information, counseling and placement service for older workers through the FederalState System of Employment Services.

ENRICHING THE LATER YEARS

Old age is too often a time of lonely sadness, when it should be a time for service and continued self-development. For many, later life can offer a second career. It can mean new opportunities for community service. It can be a time to develop new interests, acquire new knowledge, find new ways to use leisure hours.

Our goal is not merely to prolong our citizens' lives, but to enrich them.

Congress overwhelmingly endorsed this goal, when it passed the Older Americans Act. As a result, we have launched a new partnership at all levels of government, and among voluntary and private organizations.

We have established a new agency and a new impetus to promote this partnership.

Forty-one states, the District of Columbia and Puerto Rico-where more than 91% of our older persons live-are now engaged in providing special services for senior citizens. Two-hundred and seventy community programs have already been started. Several hundred more will begin in the next few months.

to:

We are helping states and communities

-Establish central information and referral services so that our older citizens can learn about and receive all the benefits to which they are entitled; -Begin or expand services in more than

65 more senior citizen centers; -Increase volunteer-service opportunities for older people;

-Offer pre-retirement courses and infor

mation about retirement; -Support services which help older people remain in their homes and neighborhoods.

To carry forward this partnership, I recommend that:

-the Older Americans Act be extended and its funding levels be increased. -appropriations under the Neighborhood Facilities Program be increased to construct multipurpose centers to serve senior citizens with a wide range of educational, recreational and health services, and to provide information about housing and employment opportunities.

-A pilot program be started to provide nutritional meals in senior citizen centers.

Decent housing plays an important role in promoting self-respect and dignity in the later years. In the past three years, the total Federal investment in special housing programs for the elderly has doubled-to over $2.5 billion.

Rental housing for the elderly is one of our most successful housing programs. We have made commitments for about 187,000 units to house more than 280,000 persons. Direct loan and grant programs assist many senior citizens to improve their homes in urban renewal areas, and in areas of concentrated code enforcement where blight is worst. The new rent supplement program, enacted in 1965, promises to help thousands of low income older citizens to have good housing at reasonable rents.

I recommend that these housing programs be continued and that the full amount authorized for the 1968 rent supplement program be provided. I am directing the Secretary of Housing and Urban Development to

make certain that the Model Cities Program gives special attention to the needs of older people in poor housing and decaying neighborhoods.

The talents of elderly Americans must not lie fallow. For most Americans, the most enriching moments of life are those spent helping their fellowman. I have asked the Director of the Office of Economic Opportunity to initiate and expand programs to make a wider range of volunteer activities available to older citizens:

-to enlist them in searching out isolated

and incapacitated older people. -to build on the success of the Foster Grandparent and Medicare Alert programs by using public-spirited older Americans as tutors and classroom aides in Head Start and other programs. -to organize older citizens as VISTA volunteers in a variety of community efforts.

OUR OBLIGATION

These are my major recommendations to the first session of the 90th Congress on behalf of older Americans. But this message does not end our quest, as a nation, for a better life for these citizens.

I believe that these new measures, together with programs already enacted, will bring us closer to fulfilling the goals set forth in our Bill of Rights for Older Americans.

We should look upon the growing number of older citizens not as a problem or a burden for our democracy, but as an opportunity to enrich their lives and, through them, the lives of all of us.

The White House

January 23, 1967

LYNDON B. JOHNSON

NOTE: The Older Americans Act Amendments of 1967 were approved by the President on July 1, 1967 (see Item 299).

January 24, 1967

To the Congress of the United States:

A Federal budget lays out a two-part plan of action:

• It proposes particular programs, military and civilian, designed to promote national security, international cooperation, and domestic progress.

• It proposes total expenditures and revenues designed to help maintain stable economic prosperity and growth. This budget for fiscal year 1968 reflects three basic considerations:

• In Vietnam, as throughout the world, we seek peace but will provide all the resources needed to combat aggression.

• In our urgent domestic programs we will continue to press ahead, at a controlled and reasoned pace.

• In our domestic economy we seek to achieve a 7th year of uninterrupted growth, adopting the fiscal measures needed to finance our expenditures responsibly, permit lower interest rates, and achieve a more balanced economy. In recent years, the American economy has performed superbly. Since 1963, our Nation's output has risen at an average rate of 5.5% a year. 5.3 million more people are employed and 1.2 million fewer unemployed. Industrial capacity has grown by

18%, and far less of it is idle than was the case 3 years ago.

During this past calendar year alone: • Our Nation's gross national productapart from price changes-has grown by nearly 5.4%.

The unemployment rate has remained at or below 4% for the first time in 13 years.

• More than 3 million additional jobs were found in nonagricultural employment, the largest yearly gain experienced since 1942.

• Corporate profits and personal income have each grown about 8% to record levels.

We have at the same time become engaged in a major effort to deter aggression in Southeast Asia. Some $19.9 billion of the Nation's resources will go to support that effort in the current fiscal year and $22.4 billion in 1968. This past year our economy met these requirements with minimum strain and disruption.

We have also embarked upon a series of new programs to lift the quality of American life in the fields of health, education, urban development, pollution control, and the war on poverty. Yet the productivity and vitality of our economy is such that the total Federal budget in 1968, including the full costs of the Vietnam conflict, the new programs, and all of the various Federal trust funds, will account for only 12% more of our gross national product than it did 3 years ago. Since the gross national product rose sharply over these 3 years, we have been able to meet our increased commitments abroad, move forward with urgent social programs at home, and still provide a massive expansion in goods and services available for private consumption and investment.

During the year and a half since the de

cision to send troops to Vietnam, consumer prices have risen 4.5% in spite of efforts to hold them down. We have, nevertheless, had considerably better success than in similar periods during World War II and the Korean conflict. Then, prices rose 13.5% and 11% respectively, even with the imposition of price and wage controls which we have avoided.

The economic performance of the past 3 years did not just happen. It grew out of the ingenuity, hard work, and imagination of all parts of American society. But the one element which provided a catalyst for all the rest was the imaginative and flexible use of Federal fiscal policy.

In 1964, and again in 1965, tax reductions were enacted which gave a strong stimulus to the economy. Idle capacity came into operation, new capacity was built, and both the numbers and productivity of the Nation's workforce rose sharply.

In late 1965 and early 1966, however, as the economy rapidly approached full capacity operation, inflationary pressures began to develop.

On two occasions, I proposed, and the Congress promptly enacted, tax changes aimed at dampening those pressures. At the same time I made every effort to postpone, stretch out, or eliminate all but the most essential Federal expenditures. Cutbacks totaling over $5 billion in program levels and $3 billion in expenditures are being undertaken by Federal agencies during the current year. These actions contributed to a welcome moderation of inflationary pressures in the latter part of 1966.

FISCAL PROGRAM FOR 1968

In the budget for 1968, I am again proposing a fiscal program tailored to meet responsibly the needs of an expanding economy.

This program will require a measure of sacrifice as well as continued work and resourcefulness.

In the year ahead, defense expenditures will continue to rise as we carry out our obligations in Vietnam. After a rigorous review of civilian programs and a sharp paring of spending requests, a modest increase in domestic expenditures will be required as we press forward to meet our obligations at home. Equity also demands that we increase substantially social security benefits for our older citizens so that they share in the Nation's growing income which their own past work and investment helped to bring about. And finally, during the coming year, we must take every reasonable step to permit a continuation of the move toward easier monetary conditions and lower interest rates which is now clearly under way.

Under these circumstances, I am proposing a temporary 6% surcharge on both corporate and individual income taxes. I also ask that individuals in the lower income brackets be exempt from the surcharge. The tax should remain in effect for two years, or for such period as may be warranted by our unusual expenditures in Vietnam. I will not hesitate to recommend an earlier expiration date, however, if the fiscal requirements of our commitments in Vietnam permit such action. In addition, I recommend legislation to provide a further acceleration of certain corporate tax payments.

With these new measures, and the expenditures I am proposing, the Federal budget deficit as measured in the national income accounts will be $2.1 billion in fiscal year 1968, compared to $3.8 billion in fiscal year 1967.

The national income accounts budget is the measure developed and used for over three decades by economists and fiscal experts

to judge the impact of the Federal budget on

the flow of income and production in the economy. Its measures of total Federal receipts and expenditures are the same as those used in recording the receipts and expenditures of business firms and individuals. Together with data on business and individuals, the national income accounts budget is used to build up official statistics on gross national product and national income.

Unlike the more traditional administrative budget, the national income budget: • includes the large expenditures and receipts of the Federal Government's trust funds, but

• excludes Federal loans and receipts from the sale of loans, since these are not recorded as income or expenditures in the accounts of business firms or individuals. I am emphasizing the national income accounts as a measure of Federal fiscal activity because the traditional administrative budget is becoming an increasingly less complete and less reliable measure of the Government's activities and their economic impact. For example, trust fund-financed activities not reflected in the administrative budget now approximate one-third of that budget. More specifically, the fiscal year 1968 administrative budget excludes $48.1 billion of trust fund receipts and $44.5 billion of trust fund expenditures.

In addition, the treatment of lending as equivalent to spending in both the administrative and cash budgets is not suitable for an analysis of the budget's impact on the flow of national production and income.

To permit a higher 1968 budget deficit than the $2.1 billion involved in my fiscal recommendations would, I believe, be unacceptable. We would run substantial risks of:

shoulders of monetary policy, and • renewing inflationary pressures, particularly in the latter half of this year. On the other hand, to seek a lower deficit or a surplus through a more restrictive fiscal program would be unwarranted and selfdefeating under present economic conditions. Such a fiscal policy could depress economic activity, reduce the incomes of individuals and corporations, and thereby fail to secure the revenues it was designed to achieve.

The economy, the budget, and the aims of our society would be jeopardized by either

a larger tax increase or by large slashes in military or civilian programs. I have reviewed these programs carefully. Waste and nonessentials have been cut out. Reductions or postponements have been made wherever possible. The increases that are proposed have been carefully selected on the basis of urgent national requirements.

The Congress through the appropriations process, will, of course, subject these programs to a searching examination. I welcome that examination. But it is my judgment that major cuts cannot be made without serious impairment to vital national objec