|
Mr. Speaker, Mr. President, distinguished
guests, my very dear friends:
In his first inaugural address, President
Franklin D. Roosevelt said, and I quote: The people of the United States have
not failed .... They want direct, vigorous action,
and they have asked for discipline and direction under our leadership.
Today, though our economic difficulties do not
approach the emergency of 1933, the message from the American people is
exactly the same. I trust that you are getting the very same message that I
am receiving: Our constituents want leadership, our constituents want action.
All of us have heard much talk on this very
floor about Congress recovering its rightful share of national leadership. I now
intend to offer you that chance.
The 73d Congress responded to FDR's appeal in
5 days. I am deeply grateful for the cooperation of the 93d Congress and the
Conference on Inflation, which ended 10 days ago.
Mr. Speaker, many--but not all--of your recommendations
on behalf of your party's caucus are reflected in some of my proposals here
today. The distinguished majority leader of the Senate offered a nine-point
program. I seriously studied all of them and adopted some of his suggestions.
I might add, I have also listened very hard to many of our former colleagues in both bodies and of
both the majority and the minority, and have been both persuaded and
dissuaded. But in the end, I had to make the decision, I had to decide, as
each of you do when the roll call is called.
I will not take your time today with the
discussion of the origins of inflation and its bad effect on the United
States, but I do know where we want to be in 1976--on the 200th birthday of a
United States of America that has not lost its way, nor its
will, nor its sense of national purpose.
During the meetings on inflation, I listened
carefully to many valuable suggestions. Since the summit, I have evaluated
literally hundreds of ideas, day and night.
My conclusions are very simply stated. There
is only one point on which all advisers have agreed: We must whip inflation
right now.
None of the remedies proposed, great or small,
compulsory or voluntary, stands a chance unless they
are combined in a considered package, in a concerted effort, in a grand
design.
I have reviewed the past and the present
efforts of our Federal Government to help the economy. They are simply not
good enough, nor sufficiently broad, nor do they pack the punch that will
turn America's economy on.
A stable American economy cannot be sustained
if the world's economy is in chaos. International cooperation is absolutely
essential and vital. But while we seek agreements with other nations, let us
put our own economic house in order. Today, I have identified 10 areas for
our joint action, the executive and the legislative branches of our
Government.
Number one: food. America is the world's
champion producer of food. Food prices and petroleum prices in the United
States are primary inflationary factors. America today partially depends on
foreign sources for petroleum, but we can grow more than enough food for
ourselves.
To halt higher food prices, we must produce
more food, and I call upon every farmer to produce to full capacity. And I
say to you and to the farmers, they have done a magnificent job in the past,
and we should be eternally grateful.
This Government, however, will do all in its
power to assure him--that farmer--he can sell his entire yield at reasonable
prices. Accordingly, I ask the Congress to remove all remaining acreage
limitations on rice, peanuts, and cotton.
I also assure America's farmers here and now
that I will allocate all the fuel and ask authority to allocate all the
fertilizer they need to do this essential job.
Agricultural marketing orders and other Federal
regulations are being reviewed to eliminate or modify those responsible for
inflated prices.
I have directed our new Council on Wage and
Price Stability to find and to expose all restrictive practices, public or
private, which raise food prices. The Administration will also monitor food
production, margins, pricing, and exports. We can and we shall have an
adequate supply at home, and through cooperation, meet the needs of our
trading partners abroad.
Over this past weekend, we initiated a
voluntary program to monitor grain exports. The Economic Policy Board will be
responsible for determining the policy under this program.
In addition, in order to better allocate our
supplies for export, I ask that a provision be added to Public Law 480 under
which we ship food to the needy and friendly countries. The President needs
authority to waive certain of the restrictions on shipments based on national
interest or humanitarian grounds.
Number two: energy. America's future depends
heavily on oil, gas, coal, electricity, and other resources called energy.
Make no mistake, we do have a real energy problem.
One-third of our oil--17 percent of America's
total energy--now comes from foreign sources that we cannot control, at high
cartel prices costing you and me $16 billion--$16 billion more than just a
year ago.
The primary solution has to be at home. If you
have forgotten the shortages of last winter, most Americans have not. I have
ordered today the reorganization of our national energy effort and the
creation of a national energy board. It will be chaired with developing-or I
should say charged with developing a single national energy policy and
program. And I think most of you will be glad to know that our former
colleague, Rog Morton, our Secretary of Interior, will
be the overall boss of our national energy program.
Rog Morton's marching orders are to reduce imports of
foreign oil by 1 million barrels per day by the end of 1975, whether by
savings here at home, or by increasing our own sources.
Secretary Morton, along with his other
responsibility, is also charged with increasing our domestic energy supply by
promptly utilizing our coal resources and expanding recovery of domestic oil
still in the grounds in old wells.
New legislation will be sought after your
recess to require use of cleaner coal processes and nuclear fuel in new
electric plants, and the quick conversion of existing oil plants. I propose
that we, together, set a target date of 1980 for eliminating oil-fired plants
from the Nation's base-loaded electrical capacity.
I will use the Defense
Production Act to allocate scarce materials for energy development, and I
will ask you, the House and Senate, for whatever amendments prove necessary.
I will meet with top management of the
automobile industry to assure, either by agreement or by law, a firm program
aimed at achieving a 40 percent increase in gasoline mileage within a 4-year
development deadline.
Priority legislation--action, I should say--to
increase energy supply here at home requires the following:
One, long-sought deregulation of natural gas
supplies,
Number two, responsible use of our Naval
petroleum reserves in California and Alaska,
Number three, amendments to the Clean Air Act;
and
Four, passage of surface mining legislation to
ensure an adequate supply with commonsense environmental protection.
Now, if all of these steps fail to meet our
current energy-saving goals, I will not hesitate to ask for tougher measures.
For the long range, we must work harder on coal gasification. We must push
with renewed vigor and talent research in the use
of nonfossil fuels. The power of the atom, the heat
of the sun and the steam stored deep in the Earth, the force of the winds and
water must be main sources of energy for our grandchildren, and we can do it.
Number three: restrictive practices. To
increase productivity and contain prices, we must end restrictive and costly
practices whether instituted by Government, industry,
labor, or others. And I am determined to return to
the vigorous enforcement of antitrust laws.
The Administration will zero in on more
effective enforcement of laws against price fixing and bid rigging. For
instance, non-competitive professional fee schedules and real estate
settlement fees must be eliminated. Such violations will be prosecuted by the
Department of Justice to the full extent of the law.
Now, I ask Congress for prompt authority to
increase maximum penalties for antitrust violations from $50,000 to $1
million for corporations, and from $50,000 to $100,000 for individual
violators.
At the Conference on Inflation we found, I
would say, very broad agreement that the Federal Government imposes too many
hidden and too many inflationary costs on our economy. As a result, I propose
a four-point program aimed at a substantial purging process.
Number one, I have ordered the Council on Wage
and Price Stability to be the watchdog over inflationary costs of all
governmental actions.
Two, I ask the Congress to establish a
National Commission on Regulatory Reform to undertake a long-overdue total reexamination of the independent regulatory agencies. It
will be a joint effort by the Congress, the executive branch, and the private
sector to identify and eliminate existing Federal rules and regulations that
increase costs to the consumer without any good reason in today's economic
climate.
Three: Hereafter, I will require that all
major legislative proposals, regulations, and rules emanating from the
executive branch of the Government will include an inflation impact statement
that certifies we have carefully weighed the effect on the Nation. I
respectfully request that the Congress require a similar advance inflation
impact statement for its own legislative initiatives.
Finally, I urge State and local units of
government to undertake similar programs to reduce inflationary effects of
their regulatory activities.
At this point, I thank the Congress for
recently revitalizing the National Commission on Productivity and Work
Quality. It will initially concentrate on problems of productivity in
Government--Federal, State, and local. Outside of Government, it will develop
meaningful blueprints for labor-management
cooperation at the plant level. It should look particularly at the
construction and the health service industries.
The Council on Wage and Price Stability will,
of course, monitor wage and price increases in the private sector. Monitoring
will include public hearings to justify either price or wage increases. I
emphasize, in fact reemphasize, that this is not a compulsory wage and price
control agency.
Now, I know many Americans see Federal
controls as the answer. But I believe from past experience controls show us
that they never really stop inflation-not the last time, not even during and
immediately after World War II when, as I recall, prices rose despite severe
and enforceable wartime rationing.
Now, peacetime controls actually, we know from
recent experience, create shortages, hamper production, stifle growth, and
limit jobs. I do not ask for such powers, however politically tempting, as
such a program could cause the fixer and the black marketeer
to flourish while decent citizens face empty shelves and stand in long
waiting lines.
Number four: We need more capital. We cannot
"eat up our seed corn." Our free enterprise system depends on
orderly capital markets through which the savings of our people become
productively used. Today, our capital markets are in total disarray. We must
restore their vitality. Prudent monetary restraint is essential.
You and the American people should know,
however, that I have personally been assured by the Chairman of the
independent Federal Reserve Board that the supply of money and credit will
expand sufficiently to meet the needs of our economy and that in no event will
a credit crunch occur.
The prime lending rate is going down. To help
industry to buy more machines and create more jobs, I am recommending a
liberalized 10 percent investment tax credit. This credit should be
especially helpful to capital-intensive industries such as primary metals,
public utilities, where capacity shortages have developed.
I am asking Congress to enact tax legislation
to provide that all dividends on preferred stocks issued for cash be fully
deductible by the issuing company. This should bring in more capital,
especially for energy-producing utilities. It will also help other industries
shift from debt to equity, providing a sounder capital structure.
Capital gains tax legislation must be
liberalized as proposed by the tax reform bill currently before the Committee
on Ways and Means. I endorse this approach and hope that it will pass
promptly.
Number five: Helping the casualties. And this
is a very important part of the overall speech. The Conference on Inflation
made everybody even more aware of who is suffering most from inflation.
Foremost are those who are jobless through no fault of their own.
Three weeks ago, I released funds which, with
earlier actions, provide public service employment for some 170,000 who need
work. I now propose to the Congress a two-step program to augment this
action.
First, 13 weeks of special unemployment
insurance benefits would be provided to those who have exhausted their
regular and extended unemployment insurance benefits, and 26 weeks of special
unemployment insurance benefits to those who qualify but are not now covered
by regular unemployment insurance programs. Funding in this case would come
from the general treasury, not from taxes on employers as is the case with
the established unemployment programs.
Second, I ask the Congress to create a brand
new Community Improvement Corps to provide work for the unemployed through
short-term useful work projects to improve, beautify, and enhance the
environment of our cities, our towns, and our countryside.
This standby program would come alive whenever
unemployment exceeds 6 percent nationally. It would be stopped when
unemployment drops below 6 percent. Local labor
markets would each qualify for grants whenever their unemployment rate
exceeds 6.5 percent.
State and local government contractors would
supervise these projects and could hire only those who had exhausted their
unemployment insurance benefits. The goal of this new program is to provide
more constructive work for all Americans, young or old, who cannot find a
job.
The purpose really follows this formula:
Short-term problems require short-term remedies. I therefore request that
these programs be for a 1-year period.
Now, I know that low- and middle-income
Americans have been hardest hit by inflation. Their budgets are most
vulnerable because a larger part of their income goes for the highly inflated
costs of food, fuel, and medical care.
The tax reform bill now in the House Committee
on Ways and Means, which I favor, already provides
approximately $1.6 billion of tax relief to these groups. Compensating new
revenues are provided in this prospective legislation by a windfall tax,
profits tax on oil producers, and by closing other loopholes. If enacted,
this will be a major contribution by the Congress in our common effort to
make our tax system fairer to all.
Number six: stimulating housing. Without
question, credit is the lifeblood of housing. The United States,
unfortunately, is suffering the longest and the most severe housing recession
since the end of World War II. Unemployment in the construction trades is
twice the national average.
One of my first acts as President was to sign
the Housing and Community Development Act of 1974. I have since concluded
that still more help is needed, help that can be delivered very quickly and
with minimum inflationary impact.
I urge the Congress to enact before recess
additional legislation to make most home mortgages eligible for purchase by
an agency of the Federal Government. As the law stands now, only FHA or VA
home mortgages, one-fifth of the total, are covered.
I am very glad that the Senate, thanks to the
leadership of Senator Brooke and Senator Cranston, has already made
substantial progress on this legislation. As soon as it comes to me, I will
make at least $3 billion immediately available for mortgage purchases, enough
to finance about 100,000 more American homes.
Number seven: thrift institutions. Savings and
loan and similar institutions are hard hit by inflation and high interest
rates. They no longer attract, unfortunately, adequate deposits. The
executive branch, in my judgment, must join with the Congress in giving
critically needed attention to the structure and the operation of our thrift
institutions which now find themselves for the third time in 8 years in
another period of serious mortgage credit scarcity.
Passage of the pending financial institution
bill will help, but no single measure has yet appeared, as I see it, to solve
feast or famine in mortgage credit. However, I promise to work with you
individually and collectively to develop additional specific programs in this
area in the future.
Number eight: international interdependency.
The United States has a responsibility not only to maintain a healthy economy
at home, but also to seek policies which complement rather than disrupt the
constructive efforts of others.
Essential to U.S. initiatives is the early
passage of an acceptable trade reform bill. My Special Representative for
Trade Negotiations [William D. Eberle] departed
earlier this afternoon to Canada, Europe, Japan, to brief foreign friends on
my proposals.
We live in an interdependent world and,
therefore, must work together to resolve common economic problems.
Number nine: Federal taxes and spending. To
support programs, to increase production and share inflation-produced
hardships, we need additional tax revenues.
I am aware that any proposal for new taxes
just 4 weeks before a national election is, to put it mildly, considered
politically unwise. And I am frank to say that I have been earnestly advised
to wait and talk about taxes anytime after November 5. But I do say in
sincerity that I will not play politics with America's future.
Our present inflation to a considerable degree
comes from many years of enacting expensive programs without raising enough
revenues to pay for them. The truth is that 19 out of the 25 years I had the honor and the privilege to serve in this Chamber, the
Federal Government ended up with Federal deficits. That is not a very good
batting average.
By now, almost everybody--almost everybody
else, I should say--has stated my position on Federal gasoline taxes. This
time I will do it myself. I am not-emphasizing not--asking you for any
increase in gas taxes.
I am--I am asking you to approve a l-year temporary tax surcharge of 5 percent on corporate
and upper-level individual incomes. This would generally exclude from the
surcharge those families with gross incomes below $15,000 a year. The
estimated $5 billion in extra revenue to be raised by this inflation-fighting
tax should pay for the new programs I have recommended in this message.
I think, and I suspect each of you know, this
is the acid test of our joint determination to whip inflation in America. I
would not ask this if major loopholes were not now being closed by the
Committee on Ways and Means' tax reform bill.
I urge you to join me before your recess, in
addition to what I have said before, to join me by voting to set a target
spending limit--let me emphasize it-a target spending limit of $300 billion
for the Federal fiscal budget of 1975.
When Congress agrees to this spending target,
I will submit a package of budget deferrals and rescissions to meet this
goal. I will do the tough job of designating for Congressional action, on
your return, those areas which I believe can and
must be reduced. These will be hard choices and every one of you in this
Chamber know it as well as I. They will be hard
choices, but no Federal agency, including the Defense
Department, will be untouchable.
It is my judgment that fiscal discipline is a
necessary weapon in any fight against inflation. While this spending target
is a small step, it is a step in the right direction, and we need to get on
that course without any further delay. I do not think that any of us in this
Chamber today can ask the American people to tighten their belts if Uncle Sam
is unwilling to tighten his belt first.
And now, if I might, I would like to say a few
words directly to your constituents and, incidentally, mine.
My fellow Americans, 10 days ago I asked you
to get things started by making a list of 10 ways to fight inflation and save
energy, to exchange your list with your neighbors,
and to send me a copy.
I have personally read scores of the thousands
of letters received at the White House, and incidentally, I have made my
economic experts read some of them, too. We all benefited, at least I did,
and I thank each and every one of you for this cooperation.
Some of the good ideas from your home to mine
have been cranked into the recommendations I have just made to the Congress
and the steps I am taking as President to whip inflation right now. There
were also firm warnings on what Government must not do, and I appreciated
those, too. Your best suggestions for voluntary restraint and self-discipline
showed me that a great degree of patriotic determination and unanimity
already exists in this great land.
I have asked Congress for urgent specific
actions it alone can take. I advised Congress of the initial steps that I am
taking as President. Here is what only you can do: Unless every able American
pitches in, Congress and I cannot do the job. Winning our fight against
inflation and waste involves total mobilization of America's greatest
resources--the brains, the skills, and the willpower of the American people.
Here is what we must do, what each and every
one of you can do: To help increase food and lower prices, grow more and
waste less; to help save scarce fuel in the energy crisis, drive less, heat
less. Every housewife knows almost exactly how much she spent for food last
week. If you cannot spare a penny from your food budget--and I know there are
many--surely you can cut the food that you waste by 5 percent.
Every American motorist knows exactly how many
miles he or she drives to work or to school every day and about how much
mileage she or he runs up each year. If we all drive at least 5 percent fewer
miles, we can save, almost unbelievably, 250,000 barrels of foreign oil per
day. By the end of 1975, most of us can do better than 5 percent by
carpooling, taking the bus, riding bikes, or just plain walking. We can save
enough gas by self-discipline to meet our 1 million barrels per day goal.
I think there is one final thing that all
Americans can do, rich or poor, and that is share with others. We can share
burdens as we can share blessings. Sharing is not easy, not easy to measure
like mileage and family budgets, but I am sure that 5 percent more is not
nearly enough to ask, so I ask you to share everything you can and a little
bit more. And it will strengthen our spirits as well as our economy.
Today I will not take more of the time of this
busy Congress, for I vividly remember the rush before every recess, and the
clock is already running on my specific and urgent requests for legislative
action. I also remember how much Congress can get done when it puts its
shoulder to the wheel.
One week from tonight I have a long-standing
invitation in Kansas City to address the Future Farmers of America, a fine
organization of wonderful young people whose help, with millions of others,
is vital in this battle. I will elaborate then how volunteer inflation
fighters and energy savers can further mobilize their total efforts.
Since asking Miss Sylvia Porter, the
well-known financial writer, to help me organize an all-out nationwide
volunteer mobilization, I have named a White House coordinator and have
enlisted the enthusiastic support and services of some 17 other distinguished
Americans to help plan for citizen and private group participation.
There will be no big Federal bureaucracy set
up for this crash program. Through the courtesy of such volunteers from the
communication and media fields, a very simple enlistment form will appear in
many of tomorrow's newspapers along with the symbol of this new mobilization,
which I am wearing on my lapel. It bears the single word WIN. I think that
tells it all. I will call upon every American to join in this massive
mobilization and stick with it until we do win as a nation and as a people.
Mr. Speaker and Mr. President, I stand on a
spot hallowed by history. Many Presidents have come here many times to
solicit, to scold, to flatter, to exhort the Congress to support them in
their leadership. Once in a great while, Presidents have stood here and truly
inspired the most skeptical and the most
sophisticated audience of their co-equal partners in Government. Perhaps once
or twice in a generation is there such a joint session. I don't expect this
one to be.
Only two of my predecessors have come in
person to call upon Congress for a declaration of war, and I shall not do
that. But I say to you with all sincerity that our inflation, our public
enemy number one, will, unless whipped, destroy our country, our homes, our
liberties, our property, and finally our national pride, as surely as any
well-armed wartime enemy.
I concede there will be no sudden Pearl Harbor to shock us into unity and to sacrifice, but I
think we have had enough early warnings. The time to intercept is right now.
The time to intercept is almost gone.
My friends and former colleagues, will you
enlist now? My friends and fellow Americans, will you enlist now? Together
with discipline and determination, we will win.
I thank you very much.
Download Audio (mp3)
Gerald Ford
Speech to Congress, October 8,
1974
|
