use of coal, our most abundant
natural fuel source.
o Standby Gasoline Rationin Plan - Under the legislation
enacted last year, will propose to the Congress a Standby
Gasoline Rationing Plan; its prompt approval will be required
if we are to be prepared for a significant energy supply
interruption.
Enhancing Basic Human and Social Needs
o National Health Plan - The time for improving the
health care provided to our citizens is long overdue, and
I am convinced that the health plan I proposed last year
provides a realistic, affordable and beneficial way of
pr)viding our citizens with the health care they, need and
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deserve. It will provide millions of low-income Americans
with health coverage for the first time, improved Medicare
coverage for the elderly, and protect every American against
the disastrous costs of extended illness.
Our national health effort also needs prompt enactment
of two other important bills -- Child Health Assurance Program,
which will provide needed health care for disadvantaged children,
and Mental. Health Systems Act, which is needed to reform our
mental health programs.
o Welfare Reform - Our nation's welfare system remains
a disgrace o o e recipient and the taxpayers. It encourages
family instability and encourages waste. It is a crazy-quilt
of differing provisions from state-to-state. The House has
approved a sound welfare reform proposal. I call upon the
Senate to act rapidly on this issue so that welfare reform
can become a reality this Session.
o General Revenue Sharing - I will propose a reauthoriza-
tion of is important program to our state and local governments,
in order to continue providing them with the funds that they
depend upon to meet essential social and operating needs.
This program is an essential element of the partnership I
have forged with state and local governments and is critical
to the continued economic health of our states, cities and
counties.
o Countercvc'ical Revenue Sharing - I will again work
with the Congress to provide the aid needed to help our most
financially pressed local areas. The Senate has already acted
and I urge prompt House passage early in the Session.
o Low-Income Ener Assistance - I am committed to
seeking authority to continue the ow-income assistance program'
enacted at my request last year to give the poor protection
against rising energy costs.
o Economic Development - This legislation will reauthorize
and improve the government's ability to provide economic develop-
ment assistance. It is a key ingredient in implementing both
my urban and rural policy and I urge prompt action on it by
the House-Senate Conference.
Making Our Government More Efficient and Effective
o Regulatory Reform - I will continue to pursue efforts
to eliminate unnecessary regulatory burdens, and will con-
centrate on seeking approval this year of my regulatory process
reform bill, my trucking and rail deregulation proposals, my
banking reform measures, and passage of sunset legislation
and communications reform. measures. Progress has been made
on each of these during the First Session. Final passage
should come before this Session ends.
o Nuclear Regulatory Commission Reorganization - As
I stated in responding to the emeny Commission Report, I
will propose a reorganization of the Nuclear Regulatory
Commission in order to improve its management and its emergency
operating capabilities. This is an essential step to the
improvement of safety in the nuclear industry.
Protecting and Enhancing Our Rights and Liberties
o Ecual Rights Amendment - While the Congress has passed
the Equal Rights Amendment, and the possibility for ratification
now lies with the State Legislatures, it is essential that
the Members of Congress help with their State Legislatures.
Toward that end, we will be working with Members from States which
have not yet been ratified. We cannot stand tall as a Nation
seeking to enhance human rights at home so long as we deny
it to American women here at home.
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o Fair Housing - I will continue to press for enactment
of this important civil rights initiative; it will enable
the government to enforce our fair housing laws effectively
and promptly. It is the most critical civil rights legis-
lation before the Congress in years. The promise of equal
housing opportunity has been far too long an empty promise.
This bill will help make that promise a reality.
o Intelligence Charters - I have already proposed a
10gislat ve carer for a FBI; I will soon be proposing a
legislative charter for the intelligence community. These
charters will protect our citizens' rights while enabling
the agencies to meet their responsibilities.
Preserving and Developing Our Natural Resources
a Alaska D-2 Lands - My highest environmental priority
in this Congress continues to be enactment of legislation
that will preserve and protect Alaska lands. I urge the Senate
to follow the House's lead in this area.
o 0 and Hazardous Wastes Sunerfund - This program
is needed to mitigate the a ects o o zardous substance
spills and releases from uncontrolled hazardous waste dumps,
which is a growing national problem.
o Nuclear Waste Management - I 'will propose a series
of legislative and administrative initiatives to implement
our Nation's first comprehensive nuclear waste program.
Building America's Military Strength
o Defense Department Authorizations and Ap ropriations -
I will be proposing a defense budget containing a real
growth in outlays. It is essential that the Congress support
an increase of that amount if we are to strengthen our defense
capabilities.
Working to Resolve International Disputes
o Ref ee Legislation and Funding - This legislation
is necessary to improve our refugee program and to provide
needed domestic assistance to refugees. Prompt House action
would assure that we have a sound framework within which to
accommodate the increasing flow of refugees.
Striving to Resolve International Economic Problems
o Bilateral and Multilateral Forei Assistance - I
will be proposing foreign assistance legislation which provides
the authority needed to carry forward a cooperative relation-
ship with a large number of developing nations. Prompt
Congressional action is essential.
o China Trade Agreement - I will be seeking early approval
by the Congress o e Trace Agreement reached with China;
the Agreement represents a major step forward in the process
toward improved economic relations with China.
Continuing to Support the Building of Democratic Institutions
and Protecting Human Rights
o Special International Security Assistance for Pakistan -
I am sending to Congress a military and economic assistance
program to enable Pakistan to strengthen its defenses. Prompt
enactment will be one of my highest legislative priorities.
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o Human Ri hts Conventions - I will continue to press
the Senate o ra y rive key human rights treaties -- the
American Convention on Human Rights, the Convention on Racial
Discrimination, the UN Covenants on Civil and Political Rights,
and on Economic and Social and Cultural Rights, and the Genocide
Convention.
Preventi the S read and Further Development of
Nuclear WeiFyons
o SAT II - I firmly believe that SALT II is in our
Nation's security interest and that it will add significantly
to the control of nuclear weapons. But because of the Soviet
invasion of Afghanistan, I do not believe it is advisable
to have the Senate consider the Treaty now.
I. ENSIIRING ECONOMIC STRENGTH
My economic program, since I took office, has been designed
to achieve several goals:
-- restore and continue economic growth;
-- reduce unemployment; and
-- restrain inflation.
Over the past three years, considerable progress has
been made in each of these areas:
-- The economy has recovered from its deepest recession
since World War II; and we have had a sustained
economic recovery during-the-last three years.
-- Unemployment has been reduced by 25% and employment
is at its highest level in history.
Inflation has increased to unacceptable levels,
in large part because of OPEC price increases, but
a program has now been put in place which will
moderate inflation in an equitable and effective
way.
In 1980, we will continue the steady economic policies
which have worked to date. We can only succeed in making
our economy strong, however', if we have Congress' cooperation.
I am confident that we can work together successfully this
year to achieve our economic goals.
Inflation
Inflation continues to be our most serious economic
problem. Restraining inflation remains my highest domestic
priority.
Inflation. at the current, unacceptably high levels is
the direct result of economic problems that have been building,
virtually without letup, for over a decade. There are no
easy answers, or quick solutions to inflation. It cannot
be eliminated overnight; its roots in our economy are too
deep, its causes are too pervasive and complex. We know we
cannot spend our way out of this problem.
But there is hope -- for a gradual reduction in the
inflation rate, for an easing of the economic pressures
causing inflation.
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The hope lies in a program of public and private restraint
in the short-run and a program to attack the structural causes
of inflation over the longer-run. This is the policy I have
pursued and will continue to pursue.
Last year was an especially difficult time for anti-inflation
policies. OPEC increased its prices by more than 80% and
thus added more than three points to the inflation rate.
If energy price increases are excluded, inflation last year
would have been nearly three percentage points lover.
The biggest challenge to anti-inflation policy is to
keep energy price increases from. doing permanent damage, to
prevent a dangerous acceleration of the wage-price spiral.
My program has been successful in accomplishing this. Inflation
will slow this year. In 1981 it should be even lower. This
progress is the result of our persistence in the battle against
inflation on many fronts:
Bud
et Restraint: The budget deficit for
FY
1979 was
lowered
level.
to $27.7 billion, more than 50% below
the
FT 1976
Reeulator Reform: The flood of new, costly government
regulations was slowed as our procedures to ensure that we
achieve our regulatory goals in the most cost-effective manner
took hold.
Wage-Price Guidelines: The guideline standards were
followed by the vast majority of unions which negotiated
contracts and by nearly every major corporation in the country.
Energy: The energy legislation put into place over the
past two years began to reduce our dependence on foreign oil
and' our consumption of such important energy fuels as gasoline,
thereby reducing the ability of oil producing nations to disrupt
our economy.
Productivity: We began to introduce policies to increase
Industrial Innovation and thereby productivity; the decline
in productivity growth must be reversed if we are to improve
our real living standards over the long term.
In 1980, with the Congress' cooperation, we will continue
our aggressive fight against inflation on each of these major
fronts:
Budget Restraint: The deficit for the FT 1981 budget
will be less than half of the FY 1980 budget deficit and will
represent a 75% reduction from the deficit I inherited.
Re ulatorv Reform: We will be pursuing deregulation
legislation for the trucking, rail, banking and communications
industries, as well as regulatory management reform legislation;
these bills will enable us to further eliminate unnecessary
regulatory burdens.
Labor Accord: The Pay Advisory and Price Advisory
Committees, established as a result of last year's historic
Accord with organized labor will enable us to better implement,
and coordinate with both labor and business, the private
restraint necessary as part of our anti-inflation efforts.
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Ener We expect to enact major energy legislation --
the Windfall Profits Tax', the Energy Mobilization Board, and
the Energy Security Corporation -- early in this Session;
this legislation, when combined with the voluntary arid mandatory
energy conservation measures that will take an even stronger
hold this year, should enable us to further reduce our dependence
on foreign oil.
Productivit : We will be implementing our industrial
innovation program and further expanding our commitment in
the budget to research and development.
Council on Wane and Price Stability
The Council on Wage and Price Stability has played a
vital role in our anti-inflation efforts. The Council and
its staff have lead responsibility within the Executive branch
for implementing the voluntary wage and price monitoring program.
Without the Council's continuing role, the anti-inflation
effort could not begin to assess whether the private sector
is cooperating with our standards.
It is therefore essential that the Council, along with.
its staff operation, be reauthorized early this year. The
reauthorization should not contain amendments that interrupt
or restrain the important and essential work of the Council
or its staff.
The 1981 Budget
The budget I will send to the Congress for FY 1981 will
meet-this Nation's critical needs; and it will continue the
sound budgetary policies that my Administration has pursued
throughout my term in office.
No single year's budget can accurately portray the
philosophy of an Administration. However, there is a clear
pattern in the budgets I have proposed -- restraint in spending,
coupled with careful targeting of resources to areas of greatest
need. My 1981 budget continues this pattern by lowering the
deficit roughly $50 billion below what it was when I ran for
office. At the same time, I will recommend increases for
programs of critical national concern.
Last year, my budget was austere. I proposed eliminating
some programs and reducing spending for others; and these
tough decisions have proven correct and have provided the
country with clear benefits. I am pleased that the Congress
approved my budget in virtually the form I proposed. As a
result of our actions, the rate of Federal spending growth
has been slowed. Just as importantly, the widespread expectation
that the Federal budget would continue its upward spiral
unchecked has been proven false. We have moved on to the
path necessary for achieving a balanced budget in the very
near future. And we have helped the fight against inflation.
The 1981 Budget will continue my policy of restraint.
Real growth in spending will be close to zero. The deficit
will be cut by more than half from last year. The deficit
as a percent of the budget and of GNP will be at the second
lowest point in this decade. We will have the smallest deficit
in seven years. And if the economy were to continue to grow
at a rate which held the unemployment rate at the current
level, this budget would be in surplus.
At the same time, I am proposing some vital spending
increases in the 1981 Budget. Most of these increases will
be in "uncontrollable" programs (those in which increases
are automatically required by existing law). There will also
be discretionary increases; in part, to strengthen our defense
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forces and enhance our crucial investments in energy production
and conservation. In addition, i will propose a major new
initiative to reduce youth unemployment, and State and local
governments will receive continued fiscal support from the
General Revenue Sharing extension I will propose.
Developing the budget this year has been, in several
respects, more difficult than in previous years. International.
turmoil threatens our vital interests, energy problems dampen
the economy and alter our domestic priorities, and inflation
erodes basic programs, all adding new pressures for Federal
spending. But I am confident that this budget responds
responsibly -- and with needed resources -- to our, Nation's
most pressing needs and positions us for responsible and
effective government in the 1980's.
Fiscal Policy
As President, I have been concerned about the tax burden
on our citizens and have, as a result, worked with the Congress
to enact two major tax cuts. In 1977, I proposed, and Congress
passed, an $8 billion individual tax cut as part of the economic
stimulus package. In 1978, I proposed, and Congress passed,
a $21 billion individual and business tax cut. This year,
those two cuts will reduce Americans' tax burden by $31 billion.
I recognize that there is interest in another tax cut
this year, but my 1981 budget proposes no tax cuts. As long
as double-digit inflation continues and there is no sign of
a recession, our top budgetary priority must be reduction
of the deficit.
Over the long run, continued tight control over budget
expenditures will hold down the share of Federal spending
in GNP. Inflation, on the other hand, is raising the percentage
of national income collected in taxes. Over time, because
of these two developments, tax reductions will be possible
while still maintaining the fiscal restraint needed to control
inflation. However, the timing and structure of any tax
reductions is of critical importance and must be dictated
by our economic circumstances: the urgency of the anti-inflation
fight requires that we defer such tax reductions at this time.
Tax reductions put into effect prematurely, and under
the wrong economic conditions, could make inflation worse
by overstimulating the economy. Inflation is still running
at unacceptably high levels.
Virtually all economic forecasters predict the onset
of a mild recession and my Administration's estimates of budget
receipts and expenditures in the FY 1981 budget assume a
recession. However, none of the current economic statistics
yet show any overall economic decline. In recent months the
economy has displayed much more strength than earlier forecasts
had predicted. Forecasts of impending recession may therefore
prove to be as wrong as previous ones. Employment has held
up well -- in part due to unsatisfactory productivity per-
formance. To enact tax cuts now would run a serious risk
of adding inflationary demand pressures to an economy which
continues to grow more strongly than predicted by the forecasts.
With the present high inflation, we cannot afford that risk.
When tax reductions are timely, they should be designed
insofar as possible in a way that achieves multiple objectives --
not only reducing the tax burden and stimulating growth, but
raising investment and productivity and reducing inflation
as well.
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In particular, a significant part of any tax reduction
should be directed to the provision of incentives for increased
investment, to improve productivity, expand capacity, and
adjust to higher energy prices. Serious consideration should
be given, in the case of tax cuts for individuals, to lowering
social security payroll taxes, since half of such reductions
would go towards lowering business costs and prices.
The necessities of the inflation fight require that we
be very cautious about when taxes are reduced, and how it
is done. But they do not require that we ignore changes in
economic conditions. Should the economic situation and prospects
sharply worsen, I will consider recommendations to deal with
the situation. Under those circumstances, tax cuts and other
measures could be taken to improve the prospects for employment
and growth, to reduce business costs, and to assist those
most severely damaged by recession, without threatening to
set off inflationary demand pressures. However, the current
economic situation does not warrant such measures and it would
be,inappropriate to propose them at this time.
Employment
My Administration, working closely with Congress, has
made significant progress in reducing the serious unemployment
problems that existed three years ago.
o The December unemployment rate of 5.9% represents
a 25% reduction from the December 1976 rate.
o. Over 9.2 million more people have jobs than before
the beginning of the Administration.
o Total employment has reached an all-time high of
98 million in. December.
o Nonwhite employment has increased by 1.4 million
persons or 15.5%.
o Adult female employment has increased by 5 million
persons.
o Employment of black teenagers, which had actually
decreased during the 1969-1975 period, has increased
by more than 15% since I took office. Although
unemployment rates for all youth, especially
minority youth, are still too high, progress has
been made.
We will continue to make progress in the 1980's as a
result of the framework which has already been established
and which will be strengthened this year.
o The Comprehensive Employment and Training Act (CETA)
was reauthorized in 1978 for four years.
o The Humphrey-Hawkins Full Employment Act became
law after many years of effort.
o The Private Sector Initiatives Program, a new
partnership between the government and the private
sector to assist the most disadvantaged unemployed,
is being successfully implemented.
o A targeted jobs tax credit has been enacted to
provide employers with the economic incentives
needed to increase their hiring of unemployed low-
income youth and others who historically have
difficulty finding jobs.
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o A massive effort to reduce the problems causing
excessive youth unemployment rates is being
strengthened and revitalized this year with a
new $2 billion youth education, training, and
employment program.
This year, we will work aggressively to make certain
that this framework continues to be successfully implemented.
Even that effort may not be sufficient, if economic forecasts
are accurate, to keep the unemployment rate from rising.
We will be monitoring the economy closely. If unemployment
should dramatically increase, I'will be prepared to consider
actions to counter that increase, consistent with our over-
riding concern about accelerating inflation. At this time
though, when unemployment is at its lowest level in years,
it would be premature and unwise to propose measures that
might be helpful in a time of recession-induced high unemployment.
Youth Employment
The fact that we have had persistently high unemployment
among poor and minority youth for three decades demonstrates
clearly the inadequacies of our system for teaching, training
and helping young people to find and keep decent jobs.
The economic challenges of the 1980's will require the
energy and commitment of the entire American work force.
We cannot afford to waste anyone's talents.
If we are to become the society of our ideals, we must
provide economic opportunity for all.
My Administration is committed to a renewed national
effort to remove any unnecessary obstacles to a productive
life for every American.
Over the past three years, we have developed a solid
record. We have increased resources for youth employment
and training programs from $2.5 to over $4 billion. We have
conducted the largest experimental youth program effort ever
attempted. We have reduced overall youth unemployment rates
by 15%. But this is not good enough. Youth unemployment,
especially for the poor and minorities, is still unacceptably
high.
Based on the experience we have gained over the past
three years, and on the advice of the thousands of Americans
who helped the Vice President's Task Force on Youth Employment
over the last nine months, my Administration has devised a
new approach, which I announced two weeks ago. Under my
program, the most significant new domestic initiative I will
be sending to Congress this year, the Federal government will
be making its most comprehensive effort ever to eradicate
the causes of excessive and harmful youth unemployment.
By 1982 this new program will have increased Federal
resources committed to reducing youth unemployment by $2 billion,
to a total of $6 billion. The program will have two key
components: for in-school youth, we will have a major effort
through the Department of Education to teach basic skills
to low-achieving youth in junior and senior high schools
located in low-income communities, while providing work
experience and training after school hours. For disadvantaged
out-of-school youth, we will provide, through the Department
of Labor, redesigned and expanded work experience and training
programs, as well as basic skills programs managed by the
Department of Education.
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The Department of Education's basic education and skill
training program, when fully implemented, will provide basic
education and employment skills to approximately 1 million
low-achieving junior and senior high school students in about
3,000 of the poorest urban and rural school districts around
the country. The new program will emphasize:
-- basic skills for low-achieving youngsters, including
help for students with limited ability in English;
-- school-wide planning with the active involvement
of teachers, parents, employers, and the community;
-- using the link between work and classroom-learning
as a way to motivate students to stay in school;
and
-- a major role for vocational education in preparing
young people for work.
The Department of Labor's new Youth Employment Program,
when fully implemented, will provide education, work experience,
training, labor market information and other services to more
than 500,000 additional young people in each year. The new
resources, when added to current programs, will serve over
2.5 million 14- to 21-year olds each year.
The program will emphasize:
-- additional training and work experience opportunities
for older and out-of-school youth;
-- stringent performance standards for both participants
and program operators;
-- financial incentives to encourage greater cooperation
between CETA sponsors, local. employers, and school
officials; and
-- consolidation of three of the existing CETA youth
programs and closer coordination with the summer
employment program to simplify local administration
and reduce paperwork.
We have learned from the 1960's and the 1970's. We know
we must concentrate on administration and management. We
know that we must have tough performance standards, not merely
allocation formulas. We know that the partnership between
government and all elements of the private sector must be
made a reality, and that focusing on basic skills now is the
key to job success in the future.
We also know that the hope our young people have for
their lives in this great country is our most precious
resource. We must keep that hope alive.
We will be working closely and intensively with the
Congress to enact and carry out this youth employment program
as soon as possible.
This past year was one of unmatched and historic achieve-
ment for a vital component of the U.S. economy -- exports
and trade.. In 1979, nearly 3 million jobs in our manufacturing
industries, or one out of every seven jobs in manufacturing,
depended upon our export performance in overseas markets.
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Our exports were a key contributor to the growth of the U.S.
economy in 19T9.
Exports of agricultural and industrial goods grew by
an unparalleled $35 billion, reaching a level of $180 billion.
This represented an increase of 25% over exports in 1978.
This record increase in exports, coupled with a slower rate
of growth of imports, resulted in substantial improvements
of $5 billion in our balance of trade. Furthermore, a rapid
growth of service exports in 1979 led to a $13 billion improve-
ment in the current account, bringing that account from a
deficit in 1978 to near balance in 1979.
I expect that in 1980 our exports will continue to
strengthen and that, if we can continue to further conserve
and limit imports of oil, we will further improve our trade
balance position and that of the dollar. The future for
American exports is bright, and will remain so, despite the
necessity of suspending certain exports to the Soviet Union.
This Administration has accomplished several goals in
the last year in assuring that there will continue to be
greater exports and, therefore, job possibilities for U.S.
workers and farmers.
To improve the condition of access of U.S. exports to
foreign markets, I signed into force in July of last year
a new trade act which reflected two years of hard bargaining
in the recently concluded round of multilateral trade nego-
tiations. These negotiations, which included all major
developed and lesser developed countries, resulted in agree-
ments to strengthen the rules of conduct of international
trade and open new markets to U.S. exports. These negotiations
were of historic importance in their scope and accomplishment,
and their success is attributable to close cooperation that
existed during and after the negotiations between the Congress,
the private sector and the Administration.
Our negotiating success now challenges us to take
advantage of the opportunity for improving further our export
performance. To meet this challenge, I proposed in 1979 a
major reorganization of the government's trade policy and
export promotion activities. That reorganization will
strengthen government coordination in the trade field and
provide an improved basis for protecting American interest
in the recently negotiated trade agreements. I put this.
reorganization into effect,. with Congressional approval,
earlier this month. With the changes initiated in my trade
reorganization, we will ensure that trade between the United
States and its trading partners will be conducted fairly and
openly.
Consistent with my decisions on suspending certain types
of trade with the Soviet Union, my Administration will be
seeking this year to find additional ways to foster U.S. export
expansion. We are studying the possibility of further agree-
ments on expanded trade with both traditional and newer trade
partners, including China. I'look forward to working with
the Congress on ways we can continue to improve our trading
position which, in turn, will help maintain a prosperous
American economy.
Small Business
This year marks the high point of three years of
accomplishment for small business under my Administration,
and the beginning of a decade of continuing effort to strengthen
this large and vital sector of our economy.
(OVER)
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The White House Conference on Small Business, which I
convened eighteen months ago and which has just concluded
its deliberations, fulfills a pledge I made in 1976 that the
voice of small business would be heard in my Administration.
In anticipation of the Conference, I called on the head of
every executive Department and agency to propose at least
one initiative of benefit to small business. Over 160 separate
initiatives have been proposed and are under examination,
and many of them have already been put in effect.
We have made great strides in reforming our regulatory
process, cutting down Federal paperwork and developing flexible
regulations which provide for minimizing or eliminating burdens
on smaller businesses. The capital gains tax has been significantly
reduced, and corporate taxes on small businesses have been
lowered.
We?have also increased Small Business Administration
lending activity, from $1.8 billion in 1976 to $3.1 billion
in 1979, an increase of 72%. Since 1977 we have more than
doubled Federal purchases of goods and services from minority
firms from $1.1 billion to $2.5 billion in 1979. I am confident
that such purchases will exceed $3.5 billion this year.
I' have put into place a comprehensive policy to strengthen
the role of women in business, and have directed Federal agencies
to take affirmative action to include women in management
assistance and other business-related programs.
SBA's advocacy role has been strengthened at my direction,
and SBA has been added to the membership of the Regulatory
Council and the Productivity Council, to help assure that
the problems and issues facing small business are-addressed
wherever relevant policy decisions are made with the Federal
government.
To-reduce the paperwork and regulatory burdens small
businesses face in raising capital, I have recently proposed
a Small Business Issuers' Simplification Act. This legislation
will exempt from the burdensome registration requirements
of the Federal securities laws sales of securities by small
businesses to institutional investors, such as banks, insurance
companies and pension funds, and others making investments
of at least $100,000.
Finally, last week I seat to the Congress a Message an
Small Business to emphasize the vital importance of small
business and to report to you on the steps we have already
taken and plan to take in 19.80 to strengthen small business.
Minority Business
From the beginning of my term, I have worked with the
Congress to increase opportunities for minority business.
As a result of our efforts, enormous progress has been made
in the last three years:
o Federal procurement from minority-owned firms has
increased by nearly two and a half times;
o Federal deposits in minority-owned banks have nearly
doubled;
o minority ownership of radio and television stations
has increased by 65%;
o almost 15% of the funds spent under the Local 'Public
Works Act of 1977 went to minority-owned firms;
a the Section 8(a) program operated by the Small
Business Administration has been reformed and
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17
This year, my Administration is committed to expanding
upon the progress made to date. This year, I am committed
to more than tripling the 1977 level of federal procurement
from minority-owned firms, and I have no doubt we can meet
that goal.
My 1981.budget improves the targeting of Small Business
Administration loans to minority-owned businesses. We will
also expand management, technical, and training assistance
for minority firms and provide substantial funding increases
for minority capital development under the SBA's minority
enterprise small business investment company (MESBIC) program.
I will also be proposing to the Congress a minority
business legislative initiative to establish in the Department
of Commerce a Minority Business Development Agency. That
Agency, a successor to the Office of Minority Business
Enterprise, was established last year under administrative
authority, but I believe Congressional authorization would
strengthen its operating abilities.
Women in Business
Last year I announced a, new policy to strengthen and
foster the growth of women-owned businesses. My new budget
includes funds to make this policy a reality by increasing
SBA direct loans to women by 50:, by assisting women in
gaining access to sources of financing, and by expanding
management and technical assistance to women. By insuring
that women have fuller access to opportunities to start and
maintain their own enterprises, we will start a genuine
momentum to take full advantage of the contribution which
women can make to the growth and productivity of our economy.
II. CREATING ENERGY SECURITY
Since I took office, my highest legislative priorities
have involved the development of our Nation's first compre-
hensive energy policy. The struggle to achieve that policy
has been difficult for all of us, but the accomplishments
of the past three years leave no doubt that our country is
finally serious about the problems caused by our over-dependence
on foreign oil. The accomplishments can be lost, however,
and the progress stopped, if we fail to move forward even
further this year. There is no single panacea that will solve
our energy crisis. We must rely on and encourage multiple
forms of production -- coal, crude oil, natural gas, solar,
nuclear, synthetics -- and conservation.
It is therefore essential that Congress enact the major
energy bills I proposed last year; and their enactment will
be my most immediate and highest legislative priority this
year.
Windfall Profits Tax
My highest, most immediate legislative priority during
this Session is prompt passage of a sound windfall profits
tax on crude oil.
Last April, I proposed a tough windfall profits tax to
recoup a portion of the unearned income that would accrue
to the oil companies as a result of the phased decontrol of
domestic crude oil prices and OPEC price increases. It is
essential that these revenues be invested on behalf of all
Americans to help us become an energy secure nation. The
revenues from the tax will be used to support key national
energy goals: low-income energy assistance, improved and
expanded mass transit and energy supply and conservation
programs.
The windfall tax that I proposed was also carefully
designed to provide incentives needed to increase domestic
more
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oil production. Under my proposal, we expect a barrel per
day increase in domestic production due to decontrol and
higher world prices. Without any windfall profits tax production
would be only marginally higher by 1985.
The American people clearly want and our national energy
needs clearly require -- a tough windfall tax. We cannot
afford further delay.
The House-Senate Conference Committee has reached agreement
on a tax-raising $227 billion over the next ten years. A
tax at that level is acceptable, provided the components of
the tax are consistent with sound energy policy. I urge the
conferees and the Congress to approve forthwith a tax that
I can sign. There can be no higher legislative priority.
Energy Mobilization Board
Last July, together with a comprehensive energy program,
I asked Congress to join with me to create an Energy Mobilization
Board, (EMB). The Board can cut through burdensome and unnecessary
red tape and reach prompt decisions on designated priority
energy projects. Decision-making can be streamlined without
overriding of substantive law, which r strongly oppose. The
Board is a key element of our strategy to attain energy security
by cutting foreign oil imports in the coming years. ?rompt
passage of the EM is one of my highest priorities this year,
and I urge the Congress to complete its action on this proposal
without delay.
Energy Security Corporation
Last year, I proposed the creation of an Energy Security
Corporation to lead our national effort to develop and produce
synthetic fuels, coal-based synthetics, oil shale and biomass.
The Corporation would be an independent body, chartered by
the government and authorized to use a variety of financing
tools -- principally price guarantees, Federal purchases,
and loan guarantees -- to stimulate private sector development
of synthetic energy alternatives to imported oil.
I have recommended that the Corporation be given a goal
to develop the capacity to produce 1..75 million barrels per day
of synthetic fuels, oil shale, and biomass by 1990. With
an ability to produce commercially synthetic alternatives
to foreign crude oil, our Nation will have effectively capped
the price which foreign oil producers can charge for crude
oil.
We cannot do the Job we must do for our Nation's security
by operating this program from within the government. The
Corporation c=:n much more easily obtain the needed talent
and operate without the constraints binding a government
agency.
Enactment of the legislation containing the Energy
Security Corporation is one of my highest legislative priorities
for this Session. I urge the conferees to complete this work
expeditiously so that the Corporation can open its doors
as early as possible this year.
Reduction in Utility Oil Use
I will soon send to the Congress legislation which will
assist utilities in the use of coal, and encourage them to
retire existing oil burning plants for generating electricity.
The Department of Energy and my staff have worked very closely
with Congressional energy leadership over the last several
months to develop a legislative proposal which can be acted
upon quickly.
My proposed utility oil use reduction legislation will
help us to achieve two of our basic energy goals -- decreasing
our dependence on foreign oil and increasing our production
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of more abundant and secure energy supplies, such as coal.
For that reason, passage of this legislation will be one of
my highest energy priorities this year.
Gasoline Rationing
I will soon be sending to Congress for its approval a
standby gasoline rationing plan, under the authority of
legislation I signed into law last year. In developing this
plan, we have given priority attention to accommodating essential
gasoline usage, bearing in mind the need to design a plan
which is workable and which can be put into place. quickly
if a severe emergency arises.
I recognize the difficulty of developing a plan that
meets the many competing State and local concerns. Last
year's experience demonstrated that difficulty very well.
I am determined,. as I am certain Congress is, to avoid
repeating it.
My Administration will-work very closely with Congress
on the standby plan. I hope the Congress will recognize the
overriding national importance of emergency preparedness and
will take action early to approve my proposed plan.
I do not intend, under our current supply conditions,
to implement a rationing program. But we can no longer afford
to be unprepared for the possibility of further severe inter-
ruptions in energy supplies.
Energy Conservation
In my very first energy address to the Nation in April 1977,
I stressed the importance of conservation as the cornerstone
of our national energy policy. It is the cheapest and fastest
means-of reducing our dependence on imported oil and it con-
stitutes an alternative source of supply. To the extent that
we conserve -- in our homes, factories, cars,'and public
buildings -- we make the task of providing secure sources
of energy for the future that much more attainable.
In November, 1978, I signed into law our country's. first
energy conservation tax credits. These provide up to $300
for home conservation investments, and an additional 10,10
investment tax credit for industrial investments in energy
efficient equipment. At the same time, we put in place a
requirement that utilities provide energy audits for their
customers and offer to arrange financing. We also established
stiff taxes on new gas guzzling automobiles. As a result
of my April 1977 initiatives, we are also providing a total
of $900 million over three years to weatherize schools and
hospitals across the Nation.
Last July, I proposed a program to provide $5.8 billion
over the next decade to subsidize interest rates on homeowner
loans for conservation investments. This program will be
targeted to low- and moderate-income homeowners and apart-
ment owners for whom the tax credits are less effective as
an incentive. Under this program it is expected that consumers'
total monthly bills will decline since the financial savings
resulting from lower energy use will be greater than the
monthly payments on the subsidized loans.
I consider this new program to be an essential piece
of my overall conservation strategy and urge the House-Senate
Conference Committee now working on the bill containing this
provision to complete work promptly.
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Energy conservation must also go forward at the State and
local levels. To help that important effort, I am again urging
Congress to pass my proposal, under the authority of the
proposed Energy Management and Partnership Act, to provide
grants to local governments to meet national energy conserva-
tion goals.
Solar Energy
Last June, I sent the Congress a Message on Solar Energy
outlining my Administration's solar program and setting a
national goal for the year 2000 of deriving 20% of this Nation's
energy from solar and renewable resources. A firm and ambitious
course -- not only by the Federal government but also by State
and local governments, private industry, academia and private
citizens -- is required to reach this goal.
As part of my solar program announced in June, I proposed
a number of initiatives to the Congress to assist in solar
energy development. Among those were the establishment of
a Solar Energy Development Bank funded at $150 million per year
to provide subsidized loans-for the installation of solar
equipment on homes and commercial structures, and additional
tax credits for passive solar construction, wood stoves,
industrial and agricultural solar applications, and gasohol.
These initiatives have yet to be enacted by the Congress and
I urge prompt action on these measures to help speed the
penetration of solar technologies in the marketplace.
In addition, my FY 1980 program for solar energy exceeded
$1 billion government-wide. This. is more than three times
greater than the program in place when I took office. In
FY 1981 government-wide expenditures for solar and renewable
energy will. be nearly $1.4 billion and will include programs
administered. by the Departments of Energy, Agriculture,
Interior, Defense, State, Housing and Urban Development, and
the Tennessee Valley Authority. The Federal solar program
has as its overall objectives, the emphasis on basic research
and development of solar technologies not currently economic
such as photovoltaics, where electricity is generated directly
from the sun, and the provision of funding and technical informa-
tion to accelerate the use of marketable solar technologies
which are available now. Solar heat and hot water and wood
energy are among these technologies.
We will continue to work with the Congress this session
on passage of critical solar energy legislation. We are
making progress on the transition away from our dependence
on fossil fuels and towards the widespread use of renewable
sources of energy. We must maintain an aggressive policy
to achieve this transition.
Nuclear Safety
Immediately following the accident at Three Mile Island,
I established a Presidential Commission, chaired by the Presi-
dent of Dartmouth College, to report to me on actions needed
to prevent recurrence of this kind of accident. Safety is
and will remain my Administration's primary priority in the
regulation and management of nuclear power. I have taken
steps to correct virtually all problems identified by the
Kemeny Commission and have acted to implement most of its
specific recommendations, including:
o A reorganization of the NRC to strengthen the role
of the Chairman. I will soon send to Congress a
reorganization plan to give the Chairman power to
select key personnel and act on behalf of the
Commission during an emergency.
o Appointment of a new Chairman of the NRC from outside
the agency when the next vacancy occurs. In the
meantime, I have designated Commissioner Ahearne
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as Chairman with a mandate to initiate changes
needed to assure the safety of nuclear power plant
operations.
o Direction to the Federal Emergency Management Agency
to lead all off-site emergency activities and review
all emergency plans in States with operating reactors
by June.
o A request to the NRC to accelerate its program to
place a resident Federal inspector at every reactor
site, and to upgrade training and evaluation programs
for reactor operators.
I endorsed the approach the NRC adopted to pause in
licensing, but have urged the Commission to complete its work
as quickly as possible, and in any event no later than June
of this year.
Once we have instituted the necessary reforms to assure
safety, we must resume the licensing process promptly so that
the new plants which we need to reduce our dependence on
foreign oil can be built and operated. Nuclear power is
an option that we should keep open.
I have recently proposed a program to accelerate dramatically
America's production and use of gasohol, as yet another important
way on which we can wage -- and win -- our energy war.
My Administration is committed to a program which will
provide between $8.5 billion and $12.8 billion of assistance
to stimulate production of alcohol fuels over the coming
decade. We will quadruple current gasohol production capacity
by the end of this year. During 1981, we should be capable
of producing ethanol at an annual rate of 500. million gallons --
more than six times the current rate. If this entire amount
of ethanol were turned into gasohol, it would replace almost
10% of our anticipated demand for unleaded gasoline in 1981.
Our overall gasohol program will spur the investments
that we together must make for a more secure energy future.
We will create new markets for our farmers. We will no longer
have to throw away waste materials which can be turned into
profitable, essential fuels.
Our Nation's enormous agricultural and fiber resources
can be used to help provide a secure source of energy for
our future. By producing gasohol from fiber and agricultural
by-products, we can meet fuel needs for millions of Americans,
including our farmers. I am eager to work with the Congress
on my alcohol fuels program, so that we can soon have legis-
lation that will authorize and provide the funding for this
important energy development.
Energy Impact Assistance
As new domestic energy resources are developed, particularly
in rural or isolated areas of the country, we must provide
for the needs of rapidly developing communities. My Administration
will continue to work with the Congress to enact legislation
establishing an Inland Energy Assistance program, with funding
of $150 million per year, to aid those States and local areas
which are experiencing a rapid growth in population as a result
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of new energy supply development. These communities often
cannot plan for or meet increased need for new public facilities
or services, since the population increases occur before the
new energy supply activities are fully developed and producing
local revenues. This legislation is essential to ensure that
the burdens associated with solving our energy problems are
borne equitably by all citizens and regions of the country.
III. ENHANCING BASIC HUMAN AND SOCIAL NEEDS
For too many years immediately preceding my Administration,
too many of our Nation's basic human and social needs were
being ignored or dealt with insensitively by the Federal govern-
ment. Over the past three years, we have significantly
increased funding for many of the vital programs in these
areas; developed new programs where needs were unaddressed;
targeted Federal support to those individuals and areas most
in need of our assistance; and removed barriers that have
unnecessarily kept many disadvantaged citizens from obtaining
aid for their most basic needs.
Our efforts over the past three years have produced clear
progress in our effort to solve some of the country's funda-
mental human and social problems. The Administration and
the Congress, working together, have demonstrated that govern-
ment must and can meet our citizens' basic human and social
needs in a responsible and compassionate way.
But there is an unfinished agenda still before the
Congress. If we are to meet our obligations to help all
Americans realize the dreams of sound health care, decent
housing, effective social services, a good education, and
a meaningful job, we still have important legislation to
enact this year. The legislation is before the Congress,
and I will be working with you toward its enactment.
National Health Plan
Last June, I proposed to Congress a National Health Plan
which will enable the country to reach the goal of compre-
hensive, universal health care coverage. The legislation
I submitted lays the foundation for this comprehensive plan
and addresses the most serious problems of health financing
and delivery. It is realistic, affordable, and enactable.
It does not overpromise or overspend, and, as a result, can
be the solution to the thirty years of Congressional battles
on national health insurance. My Plan includes the following
key features:
nearly 15 million additional poor would receive
fully-subsidized comprehensive coverage;
pre-natal and delivery services are provided for
all pregnant women and coverage is provided for all
acute care for infants in their first year of life.
o the elderly and disabled would have a limit of
$1,250 placed on annual out-of-pocket medical
expenses and would no longer face limits on
hospital coverage;
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o all full-time employees and their families would
receive insurance against at least major medical
expenses under mandated employer coverage;
o Medicare and Medicaid would be combined and expanded
into an umbrella Federal program, Healthcare, for
increased program efficiency, accountability and
uniformity; and
o strong cost controls and health system reforms
would be implemented initiatives, including greater
incentives for Health Maintenance Organizations.
If enacted this year, my Plan would begin providing
benefits in 1983.
I urge the Congress to compare my Plan with the
alternatives -- programs which either do too little to improve
the health care needs of Americans most in need or programs
which would impose enormous financial burdens on the American
taxpayers. When that comparison is completed, I am convinced
the Congress will see the need for and the benefits of my
Plan and work toward prompt enactment. We cannot afford
further delay in this vital area.
Hospital Cost Containment
Hospital Cost Containment remains the single most important
piece of legislation that the Congress can pass to demonstrate
its commitment to fight inflation. This legislative initiative
will save billions of dollars for our Nation's consumers by
eliminating unnecessary and wasteful hospital services. We
can no longer allow hospital inflation to put needed health
care out of the reach of the average American. In a sector
where there is an absence of competitive forces, Hospital
Cost Containment legislation is necessary to restrain spending,
while the process of developing other effective measures
proceeds. The longer we delay enacting Cost Containment,
the more expensive our fight against hospital inflation will
become. I am asking the Senate to move quickly on this
legislation.
Health Promotion and Disease Prevention
Last July, the Surgeon General released Healthy People,
a landmark report on health promotion and disease prevention.
The report signals the growing consensus that the Nation's
health strategy must be refocused in the 1980's to emphasize
the prevention of disease. Specifically, the report lays
out measurable and achievable goals in the reduction of
mortality which can be reached by 1990.
Consistent with this report, the health strategy I will
propose in my FY 1981 budget places unprecedented emphasis
on prevention. This strategy includes increased funding for
many new and continuing programs in the areas of environmental
hazards, workplace health and safety, commercial product
safety, traffic safety, community water fluoridation, and
health education, promotion and information.
Maternal and Child Health
Ensuring a healthy start in life for children remains
not only a high priority of my Administration, but also one
of the most cost effective forms of health care.
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When I took office, immunization levels for preventable
childhood diseases had fallen to 70:. As a result of a con-
certed nationwide effort during my Administration, I am pleased
to report that now at least 90% of children under 15, and
virtually all school-age children are immunized. In addition,
reported cases of measles and mumps are at their lowest levels
ever.
Under the National Health Plan I have proposed, there
will be no cost-sharing for prenatal and delivery services
for all pregnant women and for acute care provided to
infants in their first year of life. These preventive services
are recognized to have extremely high returns in terms of
improved newborn and long-term child health.
Under the Child Health Assurance Program (CHAP) legislation
which I have already submitted to this Congress, an additional
two million low-Income children under 18 will become eligible
for Medicaid benefits, which will include special health
assessments. CHAP will also improve the continuity of care
for the nearly 14 million children now eligible for Medicaid.
An additional 100,000 low-income pregnant women will become
eligible for prenatal care under the proposal. We must work
together this year to enact CHAP and thereby provide millions
of needy children with essential health services.
For the third consecutive year, I am requesting expansion
of the special supplemental food program for women, infants,
and children. Under my proposal, over 2 million low-income
nutritionally needy mothers, their nursing infants, and
children will receive special food supplements each month.
These-food supplements have been shown to prevent ill health
thereby reducing later medical costs.
In addition to these legislative initiatives, I will
propose increased funding in the F "T budget for the suc-
cessful Family Planning program, which targets services on
low-income women and adolescents at high risk for unwanted
pregnancy. Further, the 1981 budget contains continued
funding for my Adolescent Health initiative, which is- designed
to provide and coordinate services to pregnant teenagers as
well as reduce the incidence of unwanted pregnancies, will
be continued in the new budget. -
Expansion of Services to the Poor and Underserved
My health proposals for FY 1981 will place high priority
on expanding other improvements which have been made during
my Administration in the access and continuity of care for
medically underserved groups. I will propose substantially-
increased funding for the most successful programs in this
area, including Community and Migrant Health Centers, and
the National Health Service Corps program, which places health
professionals in rural and urban medically underserved areas.
In addition, I am proposing legislation to make coverage of
clinics providing comprehensive primary care services a mandatory
benefit under Medicaid.
Mental Health
Last year, I submitted a Mental Health Message to Congress
and proposed the Mental Health Systems Act, which is based
upon recommendations of my Commission on Mental Health. The
Act is designed to inaugurate a new era of Federal and State
partnership in the planning and provision of mental health
services. In addition, the Act specifically provides for
prevention and support services to the chronically mentally
i11, to prevent unnecessary institutionalization, prevention
services, and for the development of community-based mental
health services.
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This year, my Administration will be working intensively
with the Congress for prompt enactment of this important
legislation, and the First Lady will continue her substantial
work in this area, as an effective spokesperson and advocate
for mental health reform throughout the country.
Worker Health and Safety
My Administration will continue to enforce fully laws
protecting worker health and safety in a sensible and efficient
manner. We will be making further efforts to eliminate frivolous
and unneeded rules, while concentrating greater enforcement
efforts on the most dangerous and particularly the most unhealthy
occupational environments. More effective management of our
worker safety programs will serve the interest that both labor
and management have in better working conditions.
Drug Abuse Prevention
At the beginning of my Administration there were over
a half million heroin addicts in the United States. Our
continued emphasis on reducing the supply of heroin, as well
as providing treatment and rehabilitation to its victims,
has reduced the heroin addict population to 380,000, reduced
the number of heroin overdose deaths by 80%, and reduced the
number of heroin related injuries by 50%. However, drug abuse
in many forms continues to detract from the quality of life
and is of great concern to us and the people of all nations.
I am particularly concerned over the increasing quantities
of heroin originating in Iran and Southwest Asia and we will
continue to be especially alert to this threat in 1980. During
1980, we will also strive to reduce the supply of illegal
drugs, both at their overseas sources and within the United
States. While continuing a comprehensive treatment program,
our priority will be to reduce drug abuse among adolescents.
One of the important goals of my Administration at the beginning
of this decade is to change the social acceptance of drug
use.
Food and Nutrition
Building on the comprehensive reform of the Food Stamp
Program that I proposed and Congress passed in 1977, my Adminis-
tration and the Congress worked together last year to enact
several other important changes in the Program. These changes
will further simplify administration and reduce fraud and
error, will make the program more responsive to the needs
of the elderly and disabled, and will increase the cap on
allowable program expenditures. in this session, I will continue
to work with the Congress to achieve additional improvements
in the Food Stamp Program and to eliminate permanently the
expenditure cap. I will also propose this year that Congress
pass the Administration's Child Nutrition Amendments to target
assistance under our school meal programs to those most in
need.
EDUCATION
The stern challenges of the 80's place new demands on
every sector of our society. Education is the insurance we
have to provide the talent and capability to meet every demand
on our National agenda. The challenge of the 80's in education
is to see that quantity education becomes quality education.
That is a challenge we can meet. Last year, my Administration
and the Congress successfully collaborated to create a new
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Department of Education. The Department will give education
a stronger voice at the Federal level, while at the same time
reserving the actual control and operation of education to
states, localities, and private institutions. The Department
combines nearly 150 existing Federal education programs into
a cohesive, streamlined organization that will be more
responsive to the needs of educators and students. The
Department will cut red tape and paperwork to make the flow
of Federal dollars to school districts and institutions of
higher education more efficient, thereby providing students
and educators with more benefits per-dollar of Federal funds.
We are determined to work closely with the Congress this year
in making certain that the Department begins on a sound basis,
consistent with the purposes and hopes Congress had when
creating it.
To ensure adequate financial resources for education,
r have requested, since taking office, an overall increase
in Federal aid to education of 75% above the previous
Administration's last budget. Many programs, including those
serving disadvantaged and handicapped students and those
providing financial aid to students enrolled in postsecondary
education, have benefited from ever larger percentage increases
during my Administration.
My FT 1981 budget request in education will represent
a generous increase over last year's budget. There will be
particularly significant increases in a number of programs
serving special populations, in addition to the major new
program designed to give youth the basic skills needed to
get.and keep a job. I am also recommending a substantial
increase in the programs which deal with international
education, to improve our understanding of other nations.
In addition, proposals I submitted last July to reauthorize
the Higher Education Act are still under consideration in
the Congress. The centerpiece of my proposals for the student
financial aid programs is a major reform of the student loan
programs. My proposal would, for the first time, provide
a comprehensive program of loans from the Federal government
for higher education students who need them. Our proposals
would eliminate much of the paperwork and confusion that have
plagued students, parents, and colleges by mandating a single
application form for all Federal need-based assistance.
It is essential that this reauthorization be enacted
this year. But the reauthorization legislation must be
consistent with my commitment to a restrained, responsible
budget. We are eager to work with the Congress to achieve
this goal as 'soon as possible.
INCOME SECURITY
Welfare Meform
Last year, r proposed a welfare reform package which
offers solutions to some of the most urgent problems in our
welfare system. This proposal is embodied in two bills --
The Work and Training Opportunities Act and The Social Welfare
Reform Amendments Act. Within the framework of our present
welfare system, my reform proposals offer achievable means
to increase self-sufficiency through work rather than welfare,
more adequate assistance to ceople unable to work, the removal
of inequities in coverage under current programs, and fiscal
relief needed by States and localities.
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Our current welfare system is long overdue for serious
reform; the system is wasteful and not fully effective. The
legislation I have proposed will help eliminate inequities
by establishing a national minimum benefit, and by directly
relating benefit levels to the poverty threshold. It will
reduce program complexity, which leads to inefficiency and
waste, by simplifying and coordinating administration among
different programs.
Last year the House passed The Social Welfare Reform
Amendments Act, which addresses the major problems in our
cash assistance programs. This year, we must continue this
momentum toward welfare reform. I am determined to do whatever
I can to help enact the two bills needed for the most compre-
hensive reform of the welfare system in our history.
Child Welfare
My Administration has worked closely with the Congress
on legislation which is designed to improve greatly the child
welfare services and foster care programs and to create a
Federal system of adoption assistance. The work of the Congress
on this legislation is now almost completed. The well-being
of children in need of homes and their permanent placement
are primary concerns of my Administration, and I am determined
to see improvement in the system which cares for these children.
This legislation will help ensure that.
Low-Income Energy Assistance
Last year, I proposed a program to provide a total of
$2.4 billion per year to low-income. households which are
hardest hit by rising energy bills. With Congress' cooperation,
we were able to move quickly to provide $1.6 billion for assts
tance needed this winter. Of that amount $1.2 billion was
provided for grants to eligible households and $400 million
for an energy crisis assistance program. The first checks
were received by eligible families and individuals in early
January.
I have already proposed, and will continue to press for,
legislation which provides $2.4 billion a year for low-income
energy assistance. Funding from this program will come from
the Windfall Profits Tax. Continuing this assistance is one
of my high priorities in this session of Congress.
Social Security
I have been deeply committed to restoring the public's
confidence and trust in the Social Security System. With
the passage of the Social Security Amendments of 1977, the
financial stability of the System was improved. Each month
35 million Americans receive pension and disability checks.
They can rely on doing so without fear of interruption.
We must, however, address the continuing financial
viability of the Social Security System in light of changing
economic circumstances. We must also review the equity of
the sex-related distinctions contained in the system's benefit
provisions.
To help ensure the system's viability, I will propose
legislation to permit borrowing among the separate trust
funds. This measure will strengthen the Social Security
System for current and future beneficiaries. I will also
review closely the work of several major study groups, and
will consult with experts in the Department of Health and Human
Services and the Congress to assess their recommendations.
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Disability Insurance Reforms
As a result of the legislation we enacted in 1977, which
strengthened the financing of the Social Security System,
the Social Security disability insurance program is now in
stable financial condition. Last year, my Administration
proposed modifications in the program to further improve
its administration and to increase incentives for disabled
beneficiaries to seek rehabilitation and to return to work.
In 1980, we will work with the Congress to enact these reforms.
I. hope the Congress will stay as close as possible to my
original proposal. ,
My Administration has brought improved stability to the
Nation's housing market. Housing starts from 1977 through
1979 averaged more than 1.9 million units per year. We have
been and remain committed to assuring the availability of
an adequate level of mortgage credit during a period of record
high interest rates. Toward that goal, we developed the six-
month money market certificate-and broadened the secondary
market activity of the Government National Mortgage Association
and the Federal Rome Loan Mortgage Corporation. Most recently,
the bank regulators introduced two and one-half year certificates
which should become valuable sources of funds for savings
institutions, enabling them to continue a high level of mortgage
lending.
I am pleased that our anti-inflation policies have begun
to slow the rate of growth in home prices. Within the context
of our overall economic strategy, we will continue to support
measures which provide for improved stability in the housing
industry, avoiding the boom and. bust cycles that led to
unemployment, business failures and dislocation in the past.
I have sent to the Congress legislation to update the govern-
ment's emergency authority, under the Brooke-Cranston program
to purchase mortgages in times of economic stress. The current
authority could not be used effectively. _I urge, quick Congressional
action on this legislation, so that the Administration will
be in a position to use this program, if necessary.
We have also brought improved stability and predictability
and higher production to the provision of assisted housing
for low- and moderate-income Americans, including the elderly
and the handicapped. During the period from 1978 through
1981, my Administration will have committed nearly 1.3 million
units of housing for lower income renters and homeowners.
Actual construction starts reached 175,000 units in 1979,
a level which we will sustain through the next several years.
I will be proposing in my LT 1981 budget a level of 300,000
assisted rental units and 25,000 assisted homeownership units,
a total 25% increase over 1980 Levels. This recommendation
reflects my Administration's concern about the number of poor
Americans still living in substandard housing. I will also
propose this year to extend HUD's home ownership assistance
and interest subsidies to low-income tenants in designated
revitalization areas. That will help address the particular
problem of displacement of low-income persons and the elderly
by urban revitalization and condominium conversions.
My Administration will again be working with the Congress
to pass the condominium reform legislation that I proposed
last year. That legislation will provide basic protections
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for the purchasers of condominium units. Many unit owners
lack adequate remedies to redress serious inequities under
existing law, and expeditious Federal action in this area
is a priority.
In 1980 we will also propose a number of significant
new legislative initiatives. I will be proposing a comprehensive
simplification and consolidation of the Nation's basic housing
laws on mortgage insurance and mortgage credit activities
of the Federal Housing Administration and the Government
National Mortgage Association. This proposal will make the
services of these agencies more understandable and accessible
to the American public..
I will also be recommending prompt Congressional action
to extend the Rome Mortgage Disclosure Act, which has been
an important factor in aiding the availability of mortgage
credit in inner city areas.
Finally, building on the-urban partnership we have
established with the citiesy we will continue to increase
the control local. governments exercise over the operation
of Federal housing programs. We will propose a fundamental
change in HUD's public housing modernization program to allow
local authorities to use up to 50% of their public housing
production funds for modernization and repair of the existing,
deteriorated stock of public housing. And in recognition
of the severity of the housing problems in America's rural
communities, we will be implementing the Action Agenda of
12 Rural Housing Initiatives which I announced last month.
Neighborhood Development
Neighborhood development is an essential component of
my policies designed to revitalize our Nation's urban areas.
My Administration has taken a number of steps to assist
non-governmental, neighborhood groups carry out community
improvement plans.
In Fiscal Year 1981, I will propose increased funding
for the Neighborhood Self-Help Development Program. This
program aims to build the capacity of independent, neighborhood
organizations to implement conservation and revitalization
projects in low- and moderate-income neighborhoods.
In 1980, I will strongly support the renewal of the'Rome
Mortgage Disclosure Act in order to encourage neighborhood
reinvestment. My Administration will also continue to support
fully the neighborhood reinvestment actions of independent
regulatory agencies, such as the Federal Home Loan Bank
Board's Community Investment Fund.
TRANSPORTATION
A major goal during the 1980's is to bring about a dramatic
increase in the economic and energy efficiency of our trans-
portation systems. While this Nation's transportation facilities
are among the best in the world, they were planned, designed
and constructed in an era of abundant and cheap energy. The
country now faces a totally different situation of scarce
and increasingly expensive energy. To help combat this problem,
I have proposed to use $16.5 billion over the next decade
from the windfall profits tax revenues to increase the energy
efficiency of transportation. Of that, $13 billion would
be allocated to increase transit capacity; $2.5 billion would
be directed to promote the energy-efficient use of the automobile;
and $1 billion for research on automotive fuel efficiency.
I urge the Congress to enact this proposal without delay.
more
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To further promote energy conservation, stimulate urban
growth and create new employment opportunities in the inner
cities, I urge the Congress to support mass transportation
authorization legislation. This year I will seek reauthoriza-
tion and extension of the public transportation grant program.
With the assistance of the Congress, we have taken a
number of positive steps to reform outmoded transportation
regulation. The Airline Deregulation Act of 1978 is working
well, with reduced passenger fares per mile, and with the
airlines better able to withstand the effects of recession
and fuel price increases than would have otherwise been
possible. To continue that type of progress, last year I
submitted truck and rail regulatory reform bills and I am
committed to seeking their enactment in 1980. These important
bills will save consumers billions of dollars annually and
reduce wasted fuel consumption.
To further improve America's railroads, I have introduced
legislation to direct Federal-railroad financial assistance
toward restructuring of failing railroads and improved
employment efficiency.
I will also ask Congress to increase funding for and
extend the life of the Northeast Corridor Improvement Project
to improve passenger rail services in the Northeast.
Statutory authority for present airport programs and
related aviation taxes will expire during 1980. I have already
sent to the Congress a proposal to use nearly $15 billion
from the Airport and Airways Trust Fund over the next five
years for airport and aviation expenses. I urge Congress
to enact this proposal this year.
Finally, r an committed to the further development of
our-maritime industry. To achieve maximum export competitive
position for the United States, the ties between our port
facilities and our land transport facilities must be greatly
improved. Last year, my Administration conducted a compre-
hensive review of maritime policy and transmitted to the
Congress our goals for liner regulation and merchant marine
promotion. This year, we will be working with the Congress
to pass legislation that embodies our interest in expanded
trade and a strong merchant marine fleet.
SPECIAL NEEDS
The efforts of my Administration over the last several
years have been concentrated on providing American women with
a full range of opportunities. Programmatic initiatives have
been developed to overcome the widespread discrimination and
disparities which women have faced in education, in health,
and in employment.
The Women's Education Equity Act has been funded in both
Titles I and II to provide school boards with grants for
programs designed to end discrimination in education. The
avoidance of discrimination in education has been also stressed
through improvements in the enforcement of existing civil
rights legislation.
The particular health problems faced have been addressed
with increases in the family planning funds under Title XX,
as well as improved teenage pregnancy funding and programs.
Further, my National Kealth Plan provides complete coverage
to pregnant mothers and infants without cost.
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Employment still continues to be a major problem with
a wide gap between the average week wage of men and women.
This is being addressed through major improvements in the
funding for the Women's Bureau of the Department of Labor
for model training programs and research projects.
CETA prime sponsors have been matched on a four-to-one
basis to improve the amount of funding for these programs.
In the year ahead, the Administration will be supporting
the passage of legislation to decrease domestic violence and
provide-shelters for battered spouses.
As part of my Administration's effort to focus attention
upon and strengthen the family structure, last year I established
the Office of Families within the Department of Health, Education,
and Welfare. That office will help coordinate our activities
in this vital area. Later this year, we will hold the White
House Conference on Families, which I initially proposed during
my 1976 campaign. This conference, the culmination of three
years of work, will help focus public attention on the problems
affecting families and on the means needed to solve or avoid
those problems.
Older Americans
My Administration has taken great strides toward solving
the particular problems faced by senior citizens. Early in
this term we worked successfully with the Congress to assure
adequate revenues for the Social Security Trust Funds. I
have also signed into law legislation prohibiting employers
from requiring retirement prior to age TO, and removing mandatory
retirement for most Federal employees. Further, the Adminis-
tration worked closely with Congress to amend the Older Americans
Act in a way that has already improved administration of its
housing, social services, food delivery, and employment programs.
This year, I will be submitting to Congress a budget
which again demonstrates my commitment to programs for the
elderly. It will include increased funding for nutrition,
senior centers and home health care, and will focus added
resources on the needs of older Americans. I will also be
seeking to strengthen further the Social Security System by
proposing legislation to permit borrowing among the separate
trust funds.
With the 1981 White House Conference on Aging approaching,
my Administration is making every effort to assure an effective
and useful conference. This forum should enable older Americans
to voice their concerns and give us guidance in our continued
efforts to ensure the quality of life so richly deserved by
our senior citizens, with special attention to those in need
of long-term care.
GOVERNMENT ASSISTANCE
General Aid to State and Local Governments
Since taking office, I have been strongly committed to
strengthening the fiscal condition of our Nation's State and
local governments. I have accomplished this goal by maintaining
consistent and strong economic growth, and by encouraging
economic development of local communities, and by supporting
the General Revenue Sharing and Counter-Cyclical Fiscal
Assistance programs.
(OVER)
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General Revenue Sharing
This year I will propose the renewal of General Revenue
Sharing. My Administration's proposal '+ill forge a closer
partnership among the Federal, State and local governments
and will further emphasize the pivotal role of the States
in our Federal system. My proposal for GRS renewal also will
provide additional aid to the cities and counties that are
most strained fiscally.
I will soon send legislation to Congress that will extend
GRS for five years at the current funding level of $6.9 billion.
One-third of the money will be provided to State governments
on the basis of the current distribution formula. As a condition
for continued payments to the States, each State will be
required to constitute a broadly-based Commission to assess
and address the fiscal problems confronted by the State and
by the local governments within the State. These Commissions
will provide a mechanism for involving the States to a greater
extent in the Federal-State-local government partnership.
Two-thirds of GRS payments will be provided to local
governments on the basis of population, tax effort and per
capita income. While I will propose retention of the basic
distribution formula for local governments, I also will propose
a number of modest formula changes to provide greater aid
to localities with large service responsibilities and with
insufficient fiscal resources.
My proposal for GRS renewal will be the cornerstone of
my policy for Federal-State-local government relations in
the 1980's. This policy will emphasize the need for all levels
of government to cooperate in order to meet the needs of the
most fiscally strained cities.and counties, and also will
emphasize. the important role that GRS can play in forging
this partnership. L urge Congress to move quickly on my GRS
proposal, to assure that our Nation's States and localities
can begin the 1980's in sound fiscal condition.
Counter-Cyclical and Targeted Fiscal Assistance
Last year, r submitted to Congress a two-part fiscal
aid package designed to strengthen further the fiscal condition
of our Nation's States and localities. The first part of
this legislation provided standby counter-cyclical legislation
to protect States and localities from unexpected changes in
the national economy. The second part provided transitional
highly targeted fiscal assistance in FY 1980 to only the
most distressed local governments.
Substantial progress has been made on this legislation
in the past year. The Senate passed legislation providing
both targeted fiscal assistance and counter-cyclical aid in
August, 1979, and similar legislation is now ready for House
action. It is important that Congress complete its action
on this legislation early this year.
URBAN POLICY
Two years ago, I proposed the Nation's first comprehensive
urban policy. That policy involved more than one hundred
improvements in existing Federal programs, four new Executive
Orders and nineteen pieces of urban-oriented legislation.
With Congress' cooperation, fifteen of these bills have now
been signed into law. Additional action is expected to put
into place more of these proposals this year..
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Economic Development
One of the principal goals of my domestic policy has
been to strengthen the private sector economic base of our
Nation's economically troubled urban and rural areas. With
Congress' cooperation, we have substantially expanded the
Federal government's economic development programs and provided
new tax incentives for private investment in urban and rural
communities. These programs have helped many communities
to attract new private sector jobs and investments and to
retain the jobs and investments that already are in place.
When I took office, the Federal government was spending
less than $300 million annually on economic development programs,
and only $60 million of those funds in our Nation's urban
areas. My FY 1980 budget requested more than $1.5 billion
for economic development grants, loans and interest subsidies
and more than 32.5 billion for loan guarantees. Approximately
60% of these funds will be spent in our Nation's urban areas.
My FY 1981 budget continues these programs at these already
high levels. In addition, we have extended the 10% investment
credit to include rehabilitation of existing industrial facilities
as well as new construction.
This year we need to continue our progress by extending
and expanding the programs of the Economic Development
Administration. With Congress' cooperation, this legislation
already has passed both the House and the Senate. Both the
House and the-Senate bills include the key elements of my
original National Development Bank proposal and provide a
substantial expansion of the economic development grant, loan,
loan guarantee and interest subsidy programs of the Federal
government. This legislation is vitally important to the
economic revitalization and redevelopment of our Nation's
economically troubled urban and rural areas. I am hopeful
that the conferees will complete their work shortly so that
we can get these essential programs underway.
I continue to believe that the development of private
sector investment and jobs is the key to revitalizing our
Nation's economically depressed urban and rural areas. To
ensure that the necessary economic development goes forward,
the Congress must enact legislation reauthorizing the programs
of the Economic Development Administration. That legislation
is now in Conference, and I urge the conferees to complete
their work soon, so that we can provide a foundation for the
economic development of our Nation in the 1980's.
Community Development
The partnership among Federal, State and local governments
to revitalize our Nation's communities has been a high priority
of my Administration. When Itook office, I proposed a sub-
stantial expansion of the Community Development Block Grant
(CDBG) program and the enactment of a new $400 million Urban
Development Action Grant (IIDAG) program. Both of these programs
have provided essential community and economic development
assistance to our Nation's cities and counties.
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This year, I will ask Congress to reauthorize both the
CDBG and UDAG programs. I will propose that the CDBG program
be reauthorized for three more years, and that a $150 million
increase in funding be provided for FT 1981. I also will
propose that the UDAG program be extended for three years,
and that $675 million be provided for this program in the
upcoming fiscal year. These actions should help our Nation's
cities and counties to continue the progress they have made
in the last three years.
Rural Policy
Since the beginning of my Administration, we have taken
steps to address the pressing needs of a changing and rapidly
growing rural America. For many rural areas, and for most
rural residents, the last decade was a time of rapid growth
and development. While this growth and development has produced
higher income and increased jobs in rural communities, it
has also created substantial housing, energy, transportation,
health, and management problems..
Last December I announced our Small Community and Rural
Development Policy, which is the culmination of several years'
work and is designed to address these pressing problems now
affecting rural areas. The major elements of the policy involve:
Creation of the position of Under Secretary of
Agriculture for Small Community and Rural Development
to provide Leadership in carrying out this policy.
Establishment of an inter-agency working group to
assist in the implementation of this policy.
Appointment of a citizens Advisory Council to advise
the President on the performance of the Federal
government in the implementation of this policy
and to recommend needed changes.
-- An invitation to the Nation's government-formed
rural development councils to work in partnership
with Federal agencies in delivering State and Federal
programs to rural areas.
-- A directive to the working group to annually review
existing and proposed policies, programs, and budget
levels to determine their adequacy in meeting rural
needs and fulfilling the policy objectives and
principles..
This is a landmark policy. It is the first time rural
affairs has been given the prominence of a Presidential policy.
Although many new program authorities for dealing with rural
problems have been provided over the past two or three decades,
there has been no institutional capacity at the Federal level
for coordinating and focusing these efforts in a coherent
and effective way. This policy provides that capacity, backed
by my personal commitment to make it work.
My Administration will be working with the Congress this
year to pass legislation needed to fulfill the commitment
of this rural policy initiative.
Refugees
In 1979 my Administration made significant progress in
resolving a number of problems arising from the increase in
refugees. Last March, I proposed comprehensive refugee legisla-
tion, and I regard its passage as a high priority this year.
The legislation -- which is the first comprehensive reform
n"nre
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of our refugee immigration and domestic resettlement policies
in twenty-eight years -- will bring common sense and cohesion
to an unnecessarily fragmented approach to international and
domestic refugee needs. Under vigorous new leadership, the
Office of the U.S. Coordinator for Refugee Affairs, which
I created last year, will aggressively address the needs of
refugees at home and abroad. We will also encourage greater
cooperation with the private sector and other actions to
ensure successful refugee resettlement.
Veterans
As our commitment to peace and our national security
remains as strong as ever, so too is our Nation's obligation
to those whose past service to our country helped to keep
peace in the world. For that reason, my Administration's
commitment to the needs of America's veterans will remain
a high priority.
My Administration is committed to sustain high quality
health care in the V.A. hospital system, the largest in the
free world, and to encourage its growth in the most effective
and efficient manner. That commitment will be reflected in
my budget for FY 1981. The system must maintain its independent
integrity.
In 1980, we will continue to honor and seek recognition
of all our Nation's veterans, but we must acknowledge that
veterans of the Vietnam War have yet to be accorded the full
honor bestowed upon veterans of past wars. We will continue
this year to assist Vietnam-era veterans with special needs
and concerns, building on my initiative last year for these
veterans. Accordingly, this year, I will again ask the Congress
to reform and revitalize the VA's vocational rehabilitation
program, and to extend eligibility for the G.I. Bill to those
veterans of the Vietnam War era who are most in need of advanced
job training opportunities. In addition, I will seek increased
benefits for the recipients participating in the current G.I.
Bill program. The Nation's veterans deserve these benefits,
and I am committed to serving them.
My Budget also proposes legislation to grant a cost-of-
living increase for the recipients of compensation for disabili-
ties incurred while in the service cf their country.
CONSUMERS
Consumer Reoresentation
Last September I signed an Executive Order designed to
strengthen and coordinate Federal consumer programs and to
establish procedures to improve and facilitate consumer par-
ticipation in government decisionmaking. Under the Order,
each Federal agency must adopt and implement its own strong
consumer program.
I also established an interagency Council to coordinate
the Agencies' actions in responding to the Executive Order.
This year, under the leadership of my Special Assistant for
Consumer Affairs, we will be working to make certain that
the Order is faithfully implemented and that consumers receive
better protection and assistance from Federal agencies.
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My Administration will continue to support efforts to
provide financial assistance in regulatory proceedings to
citizen groups, small businesses and others whose participation
is limited by their economic circumstances. These programs
are needed to balance the regulatory process by assuring
opportunities for broad public involvement in these proceedings.
Finally, the Administration will continue to support
reform of class-action procedures to ease the unnecessary
burdens and costs of class actions, while at the same time
preventing their use as an harassment technique.
National Consumer Coooerative Bank
My Administration worked closely with the Congress to
create the National Consumer Cooperative Bank. The Bank is
to provide loans, loan guarantees, and other financial services
to non-profit consumer cooperatives, operating in such areas
as food, housing, health, and auto repair.
To demonstrate my commitment to this innovative institution,
I have signed legislation increasing appropriations for the
Bank from $4 million in fiscal 1979 to $74 million in fiscal
1980. Legislation has also been signed adding two members
to the Bank's board of directors -- one to represent the interests
of small business and one to represent the general public.
This year we will continue our efforts with Congress
to make the Bank a strong and vital resource for consumers.
Consumer Services Information
Genuine competition is lacking in many service industries
because consumers generally lack comparative cost and quality
information. To help alleviate this problem, my Administration
will assist non-profit groups and State and local government
agencies to develop local consumer information systems to
provide accurate cost and quality data on locally provided
services. AZ essential part of this effort will be an evaluation
of the impact of better consumer information on inflation
and productivity in the service sector.
Science and Technology
Since the beginning of my Administration, I have been
committed to strengthening our Nation's research and develop-
ment capability and to advancing those areas of science and
technology which are vital to our economic and social well-
being. That commitment has been reflected in: a 40: increase
in basic research funding, resulting in the highest research
and development funding in our- Nation's history; a new Automotive
Research initiative in which the industry, in partnership
with the Federal government, will undertake basic research
essential to help improve future automobiles; an acceleration
of scientific and technological exchanges with the People's
Republic of China; a major review of space activities and
needs, resulting in a 60% increase in space funding and in
the development of a space policy that will set the direction
of our space efforts over the next decade; and a major new
program to encourage industrial innovation.
Each of the undertakings will be pursued, in cooperation
with the Congress, in this year.
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Space
The diversity of our activities in space shows that space
technology has become an integral part of our lives -- in
communications, in remote sensing for defense and civilian
purposes, and in studies of the earth and the universe.
Guided by a sound, aggressive, and fiscally responsible space
policy, my Administration has undertaken a concerted effort
to support and further our .!Dace activities.
During my Administration, the expenditures for Federal
space programs have increased by 75%. Much of this increase
is to meet the increasingly operational nature of our space
activities. Nearly half of our expenditures are now for
defense purposes: photo-reconnaissance satellites, for example,
are enormously important in stabilizing world affairs and
thereby make a significant contribution to the security of
all nations. And my new initiative to establish an oceanic
satellite system will provide invaluable ocean data for both
the civil and defcnse sectors, thereby avoiding unnecessary
duplication.
I have also emphasized-space science and exploration,
continuing to fund such spectacular programs as the Voyager
missions that provided us with the remarkable close-up views
of Jupiter and its moons. am proposing two new measures the space telescope and the nfw Gamma Ray Observatory to
provide a unique canability to ..bnerve distant galaxies and
to obtain information about ^ur universe from outside the
Garth's obscuring atmosphere.
In 1980, I will continue my strong support for the space
program. That will be reflected in my budget and in my con-
tinued commitment to the space shuttle.
ARTS & FMMANITIES
The arts provide fundamental enrichment for our Nation.
The National Endowment for the Arta has played a major role
in focusing public attention on the arts. In doing so, the
Endowment has brought wider audiences from all parts of the
country into contact with all of the arts.
Since the beginning of my term, I have increased the
government's support for the Endowment's activities. I will
continue that record of expanded support again this year.
This will enable the Endowment to strengthen its efforts to
open the arts to new audiences, new forums, and new parts
of the country.
Humanities
The humanities play a vital rnl' in deepening our
understanding of culture and society. To enable the National
Endowment for the Humanities to continue its important efforts,
I will again'be proposing increased funding for the Endowment.
While maintaining the on-going programs aiding scholarly
research, education, and cultural interpretation, the Endowment
will use these increased funds to augment its support for:
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o research designed to increase our understanding
of the traditions, cultures, and directions of
countries in the Third World;
o studies. exploring the complex public and ethical
issues created by an increasingly technological
society; and
o efforts to preserve the priceless documents and
other materials that constitute the heritage of
this Nation and of its regional and ethnic
communities.
To bring the fruits of this work to increasing numbers
of the public at large, support will be provided for humanities
activities in libraries, museums, and media, as well as for
a variety of special activities tailored to the needs of groups
that have traditionally not had ready access to opportunities
for learning in the humanities.
In pursuing these objectives, the Endowment will concentrate
on using Federal funds to stimulate support from non-Federal
sources, in order to enhance our tradition of private
philanthropy and to expand the financial base of our cultural
institutions.
DISTRICT OF COLUMBIA
No longer is our Nation's Capital a convenient target
for misdirected political attacks. My Administration has
developed a partnership for progress with the District of
Columbia.
My Administration worked. with the last Congress to pass
a proposed Constitutional amendment granting full voting
representation to the citizens of our Nation's Capital. The
ratification process for this proposed amendment has begun
and I urge the State legislatures which have-not ratified
the resolution to join those which have. We will continue
our efforts this year in the ratification effort.
Last year, progress was made toward strengthening the
District's ability to meet its citizens' needs. With the
Congress' help, we enacted legislation authorizing construction
of the full METRO Mass Transit System and legislation funding
the District's pension plan for municipal employees.
In 1980, we-will build on this record. My Administration
will continue to work closely with the Congress and Mayor
Barry to expand home rule for the District, including development
of a sensible formula for determining the Federal payment
to the District.
I will continue working with Mayor Barry to make our
Nation's Capital City a model for the rest of the Nation.
Commission on the Holocaust
Last year, I received and approved the recommendations
of the President's Commission on the Holocaust, which I
established to assess how our government might officially
recognize, for the first time, the tragedy of the Holocaust.
I will shortly be appointing a Council of distinguished
Americans to develop ways to implement the Commission's
proposals. The Council and my Administration will work closely
with the Congress as we establish an appropriate memorial
to the six million Jews and the millions of'other victims
of Nazism during World War II.
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IV. MAEING GOVERNMENT EFFECTIVE AND EFFICIENT
One of my major commitments as a candidate was to make
the Federal government more effective and efficient. Over
the past three years, with Congress' help, I believe that
enormous progress has been made toward that goal. Reforms
thought to be impossible -- such as Civil Service Reform --
have been enacted. Regulatory burdens -- such as airline
regulation and government paperwork -- have been reduced or
eliminated. This coming year, I intend to work with the Congress
to improve. further the government's ability to serve the
nation effectively.
Government Reorganization
One of my highest priorities has been to improve the
quality and efficiency of Federal programs through reorgani-
zation. Since I took office, we have submitted 13 reorganization
initiatives to Congress, and Congress has approved all of
them. These initiatives have. strengthened the Federal govern-
ment's capacity to deal effectively with-such critical issues
as energy, civil service, disaster relief, civil rights,
international development assistance, education and trade.
In 1979, Congress approved legislation that I sought
to consolidate education programs in a new Cabinet department.
The Department of Education will provide full-time leadership,
improved management and direct accountability for its
performance to me, to the Congress and to those involved in
education at every level.
This month I put into effect a major reorganization of
the Federal. government's trade functions approved by Congress
last year. In conjunction with the Multilateral Trade
Negotiations Agreements this reorganization will ensure that
expanded trade opportunities for American business abroad
are fully realized, and that my goal of trade expansion is
given a higher priority by the Federal government.
Organizational initiatives are also an important part
of my energy program. We have consolidated enforcement
functions for the Alaska Natural Gas Transportation System
under a single Federal Inspector to ensure timely completion
of the natural gas pipeline. To reduce our dependence on
foreign oil, I have proposed the creation of an Energy
Mobilization Board which will expedite Federal, State, and
local decisions on proposed energy facilities. I am also
urging the Congress to approve creation of an Energy Security
Corporation to spur development of a domestic fuels industry.
This year I will propose to Congress another significant
reorganization: a plan which will strengthen the internal
management and effectiveness of the Nuclear Regulatory
Commission. Safety is our highest concern in regulating
nuclear power development, and my reorganization plan will
help improve the NRC's ability to ensure nuclear safety.
General Management Reform
To simplify the government for our citizens and to reduce
the burden of unnecessary requirements and regulations, we
will pursue a number of initiatives this year. We have
instituted a government-wide management system to mandate
the cost effectiveness of new regulations and the sunsetting
of old ones. In 1980, we will continue to pursue further
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reform of regulations through legislation designed to make
permanent a new framework for managing the regulatory process,
and legislation to reduce paperwork and red tape. We will
also pursue initiatives to simplify the eligibility require-
ments for human services programs and to improve the management
and delivery of social services through increased use of private
sector skills and talent. This reform will reduce the obstacles
for needy citizens seeking assistance and improve our ability
to remove fraud from the system.
Last year, we implemented a program to manage the overn-
ment's cash flow more efficiently. We have saved over 1450
million a year, and we expect further annual savings of $600
million through more timely collection of cash payments,
tighter control over disbursements and reductions in idle
.balances.
We have vigorously implemented legislation passed last
year to establish independent inspectors general in each
department and coordinated their work through the Executive
Group to Combat Fraud and Waste in Government. To spot areas
where management reform is especially likely to increase
efficiency, I have created a Management Improvement Council
to diagnose such circumstances and prescribe a cure.
We will continue to pursue vigorously our efforts to
improve the structure and management of government programs.
This is tough, unglamorous work, but it is essential to reduce
the cost of government and to provide better service to the
American people.
Civil Service and Compensation Reform
In March 1978 r said that civil service reform would
be the centerpiece of my government reorganization efforts.
The Congress supported it, and I am pleased to report it is
working very well. In the first real test of the reform act,
over 98% of the eligible top-level managers joined the Senior
Executive Service, choosing the challenge and, accountability
demanded by this new corps of top executives. The Office
of Personnel Management, the Merit Systems Protection Board,
and the Federal Labor Relations Authority authorized by the
Act have operated effectively in their first year. And the
agencies throughout the government continue to make substantial
progress in implementing the other important civil service
reforms. For the first time in the hundred year history of
the civil service system Federal employees can get and hold
jobs, and be paid, on the basis of actual on-the-job
performance -- not merely length of service.
Last year, I asked the Congress to take the next step
in my Federal Employee Compensation Reform Message. I urged
you to pass a pay reform bill which would modernize the Federal
compensation system. This legislation is fair to Federal
employees and to American taxpayers alike. Our white collar,
blue collar and military compensation systems must be reformed
in order to make certain that we neither overpay nor underpay
Federal employees. It is a fair bill, and one which will
help restore public confidence in the Federal service. I
urge Congressional action on it.
Regulatory Reform
Over the past three years, we have put into place a compre-
hensive program to overhaul the Federal regulatory establishment,
and eliminate unnecessary regulatory burdens. For 1980, I
am determined to continue the progress of this effort; it
is the most important part of my ongoing campaign to make
our government more efficient and effective.
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Airline deregulation. The- Airline Deregulation Act of
1978 has revolutionized air transportation. In the first
year of its operation, the new environment of free competition
created by the law produced a record number of flights and
passengers, a much wider variety of service packages, and
a savings of approximately $2.5 billion in the fares paid
by the travelling public. Under the Act, regulatory controls
will continue to be relaxed, until in 1985, the CAB itself
will be completely phased out of existence.
Trucking deregulation. The trucking industry is enmeshed
in detailed regulations that control the routes truckers can
drive and the goods they can carry. In addition, truckers
are allowed to fix prices through industry rate bureaus.
This regulatory system works to stifle competition, waste
fuel, reduce service to small towns, and inflate prices.
My appointees to the Interstate Commerce Commission
have started modernizing the system, but we need legislation
to provide comprehensive reform. I have submitted a bill
to open up entry, lift restrictions on the goods truckers
may haul and the routes they, may use, promote vigorous price
competition, reduce regulatory delays, and improve safety
on the road.
This bill is an important step in fighting inflation,
and I look forward to passage of a sound bill by early summer.
If appropriate legislation is not enacted, I would expect
the ICC to proceed under its authority to implement reform
initiatives.
In addition, we need legislation to increase competition
in the household moving industry. The Senate recently passed
a constructive bill, and I urge the House to strengthen and
pass it.
Railroad deregulation. Railroads have traditionally
been one of the most overregulated industries in America.
As a result, management initiative, service, and competitive
pricing have been stifled. Railroad plants and equipment
have deteriorated, and the average railroad industry rate
of return on investment is far too low. My Administration
will continue to work to eliminate these wasteful conditions
and the regulatory structure which helps cause them. Our
principal weapon in that effort is the railroad deregulation
bill that I proposed last year. Enactment of significant
railroad deregulation legislation this year is essential to
restoring our railroad system to its former strength.
Financial institutions regulation. Last year the combina-
tion of deposit rate ceilings and outmoded restrictions on
the asset powers of thrift institutions produced severe
inequities for the small saver, substantial savings outflows
from many thrift institutions, and disruptions in the availability
of mortgage credit. Contrary to its intended purpose, the
Regulation Q system has contributed to the cyclical nature
of the housing market and has destabilized the flow of mortgage
funds. In a related area, changing competitive relationships,
as well as innovations in the market, have increased inequities
and produced a continuing decline in Federal Reserve membership.
Now is the time to take the actions necessary to prepare for
the financial environment of the 1980's.
The Congress passed legislation in 1979 which increased
the ability of many Americans to obtain mortgage credit.
In addition, the Congress made major progress toward enactment
of the historic financial reform legislation I proposed last
year.
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This year we will work closely with Congress to achieve
final approval of our financial reform objectives: the
phaseout of Regulation Q deposit rate ceilings, the broadening
of the asset and liability process of thrift institutions,
the approval of legislation to stem the decline in Federal
Reserve membership,. and the elimination of other unwarranted
regulatory restraints. Prompt action is necessary to avert
a significant decline in Federal Reserve membership and to
assure a fair rate of return to the saver, a steadier flow
of housing credit, and a stable financial environment for
all classes of depository institutions.
This spring I will submit to the Congress the Adminis-
tration's findings on the McFadden Act and other geographic
restraints on banking activity.
Telecommunications dere ation. Technological advances,
such as sa a es, computers, and microwave relays, have
made it practical to move much of the telecommunications
industry from a regulated monopoly to a deregulated, com-
petitive market. This shift is already underway and is
benefitting individual customers as well as companies.
Toward that end, I will continue to support strongly
ongoing efforts in Congress to pass a bill that will encourage
and protect competition, remove needless regulation, and
maintain universal, reliable service. In addition, we need
this legislation to smooth the transition to a competitive
environment by protecting workers' rights, ensuring against
any large increases for rural telephone rates and providing
needed national security and emergency preparedness powers.
Regulation Reform Act. In March of 1979, I sent to Congress
the Regulation Reform Act. When enacted, this bill will assure
that new and existing regulations will be rigorously scrutinized
before they can be issued or retained,. that wasteful delays
are eliminated from. the regulatory process, that key regulatory
officials be selected purely on grounds of integrity and compe-
tence, and that the public will be assured meaningful oppor-
tunities to participate in regulatory decision-making. The
reform steps I have taken administratively have already avoided
billions of dollars in unnecessary regulatory costs, erased
thousands of useless regulations from the books of OSHA and
other agencies, and opened up the regulatory process across
the Executive Branch. Enactment of my regulatory reform bill
legislation is needed in this Congress, to strengthen these
reforms, and extend their benefits to the independent regulatory
commissions.
Presidential Oversight of regulation. Many regulatory
programs are vital to the protection of the health, safety
and welfare of our citizens. These we must manage effectively,
while cutting out wasteful red tape, rigidity, and costs
imposed on industry and the public, and enhancing opportunities
for public participation in decision-making. From the outset
of my Administration, I have actively used my authority as
President to assure that Executive Branch regulatory agencies
respect these goals, through executive orders, through oversight
from the Office of Management and Budget, through a Regulatory
Analysis Review Group to assure that regulatory costs are
accurately. evaluated, and through a Regulatory Council to
eliminate duplication and overlap among individual agencies.
We will pursue these efforts in 1980.
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Le slative Veto. While supporting the Regulation Reform
Act, Legislative
strong y oppose proposals that would undermine
the ability of the President to manage the regulatory process,
or would cripple the effectiveness of needed programs. In
particular, my Administration will oppose proposals to subject
individual agency rules to veto by one or two houses of Congress,
to transfer regulatory policy decision-making authority to
the Federal courts, and to create rigid statutory procedures
for Presidential supervision of Executive Branch regulatory
agencies.
This last year has seen Congress besieged by assaults
on various important regulatory statutes, especially the
Federal Trade Commission Act, seeking groundless exemptions,
crippling loopholes, and unprecedented Congressional inter-
ference with ongoing proceedings. I'will resist strenuously
all such efforts to confuse special interest pressure with
regulatory reform.
Communications
My highest priority in'the communications area is passage
of regulatory reform legislation covering the telecommunications
industry. In addition, in 1980 we will continue our program
to make the media more diverse and to ensure that the public
gets the full benefit of the advances in communications
technologies. Administration efforts include:
o working to increase minority participation; already
our program has helped produce a two-thirds increase
in minority ownership of broadcast stations, and
we will continue that progress;
o working with the Federal Communications Commission
to continue to eliminate needless paperwork and
regulations;
o pursuing plans to open up channels for as many as
1,000 new radio stations, to improve service to
rural areas and provide more opportunities for
minorities;
o developing proposals to improve the way frequencies
are assigned, including incentives for users to
conserve the increasingly crowded radio spectrum;
o encouraging the use of satellites, cable TV, and
other technologies to deliver public services and
to improve rural communications;
o workin; with Congress and the FCC to protect First
Amendment rights and the free flow of information,
through such measures as my bill on police searches
of newsrooms; and
o continuing to support a strong, independent public
broadcasting system and working to increase its
coverage to reach all Americans.
In addition, I will submit to the Senate, later this
year, the Treaty and Protocol that resulted from the World
Administrative Radio Conference concluded in Geneva in December.
This conference, and the follow-up conferences that will be
held in the next few years, will determine the utilization
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of the radio spectrum for the rest of the century. We prepared
for this conference for over two years; our delegation has
secured for the United States all allocations necessary for
its civilian and military services while also responding to
the legitimate needs of the Third World nations.
We will continue to work with Congress to pass sunset
legislation. This legislation will overcome the inertia that
lets Federal programs continue when they have outlived their
purpose. It will ensure that Congress regularly reviews
programs to decide whether they should be changed or eliminated.
A comprehensive sunset bill, with a strong mechanism to force
action when programs need change, is a vital building-block
toward making the government more efficient.
Paperwork Reduction
In the past three years, my Administration has cut the
amount of time Americans spend filling out Federal forms by
127 million hours -- almost 15%.. I recently issued an
Executive Order to continue this progress by strengthening
our management program. However, Congress is enacting new
paperwork requirements in energy, environmental protection,
and other areas, and we must have legislation to provide the
strong administrative controls that will be needed to minimize
these burdens.
I urge Congress to pass a Paperwork Reduction Act to
close the wide loopholes in Executive Branch oversight power
and create new authority to halt duplicative data collection.
In addition, I urge legislation be enacted to improve Federal
statistical systems by strengthening central management and
by encouraging agencies to share data, under new, tough
confidentiality safeguards.
Lobby Reform
The American people have a right to know what significant
influences affect their national legislature. The proliferation
of well-financed, organizational lobbying activities during
recent years has demonstrated the clear need for reform of
the outdated and ineffective lobby disclosure law now in
effect. This year my Administration will again work with
Congress to pass a sound lobby law reform bill -- one that
respects the First Amendment rights of all Americans and
minimizes paperwork burdens, yet allows meaningful disclosures.
Public Financing of Congressional Elections
The impact of special interest contributions on congres-
sional campaigns has grown dramatically in recent years.
It is time to adopt public financing for congressional elections
before it is too late. Such public financing will avoid even
the appearance of undue special interest influence, and will
allow worthy candidates without adequate funds to run for
Congress. I urge the Congress to act on this legislation.
Judicial Reform
In my Civil Justice Reform Message last year, I made
proposals to increase the efficiency, cut the cost, and enhance
the integrity of our Federal court system. Last year, I
signed the Federal Magistrates Act of 1979. Both the Senate
and the House have passed the Dispute Resolution Act, which
would develop simple and informal means of resolving citizen
disputes, and I look forward to early final action on this
legislation. The Federal Courts Improvement Act has passed
the Senate, and I urge the House to act on it early in this
session. I hope that the Congress will also pass the other
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LEAA's potential to improve and strengthen State and
local criminal justice programs has never been realized.
Two years ago, I proposed far-reaching reforms in its structure
and programs. Last month, Congress passed, and I signed,
a bill which incorporated most of those reforms and which
reauthorized LEAA for four more years. These reforms will
preclude excessive. expenditure of funds for equipment, enable
better information and research about crime problems and
permit funding only of innovative programs which have a high
probability or record of proven success.. During this year
we will implement the new legislation in a way that makes
certain the agency is efficiently carrying out its mission
of providing meaningful law enforcement assistance.
Patent Reform
As part of the Industrial Innovation policy that I
announced last year, we will be seeking to reform our patent
laws in a way which will spur creativity and invention. The
Administration will be working with Congress to develop a
single policy to guide the Departments and Agencies dealing
with patents resulting from federally-sponsored research.
Such uniform treatment should encourage the commercial use
of discoveries while protecting the taxpayers' investment.
V. PROTECTING BASIC RIGHTS AND LIBERTIES
Since taking office, I have worked to protect and enhance
the basic rights and liberties guaranteed to Americans under
the Constitution and our other laws. With your cooperation,
we have made important progress in this area. This year,
though, important work remains-to be done if our goal of
ensuring equality and basic freedoms for all Americans is
to be realized. The dream of equal opportunity remains un-
fulfilled. I will do whatever I can to bring that dream
closer to realization.
Egual Rights Amendment
I am committed as strongly as possible to the ratification
of the Equal Rights Amendment. Its ratification this year
will be one of my highest priorities.
As a result of-our efforts in 1978, the Equal Rights
Amendment's deadline for ra?tification was extended for three
years. We have now two years and three States left. We
cannot afford any delay in marshalling our resources and
efforts to obtain the ratification of those three additional
States. With your help, I believe we can succeed this year.
Although the Congress has no official role in the rati-
fication process at this point, you do have the ability to
affect public opinion and the support of State Legislators
for the Amendment. I urge Members from States which have
not yet ratified the Equal Rights Amendment to use that ability.
Civil Rights
The completion of the civil rights reorganization and
significant operational improvements in the agencies that
carry out equal employment opportunity functions have enabled
the federal government to shift its focus for the first time
to large-scale enforcement efforts. These have been buttressed
by our vigorous and successful posture in several landmark
affirmative action cases. At the same time,. the reorganization
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mandate to eliminate unnecessary costs, paperwork and other
burdens to businesses is being vigorously implemented by the
Equal Employment Opportunity Commission. That will continue
with increased resources this year.
To make certain that civil rights activities are given
the highest priority in the Agencies, we have created a civil
rights unit in the Office of Management and Budget. This
new unit will monitor civil rights enforcement and advise
the Director of OMB on the funding and management resources
needed for effective enforcement.
Martin Luther King, Jr.
Dr. Martin Luther King, Jr. led this. Nation's effort
to provide all its citizens with civil rights and equal
opportunities. His commitment to human rights, peace and
non-violence stands as a monument to his humanity and courage.
As one of our Nation's most outstanding leaders, it is
appropriate that his birthday be commemorated as a national
holiday, and I will continue to work with the Congress to
enact legislation that will achieve this goal.
Fair Housing
Enforcement of laws against housing discrimination has
lagged in comparison with the employment area. Because there
is no adequate enforcement mechanism, Title VIII of the Civil
Rights Act, which prohibits discrimination in housing, has
been largely, ineffective. I have strongly supported legislation
which seeks to provide the Department of Housing and Urban
Development with the power to hold administrative hearings
and to issue "cease and desist orders" in cases where Title VIII
has been violated. We will continue to work with the Congress
during 1980 to enact this long-overdue authority. Its enactment
will continue to be my highest legislative priority in the
civil rights area.
Intelligence Charters
A legislative charter for the intelligence agencies and
a charter for the FBI are long overdue. The failure to define
in law the duties and responsibilities of these agencies has
made possible some of the abuses which have occurred in recent
years.
Several months ago, I.submitted to the Congress a
legislative charter for the FBI which protects the rights
of our citizens while preserving the Bureau's ability to most
its important responsibilities. In 1980, we will continue
to work with the Congress toward enactment of this legislation.
Events of the past year indicate the need for a strengthened
and clearly defined role for our intelligence community.
On the basis of the sound consultative work done already with
Congress, I plan to submit a proposed charter early this year.
Hatch Act Reform
Federal employees who work in non-sensitive positions
should have the right to participate in off-the-job political
activities. My Administration will continue to support legis-
lation which would reform the Hatch Act to accomplish this
goal, and would prevent any on-the-job political abuse.
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47
Criminal Code
The Federal criminal laws are often archaic, frequently
contradictory and imprecise, and clearly in need of revision
and codification. My Administration will continue to work
with the Congress to develop a Federal criminal code which
simplifies and clarifies our criminal laws, while maintaining
our basic civil liberties and protections.
Labor Law Reform
Our labor laws are vital to ensuring that a sound labor-
management relationship exists in collective bargaining.
Efforts to abuse those labor laws, especially by unduly
slowing or blocking their implementation, have increased in
recent years. As a result, a reform of our labor laws is
badly needed to guarantew.that their intended spirit is fully
observed and enforced.
I am again ready to work with the Congress to develop
legislation which improves the fairness and effectiveness
of our labor laws.
Handicapped
During my Administration, we have made great strides
toward ending discrimination against handicapped people through
broadened employment opportunities, educational opportunities,
and greater access to public facilities and services. Just
after I came to office, the Department of Health, Education
and Welfare issued the first regulations on Section 504 of
the Rehabilitation Act. Since then, numerous other Federal
agencies have issued final regulations, and we expect to
have regulations from all the necessary agencies by the and
of 1980.
Last year I supported legislation which would prohibit
discrimination against the handicapped in private employment
and housing. I will continue to support that. initiative this
year and to clarify legislative and administrative uncertainty
about provisions of the Acts affecting the rights or programs
affecting handicapped individuals.
While my Administration has worked to improve programs
serving the handicapped, we must continue to push for removal
of psychological and physical barriers against handicapped
people in our society. We are actively organizing and
preparing for next year's International Year of the Disabled.
The International Year will enable this country -- with the
public and private sector working together -- to demonstrate
its commitment to the disabled and to teach or learn from
other nations about ways to advance the quality of life of
handicapped individuals.
Privacy
Changes in our society are threatening the rights to
personal privacy. Government and private institutions
collect increasing amounts of information about individuals.
Many decisions that once were made face-to-face are now based
on recorded data, and modern technology allows this data to
be transferred throughout the country instantaneously. Much
of this information must be collected and used to enforce
the laws, provide financial services, and for other important
services. However, these needs must be balanced against the
right to privacy and against the harm that unfair uses of
information can cause.
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Last year, I announced the government's first comprehensive
privacy program, building on legislation already passed to
prevent improper use of wiretaps and improper access to personal
bank records. This new program has five separate bills --
establishing privacy safeguards for medical, research, bank,.
insurance, and credit records and providing special protections,
modeled on the wiretap laws, for electronic funds transfer
systems. In addition, I have proposed legislation limiting
police searches of newsrooms to deal with the problems created
by the Supreme Court's Stanford Daily decision.
My privacy program includes non-legislative action as
well. We have improved the handling of Federal records --
we stopped the growth of personnel records and started cutting
back, and we established rules to control computer matching
of Federal files. I have called upon employers to establish
voluntary privacy codes for the records concerning their
employees and launched nationwide hearings to promote that
effort.
International guidelines are needed to protect the privacy
of personal information transferred from one country to
another, while avoiding disruption of needed information
flows. We have spearheaded-work in the Organization for
Economic Cooperation and Development toward this end, and
guidelines have been drafted for adoption this year.
The key protections, however, need legislation. I urge
Congress to act now on the five privacy bills I have submitted.
VI. PROTECTING AND DEVELOPING OUR NATURAL RESOURCES
Two of our Nation's greatest natural resources are our
environment and our fertile agricultural capacity. Since
I have been in office, I have worked with the Congress to
preserve, protect and where appropriate, develop our natural
resources. In the environmental. areas, I have been concerned
about the importance of preserving a clean environment, and
have taken a number of major actions designed to foster such
an environment.
In the agricultural area, r have taken the steps needed
to improve farm incomes and increase our agricultural production
to record levels. With your help we can continue to make
progress in both of these areas in 1980.
Environment
Balancing the need for resource development and conservation
has been a major environmental theme of my Administration.
I remain strongly convinced that this Nation can have economic
and energy development and adequate environmental protection.
As we open the decade of the 80's, all Americans can be proud
of their natural and cultural heritage which continues to
satisfy economic, recreational, and spiritual requirements.
1980 is the tenth anniversary of a decade of environmental
awareness that began on Earth Day, 1970. During this past
decade, monumental legislative achievements have occurred.
These include: the National Environmental Policy Act, the
Clean Air and Clean Water Acts, additions to our National
Parks, Trails, and River Systems, and the Endangered Species
Act. I was pleased to sign into law the reauthorization of
the Endangered Species Act last year. During 1980 as we
celebrate this tenth anniversary let us rededicate ourselves
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to the creation and maintenance of a safe and healthy
environment, to the wise use and development of our natural
resources, to the fair implementation of environmental statutes,
to preserving unique wildlife resources, and to even greater
achievements for improving the quality of life for all Americans.
During the next year, my Administration will vigorously
pursue the protection of Alaskan lands; the implementation
of an effective water resources policy; a careful implementation
of domestic energy production programs, with proper regard for
environmental values; a review of wilderness potential on
the public lands; creation of a hazardous waste management
program; fisheries development and coastal management policies.
Alaska Lands
Passage of legislation which adequately resolves the
allocation of Federal lands in Alaska continues to be my
highest environmental priority. At stake is the fate of tens
of millions of acres of beautiful land, outstanding and unique
wildlife populations, native cultures, and the opportunity
to ensure that future generations of Americans will be able
to experience and benefit from these nationally significant
resources.
The proposals which I have supported in the 95th Congress,
and again during the first session of this Congress, assure
that Alaska's great national treasures can be preserved, while
providing for increased domestic energy production and for
the economic needs of all Alaskans.
In addition to recommendations for designating National
Parks, Wildlife Refuges, Wilderness Areas, National Forests,
and. Wild and Scenic Rivers on the Federal lands in Alaska,
I have' or will be proposing aggressive but environmentally
sensitive oil and gas development programs in Alaska's outer
continental shelf and National Petroleum Reserve. My Adminis-
tration is also stepping up the transfer of 103 million acres
of Federal land to the State of Alaska and 44 million acres
to Alaskan natives so that both the State of Alaska and the
Native Corporations can build their economic base.
However, in order to maintain the proper balance between
resource protection and development in Alaska, the Congress
must now enact the comprehensive legislation which has been
before that body for over two years. The 96th Congress will
soon be asked to vote on what clearly amounts to the conservation
decision of the century.
The House of Representatives has already passed a strong
conservation bill and the Senate will shortly take up debate
on this issue. I urge that the Congress carry out its
responsibility to enact legislation which truly protects and
preserves our natural heritage in Alaska.
Hazardous Waste/Toxic Substances
One of the most important environmental and public health
issues facing our Nation is the threat caused by the improper
disposal of hazardous substances. Accidents like those at
Love Canal and Valley of the Drums have highlighted the
inadequacy of the existing laws and inability of governments
at all levels to respond quickly and efficiently to these
dangerous incidents. In the coming years, there may be
thousands of hazardous waste sites which will need attention,
the cost of which could be enormous. Clearly an effective
public policy is needed to deal with this situation.
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Last June, I submitted to Congress a comprehensive 31.6
billion legislative proposal that establishes a system to
deal with releases from uncontrollable hazardous waste sites
as well as spills of all and hazardous substances. This
system includes provisions for emergency government response,
effective enforcement, liability and in some cases, economic
compensation. The system also calls for a partnership with
the States in cleaning up and containing this problem. This
legislation is absolutely essential if we are to met our
responsibilities to the public and r urge the Congress to
act on it expeditiously.
Nuclear Waste Management
The problems related to the management, disposal and
storage of nuclear wastes remains one of the most serious
problems with nuclear power. My Administration has been
deeply concerned with this problem for the past three years.
An exhaustive study and review of this problem has been under-
taken by the Administration over the past year.
Based on the findings and recommendations of that study,
I will soon be proposing to-Congress comprehensive legislation
that deals directly with this problem. My proposals, if
enacted, will represent the biggest step forward in the area
of nuclear waste management since the dawn of the nuclear
age. I urge the Congress 'Co take action in this area this
year.
In 1979, I submitted to Congress my recommendations on
wilderness for the National Forests under the RARE II. procedure.
These proposals include 15.4 million acres of new wilderness the most desirable areas within the-vast review. Over 10
million acres are undergoing further study. In addition,
I directed the Forest Service to release for multiple use
management the 36 million acres of land that was designated
for non-wilderness. I urge the Congress to approve my recom-
mendations this year.
Water Policy Legislation
Sound water management is vital to the economic and
environmental health of our Nation.
Administrative implementation of the comprehensive water
policy initiatives which I announced in June of 1978 is nearing
completion. We will continue to work with the Congress to
pass legislation needed to improve further Federal water resources
programs and to support the States in their primary reaponsi-
bilities for water allocation and management.
I am pleased that last fall the Senate authorized an
expanded grant program to the States for water management
and water conservation technical assistance, and I expect
the House to soon pass this legislation. The cost sharing
bill which I have proposed is critically needed to give the
States a more effective voice in setting water project priorities
in state and Federal water policy, decisions.
I believe the establishment of an independent review
unit in the Water Resources Council is essential, and I urge
the Congress to act quickly an the pending authorization.
The independent review unit will provide an objective,
impartial, technical analysis to the Administration and to
the Congress, of water projects proposed for authorization
or new-start construction funding. This information will
enable the Administration and the Congress to make better
informed decisions on where to invest the taxpayers' water
resource dollars.
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It should be clear that my Administration supports sound
water resources development, and has taken several steps to
improve the quality of projects sent to Congress for authori-
zation and funding. I am concerned that the water projects
authorization bills now under consideration by Congress threaten
to overturn the progress made in recent years. I urge the
Congress to give this legislation the careful and thoughtful
scrutiny required by our joint commitment to restraining Federal
spending and ensuring a sound environment.
Fisheries Development
Last May, my Administration proposed a fisheries development
policy that recognizes both the importance of the U.S. com-
mercial fishing industry to the Nation's economy and. that
fish is an important food source. This policy includes a
recognition of the potential for fisheries expansion within
the Nation's 200-mile fisheries conservation zone, and the
importance of the Federal government's creating a positive
climate for fisheries development. In conjunction with this
policy, my Administration has sent a legislative proposal
on fisheries development to the Congress.
It is time that the United States begin taking action
to more fully utilize the fisheries resources of the 200-mile
economic zone. I urge the Congress to join with me in this
effort.
AGRICULTURE
Agricultural Progress
While much work remains to be done, America's agriculture
is by far the best in the world. Efforts made by my Administra-
tion, in cooperation with Congress, to secure economic
stability for the farmer, have produced results.
In 1979, we experienced another record year for farm
production. Net farm income jumped to $32 billion in 1979,
a $4 billion increase over 1978. Agricultural exports also
reached new highs, rising 18% in 1979 to $32 billion. Despite
the suspension of exports to the Soviet Union, we can expect
a continued healthy export picture for our Nation's farmers.
Last year the Secretary of Agriculture travelled around
the country and. conducted an extraordinarily detailed and creative
dialogue with the Nation's farmers. He obtained invaluable
suggestions on economic and social issues concerning farm
life; as we prepare our farm program for this year and beyond,
the advice of our Nation's farmers will clearly be reflected
in the policies we develop with the Congress.
Soviet Grain Suspension
In response to the Soviet armed invasion of Afghanistan
on Christmas Eve, I took several actions to demonstrate our
Nation's resolve to resist such hostile acts of aggression
against a sovereign, independent nation. One of the most
important of these actions was the suspension of grain sales
to the Soviet Union beyond the 8 million tons provided under
our 1975 grains agreement. The Soviet Union had intended
to purchase an estimated 25 million tons of O.S. wheat and
feed grains. Thus, the suspension of sales above the 8 million
ton agreement level is expected to result in the freeing of
about 17 million tons.
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My decision to suspend these sales was a difficult one,
but a necessary one. We could not continue to do business
as usual with the Soviet Union while it is invading an
independent, sovereign nation in an area of the world of
strategic importance to the United States. I am fully com-
mitted to a policy of promoting international trade, and
particularly the expanded export of U.S. agricultural products.
I am proud of my Administration's record in this regard.
Because of the aggressive efforts of American farmers and
businessmen, working in cooperation with Federal represen-
tatives, and the provision of new authorities by Congress,
we have set new export records in each of the past 3 years.
Even with the Soviet suspension, we intend to set still
another record in the coming year. In making my decisions
on the suspension, I believed it would be unfair to ask the
American farmer to bear a greater share of the burden and
sacrifice than their fellow Americans were asked to bear.
Farmers should not be penalized simoly because they are part
of an agricultural machine that is of growing strategic
importance in the world.
To protect American farmers from the price depressing
effects of the grain suspension, I directed the Secretary
of Agriculture to take several actions:
o The Commodity Credit Corporation will assume the
contractual obligations for grain previously com-
mitted for shipment to the Soviet Union.
o The Department of Agriculture, acting through the
Commodity Credit Corporation, will purchase wheat
contracted for export to the Soviet Union for the
purpose of forming an emergency international wheat
reserve. In this connection, I will propose legislation
authorizing release of this wheat for international
aid purposes.
o To encourage farmers to place additional grain in
the farmer-held grain reserve, the Secretary of
Agriculture has made several modifications in that
important. program.
o The Commodity Credit Corporation will purchase corn
at the local level to alleviate the congestion
within the transportation system caused by the
refusal of the International Longshoremen's
Association to load grain up to the 8 million metric
ton level.
In combination, these actions are expected to isolate
from the market an amount of grain equivalent to that not
shipped to the Soviet Union, thereby avoiding a decline in
grain prices. I am pleased to report that these actions are
having the desired results and that American farmers are being
protected from the effects of the suspension.
If further actions are necessary to insure that American
agriculture does not bear a disproportionately large share
of the burden associated with this action, I will not hesitate
to take them.
Croo Insurance
We now have an assortment of Federal loan, grant and
insurance programs designed to protect farmers from the economic
risks associated with natural disasters. We recognized early
in my Administration that these programs were in serious
need of reform. They are marked by many shortcomings:
inconsistencies in eligibility, inequities in the level of
benefits to producers of different crops, and inefficiencies
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in the use of taxpayer money. Recent evidence of abuse in
the agricultural disaster loan programs provides further evidence
of the need for this reform.
'I have sent the Congress a proposal to consolidate these
authorities in the form of an all-risk comprehensive insurance
program. Congress has made clear progress in devising an
improved crop insurance program, but work remains to be done.
I urge the Congress to finish its work on this legislation
as soon as possible.
International Emergency Wheat Reserve
The Congress has not yet acted on the proposal I made
in the last Session to create an international Emergency Wheat
Reserve. This reserve of up to 4 million tons of wheat would
be used to assure recipient nations that we will most our
international food aid commitments. The suspension of further
grain sales to the Soviet Union provides an appropriate oppor-
tunity to provide this authority, and thereby establish
guidelines for the release of wheat now being acquired by
the Commodity Credit Corporztion.
FOREIGN POLICY
From the time I assumed office three years ago this month,
I have stressed the need for this country to assert a leading
role in a world undergoing the most extensive and intensive
change in human history.
My policies have been directed in particular at three
areas of change:
-- the steady growth and increased projection abroad
of Soviet military power -- power that has grown
faster than our own over the past two decades.
-- the-overwhelming dependence of Western nations,
which now increasingly includes the'United States,
on vital oil supplies from the Middle East.
-- the pressures of change in many nations of the
developing world, including the year old revolution
in Iran and uncertainty about the future in many
other countries.
As a result of those fundamental facts, we face some
of the most serious challenges in the history of this Nation.
The Soviet invasion of Afghanistan is a threat to global peace,
to East-West relations, and to regional stability and to the
flow of oil.. As the unprecedented and overwhelming vote in
the General Assembly demonstrated, countries across the
world -- and particularly the non-aligned -- regard the Soviet
invasion as a threat to their independence and security.
Turmoil within the region adjacent to the Persian Gulf poses
risks for the security and prosperity of every Western nation
and thus for the entire global economy. The continuing holding
of American hostages in Iran is both an affront to civilized
people everywhere, and a serious impediment to meeting the
self-evident threat to widely-shared common interests -- including
those of Iran.
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But as we focus our most urgent efforts on pressing
problems, we will continue to pursue the benefits that only
change can bring. For it always has been the essence of
America that we want to move on -- we understand that pros-
perity, progress and most of all peace cannot be had by
standing still. A world of nations striving to preserve
their independence, and of peoples aspiring for economic
development and political freedom, is not a world hostile
to the ideals and interests of the United States. We face
powerful adversaries, but we have strong friends and dependable
allies. We have common interests with the vast majority of
the world's nations and peoples.
There have been encouraging developments in recent years,
as well as matters requiring continued vigilance and concern:
-- Our alliances with the world's most advanced and
democratic states from Western Europe through Japan
are stronger than ever.
-- We have helped to bring about a dramatic improvement
in relations between Egypt and Israel and an historic
step towards a comprehensive Arab-Israeli settlement.
Our-relations with China are growing closer, providing
a major new dimension in our policy in Asia and
the world.
And, across southern Africa from Rhodesia to Namibia
we are helping with the peaceful transition to majority
rule in a context of respect for minority as well
as majority rights.
The central challenge for us today is to our steadfastness
of purpose. We are no longer tempted by- isolationism. But
we must also learn to deal effectively with the contradiction
of the world -- the need to cooperate with potential adversaries
without euphoria, without undermining our determination to
compete with such adversaries and if necessary confront the
threats they may pose to our security.
We face a broad range of threats and opportunities.
We have and should continue to pursue a broad range of defense,
diplomatic and economic capabilities and objectives.
I see five basic goals for America in the world over
the 1980's:
-- First, we will continue, as we have over the past
three years, to build America's military strength
and that of our allies and friends. Neither the
Soviet Union nor any other nation will have reason
to question our will to sustain the strongest and
most flexible defense forces.
-- Second, we will pursue an active diplomacy in the
world, working -- together with our friends and
allies -- to resolve disputes through peaceful
means and to make any aggressor pay a heavy price.
-- Third, we will strive to resolve pressing inter-
national economic problems -- particularly energy
and inflation -- and continue to pursue our still
larger objective of global economic growth through
expanded trade and development assistance.
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Fourth, we will continue vigorously to support the
process of building democratic institutions and
improving human rights protection around the world.
We are deeply convinced that the future lies not
with dictatorship but democracy.
Fifth, we remain deeply committed to the process
of mutual and verifiable arms control, particularly
to the effort to prevent the spread and further
development of nuclear weapons. Our decision to
deter, but not abandon our efforts to secure
ratification of the SALT II Treaty reflects our
firm conviction that the United States has a
profound national security interest in the constraints
on Soviet nuclear forces which only that treaty
can provide.
Continuing close cooperation between the Congress and
the Executive Branch will be required to achieve these goals.
My most immediate legislative priorities include:
(1)
Defense Department, Authorization and Appropriations
Bills
(2)
Special International Security Assistance, for
Pakistan and. other countries
(3)
Bilateral and Multilateral Foreign Assistance
including Central America supplemental
Bills,
(4)
The China Trade Agreement
(5)
Intelligence Charters
(6)
Refugee Legislation and Funding
(7)
Human Rights Conventions
(8)
And, when appropriate, the SALT'II Treaty.
One very immediate and pressing objective that is uppermost
on our minds and those of the American people is the release
of our hostages in Iran.
We have no basic quarrel with the nation, the revolution
or the people of Iran. The threat to them comes not from
American policy but from Soviet actions in the region. We
are prepared to work with the government of Iran to develop
a new and mutually beneficial relationship.
But that will not be possible so long as Iran continues
to hold Americans hostage, in defiance of the world community
and civilized behavior. They must be released unharmed.
We have thus far pursued a measured program of peaceful diplomatic
and economic steps in an attempt to resolve this issue without
resorting to other remedies available to us under international
law. This reflects the deep respect of our Nation for the
rule of law and for the safety of our people being held, and
our belief that a great power bears a responsibility to use
its strength in a measured and judicious manner. But our
patience is not unlimited and our concern for the well-being
of our fellow citizens grows each day.
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56
ENHANCING NATIONAL SECURITY -- AMERICAN MILITARY STRENGTH
The maintenance of national security is my first concern,
as it has been for every President before me.
As I stated one year ago in Atlanta: "This is still
a world of danger, a world in which democracy and freedom
are still challenged, a world in which peace must be re-won
every day."
We must have both the military power and the political
will to deter our adversaries and to support our friends and
allies.
We must pay whatever price is required to remain the
strongest nation in the world. That price has increased as
the military power of our major adversary has grown and its
readiness to use that power been made all too evident in
Afghanistan.
The U.S.-Soviet Relationship
We are demonstrating to the Soviet Union across a broad
front that it will pay a heavy price for its aggression in
terms of our relationship. Throughout the last decades
U.S.-Soviet relations have been a mixture of cooperation and
competition. The Soviet attack on Afghanistan and the ruthless
extermination of its government have highlighted In the starkest
terms the darker side of their policies -- going well beyond
competition and the legitimate pursuit of national interest,
and violating all. norms of international law and practice.
This attempt to subjugate an independent, non-aligned
Islamic people is a callous violation of international law
and the United Nations Charter, two fundamentals of inter-
national order. 'fence, it is also a dangerous threat to
world peace. For the first time since World War II, the
Soviets have sent combat forces into an area that was not
previously under their control, into a non-aligned and
sovereign state.
On January 4 I therefore announced a number of measures,
including the reduction of grain sales and the curtailment
of trade and technology transfer, designed to demonstrate
our firm opposition to Soviet actions in Afghanistan and to
underscore our belief that in the face of this blatant trans-
gression of international law, it was impossible to conduct
business as usual. I have also been in consultation with
our allies and with countries in the region regarding additional
multilateral measures that might be taken to register our
disapproval and bolster security in Southwest Asia. I have
been heartened by the support expressed for our position,
and by the fact that such support has been tangible, as well
as moral.
The destruction of the independence of Afghanistan
government and the occupation by the Soviet Union has altered
the strategic situation in that part of the world in a very
ominous fashion. It has brought the Soviet Union within
striking distance of the Indian Ocean and even the Persian
Gulf.
It has eliminated a buffer between the Soviet Union and
Pakistan and presented a new threat to Iran. These two countries
are now far more vulnerable to Soviet political intimidation.
If that intimidation were to prove effective, the Soviet Union
might well control an area of vital strategic and economic
significance to the survival of Western Europe, the Far East,
and ultimately the United States.
more
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It is clear that the entire subcontinent of Asia and
specifically Pakistan is ttireatened. Therefore, I am asking
Congress,. as the first order of business, to pass an economic
and military aid package designed to assist Pakistan defend
itself.
Defense Budget
For many years the Soviets have steadily increased their
real defense spending,. expanded their strategic forces,
strengthened their forces in Europe and Asia, and enhanced
their capability for projecting military force around the
world directly or through the use of proxies. Afghanistan
dramatizes the vastly increased military power of the Soviet
Union.
The Soviet Union has built a war machine far beyond any
reasonable requirements for their own defense and security.
In contrast, our own defense spending declined in real terms
every year from 1968 through 1976.
We. have reversed this decline in our own effort. Every
year since 1976 there has been a real increase in our defense
spending -- and our lead has encouraged increases by our allies.
With the support of the Congress, we must and will make an
even greater effort in the years ahead.
The Fiscal Year 1981 budget would increase funding
authority for defense to more than $158 billion, a real growth
of more than 5% over my request for Fiscal Year 1980. There-
fore, requested outlays for defense during Fiscal Year 1981
will grow by more than 3% in real. terms over the preceding
year.
The trends we mean to correct cannot be remedied overnight;
we must be willing to see this program through. To ensure
that we do so I am setting a growth rate for defense that
we can sustain over the long haul..
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The defense program I have proposed for the next five
years will require some sacrifice -- but sacrifice we can
well afford.
The defense program emphasizes tour areas:
(a) It ensures that our strategic nuclear forces will
be equivalent to those of the Soviet Union and
that deterrence against nuclear war will be
maintained;
(b) It upgrades our forces so that the military balance
between NATO and the Warsaw Pact will continue to
deter the outbreak of war -- conventional or
nuclear -- in Europe;
(c) It provides us the ability to come quickly to the
aid of friends and allies around the globe;
(d) And. it ensures that our Navy will continue to be
the most powerful on the seas.
Strategic Forces
We are strengthening each of the three legs of our
strategic forces. The cruise missile production which will
begin next year will modernize our strategic air deterrent.
3-52 capabilities will also be improved. These steps will
maintain and enhance the 3-52 fleet by improving its ability
to deliver weapons against increasingly heavily defended
targets.
We are also modernizing our strategic submarine. missile
force. The first new Trident submarine has already been
launched and will begin sea trials this year. The second
Trident will be launched in the spring of 1980.. The first
of our new Trident missiles, with a range of more than 4,000
miles, have already begun operational patrols in Poseidon
submarines.
The new MX missile will enhance the survivability of
our land-based intercontinental ballistic missile force.
That is why I decided last spring to produce this missile
and selected the basing mode best suited to enhance its capability.
Further the MX will strengthen. our capability to attack a wide
variety of Soviet targets.
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Our new systems will enable U.S. strategic forces to
maintain equivalence in the face of the mounting Soviet
challenge. We would however need an even greater investment
in strategic systems to meet the likely Soviet buildup without
SALT.
Forces for NATO
We are greatly accelerating our ability to reinforce
Western Europe with massive ground and air forces in a crisis.
We are undertaking a major modernization program for the
Army's weapons and equipment-, adding. armor, firepower, and
tactical mobility.
We are propositioning more heavy equipment in Europe
to help us cope with attacks with little warning, and greatly
strengthening our airlift and sealift capabilities.
We are also improving our tactical air forces -- buying
about 1700 new fighter and attack aircraft over the next five
years -- and increasing the number of Air Force fighter wings
by over 10%.
We are accelerating the rate at which we can move combat
aircraft to Europe to cope with any surprise attack, and adding
to the number of shelters at European airbases to prevent
our aircraft from being destroyed on the ground.
Rapid Deployment Forces
We are systematically enhancing our ability to respond
rapidly to non-NATO contingencies wherever required by our
commitments or when our vital. interests are threatened.
The rapid deployment forces we are assembling will be
extraordinarily flexible: They could range in size from a
few ships or air squadrons to formations as large as 100,000
men, together with their support. Our forces will be prepared
for rapid deployment to any region of strategic significance.
Among the specific initiatives we are taking to help
us respond to crises outside of Europe are:
the development and production-of a new fleet of
large cargo aircraft with intercontinental range;
the design and procurement of a force of Maritime
Propositioning Ships that will. carry heavy equipment
and supplies for three Marine Corps brigades.
in
we
of
In addition, responding to the Soviet military presence
Cuba and the proxy role of Cuba on behalf of the USSR,
have taken or are taking the following actions in support
the rapid deployment force:
(1) We are substantially increasing our ability to
monitor Cuban and Soviet/Cuban activities;
(2) We have established a Caribbean Joint Task Force
Headquarters which improves our ability to respond
to events in the region;
(3) We are increasing regional military exercises; and,
(4) We are intensifying assistance to countries in the
region that are threatened by Soviet or Cuban
intervention.
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Naval Forces
Seapower is indispensable to our global position -- in
peace and also in war. Our shipbuilding program will sustain
a 550-ship Navy in the 19903 and we will continue to build
the. most capable ships afloat.
The program I have proposed will assure the ability of
our Navy to operate in high threat areas, to maintain control
of the seas and protect vi.tal lines of communication -- both
military and economic -- and to provide the strong maritime
component of our rapid deployment forces. This is essential
for operations in remote areas of the world, where we cannot
predict far in advance the precise location of trouble, or
preposition equipment on land.
Military Personnel
No matter how capable or advanced our weapons systems,
our military security depends on the abilities, the training
and the dedication of the people who serve in our armed forces.
I am determined to recruit and to retain under any foreseeable
circumstances an ample level of such skilled and experienced
military personnel.
We have enhanced our readiness and combat endurance, by
improving the Reserve Components. All reservists are assigned
to units structured to complement and provide needed depth to
our active forces. Some reserve personnel have also now been
equipped with new equipment.
Mobilization Planning
I have also launched a major effort to establish a coherent
and practical basis for all government mobilization planning.
Begun last May', this is the first such effort conducted at
.Presidential level since World War II. It involves virtually
every Federal agency, with the aim of improved efficiency
and readiness.
Our Intelligence Posture
Our national interests are critically dependent on a
strong and effective intelligence capability. We will not
shortchange the intelligence capabilities needed to assure
our national security. Maintenance of and continued improve-
ments in our multi-faceted intelligence effort are essential
if we are to cope successfully with the turbulence and
uncertainties of today's world.
The intelligence budget I have submitted to the Congress
responds to our needs in a responsible way, providing for
significant growth over the Fiscal Year 1980 budget.
This growth will enable us to develop new technical means
of intelligence collection while also assuring that the
more traditional methods of intelligence work are also given
proper stress. We must continue to integrate both modes of
collection in our analyses.
It is imperative that we now move forward promptly within
the context of effective Congressional oversight to provide
America's intelligence community with Charters which can permit
it to operate more effectively and within a national concern
codified by law.
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REGIONAL POLICIES
Every President for over three decades has recognized
that America's interests are global and that we must pursue
a global foreign policy.
Two world wars have made clear our stake in Western Europe
and the North Atlantic area. We are also inextricably linked
with the Far East -- politically, economically, and militarily.
In both of these, the United States has a permanent presence
and security commitments which would be automatically triggered.
We have become increasingly conscious of our growing interests
in a third area -- the Middle East and the Persian Gulf area.
We have vital stakes in other major regions of the world
as well. We have long recognized that in an era of interdependence,
our own security and prosperity depend upon a larger common
effort with friends and allies throughout the world.
The Atlantic Alliance
At the outset of this Administration.I emphasized the
primacy of our Atlantic relationship in this country's national
security agenda. We have made important progress toward making
the Atlantic Alliance still more effective in a changing security
environment.
We are meeting the Soviet challenge in a number of important
First, there is a recognition among our allies that mutual
security is a responsibility to be shared by all. We are each
committed to increase national defense expenditures by 3% per
year. There remains much work to be done in strengthening
NATO's conventional defense; the work proceeding under the
Alliance's Long Term Defense Program will help achieve this
objective.
Last month, we and our NATO allies took an historic step
in Alliance security policies with the decision to improve
substantially our theater nuclear capabilities. The theater
nuclear force modernization (TNF) program, which includes the
deployment of improved Pershing ballistic missiles and of
ground-launched cruise missiles in Europe, received the
unanimous support of our allies. The accelerated deployment
of Soviet SS-20 MIRVed missiles made this modernization step
essential. TNF deployments will give the Alliance an important
retaliatory option that will make clear to the Soviets that
they cannot wage a nuclear war in Europe and expect that
Soviet territory will remain unscathed.
While we move forward with our necessary defense efforts
in Europe, we are also proceeding with our efforts to improve
European security through arms control.
As an integral part of the NATO TNF decisions, the Alliance
has made it clear that it is prepared to negotiate limitations
on long-range theater nuclear missiles.
On our part, our TNF modernization efforts will make possible
a streamlining of our nuclear weapons stockpile in Europe,
allowing us to withdraw 1,000 nuclear warheads over the next
year.
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In the Mutual and Balanced Force Reduction talks, we and
our allies have recently put forward new proposals that are
designed to simplify the negotiations and improve the prospect
for early progress in limiting conventional military forces
in Europe.
In a very real sense the accomplishments of the past year
answered a critical question concerning NATO's future: can
the Western Alliance, which has provided the foundation for
one of the longest periods of peace and prosperity that Europe
has ever enjoyed, still summon the essential cohesion, relevance,
and resolve to deal with fundamental security issues likely
to affect its member nations well into the next century?
NATO's consensus in favor of modernizing and negotiating about
its nuclear arsenal while continuing to improve conventional
forces, dramatized Allied capacity to respond effectively
to both the military and political threats posed by the
Soviet Union.
Relations with our allies and friends in Europe are taking
on ever broader dimensions. Our security agenda remains
central; we are addressing new concerns as well.
I met with an unprecedented number of European statesmen
in Washington during the year just past, including the leaders
of Great Britain, West Germany, Austria, Norway, Finland, the
Netherlands, Ireland, Sweden, and the European Community;
in all of these meetings a common theme was the changing realities
of political and economic interdependence and, as we enter
a new decade, the need to promote more equitable conditions of
peaceful growth and stability throughout the world.
This approach has achieved tangible fora in a number of
ways. For example, every West European government supports
ua as we have continued by every peaceful means to seek the
release of American hostages held in Tehran in defiance of
universal standards of international law and decency. We
are consulting and cooperating closely in our responses to
the Soviet Union's invasion. and occupation of Afghanistan.
In the NATO area itself, we moved together vigorously
to meet the serious economic problems- faced by Turkey and thereby
strengthen a vital part of NATO's southern flank and we have
signed a new base agreement with Turkey. This action, though
indispensable in its own right, also supported our continuing
efforts to promote a solution to the Cyprus problem and to
bring about the reintegration-of Greece within the military
framework of the Atlantic Alliance, objectives which retain
high. priority this year.
The United States is a Pacific nation, as much as it is
an Atlantic nation. Our interests in Asia are as important
to us as our interests in Europe. Our trade with Asia is even
greater than our trade with Europe. We have pursued and main-
tained these interests on the basis of a stable balance of
power in the region. Our partnership and alliance with Japan
is central to our Asian policy. We are strengthening our new
relationship with China. We have expanded our ties with
the Association of South East Asian Nations (ASEAN) and its
member governments.
My trip to the Far East helped forge closer working
relationships with Japan and Korea.
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Asian Security
The balance of power is fundamental to Asian security.
We have maintained that balance through a strong United States
military posture in the region, as well as close ties with
our allies, Japan, Australia. New Zealand and Korea. Over
the past year I have worked to stabilize the United States
military presence in Asia by concluding an amended base agreement
with the Philippines that will last until 1991. We have fostered
the closest degree of security cooperation with Japan in the
history of our two nations -- exemplified by joint planning
for the defense of Japan, increased Japanese contributions
to United States base costs in Japan, and large-scale Japanese
purchases of United States defense equipment. After examining
in detail new intelligence estimates of North Korean military
strength, I decided to maintain our troop strength in the
Republic of Korea at its present level until at least 1981.
The reaffirmation of our commitment to Korean security has
been of great importance to the Koreans as they make necessary
political adjustments in the wake. of President Park's
assassination.
Response by nations in East Asia to the Soviet aggression
in Afghanistan has been gratifying. Australia in particular
deserves recognition for the forthright stand it has taken.
Japan and the ASEAN nations have al3c been strongly supportive.
Over the last year we have ersanded our new relationship
with the People's Republic of China to ensure that where our
interests coincide, our separate actions will be mutually
reinforcing. To this end we have enhanced our consultative
relationship. We have also sought to develop an enduring
institutional framework in the economic, cultural, scientific,
and trade areas.
This process has been facilitated by the successful visits
of Vice Premier Deng to the United States and Vice President
Mondale to China; through the signing of over 15 commercial,
scientific, and cultural agreements; through numerous Cabinet-
level visits; and through a significant expansion of trade
and the flow of people between our two countries.
During Secretary of Defense Brown's recent trip to the
People's Republic of China, wide-ranging talks were held on
global and regional issues, arms control, technology transfer,
and ways to sustain bilateral contacts. Although we may
differ with the Chinese on some issues, our views coincide
on many important issues, particularly with respect to the
implications for the region of the Soviet invasion of Afghanistan.
In 1980 I look forward to passage by Congress early in
the year of the China Trade Agreement and of authorization
of OPIC operations in China; we plan to conclude civil aviation,
maritime, and textile agreements; and continue to expand our
commercial, cultural, and scientific relations, particularly
through ExlmBank credits to the People's Republic of China.
Southeast Asia
The countries comprising ASEAN are central to United
States interests in Southeast Asia.
Throughout the past year, our relations with ASEAN have
continued to expand as our consultative arrangements were
strengthened.
(OVER)
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The stability and prosperity of Southeast Asia have been
severely challenged by Soviet-supported Vietnamese aggression
in Cambodia. During this year we will continue to encourage
a political settlement in Cambodia which will permit that
nation to be governed by leaders of its own choice. We have
taken all prudent steps possible to deter Vietnamese attacks
on Thai territory by increasing our support to the Thais, and
by direct warnings to Vietnam and the U.S.S.R. The other
members of ASEAN have stood firmly behind Thailand, and this
in great measure has helped to contain the conflict. We have
been gratified by Thailand's courageous and humane acceptance
of the Cambodian refugees.
Middle East--Persian Gulf--South Asia
Events in Iran and Afghanistan have dramatized for us the
critical importance for American security and prosperity of the
area running from the Middle East through the Persian Gulf
to South Asia. This region provides two-thirds of the
world's oil exports, supplying most of the energy needs of
our allies in Europe and Japan. It has been a scene of almost
constant conflict between nations, and of serious internal
instability,within many countries. And now one of its nations
has been invaded by tae Soviet Union.
We are dealing with these multiple challenges in a number
of ways.
Middle East
First, it has-been a key goal of my Administration since
1977 to promote an. enduring resolution of the Arab-Israeli
conflict -- which is so essential to bringing stability and
peace to the entire region. Following the Camp David Summit
of August 1978, in March 1979, I helped bring about the signing
of a peace treaty between Egypt and Israel -- the first time
in 30 years of Middle East conflict that peace had shined
with such a bright and promising flame. At the historic
signing ceremony at the White House, Prime Minister Begin
and President Sadat repeated their Camp David-pledge to work
for full autonomy for the West Sank and Gaza.
Since then Egypt and Israel have been working to complete
this part of the Camp David framework and to provide an oppor-
tunity for the Palestinian people to participate in determining
their future. I strongly support these efforts, and have pledged
that we will be a full partner in the autonomy negotiations.
We will continue to work vigorously for a comprehensive peace
in the Middle East, building on the unprecedented achievements
at Camp David.
At the same time, I have reinforced America's commitment
to Israel's security, and to the right of all nations in the
area to live at peace with their neighbors, within secure and
recognized frontiers.
Persian Gulf
In recent years as our own fuel imports have soared, the
Persian Gulf has become vital to the United States as it has
been to many of our friends and allies. Over the longer term,
the world's dependence on Persian Gulf oil is likely to increase.
The denial of these oil supplies -- to us or to others -- would
threaten our security and provoke an economic crisis greater
than that of the Great Depression 50 years ago, with a fundamental
change in the way we live.
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Twin threats to the flow of oil -- from regional instability
and now potentially from the Soviet Union -- require that we
firmly defend our vital interests when threatened.
In the past year, we have begun to increase our capacity
to project military power into the Persian Gulf region, and
are engaged in explorations of increased use of military facilities
in the area. We have increased our naval presence in the
Indian Ocean. We have been working with countries in the region
on shared security concerns. Our rapid deployment forces,
as described earlier, could be used in support of friendly
governments in the Gulf and Southwest Asian region, as well
as in other areas.
-Southh Asia
The overwhelming challenge in this region will be dealing
with the new situation posed by Soviet aggression in Afghanistan.
We must help the regional states develop a capability to withstand
Soviet pressures in a strengthened framework for cooperation
in the region. We want to cooperate with all the states of
the region in this regard -- with India and Pakistan, with
Sri Lanka, Bangladesh and Nepal.
In this new situation, we are proposing to the Congress
a military and economic assistance program to enable Pakistan
to buttress its defenses. This is a matter of the most urgent
concern, and I strongly urge the earliest possible approval
by the House and Senate. We are also working closely with
other friends of Pakistan to increase the resources available
for Pakistan's development and security.
We are also pursuing the possibility of gaining access
to military facilities in the region in time of trouble. We
are prepared to work closely with our friends in the region,
on a cooperative basis, to do whatever is required to ensure
that aggressors Would bear heavy costs so that further
aggression is deterred.
A high priority for us in the region is to manage our
nuclear concerns with India and Pakistan in ways that are compatible
with our global and regional priorities. The changed security
situation in South Asia arising from the Soviet invasion of
Afghanistan calls for legislative action to allow renewed
assistance to Pakistan. But this in no way diminishes our
commitment to work to prevent nuclear weapons proliferation,
in Pakistan or elsewhere.
Steady growth of our economic assistance is also essential
if the countries of South Asia are to achieve growth and true
stability.
A peaceful transition to majority rule in Southern Africa
continues to be a major goal of the United States. We gave.
our fullest support to the successful British drive to reach
an agreement among all parties in Rhodesia. The process of
implementation will not be easy, but the path is now open to
a peaceful outcome. With our European allies, Canada and the
African states directly concerned we also are making progress
toward independence and majority rule for Namibia. The momentum
resulting from successful resolution of the Rhodesian conflict
should aid in these initiatives.
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Congressional. support for the Executive Branch decision
to maintain sanctions on Rhodesia until the parties reached
agreement on a ceasefire and an impartial elections process
had begun was instrumental in creating the conditions necessary
for agreement. Now that the United States, European trading
partners and the surrounding African states have lifted sanctions,
the process of economic reconstruction in Rhodesia -- soon
to be Zimbabwe -- can begin.
With the creation of an independent Zimbabwe after many
years. of fighting, we will be prepared to cooperate in a coherent
multi-donor development plan for the poor nations in the Southern
Africa region.
Our active support for self-determination and racial
equality in Southern Africa has enabled the United States to
develop a continuing and effective dialogue with governments
throughout the continent. As Africa grows more important
to us for economic, political and strategic reasons, we will
be strengthening our ties of mutual interest with Africans.
We will continue to participate in their first priority
economic development -- and to help Africans resolve their
political problems and maintain stability in their continent.
Whether in the Horn or in other areas of the continent,
we will also provide to friendly nations security assistance
when needed for defense of their borders.
North Africa
In 1979 the United States moved to help a long-standing
friend by strengthening our arms supply relationship with Morocco.
In assisting Morocco to deal with attacks inside its internationally
recognized frontiers, we seek conditions of greater security
and confidence in which a political settlement of the Western
Sahara conflict can be effectively pursued. Though not itself
a mediator, the United States in the months ahead will encourage
the countries in the area to resolve their differences peacefully
in order that the vast economic potential of North Africa can
be exploited for the well-being of the people living there.
Latin America
Since my inauguration, I have worked hard to forge a new,
collaborative relationship with the nations of Latin America
and the Caribbean -- one resting on a firm commitment to human
rights, democratization, economic development and non-intervention.
The events of 1979 -- even the turbulence in Central America
and the Caribbean -- presented us with opportunities to move
toward these goals.
There was encouraging progress in the area of human rights
and democratization in the Western Hemisphere this past year.
The inauguration of a new democracy in Ecuador, and the strong
effort by the Andean countries to preserve democracy in Bolivia
were positive steps.
During 1979, I met with the President of Mexico twice
to discuss the opportunities and difficult issues before our
two countries. We have taken worthwhile steps, including
an agreement on natural gas and on trade.
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On October 1, Vice President Mondale and many leaders
from Latin America traveled to Panama to celebrate the coming
into force of the Panama Canal Treaties. The transition to
a new relationship and a new structure to manage the Canal
was smooth and effective because of the contributions and the
mutual respect between Panamanians and Americans.
The Vice President also traveled to Brazil and Venezuela.
The Secretary of State met with leaders in Quito at the inaugura-
tion of the new democratic President of Ecuador and in LaPaz
at the OAS General Assembly. These meetings have helped us
to develop further the close consultative ties which are so
important to a free- and balanced community of nations in the
hemisphere.
Also, in 1979, the United States moved to a much closer
economic and political relationship with the increasingly signifi-
cant Andean Pact countries. A memorandum of understanding
on economic relations was signed in Washington in November.
Central America and the Caribbean region are undergoing
a. period of rapid social and political change. There is a
threat that intervention by Cuba may thwart the desire of
the people of the region for progress within a democratic
framework and we have been working closely with the governments
in the region to try to aid in the developmental process of
the region and are prepared to assist those threatened by
outside intervention.
The Caribbean Group, which is coordinated by the World
Bank and which we helped establish, has now become an important
factor for development in the region, adding $260 million
in concessionary resources to the region.. We have increased
our atd-to the Caribbean, reprogrammed loans, and are seeking
prompt Congressional action on a supplemental of $80 million
for Nicaragua and Central. America.
My Science Advisor, Dr. Frank Press, led a large delegation
of scientists and educators to Barbados, Peru, Venezuela and
Brazil to forge new and fruitful ties between our countries
in important areas of science and technology.
THE INTERNATIONAL ECONOMY
A growing defense effort and a vigorous foreign policy
rest upon a strong economy here in the United States. And
the strength of our own economy depends upon our ability to
lead and compete in the international marketplace.
Energy
An essential lesson to be drawn from Iran is that there
are compelling foreign policy, as well as domestic economic
reasons for lessening our dependence on foreign oil.
In response to a series of United States proposals, the
industrial countries adopted in 1979 a cooperative energy
strategy for the 1980's. Its main elements are collective
restraint on oil imports; intensified efforts to conserve
oil and boost production of conventional substitutes for oil;
and collaborative research, development and commercialization
of new fuel technologies.
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At the Tokyo Economic Summit in June, the heads of
government of the seven major industrial democracies agreed
that they must take responsibility for curbing oil demand.
By the and of the year, 20 industrialized nations, members
of the International Energy Association, had agreed not only
to enforce equitably allocated ceilings on their oil imports,
but to create a system for quickly adjusting the ceilings
to changes in world oil supply. Completion of the detailed
agreements to execute the global oil demand-allocation process
is at the head of the international energy agenda for 1980..
At the 1980 Economic Summit in Venice, I intend to propose
further joint action to smooth the transition from oil to
more abundant fuels and to slow the growth in oil prices.
In support of'the international oil strategy, the
Administration and the United States coal industry are launching
joint marketing efforts to make this country a major exporter
of steam coal. With assurance of reliable United States coal
supply at competitive prices, many of the electric power plants
to be built in the 1980s and 1990s can be coal-tired rather
than oil-burning. Coal exports will help us pay for our
declining but costly oil. imports.
A new source of natural gas supply for the United States --
Mexico -- was opened through the conclusion of government-
to-government negotiations. Through close cooperation with
our northern neighbor, Canada, the Administration cleared
the way for expanding the flow of Canadian natural gas to
the United States and for private development of the Alaskan
gas pipeline across Canada to the lower 48 states.
We continue to believe that nuclear power will play an
essential role in meeting the energy needs of many nations,
but with effective. safeguards against the proliferation of
nuclear weapons.
International Monetary Policy
We are moving forcefully to establish the fundamental
economic conditions for a strong dollar. In 1979 the balance
of payments was in approximate balance for the first time
in three years, despite substantially higher oil import costs.
Our anti-inflationary economic policies and strong energy
program should provide a basis for further improvement. Of
course the outcome depends in part also upon responsible
pricing behavior by OPEC and. other oil producers.
We support the efforts under way to strengthen the
international monetary system. I urge the Congress to enact
promptly legislation permitting the United States to increase
its quota in the International Monetary Fund (IMF) as part
of the general expansion of Fund resources. We welcome the
measures being taken by the IMF to improve its ability to ,
promote sound economic and exchange rate policies in all member
countries. We also welcome the study of the possible
establishment of a "substitution account" to strengthen the
international monetary system by promoting the role of the
Special Drawing Right as the principal reserve asset in the
system.
Under the direction of my Special Trade Representative,
we brought to a successful conclusion the multilateral trade
negotiations, the most ambitious set of negotiations to
reduce barriers to international trade in a decade. The
resulting "MTN" agreements, covering a broad spectrum of
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trade issues, were concluded and ratified by overwhelming
majorities of the United States Congress. These binding
commitments, signed by all the major trading. nations, provide
the framework for a new era in international trading relations
with them and with the developing nations. This makes clear
my resolve and that of the American people to resist the
dangers of protectionism.
The reorganization of the Federal government trade agencies.
which I directed will assure more effective and prompt
governmental action to exploit the export opportunities
afforded by the MTN. The plan, approved by Congress this
fall, establishes a strong, authoritative voice in the
Executive Office of the President to provide coherence and
leadership to United States trade policy, negotiations, and
the implementation of the MTN trade codes. The reorganization
establishes the Office of the U.S. Trade Representative and
strengthens the Commerce Department.
Sugar
In 1979, Congress ratified the International Sugar Agreement,
thus fulfilling a major commitment of this Administration.
The agreement is an important element in our international
commodity policy. with far-reaching implications for our
relations with developing countries, particularly sugar
producers in Latin America. This agreement and other measures
my Administration has taken already have helped to stabilize
sugar prices and bring high domestic prices into line with
those prevailing in the world marketplace. Producers and
consumers alike will benefit from a more stable market for
this essential commodity. We need prompt enactment of
implementing legislation for this agreement.
Tin
At year's and, Congress approved stockpile disposal
legislation which will permit the General Services Administration
to sell 30,000 metric tons of tin from our strategic stockpile
and contribute up to 5,000 metric tons to the International
Tin Organization's (ITO) buffer stock. This fulfills a
United States pledge made during the Conference on International
Economic Cooperation and represents a major step forward in
our relations with producing countries in the developing world.
We will consult with other members of the ITO to ensure that
our tin disposals do not disrupt markets and take into account
the needs of both producers and consumers.
Common Fund
The United States joined members of the United Nations
Conference on Trade and Development, both developed and
developing nations, in negotiating an agreement on the framework
of a Common Fund to help international commodity agreements
stabilize the prices of raw materials. Negotiations are now
underway on the final articles of agreement of the Fund.
The United States also participated in successful negotiations
on an international rubber agreement.
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Economic Cooperation With Developing Nations
Our relations with the developing nations are of central
importance to the United States. The fabric of our relations
with these countries has both political and economic dimensions,
as we witnessed in recent weeks when nations of the Third
World took the lead in condemning the Soviet invasion of
Afghanistan.. Our ability to work together with developing
nations toward goals we have in common -- their political
independence, the resolution of regional tensions, and our
growing ties of trade for example -- require us to maintain
the policy of active engagement with the developing world
that we have pursued over the past three years.
The foreign assistance legislation which I will be
submitting to you for FT 81 provides the-authority and the
funds to carry on a cooperative relationship with a large
number of developing nations. Prompt Congressional action
on this legislation is essential is order to meet our treaty
and base rights agreements, continue our peace efforts in
the Middle East, provide economic and development support
to countries in need, promote progress on North-South issues,
protect Western interests, and counter Soviet influence..
We- will also be asking Congress to enable us to honor,
our, international agreements for multilateral assistance by
authorizing and appropriating funds for the International
Financial Institutions.
Finally, the Administration and the Congress agreed in
1979 on fundamental changes in the way the United States
government is organized to conduct economic and technical
relations with the-developing nations. L submitted and the
Congress approved a plan to consolidate in a small policy-
coordination body, the International Development Cooperation
Agency (IDCA), responsibility for direct United States
development assistance, for guidance to United States
representatives in multilateral development agencies, and
for presenting our long-term development interests in Federal
government policy bodies dealing with trade and other economic
relations with developing nations. I also submitted, and
the House approved in the 1979 session of Congress, a plan
to establish the Institute. for Scientific and Technological
Cooperation (ISTC), a constituent element of the IDCA group
of agencies. Once approved, the ISTC will carry out research
as well as support research by foreign scientists on technological.
means of reducing poverty in developing nations.
Food -- The War on Hunger
One of the main economic problems facing developing countries
is lagging food production. We must help these countries
meet this problem --not only so that their peoples will be
free from the threat of continuing hunger, but also so that.
their societies will be-strong enough to resist. external pressure.
I have directed that United States bilateral and multilateral
aid be geared increasingly to this goal, as recommended by
our Hunger Commission, chaired by Sol Linowitz; we are urging
other donor countries to join in more effective of forts to
this and.
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Good progress has been made since the Tokyo Economic
Summit called-for increased effort on this front. The World
Bank is giving this problem top priority, as are some other
donor countries. The resources of the consultative Group
on International Agricultural Research will be doubled over
a five-year period. The work of our own Institute of Scientific
and Technological Cooperation will further strengthen the search
for relevant new agricultural technologies.
The goal of treeing the world from hunger by the year
2000 should command the full support of all countries.
THE HUMAN DIMENSION OF FOREIGN POLICY
Human Rights
The ultimate aim of our foreign policy must be to preserve
freedom for ourselves and to expand freedom for others. This
is a matter both of national principle and of national interest.
For we believe that tree and open societies are not only better
able to meet the rising expectations of their people; they
are also better able to accommodate often conflicting internal
pressures before popular frustrations explode in violent and
radical directions.
We do not seek to impose our system or institutions on
others. Rather, we seek to support, in practical and concrete
ways, the efforts of other nations to build their own
institutions in ways that will meet the irrepressible human
drive for freedom and justice.
Human rights policy commands the strong support of our
citizens, and of the Congress. The world. climate increasingly
favors human rights progress.
Despite new turbulence and conflict, the.past year featured
some encouraging positive developments. We cannot and should
not claim-credit for them. But it is clear that we are part
of a growing movement. During 1979, we saw:
> The further strengthening of democratic practices
in Spain and Portugal, with free elections in both
countries;
-- The disappearance of several of the world's most
repressive regimes;
- The treeing of political prisoners in Asia, Africa,
and Latin America;
-- A return to democratic rule in several Latin American
countries and widespread progress in reducing human
rights violations in the region;
-- The growing strength of international human
rights institutions. The Inter-American Court
of Human Rights held its first meeting. Prepara-
tions began for another conference to review
compliance with the Helsinki accords, to be held
in Madrid this November. The OAU took long strides
toward establishing a human rights commission for
Africa. UN bodies became increasingly active in
their human rights efforts.
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The United States is still not a party to the key human
rights treaties that establish world standards and implementing
machinery. In early 1978, I sent for Senate approval four
such treaties, the American Convention on Human Rights, the
Convention on Racial Discrimination, and the UN Covenants
on Civil. and Political Rights and on Economic and Social and
Cultural Rights. Hearings were held in 1979. No single
action by this country would do more to advance the cause
of human rights than Senate approval of these instruments
and a fifth human rights treaty sent to Congress previously,
the Genocide Convention. I urge the earliest possible Senate
action.
Humanitarian Aid
The was exodus of refugees from Vietnam reached a
crescendo in summer 1979 with over 65,000 people a month fleeing
repression and economic privation. Most fled by boat, and
many were lost at sea. In July, at a special UN meeting on
refugees, Vice President Mondale presented a major United States
program to rescue and help support and resettle the new
refugee population. I doubled to 14,.000 a month the number
of Indochinese refugees the-United States, in accord with
our finest traditions, would absorb over the year ahead.
The Vietnamese invasion of Kampuchea in late 1978 gravely
jeopardized the supply of food for the already decimated and
brutalized Khmer people. In October, I announced that the
United States would pay one-third of the costs of the inter-
national relief program mounted jointly by UNICEF and the
International Committee of the Red Cross. Leaders of thirty-
five church and voluntary agencies, with White House
encouragement, are engaged in their own large fund-raising
program for refugees.
In early November,. Mrs.. Carter' visited refugees on the
Thai-Cambodian border and reported back to me, the United States
voluntary agencies, and the American people. In response,
our efforts to avert a mass famine were accelerated.
The obstacles remain daunting -- continued warfare
and aggression by Vietnam, non-distribution by the Phnom Penh
authorities of much of the UNICEF-ICRC aid, movement of up
to 900,000 hungry Khmer to and across the Thai border where
they can be fed and helped.
But Americans will continue their efforts both public
and private to avert the famine that looms. New help for
our efforts will come from.-the National Committee formed
in. early 1980 by leading citizens to help in mobilizing and
supporting the sustained effort essential to achieve this
humanitarian goal.
As the year began, we are also considering new means
of helping, through our contribution to the UN High
Commissioner for Refugees and in other ways, the mounting
Afghan refugee population in Pakistan and other desperate
refugee situations such as Somalia.
It cannot be-ignored that the destructive and aggressive
policies of the Soviet Union have added immeasurably to the
suffering in these three tragic situations.
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I have asked the heads of the appropriate departments
of the Executive Branch to play an active role in the Select
Commission on Immigration and Refugee Policy to formulate
a new approach to deal with sensitivity with the difficult
subject of people arriving on our shores from Latin America.
My meeting with Pope John Paul II during his historic
and unprecedented visit.to the United States helped raise
the world's consciousness in connection with pressing
problems of famine, homelessness, and human rights. Our
talks spurred positive action in many of these areas, notably
Indochina, and set. the stage for further action in 1980.
THE CONTROL OF NUCLEAR WEAPONS
Together with our friends and allies, we are striving
to build a world in which peoples with diverse interests can
live freely and prosper. But all that humankind has achieved
to date, all that we are seeking to accomplish, and human
existence itself can be undone in an instant -- in the
catastrophe of a nuclear war.
Thus one of the central objectives of my Administration
has been to control the proliferation of nuclear weapons to
those nations which do not have them, and their further
development by the existing nuclear powers -- notably the
Soviet Union and the United States.
Non-Proliferation
I entered office committed to assert American leadership
in stemming the proliferation of nuclear weapons -- which
could create fundamental new instabilities in critical regions
of the world, and threaten the security of the United States.
This should not and cannot be done unilaterally. The coopera-
tion of other suppliers of nuclear technology and materials
is needed. This issue must not become a North-South
confrontation.
We have been proceeding on a number of fronts:
We have been seeking to encourage nations to accede
to the Non-Proliferation Treaty, or to accept full-
scope international safeguards. The Nuclear
Non-Proliferation Act calls for such safeguards in
connection with United States nuclear exports.
The International. Nuclear Fuel Cycle Evaluation
(INFCE) has demonstrated that suppliers and
recipients can work together. Its results will
be published in a month. While differences remain,
it will provide a broader international basis for
national decisions which must balance energy needs
with non-proliferation concerns.
Finally, we are working to encourage regional
cooperation and restraint. Protocol. I of the
Treaty of Tlatelolco which will contribute to the
lessening of nuclear dangers for our Latin American
neighbors has not yet been ratified by the United
States Senate.
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Working together with the Congress, I remain committed
to the vigorous pursuit of our non-proliferation objectives.
Limitations on Strategic Arms
The most prominent of our nuclear arms control efforts
is, of course, SALT II.
The signing of the Treaty brought to an and painstaking
negotiations carried out under three administrations of both
parties.
-- SALT II is in our mutual interest; it is neither
an American favor to the Soviet Union nor a Soviet
favor to the United States.
-- Ratification of the SALT' II Treaty would represent
a major step forward in restraining the continued
growth of Soviet strategic forces.
Because SALT'II reduces superpower competition in its
most dangerous manifestation, this Treaty is the single most
important bilateral accord of the decade:
-- SALT II will permit us better to maintain strategic
equivalence in nuclear weapons and devote our defense
increases more heavily to our highest priority needs
for conventional force improvements;
-- Without It, the Soviets can add more power to their
forces and better conceal from us what they are
doing;
-- Without SALT II, and the beginning of SALT III,
deeper cuts would. take many more years to achieve;
Without SALT II, our efforts to control the
proliferation of nuclear weapons will be more
difficult.
I believe that the Senate will ratify SALT II because
the Treaty is, in its simplest terms, in the interest of our
Nation's security.
But r do not believe it advisable at this time to bring
up the Treaty for consideration on the Senate floor. The
Congress and the Executive Branch must first deal with the
pressing matters arising from the Soviet invasion of
Afghanistan.
CONCLUSION
As we enter the decade of the 1980's, we face challenges
both at home and abroad which will test our qualities as a
people -- our toughness and willingness to sacrifice for
larger goals, our courage and our vision.
For this Nation to remain secure, for this country to
prosper, we must rise above narrow interests. The dangers
of disunity are self-evident in a world of major power
confrontation. The rewards of a new national consensus and
sense of purpose are equally clear.
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We have new support in the world for our purposes of
national independence and individual human dignity. We have
a new will at home to do what is required to keep us the
strongest nation on earth.
We must move together into this decade with the strength
which comes from realization of the dangers before us and
from the confidence that together we can overcome them.
THE WEITE HOUSE,
January 21, 1980.
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