The addresses are separated by three asterisks: ***

Dates of addresses by Jimmy Carter in this eBook: January 19, 1978 January 25, 1979 January 21, 1980 January 16, 1981

***

State of the Union AddressJimmy CarterJanuary 19, 1978

Two years ago today we had the first caucus in Iowa, and one year agotomorrow, I walked from here to the White House to take up the duties ofPresident of the United States. I didn't know it then when I walked, butI've been trying to save energy ever since. 

I return tonight to fulfill one of those duties of the Constitution: togive to the Congress, and to the Nation, information on the state of theUnion. 

Militarily, politically, economically, and in spirit, the state of ourUnion is sound. 

We are a great country, a strong country, a vital and dynamic country, andso we will remain. 

We are a confident people and a hardworking people, a decent and acompassionate people, and so we will remain. 

I want to speak to you tonight about where we are and where we must go, about what we have done and what we must do. And I want to pledge to you mybest efforts and ask you to pledge yours. 

Each generation of Americans has to face circumstances not of its ownchoosing, but by which its character is measured and its spirit is tested. 

There are times of emergency, when a nation and its leaders must bringtheir energies to bear on a single urgent task. That was the duty AbrahamLincoln faced when our land was torn apart by conflict in the War Betweenthe States. That was the duty faced by Franklin Roosevelt when he ledAmerica out of an economic depression and again when he led America tovictory in war. 

There are other times when there is no single overwhelming crisis, yetprofound national interests are at stake. 

At such times the risk of inaction can be equally great. It becomes thetask of leaders to call forth the vast and restless energies of our peopleto build for the future. 

That is what Harry Truman did in the years after the Second World War, whenwe helped Europe and Japan rebuild themselves and secured an internationalorder that has protected freedom from aggression. 

We live in such times now, and we face such duties. 

We've come through a long period of turmoil and doubt, but we've once againfound our moral course, and with a new spirit, we are striving to expressour best instincts to the rest of the world. 

There is all across our land a growing sense of peace and a sense of commonpurpose. This sense of unity cannot be expressed in programs or inlegislation or in dollars. It's an achievement that belongs to everyindividual American. This unity ties together, and it towers over all ourefforts here in Washington, and it serves as an inspiring beacon for all ofus who are elected to serve. 

This new atmosphere demands a new spirit, a partnership between those of uswho lead and those who elect. The foundations of this partnership aretruth, the courage to face hard decisions, concern for one another and thecommon good over special interests, and a basic faith and trust in thewisdom and strength and judgment of the American people. 

For the first time in a generation, we are not haunted by a majorinternational crisis or by domestic turmoil, and we now have a rare and apriceless opportunity to address persistent problems and burdens which cometo us as a nation, quietly and steadily getting worse over the years. 

As President, I've had to ask you, the Members of Congress, and you, theAmerican people, to come to grips with some of the most difficult and hardquestions facing our society. 

We must make a maximum effort, because if we do not aim for the best, weare very likely to achieve little. I see no benefit to the country if wedelay, because the problems will only get worse. 

We need patience and good will, but we really need to realize that there isa limit to the role and the function of government. Government cannot solveour problems, it can't set our goals, it cannot define our vision. Government cannot eliminate poverty or provide a bountiful economy orreduce inflation or save our cities or cure illiteracy or provide energy. And government cannot mandate goodness. Only a true partnership betweengovernment and the people can ever hope to reach these goals. 

Those of us who govern can sometimes inspire, and we can identify needs andmarshal resources, but we simply cannot be the managers of everything andeverybody. 

We here in Washington must move away from crisis management, and we mustestablish clear goals for the future, immediate and the distant future, which will let us work together and not in conflict. Never again should weneglect a growing crisis like the shortage of energy, where further delaywill only lead to more harsh and painful solutions. 

Every day we spend more than $120 million for foreign oil. This slows oureconomic growth, it lowers the value of the dollar overseas, and itaggravates unemployment and inflation here at home. 

Now we know what we must do, increase production. We must cut down onwaste. And we must use more of those fuels which are plentiful and morepermanent. We must be fair to people, and we must not disrupt our Nation'seconomy and our budget. 

Now, that sounds simple. But I recognize the difficulties involved. I knowthat it is not easy for the Congress to act. But the fact remains that onthe energy legislation, we have failed the American people. Almost 5 yearsafter the oil embargo dramatized the problem for us all, we still do nothave a national energy program. Not much longer can we tolerate thisstalemate. It undermines our national interest both at home and abroad. Wemust succeed, and I believe we will. 

Our main task at home this year, with energy a central element, is theNation's economy. We must continue the recovery and further cutunemployment and inflation. 

Last year was a good one for the United States. We reached all of our majoreconomic goals for 1977. Four million new jobs were created, an alltimerecord, and the number of unemployed dropped by more than a million. Unemployment right now is the lowest it has been since 1974, and not sinceWorld War II has such a high percentage of American people been employed. 

The rate of inflation went down. There was a good growth in businessprofits and investments, the source of more jobs for our workers, and ahigher standard of living for all our people. After taxes and inflation, there was a healthy increase in workers' wages. 

And this year, our country will have the first $2 trillion economy in thehistory of the world. 

Now, we are proud of this progress the first year, but we must do evenbetter in the future. 

We still have serious problems on which all of us must work together. Ourtrade deficit is too large. Inflation is still too high, and too manyAmericans still do not have a job. 

Now, I didn't have any simple answers for all these problems. But we havedeveloped an economic policy that is working, because it's simple, balanced, and fair. It's based on four principles: First, the economy mustkeep on expanding to produce new jobs and better income, which our peopleneed. The fruits of growth must be widely shared. More jobs must be madeavailable to those who have been bypassed until now. And the tax systemmust be made fairer and simpler. 

Secondly, private business and not the Government must lead the expansionin the future. 

Third, we must lower the rate of inflation and keep it down. Inflationslows down economic growth, and it's the most cruel to the poor and also tothe elderly and others who live on fixed incomes. 

And fourth, we must contribute to the strength of the world economy. 

I will announce detailed proposals for improving our tax system later thisweek. We can make our tax laws fairer, we can make them simpler and easierto understand, and at the same time, we can, and we will, reduce the taxburden on American citizens by $25 billion. 

The tax reforms and the tax reductions go together. Only with the longoverdue reforms will the full tax cut be advisable. 

Almost $17 billion in income tax cuts will go to individuals. Ninety-sixpercent of all American taxpayers will see their taxes go down. For atypical family of four, this means an annual saving of more than $250 ayear, or a tax reduction of about 20 percent. A further $2 billion cut inexcise taxes will give more relief and also contribute directly to loweringthe rate of inflation. 

And we will also provide strong additional incentives for businessinvestment and growth through substantial cuts in the corporate tax ratesand improvement in the investment tax credit. 

Now, these tax proposals will increase opportunity everywhere in theNation. But additional jobs for the disadvantaged deserve specialattention. 

We've already passed laws to assure equal access to the voting booth and torestaurants and to schools, to housing, and laws to permit access to jobs. But job opportunity, the chance to earn a decent living, is also a basichuman right, which we cannot and will not ignore. 

A major priority for our Nation is the final elimination of the barriersthat restrict the opportunities available to women and also to black peopleand Hispanics and other minorities. We've come a long way toward that goal. But there is still much to do. What we inherited from the past must not bepermitted to shackle us in the future. 

I'll be asking you for a substantial increase in funds for public jobs forour young people, and I also am recommending that the Congress continue thepublic service employment programs at more than twice the level of a yearago. When welfare reform is completed, we will have more than a millionadditional jobs so that those on welfare who are able to work can work. 

However, again, we know that in our free society, private business is stillthe best source of new jobs. Therefore, I will propose a new program toencourage businesses to hire young and disadvantaged Americans. These youngpeople only need skills and a chance in order to take their place in oureconomic system. Let's give them the chance they need. A major step in theright direction would be the early passage of a greatly improvedHumphrey-Hawkins bill. 

My budget for 1979 addresses these national needs, but it is lean andtight. I have cut waste wherever possible. 

I am proposing an increase of less than 2 percent after adjusting forinflation, the smallest increase in the Federal budget in 4 years. 

Lately, Federal spending has taken a steadily increasing portion of whatAmericans produce. Our new budget reverses that trend, and later I hope tobring the Government's toll down even further. And with your help, we'll dothat. 

In time of high employment and a strong economy, deficit spending shouldnot be a feature of our budget. As the economy continues to gain strengthand as our unemployment rates continue to fall, revenues will grow. Withcareful planning, efficient management, and proper restraint on spending, we can move rapidly toward a balanced budget, and we will. 

Next year the budget deficit will be only slightly less than this year. Butone-third of the deficit is due to the necessary tax cuts that I'veproposed. This year the right choice is to reduce the burden on taxpayersand provide more jobs for our people. 

The third element in our program is a renewed attack on inflation. We'velearned the hard way that high unemployment will not prevent or cureinflation. Government can help us by stimulating private investment and bymaintaining a responsible economic policy. Through a new top-level reviewprocess, we will do a better job of reducing Government regulation thatdrives up costs and drives up prices. 

But again, Government alone cannot bring down the rate of inflation. When alevel of high inflation is expected to continue, then companies raiseprices to protect their profit margins against prospective increases inwages and other costs, while workers demand higher wages as protectionagainst expected price increases. It's like an escalation in the arms race, and understandably, no one wants to disarm alone. 

Now, no one firm or a group of workers can halt this process. It's aneffort that we must all make together. I'm therefore asking government, business, labor, and other groups to join in a voluntary program tomoderate inflation by holding wage and price increases in each sector ofthe economy during 1978 below the average increases of the last 2 years. 

I do not believe in wage and price controls. A sincere commitment tovoluntary constraint provides a way, perhaps the only way, to fightinflation without Government interference. 

As I came into the Capitol tonight, I saw the farmers, my fellow farmers, standing out in the snow. I'm familiar with their problem, and I know fromCongress' action that you are too. When I was running Carters Warehouse, wehad spread on our own farms 5-10-15 fertilizer for about $40 a ton. Thelast time I was home, the price was about $100 a ton. The cost of nitrogenhas gone up 150 percent, and the price of products that farmers sell haseither stayed the same or gone down a little. 

Now, this past year in 1977, you, the Congress, and I together passed a newagricultural act. It went into effect October 1. It'll have its firstimpact on the 1978 crops. It will help a great deal. It'll add $6 1/2billion or more to help the farmers with their price supports and targetprices. 

Last year we had the highest level of exports of farm products in thehistory of our country, $24 billion. We expect to have more this year. We'll be working together. But I think it's incumbent on us to monitor verycarefully the farm situation and continue to work harmoniously with thefarmers of our country. What's best for the farmers, the farm families, inthe long run is also best for the consumers of our country. 

Economic success at home is also the key to success in our internationaleconomic policy. An effective energy program, strong investment andproductivity, and controlled inflation will provide [improve] our tradebalance and balance it, and it will help to protect the integrity of thedollar overseas. 

By working closely with our friends abroad, we can promote the economichealth of the whole world, with fair and balanced agreements lowering thebarriers to trade. 

Despite the inevitable pressures that build up when the world economysuffers from high unemployment, we must firmly resist the demands forself-defeating protectionism. But free trade must also be fair trade. And Iam determined to protect American industry and American workers againstforeign trade practices which are unfair or illegal. 

In a separate written message to Congress, I've outlined other domesticinitiatives, such as welfare reform, consumer protection, basic educationskills, urban policy, reform of our labor laws, and national health carelater on this year. I will not repeat these tonight. But there are severalother points that I would like to make directly to you. 

During these past years, Americans have seen our Government grow far fromus. 

For some citizens, the Government has almost become like a foreign country, so strange and distant that we've often had to deal with it through trainedambassadors who have sometimes become too powerful and too influential, lawyers, accountants, and lobbyists. This cannot go on. 

We must have what Abraham Lincoln wanted, a government for the people. 

We've made progress toward that kind of government. You've given me theauthority I requested to reorganize the Federal bureaucracy. And I am usingthat authority. 

We've already begun a series of reorganization plans which will becompleted over a period of 3 years. We have also proposed abolishing almost500 Federal advisory and other commissions and boards. But I know that theAmerican people are still sick and tired of Federal paperwork and redtape. Bit by bit we are chopping down the thicket of unnecessary Federalregulations by which Government too often interferes in our personal livesand our personal business. We've cut the public's Federal paperwork load bymore than 12 percent in less than a year. And we are not through cutting. 

We've made a good start on turning the gobbledygook of Federal regulationsinto plain English that people can understand. But we know that we stillhave a long way to go. 

We've brought together parts of 11 Government agencies to create a newDepartment of Energy. And now it's time to take another major step bycreating a separate Department of Education. 

But even the best organized Government will only be as effective as thepeople who carry out its policies. For this reason, I consider civilservice reform to be absolutely vital. Worked out with the civil servantsthemselves, this reorganization plan will restore the merit principle to asystem which has grown into a bureaucratic maze. It will provide greatermanagement flexibility and better rewards for better performance withoutcompromising job security. 

Then and only then can we have a government that is efficient, open, andtruly worthy of our people's understanding and respect. I have promisedthat we will have such a government, and I intend to keep that promise. 

In our foreign policy, the separation of people from government has been inthe past a source of weakness and error. In a democratic system like ours, foreign policy decisions must be able to stand the test of publicexamination and public debate. If we make a mistake in this administration, it will be on the side of frankness and openness with the American people. 

In our modern world, when the deaths of literally millions of people canresult from a few terrifying seconds of destruction, the path of nationalstrength and security is identical to the path of peace. 

Tonight, I am happy to report that because we are strong, our Nation is atpeace with the world. 

We are a confident nation. We've restored a moral basis for our foreignpolicy. The very heart of our identity as a nation is our firm commitmentto human rights. 

We stand for human rights because we believe that government has as apurpose to promote the well-being of its citizens. This is true in ourdomestic policy; it's also true in our foreign policy. The world must knowthat in support of human rights, the United States will stand firm. 

We expect no quick or easy results, but there has been significant movementtoward greater freedom and humanity in several parts of the world. 

Thousands of political prisoners have been freed. The leaders of the world, even our ideological adversaries, now see that their attitude towardfundamental human rights affects their standing in the internationalcommunity, and it affects their relations with the United States. 

To serve the interests of every American, our foreign policy has threemajor goals. 

The first and prime concern is and will remain the security of ourcountry. 

Security is based on our national will, and security is based on thestrength of our Armed Forces. We have the will, and militarily we are verystrong. 

Security also comes through the strength of our alliances. We havereconfirmed our commitment to the defense of Europe, and this year we willdemonstrate that commitment by further modernizing and strengthening ourmilitary capabilities there. 

Security can also be enhanced by agreements with potential adversarieswhich reduce the threat of nuclear disaster while maintaining our ownrelative strategic capability. 

In areas of peaceful competition with the Soviet Union, we will continue tomore than hold our own. 

At the same time, we are negotiating with quiet confidence, without haste, with careful determination, to ease the tensions between us and to ensuregreater stability and security. 

The strategic arms limitation talks have been long and difficult. We want amutual limit on both the quality and the quantity of the giant nucleararsenals of both nations, and then we want actual reductions in strategicarms as a major step toward the ultimate elimination of nuclear weaponsfrom the face of the Earth. 

If these talks result in an agreement this year, and I trust they will, Ipledge to you that the agreement will maintain and enhance the stability ofthe world's strategic balance and the security of the United States. 

For 30 years, concerted but unsuccessful efforts have been made to ban thetesting of atomic explosives, both military weapons and peaceful nucleardevices. 

We are hard at work with Great Britain and the Soviet Union on an agreementwhich will stop testing and will protect our national security and providefor adequate verification of compliance. We are now making, I believe, goodprogress toward this comprehensive ban on nuclear explosions. 

We are also working vigorously to halt the proliferation of nuclear weaponsamong the nations of the world which do not now have them and to reduce thedeadly global traffic in conventional arms sales. Our stand for peace issuspect if we are also the principal arms merchant of the world. So, we'vedecided to cut down our arms transfers abroad on a year-by-year basis andto work with other major arms exporters to encourage their similarconstraint. 

Every American has a stake in our second major goal, a world at peace. In anuclear age, each of us is threatened when peace is not secured everywhere. We are trying to promote harmony in those parts of the world where majordifferences exist among other nations and threaten international peace. 

In the Middle East, we are contributing our good offices to maintain themomentum of the current negotiations and to keep open the lines ofcommunication among the Middle Eastern leaders. The whole world has a greatstake in the success of these efforts. This is a precious opportunity for ahistoric settlement of a longstanding conflict, an opportunity which maynever come again in our lifetime. 

Our role has been difficult and sometimes thankless and controversial. Butit has been constructive and it has been necessary, and it will continue. 

Our third major foreign policy goal is one that touches the life of everyAmerican citizen every day, world economic growth and stability. 

This requires strong economic performance by the industrialized democracieslike ourselves and progress in resolving the global energy crisis. Lastfall, with the help of others, we succeeded in our vigorous efforts tomaintain the stability of the price of oil. But as many foreign leadershave emphasized to me personally and, I am sure, to you, the greatestfuture contribution that America can make to the world economy would be aneffective energy conservation program here at home. We will not hesitate totake the actions needed to protect the integrity of the American dollar. 

We are trying to develop a more just international system. And in thisspirit, we are supporting the struggle for human development in Africa, inAsia, and in Latin America. 

Finally, the world is watching to see how we act on one of our mostimportant and controversial items of business, approval of the Panama Canaltreaties. The treaties now before the Senate are the result of the work offour administrations, two Democratic, two Republican. 

They guarantee that the canal will be open always for unrestricted use bythe ships of the world. Our ships have the right to go to the head of theline for priority of passage in times of emergency or need. We retain thepermanent right to defend the canal with our own military forces, ifnecessary, to guarantee its openness and its neutrality. 

The treaties are to the clear advantage of ourselves, the Panamanians, andthe other users of the canal. Ratifying the Panama Canal treaties willdemonstrate our good faith to the world, discourage the spread of hostileideologies in this hemisphere, and directly contribute to the economicwell-being and the security of the United States. 

I have to say that that's very welcome applause. 

There were two moments on my recent journey which, for me, confirmed thefinal aims of our foreign policy and what it always must be. 

One was in a little village in India, where I met a people as passionatelyattached to their rights and liberties as we are, but whose children have afar smaller chance for good health or food or education or humanfulfillment than a child born in this country. 

The other moment was in Warsaw, capital of a nation twice devastated by warin this century. There, people have rebuilt the city which war'sdestruction took from them. But what was new only emphasized clearly whatwas lost. 

What I saw in those two places crystalized for me the purposes of our ownNation's policy: to ensure economic justice, to advance human rights, toresolve conflicts without violence, and to proclaim in our great democracyour constant faith in the liberty and dignity of human beings everywhere. 

We Americans have a great deal of work to do together. In the end, how wellwe do that work will depend on the spirit in which we approach it. We mustseek fresh answers, unhindered by the stale prescriptions of the past. 

It has been said that our best years are behind us. But I say again thatAmerica's best is still ahead. We have emerged from bitter experienceschastened but proud, confident once again, ready to face challenges onceagain, and united once again. 

We come together tonight at a solemn time. Last week the Senate lost a goodand honest man, Lee Metcalf of Montana. 

And today, the flag of the United States flew at half-mast from thisCapitol and from American installations and ships all over the world, inmourning for Senator Hubert Humphrey. 

Because he exemplified so well the joy and the zest of living, his deathreminds us not so much of our own mortality, but of the possibilitiesoffered to us by life. He always looked to the future with a specialAmerican kind of confidence, of hope and enthusiasm. And the best way thatwe can honor him is by following his example. 

Our task, to use the words of Senator Humphrey, is "reconciliation, rebuilding, and rebirth. "

Reconciliation of private needs and interests into a higher purpose. 

Rebuilding the old dreams of justice and liberty, and country andcommunity. 

Rebirth of our faith in the common good. 

Each of us here tonight, and all who are listening in your homes, mustrededicate ourselves to serving the common good. We are a community, abeloved community, all of us. Our individual fates are linked, our futuresintertwined. And if we act in that knowledge and in that spirit, together, as the Bible says, we can move mountains. 

Thank you very much. 

***

State of the Union AddressJimmy CarterJanuary 25, 1979

Tonight I want to examine in a broad sense the state of our AmericanUnion--how we are building a new foundation for a peaceful and a prosperousworld. 

Our children who will be born this year will come of age in the 21stcentury. What kind of society, what kind of world are we building for them?Will we ourselves be at peace? Will our children enjoy a better quality oflife? Will a strong and united America still be a force for freedom andprosperity around the world?

Tonight, there is every sign that the state of our Union is sound. 

Our economy offers greater prosperity for more of our people than everbefore. Real per capita income and real business profits have risensubstantially in the last 2 years. Farm exports are setting an all-timerecord each year, and farm income last year, net farm income, was up morethan 25 percent. 

Our liberties are secure. Our military defenses are strong and growingstronger. And more importantly, tonight, America--our beloved country--isat peace. 

Our earliest national commitments, modified and reshaped by succeedinggenerations, have served us well. But the problems that we face today aredifferent from those that confronted earlier generations of Americans. Theyare more subtle, more complex, and more interrelated. At home, we arerecognizing ever more clearly that government alone cannot solve theseproblems. And abroad, few of them can be solved by the United States alone. But Americans as a united people, working with our allies and friends, havenever been afraid to face problems and to solve problems, either here orabroad. 

The challenge to us is to build a new and firmer foundation for thefuture--for a sound economy, for a more effective government, for morepolitical trust, and for a stable peace--so that the America our childreninherit will be even stronger and even better than it is today. 

We cannot resort to simplistic or extreme solutions which substitute mythsfor common sense. 

In our economy, it is a myth that we must choose endlessly betweeninflation and recession. Together, we build the foundation for a strongeconomy, with lower inflation, without contriving either a recession withits high unemployment or unworkable, mandatory government controls. 

In our government, it is a myth that we must choose between compassion andcompetence. Together, we build the foundation for a government that works, and works for people. 

In our relations with our potential adversaries, it is a myth that we mustchoose between confrontation and capitulation. Together, we build thefoundation for a stable world of both diversity and peace. 

Together, we've already begun to build the foundation for confidence in oureconomic system. During the last 2 years, in bringing our economy out ofthe deepest recession since the 1930's, we've created 7, 100, 000 new jobs. The unemployment rate has gone down 25 percent. And now we must redoubleour fight against the persistent inflation that has wracked our country formore than a decade. That's our important domestic issue, and we must do ittogether. 

We know that inflation is a burden for all Americans, but it's a disasterfor the poor, the sick, and the old. No American family should be forced tochoose among food, warmth, health care, or decent housing because the costof any of these basic necessities has climbed out of reach. 

Three months ago, I outlined to the Nation a balanced anti-inflationprogram that couples responsible government restraint with responsible wageand price restraint. It's based upon my knowledge that there is a morepowerful force than government compulsion--the force created by thecooperative efforts of millions of Americans working toward a common goal. 

Business and labor have been increasingly supportive. It's imperative thatwe in government do our part. We must stop excessive government growth, andwe must control government spending habits. 

I've sent to this Congress a stringent but a fair budget, one that, since Iran for President in 1976, will have cut the Federal deficit in half. Andas a percentage of our gross national product, the deficit will havedropped by almost 75 percent. 

This Congress had a good record last year, and I now ask the 96th Congressto continue this partnership in holding the line on excess Federalspending. It will not be easy. But we must be strong, and we must bepersistent. 

This budget is a clear message that, with the help of you and the Americanpeople, I am determined, as President, to bring inflation under control. 

The 1980 budget provides enough spending restraint to begin unwindinginflation, but enough support for our country to keep American workersproductive and to encourage the investments that provide new jobs. We willcontinue to mobilize our Nation's resources to reduce our trade deficitsubstantially this year and to maintain the strength of the Americandollar. 

We've demonstrated in this restrained budget that we can build on the gainsof the past 2 years to provide additional support to educate disadvantagedchildren, to care for the elderly, to provide nutrition and legal servicesfor the poor, and to strengthen the economic base of our urban communitiesand, also, our rural areas. 

This year, we will take our first steps to develop a national health plan. 

We must never accept a permanent group of unemployed Americans, with nohope and no stake in building our society. For those left out of theeconomy because of discrimination, a lack of skills, or poverty, we mustmaintain high levels of training, and we must continue to provide jobs. 

A responsible budget is not our only weapon to control inflation. We mustact now to protect all Americans from health care costs that are rising $1million per hour, 24 hours a day, doubling every 5 years. We must takecontrol of the largest contributor to that inflation: skyrocketing hospitalcosts. 

There will be no clearer test of the commitment of this Congress to theanti-inflation fight than the legislation that I will submit again thisyear to hold down inflation in hospital care. 

Over the next 5 years, my proposals will save Americans a total of $60billion, of which $25 billion will be savings to the American taxpayer inthe Federal budget itself. The American people have waited long enough. This year we must act on hospital cost containment. 

We must also fight inflation by improvements and better enforcement of ourantitrust laws and by reducing government obstacles to competition in theprivate sector. 

We must begin to scrutinize the overall effect of regulation in oureconomy. Through deregulation of the airline industry we've increasedprofits, cut prices for all Americans, and begun--for one of the few timesin the history of our Nation--to actually dismantle a major Federalbureaucracy. This year, we must begin the effort to reform our regulatoryprocesses for the railroad, bus, and the trucking industries. 

America has the greatest economic system in the world. Let's reducegovernment interference and give it a chance to work. 

I call on Congress to take other anti-inflation action--to expand ourexports to protect American jobs threatened by unfair trade, to conserveenergy, to increase production and to speed development of solar power, andto reassess our Nation's technological superiority. American workers whoenlist in the fight against inflation deserve not just our gratitude, butthey deserve the protection of the real wage insurance proposal that I havealready made to the Congress. 

To be successful, we must change our attitudes as well as our policies. Wecannot afford to live beyond our means. We cannot afford to create programsthat we can neither manage nor finance, or to waste our natural resources, and we cannot tolerate mismanagement and fraud. Above all, we must meet thechallenges of inflation as a united people. 

With the support of the American people, government in recent decades hashelped to dismantle racial barriers, has provided assistance for thejobless and the retired, has fed the hungry, has protected the safety, health, and bargaining rights of American workers, and has helped topreserve our natural heritage. 

But it's not enough to have created a lot of government programs. Now wemust make the good programs more effective and improve or weed out thosewhich are wasteful or unnecessary. 

With the support of the Congress, we've begun to reorganize and to getcontrol of the bureaucracy. We are reforming the civil service system, sothat we can recognize and reward those who do a good job and correct orremove those who do not. 

This year, we must extend major reorganization efforts to education, toeconomic development, and to the management of our natural resources. Weneed to enact a sunshine [sunset] law that when government programs haveoutlived their value, they will automatically be terminated. 

There's no such thing as an effective and a noncontroversial reorganizationand reform. But we know that honest, effective government is essential torestore public faith in our public action. 

None of us can be satisfied when two-thirds of the American citizens chosenot to vote last year in a national election. Too many Americans feelpowerless against the influence of private lobbying groups and theunbelievable flood of private campaign money which threatens our electoralprocess. 

This year, we must regain the public's faith by requiring limited financialfunds from public funds for congressional election campaigns. House bill 1provides for this public financing of campaigns. And I look forward with agreat deal of anticipation to signing it at an early date. 

A strong economy and an effective government will restore confidence inAmerica. But the path of the future must be charted in peace. We mustcontinue to build a new and a firm foundation for a stable worldcommunity. 

We are building that new foundation from a position of nationalstrength--the strength of our own defenses, the strength of our friendshipswith other nations, and of our oldest American ideals. 

America's military power is a major force for security and stability in theworld. We must maintain our strategic capability and continue the progressof the last 2 years with our NATO Allies, with whom we have increased ourreadiness, modernized our equipment, and strengthened our defense forces inEurope. I urge you to support the strong defense budget which I haveproposed to the Congress. 

But our national security in this complicated age requires more than justmilitary might. In less than a lifetime, world population has more thandoubled, colonial empires have disappeared, and a hundred new nations havebeen born, and migration to the world's cities have all awakened newyearnings for economic justice and human rights among people everywhere. 

This demand for justice and human rights is a wave of the future. In such aworld, the choice is not which super power will dominate the world. Nonecan and none will. The choice instead is between a world of anarchy anddestruction, or a world of cooperation and peace. 

In such a world, we seek not to stifle inevitable change, but to influenceits course in helpful and constructive ways that enhance our values, ournational interests, and the cause of peace. 

Towering over this volatile, changing world, like a thundercloud on asummer day, looms the awesome power of nuclear weapons. 

We will continue to help shape the forces of change, to anticipate emergingproblems of nuclear proliferation and conventional arms sales, and to useour great strength parts of the world before they erupt and spread. 

We have no desire to be the world's policeman. But America does want to bethe world's peacemaker. 

We are building the foundation for truly global cooperation, not only withWestern and industrialized nations but with the developing countries aswell. Our ties with Japan and our European allies are stronger than ever, and so are our friendly relations with the people of Latin America, Africa, and the Western Pacific and Asia. 

We've won new respect in this hemisphere with the Panama Canal treaties. We've gained new trust with the developing world through our opposition toracism, our commitment to human rights, and our support for majority rulein Africa. 

The multilateral trade negotiations are now reaching a successfulconclusion, and congressional approval is essential to the economicwell-being of our own country and of the world. This will be one of our toppriorities in 1979. 

We are entering a hopeful era in our relations with one-fourth of theworld's people who live in China. The presence of Vice Premier DengXiaoping next week will help to inaugurate that new era. And with promptcongressional action on authorizing legislation, we will continue ourcommitment to a prosperous, peaceful, and secure life for the people ofTaiwan. 

I'm grateful that in the past year, as in the year before, no American hasdied in combat anywhere in the world. And in Iran, Nicaragua, Cyprus, Namibia, and Rhodesia, our country is working for peaceful solutions todangerous conflicts. 

In the Middle East, under the most difficult circumstances, we have soughtto help ancient enemies lay aside deep-seated differences that haveproduced four bitter wars in our lifetime. 

Our firm commitment to Israel's survival and security is rooted in ourdeepest convictions and in our knowledge of the strategic importance to ourown Nation of a stable Middle East. To promote peace and reconciliation inthe region, we must retain the trust and the confidence both of Israel andalso of the Arab nations that are sincerely searching for peace. 

I am determined, as President, to use the full, beneficial influence of ourcountry so that the precious opportunity for lasting peace between Israeland Egypt will not be lost. 

The new foundation of international cooperation that we seek excludes nonation. Cooperation with the Soviet Union serves the cause of peace, for inthis nuclear age, world peace must include peace between the superpowers--and it must mean the control of nuclear arms. 

Ten years ago, the United States and the Soviet Union made the historicdecision to open the strategic arms limitations talks, or SALT. The purposeof SALT, then as now, is not to gain a unilateral advantage for eithernation, but to protect the security of both nations, to reverse the costlyand dangerous momentum of the nuclear arms race, to preserve a stablebalance of nuclear forces, and to demonstrate to a concerned world that weare determined to help preserve the peace. 

The first SALT agreement was concluded in 1972. And since then, during 6years of negotiation by both Republican and Democratic leaders, nearly allissues of SALT II have been resolved. If the Soviet Union continues tonegotiate in good faith, a responsible SALT agreement will be reached. 

It's important that the American people understand the nature of the SALTprocess. 

SALT II is not based on sentiment; it's based on self-interest--of theUnited States and of the Soviet Union. Both nations share a powerful commoninterest in reducing the threat of a nuclear war. I will sign no agreementwhich does not enhance our national security. 

SALT II does not rely on trust; it will be verifiable. We have verysophisticated, proven means, including our satellites, to determine forourselves whether or not the Soviet Union is meeting its treatyobligations. I will sign no agreement which cannot be verified. 

The American nuclear deterrent will remain strong after SALT II. Forexample, just one of our relatively invulnerable Poseidonsubmarines--comprising less than 2 percent of our total nuclear force ofsubmarines, aircraft, and land-based missiles--carries enough warheads todestroy every large- and medium-sized city in the Soviet Union. Ourdeterrent is overwhelming, and I will sign no agreement unless our deterrentforce will remain overwhelming. 

A SALT agreement, of course, cannot substitute for wise diplomacy or astrong defense, nor will it end the danger of nuclear war. But it willcertainly reduce that danger. It will strengthen our efforts to ban nucleartests and to stop the spread of atomic weapons to other nations. And it canbegin the process of negotiating new agreements which will further limitnuclear arms. 

The path of arms control, backed by a strong defense, the path our Nationand every President has walked for 30 years, can lead to a world of law andof international negotiation and consultation in which all peoples mightlive in peace. In this year 1979, nothing is more important than that theCongress and the people of the United States resolve to continue with me onthat path of nuclear arms control and world peace. This is paramount. 

I've outlined some of the changes that have transformed the world and whichare continuing as we meet here tonight. But we in America need not fearchange. The values on which our Nation was founded: individual liberty, self-determination, the potential for human fulfillment in freedom, all ofthese endure. We find these democratic principles praised, even in bookssmuggled out of totalitarian nations and on wallposters in lands which wethought were closed to our influence. Our country has regained its specialplace of leadership in the worldwide struggle for human rights. And that isa commitment that we must keep at home, as well as abroad. 

The civil rights revolution freed all Americans, black and white, but itsfull promise still remains unrealized. I will continue to work with all mystrength for equal opportunity for all Americans--and for affirmativeaction for those who carry the extra burden of past denial of equalopportunity. 

We remain committed to improving our labor laws to better protect therights of American workers. And our Nation must make it clear that thelegal rights of women as citizens are guaranteed under the laws of our landby ratifying the equal rights amendment. 

As long as I'm President, at home and around the world America's examplesand America's influence will be marshaled to advance the cause of humanrights. 

To establish those values, two centuries ago a bold generation of Americansrisked their property, their position, and life itself. We are their heirs, and they are sending us a message across the centuries. The words they madeso vivid are now growing faintly indistinct, because they are not heardoften enough. They are words like "justice, " "equality, " "unity, " "truth, ""sacrifice, " "liberty, " "faith, " and "love. "

These words remind us that the duty of our generation of Americans is torenew our Nation's faith, not focused just against foreign threats butagainst the threats of selfishness, cynicism, and apathy. 

The new foundation I've discussed tonight can help us build a nation and aworld where every child is nurtured and can look to the future with hope, where the resources now wasted on war can be turned towards meeting humanneeds, where all people have enough to eat, a decent home, and protectionagainst disease. 

It can help us build a nation and a world where all people are free to seekthe truth and to add to human understanding, so that all of us may live ourlives in peace. 

Tonight, I ask you, the Members of the Congress, to join me in buildingthat new foundation, a better foundation, for our beloved country and ourworld. 

Thank you very much. 

***

State of the Union AddressJimmy CarterJanuary 21, 1980

This last few months has not been an easy time for any of us. As we meettonight, it has never been more clear that the state of our Union dependson the state of the world. And tonight, as throughout our own generation, freedom and peace in the world depend on the state of our Union. 

The 1980's have been born in turmoil, strife, and change. This is a time ofchallenge to our interests and our values and it's a time that tests ourwisdom and our skills. 

At this time in Iran, 50 Americans are still held captive, innocent victimsof terrorism and anarchy. Also at this moment, massive Soviet troops areattempting to subjugate the fiercely independent and deeply religiouspeople of Afghanistan. These two acts--one of international terrorism andone of military aggression--present a serious challenge to the UnitedStates of America and indeed to all the nations of the world. Together, wewill meet these threats to peace. 

I'm determined that the United States will remain the strongest of allnations, but our power will never be used to initiate a threat to thesecurity of any nation or to the rights of any human being. We seek to beand to remain secure--a nation at peace in a stable world. But to be securewe must face the world as it is. 

Three basic developments have helped to shape our challenges: the steadygrowth and increased projection of Soviet military power beyond its ownborders; the overwhelming dependence of the Western democracies on oilsupplies from the Middle East; and the press of social and religious andeconomic and political change in the many nations of the developing world, exemplified by the revolution in Iran. 

Each of these factors is important in its own right. Each interacts withthe others. All must be faced together, squarely and courageously. We willface these challenges, and we will meet them with the best that is in us. And we will not fail. 

In response to the abhorrent act in Iran, our Nation has never been arousedand unified so greatly in peacetime. Our position is clear. The UnitedStates will not yield to blackmail. 

We continue to pursue these specific goals: first, to protect the presentand long-range interests of the United States; secondly, to preserve thelives of the American hostages and to secure, as quickly as possible, theirsafe release, if possible, to avoid bloodshed which might further endangerthe lives of our fellow citizens; to enlist the help of other nations incondemning this act of violence, which is shocking and violates the moraland the legal standards of a civilized world; and also to convince and topersuade the Iranian leaders that the real danger to their nation lies inthe north, in the Soviet Union and from the Soviet troops now inAfghanistan, and that the unwarranted Iranian quarrel with the UnitedStates hampers their response to this far greater danger to them. 

If the American hostages are harmed, a severe price will be paid. We willnever rest until every one of the American hostages are released. 

But now we face a broader and more fundamental challenge in this regionbecause of the recent military action of the Soviet Union. 

Now, as during the last 3 1/2 decades, the relationship between ourcountry, the United States of America, and the Soviet Union is the mostcritical factor in determining whether the world will live at peace or beengulfed in global conflict. 

Since the end of the Second World War, America has led other nations inmeeting the challenge of mounting Soviet power. This has not been a simpleor a static relationship. Between us there has been cooperation, there hasbeen competition, and at times there has been confrontation. 

In the 1940's we took the lead in creating the Atlantic Alliance inresponse to the Soviet Union's suppression and then consolidation of itsEast European empire and the resulting threat of the Warsaw Pact to WesternEurope. 

In the 1950's we helped to contain further Soviet challenges in Korea andin the Middle East, and we rearmed to assure the continuation of thatcontainment. 

In the 1960's we met the Soviet challenges in Berlin, and we faced theCuban missile crisis. And we sought to engage the Soviet Union in theimportant task of moving beyond the cold war and away from confrontation. 

And in the 1970's three American Presidents negotiated with the Sovietleaders in attempts to halt the growth of the nuclear arms race. We soughtto establish rules of behavior that would reduce the risks of conflict, andwe searched for areas of cooperation that could make our relationsreciprocal and productive, not only for the sake of our two nations but forthe security and peace of the entire world. 

In all these actions, we have maintained two commitments: to be ready tomeet any challenge by Soviet military power, and to develop ways to resolvedisputes and to keep the peace. 

Preventing nuclear war is the foremost responsibility of the twosuperpowers. That's why we've negotiated the strategic arms limitationtreaties--SALT I and SALT II. Especially now, in a time of great tension, observing the mutual constraints imposed by the terms of these treatieswill be in the best interest of both countries and will help to preserveworld peace. I will consult very closely with the Congress on this matteras we strive to control nuclear weapons. That effort to control nuclearweapons will not be abandoned. 

We superpowers also have the responsibility to exercise restraint in theuse of our great military force. The integrity and the independence ofweaker nations must not be threatened. They must know that in our presencethey are secure. 

But now the Soviet Union has taken a radical and an aggressive new step. It's using its great military power against a relatively defenselessnation. The implications of the Soviet invasion of Afghanistan could posethe most serious threat to the peace since the Second World War. 

The vast majority of nations on Earth have condemned this latest Sovietattempt to extend its colonial domination of others and have demanded theimmediate withdrawal of Soviet troops. The Moslem world is especially andjustifiably outraged by this aggression against an Islamic people. Noaction of a world power has ever been so quickly and so overwhelminglycondemned. But verbal condemnation is not enough. The Soviet Union must paya concrete price for their aggression. 

While this invasion continues, we and the other nations of the world cannotconduct business as usual with the Soviet Union. That's why the UnitedStates has imposed stiff economic penalties on the Soviet Union. I will notissue any permits for Soviet ships to fish in the coastal waters of theUnited States. I've cut Soviet access to high-technology equipment and toagricultural products. I've limited other commerce with the Soviet Union, and I've asked our allies and friends to join with us in restraining theirown trade with the Soviets and not to replace our own embargoed items. AndI have notified the Olympic Committee that with Soviet invading forces inAfghanistan, neither the American people nor I will support sending anOlympic team to Moscow. 

The Soviet Union is going to have to answer some basic questions: Will ithelp promote a more stable international environment in which its ownlegitimate, peaceful concerns can be pursued? Or will it continue to expandits military power far beyond its genuine security needs, and use thatpower for colonial conquest? The Soviet Union must realize that itsdecision to use military force in Afghanistan will be costly to everypolitical and economic relationship it values. 

The region which is now threatened by Soviet troops in Afghanistan is ofgreat strategic importance: It contains more than two-thirds of the world'sexportable oil. The Soviet effort to dominate Afghanistan has broughtSoviet military forces to within 300 miles of the Indian Ocean and close tothe Straits of Hormuz, a waterway through which most of the world's oilmust flow. The Soviet Union is now attempting to consolidate a strategicposition, therefore, that poses a grave threat to the free movement ofMiddle East oil. 

This situation demands careful thought, steady nerves, and resolute action, not only for this year but for many years to come. It demands collectiveefforts to meet this new threat to security in the Persian Gulf and inSouthwest Asia. It demands the participation of all those who rely on oilfrom the Middle East and who are concerned with global peace and stability. And it demands consultation and close cooperation with countries in thearea which might be threatened. 

Meeting this challenge will take national will, diplomatic and politicalwisdom, economic sacrifice, and, of course, military capability. We mustcall on the best that is in us to preserve the security of this crucialregion. 

Let our position be absolutely clear: An attempt by any outside force togain control of the Persian Gulf region will be regarded as an assault onthe vital interests of the United States of America, and such an assaultwill be repelled by any means necessary, including military force. 

During the past 3 years, you have joined with me to improve our ownsecurity and the prospects for peace, not only in the vital oil-producingarea of the Persian Gulf region but around the world. We've increasedannually our real commitment for defense, and we will sustain this increaseof effort throughout the Five Year Defense Program. It's imperative thatCongress approve this strong defense budget for 1981, encompassing a5-percent real growth in authorizations, without any reduction. 

We are also improving our capability to deploy U. S. Military forces rapidlyto distant areas. We've helped to strengthen NATO and our other alliances, and recently we and other NATO members have decided to develop and todeploy modernized, intermediate-range nuclear forces to meet an unwarrantedand increased threat from the nuclear weapons of the Soviet Union. 

We are working with our allies to prevent conflict in the Middle East. Thepeace treaty between Egypt and Israel is a notable achievement whichrepresents a strategic asset for America and which also enhances prospectsfor regional and world peace. We are now engaged in further negotiations toprovide full autonomy for the people of the West Bank and Gaza, to resolvethe Palestinian issue in all its aspects, and to preserve the peace andsecurity of Israel. Let no one doubt our commitment to the security ofIsrael. In a few days we will observe an historic event when Israel makesanother major withdrawal from the Sinai and when Ambassadors will beexchanged between Israel and Egypt. 

We've also expanded our own sphere of friendship. Our deep commitment tohuman rights and to meeting human needs has improved our relationship withmuch of the Third World. Our decision to normalize relations with thePeople's Republic of China will help to preserve peace and stability inAsia and in the Western Pacific. 

We've increased and strengthened our naval presence in the Indian Ocean, and we are now making arrangements for key naval and air facilities to beused by our forces in the region of northeast Africa and the Persian Gulf. 

We've reconfirmed our 1959 agreement to help Pakistan preserve itsindependence and its integrity. The United States will take actionconsistent with our own laws to assist Pakistan in resisting any outsideaggression. And I'm asking the Congress specifically to reaffirm thisagreement. I'm also working, along with the leaders of other nations, toprovide additional military and economic aid for Pakistan. That requestwill come to you in just a few days. 

Finally, we are prepared to work with other countries in the region toshare a cooperative security framework that respects differing values andpolitical beliefs, yet which enhances the independence, security, andprosperity of all. 

All these efforts combined emphasize our dedication to defend and preservethe vital interests of the region and of the nation which we represent andthose of our allies--in Europe and the Pacific, and also in the parts ofthe world which have such great strategic importance to us, stretchingespecially through the Middle East and Southwest Asia. With your help, Iwill pursue these efforts with vigor and with determination. You and I willact as necessary to protect and to preserve our Nation's security. 

The men and women of America's Armed Forces are on duty tonight in manyparts of the world. I'm proud of the job they are doing, and I know youshare that pride. I believe that our volunteer forces are adequate forcurrent defense needs, and I hope that it will not become necessary toimpose a draft. However, we must be prepared for that possibility. For thisreason, I have determined that the Selective Service System must now berevitalized. I will send legislation and budget proposals to the Congressnext month so that we can begin registration and then meet futuremobilization needs rapidly if they arise. 

We also need clear and quick passage of a new charter to define the legalauthority and accountability of our intelligence agencies. We willguarantee that abuses do not recur, but we must tighten our controls onsensitive intelligence information, and we need to remove unwarrantedrestraints on America's ability to collect intelligence. 

The decade ahead will be a time of rapid change, as nations everywhere seekto deal with new problems and age-old tensions. But America need have nofear. We can thrive in a world of change if we remain true to our valuesand actively engaged in promoting world peace. We will continue to work aswe have for peace in the Middle East and southern Africa. We will continueto build our ties with developing nations, respecting and helping tostrengthen their national independence which they have struggled so hard toachieve. And we will continue to support the growth of democracy and theprotection of human rights. 

In repressive regimes, popular frustrations often have no outlet exceptthrough violence. But when peoples and their governments can approach theirproblems together through open, democratic methods, the basis for stabilityand peace is far more solid and far more enduring. That is why our supportfor human rights in other countries is in our own national interest as wellas part of our own national character. 

Peace--a peace that preserves freedom--remains America's first goal. In thecoming years, as a mighty nation we will continue to pursue peace. But tobe strong abroad we must be strong at home. And in order to be strong, wemust continue to face up to the difficult issues that confront us as anation today. 

The crises in Iran and Afghanistan have dramatized a very important lesson:Our excessive dependence on foreign oil is a clear and present danger toour Nation's security. The need has never been more urgent. At long last, we must have a clear, comprehensive energy policy for the United States. 

As you well know, I have been working with the Congress in a concentratedand persistent way over the past 3 years to meet this need. We have madeprogress together. But Congress must act promptly now to complete finalaction on this vital energy legislation. Our Nation will then have a majorconservation effort, important initiatives to develop solar power, realistic pricing based on the true value of oil, strong incentives for theproduction of coal and other fossil fuels in the United States, and ourNation's most massive peacetime investment in the development of syntheticfuels. 

The American people are making progress in energy conservation. Last yearwe reduced overall petroleum consumption by 8 percent and gasolineconsumption by 5 percent below what it was the year before. Now we must domore. 

After consultation with the Governors, we will set gasoline conservationgoals for each of the 50 States, and I will make them mandatory if thesegoals are not met. 

I've established an import ceiling for 1980 of 8. 2 million barrels aday--well below the level of foreign oil purchases in 1977. I expect ourimports to be much lower than this, but the ceiling will be enforced by anoil import fee if necessary. I'm prepared to lower these imports stillfurther if the other oil-consuming countries will join us in a fair andmutual reduction. If we have a serious shortage, I will not hesitate toimpose mandatory gasoline rationing immediately. 

The single biggest factor in the inflation rate last year, the increase inthe inflation rate last year, was from one cause: the skyrocketing pricesof OPEC oil. We must take whatever actions are necessary to reduce ourdependence on foreign oil--and at the same time reduce inflation. 

As individuals and as families, few of us can produce energy by ourselves. But all of us can conserve energy--every one of us, every day of our lives. Tonight I call on you--in fact, all the people of America--to help ourNation. Conserve energy. Eliminate waste. Make 1980 indeed a year of energyconservation. 

Of course, we must take other actions to strengthen our Nation's economy. 

First, we will continue to reduce the deficit and then to balance theFederal budget. 

Second, as we continue to work with business to hold down prices, we'llbuild also on the historic national accord with organized labor to restrainpay increases in a fair fight against inflation. 

Third, we will continue our successful efforts to cut paperwork and todismantle unnecessary Government regulation. 

Fourth, we will continue our progress in providing jobs for America, concentrating on a major new program to provide training and work for ouryoung people, especially minority youth. It has been said that "a mind is aterrible thing to waste. " We will give our young people new hope for jobsand a better life in the 1980's. 

And fifth, we must use the decade of the 1980's to attack the basicstructural weaknesses and problems in our economy through measures toincrease productivity, savings, and investment. 

With these energy and economic policies, we will make America even strongerat home in this decade--just as our foreign and defense policies will makeus stronger and safer throughout the world. We will never abandon ourstruggle for a just and a decent society here at home. That's the heart ofAmerica--and it's the source of our ability to inspire other people todefend their own rights abroad. 

Our material resources, great as they are, are limited. Our problems aretoo complex for simple slogans or for quick solutions. We cannot solve themwithout effort and sacrifice. Walter Lippmann once reminded us, "You tookthe good things for granted. Now you must earn them again. For every rightthat you cherish, you have a duty which you must fulfill. For every goodwhich you wish to preserve, you will have to sacrifice your comfort andyour ease. There is nothing for nothing any longer. "

Our challenges are formidable. But there's a new spirit of unity andresolve in our country. We move into the 1980's with confidence and hopeand a bright vision of the America we want: an America strong and free, anAmerica at peace, an America with equal rights for all citizens--and forwomen, guaranteed in the United States Constitution--an America with jobsand good health and good education for every citizen, an America with aclean and bountiful life in our cities and on our farms, an America thathelps to feed the world, an America secure in filling its own energy needs, an America of justice, tolerance, and compassion. For this vision to cometrue, we must sacrifice, but this national commitment will be an excitingenterprise that will unify our people. 

Together as one people, let us work to build our strength at home, andtogether as one indivisible union, let us seek peace and securitythroughout the world. 

Together let us make of this time of challenge and danger a decade ofnational resolve and of brave achievement. 

Thank you very much. 

***

State of the Union AddressJimmy CarterJanuary 16, 1981

To the Congress of the United States:

The State of the Union is sound. Our economy is recovering from arecession. A national energy plan is in place and our dependence on foreignoil is decreasing. We have been at peace for four uninterrupted years. 

But, our Nation has serious problems. Inflation and unemployment areunacceptably high. The world oil market is increasingly tight. There aretrouble spots throughout the world, and 52 American hostages are being heldin Iran against international law and against every precept of humanaffairs. 

However, I firmly believe that, as a result of the progress made in so manydomestic and international areas over the past four years, our Nation isstronger, wealthier, more compassionate and freer than it was four yearsago. I am proud of that fact. And I believe the Congress should be proud aswell, for so much of what has been accomplished over the past four yearshas been due to the hard work, insights and cooperation of Congress. Iapplaud the Congress for its efforts and its achievements. 

In this State of the Union Message I want to recount the achievements andprogress of the last four years and to offer recommendations to theCongress for this year. While my term as President will end before the 97thCongress begins its work in earnest, I hope that my recommendations willserve as a guide for the direction this country should take so we build onthe record of the past four years. 

RECORD OF PROGRESS

When I took office, our Nation faced a number of serious domestic andinternational problems:

--no national energy policy existed, and our dependence on foreign oil wasrapidly increasing;

--public trust in the integrity and openness of the government was low;

--the Federal government was operating inefficiently in administeringessential programs and policies;

--major social problems were being ignored or poorly addressed by theFederal government;

--our defense posture was declining as a result of a defense budget whichwas continuously shrinking in real terms;

--the strength of the NATO Alliance needed to be bolstered;

--tensions between Israel and Egypt threatened another Middle East war;and

--America's resolve to oppose human rights violations was under seriousquestion. 

Over the past 48 months, clear progress has been made in solving thechallenges we found in January of 1977:

--almost all of our comprehensive energy program have been enacted, and theDepartment of Energy has been established to administer the program;confidence in the government's integrity has been restored, and respect forthe government's openness and fairness has been renewed;

--the government has been made more effective and efficient: the CivilService system was completely reformed for the first time this century;

--14 reorganization initiatives have been proposed to the Congress, approved, and implemented;

--two new Cabinet departments have been created to consolidate andstreamline the government's handling of energy and education problems;

--inspectors general have been placed in each Cabinet department to combatfraud, waste and other abuses;

--the regulatory process has been reformed through creation of theRegulatory Council, implementation of Executive Order 12044 and itsrequirement for cost-impact analyses, elimination of unnecessaryregulation, and passage of the Regulatory Flexibility Act;

--procedures have been established to assure citizen participation ingovernment;

--and the airline, trucking, rail and communications industries are beingderegulated;

--critical social problems, many long ignored by the Federal government, have been addressed directly;

--an urban policy was developed and implemented to reverse the declinein our urban areas;

--the Social Security System was refinanced to put it on a sound financialbasis;

--the Humphrey-Hawkins Full Employment Act was enacted;

--Federal assistance for education was expanded by more than 75 percent;

--the minimum wage was increased to levels needed to ease the effects ofinflation;

--affirmative action has been pursued aggressively; more blacks, Hispanicsand women have been appointed to senior government positions and tojudgeships than at any other time in our history;

--the ERA ratification deadline was extended to aid the ratification effort;

--and minority business procurement by the Federal government has more thandoubled;

--the Nation's first sectoral policies were put in place, for the auto andsteel industries, with my Administration demonstrating the value ofcooperation between the government, business and labor;

--reversing previous trends, real defense spending has increased every yearsince 1977;

--the real increase in FY 1980 defense spending is well above 3 percentand I expect FY 1981 defense spending to be even higher;

--looking ahead, the defense program I am proposing is premised on a realincrease in defense spending over the next five years of 20 percent ormore;

--the NATO Alliance has proven its unity in responding to the situations inEastern Europe and Southwest Asia and in agreeing on the issues to beaddressed in the review of the Helsinki Final Act currently underway inMadrid;

--the peace process in the Middle East established at Camp David and by thePeace Treaty between Egypt and Israel is being buttressed on two fronts:steady progress in the normalization of Egyptian-Israeli relations in manyfields, and the commitment of both Egypt and Israel, with United States'assistance, to see through to successful conclusion the autonomynegotiations for the West Bank and Gaza;

--the Panama Canal Treaties have been put into effect, which has helped toimprove relations with Latin America;

--we have continued this Nation's strong commitment to the pursuit of humanrights throughout the world, evenhandedly and objectively;

--our commitment to a worldwide human rights policy has remained firm;

--and many other countries have given high priority to it;

--our resolve to oppose aggression, such as the illegal invasion of theSoviet Union into Afghanistan, has been supported by tough action. 

I. ENSURING ECONOMIC STRENGTH ECONOMY

During the last decade our Nation has withstood a series of economic shocksunprecedented in peacetime. The most dramatic of these has been theexplosive increases of OPEC oil prices. But we have also faced worldcommodity shortages, natural disasters, agricultural shortages and majorchallenges to world peace and security. Our ability to deal with theseshocks has been impaired because of a decrease in the growth ofproductivity and the persistence of underlying inflationary forces built upover the past 15 years. 

Nevertheless, the economy has proved to be remarkably resilient. Realoutput has grown at an average rate of 3 percent per year since I tookoffice, and employment has grown by 10 percent. We have added about 8million productive private sector jobs to the economy. However, unacceptably high inflation--the most difficult economic problem I havefaced--persists. 

This inflation--which threatens the growth, productivity, and stability ofour economy--requires that we restrain the growth of the budget to themaximum extent consistent with national security and human compassion. Ihave done so in my earlier budgets, and in my FY '82 budget. However, whilerestraint is essential to any appropriate economic policy, high inflationcannot be attributed solely to government spending. The growth in budgetoutlays has been more the result of economic factors than the cause ofthem. 

We are now in the early stages of economic recovery following a shortrecession. Typically, a post-recessionary period has been marked byvigorous economic growth aided by anti-recessionary policy measures such aslarge tax cuts or big, stimulation spending programs. I have declined torecommend such actions to stimulate economic activity, because thepersistent inflationary pressures that beset our economy today dictate arestrained fiscal policy. 

Accordingly, I am asking the Congress to postpone until January 1, 1982, the personal tax reductions I had earlier proposed to take effect onJanuary 1 of this year. 

However, my 1982 budget proposes significant tax changes to increase thesources of financing for business investment. While emphasizing the needfor continued fiscal restraint, this budget takes the first major step in along-term tax reduction program designed to increase capital formation. Thefailure of our Nation's capital stock to grow at a rate that keeps pacewith its labor force has clearly been one cause of our productivityslowdown. Higher investment rates are also critically needed to meet ourNation's energy needs, and to replace energy-inefficient plants andequipment with new energy-saving physical plants. The level of investmentthat is called for will not occur in the absence of policies to encourageit. 

Therefore, my budget proposes a major liberalization of tax allowances fordepreciation, as well as simplified depreciation accounting, increasing theallowable rates by about 40 percent. I am also proposing improvements inthe investment tax credit, making it refundable, to meet the investmentneeds of firms with no current earnings. 

These two proposals, along with carefully-phased tax reductions forindividuals, will improve both economic efficiency and tax equity. I urgethe Congress to enact legislation along the lines and timetable I haveproposed. 

THE 1982 BUDGET

The FY 1982 budget I have sent to the Congress continues our four-yearpolicy of prudence and restraint. While the budget deficits during my termare higher than I would have liked, their size is determined for the mostpart by economic conditions. And in spite of these conditions, the relativesize of the deficit continues to decline. In 1976, before I took office, the budget deficit equalled 4 percent of gross national product. It hadbeen cut to 2. 3 percent in the 1980 fiscal year just ended. My 1982 budgetcontains a deficit estimated to be less than 1 percent of our grossnational product. 

The rate of growth in Federal spending has been held to a minimum. Nevertheless, outlays are still rising more rapidly than many hadanticipated, the result of many powerful forces in our society:

We face a threat to our security, as events in Afghanistan, the MiddleEast, and Eastern Europe make clear. We have a steadily aging populationand, as a result, the biggest single increase in the Federal budget is therising cost of retirement programs, particularly social security. We faceother important domestic needs: to continue responsibility for thedisadvantaged; to provide the capital needed by our cities and ourtransportation systems; to protect our environment; to revitalize Americanindustry; and to increase the export of American goods and services soessential to the creation of jobs and a trade surplus. 

Yet the Federal Government itself may not always be the proper source ofsuch assistance. For example, it must not usurp functions if they can bemore appropriately decided upon, managed, and financed by the privatesector or by State and local governments. My Administration has alwayssought to consider the proper focus of responsibility for the mostefficient resolution of problems. 

We have also recognized the need to simplify the system of grants to Stateand local governments. I have again proposed several grant consolidationsin the 1982 budget, including a new proposal that would consolidate severalhighway programs. 

The pressures for growth in Federal use of national resources are great. MyAdministration has initiated many new approaches to cope with thesepressures. We started a multi-year budget system, and we began a system forcontrolling Federal credit programs. Yet in spite of increasing needs tolimit spending growth, we have consistently adhered to these strong budgetprinciples:

Our Nation's armed forces must always stand sufficiently strong to deteraggression and to assure our security. An effective national energy plan isessential to increase domestic production of oil and gas, to encourageconservation of our scarce energy resources, to stimulate conversion tomore abundant fuels, and to reduce our trade deficit. The essential humanneeds for our citizens must be given the highest priority. The FederalGovernment must lead the way in investment in the Nation's technologicalfuture. The Federal Government has an obligation to nurture and protect ourenvironment--the common resource, birthright, and sustenance of theAmerican people. 

My 1982 budget continues to support these principles. It also proposesresponsible tax reductions to encourage a more productive economy, andadequate funding of our highest priority programs within an overall policyof constraint. 

Fiscal restraint must be continued in the years ahead. Budgets must betight enough to convince those who set wages and prices that the FederalGovernment is serious about fighting inflation but not so tight as to chokeoff all growth. 

Careful budget policy should be supplemented by other measures designed toreduce inflation at lower cost in lost output and employment. These othersteps include measures to increase investment--such as the tax proposalsincluded in my 1982 budget--and measures to increase competition andproductivity in our economy. Voluntary incomes policies can also directlyinfluence wages and prices in the direction of moderation and thereby bringinflation down faster and at lower cost to the economy. Through a tax-basedincomes policy (TIP) we could provide tax incentives for firms and workersto moderate their wage and price increases. In the coming years, control ofFederal expenditures can make possible periodic tax reductions. TheCongress should therefore begin now to evaluate the potentialities of a TIPprogram so that when the next round of tax reductions is appropriate a TIPprogram will be seriously considered. 

EMPLOYMENT

During the last four years we have given top priority to meeting the needsof workers and providing additional job opportunities to those who seekwork. Since the end of 1976:

Almost 9 million new jobs have been added to the nation's economy totalemployment has reached 97 million. More jobs than ever before are held bywomen, minorities and young people. Employment over the past four years hasincreased by: 17% for adult women 11% for blacks, and 30% for Hispanicsemployment of black teenagers increased by more than 5%, reversing thedecline that occurred in the previous eight years. 

Major initiatives launched by this Administration helped bring about theseaccomplishments and have provided a solid foundation for employment andtraining policy in the 1980's. In 1977, as part of the comprehensiveeconomic stimulus program:

425, 000 public service jobs were created A $1 billion youth employmentinitiative funded 200, 000 jobs the doubling of the Job Corps to 44, 000slots began and 1 million summer youth jobs were approved--a 25 percentincrease. 

In 1978:

The Humphrey-Hawkins Full Employment Act became law the $400 millionPrivate Sector Initiatives Program was begun a targeted jobs tax credit fordisadvantaged youth and others with special employment barriers was enactedthe Comprehensive Employment and Training Act was reauthorized for fouryears. 

In 1979:

A $6 billion welfare reform proposal was introduced with funding for400, 000 public service jobs welfare reform demonstration projects werelaunched in communities around the country the Vice President initiated anationwide review of youth unemployment in this country. 

In 1980:

The findings of the Vice President's Task Force revealed the majoreducation and employment deficits that exist for poor and minorityyoungsters. As a result a $2 billion youth education and jobs initiativewas introduced to provide unemployed youth with the basic education andwork experience they need to compete in the labor market of the 1980's. Aspart of the economic revitalization program several steps were proposed toaid workers in high unemployment communities:

An additional 13 weeks of unemployment benefits for the long termunemployed. $600 million to train the disadvantaged and unemployed for newprivate sector jobs. Positive adjustment demonstrations to aid workers indeclining industries. The important Title VII Private Sector InitiativesProgram was reauthorized for an additional two years. 

In addition to making significant progress in helping the disadvantaged andunemployed, important gains were realized for all workers:

An historic national accord with organized labor made it possible for theviews of working men and women to be heard as the nation's economic anddomestic policies were formulated; the Mine Safety and Health Act broughtabout improved working conditions for the nation's 500, 000 miners. Substantial reforms of Occupational Safety and Health Administration wereaccomplished to help reduce unnecessary burdens on business and to focus onmajor health and safety problems; the minimum wage was increased over afour year period from $2. 30 to $3. 35 an hour; the Black Lung Benefit ReformAct was signed into law; attempts to weaken Davis-Bacon Act were defeated. 

While substantial gains have been made in the last four years, continuedefforts are required to ensure that this progress is continued:

Government must continue to make labor a full partner in the policydecisions that affect the interests of working men and women; a broad, bipartisan effort to combat youth unemployment must be sustainedcompassionate reform of the nation's welfare system should be continuedwith employment opportunities provided for those able to work; workers indeclining industries should be provided new skills and help in findingemployment. 

TRADE

Over the past year, the U. S. Trade picture improved as a result of solidexport gains in both manufactured and agricultural products. Agriculturalexports reached a new record of over $40 billion, while manufacturedexports have grown by 24 percent to a record $144 billion. In these areasthe United States recorded significant surpluses of $24 billion and $19billion respectively. While our oil imports remained a major drain on ourforeign exchange earnings, that drain was somewhat moderated by a 19percent decline in the volume of oil imports. 

U. S. Trade negotiators made significant progress over the past year inassuring effective implementation of the agreements negotiated during theTokyo Round of Multilateral Trade Negotiations. Agreements reached with theJapanese government, for example, will assure that the United States willbe able to expand its exports to the Japanese market in such key areas astelecommunications equipment, tobacco, and lumber. Efforts by U. S. Tradenegotiators also helped to persuade a number of key developing countries toaccept many of the non-tariff codes negotiated during the MultilateralTrade Negotiations. This will assure that these countries will increasinglyassume obligations under the international trading system. 

A difficult world economic environment posed a challenge for the managementof trade relations. U. S. Trade negotiators were called upon to manageserious sectoral problems in such areas as steel, and helped to assure thatU. S. Chemical exports will have continued access to the European market. 

Close consultations with the private sector in the United States haveenabled U. S. Trade negotiators to pinpoint obstacles to U. S. Trade inservices, and to build a basis for future negotiations. Services have beenan increasingly important source of export earnings for the United States, and the United States must assure continued and increased access to foreignmarkets. 

The trade position of the United States has improved. But vigorous effortsare needed in a number of areas to assure continued market access for U. S. Exports, particularly agricultural and high technology products, in whichthe United States continues to have a strong competitive edge. Continuedefforts are also needed to remove many domestic disincentives, which nowhamper U. S. Export growth. And we must ensure that countries do notmanipulate investment, or impose investment performance requirements whichdistort trade and cost us jobs in this country. 

In short, we must continue to seek free--but fair--trade. That is thepolicy my Administration has pursued from the beginning, even in areaswhere foreign competition has clearly affected our domestic industry. Inthe steel industry, for instance, we have put Trigger Price Mechanism intoplace to help prevent the dumping of steel. That action has strengthenedthe domestic steel industry. In the automobile industry, we have worked--without resort to import quotas--to strengthen the industry's ability tomodernize and compete effectively. 

SMALL BUSINESS

I have often said that there is nothing small about small business inAmerica. These firms account for nearly one-half our gross nationalproduct; over half of new technology; and much more than half of the jobscreated by industry. 

Because this sector of the economy is the very lifeblood of our Nationaleconomy, we have done much together to improve the competitive climate forsmaller firms. These concerted efforts have been an integral part of myprogram to revitalize the economy. 

They include my campaign to shrink substantially the cash and timeconsuming red tape burden imposed on business. They include mypersonally-directed policy of ambitiously increasing the Federalcontracting dollars going to small firms, especially those owned by womenand minorities. And they include my proposals to reinvigorate existingsmall businesses and assist the creation of new ones through tax reform;financing assistance; market expansion; and support of product innovation. 

Many of my initiatives to facilitate the creation and growth of smallbusinesses were made in response to the White House Conference on SmallBusiness, which I convened. My Administration began the implementation ofmost of the ideas produced last year by that citizen's advisory body;others need to be addressed. I have proposed the reconvening of theConference next year to review progress; reassess priorities; and set newgoals. In the interim I hope that the incoming Administration and the newCongress will work with the committee I have established to keep thesebusiness development ideas alive and help implement Conferencerecommendations. 

MINORITY BUSINESS

One of the most successful developments of my Administration has been thegrowth and strengthening of minority business. This is the firstAdministration to put the issue on the policy agenda as a matter of majorimportance. To implement the results of our early efforts in this field Isubmitted legislation to Congress designed to further the development ofminority business. 

We have reorganized the Office of Minority Business into the MinorityBusiness Development Administration in the Department of Commerce. MBDA hasalready proven to be a major factor in assisting minority businesses toachieve equitable competitive positions in the marketplace. 

The Federal government's procurement from minority-owned firms has nearlytripled since I took office. Federal deposits in minority-owned banks havemore than doubled and minority ownership of radio and television stationshas nearly doubled. The SBA administered 8(a) Pilot Program for procurementwith the Army proved to be successful and I recently expanded the number ofagencies involved to include NASA and the Departments of Energy andTransportation. 

I firmly believe the critical path to full freedom and equality forAmerica's minorities rests with the ability of minority communities toparticipate competitively in the free enterprise system. I believe thegovernment has a fundamental responsibility to assist in the development ofminority business and I hope the progress made in the last four years willcontinue. 

II. CREATING ENERGY SECURITY

Since I took office, my highest legislative priorities have involved thereorientation and redirection of U. S. Energy activities and for the firsttime, to establish a coordinated national energy policy. The struggle toachieve that policy has been long and difficult, but the accomplishments ofthe past four years make clear that our country is finally serious aboutthe problems caused by our overdependence on foreign oil. Our progressshould not be lost. We must rely on and encourage multiple forms of energyproduction--coal, crude oil, natural gas, solar, nuclear, synthetics--andenergy conservation. The framework put in place over the last four yearswill enable us to do this. 

NATIONAL ENERGY POLICY

As a result of actions my Administration and the Congress have taken overthe past four years, our country finally has a national energy policy:

Under my program of phased decontrol, domestic crude oil price controlswill end September 30, 1981. As a result exploratory drilling activitieshave reached an all-time high; Prices for new natural gas are beingdecontrolled under the Natural Gas Policy Act--and natural gas productionis now at an all time high; the supply shortages of several years ago havebeen eliminated; The windfall profits tax on crude oil has been enactedproviding $227 billion over ten years for assistance to low-incomehouseholds, increased mass transit funding, and a massive investment in theproduction and development of alternative energy sources; The SyntheticFuels Corporation has been established to help private companies build thefacilities to produce energy from synthetic fuels; Solar energy funding hasbeen quadrupled, solar energy tax credits enacted, and a Solar Energy andEnergy Conservation Bank has been established; A route has been chosen tobring natural gas from the North Slope of Alaska to the lower 48 states;Coal production and consumption incentives have been increased, and coalproduction is now at its highest level in history; A gasoline rationingplan has been approved by Congress for possible use in the event of asevere energy supply shortage or interruption; Gasohol production has beendramatically increased, with a program being put in place to produce 500million gallons of alcohol fuel by the end of this year--an amount thatcould enable gasohol to meet the demand for 10 percent of all unleadedgasoline; New energy conservation incentives have been provided forindividuals, businesses and communities and conservation has increaseddramatically. The U. S. Has reduced oil imports by 25 percent--or 2 millionbarrels per day--over the past four years. 

INCREASED DEVELOPMENT OF DOMESTIC ENERGY SOURCES

Although it is essential that the Nation reduce its dependence on importedfossil fuels and complete the transition to reliance on domestic renewablesources of energy, it is also important that this transition beaccomplished in an orderly, economic, and environmentally sound manner. Tothis end, the Administration has launched several initiatives. 

Leasing of oil and natural gas on federal lands, particularly the outercontinental shelf, has been accelerated at the same time as theAdministration has reformed leasing procedures through the 1978 amendmentsto the Outer Continental Shelf Lands Act. In 1979 the Interior Departmentheld six OCS lease sales, the greatest number ever, which resulted infederal receipts of $6. 5 billion, another record. The five-year OCS Leasingschedule was completed, requiring 36 sales over the next five years. 

Since 1971 no general federal coal lease sales were suspended. Over thepast four years the Administration has completely revised the federal coalleasing program to bring it into compliance with the requirements of 1976Federal Land Planning and Management Act and other statutory provisions. The program is designed to balance the competing interests that affectresource development on public lands and to ensure that adequate suppliesof coal will be available to meet national needs. As a result, the firstgeneral competitive federal coal lease sale in ten years will be held thismonth. 

In July 1980, I signed into law the Energy Security Act of 1980 whichestablished the Synthetic Fuels Corporation. The Corporation is designed tospur the development of commercial technologies for production of syntheticfuels, such as liquid and gaseous fuels from coal and the production of oilfrom oil shale. The Act provides the Corporation with an initial $22billion to accomplish these objectives. The principal purpose of thelegislation is to ensure that the nation will have available in the late1980's the option to undertake commercial development of synthetic fuels ifthat becomes necessary. The Energy Security Act also provides significantincentives for the development of gasohol and biomass fuels, therebyenhancing the nation's supply of alternative energy sources. 

COMMITMENT TO A SUSTAINABLE ENERGY FUTURE

The Administration's 1977 National Energy Plan marked an historic departurefrom the policies of previous Administrations. The plan stressed theimportance of both energy production and conservation to achieving ourultimate national goal of relying primarily on secure sources of energy. The National Energy Plan made energy conservation a cornerstone of ournational energy policy. 

In 1978, I initiated the Administration's Solar Domestic Policy Review. This represented the first step towards widespread introduction ofrenewable energy sources into the Nation's economy. As a result of theReview, I issued the 1979 Solar Message to Congress, the first such messagein the Nation's history. The Message outlined the Administration's solarprogram and established an ambitious national goal for the year 2000 ofobtaining 20 percent of this Nation's energy from solar and renewablesources. The thrust of the federal solar program is to help industrydevelop solar energy sources by emphasizing basic research and developmentof solar technologies which are not currently economic, such asphotovoltaics, which generate energy directly from the sun. At the sametime, through tax incentives, education, and the Solar Energy and EnergyConservation Bank, the solar program seeks to encourage state and localgovernments, industry, and our citizens to expand their use of solar andrenewable resource technologies currently available. 

As a result of these policies and programs, the energy efficiency of theAmerican economy has improved markedly and investments in renewable energysources have grown significantly. It now takes 3 1/2 percent less energy toproduce a constant dollar of GNP than it did in January 1977. This increasein efficiency represents a savings of over 1. 3 million barrels per day ofoil equivalent, about the level of total oil production now occurring inAlaska. Over the same period, Federal support for conservation and solarenergy has increased by more than 3000 percent, to $3. 3 billion in FY 1981, including the tax credits for solar energy and energy conservationinvestments--these credits are expected to amount to $1. 2 billion in FY1981 and $1. 5 billion in FY 1982. 

COMMITMENT TO NUCLEAR SAFETY AND SECURITY

Since January 1977, significant progress has been achieved in resolvingthree critical problems resulting from the use of nuclear energy:radioactive waste management, nuclear safety and weapons proliferation. 

In 1977, the Administration announced its nuclear nonproliferation policyand initiated the International Fuel Cycle Evaluation. In 1978, Congresspassed the Nuclear Nonproliferation Act, an historic piece of legislation. 

In February 1980, the Administration transmitted its nuclear wastemanagement policy to the Congress. This policy was a major advance over allprevious efforts. The principal aspects of that policy are: acknowledgingthe seriousness of the problem and the numerous technical and institutionalissues; adopting a technically and environmentally conservative approach tothe first permanent repository; and providing the states with significantinvolvement in nuclear waste disposal decisions by creating the StatePlanning Council. While much of the plan can be and is being implementedadministratively, some new authorities are needed. The Congress should giveearly priority to enacting provisions for away-from-reactor storage and theState Planning Council. 

The accident at Three Mile Island made the nation acutely aware of thesafety risks posed by nuclear power plants. In response, the Presidentestablished the Kemeny Commission to review the accident and makerecommendations. Virtually all of the Commission's substantiverecommendations were adopted by the Administration and are now beingimplemented by the Nuclear Regulatory Commission. The Congress adopted thePresident's proposed plan for the Nuclear Regulatory Commission and theNuclear Safety Oversight Committee was established to ensure that theAdministration's decisions were implemented. 

Nuclear safety will remain a vital concern in the years ahead. We mustcontinue to press ahead for the safe, secure disposal of radioactivewastes, and prevention of nuclear proliferation. 

While significant growth in foreign demand for U. S. Steam coal is foreseen, congestion must be removed at major U. S. Coal exporting ports such asHampton Roads, Virginia, and Baltimore, Maryland. My Administration hasworked through the Interagency Coal Task Force Study to promote cooperationand coordination of resources between shippers, railroads, vessel broker/operators and port operators, and to determine the most appropriate Federalrole in expanding and modernizing coal export facilities, includingdredging deeper channels at selected ports. As a result of the Task Force'sefforts, administrative steps have been taken by the Corps of Engineers toreduce significantly the amount of time required for planning and economicreview of port dredging proposals. The Administration has also recommendedthat the Congress enact legislation to give the President generic authorityto recommend appropriations for channel dredging activities. Privateindustry will, of course, play the major role in developing the UnitedStates' coal export facilities, but the government must continue to work tofacilitate transportation to foreign markets. 

III. ENHANCING BASIC HUMAN AND SOCIAL NEEDS

For too long prior to my Administration, many of our Nation's basic humanand social needs were being ignored or handled insensitively by the Federalgovernment. Over the last four years, we have significantly increasedfunding for many of the vital programs in these areas; developed newprograms where needs were unaddressed; targeted Federal support to thoseindividuals and areas most in need of our assistance; and removed barriersthat have unnecessarily kept many disadvantaged citizens from obtaining aidfor their most basic needs. 

Our record has produced clear progress in the effort to solve some of thecountry's fundamental human and social problems. My Administration and theCongress, working together, have demonstrated that government must and canmeet our citizens' basic human and social needs in a responsible andcompassionate way. 

But there is an unfinished agenda still before the Congress. If we are tomeet our obligations to help all Americans realize the dreams of soundhealth care, decent housing, effective social services, a good education, and a meaningful job, important legislation still must be enacted. NationalHealth Insurance, Welfare Reform, Child Health Assessment Program, arebefore the Congress and I urge their passage. 

HEALTH NATIONAL HEALTH PLAN

During my Administration, I proposed to Congress a National Health Planwhich will enable the country to reach the goal of comprehensive, universalhealth care coverage. The legislation I submitted lays the foundation forthis comprehensive plan and addresses the most serious problems of healthfinancing and delivery. It is realistic and enactable. It does notoverpromise or overspend, and, as a result, can be the solution to thethirty years of Congressional battles on national health insurance. My Planincludes the following key features:

Nearly 15 million additional poor would receive fully-subsidizedcomprehensive coverage; pre-natal and delivery services are provided forall pregnant women and coverage is provided for all acute care for infantsin their first year of life; the elderly and disabled would have a limit of$1, 250 placed on annual out-of-pocket medical expenses and would no longerface limits on hospital coverage; all full-time employees and theirfamilies would receive insurance against at least major medical expensesunder mandated employer coverage; Medicare and Medicaid would be combinedand expanded into an umbrella Federal program, Healthcare, for increasedprogram efficiency, accountability and uniformity; and strong costcontrols and health system reforms would be implemented, includinggreater incentives for Health Maintenance Organizations. 

I urge the new Congress to compare my Plan with the alternatives--programswhich either do too little to improve the health care needs of Americansmost in need or programs which would impose substantial financial burdenson the American taxpayers. I hope the Congress will see the need for andthe benefits of my Plan and work toward prompt enactment. We cannot affordfurther delay in this vital area. 

HEALTH CARE COST CONTROL

Inflation in health care costs remains unacceptably high. Throughout myAdministration, legislation to reduce health care cost inflation was one ofmy highest priorities, but was not passed by the Congress. Therefore, my FY1982 budget proposes sharing the responsibility for health care costcontrol with the private sector, through voluntary hospital cost guidelinesand intensified monitoring. In the longer term, the health carereimbursement system must be reformed. We must move away from inflationarycost-based reimbursement and fee-for-service, and toward a system ofprospective reimbursement, under which health care providers would operatewithin predetermined budgets. This reimbursement reform is essential toultimately control inflation in health care costs, and will be asignificant challenge to the new Congress. 

HEALTH PROMOTION AND DISEASE PREVENTION

During my Administration, the Surgeon General released "Healthy People, " alandmark report on health promotion and disease prevention. The reportsignals the growing consensus that the Nation's health strategy must berefocused in the 1980's to emphasize the prevention of disease. Specifically, the report lays out measurable and achieveable goals in thereduction of mortality which can be reached by 1990. 

I urge the new Congress to endorse the principles of "Healthy People, " andto adopt the recommendations to achieve its goals. This will necessitateadoption of a broader concept of health care, to include such areas asenvironmental health, workplace health and safety, commercial productsafety, traffic safety, and health education, promotion and information. 

MATERNAL AND CHILD HEALTH

Ensuring a healthy start in life for children remains not only a highpriority of my Administration, but also one of the most cost effectiveforms of health care. 

When I took office, immunization levels for preventable childhood diseaseshad fallen to 70%. As a result of a concerted nationwide effort during myAdministration, I am pleased to report that now at least 90% of childrenunder 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 would be nocost-sharing for prenatal and delivery services for all pregnant women andfor acute care provided to infants in their first year of life. Thesepreventive services have extremely high returns in terms of improvednewborn and long-term child health. 

Under the Child Health Assurance Program (CHAP) legislation which Isubmitted to the Congress, and which passed the House, an additional twomillion low-income children under 18 would become eligible for Medicaidbenefits, which would include special health assessments. CHAP would alsoimprove the continuity of care for the nearly 14 million children noweligible for Medicaid. An additional 100, 000 low-income pregnant womenwould become eligible for prenatal care under the proposal. I strongly urgethe new Congress to enact CHAP and thereby provide millions of needychildren with essential health services. The legislation has had strongbipartisan support, which should continue as the details of the bill arecompleted. 

I also urge the new Congress to provide strong support for two highlysuccessful ongoing programs: the special supplemental food program forwomen, infants and children (WIC) and Family Planning. The food supplementsunder WIC have been shown to effectively prevent ill health and therebyreduce later medical costs. The Family Planning program has been effectiveat reducing unwanted pregnancies among low-income women and adolescents. 

EXPANSION OF SERVICES TO THE POOR AND UNDERSERVED

During my Administration, health services to the poor and underserved havebeen dramatically increased. The number of National Health Service Corps(NHSC) assignees providing services in medically underserved communitieshas grown from 500 in 1977 to nearly 3, 000 in 1981. The population servedby the NHSC has more than tripled since 1977. The number of CommunityHealth Centers providing services in high priority underserved areas hasdoubled during my Administration, and will serve an estimated six millionpeople in 1981. I strongly urge the new Congress to support these highlysuccessful programs. 

MENTAL HEALTH

One of the most significant health achievements during my Administrationwas the recent passage of the Mental Health Systems Act, which grew out ofrecommendations of my Commission on Mental Health. I join many others in mygratitude to the First Lady for her tireless and effective contribution tothe passage of this important legislation. 

The Act is designed to inaugurate a new era of Federal and Statepartnership in the planning and provision of mental health services. Inaddition, the Act specifically provides for prevention and support servicesto the chronically mentally ill to prevent unnecessary institutionalizationand for the development of community-based mental health services. I urgethe new Congress to provide adequate support for the full and timelyimplementation of this Act. 

HEALTH PROTECTION

With my active support, the Congress recently passed "Medigap" legislation, which provides for voluntary certification of health insurance policiessupplemental to Medicare, to curb widespread abuses in this area. 

In the area of toxic agent control, legislation which I submitted to theCongress recently passed. This will provide for a "super-fund" to coverhazardous waste cleanup costs. 

In the area of accidental injury control, we have established automobilesafety standards and increased enforcement activities with respect to the55 MPH speed limit. By the end of the decade these actions are expected tosave over 13, 000 lives and 100, 000 serious injuries each year. 

I urge the new Congress to continue strong support for all theseactivities. 

FOOD AND NUTRITION

Building on the comprehensive reform of the Food Stamp Program that Iproposed and Congress passed in 1977, my Administration and the Congressworked together in 1979 and 1980 to enact several other important changesin the Program. These changes will further simplify administration andreduce fraud and error, will make the program more responsive to the needsof the elderly and disabled, and will increase the cap on allowable programexpenditures. The Food Stamp Act will expire at the end of fiscal 1981. Itis essential that the new Administration and the Congress continue thisprogram to ensure complete eradication of the debilitating malnutritionwitnessed and documented among thousands of children in the 1960's. 

DRUG ABUSE PREVENTION

At the beginning of my Administration there were over a half million heroinaddicts in the United States. Our continued emphasis on reducing the supplyof heroin, as well as providing treatment and rehabilitation to itsvictims, has reduced the heroin addict population, reduced the number ofheroin overdose deaths by 80%, and reduced the number of heroin relatedinjuries by 50%. We have also seen and encouraged a national movement ofparents and citizens committed to reversing the very serious and disturbingtrends of adolescent drug abuse. 

Drug abuse in many forms will continue to detract, however, from thequality of life of many Americans. To prevent that, I see four greatchallenges in the years ahead. First, we must deal aggressively with thesupplies of illegal drugs at their source, through joint crop destructionprograms with foreign nations and increased law enforcement and borderinterdiction. Second, we must look to citizens and parents across thecountry to help educate the increasing numbers of American youth who areexperimenting with drugs to the dangers of drug abuse. Education is a keyfactor in reducing drug abuse. Third, we must focus our efforts on drug andalcohol abuse in the workplace for not only does this abuse contribute tolow productivity but it also destroys the satisfaction and sense of purposeall Americans can gain from the work experience. Fourth, we need a changein attitude, from an attitude which condones the casual use of drugs to onethat recognizes the appropriate use of drugs for medical purposes andcondemns the inappropriate and harmful abuse of drugs. I hope the Congressand the new Administration will take action to meet each of thesechallenges. 

EDUCATION

The American people have always recognized that education is one of thesoundest investments they can make. The dividends are reflected in everydimension of our national life--from the strength of our economy andnational security to the vitality of our music, art, and literature. Amongthe accomplishments that have given me the most satisfaction over the lastfour years are the contributions that my Administration has been able tomake to the well-being of students and educators throughout the country. 

This Administration has collaborated successfully with the Congress onlandmark education legislation. Working with the Congressional leadership, my Administration spotlighted the importance of education by creating a newDepartment of Education. The Department has given education a strongervoice at the Federal level, while at the same time reserving the actualcontrol and operation of education to states, localities, and privateinstitutions. The Department has successfully combined nearly 150 Federaleducation programs into a cohesive, streamlined organization that is moreresponsive to the needs of educators and students. The Department has madestrides to cut red tape and paperwork and thereby to make the flow ofFederal dollars to school districts and institutions of higher educationmore efficient. It is crucial that the Department be kept intact andstrengthened. 

Our collaboration with the Congress has resulted in numerous otherimportant legislative accomplishments for education. A little over twoyears ago, I signed into law on the same day two major bills--onebenefiting elementary and secondary education and the other, postsecondaryeducation. The Education Amendments of 1978 embodied nearly all of myAdministration's proposals for improvements in the Elementary and SecondaryEducation Act, including important new programs to improve students'achievement in the basic skills and to aid school districts withexceptionally high concentrations of children from low-income families. TheMiddle Income Student Assistance Act, legislation jointly sponsored by thisAdministration and the Congressional leadership, expanded eligibility forneed-based Basic Educational Opportunity Grants to approximately one-thirdof the students enrolled in post-secondary education and made many morestudents eligible for the first time for other types of grants, work-study, and loans. 

Just three and a half months ago, my Administration and the Congresssuccessfully concluded over two years of work on a major reauthorizationbill that further expands benefits to postsecondary education. Reflected inthe Education Amendments of 1980 are major Administration recommendationsfor improvements in the Higher Education Act--including proposals forbetter loan access for students; a new parent loan program; simplifiedapplication procedures for student financial aid; a strengthened Federalcommitment to developing colleges, particularly the historically Blackinstitutions; a new authorization for equipment and facilitiesmodernization funding for the nation's major research universities; andrevitalized international education programs. 

Supplementing these legislative accomplishments have been importantadministrative actions aimed at reducing paperwork and simplifyingregulations associated with Federal education programs. We also launchedmajor initiatives to reduce the backlog of defaulted student loans andotherwise to curb fraud, abuse, and waste in education programs. 

To insure that the education enterprise is ready to meet the scientific andtechnological changes of the future, we undertook a major study of thestatus of science and engineering education throughout the nation. I hopethat the findings from this report will serve as a springboard for neededreforms at all levels of education. 

I am proud that this Administration has been able to provide the financialmeans to realize many of our legislative and administrative goals. Comparedto the previous administration's last budget, I have requested the largestoverall increase in Federal funding for education in our nation's history. My budget requests have been particularly sensitive to the needs of specialpopulations like minorities, women, the educationally and economicallydisadvantaged, the handicapped, and students with limited English-speakingability. At the same time, I have requested significant increases for manyprograms designed to enhance the quality of American education, includingprograms relating to important areas as diverse as international education, research libraries, museums, and teacher centers. 

Last year, I proposed to the Congress a major legislative initiative thatwould direct $2 billion into education and job training programs designedto alleviate youth unemployment through improved linkages between theschools and the work place. This legislation generated bipartisan support;but unfortunately, action on it was not completed in the final, rushed daysof the 96th Congress. I urge the new Congress--as it undertakes broadefforts to strengthen the economy as well as more specific tasks likereauthorizing the Vocational Education Act--to make the needs of ournation's unemployed youth a top priority for action. Only by combining abasic skills education program together with work training and employmentincentives can we make substantial progress in eliminating one of the mostsevere social problems in our nation--youth unemployment, particularlyamong minorities. I am proud of the progress already made through passageof the Youth Employment and Demonstration Project Act of 1977 and thesubstantial increase in our investment in youth employment programs. Thenew legislation would cap these efforts. 

INCOME SECURITY SOCIAL SECURITY

One of the highest priorities of my Administration has been to continue thetradition of effectiveness and efficiency widely associated with the socialsecurity program, and to assure present and future beneficiaries that theywill receive their benefits as expected. The earned benefits that are paidmonthly to retired and disabled American workers and their families providea significant measure of economic protection to millions of people whomight otherwise face retirement or possible disability with fear. I haveenacted changes to improve the benefits of many social securitybeneficiaries during my years as President. 

The last four years have presented a special set of concerns over thefinancial stability of the social security system. Shortly after takingoffice I proposed and Congress enacted legislation to protect the stabilityof the old age and survivors trust fund and prevent the imminent exhaustionof the disability insurance trust fund, and to correct a flaw in thebenefit formula that was threatening the long run health of the entiresocial security system. The actions taken by the Congress at my requesthelped stabilize the system. That legislation was later complemented by theDisability Insurance Amendments of 1980 which further bolstered thedisability insurance program, and reduced certain inequities amongbeneficiaries. 

My commitment to the essential retirement and disability protectionprovided to 35 million people each month has been demonstrated by the factthat without interruption those beneficiaries have continued to receivetheir social security benefits, including annual cost of living increases. Changing and unpredictable economic circumstances require that we continueto monitor the financial stability of the social security system. Tocorrect anticipated short-term strains on the system, I proposed last yearthat the three funds be allowed to borrow from one another, and I urge theCongress again this year to adopt such interfund borrowing. To furtherstrengthen the social security system and provide a greater degree ofassurance to beneficiaries, given projected future economic uncertainties, additional action should be taken. Among the additional financing optionsavailable are borrowing from the general fund, financing half of thehospital insurance fund with general revenues, and increasing the payrolltax rate. The latter option is particularly unpalatable given thesignificant increase in the tax rate already mandated in law. 

This Administration continues to oppose cuts in basic social securitybenefits and taxing social security benefits. The Administration continuesto support annual indexing of social security benefits. 

WELFARE REFORM

In 1979 I proposed a welfare reform package which offers solutions to someof the most urgent problems in our welfare system. This proposal isembodied in two bills, The Work and Training Opportunities Act and TheSocial Welfare Reform Amendments Act. The House passed the second of thesetwo proposals. Within the framework of our present welfare system, myreform proposals offer achievable means to increase self-sufficiencythrough work rather than welfare, more adequate assistance to people unableto work, the removal of inequities in coverage under current programs, andfiscal relief needed by States and localities. 

Our current welfare system is long overdue for serious reform; the systemis wasteful and not fully effective. The legislation I have proposed willhelp eliminate inequities by establishing a national minimum benefit, andby directly relating benefit levels to the poverty threshold. It willreduce program complexity, which leads to inefficiency and waste, bysimplifying and coordinating administration among different programs. 

I urge the Congress to take action in this area along the lines I haverecommended. 

CHILD WELFARE

My Administration has worked closely with the Congress on legislation whichis designed to improve greatly the child welfare services and foster careprograms and to create a Federal system of adoption assistance. Theseimprovements will be achieved with the recent enactment of H. R. 3434, theAdoption Assistance and Child Welfare Act of 1980. The well-being ofchildren in need of homes and their permanent placement have been a primaryconcern of my Administration. This legislation will ensure that childrenare not lost in the foster care system, but instead will be returned totheir families where possible or placed in permanent adoptive homes. 

LOW-INCOME ENERGY ASSISTANCE

In 1979 I proposed a program to provide an annual total of $1. 6 billion tolow-income households which are hardest hit by rising energy bills. Withthe cooperation of Congress, we were able to move quickly to provideassistance to eligible households in time to meet their winter heatingbills. 

In response to the extreme heat conditions affecting many parts of thecountry during 1980, I directed the Community Services Administration tomake available over $27 million to assist low-income individuals, especially the elderly, facing life threatening circumstances due toextreme heat. 

Congress amended and reauthorized the low-income energy assistance programfor fiscal year 1981, and provided $1. 85 billion to meet anticipatedincreasing need. The need for a program to help low-income households withrising energy expenses will not abate in the near future. The low-incomeenergy assistance program should be reauthorized to meet those needs. 

HOUSING

For the past 14 months, high interest rates have had a severe impact on thenation's housing market. Yet the current pressures and uncertainties shouldnot obscure the achievements of the past four years. 

Working with the Congress, the regulatory agencies, and the financialcommunity, my Administration has brought about an expanded and steadierflow of funds into home mortgages. Deregulation of the interest ratespayable by depository institutions, the evolution of variable andrenegotiated rate mortgages, development of high yielding savingscertificates, and expansion of the secondary mortgage market have allincreased housing's ability to attract capital and have assured thatmortgage money would not be cut off when interest rates rose. These actionswill diminish the cyclicality of the housing industry. Further, we havesecured legislation updating the Federal Government's emergency authorityto provide support for the housing industry through the Brooke-Cranstonprogram, and creating a new Section 235 housing stimulus program. Thesetools will enable the Federal Government to deal quickly and effectivelywith serious distress in this critical industry. 

We have also worked to expand homeownership opportunities for Americans. Byusing innovative financing mechanisms, such as the graduated paymentmortgage, we have increased the access of middle income families to housingcredit. By revitalizing the Section 235 program, we have enabled nearly100, 000 moderate income households to purchase new homes. By reducingpaperwork and regulation in Federal programs, and by working with State andlocal governments to ease the regulatory burden, we have helped to holddown housing costs and produce affordable housing. 

As a result of these governmentwide efforts, 5 1/2 million more Americanfamilies bought homes in the past four years than in any equivalent periodin history. And more than 7 million homes have begun construction during myAdministration, 1 million more than in the previous four years. 

We have devoted particular effort to meeting the housing needs of low andmoderate income families. In the past four years, more than 1 millionsubsidized units have been made available for occupancy by lower incomeAmericans and more than 600, 000 assisted units have gone into construction. In addition, we have undertaken a series of measures to revitalize andpreserve the nation's 2 million units of public and assisted housing. 

For Fiscal Year 1982, I am proposing to continue our commitment to lowerincome housing. I am requesting funds to support 260, 000 units of Section 8and public housing, maintaining these programs at the level provided byCongress in Fiscal 1981. 

While we have made progress in the past four years, in the future there arereasons for concern. Home price inflation and high interest rates threatento put homeownership out of reach for first-time homebuyers. Lower incomehouseholds, the elderly and those dependent upon rental housing face risingrents, low levels of rental housing construction by historic standards, andthe threat of displacement due to conversion to condominiums and otherfactors. Housing will face strong competition for investment capital fromthe industrial sector generally and the energy industries, in particular. 

To address these issues, I appointed a Presidential Task Force and AdvisoryGroup last October. While this effort will not proceed due to the electionresult, I hope the incoming Administration will proceed with a similarventure. 

The most important action government can take to meet America's housingneeds is to restore stability to the economy and bring down the rate ofinflation. Inflation has driven up home prices, operating costs andinterest rates. Market uncertainty about inflation has contributed to theinstability in interest rates, which has been an added burden tohomebuilders and homebuyers alike. By making a long-term commitment toprovide a framework for greater investment, sustained economic growth, andprice stability, my Administration has begun the work of creating a healthyenvironment for housing. 

TRANSPORTATION

With the passage of the Airline Deregulation Act of 1978, the Motor CarrierAct of 1980, and the Harley O. Staggers Rail Act of 1980, myAdministration, working with the Congress, has initiated a new era ofreduced regulation of transportation industries. Deregulation will lead toincreased productivity and operating efficiencies in the industriesinvolved, and stimulate price and service competition, to the benefit ofconsumers generally. I urge the new Administration to continue our effortson behalf of deregulation legislation for the intercity passenger busindustry as well. 

In the coming decade, the most significant challenge facing the nation intransportation services will be to improve a deteriorating physicalinfrastructure of roadways, railroads, waterways and mass transit systems, in order to conserve costly energy supplies while promoting effectivetransportation services. 

HIGHWAYS

Our vast network of highways, which account for 90 percent of travel and 80percent by value of freight traffic goods movement, is deteriorating. Ifcurrent trends continue, a major proportion of the Interstate pavement willhave deteriorated by the end of the 1980's. 

Arresting the deterioration of the nation's system of highways is a highpriority objective for the 1980's. We must reorient the Federal missionfrom major new construction projects to the stewardship of the existingInterstate Highway System. Interstate gaps should be judged on theconnections they make and on their compatibility with community needs. 

During this decade, highway investments will be needed to increaseproductivity, particularly in the elimination of bottlenecks, provide moreefficient connections to ports and seek low-cost solutions to trafficdemand. 

My Administration has therefore recommended redefining completion of theInterstate system, consolidating over 27 categorical assistance programsinto nine, and initiating a major repair and rehabilitation program forsegments of the Interstate system. This effort should help maintain thecondition and performance of the Nation's highways, particularly theInterstate and primary system; provide a realistic means to complete theInterstate system by 1990; ensure better program delivery throughconsolidation, and assist urban revitalization. In addition, the Congressmust address the urgent funding problems of the highway trust fund, and theneed to generate greater revenues. 

MASS TRANSIT

In the past decade the nation's public transit systems' ridership increasedat an annual average of 1. 1% each year in the 1970's (6. 9% in 1979). Continued increases in the cost of fuel are expected to make transit agrowing part of the nation's transportation system. 

As a result, my Administration projected a ten year, $43 billion program toincrease mass transit capacity by 50 percent, and promote more energyefficient vehicle uses in the next decade. The first part of this proposalwas the five year, $24. 7 billion Urban Mass Transportation Administrationreauthorization legislation I sent to the Congress in March, 1980. I urgethe 97th Congress to quickly enact this or similar legislation in 1981. 

My Administration was also the first to have proposed and signed into law anon-urban formula grant program to assist rural areas and small communitieswith public transportation programs to end their dependence on theautomobile, promote energy conservation and efficiency, and providetransportation services to impoverished rural communities. 

A principal need of the 1980's will be maintaining mobility for allsegments of the population in the face of severely increasingtransportation costs and uncertainty of fuel supplies. We must improve theflexibility of our transportation system and offer greater choice anddiversity in transportation services. While the private automobile willcontinue to be the principal means of transportation for many Americans, public transportation can become an increasingly attractive alternative. We, therefore, want to explore a variety of paratransit modes, varioustypes of buses, modern rapid transit, regional rail systems and light railsystems. 

Highway planning and transit planning must be integrated and related toState, regional, district and neighborhood planning efforts now in place oremerging. Low density development and land use threaten the fiscal capacityof many communities to support needed services and infrastructure. 

ELDERLY AND HANDICAPPED TRANSPORTATION

Transportation policies in the 1980's must pay increasing attention to theneeds of the elderly and handicapped. By 1990, the number of people over 65will have grown from today's 19 million to 27 million. During the sameperiod, the number of handicapped--people who have difficulty usingtransit as well as autos, including the elderly--is expected to increasefrom 9 to 11 million, making up 4. 5 percent of the population. 

We must not retreat from a policy that affords a significant and growingportion of our population accessible public transportation whilerecognizing that the handicapped are a diverse group and will needflexible, door-to-door service where regular public transportation will notdo the job. 

RAILROADS

In addition, the Federal government must reassess the appropriate Federalrole of support for passenger and freight rail services such as Amtrak andConrail. Our goal through federal assistance should be to maintain andenhance adequate rail service, where it is not otherwise available to needycommunities. But Federal subsidies must be closely scrutinized to be surethey are a stimulus to, and not a replacement for, private investment andinitiative. Federal assistance cannot mean permanent subsidies forunprofitable operations. 

WATERWAYS AND RURAL TRANSPORTATION

There is a growing need in rural and small communities for improvedtransportation services. Rail freight service to many communities hasdeclined as railroads abandon unproductive branch lines. At the same time, rural roads are often inadequate to handle large, heavily-loaded trucks. The increased demand for "harvest to harbor" service has also placed anincreased burden on rural transportation systems, while bottlenecks alongthe Mississippi River delay grain shipments to the Gulf of Mexico. 

We have made some progress:

--To further develop the nation's waterways, my Administration beganconstruction of a new 1, 200 foot lock at the site of Lock and Dam 26 on theMississippi River. When opened in 1987, the new lock will have a capacityof 86 million tons per year, an 18 percent increase over the presentsystem. The U. S. Army Corps of Engineers has also undertaken studies toassess the feasibility of expanding the Bonneville Locks. Rehabilitation ofJohn Day Lock was begun in 1980 and should be completed in 1982. MyAdministration also supports the completion of the Upper Mississippi RiverMaster Plan to determine the feasibility of constructing a second lock atAlton, Illinois. These efforts will help alleviate delays in transportingcorn, soybeans and other goods along the Mississippi River to the Gulf ofMexico. 

--The Department of Transportation's new Small Community and RuralTransportation Policy will target federal assistance for passengertransportation, roads and highways, truck service, and railroad freightservice to rural areas. This policy implements and expands upon the earlierWhite House Initiative, "Improving Transportation in Rural America, "announced in June, 1979, and the President's "Small Community and RuralDevelopment Policy" announced in December, 1979. The Congress should seekways to balance rail branch line abandonment with the service needs ofrural and farm communities, provide financial assistance to rail branchline rehabilitation where appropriate, assist shippers to adjust to railbranch line abandonment where it takes place, and help make it possible fortrucking firms to serve light density markets with dependable and efficienttrucking services. 

MARITIME POLICY

During my Administration I have sought to ensure that the U. S. Maritimeindustry will not have to function at an unfair competitive disadvantage inthe international market. As I indicated in my maritime policy statement tothe Congress in July, 1979, the American merchant marine is vital to ourNation's welfare, and Federal actions should promote rather than harm it. In pursuit of this objective, I signed into law the Controlled Carrier Actof 1978, authorizing the Federal Maritime Commission to regulate certainrate cutting practices of some state-controlled carriers, and recentlysigned a bilateral maritime agreement with the People's Republic of Chinathat will expand the access of American ships to 20 specified Chineseports, and set aside for American-flag ships a substantial share (at leastone-third) of the cargo between our countries. This agreement shouldofficially foster expanded U. S. And Chinese shipping services linking thetwo countries, and will provide further momentum to the growth ofSino-American trade. 

There is also a need to modernize and expand the dry bulk segment of ourfleet. Our heavy dependence on foreign carriage of U. S. -bulk cargoesdeprives the U. S. Economy of seafaring and shipbuilding jobs, adds to thebalance-of-payments deficit, deprives the Government of substantial taxrevenues, and leaves the United States dependent on foreign-flag shippingfor a continued supply of raw materials to support the civil economy andwar production in time of war. 

I therefore sent to the Congress proposed legislation to strengthen thiswoefully weak segment of the U. S. -flag fleet by removing certaindisincentives to U. S. Construction of dry bulkers and their operation underU. S. Registry. Enactment of this proposed legislation would establish thebasis for accelerating the rebuilding of the U. S. -flag dry bulk fleettoward a level commensurate with the position of the United States as theworld's leading bulk trading country. 

During the past year the Administration has stated its support forlegislation that would provide specific Federal assistance for theinstallation of fuel-efficient engines in existing American ships, andwould strengthen this country's shipbuilding mobilization base. Strengthening the fleet is important, but we must also maintain ourshipbuilding base for future ship construction. 

Provisions in existing laws calling for substantial or exclusive use ofAmerican-flag vessels to carry cargoes generated by the Government must bevigorously pursued. 

I have therefore supported requirements that 50 percent of oil purchasedfor the strategic petroleum reserve be transported in U. S. -flag vessels, that the Cargo Preference Act be applied to materials furnished for theU. S. Assisted construction of air bases in Israel, and to cargoestransported pursuant to the Chrysler Corporation Loan Guarantee Act. Inaddition, the deep Seabed Hard Mineral Resources Act requires that at leastone ore carrier per mine site be a U. S. -flag vessel. 

Much has been done, and much remains to be done. The FY 1982 budgetincludes a $107 million authorization for Construction Differential Subsidy("CDS") funds which, added to the unobligated CDS balance of $100 millionfrom 1980, and the recently enacted $135 million 1981 authorization, willprovide an average of $171 million in CDS funds in 1981 and 1982. 

COAL EXPORT POLICY

While significant growth in foreign demand for U. S. Steam coal is foreseen, congestion at major U. S. Coal exporting ports such as Hampton Roads, Virginia, and Baltimore, Maryland, could delay and impede exports. 

My Administration has worked through the Interagency Coal Task Force Study, which I created, to promote cooperation and coordination of resourcesbetween shippers, railroads, vessel broker/ operators and port operators, and to determine the most appropriate Federal role in expanding andmodernizing coal export facilities, including dredging deeper channels atselected ports. 

Some progress has already been made. In addition to action taken bytransshippers to reduce the number of coal classifications used wheneverpossible, by the Norfolk and Western Railroad to upgrade its computercapability to quickly inventory its coal cars in its yards, and by theChessie Railroad which is reactivating Pier 15 in Newport News and hasestablished a berth near its Curtis Bay Pier in Baltimore to decreasedelays in vessel berthing, public activities will include:

--A $26. 5 million plan developed by the State of Pennsylvania and Conrailto increase Conrail's coal handling capacity at Philadelphia;

--A proposal by the State of Virginia to construct a steam coal port onthe Craney Island Disposal area in Portsmouth harbor;

--Plans by Mobile, Alabama, which operates the only publicly owned coalterminal in the U. S. To enlarge its capacity at McDuffie Island to 10million tons ground storage and 100 car unit train unloading capability;

--Development at New Orleans of steam coal facilities that are expected toadd over 20 million tons of annual capacity by 1983; and

--The Corps of Engineers, working with other interested Federal agencies, will determine which ports should be dredged, to what depth and on whatschedule, in order to accommodate larger coal carrying vessels. 

Private industry will, of course, play a major role in developing theUnited States' coal export facilities. The new Administration shouldcontinue to work to eliminate transportation bottlenecks that impede ouraccess to foreign markets. 

Special Needs

WOMEN

The past four years have been years of rapid advancement for women. Ourfocus has been two-fold: to provide American women with a full range ofopportunities and to make them a part of the mainstream of every aspect ofour national life and leadership. 

I have appointed a record number of women to judgeships and to topgovernment posts. Fully 22 percent of all my appointees are women, and Inominated 41 of the 46 women who sit on the Federal bench today. For thefirst time in our history, women occupy policymaking positions at thehighest level of every Federal agency and department and have demonstratedtheir ability to serve our citizens well. 

We have strengthened the rights of employed women by consolidating andstrengthening enforcement of sex discrimination laws under the EEOC, byexpanding employment rights of pregnant women through the PregnancyDisability Bill, and by increasing federal employment opportunities forwomen through civil service reform, and flexi-time and part-timeemployment. 

By executive order, I created the first national program to provide womenbusinessowners with technical assistance, grants, loans, and improvedaccess to federal contracts. 

We have been sensitive to the needs of women who are homemakers. Iestablished an Office of Families within HHS and sponsored the White HouseConference on Families. We initiated a program targeting CETA funds to helpdisplaced homemakers. The Social Security system was amended to eliminatethe widow's penalty and a comprehensive study of discriminatory provisionsand possible changes was presented to Congress. Legislation was passed togive divorced spouses of foreign service officers rights to share inpension benefits. 

We created an office on domestic violence within HHS to coordinate the 12agencies that now have domestic violence relief programs, and to distributeinformation on the problem and the services available to victims. 

Despite a stringent budget for FY 1981, the Administration consistentlysupported the Women's Educational Equity Act and family planningactivities, as well as other programs that affect women, such as foodstamps, WIC, and social security. 

We have been concerned not only about the American woman's opportunities, but ensuring equality for women around the world. In November, 1980, I sentto the Senate the Convention on the Elimination of All Forms ofDiscrimination Against Women. This United Nations document is the mostcomprehensive and detailed international agreement which seeks theadvancement of women. 

On women's issues, I have sought the counsel of men and women in and out ofgovernment and from all regions of our country. I established two panels--the President's Advisory Committee for Women and the Interdepartmental TaskForce on Women--to advise me on these issues. The mandate for both groupsexpired on December 31, but they have left behind a comprehensive review ofthe status of women in our society today. That review provides excellentguidance for the work remaining in our battle against sex discrimination. 

Even though we have made progress, much remains on the agenda for women. Iremain committed to the Equal Rights Amendment and will continue to workfor its passage. It is essential to the goal of bringing America's womenfully into the mainstream of American life that the ERA be ratified. 

The efforts begun for women in employment, business and education should becontinued and strengthened. Money should be available to states toestablish programs to help the victims of domestic violence. Congressshould pass a national health care plan and a welfare reform program, andthese measures should reflect the needs of women. 

The talents of women should continue to be used to the fullest inside andoutside of government, and efforts should continue to see that they havethe widest range of opportunities and options. 

HANDICAPPED

I hope that my Administration will be remembered in this area for leadingthe way toward full civil rights for handicapped Americans. When I tookoffice, no federal agency had yet issued 504 regulations. As I leaveoffice, this first step by every major agency and department in the federalgovernment is almost complete. But it is only a first step. The years aheadwill require steadfast dedication by the President to protect and promotethese precious rights in the classroom, in the workplace, and in all publicfacilities so that handicapped individuals may join the American mainstreamand contribute to the fullest their resources and talents to our economicand social life. 

Just as we supported, in an unprecedented way, the civil rights of disabledpersons in schools and in the workplace, other initiatives in healthprevention, such as our immunization and nutrition programs for youngchildren and new intense efforts to reverse spinal cord injury, mustcontinue so that the incidence of disability continues to decline. 

This year is the U. N. -declared International Year of Disabled Persons. Weare organizing activities to celebrate and promote this importantcommemorative year within the government as well as in cooperation withprivate sector efforts in this country and around the world. TheInternational Year will give our country the opportunity to recognize thetalents and capabilities of our fellow citizens with disabilities. We canalso share our rehabilitation and treatment skills with other countries andlearn from them as well. I am proud that the United States leads the worldin mainstreaming and treating disabled people. However, we have a long wayto go before all psychological and physical barriers to disabled people aretorn down and they can be full participants in our American way of life. Wemust pledge our full commitment to this goal during the International Year. 

FAMILIES

Because of my concern for American families, my Administration convenedlast year the first White House Conference on Families which involved sevennational hearings, over 506 state and local events, three White HouseConferences, and the direct participation of more than 125, 000 citizens. The Conference reaffirmed the centrality of families in our lives andnation but documented problems American families face as well. We alsoestablished the Office of Families within the Department of Health andHuman Services to review government policies and programs that affectfamilies. 

I expect the departments and agencies within the executive branch of theFederal government as well as Members of Congress, corporate and businessleaders, and State and local officials across the country, to study closelythe recommendations of the White House Conference and implement themappropriately. As public policy is developed and implemented by the Federalgovernment, cognizance of the work of the Conference should be taken as apragmatic and essential step. 

The Conference has done a good job of establishing an agenda for action toassure that the policies of the Federal government are more sensitive intheir impact on families. I hope the Congress will review and seriouslyconsider the Conference's recommendations. 

OLDER AMERICANS

My Administration has taken great strides toward solving the difficultproblems faced by older Americans. Early in my term we worked successfullywith the Congress to assure adequate revenues for the Social Security TrustFunds. And last year the strength of the Social Security System wasstrengthened by legislation I proposed to permit borrowing among theseparate trust funds. I have also signed into law legislation prohibitingemployers from requiring retirement prior to age 70, and removing mandatoryretirement for most Federal employees. In addition, my Administrationworked very closely with Congress to amend the Older Americans Act in a waythat 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 againdemonstrates my commitment to programs for the elderly. It will include, asmy previous budgets have, increased funding for nutrition, senior centersand home health care, and will focus added resources on the needs of olderAmericans. 

With the 1981 White House Conference on Aging approaching, I hope the newAdministration will make every effort to assure an effective and usefulconference. This Conference should enable older Americans to voice theirconcerns and give us guidance in our continued efforts to ensure thequality of life so richly deserved by our senior citizens. 

REFUGEES

We cannot hope to build a just and humane society at home if we ignore thehumanitarian claims of refugees, their lives at stake, who have nowhereelse to turn. Our country can be proud that hundreds of thousands of peoplearound the world would risk everything they have--including their ownlives--to come to our country. 

This Administration initiated and implemented the first comprehensivereform of our refugee and immigration policies in over 25 years. We alsoestablished the first refugee coordination office in the Department ofState under the leadership of a special ambassador and coordinator forrefugee affairs and programs. The new legislation and the coordinator'soffice will bring common sense and consolidation to our Nation's previouslyfragmented, inconsistent, and in many ways, outdated, refugee andimmigration policies. 

With the unexpected arrival of thousands of Cubans and Haitians who soughtrefuge in our country last year, outside of our regular immigration andrefugee admissions process, our country and its government were tested inbeing compassionate and responsive to a major human emergency. Because wehad taken steps to reorganize our refugee programs, we met that testsuccessfully. I am proud that the American people responded to this crisiswith their traditional good will and hospitality. Also, we would never havebeen able to handle this unprecedented emergency without the efforts of theprivate resettlement agencies who have always been there to help refugeesin crises. 

Immigrants to this country always contribute more toward making our countrystronger than they ever take from the system. I am confident that thenewest arrivals to our country will carry on this tradition. 

While we must remain committed to aiding and assisting those who come toour shores, at the same time we must uphold our immigration and refugeepolicies and provide adequate enforcement resources. As a result of ourenforcement policy, the illegal flow from Cuba has been halted and anorderly process has been initiated to make certain that our refugee andimmigration laws are honored. 

This year the Select Commission on Immigration and Refugee Policy willcomplete its work and forward its advice and recommendations. I hope thatthe recommendations will be carefully considered by the new Administrationand the Congress, for it is clear that we must take additional action tokeep our immigration policy responsive to emergencies and ever changingtimes. 

VETERANS

This country and its leadership has a continuing and unique obligation tothe men and women who served their nation in the armed forces and helpmaintain or restore peace in the world. 

My commitment to veterans, as evidenced by my record, is characterized by aconscientious and consistent emphasis in these general areas:

First, we have worked to honor the Vietnam veteran. During myAdministration, and under the leadership of VA Administrator Max Cleland, Iwas proud to lead our country in an overdue acknowledgement of our Nation'sgratitude to the men and women who served their country during the bitterwar in Southeast Asia. Their homecoming was deferred and seemed doomed tobe ignored. Our country has matured in the last four years and at long lastwe were able to separate the war from the warrior and honor these veterans. But with our acknowledgement of their service goes an understanding thatsome Vietnam veterans have unique needs and problems. 

My Administration was able to launch a long sought after psychologicalreadjustment and outreach program, unprecedented in its popularity, sensitivity and success. This program must be continued. The Administrationhas also grappled with the difficult questions posed by some veterans whoserved in Southeast Asia and were exposed to potentially harmfulsubstances, including the herbicide known as Agent Orange. We have launchedscientific inquiries that should answer many veterans' questions abouttheir health and should provide the basis for establishing soundcompensation policy. We cannot rest until their concerns are dealt with ina sensitive, expeditious and compassionate fashion. 

Second, we have focused the VA health care system in the needs of theservice-connected disabled veteran. We initiated and are implementing thefirst reform of the VA vocational rehabilitation system since its inceptionin 1943. Also, my Administration was the first to seek a cost-of-livingincrease for the recipients of VA compensation every year. My last budgetalso makes such a request. The Administration also launched the DisabledVeterans Outreach Program in the Department of Labor which has successfullyplaced disabled veterans in jobs. Services provided by the VA health caresystem will be further targeted to the special needs of disabled veteransduring the coming year. 

Third, the VA health care system, the largest in the free world, hasmaintained its independence and high quality during my Administration. Wehave made the system more efficient and have therefore treated moreveterans than ever before by concentrating on out-patient care and throughmodern management improvements. As the median age of the American veteranpopulation increases, we must concentrate on further changes within the VAsystem to keep it independent and to serve as a model to the nation and tothe world as a center for research, treatment and rehabilitation. 

Government Assistance

GENERAL AID TO STATE AND LOCAL GOVERNMENTS

Since taking office, I have been strongly committed to strengthening thefiscal and economic condition of our Nation's State and local governments. I have accomplished this goal by encouraging economic development of localcommunities, and by supporting the General Revenue Sharing and otheressential grant-in-aid programs. 

GRANTS-IN-AID TO STATES AND LOCALITIES

During my Administration, total grants-in-aid to State and localgovernments have increased by more than 40 percent, from $68 billion inFiscal Year 1977 to $96 billion in Fiscal Year 1981. This significantincrease in aid has allowed States and localities to maintain services thatare essential to their citizens without imposing onerous tax burdens. Italso has allowed us to establish an unprecedented partnership between theleaders of the Federal government and State and local government electedofficials. 

GENERAL REVENUE SHARING

Last year Congress enacted legislation that extends the General RevenueSharing program for three more years. This program is the cornerstone ofour efforts to maintain the fiscal health of our Nation's local government. It will provide $4. 6 billion in each of the next three years to cities, counties and towns. This program is essential to the continued ability ofour local governments to provide essential police, fire and sanitationservices. 

This legislation renewing GRS will be the cornerstone ofFederal-State-local government relations in the 1980's. This policy willemphasize the need for all levels of government to cooperate in order tomeet the needs of the most fiscally strained cities and counties, and alsowill emphasize the important role that GRS can play in forging thispartnership. I am grateful that Congress moved quickly to assure that ourNation's localities can begin the 1980's in sound fiscal condition. 

COUNTER-CYCLICAL ASSISTANCE

Last year, I proposed that Congress enact a $1 billion counter-cyclicalfiscal assistance program to protect States and localities from unexpectedchanges in the national economy. This program unfortunately was not enactedby the [full] Congress. I, therefore, have not included funding forcounter-cyclical aid in my Fiscal Year 1982 budget. Nevertheless, I urgeCongress to enact a permanent stand-by counter-cyclical program, so thatStates and cities can be protected during the next economic downturn. 

URBAN POLICY

Three years ago, I proposed the Nation's first comprehensive urban policy. That policy involved more than one hundred improvements in existing Federalprograms, four new Executive Orders and nineteen pieces of urban-orientedlegislation. With Congress' cooperation, sixteen of these bills have nowbeen signed into law. 

ECONOMIC DEVELOPMENT

One of the principal goals of my domestic policy has been to strengthen theprivate sector economic base of our Nation's economically troubled urbanand rural areas. With Congress' cooperation, we have substantially expandedthe Federal government's economic development programs and provided new taxincentives for private investment in urban and rural communities. Theseprograms have helped many communities to attract new private sector jobsand investments and to retain the jobs and investments that already are inplace. 

When I took office, the Federal government was spending less than $300million annually on economic development programs, and only $60 million ofthose funds in our Nation's urban areas. Since that time, we have createdthe Urban Development Action Grant (UDAG) program and substantiallyexpanded the economic development programs in the Commerce Department. MyFY 1982 budget requests more than $1. 5 billion for economic developmentgrants, loans and interest subsidies and almost $1. 5 billion for loanguarantees. Approximately 60 percent of these funds will be spent in ourNation's urban areas. In addition, we have extended the 10 percentinvestment credit to include rehabilitation of existing industrialfacilities as well as new construction. 

I continue to believe that the development of private sector investment andjobs is the key to revitalizing our Nation's economically depressed urbanand rural areas. To ensure that the necessary economic development goesforward, the Congress must continue to provide strong support for the UDAGprogram and the programs for the Economic Development Administration. Thoseprograms provide a foundation for the economic development of our Nation inthe 1980's. 

COMMUNITY DEVELOPMENT

The partnership among Federal, State and local governments to revitalizeour Nation's communities has been a high priority of my Administration. When I took office, I proposed a substantial expansion of the CommunityDevelopment Block Grant (CDBG) program and the enactment of a new $400million Urban Development Action Grant (UDAG) program. Both of theseprograms have provided essential community and economic developmentassistance to our Nation's cities and counties. 

Last year, Congress reauthorized both the CDBG and UDAG programs. The CDBGprogram was reauthorized for three more years with annual funding increasesof $150 million, and the UDAG program was extended for three years at thecurrent funding level of $675 million annually. My 1982 budget requestsfull funding for both of these programs. These actions should help ourNation's cities and counties to continue the progress they have made in thelast three years. 

NEIGHBORHOODS

During my Administration we have taken numerous positive steps to achieve afull partnership of neighborhood organizations and government at alllevels. We have successfully fought against red lining and housingdiscrimination. We created innovative Self Help funding and technicalresource transfer mechanisms. We have created unique methods of access forneighborhood organizations to have a participating role in Federal andState government decision-making. Neighborhood based organizations are thethreshold of the American community. 

The Federal government will need to develop more innovative and practicalways for neighborhood based organizations to successfully participate inthe identification and solution of local and neighborhood concerns. Fullpartnership will only be achieved with the knowing participation of leadersof government, business, education and unions. Neither state nor Federalsolutions imposed from on high will suffice. Neighborhoods are the fabricand soul of this great land. Neighborhoods define the weave that has beenused to create a permanent fabric. The Federal government must take everyopportunity to provide access and influence to the individuals andorganizations affected at the neighborhood level. 

Rural Policy

Since the beginning of my Administration, I have been committed toimproving the effectiveness with which the Federal government deals withthe problems and needs of a rapidly changing rural America. The rapidgrowth of some rural areas has placed a heavy strain on communities andtheir resources. There are also persistent problems of poverty and economicstagnation in other parts of rural America. Some rural areas continue tolose population, as they have for the past several decades. 

In December, 1979, I announced the Small Community and Rural DevelopmentPolicy. It was the culmination of several years' work and was designed toaddress the varying needs of our rural population. In 1980, myAdministration worked with the Congress to pass the Rural DevelopmentPolicy Act of 1980, which when fully implemented will allow us to meet theneeds of rural people and their communities more effectively and moreefficiently. 

As a result of the policy and the accompanying legislation, we have:

--Created the position of Under Secretary of Agriculture for SmallCommunity and Rural Development to provide overall leadership. 

--Established a White House Working Group to assist in the implementationof the policy. 

--Worked with more than 40 governors to form State rural developmentcouncils to work in partnership with the White House Working Group, and theFederal agencies, to better deliver State and Federal programs to ruralareas. 

--Directed the White House Working Group to annually review existing andproposed policies, programs, and budget levels to determine their adequacyin meeting rural needs and the fulfilling of the policy's objectives andprinciples. 

This effort on the part of my Administration and the Congress has resultedin a landmark policy. For the first time, rural affairs has received theprominence it has always deserved. It is a policy that can truly helpalleviate the diverse and differing problems rural America will face in the1980's. 

With the help and dedication of a great many people around the country whoare concerned with rural affairs, we have constructed a mechanism fordealing effectively with rural problems. There is now a great opportunityto successfully combine Federal efforts with the efforts of rural communityleaders and residents. It is my hope this spirit of cooperation and recordof accomplishment will be continued in the coming years. 

CONSUMERS

In September, 1979, I signed an Executive Order designed to strengthen andcoordinate Federal consumer programs and to establish procedures to improveand facilitate consumer participation in government decision-making. FortyFederal agencies have adopted programs to comply with the requirements ofthe Order. These programs will improve complaint handling, provide betterinformation to consumers, enhance opportunities for public participation ingovernment proceedings, and assure that the consumer point of view isconsidered in all programs, policies, and regulations. 

While substantial progress has been made in assuring a consumer presence inFederal agencies, work must continue to meet fully the goals of theExecutive Order. Close monitoring of agency compliance with therequirements of the Order is necessary. Continued evaluation to assure thatthe programs are effective and making maximum use of available resources isalso essential. As a complement to these initiatives, efforts to providefinancial assistance in regulatory proceedings to citizen groups, smallbusinesses, and others whose participation is limited by their economiccircumstances must continue to be pursued. 

It is essential that consumer representatives in government pay particularattention to the needs and interests of low-income consumers andminorities. The Office of Consumer Affairs' publication, "People Power:What Communities Are Doing to Counter Inflation, " catalogues some of theways that government and the private sector can assist the less powerful inour society to help themselves. New ways should be found to help fosterthis new people's movement which is founded on the principle ofself-reliance. 

Science and Technology

Science and technology contribute immeasurably to the lives of allAmericans. Our high standard of living is largely the product of thetechnology that surrounds us in the home or factory. Our good health is duein large part to our ever increasing scientific understanding. Our nationalsecurity is assured by the application pate science and technology willbring. 

The Federal government has a special role to play in science andtechnology. Although the fruits of scientific achievements surround us, itis often difficult to predict the benefits that will arise from a givenscientific venture. And these benefits, even if predictable, do not usuallylead to ownership rights. Accordingly, the Government has a specialobligation to support science as an investment in our future. 

My Administration has sought to reverse a decade-long decline in funding. Despite the need for fiscal restraint, real support of basic research hasgrown nearly 11% during my term in office. And, my Administration hassought to increase the support of long-term research in the variety ofmission agencies. In this way, we can harness the American genius forinnovation to meet the economic, energy, health, and security challengesthat confront our nation. 

--International Relations and National Security. Science and technologyare becoming increasingly important elements of our national security andforeign policies. This is especially so in the current age of sophisticateddefense systems and of growing dependence among all countries on moderntechnology for all aspects of their economic strength. For these reasons, scientific and technological considerations have been integral elements ofthe Administration's decision-making on such national security and foreignpolicy issues as the modernization of our strategic weaponry, arms control, technology transfer, the growing bilateral relationship with China, and ourrelations with the developing world. 

Four themes have shaped U. S. Policy in international scientific andtechnological cooperation: pursuit of new international initiatives toadvance our own research and development objectives; development andstrengthening of scientific exchange to bridge politically ideological, andcultural divisions between this country and other countries; formulation ofprograms and institutional relations to help developing countries usescience and technology beneficially; and cooperation with other nations tomanage technologies with local impact. At my direction, my Science andTechnology Adviser has actively pursued international programs in supportof these four themes. We have given special attention to scientific andtechnical relations with China, to new forms of scientific and technicalcooperation with Japan, to cooperation with Mexico, other Latin Americanand Caribbean countries and several states in Black America, and to theproposed Institute for Scientific and Technological Cooperation. 

In particular our cooperation with developing countries reflects theimportance that each of them has placed on the relationship betweeneconomic growth and scientific and technological capability. It alsoreflects their view that the great strength of the U. S. In science andtechnology makes close relations with the U. S. Technical community anespecially productive means of enhancing this capability. Scientific andtechnological assistance is a key linkage between the U. S. And thedeveloping world, a linkage that has been under-utilized in the past andone which we must continue to work to strengthen. 

--Space Policy. The Administration has established a framework for astrong and evolving space program for the 1980's. 

The Administration's space policy reaffirmed the separation of militaryspace systems and the open civil space program, and at the same time, provided new guidance on technology transfer between the civil and militaryprograms. The civil space program centers on three basic tenets: First, ourspace policy will reflect a balanced strategy of applications, science, andtechnology development. Second, activities will be pursued when they can beuniquely or more efficiently accomplished in space. Third, a prematurecommitment to a high challenge, space-engineering initiative of thecomplexity of Apollo is inappropriate. As the Shuttle development phasesdown, however, there will be added flexibility to consider new spaceapplications, space science and new space exploration activities. 

--Technology Development. The Shuttle dominates our technology developmenteffort and correctly so. It represents one of the most sophisticatedtechnological challenges ever undertaken, and as a result, has encounteredtechnical problems. Nonetheless, the first manned orbital flight is nowscheduled for March, 1981. I have been pleased to support strongly thenecessary funds for the Shuttle throughout my Administration. 

--Space Applications. Since 1972, the U. S. Has conducted experimentalcivil remote sensing through Landsat satellites, thereby realizing manysuccessful applications. Recognizing this fact, I directed theimplementation of an operational civil land satellite remote sensingsystem, with the operational management responsibility in Commerce'sNational Oceanic and Atmospheric Administration. In addition, because oceanobservations from space can meet common civil and military datarequirements, a National Oceanic Satellite System has been proposed as amajor FY 1981 new start. 

--Space Science Exploration. The goals of this Administration's policy inspace science have been to: (1) continue a vigorous program of planetaryexploration to understand the origin and evolution of the solar system; (2)utilize the space telescope and free-flying satellites to usher in a newera of astronomy; (3) develop a better understanding of the sun and itsinteraction with the terrestrial environment; and (4) utilize the Shuttleand Spacelab to conduct basic research that complements earth-based lifescience investigations. 

DISTRICT OF COLUMBIA

Washington, D. C. , is home to both the Federal Government and to more thanhalf a million American citizens. I have worked to improve the relationshipbetween the Federal establishment and the Government of the District ofColumbia in order to further the goals and spirit of home rule. The Citycontrols more of its own destiny than was the case four years ago. Yet, despite the close cooperation between my Administration and that of MayorBarry, we have not yet seen the necessary number of states ratify theConstitutional Amendment granting full voting representation in theCongress to the citizens of this city. It is my hope that this inequitywill be rectified. The country and the people who inhabit Washingtondeserve no less. 

THE ARTS

The arts are a precious national resource. 

Federal support for the arts has been enhanced during my Administration byexpanding government funding and services to arts institutions, individualartists, scholars, and teachers through the National Endowment for theArts. We have broadened its scope and reach to a more diverse population. We have also reactivated the Federal Council on the Arts and Humanities. 

It is my hope that during the coming years the new Administration and theCongress will:

--Continue support of institutions promoting development and understandingof the arts;

--Encourage business participants in a comprehensive effort to achieve atruly mixed economy of support for the arts;

--Explore a variety of mechanisms to nurture the creative talent of ourcitizens and build audiences for their work;

--Support strong, active National Endowments for the Arts;

--Seek greater recognition for the rich cultural tradition of the nation'sminorities;

--Provide grants for the arts in low-income neighborhoods. 

THE HUMANITIES

In recently reauthorizing Federal appropriations for the National Endowmentfor the Humanities, the Congress has once again reaffirmed that "theencouragement and support of national progress and scholarship in thehumanities . . . While primarily a matter for private and local initiative, is also an appropriate matter of concern to the Federal Government" andthat "a high civilization must not limit its efforts to science andtechnology alone but must give full value and support to the other greatbranches of man's scholarly and cultural activity in order to achieve abetter understanding of the past, a better analysis of the present, and abetter view of the future. "

I believe we are in agreement that the humanities illuminate the valuesunderlying important personal, social, and national questions raised in oursociety by its multiple links to and increasing dependence on technology, and by the diverse heritage of our many regions and ethnic groups. Thehumanities cast light on the broad issue of the role in a society of menand women of imagination and energy--those individuals who through theirown example define "the spirit of the age, " and in so doing move nations. Our Government's support for the humanities, within the framework laid downby the Congress, is a recognition of their essential nourishment of thelife of the mind and vital enrichment of our national life. 

I will be proposing an increase in funding this year sufficient to enablethe Endowment to maintain the same level of support offered our citizens inFiscal Year 1981. 

In the allocation of this funding, special emphasis will be given to:

--Humanities education in the nation's schools, in response to the greatneeds that have arisen in this area;

--Scholarly research designed to increase our understanding of thecultures, traditions, and historical forces at work in other nations and inour own;

--Drawing attention to the physical disintegration of the raw material ofour cultural heritage--books, manuscripts, periodicals, and otherdocuments--and to the development of techniques to prevent the destructionand to preserve those materials; and

--The dissemination of quality programming in the humanities toincreasingly large American audiences through the use of radio andtelevision. 

The dominant effort in the Endowment's expenditures will be a commitment tostrengthen and promulgate scholarly excellence and achievement in work inthe humanities in our schools, colleges, universities, libraries, museumsand other cultural institutions, as well as in the work of individualscholars or collaborative groups engaged in advanced research in thehumanities. 

In making its grants the Endowment will increase its emphasis on techniqueswhich stimulate support for the humanities from non-Federal sources, inorder to reinforce our tradition of private philanthropy in this field, andto insure and expand the financial viability of our cultural institutionsand life. 

INSULAR AREAS

I have been firmly committed to self-determination for Puerto Rico, theVirgin Islands, Guam, American Samoa and the Northern Mariana Islands, andhave vigorously supported the realization of whatever political statusaspirations are democratically chosen by their peoples. This principle wasthe keystone of the comprehensive territorial policy I sent the Congresslast year. I am pleased that most of the legislative elements of thatpolicy were endorsed by the 96th Congress. 

The unique cultures, fragile economies, and locations of our Caribbean andPacific Islands are distinct assets to the United States which require thesensitive application of policy. The United States Government should pursueinitiatives begun by my Administration and the Congress to stimulateinsular economic development; enhance treatment under Federal programseliminating current inequities; provide vitally needed special assistanceand coordinate and rationalize policies. These measures will result ingreater self-sufficiency and balanced growth. In particular, I hope thatthe new Congress will support funding for fiscal management, comprehensiveplanning and other technical assistance for the territories, as well ascreate the commission I have proposed to review the applicability of allFederal laws to the insular areas and make recommendations for appropriatemodification. 

IV. REMOVING GOVERNMENTAL WASTE AND INEFFICIENCY

One of my major commitments has been to restore public faith in our Federalgovernment by cutting out waste and inefficiency. In the past four years, we have made dramatic advances toward this goal, many of them previouslyconsidered impossible to achieve. Where government rules and operationswere unnecessary, they have been eliminated, as with airline, rail, trucking and financial deregulation. Where government functions are needed, they have been streamlined, through such landmark measures as the CivilService Reform Act of 1978. I hope that the new administration and theCongress will keep up the momentum we have established for effective andresponsible change in this area of crucial public concern. 

CIVIL SERVICE REFORM

In March 1978, I submitted the Civil Service Reform Act to Congress. Icalled it the centerpiece of my efforts to reform and reorganize thegovernment. With bipartisan support from Congress, the bill passed, and Iam pleased to say that implementation is running well ahead of thestatutory schedule. Throughout the service, we are putting into place themeans to assure that reward and retention are based on performance and notsimply on length of time on the job. In the first real test of the ReformAct, 98 percent of the eligible top-level managers joined the SeniorExecutive Service, choosing to relinquish job protections for the challengeand potential reward of this new corps of top executives. Though the Actdoes not require several of its key elements to be in operation for anotheryear, some Federal agencies already have established merit pay systems forGS-13-15 managers, and most agencies are well on their way to establishingnew performance standards for all their employees. All have paid out, orare now in the process of paying out, performance bonuses earned byoutstanding members of the Senior Executive Service. Dismissals haveincreased by 10 percent, and dismissals specifically for inadequate jobperformance have risen 1500 percent, since the Act was adopted. Finally, wehave established a fully independent Merit Systems Protection Board andSpecial Counsel to protect the rights of whistle-blowers and other Federalemployees faced with threats to their rights. 

In 1981, civil service reform faces critical challenges, all agencies musthave fully functioning performance appraisal systems for all employees, andmerit pay systems for compensating the government's 130, 000 GS-13-15managers. Performance bonuses for members of the Senior Executive Servicewill surely receive scrutiny. If this attention is balanced andconstructive, it can only enhance the chances for ultimate success of ourbipartisan commitment to the revolutionary and crucial "pay forperformance" concept. 

REGULATORY REFORM

During the past four years we have made tremendous progress in regulatoryreform. We have discarded old economic regulations that preventedcompetition and raised consumer costs, and we have imposed strongmanagement principles on the regulatory programs the country needs, cuttingpaperwork and other wasteful burdens. The challenge for the future is tocontinue the progress in both areas without crippling vital health andsafety programs. 

Our economic deregulation program has achieved major successes in fiveareas:

Airlines: The Airline Deregulation Act is generating healthy competition, saving billions in fares, and making the airlines more efficient. The Actprovides that in 1985 the CAB itself will go out of existence. 

Trucking: The trucking deregulation bill opens the industry to competitionand allows truckers wide latitude on the routes they drive and the goodsthey haul. The bill also phases out most of the old law's immunity forsetting rates. The Congressional Budget Office estimates these reforms willsave as much as $8 billion per year and cut as much as half a percentagepoint from the inflation rate. 

Railroads: Overregulation has stifled railroad management initiative, service, and competitive pricing. The new legislation gives the railroadsthe freedom they need to rebuild a strong, efficient railroad industry. 

Financial Institutions: With the help of the Congress, over the past fouryears we have achieved two major pieces of financial reform legislation, legislation which has provided the basis for the most far-reaching changesin the financial services industry since the 1930's. The InternationalBanking Act of 1978 was designed to reduce the advantages that foreignbanks operating in the United States possessed in comparison to domesticbanks. The Depository Institutions Deregulation and Monetary Control Act, adopted last March, provides for the phased elimination of a variety ofanti-competitive barriers to financial institutions and freedom to offerservices to and attract the savings of consumers, especially small savers. 

Recently, I submitted to the Congress my Administration's recommendationsfor the phased liberalization of restrictions on geographic expansion bycommercial banks. Last year the Administration and financial regulatoryagencies proposed legislation to permit the interstate acquisition offailing depository institutions. In view of the difficult outlook for somedepository institutions I strongly urge the Congress to take promptfavorable action on the failing bank legislation. 

Telecommunications: While Congress did not pass legislation in this area, the Federal Communications Commission has taken dramatic action to open allaspects of communications to competition and to eliminate regulations inthe areas where competition made them obsolete. The public is benefittingfrom an explosion of competition and new services. 

While these initiatives represent dramatic progress in economicderegulation, continued work is needed. I urge Congress to act oncommunications legislation and to consider other proposed deregulationmeasures, such as legislation on the bus industry. In addition, theregulatory commissions must maintain their commitment to competition as thebest regulator of all. 

The other part of my reform program covers the regulations that are neededto protect the health, safety, and welfare of our citizens. For theseregulations, my Administration has created a management program to cutcosts without sacrificing goals. Under my Executive Order 12044, werequired agencies to analyze the costs of their major new rules andconsider alternative approaches, such as performance standards andvoluntary codes, that may make rules less costly and more flexible. Wecreated the Regulatory Analysis Review Group in the White House to analyzethe most costly proposed new rules and find ways to improve them. TheRegulatory Council was established to provide the first Government-widelisting of upcoming rules and eliminate overlapping and conflictingregulations. Agencies have launched "sunset" programs to weed out outmodedold regulations. We have acted to encourage public participation inregulatory decision-making. 

These steps have already saved billions of dollars in regulatory costs andslashed thousands of outmoded regulations. We are moving steadily toward aregulatory system that provides needed protections fairly, predictably, andat minimum cost. 

I urge Congress to continue on this steady path and resist the simplisticsolutions that have been proposed as alternatives. Proposals likelegislative veto and increased judicial review will add another layer tothe regulatory process, making it more cumbersome and inefficient. Theright approach to reform is to improve the individual statutes, where theyneed change, and to ensure that the regulatory agencies implement thosestatutes sensibly. 

PAPERWORK REDUCTION

The Federal Government imposes a huge paperwork burden on business, localgovernment, and the private sector. Many of these forms are needed forvital government functions, but others are duplicative, overly complex orobsolete. 

During my Administration we cut the paperwork burden by 15 percent, and wecreated procedures to continue this progress. The new Paperwork ReductionAct centralizes, in OMB, oversight of all agencies' informationrequirements and strengthens OMB's authority to eliminate needless forms. The "paperwork budget" process, which I established by executive order, applies the discipline of the budget process to the hours of reporting timeimposed on the public, forcing agencies to scrutinize all their forms eachyear. With effective implementation, these steps should allow further, substantial paperwork cuts in the years ahead. 

TIGHTENING STANDARDS FOR GOVERNMENTAL EFFICIENCY AND INTEGRITY

To develop a foundation to carry out energy policy, we consolidatedscattered energy programs and launched the Synthetic Fuels Corporation; togive education the priority it deserves and at the same time reduce HHS tomore manageable size, I gave education a seat at the Cabinet table, tocreate a stronger system for attacking waste and fraud, I reorganized auditand investigative functions by putting an Inspector General in majoragencies. Since I took office, we have submitted 14 reorganizationinitiatives and had them all approved by Congress. We have saved hundredsof millions of dollars through the adoption of businesslike cash managementprinciples and set strict standards for personal financial disclosure andconflict of interest avoidance by high Federal officials. 

To streamline the structure of the government, we have secured approval of14 reorganization initiatives, improving the efficiency of the mostimportant sectors of the government, including energy, education, and civilrights enforcement. We have eliminated more than 300 advisory committees aswell as other agencies, boards and commissions which were obsolete orineffective. Independent Inspectors General have been appointed in majoragencies to attack fraud and waste. More than a billion dollars ofquestionable transactions have been identified through their auditactivities. 

The adoption of business-like cash management and debt collectioninitiatives will save over $1 billion, by streamlining the processing ofreceipts, by controlling disbursements more carefully, and by reducing idlecash balances. Finally this Administration has set strict standards forpersonal financial disclosure and conflict of interest avoidance by highFederal officials, to elevate the level of public trust in the government. 

V. PROTECTING BASIC RIGHTS AND LIBERTIES

I am extremely proud of the advances we have made in ensuring equality andprotecting the basic freedoms of all Americans. 

--The Equal Employment Opportunity Commission (EEOC) and the Office ofFederal Contract Compliance (OFCCP) have been reorganized and strengthenedand a permanent civil rights unit has been established in OMB. 

--To avoid fragmented, inconsistent and duplicative enforcement of civilrights laws, three agencies have been given coordinative andstandard-setting responsibilities in discrete areas: EEOC for allemployment-related activities, HUD for all those relating to housing, andthe Department of Justice for all other areas. 

--With the enactment of the Right to Financial Privacy Act and a billlimiting police search of newsrooms, we have begun to establish a sound, comprehensive, privacy program. 

Ratification of the Equal Rights Amendment must be aggressively pursued. Only one year remains in which to obtain ratification by three additionalstates. 

The Congress must give early attention to a number of important bills whichremain. These bills would:

--strengthen the laws against discrimination in housing. Until it isenacted, the 1968 Civil Rights Act's promise of equal access to housingwill remain unfulfilled;

--establish a charter for the FBI and the intelligence agencies. Thefailure to define in law the duties and responsibilities of these agencieshas made possible some of the abuses which have occurred in recent years;

--establish privacy safeguards for medical research, bank, insurance, andcredit records; and provide special protection for election fund transfersystems. 

EQUAL RIGHTS AMENDMENT

I remain committed as strongly as possible to the ratification of the EqualRights Amendment. 

As a result of our efforts in 1978, the Equal Rights Amendment's deadlinefor ratification was extended for three years. We have now one year andthree States left. We cannot afford any delay in marshalling our resourcesand efforts to obtain the ratification of those three additional States. 

Although the Congress has no official role in the ratification process atthis point, you do have the ability to affect public opinion and thesupport of State Legislators for the Amendment. I urge Members from Stateswhich have not yet ratified the Equal Rights Amendment to use theirinfluence to secure ratification. I will continue my own efforts to helpensure ratification of the Equal Rights Amendment. 

MARTIN LUTHER KING, JR. 

Dr. Martin Luther King, Jr. Led this Nation's effort to provide all itscitizens with civil rights and equal opportunities. His commitment to humanrights, peace and non-violence stands as a monument to his humanity andcourage. As one of our Nation's most outstanding leaders, it is appropriatethat his birthday be commemorated as a national holiday. I hope theCongress will enact legislation this year that will achieve this goal. 

FAIR HOUSING

The Fair Housing Act Amendments of 1980 passed the House of Representativesby an overwhelming bipartisan majority only to die in the Senate at theclose of the 96th Congress. The leaders of both parties have pledged tomake the enactment of fair housing legislation a top priority of theincoming Congress. The need is pressing and a strengthened federalenforcement effort must be the primary method of resolution. 

CRIMINAL CODE

The Federal criminal laws are often archaic, frequently contradictory andimprecise, and clearly in need of revision and codification. The newAdministration should continue the work which has been begun to develop aFederal criminal code which simplifies and clarifies our criminal laws, while maintaining our basic civil liberties and protections. 

PRIVACY

As our public and private institutions collect more and more informationand as communications and computer technologies advance, we must act toprotect the personal privacy of our citizens. 

In the past four years we acted on the report of the Privacy Commission andestablished a national privacy policy. We worked with Congress to passlegislation restricting wiretaps and law enforcement access to bank recordsand to reporters' files. We reduced the number of personal files held bythe government and restricted the transfer of personal information amongFederal agencies. We also worked with the Organization for EconomicCooperation and Development to establish international guidelines toprotect the privacy of personal information that is transferred acrossborders. 

VI. PROTECTING AND DEVELOPING OUR NATURAL RESOURCES

Two of our Nation's most precious natural resources are our environment andour vast agricultural capacity. From the beginning of my Administration, Ihave worked with the Congress to enhance and protect, as well as developour natural resources. In the environmental areas, I have been especiallyconcerned about the importance of balancing the need for resourcedevelopment with preserving a clean environment, and have taken numerousactions to foster this goal. In the agricultural area, I have taken thesteps needed to improve farm incomes and to increase our agriculturalproduction to record levels. That progress must be continued in the 1980's. 

ENVIRONMENT

Preserving the quality of our environment has been among the most importantobjectives of my Administration and of the Congress. As a result of theseshared commitments and the dedicated efforts of many members of theCongress and my Administration, we have achieved several historicaccomplishments. 

PROTECTION OF ALASKA LANDS

Passage of the Alaska National Interest Lands Conservation Act was one ofthe most important conservation actions of this century. At stake was thefate of millions of acres of beautiful land, outstanding and uniquewildlife populations, native cultures, and the opportunity to ensure thatfuture generations of Americans would be able to enjoy the benefits ofthese nationally significant resources. As a result of the leadership, commitment, and persistence of my Administration and the Congressionalleadership, the Alaska Lands Bill was signed into law last December. 

The Act adds 97 million acres of new parks and refuges, more than doublingthe size of our National Park and National Wildlife Refuge Systems. Thebill triples the size of our national wilderness system, increasing itssize by 56 million acres. And by adding 25 free-flowing river segments tothe Wild and Scenic River System, the bill almost doubles the river mileagein that system. The Alaska Lands Act reaffirms our commitment to theenvironment and strikes a balance between protecting areas of great beautyand allowing development of Alaska's oil, gas, mineral, and timberresources. 

PROTECTION OF NATURAL RESOURCES

In addition to the Alaska Lands Act, over the past four years we have beenable to expand significantly the national wilderness and parks systems. In1978, the Congress passed the historical Omnibus Parks Act, which made 12additions to the National Park System. The Act also established the firsttwo national trails since the National Trails System Act was passed in1968. Then, in 1980, as a result of my 1979 Environmental Message, theFederal land management agencies have established almost 300 new NationalRecreational Trails. With the completion of the RARE II process, whicheliminated the uncertainty surrounding the status of millions of acres ofland, we called for over 15 million acres of new wilderness in the nation'sNational Forest, in 1980 the Congress established about 4. 5 million acresof wilderness in the lower 48 states. In addition, the Administrationrecommended legislation to protect Lake Tahoe, and through an ExecutiveOrder has already established a mechanism to help ensure the Lake'sprotection. Finally, in 1980 the Administration established the ChannelIslands Marine Sanctuary. 

Administration actions over the past four years stressed the importance ofproviding Federal support only for water resource projects that areeconomically and environmentally sound. This policy should have a major andlasting influence on the federal government's role in water resourcedevelopment and management. The Administration's actions to recommend tothe Congress only economically and environmentally sound water resourceprojects for funding resulted not only in our opposing uneconomic projectsbut also, in 1979, in the first Administration proposal of new projectstarts in 4 years. 

One of the most significant water policy actions of the past four years wasthe Administration's June 6, 1978 Water Policy Reform Message to theCongress. This Message established a new national water resources policywith the following objectives:

--to give priority emphasis to water conservation;

--to consider environmental requirements and values more fully and alongwith economic factors in the planning and management of water projects andprograms;

--to enhance cooperation between state and federal agencies in waterresources planning and management. 

In addition, the Executive Office of the President established 11 policydecision criteria to evaluate the proposed federal water projects, theWater Resources Council developed and adopted a new set of Principles andStandards for water projects which is binding on all federal constructionagencies, and improved regulations were developed to implement the NationalHistoric Preservation Act and the Fish and Wildlife Coordination Act. As aresult, water resource projects must be determined to be economically soundbefore the Administration will recommend authorization or appropriation. Over the years ahead, this policy will help to reduce wasteful federalspending by targeting federal funds to the highest priority water resourceprojects. 

In the pursuit of this policy, however, we cannot lose projects. In thepart that sound water resource projects play in providing irrigation, power, and flood control. We must also recognize the special needs ofparticular regions of the country in evaluating the need for additionalprojects. 

ADDRESSING GLOBAL RESOURCE AND ENVIRONMENTAL PROBLEMS

The Global 2000 Report to the President, prepared in response to my 1977Environment Message, is the first of its kind. Never before has ourgovernment, or any government, taken such a comprehensive, long-range lookat the interrelated global issues of resources, population, andenvironment. 

The Report's conclusions are important. They point to a rapid increase inpopulation and human needs through the year 2000 while at the same time adecline in the earth's capacity to meet those needs, unless nations of theworld act decisively to alter current trends. 

The United States has contributed actively to a series of U. N. Conferenceson the environment, population, and resources, and is preparing forthe 1981 Conference on New and Renewable Sources of Energy. Following my1977 Environmental Message, the Administration development assistanceprograms have added emphasis to natural resource management andenvironmental protection. My 1979 Environmental Message called attention tothe alarming loss of world forests, particularly in the tropics. Aninteragency task force on tropical forests has developed a U. S. Governmentprogram to encourage conservation and wise management of tropical forests. The Administration is encouraging action by other nations and worldorganizations to the same purpose. The United States is a world leader inwildlife conservation and the assessment of environmental effects ofgovernment actions. The January 5, 1979, Executive Order directing U. S. Government agencies to consider the effects of their major actions abroad, is another example of this leadership. 

COMMITMENT TO CONTROL OF POLLUTION AND HAZARDOUS CHEMICALS

Over the past four years, there has been steady progress towards cleanerair and water, sustained by the commitment of Congress and theAdministration to these important national objectives. In addition, theAdministration has developed several new pollution compliance approachessuch as alternative and innovative waste water treatment projects, the"bubble" concept, the "offset" policy, and permit consolidation, all ofwhich are designed to reduce regulatory burdens on the private sector. 

One of the most pressing problems to come to light in the past four yearshas been improper hazardous waste disposal. The Administration has moved onthree fronts. First, we proposed the Oil Hazardous Substances and HazardousWaste Response, Liability and Compensation Act (the Superfund bill) toprovide comprehensive authority and $1. 6 billion in funds to clean upabandoned hazardous waste disposal sites. In November 1980 the Congresspassed a Superfund bill which I signed into law. 

Second, the administration established a hazardous waste enforcement strikeforce to ensure that when available, responsible parties are required toclean up sites posing dangers to public health and to the environment. Todate, 50 lawsuits have been brought by the strike force. 

Third, regulations implementing subtitle C of the Resource Conservation andRecovery Act were issued. The regulations establish comprehensive controlsfor hazardous waste and, together with vigorous enforcement, will help toensure that Love Canal will not be repeated. 

THE FUTURE

For the future, we cannot, and we must not, forget that we are charged withthe stewardship of an irreplaceable environment and natural heritage. Ourchildren, and our children's children, are dependent upon our maintainingour commitment to preserving and enhancing the quality of our environment. It is my hope that when our descendants look back on the 1980's they willbe able to affirm:

--that we kept our commitment to the restoration of environmentalquality;

--that we protected the public health from the continuing dangers of toxicchemicals, from pollution, from hazardous and radioactive waste, and thatwe made our communities safer, healthier and better places to live;

--that we preserved America's wilderness areas and particularly its lastgreat frontier, Alaska, for the benefit of all Americans in perpetuity;

--that we put this nation on a path to a sustainable energy future, onebased increasingly on renewable resources and on energy conservation;

--that we moved to protect America's countryside and coastland frommismanagement and irresponsibility;

--that we redirected the management of the nation's water resources towardwater conservation, sound development and environmental protection;

--that we faced squarely such worldwide problems as the destruction offorests, acid rain, carbon dioxide build-up and nuclear proliferation; and

--that we protected the habitat and the existence of our own species onthis earth. 

AGRICULTURE THE FARM ECONOMY

The farm economy is sound and its future is bright. Agriculture remains amajor bulwark of the nation's economy and an even more important factor inthe world food system. The demand for America's agricultural abundance, here and abroad, continues to grow. In the near-term, the strength of thisdemand is expected to press hard against supplies, resulting in continuedprice strength. 

The health and vitality of current-day agriculture represents a significantdeparture from the situation that existed when I came to office four yearsago. In January 1977, the farm economy was in serious trouble. Farm pricesand farm income were falling rapidly. Grain prices were at their lowestlevels in years and steadily falling. Livestock producers, in their fourthstraight year of record losses, were liquidating breeding herds at anunparalleled rate. Dairy farmers were losing money on every hundredweightof milk they produced. Sugar prices were in a nosedive. 

Through a combination of improvements in old, established programs and theadoption of new approaches where innovation and change were needed, myAdministration turned this situation around. Commodity prices have steadilyrisen. Farm income turned upward. U. S. Farm exports set new records eachyear, increasing over 80 percent for the four year period. Livestockproducers began rebuilding their herds. Dairy farmers began to earn aprofit again. 

RECENT POLICY INITIATIVES

Several major agricultural policy initiatives have been undertaken over thepast year. Some are the culmination of policy proposals made earlier inthis Administration; others are measures taken to help farmers offset theimpact of rapid inflation in production costs. In combination, theyrepresent a significant strengthening of our nation's food and agriculturalpolicy. These initiatives include:

FOOD SECURITY RESERVE

The Congress authorized formation of a 4 million ton food grain reserve foruse in international food assistance. This reserve makes it possible forthe United States to stand behind its food aid commitment to food deficitnations, even during periods of short supplies and high prices. Thiscorrects a serious fault in our past food assistance policy. 

COMPREHENSIVE CROP INSURANCE

The Congress also authorized a significant new crop insurance programduring 1980. This measure provides farmers with an important new programtool for sharing the economic risks that are inherent to agriculture. Whenfully operational, it will replace a hodgepodge of disaster programs thatsuffered from numerous shortcomings. 

SPECIAL LOAN RATES

Another legislative measure passed late in the 2nd session of the 96thCongress authorizes the Secretary of Agriculture to provide higher loanrates to farmers who enter their grain in the farmer-owned grain reserve. This additional incentive to participate will further strengthen thereserve. 

INCREASED LOAN PRICES

In July 1980, I administratively raised loan prices for wheat, feedgrains, and soybeans to help offset the effects of a serious cost-price squeeze. Atthe same time, the release and call prices for the grain reserve wereadjusted upward. 

HIGHER TARGET PRICES

The Agricultural Adjustment Act of 1980 raised the target prices for1980-crop wheat and feed grain crops. This change corrected forshortcomings in the adjustment formula contained in the Food andAgriculture Act of 1977. 

FUTURE AGENDA

The food and agricultural policies adopted by this Administration over thepast four years, including those described above, will provide a firmfoundation for future governmental actions in this field. Expiration of theFood and Agriculture Act of 1977 later this year will require earlyattention by the Congress. With relatively minor changes, most of theauthorities contained in the 1977 Act should be extended in their presentform. The farmer-owned grain reserve has proven to be a particularlyeffective means of stabilizing grain markets and should be preserved inessentially its present form. 

Beyond this, it will be important for the Congress to keep a close eye onprice-cost developments in the farm sector. As noted above, some of theactions I took last year were for the purpose of providing relief from thecost-price squeeze facing farmers. Should these pressures continue, furtheractions might be required. 

My Administration has devoted particular attention to the issues of worldhunger, agricultural land use, and the future structure of Americanagriculture. I encourage the Congress and the next Administration to reviewthe results of these landmark enquiries and, where deemed appropriate, toact on their recommendations. 

Following a careful review of the situation, I recently extended thesuspension of grain sales to the Soviet Union. I am satisfied that thisaction has served its purpose effectively and fairly. However, as long asthis suspension must remain in effect, it will be important for the nextAdministration and the Congress to take whatever actions are necessary toensure that the burden does not fall unfairly on our Nation's farmers. Thishas been a key feature of my Administration's policy, and it should bemaintained. 

VII. FOREIGN POLICY

From the time I assumed office four years ago this month, I have stressedthe need for this country to assert a leading role in a world undergoingthe 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 militarypower, power that has grown faster than our own over the past two decades. 

--the overwhelming dependence of Western nations, which now increasinglyincludes the United States, on vital oil supplies from the Middle East. 

--the pressures of change in many nations of the developing world, in Iranand uncertainty about the future stability of many developing countries. 

As a result of those fundamental facts, we face some of the most seriouschallenges in the history of this nation. The Soviet invasion ofAfghanistan is a threat to global peace, to East-West relations, and toregional stable flow of oil. As the unprecedented relations, an andoverwhelming vote in the General Assembly demonstrated, countries acrossthe world, and particularly the nonaligned, regard the Soviet invasion as athreat to their independence and security. Turmoil within the regionadjacent to the Persian Gulf poses risks for the security and prosperity ofevery oil importing nation and thus for the entire global economy. Thecontinuing holding of American hostages in Iran is both an affront tocivilized people everywhere, and a serious impediment to meeting theself-evident threat to widely-shared common interests, including those ofIran. 

But as we focus our most urgent efforts on pressing problems, we willcontinue to pursue the benefits that only change can bring. For it alwayshas been the essence of America that we want to move on, we understand thatprosperity, progress and most of all peace cannot be had by standing still. A world of nations striving to preserve their independence, and of peoplesaspiring for economic development and political freedom, is not a worldhostile to the ideals and interests of the United States. We face powerfuladversaries, but we have strong friends and dependable allies. We havecommon interests with the vast majority of the world's nations andpeoples. 

There have been encouraging developments in recent years, as well asmatters requiring continued vigilance and concern:

--Our alliances with the world's most advanced and democratic states fromWestern Europe through Japan are stronger than ever. 

--We have helped to bring about a dramatic improvement in relationsbetween Egypt and Israel and an historic step towards a comprehensiveArab-Israeli settlement. 

--Our relations with China are growing closer, providing a major newdimension in our policy in Asia and the world. 

--Across southern Africa from Rhodesia to Namibia we are helping with thepeaceful transition to majority rule in a context of respect for minorityas well as majority rights. 

--We have worked domestically and with our allies to respond to anuncertain energy situation by conservation and diversification of energysupplies based on internationally agreed targets. 

--We have unambiguously demonstrated our commitment to defend Westerninterests in Southwest Asia, and we have significantly increased ourability to do so. 

--And over the past four years the U. S. Has developed an energy programwhich is comprehensive and ambitious. New institutions have beenestablished such as the Synthetic Fuels Corporation and Solar Bank. Pricedecontrol for oil and gas is proceeding. American consumers have risen tothe challenge, and we have experienced real improvements in consumptionpatterns. 

The central challenge for us today is to our steadfastedness of purpose. Weare no longer tempted by isolationism. But we must also learn to dealeffectively with the contradictions of the world, the need to cooperatewith potential adversaries without euphoria, without undermining ourdetermination to compete with such adversaries and if necessary confrontthe threats they may pose to our security. 

We face a broad range of threats and opportunities. We have and shouldcontinue to pursue a broad range of defense, diplomatic and economiccapabilities and objectives. 

I see six basic goals for America in the world over the 1980's:

--First, we will continue, as we have over the past four years, to buildAmerica's military strength and that of our allies and friends. Neither theSoviet Union nor any other nation will have reason to question our will tosustain 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 peacefulmeans and to make any aggressor pay a heavy price. 

--Third, we will strive to resolve pressing international economicproblems, particularly energy and inflation, and continue to pursue ourstill larger objective of global economic growth through expanded trade anddevelopment assistance and through the preservation of an open multilateraltrading system. 

--Fourth, we will continue vigorously to support the process of buildingdemocratic institutions and improving human rights protection around theworld. We are deeply convinced that the future lies not with dictatorshipbut democracy. 

--Fifth, we remain deeply committed to the process of mutual andverifiable arms control, particularly to the effort to prevent the spreadand further development of nuclear weapons. Our decision to defer, but notabandon our efforts to secure ratification of the SALT II Treaty reflectsour firm conviction that the United States has a profound nationalsecurity interest in the constraints on Soviet nuclear forces which onlythat treaty can provide. 

--Sixth, we must continue to look ahead in order to evaluate and respondto resource, environment and population challenges through the end of thiscentury. 

One very immediate and pressing objective that is uppermost on our mindsand 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 peopleof Iran. The threat to them comes not from American policy but from Sovietactions in the region. We are prepared to work with the government of Iranto develop a new and mutually beneficial relationship. 

But that will not be possible so long as Iran continues to hold Americanshostages, in defiance of the world community and civilized behavior. Theymust be released unharmed. We have thus far pursued a measured program ofpeaceful diplomatic and economic steps in an attempt to resolve this issuewithout resorting to other remedies available to us under internationallaw. This reflects the deep respect of our nation for the rule of law andfor the safety of our people being held, and our belief that a great powerbears a responsibility to use its strength in a measured and judiciousmanner. But our patience is not unlimited and our concern for thewell-being of our fellow citizens grows each day. 

ENHANCING NATIONAL SECURITY, AMERICAN MILITARY STRENGTH

The maintenance of national security is my first concern, as it has beenfor every president before me. 

We must have both the military power and the political will to deter ouradversaries and to support our friends and allies. 

We must pay whatever price is required to remain the strongest nation inthe world. That price has increased as the military power of our majoradversary has grown and its readiness to use that power been made all tooevident in Afghanistan. The real increases in defense spending, thereforeprobably will be higher than previously projected; protecting our securitymay require a larger share of our national wealth in the future. 

THE U. S. -SOVIET RELATIONSHIP

We are demonstrating to the Soviet Union across a broad front that it willpay a heavy price for its aggression in terms of our relationship. Throughout the last decades U. S. -Soviet relations have been a mixture ofcooperation and competition. The Soviet invasion of Afghanistan and theimposition of a puppet government have highlighted in the starkest termsthe darker side of their policies, going well beyond competition and thelegitimate pursuit of national interest, and violating all norms ofinternational law and practice. 

This attempt to subjugate an independent, non-aligned Islamic people is acallous violation of international law and the United Nations Charter, twofundamentals of international order. Hence, it is also a dangerous threatto world peace. For the first time since the communization of EasternEurope after World War II, the Soviets have sent combat forces into an areathat was not previously under their control, into a non-aligned andsovereign state. 

The destruction of the independence of the Afghanistan government and theoccupation by the Soviet Union have altered the strategic situation in thatpart of the world in a very ominous fashion. It has significantly shortenedthe striking distance to the Indian Ocean and the Persian Gulf for theSoviet Union. 

It has also eliminated a buffer between the Soviet Union and Pakistan andpresented a new threat to Iran. These two countries are now far morevulnerable to Soviet political intimidation. If that intimidation were toprove effective, the Soviet Union could control an area of vital strategicand economic significance to the survival of Western Europe, the Far East, and ultimately the United States. 

It has now been over a year since the Soviet invasion of Afghanistan dealta major blow to U. S. -Soviet relations and the entire international system. The U. S. Response has proven to be serious and far-reaching. It has beenincreasingly effective, imposing real and sustained costs on the U. S. S. R. 'seconomy and international image. 

Meanwhile, we have encouraged and supported efforts to reach a politicalsettlement in Afghanistan which would lead to a withdrawal of Soviet forcesfrom that country and meet the interests of all concerned. It is Sovietintransigence that has kept those efforts from bearing fruit. 

Meanwhile, an overwhelming November resolution of the United NationsGeneral Assembly on Afghanistan has again made clear that the world has notand will not forget Afghanistan. And our response continues to make itclear that Soviet use of force in pursuit of its international objectivesis incompatible with the notion of business-as-usual. 

BILATERAL COMMUNICATION

U. S. -Soviet relations remain strained by the continued Soviet presence inAfghanistan, by growing Soviet military capabilities, and by the Soviets'apparent willingness to use those capabilities without respect for the mostbasic norms of international behavior. 

But the U. S. -Soviet relationship remains the single most important elementin determining whether there will be war or peace. And so, despite seriousstrains in our relations, we have maintained a dialogue with the SovietUnion over the past year. Through this dialogue, we have ensured againstbilateral misunderstandings and miscalculations which might escalate out ofcontrol, and have managed to avoid the injection of superpower rivalriesinto areas of tension like the Iran-Iraq conflict. 

POLAND

Now, as was the case a year ago, the prospect of Soviet use of forcethreatens the international order. The Soviet Union has completedpreparations for a possible military intervention against Poland. Althoughthe situation in Poland has shown signs of stabilizing recently, Sovietforces remain in a high state of readiness and they could move into Polandon short notice. We continue to believe that the Polish people should beallowed to work out their internal problems themselves, without outsideinterference, and we have made clear to the Soviet leadership that anyintervention in Poland would have severe and prolonged consequences forEast-West detente, and U. S. -Soviet relations in particular. 

DEFENSE BUDGET

For many years the Soviets have steadily increased their real defensespending, expanded their strategic forces, strengthened their forces inEurope and Asia, and enhanced their capability for projecting militaryforce around the world directly or through the use of proxies. Afghanistandramatizes the vastly increased military power of the Soviet Union. 

The Soviet Union has built a war machine far beyond any reasonablerequirements for their own defense and security. In contrast, our owndefense spending declined in real terms every year from 1968 through 1976. 

We have reversed this decline in our own effort. Every year since 1976there has been a real increase in our defense spending, and our lead hasencouraged increases by our allies. With the support of the Congress, wemust and will make an even greater effort in the years ahead. 

The Fiscal Year 1982 budget would increase funding authority for defense tomore than $196 billion. This amount, together with a supplemental requestfor FY 1981 of about $6 billion, will more than meet my Administration'spledge for a sustained growth of 3 percent in real expenditures, andprovides for 5 percent in program growth in FY 1982 and beyond. 

The trends we mean to correct cannot be remedied overnight; we must bewilling to see this program through. To ensure that we do so I am setting agrowth rate for defense that we can sustain over the long haul. 

The defense program I have proposed for the next five years will requiresome sacrifice, but sacrifice we can well afford. 

The defense program emphasizes four areas:

1. It ensures that our strategic nuclear forces will be equivalent to thoseof the Soviet Union and that deterrence against nuclear war will bemaintained; 2. It upgrades our forces so that the military balance betweenNATO and the Warsaw Pact will continue to deter the outbreak of war, conventional or nuclear, in Europe; 3. It provides us the ability to comequickly to the aid of friends and allies around the globe; 4. And it ensuresthat 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. Thecruise missile production which will begin next year will modernize ourstrategic air deterrent. B-52 capabilities will also be improved. Thesesteps will maintain and enhance the B-52 fleet by improving its ability todeliver weapons against increasingly heavily defended targets. 

We are also modernizing our strategic submarine force. Four more POSEIDONsubmarines backfitted with new, 4, 000 mile TRIDENT I missiles begandeployments in 1980. Nine TRIDENT submarines have been authorized through1981, and we propose one more each year. 

The new M-X missile program to enhance our land-based intercontinentalballistic missile force continues to make progress. Technical refinementsin the basing design over the last year will result in operationalbenefits, lower costs, and reduced environmental impact. The M-X programcontinues to be an essential ingredient in our strategic posture, providingsurvivability, endurance, secure command and control and the capability tothreaten targets the Soviets hold dear. 

Our new systems will enable U. S. Strategic forces to maintain equivalencein the face of the mounting Soviet challenge. We would however need an evengreater investment in strategic systems to meet the likely Soviet buildupwithout SALT. 

STRATEGIC DOCTRINE

This Administration's systematic contributions to the necessary evolutionof strategic doctrine began in 1977 when I commissioned a comprehensive netassessment. From that base a number of thorough investigations of specifictopics continued. I should emphasize that the need for an evolutionarydoctrine is driven not by any change in our basic objective, which remainspeace and freedom for all mankind. Rather, the need for change is driven bythe inexorable buildup of Soviet military power and the increasingpropensity of Soviet leaders to use this power in coercion and outrightaggression to impose their will on others. 

I have codified our evolving strategic doctrine in a number of interrelatedand mutually supporting Presidential Directives. Their overarching theme isto provide a doctrinal basis, and the specific program to implement it, that tells the world that no potential adversary of the United States couldever conclude that the fruits of his aggression would be significant orworth the enormous costs of our retaliation. 

The Presidential Directives include:

PD-18: An overview of our strategic objectives PD-37: Basic space policyPD-41: Civil Defense PD-53: Survivability and endurance fortelecommunications PD-57: Mobilization planning PD-58: Continuity ofGovernment PD-59: Countervailing Strategy for General War. 

These policies have been devised to deter, first and foremost, Sovietaggression. As such they confront not only Soviet military forces but alsoSoviet military doctrine. By definition deterrence requires that we shapeSoviet assessments about the risks of war, assessments they will make usingtheir doctrine, not ours. 

But at the same time we in no way seek to emulate their doctrine. Inparticular, nothing in our policy contemplates that nuclear warfare couldever be a deliberate instrument for achieving our own goals of peace andfreedom. Moreover, our policies are carefully devised to provide thegreatest possible incentives and opportunities for future progress in armscontrol. 

Finally, our doctrinal evolution has been undertaken with appropriateconsultation with our NATO Allies and others. We are fully consistent withNATO's strategy of flexible response. 

FORCES FOR NATO

We are greatly accelerating our ability to reinforce Western Europe withmassive ground and air forces in a crisis. We are undertaking a majormodernization program for the Army's weapons and equipment, adding armor, firepower, and tactical mobility. 

We are prepositioning more heavy equipment in Europe to help us cope withattacks with little warning, and greatly strengthening our airlift andsealift capabilities. 

We are also improving our tactical air forces, buying about 1700 newfighter and attack aircraft over the next five years, and increasing thenumber of Air Force fighter wings by over 10 percent. 

We are working closely with our European allies to secure the Host NationSupport necessary to enable us to deploy more quickly a greater ratio ofcombat forces to the European theater at a lower cost to the UnitedStates. 

SECURITY ASSISTANCE

As we move to enhance U. S. Defense capabilities, we must not lose sight ofthe need to assist others in maintaining their own security andindependence. Events since World War II, most recently in Southwest Asia, have amply demonstrated that U. S. Security cannot exist in a vacuum, andthat our own prospects for peace are closely tied to those of our friends. The security assistance programs which I am proposing for the coming fiscalyear thus directly promote vital U. S. Foreign policy and national securityaims, and are integral parts of our efforts to improve and upgrade our ownmilitary forces. 

More specifically, these programs, which are part of our overall foreignaid request, promote U. S. Security in two principal ways. First, theyassist friendly and allied nations to develop the capability to defendthemselves and maintain their own independence. An example during this pastyear was the timely support provided Thailand to help bolster thatcountry's defenses against the large numbers of Soviet-backed Vietnamesetroops ranged along its eastern frontier. In addition, over the years theseprograms have been important to the continued independence of other friendsand allies such as Israel, Greece, Turkey and Korea. Second, securityassistance constitutes an essential element in the broad cooperativerelationships we have established with many nations which permit eitherU. S. Bases on their territory or access by U. S. Forces to their facilities. These programs have been particularly important with regard to therecently-concluded access agreements with various countries in the PersianGulf and Indian Ocean regions and have been crucial to the protection ofour interests throughout Southwest Asia. 

RAPID DEPLOYMENT FORCES

We are systematically enhancing our ability to respond rapidly to non-NATOcontingencies wherever required by our commitments or when our vitalinterests are threatened. 

The rapid deployment forces we are assembling will be extraordinarilyflexible: They could range in size from a few ships or air squadrons toformations as large as 100, 000 men, together with their support. Our forceswill be prepared for rapid deployment to any region of strategicsignificance. 

Among the specific initiatives we are taking to help us respond to crisesoutside of Europe are:

The development of a new fleet of large cargo aircraft withintercontinental range; the design and procurement of a force of MaritimePrepositioning Ships that will carry heavy equipment and supplies for threeMarine Corps brigades; the procurement of fast sealift ships to move largequantities of men and material quickly from the U. S. To overseas areas ofdeployment; increasing training and exercise activities to ensure that ourforces will be well prepared to deploy and operate in distant areas. 

In addition, our European allies have agreed on the importance of providingsupport to U. S. Deployments to Southwest Asia. 

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 1990's and wewill continue to build the most capable ships afloat. 

The program I have proposed will assure the ability of our Navy to operatein high threat areas, to maintain control of the seas and protect vitallines of communication, both military and economic and to provide thestrong maritime component of our rapid deployment forces. This is essentialfor operations in remote areas of the world, where we cannot predict far inadvance the precise location of trouble, or preposition equipment on land. 

MILITARY PERSONNEL

No matter how capable or advanced our weapons systems, our militarysecurity depends on the abilities, the training and the dedication of thepeople who serve in our armed forces. I am determined to recruit and toretain under any foreseeable circumstances an ample level of such skilledand experienced military personnel. This Administration has supported forFY 1981 the largest peacetime increase ever in military pay andallowances. 

We have enhanced our readiness and combat endurance by improving theReserve Components. All reservists are assigned to units structured tocomplement and provide needed depth to our active forces. Some reservepersonnel have also now been equipped with new equipment. 

MOBILIZATION PLANNING

We have completed our first phase of mobilization planning, the first suchPresidentially-directed effort since World War II. The government-wideexercise of our mobilization plans at the end of 1980 showed, first, thatplanning pays off and, second, that much more needs to be done. 

OUR INTELLIGENCE POSTURE

Our national interests are critically dependent on a strong and effectiveintelligence capability. We will maintain and strengthen the intelligencecapabilities needed to assure our national security. Maintenance of andcontinued improvements in our multi-faceted intelligence effort areessential if we are to cope successfully with the turbulence anduncertainties of today's world. 

The intelligence budget I have submitted to the Congress responds to ourneeds in a responsible way, providing for significant growth over theFiscal Year 1981 budget. This growth will enable us to develop newtechnical means of intelligence collection while also assuring that themore traditional methods of intelligence work are also given proper stress. We must continue to integrate both modes of collection in our analyses. 

REGIONAL POLICIES

Every President for over three decades has recognized that America'sinterests are global and that we must pursue a global foreign policy. 

Two world wars have made clear our stake in Western Europe and the NorthAtlantic area. We are also inextricably linked with the Far East, politically, economically, and militarily. In both of these, the UnitedStates has a permanent presence and security commitments which would beautomatically triggered. We have become increasingly conscious of ourgrowing interests in a third area, the Middle East and the Persian Gulfarea. 

We have vital stakes in other major regions of the world as well. We havelong recognized that in an era of interdependence, our own security andprosperity depend upon a larger common effort with friends and alliesthroughout the world. 

THE ATLANTIC ALLIANCE

In recognition of the threat which the Soviet invasion of Afghanistan posedto Western interests in both Europe and Southwest Asia, NATO foreign anddefense ministers have expressed full support for U. S. Efforts to develop acapability to respond to a contingency in Southwest Asia and have approvedan extensive program to help fill the gap which could be created by thediversion of U. S. Forces to that region. 

The U. S. Has not been alone in seeking to maintain stability in theSouthwest Asia area and insure access to the needed resources there. TheEuropean nations with the capability to do so are improving their ownforces in the region and providing greater economic and political supportto the residents of the area. In the face of the potential danger posed bythe Iran-Iraq conflict, we have developed coordination among the Westernforces in the area of the Persian Gulf in order to be able to safeguardpassage in that essential waterway. 

Concerning developments in and around Poland the allies have achieved thehighest level of cohesion and unity of purpose in making clear the effectson future East-West relations of a precipitous Soviet act there. 

The alliance has continued to build on the progress of the past three yearsin improving its conventional forces through the Long-Term Defense Program. Though economic conditions throughout Europe today are making itsachievement difficult, the yearly real increase of 3 percent in defensespending remains a goal actively sought by the alliance. 

The NATO alliance also has moved forward during the past year with theimplementation of its historic December 1979 decision to modernize itsTheater Nuclear Force capabilities through deployment of improved Pershingballistic missiles and ground-launched cruise missiles in Europe. Ourallies continue to cooperate actively with us in this important jointendeavor, whose purpose is to demonstrate convincingly to the Soviet Unionthe potential costs of a nuclear conflict in Europe. At the same time, weoffered convincing evidence of our commitment to arms control in Europe byinitiating preliminary consultations with the Soviet Union in Geneva on thesubject of negotiated limits on long-range theater nuclear forces. Also, during 1980 we initiated and carried out a withdrawal from our nuclearweapons stockpile in Europe of 1, 000 nuclear warheads. This successfuldrawdown in our nuclear stockpile was a further tangible demonstration ofour commitment to the updating of our existing theater nuclear forces inEurope. 

In the NATO area, we continued to work closely with other countries inproviding resources to help Turkey regain economic health. We regrettedthat massive political and internal security problems led the Turkishmilitary to take over the government on September 12. The new Turkishauthorities are making some progress in resolving those problems, and theyhave pledged an early return to civilian government. The tradition of theTurkish military gives us cause to take that pledge seriously. We welcomedthe reestablishment of Greece's links to the integrated military commandstructure of the Atlantic Alliance--a move which we had stronglyencouraged--as a major step toward strengthening NATO's vital southernflank at a time of international crisis and tension in adjacent areas. Greek reintegration exemplifies the importance which the allies place oncooperating in the common defense and shows that the allies can make thedifficult decisions necessary to insure their continued security. We alsowelcomed the resumption of the intercommunal talks on Cyprus. 

THE U. S. AND THE PACIFIC NATIONS

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 as great as our trade with Europe. During the pastfour years we have regained a strong, dynamic and flexible posture for theUnited States in this vital region. 

Our major alliances with Japan, Australia and New Zealand are now strongerthan they ever have been, and together with the nations of western Europe, we have begun to form the basic political structure for dealing withinternational crises that affect us all. Japan, Australia and New Zealandhave given us strong support in developing a strategy for responding toinstability in the Persian Gulf. 

Normalization of U. S. Relations with China has facilitated China's fullentry into the international community and encouraged a constructiveChinese role in the Asia-Pacific region. Our relations with China have beenrapidly consolidated over the past year through the conclusion of a seriesof bilateral agreements. We have established a pattern of frequent andfrank consultations between our two governments, exemplified by a series ofhigh-level visits and by regular exchanges at the working level, throughwhich we have been able to identify increasingly broad areas of commoninterest on which we can cooperate. 

United States relations with the Association of Southeast Asian Nations(ASEAN) have also expanded dramatically in the past four years. ASEAN isnow the focus for U. S. Policy in Southeast Asia, and its cohesion andstrength are essential to stability in this critical area and beyond. 

Soviet-supported Vietnamese aggression in Indo-china has posed a majorchallenge to regional stability. In response, we have reiterated oursecurity commitment to Thailand and have provided emergency securityassistance for Thai forces facing a Vietnamese military threat along theThai-Cambodian border. We have worked closely with ASEAN and the U. N. Topress for withdrawal of Vietnamese forces from Cambodia and to encourage apolitical settlement in Cambodia which permits that nation to be governedby leaders of its own choice. We still look forward to the day whenCambodia peacefully can begin the process of rebuilding its social, economic and political institutions, after years of devastation andoccupation. And, on humanitarian grounds and in support of our friends inthe region, we have worked vigorously with international organizations toarrange relief and resettlement for the exodus of Indo-chinese refugeeswhich threatened to overwhelm these nations. 

We have maintained our alliance with Korea and helped assure Korea'ssecurity during a difficult period of political transition. 

We have amended our military base agreement with the Philippines, ensuringstable access to these bases through 1991. The importance of our Philippinebases to the strategic flexibility of U. S. Forces and our access to theIndian Ocean is self-evident. 

Finally, we are in the process of concluding a long negotiationestablishing Micronesia's status as a freely associated state. 

We enter the 1980's with a firm strategic footing in East Asia and thePacific, based on stable and productive U. S. Relations with the majority ofcountries of the region. We have established a stable level of U. S. Involvement in the region, appropriate to our own interests and to theinterests of our friends and allies there. 

THE MIDDLE EAST AND SOUTHWEST ASIA

The continuing Soviet occupation of Afghanistan and the dislocations causedby the Iraq-Iran war serve as constant reminders of the critical importancefor us, and our allies, of a third strategic zone stretching across theMiddle East, the Persian Gulf, and much of the Indian subcontinent. ThisSouthwest Asian region has served as a key strategic and commercial linkbetween East and West over the centuries. Today it produces two-thirds ofthe world's oil exports, providing most of the energy needs of our Europeanallies and Japan. It has experienced almost continuous conflict betweennations, internal instabilities in many countries, and regional rivalries, combined with very rapid economic and social change. And now the SovietUnion remains in occupation of one of these nations, ignoring world opinionwhich has called on it to get out. 

We have taken several measures to meet these challenges. 

MIDDLE EAST

In the Middle East, our determination to consolidate what has already beenachieved in the peace process--and to buttress that accomplishment withfurther progress toward a comprehensive peace settlement--must remain acentral goal of our foreign policy. Pursuant to their peace treaty, Egyptand Israel have made steady progress in the normalization of theirrelations in a variety of fields, bringing the benefits of peace directlyto their people. The new relationship between Egypt and Israel stands as anexample of peaceful cooperation in an increasingly fragmented and turbulentregion. 

Both President Sadat and Prime Minister Begin remain committed to thecurrent negotiations to provide full autonomy to the inhabitants of theWest Bank and Gaza. These negotiations have been complex and difficult, butthey have already made significant progress, and it is vital that the twosides, with our assistance, see the process through to a successfulconclusion. We also recognize the need to broaden the peace process toinclude other parties to the conflict and believe that a successfulautonomy agreement is an essential first step toward this objective. 

We have also taken a number of steps to strengthen our bilateral relationswith both Israel and Egypt. We share important strategic interests withboth of these countries. 

We remain committed to Israel's security and are prepared to take concretesteps to support Israel whenever that security is threatened. 

PERSIAN GULF

The Persian Gulf has been a vital crossroads for trade between Europe andAsia at many key moments in history. It has become essential in recentyears for its supply of oil to the United States, our allies, and ourfriends. We have taken effective measures to control our own consumption ofimported fuel, working in cooperation with the other key industrial /nations of the world. However, there is little doubt that the healthygrowth of our American and world economies will depend for many years oncontinued safe access to the Persian Gulf's oil production. The denial ofthese oil supplies would threaten not only our own but world security. 

The potent new threat from an advancing Soviet Union, against thebackground of regional instability of which it can take advantage, requiresthat we reinforce our ability to defend our regional friends and to protectthe flow of oil. We are continuing to build on the strong political, economic, social and humanitarian ties which bind this government and theAmerican people to friendly governments and peoples of the Persian Gulf. 

We have also embarked on a course to reinforce the trust and confidence ourregional friends have in our ability to come to their assistance rapidlywith American military force if needed. We have increased our navalpresence in the Indian Ocean. We have created a Rapid Deployment Forcewhich can move quickly to the Gulf--or indeed any other area of the worldwhere outside aggression threatens. We have concluded several agreementswith countries which are prepared to let us use their airports and navalfacilities in an emergency. We have met requests for reasonable amounts ofAmerican weaponry from regional countries which are anxious to defendthemselves. And we are discussing with a number of our area friends furtherways we can help to improve their security and ours, both for the short andthe longer term. 

SOUTH ASIA

We seek a South Asia comprising sovereign and stable states, free ofoutside interference, which can strengthen their political institutionsaccording to their own national genius and can develop their economies forthe betterment of their people. 

The Soviet invasion of Afghanistan has posed a new challenge to thisregion, and particularly to neighboring Pakistan. We are engaged in acontinuing dialogue with the Pakistan government concerning its developmentand security requirements and the economic burden imposed by Afghanrefugees who have fled to Pakistan. We are participating with other aidconsortium members in debt rescheduling and will continue to cooperatethrough the UNHCR in providing refugee assistance. We remain committed toPakistan's territorial integrity and independence. 

Developments in the broad South/Southwest Asian region have also lent a newimportance to our relations with India, the largest and strongest power inthe area. We share India's interest in a more constructive relationship. Indian policies and perceptions at times differ from our own, and we haveestablished a candid dialogue with this sister democracy which seeks toavoid the misunderstandings which have sometimes complicated our ties. 

We attach major importance to strong economic assistance programs to thecountries in the area, which include a majority of the poor of thenon-Communist world. We believe that these programs will help achievestability in the area, an objective we share with the countries in theregion. Great progress has been achieved by these countries in increasingfood production; international cooperation in harnessing the great riverresources of South Asia would contribute further to this goal and help toincrease energy production. 

We continue to give high priority to our non-proliferation goals in thearea in the context of our broad global and regional priorities. Thedecision to continue supply of nuclear fuel to the Indian Tarapur reactorswas sensitive to this effort. 

AFRICA

The United States has achieved a new level of trust and cooperation withAfrica. Our efforts, together with our allies, to achieve peace in southernAfrica, our increased efforts to help the poorest countries in Africa tocombat poverty, and our expanded efforts to promote trade and investmenthave led to growing respect for the U. S. And to cooperation in areas ofvital interest to the United States. 

Africa is a continent of poor nations for the most part. It also containsmany of the mineral resources vital for our economy. We have worked withAfrica in a spirit of mutual cooperation to help the African nations solvetheir problems of poverty and to develop stronger ties between our privatesector and African economies. Our assistance to Africa has more thandoubled in the last four years. Equally important, we set in motion newmechanisms for private investment and trade. 

Nigeria is the largest country in Black Africa and the second largest oilsupplier to the United States. During this Administration we have greatlyexpanded and improved our relationship with Nigeria and other West Africanstates whose aspirations for a constitutional democratic order we share andsupport. This interest was manifested both symbolically and practically bythe visit of Vice President Mondale to West Africa in July (1980) and thesuccessful visit to Washington of the President of Nigeria in October. 

During Vice President Mondale's visit, a Joint Agricultural ConsultativeCommittee was established, with the U. S. Represented entirely by theprivate sector. This could herald a new role for the American privatesector in helping solve the world's serious food shortages. I am pleased tosay that our relations with Nigeria are at an all-time high, providing thefoundation for an even stronger relationship in the years ahead. 

Another tenet of this Administration's approach to African problems hasbeen encouragement and support for regional solutions to Africa'sproblems. We have supported initiatives by the Organization of AfricanUnity to solve the protracted conflict in the western Sahara, Chad, and theHorn. In Chad, the world is watching with dismay as a country torn by adevastating civil war has become a fertile field for Libya's exploitation, thus demonstrating that threats to peace can come from forces within aswell as without Africa. 

In southern Africa the United States continues to pursue a policy ofencouraging peaceful development toward majority rule. In 1980, SouthernRhodesia became independent as Zimbabwe, a multiracial nation under asystem of majority rule. Zimbabwean independence last April was theculmination of a long struggle within the country and diplomatic effortsinvolving Great Britain, African states neighboring Zimbabwe, and theUnited States. 

The focus of our efforts in pursuit of majority rule in southern Africa hasnow turned to Namibia. Negotiations are proceeding among concerned partiesunder the leadership of U. N. Secretary General Waldheim. This should leadto implementation of the U. N. Plan for self-determination and independencefor Namibia during 1981. If these negotiations are successfully concluded, sixty-five years of uncertainty over the status of the territory, includinga seven-year-long war, will be ended. 

In response to our active concern with issues of importance to Africans, African states have cooperated with us on issues of importance to ournational interests. African states voted overwhelmingly in favor of theU. N. Resolution calling for release of the hostages, and for the U. N. Resolution condemning the Soviet invasion of Afghanistan. Two countries ofAfrica have signed access agreements with the U. S. Allowing us use of navaland air facilities in the Indian Ocean. 

Africans have become increasingly vocal on human rights. African leadershave spoken out on the issue of political prisoners, and the OAU isdrafting its own Charter on Human Rights. Three countries in Africa--Nigeria, Ghana, and Uganda--have returned to civilian rule during the pastyear. 

U. S. Cooperation with Africa on all these matters represents a strong baseon which we can build in future years. 

Liberia is a country of long-standing ties with the U. S. And the site ofconsiderable U. S. Investment and facilities. This past April a coupreplaced the government and a period of political and economic uncertaintyensued. The U. S. Acted swiftly to meet this situation. We, together withAfrican leaders, urged the release of political prisoners, and many havebeen released; we provided emergency economic assistance to help avoideconomic collapse, and helped to involve the IMF and the banking communityto bring about economic stability; and we have worked closely with the newleaders to maintain Liberia's strong ties with the West and to protectAmerica's vital interests. 

NORTH AFRICA

In early 1979, following a Libyan-inspired commando attack on a Tunisianprovincial city, the U. S. Responded promptly to Tunisia's urgent requestfor assistance, both by airlifting needed military equipment and by makingclear our longstanding interest in the security and integrity of thisfriendly country. The U. S. Remains determined to oppose other irresponsibleLibyan aspirations. Despairing of a productive dialogue with the Libyanauthorities, the U. S. Closed down its embassy in Libya and later expelledsix Libyan diplomats in Washington in order to deter an intimidationcampaign against Libyan citizens in the U. S. 

U. S. Relations with Algeria have improved, and Algeria has played anindispensable and effective role as intermediary between Iran and the U. S. Over the hostage issue. 

The strengthening of our arms supply relationship with Morocco has helpedto deal with attacks inside its internationally recognized frontiers and tostrengthen its confidence in seeking a political settlement of the WesternSahara conflict. While not assuming a mediatory role, the U. S. Encouragedall interested parties to turn their energies to a peaceful and sensiblecompromise resolution of the war in the Sahara and supported efforts by theOrganization of African Unity toward that end. As the year drew to a close, the U. S. Was encouraged by evolution in the attitudes of all sides, and ishopeful that their differences will be peacefully resolved in the yearahead so that the vast economic potential of North Africa can be developedfor the well-being of the people living there. 

LATIN AMERICA AND THE CARIBBEAN

The principles of our policies in this hemisphere have been clear andconstant over the last four years. We support democracy and respect forhuman rights. We have struggled with many to help free the region of bothrepression and terrorism. We have respected ideological diversity andopposed outside intervention in purely internal affairs. We will act, though, in response to a request for assistance by a country threatened byexternal aggression. We support social and economic development within ademocratic framework. We support the peaceful settlement of disputes. Westrongly encourage regional cooperation and shared responsibilities withinthe hemisphere to all these ends, and we have eagerly and regularly soughtthe advice of the leaders of the region on a wide range of issues. 

Last November, I spoke to the General Assembly of the Organization ofAmerican States of a cause that has been closest to my heart--humanrights. It is an issue that has found its time in the hemisphere. The causeis not mine alone, but an historic movement that will endure. 

At Riobamba, Ecuador, last September four Andean Pact countries, CostaRica, and Panama broke new ground by adopting a "Code of Conduct, " thatjoint action in defense of human rights does not violate the principles ofnonintervention in the internal affairs of states in this hemisphere. TheOrganization of American States has twice condemned the coup thatoverturned the democratic process in Bolivia and the widespread abuse ofhuman rights by the regime which seized power. The Inter-AmericanCommission on Human Rights has gained world acclaim for its dispassionatereports. It completed two major country studies this year in addition toits annual report. In a resolution adopted without opposition, the OASGeneral Assembly in November strongly supported the work of the Commission. The American Convention on Human Rights is in force and an Inter-AmericanCourt has been created to judge human rights violations. This conventionhas been pending before the Senate for two years; I hope the United Statesthis year will join the other nations of the hemisphere in ratifying aconvention which embodies principles that are our tradition. 

The trend in favor of democracy has continued. During this past year, Peruinaugurated a democratically elected government. Brazil continues itsprocess of liberalization. In Central America, Hondurans voted in recordnumbers in their first national elections in over eight years. In theCaribbean seven elections have returned governments firmly committed to thedemocratic traditions of the Commonwealth. 

Another major contribution to peace in the hemisphere is Latin America'sown Treaty for the Prohibition of Nuclear Weapons. On behalf of the UnitedStates, I signed Protocol I of this Treaty in May of 1977 and sent it tothe Senate for ratification. I urge that it be acted upon promptly by theSenate in order that it be brought into the widest possible effect in theLatin American region. 

Regional cooperation for development is gaining from Central America to theAndes, and throughout the Caribbean. The Caribbean Group for Cooperation inEconomic Development, which we established with 29 other nations in 1977, has helped channel $750 million in external support for growth in theCaribbean. The recent meeting of the Chiefs of State of the EasternCaribbean set a new precedent for cooperation in that region. Mexico andVenezuela jointly and Trinidad and Tobago separately have established oilfacilities that will provide substantial assistance to their oil importingneighbors. The peace treaty between El Salvador and Honduras will hopefullystimulate Central America to move forward again toward economicintegration. Formation of Caribbean/ Central American Action, a privatesector organization, has given a major impetus to improvingpeople-to-people bonds and strengthening the role of private enterprise inthe development of democratic societies. 

The Panama treaties have been in force for over a year. A new partnershiphas been created with Panama; it is a model for large and small nations. Alongstanding issue that divided us from our neighbors has been resolved. The security of the canal has been enhanced. The canal is operating as wellas ever, with traffic through it reaching record levels this year. Canalemployees, American and Panamanian alike, have remained on the job and havefound their living and working conditions virtually unchanged. 

In 1980, relations with Mexico continued to improve due in large measure tothe effectiveness of the Coordinator for Mexican Affairs and the expandeduse of the U. S. -Mexico Consultative Mechanism. By holding periodic meetingsof its various working groups, we have been able to prevent mutual concernsfrom becoming political issues. The Secretary of State visited Mexico Cityin November, and, along with the Mexican Secretary of Foreign Relations, reviewed the performance of the Consultative Mechanism. The office of theCoordinator has ensured the implementation of my directive to all agenciesto accord high priority to Mexican concerns. Trade with Mexico rose byalmost 60 percent to nearly $30 billion, making that country our thirdlargest trading partner. 

These are all encouraging developments. Other problems remain, however. 

The impact of large-scale migration is affecting many countries in thehemisphere. The most serious manifestation was the massive, illegal exodusfrom Cuba last summer. The Cuban government unilaterally encouraged thedisorderly and even deadly migration of 125, 000 of its citizens in completedisregard for international law or the immigration laws of its neighbors. Migrations of this nature clearly require concerted action, and we haveasked the OAS to explore means of dealing with similar situations which mayoccur in the future. 

We have a long-standing treaty with Colombia on Quita Sueno, Roncador, andSerrano which remains to be ratified by the Senate. 

In Central America, the future of Nicaragua is unclear. Recent tensions, the restrictions on the press and political activity, an inordinate Cubanpresence in the country and the tragic killing by the security forces of abusinessman well known for his democratic orientation, cause usconsiderable concern. These are not encouraging developments. But those whoseek a free society remain in the contest for their nation's destiny. Theyhave asked us to help rebuild their country, and by our assistance, todemonstrate that the democratic nations do not intend to abandon Nicaraguato the Cubans. As long as those who intend to pursue their pluralisticgoals play important roles in Nicaragua, it deserves our continuingsupport. 

In El Salvador, we have supported the efforts of the Junta to change thefundamental basis of an inequitable system and to give a stake in a newnation to those millions of people, who for so long, lived without hope ordignity. As the government struggles against those who would restore an oldtyranny or impose a new one, the United States will continue to standbehind them. 

We have increased our aid to the Caribbean, an area vital to our nationalsecurity, and we should continue to build close relations based on mutualrespect and understanding, and common interests. 

As the nations of this hemisphere prepare to move further into the 1980's, I am struck by the depth of underlying commitment that there is to ourcommon principles: non-intervention, peaceful settlement of disputes, cooperation for development, democracy and defense of basic human rights. Ileave office satisfied that the political, economic, social andorganizational basis for further progress with respect to all theseprinciples have been substantially strengthened in the past four years. Iam particularly reassured by the leadership by other nations of thehemisphere in advancing these principles. The success of our common task ofimproving the circumstances of all peoples and nations in the hemispherecan only be assured by the sharing of responsibility. I look forward to ahemisphere that at the end of this decade has proven itself anew as aleader in the promotion of both national and human dignity. 

THE INTERNATIONAL ECONOMY

A growing defense effort and a vigorous foreign policy rest upon a strongeconomy here in the United States. And the strength of our own economydepends upon our ability to lead and compete in the internationalmarketplace. 

ENERGY

Last year, the war between Iraq and Iran led to the loss of nearly 4million barrels of oil to world markets, the third major oil marketdisruption in the past seven years. This crisis has vividly demonstratedonce again both the value of lessened dependence on oil imports and thecontinuing instability of the Persian Gulf area. 

Under the leadership of the United States, the 21 members of theInternational Energy Agency took collective action to ensure that the oilshortfall stemming from the Iran-Iraq war would not be aggravated bycompetition for scarce spot market supplies. We are also working togetherto see that those nations most seriously affected by the oil disruption--including our key NATO allies Turkey and Portugal--can get the oil theyneed. At the most recent IEA Ministerial meeting we joined the othermembers in pledging to take those policy measures necessary to slice ourjoint oil imports in the first quarter of 1981 by 2. 2 million barrels. 

Our international cooperation efforts in the energy field are not limitedto crisis management. At the Economic Summit meetings in Tokyo and Venice, the heads of government of the seven major industrial democracies agreed toa series of tough energy conservation and production goals. We are workingtogether with all our allies and friends in this effort. 

Construction has begun on a commercial scale coal liquefaction plant inWest Virginia co-financed by the United States, Japan and West Germany. Aninteragency task force has just reported to me on a series of measures weneed to take to increase coal production and exports. This report builds onthe work of the International Energy Agency's Coal Industry Advisory Board. With the assurances of a reliable United States steam coal supply atreasonable prices, many of the electric power plants to be built in the1980's and 1990's can be coal-fired rather than oil-burning. 

We are working cooperatively with other nations to increase energy securityin other areas as well. Joint research and development with our allies isunderway in solar energy, nuclear power, industrial conservation and otherareas. In addition, we are assisting rapidly industrializing nations tocarefully assess their basic energy policy choices, and our developmentassistance program helps the developing countries to increase indigenousenergy production to meet the energy needs of their poorest citizens. Wesupport the proposal for a new World Bank energy affiliate to these sameends, whose fulfillment will contribute to a better global balance betweenenergy supply and demand. 

INTERNATIONAL MONETARY POLICY

Despite the rapid increase in oil costs, the policy measures we have takento improve domestic economic performance have had a continued powerfuleffect on our external accounts and on the strength of the dollar. A strongdollar helps in the fight against inflation. 

There has also been considerable forward movement in efforts to improve thefunctioning of the international monetary system. The stability of theinternational system of payments and trade is important to the stabilityand good health of our own economy. We have given strong support to theinnovative steps being taken by the International Monetary Fund and WorldBank to help promote early adjustment to the difficult internationaleconomic problems. Recent agreement to increase quotas by fifty percentwill ensure the IMF has sufficient resources to perform its central role inpromoting adjustment and financing payments imbalances. The World Bank'snew structural adjustment lending program will also make an importantcontribution to international efforts to help countries achieve asustainable level of growth and development. 

SUGAR

In 1980, Congress passed U. S. Implementing legislation for theInternational Sugar Agreement, thus fulfilling a major commitment of thisAdministration. The agreement is an important element in our internationalcommodity policy with far-reaching implications for our relations withdeveloping countries, particularly sugar producers in Latin America. Producers and consumers alike will benefit from a more stable market forthis essential commodity. 

COFFEE

At year's end, Congress approved implementing legislation permitting theU. S. To carry out fully its commitments under International CoffeeAgreement Specifically, the legislation enables us to meet our part of anunderstanding negotiated last fall among members of the Agreement, whichdefends, by use of export quotas, a price range well below coffee prices ofprevious years and which commits major coffee producers to eliminate cartelarrangements that manipulated future markets to raise prices. The way isnow open to a fully-functioning International Coffee Agreement which canhelp to stabilize this major world commodity market. The results will bepositive for both consumers--who will be less likely to suffer from sharpincreases in coffee prices--and producers--who can undertake futureinvestment with assurance of greater protection against disruptive pricefluctuations in their exports. 

NATURAL RUBBER

In 1980, the International Natural Rubber Agreement entered into forceprovisionally. U. S. Membership in this new body was approved overwhelminglyby the Senate last year. The natural rubber agreement is a model of itskind and should make a substantial contribution to a stable world market inthis key industrial commodity. It is thus an excellent example ofconstructive steps to improve the operation of the world economy in wayswhich can benefit the developing and industrialized countries alike. Inparticular, the agreement has improved important U. S. Relationships withthe major natural rubber-producing countries of Southeast Asia. 

COMMON FUND

The United States joined members of the United Nations Conference on Tradeand Development, both developed and developing nations, in concludingArticles of Agreement in 1980 for a Common Fund to help internationalcommodity agreements stabilize the prices of raw materials. 

ECONOMIC COOPERATION WITH DEVELOPING NATIONS

Our relations with the developing nations are of major importance to theUnited States. The fabric of our relations with these countries has strongeconomic and political dimensions. They constitute the most rapidly growingmarkets for our exports, and are important sources of fuel and rawmaterials. Their political views are increasingly important, asdemonstrated in their overwhelming condemnation of the Soviet invasion ofAfghanistan. Our ability to work together with developing nations towardgoals we have in common (their political independence, the resolution ofregional tensions, and our growing ties of trade for example) require us tomaintain the policy of active involvement with the developing world that wehave pursued over the past four years. 

The actions we have taken in such areas as energy, trade, commodities, andinternational financial institutions are all important to the welfare ofthe developing countries. Another important way the United States candirectly assist these countries and demonstrate our concern for theirfuture is through our multilateral and bilateral foreign assistanceprogram. The legislation which I will be submitting to you for FY 82provides the authority and the funds to carry on this activity. PromptCongressional action on this legislation is essential in order to attacksuch high priority global problems as food and energy, meet our treaty andbase rights agreements, continue our peace efforts in the Middle East, provide economic and development support to countries in need, promoteprogress on North-South issues, protect Western interests, and counterSoviet influence. 

Our proposed FY 1982 bilateral development aid program is directlyresponsive to the agreement reached at the 1980 Venice Economic Summit thatthe major industrial nations should increase their aid for food and energyproduction and for family planning. We understand that other Summitcountries plan similar responses. It is also important to honor ourinternational agreements for multilateral assistance by authorizing andappropriating funds for the International Financial Institutions. Thesemultilateral programs enhance the efficiency of U. S. Contributions bycombining them with those of many other donor countries to promotedevelopment; the proposed new World Bank affiliate to increase energyoutput in developing countries offers particular promise. All these typesof aid benefit our long-run economic and political interests. 

Progress was made on a number of economic issues in negotiations throughoutthe U. N. System. However, in spite of lengthy efforts in the UnitedNations, agreement has not been reached on how to launch a process ofGlobal Negotiations in which nations might collectively work to solve suchimportant issues as energy, food, protectionism, and population pressures. The United States continues to believe that progress can best be made whennations focus on such specific problems, rather than on procedural andinstitutional questions. It will continue to work to move the North-Southdialogue into a more constructive phase. 

FOOD--THE WAR ON HUNGER

The War on Hunger must be a continuous urgent priority. Major portions ofthe world's population continue to be threatened by the specter of hungerand malnutrition. During the past year, some 150 million people in 36African countries were faced with near disaster as the result of seriousdrought, induced food shortages. Our government, working in concert withthe U. N. 's Food and Agricultural Organization (FAO), helped to respond tothat need. But the problems of hunger cannot be solved by short-termmeasures. We must continue to support those activities, bilateral andmultilateral, which aim at improving food production especially indeveloping countries and assuring global food security. These measures arenecessary to the maintenance of a stable and healthy world economy. 

I am pleased that negotiation of a new Food Aid Convention, whichguarantees a minimum annual level of food assistance, was successfullyconcluded in March. The establishment of the International Emergency WheatReserve will enable the U. S. To meet its commitment under the newConvention to feed hungry people, even in times of short supply. 

Of immediate concern is the prospect of millions of Africans threatened byfamine because of drought and civil disturbances. The U. S. Plea forincreased food aid resulted in the organization of an internationalpledging conference and we are hopeful that widespread starvation will beavoided. 

Good progress has been made since the Venice Economic Summit called forincreased effort on this front. We and other donor countries have begun toassist poor countries develop long-term strategies to improve their foodproduction. The World Bank will invest up to $4 billion in the next fewyears in improving the grain storage and food-handling capacity ofcountries prone to food shortages. 

Good progress has been made since the Tokyo Economic Summit called forincreased effort on this front. The World Bank is giving this problem toppriority, as are some other donor countries. The resources of theconsultative Group on International Agricultural Research will be doubledover a five-year period. The work of our own Institute of Scientific andTechnological Cooperation will further strengthen the search for relevantnew agricultural technologies. 

The goal of freeing the world from hunger by the year 2000 should commandthe full support of all countries. 

The Human Dimension of Foreign Policy

HUMAN RIGHTS

The human rights policy of the United States has been an integral part ofour overall foreign policy for the past several years. This policy servesthe national interest of the United States in several important ways: byencouraging respect by governments for the basic rights of human beings, itpromotes peaceful, constructive change, reduces the likelihood of internalpressures for violent change and for the exploitation of these by ouradversaries, and thus directly serves our long-term interest in peace andstability; by matching espousal of fundamental American principles offreedom with specific foreign policy actions, we stand out in vividcontrast to our ideological adversaries; by our efforts to expand freedomelsewhere, we render our own freedom, and our own nation, more secure. Countries that respect human rights make stronger allies and betterfriends. 

Rather than attempt to dictate what system of government or institutionsother countries should have, the U. S. Supports, throughout the world, theinternationally recognized human rights which all members of the UnitedNations have pledged themselves to respect. There is more than one modelthat can satisfy the continuing human reach for freedom and justice:

1980 has been a year of some disappointments, but has also seen somepositive developments in the ongoing struggle for fulfillment of humanrights throughout the world. In the year we have seen:

--Free elections were held and democratic governments installed in Peru, Dominica, and Jamaica. Honduras held a free election for installation of aconstituent assembly. An interim government was subsequently named pointingtoward national presidential elections in 1981. Brazil continues on itscourse of political liberalization. 

--The "Charter of Conduct" signed in Riobamba, Ecuador, by Ecuador, Colombia, Venezuela, Peru, Costa Rica, Panama and Spain, affirms theimportance of democracy and human rights for the Andean countries. 

--The Organization of American States, in its annual General Assembly, approved a resolution in support of the Inter-American Human RightsCommission's work. The resolution took note of the Commission's annualreport, which described the status of human rights in Chile, El Salvador, Paraguay and Uruguay; and the special reports on Argentina and Haiti, whichdescribed human rights conditions as investigated during on-siteinspections to these countries. 

--The awarding of the Nobel Prize for Peace to Adolfo Perez Esquivel ofArgentina for his non-violent advocacy of human rights. 

--The United States was able to rejoin the International LaborOrganization after an absence of two years, as that U. N. Body reformed itsprocedures to return to its original purpose of strengtheningemployer-employee-government relations to insure human rights for theworking people of the world. 

The United States, of course, cannot take credit for all these variousdevelopments. But we can take satisfaction in knowing that our policiesencourage and perhaps influence them. 

Those who see a contradiction between our security and our humanitarianinterests forget that the basis for a secure and stable society is the bondof trust between a government and its people. I profoundly believe that thefuture of our world is not to be found in authoritarianism: that wears themask of order, or totalitarianism that wears the mask of justice. Instead, let us find our future in the human face of democracy, the human voice ofindividual liberty, the human hand of economic development. 

HUMANITARIAN AID

The United States has continued to play its traditional role of safehavenfor those who flee or are forced to flee their homes because of persecutionor war. During 1980, the United States provided resettlement opportunitiesfor 216, 000 refugees from countries around the globe. In addition, theUnited States joined with other nations to provide relief to refugees incountry of first asylum in Africa, the Middle East, and Asia. 

The great majority of refugee admissions continued to be from Indo-china. During 1980, 168, 000 Indo-chinese were resettled in the United States. Although refugee populations persist in camps in Southeast Asia, andrefugees continue to flee Vietnam, Laos and Kampuchea, the flow is not asgreat as in the past. One factor in reducing the flow from Vietnam has beenthe successful negotiation and commencement of an Orderly Departure Programwhich permits us to process Vietnamese for resettlement in the UnitedStates with direct departure from Ho Chi Minh Ville in an orderly fashion. The first group of 250 departed Vietnam for the United States in December, 1980. 

In addition to the refugees admitted last year, the United States acceptedfor entry into the United States 125, 000 Cubans who were expelled by FidelCastro. Federal and state authorities, as well as private voluntaryagencies, responded with unprecedented vigor to coping with the unexpectedinflux of Cubans. 

Major relief efforts to aid refugees in countries of first asylum continuedin several areas of the world. In December, 1980, thirty-two nations, meeting in New York City, agreed to contribute $65 million to thecontinuing famine relief program in Kampuchea. Due in great part to thegenerosity of the American people and the leadership exercised in theinternational arena by the United States, we have played the pivotal rolein ameliorating massive suffering in Kampuchea. 

The United States has taken the lead among a group of donor countries whoare providing relief to some two million refugees in the Horn of Africa whohave been displaced by fighting in Ethiopia. U. S. Assistance, primarily toSomalia, consists of $35 million worth of food and $18 million in cash andkind. Here again, United States efforts can in large part be credited withkeeping hundreds of thousands of people alive. 

Another major international relief effort has been mounted in Pakistan. TheUnited States is one of 25 countries plus the European Economic Communitywho have been helping the Government of Pakistan to cope with the problemof feeding and sheltering the more than one million refugees that have beengenerated by the Soviet invasion of Afghanistan. 

In April, 1980, the Congress passed the Refugee Act of 1980 which broughttogether, for the first time, in one piece of legislation the variousthreads of U. S. Policy towards refugees. The law laid down a new, broaderdefinition of the term refugee, established mechanisms for arriving at alevel of refugee admissions through consultation with Congress, andestablished the Office of the United States Coordinator for Refugees. 

It cannot be ignored that the destructive and aggressive policies of theSoviet Union have added immeasurably to the suffering in these three tragicsituations. 

The Control of Nuclear Weapons

Together with our friends and allies, we are striving to build a world inwhich peoples with diverse interests can live freely and prosper. But allthat humankind has achieved to date, all that we are seeking to accomplish, and human existence itself can be undone in an instant--in the catastropheof a nuclear war. 

Thus one of the central objectives of my Administration has been to controlthe proliferation of nuclear weapons to those nations which do not havethem, and their further development by the existing nuclear powers--notably the Soviet Union and the United States. 

NON-PROLIFERATION

My Administration has been committed to stemming the spread of nuclearweapons. Nuclear proliferation would raise the spectre of the use ofnuclear explosives in crucial, unstable regions of the world endangeringnot only our security and that of our Allies, but that of the whole world. Non-proliferation is not and can not be a unilateral U. S. Policy, norshould it be an issue of contention between the industrialized anddeveloping states. The international non-proliferation effort requires thesupport of suppliers as well as importers of nuclear technology andmaterials. 

We have been proceeding on a number of fronts:

--First, we have been seeking to encourage nations to accede to theNon-Proliferation Treaty. The U. S. Is also actively encouraging othernations to accept full-scope safeguards on all of their nuclear activitiesand is asking other nuclear suppliers to adopt a full-scope safeguardsrequirement as a condition for future supply. 

--Second, the International Nuclear Fuel Cycle Evaluation (INFCE), whichwas completed in 1980, demonstrated that suppliers and recipients can worktogether on these technically complex and sensitive issues. Whiledifferences remain, the INFCE effort provides a broader international basisfor national decisions which must balance energy needs withnon-proliferation concerns. 

--Finally, we are working to encourage regional cooperation and restraint. Protocol I of the Treaty of Tlatelolco which will contribute to thelessening of nuclear dangers for our Latin American neighbors ought now tobe ratified by the United States Senate. 

LIMITATIONS ON STRATEGIC ARMS

I remain convinced that the SALT II Treaty is in our Nation's securityinterest and that it would add significantly to the control of nuclearweapons. I strongly support continuation of the SALT process and thenegotiation of more far-reaching mutual restraints on nuclear weaponry. 

CONCLUSION

We have new support in the world for our purposes of national independenceand individual human dignity. We have a new will at home to do what isrequired to keep us the strongest nation on earth. 

We must move together into this decade with the strength which comes fromrealization of the dangers before us and from the confidence that togetherwe can overcome them. The White House, January 16, 1981.