State of the Union Address
The State of the Union is sound. Our economy is recovering from a recession.
A national energy plan is in place and our dependence on foreign oil is
decreasing. We have been at peace for four uninterrupted years.
But, our Nation has serious problems. Inflation and unemployment are
unacceptably high. The world oil market is increasingly tight. There are
trouble spots throughout the world, and 52 American hostages are being
held in Iran against international law and against every precept of human
However, I firmly believe that, as a result of the progress made in
so many domestic and international areas over the past four years, our
Nation is stronger, wealthier, more compassionate and freer than it was
four years ago. I am proud of that fact. And I believe the Congress should
be proud as well, for so much of what has been accomplished over the past
four years has been due to the hard work, insights and cooperation of Congress.
I applaud the Congress for its efforts and its achievements.
In this State of the Union Message I want to recount the achievements
and progress of the last four years and to offer recommendations to the
Congress for this year. While my term as President will end before the
97th Congress begins its work in earnest, I hope that my recommendations
will serve as a guide for the direction this country should take so we
build on the record of the past four years.
RECORD OF PROGRESS
When I took office, our Nation faced a number of serious domestic and
no national energy policy existed, and our dependence on foreign oil
was rapidly increasing;
public trust in the integrity and openness of the government was low;
the Federal government was operating inefficiently in administering
essential programs and policies;
major social problems were being ignored or poorly addressed by the
our defense posture was declining as a result of a defense budget which
was continuously shrinking in real terms;
the strength of the NATO Alliance needed to be bolstered;
tensions between Israel and Egypt threatened another Middle East war;
America's resolve to oppose human rights violations was under serious
Over the past 48 months, clear progress has been made in solving the
challenges we found in January of 1977:
almost all of our comprehensive energy program have been enacted, and
the Department of Energy has been established to administer the program;
confidence in the government's integrity has been restored, and respect
for the government's openness and fairness has been renewed;
the government has been made more effective and efficient: the Civil
Service system was completely reformed for the first time this century;
14 reorganization initiatives have been proposed to the Congress, approved,
and implemented; two new Cabinet departments have been created to consolidate
and streamline the government's handling of energy and education problems;
inspectors general have been placed in each Cabinet department to combat
fraud, waste and other abuses; the regulatory process has been reformed
through creation of the Regulatory Council, implementation of Executive
Order 12044 and its requirement for cost-impact analyses, elimination of
unnecessary regulation, and passage of the Regulatory Flexibility Act;
procedures have been established to assure citizen participation in government;
and the airline, trucking, rail and communications industries are being
critical social problems, many long ignored by the Federal government,
have been addressed directly; an urban policy was developed and implemented
to reverse the decline in our urban areas; the Social Security System was
refinanced to put it on a sound financial basis; the Humphrey-Hawkins Full
Employment Act was enacted; Federal assistance for education was expanded
by more than 75 percent; the minimum wage was increased to levels needed
to ease the effects of inflation; affirmative action has been pursued aggressively
more blacks, Hispanics and women have been appointed to senior government
positions and to judgeships than at any other time in our history; the
ERA ratification deadline was extended to aid the ratification effort;
and minority business procurement by the Federal government has more than
the Nation's first sectoral policies were put in place, for the auto
and steel industries, with my Administration demonstrating the value of
cooperation between the government, business and labor;
reversing previous trends, real defense spending has increased every
year since 1977; the real increase in FY 1980 defense spending is well
above 3 percent and I expect FY 1981 defense spending to be even higher;
looking ahead, the defense program I am proposing is premised on a real
increase in defense spending over the next five years of 20 percent or
the NATO Alliance has proven its unity in responding to the situations
in Eastern Europe and Southwest Asia and in agreeing on the issues to be
addressed in the review of the Helsinki Final Act currently underway in
the peace process in the Middle East established at Camp David and by
the Peace Treaty between Egypt and Israel is being buttressed on two fronts:
steady progress in the normalization of Egyptian-Israeli relations in many
fields, and the commitment of both Egypt and Israel, with United States'
assistance, to see through to successful conclusion the autonomy negotiations
for the West Bank and Gaza;
the Panama Canal Treaties have been put into effect, which has helped
to improve relations with Latin America;
we have continued this Nation's strong commitment to the pursuit of
human rights throughout the world, evenhandedly and objectively; our commitment
to a worldwide human rights policy has remained firm; and many other countries
have given high priority to it;
our resolve to oppose aggression, such as the illegal invasion of the
Soviet Union into Afghanistan, has been supported by tough action.
I. ENSURING ECONOMIC STRENGTH ECONOMY
During the last decade our Nation has withstood a series of economic
shocks unprecedented in peacetime. The most dramatic of these has been
the explosive increases of OPEC oil prices. But we have also faced world
commodity shortages, natural disasters, agricultural shortages and major
challenges to world peace and security. Our ability to deal with these
shocks has been impaired because of a decrease in the growth of productivity
and the persistence of underlying inflationary forces built up over the
past 15 years.
Nevertheless, the economy has proved to be remarkably resilient. Real
output has grown at an average rate of 3 percent per year since I took
office, and employment has grown by 10 percent. We have added about 8 million
productive private sector jobs to the economy. However, unacceptably high
inflation-- the most difficult economic problem I have faced-- persists.
This inflation-- which threatens the growth, productivity, and stability
of our economy-- requires that we restrain the growth of the budget to
the maximum extent consistent with national security and human compassion.
I have done so in my earlier budgets, and in my FY '82 budget. However,
while restraint is essential to any appropriate economic policy, high inflation
cannot be attributed solely to government spending. The growth in budget
outlays has been more the result of economic factors than the cause of
We are now in the early stages of economic recovery following a short
recession. Typically, a post-recessionary period has been marked by vigorous
economic growth aided by anti-recessionary policy measures such as large
tax cuts or big, stimulation spending programs. I have declined to recommend
such actions to stimulate economic activity, because the persistent inflationary
pressures that beset our economy today dictate a restrained fiscal policy.
Accordingly, I am asking the Congress to postpone until January 1, 1982,
the personal tax reductions I had earlier proposed to take effect on January
1 of this year.
However, my 1982 budget proposes significant tax changes to increase
the sources of financing for business investment. While emphasizing the
need for continued fiscal restraint, this budget takes the first major
step in a long-term tax reduction program designed to increase capital
formation. The failure of our Nation's capital stock to grow at a rate
that keeps pace with its labor force has clearly been one cause of our
productivity slowdown. Higher investment rates are also critically needed
to meet our Nation's energy needs, and to replace energy-inefficient plants
and equipment with new energy-saving physical plants. The level of investment
that is called for will not occur in the absence of policies to encourage
Therefore, my budget proposes a major liberalization of tax allowances
for depreciation, as well as simplified depreciation accounting, increasing
the allowable rates by about 40 percent. I am also proposing improvements
in the investment tax credit, making it refundable, to meet the investment
needs of firms with no current earnings.
These two proposals, along with carefully-phased tax reductions for
individuals, will improve both economic efficiency and tax equity. I urge
the Congress to enact legislation along the lines and timetable I have
THE 1982 BUDGET
The FY 1982 budget I have sent to the Congress continues our four-year
policy of prudence and restraint. While the budget deficits during my term
are higher than I would have liked, their size is determined for the most
part by economic conditions. And in spite of these conditions, the relative
size of the deficit continues to decline. In 1976, before I took office,
the budget deficit equalled 4 percent of gross national product. It had
been cut to 2.3 percent in the 1980 fiscal year just ended. My 1982 budget
contains a deficit estimated to be less than 1 percent of our gross national
The rate of growth in Federal spending has been held to a minimum. Nevertheless,
outlays are still rising more rapidly than many had anticipated, the result
of many powerful forces in our society:
We face a threat to our security, as events in Afghanistan, the Middle
East, and Eastern Europe make clear. We have a steadily aging population
and, as a result, the biggest single increase in the Federal budget is
the rising cost of retirement programs, particularly social security. We
face other important domestic needs: to continue responsibility for the
disadvantaged; to provide the capital needed by our cities and our transportation
systems; to protect our environment; to revitalize American industry; and
to increase the export of American goods and services so essential to the
creation of jobs and a trade surplus.
Yet the Federal Government itself may not always be the proper source
of such assistance. For example, it must not usurp functions if they can
be more appropriately decided upon, managed, and financed by the private
sector or by State and local governments. My Administration has always
sought to consider the proper focus of responsibility for the most efficient
resolution of problems.
We have also recognized the need to simplify the system of grants to
State and local governments. I have again proposed several grant consolidations
in the 1982 budget, including a new proposal that would consolidate several
The pressures for growth in Federal use of national resources are great.
My Administration has initiated many new approaches to cope with these
pressures. We started a multi-year budget system, and we began a system
for controlling Federal credit programs. Yet in spite of increasing needs
to limit spending growth, we have consistently adhered to these strong
Our Nation's armed forces must always stand sufficiently strong to deter
aggression and to assure our security.
An effective national energy plan is essential to increase domestic
production of oil and gas, to encourage conservation of our scarce energy
resources, to stimulate conversion to more abundant fuels, and to reduce
our trade deficit.
The essential human needs for our citizens must be given the highest
The Federal Government must lead the way in investment in the Nation's
The Federal Government has an obligation to nurture and protect our
environment-- the common resource, birthright, and sustenance of the American
My 1982 budget continues to support these principles. It also proposes
responsible tax reductions to encourage a more productive economy, and
adequate funding of our highest priority programs within an overall policy
Fiscal restraint must be continued in the years ahead. Budgets must
be tight enough to convince those who set wages and prices that the Federal
Government is serious about fighting inflation but not so tight as to choke
off all growth.
Careful budget policy should be supplemented by other measures designed
to reduce inflation at lower cost in lost output and employment. These
other steps include measures to increase investment-- such as the tax proposals
included in my 1982 budget-- and measures to increase competition and productivity
in our economy. Voluntary incomes policies can also directly influence
wages and prices in the direction of moderation and thereby bring inflation
down faster and at lower cost to the economy. Through a tax-based incomes
policy (TIP)we could provide tax incentives for firms and workers to moderate
their wage and price increases. In the coming years, control of Federal
expenditures can make possible periodic tax reductions. The Congress should
therefore begin now to evaluate the potentialities of a TIP program so
that when the next round of tax reductions is appropriate a TIP program
will be seriously considered.
During the last four years we have given top priority to meeting the
needs of workers and providing additional job opportunities to those who
seek work. Since the end of 1976:
almost 9 million new jobs have been added to the nation's economy
total employment has reached 97 million. More jobs than ever before
are held by women, minorities and young people. Employment over the past
four years has increased by:
17% for adult women
11% for blacks, and
30% for Hispanics
employment of black teenagers increased by more than 5%, reversing
the decline that occurred in the previous eight years.
Major initiatives launched by this Administration helped bring about
these accomplishments and have provided a solid foundation for employment
and training policy in the 1980's. In 1977, as part of the comprehensive
economic stimulus program:
425,000 public service jobs were created
A $1 billion youth employment initiative funded 200,000 jobs
the doubling of the Job Corps to 44,000 slots began and 1 million summer
youth jobs were approved-- a 25 percent increase.
the Humphrey-Hawkins Full Employment Act became law
the $400 million Private Sector Initiatives Program was begun
a targeted jobs tax credit for disadvantaged youth and others with
special employment barriers was enacted
the Comprehensive Employment and Training Act was reauthorized for
a $6 billion welfare reform proposal was introduced with funding for
400,000 public service jobs
welfare reform demonstration projects were launched in communities
around the country
the Vice President initiated a nationwide review of youth unemployment
in this country.
the findings of the Vice President's Task Force revealed the major education
and employment deficits that exist for poor and minority youngsters. As
a result a $2 billion youth education and jobs initiative was introduced
to provide unemployed youth with the basic education and work experience
they need to compete in the labor market of the 1980's.
As part of the economic revitalization program several steps were proposed
to aid workers in high unemployment communities:
an additional 13 weeks of unemployment benefits for the long term unemployed.
$600 million to train the disadvantaged and unemployed for new private
positive adjustment demonstrations to aid workers in declining industries.
The important Title VII Private Sector Initiatives Program was reauthorized
for an additional two years.
In addition to making significant progress in helping the disadvantaged
and unemployed, important gains were realized for all workers:
an historic national accord with organized labor made it possible for
the views of working men and women to be heard as the nation's economic
and domestic policies were formulated.
the Mine Safety and Health Act brought about improved working conditions
for the nation's 500,000 miners.
substantial reforms of Occupational Safety and Health Administration
were accomplished to help reduce unnecessary burdens on business and to
focus on major health and safety problems.
the minimum wage was increased over a four year period from $2.30 to
$3.35 an hour.
the Black Lung Benefit Reform Act was signed into law.
attempts to weaken Davis-Bacon Act were defeated.
While substantial gains have been made in the last four years, continued
efforts are required to ensure that this progress is continued:
government must continue to make labor a full partner in the policy
decisions that affect the interests of working men and women.
a broad, bipartisan effort to combat youth unemployment must be sustained
compassionate reform of the nation's welfare system should be continued
with employment opportunities provided for those able to work.
workers in declining industries should be provided new skills and help
in finding employment
Over the past year, the U.S. trade picture improved as a result of solid
export gains in both manufactured and agricultural products. Agricultural
exports reached a new record of over $40 billion, while manufactured exports
have grown by 24 percent to a record $144 billion. In these areas the United
States recorded significant surpluses of $24 billion and $19 billion respectively.
While our oil imports remained a major drain on our foreign exchange earnings,
that drain was somewhat moderated by a 19 percent decline in the volume
of oil imports.
U.S. trade negotiators made significant progress over the past year
in assuring effective implementation of the agreements negotiated during
the Tokyo Round of Multilateral Trade Negotiations. Agreements reached
with the Japanese government, for example, will assure that the United
States will be able to expand its exports to the Japanese market in such
key areas as telecommunications equipment, tobacco, and lumber. Efforts
by U.S. trade negotiators also helped to persuade a number of key developing
countries to accept many of the non-tariff codes negotiated during the
Multilateral Trade Negotiations. This will assure that these countries
will increasingly assume obligations under the international trading system.
A difficult world economic environment posed a challenge for the management
of trade relations. U.S. trade negotiators were called upon to manage serious
sectoral problems in such areas as steel, and helped to assure that U.S.
chemical exports will have continued access to the European market.
Close consultations with the private sector in the United States have
enabled U.S. trade negotiators to pinpoint obstacles to U.S. trade in services,
and to build a basis for future negotiations. Services have been an increasingly
important source of export earnings for the United States, and the United
States must assure continued and increased access to foreign markets.
The trade position of the United States has improved. But vigorous efforts
are needed in a number of areas to assure continued market access for U.S.
exports, particularly agricultural and high technology products, in which
the United States continues to have a strong competitive edge. Continued
efforts are also needed to remove many domestic disincentives, which now
hamper U.S. export growth. And we must ensure that countries do not manipulate
investment, or impose investment performance requirements which distort
trade and cost us jobs in this country.
In short, we must continue to seek free-- but fair-- trade. That is
the policy my Administration has pursued from the beginning, even in areas
where foreign competition has clearly affected our domestic industry. In
the steel industry, for instance, we have put Trigger Price Mechanism into
place to help prevent the dumping of steel. That action has strengthened
the domestic steel industry. In the automobile industry, we have worked--
without resort to import quotas-- to strengthen the industry's ability
to modernize and compete effectively.
I have often said that there is nothing small about small business in
America. These firms account for nearly one-half our gross national product;
over half of new technology; and much more than half of the jobs created
Because this sector of the economy is the very lifeblood of our National
economy, we have done much together to improve the competitive climate
for smaller firms. These concerted efforts have been an integral part of
my program to revitalize the economy.
They include my campaign to shrink substantially the cash and time consuming
red tape burden imposed on business. They include my personally-directed
policy of ambitiously increasing the Federal contracting dollars going
to small firms, especially those owned by women and minorities. And they
include my proposals to reinvigorate existing small businesses and assist
the creation of new ones through tax reform; financing assistance; market
expansion; and support of product innovation.
Many of my initiatives to facilitate the creation and growth of small
businesses were made in response to the White House Conference on Small
Business, which I convened. My Administration began the implementation
of most of the ideas produced last year by that citizen's advisory body;
others need to be addressed. I have proposed the reconvening of the Conference
next year to review progress; reassess priorities; and set new goals. In
the interim I hope that the incoming Administration and the new Congress
will work with the committee I have established to keep these business
development ideas alive and help implement Conference recommendations.
One of the most successful developments of my Administration has been
the growth and strengthening of minority business. This is the first Administration
to put the issue on the policy agenda as a matter of major importance.
To implement the results of our early efforts in this field I submitted
legislation to Congress designed to further the development of minority
We have reorganized the Office of Minority Business into the Minority
Business Development Administration in the Department of Commerce. MBDA
has already proven to be a major factor in assisting minority businesses
to achieve equitable competitive positions in the marketplace.
The Federal government's procurement from minority-owned firms has nearly
tripled since I took office. Federal deposits in minority-owned banks have
more than doubled and minority ownership of radio and television stations
has nearly doubled. The SBA administered 8(a) Pilot Program for procurement
with the Army proved to be successful and I recently expanded the number
of agencies involved to include NASA and the Departments of Energy and
I firmly believe the critical path to full freedom and equality for
America's minorities rests with the ability of minority communities to
participate competitively in the free enterprise system. I believe the
government has a fundamental responsibility to assist in the development
of minority business and I hope the progress made in the last four years
II. CREATING ENERGY SECURITY
Since I took office, my highest legislative priorities have involved
the reorientation and redirection of U.S. energy activities and for the
first time, to establish a coordinated national energy policy. The struggle
to achieve that policy has been long and difficult, but the accomplishments
of the past four years make clear that our country is finally serious about
the problems caused by our overdependence on foreign oil. Our progress
should not be lost. We must rely on and encourage multiple forms of energy
production-- coal, crude oil, natural gas, solar, nuclear, synthetics--
and energy conservation. The framework put in place over the last four
years will enable us to do this.
NATIONAL ENERGY POLICY
As a result of actions my Administration and the Congress have taken
over the past four years, our country finally has a national energy policy:
Under my program of phased decontrol, domestic crude oil price controls
will end September 30, 1981. As a result exploratory drilling activities
have reached an all-time high;
Prices for new natural gas are being decontrolled under the Natural
Gas Policy Act-- and natural gas production is now at an all time high;
the supply shortages of several years ago have been eliminated;
The windfall profits tax on crude oil has been enacted providing $227
billion over ten years for assistance to low-income households, increased
mass transit funding, and a massive investment in the production and development
of alternative energy sources;
The Synthetic Fuels Corporation has been established to help private
companies build the facilities to produce energy from synthetic fuels;
Solar energy funding has been quadrupled, solar energy tax credits
enacted, and a Solar Energy and Energy Conservation Bank has been established;
A route has been chosen to bring natural gas from the North Slope of
Alaska to the lower 48 states;
Coal production and consumption incentives have been increased, and
coal production is now at its highest level in history;
A gasoline rationing plan has been approved by Congress for possible
use in the event of a severe energy supply shortage or interruption;
Gasohol production has been dramatically increased, with a program
being put in place to produce 500 million gallons of alcohol fuel by the
end of this year-- an amount that could enable gasohol to meet the demand
for 10 percent of all unleaded gasoline;
New energy conservation incentives have been provided for individuals,
businesses and communities and conservation has increased dramatically.
The U.S. has reduced oil imports by 25 percent-- or 2 million barrels per
day-- over the past four years.
INCREASED DEVELOPMENT OF DOMESTIC ENERGY SOURCES
Although it is essential that the Nation reduce its dependence on imported
fossil fuels and complete the transition to reliance on domestic renewable
sources of energy, it is also important that this transition be accomplished
in an orderly, economic, and environmentally sound manner. To this end,
the Administration has launched several initiatives.
Leasing of oil and natural gas on federal lands, particularly the outer
continental shelf, has been accelerated at the same time as the Administration
has reformed leasing procedures through the 1978 amendments to the Outer
Continental Shelf Lands Act. In 1979 the Interior Department held six OCS
lease sales, the greatest number ever, which resulted in federal receipts
of $6.5 billion, another record. The five-year OCS Leasing schedule was
completed, requiring 36 sales over the next five years.
Since 1971 no general federal coal lease sales were suspended. Over
the past four years the Administration has completely revised the federal
coal leasing program to bring it into compliance with the requirements
of 1976 Federal Land Planning and Management Act and other statutory provisions.
The program is designed to balance the competing interests that affect
resource development on public lands and to ensure that adequate supplies
of coal will be available to meet national needs. As a result, the first
general competitive federal coal lease sale in ten years will be held this
In July 1980, I signed into law the Energy Security Act of 1980 which
established the Synthetic Fuels Corporation. The Corporation is designed
to spur the development of commercial technologies for production of synthetic
fuels, such as liquid and gaseous fuels from coal and the production of
oil from oil shale. The Act provides the Corporation with an initial $22
billion to accomplish these objectives. The principal purpose of the legislation
is to ensure that the nation will have available in the late 1980's the
option to undertake commercial development of synthetic fuels if that becomes
necessary. The Energy Security Act also provides significant incentives
for the development of gasohol and biomass fuels, thereby enhancing the
nation's supply of alternative energy sources.
COMMITMENT TO A SUSTAINABLE ENERGY FUTURE
The Administration's 1977 National Energy Plan marked an historic departure
from the policies of previous Administrations. The plan stressed the importance
of both energy production and conservation to achieving our ultimate national
goal of relying primarily on secure sources of energy. The National Energy
Plan made energy conservation a cornerstone of our national energy policy.
In 1978, I initiated the Administration's Solar Domestic Policy Review.
This represented the first step towards widespread introduction of renewable
energy sources into the Nation's economy. As a result of the Review, I
issued the 1979 Solar Message to Congress, the first such message in the
Nation's history. The Message outlined the Administration's solar program
and established an ambitious national goal for the year 2000 of obtaining
20 percent of this Nation's energy from solar and renewable sources. The
thrust of the federal solar program is to help industry develop solar energy
sources by emphasizing basic research and development of solar technologies
which are not currently economic, such as photovoltaics, which generate
energy directly from the sun. At the same time, through tax incentives,
education, and the Solar Energy and Energy Conservation Bank, the solar
program seeks to encourage state and local governments, industry, and our
citizens to expand their use of solar and renewable resource technologies
As a result of these policies and programs, the energy efficiency of
the American economy has improved markedly and investments in renewable
energy sources have grown significantly. It now takes 3 1/2 percent less
energy to produce a constant dollar of GNP than it did in January 1977.
This increase in efficiency represents a savings of over 1.3 million barrels
per day of oil equivalent, about the level of total oil production now
occurring in Alaska. Over the same period, Federal support for conservation
and solar energy has increased by more than 3000 percent, to $3.3 billion
in FY 1981, including the tax credits for solar energy and energy conservation
investments-- these credits are expected to amount to $1.2 billion in FY
1981 and $1.5 billion in FY 1982.
COMMITMENT TO NUCLEAR SAFETY AND SECURITY
Since January 1977, significant progress has been achieved in resolving
three critical problems resulting from the use of nuclear energy: radioactive
waste management, nuclear safety and weapons proliferation.
In 1977, the Administration announced its nuclear nonproliferation policy
and initiated the International Fuel Cycle Evaluation. In 1978, Congress
passed the Nuclear Nonproliferation Act, an historic piece of legislation.
In February 1980, the Administration transmitted its nuclear waste management
policy to the Congress. This policy was a major advance over all previous
efforts. The principal aspects of that policy are: acknowledging the seriousness
of the problem and the numerous technical and institutional issues; adopting
a technically and environmentally conservative approach to the first permanent
repository; and providing the states with significant involvement in nuclear
waste disposal decisions by creating the State Planning Council. While
much of the plan can be and is being implemented administratively, some
new authorities are needed. The Congress should give early priority to
enacting provisions for away-from-reactor storage and the State Planning
The accident at Three Mile Island made the nation acutely aware of the
safety risks posed by nuclear power plants. In response, the President
established the Kemeny Commission to review the accident and make recommendations.
Virtually all of the Commission's substantive recommendations were adopted
by the Administration and are now being implemented by the Nuclear Regulatory
Commission. The Congress adopted the President's proposed plan for the
Nuclear Regulatory Commission and the Nuclear Safety Oversight Committee
was established to ensure that the Administration's decisions were implemented.
Nuclear safety will remain a vital concern in the years ahead. We must
continue to press ahead for the safe, secure disposal of radioactive wastes,
and prevention of nuclear proliferation.
While significant growth in foreign demand for U.S. steam coal is foreseen,
congestion must be removed at major U.S. coal exporting ports such as Hampton
Roads, Virginia, and Baltimore, Maryland. My Administration has worked
through the Interagency Coal Task Force Study to promote cooperation and
coordination of resources between shippers, railroads, vessel broker/ operators
and port operators, and to determine the most appropriate Federal role
in expanding and modernizing coal export facilities, including dredging
deeper channels at selected ports. As a result of the Task Force's efforts,
administrative steps have been taken by the Corps of Engineers to reduce
significantly the amount of time required for planning and economic review
of port dredging proposals. The Administration has also recommended that
the Congress enact legislation to give the President generic authority
to recommend appropriations for channel dredging activities. Private industry
will, of course, play the major role in developing the United States' coal
export facilities, but the government must continue to work to facilitate
transportation to foreign markets.
III. ENHANCING BASIC HUMAN AND SOCIAL NEEDS
For too long prior to my Administration, many of our Nation's basic
human and social needs were being ignored or handled insensitively by the
Federal government. Over the last four years, we have significantly increased
funding for many of the vital programs in these areas; developed new programs
where needs were unaddressed; targeted Federal support to those individuals
and areas most in need of our assistance; and removed barriers that have
unnecessarily kept many disadvantaged citizens from obtaining aid for their
most basic needs.
Our record has produced clear progress in the effort to solve some of
the country's fundamental human and social problems. My Administration
and the Congress, working together, have demonstrated that government must
and can meet our citizens' basic human and social needs in a responsible
and compassionate way.
But there is an unfinished agenda still before the Congress. If we are
to meet our obligations to help all Americans realize the dreams of sound
health care, decent housing, effective social services, a good education,
and a meaningful job, important legislation still must be enacted. National
Health Insurance, Welfare Reform, Child Health Assessment Program, are
before the Congress and I urge their passage.
HEALTH NATIONAL HEALTH PLAN
During my Administration, I proposed to Congress a National Health Plan
which will enable the country to reach the goal of comprehensive, universal
health care coverage. The legislation I submitted lays the foundation for
this comprehensive plan and addresses the most serious problems of health
financing and delivery. It is realistic and enactable. It does not overpromise
or overspend, and, as a result, can be the solution to the thirty years
of Congressional battles on national health insurance. My Plan includes
the following key features:
nearly 15 million additional poor would receive fully-subsidized comprehensive
pre-natal and delivery services are provided for all pregnant women
and coverage is provided for all acute care for infants in their first
year of life;
the elderly and disabled would have a limit of $1,250 placed on annual
out-of-pocket medical expenses and would no longer face limits on hospital
all full-time employees and their families would receive insurance
against at least major medical expenses under mandated employer coverage;
Medicare and Medicaid would be combined and expanded into an umbrella
Federal program, Healthcare, for increased program efficiency, accountability
and uniformity; and
strong cost controls and health system reforms would be implemented,
including greater incentives for Health Maintenance Organizations.
I urge the new Congress to compare my Plan with the alternatives--
programs which either do too little to improve the health care needs of
Americans most in need or programs which would impose substantial financial
burdens on the American taxpayers. I hope the Congress will see the need
for and the benefits of my Plan and work toward prompt enactment. We cannot
afford further delay in this vital area.
HEALTH CARE COST CONTROL
Inflation in health care costs remains unacceptably high. Throughout
my Administration, legislation to reduce health care cost inflation was
one of my highest priorities, but was not passed by the Congress. Therefore,
my FY 1982 budget proposes sharing the responsibility for health care cost
control with the private sector, through voluntary hospital cost guidelines
and intensified monitoring. In the longer term, the health care reimbursement
system must be reformed. We must move away from inflationary cost-based
reimbursement and fee-for-service, and toward a system of prospective reimbursement,
under which health care providers would operate within predetermined budgets.
This reimbursement reform is essential to ultimately control inflation
in health care costs, and will be a significant challenge to the new Congress.
HEALTH PROMOTION AND DISEASE PREVENTION
During my Administration, the Surgeon General released "Healthy People,"
a landmark report on health promotion and disease prevention. The report
signals the growing consensus that the Nation's health strategy must be
refocused in the 1980's to emphasize the prevention of disease. Specifically,
the report lays out measurable and achieveable goals in the reduction of
mortality which can be reached by 1990.
I urge the new Congress to endorse the principles of "Healthy People,"
and to adopt the recommendations to achieve its goals. This will necessitate
adoption of a broader concept of health care, to include such areas as
environmental health, workplace health and safety, commercial product safety,
traffic safety, and health education, promotion and information.
MATERNAL AND CHILD HEALTH
Ensuring a healthy start in life for children remains not only a high
priority of my Administration, but also one of the most cost effective
forms of health care.
When I took office, immunization levels for preventable childhood diseases
had fallen to 70%. As a result of a concerted nationwide effort during
my Administration, I am pleased to report that now at least 90% of children
under 15, and virtually all school-age children are immunized. In addition,
reported cases of measles and mumps are at their lowest levels ever.
Under the National Health Plan I have proposed, there would be no cost-sharing
for prenatal and delivery services for all pregnant women and for acute
care provided to infants in their first year of life. These preventive
services have extremely high returns in terms of improved newborn and long-term
Under the Child Health Assurance Program (CHAP) legislation which I
submitted to the Congress, and which passed the House, an additional two
million low-income children under 18 would become eligible for Medicaid
benefits, which would include special health assessments. CHAP would also
improve the continuity of care for the nearly 14 million children now eligible
for Medicaid. An additional 100,000 low-income pregnant women would become
eligible for prenatal care under the proposal. I strongly urge the new
Congress to enact CHAP and thereby provide millions of needy children with
essential health services. The legislation has had strong bipartisan support,
which should continue as the details of the bill are completed.
I also urge the new Congress to provide strong support for two highly
successful ongoing programs: the special supplemental food program for
women, infants and children (WIC) and Family Planning. The food supplements
under WIC have been shown to effectively prevent ill health and thereby
reduce later medical costs. The Family Planning program has been effective
at reducing unwanted pregnancies among low-income women and adolescents.
EXPANSION OF SERVICES TO THE POOR AND UNDERSERVED
During my Administration, health services to the poor and underserved
have been dramatically increased. The number of National Health Service
Corps (NHSC) assignees providing services in medically underserved communities
has grown from 500 in 1977 to nearly 3,000 in 1981. The population served
by the NHSC has more than tripled since 1977. The number of Community Health
Centers providing services in high priority underserved areas has doubled
during my Administration, and will serve an estimated six million people
in 1981. I strongly urge the new Congress to support these highly successful
One of the most significant health achievements during my Administration
was the recent passage of the Mental Health Systems Act, which grew out
of recommendations of my Commission on Mental Health. I join many others
in my gratitude to the First Lady for her tireless and effective contribution
to the passage of this important legislation.
The Act is designed to inaugurate a new era of Federal and State partnership
in the planning and provision of mental health services. In addition, the
Act specifically provides for prevention and support services to the chronically
mentally ill to prevent unnecessary institutionalization and for the development
of community-based mental health services. I urge the new Congress to provide
adequate support for the full and timely implementation of this Act.
With my active support, the Congress recently passed "Medigap" legislation,
which provides for voluntary certification of health insurance policies
supplemental to Medicare, to curb widespread abuses in this area.
In the area of toxic agent control, legislation which I submitted to
the Congress recently passed. This will provide for a "super-fund" to cover
hazardous waste cleanup costs.
In the area of accidental injury control, we have established automobile
safety standards and increased enforcement activities with respect to the
55 MPH speed limit. By the end of the decade these actions are expected
to save over 13,000 lives and 100,000 serious injuries each year.
I urge the new Congress to continue strong support for all these activities.
FOOD AND NUTRITION
Building on the comprehensive reform of the Food Stamp Program that
I proposed and Congress passed in 1977, my Administration and the Congress
worked together in 1979 and 1980 to enact several other important changes
in the Program. These changes will further simplify administration and
reduce fraud and error, will make the program more responsive to the needs
of the elderly and disabled, and will increase the cap on allowable program
expenditures. The Food Stamp Act will expire at the end of fiscal 1981.
It is essential that the new Administration and the Congress continue this
program to ensure complete eradication of the debilitating malnutrition
witnessed and documented among thousands of children in the 1960's.
DRUG ABUSE PREVENTION
At the beginning of my Administration there were over a half million
heroin addicts in the United States. Our continued emphasis on reducing
the supply of heroin, as well as providing treatment and rehabilitation
to its victims, has reduced the heroin addict population, reduced the number
of heroin overdose deaths by 80%, and reduced the number of heroin related
injuries by 50%. We have also seen and encouraged a national movement of
parents and citizens committed to reversing the very serious and disturbing
trends of adolescent drug abuse.
Drug abuse in many forms will continue to detract, however, from the
quality of life of many Americans. To prevent that, I see four great challenges
in the years ahead. First, we must deal aggressively with the supplies
of illegal drugs at their source, through joint crop destruction programs
with foreign nations and increased law enforcement and border interdiction.
Second, we must look to citizens and parents across the country to help
educate the increasing numbers of American youth who are experimenting
with drugs to the dangers of drug abuse. Education is a key factor in reducing
drug abuse. Third, we must focus our efforts on drug and alcohol abuse
in the workplace for not only does this abuse contribute to low productivity
but it also destroys the satisfaction and sense of purpose all Americans
can gain from the work experience. Fourth, we need a change in attitude,
from an attitude which condones the casual use of drugs to one that recognizes
the appropriate use of drugs for medical purposes and condemns the inappropriate
and harmful abuse of drugs. I hope the Congress and the new Administration
will take action to meet each of these challenges.
The American people have always recognized that education is one of
the soundest investments they can make. The dividends are reflected in
every dimension of our national life-- from the strength of our economy
and national security to the vitality of our music, art, and literature.
Among the accomplishments that have given me the most satisfaction over
the last four years are the contributions that my Administration has been
able to make to the well-being of students and educators throughout the
This Administration has collaborated successfully with the Congress
on landmark education legislation. Working with the Congressional leadership,
my Administration spotlighted the importance of education by creating a
new Department of Education. The Department has given education a stronger
voice at the Federal level, while at the same time reserving the actual
control and operation of education to states, localities, and private institutions.
The Department has successfully combined nearly 150 Federal education programs
into a cohesive, streamlined organization that is more responsive to the
needs of educators and students. The Department has made strides to cut
red tape and paperwork and thereby to make the flow of Federal dollars
to school districts and institutions of higher education more efficient.
It is crucial that the Department be kept intact and strengthened.
Our collaboration with the Congress has resulted in numerous other important
legislative accomplishments for education. A little over two years ago,
I signed into law on the same day two major bills-- one benefiting elementary
and secondary education and the other, postsecondary education. The Education
Amendments of 1978 embodied nearly all of my Administration's proposals
for improvements in the Elementary and Secondary Education Act, including
important new programs to improve students' achievement in the basic skills
and to aid school districts with exceptionally high concentrations of children
from low-income families. The Middle Income Student Assistance Act, legislation
jointly sponsored by this Administration and the Congressional leadership,
expanded eligibility for need-based Basic Educational Opportunity Grants
to approximately one-third of the students enrolled in post-secondary education
and made many more students eligible for the first time for other types
of grants, work-study, and loans.
Just three and a half months ago, my Administration and the Congress
successfully concluded over two years of work on a major reauthorization
bill that further expands benefits to postsecondary education. Reflected
in the Education Amendments of 1980 are major Administration recommendations
for improvements in the Higher Education Act-- including proposals for
better loan access for students; a new parent loan program; simplified
application procedures for student financial aid; a strengthened Federal
commitment to developing colleges, particularly the historically Black
institutions; a new authorization for equipment and facilities modernization
funding for the nation's major research universities; and revitalized international
Supplementing these legislative accomplishments have been important
administrative actions aimed at reducing paperwork and simplifying regulations
associated with Federal education programs. We also launched major initiatives
to reduce the backlog of defaulted student loans and otherwise to curb
fraud, abuse, and waste in education programs.
To insure that the education enterprise is ready to meet the scientific
and technological changes of the future, we undertook a major study of
the status of science and engineering education throughout the nation.
I hope that the findings from this report will serve as a springboard for
needed reforms at all levels of education.
I am proud that this Administration has been able to provide the financial
means to realize many of our legislative and administrative goals. Compared
to the previous administration's last budget, I have requested the largest
overall increase in Federal funding for education in our nation's history.
My budget requests have been particularly sensitive to the needs of special
populations like minorities, women, the educationally and economically
disadvantaged, the handicapped, and students with limited English-speaking
ability. At the same time, I have requested significant increases for many
programs designed to enhance the quality of American education, including
programs relating to important areas as diverse as international education,
research libraries, museums, and teacher centers.
Last year, I proposed to the Congress a major legislative initiative
that would direct $2 billion into education and job training programs designed
to alleviate youth unemployment through improved linkages between the schools
and the work place. This legislation generated bipartisan support; but
unfortunately, action on it was not completed in the final, rushed days
of the 96th Congress. I urge the new Congress-- as it undertakes broad
efforts to strengthen the economy as well as more specific tasks like reauthorizing
the Vocational Education Act-- to make the needs of our nation's unemployed
youth a top priority for action. Only by combining a basic skills education
program together with work training and employment incentives can we make
substantial progress in eliminating one of the most severe social problems
in our nation-- youth unemployment, particularly among minorities. I am
proud of the progress already made through passage of the Youth Employment
and Demonstration Project Act of 1977 and the substantial increase in our
investment in youth employment programs. The new legislation would cap
INCOME SECURITY SOCIAL SECURITY
One of the highest priorities of my Administration has been to continue
the tradition of effectiveness and efficiency widely associated with the
social security program, and to assure present and future beneficiaries
that they will receive their benefits as expected. The earned benefits
that are paid monthly to retired and disabled American workers and their
families provide a significant measure of economic protection to millions
of people who might otherwise face retirement or possible disability with
fear. I have enacted changes to improve the benefits of many social security
beneficiaries during my years as President.
The last four years have presented a special set of concerns over the
financial stability of the social security system. Shortly after taking
office I proposed and Congress enacted legislation to protect the stability
of the old age and survivors trust fund and prevent the imminent exhaustion
of the disability insurance trust fund, and to correct a flaw in the benefit
formula that was threatening the long run health of the entire social security
system. The actions taken by the Congress at my request helped stabilize
the system. That legislation was later complemented by the Disability Insurance
Amendments of 1980 which further bolstered the disability insurance program,
and reduced certain inequities among beneficiaries.
My commitment to the essential retirement and disability protection
provided to 35 million people each month has been demonstrated by the fact
that without interruption those beneficiaries have continued to receive
their social security benefits, including annual cost of living increases.
Changing and unpredictable economic circumstances require that we continue
to monitor the financial stability of the social security system. To correct
anticipated short-term strains on the system, I proposed last year that
the three funds be allowed to borrow from one another, and I urge the Congress
again this year to adopt such interfund borrowing. To further strengthen
the social security system and provide a greater degree of assurance to
beneficiaries, given projected future economic uncertainties, additional
action should be taken. Among the additional financing options available
are borrowing from the general fund, financing half of the hospital insurance
fund with general revenues, and increasing the payroll tax rate. The latter
option is particularly unpalatable given the significant increase in the
tax rate already mandated in law.
This Administration continues to oppose cuts in basic social security
benefits and taxing social security benefits. The Administration continues
to support annual indexing of social security benefits.
In 1979 I proposed a welfare reform package which offers solutions to
some of the most urgent problems in our welfare system. This proposal is
embodied in two bills, The Work and Training Opportunities Act and The
Social Welfare Reform Amendments Act. The House passed the second of these
two proposals. Within the framework of our present welfare system, my reform
proposals offer achievable means to increase self-sufficiency through work
rather than welfare, more adequate assistance to people unable to work,
the removal of inequities in coverage under current programs, and fiscal
relief needed by States and localities.
Our current welfare system is long overdue for serious reform; the system
is wasteful and not fully effective. The legislation I have proposed will
help eliminate inequities by establishing a national minimum benefit, and
by directly relating benefit levels to the poverty threshold. It will reduce
program complexity, which leads to inefficiency and waste, by simplifying
and coordinating administration among different programs.
I urge the Congress to take action in this area along the lines I have
My Administration has worked closely with the Congress on legislation
which is designed to improve greatly the child welfare services and foster
care programs and to create a Federal system of adoption assistance. These
improvements will be achieved with the recent enactment of H.R. 3434, the
Adoption Assistance and Child Welfare Act of 1980. The well-being of children
in need of homes and their permanent placement have been a primary concern
of my Administration. This legislation will ensure that children are not
lost in the foster care system, but instead will be returned to their families
where possible or placed in permanent adoptive homes.
LOW-INCOME ENERGY ASSISTANCE
In 1979 I proposed a program to provide an annual total of $1.6 billion
to low-income households which are hardest hit by rising energy bills.
With the cooperation of Congress, we were able to move quickly to provide
assistance to eligible households in time to meet their winter heating
In response to the extreme heat conditions affecting many parts of the
country during 1980, I directed the Community Services Administration to
make available over $27 million to assist low-income individuals, especially
the elderly, facing life threatening circumstances due to extreme heat.
Congress amended and reauthorized the low-income energy assistance program
for fiscal year 1981, and provided $1.85 billion to meet anticipated increasing
need. The need for a program to help low-income households with rising
energy expenses will not abate in the near future. The low-income energy
assistance program should be reauthorized to meet those needs.
For the past 14 months, high interest rates have had a severe impact
on the nation's housing market. Yet the current pressures and uncertainties
should not obscure the achievements of the past four years.
Working with the Congress, the regulatory agencies, and the financial
community, my Administration has brought about an expanded and steadier
flow of funds into home mortgages. Deregulation of the interest rates payable
by depository institutions, the evolution of variable and renegotiated
rate mortgages, development of high yielding savings certificates, and
expansion of the secondary mortgage market have all increased housing's
ability to attract capital and have assured that mortgage money would not
be cut off when interest rates rose. These actions will diminish the cyclicality
of the housing industry. Further, we have secured legislation updating
the Federal Government's emergency authority to provide support for the
housing industry through the Brooke-Cranston program, and creating a new
Section 235 housing stimulus program. These tools will enable the Federal
Government to deal quickly and effectively with serious distress in this
We have also worked to expand homeownership opportunities for Americans.
By using innovative financing mechanisms, such as the graduated payment
mortgage, we have increased the access of middle income families to housing
credit. By revitalizing the Section 235 program, we have enabled nearly
100,000 moderate income households to purchase new homes. By reducing paperwork
and regulation in Federal programs, and by working with State and local
governments to ease the regulatory burden, we have helped to hold down
housing costs and produce affordable housing.
As a result of these governmentwide efforts, 5 1/2 million more American
families bought homes in the past four years than in any equivalent period
in history. And more than 7 million homes have begun construction during
my Administration, 1 million more than in the previous four years.
We have devoted particular effort to meeting the housing needs of low
and moderate income families. In the past four years, more than 1 million
subsidized units have been made available for occupancy by lower income
Americans and more than 600,000 assisted units have gone into construction.
In addition, we have undertaken a series of measures to revitalize and
preserve the nation's 2 million units of public and assisted housing.
For Fiscal Year 1982, I am proposing to continue our commitment to lower
income housing. I am requesting funds to support 260,000 units of Section
8 and public housing, maintaining these programs at the level provided
by Congress in Fiscal 1981.
While we have made progress in the past four years, in the future there
are reasons for concern. Home price inflation and high interest rates threaten
to put homeownership out of reach for first-time homebuyers. Lower income
households, the elderly and those dependent upon rental housing face rising
rents, low levels of rental housing construction by historic standards,
and the threat of displacement due to conversion to condominiums and other
factors. Housing will face strong competition for investment capital from
the industrial sector generally and the energy industries, in particular.
To address these issues, I appointed a Presidential Task Force and Advisory
Group last October. While this effort will not proceed due to the election
result, I hope the incoming Administration will proceed with a similar
The most important action government can take to meet America's housing
needs is to restore stability to the economy and bring down the rate of
inflation. Inflation has driven up home prices, operating costs and interest
rates. Market uncertainty about inflation has contributed to the instability
in interest rates, which has been an added burden to homebuilders and homebuyers
alike. By making a long-term commitment to provide a framework for greater
investment, sustained economic growth, and price stability, my Administration
has begun the work of creating a healthy environment for housing.
With the passage of the Airline Deregulation Act of 1978, the Motor
Carrier Act of 1980, and the Harley O. Staggers Rail Act of 1980, my Administration,
working with the Congress, has initiated a new era of reduced regulation
of transportation industries. Deregulation will lead to increased productivity
and operating efficiencies in the industries involved, and stimulate price
and service competition, to the benefit of consumers generally. I urge
the new Administration to continue our efforts on behalf of deregulation
legislation for the intercity passenger bus industry as well.
In the coming decade, the most significant challenge facing the nation
in transportation services will be to improve a deteriorating physical
infrastructure of roadways, railroads, waterways and mass transit systems,
in order to conserve costly energy supplies while promoting effective transportation
Our vast network of highways, which account for 90 percent of travel
and 80 percent by value of freight traffic goods movement, is deteriorating.
If current trends continue, a major proportion of the Interstate pavement
will have deteriorated by the end of the 1980's.
Arresting the deterioration of the nation's system of highways is a
high priority objective for the 1980's. We must reorient the Federal mission
from major new construction projects to the stewardship of the existing
Interstate Highway System. Interstate gaps should be judged on the connections
they make and on their compatibility with community needs.
During this decade, highway investments will be needed to increase productivity,
particularly in the elimination of bottlenecks, provide more efficient
connections to ports and seek low-cost solutions to traffic demand.
My Administration has therefore recommended redefining completion of
the Interstate system, consolidating over 27 categorical assistance programs
into nine, and initiating a major repair and rehabilitation program for
segments of the Interstate system. This effort should help maintain the
condition and performance of the Nation's highways, particularly the Interstate
and primary system; provide a realistic means to complete the Interstate
system by 1990; ensure better program delivery through consolidation, and
assist urban revitalization. In addition, the Congress must address the
urgent funding problems of the highway trust fund, and the need to generate
In the past decade the nation's public transit systems' ridership increased
at an annual average of 1.1% each year in the 1970's (6.9% in 1979). Continued
increases in the cost of fuel are expected to make transit a growing part
of the nation's transportation system.
As a result, my Administration projected a ten year, $43 billion program
to increase mass transit capacity by 50 percent, and promote more energy
efficient vehicle uses in the next decade. The first part of this proposal
was the five year, $24.7 billion Urban Mass Transportation Administration
reauthorization legislation I sent to the Congress in March, 1980. I urge
the 97th Congress to quickly enact this or similar legislation in 1981.
My Administration was also the first to have proposed and signed into
law a non-urban formula grant program to assist rural areas and small communities
with public transportation programs to end their dependence on the automobile,
promote energy conservation and efficiency, and provide transportation
services to impoverished rural communities.
A principal need of the 1980's will be maintaining mobility for all
segments of the population in the face of severely increasing transportation
costs and uncertainty of fuel supplies. We must improve the flexibility
of our transportation system and offer greater choice and diversity in
transportation services. While the private automobile will continue to
be the principal means of transportation for many Americans, public transportation
can become an increasingly attractive alternative. We, therefore, want
to explore a variety of paratransit modes, various types of buses, modern
rapid transit, regional rail systems and light rail systems.
Highway planning and transit planning must be integrated and related
to State, regional, district and neighborhood planning efforts now in place
or emerging. Low density development and land use threaten the fiscal capacity
of many communities to support needed services and infrastructure.
ELDERLY AND HANDICAPPED
Transportation policies in the 1980's must pay increasing attention
to the needs of the elderly and handicapped. By 1990, the number of people
over 65 will have grown from today's 19 million to 27 million. During the
same period, the number of handicapped-- people who have difficulty using
transit as well as autos, including the elderly-- is expected to increase
from 9 to 11 million, making up 4.5 percent of the population.
We must not retreat from a policy that affords a significant and growing
portion of our population accessible public transportation while recognizing
that the handicapped are a diverse group and will need flexible, door-to-door
service where regular public transportation will not do the job.
In addition, the Federal government must reassess the appropriate Federal
role of support for passenger and freight rail services such as Amtrak
and Conrail. Our goal through federal assistance should be to maintain
and enhance adequate rail service, where it is not otherwise available
to needy communities. But Federal subsidies must be closely scrutinized
to be sure they are a stimulus to, and not a replacement for, private investment
and initiative. Federal assistance cannot mean permanent subsidies for
WATERWAYS AND RURAL TRANSPORTATION
There is a growing need in rural and small communities for improved
transportation services. Rail freight service to many communities has declined
as railroads abandon unproductive branch lines. At the same time, rural
roads are often inadequate to handle large, heavily-loaded trucks. The
increased demand for "harvest to harbor" service has also placed an increased
burden on rural transportation systems, while bottlenecks along the Mississippi
River delay grain shipments to the Gulf of Mexico.
We have made some progress:
-- To further develop the nation's waterways, my Administration began
construction of a new 1,200 foot lock at the site of Lock and Dam 26 on
the Mississippi River. When opened in 1987, the new lock will have a capacity
of 86 million tons per year, an 18 percent increase over the present system.
The U.S. Army Corps of Engineers has also undertaken studies to assess
the feasibility of expanding the Bonneville Locks. Rehabilitation of John
Day Lock was begun in 1980 and should be completed in 1982. My Administration
also supports the completion of the Upper Mississippi River Master Plan
to determine the feasibility of constructing a second lock at Alton, Illinois.
These efforts will help alleviate delays in transporting corn, soybeans
and other goods along the Mississippi River to the Gulf of Mexico.
-- The Department of Transportation's new Small Community and Rural
Transportation Policy will target federal assistance for passenger transportation,
roads and highways, truck service, and railroad freight service to rural
areas. This policy implements and expands upon the earlier White House
Initiative, "Improving Transportation in Rural America," announced in June,
1979, and the President's "Small Community and Rural Development Policy"
announced in December, 1979. The Congress should seek ways to balance rail
branch line abandonment with the service needs of rural and farm communities,
provide financial assistance to rail branch line rehabilitation where appropriate,
assist shippers to adjust to rail branch line abandonment where it takes
place, and help make it possible for trucking firms to serve light density
markets with dependable and efficient trucking services.
During my Administration I have sought to ensure that the U.S. maritime
industry will not have to function at an unfair competitive disadvantage
in the international market. As I indicated in my maritime policy statement
to the Congress in July, 1979, the American merchant marine is vital to
our Nation's welfare, and Federal actions should promote rather than harm
it. In pursuit of this objective, I signed into law the Controlled Carrier
Act of 1978, authorizing the Federal Maritime Commission to regulate certain
rate cutting practices of some state-controlled carriers, and recently
signed a bilateral maritime agreement with the People's Republic of China
that will expand the access of American ships to 20 specified Chinese ports,
and set aside for American-flag ships a substantial share (at least one-third)
of the cargo between our countries. This agreement should officially foster
expanded U.S. and Chinese shipping services linking the two countries,
and will provide further momentum to the growth of Sino-American trade.
There is also a need to modernize and expand the dry bulk segment of
our fleet. Our heavy dependence on foreign carriage of U.S.-bulk cargoes
deprives the U.S. economy of seafaring and shipbuilding jobs, adds to the
balance-of-payments deficit, deprives the Government of substantial tax
revenues, and leaves the United States dependent on foreign-flag shipping
for a continued supply of raw materials to support the civil economy and
war production in time of war.
I therefore sent to the Congress proposed legislation to strengthen
this woefully weak segment of the U.S.-flag fleet by removing certain disincentives
to U.S. construction of dry bulkers and their operation under U.S. registry.
Enactment of this proposed legislation would establish the basis for accelerating
the rebuilding of the U.S.-flag dry bulk fleet toward a level commensurate
with the position of the United States as the world's leading bulk trading
During the past year the Administration has stated its support for legislation
that would provide specific Federal assistance for the installation of
fuel-efficient engines in existing American ships, and would strengthen
this country's shipbuilding mobilization base. Strengthening the fleet
is important, but we must also maintain our shipbuilding base for future
Provisions in existing laws calling for substantial or exclusive use
of American-flag vessels to carry cargoes generated by the Government must
be vigorously pursued.
I have therefore supported requirements that 50 percent of oil purchased
for the strategic petroleum reserve be transported in U.S.-flag vessels,
that the Cargo Preference Act be applied to materials furnished for the
U.S. assisted construction of air bases in Israel, and to cargoes transported
pursuant to the Chrysler Corporation Loan Guarantee Act. In addition, the
deep Seabed Hard Mineral Resources Act requires that at least one ore carrier
per mine site be a U.S.-flag vessel.
Much has been done, and much remains to be done. The FY 1982 budget
includes a $107 million authorization for Construction Differential Subsidy
("CDS") funds which, added to the unobligated CDS balance of $100 million
from 1980, and the recently enacted $135 million 1981 authorization, will
provide an average of $171 million in CDS funds in 1981 and 1982.
COAL EXPORT POLICY
While significant growth in foreign demand for U.S. steam coal is foreseen,
congestion at major U.S. coal exporting ports such as Hampton Roads, Virginia,
and Baltimore, Maryland, could delay and impede exports.
My Administration has worked through the Interagency Coal Task Force
Study, which I created, to promote cooperation and coordination of resources
between shippers, railroads, vessel broker/ operators and port operators,
and to determine the most appropriate Federal role in expanding and modernizing
coal export facilities, including dredging deeper channels at selected
Some progress has already been made. In addition to action taken by
transshippers to reduce the number of coal classifications used whenever
possible, by the Norfolk and Western Railroad to upgrade its computer capability
to quickly inventory its coal cars in its yards, and by the Chessie Railroad
which is reactivating Pier 15 in Newport News and has established a berth
near its Curtis Bay Pier in Baltimore to decrease delays in vessel berthing,
public activities will include:
-- A $26.5 million plan developed by the State of Pennsylvania and Conrail
to increase Conrail's coal handling capacity at Philadelphia;
-- A proposal by the State of Virginia to construct a steam coal port
on the Craney Island Disposal area in Portsmouth harbor;
-- Plans by Mobile, Alabama, which operates the only publicly owned
coal terminal in the U.S. to enlarge its capacity at McDuffie Island to
10 million tons ground storage and 100 car unit train unloading capability;
-- Development at New Orleans of steam coal facilities that are expected
to add over 20 million tons of annual capacity by 1983; and
-- The Corps of Engineers, working with other interested Federal agencies,
will determine which ports should be dredged, to what depth and on what
schedule, in order to accommodate larger coal carrying vessels.
Private industry will, of course, play a major role in developing the
United States' coal export facilities. The new Administration should continue
to work to eliminate transportation bottlenecks that impede our access
to foreign markets.
The past four years have been years of rapid advancement for women.
Our focus has been two-fold: to provide American women with a full range
of opportunities and to make them a part of the mainstream of every aspect
of our national life and leadership.
I have appointed a record number of women to judgeships and to top government
posts. Fully 22 percent of all my appointees are women, and I nominated
41 of the 46 women who sit on the Federal bench today. For the first time
in our history, women occupy policymaking positions at the highest level
of every Federal agency and department and have demonstrated their ability
to serve our citizens well.
We have strengthened the rights of employed women by consolidating and
strengthening enforcement of sex discrimination laws under the EEOC, by
expanding employment rights of pregnant women through the Pregnancy Disability
Bill, and by increasing federal employment opportunities for women through
civil service reform, and flexi-time and part-time employment.
By executive order, I created the first national program to provide
women businessowners with technical assistance, grants, loans, and improved
access to federal contracts.
We have been sensitive to the needs of women who are homemakers. I established
an Office of Families within HHS and sponsored the White House Conference
on Families. We initiated a program targeting CETA funds to help displaced
homemakers. The Social Security system was amended to eliminate the widow's
penalty and a comprehensive study of discriminatory provisions and possible
changes was presented to Congress. Legislation was passed to give divorced
spouses of foreign service officers rights to share in pension benefits.
We created an office on domestic violence within HHS to coordinate the
12 agencies that now have domestic violence relief programs, and to distribute
information on the problem and the services available to victims.
Despite a stringent budget for FY 1981, the Administration consistently
supported the Women's Educational Equity Act and family planning activities,
as well as other programs that affect women, such as food stamps, WIC,
and social security.
We have been concerned not only about the American woman's opportunities,
but ensuring equality for women around the world. In November, 1980, I
sent to the Senate the Convention on the Elimination of All Forms of Discrimination
Against Women. This United Nations document is the most comprehensive and
detailed international agreement which seeks the advancement of women.
On women's issues, I have sought the counsel of men and women in and
out of government and from all regions of our country. I established two
panels-- the President's Advisory Committee for Women and the Interdepartmental
Task Force on Women-- to advise me on these issues. The mandate for both
groups expired on December 31, but they have left behind a comprehensive
review of the status of women in our society today. That review provides
excellent guidance for the work remaining in our battle against sex discrimination.
Even though we have made progress, much remains on the agenda for women.
I remain committed to the Equal Rights Amendment and will continue to work
for its passage. It is essential to the goal of bringing America's women
fully into the mainstream of American life that the ERA be ratified.
The efforts begun for women in employment, business and education should
be continued and strengthened. Money should be available to states to establish
programs to help the victims of domestic violence. Congress should pass
a national health care plan and a welfare reform program, and these measures
should reflect the needs of women.
The talents of women should continue to be used to the fullest inside
and outside of government, and efforts should continue to see that they
have the widest range of opportunities and options.
I hope that my Administration will be remembered in this area for leading
the way toward full civil rights for handicapped Americans. When I took
office, no federal agency had yet issued 504 regulations. As I leave office,
this first step by every major agency and department in the federal government
is almost complete. But it is only a first step. The years ahead will require
steadfast dedication by the President to protect and promote these precious
rights in the classroom, in the workplace, and in all public facilities
so that handicapped individuals may join the American mainstream and contribute
to the fullest their resources and talents to our economic and social life.
Just as we supported, in an unprecedented way, the civil rights of disabled
persons in schools and in the workplace, other initiatives in health prevention,
such as our immunization and nutrition programs for young children and
new intense efforts to reverse spinal cord injury, must continue so that
the incidence of disability continues to decline.
This year is the U.N.-declared International Year of Disabled Persons.
We are organizing activities to celebrate and promote this important commemorative
year within the government as well as in cooperation with private sector
efforts in this country and around the world. The International Year will
give our country the opportunity to recognize the talents and capabilities
of our fellow citizens with disabilities. We can also share our rehabilitation
and treatment skills with other countries and learn from them as well.
I am proud that the United States leads the world in mainstreaming and
treating disabled people. However, we have a long way to go before all
psychological and physical barriers to disabled people are torn down and
they can be full participants in our American way of life. We must pledge
our full commitment to this goal during the International Year.
Because of my concern for American families, my Administration convened
last year the first White House Conference on Families which involved seven
national hearings, over 506 state and local events, three White House Conferences,
and the direct participation of more than 125,000 citizens. The Conference
reaffirmed the centrality of families in our lives and nation but documented
problems American families face as well. We also established the Office
of Families within the Department of Health and Human Services to review
government policies and programs that affect families.
I expect the departments and agencies within the executive branch of
the Federal government as well as Members of Congress, corporate and business
leaders, and State and local officials across the country, to study closely
the recommendations of the White House Conference and implement them appropriately.
As public policy is developed and implemented by the Federal government,
cognizance of the work of the Conference should be taken as a pragmatic
and essential step.
The Conference has done a good job of establishing an agenda for action
to assure that the policies of the Federal government are more sensitive
in their impact on families. I hope the Congress will review and seriously
consider the Conference's recommendations.
My Administration has taken great strides toward solving the difficult
problems faced by older Americans. Early in my term we worked successfully
with the Congress to assure adequate revenues for the Social Security Trust
Funds. And last year the strength of the Social Security System was strengthened
by legislation I proposed to permit borrowing among the separate trust
funds. I have also signed into law legislation prohibiting employers from
requiring retirement prior to age 70, and removing mandatory retirement
for most Federal employees. In addition, my Administration worked very
closely with Congress to amend the Older Americans Act in a way that has
already improved administration of its housing, social services, food delivery,
and employment programs.
This year, I will be submitting to Congress a budget which again demonstrates
my commitment to programs for the elderly. It will include, as my previous
budgets have, increased funding for nutrition, senior centers and home
health care, and will focus added resources on the needs of older Americans.
With the 1981 White House Conference on Aging approaching, I hope the
new Administration will make every effort to assure an effective and useful
conference. This Conference should enable older Americans to voice their
concerns and give us guidance in our continued efforts to ensure the quality
of life so richly deserved by our senior citizens.
We cannot hope to build a just and humane society at home if we ignore
the humanitarian claims of refugees, their lives at stake, who have nowhere
else to turn. Our country can be proud that hundreds of thousands of people
around the world would risk everything they have-- including their own
lives-- to come to our country.
This Administration initiated and implemented the first comprehensive
reform of our refugee and immigration policies in over 25 years. We also
established the first refugee coordination office in the Department of
State under the leadership of a special ambassador and coordinator for
refugee affairs and programs. The new legislation and the coordinator's
office will bring common sense and consolidation to our Nation's previously
fragmented, inconsistent, and in many ways, outdated, refugee and immigration
With the unexpected arrival of thousands of Cubans and Haitians who
sought refuge in our country last year, outside of our regular immigration
and refugee admissions process, our country and its government were tested
in being compassionate and responsive to a major human emergency. Because
we had taken steps to reorganize our refugee programs, we met that test
successfully. I am proud that the American people responded to this crisis
with their traditional good will and hospitality. Also, we would never
have been able to handle this unprecedented emergency without the efforts
of the private resettlement agencies who have always been there to help
refugees in crises.
Immigrants to this country always contribute more toward making our
country stronger than they ever take from the system. I am confident that
the newest arrivals to our country will carry on this tradition.
While we must remain committed to aiding and assisting those who come
to our shores, at the same time we must uphold our immigration and refugee
policies and provide adequate enforcement resources. As a result of our
enforcement policy, the illegal flow from Cuba has been halted and an orderly
process has been initiated to make certain that our refugee and immigration
laws are honored.
This year the Select Commission on Immigration and Refugee Policy will
complete its work and forward its advice and recommendations. I hope that
the recommendations will be carefully considered by the new Administration
and the Congress, for it is clear that we must take additional action to
keep our immigration policy responsive to emergencies and ever changing
This country and its leadership has a continuing and unique obligation
to the men and women who served their nation in the armed forces and help
maintain or restore peace in the world.
My commitment to veterans, as evidenced by my record, is characterized
by a conscientious and consistent emphasis in these general areas:
First, we have worked to honor the Vietnam veteran. During my Administration,
and under the leadership of VA Administrator Max Cleland, I was proud to
lead our country in an overdue acknowledgement of our Nation's gratitude
to the men and women who served their country during the bitter war in
Southeast Asia. Their homecoming was deferred and seemed doomed to be ignored.
Our country has matured in the last four years and at long last we were
able to separate the war from the warrior and honor these veterans. But
with our acknowledgement of their service goes an understanding that some
Vietnam veterans have unique needs and problems.
My Administration was able to launch a long sought after psychological
readjustment and outreach program, unprecedented in its popularity, sensitivity
and success. This program must be continued. The Administration has also
grappled with the difficult questions posed by some veterans who served
in Southeast Asia and were exposed to potentially harmful substances, including
the herbicide known as Agent Orange. We have launched scientific inquiries
that should answer many veterans' questions about their health and should
provide the basis for establishing sound compensation policy. We cannot
rest until their concerns are dealt with in a sensitive, expeditious and
Second, we have focused the VA health care system in the needs of the
service-connected disabled veteran. We initiated and are implementing the
first reform of the VA vocational rehabilitation system since its inception
in 1943. Also, my Administration was the first to seek a cost-of-living
increase for the recipients of VA compensation every year. My last budget
also makes such a request. The Administration also launched the Disabled
Veterans Outreach Program in the Department of Labor which has successfully
placed disabled veterans in jobs. Services provided by the VA health care
system will be further targeted to the special needs of disabled veterans
during the coming year.
Third, the VA health care system, the largest in the free world, has
maintained its independence and high quality during my Administration.
We have made the system more efficient and have therefore treated more
veterans than ever before by concentrating on out-patient care and through
modern management improvements. As the median age of the American veteran
population increases, we must concentrate on further changes within the
VA system to keep it independent and to serve as a model to the nation
and to the world as a center for research, treatment and rehabilitation.
GENERAL AID TO STATE AND LOCAL
Since taking office, I have been strongly committed to strengthening
the fiscal and economic condition of our Nation's State and local governments.
I have accomplished this goal by encouraging economic development of local
communities, and by supporting the General Revenue Sharing and other essential
GRANTS-IN-AID TO STATES AND LOCALITIES
During my Administration, total grants-in-aid to State and local governments
have increased by more than 40 percent, from $68 billion in Fiscal Year
1977 to $96 billion in Fiscal Year 1981. This significant increase in aid
has allowed States and localities to maintain services that are essential
to their citizens without imposing onerous tax burdens. It also has allowed
us to establish an unprecedented partnership between the leaders of the
Federal government and State and local government elected officials.
GENERAL REVENUE SHARING
Last year Congress enacted legislation that extends the General Revenue
Sharing program for three more years. This program is the cornerstone of
our efforts to maintain the fiscal health of our Nation's local government.
It will provide $4.6 billion in each of the next three years to cities,
counties and towns. This program is essential to the continued ability
of our local governments to provide essential police, fire and sanitation
This legislation renewing GRS will be the cornerstone of Federal-State-local
government relations in the 1980's. This policy will emphasize the need
for all levels of government to cooperate in order to meet the needs of
the most fiscally strained cities and counties, and also will emphasize
the important role that GRS can play in forging this partnership. I am
grateful that Congress moved quickly to assure that our Nation's localities
can begin the 1980's in sound fiscal condition.
Last year, I proposed that Congress enact a $1 billion counter-cyclical
fiscal assistance program to protect States and localities from unexpected
changes in the national economy. This program unfortunately was not enacted
by the [full] Congress. I, therefore, have not included funding for counter-cyclical
aid in my Fiscal Year 1982 budget. Nevertheless, I urge Congress to enact
a permanent stand-by counter-cyclical program, so that States and cities
can be protected during the next economic downturn.
Three years ago, I proposed the Nation's first comprehensive urban policy.
That policy involved more than one hundred improvements in existing Federal
programs, four new Executive Orders and nineteen pieces of urban-oriented
legislation. With Congress' cooperation, sixteen of these bills have now
been signed into law.
One of the principal goals of my domestic policy has been to strengthen
the private sector economic base of our Nation's economically troubled
urban and rural areas. With Congress' cooperation, we have substantially
expanded the Federal government's economic development programs and provided
new tax incentives for private investment in urban and rural communities.
These programs have helped many communities to attract new private sector
jobs and investments and to retain the jobs and investments that already
are in place.
When I took office, the Federal government was spending less than $300
million annually on economic development programs, and only $60 million
of those funds in our Nation's urban areas. Since that time, we have created
the Urban Development Action Grant (UDAG) program and substantially expanded
the economic development programs in the Commerce Department. My FY 1982
budget requests more than $1.5 billion for economic development grants,
loans and interest subsidies and almost $1.5 billion for loan guarantees.
Approximately 60 percent of these funds will be spent in our Nation's urban
areas. In addition, we have extended the 10 percent investment credit to
include rehabilitation of existing industrial facilities as well as new
I continue to believe that the development of private sector investment
and jobs is the key to revitalizing our Nation's economically depressed
urban and rural areas. To ensure that the necessary economic development
goes forward, the Congress must continue to provide strong support for
the UDAG program and the programs for the Economic Development Administration.
Those programs provide a foundation for the economic development of our
Nation in the 1980's.
The partnership among Federal, State and local governments to revitalize
our Nation's communities has been a high priority of my Administration.
When I took office, I proposed a substantial expansion of the Community
Development Block Grant (CDBG) program and the enactment of a new $400
million Urban Development Action Grant (UDAG) program. Both of these programs
have provided essential community and economic development assistance to
our Nation's cities and counties.
Last year, Congress reauthorized both the CDBG and UDAG programs. The
CDBG program was reauthorized for three more years with annual funding
increases of $150 million, and the UDAG program was extended for three
years at the current funding level of $675 million annually. My 1982 budget
requests full funding for both of these programs. These actions should
help our Nation's cities and counties to continue the progress they have
made in the last three years.
During my Administration we have taken numerous positive steps to achieve
a full partnership of neighborhood organizations and government at all
levels. We have successfully fought against red lining and housing discrimination.
We created innovative Self Help funding and technical resource transfer
mechanisms. We have created unique methods of access for neighborhood organizations
to have a participating role in Federal and State government decision-making.
Neighborhood based organizations are the threshold of the American community.
The Federal government will need to develop more innovative and practical
ways for neighborhood based organizations to successfully participate in
the identification and solution of local and neighborhood concerns. Full
partnership will only be achieved with the knowing participation of leaders
of government, business, education and unions. Neither state nor Federal
solutions imposed from on high will suffice. Neighborhoods are the fabric
and soul of this great land. Neighborhoods define the weave that has been
used to create a permanent fabric. The Federal government must take every
opportunity to provide access and influence to the individuals and organizations
affected at the neighborhood level.
Since the beginning of my Administration, I have been committed to improving
the effectiveness with which the Federal government deals with the problems
and needs of a rapidly changing rural America. The rapid growth of some
rural areas has placed a heavy strain on communities and their resources.
There are also persistent problems of poverty and economic stagnation in
other parts of rural America. Some rural areas continue to lose population,
as they have for the past several decades.
In December, 1979, I announced the Small Community and Rural Development
Policy. It was the culmination of several years' work and was designed
to address the varying needs of our rural population. In 1980, my Administration
worked with the Congress to pass the Rural Development Policy Act of 1980,
which when fully implemented will allow us to meet the needs of rural people
and their communities more effectively and more efficiently.
As a result of the policy and the accompanying legislation, we have:
-- Created the position of Under Secretary of Agriculture for Small
Community and Rural Development to provide overall leadership.
-- Established a White House Working Group to assist in the implementation
of the policy.
-- Worked with more than 40 governors to form State rural development
councils to work in partnership with the White House Working Group, and
the Federal agencies, to better deliver State and Federal programs to rural
-- Directed the White House Working Group to annually review existing
and proposed policies, programs, and budget levels to determine their adequacy
in meeting rural needs and the fulfilling of the policy's objectives and
This effort on the part of my Administration and the Congress has resulted
in a landmark policy. For the first time, rural affairs has received the
prominence it has always deserved. It is a policy that can truly help alleviate
the diverse and differing problems rural America will face in the 1980's.
With the help and dedication of a great many people around the country
who are concerned with rural affairs, we have constructed a mechanism for
dealing effectively with rural problems. There is now a great opportunity
to successfully combine Federal efforts with the efforts of rural community
leaders and residents. It is my hope this spirit of cooperation and record
of accomplishment will be continued in the coming years.
In September, 1979, I signed an Executive Order designed to strengthen
and coordinate Federal consumer programs and to establish procedures to
improve and facilitate consumer participation in government decision-making.
Forty Federal agencies have adopted programs to comply with the requirements
of the Order. These programs will improve complaint handling, provide better
information to consumers, enhance opportunities for public participation
in government proceedings, and assure that the consumer point of view is
considered in all programs, policies, and regulations.
While substantial progress has been made in assuring a consumer presence
in Federal agencies, work must continue to meet fully the goals of the
Executive Order. Close monitoring of agency compliance with the requirements
of the Order is necessary. Continued evaluation to assure that the programs
are effective and making maximum use of available resources is also essential.
As a complement to these initiatives, efforts to provide financial assistance
in regulatory proceedings to citizen groups, small businesses, and others
whose participation is limited by their economic circumstances must continue
to be pursued.
It is essential that consumer representatives in government pay particular
attention to the needs and interests of low-income consumers and minorities.
The Office of Consumer Affairs' publication, "People Power: What Communities
Are Doing to Counter Inflation," catalogues some of the ways that government
and the private sector can assist the less powerful in our society to help
themselves. New ways should be found to help foster this new people's movement
which is founded on the principle of self-reliance.
Science and Technology
Science and technology contribute immeasurably to the lives of all Americans.
Our high standard of living is largely the product of the technology that
surrounds us in the home or factory. Our good health is due in large part
to our ever increasing scientific understanding. Our national security
is assured by the application pate science and technology will bring.
The Federal government has a special role to play in science and technology.
Although the fruits of scientific achievements surround us, it is often
difficult to predict the benefits that will arise from a given scientific
venture. And these benefits, even if predictable, do not usually lead to
ownership rights. Accordingly, the Government has a special obligation
to support science as an investment in our future.
My Administration has sought to reverse a decade-long decline in funding.
Despite the need for fiscal restraint, real support of basic research has
grown nearly 11% during my term in office. And, my Administration has sought
to increase the support of long-term research in the variety of mission
agencies. In this way, we can harness the American genius for innovation
to meet the economic, energy, health, and security challenges that confront
-- International Relations and National Security. Science and technology
are becoming increasingly important elements of our national security and
foreign policies. This is especially so in the current age of sophisticated
defense systems and of growing dependence among all countries on modern
technology for all aspects of their economic strength. For these reasons,
scientific and technological considerations have been integral elements
of the Administration's decision-making on such national security and foreign
policy issues as the modernization of our strategic weaponry, arms control,
technology transfer, the growing bilateral relationship with China, and
our relations with the developing world.
Four themes have shaped U.S. policy in international scientific and
technological cooperation: pursuit of new international initiatives to
advance our own research and development objectives; development and strengthening
of scientific exchange to bridge politically ideological, and cultural
divisions between this country and other countries; formulation of programs
and institutional relations to help developing countries use science and
technology beneficially; and cooperation with other nations to manage technologies
with local impact. At my direction, my Science and Technology Adviser has
actively pursued international programs in support of these four themes.
We have given special attention to scientific and technical relations with
China, to new forms of scientific and technical cooperation with Japan,
to cooperation with Mexico, other Latin American and Caribbean countries
and several states in Black America, and to the proposed Institute for
Scientific and Technological Cooperation.
In particular our cooperation with developing countries reflects the
importance that each of them has placed on the relationship between economic
growth and scientific and technological capability. It also reflects their
view that the great strength of the U.S. in science and technology makes
close relations with the U.S. technical community an especially productive
means of enhancing this capability. Scientific and technological assistance
is a key linkage between the U.S. and the developing world, a linkage that
has been under-utilized in the past and one which we must continue to work
-- Space Policy. The Administration has established a framework for
a strong and evolving space program for the 1980's.
The Administration's space policy reaffirmed the separation of military
space systems and the open civil space program, and at the same time, provided
new guidance on technology transfer between the civil and military programs.
The civil space program centers on three basic tenets: First, our space
policy will reflect a balanced strategy of applications, science, and technology
development. Second, activities will be pursued when they can be uniquely
or more efficiently accomplished in space. Third, a premature commitment
to a high challenge, space-engineering initiative of the complexity of
Apollo is inappropriate. As the Shuttle development phases down, however,
there will be added flexibility to consider new space applications, space
science and new space exploration activities.
-- Technology Development. The Shuttle dominates our technology development
effort and correctly so. It represents one of the most sophisticated technological
challenges ever undertaken, and as a result, has encountered technical
problems. Nonetheless, the first manned orbital flight is now scheduled
for March, 1981. I have been pleased to support strongly the necessary
funds for the Shuttle throughout my Administration.
-- Space Applications. Since 1972, the U.S. has conducted experimental
civil remote sensing through Landsat satellites, thereby realizing many
successful applications. Recognizing this fact, I directed the implementation
of an operational civil land satellite remote sensing system, with the
operational management responsibility in Commerce's National Oceanic and
Atmospheric Administration. In addition, because ocean observations from
space can meet common civil and military data requirements, a National
Oceanic Satellite System has been proposed as a major FY 1981 new start.
-- Space Science Exploration. The goals of this Administration's policy
in space science have been to: (1) continue a vigorous program of planetary
exploration to understand the origin and evolution of the solar system;
(2) utilize the space telescope and free-flying satellites to usher in
a new era of astronomy; (3) develop a better understanding of the sun and
its interaction with the terrestrial environment; and (4) utilize the Shuttle
and Spacelab to conduct basic research that complements earth-based life
DISTRICT OF COLUMBIA
Washington, D.C., is home to both the Federal Government and to more
than half a million American citizens. I have worked to improve the relationship
between the Federal establishment and the Government of the District of
Columbia in order to further the goals and spirit of home rule. The City
controls more of its own destiny than was the case four years ago. Yet,
despite the close cooperation between my Administration and that of Mayor
Barry, we have not yet seen the necessary number of states ratify the Constitutional
Amendment granting full voting representation in the Congress to the citizens
of this city. It is my hope that this inequity will be rectified. The country
and the people who inhabit Washington deserve no less.
The arts are a precious national resource.
Federal support for the arts has been enhanced during my Administration
by expanding government funding and services to arts institutions, individual
artists, scholars, and teachers through the National Endowment for the
Arts. We have broadened its scope and reach to a more diverse population.
We have also reactivated the Federal Council on the Arts and Humanities.
It is my hope that during the coming years the new Administration and
the Congress will:
-- Continue support of institutions promoting development and understanding
of the arts;
-- Encourage business participants in a comprehensive effort to achieve
a truly mixed economy of support for the arts;
-- Explore a variety of mechanisms to nurture the creative talent of
our citizens and build audiences for their work;
-- Support strong, active National Endowments for the Arts;
-- Seek greater recognition for the rich cultural tradition of the nation's
-- Provide grants for the arts in low-income neighborhoods.
In recently reauthorizing Federal appropriations for the National Endowment
for the Humanities, the Congress has once again reaffirmed that "the encouragement
and support of national progress and scholarship in the humanities . .
. while primarily a matter for private and local initiative, is also an
appropriate matter of concern to the Federal Government" and that "a high
civilization must not limit its efforts to science and technology alone
but must give full value and support to the other great branches of man's
scholarly and cultural activity in order to achieve a better understanding
of the past, a better analysis of the present, and a better view of the
I believe we are in agreement that the humanities illuminate the values
underlying important personal, social, and national questions raised in
our society by its multiple links to and increasing dependence on technology,
and by the diverse heritage of our many regions and ethnic groups. The
humanities cast light on the broad issue of the role in a society of men
and women of imagination and energy-- those individuals who through their
own example define "the spirit of the age," and in so doing move nations.
Our Government's support for the humanities, within the framework laid
down by the Congress, is a recognition of their essential nourishment of
the life of the mind and vital enrichment of our national life.
I will be proposing an increase in funding this year sufficient to enable
the Endowment to maintain the same level of support offered our citizens
in Fiscal Year 1981.
In the allocation of this funding, special emphasis will be given to:
-- Humanities education in the nation's schools, in response to the
great needs that have arisen in this area;
-- Scholarly research designed to increase our understanding of the
cultures, traditions, and historical forces at work in other nations and
in our own;
-- Drawing attention to the physical disintegration of the raw material
of our cultural heritage-- books, manuscripts, periodicals, and other documents--
and to the development of techniques to prevent the destruction and to
preserve those materials; and
-- The dissemination of quality programming in the humanities to increasingly
large American audiences through the use of radio and television.
The dominant effort in the Endowment's expenditures will be a commitment
to strengthen and promulgate scholarly excellence and achievement in work
in the humanities in our schools, colleges, universities, libraries, museums
and other cultural institutions, as well as in the work of individual scholars
or collaborative groups engaged in advanced research in the humanities.
In making its grants the Endowment will increase its emphasis on techniques
which stimulate support for the humanities from non-Federal sources, in
order to reinforce our tradition of private philanthropy in this field,
and to insure and expand the financial viability of our cultural institutions
I have been firmly committed to self-determination for Puerto Rico,
the Virgin Islands, Guam, American Samoa and the Northern Mariana Islands,
and have vigorously supported the realization of whatever political status
aspirations are democratically chosen by their peoples. This principle
was the keystone of the comprehensive territorial policy I sent the Congress
last year. I am pleased that most of the legislative elements of that policy
were endorsed by the 96th Congress.
The unique cultures, fragile economies, and locations of our Caribbean
and Pacific Islands are distinct assets to the United States which require
the sensitive application of policy. The United States Government should
pursue initiatives begun by my Administration and the Congress to stimulate
insular economic development; enhance treatment under Federal programs
eliminating current inequities; provide vitally needed special assistance
and coordinate and rationalize policies. These measures will result in
greater self-sufficiency and balanced growth. In particular, I hope that
the new Congress will support funding for fiscal management, comprehensive
planning and other technical assistance for the territories, as well as
create the commission I have proposed to review the applicability of all
Federal laws to the insular areas and make recommendations for appropriate
IV. REMOVING GOVERNMENTAL WASTE AND INEFFICIENCY
One of my major commitments has been to restore public faith in our
Federal government by cutting out waste and inefficiency. In the past four
years, we have made dramatic advances toward this goal, many of them previously
considered impossible to achieve. Where government rules and operations
were unnecessary, they have been eliminated, as with airline, rail, trucking
and financial deregulation. Where government functions are needed, they
have been streamlined, through such landmark measures as the Civil Service
Reform Act of 1978. I hope that the new administration and the Congress
will keep up the momentum we have established for effective and responsible
change in this area of crucial public concern.
CIVIL SERVICE REFORM
In March 1978, I submitted the Civil Service Reform Act to Congress.
I called it the centerpiece of my efforts to reform and reorganize the
government. With bipartisan support from Congress, the bill passed, and
I am pleased to say that implementation is running well ahead of the statutory
schedule. Throughout the service, we are putting into place the means to
assure that reward and retention are based on performance and not simply
on length of time on the job. In the first real test of the Reform Act,
98 percent of the eligible top-level managers joined the Senior Executive
Service, choosing to relinquish job protections for the challenge and potential
reward of this new corps of top executives. Though the Act does not require
several of its key elements to be in operation for another year, some Federal
agencies already have established merit pay systems for GS-13-15 managers,
and most agencies are well on their way to establishing new performance
standards for all their employees. All have paid out, or are now in the
process of paying out, performance bonuses earned by outstanding members
of the Senior Executive Service. Dismissals have increased by 10 percent,
and dismissals specifically for inadequate job performance have risen 1500
percent, since the Act was adopted. Finally, we have established a fully
independent Merit Systems Protection Board and Special Counsel to protect
the rights of whistle-blowers and other Federal employees faced with threats
to their rights.
In 1981, civil service reform faces critical challenges, all agencies
must have fully functioning performance appraisal systems for all employees,
and merit pay systems for compensating the government's 130,000 GS-13-15
managers. Performance bonuses for members of the Senior Executive Service
will surely receive scrutiny. If this attention is balanced and constructive,
it can only enhance the chances for ultimate success of our bipartisan
commitment to the revolutionary and crucial "pay for performance" concept.
During the past four years we have made tremendous progress in regulatory
reform. We have discarded old economic regulations that prevented competition
and raised consumer costs, and we have imposed strong management principles
on the regulatory programs the country needs, cutting paperwork and other
wasteful burdens. The challenge for the future is to continue the progress
in both areas without crippling vital health and safety programs.
Our economic deregulation program has achieved major successes in five
Airlines: The Airline Deregulation Act is generating healthy competition,
saving billions in fares, and making the airlines more efficient. The Act
provides that in 1985 the CAB itself will go out of existence.
Trucking: The trucking deregulation bill opens the industry to competition
and allows truckers wide latitude on the routes they drive and the goods
they haul. The bill also phases out most of the old law's immunity for
setting rates. The Congressional Budget Office estimates these reforms
will save as much as $8 billion per year and cut as much as half a percentage
point from the inflation rate.
Railroads: Overregulation has stifled railroad management initiative,
service, and competitive pricing. The new legislation gives the railroads
the freedom they need to rebuild a strong, efficient railroad industry.
Financial Institutions: With the help of the Congress, over the past
four years we have achieved two major pieces of financial reform legislation,
legislation which has provided the basis for the most far-reaching changes
in the financial services industry since the 1930's. The International
Banking Act of 1978 was designed to reduce the advantages that foreign
banks operating in the United States possessed in comparison to domestic
banks. The Depository Institutions Deregulation and Monetary Control Act,
adopted last March, provides for the phased elimination of a variety of
anti-competitive barriers to financial institutions and freedom to offer
services to and attract the savings of consumers, especially small savers.
Recently, I submitted to the Congress my Administration's recommendations
for the phased liberalization of restrictions on geographic expansion by
commercial banks. Last year the Administration and financial regulatory
agencies proposed legislation to permit the interstate acquisition of failing
depository institutions. In view of the difficult outlook for some depository
institutions I strongly urge the Congress to take prompt favorable action
on the failing bank legislation.
Telecommunications: While Congress did not pass legislation in this
area, the Federal Communications Commission has taken dramatic action to
open all aspects of communications to competition and to eliminate regulations
in the areas where competition made them obsolete. The public is benefitting
from an explosion of competition and new services.
While these initiatives represent dramatic progress in economic deregulation,
continued work is needed. I urge Congress to act on communications legislation
and to consider other proposed deregulation measures, such as legislation
on the bus industry. In addition, the regulatory commissions must maintain
their commitment to competition as the best regulator of all.
The other part of my reform program covers the regulations that are
needed to protect the health, safety, and welfare of our citizens. For
these regulations, my Administration has created a management program to
cut costs without sacrificing goals. Under my Executive Order 12044, we
required agencies to analyze the costs of their major new rules and consider
alternative approaches, such as performance standards and voluntary codes,
that may make rules less costly and more flexible. We created the Regulatory
Analysis Review Group in the White House to analyze the most costly proposed
new rules and find ways to improve them. The Regulatory Council was established
to provide the first Government-wide listing of upcoming rules and eliminate
overlapping and conflicting regulations. Agencies have launched "sunset"
programs to weed out outmoded old regulations. We have acted to encourage
public participation in regulatory decision-making.
These steps have already saved billions of dollars in regulatory costs
and slashed thousands of outmoded regulations. We are moving steadily toward
a regulatory system that provides needed protections fairly, predictably,
and at minimum cost.
I urge Congress to continue on this steady path and resist the simplistic
solutions that have been proposed as alternatives. Proposals like legislative
veto and increased judicial review will add another layer to the regulatory
process, making it more cumbersome and inefficient. The right approach
to reform is to improve the individual statutes, where they need change,
and to ensure that the regulatory agencies implement those statutes sensibly.
The Federal Government imposes a huge paperwork burden on business,
local government, and the private sector. Many of these forms are needed
for vital government functions, but others are duplicative, overly complex
During my Administration we cut the paperwork burden by 15 percent,
and we created procedures to continue this progress. The new Paperwork
Reduction Act centralizes, in OMB, oversight of all agencies' information
requirements and strengthens OMB's authority to eliminate needless forms.
The "paperwork budget" process, which I established by executive order,
applies the discipline of the budget process to the hours of reporting
time imposed on the public, forcing agencies to scrutinize all their forms
each year. With effective implementation, these steps should allow further,
substantial paperwork cuts in the years ahead.
TIGHTENING STANDARDS FOR GOVERNMENTAL EFFICIENCY AND INTEGRITY
To develop a foundation to carry out energy policy, we consolidated
scattered energy programs and launched the Synthetic Fuels Corporation;
to give education the priority it deserves and at the same time reduce
HHS to more manageable size, I gave education a seat at the Cabinet table,
to create a stronger system for attacking waste and fraud, I reorganized
audit and investigative functions by putting an Inspector General in major
agencies. Since I took office, we have submitted 14 reorganization initiatives
and had them all approved by Congress. We have saved hundreds of millions
of dollars through the adoption of businesslike cash management principles
and set strict standards for personal financial disclosure and conflict
of interest avoidance by high Federal officials.
To streamline the structure of the government, we have secured approval
of 14 reorganization initiatives, improving the efficiency of the most
important sectors of the government, including energy, education, and civil
rights enforcement. We have eliminated more than 300 advisory committees
as well as other agencies, boards and commissions which were obsolete or
ineffective. Independent Inspectors General have been appointed in major
agencies to attack fraud and waste. More than a billion dollars of questionable
transactions have been identified through their audit activities.
The adoption of business-like cash management and debt collection initiatives
will save over $1 billion, by streamlining the processing of receipts,
by controlling disbursements more carefully, and by reducing idle cash
balances. Finally this Administration has set strict standards for personal
financial disclosure and conflict of interest avoidance by high Federal
officials, to elevate the level of public trust in the government.
V. PROTECTING BASIC RIGHTS AND LIBERTIES
I am extremely proud of the advances we have made in ensuring equality
and protecting the basic freedoms of all Americans.
--The Equal Employment Opportunity Commission (EEOC) and the Office
of Federal Contract Compliance (OFCCP) have been reorganized and strengthened
and a permanent civil rights unit has been established in OMB.
-- To avoid fragmented, inconsistent and duplicative enforcement of
civil rights laws, three agencies have been given coordinative and standard-setting
responsibilities in discrete areas: EEOC for all employment-related activities,
HUD for all those relating to housing, and the Department of Justice for
all other areas.
-- With the enactment of the Right to Financial Privacy Act and a bill
limiting police search of newsrooms, we have begun to establish a sound,
comprehensive, privacy program.
Ratification of the Equal Rights Amendment must be aggressively pursued.
Only one year remains in which to obtain ratification by three additional
The Congress must give early attention to a number of important bills
which remain. These bills would:
-- strengthen the laws against discrimination in housing. Until it is
enacted, the 1968 Civil Rights Act's promise of equal access to housing
will remain unfulfilled;
-- establish a charter for the FBI and the intelligence agencies. The
failure to define in law the duties and responsibilities of these agencies
has made possible some of the abuses which have occurred in recent years;
-- establish privacy safeguards for medical research, bank, insurance,
and credit records; and provide special protection for election fund transfer
EQUAL RIGHTS AMENDMENT
I remain committed as strongly as possible to the ratification of the
Equal Rights Amendment.
As a result of our efforts in 1978, the Equal Rights Amendment's deadline
for ratification was extended for three years. We have now one year and
three States left. We cannot afford any delay in marshalling our resources
and efforts to obtain the ratification of those three additional States.
Although the Congress has no official role in the ratification process
at this point, you do have the ability to affect public opinion and the
support of State Legislators for the Amendment. I urge Members from States
which have not yet ratified the Equal Rights Amendment to use their influence
to secure ratification. I will continue my own efforts to help ensure ratification
of the Equal Rights Amendment.
MARTIN LUTHER KING, JR.
Dr. Martin Luther King, Jr. led this Nation's effort to provide all
its citizens with civil rights and equal opportunities. His commitment
to human rights, peace and non-violence stands as a monument to his humanity
and courage. As one of our Nation's most outstanding leaders, it is appropriate
that his birthday be commemorated as a national holiday. I hope the Congress
will enact legislation this year that will achieve this goal.
The Fair Housing Act Amendments of 1980 passed the House of Representatives
by an overwhelming bipartisan majority only to die in the Senate at the
close of the 96th Congress. The leaders of both parties have pledged to
make the enactment of fair housing legislation a top priority of the incoming
Congress. The need is pressing and a strengthened federal enforcement effort
must be the primary method of resolution.
The Federal criminal laws are often archaic, frequently contradictory
and imprecise, and clearly in need of revision and codification. The new
Administration should continue the work which has been begun to develop
a Federal criminal code which simplifies and clarifies our criminal laws,
while maintaining our basic civil liberties and protections.
As our public and private institutions collect more and more information
and as communications and computer technologies advance, we must act to
protect the personal privacy of our citizens.
In the past four years we acted on the report of the Privacy Commission
legislation restricting wiretaps and law enforcement access to bank records
and to reporters' files. We reduced the number of personal files held by
the government and restricted the transfer of personal information among
Federal agencies. We also worked with the Organization for Economic Cooperation
and Development to establish international guidelines to protect the privacy
of personal information that is transferred across borders.
VI. PROTECTING AND DEVELOPING OUR NATURAL RESOURCES
Two of our Nation's most precious natural resources are our environment
and our vast agricultural capacity. From the beginning of my Administration,
I have worked with the Congress to enhance and protect, as well as develop
our natural resources. In the environmental areas, I have been especially
concerned about the importance of balancing the need for resource development
with preserving a clean environment, and have taken numerous actions to
foster this goal. In the agricultural area, I have taken the steps needed
to improve farm incomes and to increase our agricultural production to
record levels. That progress must be continued in the 1980's.
Preserving the quality of our environment has been among the most important
objectives of my Administration and of the Congress. As a result of these
shared commitments and the dedicated efforts of many members of the Congress
and my Administration, we have achieved several historic accomplishments.
PROTECTION OF ALASKA LANDS
Passage of the Alaska National Interest Lands Conservation Act was one
of the most important conservation actions of this century. At stake was
the fate of millions of acres of beautiful land, outstanding and unique
wildlife populations, native cultures, and the opportunity to ensure that
future generations of Americans would be able to enjoy the benefits of
these nationally significant resources. As a result of the leadership,
commitment, and persistence of my Administration and the Congressional
leadership, the Alaska Lands Bill was signed into law last December.
The Act adds 97 million acres of new parks and refuges, more than doubling
the size of our National Park and National Wildlife Refuge Systems. The
bill triples the size of our national wilderness system, increasing its
size by 56 million acres. And by adding 25 free-flowing river segments
to the Wild and Scenic River System, the bill almost doubles the river
mileage in that system. The Alaska Lands Act reaffirms our commitment to
the environment and strikes a balance between protecting areas of great
beauty and allowing development of Alaska's oil, gas, mineral, and timber
PROTECTION OF NATURAL RESOURCES
In addition to the Alaska Lands Act, over the past four years we have
been able to expand significantly the national wilderness and parks systems.
In 1978, the Congress passed the historical Omnibus Parks Act, which made
12 additions to the National Park System. The Act also established the
first two national trails since the National Trails System Act was passed
in 1968. Then, in 1980, as a result of my 1979 Environmental Message, the
Federal land management agencies have established almost 300 new National
Recreational Trails. With the completion of the RARE II process, which
eliminated the uncertainty surrounding the status of millions of acres
of land, we called for over 15 million acres of new wilderness in the nation's
National Forest, in 1980 the Congress established about 4.5 million acres
of wilderness in the lower 48 states. In addition, the Administration recommended
legislation to protect Lake Tahoe, and through an Executive Order has already
established a mechanism to help ensure the Lake's protection. Finally,
in 1980 the Administration established the Channel Islands Marine Sanctuary.
Administration actions over the past four years stressed the importance
of providing Federal support only for water resource projects that are
economically and environmentally sound. This policy should have a major
and lasting influence on the federal government's role in water resource
development and management. The Administration's actions to recommend to
the Congress only economically and environmentally sound water resource
projects for funding resulted not only in our opposing uneconomic projects
but also, in 1979, in the first Administration proposal of new project
starts in 4 years.
One of the most significant water policy actions of the past four years
was the Administration's June 6, 1978 Water Policy Reform Message to the
Congress. This Message established a new national water resources policy
with the following objectives:
-- to give priority emphasis to water conservation;
-- to consider environmental requirements and values more fully and
along with economic factors in the planning and management of water projects
-- to enhance cooperation between state and federal agencies in water
resources planning and management.
In addition, the Executive Office of the President established 11 policy
decision criteria to evaluate the proposed federal water projects, the
Water Resources Council developed and adopted a new set of Principles and
Standards for water projects which is binding on all federal construction
agencies, and improved regulations were developed to implement the National
Historic Preservation Act and the Fish and Wildlife Coordination Act. As
a result, water resource projects must be determined to be economically
sound before the Administration will recommend authorization or appropriation.
Over the years ahead, this policy will help to reduce wasteful federal
spending by targeting federal funds to the highest priority water resource
In the pursuit of this policy, however, we cannot lose projects. In
the part that sound water resource projects play in providing irrigation,
power, and flood control. We must also recognize the special needs of particular
regions of the country in evaluating the need for additional projects.
ADDRESSING GLOBAL RESOURCE AND ENVIRONMENTAL PROBLEMS
The Global 2000 Report to the President, prepared in response to my
1977 Environment Message, is the first of its kind. Never before has our
government, or any government, taken such a comprehensive, long-range look
at the interrelated global issues of resources, population, and environment.
The Report's conclusions are important. They point to a rapid increase
in population and human needs through the year 2000 while at the same time
a decline in the earth's capacity to meet those needs, unless nations of
the world act decisively to alter current trends.
The United States has contributed actively to a series of U.N. conferences
on the environment, population, and resources, and is preparing for
the 1981 Conference on New and Renewable Sources of Energy. Following my
1977 Environmental Message, the Administration development assistance programs
have added emphasis to natural resource management and environmental protection.
My 1979 Environmental Message called attention to the alarming loss of
world forests, particularly in the tropics. An interagency task force on
tropical forests has developed a U.S. government program to encourage conservation
and wise management of tropical forests. The Administration is encouraging
action by other nations and world organizations to the same purpose. The
United States is a world leader in wildlife conservation and the assessment
of environmental effects of government actions. The January 5, 1979, Executive
Order directing U.S. government agencies to consider the effects of their
major actions abroad, is another example of this leadership.
COMMITMENT TO CONTROL OF POLLUTION AND HAZARDOUS CHEMICALS
Over the past four years, there has been steady progress towards cleaner
air and water, sustained by the commitment of Congress and the Administration
to these important national objectives. In addition, the Administration
has developed several new pollution compliance approaches such as alternative
and innovative waste water treatment projects, the "bubble" concept, the
"offset" policy, and permit consolidation, all of which are designed to
reduce regulatory burdens on the private sector.
One of the most pressing problems to come to light in the past four
years has been improper hazardous waste disposal. The Administration has
moved on three fronts. First, we proposed the Oil Hazardous Substances
and Hazardous Waste Response, Liability and Compensation Act (the Superfund
bill) to provide comprehensive authority and $1.6 billion in funds to clean
up abandoned hazardous waste disposal sites. In November 1980 the Congress
passed a Superfund bill which I signed into law.
Second, the administration established a hazardous waste enforcement
strike force to ensure that when available, responsible parties are required
to clean up sites posing dangers to public health and to the environment.
To date, 50 lawsuits have been brought by the strike force.
Third, regulations implementing subtitle C of the Resource Conservation
and Recovery Act were issued. The regulations establish comprehensive controls
for hazardous waste and, together with vigorous enforcement, will help
to ensure that Love Canal will not be repeated.
For the future, we cannot,and we must not, forget that we are charged
with the stewardship of an irreplaceable environment and natural heritage.
Our children, and our children's children, are dependent upon our maintaining
our commitment to preserving and enhancing the quality of our environment.
It is my hope that when our descendants look back on the 1980's they will
be able to affirm:
-- that we kept our commitment to the restoration of environmental quality;
-- that we protected the public health from the continuing dangers of
toxic chemicals, from pollution, from hazardous and radioactive waste,
and that we made our communities safer, healthier and better places to
-- that we preserved America's wilderness areas and particularly its
last great frontier, Alaska, for the benefit of all Americans in perpetuity;
-- that we put this nation on a path to a sustainable energy future,
one based increasingly on renewable resources and on energy conservation;
-- that we moved to protect America's countryside and coastland from
mismanagement and irresponsibility;
-- that we redirected the management of the nation's water resources
toward water conservation, sound development and environmental protection;
-- that we faced squarely such worldwide problems as the destruction
of forests, acid rain, carbon dioxide build-up and nuclear proliferation;
-- that we protected the habitat and the existence of our own species
on this earth.
AGRICULTURE THE FARM ECONOMY
The farm economy is sound and its future is bright. Agriculture remains
a major bulwark of the nation's economy and an even more important factor
in the world food system. The demand for America's agricultural abundance,
here and abroad, continues to grow. In the near-term, the strength of this
demand is expected to press hard against supplies, resulting in continued
The health and vitality of current-day agriculture represents a significant
departure from the situation that existed when I came to office four years
ago. In January 1977, the farm economy was in serious trouble. Farm prices
and farm income were falling rapidly. Grain prices were at their lowest
levels in years and steadily falling. Livestock producers, in their fourth
straight year of record losses, were liquidating breeding herds at an unparalleled
rate. Dairy farmers were losing money on every hundredweight of milk they
produced. Sugar prices were in a nosedive.
Through a combination of improvements in old, established programs and
the adoption of new approaches where innovation and change were needed,
my Administration turned this situation around. Commodity prices have steadily
risen. Farm income turned upward. U.S. farm exports set new records each
year, increasing over 80 percent for the four year period. Livestock producers
began rebuilding their herds. Dairy farmers began to earn a profit again.
RECENT POLICY INITIATIVES
Several major agricultural policy initiatives have been undertaken over
the past year. Some are the culmination of policy proposals made earlier
in this Administration; others are measures taken to help farmers offset
the impact of rapid inflation in production costs. In combination, they
represent a significant strengthening of our nation's food and agricultural
policy. These initiatives include:
FOOD SECURITY RESERVE
The Congress authorized formation of a 4 million ton food grain reserve
for use in international food assistance. This reserve makes it possible
for the United States to stand behind its food aid commitment to food deficit
nations, even during periods of short supplies and high prices. This corrects
a serious fault in our past food assistance policy.
COMPREHENSIVE CROP INSURANCE
The Congress also authorized a significant new crop insurance program
during 1980. This measure provides farmers with an important new program
tool for sharing the economic risks that are inherent to agriculture. When
fully operational, it will replace a hodgepodge of disaster programs that
suffered from numerous shortcomings.
SPECIAL LOAN RATES
Another legislative measure passed late in the 2nd session of the 96th
Congress authorizes the Secretary of Agriculture to provide higher loan
rates to farmers who enter their grain in the farmer-owned grain reserve.
This additional incentive to participate will further strengthen the reserve.
INCREASED LOAN PRICES
In July 1980, I administratively raised loan prices for wheat, feedgrains,
and soybeans to help offset the effects of a serious cost-price squeeze.
At the same time, the release and call prices for the grain reserve were
HIGHER TARGET PRICES
The Agricultural Adjustment Act of 1980 raised the target prices for
1980-crop wheat and feed grain crops. This change corrected for shortcomings
in the adjustment formula contained in the Food and Agriculture Act of
The food and agricultural policies adopted by this Administration over
the past four years, including those described above, will provide a firm
foundation for future governmental actions in this field. Expiration of
the Food and Agriculture Act of 1977 later this year will require early
attention by the Congress. With relatively minor changes, most of the authorities
contained in the 1977 Act should be extended in their present form. The
farmer-owned grain reserve has proven to be a particularly effective means
of stabilizing grain markets and should be preserved in essentially its
Beyond this, it will be important for the Congress to keep a close eye
on price-cost developments in the farm sector. As noted above, some of
the actions I took last year were for the purpose of providing relief from
the cost-price squeeze facing farmers. Should these pressures continue,
further actions might be required.
My Administration has devoted particular attention to the issues of
world hunger, agricultural land use, and the future structure of American
agriculture. I encourage the Congress and the next Administration to review
the results of these landmark enquiries and, where deemed appropriate,
to act on their recommendations.
Following a careful review of the situation, I recently extended the
suspension of grain sales to the Soviet Union. I am satisfied that this
action has served its purpose effectively and fairly. However, as long
as this suspension must remain in effect, it will be important for the
next Administration and the Congress to take whatever actions are necessary
to ensure that the burden does not fall unfairly on our Nation's farmers.
This has been a key feature of my Administration's policy, and it should
VII. FOREIGN POLICY
From the time I assumed office four years ago this month, I have stressed
the need for this country to assert a leading role in a world undergoing
the most extensive and intensive change in human history.
My policies have been directed in particular at three areas of change:
-- the steady growth and increased projection abroad of Soviet military
power, power that has grown faster than our own over the past two decades.
-- the overwhelming dependence of Western nations, which now increasingly
includes the United States, on vital oil supplies from the Middle East.
-- the pressures of change in many nations of the developing world,
in Iran and uncertainty about the future stability of many developing countries.
As a result of those fundamental facts, we face some of the most serious
challenges in the history of this nation. The Soviet invasion of Afghanistan
is a threat to global peace, to East-West relations, and to regional stable
flow of oil. As the unprecedented relations, an and overwhelming vote in
the General Assembly demonstrated, countries across the world, and particularly
the nonaligned, regard the Soviet invasion as a threat to their independence
and security. Turmoil within the region adjacent to the Persian Gulf poses
risks for the security and prosperity of every oil importing nation and
thus for the entire global economy. The continuing holding of American
hostages in Iran is both an affront to civilized people everywhere, and
a serious impediment to meeting the self-evident threat to widely-shared
common interests, including those of Iran.
But as we focus our most urgent efforts on pressing problems, we will
continue to pursue the benefits that only change can bring. For it always
has been the essence of America that we want to move on, we understand
that prosperity, progress and most of all peace cannot be had by standing
still. A world of nations striving to preserve their independence, and
of peoples aspiring for economic development and political freedom, is
not a world hostile to the ideals and interests of the United States. We
face powerful adversaries, but we have strong friends and dependable allies.
We have common interests with the vast majority of the world's nations
There have been encouraging developments in recent years, as well as
matters requiring continued vigilance and concern:
-- Our alliances with the world's most advanced and democratic states
from Western Europe through Japan are stronger than ever.
-- We have helped to bring about a dramatic improvement in relations
between Egypt and Israel and an historic step towards a comprehensive Arab-Israeli
-- Our relations with China are growing closer, providing a major new
dimension in our policy in Asia and the world.
-- Across southern Africa from Rhodesia to Namibia we are helping with
the peaceful transition to majority rule in a context of respect for minority
as well as majority rights.
-- We have worked domestically and with our allies to respond to an
uncertain energy situation by conservation and diversification of energy
supplies based on internationally agreed targets.
-- We have unambiguously demonstrated our commitment to defend Western
interests in Southwest Asia, and we have significantly increased our ability
to do so.
-- And over the past four years the U.S. has developed an energy program
which is comprehensive and ambitious. New institutions have been established
such as the Synthetic Fuels Corporation and Solar Bank. Price decontrol
for oil and gas is proceeding. American consumers have risen to the challenge,
and we have experienced real improvements in consumption patterns.
The central challenge for us today is to our steadfastedness of purpose.
We are no longer tempted by isolationism. But we must also learn to deal
effectively with the contradictions of the world, the need to cooperate
with potential adversaries without euphoria, without undermining our determination
to compete with such adversaries and if necessary confront the threats
they may pose to our security.
We face a broad range of threats and opportunities. We have and should
continue to pursue a broad range of defense, diplomatic and economic capabilities
I see six basic goals for America in the world over the 1980's:
-- First, we will continue, as we have over the past four years, to
build America's military strength and that of our allies and friends. Neither
the Soviet Union nor any other nation will have reason to question our
will to sustain the strongest and most flexible defense forces.
-- Second, we will pursue an active diplomacy in the world, working,
together with our friends and allies, to resolve disputes through peaceful
means and to make any aggressor pay a heavy price.
-- Third, we will strive to resolve pressing international economic
problems, particularly energy and inflation, and continue to pursue our
still larger objective of global economic growth through expanded trade
and development assistance and through the preservation of an open multilateral
-- Fourth, we will continue vigorously to support the process of building
democratic institutions and improving human rights protection around the
world. We are deeply convinced that the future lies not with dictatorship
-- Fifth, we remain deeply committed to the process of mutual and verifiable
arms control, particularly to the effort to prevent the spread and further
development of nuclear weapons. Our decision to defer, but not abandon
our efforts to secure ratification of the SALT II Treaty reflects our firm
conviction that the United States has a profound national security
interest in the constraints on Soviet nuclear forces which only that treaty
-- Sixth, we must continue to look ahead in order to evaluate and respond
to resource, environment and population challenges through the end of this
One very immediate and pressing objective that is uppermost on our minds
and those of the American people is the release of our hostages in Iran.
We have no basic quarrel with the nation, the revolution or the
people of Iran. The threat to them comes not from American policy but from
Soviet actions in the region. We are prepared to work with the government
of Iran to develop a new and mutually beneficial relationship.
But that will not be possible so long as Iran continues to hold Americans
hostages, in defiance of the world community and civilized behavior. They
must be released unharmed. We have thus far pursued a measured program
of peaceful diplomatic and economic steps in an attempt to resolve this
issue without resorting to other remedies available to us under international
law. This reflects the deep respect of our nation for the rule of law and
for the safety of our people being held, and our belief that a great power
bears a responsibility to use its strength in a measured and judicious
manner. But our patience is not unlimited and our concern for the well-being
of our fellow citizens grows each day.
ENHANCING NATIONAL SECURITY, AMERICAN MILITARY STRENGTH
The maintenance of national security is my first concern, as it has
been for every president before me.
We must have both the military power and the political will to deter
our adversaries and to support our friends and allies.
We must pay whatever price is required to remain the strongest nation
in the world. That price has increased as the military power of our major
adversary has grown and its readiness to use that power been made all too
evident in Afghanistan. The real increases in defense spending, therefore
probably will be higher than previously projected; protecting our security
may require a larger share of our national wealth in the future.
THE U.S.-SOVIET RELATIONSHIP
We are demonstrating to the Soviet Union across a broad front that it
will pay a heavy price for its aggression in terms of our relationship.
Throughout the last decades U.S.-Soviet relations have been a mixture of
cooperation and competition. The Soviet invasion of Afghanistan and the
imposition of a puppet government have highlighted in the starkest terms
the darker side of their policies, going well beyond competition and the
legitimate pursuit of national interest, and violating all norms of international
law and practice.
This attempt to subjugate an independent, non-aligned Islamic people
is a callous violation of international law and the United Nations Charter,
two fundamentals of international order. Hence, it is also a dangerous
threat to world peace. For the first time since the communization of Eastern
Europe after World War II, the Soviets have sent combat forces into an
area that was not previously under their control, into a non-aligned and
The destruction of the independence of the Afghanistan government and
the occupation by the Soviet Union have altered the strategic situation
in that part of the world in a very ominous fashion. It has significantly
shortened the striking distance to the Indian Ocean and the Persian Gulf
for the Soviet Union.
It has also eliminated a buffer between the Soviet Union and Pakistan
and presented a new threat to Iran. These two countries are now far more
vulnerable to Soviet political intimidation. If that intimidation were
to prove effective, the Soviet Union could control an area of vital strategic
and economic significance to the survival of Western Europe, the Far East,
and ultimately the United States.
It has now been over a year since the Soviet invasion of Afghanistan
dealt a major blow to U.S.-Soviet relations and the entire international
system. The U.S. response has proven to be serious and far-reaching. It
has been increasingly effective, imposing real and sustained costs on the
U.S.S.R.'s economy and international image.
Meanwhile, we have encouraged and supported efforts to reach a political
settlement in Afghanistan which would lead to a withdrawal of Soviet forces
from that country and meet the interests of all concerned. It is Soviet
intransigence that has kept those efforts from bearing fruit.
Meanwhile, an overwhelming November resolution of the United Nations
General Assembly on Afghanistan has again made clear that the world has
not and will not forget Afghanistan. And our response continues to make
it clear that Soviet use of force in pursuit of its international objectives
is incompatible with the notion of business-as-usual.
U.S.-Soviet relations remain strained by the continued Soviet presence
in Afghanistan, by growing Soviet military capabilities, and by the Soviets'
apparent willingness to use those capabilities without respect for the
most basic norms of international behavior.
But the U.S.-Soviet relationship remains the single most important element
in determining whether there will be war or peace. And so, despite serious
strains in our relations, we have maintained a dialogue with the Soviet
Union over the past year. Through this dialogue, we have ensured against
bilateral misunderstandings and miscalculations which might escalate out
of control, and have managed to avoid the injection of superpower rivalries
into areas of tension like the Iran-Iraq conflict.
Now, as was the case a year ago, the prospect of Soviet use of force
threatens the international order. The Soviet Union has completed preparations
for a possible military intervention against Poland. Although the situation
in Poland has shown signs of stabilizing recently, Soviet forces remain
in a high state of readiness and they could move into Poland on short notice.
We continue to believe that the Polish people should be allowed to work
out their internal problems themselves, without outside interference, and
we have made clear to the Soviet leadership that any intervention in Poland
would have severe and prolonged consequences for East-West detente, and
U.S.-Soviet relations in particular.
For many years the Soviets have steadily increased their real defense
spending, expanded their strategic forces, strengthened their forces in
Europe and Asia, and enhanced their capability for projecting military
force around the world directly or through the use of proxies. Afghanistan
dramatizes the vastly increased military power of the Soviet Union.
The Soviet Union has built a war machine far beyond any reasonable requirements
for their own defense and security. In contrast, our own defense spending
declined in real terms every year from 1968 through 1976.
We have reversed this decline in our own effort. Every year since 1976
there has been a real increase in our defense spending, and our lead has
encouraged increases by our allies. With the support of the Congress, we
must and will make an even greater effort in the years ahead.
The Fiscal Year 1982 budget would increase funding authority for defense
to more than $196 billion. This amount, together with a supplemental request
for FY 1981 of about $6 billion, will more than meet my Administration's
pledge for a sustained growth of 3 percent in real expenditures, and provides
for 5 percent in program growth in FY 1982 and beyond.
The trends we mean to correct cannot be remedied overnight; we must
be willing to see this program through. To ensure that we do so I am setting
a growth rate for defense that we can sustain over the long haul.
The defense program I have proposed for the next five years will require
some sacrifice, but sacrifice we can well afford.
The defense program emphasizes four areas:
It ensures that our strategic nuclear forces will be equivalent to those
of the Soviet Union and that deterrence against nuclear war will be maintained;
It upgrades our forces so that the military balance between NATO and
the Warsaw Pact will continue to deter the outbreak of war, conventional
or nuclear, in Europe;
It provides us the ability to come quickly to the aid of friends and
allies around the globe;
And it ensures that our Navy will continue to be the most powerful
on the seas.
We are strengthening each of the three legs of our strategic forces.
The cruise missile production which will begin next year will modernize
our strategic air deterrent. B-52 capabilities will also be improved. These
steps will maintain and enhance the B-52 fleet by improving its ability
to deliver weapons against increasingly heavily defended targets.
We are also modernizing our strategic submarine force. Four more POSEIDON
submarines backfitted with new, 4,000 mile TRIDENT I missiles began deployments
in 1980. Nine TRIDENT submarines have been authorized through 1981, and
we propose one more each year.
The new M-X missile program to enhance our land-based intercontinental
ballistic missile force continues to make progress. Technical refinements
in the basing design over the last year will result in operational benefits,
lower costs, and reduced environmental impact. The M-X program continues
to be an essential ingredient in our strategic posture, providing survivability,
endurance, secure command and control and the capability to threaten targets
the Soviets hold dear.
Our new systems will enable U.S. strategic forces to maintain equivalence
in the face of the mounting Soviet challenge. We would however need an
even greater investment in strategic systems to meet the likely Soviet
buildup without SALT.
This Administration's systematic contributions to the necessary evolution
of strategic doctrine began in 1977 when I commissioned a comprehensive
net assessment. From that base a number of thorough investigations of specific
topics continued. I should emphasize that the need for an evolutionary
doctrine is driven not by any change in our basic objective, which remains
peace and freedom for all mankind. Rather, the need for change is driven
by the inexorable buildup of Soviet military power and the increasing propensity
of Soviet leaders to use this power in coercion and outright aggression
to impose their will on others.
I have codified our evolving strategic doctrine in a number of interrelated
and mutually supporting Presidential Directives. Their overarching theme
is to provide a doctrinal basis, and the specific program to implement
it, that tells the world that no potential adversary of the United States
could ever conclude that the fruits of his aggression would be significant
or worth the enormous costs of our retaliation.
The Presidential Directives include:
PD-18: An overview of our strategic objectives
PD-37: Basic space policy
PD-41: Civil Defense
PD-53: Survivability and endurance for telecommunications
PD-57: Mobilization planning
PD-58: Continuity of Government
PD-59: Countervailing Strategy for General War These policies have
been devised to deter, first and foremost, Soviet aggression. As such they
confront not only Soviet military forces but also Soviet military doctrine.
By definition deterrence requires that we shape Soviet assessments about
the risks of war, assessments they will make using their doctrine, not
But at the same time we in no way seek to emulate their doctrine. In
particular, nothing in our policy contemplates that nuclear warfare could
ever be a deliberate instrument for achieving our own goals of peace and
freedom. Moreover, our policies are carefully devised to provide the greatest
possible incentives and opportunities for future progress in arms control.
Finally, our doctrinal evolution has been undertaken with appropriate
consultation with our NATO Allies and others. We are fully consistent with
NATO's strategy of flexible response.
FORCES FOR NATO
We are greatly accelerating our ability to reinforce Western Europe
with massive ground and air forces in a crisis. We are undertaking a major
modernization program for the Army's weapons and equipment, adding armor,
firepower, and tactical mobility.
We are prepositioning more heavy equipment in Europe to help us cope
with attacks with little warning, and greatly strengthening our airlift
and sealift capabilities.
We are also improving our tactical air forces, buying about 1700 new
fighter and attack aircraft over the next five years, and increasing the
number of Air Force fighter wings by over 10 percent.
We are working closely with our European allies to secure the Host Nation
Support necessary to enable us to deploy more quickly a greater ratio of
combat forces to the European theater at a lower cost to the United States.
As we move to enhance U.S. defense capabilities, we must not lose sight
of the need to assist others in maintaining their own security and independence.
Events since World War II, most recently in Southwest Asia, have amply
demonstrated that U.S. security cannot exist in a vacuum, and that our
own prospects for peace are closely tied to those of our friends. The security
assistance programs which I am proposing for the coming fiscal year thus
directly promote vital U.S. foreign policy and national security aims,
and are integral parts of our efforts to improve and upgrade our own military
More specifically, these programs, which are part of our overall foreign
aid request, promote U.S. security in two principal ways. First, they assist
friendly and allied nations to develop the capability to defend themselves
and maintain their own independence. An example during this past year was
the timely support provided Thailand to help bolster that country's defenses
against the large numbers of Soviet-backed Vietnamese troops ranged along
its eastern frontier. In addition, over the years these programs have been
important to the continued independence of other friends and allies such
as Israel, Greece, Turkey and Korea. Second, security assistance constitutes
an essential element in the broad cooperative relationships we have established
with many nations which permit either U.S. bases on their territory or
access by U.S. forces to their facilities. These programs have been particularly
important with regard to the recently-concluded access agreements with
various countries in the Persian Gulf and Indian Ocean regions and have
been crucial to the protection of our interests throughout Southwest Asia.
RAPID DEPLOYMENT FORCES
We are systematically enhancing our ability to respond rapidly to non-NATO
contingencies wherever required by our commitments or when our vital interests
The rapid deployment forces we are assembling will be extraordinarily
flexible: They could range in size from a few ships or air squadrons to
formations as large as 100,000 men, together with their support. Our forces
will be prepared for rapid deployment to any region of strategic significance.
Among the specific initiatives we are taking to help us respond to crises
outside of Europe are:
the development of a new fleet of large cargo aircraft with intercontinental
the design and procurement of a force of Maritime Prepositioning Ships
that will carry heavy equipment and supplies for three Marine Corps brigades;
the procurement of fast sealift ships to move large quantities of men
and material quickly from the U.S. to overseas areas of deployment;
increasing training and exercise activities to ensure that our forces
will be well prepared to deploy and operate in distant areas.
In addition, our European allies have agreed on the importance of providing
support to U.S. deployments to Southwest Asia.
Seapower is indispensable to our global position, in peace and also
in war. Our shipbuilding program will sustain a 550-ship Navy in the 1990's
and we will continue to build the most capable ships afloat.
The program I have proposed will assure the ability of our Navy to operate
in high threat areas, to maintain control of the seas and protect vital
lines of communication, both military and economic and to provide the strong
maritime component of our rapid deployment forces. This is essential for
operations in remote areas of the world, where we cannot predict far in
advance the precise location of trouble, or preposition equipment on land.
No matter how capable or advanced our weapons systems, our military
security depends on the abilities, the training and the dedication of the
people who serve in our armed forces. I am determined to recruit and to
retain under any foreseeable circumstances an ample level of such skilled
and experienced military personnel. This Administration has supported for
FY 1981 the largest peacetime increase ever in military pay and allowances.
We have enhanced our readiness and combat endurance by improving the
Reserve Components. All reservists are assigned to units structured to
complement and provide needed depth to our active forces. Some reserve
personnel have also now been equipped with new equipment.
We have completed our first phase of mobilization planning, the first
such Presidentially-directed effort since World War II. The government-wide
exercise of our mobilization plans at the end of 1980 showed, first, that
planning pays off and, second, that much more needs to be done.
OUR INTELLIGENCE POSTURE
Our national interests are critically dependent on a strong and effective
intelligence capability. We will maintain and strengthen the intelligence
capabilities needed to assure our national security. Maintenance of and
continued improvements in our multi-faceted intelligence effort are essential
if we are to cope successfully with the turbulence and uncertainties of
The intelligence budget I have submitted to the Congress responds to
our needs in a responsible way, providing for significant growth over the
Fiscal Year 1981 budget. This growth will enable us to develop new technical
means of intelligence collection while also assuring that the more traditional
methods of intelligence work are also given proper stress. We must continue
to integrate both modes of collection in our analyses.
Every President for over three decades has recognized that America's
interests are global and that we must pursue a global foreign policy.
Two world wars have made clear our stake in Western Europe and the North
Atlantic area. We are also inextricably linked with the Far East, politically,
economically, and militarily. In both of these, the United States has a
permanent presence and security commitments which would be automatically
triggered. We have become increasingly conscious of our growing interests
in a third area, the Middle East and the Persian Gulf area.
We have vital stakes in other major regions of the world as well. We
have long recognized that in an era of interdependence, our own security
and prosperity depend upon a larger common effort with friends and allies
throughout the world.
THE ATLANTIC ALLIANCE
In recognition of the threat which the Soviet invasion of Afghanistan
posed to Western interests in both Europe and Southwest Asia, NATO foreign
and defense ministers have expressed full support for U.S. efforts to develop
a capability to respond to a contingency in Southwest Asia and have approved
an extensive program to help fill the gap which could be created by the
diversion of U.S. forces to that region.
The U.S. has not been alone in seeking to maintain stability in the
Southwest Asia area and insure access to the needed resources there. The
European nations with the capability to do so are improving their own forces
in the region and providing greater economic and political support to the
residents of the area. In the face of the potential danger posed by the
Iran-Iraq conflict, we have developed coordination among the Western forces
in the area of the Persian Gulf in order to be able to safeguard passage
in that essential waterway.
Concerning developments in and around Poland the allies have achieved
the highest level of cohesion and unity of purpose in making clear the
effects on future East-West relations of a precipitous Soviet act there.
The alliance has continued to build on the progress of the past three
years in improving its conventional forces through the Long-Term Defense
Program. Though economic conditions throughout Europe today are making
its achievement difficult, the yearly real increase of 3 percent in defense
spending remains a goal actively sought by the alliance.
The NATO alliance also has moved forward during the past year with the
implementation of its historic December 1979 decision to modernize its
Theater Nuclear Force capabilities through deployment of improved Pershing
ballistic missiles and ground-launched cruise missiles in Europe. Our allies
continue to cooperate actively with us in this important joint endeavor,
whose purpose is to demonstrate convincingly to the Soviet Union the potential
costs of a nuclear conflict in Europe. At the same time, we offered convincing
evidence of our commitment to arms control in Europe by initiating preliminary
consultations with the Soviet Union in Geneva on the subject of negotiated
limits on long-range theater nuclear forces. Also, during 1980 we initiated
and carried out a withdrawal from our nuclear weapons stockpile in Europe
of 1,000 nuclear warheads. This successful drawdown in our nuclear stockpile
was a further tangible demonstration of our commitment to the updating
of our existing theater nuclear forces in Europe.
In the NATO area, we continued to work closely with other countries
in providing resources to help Turkey regain economic health. We regretted
that massive political and internal security problems led the Turkish military
to take over the government on September 12. The new Turkish authorities
are making some progress in resolving those problems, and they have pledged
an early return to civilian government. The tradition of the Turkish military
gives us cause to take that pledge seriously. We welcomed the reestablishment
of Greece's links to the integrated military command structure of the Atlantic
Alliance-- a move which we had strongly encouraged-- as a major step toward
strengthening NATO's vital southern flank at a time of international crisis
and tension in adjacent areas. Greek reintegration exemplifies the importance
which the allies place on cooperating in the common defense and shows that
the allies can make the difficult decisions necessary to insure their continued
security. We also welcomed the resumption of the intercommunal talks on
THE U.S. AND THE PACIFIC NATIONS
The United States is a Pacific nation, as much as it is an Atlantic
nation. Our interests in Asia are as important to us as our interests in
Europe. Our trade with Asia is as great as our trade with Europe. During
the past four years we have regained a strong, dynamic and flexible posture
for the United States in this vital region.
Our major alliances with Japan, Australia and New Zealand are now stronger
than they ever have been, and together with the nations of western Europe,
we have begun to form the basic political structure for dealing with international
crises that affect us all. Japan, Australia and New Zealand have given
us strong support in developing a strategy for responding to instability
in the Persian Gulf.
Normalization of U.S. relations with China has facilitated China's full
entry into the international community and encouraged a constructive Chinese
role in the Asia-Pacific region. Our relations with China have been rapidly
consolidated over the past year through the conclusion of a series of bilateral
agreements. We have established a pattern of frequent and frank consultations
between our two governments, exemplified by a series of high-level visits
and by regular exchanges at the working level, through which we have been
able to identify increasingly broad areas of common interest on which we
United States relations with the Association of Southeast Asian Nations
(ASEAN) have also expanded dramatically in the past four years. ASEAN is
now the focus for U.S. policy in Southeast Asia, and its cohesion and strength
are essential to stability in this critical area and beyond.
Soviet-supported Vietnamese aggression in Indo-china has posed a major
challenge to regional stability. In response, we have reiterated our security
commitment to Thailand and have provided emergency security assistance
for Thai forces facing a Vietnamese military threat along the Thai-Cambodian
border. We have worked closely with ASEAN and the U.N. to press for withdrawal
of Vietnamese forces from Cambodia and to encourage a political settlement
in Cambodia which permits that nation to be governed by leaders of its
own choice. We still look forward to the day when Cambodia peacefully can
begin the process of rebuilding its social, economic and political institutions,
after years of devastation and occupation. And, on humanitarian grounds
and in support of our friends in the region, we have worked vigorously
with international organizations to arrange relief and resettlement for
the exodus of Indo-chinese refugees which threatened to overwhelm these
We have maintained our alliance with Korea and helped assure Korea's
security during a difficult period of political transition.
We have amended our military base agreement with the Philippines, ensuring
stable access to these bases through 1991. The importance of our Philippine
bases to the strategic flexibility of U.S. forces and our access to the
Indian Ocean is self-evident.
Finally, we are in the process of concluding a long negotiation establishing
Micronesia's status as a freely associated state.
We enter the 1980's with a firm strategic footing in East Asia and the
Pacific, based on stable and productive U.S. relations with the majority
of countries of the region. We have established a stable level of U.S.
involvement in the region, appropriate to our own interests and to the
interests of our friends and allies there.
THE MIDDLE EAST AND SOUTHWEST ASIA
The continuing Soviet occupation of Afghanistan and the dislocations
caused by the Iraq-Iran war serve as constant reminders of the critical
importance for us, and our allies, of a third strategic zone stretching
across the Middle East, the Persian Gulf, and much of the Indian subcontinent.
This Southwest Asian region has served as a key strategic and commercial
link between East and West over the centuries. Today it produces two-thirds
of the world's oil exports, providing most of the energy needs of our European
allies and Japan. It has experienced almost continuous conflict between
nations, internal instabilities in many countries, and regional rivalries,
combined with very rapid economic and social change. And now the Soviet
Union remains in occupation of one of these nations, ignoring world opinion
which has called on it to get out.
We have taken several measures to meet these challenges.
In the Middle East, our determination to consolidate what has already
been achieved in the peace process-- and to buttress that accomplishment
with further progress toward a comprehensive peace settlement-- must remain
a central goal of our foreign policy. Pursuant to their peace treaty, Egypt
and Israel have made steady progress in the normalization of their relations
in a variety of fields, bringing the benefits of peace directly to their
people. The new relationship between Egypt and Israel stands as an example
of peaceful cooperation in an increasingly fragmented and turbulent region.
Both President Sadat and Prime Minister Begin remain committed to the
current negotiations to provide full autonomy to the inhabitants of the
West Bank and Gaza. These negotiations have been complex and difficult,
but they have already made significant progress, and it is vital that the
two sides, with our assistance, see the process through to a successful
conclusion. We also recognize the need to broaden the peace process to
include other parties to the conflict and believe that a successful autonomy
agreement is an essential first step toward this objective.
We have also taken a number of steps to strengthen our bilateral relations
with both Israel and Egypt. We share important strategic interests with
both of these countries.
We remain committed to Israel's security and are prepared to take concrete
steps to support Israel whenever that security is threatened.
The Persian Gulf has been a vital crossroads for trade between Europe
and Asia at many key moments in history. It has become essential in recent
years for its supply of oil to the United States, our allies, and our friends.
We have taken effective measures to control our own consumption of imported
fuel, working in cooperation with the other key industrial / nations of
the world. However, there is little doubt that the healthy growth of our
American and world economies will depend for many years on continued safe
access to the Persian Gulf's oil production. The denial of these oil supplies
would threaten not only our own but world security.
The potent new threat from an advancing Soviet Union, against the background
of regional instability of which it can take advantage, requires that we
reinforce our ability to defend our regional friends and to protect the
flow of oil. We are continuing to build on the strong political, economic,
social and humanitarian ties which bind this government and the American
people to friendly governments and peoples of the Persian Gulf.
We have also embarked on a course to reinforce the trust and confidence
our regional friends have in our ability to come to their assistance rapidly
with American military force if needed. We have increased our naval presence
in the Indian Ocean. We have created a Rapid Deployment Force which can
move quickly to the Gulf-- or indeed any other area of the world where
outside aggression threatens. We have concluded several agreements with
countries which are prepared to let us use their airports and naval facilities
in an emergency. We have met requests for reasonable amounts of American
weaponry from regional countries which are anxious to defend themselves.
And we are discussing with a number of our area friends further ways we
can help to improve their security and ours, both for the short and the
We seek a South Asia comprising sovereign and stable states, free of
outside interference, which can strengthen their political institutions
according to their own national genius and can develop their economies
for the betterment of their people.
The Soviet invasion of Afghanistan has posed a new challenge to this
region, and particularly to neighboring Pakistan. We are engaged in a continuing
dialogue with the Pakistan government concerning its development and security
requirements and the economic burden imposed by Afghan refugees who have
fled to Pakistan. We are participating with other aid consortium members
in debt rescheduling and will continue to cooperate through the UNHCR in
providing refugee assistance. We remain commited to Pakistan's territorial
integrity and independence.
Developments in the broad South/Southwest Asian region have also lent
a new importance to our relations with India, the largest and strongest
power in the area. We share India's interest in a more constructive relationship.
Indian policies and perceptions at times differ from our own, and we have
established a candid dialogue with this sister democracy which seeks to
avoid the misunderstandings which have sometimes complicated our ties.
We attach major importance to strong economic assistance programs to
the countries in the area, which include a majority of the poor of the
non-Communist world. We believe that these programs will help achieve stability
in the area, an objective we share with the countries in the region. Great
progress has been achieved by these countries in increasing food production;
international cooperation in harnessing the great river resources of South
Asia would contribute further to this goal and help to increase energy
We continue to give high priority to our non-proliferation goals in
the area in the context of our broad global and regional priorities. The
decision to continue supply of nuclear fuel to the Indian Tarapur reactors
was sensitive to this effort.
The United States has achieved a new level of trust and cooperation
with Africa. Our efforts, together with our allies, to achieve peace in
southern Africa, our increased efforts to help the poorest countries in
Africa to combat poverty, and our expanded efforts to promote trade and
investment have led to growing respect for the U.S. and to cooperation
in areas of vital interest to the United States.
Africa is a continent of poor nations for the most part. It also contains
many of the mineral resources vital for our economy. We have worked with
Africa in a spirit of mutual cooperation to help the African nations solve
their problems of poverty and to develop stronger ties between our private
sector and African economies. Our assistance to Africa has more than doubled
in the last four years. Equally important, we set in motion new mechanisms
for private investment and trade.
Nigeria is the largest country in Black Africa and the second largest
oil supplier to the United States. During this Administration we have greatly
expanded and improved our relationship with Nigeria and other West African
states whose aspirations for a constitutional democratic order we share
and support. This interest was manifested both symbolically and practically
by the visit of Vice President Mondale to West Africa in July (1980) and
the successful visit to Washington of the President of Nigeria in October.
During Vice President Mondale's visit, a Joint Agricultural Consultative
Committee was established, with the U.S. represented entirely by the private
sector. This could herald a new role for the American private sector in
helping solve the world's serious food shortages. I am pleased to say that
our relations with Nigeria are at an all-time high, providing the foundation
for an even stronger relationship in the years ahead.
Another tenet of this Administration's approach to African problems
has `been encouragement and support for regional solutions to Africa's
problems. We have supported initiatives by the Organization of African
Unity to solve the protracted conflict in the western Sahara, Chad, and
the Horn. In Chad, the world is watching with dismay as a country torn
by a devastating civil war has become a fertile field for Libya's exploitation,
thus demonstrating that threats to peace can come from forces within as
well as without Africa.
In southern Africa the United States continues to pursue a policy of
encouraging peaceful development toward majority rule. In 1980, Southern
Rhodesia became independent as Zimbabwe, a multiracial nation under a system
of majority rule. Zimbabwean independence last April was the culmination
of a long struggle within the country and diplomatic efforts involving
Great Britain, African states neighboring Zimbabwe, and the United States.
The focus of our efforts in pursuit of majority rule in southern Africa
has now turned to Namibia. Negotiations are proceeding among concerned
parties under the leadership of U.N. Secretary General Waldheim. This should
lead to implementation of the U.N. plan for self-determination and independence
for Namibia during 1981. If these negotiations are successfully concluded,
sixty-five years of uncertainty over the status of the territory, including
a seven-year-long war, will be ended.
In response to our active concern with issues of importance to Africans,
African states have cooperated with us on issues of importance to our national
interests. African states voted overwhelmingly in favor of the U.N. Resolution
calling for release of the hostages, and for the U.N. Resolution condemning
the Soviet invasion of Afghanistan. Two countries of Africa have signed
access agreements with the U.S. allowing us use of naval and air facilities
in the Indian Ocean.
Africans have become increasingly vocal on human rights. African leaders
have spoken out on the issue of political prisoners, and the OAU is drafting
its own Charter on Human Rights. Three countries in Africa-- Nigeria, Ghana,
and Uganda-- have returned to civilian rule during the past year.
U.S. cooperation with Africa on all these matters represents a strong
base on which we can build in future years.
Liberia is a country of long-standing ties with the U.S. and the site
of considerable U.S. investment and facilities. This past April a coup
replaced the government and a period of political and economic uncertainty
ensued. The U.S. acted swiftly to meet this situation. We, together with
African leaders, urged the release of political prisoners, and many have
been released; we provided emergency economic assistance to help avoid
economic collapse, and helped to involve the IMF and the banking community
to bring about economic stability; and we have worked closely with the
new leaders to maintain Liberia's strong ties with the West and to protect
America's vital interests.
In early 1979, following a Libyan-inspired commando attack on a Tunisian
provincial city, the U.S. responded promptly to Tunisia's urgent request
for assistance, both by airlifting needed military equipment and by making
clear our longstanding interest in the security and integrity of this friendly
country. The U.S. remains determined to oppose other irresponsible Libyan
aspirations. Despairing of a productive dialogue with the Libyan authorities,
the U.S. closed down its embassy in Libya and later expelled six Libyan
diplomats in Washington in order to deter an intimidation campaign against
Libyan citizens in the U.S.
U.S. relations with Algeria have improved, and Algeria has played an
indispensable and effective role as intermediary between Iran and the U.S.
over the hostage issue.
The strengthening of our arms supply relationship with Morocco has helped
to deal with attacks inside its internationally recognized frontiers and
to strengthen its confidence in seeking a political settlement of the Western
Sahara conflict. While not assuming a mediatory role, the U.S. encouraged
all interested parties to turn their energies to a peaceful and sensible
compromise resolution of the war in the Sahara and supported efforts by
the Organization of African Unity toward that end. As the year drew to
a close, the U.S. was encouraged by evolution in the attitudes of all sides,
and is hopeful that their differences will be peacefully resolved in the
year ahead so that the vast economic potential of North Africa can be developed
for the well-being of the people living there.
LATIN AMERICA AND THE CARIBBEAN
The principles of our policies in this hemisphere have been clear and
constant over the last four years. We support democracy and respect for
human rights. We have struggled with many to help free the region of both
repression and terrorism. We have respected ideological diversity and opposed
outside intervention in purely internal affairs. We will act, though, in
response to a request for assistance by a country threatened by external
aggression. We support social and economic development within a democratic
framework. We support the peaceful settlement of disputes. We strongly
encourage regional cooperation and shared responsibilities within the hemisphere
to all these ends, and we have eagerly and regularly sought the advice
of the leaders of the region on a wide range of issues.
Last November, I spoke to the General Assembly of the Organization of
American States of a cause that has been closest to my heart-- human rights.
It is an issue that has found its time in the hemisphere. The cause is
not mine alone, but an historic movement that will endure.
At Riobamba, Ecuador, last September four Andean Pact countries, Costa
Rica, and Panama broke new ground by adopting a "Code of Conduct," that
joint action in defense of human rights does not violate the principles
of nonintervention in the internal affairs of states in this hemisphere.
The Organization of American States has twice condemned the coup that overturned
the democratic process in Bolivia and the widespread abuse of human rights
by the regime which seized power. The Inter-American Commission on Human
Rights has gained world acclaim for its dispassionate reports. It completed
two major country studies this year in addition to its annual report. In
a resolution adopted without opposition, the OAS General Assembly in November
strongly supported the work of the Commission. The American Convention
on Human Rights is in force and an Inter-American Court has been created
to judge human rights violations. This convention has been pending before
the Senate for two years; I hope the United States this year will join
the other nations of the hemisphere in ratifying a convention which embodies
principles that are our tradition.
The trend in favor of democracy has continued. During this past year,
Peru inaugurated a democratically elected government. Brazil continues
its process of liberalization. In Central America, Hondurans voted in record
numbers in their first national elections in over eight years. In the Caribbean
seven elections have returned governments firmly committed to the democratic
traditions of the Commonwealth.
Another major contribution to peace in the hemisphere is Latin America's
own Treaty for the Prohibition of Nuclear Weapons. On behalf of the United
States, I signed Protocol I of this Treaty in May of 1977 and sent it to
the Senate for ratification. I urge that it be acted upon promptly by the
Senate in order that it be brought into the widest possible effect in the
Latin American region.
Regional cooperation for development is gaining from Central America
to the Andes, and throughout the Caribbean. The Caribbean Group for Cooperation
in Economic Development, which we established with 29 other nations in
1977, has helped channel $750 million in external support for growth in
the Caribbean. The recent meeting of the Chiefs of State of the Eastern
Caribbean set a new precedent for cooperation in that region. Mexico and
Venezuela jointly and Trinidad and Tobago separately have established oil
facilities that will provide substantial assistance to their oil importing
neighbors. The peace treaty between El Salvador and Honduras will hopefully
stimulate Central America to move forward again toward economic integration.
Formation of Caribbean/ Central American Action, a private sector organization,
has given a major impetus to improving people-to-people bonds and strengthening
the role of private enterprise in the development of democratic societies.
The Panama treaties have been in force for over a year. A new partnership
has been created with Panama; it is a model for large and small nations.
A longstanding issue that divided us from our neighbors has been resolved.
The security of the canal has been enhanced. The canal is operating as
well as ever, with traffic through it reaching record levels this year.
Canal employees, American and Panamanian alike, have remained on the job
and have found their living and working conditions virtually unchanged.
In 1980, relations with Mexico continued to improve due in large measure
to the effectiveness of the Coordinator for Mexican Affairs and the expanded
use of the U.S.-Mexico Consultative Mechanism. By holding periodic meetings
of its various working groups, we have been able to prevent mutual concerns
from becoming political issues. The Secretary of State visited Mexico City
in November, and, along with the Mexican Secretary of Foreign Relations,
reviewed the performance of the Consultative Mechanism. The office of the
Coordinator has ensured the implementation of my directive to all agencies
to accord high priority to Mexican concerns. Trade with Mexico rose by
almost 60 percent to nearly $30 billion, making that country our third
largest trading partner.
These are all encouraging developments. Other problems remain, however.
The impact of large-scale migration is affecting many countries in the
hemisphere. The most serious manifestation was the massive, illegal exodus
from Cuba last summer. The Cuban government unilaterally encouraged the
disorderly and even deadly migration of 125,000 of its citizens in complete
disregard for international law or the immigration laws of its neighbors.
Migrations of this nature clearly require concerted action, and we have
asked the OAS to explore means of dealing with similar situations which
may occur in the future.
We have a long-standing treaty with Colombia on Quita Sueno, Roncador,
and Serrano which remains to be ratified by the Senate.
In Central America, the future of Nicaragua is unclear. Recent tensions,
the restrictions on the press and political activity, an inordinate Cuban
presence in the country and the tragic killing by the security forces of
a businessman well known for his democratic orientation, cause us considerable
concern. These are not encouraging developments. But those who seek a free
society remain in the contest for their nation's destiny. They have asked
us to help rebuild their country, and by our assistance, to demonstrate
that the democratic nations do not intend to abandon Nicaragua to the Cubans.
As long as those who intend to pursue their pluralistic goals play important
roles in Nicaragua, it deserves our continuing support.
In El Salvador, we have supported the efforts of the Junta to change
the fundamental basis of an inequitable system and to give a stake in a
new nation to those millions of people, who for so long, lived without
hope or dignity. As the government struggles against those who would restore
an old tyranny or impose a new one, the United States will continue to
stand behind them.
We have increased our aid to the Caribbean, an area vital to our national
security, and we should continue to build close relations based on mutual
respect and understanding, and common interests.
As the nations of this hemisphere prepare to move further into the 1980's,
I am struck by the depth of underlying commitment that there is to our
common principles: non-intervention, peaceful settlement of disputes, cooperation
for development, democracy and defense of basic human rights. I leave office
satisfied that the political, economic, social and organizational basis
for further progress with respect to all these principles have been substantially
strengthened in the past four years. I am particularly reassured by the
leadership by other nations of the hemisphere in advancing these principles.
The success of our common task of improving the circumstances of all peoples
and nations in the hemisphere can only be assured by the sharing of responsibility.
I look forward to a hemisphere that at the end of this decade has proven
itself anew as a leader in the promotion of both national and human dignity.
THE INTERNATIONAL ECONOMY
A growing defense effort and a vigorous foreign policy rest upon a strong
economy here in the United States. And the strength of our own economy
depends upon our ability to lead and compete in the international marketplace.
Last year, the war between Iraq and Iran led to the loss of nearly 4
million barrels of oil to world markets, the third major oil market disruption
in the past seven years. This crisis has vividly demonstrated once again
both the value of lessened dependence on oil imports and the continuing
instability of the Persian Gulf area.
Under the leadership of the United States, the 21 members of the International
Energy Agency took collective action to ensure that the oil shortfall stemming
from the Iran-Iraq war would not be aggravated by competition for scarce
spot market supplies. We are also working together to see that those nations
most seriously affected by the oil disruption-- including our key NATO
allies Turkey and Portugal-- can get the oil they need. At the most recent
IEA Ministerial meeting we joined the other members in pledging to take
those policy measures necessary to slice our joint oil imports in the first
quarter of 1981 by 2.2 million barrels.
Our international cooperation efforts in the energy field are not limited
to crisis management. At the Economic Summit meetings in Tokyo and Venice,
the heads of government of the seven major industrial democracies agreed
to a series of tough energy conservation and production goals. We are working
together with all our allies and friends in this effort.
Construction has begun on a commercial scale coal liquefaction plant
in West Virginia co-financed by the United States, Japan and West Germany.
An interagency task force has just reported to me on a series of measures
we need to take to increase coal production and exports. This report builds
on the work of the International Energy Agency's Coal Industry Advisory
Board. With the assurances of a reliable United States steam coal supply
at reasonable prices, many of the electric power plants to be built in
the 1980's and 1990's can be coal-fired rather than oil-burning.
We are working cooperatively with other nations to increase energy security
in other areas as well. Joint research and development with our allies
is underway in solar energy, nuclear power, industrial conservation and
other areas. In addition, we are assisting rapidly industrializing nations
to carefully assess their basic energy policy choices, and our development
assistance program helps the developing countries to increase indigenous
energy production to meet the energy needs of their poorest citizens. We
support the proposal for a new World Bank energy affiliate to these same
ends, whose fulfillment will contribute to a better global balance between
energy supply and demand.
INTERNATIONAL MONETARY POLICY
Despite the rapid increase in oil costs, the policy measures we have
taken to improve domestic economic performance have had a continued powerful
effect on our external accounts and on the strength of the dollar. A strong
dollar helps in the fight against inflation.
There has also been considerable forward movement in efforts to improve
the functioning of the international monetary system. The stability of
the international system of payments and trade is important to the stability
and good health of our own economy. We have given strong support to the
innovative steps being taken by the International Monetary Fund and World
Bank to help promote early adjustment to the difficult international economic
problems. Recent agreement to increase quotas by fifty percent will ensure
the IMF has sufficient resources to perform its central role in promoting
adjustment and financing payments imbalances. The World Bank's new structural
adjustment lending program will also make an important contribution to
international efforts to help countries achieve a sustainable level of
growth and development.
In 1980, Congress passed U.S. implementing legislation for the International
Sugar Agreement, thus fulfilling a major commitment of this Administration.
The agreement is an important element in our international commodity policy
with far-reaching implications for our relations with developing countries,
particularly sugar producers in Latin America. Producers and consumers
alike will benefit from a more stable market for this essential commodity.
At year's end, Congress approved implementing legislation permitting
the U.S. to carry out fully its commitments under International Coffee
Agreement Specifically, the legislation enables us to meet our part of
an understanding negotiated last fall among members of the Agreement, which
defends, by use of export quotas, a price range well below coffee prices
of previous years and which commits major coffee producers to eliminate
cartel arrangements that manipulated future markets to raise prices. The
way is now open to a fully-functioning International Coffee Agreement which
can help to stabilize this major world commodity market. The results will
be positive for both consumers-- who will be less likely to suffer from
sharp increases in coffee prices-- and producers-- who can undertake future
investment with assurance of greater protection against disruptive price
fluctuations in their exports.
In 1980, the International Natural Rubber Agreement entered into force
provisionally. U.S. membership in this new body was approved overwhelmingly
by the Senate last year. The natural rubber agreement is a model of its
kind and should make a substantial contribution to a stable world market
in this key industrial commodity. It is thus an excellent example of constructive
steps to improve the operation of the world economy in ways which can benefit
the developing and industrialized countries alike. In particular, the agreement
has improved important U.S. relationships with the major natural rubber-producing
countries of Southeast Asia.
The United States joined members of the United Nations Conference on
Trade and Development, both developed and developing nations, in concluding
Articles of Agreement in 1980 for a Common Fund to help international commodity
agreements stabilize the prices of raw materials.
ECONOMIC COOPERATION WITH DEVELOPING NATIONS
Our relations with the developing nations are of major importance to
the United States. The fabric of our relations with these countries has
strong economic and political dimensions. They constitute the most rapidly
growing markets for our exports, and are important sources of fuel and
raw materials. Their political views are increasingly important, as demonstrated
in their overwhelming condemnation of the Soviet invasion of Afghanistan.
Our ability to work together with developing nations toward goals we have
in common (their political independence, the resolution of regional tensions,
and our growing ties of trade for example) require us to maintain the policy
of active involvement with the developing world that we have pursued over
the past four years.
The actions we have taken in such areas as energy, trade, commodities,
and international financial institutions are all important to the welfare
of the developing countries. Another important way the United States can
directly assist these countries and demonstrate our concern for their future
is through our multilateral and bilateral foreign assistance program. The
legislation which I will be submitting to you for FY 82 provides the authority
and the funds to carry on this activity. Prompt Congressional action on
this legislation is essential in order to attack such high priority global
problems as food and energy, meet our treaty and base rights agreements,
continue our peace efforts in the Middle East, provide economic and development
support to countries in need, promote progress on North-South issues, protect
Western interests, and counter Soviet influence.
Our proposed FY 1982 bilateral development aid program is directly responsive
to the agreement reached at the 1980 Venice Economic Summit that the major
industrial nations should increase their aid for food and energy production
and for family planning. We understand that other Summit countries plan
similar responses. It is also important to honor our international agreements
for multilateral assistance by authorizing and appropriating funds for
the International Financial Institutions. These multilateral programs enhance
the efficiency of U.S. contributions by combining them with those of many
other donor countries to promote development; the proposed new World Bank
affiliate to increase energy output in developing countries offers particular
promise. All these types of aid benefit our long-run economic and political
Progress was made on a number of economic issues in negotiations throughout
the U.N. system. However, in spite of lengthy efforts in the United Nations,
agreement has not been reached on how to launch a process of Global Negotiations
in which nations might collectively work to solve such important issues
as energy, food, protectionism, and population pressures. The United States
continues to believe that progress can best be made when nations focus
on such specific problems, rather than on procedural and institutional
questions. It will continue to work to move the North-South dialogue into
a more constructive phase.
FOOD-- THE WAR ON HUNGER
The War on Hunger must be a continuous urgent priority. Major portions
of the world's population continue to be threatened by the specter of hunger
and malnutrition. During the past year, some 150 million people in 36 African
countries were faced with near disaster as the result of serious drought,
induced food shortages. Our government, working in concert with the U.N.'s
Food and Agricultural Organization (FAO), helped to respond to that need.
But the problems of hunger cannot be solved by short-term measures. We
must continue to support those activities, bilateral and multilateral,
which aim at improving food production especially in developing countries
and assuring global food security. These measures are necessary to the
maintenance of a stable and healthy world economy.
I am pleased that negotiation of a new Food Aid Convention, which guarantees
a minimum annual level of food assistance, was successfully concluded in
March. The establishment of the International Emergency Wheat Reserve will
enable the U.S. to meet its commitment under the new Convention to feed
hungry people, even in times of short supply.
Of immediate concern is the prospect of millions of Africans threatened
by famine because of drought and civil disturbances. The U.S. plea for
increased food aid resulted in the organization of an international pledging
conference and we are hopeful that widespread starvation will be avoided.
Good progress has been made since the Venice Economic Summit called
for increased effort on this front. We and other donor countries have begun
to assist poor countries develop long-term strategies to improve their
food production. The World Bank will invest up to $4 billion in the next
few years in improving the grain storage and food-handling capacity of
countries prone to food shortages.
Good progress has been made since the Tokyo Economic Summit called for
increased effort on this front. The World Bank is giving this problem top
priority, as are some other donor countries. The resources of the consultative
Group on International Agricultural Research will be doubled over a five-year
period. The work of our own Institute of Scientific and Technological Cooperation
will further strengthen the search for relevant new agricultural technologies.
The goal of freeing the world from hunger by the year 2000 should command
the full support of all countries. The Human Dimension of Foreign Policy
The human rights policy of the United States has been an integral part
of our overall foreign policy for the past several years. This policy serves
the national interest of the United States in several important ways: by
encouraging respect by governments for the basic rights of human beings,
it promotes peaceful, constructive change, reduces the likelihood of internal
pressures for violent change and for the exploitation of these by our adversaries,
and thus directly serves our long-term interest in peace and stability;
by matching espousal of fundamental American principles of freedom with
specific foreign policy actions, we stand out in vivid contrast to our
ideological adversaries; by our efforts to expand freedom elsewhere, we
render our own freedom, and our own nation, more secure. Countries that
respect human rights make stronger allies and better friends.
Rather than attempt to dictate what system of government or institutions
other countries should have, the U.S. supports, throughout the world, the
internationally recognized human rights which all members of the United
Nations have pledged themselves to respect. There is more than one model
that can satisfy the continuing human reach for freedom and justice:
1980 has been a year of some disappointments, but has also seen some
positive developments in the ongoing struggle for fulfillment of human
rights throughout the world. In the year we have seen:
-- Free elections were held and democratic governments installed in
Peru, Dominica, and Jamaica. Honduras held a free election for installation
of a constituent assembly. An interim government was subsequently named
pointing toward national presidential elections in 1981. Brazil continues
on its course of political liberalization.
-- The "Charter of Conduct" signed in Riobamba, Ecuador, by Ecuador,
Colombia, Venezuela, Peru, Costa Rica, Panama and Spain, affirms the importance
of democracy and human rights for the Andean countries.
-- The Organization of American States, in its annual General Assembly,
approved a resolution in support of the Inter-American Human Rights Commission's
work. The resolution took note of the Commission's annual report, which
described the status of human rights in Chile, El Salvador, Paraguay and
Uruguay; and the special reports on Argentina and Haiti, which described
human rights conditions as investigated during on-site inspections to these
-- The awarding of the Nobel Prize for Peace to Adolfo Perez Esquivel
of Argentina for his non-violent advocacy of human rights.
-- The United States was able to rejoin the International Labor Organization
after an absence of two years, as that U.N. body reformed its procedures
to return to its original purpose of strengthening employer-employee-government
relations to insure human rights for the working people of the world.
The United States, of course, cannot take credit for all these various
developments. But we can take satisfaction in knowing that our policies
encourage and perhaps influence them.
Those who see a contradiction between our security and our humanitarian
interests forget that the basis for a secure and stable society is the
bond of trust between a government and its people. I profoundly believe
that the future of our world is not to be found in authoritarianism: that
wears the mask of order, or totalitarianism that wears the mask of justice.
Instead, let us find our future in the human face of democracy, the human
voice of individual liberty, the human hand of economic development.
The United States has continued to play its traditional role of safehaven
for those who flee or are forced to flee their homes because of persecution
or war. During 1980, the United States provided resettlement opportunities
for 216,000 refugees from countries around the globe. In addition, the
United States joined with other nations to provide relief to refugees in
country of first asylum in Africa, the Middle East, and Asia.
The great majority of refugee admissions continued to be from Indo-china.
During 1980, 168,000 Indo-chinese were resettled in the United States.
Although refugee populations persist in camps in Southeast Asia, and refugees
continue to flee Vietnam, Laos and Kampuchea, the flow is not as great
as in the past. One factor in reducing the flow from Vietnam has been the
successful negotiation and commencement of an Orderly Departure Program
which permits us to process Vietnamese for resettlement in the United States
with direct departure from Ho Chi Minh Ville in an orderly fashion. The
first group of 250 departed Vietnam for the United States in December,
In addition to the refugees admitted last year, the United States accepted
for entry into the United States 125,000 Cubans who were expelled by Fidel
Castro. Federal and state authorities, as well as private voluntary agencies,
responded with unprecedented vigor to coping with the unexpected influx
Major relief efforts to aid refugees in countries of first asylum continued
in several areas of the world. In December, 1980, thirty-two nations, meeting
in New York City, agreed to contribute $65 million to the continuing famine
relief program in Kampuchea. Due in great part to the generosity of the
American people and the leadership exercised in the international arena
by the United States, we have played the pivotal role in ameliorating massive
suffering in Kampuchea.
The United States has taken the lead among a group of donor countries
who are providing relief to some two million refugees in the Horn of Africa
who have been displaced by fighting in Ethiopia. U.S. assistance, primarily
to Somalia, consists of $35 million worth of food and $18 million in cash
and kind. Here again, United States efforts can in large part be credited
with keeping hundreds of thousands of people alive.
Another major international relief effort has been mounted in Pakistan.
The United States is one of 25 countries plus the European Economic Community
who have been helping the Government of Pakistan to cope with the problem
of feeding and sheltering the more than one million refugees that have
been generated by the Soviet invasion of Afghanistan.
In April, 1980, the Congress passed the Refugee Act of 1980 which brought
together, for the first time, in one piece of legislation the various threads
of U.S. policy towards refugees. The law laid down a new, broader definition
of the term refugee, established mechanisms for arriving at a level of
refugee admissions through consultation with Congress, and established
the Office of the United States Coordinator for Refugees.
It cannot be ignored that the destructive and aggressive policies of
the Soviet Union have added immeasurably to the suffering in these three
The Control of Nuclear Weapons
Together with our friends and allies, we are striving to build a world
in which peoples with diverse interests can live freely and prosper. But
all that humankind has achieved to date, all that we are seeking to accomplish,
and human existence itself can be undone in an instant-- in the catastrophe
of a nuclear war.
Thus one of the central objectives of my Administration has been to
control the proliferation of nuclear weapons to those nations which do
not have them, and their further development by the existing nuclear powers--
notably the Soviet Union and the United States.
My Administration has been committed to stemming the spread of nuclear
weapons. Nuclear proliferation would raise the spectre of the use of nuclear
explosives in crucial, unstable regions of the world endangering not only
our security and that of our Allies, but that of the whole world. Non-proliferation
is not and can not be a unilateral U.S. policy, nor should it be an issue
of contention between the industrialized and developing states. The international
non-proliferation effort requires the support of suppliers as well as importers
of nuclear technology and materials.
We have been proceeding on a number of fronts:
-- First, we have been seeking to encourage nations to accede to the
Non-Proliferation Treaty. The U.S. is also actively encouraging other nations
to accept full-scope safeguards on all of their nuclear activities and
is asking other nuclear suppliers to adopt a full-scope safeguards requirement
as a condition for future supply.
-- Second, the International Nuclear Fuel Cycle Evaluation (INFCE),
which was completed in 1980, demonstrated that suppliers and recipients
can work together on these technically complex and sensitive issues. While
differences remain, the INFCE effort provides a broader international basis
for national decisions which must balance energy needs with non-proliferation
-- Finally, we are working to encourage regional cooperation and restraint.
Protocol I of the Treaty of Tlatelolco which will contribute to the lessening
of nuclear dangers for our Latin American neighbors ought now to be ratified
by the United States Senate.
LIMITATIONS ON STRATEGIC ARMS
I remain convinced that the SALT II Treaty is in our Nation's security
interest and that it would add significantly to the control of nuclear
weapons. I strongly support continuation of the SALT process and the negotiation
of more far-reaching mutual restraints on nuclear weaponry.
We have new support in the world for our purposes of national independence
and individual human dignity. We have a new will at home to do what is
required to keep us the strongest nation on earth.
We must move together into this decade with the strength which comes
from realization of the dangers before us and from the confidence that
together we can overcome them.