We live in a time of transition, an uneasy era which is likely to endure for the rest of this century. During the period we may be tempted to abandon some of the time-honored principles and commitments which have been proven during the difficult times of past generations. We must never yield to this temptation. Our American values are not luxuries, but necessities— not the salt in our bread, but the bread itself.

Another thing that occurs is for a family that stays intact when the father shifts from a State where his family gets welfare assistance to one where he doesn't get many of the programs to aid him and his family, for instance, a father--and this happens to be Wisconsin--who is working full time at the minimum wage, after he pays his taxes and draws tax credits for earned income and receives food stamps, has an income of $5,691, working full time. If that father quit his full-time job and took a half-time job at the same wage scale, minimum wage, his income would jump almost $3,000, a little more than $3,000--$1,300 to $6,940. This is another defect in the hodgepodge welfare system that runs counter to the basic commitment of American people that work on a full-time basis--for those who are able to work--is beneficial, ought to be beneficial to a family. Another thing that happens in the welfare system is that those who are working and receiving benefits, if their income should increase, either to more hours per week, or to a higher wage scale, is quite often counterproductive, and it doesn't take a working person, adult, long to figure out that an increased effort pays no dividends.' For instance, for a family head who again is earning the minimum wage, if they got an increase in income of $100, they would lose--this is kind of an average for the whole Nation--they would lose $66.67 in AFDC payments! The earned income tax credit--they would lose $10; food stamps--they would lose $9.90; housing assistance, where that is paid, lose $8.25. So, they would lose, out of the $100 increase in check, salary, $94.82, which means that they would have a net reward of only $5 out of an increase in earnings of $100. So, you can see there's very little incentive to work your way off welfare. I might point out that the legislative leaders, particularly Congressman Ullman and Senator Long, have been through these proposals with us the last time this morning. And this is going to require a very close working relationship with the committees involved. It's one of those long-standing needs in the Federal Government that has not yet been addressed, and comprehensive welfare reform is long overdue. I think we have an excellent chance to meet all the principles and goals that we've described here. We will meet the time schedule to present to the Congress the complete legislative package by the first part of August.

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I want to mention now a subject that's important to me and to you. I've worked with many of your members trying to overcome the very great difficulties of simply getting free American people registered to vote. We need to open up our electoral system to greater participation. Many working people don't vote because they don't have the time to go through lengthy and needless registration procedures. Vice President Mondale and I have worked out legislation that would let people register at the polls on the day of a Federal election. There are some powerful, special interests, including the Republican Party, who are trying to kill the electoral reform bill because they don't want working people to register and to vote. I need you to help me get this bill passed through Congress. And we need to create an agency for consumer protection. Now in Government, many of the regulatory agencies that were designed originally to protect consumers have been seduced, and now they protect the industry that's supposed to be regulated. This needs to be changed. This bill would consolidate consumer advocacy programs that are now scattered ineffectively throughout the maze of Federal agencies. It would just give consumers a voice in Government offices where, too often, the only voices heard have been those of lobbyists for the wealthy and powerful. Now, there are enormous pressures to kill this legislation creating this new consumer agency. I want to make sure that they don't get away with it. The UAW has long supported the consumer agency and easy registration procedures to vote. Together, I believe we can get both these measures passed this year. We must also make government more efficient, because we don't have the money to waste on inefficiency, on duplication, or to give handouts to those who can take care of themselves. Waste robs us all. It prevents the realization of our hopes and dreams. An efficient government means spending money only where it will actually benefit our people. We've proposed a $350-million increase in the Title I education funds for poor and deprived little children. We've proposed raising the basic opportunity grants from $1,400 to $1,800 a year, to help families put their children through college. But when spending is wasteful--when spending is wasteful--we've moved vigorously to cut it out. We found $4 billion in water projects that simply couldn't be justified or were more expensive or elaborate than they needed to be. We are moving to get rid of some of the more than 1,100 advisory commissions in the Federal Government. We are instituting zero-based budgeting, and we are supporting sunset legislation to help us get rid of programs that have outlived their usefulness. The more money that we can save that's now being wasted, the more money we'll have without increasing taxes to meet the needs of our people. We've also begun a complete reorganization of the executive branch, and we are starting at home in the Executive Office of the President. Now, I believe that we can be fiscally responsible and still satisfy the needs of our people. And I believe that we cannot satisfy our needs unless we are competent and efficient. We can cut both unemployment and inflation. And I believe that our policies will help us reach both goals.

Also, we need tax reduction and tax reform. They go together. They add up to $25 billion in net cuts in the income taxes Americans have to pay, and they are also designed to create an additional 1 million new jobs. Seventeen billion dollars of this tax cut will be for working families in our country, personal income tax reductions, and the rest in corporate tax reductions. Corporations will also receive higher tax credits for investing in the sort of new plants, new equipment that will make New England and the rest of the Nation competitive with aggressive foreign exports. But we can't have these cuts in taxes unless we help pay for them by eliminating some of our unnecessary and unwarranted income tax subsidies. Two of these are the deferral subsidy and the DISC subsidies. Both have a particularly bad effect in New England, where competition from abroad has had such a terrible effect on businessmen and on workers alike. The deferral subsidy sets a situation in effect where multilateral corporations pay lower taxes on foreign profits than they pay on their U.S. profits. This amounts to subsidizing corporations to export jobs overseas. The so-called DISC subsidies are just as bad. They let U.S. corporations set up dummy corporations to handle foreign exports, so as to keep from paying U.S. taxes on half their profits. Both these giveaways go overwhelmingly to a few of the largest multinational corporations, and both mean that the average taxpayer has to pay the bill, more taxes, just to take up the slack caused by these subsidies. And both cost America, and particularly New England, jobs. Both loopholes should be closed. As for the famous three-martini lunch, I don't care how many martinis anyone has with lunch, but I am concerned about who picks up the check. I don't think a relatively small minority has some sort of divine right to have expensive meals, free theater tickets, country club dues, sporting events tickets paid for by heavier taxes on everybody else. If the Congress will help me by getting rid of these tax loopholes and by enacting the entire economic program, we can have a good start on correcting unemployment and inflation. The economy won't turn around overnight, of course, any more than an ocean liner can turn around on a dime. The job will require slow, careful planning, not dramatic master strokes. It will require small corrections, of course, that we adhere to very patiently. It will require careful planning, careful adjustment, careful tuning and cooperation. The machinery of the American economy is sound. We have a lot to be thankful for. It's worked well despite severe shocks, but it can work better, and that's our major goal in this country this year.

Yes, I would object to that. I don't have any objection to any analysis of the question, but I think my own statement and the statement of all the leaders of our country that whatever Puerto Rico'<nowiki/>s people want t° do is acceptable to me. If the Puerto Rican people want to be a commonwealth, I will support it. If the Puerto Rican people want to be a State, I will support it. If the Puerto Rican people want to be an independent nation, I would support it.

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I want to add just a couple of more points. Then I'll be through. We are concerned about the rebuilding of American urban centers. I won't cover what Patricia Harris is going to cover in her speech, but we've asked for $5 billion increase in budget authority and proposed new formulae to focus this attention where it's needed most. In housing we are increasing Title VIII sections of housing, reviving the 202 housing programs for elderly people. We've proposed an extension of $200 million in separate funding for private day care services, and action by both Houses of Congress is quite near. And we recently proposed major reforms in the foster care system to permit more easily approved adoptions and to hold families, again, together. I could go on and on, because the list of programs is very long and the amount of money involved is very great, and the eagerness to implement these programs by me and the Democratic Congress is there and the Cabinet officers and administrators contains an attitude not of holding back what Congress has approved, as has been the case too often in the past, but an eagerness to put into effect these programs completely and without delay.

Now I want to discuss something that's important to you and me both--our social security system. This is a problem for all Western democracies. Social security, which is probably the greatest legacy left over for us from the New Deal, has served us now for 40 years. But since 1975, social security has been paying out more than it's been taking in. Unless we take action now, the Disability Insurance Fund's reserves will be gone in 2 years, and the retirement reserves will be gone 4 years from then. Some have proposed a simple solution for this: to tax the American worker to the hilt. Well, we are not going to do that. Too many people are already paying more payroll taxes than they do income taxes, and we are not going to go this route to save the social security system. And we are not going to let social security go broke. We're going to keep faith with the 33 million Americans who already enjoy social security benefits and with the 104 million of us, who are paying into the social security system with the expectation that we will receive benefits when we retire, or when we become disabled, or those that are necessary to take care of our families if something happens to us. Now, there's no easy answer, but the changes that I have already submitted to the Congress will make social security financially sound for the rest of the century and will correct most of the problems for the next 75 years--and without a higher tax rate than already scheduled by law for the average wage earner. I'm going to need your help in Congress to get this bill passed, and I hope you'll help me with it.

For me personally and for most other Americans, this commitment to peace and diplomacy does not imply a blind or total pacifism. There are times when war is justified, and for many centuries the moral criteria for violence have been carefully delineated.

Today we are asking our political system to do things of which the founding fathers never dreamed. The government they designed for a few hundred thousand people now serves a nation of almost 230 million people. Their small coastal republic now spans beyond a continent, and we now have the responsibility to help lead much of the world through difficult times to a secure and prosperous future. Today, as people have become ever more doubtful of the ability of the government to deal with our problems, we are increasingly drawn to single-issue groups and special interest organizations to ensure that whatever else happens our own personal views and our own private interests are protected. This is a disturbing factor in American political life. It tends to distort our purposes because the national interest is not always the sum of all our single or special interests. We are all Americans together — and we must not forget that the common good is our common interest and our individual responsibility.

Thomas Jefferson, in the original days of our country, said he was fearful that the church might influence the state to take away human liberty. Roger Williams, who created the first Baptist church in America, was afraid that the church might be corrupted by the state. These concerns led to our Constitution’s First Amendment, which prohibits the establishment of any official state religion and, in the same sentence, prohibits the passing of any laws that might interfere with religious freedom.