Speech Transcript:

his is the moment when Congress and the Executive annually begin their
cooperative work to build a better America.

One basic purpose unites us: To promote strength and security, side
by side with liberty and opportunity.

As we meet today, in the 170th year of the Republic, our Nation must
continue to provide--as all other free governments have had to do
throughout time--a satisfactory answer to a question as old as
history. It is: Can Government based upon liberty and the God-given
rights of man, permanently endure when ceaselessly challenged by a
dictatorship, hostile to our mode of life, and controlling an
economic and military power of great and growing strength?

For us the answer has always been found, and is still found in the
devotion, the vision, the courage and the fortitude of our people.

Moreover, this challenge we face, not as a single powerful nation,
but as one that has in recent decades reached a position of
recognized leadership in the Free World.

We have arrived at this position of leadership in an era of
remarkable productivity and growth. It is also a time when man's
power of mass destruction has reached fearful proportions.

Possession of such capabilities helps create world suspicion and
tension. We, on our part, know that we seek only a just peace for
all, with aggressive designs against no one. Yet we realize that
there is uneasiness in the world because of a belief on the part of
peoples that through arrogance, miscalculation or fear of attack,
catastrophic war could be launched. Keeping the peace in today's
world more than ever calls for the utmost in the nation's resolution,
wisdom, steadiness and unremitting effort.

We cannot build peace through desire alone. Moreover, we have learned
the bitter lesson that international agreements, historically
considered by us as sacred, are regarded in Communist doctrine and in
practice to be mere scraps of paper. The most recent proof of their
disdain of international obligations, solemnly undertaken, is their
announced intention to abandon their responsibilities respecting
Berlin.

As a consequence, we can have no confidence in any treaty to which
Communists are a party except where such a treaty provides within
itself for self-enforcing mechanisms. Indeed, the demonstrated
disregard of the Communists of their own pledges is one of the
greatest obstacles to success in substituting the Rule of Law for
rule by force.

Yet step by step we must strengthen the institutions of peace--a
peace that rests upon justice--a peace that depends upon a deep
knowledge and clear understanding by all peoples of the cause and
consequences of possible failure in this great purpose.

I.

To achieve this peace we seek to prevent war at any place and in any
dimension. If, despite our best efforts, a local dispute should flare
into armed hostilities, the next problem would be to keep the conflict
from spreading, and so compromising freedom. In support of these
objectives we maintain forces of great power and flexibility.

Our formidable air striking forces are a powerful deterrent to
general war. Large and growing portions of these units can depart
from their bases in a matter of minutes.

Similar forces are included in our naval fleets.

Ground and other tactical formations can move with swiftness and
precision, when requested by friendly and responsible governments, to
help curb threatened aggression. The stabilizing influence of this
capacity has been dramatically demonstrated more than once over the
past year.

Our military and related scientific progress has been highly
gratifying.

Great strides have been made in the development of ballistic
missiles. Intermediate range missiles are now being deployed in
operational units. The Atlas intercontinental ballistic missile
program has been marked by rapid development as evidenced by recent
successful tests. Missile training units have been established and
launching sites are far along in construction.

New aircraft that fly at twice the speed of sound are entering our
squadrons.

We have successfully placed five satellites in orbit, which have
gathered information of scientific importance never before available.
Our latest satellite illustrates our steady advance in rocketry and
foreshadows new developments in world-wide communications.

Warning systems constantly improve.

Our atomic submarines have shattered endurance records and made
historic voyages under the North Polar Sea.

A major segment of our national scientific and engineering community
is working intensively to achieve new and greater developments.
Advance in military technology requires adequate financing but, of
course, even more, it requires talent and time. All this is given
only as a matter of history; as a record of our progress in space and
ballistic missile fields in no more than four years of intensive
effort. At the same time we clearly recognize that some of the recent
Soviet accomplishments in this particular technology are indeed
brilliant.

Under the law enacted last year the Department of Defense is being
reorganized to give the Secretary of Defense full authority over the
military establishment. Greater efficiency, more cohesive effort and
speedier reaction to emergencies are among the many advantages we are
already noting from these changes.

These few highlights point up our steady military gains. We are
rightfully gratified by the achievements they represent. But we must
remember that these imposing armaments are purchased at great cost.

National Security programs account for nearly sixty percent of the
entire Federal budget for this coming fiscal year.

Modern weapons are exceedingly expensive.

The overall cost of introducing ATLAS into our armed forces will
average $35 million per missile on the firing line.

This year we are investing an aggregate of close to $7 billion in
missile programs alone.

Other billions go for research, development, test and evaluation of
new weapons systems.

Our latest atomic submarines will cost $50 millions each, while some
special types will cost three times as much.

We are now ordering fighter aircraft which are priced at fifty times
as much as the fighters of World War II. We are buying certain
bombers that cost their weight in gold.

These sums are tremendous, even when compared with the marvelous
resiliency and capacity of our economy.

Such expenditures demand both balance and perspective in our planning
for defense. At every turn, we must weigh, judge and select. Needless
duplication of weapons and forces must be avoided.

We must guard against feverish building of vast armaments to meet
glibly predicted moments of so-called "maximum peril." The threat we
face is not sporadic or dated: It is continuous. Hence we must not be
swayed in our calculations either by groundless fear or by
complacency. We must avoid extremes, for vacillation between extremes
is inefficient, costly, and destructive of morale. In these days of
unceasing technological advance, we must plan our defense
expenditures systematically and with care, fully recognizing that
obsolescence compels the never-ending replacement of older weapons
with new ones.

The defense budget for the coming year has been planned on the basis
of these principles and considerations. Over these many months I have
personally participated in its development.

The aim is a sensible posture of defense. The secondary aim is
increased efficiency and avoidance of waste. Both are achieved by
this budgetary plan.

Working by these guide lines I believe with all my heart that America
can be as sure of the strength and efficiency of her armed forces as
she is of their loyalty. I am equally sure that the nation will thus
avoid useless expenditures which, in the name of security, might tend
to undermine the economy and, therefore, the nation's safety.

Our own vast strength is only a part of that required for dependable
security. Because of this we have joined with nearly 50 other nations
in collective security arrangements. In these common undertakings each
nation is expected to contribute what it can in sharing the heavy
load. Each supplies part of a strategic deployment to protect the
forward boundaries of freedom.

Constantly we seek new ways to make more effective our contribution
to this system of collective security. Recently I have asked a
Committee of eminent Americans of both parties to re-appraise our
military assistance programs and the relative emphasis which should
be placed on military and economic aid.

I am hopeful that preliminary recommendations of this Committee will
be available in time to assist in shaping the Mutual Security program
for the coming fiscal year.

Any survey of the free world's defense structure cannot fail to
impart a feeling of regret that so much of our effort and resources
must be devoted to armaments. At Geneva and elsewhere we continue to
seek technical and other agreements that may help to open up, with
some promise, the issues of international disarmament. America will
never give up the hope that eventually all nations can, with mutual
confidence, drastically reduce these non-productive expenditures.

II.

The material foundation of our national safety is a strong and
expanding economy. This we have--and this we must maintain. Only with
such an economy can we be secure and simultaneously provide for the
well-being of our people.

A year ago the nation was experiencing a decline in employment and
output. Today that recession is fading into history, and this without
gigantic, hastily-improvised public works projects or untimely tax
reductions. A healthy and vigorous recovery has been under way since
last May. New homes are being built at the highest rate in several
years. Retail sales are at peak levels. Personal income is at an
all-time high.

The marked forward thrust of our economy reaffirms our confidence in
competitive enterprise. But--clearly--wisdom and prudence in both the
public and private sectors of the economy are always necessary.

Our outlook is this: 1960 commitments for our armed forces, the
Atomic Energy Commission and Military Assistance exceed 47 billion
dollars. In the foreseeable future they are not likely to be
significantly lower. With an annual population increase of three
million, other governmental costs are bound to mount.

After we have provided wisely for our military strength, we must
judge how to allocate our remaining government resources most
effectively to promote our well-being and economic growth.

Federal programs that will benefit all citizens are moving forward.

Next year we will be spending increased amounts on health programs;

on Federal assistance to science and education;

on the development of the nation's water resources; on the renewal of
urban areas;

and on our vast system of Federal-aid highways.

Each of these additional outlays is being made necessary by the
surging growth of America.

Let me illustrate. Responsive to this growth, Federal grants and long
term loans to assist 14 major types of capital improvements in our
cities will total over 2 billion dollars in 1960--double the
expenditure of two years ago. The major responsibility for
development in these fields rests in the localities, even though the
Federal Government will continue to do its proper part in meeting the
genuine needs of a burgeoning population.

But the progress of our economy can more than match the growth of our
needs. We need only to act wisely and confidently.

Here, I hope you will permit me to digress long enough to express
something that is much on my mind.

The basic question facing us today is more than mere survival--the
military defense of national life and territory. It is the
preservation of a way of life.

We must meet the world challenge and at the same time permit no
stagnation in America.

Unless we progress, we regress.

We can successfully sustain security and remain true to our heritage
of freedom if we clearly visualize the tasks ahead and set out to
perform them with resolution and fervor. We must first define these
tasks and then understand what we must do to perform them.

If progress is to be steady we must have long term guides extending
far ahead, certainly five, possibly even ten years. They must reflect
the knowledge that before the end of five years we will have a
population of over 190 million. They must be goals that stand high,
and so inspire every citizen to climb always toward mounting levels
of moral, intellectual and material strength. Every advance toward
them must stir pride in individual and national achievements.

To define these goals, I intend to mobilize help from every available
source.

We need more than politically ordained national objectives to
challenge the best efforts of free men and women. A group of selfless
and devoted individuals, outside of government, could effectively
participate in making the necessary appraisal of the potentials of
our future. The result would be establishment of national goals that
would not only spur us on to our finest efforts, but would meet the
stern test of practicality.

The Committee I plan will comprise educators and representatives of
labor, management, finance, the professions and every other kind of
useful activity.

Such a study would update and supplement, in the light of continuous
changes in our society and its economy, the monumental work of the
Committee on Recent Social Trends which was appointed in 1931 by
President Hoover. Its report has stood the test of time and has had a
beneficial influence on national development. The new Committee would
be concerned, among other things, with the acceleration of our
economy's growth and the living standards of our people, their health
and education, their better assurance of life and liberty and their
greater opportunities. It would also be concerned with methods to
meet such goals and what levels of government--Local, State, or
Federal--might or should be particularly concerned.

As one example, consider our schools, operated under the authority of
local communities and states. In their capacity and in their quality
they conform to no recognizable standards. In some places facilities
are ample, in others meager. Pay of teachers ranges between wide
limits, from the adequate to the shameful. As would be expected,
quality of teaching varies just as widely. But to our teachers we
commit the most valuable possession of the nation and of the family--
our children.

We must have teachers of competence. To obtain and hold them we need
standards. We need a National Goal. Once established I am certain
that public opinion would compel steady progress toward its
accomplishment.

Such studies would be helpful, I believe, to government at all levels
and to all individuals. The goals so established could help us see our
current needs in perspective. They will spur progress.

We do not forget, of course, that our nation's progress and fiscal
integrity are interdependent and inseparable. We can afford
everything we clearly need, but we cannot afford one cent of waste.
We must examine every item of governmental expense critically. To do
otherwise would betray our nation's future. Thrift is one of the
characteristics that has made this nation great. Why should we ignore
it now?

We must avoid any contribution to inflationary processes, which could
disrupt sound growth in our economy. Prices have displayed a welcome
stability in recent months and, if we are wise and resolute, we will
not tolerate inflation in the years to come. But history makes clear
the risks inherent in any failure to deal firmly with the basic
causes of inflation.

Two of the most important of these causes are the wage-price spiral
and continued deficit financing.

Inflation would reduce job opportunities, price us out of world
markets, shrink the value of savings and penalize the thrift so
essential to finance a growing economy.

Inflation is not a Robin Hood, taking from the rich to give to the
poor. Rather, it deals most cruelly with those who can least protect
themselves. It strikes hardest those millions of our citizens whose
incomes do not quickly rise with the cost of living. When prices
soar, the pensioner and the widow see their security undermined, the
man of thrift sees his savings melt away; the white collar worker,
the minister, and the teacher see their standards of living dragged
down.

Inflation can be prevented. But this demands statesmanship on the
part of business and labor leaders and of government at all levels.

We must encourage the self-discipline, the restraint necessary to
curb the wage-price spiral and we must meet current costs from
current revenue.

To minimize the danger of future soaring prices and to keep our
economy sound and expanding, I shall present to the Congress certain
proposals.

First, I shall submit a balanced budget for the next year, a year
expected to be the most prosperous in our history. It is a realistic
budget with wholly attainable objectives.

If we cannot live within our means during such a time of rising
prosperity, the hope for fiscal integrity will fade. If we persist in
living beyond our means, we make it difficult for every family in our
land to balance its own household budget. But to live within our
means would be a tangible demonstration of the self-discipline needed
to assure a stable dollar.

The Constitution entrusts the Executive with many functions, but the
Congress--and the Congress alone--has the power of the purse.
Ultimately upon Congress rests responsibility for determining the
scope and amount of Federal spending.

By working together, the Congress and the Executive can keep a
balance between income and outgo. If this is done there is real hope
that we can look forward to a time in the foreseeable future when
needed tax reforms can be accomplished.

In this hope, I am requesting the Secretary of the Treasury to
prepare appropriate proposals for revising, at the proper time, our
tax structure, to remove inequities and to enhance incentives for all
Americans to work, to save, and to invest. Such recommendations will
be made as soon as our fiscal condition permits. These prospects will
be brightened if 1960 expenditures do not exceed the levels
recommended.

Second, I shall recommend to the Congress that the Chief Executive be
given the responsibility either to approve or to veto specific items
in appropriations and authorization bills. [I assure you gentlemen
that I know this recommendation has been made time and again by every
President that has appeared in this hall for many years, but I say
this, it still is one of the most important corrections that could be
made in our annual expenditure program, because this would save tax
dollars.]

Third, to reduce Federal operations in an area where private
enterprise can do the job, I shall recommend legislation for greater
flexibility in extending Federal credit, and in improving the
procedures under which private credits are insured or guaranteed.
Present practices have needlessly added large sums to Federal
expenditures.

Fourth, action is required to make more effective use of the large
Federal expenditures for agriculture and to achieve greater fiscal
control in this area.

Outlays of the Department of Agriculture for the current fiscal year
for the support of farm prices on a very few farm products will
exceed five billion dollars. That is a sum equal to approximately
two-fifths of the net income of all farm operators in the entire
United States.

By the end of this fiscal year it is estimated that there will be in
Government hands surplus farm products worth about nine billion
dollars. And by July 1, 1959, Government expenditures for storage,
interest, and handling of its agricultural inventory will reach a
rate of one billion dollars a year.

This level of expenditure for farm products could be made willingly
for a temporary period if it were leading to a sound solution of the
problem. But unfortunately this is not true. We need new
legislation.

In the past I have sent messages to the Congress requesting greater
freedom for our farmers to manage their own farms and greater freedom
for markets to reflect the wishes of producers and consumers.
Legislative changes that followed were appropriate in direction but
did not go far enough.

The situation calls for prompt and forthright action. Recommendation
for action will be contained in a message to be transmitted to the
Congress shortly.

These fiscal and related actions will help create an environment of
price stability for economic growth. However, certain additional
measures are needed.

I shall ask Congress to amend the Employment Act of 1946 to make it
clear that Government intends to use all appropriate means to protect
the buying power of the dollar.

I am establishing a continuing Cabinet group on Price Stability for
Economic Growth to study governmental and private policies affecting
costs, prices, and economic growth. It will strive also to build a
better public understanding of the conditions necessary for
maintaining growth and price stability.

Studies are being undertaken to improve our information on prices,
wages, and productivity.

I believe all citizens in all walks of life will support this program
of action to accelerate economic growth and promote price stability.

III.

I take up next certain aspects of our international situation and our
programs to strengthen it.

America's security can be assured only within a world community of
strong, stable, independent nations, in which the concepts of
freedom, justice and human dignity can flourish.

There can be no such thing as Fortress America. If ever we were
reduced to the isolation implied by that term, we would occupy a
prison, not a fortress. The question whether we can afford to help
other nations that want to defend their freedom but cannot fully do
so from their own means, has only one answer: we can and we must, we
we have been doing so since 1947.

Our foreign policy has long been dedicated to building a permanent
and just peace.

During the past six years our free world security arrangements have
been bolstered and the bonds of freedom have been more closely knit.
Our friends in Western Europe are experiencing new internal vitality,
and are increasingly more able to resist external threats. Over the
years the world has come to understand clearly that it is our firm
policy not to countenance aggression. In Lebanon, Taiwan, and
Berlin--our stand has been clear, right, and expressive of the
determined will of a united people.

Acting with other free nations we have undertaken the solemn
obligation to defend the people of free Berlin against any effort to
destroy their freedom. In the meantime we shall constantly seek
meaningful agreements to settle this and other problems, knowing full
well that not only the integrity of a single city, but the hope of all
free peoples is at stake.

We need, likewise, to continue helping to build the economic base so
essential to the Free World's stability and strength.

The International Monetary Fund and the World Bank have both fully
proven their worth as instruments of international financial
cooperation. Their Executive Directors have recommended an increase
in each member country's subscription. I am requesting the Congress
for immediate approval of our share of these increases.

We are now negotiating with representatives of the twenty Latin
American Republics for the creation of an inter-American financial
institution. Its purpose would be to join all the American Republics
in a common institution which would promote and finance development
in Latin America, and make more effective the use of capital from the
World Bank, the Export-Import Bank, and private sources.

Private enterprise continues to make major contributions to economic
development in all parts of the world. But we have not yet marshalled
the full potential of American business for this task, particularly in
countries which have recently attained their independence. I shall
present to this Congress a program designed to encourage greater
participation by private enterprise in economic development abroad.

Further, all of us know that to advance the cause of freedom we must
do much more than help build sound economies. The spiritual,
intellectual, and physical strength of people throughout the world
will in the last analysis determine their willingness and their
ability to resist Communism.

To give a single illustration of our many efforts in these fields: We
have been a participant in the effort that has been made over the past
few years against one of the great scourges of mankind--disease.
Through the Mutual Security program public health officials are being
trained by American universities to serve in less developed countries.
We are engaged in intensive malaria eradication projects in many parts
of the world. America's major successes in our own country prove the
feasibility of success everywhere.

By these and other means we shall continue and expand our campaign
against the afflictions that now bring needless suffering and death
to so many of the world's people. We wish to be part of a great
shared effort toward the triumph of health.

IV.

America is best described by one word, freedom.

If we hope to strengthen freedom in the world we must be ever mindful
of how our own conduct reacts elsewhere. No nation has ever been so
floodlighted by world opinion as the United States is today.
Everything we do is carefully scrutinized by other peoples throughout
the world. The bad is seen along with the good.

Because we are human we err. But as free men we are also responsible
for correcting the errors and imperfections of our ways.

Last January I made comprehensive recommendations to the Congress for
legislation in the labor-management field. To my disappointment,
Congress failed to act. The McClellan Committee disclosures of
corruption, racketeering, and abuse of trust and power in
labor-management affairs have aroused America and amazed other
peoples. They emphasize the need for improved local law enforcement
and the enactment of effective Federal legislation to protect the
public interest and to insure the rights and economic freedoms of
millions of American workers. Halfhearted measures will not do. I
shall recommend prompt enactment of legislation designed:

To safeguard workers' funds in union treasuries against misuse of any
kind whatsoever.

To protect the rights and freedoms of individual union members,
including the basic right to free and secret elections of officers.

To advance true and responsible collective bargaining.

To protect the public and innocent third parties from unfair and
coercive practices such as boycotting and blackmail picketing.

The workers and the public must have these vital protections.

In other areas of human rights--freedom from discrimination in
voting, in public education, in access to jobs, and in other
respects-- the world is likewise watching our conduct.

The image of America abroad is not improved when school children,
through closing of some of our schools and through no fault of their
own, are deprived of their opportunity for an education.

The government of a free people has no purpose more noble than to
work for the maximum realization of equality of opportunity under
law. This is not the sole responsibility of any one branch of our
government. The judicial arm, which has the ultimate authority for
interpreting the Constitution, has held that certain state laws and
practices discriminate upon racial grounds and are unconstitutional.
Whenever the supremacy of the Constitution of the United States is
challenged I shall continue to take every action necessary to uphold
it.

One of the fundamental concepts of our constitutional system is that
it guarantees to every individual, regardless of race, religion, or
national origin, the equal protection of the laws. Those of us who
are privileged to hold public office have a solemn obligation to make
meaningful this inspiring objective. We can fulfill that obligation by
our leadership in teaching, persuading, demonstrating, and in
enforcing the law.

We are making noticeable progress in the field of civil rights-- we
are moving forward toward achievement of equality of opportunity for
all people everywhere in the United States. In the interest of the
nation and of each of its citizens, that progress must continue.

Legislative proposals of the Administration in this field will be
submitted to the Congress early in the session. All of us should help
to make clear that the government is united in the common purpose of
giving support to the law and the decisions of the Courts.

By moving steadily toward the goal of greater freedom under law, for
our own people, we shall be the better prepared to work for the cause
of freedom under law throughout the world.

All peoples are sorely tired of the fear, destruction, and the waste
of war. As never before, the world knows the human and material costs
of war and seeks to replace force with a genuine rule of law among
nations.

It is my purpose to intensify efforts during the coming two years in
seeking ways to supplement the procedures of the United Nations and
other bodies with similar objectives, to the end that the rule of law
may replace the rule of force in the affairs of nations. Measures
toward this end will be proposed later, including a re-examination of
our own relation to the International Court of Justice.

Finally--let us remind ourselves that Marxist scripture is not new;
it is not the gospel of the future. Its basic objective is
dictatorship, old as history. What is new is the shining prospect
that man can build a world where all can live in dignity.

We seek victory--not over any nation or people--but over the ancient
enemies of us all; victory over ignorance, poverty, disease, and
human degradation wherever they may be found.

We march in the noblest of causes--human freedom.

If we make ourselves worthy of America's ideals, if we do not forget
that our nation was founded on the premise that all men are creatures
of God's making, the world will come to know that it is free men who
carry forward the true promise of human progress and dignity.