Mr. Speaker, Mr. President, my colleagues in the Congress, our
distinguished guests, my fellow Americans:

We meet here tonight at a time of great challenge and great opportunities
for America. We meet at a time when we face great problems at home and
abroad that will test the strength of our fiber as a nation. But we also
meet at a time when that fiber has been tested, and it has proved strong.

America is a great and good land, and we are a great and good land because
we are a strong, free, creative people and because America is the single
greatest force for peace anywhere in the world. Today, as always in our
history, we can base our confidence in what the American people will
achieve in the future on the record of what the American people have
achieved in the past.

Tonight, for the first time in 12 years, a President of the United States
can report to the Congress on the state of a Union at peace with every
nation of the world. Because of this, in the 22,000-word message on the
state of the Union that I have just handed to the Speaker of the House and
the President of the Senate, I have been able to deal primarily with the
problems of peace with what we can do here at home in America for the
American people--rather than with the problems of war.

The measures I have outlined in this message set an agenda for truly
significant progress for this Nation and the world in 1974. Before we chart
where we are going, let us see how far we have come.

It was 5 years ago on the steps of this Capitol that I took the oath of
office as your President. In those 5 years, because of the initiatives
undertaken by this Administration, the world has changed. America has
changed. As a result of those changes, America is safer today, more
prosperous today, with greater opportunity for more of its people than ever
before in our history.

Five years ago, America was at war in Southeast Asia. We were locked in
confrontation with the Soviet Union. We were in hostile isolation from a
quarter of the world's people who lived in Mainland China.

Five years ago, our cities were burning and besieged.

Five years ago, our college campuses were a battleground.

Five years ago, crime was increasing at a rate that struck fear across the
Nation.

Five years ago, the spiraling rise in drug addiction was threatening human
and social tragedy of massive proportion, and there was no program to deal
with it.

Five years ago--as young Americans had done for a generation before
that--America's youth still lived under the shadow of the military draft.

Five years ago, there was no national program to preserve our environment.
Day by day, our air was getting dirtier, our water was getting more foul.

And 5 years ago, American agriculture was practically a depressed industry
with 100,000 farm families abandoning the farm every year.

As we look at America today, we find ourselves challenged by new problems.
But we also find a record of progress to confound the professional criers
of doom and prophets of despair. We met the challenges we faced 5 years
ago, and we will be equally confident of meeting those that we face today.

Let us see for a moment how we have met them.

After more than 10 years of military involvement, all of our troops have
returned from Southeast Asia, and they have returned with honor. And we can
be proud of the fact that our courageous prisoners of war, for whom a
dinner was held in Washington tonight, that they came home with their heads
high, on their feet and not on their knees.

In our relations with the Soviet Union, we have turned away from a policy
of confrontation to one of negotiation. For the first time since World War
II, the world's two strongest powers are working together toward peace in
the world. With the People's Republic of China after a generation of
hostile isolation, we have begun a period of peaceful exchange and
expanding trade.

Peace has returned to our cities, to our campuses. The 17-year rise in
crime has been stopped. We can confidently say today that we are finally
beginning to win the war against crime. Right here in this Nation's
Capital--which a few years ago was threatening to become the crime capital
of the world--the rate in crime has been cut in half. A massive campaign
against drug abuse has been organized. And the rate of new heroin
addiction, the most vicious threat of all, is decreasing rather than
increasing.

For the first time in a generation, no young Americans are being drafted
into the armed services of the United States. And for the first time ever,
we have organized a massive national effort to protect the environment. Our
air is getting cleaner, our water is getting purer, and our agriculture,
which was depressed, is prospering. Farm income is up 70 percent, farm
production is setting all-time records, and the billions of dollars the
taxpayers were paying in subsidies has been cut to nearly zero.

Overall, Americans are living more abundantly than ever before, today. More
than 2 1/2 million new jobs were created in the past year alone. That is
the biggest percentage increase in nearly 20 years. People are earning
more. What they earn buys more, more than ever before in history. In the
past 5 years, the average American's real spendable income--that is, what
you really can buy with your income, even after allowing for taxes and
inflation--has increased by 16 percent.

Despite this record of achievement, as we turn to the year ahead we hear
once again the familiar voice of the perennial prophets of gloom telling us
now that because of the need to fight inflation, because of the energy
shortage, America may be headed for a recession.

Let me speak to that issue head on. There will be no recession in the
United States of America. Primarily due to our energy crisis, our economy
is passing through a difficult period. But I pledge to you tonight that the
full powers of this Government will be used to keep America's economy
producing and to protect the jobs of America's workers.

We are engaged in a long and hard fight against inflation. There have been,
and there will be in the future, ups and downs in that fight. But if this
Congress cooperates in our efforts to hold down the cost of Government, we
shall win our fight to hold down the cost of living for the American
people.

As we look back over our history, the years that stand out as the ones of
signal achievement are those in which the Administration and the Congress,
whether one party or the other, working together, had the wisdom and the
foresight to select those particular initiatives for which the Nation was
ready and the moment was right--and in which they seized the moment and
acted.

Looking at the year 1974 which lies before us, there are 10 key areas in
which landmark accomplishments are possible this year in America. If we
make these our national agenda, this is what we will achieve in 1974:

We will break the back of the energy crisis; we will lay the foundation for
our future capacity to meet America's energy needs from America's own
resources.

And we will take another giant stride toward lasting peace in the
world--not only by continuing our policy of negotiation rather than
confrontation where the great powers are concerned but also by helping
toward the achievement of a just and lasting settlement in the Middle
East.

We will check the rise in prices without administering the harsh medicine
of recession, and we will move the economy into a steady period of growth
at a sustainable level.

We will establish a new system that makes high-quality health care
available to every American in a dignified manner and at a price he can
afford.

We will make our States and localities more responsive to the needs of
their own citizens.

We will make a crucial breakthrough toward better transportation in our
towns and in our cities across America.

We will reform our system of Federal aid to education, to provide it when
it is needed, where it is needed, so that it will do the most for those who
need it the most.

We will make an historic beginning on the task of defining and protecting
the right of personal privacy for every American.

And we will start on a new road toward reform of a welfare system that
bleeds the taxpayer, corrodes the community, and demeans those it is
intended to assist.

And together with the other nations of the world, we will establish the
economic framework within which Americans will share more fully in an
expanding worldwide trade and prosperity in the years ahead, with more open
access to both markets and supplies.

In all of the 186 State of the Union messages delivered from this place, in
our history this is the first in which the one priority, the first
priority, is energy. Let me begin by reporting a new development which I
know will be welcome news to every American. As you know, we have committed
ourselves to an active role in helping to achieve a just and durable peace
in the Middle East, on the basis of full implementation of Security Council
Resolutions 242 and 338. The first step in the process is the disengagement
of Egyptian and Israeli forces which is now taking place.

Because of this hopeful development, I can announce tonight that I have
been assured, through my personal contacts with friendly leaders in the
Middle Eastern area, that an urgent meeting will be called in the immediate
future to discuss the lifting of the oil embargo.

This is an encouraging sign. However, it should be clearly understood by
our friends in the Middle East that the United States will not be coerced
on this issue.

Regardless of the outcome of this meeting, the cooperation of the American
people in our energy conservation program has already gone a long way
towards achieving a goal to which I am deeply dedicated. Let us do
everything we can to avoid gasoline rationing in the United States of
America.

Last week, I sent to the Congress a comprehensive special message setting
forth our energy situation, recommending the legislative measures which are
necessary to a program for meeting our needs. If the embargo is lifted,
this will ease the crisis, but it will not mean an end to the energy
shortage in America. Voluntary conservation will continue to be necessary.
And let me take this occasion to pay tribute once again to the splendid
spirit of cooperation the American people have shown which has made
possible our success in meeting this emergency up to this time.

The new legislation I have requested will also remain necessary. Therefore,
I urge again that the energy measures that I have proposed be made the
first priority of this session of the Congress. These measures will require
the oil companies and other energy producers to provide the public with the
necessary information on their supplies. They will prevent the injustice of
windfall profits for a few as a result of the sacrifices of the millions of
Americans. And they will give us the organization, the incentives, the
authorities needed to deal with the short-term emergency and to move toward
meeting our long-term needs.

Just as 1970 was the year in which we began a full-scale effort to protect
the environment, 1974 must be the year in which we organize a full-scale
effort to provide for our energy needs, not only in this decade but through
the 21st century.

As we move toward the celebration 2 years from now of the 200th anniversary
of this Nation's independence, let us press vigorously on toward the goal I
announced last November for Project Independence. Let this be our national
goal: At the end of this decade, in the year 1980, the United States will
not be dependent on any other country for the energy we need to provide our
jobs, to heat our homes, and to keep our transportation moving.

To indicate the size of the Government commitment, to spur energy research
and development, we plan to spend $10 billion in Federal funds over the
next 5 years. That is an enormous amount. But during the same 5 years,
private enterprise will be investing as much as $200 billion--and in 10
years, $500 billion--to develop the new resources, the new technology, the
new capacity America will require for its energy needs in the 1980's. That
is just a measure of the magnitude of the project we are undertaking.

But America performs best when called to its biggest tasks. It can truly be
said that only in America could a task so tremendous be achieved so
quickly, and achieved not by regimentation, but through the effort and
ingenuity of a free people, working in a free system.

Turning now to the rest of the agenda for 1974, the time is at hand this
year to bring comprehensive, high quality health care within the reach of
every American. I shall propose a sweeping new program that will assure
comprehensive health insurance protection to millions of Americans who
cannot now obtain it or afford it, with vastly improved protection against
catastrophic illnesses. This will be a plan that maintains the high
standards of quality in America's health care. And it will not require
additional taxes.

Now, I recognize that other plans have been put forward that would cost $80
billion or even $100 billion and that would put our whole health care
system under the heavy hand of the Federal Government. This is the wrong
approach. This has been tried abroad, and it has failed. It is not the way
we do things here in America. This kind of plan would threaten the quality
of care provided by our whole health care system. The right way is one that
builds on the strengths of the present system and one that does not destroy
those strengths, one based on partnership, not paternalism. Most important
of all, let us keep this as the guiding principle of our health programs.
Government has a great role to play, but we must always make sure that our
doctors will be working for their patients and not for the Federal
Government.

Many of you will recall that in my State of the Union Address 3 years ago,
I commented that "Most Americans today are simply fed up with government at
all levels," and I recommended a sweeping set of proposals to revitalize
State and local governments, to make them more responsive to the people
they serve. I can report to you today that as a result of revenue sharing
passed by the Congress, and other measures, we have made progress toward
that goal. After 40 years of moving power from the States and the
communities to Washington, D.C., we have begun moving power back from
Washington to the States and communities and, most important, to the people
of America.

In this session of the Congress, I believe we are near the breakthrough
point on efforts which I have suggested, proposals to let people themselves
make their own decisions for their own communities and, in particular, on
those to provide broad new flexibility in Federal aid for community
development, for economic development, for education. And I look forward to
working with the Congress, with members of both parties in resolving
whatever remaining differences we have in this legislation so that we can
make available nearly $5 1/2 billion to our States and localities to use
not for what a Federal bureaucrat may want, but for what their own people
in those communities want. The decision should be theirs.

I think all of us recognize that the energy crisis has given new urgency to
the need to improve public transportation, not only in our cities but in
rural areas as well. The program I have proposed this year will give
communities not only more money but also more freedom to balance their own
transportation needs. It will mark the strongest Federal commitment ever to
the improvement of mass transit as an essential element of the improvement
of life in our towns and cities.

One goal on which all Americans agree is that our children should have the
very best education this great Nation can provide.

In a special message last week, I recommended a number of important new
measures that can make 1974 a year of truly significant advances for our
schools and for the children they serve. If the Congress will act on these
proposals, more flexible funding will enable each Federal dollar to meet
better the particular need of each particular school district. Advance
funding will give school authorities a chance to make each year's plans,
knowing ahead of time what Federal funds they are going to receive. Special
targeting will give special help to the truly disadvantaged among our
people. College students faced with rising costs for their education will
be able to draw on an expanded program of loans and grants. These advances
are a needed investment in America's most precious resource, our next
generation. And I urge the Congress to act on this legislation in 1974.

One measure of a truly free society is the vigor with which it protects the
liberties of its individual citizens. As technology has advanced in
America, it has increasingly encroached on one of those liberties--what I
term the right of personal privacy. Modern information systems, data banks,
credit records, mailing list abuses, electronic snooping, the collection of
personal data for one purpose that may be used for another--all these have
left millions of Americans deeply concerned by the privacy they cherish.

And the time has come, therefore, for a major initiative to define the
nature and extent of the basic rights of privacy and to erect new
safeguards to ensure that those rights are respected.

I shall launch such an effort this year at the highest levels of the
Administration, and I look forward again to working with this Congress in
establishing a new set of standards that respect the legitimate needs of
society, but that also recognize personal privacy as a cardinal principle
of American liberty.

Many of those in this Chamber tonight will recall that it was 3 years ago
that I termed the Nation's welfare system "a monstrous, consuming
outrage--an outrage against the community, against the taxpayer, and
particularly against the children that it is supposed to help."

That system is still an outrage. By improving its administration, we have
been able to reduce some of the abuses. As a result, last year, for the
first time in 18 years, there has been a halt in the growth of the welfare
caseload. But as a system, our welfare program still needs reform as
urgently today as it did when I first proposed in 1969 that we completely
replace it with a different system.

In these final 3 years of my Administration, I urge the Congress to join me
in mounting a major new effort to replace the discredited present welfare
system with one that works, one that is fair to those who need help or
cannot help themselves, fair to the community, and fair to the taxpayer.
And let us have as our goal that there will be no Government program which
makes it more profitable to go on welfare than to go to work.

I recognize that from the debates that have taken place within the Congress
over the past 3 years on this program that we cannot expect enactment
overnight of a new reform. But I do propose that the Congress and the
Administration together make this the year in which we discuss, debate, and
shape such a reform so that it can be enacted as quickly as possible.

America's own prosperity in the years ahead depends on our sharing fully
and equitably in an expanding world prosperity. Historic negotiations will
take place this year that will enable us to ensure fair treatment in
international markets for American workers, American farmers, American
investors, and American consumers.

It is vital that the authorities contained in the trade bill I submitted to
the Congress be enacted so that the United States can negotiate flexibly
and vigorously on behalf of American interests. These negotiations can
usher in a new era of international trade that not only increases the
prosperity of all nations but also strengthens the peace among all
nations.

In the past 5 years, we have made more progress toward a lasting structure
of peace in the world than in any comparable time in the Nation's history.
We could not have made that progress if we had not maintained the military
strength of America. Thomas Jefferson once observed that the price of
liberty is eternal vigilance. By the same token, and for the same reason,
in today's world the price of peace is a strong defense as far as the
United States is concerned.

In the past 5 years, we have steadily reduced the burden of national
defense as a share of the budget, bringing it down from 44 percent in 1969
to 29 percent in the current year. We have cut our military manpower over
the past 5 years by more than a third, from 3.5 million to 2.2 million.

In the coming year, however, increased expenditures will be needed. They
will be needed to assure the continued readiness of our military forces, to
preserve present force levels in the face of rising costs, and to give us
the military strength we must have if our security is to be maintained and
if our initiatives for peace are to succeed.

The question is not whether we can afford to maintain the necessary
strength of our defense, the question is whether we can afford not to
maintain it, and the answer to that question is no. We must never allow
America to become the second strongest nation in the world.

I do not say this with any sense of belligerence, because I recognize the
fact that is recognized around the world. America's military strength has
always been maintained to keep the peace, never to break it. It has always
been used to defend freedom, never to destroy it. The world's peace, as
well as our own, depends on our remaining as strong as we need to be as
long as we need to be.

In this year 1974, we will be negotiating with the Soviet Union to place
further limits on strategic nuclear arms. Together with our allies, we will
be negotiating with the nations of the Warsaw Pact on mutual and balanced
reduction of forces in Europe. And we will continue our efforts to promote
peaceful economic development in Latin America, in Africa, in Asia. We will
press for full compliance with the peace accords that brought an end to
American fighting in Indochina, including particularly a provision that
promised the fullest possible accounting for those Americans who are
missing in action.

And having in mind the energy crisis to which I have referred to earlier,
we will be working with the other nations of the world toward agreement on
means by which oil supplies can be assured at reasonable prices on a stable
basis in a fair way to the consuming and producing nations alike.

All of these are steps toward a future in which the world's peace and
prosperity, and ours as well as a result, are made more secure.

Throughout the 5 years that I have served as your President, I have had one
overriding aim, and that was to establish a new structure of peace in the
world that can free future generations of the scourge of war. I can
understand that others may have different priorities. This has been and
this will remain my first priority and the chief legacy I hope to leave
from the 8 years of my Presidency.

This does not mean that we shall not have other priorities, because as we
strengthen the peace, we must also continue each year a steady
strengthening of our society here at home. Our conscience requires it, our
interests require it, and we must insist upon it.

As we create more jobs, as we build a better health care system, as we
improve our education, as we develop new sources of energy, as we provide
more abundantly for the elderly and the poor, as we strengthen the system
of private enterprise that produces our prosperity--as we do all of this
and even more, we solidify those essential bonds that hold us together as
a nation.

Even more importantly, we advance what in the final analysis government in
America is all about.

What it is all about is more freedom, more security, a better life for each
one of the 211 million people that live in this land.

We cannot afford to neglect progress at home while pursuing peace abroad.
But neither can we afford to neglect peace abroad while pursuing progress
at home. With a stable peace, all is possible, but without peace, nothing
is possible.

In the written message that I have just delivered to the Speaker and to the
President of the Senate, I commented that one of the continuing challenges
facing us in the legislative process is that of the timing and pacing of
our initiatives, selecting each year among many worthy projects those that
are ripe for action at that time.

What is true in terms of our domestic initiatives is true also in the
world. This period we now are in, in the world--and I say this as one who
has seen so much of the world, not only in these past 5 years but going
back over many years--we are in a period which presents a juncture of
historic forces unique in this century. They provide an opportunity we may
never have again to create a structure of peace solid enough to last a
lifetime and more, not just peace in our time but peace in our children's
time as well. It is on the way we respond to this opportunity, more than
anything else, that history will judge whether we in America have met our
responsibility. And I am confident we will meet that great historic
responsibility which is ours today.

It was 27 years ago that John F. Kennedy and I sat in this Chamber, as
freshmen Congressmen, hearing our first State of the Union address
delivered by Harry Truman. I know from my talks with him, as members of the
Labor Committee on which we both served, that neither of us then even
dreamed that either one or both might eventually be standing in this place
that I now stand in now and that he once stood in, before me. It may well
be that one of the freshmen Members of the 93d Congress, one of you out
there, will deliver his own State of the Union message 27 years from now,
in the year 2001.

Well, whichever one it is, I want you to be able to look back with pride
and to say that your first years here were great years and recall that you
were here in this 93d Congress when America ended its longest war and began
its longest peace.

Mr. Speaker, and Mr. President, and my distinguished colleagues and our
guests: I would like to add a personal word with regard to an issue that
has been of great concern to all Americans over the past year. I refer, of
course, to the investigations of the so-called Watergate affair. As you
know, I have provided to the Special Prosecutor voluntarily a great deal of
material. I believe that I have provided all the material that he needs to
conclude his investigations and to proceed to prosecute the guilty and to
clear the innocent.

I believe the time has come to bring that investigation and the other
investigations of this matter to an end. One year of Watergate is enough.

And the time has come, my colleagues, for not only the Executive, the
President, but the Members of Congress, for all of us to join together in
devoting our full energies to these great issues that I have discussed
tonight which involve the welfare of all of the American people in so many
different ways, as well as the peace of the world.

I recognize that the House Judiciary Committee has a special responsibility
in this area, and I want to indicate on this occasion that I will cooperate
with the Judiciary Committee in its investigation. I will cooperate so that
it can conclude its investigation, make its decision, and I will cooperate
in any way that I consider consistent with my responsibilities to the
Office of the Presidency of the United States.

There is only one limitation. I will follow the precedent that has been
followed by and defended by every President from George Washington to
Lyndon B. Johnson of never doing anything that weakens the Office of the
President of the United States or impairs the ability of the Presidents of
the future to make the great decisions that are so essential to this Nation
and the world.

Another point I should like to make very briefly: Like every Member of the
House and Senate assembled here tonight, I was elected to the office that I
hold. And like every Member of the House and Senate, when I was elected to
that office, I knew that I was elected for the purpose of doing a job and
doing it as well as I possibly can. And I want you to know that I have no
intention whatever of ever walking away from the job that the people
elected me to do for the people of the United States.

Now, needless to say, it would be understatement if I were not to admit
that the year 1973 was not a very easy year for me personally or for my
family. And as I have already indicated, the year 1974 presents very great
and serious problems, as very great and serious opportunities are also
presented.

But my colleagues, this I believe: With the help of God, who has blessed
this land so richly, with the cooperation of the Congress, and with the
support of the American people, we can and we will make the year 1974 a
year of unprecedented progress toward our goal of building a structure of
lasting peace in the world and a new prosperity without war in the United
States of America.