Fiscal Year 1978 Budget Revisions Message to the Congress Transmitting the Revisions.

To the Congress of the United States:

I am presenting today proposed changes in the 1978 budget.

Although I have not been able to analyze this budget in depth, these proposals do differ significantly from those of the previous administration.

Proposals have been rejected that would have needlessly added to the burden on the elderly and those who depend upon medicare, medicaid, and food programs.

I have withdrawn proposals that would have placed further financial strain on State and local governments.

Changes are included that will help us move more quickly to meet our commitments in such vital areas as the environment, education, and housing; and I am introducing measures that will help us control unacceptable inflation in medical costs.

The planned increase in defense spending, has been reduced while our real military strength is enhanced.

Revisions have been made that reflect new priorities for water resources development and also for energy, placing greater emphasis on conservation, development of nonnuclear power sources, and expanding our petroleum storage program. Later in the spring, work with the Congress will be completed on a comprehensive, long-range national energy policy.

This budget includes the economic stimulus package, which will reduce unemployment and promote steady, balanced economic growth. The package, which has been slightly changed since it was first presented to the Congress last month, provides for $15.7 billion in tax reductions and increase outlays in 1977 and $15.9 billion in 1978. It includes a $50 per capita rebate on personal income taxes; an increase in the standard deduction; reduction' in business taxes to stimulate employment and provide incentives for investment; expansion in training and employment programs; increases in public works funding; and additional money for countercyclical revenue sharing grants to State and local governments.

I am also asking the Congress to extend the supplemental payments program, which is now expiring, so that unemployed workers will be able to qualify through the end of this year for up to 52 weeks of unemployment benefits.

There are several important goals which these revisions do not reflect, because my administration has not yet had time to review all current tax and spending programs or fully prepare our own proposals. The 1978 budget is essentially still President Ford's budget, with only such limited revisions as my administration has had time to make. But these revisions do reflect our careful choices among many possible options; they are important first steps toward a Federal Government that is more effective and responsive to our people's needs.

Last year, spending estimates were too high, and economic policy-making was adversely affected. Because time did not permit detailed review of the current estimates, I have instructed the Office of Management and Budget to make a thorough review of these estimates. The Congress will be informed of any resulting revisions.

The revised budget outlined in this document continues to reflect the current overlapping and unwieldy structure of the Federal Government--a structure I intend, with the help of the Congress, to simplify and improve.

Although it has not been possible in these revisions to the 1978 budget, future budgets will reflect detailed, zero-based reviews of Federal spending programs, comprehensive reform of the tax system, and fundamental reorganization of the Government.

JIMMY CARTER

February 22, 1977.