Industry and funded by your local cable or satellite provider. Watch us in hd, like us on facebook and follow us on twitter. President obama delivers his state of the Union Address on tuesday, january 20th, to a joint session of congress. Now American History tv looks back to 1975 and president gerald r. Fords state of the union speech which was delivered five months after assuming office in the wake of president nixons res igs nation. He told congress he didnt expect much applause, because as he said, quote ive got bad news. He detailed the countrys economic and energy woes, blaming in part what he called, quote, ever increasing levels of government benefits. On the eve of the american bicentennial, he urged his countrymen to move in a new direction. My colleagues of the korngs i have the distinct privilege and the high personal honor of presenting to you the president of the United States. Mrk applause ] mr. Speaker, mr. Vice president , members of the 94th congress, and distinguished guests 26 years ago a freshman congressman, a young fellow, with lots of idealism who was out to change the world, stood before sam rayburn in the well of the house and solemnly swore to the same oath that all of you took yesterday. An unforgettable experience. And i congratulate you also. Two days later that same freshman stood at the back of this great chamber. Over there someplace. As president truman all charged up by his singlehanded election victory, reported as the constitution requires in the state of the union when the bipartisan applause stopped, president truman said, i am happy to report to the 81st congress that the state of the union is good. Our nation is better able than ever before to meet the needs of the American People and to give them their fair chance in the pursuit of happiness. It is foremost among the nations of the world in the search for peace. Today that freshman member from michigan stands where mr. Truman stood. And i must say to you, that the state of the union is not good. Millions of merns are out of work recession and inflation are eroding the money of millions more, prices are too high and sales are too slow. This years federal deficit will be about 30 billion. Next years probably 45 billion. The National Debt will rise to over 500 billion. Our plant capacity and productivity are not increasing fast enough. We depend on others for essential energy. Some people question their governments ability to make hard decisions and stick with them. They expect washington politics as usual. Yet what president truman said on january 5, 1949 is even more true in 1975. We are better able to meet our peoples needs. All americans do have a fair chance to pursuit happiness. Not only are we still the foremost nation in the pursuit of peace but todays prospects of attaining it are infinitely brighter. There were 59 million americans employed at the start of 1949. Now there are more than 85 million americans who have jobs. In comparable dollars the average income of the American Family has doubled during the past 26 years. Now i want to speak very bluntly. Ive got bad news. And i dont expect much, if any, applause. The American People want action and it will take both the congress and the president to give them what they want. Mrk applause ] progress and solutions can be achieved and they will be achieved. My message today is not intended to address all of the complex needs of america. I will send separate messages making specific recommendations for domestic legislation. Such as the extension of general revenue sharing and the Voting Rights act. The moment has come to move in a new direction. We can do this by fashioning a new partnership between the congress on the one hand, the white house on the other and the people we both represent. Let us mobilize the most powerful and the most creative industrial nation that ever existed on this earth to put all our people to work. The emphasis on our economic efforts must now shift from inflation to jobs. To bolster business and industry and to create new jobs, i propose a oneyear tax reduction of 16 billion. Threequarters would go to individuals and onequarter to promote business investment. This cash rebate to individuals amounts to 12 of 1974 tax payments. A total cut of 12 billion. With a maximum of 1,000 per return. I call on the congress to act by april 1st. If you do, and i hope you will, the treasury can send the first check for half the rebate in may and the second by september. The other onefourth of the cut, about 4 billion will go to business including farms to proceed moss expansion and to create more jobs. The oneyear reduction for businesses would be in the form of a liberalized investment tax credit. Increasing the rate to 12 for all business. This tax cut does not include the more fundamental reforms needed in our tax system but it points us in the right direction. Allowing taxpayers rather than the government to spend their pay. Cutting taxes now is essential if we are to turn the economy around. A tax cut offers the best hope of creating more jobs. Unfortunately, it will increase the size of the budget deficit. Therefore, it is more important than ever that we take steps to control the growth of federal expenditures. Part of our trouble is that we have been selfindulgent. For decades we have been voting ever increasing levels of government benefits. And now the bill has come due. We have been adding so many new programs that the size and the growth of the federal budget has taken on a life of its own. One characteristic of these programs is that their Cost Increases automatically every year because the number of people eligible for most of the benefits increases every year. When these programs were enacted, theres no dollar amount set. No one knows what they will cost. All we know is that whatever they cost last year they will cost more this year. Its a simple arithmetic. Unless we check the excessive growth of federal expenditures or impose on ourselves matching increasing in taxes, we will continue to run huge inflationary deficits in the federal budget. If we project the current builtin of federal spending through the next 15 years, state, federal and local government expenditures could easily comprise half of our Gross National product. This compares with less than a third in 1975. Ive just concluded the process of preparing the budget submissions for fiscal year 1976. In that budget, i will propose legislation to growth of a number of existing programs. I have also concluded that no new spending programs can be initiated this year except for energy. Further, i will not hesitate to veto any new spending programs adopted by the congress. As an additional step toward putting the federal governments federal pay in 1975. In all Government Programs tied to the Consumer Price index, including social security, Civil Service and military retirement pay and food stamps, i also propose a oneyear maximum increase of 5 . None of these recommended ceiling limitations over which congress has final authority because they involve anticipated payments to many many deserving people. Nonetheless, it must be done. I must emphasize that im not asking to eliminate reduce freeze these payments. Im merely recommending that we slow down the rate at which these payments increase and these programs grow. Only a reduction in the growth of spending can keep federal borrowing down. And reduce the damage to the private sector from high interest rates. Only a reduction in spending can make it possible for the Federal Reserve system to avoid an inflationary growth in the money supply and, thus, restore balance to our economy. A major reduction in the growth of federal spending can help dispel the uncertainty that so many feel about our economy. And put us on the way to curing our economic ills. If we dont act to slow down the rate of increase in federal spending, the United States treasury will be legally obligated to spend more than 360 billion in fiscal year 1976. Even if no new programs are enacted. These are not matters of conjecture or prediction but simple arithmetic. The size of these numbers and their implications for our everyday life and the health of our Economic System are shocking. I committed to the last congress a list of budget referrals and decisions. There will be more cuts recommended in the budget i will submit. Even so, the level of outlays for fiscal year 1976 is still much, much too high. Not only is it too high for this year, but the decisions we make now will inevitably have a major and growing impact on expenditure levels in future years. I think this is a very fundamental issue. That we the congress and i, must jointly solve. Economic disruptions we and others are experiencing stems in part from the fact that the world price of petroleum has quadrupled in the last year. But in all honesty we cannot put all of the blame on the oil exporting nations. We, the United States, are not blameless. Our growing dependence on foreign sources has been adding to our vulnerability. For years and years. And we did nothing to prepare ourselves for such an event as the embargo of 1973. During the 1960s this country had a surplus capacity of crude oil, which we were able to make available to our trading partners whenever there was a disruption of supply. This surplus capacity enabled us to influence both supplies and prices of crude oil throughout the world. Our excess capacity neutralized any effort at establishing an effective cartel. Thus, the rest of the world was assured of adequate supplies of oil at reasonable prices. By 1970 our capacity, our surplus capacity had vanished. As a consequence latent power of the oil cartel could emerge in full force. Europe and japan both heavily dependent on imported oil. Now struggle to keep their economics or economies in balance. Even the yashgts our country which is far more selfsufficient than most other industrial countries has been put under serious pressure. I am proposing a program which will begin to restore our countrys surplus capacity in total energy. In this way, we will be able to assure ourselves reliable and adequate energy and help foster a new world Energy Stability for other major consuming nations. But this nation and in fact, the world must face the prospect of energy difficults between now and 1985. This program will impose burdens on all of us. With the aim of reducing our consumption of energy and increasing our production. Great attention has been paid to the considerations of fairness. And i can assure you that the burdens will not fall more harshly on those less able to bear them. Im recommending a plan to make us invulnerable to cutoffs of foreign oil. It will require sacrifices, but it and this is important it will work. Ive set the following National Energy goals to assure that our future is as secure and as productive as our past. First, we must reduce oil imports by 1 Million Barrels per day by the end of this year and by 2 Million Barrels per day by the end of 1977. Second we must end vulnerability to economic disruption by foreign suppliers by 1985. Third, we must develop our Energy Technology and resources so that the United States has the ability to supply a significant share of the energy needs of the free world by the end of this century. To attain these objectives we need immediate action to cut imports. Unfortunately, in the short term, there are only a limited number of actions which can increase domestic supply. I will press for all of them. I urge quick action on the necessary legislation to allow commercial production at the elks hill, california, Naval Petroleum reserve. [ applause ] in order we make greater use of domestic coal resources, i am submitting amend, to the Energy Supply and environmental Coordination Act which will greatly increase the number of power plants that can be promptly converted to coal. Obviously, voluntary conservation needs to be essential but tougher programs are needed and needed now. Therefore, i am using president ial powers to raise the fee on all imported crude oil and petroleum products. Crude oil fee levels will be increased 1 per barrel on february 1st by 2 per barrel on march 1st and by 3 per barrel on april 1st. I will take actions to reduce undue hardships on any geographical region. We the will be rescinded when the broader but necessary legislation is enacted. So that end i am requesting the congress to act within 90 days on a more comprehensive energy tax program. It includes excise taxes and import fees totaling 2 per barrel, on product imports and on all crude oil. Deregulation of new natural gas and enactment of a natural gas excise tax. I plan to take president ial initiative to decontrol the price of Domestic Crude Oil on april 1st. I urge the congress to enact a windfall profits tax by that date to ensure that Oil Producers do not profit unduly. [ applause ] the sooner congress acts, the more effective the Oil Conservation program will be and the quicker the federal revenues can be returned to our people. I am prepared to use president ial authority to limit imports as necessary to guarantee success. I want you to know that before deciding on my energy Conservation Program, i considered rationing and higher gasoline taxes as alternatives. In my judgment neither would achieve the desired results and both would produce unacceptable inequityies inequities. A massive program must be initiated to increase Energy Supply, to cut demand and provide new standby emergency programs. To achieve the independence we want by 1985. The largest part of increased Oil Production must come from new frontier areas from the outer Continental Shelf and Naval Reserve number 4 in alaska. It is the intent of this administration to move ahead with exploration, leasing and production on those frontier areas of the outer Continental Shelf where the environmental risks are acceptable. Use of our most abundant domestic resource, coal, is severely limited. We must strike a reasonable compromise on Environmental Concerns with coal. I am submitting clean air amendments, which will allow greater coal use without sacrificing clean air goals. I vetoed the strip mining legislation passed by the last congress. With appropriate changes, i will sign a revised version when it comes to the white house. I am proposing a number of actions to energize our Nuclear Power program. I expedite nuclear leasing and the rapid sites. In recent months ulgss have canceled or postponed over 60 of planned Nuclear Expansion and 30 of planned additions to nonnuclear capacity. Financing problems for that industry are worsening. I am, therefore recommending that the oneyear investment tax credit of 12 be extended an additional two years to specifically speed the construction of power plants that do not use natural gas or oil. Im also submitting proposals for selective reform of state utility regulation commissions to provide the critical stability for our Domestic Energy production in the face of world price uncertainty, i will request legislation to authorize and require, authorize and require tariffs, import quotas or price floors to protect our Energy Prices at levels which will achieve Energy Independence independence. Increasing Energy Supplies is not enough. We must take additional steps to cut longterm consumption. I, therefore, propose to the Congress Legislation to make thermal efficiency standards mandatory for all New Buildings in the United States. A new tax credit of up to 150 for those homeowners who install insulation equipment. The establishment of an energy Conservation Program to help lowincome families purchase insulation supplies. Legislation to modify and defer automotive pollution standards for five years. Which will enable us to improve automobile gas mileage by 40 by 1980. These proposals and actions, cumulatively, can reduce our dependence on Foreign Energy splice to 3 to 5 billion Barrels Per Day by 1985. To make the United States invulnerable to foreign i propose standby emergency legislation and a Strategic Storage program of 1 billion barrels of oil for domestic needs. And 300 Million Barrels for National Defense purposes. I will ask for the funds needed for Energy Research and development activities. I will establish a goal of 1 Million Barrels of Synthetic Fuels and shale Oil Production per day by 1985 together with an Incentive Program to achieve it. I have a very deep belief in americas capabilities. Within the next ten years, my program envisions 200 major Nuclear Power plants, 250 major new coal mines, 150 major fired or co