Mr. Speaker, Mr. President, Members of the Congress, and my fellow
Americans:

I was thinking as I was walking down the aisle tonight of what Sam Rayburn
told me many years ago: The Congress always extends a very warm welcome to
the President--as he comes in.

Thank all of you very, very much.

I have come once again to this Chamber--the home of our democracy--to give
you, as the Constitution requires, "Information of the State of the
Union."

I report to you that our country is challenged, at home and abroad:

--that it is our will that is being tried, not our strength; our sense of
purpose, not our ability to achieve a better America;

--that we have the strength to meet our every challenge; the physical
strength to hold the course of decency and compassion at home; and the
moral strength to support the cause of peace in the world.

And I report to you that I believe, with abiding conviction, that this
people--nurtured by their deep faith, tutored by their hard lessons, moved
by their high aspirations--have the will to meet the trials that these times
impose.

Since I reported to you last January:

--Three elections have been held in Vietnam--in the midst of war and under
the constant threat of violence.

--A President, a Vice President, a House and Senate, and village officials
have been chosen by popular, contested ballot.

--The enemy has been defeated in battle after battle.

--The number of South Vietnamese living in areas under Government
protection tonight has grown by more than a million since January of last
year.

These are all marks of progress. Yet:

--The enemy continues to pour men and material across frontiers and into
battle, despite his continuous heavy losses.

--He continues to hope that America's will to persevere can be broken.
Well--he is wrong. America will persevere. Our patience and our
perseverance will match our power. Aggression will never prevail.

But our goal is peace--and peace at the earliest possible moment.

Right now we are exploring the meaning of Hanoi's recent statement. There
is no mystery about the questions which must be answered before the bombing
is stopped.

We believe that any talks should follow the San Antonio formula that I
stated last September, which said:

--The bombing would stop immediately if talks would take place promptly and
with reasonable hopes that they would be productive.

--And the other side must not take advantage of our restraint as they have
in the past. This Nation simply cannot accept anything less without
jeopardizing the lives of our men and of our allies.

If a basis for peace talks can be established on the San Antonio
foundations--and it is my hope and my prayer that they can--we would
consult with our allies and with the other side to see if a complete
cessation of hostilities--a really true cease-fire--could be made the first
order of business. I will report at the earliest possible moment the
results of these explorations to the American people.

I have just recently returned from a very fruitful visit and talks with His
Holiness the Pope and I share his hope--as he expressed it earlier
today--that both sides will extend themselves in an effort to bring an end
to the war in Vietnam. I have today assured him that we and our allies will
do our full part to bring this about.

Since I spoke to you last January, other events have occurred that have
major consequences for world peace.

--The Kennedy Round achieved the greatest reduction in tariff barriers in
all the history of trade negotiations.

--The nations of Latin America at Punta del Este resolved to move toward
economic integration.

--In Asia, the nations from Korea and Japan to Indonesia and Singapore
worked behind America's shield to strengthen their economies and to broaden
their political cooperation.

--In Africa, from which the distinguished Vice President has just returned,
he reports to me that there is a spirit of regional cooperation that is
beginning to take hold in very practical ways.

These events we all welcomed. Yet since I last reported to you, we and the
world have been confronted by a number of crises:

--During the Arab-Israeli war last June, the hot line between Washington
and Moscow was used for the first time in our history. A cease-fire was
achieved without a major power confrontation.

Now the nations of the Middle East have the opportunity to cooperate with
Ambassador Jarring's U.N. mission and they have the responsibility to find
the terms of living together in stable peace and dignity, and we shall do
all in our power to help them achieve that result.

--Not far from this scene of conflict, a crisis flared on Cyprus involving
two peoples who are America's friends: Greece and Turkey. Our very able
representative, Mr. Cyrus Vance, and others helped to ease this tension.

--Turmoil continues on the mainland of China after a year of violent
disruption. The radical extremism of their Government has isolated the
Chinese people behind their own borders. The United States, however,
remains willing to permit the travel of journalists to both our countries;
to undertake cultural and educational exchanges; and to talk about the
exchange of basic food crop materials.

Since I spoke to you last, the United States and the Soviet Union have
taken several important steps toward the goal of international
cooperation.

As you will remember, I met with Chairman Kosygin at Glassboro and we
achieved if not accord, at least a clearer understanding of our respective
positions after 2 days of meeting.

Because we believe the nuclear danger must be narrowed, we have worked with
the Soviet Union and with other nations to reach an agreement that will
halt the spread of nuclear weapons. On the basis of communications from
Ambassador Fisher in Geneva this afternoon, I am encouraged to believe that
a draft treaty can be laid before the conference in Geneva in the very near
future. I hope to be able to present that treaty to the Senate this year
for the Senate's approval.

We achieved, in 1967, a consular treaty with the Soviets, the first
commercial air agreement between the two countries, and a treaty banning
weapons in outer space. We shall sign, and submit to the Senate shortly, a
new treaty with the Soviets and with others for the protection of
astronauts.

Serious differences still remain between us, yet in these relations, we
have made some progress since Vienna, the Berlin Wall, and the Cuban
missile crisis.

But despite this progress, we must maintain a military force that is
capable of deterring any threat to this Nation's security, whatever the
mode of aggression. Our choices must not be confined to total war--or to
total acquiescence.

We have such a military force today. We shall maintain it.

I wish--with all of my heart--that the expenditures that are necessary to
build and to protect our power could all be devoted to the programs of
peace. But until world conditions permit, and until peace is assured,
America's might--and America's bravest sons who wear our Nation's
uniform--must continue to stand guard for all of us--as they gallantly do
tonight in Vietnam and other places in the world.

Yet neither great weapons nor individual courage can provide the conditions
of peace.

For two decades America has committed itself against the tyranny of want
and ignorance in the world that threatens the peace. We shall sustain that
commitment. This year I shall propose:

--That we launch, with other nations, an exploration of the ocean depths to
tap its wealth, and its energy, and its abundance.

--That we contribute our fair share to a major expansion of the
International Development Association, and to increase the resources of the
Asian Development Bank.

--That we adopt a prudent aid program, rooted in the principle of
self-help.

--That we renew and extend the food for freedom program.

Our food programs have already helped millions avoid the horrors of
famine.

But unless the rapid growth of population in developing countries is
slowed, the gap between rich and poor will widen steadily.

Governments in the developing countries must take such facts into
consideration. We in the United States are prepared to help assist them in
those efforts.

But we must also improve the lives of children already born in the villages
and towns and cities on this earth. They can be taught by great teachers
through space communications and the miracle of satellite television--and we
are going to bring to bear every resource of mind and technology to help
make this dream come true.

Let me speak now about some matters here at home.

Tonight our Nation is accomplishing more for its people than has ever been
accomplished before. Americans are prosperous as men have never been in
recorded history. Yet there is in the land a certain restlessness--a
questioning.

The total of our Nation's annual production is now above $800 billion. For
83 months this Nation has been on a steady upward trend of growth.

All about them, most American families can see the evidence of growing
abundance: higher paychecks, humming factories, new cars moving down new
highways. More and more families own their own homes, equipped with more
than 70 million television sets.

A new college is founded every week. Today more than half of the high
school graduates go on to college.

There are hundreds of thousands of fathers and mothers who never completed
grammar school--who will see their children graduate from college.

Why, then, this restlessness?

Because when a great ship cuts through the sea, the waters are always
stirred and troubled.

And our ship is moving. It is moving through troubled and new waters; it is
moving toward new and better shores.

We ask now, not how can we achieve abundance?--but how shall we use our
abundance? Not, is there abundance enough for all?--but, how can all share
in our abundance?

While we have accomplished much, much remains for us to meet and much
remains for us to master.

--In some areas, the jobless rate is still three or four times the national
average.

--Violence has shown its face in some of our cities.

--Crime increases on our streets.

--Income for farm workers remains far behind that for urban workers; and
parity for our farmers who produce our food is still just a hope--not an
achievement.

--New housing construction is far less than we need--to assure decent
shelter for every family.

--Hospital and medical costs are high, and they are rising.

--Many rivers--and the air in many cities--remain badly polluted. And our
citizens suffer from breathing that air.

We have lived with conditions like these for many, many years. But much
that we once accepted as inevitable, we now find absolutely intolerable.

In our cities last summer, we saw how wide is the gulf for some Americans
between the promise and the reality of our society.

We know that we cannot change all of this in a day. It represents the
bitter consequences of more than three centuries.

But the issue is not whether we can change this; the issue is whether we
will change this.

Well, I know we can. And I believe we will.

This then is the work we should do in the months that are ahead of us in
this Congress.

The first essential is more jobs, useful jobs for tens of thousands who can
become productive and can pay their own way.

Our economy has created 7 1/2 million new jobs in the past 4 years. It is
adding more than a million and a half new jobs this year.

Through programs passed by the Congress, job training is being given
tonight to more than a million Americans in this country.

This year, the time has come when we must get to those who are last in
line--the hard-core unemployed--the hardest to reach.

Employment officials estimate that 500,000 of these persons are now
unemployed in the major cities of America. Our objective is to place these
500,000 in private industry jobs within the next 3 years.

To do this, I propose a $2. 1 billion manpower program in the coming fiscal
year--a 25 percent increase over the current year. Most of this increase
will be used to start a new partnership between government and private
industry to train and to hire the hard-core unemployed persons. I know of
no task before us of more importance to us, to the country, or to our
future.

Another essential is to rebuild our cities.

Last year the Congress authorized $662 million for the Model Cities
program. I requested the full amount of that authorization to help meet the
crisis in the cities of America. But the Congress appropriated only $312
million--less than half.

This year I urge the Congress to honor my request for model cities funds to
rebuild the centers of American cities by granting us the full amount that
you in the Congress authorized--$1 billion.

The next essential is more housing--and more housing now.

Surely a nation that can go to the moon can place a decent home within the
reach of its families.

Therefore we must call together the resources of industry and labor, to
start building 300,000 housing units for low- and middle-income families
next year--that is three times more than this year. We must make it
possible for thousands of families to become homeowners, not rent-payers.

I propose, for the consideration of this Congress, a 10-year campaign to
build 6 million new housing units for low and middle-income families. Six
million units in the next 10 years. We have built 530,000 the last 10
years.

Better health for our children--all of our children--is essential if we are
to have a better America.

Last year, Medicare, Medicaid, and other new programs that you passed in
the Congress brought better health to more than 25 million Americans.

American medicine--with the very strong support and cooperation of public
resources--has produced a phenomenal decline in the death rate from many of
the dread diseases.

But it is a shocking fact that, in saving the lives of babies, America
ranks 15th among the nations of the world. And among children, crippling
defects are often discovered too late for any corrective action. This is a
tragedy that Americans can, and Americans should, prevent.

I shall, therefore, propose to the Congress a child health program to
provide, over the next 5 years, for families unable to afford it--access to
health services from prenatal care of the mother through the child's first
year.

When we do that you will find it is the best investment we ever made
because we will get these diseases in their infancy and we will find a cure
in a great many instances that we can never find by overcrowding our
hospitals when they are grown.

Now when we act to advance the consumer's cause I think we help every
American.

Last year, with very little fanfare the Congress and the executive branch
moved in that field.

We enacted the Wholesome Meat Act, the Flammable Fabrics Act, the Product
Safety Commission, and a law to improve clinical laboratories.

And now, I think, the time has come to complete our unfinished work. The
Senate has already passed the truth-in-lending bill, the fire safety bill,
and the pipeline safety laws.

Tonight I plead with the House to immediately act upon these measures and I
hope take favorable action upon all of them. I call upon the Congress to
enact, without delay, the remainder of the 12 vital consumer protection
laws that I submitted to the Congress last year.

I also urge final action on a measure that is already passed by the House
to guard against fraud and manipulation in the Nation's commodity exchange
market.

These measures are a pledge to our people--to keep them safe in their homes
and at work, and to give them a fair deal in the marketplace.

And I think we must do more. I propose:

--New powers for the Federal Trade Commission to stop those who defraud and
who swindle our public.

--New safeguards to insure the quality of fish and poultry, and the safety
of our community water supplies.

--A major study of automobile insurance.

--Protection against hazardous radiation from television sets and other
electronic equipment.

And to give the consumer a stronger voice, I plan to appoint a consumer
counsel in the Justice Department--a lawyer for the American consumer--to
work directly under the Attorney General, to serve the President's Special
Assistant for Consumer Affairs, and to serve the consumers of this land.

This Congress--Democrats and Republicans--can earn the thanks of history.
We can make this truly a new day for the American consumer, and by giving
him this protection we can live in history as the consumer-conscious
Congress.

So let us get on with the work. Let us act soon.

We, at every level of the government, State, local, Federal, know that the
American people have had enough of rising crime and lawlessness in this
country.

They recognize that law enforcement is first the duty of local police and
local government.

They recognize that the frontline headquarters against crime is in the
home, the church, the city hall and the county courthouse and the
statehouse--not in the far-removed National Capital of Washington.

But the people also recognize that the National Government can and the
National Government should help the cities and the States in their war on
crime to the full extent of its resources and its constitutional authority.
And this we shall do.

This does not mean a national police force. It does mean help and financial
support:

--to develop State and local master plans to combat crime,

--to provide better training and better pay for police, and

--to bring the most advanced technology to the war on crime in every city
and every county in America.

There is no more urgent business before this Congress than to pass the Safe
Streets Act this year that I proposed last year. That law will provide
these required funds. They are so critically needed that I have doubled my
request under this act to $100 million in fiscal 1969.

And I urge the Congress to stop the trade in mail-order murder, to stop it
this year by adopting a proper gun control law.

This year, I will propose a Drug Control Act to provide stricter penalties
for those who traffic in LSD and other dangerous drugs with our people.

I will ask for more vigorous enforcement of all of our drug laws by
increasing the number of Federal drug and narcotics control officials by
more than 30 percent. The time has come to stop the sale of slavery to the
young. I also request you to give us funds to add immediately 100 assistant
United States attorneys throughout the land to help prosecute our criminal
laws. We have increased our judiciary by 40 percent and we have increased
our prosecutors by 16 percent. The dockets are full of cases because we
don't have assistant district attorneys to go before the Federal judge and
handle them. We start these young lawyers at $8,200 a year. And the docket
is clogged because we don't have authority to hire more of them.

I ask the Congress for authority to hire 100 more. These young men will
give special attention to this drug abuse, too.

Finally, I ask you to add 100 FBI agents to strengthen law enforcement in
the Nation and to protect the individual rights of every citizen.

A moment ago I spoke of despair and frustrated hopes in the cities where
the fires of disorder burned last summer. We can--and in time we
will--change that despair into confidence, and change those frustrations
into achievements. But violence will never bring progress.

We can make progress only by attacking the causes of violence and only
where there is civil order founded on justice.

Today we are helping local officials improve their capacity to deal
promptly with disorders.

Those who preach disorder and those who preach violence must know that
local authorities are able to resist them swiftly, to resist them sternly,
and to resist them decisively.

I shall recommend other actions:

--To raise the farmers' income by establishing a security commodity reserve
that will protect the market from price-depressing stocks and protect the
consumer from food scarcity.

--I shall recommend programs to help farmers bargain more effectively for
fair prices.

--I shall recommend programs for new air safety measures.

--Measures to stem the rising costs of medical care.

--Legislation to encourage our returning veterans to devote themselves to
careers in community service such as teaching, and being firemen, and
joining our police force, and our law enforcement officials.

--I shall recommend programs to strengthen and finance our anti-pollution
efforts.

--Fully funding all of the $2.18 billion poverty program that you in the
Congress had just authorized in order to bring opportunity to those who
have been left far behind.

--I shall recommend an Educational Opportunity Act to speed up our drive to
break down the financial barriers that are separating our young people from
college.

I shall also urge the Congress to act on several other vital pending
bills--especially the civil rights measures--fair jury trials, protection
of Federal rights, enforcement of equal employment opportunity, and fair
housing.

The unfinished work of the first session must be completed--the Higher
Education Act, the Juvenile Delinquency Act, conservation measures to save
the redwoods of California, and to preserve the wonders of our scenic
rivers, the Highway Beautification Act--and all the other measures for a
cleaner, and for a better, and for a more beautiful America.

Next month we'll begin our 8th year of uninterrupted prosperity. The
economic outlook for this year is one of steady growth--if we are vigilant.

True, there are some clouds on the horizon. Prices are rising. Interest
rates have passed the peak of 1966; and if there is continued inaction on
the tax bill, they will climb even higher.

I warn the Congress and the Nation tonight that this failure to act on the
tax bill will sweep us into an accelerating spiral of price increases, a
slump in homebuilding, and a continuing erosion of the American dollar.

This would be a tragedy for every American family. And I predict that if
this happens, they will all let us know about it.

We--those of us in the executive branch, in the Congress, and the leaders
of labor and business--must do everything we can to prevent that kind of
misfortune.

Under the new budget, the expenditures for 1969 will increase by $10.4
billion. Receipts will increase by $22.3 billion including the added tax
revenues. Virtually all of this expenditure increase represents the
mandatory cost of our defense efforts, $3 billion; increased interest,
almost $1 billion; or mandatory payments under laws passed by
Congress--such as those provided in the Social Security Act that you passed
in 1967, and to Medicare and Medicaid beneficiaries, veterans, and farmers,
of about $4 1/2 billion; and the additional $1 billion 600 million next
year for the pay increases that you passed in military and civilian pay.
That makes up the $10 billion that is added to the budget. With few
exceptions, very few, we are holding the fiscal 1969 budget to last year's
level, outside of those mandatory and required increases.

A Presidential commission composed of distinguished congressional fiscal
leaders and other prominent Americans recommended this year that we adopt a
new budget approach. I am carrying out their recommendations in this year's
budget. This budget, therefore, for the first time accurately covers all
Federal expenditures and all Federal receipts, including for the first time
in one budget $47 billion from the social security, Medicare, highway, and
other trust funds.

The fiscal 1969 budget has expenditures of approximately $186 billion, with
total estimated revenues, including the tax bill, of about $178 billion.

If the Congress enacts the tax increase, we will reduce the budget deficit
by some $12 billion. The war in Vietnam is costing us about $25 billion and
we are asking for about $12 billion in taxes--and if we get that $12
billion tax bill we will reduce the deficit from about $20 billion in 1968
to about $8 billion in 1969.

Now, this is a tight budget. It follows the reduction that I made in
cooperation with the Congress--a reduction made after you had reviewed
every appropriations bill and reduced the appropriations by some $5 or $6
billion and expenditures by $1.5 billion. We conferred together and I
recommended to the Congress and you subsequently approved taking 2 percent
from payrolls and 10 percent from controllable expenditures. We therefore
reduced appropriations almost $10 billion last session and expenditures
over $4 billion. Now, that was in the budget last year.

I ask the Congress to recognize that there are certain selected programs
that meet the Nation's most urgent needs and they have increased. We have
insisted that decreases in very desirable but less urgent programs be made
before we would approve any increases. So I ask the Congress tonight:

--to hold its appropriations to the budget requests, and

--to act responsibly early this year by enacting the tax surcharge which
for the average American individual amounts to about a penny out of each
dollar's income.

This tax increase would yield about half of the $23 billion per year that
we returned to the people in the tax reduction bills of 1964 and 1965.

This must be a temporary measure, which expires in less than 2 years.
Congress can repeal it sooner if the need has passed. But Congress can
never repeal inflation.

The leaders of American business and the leaders of American labor--those
who really have power over wages and prices--must act responsibly, and in
their Nation's interest by keeping increases in line with productivity. If
our recognized leaders do not do this, they and those for whom they speak
and all of us are going to suffer very serious consequences.

On January 1st, I outlined a program to reduce our balance of payments
deficit sharply this year. We will ask the Congress to help carry out those
parts of the program which require legislation. We must restore equilibrium
to our balance of payments.

We must also strengthen the international monetary system. We have assured
the world that America's full gold stock stands behind our commitment to
maintain the price of gold at $35 an ounce. We must back this commitment by
legislating now to free our gold reserves.

Americans, traveling more than any other people in history, took $4 billion
out of their country last year in travel costs. We must try to reduce the
travel deficit that we have of more than $2 billion. We are hoping that we
can reduce it by $500 million--without unduly penalizing the travel of
teachers, students, business people who have essential and necessary
travel, or people who have relatives abroad whom they want to see. Even
with this reduction of $500 million, the American people will still be
traveling more overseas than they did in 1967, 1966, or 1965 or any other
year in their history.

If we act together as I hope we can, I believe we can continue our economic
expansion which has already broken all past records. And I hope that we can
continue that expansion in the days ahead.

Each of these questions I have discussed with you tonight is a question of
policy for our people. Therefore, each of them should be--and doubtless
will be--debated by candidates for public office this year.

I hope those debates will be marked by new proposals and by a seriousness
that matches the gravity of the questions themselves.

These are not appropriate subjects for narrow partisan oratory. They go to
the heart of what we Americans are all about--all of us, Democrats and
Republicans.

Tonight I have spoken of some of the goals I should like to see America
reach. Many of them can be achieved this year--others by the time we
celebrate our Nation's 200th birthday--the bicentennial of our
independence.

Several of these goals are going to be very hard to reach. But the State of
our Union will be much stronger 8 years from now on our 200th birthday if
we resolve to reach these goals now. They are more important--much more
important--than the identity of the party or the President who will then be
in office.

These goals are what the fighting and our alliances are really meant to
protect.

Can we achieve these goals?

Of course we can--if we will.

If ever there was a people who sought more than mere abundance, it is our
people.

If ever there was a nation that was capable of solving its problems, it is
this Nation.

If ever there were a time to know the pride and the excitement and the hope
of being an American--it is this time.

So this, my friends, is the State of our Union: seeking, building, tested
many times in this past year--and always equal to the test.

Thank you and good night.