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
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
- 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
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
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 by
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
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 will
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
- 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 month.
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
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 currently available.
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
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 Council.
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
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
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
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 coverage;
- 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
- all full-time employees and their families would receive
insurance against at least major medical expenses under mandated employer
- Medicare and Medicaid would be combined and expanded into an
umbrella Federal program, Healthcare, for increased program efficiency,
accountability and uniformity;
- strong cost controls and health system reforms would be
implemented, including greater incentives for Health Maintenance
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
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
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
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 country.
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 education
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 these efforts.
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
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
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 bills.
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
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
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
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
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
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
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 unprofitable operations.
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
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 country.
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 ship construction.
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
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 ports.
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
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
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
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
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
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
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 times.
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
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 compassionate fashion.
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 GOVERNMENTS
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 services.
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 areas.
-- 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 principles.
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
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
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 our nation.
-- 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 to
-- 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 science investigations.
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
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
-- 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 future."
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
-- 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
-- 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
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
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
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
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
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
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
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 or
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
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
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
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 states.
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
-- 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 systems.
EQUAL RIGHTS AMENDMENT
I remain committed as strongly as possible to the ratification of the Equal Rights
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
to pass 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
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
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 resources.
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
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 projects.
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
ADDRESSING GLOBAL RESOURCE AND
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
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
-- 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 live;
-- 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
-- that we faced squarely such worldwide problems as the destruction
of forests, acid rain, carbon dioxide build-up and nuclear proliferation; and
-- 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 price strength.
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
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 adjusted upward.
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 1977.
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
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 be
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
-- 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
-- the pressures of change in many nations of the developing world,
in Iran and uncertainty about the future stability of many developing
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
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 and peoples.
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 and objectives.
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 trading system.
-- 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 can provide.
-- Sixth, we must continue to look ahead in order to evaluate and
respond to resource, environment and population challenges through the end of
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
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 sovereign state.
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
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
- 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 ours.
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
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
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 are threatened.
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
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
- 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 today's world.
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
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 Cyprus.
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
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 can cooperate.
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
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 nations.
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
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 production.
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
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
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
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
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
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
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
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
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
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
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
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
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 countries.
-- 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, 1980.
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 of
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 tragic
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
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 concerns.
-- 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.