John F. Kennedy
State of the Union Address
January 14, 1963
Mr. Vice President, Mr. Speaker, Members of the 88th Congress:
I congratulate you all--not merely on your electoral victory but on
your selected role in history. For you and I are privileged to serve the
great Republic in what could be the most decisive decade in its long history.
The choices we make, for good or ill, may well shape the state of the Union
for generations yet to come.
Little more than 100 weeks ago I assumed the office of President of
the United States. In seeking the help of the Congress and our countrymen,
I pledged no easy answers. I pledged--and asked--only toil and dedication.
These the Congress and the people have given in good measure. And today,
having witnessed in recent months a heightened respect for our national
purpose and power--having seen the courageous calm of a united people in
a perilous hour-and having observed a steady improvement in the opportunities
and well-being of our citizens--I can report to you that the state of this
old but youthful Union, in the 175th year of its life, is good.
In the world beyond our borders, steady progress has been made in building
a world of order. The people of West Berlin remain both free and secure.
A settlement, though still precarious, has been reached in Laos. The spearpoint
of aggression has been blunted in Viet-Nam. The end of agony may be in
sight in the Congo. The doctrine of troika is dead. And, while danger continues,
a deadly threat has been removed in Cuba.
At home, the recession is behind us. Well over a million more men and
women are working today than were working 2 years ago. The average factory
workweek is once again more than 40 hours; our industries are turning out
more goods than ever before; and more than half of the manufacturing capacity
that lay silent and wasted 100 weeks ago is humming with activity.
In short, both at home and abroad, there may now be a temptation to
relax. For the road has been long, the burden heavy, and the pace consistently
But we cannot be satisfied to rest here. This is the side of the hill,
not the top. The mere absence of war is not peace. The mere absence of
recession is not growth. We have made a beginning--but we have only begun.
Now the time has come to make the most of our gains--to translate the
renewal of our national strength into the achievement of our national purpose.
America has enjoyed 22 months of uninterrupted economic recovery. But
recovery is not enough. If we are to prevail in the long run, we must expand
the long-run strength of our economy. We must move along the path to a
higher rate of growth and full employment.
For this would mean tens of billions of dollars more each year in production,
profits, wages, and public revenues. It would mean an end to the persistent
slack which has kept our unemployment at or above 5 percent for 61 out
of the past 62 months--and an end to the growing pressures for such restrictive
measures as the 35-hour week, which alone could increase hourly labor costs
by as much as 14 percent, start a new wage-price spiral of inflation, and
undercut our efforts to compete with other nations.
To achieve these greater gains, one step, above all, is essential--the
enactment this year of a substantial reduction and revision in Federal
For it is increasingly clear--to those in Government, business, and
labor who are responsible for our economy's success--that our obsolete
tax system exerts too heavy a drag on private purchasing power, profits,
and employment. Designed to check inflation in earlier years, it now checks
growth instead. It discourages extra effort and risk. It distorts the use
of resources. It invites recurrent recessions, depresses our Federal revenues,
and causes chronic budget deficits.
Now, when the inflationary pressures of the war and the post-war years
no longer threaten, and the dollar commands new respect-now, when no military
crisis strains our resources--now is the time to act. We cannot afford
to be timid or slow. For this is the most urgent task confronting the Congress
In an early message, I shall propose a permanent reduction in tax rates
which will lower liabilities by $13.5 billion. Of this, $11 billion results
from reducing individual tax rates, which now range between 20 and 91 percent,
to a more sensible range of 14 to 65 percent, with a split in the present
first bracket. Two and one-half billion dollars results from reducing corporate
tax rates, from 52 percent--which gives the Government today a majority
interest in profits-to the permanent pre-Korean level of 47 percent. This
is in addition to the more than $2 billion cut in corporate tax liabilities
resulting from last year's investment credit and depreciation reform.
To achieve this reduction within the limits of a manageable budgetary
deficit, I urge: first, that these cuts be phased over 3 calendar years,
beginning in 1963 with a cut of some $6 billion at annual rates; second,
that these reductions be coupled with selected structural changes, beginning
in 1964, which will broaden the tax base, end unfair or unnecessary preferences,
remove or lighten certain hardships, and in the net offset some $3.5 billion
of the revenue loss; and third, that budgetary receipts at the outset be
increased by $1.5 billion a year, without any change in tax liabilities,
by gradually shifting the tax payments of large corporations to a . more
current time schedule. This combined program, by increasing the amount
of our national income, will in time result in still higher Federal revenues.
It is a fiscally responsible program--the surest and the soundest way of
achieving in time a balanced budget in a balanced full employment economy.
This net reduction in tax liabilities of $10 billion will increase the
purchasing power of American families and business enterprises in every
tax bracket, with greatest increase going to our low-income consumers.
It will, in addition, encourage the initiative and risk-taking on which
our free system depends--induce more investment, production, and capacity
use--help provide the 2 million new jobs we need every year--and reinforce
the American principle of additional reward for additional effort.
I do not say that a measure for tax reduction and reform is the only
way to achieve these goals.
--No doubt a massive increase in Federal spending could also create
jobs and growth-but, in today's setting, private consumers, employers,
and investors should be given a full opportunity first.
--No doubt a temporary tax cut could provide a spur to our economy--but
a long run problem compels a long-run solution.
--No doubt a reduction in either individual or corporation taxes alone
would be of great help--but corporations need customers and job seekers
--No doubt tax reduction without reform would sound simpler and more
attractive to many--but our growth is also hampered by a host of tax inequities
and special preferences which have distorted the flow of investment.
--And, finally, there are no doubt some who would prefer to put off
a tax cut in the hope that ultimately an end to the cold war would make
possible an equivalent cut in expenditures-but that end is not in view
and to wait for it would be costly and self-defeating.
In submitting a tax program which will, of course, temporarily increase
the deficit but can ultimately end it--and in recognition of the need to
control expenditures--I will shortly submit a fiscal 1964 administrative
budget which, while allowing for needed rises in defense, space, and fixed
interest charges, holds total expenditures for all other purposes below
this year's level.
This requires the reduction or postponement of many desirable programs,
the absorption of a large part of last year's Federal pay raise through
personnel and other economies, the termination of certain installations
and projects, and the substitution in several programs of private for public
credit. But I am convinced that the enactment this year of tax reduction
and tax reform overshadows all other domestic problems in this Congress.
For we cannot for long lead the cause of peace and freedom, if we ever
cease to set the pace here at home.
Tax reduction alone, however, is not enough to strengthen our society,
to provide opportunities for the four million Americans who are born every
year, to improve the lives of 32 million Americans who live on the outskirts
The quality of American life must keep pace with the quantity of American
This country cannot afford to be materially rich and spiritually poor.
Therefore, by holding down the budgetary cost of existing programs to
keep within the limitations I have set, it is both possible and imperative
to adopt other new measures that we cannot afford to postpone.
These measures are based on a series of fundamental premises, grouped
under four related headings:
First, we need to strengthen our Nation by investing in our youth:
--The future of any country which is dependent upon the will and wisdom
of its citizens is damaged, and irreparably damaged, whenever any of its
children is not educated to the full extent of his talent, from grade school
through graduate school. Today, an estimated 4 out of every 10 students
in the 5th grade will not even finish high school--and that is a waste
we cannot afford.
--In addition, there is no reason why one million young Americans, out
of school and out of work, should all remain unwanted and often untrained
on our city streets when their energies can be put to good use.
--Finally, the overseas success of our Peace Corps volunteers, most
of them young men and women carrying skills and ideas to needy people,
suggests the merit of a similar corps serving our own community needs:
in mental hospitals, on Indian reservations, in centers for the aged or
for young delinquents, in schools for the illiterate or the handicapped.
As the idealism of our youth has served world peace, so can it serve the
Second, we need to strengthen our Nation by safeguarding its health:
--Our working men and women, instead of being forced to beg for help
from public charity once they are old and ill, should start contributing
now to their own retirement health program through the Social Security
--Moreover, all our miracles of medical research will count for little
if we cannot reverse the growing nationwide shortage of doctors, dentists,
and nurses, and the widespread shortages of nursing homes and modern urban
hospital facilities. Merely to keep the present ratio of doctors and dentists
from declining any further, we must over the next 10 years increase the
capacity of our medical schools by 50 percent and our dental schools by
--Finally, and of deep concern, I believe that the abandonment of the
mentally ill and the mentally retarded to the grim mercy of custodial institutions
too often inflicts on them and on their families a needless cruelty which
this Nation should not endure. The incidence of mental retardation in this
country is three times as high as that of Sweden, for example--and that
figure can and must be reduced.
Third, we need to strengthen our Nation by protecting the basic rights
of its citizens:
--The right to competent counsel must be assured to every man
accused of crime in Federal court, regardless of his means.
--And the most precious and powerful right in the world, the right to
vote in a free American election, must not be denied to any citizen on
grounds of his race or color. I wish that all qualified Americans permitted
to vote were willing to vote, but surely in this centennial year of Emancipation
all those who are willing to vote should always be permitted.
Fourth, we need to strengthen our Nation by making the best and the
most economical use of its resources and facilities:
--Our economic health depends on healthy transportation arteries; and
I believe the way to a more modern, economical choice of national transportation
service is through increased competition and decreased regulation. Local
mass transit, faring even worse, is as essential a community service as
hospitals and highways. Nearly three-fourths of our citizens live in urban
areas, which occupy only 2 percent of our land-and if local transit is
to survive and relieve the congestion of these cities, it needs Federal
stimulation and assistance.
--Next, this Government is in the storage and stockpile business to
the melancholy tune of more than $ 16 billion. We must continue to support
farm income, but we should not pile more farm surpluses on top of the $7.5
billion we already own. We must maintain a stockpile of strategic materials,
but the $8.5 billion we have acquired--for reasons both good and bad--is
much more than we need; and we should be empowered to dispose of the excess
in ways which will not cause market disruption.
--Finally, our already overcrowded national parks and recreation areas
will have twice as many visitors 10 years from now as they do today. If
we do not plan today for the future growth of these and other great natural
assets--not only parks and forests but wildlife and wilderness preserves,
and water projects of all kinds--our children and their children will be
poorer in every sense of the word.
These are not domestic concerns alone. For upon our achievement of greater
vitality and strength here at home hang our fate and future in the world:
our ability to sustain and supply the security of free men and nations,
our ability to command their respect for our leadership, our ability to
expand our trade without threat to our balance of payments, and our ability
to adjust to the changing demands of cold war competition and challenge.
We shall be judged more by what we do at home than by what we preach
abroad. Nothing we could do to help the developing countries would help
them half as much as a booming U.S. economy. And nothing our opponents
could do to encourage their own ambitions would encourage them half as
much as a chronic lagging U.S. economy. These domestic tasks do not divert
energy from our security--they provide the very foundation for freedom's
survival and success,
Turning to the world outside, it was only a few years ago--in Southeast
Asia, Africa, Eastern Europe, Latin America, even outer space--that communism
sought to convey the image of a unified, confident, and expanding empire,
closing in on a sluggish America and a free world in disarray. But few
people would hold to that picture today.
In these past months we have reaffirmed the scientific and military
superiority of freedom. We have doubled our efforts in space, to assure
us of being first in the future. We have undertaken the most far-reaching
defense improvements in the peacetime history of this country. And we have
maintained the frontiers of freedom from Viet-Nam to West Berlin.
But complacency or self-congratulation can imperil our security as much
as the weapons of tyranny. A moment of pause is not a promise of peace.
Dangerous problems remain from Cuba to the South China Sea. The world's
prognosis prescribes, in short, not a year's vacation for us, but a year
of obligation and opportunity.
Four special avenues of opportunity stand out: the Atlantic Alliance,
the developing nations, the new Sino-Soviet difficulties, and the search
for worldwide peace.
First, how fares the grand alliance? Free Europe is entering into a
new phase of its long and brilliant history. The era of colonial expansion
has passed; the era of national rivalries is fading; and a new era of interdependence
and unity is taking shape. Defying the old prophecies of Marx, consenting
to what no conqueror could ever compel, the free nations of Europe are
moving toward a unity of purpose and power and policy in every sphere of
For 17 years this movement has had our consistent support, both political
and economic. Far from resenting the new Europe, we regard her as a welcome
partner, not a rival. For the road to world peace and freedom is still
long, and there are burdens which only full partners can share--in supporting
the common defense, in expanding world trade, in aligning our balance of
payments, in aiding the emergent nations, in concerting political and economic
policies, and in welcoming to our common effort other industrialized nations,
notably Japan, whose remarkable economic and political development of the
1950's permits it now to play on the world scene a major constructive role.
No doubt differences of opinion will continue to get more attention
than agreements on action, as Europe moves from independence to more formal
interdependence. But these are honest differences among honorable associates--more
real and frequent, in fact, among our Western European allies than between
them and the United States. For the unity of freedom has never relied on
uniformity of opinion. But the basic agreement of this alliance on fundamental
The first task of the alliance remains the common defense. Last month
Prime Minister Macmillan and I laid plans for a new stage in our long cooperative
effort, one which aims to assist in the wider task of framing a common
nuclear defense for the whole alliance.
The Nassau agreement recognizes that the security of the West is indivisible,
and so must be our defense. But it also recognizes that this is an alliance
of proud and sovereign nations, and works best when we do not forget it.
It recognizes further that the nuclear defense of the West is not a matter
for the present nuclear powers alone--that France will be such a power
in the future--and that ways must be found without increasing the hazards
of nuclear diffusion, to increase the role of our other partners in planning,
manning, and directing a truly multilateral nuclear force within an increasingly
intimate NATO alliance. Finally, the Nassau agreement recognizes that nuclear
defense is not enough, that the agreed NATO levels of conventional strength
must be met, and that the alliance cannot afford to be in a position of
having to answer every threat with nuclear weapons or nothing.
We remain too near the Nassau decisions, and too far from their full
realization, to know their place in history. But I believe that, for the
first time, the door is open for the nuclear defense of the alliance to
become a source of confidence, instead of a cause of contention.
The next most pressing concern of the alliance is our common economic
goals of trade and growth. This Nation continues to be concerned about
its balance-of-payments deficit, which, despite its decline, remains a
stubborn and troublesome problem. We believe, moreover, that closer economic
ties among all free nations are essential to prosperity and peace. And
neither we nor the members of the European Common Market are so affluent
that we can long afford to shelter high cost farms or factories from the
winds of foreign competition, or to restrict the channels of trade with
other nations of the free world. If the Common Market should move toward
protectionism and restrictionism, it would undermine its, own basic principles.
This Government means to use the authority conferred on it last year by
the Congress to encourage trade expansion on both sides of the Atlantic
and around the world.
Second, what of the developing and nonaligned nations? They were shocked
by the Soviets' sudden and secret attempt to transform Cuba into a nuclear
striking base-and by Communist China's arrogant invasion of India. They
have been reassured by our prompt assistance to India, by our support through
the United Nations of the Congo's unification, by our patient search for
disarmament, and by the improvement in our treatment of citizens and visitors
whose skins do not happen to be white. And as the older colonialism recedes,
and the neocolonialism of the Communist powers stands out more starkly
than ever, they realize more clearly that the issue in the world struggle
is not communism versus capitalism, but coercion versus free choice.
They are beginning to realize that the longing for independence is the
same the world over, whether it is the independence of West Berlin or Viet-Nam.
They are beginning to realize that such independence runs athwart all Communist
ambitions but is in keeping with our own--and that our approach to their
diverse needs is resilient and resourceful, while the Communists are still
relying on ancient doctrines and dogmas.
Nevertheless it is hard for any nation to focus on an external or subversive
threat to its independence when its energies are drained in daily combat
with the forces of poverty and despair. It makes little sense for us to
assail, in speeches and resolutions, the horrors of communism, to spend
$50 billion a year to prevent its military advance-and then to begrudge
spending, largely on American products, less than one-tenth of that amount
to help other nations strengthen their independence and cure the social
chaos in which communism always has thrived.
I am proud--and I think most Americans are proud--of a mutual defense
and assistance program, evolved with bipartisan support in three administrations,
which has, with all its recognized problems, contributed to the fact that
not a single one of the nearly fifty U.N. members to gain independence
since the Second World War has succumbed to Communist control.
I am proud of a program that has helped to arm and feed and clothe millions
of people who live on the front lines of freedom.
I am especially proud that this country has put forward for the 60's
a vast cooperative effort to achieve economic growth and social progress
throughout the Americas-the Alliance for Progress.
I do not underestimate the difficulties that we face in this mutual
effort among our close neighbors, but the free states of this hemisphere,
working in close collaboration, have begun to make this alliance a living
reality. Today it is feeding one out of every four school age children
in Latin America an extra food ration from our farm surplus. It has distributed
1.5 million school books and is building 17,000 classrooms. It has helped
resettle tens of thousands of farm families on land they can call their
own. It is stimulating our good neighbors to more self-help and self-reform--fiscal,
social, institutional, and land reforms. It is bringing new housing and
hope, new health and dignity, to millions who were forgotten. The men and
women of this hemisphere know that the alliance cannot Succeed if it is
only another name for United States handouts--that it can succeed only
as the Latin American nations themselves devote their best effort to fulfilling
This story is the same in Africa, in the Middle East, and in Asia. Wherever
nations are willing to help themselves, we stand ready to help them build
new bulwarks of freedom. We are not purchasing votes for the cold war;
we have gone to the aid of imperiled nations, neutrals and allies alike.
What we do ask--and all that we ask--is that our help be used to best advantage,
and that their own efforts not be diverted by needless quarrels with other
Despite all its past achievements, the continued progress of the mutual
assistance program requires a persistent discontent with present performance.
We have been reorganizing this program to make it a more effective, efficient
instrument--and that process will continue this year.
But free world development will still be an uphill struggle. Government
aid can only supplement the role of private investment, trade expansion,
commodity stabilization, and, above all, internal self-improvement. The
processes of growth are gradual--bearing fruit in a decade, not a day.
Our successes will be neither quick nor dramatic. But if these programs
were ever to be ended, our failures in a dozen countries would be sudden
Neither money nor technical assistance, however, can be our only weapon
against poverty. In the end, the crucial effort is one of purpose, requiring
the fuel of finance but also a torch of idealism. And nothing carries the
spirit of this American idealism more effectively to the far corners of
the earth than the American Peace Corps.
A year ago, less than 900 Peace Corps volunteers were on the job. A
year from now they will number more than 9,000-men and women, aged 18 to
79, willing to give 2 years of their lives to helping people in other lands.
There are, in fact, nearly a million Americans serving their country
and the cause of freedom in overseas posts, a record no other people can
match. Surely those of us who stay at home should be glad to help indirectly;
by supporting our aid programs; .by opening our doors to foreign visitors
and diplomats and students; and by proving, day by day, by deed as well
as word, that we are a just and generous people.
Third, what comfort can we take from the increasing strains and tensions
within the Communist bloc? Here hope must be tempered with caution. For
the Soviet-Chinese disagreement is over means, not ends. A dispute over
how best to bury the free world is no grounds for Western rejoicing.
Nevertheless, while a strain is not a fracture, it is clear that the
forces of diversity are at work inside the Communist camp, despite all
the iron disciplines of regimentation and all the iron dogmatism's of ideology.
Marx is proven wrong once again: for it is the closed Communist societies,
not the free and open societies which carry within themselves the seeds
of internal disintegration.
The disarray of the Communist empire has been heightened by two other
formidable forces. One is the historical force of nationalism-and the yearning
of all men to be free. The other is the gross inefficiency of their economies.
For a closed society is not open to ideas of progress--and a police state
finds that it cannot command the grain to grow.
New nations asked to choose between two competing systems need only
compare conditions in East and West Germany, Eastern and Western Europe,
North and South Viet-Nam. They need only compare the disillusionment of
Communist Cuba with the promise of the Alliance for Progress. And all the
world knows that no successful system builds a wall to keep its people
in and freedom out--and the wall of shame dividing Berlin is a symbol of
Finally, what can we do to move from the present pause toward enduring
peace? Again I would counsel caution. I foresee no spectacular reversal
in Communist methods or goals. But if all these trends and developments
can persuade the Soviet Union to walk the path of peace, then let her know
that all free nations will journey with her. But until that choice is made,
and until the world can develop a reliable system of international security,
the free peoples have no choice but to keep their arms nearby.
This country, therefore, continues to require the best defense in the
world--a defense which is suited to the sixties. This means, unfortunately,
a rising defense budget-for there is no substitute for adequate defense,
and no "bargain basement" way of achieving it. It means the expenditure
of more than $15 billion this year on nuclear weapons systems alone, a
sum which is about equal to the combined defense budgets of our European
But it also means improved air and missile defenses, improved civil
defense, a strengthened anti-guerrilla capacity and, of prime importance,
more powerful and flexible nonnuclear forces. For threats of massive retaliation
may not deter piecemeal aggression-and a line of destroyers in a quarantine,
or a division of well-equipped men on a border, may be more useful to our
real security than the multiplication of awesome weapons beyond all rational
But our commitment to national safety is not a commitment to expand
our military establishment indefinitely. We do not dismiss disarmament
as merely an idle dream. For we believe that, in the end, it is the only
way to assure the security of all without impairing the interests of any.
Nor do we mistake honorable negotiation for appeasement. While we shall
never weary in the defense of freedom, neither shall we ever abandon the
pursuit of peace.
In this quest, the United Nations requires our full and continued support.
Its value in serving the cause of peace has been shown anew in its role
in the West New Guinea settlement, in its use as a forum for the Cuban
crisis, and in its task of unification in the Congo. Today the United Nations
is primarily the protector of the small and the weak, and a safety valve
for the strong. Tomorrow it can form the framework for a world of law--a
world in which no nation dictates the destiny of another, and in which
the vast resources now devoted to destructive means will serve constructive
In short, let our adversaries choose. If they choose peaceful competition,
they shall have it. If they come to realize that their ambitions cannot
succeed--if they see their "wars of liberation" and subversion will ultimately
fail--if they recognize that there is more security in accepting inspection
than in permitting new nations to master the black arts of nuclear war--and
if they are willing to turn their energies, as we are, to the great unfinished
tasks of our own peoples--then, surely, the areas of agreement can be very
wide indeed: a clear understanding about Berlin, stability in Southeast
Asia, an end to nuclear testing, new checks on surprise or accidental attack,
and, ultimately, general and complete disarmament.
For we seek not the worldwide victory of one nation or system but a
worldwide victory of man. The modern globe is too small, its weapons are
too destructive, and its disorders are too contagious to permit any other
kind of victory.
To achieve this end, the United States will continue to spend a greater
portion of its national production than any other people in the free world.
For 15 years no other free nation has demanded so much of itself. Through
hot wars and cold, through recession and prosperity, through the ages of
the atom and outer space, the American people have never faltered and their
faith has never flagged. If at times our actions seem to make life difficult
for others, it is only because history has made life difficult for us all.
But difficult days need not be dark. I think these are proud and memorable
days in the cause of peace and freedom. We are proud, for example, of Major
Rudolf Anderson who gave his life over the island of Cuba. We salute Specialist
James Allen Johnson who died on the border of South Korea. We pay honor
to Sergeant Gerald Pendell who was killed in Viet-Nam. They are among the
many who in this century, far from home, have died for our country. Our
task now, and the task of all Americans is to live up to their commitment.
My friends: I close on a note of hope. We are not lulled by the momentary
calm of the sea or the somewhat clearer skies above. We know the turbulence
that lies below, and the storms that are beyond the horizon this year.
But now the winds of change appear to be blowing more strongly than ever,
in the world of communism as well as our own. For 175 years we have sailed
with those winds at our back, and with the tides of human freedom in our
favor. We steer our ship with hope, as Thomas Jefferson said, "leaving
Today we still welcome those winds of change--and we have every reason
to believe that our tide is running strong. With thanks to Almighty God
for seeing us through a perilous passage, we ask His help anew in guiding
the "Good Ship Union."