Anti-Inflation Policy Remarks on the Administration's Anti-Inflation Policy.

The most serious problem that our Nation has is inflation, and it's getting worse. It's absolutely imperative that Americans commit themselves, all of us, to a common sacrifice to control this rapid increase in prices.

I don't think it's going to be effective to ask other Americans to join in this effort for their own benefit unless the Congress, the President, and the entire Federal Government is willing to set an example here in Washington.

The Congress is now considering, for instance, legislation to control hospital costs. There has been an enormous increase in profits by people who own and operate private hospitals. Costs have been going up 17 percent a year, more than twice as rapidly as the cost of other products and services in our country.

Because of these enormous profits, lobbying pressures on the Congress are also enormous. But this is a tangible effort that, if successful by the Congress, can save consumers in our country, those who need medical care, $30 billion in the next 5 years, and can save in Federal expenditures billions of dollars in the cost of Medicaid and Medicare.

The budget that I submitted to Congress that was prepared last November and December has a deficit of about $60 billion. We've cut it down now to $53 billion by proposing a lower tax reduction. It's still too high. And still, there's pressure in Congress to increase spending unnecessarily.

I'd like to give one example. In education, we had a 24-percent increase in the educational budget in the proposed expenditures for next year compared to the current year. Still, the Congress wants to increase this more. In basic opportunity grants for college students, we advocated an increase of 47 percent as an alternative to tax credits for tuition. That's a $1.1 billion increase. Now the Congress wants to add several hundred million dollars more, completely excessive and threatening to unbalance the budget even further.

In defense spending, we had a $126 billion budget, the highest in history, carefully planned by me, the Defense Department leaders, and others. The Congress-the House has now voted to build a nuclear aircraft carrier which is not needed and which will cost $2½ billion.

We presently have a great shortage of beef in our country. Because of this shortage, which is going to continue for the next 3 or 4 years, beef prices already this year, since the first of January, have increased more than 35 percent. We have a lasting shortage of lean beef, used primarily for hamburger, and which is to be mixed with the trimmings from the fat cattle produced in our own country.

The Secretary of Agriculture has decided to negotiate to permit carefully controlled, modest increases in beef imports over the next year or so. This will not change the price of fat cattle at all. It will certainly not hurt the farmers who produce beef, but it will be a great help to consumers.

Another administrative decision that is being made now is in OSHA, the Occupational Safety and Health Administration. We want to control cotton dust in textile mills. Originally in 1976, a proposal was made to do this that cost $2.7 billion in investments of about $600 million a year. We've now worked out, after very careful planning and cooperation, a way to control this threat to the health of workers in textile mills, but with a greatly reduced overall cost.

The point I'm making is that there is not just one single action that can be taken or avoided to control inflation. It covers literally dozens, even hundreds of individual decisions made by me, the Congress, and the private sector of our economy. It absolutely must be done. It's not easy to go against hospitals, to go against doctors, to go against students, to go against farmers, to go against veterans, to go against the building of highways or the building of nuclear aircraft carriers. But someone has to hold the line on the budget, and I'm determined to do so. This is one of the most important and difficult decisions that we'll have to make, and there are literally hundreds of decisions to be made. And I call upon the Congress to join in with me to avoid a series of vetoes that will create disharmony in our Government.

I call on the private sector to join in and not mount intense lobbying efforts to control some privilege that they have in setting unnecessarily high prices. And I will do my part. I believe the American people will understand the need for it, and I'm perfectly willing to take the political consequences when people are dissatisfied with the requirement of having to make some modest sacrifice of their own.

This afternoon, Bob Strauss and Bob Bergland will explain some specific actions that we have been taking and will be taking. And I believe that it is important for the American people to understand that this is a great challenge to us, but it's extremely important. And I believe that there will be approbation or approval among American people if we adhere to the principles that I've described briefly this afternoon.

Thank you very much.