Houston, Texas Remarks at a Democratic Fundraising Dinner.

Governor Dolph Briscoe, Governor Edwin Edwards, Mayor McConn, Majority Leader Jim Wright, Congresswoman Barbara Jordan, Congressmen Eckhardt, Gammage from this area, and others in the great Texas political delegation in Washington, Attorney General John Hill, Lieutenant Governor Hobby, fellow Democrats that I've met already tonight from Texas, Oklahoma, Louisiana, New Mexico, Florida, California, Arkansas, Mississippi, and other States:

I'm glad to be here with you. Thank you for the wonderful welcome. It's a wonderful night for Democrats.

It would be difficult to single out all the brilliant Democratic political leaders who are here tonight. But I would like to comment on two Texans whom I've gotten to know well and who mean a lot to me. One of them is Senator Lloyd Bentsen, a man who's difficult to describe in adequate superlatives, who is a fiscal conservative, who's a social progressive in a very courageous way, who has a strong national defense commitment, who's a statesman on foreign affairs, and within this framework of brief description, is one of the strongest advocates for Texas and what you stand for that I've ever met.

When we agree, he's a valuable ally; when we disagree, he's a fair and a formidable adversary. He is a man who's completely qualified to serve not only in the United States Senate but in the very highest office of our land. And since I never found an appropriate occasion to say this during the Texas Presidential primary in 1976, I wanted to say it tonight. [Laughter]

The other Texan is not quite so well known, and before I say a few comments about him, I'd like to give a little background.

Right after I was elected President, Helen Strauss called me on the phone, and she said, "President Carter, I would like to ask a favor of you." I said, "I'd be glad to do anything for you, Helen." She said, "I'd like for you to give my husband a job." [Laughter] And I said, "Well, you've been a friend of mine for a long time, and I care a lot about you. I know you as a superlative American leader. Who is your husband?" [Laughter]

She said, "My husband's name is Bob Strauss. He has been the chairman of the Democratic Party." And I said, "Yes, I believe I've heard of him, although I don't know him well." [Laughter] I said, "Can you tell me something about his qualifications?" And she said, "Well, we are old friends, are we not?" And I said, "Yes, we are." She said, "Well, it would suit me better if we didn't discuss qualifications." [Laughter]

I said, "Well, why, since you all have lived in Washington, would you want to get your husband a job to stay in the Capital City?" She said, "Well, in the first place, he's exhausted from helping with the campaigns of Lloyd Bentsen and Scoop Jackson." [Laughter] "He would like to have a job where he can stay home every night and get some rest. He's become accustomed to beautiful clothing styles and the Washington night life. He hates to go back to Texas and get his fancy Italian shoes messed up with cow manure." [Laughter]

I understand now that he's on a Federal salary with a pay freeze in, that he's buying his shoes from South Korea and Taiwan and Hong Kong. [Laughter]

But to make a long story short, Bob Strauss has come to work for me, and he does an absolutely superlative job. Not only does he represent our Nation well in international economic circles, but he very often gives me sound advice, seriously speaking.

He pointed out to me that in Texas he had been quite successful and that one of the reasons for political success was that there has to be an intimate trust and interrelationship between the top political officeholder and those who serve in important positions, that one of those ways to guarantee this is have a blood relationship. He made two recommendations, one of which I did not follow, and the other one I did. He recommended by brother, Billy, as Ambassador to the Vatican. [Laughter] I couldn't take this advice for several reasons that I won't describe tonight.

But when he made the second recommendation, I decided to take it. He said he had a first cousin who was quite knowledgeable about Europe, and when I began my trip in January to the Eastern European countries, he said his cousin spoke excellent Polish and would be— [laughter] -

Well, you can see the reason for the sound relationship that I have formed with Bob Strauss, a great Texan. [Laughter] And he represents our country well. He doesn't create much problem overseas. Prime Minister Fukuda did come by to see me the last time he was in Washington and said that Bob Strauss was causing him some problems, that he had gotten the majority of the members of the Japanese Diet to vote for the Japanese state patrolmen to leave their Hondas and ride Harley-Davidson motorcycles. [Laughter]

But I think all of you would agree that in the finest sense of the word, that Bob Strauss represents Texas and the United States and the Democratic Party in a superlative way.

I hate to go to the next Cabinet meeting, because I'm just getting him back for the last few that I've been to with him-he always gets the best end of the deal.

The first time I met Bob Strauss and had a chance to talk with him, he said that the Democratic Party was a crumbling coalition held together by two things—its debts and Texans. [Laughter]

The last part might still be true, but I can tell you that Bob Strauss and John White have done a great deal to remove the ties that bind us together because of overwhelming debts. We have now reforged historic old alliances, and our party has been reinvigorated because we are a party with plans, with programs, and with unchanging ideals. Our country might be able to get along without Texas oil or Texas agricultural products, even for a while without Texas income taxes, but we could never get along without Texas brainpower and Texas political leadership.

Democrats from your State in this century have been remarkable for their superb leadership qualities—two great Speakers of the House, John Nance Garner and Sam Rayburn; two Vice Presidents, one of whom was John Nance Garner; and the hardest working President and one of the most successful Presidents that the United States has ever known, Lyndon Baines Johnson.

Since I began my work in the Oval Office I've made a point to study in my spare time the history, the biographies of those who have served our country in the same position. In some ways, this is a lonely job. And as I've analyzed the place in the evolution of our country that different predecessors of mine will fill, I've been increasingly impressed with what President Johnson did in a time of great upheaval, sorrow, division. The strength of his leadership held our country together. And he was able, from the most powerful position on Earth, to reach his hand and his heart effectively to those who were poor, who were black, who didn't speak English well, who were not well educated, who were inarticulate, who had little power or little prestige or little influence, and he aroused the conscience of a great nation.

He pointed out to us our failures and our defects and, through his concerted and effective work, did not only arouse the American people but aroused the Congress, had passed into law the civil rights acts, the voting act that has given Americans a final realization of what our Constitution long guaranteed, but for a long time did not see fulfilled. And as a President now, I feel a sincere debt of gratitude to this great Texan, this great American.

Emerson said that the two national parties have always been divided: one, the party of memory, and the other one, the party of hope. Our party, the oldest political party in the world, is still the party of hope, of youth, and of vitality. That's why I'm convinced that John Hill will be Texas' next Governor. And that's why I'm convinced that Bob Krueger will go to the United States Senate, and to replace almost 200 years of congressional seniority, why eight bright, energetic Texans running for the seats of retired Texas Representatives in the House will win this fall.

And Texans will not be the only winners. We have other winners here tonight. New Mexico's Bruce King will go back in as Governor. And one of the brightest young American politicians, Bill Clinton, will be the new Governor in Arkansas.

Our candidates will win, because the Democratic Party is the party of hope. But it's also the party of leadership and compassion. The Texas party and the national party work together. Texas Democrats don't waste time fighting other Democrats after the primaries. And I would particularly like to cite Joe Christie as a wonderful example of this attitude.

The Texas party and the Oklahoma, Arkansas, New Mexico, and the national parties share the same basic goals—fairer taxes, lower taxes, more money in American workers' pockets.

Last year, the Democratic Congress reduced income taxes $6 billion. This year, I hope to see the Congress reduce income taxes another $15 or $20 billion. We believe in work, fewer handouts for those able to work, more jobs for them, more able Americans off the dole, onto the payroll.

We're considering welfare reform to accomplish this purpose, and we believe that jobs primarily ought to come in the private sector of our economy, with the government filling in those areas for people that are the last to be hired and the first to be fired and who need to be introduced to what it means in this great country to hold a job, to have one's own capability realized in productive effort.

We believe in balanced budgets, we believe that public officials ought to be eagle-eyed and tight-fisted about government expenditures, that we ought to be prudent trustees of the taxpayers' money. We believe that government waste ought to be eliminated, that mismanagement should be corrected. We believe in putting merit back in the merit system and to give managers the ability to manage. We're going to do all these things if we work together.

And the Democrats believe in the free enterprise system. Sometimes our party doesn't get credit for the depth of this belief. We do believe in tough competition, which is part of the essence of our economic system. We believe that excessive government interference in business ought to be eliminated.

A year and a half ago, we inherited a horrible conglomeration of not only regulations but increasing regulations. In 1 day last year, we got rid of 1,100 OSHA regulations at one sweep. And we are now committed to writing regulations that are necessary, simply, in plain English, and we are giving the authors of those regulations the opportunity to sign them when they get through writing.

We believe in American cities, and we inherited a deteriorating condition, not only in the older cities in the North but the newer, more vigorous cities throughout the Sunbelt. We believe that we ought to form a new partnership between government at all levels, private enterprise, volunteers, neighborhood groups who work together to revitalize that center of growth and culture and exchange of ideas. We believe that we need to attract back to the central, deteriorating parts of our cities new growth, new investment, new courage, new confidence in the future.

We believe that American agriculture ought to be strong, and we recognize that it is the greatest single strategic advantage that this country has over all others. We are the breadbasket of the world, and we're going to stay that way.

These issues are part and parcel of our commitment to global peace, to prosperity, not only for ourselves but for others: where men and women might be free to make their own decisions; where democracy and democratic principles might be enhanced; free markets might be guaranteed for the exchange of goods that we ourselves as Americans exemplify; our rededication to the United States Constitution, its principles, and the Bill of Rights. And as long as I'm in the White House, our country will stand for the pursuit without ceasing to establish and to maintain basic human rights throughout the whole world.

Now, I know that Democrats don't always agree. We are sometimes a contentious bunch. We always fight among ourselves at times, and we probably always will. But it's kind of a family fight. Like families, we know how to kiss and make up, and we also know how to multiply. [Laughter]

I want to talk tonight, in wrapping up my speech, about two basic issues, issues that this Nation cannot afford to ignore: energy and inflation. Energy is our most urgent legislative priority, one in which our very security as a nation is at stake. And I'm going to go into it tonight in Some depth, because I have some points I want to make to you. Inflation is our most serious domestic problem at this moment. Let me talk about inflation first.

The United States is not the only nation struggling with this problem. Nearly every country on Earth is battling the twin problems—and they are interrelated—of inflation and unemployment. And we are doing better than almost anyone else.

We are beating down unemployment in this country. We put more people back to work in the first 18 months of this administration than any other administration in United States history. There are now 5 1/2 million more people holding jobs today than there were 18 months ago.

And we intend to beat inflation, too, and without sacrificing our steady growth and our economic expansion. We will do it without throwing people out of work. We'll do it without sowing the seeds of another severe recession. We're going to put an end to the cycle of boom and bust that has plagued the American economy-American business, American farmers, American consumers—for the last decade or two.

To achieve our first objective, which is to stop inflation from rising any further, I've set some very tight limits on Government expenditures. We will reduce Federal spending as a percentage of the gross national product for the first time in this generation.

We will continue to use personal and corporate tax cuts to promote that economic growth and investment so that we can have a stable and a more prosperous America.

It won't be easy. The administration and the Congress will have to resist very heavy pressure from strong interest groups highway contractors, defense contractors, homebuilders, dambuilders, even from farmers, educators, veterans, local officials, State officials. I'm prepared to use the full powers of my office—every resource at my command, including the veto—to hold the line on the Federal budget.

Now, all these are good groups, and it's never pleasant or popular to say no to a useful program. The budget that was proposed to the Congress is a bountiful budget, it's an adequate budget, it's a Democratic budget. But each of the proposals for increased Federal spending, I realize, has great appeal. But there comes a time when a nation must draw the line. There comes a time when we must look beyond each narrow interest, no matter how beneficent it might be, to the overriding interests of our Nation. And that time has come.

I'm prepared to draw the line. I will be the one to say no. I ask you for your support, even when you have to be the one to make a sacrifice.

In every way that government can influence inflation, we will do it—through reorganization of the Government bureaucracy itself, through civil service reform, which I hope the Congress will pass without delay, through tax reform, and, wherever possible, for safe and appropriate deregulation. I'm personally trying to make regulation as efficient and economical and as minimal as possible.

Together, all these measures together and others will reduce that portion of inflation that government has caused and set an example to help us all stop the rise in the inflation rate.

But our long-term task is not just to stop the rise in the inflation rate but to push the inflation rate back down. We've set a very specific deceleration target to make sure that prices and wages rise less each year than the average for the 2 preceding years. Inflation, therefore, must be lower in 1979 than it is in 1978, and lower in 1980 than it will be in 1979.

We've set an example at the Federal level. We've frozen the salaries of our senior people and cut the cost-of-living increase for all other Federal employees to 5 1/2 percent. We're waiting for the Congress to act on this. I believe they will. We've asked Governors, mayors, and others to follow our example.

In every sector of the economy there is a need to adopt this deceleration standard each year and, therefore, to make steady progress. These inflationary pressures have taken many years to develop. The causes are complicated, difficult to discern, and multitudinous. They will take many years to overcome. But we can overcome them through patient and persistent attack so long as we work together and exercise mutual restraint, sometimes mutual sacrifice in our common interest.

The other subject I want to talk about in closing is energy. And if there is any applause in the next 5 minutes, I want you to know that I will consider it the moral equivalent of hospitality. [Laughter]

If ever we have faced a test of our national will, it's now. America has lived high on low-cost energy. We've consumed ever increasing amounts of oil and gas at prices well below their replacement cost. Despite the lessons of 1973, we still have no national program to bring energy demand in line with energy supply. We are the only industrial nation on Earth that has not cut energy consumption since the OPEC oil embargo. We are the only industrial nation on Earth without an effective energy plan.

In the last 6 years, our oil imports have doubled. Americans used more gasoline last summer than ever before in history. And this year, we will set another all-time high for gasoline consumption, and all this despite the fact that we now have lighter cars and better gas mileage.

We created with superb congressional work a new Department of Energy, and we've failed to give it the tools that it needs to do the job. For the past 14 months, we've been talking energy policy, and while we've been talking, America has suffered economically. Talk is cheap; energy is not.

We imported $10 billion more oil last year than we did the year before. Despite the lessons of 1973, we are more dependent on the whims of foreign oil producers today than ever before in our history. The economic and military security of the United States is seriously jeopardized when we rely on foreign sources for almost half of our petroleum needs. The heart of our defense policy is the longstanding mutual commitments between the United States of America and our NATO Allies and Pacific allies. To protect our interests, we need steady and reliable supplies of all vital raw materials.

We have no feasible alternatives to the petroleum reserves of the 13 OPEC nations, nor to the inescapable linkage and interrelationship between international politics and the oil trade. We lose credibility with our allies when our national energy policies do not reflect this reality.

Our influence, our prestige in the global economic community are tarnished, and United States leadership is seriously weakened without a policy to reduce waste and to bring energy costs in line with the cost of replacement.

Each time I talk to my colleagues-Prime Minister Fukuda from Japan, or Chancellor Schmidt from the Federal Republic of Germany, Prime Minister Callaghan from Great Britain, or others, they make this point to me. In their view, a conservation and conversion program, aided by aligning domestic and global prices of crude oil over an orderly period of time, is the most important single step that the United States can take. It is absolutely vital to them.

The energy bill before Congress provides this alignment fairly and effectively, and on a schedule that minimizes economic disruption.

Next month I will travel to Bonn, Germany, for the economic summit meeting. The subject of the meeting is global economic recovery. Each day it is clearer and clearer to me that United States action on an energy policy is absolutely crucial to that goal of global economic recovery. There's an inescapable connection between our energy policy, the domestic economy, and the world economy.

Our $45 billion oil import bill last year was a major factor in the huge United States current account deficit. And the different growth rates among nations increases this deficit. Other nations are unwilling to stimulate their own economy until they are convinced that we will check the waste of oil in our extremely high and rapidly increasing level of oil imports.

Concern about our deficit, which is growing every year, almost every month, drives down the value of the dollar, which is the basis, as you know, of the world economic or monetary system. The weakness of the dollar adds more inflationary pressure at home and arouses protectionist sentiment abroad, which in turn fuels new inflation and further weakens economic recovery.

In 1976, the current account deficit for our country was $1 1/2 billion. One year later, in 1977, it was $20 1/2 billion. More than half of that $19 billion increase reflects the increase in our oil imports.

Our determination to enact a strong, comprehensive national energy policy reflects our willingness to end this self-indulgence, this waste, once and for all. It's time for us to become responsible caretakers of the bounteous world that God gave us.

Today we have an uncommon opportunity to tackle some fundamental problems which we've had to push aside while tending to more urgent crises like civil rights a few years ago, or Watergate, or the war in Vietnam.

Energy is one of these persistent problems that we now have to deal with. Like inflation, it's not a problem that we created, it's one that we inherited.

As America entered this decade, our per capita energy consumption was already nearly double that of the United Kingdom and West Germany, triple that of France and Japan, more than quadruple that of the rest of the developed world. Each year our appetite for imported oil has grown. We would need a new North Slope or a new North Sea every year or 15 months just to keep up with the present rate of growth in energy consumption. Although we differ on the exact date, there is no doubt that at some point in this century, central global petroleum demand is going to exceed global petroleum supply.

Our strategy for change, controversial, is now being considered by the Congress, is focused and fair. It's based on three elementary and essential principles: first is conservation—stop wasting. The second one is to encourage exploration and production and give incentives to do so. And third is to develop alternatives to fossil fuels.

I want to emphasize just one aspect of conservation that is sometimes overlooked. We waste in this country almost half of the energy we use. Fuel economy must be a primary consideration in the design of our industrial plants, our homes, our vehicles, our splendid array of large and small appliances.

The second element of the energy program provides incentives for new production and exploration. The energy legislation will make sure that American oil commands as high a price as any in the world. New natural gas supplies will get generous price increases immediately and full deregulation in 1985.

Now, these rewards, which don't suit everyone—I realize that—are balanced by essential safeguards to protect consumers here in Texas and elsewhere in the country.

Our third and final strategy is speeding the conversion to more abundant existing fuels. This State, Texas, set an example for the Nation with your pioneering 1975 statewide conversion program to coal. Texas will continue to be a major energy State long after you have exhausted the major portion of your petroleum reserves. You have geothermal steam, geopressurized methane sources to tap. You have substantial lignite reserves you're now beginning to use in large quantities. You're the Nation's third largest producers of uranium, and you're working hard to advance the day when such renewable resources as the Sun, wind, and biomass will relieve some of the demand for oil and gas and coal.

These alternative fuels are critical to the continuing economic growth of your State and the Nation, and they are equally vital to our continuing strong national defense.

It's essential that we pass this energy legislation. It's been thoroughly debated. All viewpoints have been considered. Compromises have been made for 14 months. Each day that we continue without a national energy policy further erodes our domestic economy and also our international image.

In fact, and unfortunately, we do have an energy policy now. It's a policy by default, a mass of confusing and conflicting legislative and regulatory restrictions. It does precisely the opposite of what we want. It encourages consumption and discourages exploration and production. It rewards those who use the most of our least abundant fuels.

It's time to end this folly that we've inherited. If we are to attain the peaceful and prosperous world we seek, we have to meet—and beat—this serious challenge now.

The energy bill buys us critical time that we need to plan for the future. The bill is before the Congress now, as you know. Now is the time for us to act.

Here in Texas and neighboring States-and particularly, I would say, here in Houston—is the center of the United States petroleum industry. I come, as President of the greatest nation in the world, to ask you for help to do what is best for our Nation, what's best for Texas, and what I'm convinced is best for you.

Now, I know that no acts of Congress, no program of our Government, no Executive order of mine as President can by itself achieve these major goals of controlling inflation and the interrelated problem of meeting our future energy needs. It will require a change from our preoccupation with self and a willingness to sacrifice for the common good.

We Democrats have never been timid nor fearful in the face of any challenge to our Nation. We will not betray the trust of leadership which you and I share together. Together we can create an even greater United States of America.
Thank you very much.