Statement by the President on the Message on Pay, Retirement, and Health Benefits of Federal Employees.

TODAY, I have sent to the Congress a Federal pay bill which provides increases in salary and fringe benefits averaging 3.2 percent.

This increase, exactly within the wage and price guideposts recommended by the President's Council of Economic Advisers, is designed to be just--and to fight inflation.

Every action we take should be advanced in the light of what effect it will have on our men in Vietnam--men who are fighting and dying for us now.

We here at home ought to set an example for them.

If we increase wages and show no restraint on prices, we will lose the war on inflation. We will severely handicap our men in Vietnam.

I have asked Government employees to set an example. I have asked them to live within the guideposts which we believe are a key bulwark against inflation.

For 5 years, our economy has been moving toward full use of its capacity. But as we near this long-sought condition, we must work together to preserve the value of the dollar from the threat of inflation.

Nothing will destroy the progress of Federal employees--and all wage earners--more swiftly than inflation.

We must sustain our 5-year long prosperity. We can do it.

As I have asked Government employees to stand firm in the fight against inflation, so have I asked, and continue to ask, all employers and employees in the Nation to exercise voluntary restraint. This great Nation can retain its economic strength and health, if we stand together to preserve our prosperity. That is why I am proud of the Federal pay increase bill.