Annual Message to the Congress on the State of the Union.

To the Congress of the United States:

It was just 3 years ago today that I took the oath of office as President. I opened my address that day by suggesting that some moments in history stand out "as moments of beginning," when "courses are set that shape decades or centuries." I went on to say that "this can be such a moment."

Looking back 3 years later, I would suggest that it was such a moment--a time in which new courses were set on which we now are traveling. Just how profoundly these new courses will shape our decade or our century is still an unanswered question, however, as we enter the fourth year of this administration. For moments of beginning will mean very little in history unless we also have the determination to follow up on those beginnings.

Setting the course is not enough. Staying the course is an equally important challenge. Good government involves both the responsibility for making fresh starts and the responsibility for perseverance.

The responsibility for perseverance is one that is shared by the President, the public, and the Congress.

--We have come a long way, for example, on the road to ending the Vietnam war and to improving relations with our adversaries. But these initiatives will depend for their lasting meaning on our persistence in seeing them through.

--The magnificent cooperation of the American people has enabled us to make substantial progress in curbing inflation and in reinvigorating our economy. But the new prosperity we seek can be completed only if the public continues in its commitment to economic responsibility and discipline.

--Encouraging new starts have also been made over the last 3 years in treating our domestic ills. But continued progress now requires the Congress to act on its large and growing backlog of pending legislation.

America's agenda for action is already well established as we enter 1972. It will grow in the weeks ahead as we present still more initiatives. But we dare not let the emergence of new business obscure the urgency of old business. Our new agenda will be little more than an empty gesture if we abandon--or even de-emphasize-that part of the old agenda which is yet unfinished.

GETTING OURSELVES TOGETHER

One measure of the Nation's progress in these first years of the seventies is the improvement in our national morale. While the 1960'S were a time of great accomplishment, they were also a time of growing confusion. Our recovery from that condition is not complete, but we have made a strong beginning.

Then we were a shaken and uncertain people, but now we are recovering our confidence. Then we were divided and suspicious, but now we are renewing our sense of common purpose. Then we were surrounded by shouting and posturing, but we have been learning once again to lower our voices. And we have also been learning to listen.

A history of the 1960's was recently published under the title, Coming Apart. But today we can say with confidence that we are coming apart no longer. The "center" of American life has held, and once again we are getting ourselves together.

THE SPIRIT OF REASON AND REALISM

Under the pressures of an election year, it would be easy to look upon the legislative program merely as a political device and not as a serious agenda. We must resist this temptation. The year ahead of us holds precious time in which to accomplish good for this Nation and we must not, we dare not, waste it. Our progress depends on a continuing spirit of partnership between the President and the Congress, between the House and the Senate, between Republicans and Democrats. That spirit does not require us always to agree with one another but it does require us to approach our tasks, together, in a spirit of reason and realism.

Clear words are the great servant of reason. Intemperate words are the great enemy of reason. The cute slogan, the glib headline, the clever retort, the appeal to passion--these are not the way to truth or to good public policy.

To be dedicated to clear thinking, to place the interests of all above the interests of the few, to hold to ultimate values and to curb momentary passions, to think more about the next generation and less about the next election--these are now our special challenges.

ENDING THE WAR

The condition of a nation's spirit cannot be measured with precision, but some of the factors which influence that spirit can. I believe the most dramatic single measurement of the distance we have traveled in the last 36 months is found in the statistics concerning our involvement in the war in Vietnam.

On January 20, 1969 our authorized troop ceiling in Vietnam was 549,500. And there was no withdrawal plan to bring these men home. On seven occasions since that time, I have announced withdrawal decisions--involving a total of 480,500 troops. As a result, our troop ceiling will be only 69,000 by May 1. This means that in 3 years we will have cut our troop strength in Vietnam by 87 percent. As we proceed toward our goal of a South Vietnam fully able to defend itself, we will reduce that level still further.

In this same period, expenditures connected with the war have been cut drastically. There has been a drop of well over 50 percent in American air activity in all of Southeast Asia. Our ground combat role has been ended. Most importantly, there has been a reduction of 95 percent in combat deaths.

Our aim is to cut the death and casualty toll by 100 percent, to obtain the release of those who are prisoners of war, and to end the fighting altogether.

It is my hope that we can end this tragic conflict through negotiation. If we cannot, then we will end it through Vietnamization. But end it we shall in a way which fulfills our commitment to the people of South Vietnam and which gives them the chance for which they have already sacrificed so much--the chance to choose their own future.

THE LESSONS OF CHANGE

The American people have learned many lessons in the wake of Vietnam-some helpful and some dangerous. One important lesson is that we can best serve our own interests in the world by setting realistic limits on what we try to accomplish unilaterally. For the peace of the world will be more secure, and its progress more rapid, as more nations come to share more fully in the responsibilities for peace and for progress.

At the same time, to conclude that the United States should now withdraw from all or most of its international responsibilities would be to make a dangerous error. There has been a tendency among some to swing from one extreme to the other in the wake of Vietnam, from wanting to do too much in the world to wanting to do too little. We must resist this temptation to over-react. We must stop the swinging pendulum before it moves to an opposite position, and forge instead an attitude toward the world which is balanced and sensible and realistic.

America has an important role to play in international affairs, a great influence to exert for good. As we have throughout this century, we must continue our profound concern for advancing peace and freedom, by the most effective means possible, even as we shift somewhat our view of what means are most effective. This is our policy:

--We will maintain a nuclear deterrent adequate to meet any threat to the security of the United States or of our allies.

--We will help other nations develop the capability of defending themselves.

--We will faithfully honor all of our treaty commitments.

--We will act to defend our interests whenever and wherever they are threatened any place in the world.

--But where our interests or our treaty commitments are not involved our role will be limited.

--We will not intervene militarily.

--But we will use our influence to prevent war.

--If war comes we will use our influence to try to stop it.

--Once war is over we will do our share in helping to bind up the wounds of those who have participated in it.

OPENING NEW LINES OF COMMUNICATION

Even as we seek to deal more realistically with our partners, so we must also deal more realistically with those who have been our adversaries. In the last year we have made a number of notable advances toward this goal.

In our dealings with the Soviet Union, for example, we have been able, together with our allies, to reach an historic agreement concerning Berlin. We have advanced the prospects for limiting strategic armaments. We have moved toward greater cooperation in space research and toward improving our economic relationships. There have been disappointments such as South Asia and uncertainties such as the Middle East. But there has also been progress we can build on.

It is to build on the progress of the past and to lay the foundations for greater progress in the future that I will soon be visiting the capitals of both the People's Republic of China and the Soviet Union. These visits will help to fulfill the promise I made in my Inaugural address when I said "that during this administration our lines of communication will be open," so that we can help create "an open world-open to ideas, open to the exchange of goods and people, a world in which no people, great or small, will live in angry isolation." It is in this spirit that I will undertake these journeys.

We must also be realistic, however, about the scope of our differences with these governments. My visits will mean. not that our differences have disappeared or will disappear in the near future. But peace depends on the ability of great powers to live together on the same planet despite their differences. The important thing is that we talk about these differences rather than fight about them.

It would be a serious mistake to say that nothing can come of our expanded communications with Peking and Moscow. But it would also be a mistake to expect too much too quickly. It would also be wrong to focus so much attention on these new opportunities that we neglect our old friends. That is why I have met in the last few weeks with the leaders of two of our hemisphere neighbors, Canada and Brazil, with the leaders of three great European nations, and with the Prime Minister of Japan. I believe these meetings were extremely successful in cementing our understandings with these governments as we move forward together in a fast changing period.

Our consultations with our allies may not receive as much attention as our talks with potential adversaries. But this makes them no less important. The cornerstone of our foreign policy remains--and will remain--our close bonds with our friends around the world.

A STRONG DEFENSE: THE GUARDIAN OF PEACE

There are two additional elements which are critical to our efforts to strengthen the structure of peace.

The first of these is the military strength of the United States.

In the last 3 years we have been moving from a wartime to a peacetime footing, from a period of continued confrontation and arms competition to a period of negotiation and potential arms limitation, from a period when America often acted as policeman for the world to a period when other nations are assuming greater responsibility for their own defense. I was recently encouraged, for example, by the decision of our European allies to increase their share of the NATO defense budget by some $1 billion.

As a part of this process, we have ended the production of chemical and biological weaponry and have converted two of our largest facilities for such production to humanitarian research. We have been able to reduce and in some periods even to eliminate draft calls. In 1971, draft calls--which were as high as 382,000 at the peak of the Vietnam war--fell below 100,000, the lowest level since 1962. In the coming year they will be significantly lower. I am confident that by the middle of next year we can achieve our goal of reducing draft calls to zero.

As a result of all these developments, our defense spending has fallen to 7 percent of our gross national product in the current fiscal year, compared with 8.3 percent in 1964 and 9.5 percent in 1968. That figure will be down to 6.4 percent in fiscal year 1973. Without sacrificing any of our security interests, we have been able to bring defense spending below the level of human resource spending for the first time in 20 years. This condition is maintained in my new budget--which also, for the first time, allocates more money to the Department of Health, Education, and Welfare than to the Department of Defense.

But just as we avoid extreme reactions in our political attitudes toward the world, so we must avoid over-reacting as we plan for our defense. We have reversed spending priorities, but we have never compromised our national security. And we never will. For any step which weakens America's defenses will also weaken the prospects for peace.

Our plans for the next year call for an increase in defense spending. That increase is made necessary in part by rising research and development costs, in part by military pay increases--which, in turn, will help us eliminate the draft--and in part by the need to proceed with new weapon systems to maintain our security at an adequate level. Even as we seek with the greatest urgency stable controls on armaments, we cannot ignore the fact that others are going forward with major increases in their own arms programs.

In the year ahead we will be working to improve and protect, to diversify and disperse our strategic forces in ways which make them even less vulnerable to attack and more effective in deterring war. I will request a substantial budget increase to preserve the sufficiency of our strategic nuclear deterrent, including an allocation of over $900 million to improve our seabased deterrent force. I recently directed the Department of Defense to develop a program to build additional missile launching submarines, carrying a new and far more effective missile. We will also proceed with programs to reoutfit our Polaris submarines with the Poseidon missile system, to replace older land-based missiles with Minuteman III, and to deploy the SAFEGUARD Antiballistic Missile System.

At the same time, we must move to maintain our strength at sea. The Navy's budget was increased by $2 billion in the current fiscal year, and I will ask for a similar increase next year, with particular emphasis on our shipbuilding programs.

Our military research and development program must also be stepped up. Our budget in this area was increased by $594 million in the current fiscal year and I will recommend a further increase for next year of $838 million. I will also propose a substantial program to develop and procure more effective weapons systems for our land and tactical air forces, and to improve the National Guard and Reserves, providing more modern weapons and better training.

In addition, we will expand our strong program to attract volunteer career soldiers so that we can phase out the draft. With the cooperation of the Congress, we have been able to double the basic pay of first time enlistees. Further substantial military pay increases are planned. I will also submit to the Congress an overall reform of our military retirement and survivor benefit programs, raising the level of protection for military families. In addition, we will expand efforts to improve race relations, to equalize promotional opportunities, to control drug abuse, and generally to improve the quality of life in the Armed Forces.

As we take all of these steps, let us remember that strong military defenses are not the enemy of peace; they are the guardians of peace. Our ability to build a stable and tranquil world--to achieve an arms control agreement, for example-depends on our ability to negotiate from a position of strength. We seek adequate power not as an end in itself but as a means for achieving our purpose. And our purpose is peace.

In my Inaugural address 3 years ago I called for cooperation to reduce the burden of arms--and I am encouraged by the progress we have been making toward that goal. But I also added this comment: "... to all those who would be tempted by weakness, let us leave no doubt that we will be as strong as we need to be for as long as we need to he." Today I repeat that reminder.

A REALISTIC PROGRAM OF FOREIGN ASSISTANCE

Another important expression of America's interest and influence in the world is our foreign assistance effort. This effort has special significance at a time when we are reducing our direct military presence abroad and encouraging other countries to assume greater responsibilities. Their growing ability to undertake these responsibilities often depends on America's foreign assistance.

We have taken significant steps to reform our foreign assistance programs in recent years, to eliminate waste and to give them greater impact. Now three further imperatives rest with the Congress:

--to fund in full the levels of assistance which I have earlier recommended for the current fiscal year, before the present interim funding arrangement expires in late February;

--to act upon the fundamental aid reform proposals submitted by this administration in 1971;

--and to modify those statutes which govern our response to expropriation of American property by foreign governments, as I recommended in my recent statement on the security of overseas investments.

These actions, taken together, will constitute not an exception to the emerging pattern for a more realistic American role in the world, but rather a fully consistent and crucially important element in that pattern.

As we work to help our partners in the world community develop their economic potential and strengthen their military forces, we should also cooperate fully with them in meeting international challenges such as the menace of narcotics, the threat of pollution, the growth of population, the proper use of the seas and seabeds, and the plight of those who have been victimized by wars and natural disasters. All of these are global problems and they must be confronted on a global basis. The efforts of the United Nations to respond creatively to these challenges have been most promising, as has the work of NATO in the environmental field. Now we must build on these beginnings.

AMERICA'S INFLUENCE FOR GOOD

The United States is not the world's policeman nor the keeper of its moral conscience. But--whether we like it or not-we still represent a force for stability in what has too often been an unstable world, a force for justice in a world which is too often unjust, a force for progress in a world which desperately needs to progress, a force for peace in a world that is weary of war.

We can have a great influence for good in our world--and for that reason we bear a great responsibility. Whether we fulfill that responsibility--whether we fully use our influence for good--these are questions we will be answering as we reshape our attitudes and policies toward other countries, as we determine our defensive capabilities, and as we make fundamental decisions about foreign assistance. I will soon discuss these and other concerns in greater detail in my annual report to the Congress on foreign policy.

Our influence for good in the world depends, of course, not only on decisions which touch directly on international affairs but also on our internal strength-on our sense of pride and purpose, on the vitality of our economy, on the success of our efforts to build a better life for all our people. Let us turn then from the state of the Union abroad to the state of the Union at home.

THE ECONOMY: TOWARD A NEW PROSPERITY

Just as the Vietnam war occasioned much of our spiritual crisis, so it lay at the root of our economic problems 3 years ago. The attempt to finance that war through budget deficits in a period of full employment had produced a wave of price inflation as dangerous and as persistent as any in our history. It was more persistent, frankly, than I expected it would be when I first took office. And it only yielded slowly to our dual efforts to cool the war and to cool inflation.

Our challenge was further compounded by the need to reabsorb more than 2 million persons who were released from the Armed Forces and from defense-related industries and by the substantial expansion of the labor force.

In short, the escalation of the Vietnam war in the late 1960's destroyed price stability. And the de-escalation of that war in the early 1970's impeded full employment.

Throughout these years, however, I have remained convinced that both price stability and full employment were realistic goals for this country. By last summer it became apparent that our efforts to eradicate inflation without wage and price controls would either take too long or-if they were to take effect quickly--would come at the cost of persistent high unemployment. This cost was unacceptable. On August 15th I therefore announced a series of new economic policies to speed our progress toward a new prosperity without inflation in peacetime.

These policies have received the strong support of the Congress and the American people, and as a result they have been effective. To carry forward these policies, three important steps were taken this past December--all within a brief e-week period--which will also help to make the coming year a very good year for the American economy.

On December 10, I signed into law the Revenue Act of 1971, providing tax cuts over the next 3 years of some $ 15 billion, cuts which I requested to stimulate the economy and to provide hundreds of thousands of new jobs. On December 22, I signed into law the Economic Stabilization Act Amendments of 1971, which will allow us to continue our program of wage and price restraints to break the back of inflation.

Between these two events, on December 18, I was able to announce a major breakthrough on the international economic front--reached in cooperation with our primary economic partners. This breakthrough will mitigate the intolerable strains which were building up in the world's monetary and payments structure and will lead to a removal of trade barriers which have impeded American exports. It also sets the stage for broader reforms in the international monetary system so that we can avoid repeated monetary crises in the future. Both the monetary realignment--the first of its scope in history--and our progress in readjusting trade conditions will mean better markets for American goods abroad and more jobs for American workers at home.

A BRIGHTER ECONOMIC PICTURE

As a result of all these steps, the economic picture--which has brightened steadily during the last 5 months--will, I believe, continue to grow brighter. This is not my judgment alone; it is widely shared by the American people. Virtually every survey and forecast in recent weeks shows a substantial improvement in public attitudes about the economy--which are themselves so instrumental in shaping economic realities.

The inflationary psychology which gripped our Nation so tightly for so long is on the ebb. Business and consumer confidence has been rising. Businessmen are planning a 9.1 percent increase in plant and equipment expenditures in 1972, more than four times as large as the increase in 1971. Consumer spending and retail sales are on the rise. Home building is booming--housing starts last year were up more than 40 percent from 1970, setting an all-time record. Interest rates are sharply down. Both income and production are rising. Real output in our economy in the last 3 months of 1971 grew at a rate that was about double that of the previous two quarters.

Perhaps most importantly, total employment has moved above the 80 million mark--to a record high--and is growing rapidly. In the last 5 months of 1971, some 1.1 million additional jobs were created in our economy and only a very unusual increase in the size of our total labor force kept the unemployment rate from falling.

But whatever the reason, 6 percent unemployment is too high. I am determined to cut that percentage--through a variety of measures. The budget I present to the Congress next week will be an expansionary budget--reflecting the impact of new job-creating tax cuts and job-creating expenditures. We will also push to increase employment through our programs for manpower training and public service employment, through our efforts to expand foreign markets, and through other new initiatives.

Expanded employment in 1972 will be different, however, from many other periods of full prosperity. For it will come without the stimulus of war--and it will come without inflation. Our program of wage and price controls is working. The consumer price index, which rose at a yearly rate of slightly over 6 percent during 1969 and the first half of 1970, rose at a rate of only 1.7 percent from August through November of 1971.

I would emphasize once again, however, that our ultimate objective is lasting price stability without controls. When we achieve an end to the inflationary psychology which developed in the 1960's, we will return to our traditional policy of relying on free market forces to determine wages and prices.

I would also emphasize that while our new budget will be in deficit, the deficit will not be irresponsible. It will be less than this year's actual deficit and would disappear entirely under full employment conditions. While Federal spending continues to grow, the rate of increase in spending has been cut very sharply--to little more than half that experienced under the previous administration. The fact that our battle against inflation has led us to adopt a new policy of wage and price restraints should not obscure the continued importance of our fiscal and monetary policies in holding down the cost of living. It is most important that the Congress join now in resisting the temptation to overspend and in accepting the discipline of a balanced full employment budget.

I will soon present a more complete discussion of all of these matters in my Budget Message and in my Economic Report.

A NEW ERA IN INTERNATIONAL ECONOMICS

Just as we have entered a new period of negotiation in world politics, so we have also moved into a new period of negotiation on the international economic front. We expect these negotiations to help us build both a new international system for the exchange of money and a new system of international trade. These accomplishments, in turn, can open a new era of fair competition and constructive interdependence in the global economy.

We have already made important strides in this direction. The realignment of exchange rates which was announced last month represents an important forward step--but now we also need basic long-range monetary reform. We have made an important beginning toward altering the conditions for international trade and investment--and we expect further substantial progress. I would emphasize that progress for some nations in these fields need not come at the expense of others. All nations will benefit from the right kind of monetary and trade reform.

Certainly the United States has a high stake in such improvements. Our international economic position has been slowly deteriorating now for some time--a condition which could have dangerous implications for both our influence abroad and our prosperity at home. It has been estimated, for example, that full employment prosperity will depend on the creation of some 20 million additional jobs in this decade. And expanding our foreign markets is a most effective way to expand domestic employment.

One of the major reasons for the weakening of our international economic position is that the ground rules for the exchange of goods and money have forced us to compete with one hand tied behind our back. One of our most important accomplishments in 1971 was our progress in changing this situation.

COMPETING MORE EFFECTIVELY

Monetary and trade reforms are only one part of this story. The ability of the United States to hold its own in world competition depends not only on the fairness of the rules, but also on the competitiveness of our economy. We have made great progress in the last few months in improving the terms of competition. Now we must also do all we can to strengthen the ability of our own economy to compete.

We stand today at a turning point in the history of our country--and in the history of our planet. On the one hand, we have the opportunity to help bring a new economic order to the world, an open order in which nations eagerly face outward to build that network of interdependence which is the best foundation for prosperity and for peace. But we will also be tempted in the months ahead to take the opposite course--to withdraw from the world economically as some would have us withdraw politically, to build an economic "Fortress America" within which our growing weakness could be concealed. Like a child who will not go out to play with other children, we would probably be saved a few minor bumps and bruises in the short run if we were to adopt this course. But in the long run the world would surely pass us by.

I reject this approach. I remain committed to that open world I discussed in my Inaugural address. That is why I have worked for a more inviting climate for America's economic activity abroad. That is why I have placed so much emphasis on increasing the productivity of our economy at home. And that is also why I believe so firmly that we must stimulate more long-range investment in our economy, find more effective ways to develop and use new technology, and do a better job of training and using skilled manpower.

An acute awareness of the international economic challenge led to the creation just one year ago of the Cabinet-level Council on International Economic Policy. This new institution has helped us to understand this challenge better and to respond to it more effectively.

As our understanding deepens, we will discover additional ways of improving our ability to compete. For example, we can enhance our competitive position by moving to implement the metric system of measurement, a proposal which the Secretary of Commerce presented in detail to the Congress last year. And we should also be doing far more to gain our fair share of the international tourism market, now estimated at $17 billion annually, one of the largest factors in world trade. A substantial part of our balance of payments deficit results from the fact that American tourists abroad spend $2.5 billion more than foreign tourists spend in the United States. We can help correct this situation by attracting more foreign tourists to our shores--especially as we enter our Bicentennial era. I am therefore requesting that the budget for the United States Travel Service be nearly doubled in the coming year.

THE UNFINISHED AGENDA

Our progress toward building a new economic order at home and abroad has been made possible by the cooperation and cohesion of the American people. I am sure that many Americans had misgivings about one aspect or another of the new economic policies I introduced last summer. But most have nevertheless been ready to accept this new effort in order to build the broad support which is essential for effective change.

The time has now come for us to apply this same sense of realism and reasonability to other reform proposals which have been languishing on our domestic agenda. As was the case with our economic policies, most Americans agree that we need a change in our welfare system, in our health strategy, in our programs to improve the environment, in the way we finance State and local government, and in the organization of government at the Federal level. Most Americans are not satisfied with the status quo in education, in transportation, in law enforcement, in drug control, in community development. In each of these areas--and in others--I have put forward specific proposals which are responsive to this deep desire for change.

And yet achieving change has often been difficult. There has been progress in some areas, but for the most part, as a nation we have not shown the same sense of self-discipline in our response to social challenges that we have developed in meeting our economic needs. We have not been as ready as we should have been to compromise our differences and to build a broad coalition for change. And so we often have found ourselves in a situation of stalemate--doing essentially nothing even though most of us agree that nothing is the very worst thing we can do.

Two years ago this week, and again one year ago, my messages on the state of the Union contained broad proposals for domestic reform. I am presenting a number of new proposals in this year's message. But I also call once again, with renewed urgency, for action on our unfinished agenda.

WELFARE REFORM

The first item of unfinished business is welfare reform.

Since I first presented my proposals in August of 1969, some 4 million additional persons have been added to our welfare rolls. The cost of our old welfare system has grown by an additional $4.2 billion. People have not been moving as fast as they should from welfare rolls to payrolls. Too much of the traffic has been the other way.

Our antiquated welfare system is responsible for this calamity. Our new program of "workfare" would begin to end it.

Today, more than ever, we need a new program which is based on the dignity of work, which provides strong incentives for work, and which includes for those who are able to work an effective work requirement. Today, more than ever, we need a new program which helps hold families together rather than driving them apart, which provides day care services so that low income mothers can trade dependence on government for the dignity of employment, which relieves intolerable fiscal pressures on State and local governments, and which replaces 54 administrative systems with a more efficient and reliable nationwide approach.

I have now given prominent attention to this subject in three consecutive messages on the state of the Union. The House of Representatives has passed welfare reform twice. Now that the new economic legislation has been passed, I urge the Senate Finance Committee to place welfare reform at the top of its agenda. It is my earnest hope that when this Congress adjourns, welfare reform will not be an item of pending business but an accomplished reality.

REVENUE SHARING: RETURNING POWER TO THE PEOPLE

At the same time that I introduced my welfare proposals 2 1/2 years ago, I also presented a program for sharing Federal revenues with State and local governments. Last year I greatly expanded on this concept. Yet, despite undisputed evidence of compelling needs, despite overwhelming public support, despite the endorsement of both major political parties and most of the Nation's Governors and mayors, and despite the fact that most other nations with federal systems of government already have such a program, revenue sharing still remains on the list of unfinished business.

I call again today for the enactment of revenue sharing. During its first full year of operation our proposed programs would spend $17.6 billion, both for general purposes and through six special purpose programs for law enforcement, manpower, education, transportation, rural community, development, and urban community development.

As with welfare reform, the need for revenue sharing becomes more acute as time passes. The financial crisis of State and local government is deepening. The pattern of breakdown in State and municipal services grows more threatening. Inequitable tax pressures are mounting. The demand for more flexible and more responsive government--at levels closer to the problems and closer to the people--is building.

Revenue sharing can help us meet these challenges. It can help reverse what has been the flow of power and resources toward Washington by sending power and resources back to the States, to the communities, and to the people. Revenue sharing can bring a new sense of accountability, a new burst of energy and a new spirit of creativity to our federal system.

I am pleased that the House Ways and Means Committee has made revenue sharing its first order of business in the new session. I urge the Congress to enact in this session, not an empty program which bears the revenue sharing label while continuing the outworn system of categorical grants, but a bold, comprehensive program of genuine revenue sharing.

I also presented last year a $100 million program of planning and management grants to help the States and localities do a better job of analyzing their problems and carrying out solutions. I hope this program will also be quickly accepted. For only as State and local governments get a new lease on life can we hope to bring government back to the people--and with it a stronger sense that each individual can be in control of his life, that every person can make a difference.

OVERHAULING THE MACHINERY OF GOVERNMENT: EXECUTIVE REORGANIZATION

As we work to make State and local government more responsive--and more responsible--let us also seek these same goals at the Federal level. I again urge the Congress to enact my proposals for reorganizing the executive branch of the Federal Government. Here again, support from the general public--as well as from those who have served in the executive branch under several Presidents has been most encouraging. So has the success of the important organizational reforms we have already made. These have included a restructured Executive Office of the President--with a new Domestic Council, a new Office of Management and Budget, and other units; reorganized field operations in Federal agencies; stronger mechanisms for interagency coordination, such as Federal Regional Councils; a new United States Postal Service; and new offices for such purposes as protecting the environment, coordinating communications policy, helping the consumer, and stimulating voluntary service. But the centerpiece of our efforts to streamline the executive branch still awaits approval.

How the government is put together often determines how well the government can do its job. Our Founding Fathers understood this fact--and thus gave detailed attention to the most precise structural questions. Since that time, however, and especially in recent decades, new responsibilities and new constituencies have caused the structure they established to expand enormously--and in a piecemeal and haphazard fashion.

As a result, our Federal Government today is too often a sluggish and unresponsive institution, unable to deliver a dollar's worth of service for a dollar's worth of taxes.

My answer to this problem is to streamline the executive branch by reducing the overall number of executive departments and by creating four new departments in which existing responsibilities would be refocused in a coherent and comprehensive way. The rationale which I have advanced calls for organizing these new departments around the major purposes of the government by creating a Department of Natural Resources, a Department of Human Resources, a Department of Community Development, and a Department of Economic Affairs. I have revised my original plan so that we would not eliminate the Department of Agriculture but rather restructure that Department so it can focus more effectively on the needs of farmers.

The Congress has recently reorganized its own operations, and the Chief Justice of the United States has led a major effort to reform and restructure the judicial branch. The impulse for reorganization is strong and the need for reorganization is clear. I hope the Congress will not let this opportunity for sweeping reform of the executive branch slip away.

A NEW APPROACH TO THE DELIVERY OF SOCIAL SERVICES

As a further step to put the machinery of government in proper working order, I will also propose new legislation to reform and rationalize the way in which social services are delivered to families and individuals.

Today it often seems that our service programs are unresponsive to the recipients' needs and wasteful of the taxpayers' money. A major reason is their extreme fragmentation. Rather than pulling many services together, our present system separates them into narrow and rigid categories. The father of a family is helped by one program, his daughter by another, and his elderly parents by a third. An individual goes to one place for nutritional help, to another for health services, and to still another for educational counseling. A community finds that it cannot transfer Federal funds from one program area to another area in which needs are more pressing.

Meanwhile, officials at all levels of government find themselves wasting enormous amounts of time, energy, and the taxpayers' money untangling Federal red tape--time and energy and dollars which could better be spent in meeting people's needs.

We need a new approach to the delivery of social services--one which is built around people and not around programs. We need an approach which treats a person as a whole and which treats the family as a unit. We need to break through rigid categorical walls, to open up narrow bureaucratic compartments, to consolidate and coordinate related programs in a comprehensive approach to related problems.

The Allied Services Act which will soon be submitted to the Congress offers one set of tools for carrying out that new approach in the programs of the Department of Health, Education, and Welfare. It would strengthen State and local planning and administrative capacities, allow for the transfer of funds among various HEW programs, and permit the waiver of certain cumbersome Federal requirements. . By streamlining and simplifying the delivery of services, it would help more people move more rapidly from public dependency toward the dignity of being self-sufficient.

Good men and good money can be wasted on bad mechanisms. By giving those mechanisms a thorough overhaul, we can help to restore the confidence of the people in the capacities of their government.

PROTECTING THE ENVIRONMENT

A central theme of both my earlier messages on the state of the Union was the state of our environment--and the importance of making "our peace with nature." The last few years have been a time in which environmental values have become firmly embedded in our attitudes--and in our institutions. At the Federal level, we have established a new Environmental Protection Agency, a new Council on Environmental Quality and a new National Oceanic and Atmospheric Administration, and we have proposed an entire new Department of Natural Resources. New air quality standards have been set, and there is evidence that the air in many cities is becoming less polluted. Under authority granted by the Refuse Act of 1899, we have instituted a new permit program which, for the first time, allows the Federal Government to inventory all significant industrial sources of water pollution and to specify required abatement actions. Under the Refuse Act, more than 160 civil actions and 320 criminal actions to stop water pollution have been filed against alleged polluters in the last 12 months. Major programs have also been launched to build new municipal waste treatment facilities, to stop pollution from Federal facilities, to expand our wilderness areas, and to leave a legacy of parks for future generations. Our outlays for inner city parks have been significantly expanded, and 62 Federal tracts have been transferred to the States and to local governments for recreational uses. In the coming year, I hope to transfer to local park use much more Federal land which is suitable for recreation but which is now underutilized. I trust the Congress will not delay this process.

The most striking fact about environmental legislation in the early 1970's is how much has been proposed and how little has been enacted. Of the major legislative proposals I made in my special message to the Congress on the environment last winter, 18 are still awaiting final action. They include measures to regulate pesticides and toxic substances, to control noise pollution, to restrict dumping in the oceans, in coastal waters, and in the Great Lakes, to create an effective policy for the use and development of land, to regulate the siting of power plants, to control strip mining, and to help achieve many other important environmental goals. The unfinished agenda also includes our National Resource Land Management Act, and other measures to improve environmental protection on federally owned lands.

The need for action in these areas is urgent. The forces which threaten our environment will not wait while we procrastinate. Nor can we afford to rest on last year's agenda in the environmental field. For as our understanding of these problems increases, so must our range of responses. Accordingly, I will soon be sending to the Congress another message on the environment that will present further administrative and legislative initiatives. Altogether our new budget will contain more than three times as much money for environmental programs in fiscal year 1973 as we spent in fiscal year 1969. To fail in meeting the environmental challenge, however, would be even more costly.

I urge the Congress to put aside narrow partisan perspectives that merely ask "whether" we should act to protect the environment and to focus instead on the more difficult question of "how" such action can most effectively be carried out.

ABUNDANT CLEAN ENERGY

In my message to the Congress on energy policy, last June, I outlined additional steps relating to the environment which also merit renewed attention. The challenge, as I defined it, is to produce a sufficient supply of energy to fuel our industrial civilization and at the same time to protect a beautiful and healthy environment. I am convinced that we can achieve both these goals, that we can respect our good earth without turning our back on progress.

In that message last June, I presented a long list of means for assuring an ample supply of clean energy--including the liquid metal fast breeder reactor--and I again emphasize their importance. Because it often takes several years to bring new technologies into use in the energy field, there is no time for delay. Accordingly, I am including in my new budget increased funding for the most promising of these and other clean energy programs. By acting this year, we can avoid having to choose in some future year between too little energy, and too much pollution.

KEEPING PEOPLE HEALTHY

The National Health Strategy I outlined last February is designed to achieve one of the Nation's most important goals for the 1970's, improving the quality and availability of medical care, while fighting the trend toward runaway costs. Important elements of that strategy have already been enacted. The Comprehensive Health Manpower Training Act and the Nurse Training Act, which I signed on November 18, represent the most far-reaching effort in our history to increase the supply of doctors, nurses, dentists and other health professionals and to attract them to areas which are experiencing manpower shortages. The National Cancer Act, which I signed on December 23, marked the climax of a year-long effort to step up our campaign against cancer. During the past year, our cancer research budget has been increased by $100 million and the full weight of my office has been given to our all-out war on this disease. We have also expanded the fight against sickle cell anemia by an additional $5 million.

I hope that action on these significant fronts during the first session of the 92nd Congress will now be matched by action in other areas during the second session. The Health Maintenance Organization Act, for example, is an essential tool for helping doctors deliver care more effectively and more efficiently with a greater emphasis on prevention and early treatment. By working to keep our people healthy instead of treating us only when we are sick, Health Maintenance Organizations can do a great deal to help us reduce medical costs.

Our National Health Insurance Partnership legislation is also essential to assure that no American is denied basic medical care because of inability to pay. Too often, present health insurance leaves critical outpatient services uncovered, distorting the way in which facilities are used. It also fails to protect adequately against catastrophic costs and to provide sufficient assistance for the poor. The answer I have suggested is a comprehensive national plan--not one that nationalizes our private health insurance industry but one that corrects the weaknesses in that system while building on its considerable strengths.

A large part of the enormous increase in the Nation's expenditures on health in recent years has gone not to additional services but merely to meet price inflation. Our efforts to balance the growing demand for care with an increased supply of services will help to change this picture. So will that part of our economic program which is designed to control medical costs. I am confident that with the continued cooperation of those who provide health services, we will succeed on this most important battlefront in our war against inflation.

Our program for the next year will also include further funding increases for health research--including substantial new sums for cancer and sickle cell anemia--as well as further increases for medical schools and for meeting special problems such as drug addiction and alcoholism. We also plan to construct new veterans hospitals and expand the staffs at existing ones.

In addition, we will be giving increased attention to the fight against diseases of the heart, blood vessels and lungs, which presently account for more than half of all the deaths in this country. It is deeply disturbing to realize that, largely because of heart disease, the mortality rate for men under the age of 55 is about twice as great in the United States as it is, for example, in some Scandinavian countries.

I will shortly assign a panel of distinguished experts to help us determine why heart disease is so prevalent and so menacing and what we can do about it. I will also recommend an expanded budget for the National Heart and Lung Institute. The young father struck down by a heart attack in the prime of life, the productive citizen crippled by a stroke, an older person tortured by breathing difficulties during his later years--these are tragedies which can be reduced in number and we must do all that is possible to reduce them.

NUTRITION

One of the critical areas in which we have worked to advance the health of the Nation is that of combating hunger and improving nutrition. With the increases in our new budget, expenditures on our food stamp program will have increased ninefold since 1969, to the $2.3 billion level. Spending on school lunches for needy children will have increased more than sevenfold, from $107 million in 1969 to $770 million in 1973. Because of new regulations which will be implemented in the year ahead, we will be able to increase further both the equity of our food stamp program and the adequacy of its benefits.

COPING WITH ACCIDENTS--AND PREVENTING THEM

Last year, more than 115,000 Americans lost their lives in accidents. Four hundred thousand more were permanently disabled and 10 million were temporarily disabled. The loss to our economy from accidents last year is estimated at over $28 billion. These are sad and staggering figures--especially since this toll could be greatly reduced by upgrading our emergency medical services. Such improvement does not even require new scientific breakthroughs; it only requires that we apply our present knowledge more effectively.

To help in this effort, I am directing the Department of Health, Education, and Welfare to develop new ways of organizing emergency medical services and of providing care to accident victims. By improving communication, transportation, and the training of emergency personnel, we can save many thousands of lives which would otherwise be lost to accidents and sudden illnesses.

One of the significant joint accomplishments of the Congress and this administration has been a vigorous new program to protect against job-related accidents and illnesses. Our occupational health and safety program will be further strengthened in the year ahead--as will our ongoing efforts to promote air traffic safety, boating safety, and safety on the highways.

In the last 3 years, the motor vehicle death rate has fallen by 13 percent, but we still lose some 50,000 lives on our highways each year--more than we have lost in combat in the entire Vietnam war.

Fully one-half of these deaths were directly linked to alcohol. This appalling reality is a blight on our entire Nation-and only the active concern of the entire Nation can remove it. The Federal Government will continue to help all it can, through its efforts to promote highway safety and automobile safety, and through stronger programs to help the problem drinker.

YESTERDAY'S GOALS: TOMORROW'S ACCOMPLISHMENTS

Welfare reform, revenue sharing, executive reorganization, environmental protection, and the new national health strategy--these, along with economic improvement, constituted the six great goals I emphasized in my last State of the Union address--six major components of a New American Revolution. They remain six areas of great concern today. With the cooperation of the Congress, they can be six areas of great accomplishment tomorrow.

But the challenges we face cannot be reduced to six categories. Our problems-and our opportunities--are manifold, and action on many fronts is required. It is partly for this reason that my State of the Union address this year includes this written message to the Congress. For it gives me the chance to discuss more fully a number of programs which also belong on our list of highest priorities.

ACTION FOR THE AGING

Last month, I joined with thousands of delegates to the White House Conference on Aging in a personal commitment to make 1972 a year of action on behalf of 21 million older Americans. Today I call on the Congress to join me in that pledge. For unless the American dream comes true for our older generation it cannot be complete for any generation.

We can begin to make this a year of action for the aging by acting on a number of proposals which have been pending since 1969. For older Americans, the most significant of these is the bill designated H.R.i. This legislation, which also contains our general welfare reform measures, would place a national floor under the income of all older Americans, guarantee inflation-proof social security benefits, allow social security recipients to earn more from their own work, increase benefits for widows, and provide a 5-percent across the-board increase in social security. Altogether, H.R. 1--as it now stands-would mean some $5.5 billion in increased benefits for America's older citizens. I hope the Congress will also take this opportunity to eliminate the $5.80 monthly fee now charged under Part B of Medicare--a step which would add an additional $1.5 billion to the income of the elderly. These additions would come on top of earlier social security increases totalling some $3 billion over the last 3 years.

A number of newer proposals also deserve approval. I am requesting that the budget of the Administration on Aging be increased five-fold over last year's request, to $100 million, in part so that we can expand programs which help older citizens live dignified lives in their own homes. I am recommending substantially larger budgets for those programs which give older Americans a better chance to serve their countrymen--Retired Senior Volunteers, Foster Grandparents, and others. And we will also work to ease the burden of property taxes which so many older Americans find so inequitable and so burdensome. Other initiatives, including proposals for extending and improving the Older Americans Act, will be presented as we review the recommendations of the White House Conference on Aging. Our new Cabinet-level Domestic Council Committee on Aging has these recommendations at the top of its agenda.

We will also be following up in 1972 on one of the most important of our 1971 initiatives--the crackdown on substandard nursing homes. Our follow-through will give special attention to providing alternative arrangements for those who are victimized by such facilities.

The legislation I have submitted to provide greater financial security at retirement, both for those now covered by private pension plans and those who are not, also merits prompt action by the Congress. Only half the country's work force is now covered by tax deductible private pensions; the other half deserve a tax deduction for their retirement savings too. Those who are now covered by pension plans deserve the assurance that their plans are administered under strict fiduciary standards with full disclosure. And they should also have the security provided by prompt vesting--the assurance that even if one leaves a given job, he can still receive the pension he earned there when he retires. The legislation I have proposed would achieve these goals, and would also raise the limit on deductible pension savings for the self-employed.

The state of our Union is strong today because of what older Americans have so long been giving to their country. The state of our Union will be stronger tomorrow if we recognize how much they still can contribute. The best thing our country can give to its older citizens is the chance to be a part of it, the chance to play a continuing role in the great American adventure.

EQUAL OPPORTUNITY FOR MINORITIES

America cannot be at its best as it approaches its 200th birthday unless all Americans have the opportunity to be at their best. A free and open American society, one that is true to the ideals of its founders, must give each of its citizens an equal chance at the starting line and an equal opportunity to go as far and as high as his talents and energies will take him.

The Nation can be proud of the progress it has made in assuring equal opportunity for members of minority groups in recent years. There are many measures of our progress.

Since 1969, we have virtually eliminated the dual school system in the South. Three years ago, 68 percent of all black children in the South were attending all black schools; today only 9 percent are attending schools which are entirely black. Nationally, the number of 100 percent minority schools has decreased by 70 percent during the past 3 years. To further expand educational opportunity, my proposed budget for predominantly black colleges will exceed $200 million next year, more than double the level of 3 years ago.

On the economic front, overall Federal aid to minority business enterprise has increased threefold in the last 3 years, and I will propose a further increase of $90 million. Federal hiring among minorities has been intensified, despite cutbacks in Federal employment, so that one-fifth of all Federal employees are now members of minority groups. Building on strong efforts such as the Philadelphia Plan, we will work harder to ensure that Federal contractors meet fair hiring standards. Compliance reviews will be stepped up, to a level more than 300 percent higher than in 1969. Our proposed budget for the Equal Employment Opportunity Commission will be up 36 percent next year, while our proposed budget for enforcing fair housing laws will grow by 20 percent. I also support legislation to strengthen the enforcement powers of the EEOC by providing the Commission with authority to seek court enforcement of its decisions and by giving it jurisdiction over the hiring practices of State and local governments.

Overall, our proposed budget for civil rights activities is up 25 percent for next year, an increase which will give us nearly three times as much money for advancing civil rights as we had 3 years ago. We also plan a 42 percent increase in the budget for the Cabinet Committee on Opportunities for the Spanish Speaking. And I will propose that the Congress extend the operations of the Civil Rights Commission for another 5-year period.

SELF-DETERMINATION FOR INDIANS

One of the major initiatives in the second year of my Presidency was designed to bring a new era in which the future for American Indians is determined by Indian acts and Indian decisions. The comprehensive program I put forward sought to avoid the twin dangers of paternalism on the one hand and the termination of trust responsibility on the other. Some parts of this program have now become effective, including a generous settlement of the Alaska Native Claims and the return to the Taos Pueblo Indians of the sacred lands around Blue Lake. Construction grants have been authorized to assist the Navajo Community College, the first Indian-managed institution of higher education.

We are also making progress toward Indian self-determination on the administrative front. A newly reorganized Bureau of Indian Affairs, with almost all-Indian leadership, will from now on be concentrating its resources on a program of reservation-by-reservation development, including redirection of employment assistance to strengthen reservation economies, creating local Indian Action Teams for manpower training, and increased contracting of education and other functions to Indian communities.

I again urge the Congress to join in helping Indians help themselves in fields such as health, education, the protection of land and water rights, and economic development. We have talked about injustice to the first Americans long enough. As Indian leaders themselves have put it, the time has come for more rain and less thunder.

EQUAL RIGHTS FOR WOMEN

This administration will also continue its strong efforts to open equal opportunities for women, recognizing clearly that women are often denied such opportunities today. While every woman may not want a career outside the home, every woman should have the freedom to choose whatever career she wishes--and an equal chance to pursue it.

We have already moved vigorously against job discrimination based on sex in both the private and public sectors. For the first time, guidelines have been issued to require that Government contractors in the private sector have action plans for the hiring and promotion of women. We are committed to strong enforcement of equal employment opportunity for women under Title VII of the Civil Rights Act. To help carry out these commitments I will propose to the Congress that the jurisdiction of the Commission on Civil Rights be broadened to encompass sex-based discrimination.

Within the Government, more women have been appointed to high posts than ever before. As the result of my directives issued in April 1971 the number of women appointed to high-level Federal positions has more than doubled--and the number of women in Federal middle management positions has also increased dramatically. More women than ever before have been appointed to Presidential boards and commissions. Our vigorous program to recruit more women for Federal service will be continued and intensified in the coming year.

OPPORTUNITY FOR VETERANS

A grateful nation owes its servicemen and servicewomen every opportunity it can open to them when they return to civilian life. The Nation may be weary of war, but we dare not grow weary of doing right by those who have borne its heaviest burdens.

The Federal Government is carrying out this responsibility in many ways: through the G.I. Bill for education-which will spend 2 1/2 times more in 1973 than in 1969; through home loan programs and disability and pension benefits-which also have been expanded; through better medical services--including strong new drug treatment programs; through its budget for veterans hospitals, which is already many times the 1969 level and will be stepped up further next year.

We have been particularly concerned in the last 3 years with the employment of veterans--who experience higher unemployment rates than those who have not served in the Armed Forces. During this past year I announced a six-point national program to increase public awareness of this problem, to provide training and counseling to veterans seeking jobs and to help them find employment opportunities. Under the direction of the Secretary of Labor and with the help of our Jobs for Veterans Committee and the National Alliance of Businessmen, this program has been moving forward. During its first five months of operation, 122,000 Vietnamera veterans were placed in jobs by the Federal-State Employment Service and 40,000 were enrolled in job training programs. During the next six months, we expect the Federal-State Employment Service to place some 200,000 additional veterans in jobs and to enroll nearly 200,000 more in manpower training programs.

But let us never forget, in this as in so many other areas, that the opportunity for any individual to contribute fully to his society depends in the final analysis on the response--in his own community---of other individuals.

GREATER ROLE FOR AMERICAN YOUTH

Full participation and first class citizenship--these must be our goals for America's young people. It was to help achieve these goals that I signed legislation to lower the minimum voting age to 18 in June of 1970, and moved to secure a court validation of its constitutionality. And I took special pleasure a year later in witnessing the certification of the amendment which placed this franchise guarantee in the Constitution.

But a voice at election time alone is not enough. Young people should have a hearing in government on a day-by-day basis. To this end, and at my direction, agencies throughout the Federal Government have stepped up their hiring of young people and have opened new youth advisory channels. We have also convened the first White House Youth Conference--a wide-open forum whose recommendations have been receiving a thorough review by the Executive departments.

Several other reforms also mean greater freedom and opportunity for America's young people. Draft calls have been substantially reduced, as a step toward our target of reducing them to zero by mid-1973. The lottery system and other new procedures and the contributions of youth advisory councils and younger members on local boards have made the draft far more fair than it was. My educational reform proposals embody the principle that no qualified student who wants to go to college should be barred by lack of money-a guarantee that would open doors of opportunity for many thousands of deserving young people. Our new career education emphasis can also be a significant springboard to good jobs and rewarding lives.

Young America's "extra dimension" in the sixties and seventies has been a drive to help the less fortunate--an activist idealism bent on making the world a better place to live. Our new ACTION volunteer agency, building on the successful experiences of constituent units such as the Peace Corps and Vista, has already broadened service opportunities for the young-and more new programs are in prospect. The Congress can do its part in forwarding this positive momentum by assuring that the ACTION programs have sufficient funds to carry out their mission.

THE AMERICAN FARMER

As we face the challenge of competing more effectively abroad and of producing more efficiently at home, our entire Nation can take the American farmer as its model. While the productivity of our non-farm industries has gone up 60 percent during the last 20 years, agricultural productivity has gone up 200 percent, or nearly 3 1/2 times as much. One result has been better products and lower prices for American consumers. Another is that farmers have more than held their own in international markets. Figures for the last fiscal year show nearly a $900 million surplus for commercial agricultural trade.

The strength of American agriculture is at the heart of the strength of America. American farmers deserve a fair share in the fruits of our prosperity.

We still have much ground to cover before we arrive at that goal--but we have been moving steadily toward it. In 1950 the income of the average farmer was only 58 percent of that of his non-farm counterpart. Today that figure stands at 74 percent--not nearly high enough, but moving in the right direction.

Gross farm income reached a record high in 1971, and for 1972 a further increase of $2 billion is predicted. Because of restraints on production costs, net farm income is expected to rise in 1972 by 6.4 percent or some $1 billion. Average income per farm is expected to go up 8 percent--to an all-time high--in the next 12 months.

Still there are very serious farm problems-and we are taking strong action to meet them.

I promised 3 years ago to end the sharp skid in farm exports--and I have kept that promise. In just 2 years, farm exports climbed by 37 percent, and last year they set an all-time record. Our expanded marketing programs, the agreement to sell 2 million tons of feed grains to the Soviet Union, our massive aid to South Asia under Public Law 480, and our efforts to halt transportation strikes--by doing all we can under the old law and by proposing a new and better one--these efforts and others are moving us toward our $10 billion farm export goal.

I have also promised to expand domestic markets, to improve the management of surpluses, and to help in other ways to raise the prices received by farmers. I have kept that promise, too. A surprisingly large harvest drove corn prices down last year, but they have risen sharply since last November. Prices received by dairy farmers, at the highest level in history last year, will continue strong in 1972. Soybean prices will be at their highest level in two decades. Prices received by farmers for hogs, poultry and eggs are all expected to go higher. Expanded Government purchases and other assistance will also provide a greater boost to farm income.

With the close cooperation of the Congress, we have expanded the farmers' freedom and flexibility through the Agricultural Act of 1970. We have strengthened the Farm Credit System and substantially increased the availability of farm credit. Programs for controlling plant and animal disease and for soil and water conservation have also been expanded. All these efforts will continue, as will our efforts to improve the legal climate for cooperative bargaining--an important factor in protecting the vitality of the family farm and in resisting excessive Government management.

DEVELOPING RURAL AMERICA

In my address to the Congress at this time 2 years ago, I spoke of the fact that one-third of our counties had lost population in the 1960's, that many of our rural areas were slowly being emptied of their people and their promise, and that we should work to reverse this picture by including rural America in a nationwide program to foster balanced growth.

It is striking to realize that even if we had a population of one billion--nearly five times the current level---our area is so great that we would still not be as densely populated as many European nations are at present. Clearly, our problems are not so much those of numbers as they are of distribution. We must work to revitalize the American countryside.

We have begun to make progress on this front in the last 3 years. Rural housing programs have been increased by more than 450 percent from 1969 to 1973. The number of families benefiting from rural water and sewer programs is now 75 percent greater than it was in 1969. We have worked to encourage sensible growth patterns through the location of Federal facilities. The first biennial Report on National Growth, which will be released in the near future, will further describe these patterns, their policy implications and the many ways we are responding to this challenge.

But we must do more. The Congress can begin by passing my $ 1.1 billion program of Special Revenue Sharing for Rural Community Development. In addition, I will soon present a major proposal to expand significantly the credit authorities of the Farmers Home Administration, so that this agency--which has done so much to help individual farmers-can also help spur commercial, industrial and community development in rural America. Hopefully, the FHA will be able to undertake this work as a part of a new Department of Community Development.

In all these ways, we can help ensure that rural America will be in the years ahead what it has been from our Nation's beginning--an area which looks eagerly to the future with a sense of hope and promise.

A COMMITMENT TO OUR CITIES

Our commitment to balanced growth also requires a commitment to our cities-to old cities threatened by decay, to suburbs now sprawling senselessly because of inadequate planning, and to new cities not yet born but clearly needed by our growing population. I discussed these challenges in my special message to the Congress on Population Growth and the American Future in the summer of 1969-and I have often discussed them since. My recommendations for transportation, education, health, welfare, revenue sharing, planning and management assistance, executive reorganization, the environment-especially the proposed Land Use Policy Act--and my proposals in many other areas touch directly on community development.

One of the keys to better cities is better coordination of these many components. Two of my pending proposals go straight to the heart of this challenge. The first, a new Department of Community Development, would provide a single point of focus for our strategy for growth. The second, Special Revenue Sharing for Urban Community Development, would remove the rigidities of categorical project grants which now do so much to fragment planning, delay action, and discourage local responsibility. My new budget proposes a $300 million increase over the full year level which we proposed for this program a year ago.

The Department of Housing and Urban Development has been working to foster orderly growth in our cities in a number of additional ways. A Planned Variation concept has been introduced into the Model Cities program which gives localities more control over their own future. HUD's own programs have been considerably decentralized. The New Communities Program has moved forward and seven projects have received final approval. The Department's efforts to expand mortgage capital, to more than double the level of subsidized housing, and to encourage new and more efficient building techniques through programs like Operation Breakthrough have all contributed to our record level of housing starts. Still more can be done if the Congress enacts the administration's Housing Consolidation and Simplification Act, proposed in 1970.

The Federal Government is only one of many influences on development patterns across our land. Nevertheless, its influence is considerable. We must do all we can to see that its influence is good.

IMPROVING TRANSPORTATION

Although the executive branch and the Congress have been led by different parties during the last 3 years, we have cooperated with particular effectiveness in the field of transportation. Together we have shaped the Urban Mass Transportation Assistance Act of 1970--a 12-year, $10 billion effort to expand and improve our common carriers and thus make our cities more livable. We have brought into effect a 10-year, $3 billion ship construction program as well as increased research efforts and a modified program of operating subsidies to revamp our merchant marine. We have accelerated efforts to improve air travel under the new Airport and Airway Trust Fund and have been working in fresh ways to save and improve our railway passenger service. Great progress has also been made in promoting transportation safety and we have moved effectively against cargo thefts and skyjacking.

I hope this strong record will be even stronger by the time the 92nd Congress adjourns. I hope that our Special Revenue Sharing program for transportation will by then be a reality--so that cities and States can make better long-range plans with greater freedom to achieve their own proper balance among the many modes of transportation. I hope, too, that our recommendations for revitalizing surface freight transportation will by then be accepted, including measures both to modernize railway equipment and operations and to update regulatory practices. By encouraging competition, flexibility and efficiency among freight carriers, these steps could save the American people billions of dollars in freight costs every year, helping to curb inflation, expand employment and improve our balance of trade.

One of our most damaging and perplexing economic problems is that of massive and prolonged transportation strikes. There is no reason why the public should be the helpless victim of such strikes--but this is frequently what happens. The dock strike, for example, has been extremely costly for the American people, particularly for the farmer for whom a whole year's income can hinge on how promptly he can move his goods. Last year's railroad strike also dealt a severe blow to our

economy.

Both of these emergencies could have been met far more effectively if the Congress had enacted my Emergency Public Interest Protection Act, which I proposed in February, of 1970. By passing this legislation in this session, the Congress can give us the permanent machinery so badly needed for resolving future disputes.

Historically, our transportation systems have provided the cutting edge for our development. Now, to keep our country from falling behind the times, we must keep well ahead of events in our transportation planning. This is why we are placing more emphasis and spending more money this year on transportation research and development. For this reason, too, I will propose a 65 percent increase--to the $1 billion level--in our budget for mass transportation. Highway building has been our first priority--and our greatest success story--in the past two decades. Now we must write a similar success story for mass transportation in the 1970's.

PEACE AT HOME: FIGHTING CRIME

Our quest for peace abroad over the last 3 years has been accompanied by an intensive quest for peace at home. And our success in stabilizing developments on the international scene has been matched by a growing sense of stability in America. Civil disorders no longer engulf our cities. Colleges and universities have again become places of learning. And while crime is still increasing, the rate of increase has slowed to a 5-year low. In the one city for which the Federal Government has a special responsibility--Washington, D.C.--the picture is even brighter, for here serious crime actually fell by 13 percent in the last year. Washington was one of 52 major cities which recorded a net reduction in crime in the first nine months of 1971, compared to 23 major cities which made comparable progress a year earlier.

This encouraging beginning is not something that has just happened by itself---I believe it results directly from strong new crime fighting efforts by this administration, by the Congress, and by State and local governments.

Federal expenditures on crime have increased 200 percent since 1969 and we are proposing another 18 percent increase in our new budget. The Organized Grime Control Act of 1970, the District of Columbia Court Reform Act, and the Omnibus Crime Control Act of 1970 have all provided new instruments for this important battle. So has our effort to expand the Federal strike force program as a weapon against organized crime. Late last year, we held the first National Conference on Corrections--and we will continue to move forward in this most critical field. I will also propose legislation to improve our juvenile delinquency prevention programs. And I again urge action on my Special Revenue Sharing proposal for law enforcement.

By continuing our stepped up assistance to local law enforcement authorities through the Law Enforcement Assistance Administration, by continuing to press for improved courts and correctional institutions, by continuing our intensified war on drug abuse, and by continuing to give vigorous support to the principles of order and respect for law, I believe that what has been achieved in the Nation's capital can be achieved in a growing number of other communities throughout the Nation.

COMBATING DRUG ABUSE

A problem of modern life which is of deepest concern to most Americans--and of particular anguish to many--is that of drug abuse. For increasing dependence on drugs will surely sap our Nation's strength and destroy our Nation's character.

Meeting this challenge is not a task for government alone. I have been heartened by the efforts of millions of individual Americans from all walks of life who are trying to communicate across the barriers created by drug use, to reach out with compassion to those who have become drug dependent. The Federal Government will continue to lead in this effort. The last 3 years have seen an increase of nearly 600 percent in Federal expenditures for treatment and rehabilitation and an increase of more than 500 percent in program levels for research, education and training. I will propose further substantial increases for these programs in the coming year.

In order to develop a national strategy for this effort and to coordinate activities which are spread through nine Federal agencies, I asked Congress last June to create a Special Action Office for Drug Abuse Prevention. I also established an interim Office by Executive order, and that unit is beginning to have an impact. But now we must have both the legislative authority and the funds I requested if this Office is to move ahead with its critical mission.

On another front, the United States will continue to press for a strong collective effort by nations throughout the world to eliminate drugs at their source. And we will intensify the world-wide attack on drug smugglers and all who protect them. The Cabinet Committee on International Narcotics Control which I created last September--is coordinating our diplomatic and law enforcement efforts in this area.

We will also step up our program to curb illicit drug traffic at our borders and within our country. Over the last 3 years Federal expenditures for this work have more than doubled, and I will propose a further funding increase next year. In addition, I will soon initiate a major new program to drive drug traffickers and pushers off the streets of America. This program will be built around a nationwide network of investigative and prospective units, utilizing special grand juries established under the Organized Crime Control Act of 1970, to assist State and local agencies in detecting, arresting, and convicting those who would profit from the misery of others.

STRENGTHENING CONSUMER PROTECTION

Our plans for 1972 include further steps to protect consumers against hazardous food and drugs and other dangerous products. These efforts will carry forward the campaign I launched in 1969 to establish a "Buyer's Bill of Rights" and to strengthen consumer protection. As a part of that campaign, we have established a new Office of Consumer Affairs, directed by my Special Assistant for Consumer Affairs, to give consumers greater access to government, to promote consumer education, to encourage voluntary efforts by business, to work with State and local governments, and to help the Federal Government improve its consumer-related activities. We have also established a new Consumer Product Information Coordinating Center in the General Services Administration to help us share a wider range of Federal research and buying expertise with the public.

But many of our plans in this field still await Congressional action, including measures to insure product safety, to fight consumer fraud, to require full disclosure in warranties and guarantees, and to protect against unsafe medical devices.

REFORMING AND RENEWING EDUCATION

It was nearly 2 years ago, in March of 1970, that I presented my major proposals for reform and renewal in education. These proposals included student assistance measures to ensure that no qualified person would be barred from college by a lack of money, a National Institute of Education to bring new energy and new direction to educational research, and a National Foundation for Higher Education to encourage innovation in learning beyond high school. These initiatives are still awaiting final action by the Congress. They deserve prompt approval.

I would also underscore my continuing confidence that Special Revenue Sharing for Education can do much to strengthen the backbone of our educational system, our public elementary and secondary schools. Special Revenue Sharing recognizes the Nation's interest in their improvement without compromising the principle of local control. I also call again for the enactment of my $1.5 billion program of Emergency School Aid to help local school districts desegregate wisely and well. This program has twice been approved by the House and once by the Senate in different versions. I hope the Senate will now send the legislation promptly to the conference committee so that an agreement can be reached on this important measure at an early date.

This bill is designed to help local school districts with the problems incident to desegregation. We must have an end to the dual school system, as conscience and the Constitution both require--and we must also have good schools. In this connection, I repeat my own firm belief that educational quality--so vital to the future of all of our children---is not enhanced by unnecessary busing for the sole purpose of achieving an arbitrary racial balance.

FINANCING OUR SCHOOLS

I particularly hope that 1972 will be a year in which we resolve one of the most critical questions we face in education today: how best to finance our schools.

In recent years the growing scope and rising costs of education have so overburdened local revenues that financial crisis has become a way of life in many school districts. As a result, neither the benefits nor the burdens of education have been equitably distributed.

The brunt of the growing pressures has fallen on the property tax--one of the most inequitable and regressive of all public levies. Property taxes in the United States represent a higher proportion of public income than in almost any other nation. They have more than doubled in the last decade and have been particularly burdensome for our lower and middle income families and for older Americans.

These intolerable pressures--on the property tax and on our schools--led me to establish the President's Commission on School Finance in March of 1970. I charged this Commission with the responsibility to review comprehensively both the revenue needs and the revenue resources of public and non-public elementary and secondary education. The Commission will make its final report to me in March.

At the same time, the Domestic Council-and particularly the Secretaries of the Treasury and of Health, Education, and Welfare---have also been studying this difficult and tangled problem. The entire question has been given even greater urgency by recent court decisions in California, Minnesota, New Jersey, and Texas, which have held the conventional method of financing schools through local property taxes discriminatory and unconstitutional. Similar court actions are pending in more than half of our States. While these cases have not yet been reviewed by the Supreme Court, we cannot ignore the serious questions they have raised for our States, for our local school districts, and for the entire Nation.

The overhaul of school finance involves two complex and interrelated sets of problems: those concerning support of the schools themselves, and also the basic relationships of Federal, State and local governments in any program of tax reform.

We have been developing a set of comprehensive proposals to deal with these questions. Under the leadership of the Secretary of the Treasury, we are carefully reviewing the tax aspects of these proposals; and I have this week enlisted the Advisory Commission on Intergovernmental Relations in addressing the intergovernmental relations aspects. Members of the Congress and of the executive branch, Governors, State legislators, local officials and private citizens comprise this group.

Later in the year, after I have received the reports of both the President's Commission on School Finance and the Advisory Commission on Intergovernmental Relations, I shall make my final recommendations for relieving the burden of property taxes and providing both fair and adequate financing for our children's education--consistent with the principle of preserving the control by local school boards over local schools.

A NEW EMPHASIS ON CAREER EDUCATION

Career Education is another area of major new emphasis, an emphasis which grows out of my belief that our schools should be doing more to build self-reliance and self-sufficiency, to prepare students for a productive and fulfilling life. Too often, this has not been happening. Too many of our students, from all income groups, have been "turning off" or "tuning out" on their educational experiences. And-whether they drop out of school or proceed on to college--too many young people find themselves unmotivated and ill equipped for a rewarding social role. Many other Americans, who have already entered the world of work, find that they are dissatisfied with their jobs but feel that it is too late to change directions, that they already are "locked in."

One reason for this situation is the inflexibility of our educational system, including the fact that it so rigidly separates academic and vocational curricula. Too often vocational education is foolishly stigmatized as being less desirable than academic preparation. And too often the academic curriculum offers very little preparation for viable careers. Most students are unable to combine the most valuable features of both vocational and academic education; once they have chosen one curriculum, it is difficult to move to the other.

The present approach serves the best interests of neither our students nor our society. The unhappy result is high numbers of able people who are unemployed, underemployed, or unhappily employed on the one hand--while many challenging jobs go begging on the other.

We need a new approach, and I believe the best new approach is to strengthen Career Education.

Career Education provides people of all ages with broader exposure to and better preparation for the world of work. It not only helps the young, but also provides adults with an opportunity to adapt their skills to changing needs, changing technology, and their own changing interests. It would not prematurely force an individual into a specific area of work but would expand his ability to choose wisely from a wider range of options. Neither would it result in a slighting of academic preparation, which would remain a central part of the educational blend.

Career Education is not a single specific program. It is more usefully thought of as a goal--and one that we can pursue through many methods. What we need today is a nationwide search for such methods--a search which involves every area of education and every level of government. To help spark this venture, I will propose an intensified Federal effort to develop model programs which apply and test the best ideas in this field.

There is no more disconcerting waste than the waste of human potential. And there is no better investment than an investment in human fulfillment. Career Education can help make education and training more meaningful for the student, more rewarding for the teacher, more available to the adult, more relevant for the disadvantaged, and more productive for our country.

MANPOWER PROGRAMS: TAPPING OUR FULL POTENTIAL

Our trillion dollar economy rests in the final analysis on our 88 million member labor force. How well that force is used today, how well that force is prepared for tomorrow--these are central questions for our country.

They are particularly important questions in a time of stiff economic challenge and burgeoning economic opportunity. At such a time, we must find better ways to tap the full potential of every citizen.

This means doing all we can to open new education and employment opportunities for members of minority groups. It means a stronger effort to help the veteran find useful and satisfying work and to tap the enormous talents of the elderly. It means helping women--in whatever role they choose--to realize their full potential. It also means caring for the unemployed--sustaining them, retraining them and helping them find new employment.

This administration has grappled directly with these assignments. We began by completely revamping the Manpower Administration in the Department of Labor. We have expanded our manpower programs to record levels. We proposed--and the Congress enacted--a massive reform of unemployment insurance, adding 9 million workers to the system and expanding the size and duration of benefits. We instituted a Job Bank to match jobs with available workers. The efforts of the National Alliance of Businessmen to train and hire the hard-core unemployed were given a new nationwide focus. That organization has also joined with our Jobs for Veterans program in finding employment for returning servicemen. We have worked to open more jobs for women. Through the Philadelphia Plan and other actions, we have expanded equal opportunity in employment for members of minority groups. Summer jobs for disadvantaged youths went up by one-third last summer. And on July 12 of last year I signed the Emergency Employment Act of 1971, providing more than 130,000 jobs in the public sector.

In the manpower field, as in others, there is also an important unfinished agenda. At the top of this list is my Special Revenue Sharing program for manpower--a bill which would provide more Federal dollars for manpower training while increasing substantially the impact of each dollar by allowing States and cities to tailor training to local labor conditions. My welfare reform proposals are also pertinent in this context, since they are built around the goal of moving people from welfare rolls to payrolls. To help in this effort, H.R. 1 would provide transitional opportunities in community service employment for another 200,000 persons. The Career Education program can also have an important long-range influence on the way we use our manpower. And so can a major new thrust which I am announcing today to stimulate more imaginative use of America's great strength in science and technology.

MARSHALLING SCIENCE AND TECHNOLOGY

As we work to build a more productive, more competitive, more prosperous America, we will do well to remember the keys to our progress in the past. There have been many, including the competitive nature of our free enterprise system; the energy, of our working men and women; and the abundant gifts of nature. One other quality which has always been a key to progress is our special bent for technology, our singular ability to harness the discoveries of science in the service of man.

At least from the time of Benjamin Franklin, American ingenuity has enjoyed a wide international reputation. We have been known as a people who could "build a better mousetrap"--and this capacity has been one important reason for both our domestic prosperity and our international strength.

In recent years, America has focused a large share of its technological energy on projects for defense and for space. These projects have had great value. Defense technology has helped us preserve our freedom and protect the peace. Space technology has enabled us to share unparalleled adventures and to lift our sights beyond earth's bounds. The daily life of the average man has also been improved by much of our defense and space research--for example, by work on radar, jet engines, nuclear reactors, communications and weather satellites, and computers. Defense and space projects have also enabled us to build and maintain our general technological capacity, which--as a result--can now be more readily applied to civilian purposes.

America must continue with strong and sensible programs of research and development for defense and for space. I have felt for some time, however, that we should also be doing more to apply our scientific and technological genius directly to domestic opportunities. Toward this end, I have already increased our civilian research and development budget by more than 40 percent since 1969 and have directed the National Science Foundation to give more attention to this area.

I have also reoriented our space program so that it will have even greater domestic benefits. As a part of this effort, I recently announced support for the development of a new earth orbital vehicle that promises to introduce a new era in space research. This vehicle, the space shuttle, is one that can be recovered and used again and again, lowering significantly both the cost and the risk of space operations. The space shuttle would also open new opportunities in fields such as weather forecasting, domestic and international communications, the monitoring of natural resources, and air traffic safety.

The space shuttle is a wise national investment. I urge the Congress to approve this plan so that we can realize these substantial economies and these substantial benefits.

Over the last several months, this administration has undertaken a major review of both the problems and the opportunities for American technology. Leading scientists and researchers from our universities and from industry have contributed to this study. One important conclusion we have reached is that much more needs to be known about the process of stimulating and applying research and development. In some cases, for example, the barriers to progress are financial. In others they are technical. In still other instances, customs, habits, laws, and regulations are the chief obstacles. We need to learn more about all these considerations-and we intend to do so. One immediate step in this effort will be the White House Conference on the Industrial World Ahead which will convene next month and will devote considerable attention to research and development questions.

But while our knowledge in this field is still modest, there are nevertheless a number of important new steps which we can take at this time. I will soon present specific recommendations for such steps in a special message to the Congress. Among these proposals will be an increase next year of $700 million in civilian research and development spending, a 15 percent increase over last year's level and a 65 percent increase over 1969. We will place new emphasis on cooperation with private research and development, including new experimental programs for cost sharing and for technology transfers from the public to .the private sector. Our program will include special incentives for smaller high technology firms, which have an excellent record of cost effectiveness.

In addition, our Federal agencies which are highly oriented toward technology, such as the Atomic Energy Commission and the National Aeronautics and Space Administration--will work more closely with agencies which have a primary social mission. For example, our outstanding capabilities in space technology should be used to help the Department of Transportation develop better mass transportation systems. As has been said so often in the last 2 years, a nation that can send three people across 240,000 miles of space to the moon should also be able to send 240,000 people 3 miles across a city to work.

Finally, we will seek to set clear and intelligent targets for research and development, so ,that our resources can be focused on projects where an extra effort is most likely to produce a breakthrough and where the breakthrough is most likely to make a difference in our lives. Our initial efforts will include new or accelerated activities aimed at:

--creating new sources of clean and abundant energy;

--developing safe, fast, pollution-free transportation;

--reducing the loss of life and property from earthquakes, hurricanes and other natural disasters;

--developing effective emergency health care systems which could lead to the saving of as many as 30,000 lives each year;

--finding new ways to curb drug traffic and rehabilitate drug users.

And these are only the beginning.

I cannot predict exactly where each of these new ,thrusts will eventually lead us in the years ahead. But I can say with assurance that the program I have outlined will open new employment opportunities for American workers, increase the productivity of the American economy, and expand foreign markets for American goods. I can also predict with confidence that this program will enhance our standard of living and improve the quality of our lives.

Science and technology represent an enormous power in our life--and a unique opportunity. It is now for us to decide whether we will waste these magnificent energies--or whether we will use them to create a better world for ourselves and for our children.

A GROWING AGENDA FOR ACTION

The danger in presenting any substantial statement of concerns and requests is that any subject which is omitted from the list may for that reason be regarded as unimportant. I hope the Congress will vigorously resist any such suggestions, for there are many other important proposals before the House and the Senate which also deserve attention and enactment.

I think, for example, of our program for the District of Columbia. In addition to proposals already before the Congress, I will soon submit additional legislation outlining a special balanced program of physical and social development for the Nation's capital as part of our Bicentennial celebration. In this and other ways, we can make that celebration both a fitting commemoration of our revolutionary origins and a bold further step to fulfill their promise.

I think, too, of our program to help small businessmen, of our proposals concerning communications, of our recommendations involving the construction of public buildings, and of our program for the arts and humanities--where the proposed new budget is 6 times the level of 3 years ago.

In all, some 90 pieces of major legislation which I have recommended to the Congress still await action. And that list is growing longer. It is now for the Congress to decide whether this agenda represents the beginning of new progress for America--or simply another false start.

THIS NEED FOR REASON AND REALISM

I have covered many subjects in this message. Clearly, our challenges are many and complex. But that is the way things must be for responsible government in our diverse and complicated world.

We can choose, of course, to retreat from this world, pretending that our problems can be solved merely by trusting in a new philosophy, a single personality, or a simple formula. But such a retreat can only add to our difficulties and our disillusion.

If we are to be equal to the complexity of our times we must learn to move on many fronts and to keep many commitments. We must learn to reckon our success not by how much we start but by how much we finish. We must learn to be tenacious. We must learn to persevere.

If we are to master our moment, we must first be masters of ourselves. We must respond to the call which has been a central theme of this message--the call to reason and to realism.

To meet the challenge of complexity we must also learn to disperse and decentralize power--at home and abroad-allowing more people in more places to release their creative energies. We must remember that the greatest resource for good in this world is the power of the people themselves--not moving in lockstep to the commands of the few--but providing their own discipline and discovering their own destiny.

Above all, we must not lose our capacity to dream, to see, amid the realities of today, the possibilities for tomorrow. And then--if we believe in our dreams--we also must wake up and work for them.

RICHARD NIXON

THE WHITE HOUSE,

January 20, 1972.